Lobbying in Japan

Full Transcript:

David: Hi, everyone. Welcome to Brand 2020, a series where we examine how Japan explains itself, presents its message, both overseas and internally. Today, we’re going to go just a little bit off script and look at the way Japanese companies and foreign companies get to present their messages to the Japanese government, to the regulatory system, etc… This is a subject of great concern, particularly, for foreign companies that have come into this country and don’t know exactly how the process works because it’s very different from the way things work overseas. Today, I have a very special guest who is one of the top experts on that field in Japan. Mr. Timothy Langley.

Tim: Thank you David. It’s awful uncomfortable to be in this position.

David: It’s a good position for you. Now, my notes say that you were the first foreigner to go on a diet in Japan.

Tim: Yes, I detox rather frequently, but a little bit different. Yes. I’m the first foreigner that worked inside the Diet, inside the Japanese Parliament.

David: Ah, the National Diet. I see. Okay

Tim: And with the last name like Langley you can understand how interesting that experience must have been.

[News] The relationship between the US and Japan has been strained lately over the matter of Japanese trade barriers. In Tokyo, Gordon Joseph has found an American import that may help ease the tensions. Senator Taro Nakayama finds himself in an unusual situation these days: his personal secretary often gets more attention than he does. 29 year-old Timothy Langley of Atlanta, Georgia, is the first American secretary to a Japanese senator. After three years of studying in Japan, he wanted more time to improve his Japanese. So he answered Nakayama help-wanted ad.

Young Tim: I thought it would be a really great opportunity. But I just I just send it kind of on a lark.

Senator Nakayama: Very lucky. For him and for me.

TV Reporter: And maybe for Japan the United States?

Senator Nakayama: Yes.

TV Reporter: By giving Langley an insider’s view of the Japanese political system, Nakayama feels, together, they might help reduce the kinds of misunderstandings which, he says, contribute to current Japanese-American trade friction.

Senator Nakayama: Better understanding is more important for both countries [News end].

David: When did you actually get that position at the Diet?

Tim: That was maybe thirty years ago, when anybody who looked like you or me walkingaround the Nagatacho area was just instantly triggered as a spy.

David: Of course. And there were no foreigners working in the diet at that time?

Tim: No foreigners working in the diet. There were foreigners, young foreigners, fellows like me, who had finished graduate school, who were travelling to Japan, or maybe on a grant of some sort, who were working for a parliamentarian on the outside office. But this is the first time for a foreigner to get a badge, a lapel badge, that gave him free access into the Diet complex.

David: That’s a big thing. To have that lapel badge. That’s a very big deal. I bet they weren’t too happy to give that to a foreigner. A lot of people inside the diet must have been a little bit uncomfortable with that.

Tim: It was actually kind of secret because it hadn’t been done before. So, most of the times, you’ve been here a long time too David, if it hasn’t been done before, therefore, it can’t be done. And the parliamentarian that hired me was a Senator from Osaka, had a lot of await behind him, and he said he was going to push it through. “So, Langley, you just you just bide your time and just smile”. Yeah, that’s but it was a great ride.

David: You must have seen a lot of things while you were working in the diet. And the one that I’m particularly interested in is the idea of, let’s say not just corporations, but let’s say outside organizations, various institutions, that have their own policy agenda; have something they want to put forward whether it’s selling a particular product or providing a service in the marketplace, and they need to have both politicians and regulators look with favor on that position. And from what I understand, a lot of organizations inside Japan have no problem going to the Diet, in various ways, expressing their ideas to various legislators. You must see a lot of that.

Tim: Sure. There are a couple of ways that one can influence the process. One of the ways is to go into the various ministry that is actually, you know, chumping down on how the regulations are applied: who is in the scope of their regulatory prowess, that sort thing. But then there’s the political end too, and that that would be in the upper-house or in the lower-house. So, people would come into the Diet offices with a request and in any particular day, you would say 30 or 40 people that would come in. “We have a request. We would like to meet with the member if he’s available. If he’s not then you’ll do just fine. Can I have five minutes of your time?”

David: Well, if that’s it, at that level, it’s not unlike the way legislators work all over the world, where individual constituents go in and say I have a request; there’s something I’d like to talk to the member about. That’s not unusual. But I’m looking more at the way, particularly, corporations want to influence policy and want to do more than just present their position on something. They want to actually influence decision-making, particularly, inside the Diet. You must have seen a little bit of that.

Tim: Well, there’s, you know, it runs the gamut. I mean from this side of the bell curve to this side of the bell curve, this is the pretty side, this is not very pretty side. And all of that happens and it takes all sorts of different kinds of people. And that’s why in a Diet office the space is rather small, you can fit maybe three or four people. Now with the new building you can fit maybe five or six people in there. So, any visitor that would come in would meet any one of two or three people. And in the old days, you’d only really meet with one or two people. And you would bring in your proposal and it would happen day after day. I mean you would visit the diet office on a rather frequent basis. Not always bringing goods and candies and gifts, and stuff like that, but frequently you would.

David: Interesting. So, people could actually bring presents for diet members?

Tim: Well, in Japanese culture, it’s rude to go visit somebody if you’re going to ask something by going, without having, tebura, without having some sort of a gift.

David: So, I could for example bring a large suitcase, full of cash, when I go to visit my diet member.

Tim: Usually, they don’t do it that way, and if it’s done, it’s not done inside the diet office: it would be done outside. That sort of thing does happen. A lot of people have gotten in trouble with that.

David: What about foreigners? You know, I mean, we come in, I’m speaking now on behalf of all foreign companies here, but we come to Japan, we don’t know how things work here. And, we just assume, well, it’s got to be pretty much like it is overseas. So, okay. We hear the Japanese go in and just buy favors and you know, “we’re on the wrong end of some regulation. We’d like things to go a little more our way”. What kind of foreign company do?

Tim: It’s a very difficult, very delicate process. There are laws, for example, if you’re an American, a Brit or an Australian, in your country that apply to you as a person doing business in a foreign country. So, in the United States, they have the Foreign Corrupt Practices Act that dictates how you can act in a foreign country with people who are legislating issues of with it within your realm of business. And if you are, you know, spending money on them taking them golfing and that sort of thing, there are certain requirements for reporting. And there are certain things that you can and cannot do. So, you can get into big trouble as a foreign company in Japan because of things that you’re doing here, back home. So, your company, your headquarters, can get in big trouble. But, similarly here in Japan, there are laws that govern how anybody can interact with a member of the Parliament and gift-giving and doing things that in some countries would be called bribes. Yeah, that’s very closely watched and people get in trouble a lot.

David: So things have changed a lot over the last several decades. You must have seen a lot of changes here. But like you mentioned, the Foreign Corrupt Practices Act in the U.S, that’s changed a lot of things. It wasn’t designed to affect Japan so much as other parts of the world, but it certainly affects here and it affects the way foreign companies do business here-

Tim: One of the interesting aspects of the United States economy is that foreign trade, goods and services, account for about 30 percent of GDP. So, it’s a big engine of growth there. So, you have to have people that are doing business overseas. So, yes, they get watched very carefully by the US regulators and also by their competitors. So, not only the regulators are going to catch you with your hands in the cookie jar but your competitors are going to tattle on you and say I think that they’re doing something they shouldn’t be doing and you might want to take a look at that, and here’s a document that I have, and here’s a receipt, that sort of thing.

David: Okay. Well, I’m maybe getting this wrong. But, it sounds to me, like Japanese companies in many ways have an edge and I certainly don’t mean linguistic, Japanese companies have an edge in that they know how to pour water, the better word, lobby their own government. Whereas foreign companies are sort of handcuffed by regulation by laws in their home countries, that make it virtually impossible to go out and do what we would normally consider lobbying.

[News] Young Tim: Business here in the diet, I imagine, it’s just like in any parliament or any government, the people that are running the government are supported by big businesses. When they want something done, they’ll come visit the senator, but you don’t see any Americans here doing that. I haven’t met anybody representing an American concern here, in the Diet, that comes to talk to the senator about his requests. Perhaps, the Americans just don’t know how to go about it. I think really in order to facilitate the understanding of the two countries, you have to have more people over here living and studying and being in Japan for long periods of time. And until that’s done, I don’t think you’re really going to be able to penetrate Japan, like the Americans would like to. [News end]

Tim: You’re hampered in a couple of ways. One is just the cultural way: the way you lobby, the way that you interact with somebody, the way you date, the way you try and make somebody like you or be interested in you. The cultural anchors are very different than in a lot of other countries. So, the Japanese know that, they’ve been groomed in it. They know the language, they know how to walk and talk. For foreigners that are coming here, number one, they’re standing out, there not part of the group They don’t have the right lingo even if you hire somebody that was a former member of the Parliament or a former Diet secretary. Representing a foreign interest is really a kind of a delicate dance that you have to be able to do and not many foreigners can do it. Well, but the more important part is that in Japanese politics the ‘Oldboy Network’ really dictates how things are done. So, those networks are built in grade school, in high school, and in college. Particularly, if you go into a graduate school, law school, or any kind of professional school, those networks are built and then they’re groomed in your first job, which usually, if you’re cream of the crop, is going to be your last job.

David: I see. Well, then how can a foreign company get its message across? How can a foreign company possibly present its agenda? We were talking, not long ago, about just as one example about Airbnb being apparently the victim of a sudden change in regulatory policy that, may or may not, have been the result of lobbying by Japanese industry. This kind of thing must go on all the time and, I would guess, in many cases, that foreign companies who are getting the short end of the stick. Is there any way that they can lobby the Japanese government?

Tim: That’s a great question. So, the the lobbying industry here in Japan is very… it’s in infant stage. There’s not a lot of regulation that’s governing it. It’s not like in the United States where you have to report where you’re getting your money, who you’re reporting to, what kinds of things that you’re involved, in what kind of services that you provide to a regulatory authority. We don’t have that here in Japan. But, also the Japanese don’t need really that kind of service provider. They have their own way of doing it. It’s usually in the president’s office or maybe in the marketing division, less so in General Affairs, they will have a team that does this on behalf of the president or on behalf of the board. The foreigners that come in, they’re usually going on a budget. Even if they’re generating a lot of revenue in Japan, one of the things that they’re not really focused on is having a legal team or even less so a government affairs team. So, government affairs would come after, maybe, compliance. So when you have your compliance personnel filled up, maybe you’re going to start thinking about having government affairs or public policy involved in your company. So, it really takes a bigger company to have that kind of bandwidth. But, even then, who are you going to hire? Who are you going to put in that kind of a position so that they can generate goodwill? They can project your image, the essence of what your company is, what the product is, what your issue is, and why I want you, Mr. Parliamentarian, to be interested in my issue, why it’s important to you as well as it is to me. Very difficult.

David: So, there are ways, I think I hear you saying, there are ways to lobby the Japanese government, but they’re not so visible. They’re not something that someone would have picked up overseas and come here with, it’s basically something that works in this particular market and it requires a great deal of expertise.

Tim: It’s basically homegrown. I mean it’s like if your mother wasn’t Japanese, it’s very difficult for you to be able to, you know, be so eloquent in Japanese. But, there are people like that. It’s just you know, they’re very rare and it’s a tough market and you know the cost of doing business here is very high too.

David: So, I would guess even most, let’s say, fortune 500 companies here, many of them will have government affairs officer, or something like that, a government relations officer, whatever they choose to call it. And they will have a specific brief about dealing with the Japanese government but they really won’t know anything, first hand about negotiating with, about lobbying the Japanese government. So what does a company do in that situation?

Tim: No, it’s really a unique kind of situation. So, most companies they’ll hire somebody who was working inside the diet, maybe a diet secretary or a failed member of parliament. He’s been in parliament once or twice and he failed in his election, so now he’s a free agent… something like that. Or, more frequently, they’ll hire somebody that’s been in the embassy, in the commercial division of the embassy, that has been facilitating the embassy or embassy issues throughout the Parliament and they think that those are a good match too. And almost universally those aren’t the right kind of individuals that you need, because the difference that you have when you’re representing your country, and now you’re representing a company, is very different: people don’t return your calls as quickly. And, similarly, if you’re a member of the parliament, or a former member of the parliament, or if you’re worked in the Diet, you know how to schmooze, you know how to get things done, but you don’t know how to really work; you don’t know how to write the PowerPoint, or do the communications with people who are making the decisions, and facilitate that relationship too. It’s not just this way to the your audience, your target audience, but you’ve also got to facilitate, you know, you’ve got to train and kind of mollify the people who are paying your salary too.

David: Well, what I’m getting from this is it’s not just a matter of knowledge: anyone can study how the system works. But this really requires a lot of hands-on experience, and there probably aren’t a lot of people in that position, which means that a lot of these corporate government relations officers have a certain amount of knowledge, we call it book knowledge, but they really don’t have the experience which means, sooner or later, they’re going to have to go outside the company and retain that kind of expertise. And, I’m sure you’ve seen a lot of probably your contemporaries and people who followed after you in the Diet who are now involved in that kind of service business.

Tim: Yeah, but more frequently what I find is that there are a couple of companies that have grown up to be public policy or government affairs houses; they’re maybe 10 or 15 that I would regard as reputable, who can’t handle issues and can do it with the flair and with the skill that’s necessary. But, that’s not very many for a country like this, for a city like this, for the amount of government affairs and public policy issues that come up through medical or through automobiles or through any kind of trade issues. It really needs a depth of knowledge and also great access into the political system. Not just the Diet, the parliament, but also into the various ministries as well. It’s a very complex area.

David: It sounds very interesting. Yeah, we’ll need to follow up on that a little more sometime down the road. Thank you very much.

Tim: Thank you.

David: How foreign companies are able to communicate with and hopefully affect policy in the Japanese government both on the political side and the regulatory side, a key issue for anyone trying to do business here. Stay tuned.