Policy Radar July 2019

Welcome July’s Policy Radar!

Langley Esquire’s initiative to deliver up-to-date information on political developments in the Japanese Diet: the Diet’s session ended on the 26th of June and the Government has been focusing on the triennial House of Councillors Election. Thus, the Government has done little in terms of agenda-setting or policy-making, so this month’s edition will focus on an analysis of the election, and a brief summary of policy developments in the Tobacco, Data and Trade industries.

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Upper-House Election Analysis:

General Picture of the Upper-House

Japan’s House of Councillors underwent on the 21st of July a general election to renovate half of its composition. The size of the upper-chamber, increased in this election by 3 seats to correct issues of malapportionment, is of 245 seats (124 seats contested in this election). The upper-house cannot be dissolved, meaning that the term of a legislator, unless he resigns, is of 6 uninterrupted years (2 more than any maximum a Representative in the lower-house may have). The mixed electoral system is composed of two components: i) a single non-transferable vote (SNTV) distribution system elects 74 seats in prefectural constituencies and ii) a nationwide proportional representation tier elects 50 seats. Under the SNTV tier, the size of the districts varies from 32 single-member districts and those of the 13 multimember districts (magnitude ranging from 2 to 6).

Turnout was significantly low at 48.8%, becoming the second lowest turnout rate since the Postwar Era began. The House of Councillors Election of 2016 saw 54.7%. The lowest turnout rate was from Tokushima Prefecture with only 38.59% and the highest was Yamagata Prefecture with 60.74%. Nonpartisan voters accounted for around 31% of the total electorate. Furthermore, teen voter turnout was only at 31%, presenting a sharp decline from the last upper-house election. The election also saw a record 17 million of votes casted early. Additionally, 28 female lawmakers (22% of the total seats contested) were elected during this election— 18 through the prefectural-based constituencies and 10 through the nationwide PR bloc; and so was the number of female candidates during the election campaign (28.1% of all candidates). This election was the first to be held under a 2018 law which encouraged parties to increase their efforts in equalling the ratio of elected men/women Diet members. However, in comparative terms, the law has had little success.

LDP Fails to Retain Majority of the House

The LDP won 57 out of the 124 seats for grab in Sunday’s election. 38 of those 57 seats came from the prefectural constituencies, while the rest (19) were secured through the nationwide proportional representation bloc. The LDP needed at least 67 seats if it wanted to retain the majority of the house, but fell short by 10 seats. Particularly strong performance was required in single-member districts: winning at least 31 of the 32 seats contested, but the LDP only secured 22 (the rest going to the various opposition parties and independents). The LDP lost key races in the Tohoku Area in the districts of Akita, Niigata, Yamagata, Miyagi and Iwate. The other seats contested under SNTV in multimember districts, the LDP won 16 seats out of the 42. Vote towards the LDP as party in the open-list proportional representation system reached about 40%, granting them 19 seats out of the total 50. Before the election, the LDP had a ruling majority of 123 seats. This time, with 67 of its 123 seats being contested, the LDP lost 10 seats down to a total of 113; insufficient for a 123 seats single-party majority in the house. The party also saw the biggest amount of swing votes received at 25.5% (swing votes are increasingly important as voters become more independent and less committed to party structures).

The Mainichi Shimbun, 2019/7/22

Komeito and Coalition Partners

Although the LDP was not able to retain a single-party majority in the house, it will rely on its ruling coalition partner, Komeito. The centrist party did particularly well by increasing its seats by 3, from 11 to 14. The party’s leader, Yamaguchi Natsuo, was elected without any issue ranking second in the Tokyo multimember district (magnitude 6). Komeito elected all of its 7 candidates through the multimember constituencies (Tokyo, Kanagawa, Saitama, Aichi, Osaka, Hyogo and Fukuoka) and 7 additional councillors through the proportional-tier bloc with 14% of the nationwide vote: an excellent showing. The newly elected 14 Komeito candidates added to its uncontested 14 councillors equals an impressive number of 28 legislators. The ruling coalition, formed of the LDP and Komeito, would total 141— way over the 123 number for the majority of the house—, 8 short from the number of seats they had in following the 2016 election.

The other party that did particularly well was Osaka’s Ishin-no-Kai securing 10 seats, adding up to a total amount of 16 seats in the upper-house. While the party did particularly well in the Kansai region (Osaka and Hyogo) and in the Tokyo and Kanagawa prefectural districts through SNTV, it also secured 6 seats through proportional representation. Even in collaboration with the LDP and Komeito, this is insufficient to maintain the 164 seats 2/3 majority in the House of Councillors (7 seats short). This would kill the Prime Minister’s pledge to reform the constitution if he is not able to seek concessions from the more conservative members of the opposition camp and independents.

Constitutional Democratic Party Strengthens Status as Main Opposition Party

The opposition camp did particularly well, with the Constitutional Democratic Party (CDP) electing 17 Diet members now adding up to 32 seats in the upper-chamber. The CDP was able to secure 9 seats through the SNTV system, winning only one of the 32 single-member districts. With around 16% of the nationwide vote, the leftist party garnered 8 lawmakers. Their performance was robust in the multimember districts, leaving the Democratic Party For the People (DPFP) with only 2 seats— with an additional seat won in the single-member district of Nagano. The DPFP won only 6 seats in this election, leaving them with a total number of 21. This poor result by the DPFP strengthens the CDP’s status as the main opposition party not only in the upper-house but in the whole of parliament. The performance of the rest of opposition parties is as follows: Japan Communist Party, 7 (3 through SNTV and 4 through PR) down from 8 seats; Social Democratic Party, 1 (0 through SNTV and 1 through PR) equalling to 2 total seats; newly established Reiwa Shinsengumi, 2 (0 through SNTV and 2 through PR); Anti-NHK, 1 (0 through SNTV and 1 through PR); and 9 opposition-backed independents, all elected through the prefectural constituencies. The opposition camp (including Osaka’s Ishin no Kai) garnered a total of 53 seats, now totalling an amount of 104 lawmakers in the House of Councillors.

Next steps?

While PM Abe falls short of the qualified majority necessary to revise the constitution, the party has pledged to convince members of the opposition to rally constitutional reform through a « flexible discussion ». Councillor Matsukawa remains hopeful that the LDP can convince some of the DPFP’s lawmakers into revising Article 9. However, she also noted that the priority for the administration is not Article 9, rather the economy and social welfare reform. Within the LDP’s proposal to reform the constitution, there are proposals seeking to strengthen access to public education for low-income families, increasing the government’s power during national disasters, as well as reforming the Diet apportionment electoral system.

Sources close to the Prime Minister have also hinted that he will be reshuffling the cabinet in early September prior to the next Extraordinary Diet Session in Autumn. The fate of some of his key Cabinet ministers still remains undecided, however it has been indicated that major posts occupied by Aso and Suga will be kept. On the one hand, LDP Policy Research Council and former Foreign Minister Kishida drew huge losses as all the incumbents he supported failed to win seats in his own constituency (Hiroshima) as well as in three other constituencies. On the other hand, Chief Cabinet Secretary Suga was able to secure several seats, even in Kishida’s home constituency, but was unsuccessful in electing other candidates. The race for Abe’s succession as president of the party remains unclear; LDP Secretary-General Nikai insisted that Abe should run for a fourth term in 2021.

While not openly admitted by the ruling party, it is clear that the results of the Upper-House elections are a blow to the Prime Minister’s quest to revise the constitution. The administration has already begun to diverge from the priority status given to constitutional reform to other issues more salient to the public (such as the economy and social welfare reform). The reshuffling of the cabinet is another diversion seeking to mirror the shift to other policy issues/concerns. It remains to be seen whether the Prime Minister can convince LDP members that a change in the political agenda is desirable and consequential with the party’s long held tenets.

Tobacco:

Revised Health Promotion Law aiming to ban smoking indoors comes into force

The revised Health Promotion Law aiming to ban smoking indoors in public places came into effect on early July. The law specifically targets « type-1 institutions » like government agencies and ministries, schools, universities and hospitals. Bars, restaurants, offices and railways buildings will have to face similar regulations from April next year— just in time for the Tokyo Summer Olympics. The law seeks to protect the most vulnerable from the effects of smoke. The amended law also stipulates fines for individual infractors (¥300,000) and for the facility managers who allow smoking (¥500,000). While indoor smoking in these facilities is completely prohibited, the law contemplates allowing smoking outside if there are isolated smoking areas. However, the Ministry of Health, Labour and Welfare has recommended that government agencies and municipalities are « not advised » to keep outdoor smoking areas near their premises. Most schools and hospitals have voluntarily banned smoking.

Data:

Fair Trade Commission’s privacy guidelines target e-giants

The Fair Trade Commission is set to strengthen oversight over internet giants (Google, Facebook etc…) due to « inappropriate collect and use of personal data ». Japan’s Fair Trade Commission is responsible for enforcement of the Antimonopoly Act, which prohibits companies from using their dominant position in the market to take advantage of others. It is also responsible for sending warnings over violations of the Act and sanctions if they fail to comply. Since the beginning of the year, the Commission has been preparing a set of guidelines that is set to include any use of personal information without the consent of the user is an « abuse of a [commercially] dominant position ». IT platform operators like Apple, Amazon, Facebook and Google are helping the Commission with the drafting of the guidelines.

Trade:

Japan imposes restrictions on companies trading with South Korea

The Japanese Government has issued an order earlier this month for companies to apply for government approval in the export of semiconductor manufacturing materials to South Korea. The materials consist of ship etching gas, photoresist and fluorinated polymides, essential for the production of chip making equipment and panels. These materials may still be exported to South Korea, however permission by the Government takes three months or more to be approved and it is necessary for every contract with a South Korean buyer. The Japanese government has argued that this export restriction is a response to the “occurrence of an inappropriate matter.” The South Korean Trade, Industry and Energy Ministry called Japan to ease what they call an unfair restriction of exports, suggesting having working-level meetings to resolve the issue. However, it was reported that after the meeting, trade officials did not come to any agreement. In response, the South Korean Government is set to approve a package deal to support domestic production of the targeted materials so as to combat trade restrictions with Tokyo. Experts warn Tokyo that a long-term restriction on these materials may see Japanese companies losing their market access to South Korea if the trade dispute does not bring a resolution soon.

Japan removes South Korea from White List

The Japanese Government plans to remove South Korean from its White List (a list containing the country’s preferred trading partners) due to a « significantly undermined trust » between the two counties over certain issues. If South Korea is removed from the list, it would force Japanese exporters to seek government approval before selling in South Korea (similar to the process described above). The White List refers to hundreds of products and technological equipment that can be used for military purposes. Countries on the list are able to benefit from an expedited trading process over materials and electronic parts that can be used for military means. However, the Government is still deciding which products from the White List are to be further restricted and how they will be restricted. The final decision by the Japanese Government will most likely be taken on August the 2nd, however trade officials warn that the decision to remove South Korea from the list has already been taken.

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