Luke Nottage – Page 25 – Japanese Law and the Asia-Pacific

Comparing Product Safety Re-Regulation in Australia: The Never-Ending Story

Product Safety is one major theme for the 4th Consumer Law Roundtable, hosted this year at Sydney Law School on 4 December 2009. Others include unfair contract terms and consumer credit, and this Roundtable will have an Asia-Pacific focus. Professor Michelle Tan will join us again from Japan, and keynote speakers are Professor Tsuneo Matsumoto (chair of Japan’s new Consumer Commission, which he outlines here) and VUW’s Kate Tokeley (considering unfair contract terms from a New Zealand perspective). A major role of the new Consumer Affairs Agency – supervised by Commission – is to collect and analyse consumer product-related accident data, which Japanese suppliers need to disclose since amendments in 2006.
Meanwhile, on 16 November the Australian Treasury initiated yet another public Consultation: “Regulatory Impact Statement – Australian Consumer Law – Best Practice Proposals and Product Safety Regime”. Before being considered for a Bill, a cost-benefit analysis (RIS) has been required for these proposals, based on consumer law reform recommendations from the Productivity Commission in 2008 other than those (especially unfair contract terms regulations) which were introduced as a separate Bill in July – without the extra hurdle of such a RIS analysis. Unfortunately, the Treasury did not publicise well this latest Consultation (eg not via their http://www.treasury.gov.au/consumerlaw/ portal) and required Submissions by 30 November. They wanted to report to the Ministerial Council of Consumer Affairs (MCCA), also scheduled for 4 December – alongside, incidentally, PM Rudd’s major conference on the Asia Pacific Community concept (see my revised blog on that here).
Despite this very tight deadline, I provided the following Submission in response to Part II (pp 82-98) of this consultation, regarding Product Safety (PS) re-regulation. I elaborated mainly on a few key points developed in my Submission to the first consultation on the Australian Consumer Law reform announced in February 2009. Hopefully Australia will finally join Japan and many other Asia-Pacific countries (China, Canada and the US) in adopting the new global standards for PS.

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Asia-Pacific Product Safety Regulation and Other Regional Architecture for a Post-FTA Era

Imagine an international regime with these institutional features:
1. Virtually free trade in goods and services, including a “mutual recognition” system whereby compliance with regulatory requirements in one jurisdiction (eg qualifications to practice law or requirements to offering securities to the public) basically means exemption from compliance with regulations in the other jurisdiction. And for sensitive areas, such as food safety, there is a trans-national regulator.
2. Virtually free movement of capital, underpinned by private sector and governmental initiatives.
3. Permanent residence available to nationals from the other jurisdiction (and strong pressure to maintain flexible rules about multiple nationality).
4. Treaties for regulatory cooperation, simple enforcement of judgments (a court ruling in one jurisdiction is treated virtually identically to a ruling of a local court), and to avoid double taxation (including a system for taxpayer-initiated arbitration among the member states).
5. Government commitment to harmonising business law more widely, eg now for consumer and competition law.
No, the answer is not the obvious one: I am NOT talking about the European Union (EU). I am referring to the Trans-Tasman framework built up between Australia and New Zealand, particularly over the last decade, sometimes through treaties (binding in international law) but sometimes in softer ways (eg parallel legislation in each country). And since both countries are actively pursuing bilateral and now some regional Free Trade Agreements (FTAs), especially in the Asia-Pacific region, can’t at least some of these Trans-Tasman initiatives become a template for a broader “Asia Pacific Community”?
This question is particularly timely as the new DPJ-led government in Japan, has declared its support not only for the WTO system but also for FTAs, particularly in the Asian region. It also advocates improvements in food and consumer product safety measures. Whether or not Australia is considered part of Asia, either by Japan or itself, the two countries are continuing bilateral FTA negotiations in the context of growing involvement in regional arrangements in the Asia-Pacific region. Such developments constitute one theme at the NZ Centre for International Economic Law conference, “Trade Agreements: Where Do We Go From Here?”, over 22-23 October 2009 in Wellington. Below is an edited introduction to my four-part paper, now available in further updated form as a Sydney Law School Research Paper. Powerpoint slides are also available in PDF here.

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Australia and Japan: A New Economic [and Legal!] Partnership in Asia

Emeritus Professor Peter Drysdale recently presented in Sydney a preview of his now-published consultancy report for Austrade, which urges (p3):
“a paradigm shift in thinking about Australia’s relationship with the Japanese economy. The Japanese market is no longer confined to Japan itself. It is a huge international market generated by the activities of Japanese business and investors, especially via production networks in Asia. It is a market enhanced by the economic cooperation programs of the Japanese government throughout the developing world, particularly in the Asian and Pacific region. And it is a market in which Japanese business now plays an increasingly important role from an Australian base in manufacturing, agriculture and services.”
The Australian Financial Review now confirms that Japan has led China and other Asian investors into Australia over the last year (“What Crisis? Asian Investors rush to our shores”, 24 September 2009). But many probably remain unaware of these facts highlighted by Drysdale’s report (pp 3-4):
“The stock of Japanese investment in Asia amounted to A$ 180 billion out of Japan’s global investment of A$ 772 billion at end-2008. The flow of export and import trade which Japanese business generates in Asia each year was US$ 690 billion in 2008. Procurements through Japanese corporate subsidiaries in Asia amount to A$ 1.2 trillion annually. In addition, Japan spent A$ 11 billion (901 billion yen) in Asia on Overseas Development Assistance programs and procurement through economic cooperation programs. Japanese business has now also established a platform for export to the region from Australia, with diversified investments across food, manufacturing as well as resources, that already delivers A$ 6 billion in Australian sales to Asian markets other than Japan. These are all large new elements in the economic relationship with Japan beyond the A$ 51 billion export trade and A$ 20 billion import trade that Australia already does each year with Japan itself.”
These pervasive economic ties are underpinned by very wide-ranging and stable relations between Australia and Japan at all sorts of levels: governmental, judicial, educational, working holidays, and so on. As pointed out in another recent report “Australia and Japan: Beyond the Mainstream”, by Manuel Panagiotopolous and Andrew Cornell for the Australia Japan Foundation, the GFC has led policy-makers as well as businesspeople to look again more favourably on relationships that combine lower risk with less return, compared to high risk/return ventures.
We can take advantage of these strong and still very profitable Australia-Japan bilateral relationships, as well as the investment and trading links each country (especially Japan) has developed in other parts of Asia particularly since the 1990s, by more actively joining Australian and Japanese partners for ventures throughout Asia. This spreads the risks typically associated with the possibility of higher returns, and also allows each partner to contribute goods or services in which that country has more of a comparative advantage. Thus, for example, Drysdale suggests (p25):
“partnership with Australian services firms in finance, legal services and engineering could be mutual productive. … In FTA talks with Japan the Rudd Government is trying to open the way for professional and financial services firms to set up in Japan, encouraging wider recognition of qualifications and the removal of barriers to obtaining licences in Japan”.
As an example of “legal and consultancy services”, Drysdale mentions that several Australian law firms have long experience in the Asian region, and gives the example of Mallesons Japan. But he concludes that “if we are serious about joining global supply chains and capturing service industry opportunities in Asia then Australian firms need to be there on the ground to capture the business”.

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Legal Education and the Profession in Australia, Japan, and Beyond

Following on from my previous report on Mr Akira Kawamura’s talk in Sydney about the significant transformations impacting on the legal profession in Japan, East Asia and world-wide, let us briefly consider also some inter-related changes to legal education in our region. ANJeL Judges-in-Residence Program Convenor Stacey Steele is co-editing, with Kathryn Taylor, “Legal Education in East Asia: Globalisation, Change and Contexts” (forthcoming in December from Routledge: ISBN 978-0-415-49433-5) to commemorate the late Professor Mal Smith, who did so much for ANJeL, Australia-Japan relations, and legal education particularly in the Asia-Pacific region. ANJeL Co-director Kent Anderson and Competitions Program Convenor Trevor Ryan have contributed a very useful chapter on “Gatekeepers: A Comparative Critique of Admission to the Legal Profession and Japan’s New Law Schools”, which they and Stacey have kindly shared with me in manuscript form.
Hopefully without stealing too much of their thunder, I would like to extend it to locate especially Australian legal education. Below are my opening remarks for a co-authored National Report on Topic I.D “The Role of Practice in Legal Education” for the 18th International Congress of Comparative Law, held four-yearly in different venues – this time from 25 July 2010 in Washington DC. Through the Sydney Centre for International Law, Professor Cheryl Saunders, Justice James Douglas and I have arranged for many other National Reporters on diverse topics selected for the Congress. We can also expect there many National Reports from Japan, although it remains to be seen whether anyone has volunteered one for the same Legal Education topic. There remains considerable uncertainty about Japan’s new postgraduate “Law School” programs and their relationship to the National Legal Examination system, as I explained in a paper first presented a conference organised by Stacey in Melbourne where the “gatekeeper” framework was first unveiled.

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Kawamura Connections: Tokyo Lawyers Go Global, All the Way With the IBA

Mr Akira Kawamura is senior partner in Anderson Mori & Tomotsune (AMT), one of Tokyo’s “big four” firms – each of which now has around 400-500 lawyers, compared to around 50 just a decade ago. He is also Vice-President of the International Bar Association (IBA), a federation of law societies from 136 countries comprising over 20,000 members world-wide. Kawamura-sensei is also one of Sydney Law School’s distinguished alumni, obtaining an LLM here in 1979, and he is a founding Advisor to the Australian Network for Japanese Law (ANJeL) as well as a generous donor for the ANJeL Akira Kawamura course prizes in Japanese Law. On 21 September he visited the new Law School building and spoke with staff and students about global legal practice, developments in Japan, and the work of the IBA.

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Japan’s New Quasi-Jury System and Video-Taping of Interrogations

Japan has reintroduced a system involving lay participation in serious criminal trials. As discussed in several Australian Network for Japanese Law (ANJeL) events over recent years, this saiban’in system involves randomly selected ‘Lay Judges’ and professional career judges jointly assessing the facts to reach a verdict, as well as deciding on sentences. The model is more Continental European than Anglo-American, but a shared concern is to bring the justice system closer to citizens’ everyday life – a guiding principle in the Judicial Reform Council’s Final Recommendations issued in 2001. Diverse dimensions to greater popular participation throughout Japan’s legal process, including also my study of how the Japanese government organizes its litigation services beyond the criminal justice sphere, will be the subject of ANJeL’s third book from Edward Elgar (forthcoming around December 2010, co-edited with Leon Wolff and Kent Anderson).
Legislation establishing this saiban’in system was enacted in 2004, but implementation was delayed for five years to allow all stakeholders to get used to the idea and many practical implications. (For example, many of the ANJeL Judges-in-Residence sent to Australia by the Supreme Court of Japan have carefully compared how this country manages jury trials, especially in connection with the media.) The enactment illustrates my previous point that the former Liberal Democratic Party (LDP) led coalition had already shifted away from more conservative stances even before its dramatic loss of power in the general election on 30 August this year. Even more ironically, although the first saiban’in trial took place without apparent mishap earlier that month, campaigns by the Democratic Party of Japan (DPJ) and other then-Opposition parties drew on growing concerns among the general public about actually having to serve as Lay Judges. Hopefully, however, Japan’s experience will become similar to Australia’s – where the general public is quite negative about serving on juries, but individual jurors afterwards report that it was a worthwhile experience. (A similar pattern is also observed in the US.)

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Lessons for Australia – How (Japan and) other countries are dealing with current consumer issues

Tezukayama University Professor Michelle Tan (who Commented recently on my previous blog on the new DPJ government and law reform) spoke with me on this topic at the big SOCAP (Society of Consumer Affairs Professionals) conference in Sydney over 25-6 August. Key conference themes were the impact of the GFC and world-wide recession, and the new nation-wide Australian Consumer Law reforms. We emphasised the need for Australia to unify consumer nation-wide by ‘trading up’ not only to best practice from among its states and territories, but also to emerging global standards. Our presentation compared developments in consumer policy/administration generally, product liability and safety, consumer credit and unfair contract terms, collective redress and consumer ADR. (Powerpoints and a related Working Paper are here, drawing on my various Submissions to aspects of Australia’s current consumer law reform program.)

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The New DPJ Government in Japan: Implications for Law Reform

Mainstream Australian media provided distressingly meager coverage of Japan’s exciting general election for the more powerful lower House of Representatives last Sunday, which saw a remarkable about-face. The centrist Democratic Party of Japan (DPJ) went from 115 to 308 seats, with allies SDP (the small leftover of the once-powerful Social Democratic Party) and the New Party Nippon taking another 7 and 3 seats respectively. Overall, these and other former Opposition parties took 340 seats, whereas the conservative ruling coalition suffered a massive defeat. The Liberal Democratic Party (LDP) dropped to 119 seats, from 300 before the election (and 296 in 2005, the previous election called by Junichiro Kozumi who then retired as Prime Minister). The Komeito dropped from 31 to 21 seats, meaning that the former ruling coalition now only has 140 seats. In short, the tables have turned almost completely since 2005, in a country (in)famous for its aversion to abrupt changes in direction.
This blog posting is the first of several thinking through this result and some implications for policy and law reform in Japan.

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Law, Public Policy and Economics in Japan and Australia: Reviewing Bilateral Relations and Commercial Regulation in 2009

This is the grand title of a modest Sydney Law School Research Paper (No 09/71) updating and editing another collection of my blog postings both here and on the East Asia Forum. Freely downloadable via http://ssrn.com/abstract=1446523, it is based mainly on developments from the end of 2008 through to mid-2009.
Many topics are important not only within Australia and Japan, but also potentially for bilateral relations (for example, as novel dimensions to the FTA or ‘Economic Partnership Agreement’ already under negotiation between these two countries). Several topics (for example, the state of economics as a discipline after the GFC, neo-communitarian perspectives on comparative law and society, the legacy of the post-War Occupation of Japan) also address more broadly how we should (re)conceptualise law, economics and public policy particularly in the Asia-Pacific context.

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Unfair Consumer Contracts Law Reform in Australia (at last), Japan and Europe

Compared to Australian and New Zealand legislation, Japan’s Consumer Contracts Act 2000 has quite narrow restrictions on the bargaining process leading up to the conclusion of contracts between consumers and commercial suppliers (Luke Nottage ‘Nihon-Nyujirando Shohishakeiyakuho [Consumer Contract Law in Japan and New Zealand]’ 1620 Toki no Horei 4-5, June 2000). But it adds a ‘general clause’ regulating unfair contract terms, voiding those that ‘impair the interests of consumers unilaterally against the fundamental principle’ of good faith under Civil Code Art 1(2), as well as targeting some specific types of terms. The Consumer Contracts Act also extends to all types of contracts (except employment contracts: Art 48), and defines ‘consumer’ broadly as any individual not contracting for a business purpose (Art 2).

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