Luke Nottage – Page 20 – Japanese Law and the Asia-Pacific

Guest blog – The Implications of an Abe Government for public law in Japan

Written by Joel Rheuben (University of Tokyo)
After facing more than a year of deadlock in the Diet and a legislative agenda monopolised by earthquake recovery measures and the increase in the consumption tax, the outgoing Democratic Party of Japan (DPJ) Government has left in its wake a mess of unfinished business in a number of legislative areas. One of these areas is public law reform. The DPJ had been elected in 2009 on a platform of change after the long reign of the Liberal Democratic Party (LDP), and had promised a new era of government transparency and accountability. Behind the early pageantry of the “Government Revitalization Unit”, in which ministers publicly grilled senior civil servants over their agencies’ expenditure, the DPJ worked diligently to bring about much-needed change in matters such as local government, the civil service, freedom of information and administrative appeals.
With a more than comfortable majority in the House of Representatives and the passage of several of the more critical recovery measures out of the way, it remains to be seen which, if any, of the DPJ’s public law reforms the presumptive prime minister, Shinzo Abe, will run with. The LDP’s election manifesto calls for “administrative reform”, but is short on detail. However, the tenor of Mr Abe’s previous prime ministership (from September 2006 to September 2007) gives an indication of Mr Abe’s likely priorities.

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Negotiating and Applying Investor-State Arbitration Provisions in Free Trade Agreements and Investment Treaties: Australia, Japan and the Asia-Pacific

My recent Sydney Law School Research Paper No. 12/84, forthcoming in a special issue 119 (9&10) Hogaku Shimpo (Chuo University) for Professor Satoru Osanai, is an edited and updated collection of postings over 2012 on this ‘Japanese Law and the Asia-Pacific’ blog (and/or the East Asia Forum blog) dealing with investor-state arbitration (ISA) and other forms of investor-state dispute settlement.
The topic has become particularly controversial for Australia, given its ongoing Free Trade Agreement negotiations with Japan. Japan is also considering joining negotiations underway among Australia and 10 other states (including the US) for an expanded Trans-Pacific Partnership Agreement, and both are also interested in the more recent ‘Regional Comprehensive Economic Partnership‘ (RCEP) initiative (ASEAN+6). Both Japan and Australia have almost always included ISA protections in their investment treaties, but Australia omitted them in investment treaties with the USA and New Zealand, and recently declared that it will no longer accept ISA in future treaties – even with countries with less developed legal systems and economies.

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Reforming Private International Law – Finally ‘Australia in the Asian Century’?

Australia is long overdue for statutory intervention in private international law (PIL), so the recent ‘Discussion Paper 1’ (DP) from the federal Attorney-General’s Department (AGD) is very welcome. From a background in comparative and transnational business law, I strongly support legislative reform, particularly for cross-border consumer transactions and/or in relation to international arbitration. This can now draw on a wealth of experience at an international level and from our major (now mostly Asia-Pacific) trading partners. Such reforms will add tangible evidence of the Government’s recently declared commitment to ‘Australia in the Asian Century‘.

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Guest Blog – Long-Term LNG Sales to Japan and Beyond

Guest blog by Paul Davis (Baker & McKenzie, Sydney/Tokyo) – “IMPORT OF US SHALE GAS INTO ASIA: THE EFFECT ON EXISTING LONG-TERM CONTRACTS FOR THE SALE OF LNG”
[A footnoted version of the following note is forthcoming on the Baker & McKenzie website. The firm supports ANJeL’s ‘Team Australia’ law students in the INC negotiation and arbitration moot competition in Tokyo (held over 1-2 December this year), and Mr Davis is a guest lecturer in Sydney Law School’s LLM courses in “Global Energy and Resources Law” and “Law and Investment in Asia”. The law and practice of long-term contracts is not only of immediate practical significance for bilateral and regional trade and investment (including Australia-Japan FTA negotiations), but also more broadly for contract law reform projects now underway in both Australia and Japan.]
Current Top Concern to Asia’s LNG Buyers and Sellers
The main issue exercising the minds of Asia’s LNG sellers and buyers is what will happen to their current LNG sale and purchase agreements (SPAs), which are priced based upon the Japan Crude Cocktail (JCC), as cheaper (Henry Hub linked) shale gas imports start to flow into the region from North America.
Buyers will be under pressure to “close the gap.” At the same time the sellers are concerned to maintain the prices based on which they made the decision to develop their LNG projects.
SPAs differ, depending upon the LNG SPA model preferred by the seller – in effect the operator of the project. However most SPAs contain two provisions of relevance to the current issue.

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The Olympus scandal and corporate governance in Japan

On 22 October Sky News ‘Late Agenda’ interviewed me and Rick Wallace (Tokyo-based correspondent for ‘The Australian’) following an interview with Michael Woodford, former CEO of Olympus in Japan (click here and then here for 200-MB mp4 video-clips). Corporate governance in Japan is important for Australia, given the countries’ strong trade and investment relationship and recent pressure to finalise a bilateral Free Trade Agreement, as well as from broader regional and theoretical perspectives.

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Australia-Japan Business Cooperation: The Last 50 Years and a New FTA?

[A version of the second half of this Comment, on the potential impact of Australia’s new policy against treaty-based Investor-State Arbitration provisions on the pending FTA negotiations with Japan, appears also on the East Asia Forum – cited by Rowan Callick ‘Arbitration Hitch Holds Up FTAs’ The Australian (2 November 2012, p10).]
The remarkably well-attended and interactive 50th Anniversary Australia Japan Joint Business Conference took place in Sydney over 8-9 October. It was hosted by the Australian Committee, established in 1962 and comprising Australia-based firms involved with Japan. But the conference program was developed with its counterpart in Japan, which hosts there a Joint Conference in alternate years. This cooperative arrangement has become unusually close, and provides an inspiration for other bilateral business community centred relationships. (By contrast, for example, the Australia China Business Council hosts its own main events quite independently of those organised by its Chinese counterpart, comprising firms interested in doing business in Australia.) The Australia-Japan Committees’ arrangement is also very longstanding: the first joint conference took place in 1963 at the Tokyo Chamber of Commerce, with the second in 1964 at the Australian National University.
As ANU Emeritus Professor Peter Drysdale reminisced in his keynote address at this year’s conference in Sydney, this cooperative arrangement – and indeed the entire bilateral relationship between Australia and Japan – proved to be an unexpected success. After all, both countries were bitter foes during World War II. For several ensuing decades Australia maintained concerns about engaging with Asia, as well as trade liberalisation and inbound foreign investment more broadly, with Japan also habouring mercantilist tendencies.

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“Consumer Law and Policy in Australia and New Zealand” – and Beyond

As emphasised in this Blog for many years, Japan has accelerated its consumer law reforms over the last two decades. Australia has also introduced major amendments since 2009, in turn prompting pending initiatives in New Zealand.
Professor Justin Malbon and I recent completed co-editing the first research monograph examining recent Trans-Tasman developments, including significant comparisons with Japan (and beyond) particularly in chapter 3 (generally) and in chapter 8 (consumer product safety regulation). Our 15-chapter book will be published by Federation Press in Sydney in late January 2013.

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Japanese Business Law in Western Languages: An Annotated Selective Bibliography (2nd ed, Hein)

[This is the Preface and Table of Contents manuscript for the 2nd edition, published in 2013 by Hein.]
The literature in Western languages on Japanese law, especially in English and German, continues to proliferate – despite, or perhaps because of, Japan’s economic slowdown after its own “asset bubble” burst in 1990. Law reform has been particularly intense and widespread in business law, necessitating this second edition updating for important works published over the last 15 years.
In 1998 Harald Baum and Luke Nottage published the first edition of their Annotated Selective Bibliography of Japanese Business Law in Western Languages, building on a chapter in Baum’s compendium on Japanese business law published in German in 1994. A new version of the latter published in 2011 included a chapter by Baum, Nottage and Markus Thier listing subsequent works on Japanese business law. That chapter provided the core for the updated references in the second edition of the Annotated Selective Bibliography, co-authored also by Joel Rheuben, but this adds many more references. We also regrouped various chapters and introduced new chapters for fields of law such as Legal Education, Environmental Law, Communications and Information Technology, Employee and University Inventions, Consumer Protection, Product Liability, and Medical Law.
The present edition of the Annotated Selective Bibliography further comprehensively updates the annotated introduction to general works related to Japanese law and the economy, including a completely rewritten guide to finding Japanese business law materials via the internet (for a much briefer version in 2009, see here). Below we set out the rest of the Preface & Acknowledgements, along with the Table of Contents. This second edition went to press in August 2012 and will be published by Hein in early 2013. There are also plans for an e-book version that links to journal articles for subscribers to the HeinOnline database.

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Abandoning all Investor-State Dispute Settlement Mechanisms Also Not Supported by the Facts (updated 17 August)

I am glad the High Court of Australia rejected today the argument by major tobacco companies that Australia’s plain packaging legislation is an unconstitutional “acquisition” of their rights. I dislike those companies’ products, their marketing and their litigation strategies, and I support the plain packaging legislation. I’ve also made numerous submissions to the Australian government since 2005 seeking to improve safety regulation for general consumer goods – partially achieved in the 2010 “Australian Consumer Law”.
But I hope that the ongoing arbitration claim of “expropriation”, initiated by Philip Morris Asia under the 1993 Hong Kong – Australia bilateral investment treaty, does not feed into blanket rejection of any forms of investor-state dispute settlement (ISDS) in investment treaties. Although that system has flaws, it also has benefits, and there is ample scope to draft treaties to provide clear and appropriate mechanisms to balancing private and public interests. With others familiar with international investment law, I provide further examples of the most promising substantive and procedural law reforms in an Open Letter dated 28 July 2012, in response to a recent OECD Public Consultation on ISDS.
My comment will therefore address points made recently on The Conversation blog by Dr Kyla Tienhaara, who remains completely opposed to any form of ISDS. In fact, she urges the Gillard Government to try to excise ISDS from all Australia’s existing FTAs and investment treaties (dating back to 1988), in addition to eschewing them for future treaties – as the Government seems to be attempting, pursuant to its policy shift on ISDS announced in the 2011 Trade Policy Statement (TPS). An alternative is for the Government to approach Hong Kong authorities to seek agreement on amending the 1993 treaty to suspend PMA’s pending claim. More generally, Australia should consider including ISDS provisions in future treaties but expressly reserve its right to agree with the treaty partner to suspend particular types of claims, for example regarding public health issues. This compromise approach is already essentially found in investment treaty practice where the claim involves allegations of “expropriatory taxation”.

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Finding Legal Work in Japan – the “France of Asia”!

What does “Japan” evoke for you? Fine food, delicate design, pride in a long history and rich culture, powerful bureaucrats, some very big business? But it also has a sophisticated modern legal system, open to outside influences and impacting on other parts of the world – including Thailand, and more recently Cambodia and Vietnam. Just like France, in all these respects! To take the analogy even further: perhaps China is the “Germany of Asia” – now the slightly larger economy, with more focused politics, and a friendly rival for regional leadership.
On 20 August, Sydney Law School (SLS) will hold a student information session on legal practice and educational opportunities in Asia, kindly sponsored this year by “Herbert Smith Freehills”. Offshore units available for SLS course credit include the Kyoto and Tokyo Seminars in Japanese Law, co-taught by Australian- and Japan-based professors and practitioners, every February for Australian, other international and Ritsumeikan University Law School students. I also want to talk briefly about practice opportunities in Japan, based on my personal experience (as a “trainee” with Osaka law firms in the early 90s, while a postgraduate student at Kyoto University) and especially an excellent introduction to “finding legal work in Japan” written a few years ago by a SLS student (“Anon”, still living in Tokyo).

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