Luke Nottage – Page 27 – Japanese Law and the Asia-Pacific

Birth (and Transfiguration?) of an Anti-Whaling Discourse

[Forthcoming (May 2009) in the Asia Pacific Journal of Environmental Law]
Every Australian summer, relations with Japan heat up over whaling. This New Year of the Ox is no exception. On 8 January 2009, a Japanese official reportedly called on Australia to deny port access to the Sea Shepherd Conservation Society’s protest ship, which has begun impeding the lethal research underway again by the Japanese whaling fleet in the Southern Ocean. But there is uncertainty over whether the ship’s activities amount to the alleged ‘sabotage’, and about the implications under national and international law. The editor of The Australian has also argued that Sea Shepherd is ‘On the wrong course’, and that Captain ‘Paul Watson’s zealotry at sea will not stop Japanese whaling’.
On the other hand, as a practical matter, it is hard for Australia to refuse entry to the ship. Sea Shepherd renamed it the Steve Irwin, after the nation’s recently-deceased iconic figure for conservationism – still (in)famous for his own larrikin image. Such symbolism, and the public photo of Paul Watson ‘standing resolute beneath a skull-and-crossbones flag’ highlighted by the editorialist, illustrates the impact of images and wider discourse in framing the contested issue of whaling. And that is the main thesis of USydney’s Dr Charlotte Epstein, in her new book on The Power of Words in International Relations: Birth of an Anti-Whaling Discourse (MIT Press, 2008, Cambridge, Mass. /
London, England (distributed in Australia by Footprint Books), ISBN 978-0-262-55069-7, xii + 333 pages). Her book should be required reading for government officials and others interested in this issue in Australia, Japan and beyond, because the work also helps explain the irony of each country adopting mutually contradictory positions when it comes to whaling. Economic and political interests do partly explain such internally inconsistent positions, but they also seem more likely to prevail when such material interests interact with a broader ‘discourse’, which can persist in different forms in different countries at different times.

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Alcohol deregulation in Japan: Vending machines and FTA-compliant taxes

[Originally posted, with full hyperlinks and various Comments, at http://eastasiaforum.org/author/lukenottage/]
Japan appeared finally to have recovered from its own financial crisis a decade ago, albeit at the cost of much accumulated government debt. But now the country has been hit by the collapse of its export markets and the rapid rise of the yen, following recession in the US and increasingly world-wide. Professor Iwao Nakatani, former Chairman of Sony, urges a radical shift in economic policy in Japan and elsewhere – from policy ‘based on neo-conservative economics and the philosophy of small government to one based on Keynesianism and welfare state ideology’.
Some may remain sceptical that Japan ever really embraced the former philosophy, and its ascendancy was certainly never as pronounced as in the US, the UK or then Australia – where market liberalisation tended to be linked closely to race politics (Mark Davis, The Land of Plenty, MUP 2008). But deregulation of alcohol distribution is one of Japan’s many transformations over the last decade. It is also the flipside of ever-stricter rules on drink driving, although they also reflect a broader trend towards criminalisation of socio-economic deviance (evident eg in product safety or consumer credit re-regulation).
On the other hand, deregulation is most notable in terms of where you can buy alcohol to celebrate this New Year of the Ox, namely vending machines and those ubiquitous convenience stores. It is less notable in what you pay especially for certain beer-substitutes, which mainly reflects differential tax rates. In fact, such rates may well violate WTO law. Yet there is probably not enough financial reward for potential beer exporters to encourage their home governments to sue Japan. So an implication may be for FTA negotiators (even those now from Australia) to seek some offsetting advantage in their overall bilateral deal with Japan. Yet that would further undermine the entire multilateral WTO framework.

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Traffic rules and alcohol regulation in Japan

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
If you are one of those many more short-term visitors to Japan nowadays, and even if you are an old hand, watch out for signs setting out various rules that may be unexpected or new. Like these two signs:
http://eastasiaforum.org/wp-content/uploads/2008/11/download.jpg?w=225
The bigger one to the bottom left is one of many signs we see increasingly around Japan in English (and sometimes now Chinese or Korean). The text is small but reads: “In the Beautification Enforcement Areas you will be fined up to 30,000 yen for littering regardless of your nationality or status”. The kind of prohibition and penalty you might expect in Singapore. Not in Japan, where local communities have long taken pride in being tidy – although that has not excluded individuals or dodgy firms from dumping their rubbish in distant communities! But what is meant by the round blue sign up on the right?

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Economics, Politics, Public Policy and Law in Japan and the Asia Pacific in 2008

All my blogs over July-October 2008, posted originally with full hyperlinks at http://eastasiaforum.org/author/lukenottage/], have been edited and updated as:
Nottage, Luke R., ‘Economics, Politics, Public Policy and Law in Japan, Australasia and the Pacific: Corporate Governance, Financial Crisis, and Consumer Product Safety in 2008’ (November 3, 2008) Sydney Law School Research Paper No. 08/134, Available at SSRN: http://ssrn.com/abstract=1295064 (and forthcoming, early 2009, in Ritsumeikan Law Review)
Some of the individual topics focused more directly on Japanese Law, asterisked below, are also available on this USydney blog:
* 1. Taking the Australia-Japan FTA negotiations to new levels
* 2. Whaling: What can law add to science, economics, ethics and politics?
3. Australia also should ‘Rail at Australian’s Tabloid Trash’ about Japan
* 4. Consumer over-indebtedness in Japan, Australia and the US
* 5. Dodgy foods and Chinese dumplings in Japan
* 6. FDI and corporate governance in Japan
* 7. Investor-state arbitration for Indonesia, Australia and Japan
8. Rivals: China, India and Japan – economic, not Olympic?
* 9. The politics of Japan’s new Takeovers Guidelines
* 10. Tables turned in Japanese and US financial markets
* 11. Lessons from Japan for the US financial crisis
* 12. The financial crisis – and loansharks in Japan and NZ
* 13. Consequences of melamine-laced milk for China, NZ, Japan and beyond
14. Political dynasties in Japan, the US, Australia … but not NZ?
* 15. A New Consumer Agency for Japan?

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A New Consumer Agency for Japan? Consumer Redress, Contracts and Product Safety

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
The Kyoto Shimbun reported last Wednesday the first de facto victory by a consumer representative group in injunction proceedings regarding unfair contract terms. The same page mentioned the Education Ministry’s response to the recent death of a sixth-year elementary student, who choked on some bread provided in school lunches – basically, ‘chew well’! By contrast, Japan’s largest manufacturer of konnyaku (konjac) jelly snacks, MannanLife, halted all production after a one-year-old boy choked to death on 29 July.
But that situation is rather different. It also more directly highlights when and how a new Consumer Agency (shohisha-cho) might emerge in Japan. Ex-PM Fukuda’s Cabinet approved a Bill, but it then resigned without putting it through. It is unclear when and how PM Aso will submit a new Bill, and what line the opposition DPJ will now take, especially given the uncertainty about a possible early general election.

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Consequences of melamine-laced milk for China, NZ, Japan and beyond

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
For weeks I have been tracking this latest evolving food safety scandal, but reports and reactions vary markedly across the region. Media coverage is likely to remain disparate. But the saga should provide lessons for developing bilateral and regional infrastructure to “trade up” to a more harmonized regime, better securing consumer product safety in our FTA era.
At a news conference this Wednesday the Chinese Health Ministry announced melamine limits for dairy products, but declined to provide updated statistics on those so far harmed by tainted products. In September the figures given were 53000 children sickened, 13000 hospitalised, and at least three dead from kidney stones due to drinking products made from milk that suppliers or intermediaries had bolstered with this chemical to hide the fact it had been watered down. Yet the government demands notification if Chinese lawyers decide to represent victims.

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The financial crisis – and loansharks in Japan and NZ

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
In Japanese banking, the big boys are back, as I explained last week: The Economist now confirms it. Indeed, the latter suggests that “if Japanese banks have any unique skill, it may well be in coping with crisis”. Not an obvious point, as evidenced by the collective dithering after Japan’s financial markets collapsed in the early 1990s or the almost completely unexpected 1995 Kobe earthquake. But I suppose the Japanese can be very good at responding systematically, once they establish the broad parameters of the problem.
Anyway, Mitsubishi UFJ has now proceeded to take 21% of Morgan Stanley, and is now considering further integrating its securities subsidiary (involved in US$18.3b of M&A advisory work involving Japanese companies in 2007) with Morgan’s Japanese arm (which did $17.9b). This would challenge Nomura, which did $34.2b (“Aiming to Rival Nomura”, Asahi Shimbun, 4-5 October, p 25); but the latter has also snapped up Lehman’s operations in Asia (mostly Tokyo), hoping to retain many staff to grow its own business.
And on Friday, the US government finally agreed on a public bailout plan for up to $700b, which I reviewed critically earlier in the week. Along with $85b for AIG and $29b for Bear Stearns, this amounts already to 5.8% of GDP, “well above the 3.7% of the savings-and-loan bail-out in the late 1980s and early 1990s” and significantly less than the 24% of GDP committed by Japan after 1997.

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Lessons from Japan for the US financial crisis

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
Many commentators are belatedly pointing out parallels between the financial markets boom and bust cycle in Japan over the 1980s and 1990s, and that now afflicting the US. However, especially when it comes to solutions for the US and hence the world economy, things are not quite as simple as envisaged by Japan’s then financial services minister, Yoshimi Watanabe, who proclaimed in March: “The US should follow Japan’s example and tackle its sub-prime loan problem using public money. The situation is exactly like what Japan saw 10 years ago”.

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Tables turned in Japanese and US financial markets

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
In 2003, financial journalist Gillian Tett wrote a book with a self-explanatory title: Saving the Sun: How Wall Street Mavericks Shook Up Japan’s Financial World and Made Billions (Harper Collins). It epitomized a school of thought proclaiming a dramatic shift in Japan towards US-style corporate governance more generally. On 24 September, still writing for the Financial Times, Tett concluded that if she were writing her book again, she “would give it a more upbeat slant. Anyone know the Japanese for ‘eating humble pie’?”. The Japan Society of Scotland has already suggested “sunao ni ayamaru (to apologise obediently without protesting)” or “memboku wo ushinau (to lose face)”! Japan’s big financial institutions are certainly now back on the world stage, picking up some big pieces from America’s own financial crisis. And Japanese policy-makers and other commentators now want to lecture the US on how to deal with it.
Who would have thought, even a year ago, that Nomura Securities would be buying up the now-insolvent Lehman Brothers’ operations in Asia (including those in Australia, involving a total 3000 employees – with half in Tokyo) and then Europe (2500 employees)? And for just US$225m and “a nominal sum”, respectively, out of cash reserves of almost $6b Nomura has raised since April? Or that Mitsubishi UFJ, which spent $3.5b to buy out the Union Bank of California, would now be committing up to $9b to take 10-20% of Morgan Stanley, another precarious “Big Five” Wall Street investment bank? Or that Sumitomo Mitsui, which recently spent $1b for 2% of Barclays bank in the UK (which in turn has bought Lehman’s US operations), is prepared to invest US$1-3b in Goldman Sachs if requested by that other precarious Wall Street firm? Or that Mizuho would have recently pumped $1.2b into Merrill Lynch, another troubled firm that took refuge with the Bank of America in a $50b merger announced on 15 September?

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The politics of Japan’s new Takeovers Guidelines

[Originally posted, with full hyperlinks, at http://eastasiaforum.org/author/lukenottage/]
As outlined in FDI and Corporate Governance in Japan, in the context of growing inbound FDI and M&A activity, Japan is developing a hybrid approach to setting parameters for hostile takeovers. It is worthwhile taking a closer look at a third Report recently from a Study Group playing a major role, along with the courts, in elaborating Guidelines on permissible defensive measures. The Group’s membership seems to be changing, and differences are emerging compared to both the Anglo-Australian and American approaches to substantive rules on takeovers as well as the process for defining them.

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