ACCJ Journal June 2009

¥800 | June 2009

Journal■ Understanding FCPA■ Labor laws: restructuring■ ACCJ Event full report ■ Comment: Nicholas Benes

ACCJ 2009 Diet DoorknoCk

Leaders emphasize advocacy and strong U.S.-Japan ties.

environmentAL SoLUtionS

SPECIAL AdvErtISINg SECtION

June 2009 | The Journal | 1

CONTENTS Volume 46 | Issue 6 | June 2009

FEATURESCOVER STORY

12 ACCJ 2009 Diet DoorknockIn one of the key events of the year, ACCJ leaders meet Japanese politicians to put advocacy issues on the table and reiterate the strong U.S.-Japan relationship. By Julian Ryall

ACCJ 2009年国会議員訪問今年の主要イベントの1つとしてACCJ首脳陣が、日本の政治家を訪ねて提言を伝えるとともに緊密な日米関係の重要性を訴えた。文／ジュリアン・リアル

22 FCPA ExplainedImplications of the Foreign Corrupt Practices Act. By Jeffrey C. Ng

FCPA解説海外腐敗行為防止法（FCPA）の影響。文／ジェフリー・C・Ng

28 ACCJ EventHow to Build Great Relationships with Japanese Clients. By Julian Ryall

ACCJイベント日本の顧客と良好な関係を築く秘訣とは。文／ジュリアン・リアル

32 Pensions: Crisis ManagementIn a fi nancial crisis, company superannuation plans pose enormous risks. By Martin Foster

年金：危機管理金融危機を背景に、企業の退職年金制度に重大なリスクが生じている。文／マーティン・フォスター

36 Restructuring in a RecessionACCJ observations on Japan’s employment environment. By Tish Robinson, Ph.D.

景気後退期の事業再構築日本の雇用環境に対するACCJの見解。文／ティシュ・ロビンソン博士

12

ACCJ MissionFurther the development of commerce between the United States of America and Japan, promote the interests of U.S. companies and members, and improve the international business environment in Japan.

2 | The Journal | June 2009

DEPARTMENTS9 Note from the Editor

11 President’s Message

17 Media Watch Ginza shift. Car share. Habits survey. Sales tips. Women choose guesthouses. Wedding

rings. New hires’ accommodation.

26 On the Spot David Hilfman, Senior Vice President, Worldwide Sales at Continental Airlines, Inc., is

interviewed by Julian Ryall.

30 Opinion Leader JTP Corporation President Nicholas Benes is Chair of the ACCJ’s Foreign Direct

Investment Committee and was Chair of the FDI Task Force.オピニオンリーダーニコラス・ベネシュ氏：株式会社ジェイ・ティ・ピー代表取締役でACCJ対日直接投資委員会委員長、元FDIタスクフォース委員長。

34 Jesper Koll Writes First in a series of monthly columns by the foremost foreign commentator on

business in Japan.

40 Events Line-up Business and leisure-related happenings in June. By David Umeda

43 Out and About Speakers, members and guests photographed at recent ACCJ events.

47 FDI Portfolio Autopsy service. Georgia market. Job trends. Popular conbini. Thai broadband.

By Julian Ryall and Nicole Fall

50 Business Profile Hotelier Christian Hassing is General Manager and Director of the Mandarin

Oriental, Tokyo. By Julian Ryall

53 Behind the Book Globalization n. the irrational fear that someone in China will take your job by

Bruce C. Greenwald and Judd Kahn, is reviewed by Tom Baker.

54 Advocacy Update ACCJ Viewpoints

56 In the Final Analysis By Samuel H. Kidder, ACCJ Executive Director

CONTENTS Volume 46 | Issue 6 | June 2009

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ACCJ LeadersPresident

Thomas W. Whitson KPMG FAS Co., Ltd.

ChairmanAllan D. Smith AIG Companies, Japan and Korea

Vice PresidentsMichael J. Alfant Fusion Systems Japan Co., Ltd.Laurence W. Bates General Electric Japan, Ltd.

William R. Bishop, Jr. Nippon Becton Dickinson Co., Ltd.Michael D. Bobrove (Kansai) Nihon Medrad K.K.Kumi Sato Cosmo Public Relations Corporation

Mark F. Schwab United Airlines, Inc.Chris Zarodkiewicz (Chubu) Cezars International K.K.

TreasurerNasir Majid PricewaterhouseCoopersBrett Jensen (Kansai) Colliers Hallifax

Steve Burson (Chubu) H&R Consultants

ACCJ GovernorsAndrew Conrad Aflac International, Inc.

Christopher K. Ellis Chrysler Japan Company, Ltd.Bruce J. Ellsworth Johnson & Johnson Family of Companies

James Foster Microsoft JapanHarry Hill (Chubu) Oak Lawn Marketing, Inc.

Tad Johnson Pratt & Whitney Aftermarket Japan KKJohn Kakinuki GE Consumer Finance Co., Ltd.

Jiri Mestecky Kitahama Partners L.P.C.Patricia O’Keefe USC International Offices-Tokyo

Douglas L. Peterson Nikko Citi Holdings Inc.Nicole W. Piasecki Boeing Japan

Jay Ponazecki Morrison & Forester LLPMitsuyo Teramura Federal Express Corporation

Jim Weisser PBXL

ACCJ Executive StaffSamuel H. Kidder Executive Director

Aron Kremer Deputy Executive Director

ACCJ CommitteesAmerican Auto Industry Rick Brown

Architecture, Construction & Real Estate Kevyn Johnson/Michael P. KingAsia Business Philip C. Jones

B2B Sales Karl Hahne/Craig SaphinBanking and Finance Thomas Clark/Ernfred Olsen

CEO Forum Charles DuncanCharity Ball Barbara Hancock

Competition Policy Task Force Robert GrondineCorporate Social Responsibility Patricia Bader-Johnston

Direct Marketing Joseph PetersEnvironmental Naoki Arai

Financial Services Forum Charles D. Lake IIFood and Agriculture Collin Benson

Foreign Direct Investment Nicholas BenesGovernment Relations Ira Wolf

Healthcare Steve PlunkettHuman Resource Management Chris Lamatsch, Adam Kassab

Independent Business Doug JacksonInformation, Communications & Technology Darren McKellin, Ann Rollins

Insurance Nate Graddy/Jonathan MalamudIntellectual Property David Case

International Education Patrick NewellInternet Economy Task Force Yoshitaka Sugihara

Investment Management David MonroeLegal Services Arshad Karim/Eric Sedlak

Corporate Counsel Clair ChinoMarketing Programs Dominic Carter/Koichi Hama

Membership Relations Andrew SilbermanPrivatization Task Force David Hoover

Retail TBASecurities Douglas Hymas

Soft Landing Task Force Adam Kassab/Mariko NakazonoSpecial Events Barry Bergmann

Young Professionals Group John Ghanotakis/Daniel LintzTaxation Jack Bird/Michael Shikuma

Toiletries, Cosmetics & Fragrances Yukiko TsujimotoTransportation and Logistics Jeff Bernier/Jeremy Goldstrich

Travel Industry Kayoko Inoue/Vincent You University Briefing Program Richard May/David Satterwhite

Kansai ChapterBusiness Programs Pabel Delgado

Community Service Kojiro DanExternal Affairs Kiran SethiLiving in Kansai Barry Louie

Membership Paul DupuisWomen in Business Mari Nogami

Chubu ChapterCommunity Service Steve Burson

Independent Business Chris Oostyen/Jason MorganLiving in Chubu Lowell Sheppard

Membership Relations Chris ZarodkiewiczPrograms Steve Brown

American Chamber of Commerce in JapanMasonic 39 MT Bldg. 10F, 2-4-5 Azabudai

Minato-ku, Tokyo, Japan 106-0041Tel: 03-3433-5381 Fax: 03-3433-8454

www.accj.or.jp / www.ecentral.jp

The ACCJ is an independent membership organization with no affiliation with any government or other chamber of commerce. The ACCJ is a member of the

Asia Pacific Council of American Chambers and values its relationships with Japanese, American and other nations’ business organizations.

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14 YEARS DELIVERING RESULTSTel 03.3438-0833Fax [email protected]

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COLUMNISTSTom Baker, Nicole Fall, Mark Schreiber

CONTRIBUTORSAlana R. Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Darren McKellin, Tony McNicol,

Anthony H. Rowley, Julian Ryall, Catherine Shaw, Richard Smith, Jeffrey Tanenhaus

PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk

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NOTE FROM THE EDITOR

The Journal’s fi rst Diet Doorknock full report since April 2002 reveals how this key ACCJ event has grown and evolved since its inauguration

in 1994. One constant, however, has been the time-consuming and selfl ess role of ACCJ members in organizing and successfully carrying out this key initiative.

For many of the ACCJ volunteers who planned for months to participate, it is a unique opportunity to learn fi rst hand about the political process in Japan. Although many Japanese politicians—including at least four Prime Ministers—have encountered ACCJ Doorknocks before, it was also a great chance for the Chamber to further raise awareness across the political spectrum of the ACCJ’s contribution to the policy debate through advocacy activities and recommendations.

Although early Doorknocks at the height of prickly U.S.-Japan trade relations were a great success, they were perceived with a measure of suspicion by some Japanese lawmakers. As antagonistic rhetoric was exchanged over issues such as market access and deregulation, who can forget the critics smashing electronic goods on the steps of the Capitol in

Washington, D.C. and Detroit automakers voicing their dismay over import barriers in Japan?

U.S. business leaders actually meeting with Japan’s political elite soon made headlines in Japan and the U.S.

The main mission of early Doorknocks was to make Diet members aware of the ACCJ and its key objectives. These days, however, a number of meetings can get straight to the point as many of the ACCJ

members and politicians have already met and the Japanese side clearly understands the ACCJ’s objectives.

Preparation starts with ACCJ leaders assessing the political situation and choosing dates. ACCJ Committees are then notifi ed and preparation begins on industry-specifi c advocacy points. Key Diet and Cabinet members are identifi ed and meetings with them are requested. Finally, ACCJ messages are honed before the Doorknock teams are formed.

As the Doorknock nears, meeting dates are revised and confi rmed as busy politicians strive to accommodate the Doorknock. ACCJ members rehearse their presentations and pose numerous questions to organizers.

On the Doorknock days, armed with Viewpoints, notebooks and disposable cameras, ACCJ members assemble at the Diet building before walking to their meetings. After this “foot in the door” exercise, the real work of improving the international business environment in Japan for ACCJ members can begin. ■

Behind the Diet Doorknock

Simon Farrell [email protected]

12

Spread the Word

Advocacy Networking

InformationIf anyone in your valued network is not an ACCJ member yet, help sign them up. Recommend a new member to connect the best in business.

Call us at 03-3433-7304 for more information.

American Chamber of Commerce in Japan

Bringing Businesses Together for 61 Years


Thomas Whitson is ACCJ [email protected]

PRESIDENT’S MESSAGE

Half-term Highlights

The year is nearly half over and I think the Chamber is doing pretty well under the circumstances. While we make contingency plans for fi nancial

disaster, careful attention to costs and member support for ACCJ programs has resulted in profi ts so far this year.

I would like to thank everyone who helped me with the transition and have continued to educate me and cooperate with our goals for the Chamber. Although the ACCJ President’s job is a lot more work than I ever imagined, I am having a lot more fun than I expected. The high point so far was the chance to meet my old high school classmate on her fi rst foreign trip after being named U.S. Secretary of State.

Executive Director Sam Kidder and other friends at the U.S. Embassy sneaked me into the Embassy’s Meet and Greet. This is the U.S. Department of State’s open community session where the Secretary gives a rousing speech thanking the Embassy employees and their families (including Japanese staffers) for their hard work. It was a really good example of how a CEO can connect to the people that make the organization successful around the globe and I thought she reinforced the right messages. More CEOs should take the opportunity of overseas trips to recognize and thank the people who make their success possible.

Hillary Rodham Clinton was a very active and popular senior when I was a freshman in high school. She served

on the Student Council, supported Republican (!) candidates in the school’s mock political convention, co-chaired the Anti-vandalism Committee (similar to her current job?), and won the Daughters of the American Revolution Citizenship Award. Of particular interest was a December 1964 interview in the school newspaper that showed she planned to get a law degree. The most telling quote answered the question about her ambition in high school, “To marry a Senator and settle down in Georgetown.”

It is really unusual to have such a specifi c dream at age 18. To exceed it by such a margin is really almost scary. Nevertheless, I think that President Obama’s willingness to bring her into his Cabinet in such an important position is a great example of the strength of U.S. democracy and his confi dence as a leader.

In case you ask, she had absolutely no recollection or memory of me being at her school. ■

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Maine South High School graduates Tom Whitson (‘68) and U.S. Secretary of State Hillary Rodham Clinton (‘65) discuss the journalism standards of a 1964 issue of their school newspaper at the U.S. Embassy Meet and Greet in Tokyo on February 17.

The ACCJ congratulates William E. Franklin, former ACCJ President (1988-1990), for being awarded The

Order of the Rising Sun, Gold Rays with Neck Ribbon by His Majesty the Emperor of Japan on April 29th, in recognition of his contribution to the strengthening of political and economic relations between

Japan and the United States, and to the development of Japan’s wood product industry.

See the ACCJ Web site for more details: www.accj.or.jp


The Chamber has knocked on Japanese politicians’ doors 13 times since 1981, but this year’s campaign has argu-ably seen the most positive

reactions and responses since it was fi rst decided to reach out to the Diet’s most infl uential leaders. This year, like never before, Japan’s policy makers had read up on the issues in advance, had plenty of questions and were keen to hear the Chamber’s messages, according to some of those who took part.

In a coordinated three-day effort, from February 17 to 19, led by ACCJ President and KPMG FAS Co., Ltd. partner Thomas W. Whitson, 72 business leaders from the Chamber held talks with 58 politicians, including three Cabinet members of the ruling Liberal Democratic Party and four in the shadow cabinet of the opposition Democratic Party of Japan.

Even shifting what has become an annual event in recent years from the traditional month of November—out of concerns that opportunities to speak with Japanese politicians would be curtailed if Prime Minister Taro Aso went ahead and called a general election, as appeared likely at the time—had no negative impact on access.

Indeed, the timing was just perfect in one other way, according to Laurence W. Bates, general counsel for GE Japan Corpo-ration and a vice president of the Chamber.

“We traditionally do the Doorknock in the fall, but we delayed it this time because we didn’t want to coincide with the election,” says Bates, who also chairs the Chamber’s External Affairs Advisory Council. “But it all worked out very well in the end because—completely by coinci-dence—we had our fi rst meetings on the same day that Secretary of State Hillary

Clinton arrived in Japan on her fi rst over-seas trip since being sworn into offi ce.

“We found that really set the tone for the event, especially when she extended the invitation to Mr. Aso to be the fi rst foreign leader to travel to Washington to meet President Barack Obama,” he says.

“The timing really could not have been better,” he adds. “It really served to highlight in many peoples’ minds the continuing importance of the U.S.-Japan relationship.”

In the year that marks the 60th anniversary of the Chamber in Japan, the members reiterated their commitment to this country’s growth and prosperity, and emphasized again the contributions that American businesses have made to both fi rms and society here. But in a year that has witnessed major economic challenges on both sides of the Pacifi c, the message that was repeated was that

ACCJ 2009 Diet DoorknockFOCUS ON COOPERATION, GROWTH, PROSPERITY AND FREE-MARKET REFORM.By Julian Ryall


ACCJ 2009 DIET DOORKNOCK

it is more imperative than ever for both countries to work together to achieve progress in some of the areas that the Chamber has identifi ed in its Core Advocacy Principles, which were updated earlier this year.

“I think that at this time of crisis it’s a good opportunity for us both to go back to basics,” says ACCJ Governor Andrew J. Conrad, senior vice president and counsel for Afl ac International Inc., and chairman of the Chamber’s Government Relations Committee during the Doorknock. “We are committed to Japan. For many of our companies, it is the most important market overseas. We cannot exist without Japan, and the success of this country is intimately linked with the success of our companies.

“But beyond just coming in and getting out again, we are interested in the long term, and we want to be good corpo-rate citizens,” he says. “We believe that embracing our core advocacy principles will be good not only for business in Japan, but for Japanese society overall.”

Consistent with the Chamber’s mission of further developing commerce between the world’s two largest economies, the ACCJ Core Advocacy principles include a commitment to free market principles with appropriate regulation, ensuring a level playing fi eld for existing and poten-tial market participants—which includes avoiding protectionism, a transparent and fair process, the adoption of global best practices—and engaging in corporate social responsibility. Future aims include closer economic integration between the two nations.

The Chamber identifi ed nine key areas as its advocacy issues for this year, including reforms to the fi nancial system that bring Japan’s markets in line with the key principles singled out by the G-20 and the Financial Stability Forum. Other issues involve changes to the health-care system that ensure innovative new technologies and pharmaceuticals are available to patients here. Improvements in the physical infrastructure of the avia-tion and railway industries here are also sought. Improving the regulatory process

for consumer products and foods, as well as introducing global best practices for advertising claims in this area, are other advocacy issues.

The Chamber wants to see changes in the legal arena that will make it easier for foreign lawyers to practice here, and also ensure that the postal privatization process is transparent and that conditions on equivalent competition are met before Japan Post introduces new products. Tax rules on cross-border and domestic corpo-rate reorganizations need to be addressed, as does the company law provision on the identifi cation of “outside directors.” Due process standards also need to be estab-lished in a competition policy.

The delegates who met with Japanese politicians specializing in these areas were broadly optimistic that change might be forthcoming in the months and years ahead. The area of information technology and communications was identifi ed as having the most potential in the near future.

“A key goal for our participation in the Doorknock was to brief Diet members on our plans to produce a White Paper on Japan’s Internet Economy,” says Jim Foster, director of corporate affairs at Microsoft Co., Ltd. and vice-chairman of the Cham-ber’s Internet Economy Task Force.

“This would cover both regulatory issues related to competition policy, privacy and security, copyright and government rule-making, and IT utilization issues,” he adds,

“particularly in the areas of government services, education, healthcare, online commerce and the environment.

“The Internet is increasingly the driving force of a modern economy,” says Foster.

“We want to promote the development of regulatory initiatives and business practices that help Japan realize the full potential of this revolutionary technology.”

And the response from the Diet members he met in six rounds of talks over three days was encouraging, says Foster.

“There is a strong appreciation of the role of the Internet in promoting innova-tion and growth, and of the role of foreign companies in bringing this to Japan,” he says. “We only allocated a half-hour for each session, but often found that the Diet members wanted to learn more about our views and expressed strong support for drafting of the White Paper.”

The task force is aiming to have the White Paper completed in June.

“In previous years, I got the impres-sion that the politicians were far more internally focused and worried about the domestic economy, but this year it was quite different,” says Vivian Tokai, director of government relations at GE Japan Corporation and vice-chair of the Cham-ber’s Government Relations Committee.

“We seemed to be asked more questions about the state of the U.S. economy, for example, and the Obama administration. I think the most frequently asked question

Left to Right: ACCJ Governor John Kakinuki, President Thomas Whitson, Minister In Charge of Administrative Reform Akira Amari, Vice President William Bishop, and Governor Christopher Ellis.

Find out what all the whispering is about.

©2008 United Air Lines, Inc. All Rights Reserved.

unitedairlines.co.jp

10_IPPFlyer_v4.indd 1 08.11.20 3:46:42 PM


was about whether the U.S. is moving towards protectionism,” she says. “I felt they were becoming more external in their outlook; and that may be, because the global economy is experiencing problems, and they are worried about the future and are looking for hints from the U.S.”

While the Chamber cannot comment on future decisions by the U.S. government, the ACCJ remains as committed as always to free market principles, putting the appropriate regulations in where necessary, ensuring transparency and a level playing fi eld, says Bates.

“I found that, while meetings were often scheduled to last 20 minutes, the politicians would often give us much more time and showed an extraordinary level of

engagement and commitment this time around,” says Patricia Bader-Johnston, representative director of Silverbirch Associates K.K. and chair of the Chamber’s CSR Committee. “I’ve noticed changes in the last few years, but I get the sense that we are moving less from lobbying Japan’s politicians to a more cooperative, information-sharing relationship.”

Afl ac’s Conrad agrees with that assessment and says he was pleased that none of the politicians he met seemed interested in lecturing the U.S. government or companies on the state of the global economy.

“Instead, we found a spirit of cooperation and the broader recognition that we’re both in this together and that

we need to work on it together to make it better,” he says.

With the messages delivered to a welcoming audience in Japan, attention now turns to the companion Doorknock event in Washington, D.C. Around 10 senior members of the Chamber will be traveling to Capitol Hill in the near future for three days of between seven and 10 “pretty intensive” meetings a day, according to Bates, with representatives who are already working on issues in Japan and those who have leadership roles in ensuring free trade and relations with countries in Asia. ■

ACCJ 2009 DIET DOORKNOCK

Julian Ryall is The Daily Telegraph’s Tokyo correspondent.

Left to right: ACCJ Chairman Allan Smith, Financial Services Forum Vice Chair Christopher LaFleur, LDP Diet Member the Hon. Kotaro Tamura, Banking and Finance Committee Co-Chair Thomas Clark, and Governor Tad Johnson.

Left to Right: ACCJ Banking and Finance Committee Vice-Chair Yukio Yoshimura, Securities Committee Chair Douglas Hymas, DPJ Diet Member the Hon. Masaharu Nakagawa, Insurance Committee Co-Chair Nathaniel Graddy, and Internet Economy Task Force member Kevin Yu.

Left to Right: ACCJ President Thomas Whitson, LDP Diet Member the Hon. Seiko Hashimoto, Medical Devices and Diagnostics Committee Vice Chair Makoto Tamura, Governor Jim Weisser, and Healthcare IT Committee Vice Chair Jean-Pierre Bolat.

Left to Right: ACCJ Internet Economy Task Force member Hiro Kawabata, Governor John Kakinuki, LDP Diet Member the Hon. Takashi Sasagawa, Transportation and Logistics Committee Co-Chair Jeremy Goldstrich, and Government Relations Committee Vice-Chair Vivian Tokai.

10_IPPFlyer_v4.indd 1 08.11.20 3:46:42 PM

At Merrill Lynch, one of our guiding principles is Responsible Citizenship.

In Japan, we actively support local and global charities and sponsor

activities that aid community development.

Merrill Lynch is a proud supporter of the Run for the Cure® Foundation,

which seeks to eradicate breast cancer in Japan as a life-threatening

disease though education, timely screening, and treatment.


MEDIA WATCH

Along with work sharing, it appears that car sharing has been picking up momentum. These are not motor pools, however, but rather a high-tech means of enabling a vehicle to be driven by more than one person.

The evening tabloid Nikkan Gendai (Apr. 1) reports that the number of users has doubled over the past year. New members receive an IC card that unlocks the reserved vehicle at a designated pickup point. Since user fees are charged for time increments of as little as 15 or 30 minutes, expense is generally lower than for conventional car rentals, which require a six-hour minimum.

ORIX Auto Corporation charges ¥5,250 for membership and ¥1,480 for the IC card. The basic monthly charge for its “A” plan is ¥2,980 for a 1- to 1.5-liter compact, to which is added a charge of ¥190 per every 15 minutes of rental and ¥15 per kilometer

driven. Three hours of using this system will come to under ¥3,000, according to an ORIX spokesperson.

“These prices cover all charges for fuel, insurance and taxes,” the spokesperson tells the Nikkan Gendai. “And members can use cars at stations nationwide, so they can use trains or domestic air for the longer portion of their journeys, and have a car waiting for them upon arrival.”

Mitsui & Co., Ltd., JR East (East Japan Railway Company) and parking lot operator Park24 Co., Ltd. have tied up with ORIX in the scheme, with plans for vehicles to be available at all 29 stations along Tokyo’s Yamanote loop line.

Car Sharing

New GinzaTwenty years ago, Australian marketing guru George Fields published Gucci on the Ginza: Japan’s New Consumer Generation.

But Tokyo’s consumer mecca is feeling the pinch of the recession; and, as Nikkan Gendai (Mar. 7) reports, French fashion designer brand Louis Vuitton backed off from plans to acquire a location for another shop adjacent to the Ginza’s Sukiyabashi intersection. In its stead, The Gap secured the land, and is proceeding with construction of another shop that the U.S. casual clothing chain plans to open in February 2011.

Vuitton, Cartier, Tiffany and other deluxe designer brands are encountering slumping demand for their high-ticket accessories, which had enjoyed popularity among the denizens of the local night scene and single females in their twenties. The Ginza may be evolving into the place to shop for inexpensive casual duds as well. Already UNIQLO (Japan’s Fast Retailing Co., Ltd.), the Zara brand (Spain’s Inditex Group) and H&M (Sweden’s Hennes & Mauritz AB) have been attracting crowds of customers.

“On the opening day of the H&M budget clothing store in the Ginza, 8,000 people waited in line to get in,” a fashion expert tells the tabloid. “Abercrombie & Fitch is also planning to open its fl agship store in Asia in the Ginza within this year. But The Gap is not standing still, and will open a big outlet as part of its rollback strategy.”


The results of Hakuhodo Inc.’s Global Habit 2008 survey were reported in the Nikkei Marketing Journal (Mar. 18). The ad agency last year conducted interview-type surveys of 500 to 800 affl uent consumers in 14 major cities in China, Taiwan, South Korea, Singapore, Thailand, Indonesia, Malaysia, Philippines, Vietnam and India, plus Moscow.

Japanese products were rated particularly high in quality at 43.0%. Other categories included neat and fashionable; having clearly distinguishable characteristics; enjoyable; convey

liveliness and energy; and are competitively priced. Ranked overall, products from Japan outstripped those from Europe (34.3), the U.S. (33.3), South Korea (30.4) and China (21.2).

When asked which items they associated most closely with Japan, electric appliances and AV were ranked highest at 72.3%—followed by cars (67.1), digital products (62.1), animated cartoons and manga (49.3), and foodstuffs (37.0).

The survey noted that, though ranked highest in quality, Japan-made products tended to be less favored in how they respond quickly to demand and for stylishness. Also, the country’s weakest product penetration was in the music, sports and furniture/interior sectors.

The results of Hakuhodo Inc.’s Global Habit 2008 survey were reported in the Nikkei Marketing Journal (Mar. 18). The ad agency last year conducted interview-type surveys of 500 to 800 affl uent

consumers in 14 major cities in China, Taiwan, South Korea, Singapore, Thailand, Indonesia, Malaysia, Philippines, Vietnam and India, plus Moscow.

Japanese products were rated particularly high in quality at 43.0%. Other categories included neat and fashionable; having clearly distinguishable characteristics; enjoyable; convey liveliness and energy; and are competitively priced. Ranked overall, products from Japan outstripped those from Europe (34.3), the U.S. (33.3), South Korea (30.4) and China (21.2).

When asked which items they associated most closely with Japan, electric appliances and AV were ranked highest at 72.3%—followed by cars (67.1), digital products (62.1), animated cartoons and manga (49.3), and foodstuffs (37.0).

The survey noted that, though ranked highest in quality, Japan-made products tended to be less favored in how they respond quickly to demand and for stylishness. Also, the country’s weakest product penetration was in the music, sports and furniture/interior sectors.

Quality Poll

Winning Salesmanship


MEDIA WATCH

When newly hired company employees move to Tokyo to start work, what kind of lodgings do they pick? A survey conducted online by the HOME’S housing data portal (number of responses not indicated), 50% opted for a 1K (kitchen plus one multi-use room), followed by 1DK (dining room, kitchen - 18.8%) and single room (16%).

The survey found that the average monthly rent paid was ¥59,400. The top fi ve average rents in terms of

industry newcomers were trading fi rms (¥65,500); media and ad agencies (¥64,900); real estate (¥63,300); IT (¥62,700); and banking/fi nance (¥62,500).

In descending order, the must-have conditions were separate bathroom and toilet (56.7%); air-conditioning (41.6); location on the 2nd fl oor or higher (12.1 for males, and 48.7 for females); space for washing machine (35.0); and storage space (20.6). (Dime, Apr. 7)

Shinjin Choice

The impact of the recession has been particularly hard on the real estate industry, but amidst the gloom there’s one silver lining. The Sankei Shimbun (Mar. 15) reports that guesthouses are fi nding rapid favor among single females in their twenties and thirties in the greater Tokyo area, with facilities averaging over 90% capacity.

Currently, 429 such facilities are in operation (with total capacity of 6,897 tenants), said to be a 10-fold increase from seven years earlier. The guesthouse system got its start as a low-rent alternative for short-term visitors, but is now attracting long-term residents. In Yokohama’s Hodogaya-ku, one features

a fi tness room. Monthly rent is ¥56,000; and, while facilities such as for laundry are shared, the residents enjoy access to a well-equipped fi tness room and a lounge area.

Guesthouse Appeal

Ring of IreThe custom of exchanging rings at wedding ceremonies is well known in Japan, but many people fi nd the actual practice to be uncomfortable or impractical. When the Be between survey in the Asahi Shimbun (April 11) queried 7,506 married individuals concerning their wedding ring, just one out of four said he or she was in the practice of wearing the ring. Those not wearing one gave reasons that included they simply didn’t like the custom (1,815); they had never purchased one (1,275); it was “troublesome” (1,152); they didn’t have one or misplaced the one they had (417); they did not want to let others know they were married (362).

The survey also queried 1,303 single people about their attitudes toward this practice. The reply most given was that they don’t particularly want to do it (47%). This was followed by they

were willing, given the choice (30); they were dead-set on a ring (12); and they were adamantly opposed (11).

“My fi ngers got fat, and I had to ask the fi re department to cut it [ring] off,” a 61-year-old Kanagawa man told the Asahi. It seems that, as part of their rescue kits, fi re departments have ring cutters on hand. People who do decide to purchase a ring were also advised to ascertain before purchase that their skin would not react adversely to the metal.


Real estate market in Tokyo is getting hot these daysWe conclude contracts with Japanese and international clients every month, and provide them with up-to-date and valid information about the real estate market in Tokyo. Here are some positive and negative news that we at Minato Asset Management strongly believe are good reasons why the time is right to buy real estate in Tokyo.

Company profi le | Minato Asset Management Co., Ltd.

Positive news: ● Japan is a G20 major economic power that has carried out

a number of fi nancial and fi scal policies to prevent further recession.

● The Japanese government has just introduced a tax break for fi rst-time homebuyers.

● The Japanese government has modifi ed the tax code for corporations regarding fi xed-asset purchases.

● The BOJ still maintains a low interest rate of 0.1%—and will keep it that way.

● The market sentiment of the major banks is aggressive after the fi scal year ending March 31.

● The Japanese government is in discussion on introducing a tax break on the gift tax imposed on young people so that they can buy or build a house.

Negative news: ● The Japanese birthrate is still very low and the nation’s

population will not grow.● Sales of Japan government assets, so-called Maizou Kin

(buried treasure), are not faring well (according to the Nikkei newspaper). This may result in an oversupply of land in the future.

● Economic recovery here is not as strong as in some developing countries such as China.

● The global credit crisis may not yet be over.

Core Business: ● Introduction of vintage condominiums in central areas of Tokyo,

in particular, Minato Ward.● Introduction of real estate for investment, mortgages, bank

loans, etc.

Purposes: ● Provide expertise about real estate investment.

● Provide service in purchase/selling of real estate, rentals, and real estate management.

● Provide agency business for liability insurance.● Investment, possession, and operation of securities.● Research and planning for investment in fi nancial products, such

as stocks, liabilities, credits.● Investment advisory.

Minato Asset Management

Our clients have shown a willingness to buy commercial properties—as they can’t see good investment opportunities in the stock and bond market domestically. Furthermore, our clients have purchased high-yield commercial properties such as dormitories, offi ce buildings, and so forth. (These properties’ gross yield is 7%-12%.)

Potential buyers are aggressive about not missing out on bargains.Minato Asset Management handles lots of buying orders; and we have noticed a bottoming out of the market. Our clients could not buy certain properties at the expected price because somebody else purchased them at a higher price. Such recent transactions have led us to believe that Tokyo’s commercial properties have bottomed out around February. From our perspective, residential properties, on the other hand, are not yet bottomed out, though there are signs of this happening soon.

DK Shinagawa Building 5F, 3-24-21 Takanawa, Minato-ku, Tokyo 108-0074 JAPAN. Tel: 03-3442-2709 Fax: 03-3442-2708www.minato-am.com (Japanese)www.realestate-minato.com (English)blog.minato-am.com Real-estate investment blogs (Japanese)http://blog.realestate-minato.com/ (English)

Publicity


Condominium in MeguroAddress: 5 Nakameguro, Meguro-ku, TokyoTransportation: 11-min walk from Yutenji StationLand size: 704.06 sq. metersBuilding size: 1,064.77 sq. metersNumber of units: 22 Price: 668,000,000 yen (negotiable)Expected Cash fl ow: 42,646,000 yen Price is negotiable. Property is held by a Japanese trust bank.Please contact us for complete address.

Apartment in MotoazabuPrice: 489,000,000 yen (negotiable)Bedrooms: 2Address: 2 Motoazabu, Minato-ku, TokyoFloor Area: 174.34 sq. metersBalcony: 13.67 sq. metersTransportationHiroo Station (Metro Hibiya Line): 8-min walkAzabujuban Station (Metro Oedo Line): 12-min walkRoppongi Station (Metro Hibiya Line): 13-min walkMonthly FeesMaintenance: 101,652 yen. Repair Fund: 17,400 yen. Parking: 47,000 yen.Structure: RC 6 stories above ground, + 1 story undergroundCompletion: January 2008Features: New. Sunny. Large living-dining area and master bedroom.

Floor heating. Proximity to a general hospital, a park, and the international community. Within walking distance of Roppongi, Hiroo and Azabujuban.

Townhouse in HirooPrice: 330,000,000 yen (negotiable)Bedrooms: 3Address: 3 Hiroo, Shibuya-ku, TokyoFloor Area: 193.55 sq. metersBalcony: 19.56 sq. metersTransportationHiroo Station (Metro Hibiya Line): 13-min walkEbisu Station (JR Yamanote Line, Metro Hibiya Line): 14-min walkMonthly FeesMaintenance: 99,900 yen. Repair Fund: 19,180 yen.Structure: SRC 3-storiey townhouseCompletion: January 2009Features: Brand-new. Quiet residential neighborhood. Roof balcony. Playroom. Dishwasher. Floor heating. Parking.

Dormitory in YokohamaAddress: 3 Isogo, Isogo-ku, YokohamaTransportation: 7-min walk from Isogo StationLand size: 735.73 sq. metersBuilding size: 1,759.02 sq. metersNumber of units: 42 Price: 320,250,000 yen (negotiable)Expected Cash fl ow: 30,000,000 yen Price is negotiable. Property is leased to a Japanese steelmaker, a subsidiary of a listed company. Please contact us for complete address.

ResidenceResidence

InvestmentInvestment

Publicity


Foreign Corrupt Practices are not cheap: $1.9 billion, $800 million, and €395 million.

A Fortune 500 conglomerate based in Germany paid $1.9 billion in bribes to foreign offi cials in various countries between 2002 and 2006. After

getting caught it agreed to pay $800 million to the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) to settle its Foreign Corrupt Practices Act (FCPA) penalties. The company also agreed to pay an additional €395 million (about $500 million) in Germany for the same offence. This does not include the cost of lawyers, accountants, and reputational damage.

In recent years, the U.S. government has indicted and fi ned many multinational companies, including non-U.S. companies, millions of dollars for FCPA violations. So what is the FCPA?

FCPA Background The FCPA is a U.S. statute put into effect in 1977 in response to a series of inquiries made by the U.S. government into U.S. businesses in regard to their dealings with public offi cials overseas. While the statute was initially established to make it illegal for U.S. citizens and businesses operating in the U.S. to give by corrupt means “anything of value” to foreign public offi cials for the purpose of obtaining or retaining business in

FCPA ExplainedIMPLICATIONS OF THE FOREIGN CORRUPT PRACTICES ACT.By Jeffrey C. Ng


said foreign country, in recent years it has been revised to the extent that non-U.S. businesses and citizens may be subject to the FCPA regulation as well. (Yes, you can be hit with an FCPA violation charge for using the U.S. postal service or a U.S. bank account to facilitate the bribe, without ever setting foot on U.S. soil. Refer to Statoil ASA, May 2005 in right box.)

Over the years, many of the OECD (Organization for Economic Co-operation and Development) member countries have adopted similar statutes. In Japan the law is stipulated in Article 18 of the Unfair Competition Prevention Act (Fusei Kyoso Boshi Ho). Pacifi c Consultants International’s business operations in Vietnam triggered indictments based on this Japanese version of the FCPA.

The FCPA has become a topic of late, especially among multinational corporations around the world, because of heightened coordinated efforts in the past few years by the international community in tackling corruption. Since 2000, the DOJ has been the focal point in enforcement of the statute; and it appears that, in response, the number of corporate FCPA investigations has escalated since the beginning of this decade, according to Recent Trends and Patterns in FCPA Enforcement, Shearman & Sterling LLP.

In light of the FCPA enforcement trend of recent years, it is very pertinent for Japanese businesses to gain an under-standing of the FCPA provision and its scope. Currently, many Japanese companies perceive their risk exposure to the FCPA to be low, despite the broad interpretation of the statute by the DOJ and the SEC and the close ties of Japanese companies to the U.S.

FCPA ProvisionsThe FCPA statute comprises two provisions, accounting and anti-bribery.

With regard to the accounting treatment under the accounting provisions, all “covered” entities—generally SEC registrants and their subsidiaries anywhere in the world—are obligated to maintain their accounting records according to the U.S. Federal Securities Laws.

The anti-bribery provisions prohibit all “covered” entities from paying in a corrupt manner “anything of value” to foreign government offi cials in order to obtain or retain business. However, certain payments are permissible, such as for facilitation in certain countries and covering the expense of public offi cials to attend a product or service demonstration held by the company. The anti-bribery provisions apply to not only the entities in the accounting provision, but also the overseas employees and agents (regardless of nationality) of the company acting on its behalf. Practically anyone who has ever left a “footprint” (physically or virtually) in the U.S. could be subject to the FCPA.

FCPA EXPLAINED

Some recent FCPA violations

June 2004

General Electric (GE) agreed to acquire InVision Technologies (now GE InVision) in March 2004. FCPA violations by InVision were discovered through due diligence in July 2004. The deal was completed in December 2004, but InVision had to pay $800,000 in fi nes.

July 2004

Monsanto Company paid $1 million in penalties relating to bribes paid to a high-ranking government offi cial in Indonesia and booking it as consulting fees.

December 2004

Micrus Corporation had to pay $450,000 in fi nes and establish a compliance program relating to bribes paid to doctors working in public hospitals in France, Turkey, Spain and Germany. Micrus was spared criminal charges because of its cooperation on the investigation and establishment of the compliance program.

January 2005

Alltel Information Services (AIS) began an internal investigation in connection with potential FCPA violations relating to bribes allegedly paid to the then President of China Construction Bank (CCB) to strike a side deal for CCB to purchase AIS software directly from AIS instead of through AIS’s agent Grace & Digital Information Technology (GDIT). AIS had an agreement with GDIT in which AIS would pay GDIT 33.3% in commission on sales of AIS software products to CCB.

February 2005

DPC Tianjin, a Chinese subsidiary of the U.S.-based Diagnostic Products Corporation, was fi ned $2 million relating to bribes made to public doctors in exchange for promises to purchase products of DPC.

May 2005

Statoil ASA (now Statoil Hydro) was charged with an FCPA violation relating to bribes allegedly paid to high-ranking offi cials in Iran.

June 2005

Baker Hughes paid $44 million in fi nes and disgorgement of profi ts in relation to $4.1 million in bribes paid during a 2-year period. The penalty is the highest fi nes ever paid relating to an FCPA violation.

October 2006

U.S.-based Immucor was charged with an FCPA violation relating to bribes allegedly made to public doctors in Italy and subsequently falsifying the associated accounting records. Without admitting or denying the SEC’s allegations, Immucor consented to a cease-and-desist order against future violations of the anti-bribery and the accounting provisions of the FCPA.

April 2007

Lucent Technologies paid $1 million in fi nes relating to entertaining high-ranking Chinese offi cials before its merger with Alcatel SA in November 2006.

September 2007

Willbros Group, a Panama company listed on the NYSE, was charged with FCPA violations. It was alleged that Willbros made bribes to government offi cials in Bolivia, Nigeria, Mexico and Ecuador to obtain new business and reduce its tax liability.

Practically anyone who has ever left a “footprint” (physically or virtually) in the U.S. could be subject to the FCPA.


FCPA violations can result in signifi cant fi nes and penalties. For instance, a company can be fi ned up to $2 million per viola-tion of the anti-bribery provisions and culpable individuals can be subject to a fi ne of up to $250,000 per violation plus impris-onment for up to fi ve years. Willful violations of the accounting provisions can also result in a criminal conviction, with a fi ne of up to $25 million for a company and up to $5 million plus imprisonment for up to 20 years for culpable individuals.

In addition to these harsh penalties, the SEC can also seek disgorgement of the violator’s profi ts made in connection to the corrupt payments.

ConsiderationsPreventative measures are always a better tactic than reactionary steps, so organizations falling under the FCPA should have a well-established compliance program to mitigate risk. Because of their nature, it is hard to keep FCPA investigations and settlements confi dential. Therefore, we advise companies to ensure as much as possible that they have systems and procedures in place to avoid violations of the FCPA. Japanese companies may fi nd the U.S. Federal Sentencing Guidelines for Organizations (1991) a valuable reference in this regard. ■

Jeffrey C. Ng is a manager at KPMG FAS Co., Ltd.

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All Japanese multinational corporations may be subject to other criminal laws besides FCPA. Consult your legal representative for advice.

FCPA

Enforcing body

SEC DOJ

Provision Books and records Anti-bribery

Description • Maintain reasonably detailed, accurate, and fair accounting records

• Establish and maintain internal controls

• Prohibited from providing or promising anything of value to foreign public offi cials in order to retain business

Covered entity

• SEC registrants and their subsidiaries

• U.S. citizens and legal entities, regardless of whether the violation occurs within or outside U.S.

Japanese MNC at risk

• SEC registrants and their subsidiaries

• Any corporations with operations in the U.S.

• Any corporations employing U.S. citizens

SNAPSHOTEffective FCPA compliance programs should at least have:

Appropriate tone at the top ■

Compliance policy coverage (for both global and local) ■

Frequent compliance training ■

Due diligence of employees, business agents, acquisition target, etc. ■

Existence of internal reporting mechanism (e.g., fraud reporting hotline) ■

Continuous monitoring ■

Response mechanism (e.g., investigation) ■

2002 2003 2004 2005 2006 2007 2008

FCPA EXPLAINED


SNAPSHOTContinental Airlines, Inc.

Established: 1931, as Varney Speed Lines ■

Headquarters: Houston, Texas ■

Hubs: Houston, New York, Cleveland ■

and GuamNumber of employees: 42,000 ■

Daily fl ights: More than 2,800 to 135 domestic ■

and 132 international destinationsSlogan: “Work Hard, Fly Right” ■

Web site: ■ www.continental.com

Given the state of the global economy, how is Continental faring?Clearly the industry and Continental are facing signifi cant challenges, and this recession is forcing us to fi nd ways to reduce costs and seek out new revenues. Having said that, we are very pleased at our results in the Asia-Pacifi c region. We are holding our own well on the leisure side of the business, and we are proud of the work that our sales and marketing teams have done. We are pleased that the market here has proved to be relatively resilient.

How does an airline achieve that?People are being more prudent in their spending—and we have to give them a reason to select us. We are continuing to spend on modernizing our fl eet to make it more fuel effi cient, which gives us a better bottom line and lets us fl y planes to

destinations that other airlines can’t get to. We have made a signifi cant investment in our new lie-fl at seats in Business Class, which will be gradually introduced from November and are critically important to our Business Class services.

If people are spending a lot of money on Business Class, they want to make sure that they are ready to do business as soon as they get off the plane. Other improvements include our video and audio on-demand services. We have some very tough competi-tors and you’re only as good as your last fl ight, so we want to make sure that our customers get everything they have paid for.

Have you seen any shifts in travelers’ purchasing patterns?Without a doubt. People are being very careful about how they spend their money; and some corporations are now instituting

policies of utilizing advance-purchase fares, which have more restrictions but are at a lower price. Corporations are asking their people to cut back—and some are even asking their people to fl y Economy Class. That will have an effect on our profi ts, as Business Class makes a signifi cant contribu-tion to our bottom line. But since the begin-ning of the year we have been offering some special fares in Business Class and are attracting new customers.

While the airline industry has been hard hit by the global economic downturn, a contraction is also a time of opportunity, according to David Hilfman. The world’s fi fth-largest airline, Continental is celebrating its 10th anniversary of Trans-Pacifi c service and is building on its already considerable presence in the Asia-Pacifi c region with the recent introduction of a daily, non-stop fl ight between New York’s Newark Liberty International Airport and Shanghai.

David Hilfman By Julian Ryall Photos by Tony McNicol

SENIOR VICE PRESIDENT, WORLDWIDE SALES, CONTINENTAL AIRLINES, INC.


BIOGRAPHYDavid Hilfman

Born: Washington, Iowa, 1960 ■

Education: BA in Finance from the University ■

of South Florida.Married: To Tracey ■

Children: Marshall (aged 5) ■

Hobbies: Golf and chasing my 5-year-old ■

around.Career

Started in aviation in 1981 as a sales ■

representative for Eastern Airlines while a student. Joined Continental Airlines in 1986, as ■

regional sales manager in New York City, later becoming director of the western sales division, based in Los AngelesMoved to the company’s Houston ■

headquarters in 1992 and later appointed senior vice president for worldwide sales

“Yes, things are tough; but we have a resilient group with a lot of talent here.”

What sector of your service, business or tourism, has been the most affected by the economic crisis?Business has seen the biggest hit because corporations, even if they are not losing money, want to be seen to be acting conservatively. Transportation and expense budgets are usually discretionary; and while we say they should be out there facing the world and meeting their clients, the reality is that businesses are trying to fi nd ways to cut back.

Because we have a signifi cant presence in Guam, our tourist trade has held up well, especially as hotels are now offering more bargains and we are working more closely with them.

Which Japan-U.S. routes have seen the greatest changes?Our routes between Houston and Japan, and Newark and Japan are holding up well. There is still very solid demand for both those destinations, particularly as we have so many connecting points available beyond those hubs.

How about fl ights servicing the Pacifi c islands through Continental Micronesia?The beauty of our Micronesia operations is that we can tailor capacity to demand. We fl y to Guam daily, but fl ights to the islands beyond Guam depend on the season and vary from twice a week to four times a week.

We have been in Japan for over 30 years; we serve eight cities and are the largest U.S. carrier in Japan. Whereas people not long ago were heading for Hawaii, Europe or Australia, we are now seeing those travelers in Guam and the islands of Micronesia. People still want to have a holiday and they are willing to spend to have one—although not quite so much as before. That’s good for short-haul holiday destinations out of Japan.

What steps is Continental taking to reduce the impact of its services on the environment?We like to think of ourselves as a “Jolly Green Giant.” We are citizens of the globe and we want to do the right thing for the environment. That also makes good busi-ness sense. Even though we burn fossil fuels, we have implemented signifi cant fl eet modernization steps and spent billions on that fl eet. The introduction of winglets on the wing tips gives the aircraft greater range and reduces fuel consumption—and, therefore, emissions.

We are also the fi rst U.S. carrier to use biofuels that are produced from algae and jatropha. The beauty of all this is that we are focused on something that is good for both the environment and our business.

We also get ideas from our employees on ways we can be more environment-friendly—things like recycling news-papers and aluminum cans from our fl ights—and we encourage that. In the last 10 years, we have reduced by 36% the amount of fuel it takes to fl y one passenger one mile. No one can match that record—and it’s because of a million little things that all add up.

There is a lot of economic uncertainty around at the moment; what does the future hold for Continental?With apologies to Huey Lewis, I’d like to say that the future is so bright that we’ve got to wear shades. The people Continental has in the Asia-Pacifi c region, the fl eet we now operate, the facilities we have introduced and, fi nally, the fact that we are going to be joining the Star Alliance

later this year mean that we can feel very excited about the long-term prospects in the region. This is an opportunity for us to grow—and that would be good for the economy, good for business here, for tourism and the region as a whole. Yes, things are tough; but we have a resilient group with a lot of talent here—as well as good relations with local tourism organizations, the business community and the aviation authorities. I believe that we can be seen as a real leader in the market. ■

e have a nt here.”t

ON THE SPOT



Making that business connection in Japan is all very well and good, but nurturing those initial ties and

growing the relationship can be far more challenging.

The pitfalls are numerous. But one error is arguably more threatening to your future business prospects with a Japanese company than any other: getting the ba wrong.

“We Japanese have always existed among a very similar ethnic group, the maintenance of a state that is crucial to understanding why Japanese people have a far less powerful sense of themselves as an individual than a Westerner,” said Yoshiyuki Suzuki (pictured above), president of coachA, at a breakfast seminar organized by the Independent Business and B2B Committees entitled “How to Build

Great Relationships with Japanese Clients” on April 9. “We look for similarities between us, not differences; and we do not have a strong culture of debate.

“Many Japanese have become Westernized in the way in which they do business, but they still have this trait of being able to assess the atmosphere in a given situation—ba—and for which there is no equivalent word in English,” said Suzuki. He can sense ba in a heartbeat, thanks to a master’s degree in clinical psychology from Tennessee State University, whose program included helping some very angry female inmates at a state prison deal with their issues. Since returning to Japan, Suzuki has served as an executive coach to more than 150 businesspeople and instructed at over 200 companies.

Sensing the ba is something that Japanese are able to do innately and

instantly, although those citizens who have lived and worked abroad for several years often make errors in what Suzuki also termed “the common sphere”—by being too blunt, outspoken, or even pushy.

Expressing an opinion that is at variance with the majority in a group, for example, indicates that the mood has been misinterpreted—or even ignored—and causes discomfort in the majority. And while doing that in a social setting, such as disagreeing over whether a movie was good or bad, is one thing, making the same error in business can be more costly, Suzuki believes.

“A lot of Westerners say we Japanese are diffi cult to understand, but the old saying ‘When in Rome, do as the Romans do’ applies here as well,” he said.

“When we are doing business in your countries, we have to tell you what we are thinking; but when you are in Japan,

ACCJ EventHOW TO BUILD GREAT RELATIONSHIPS WITH JAPANESE CLIENTSBy Julian Ryall Photos by Mattias Westfalk


you cannot expect us to say yes or no straight away,” said Suzuki, pointing to the simple example of inviting a business acquaintance out.

In Japan, the emphasis is on the person coming “if they are free,” leaving the invitation open and up to the recipient. There is no awkward obligation placed on them attending.

Another area in which the business ba is liable to be severely disruptive is when it comes to talking about money, said Suzuki.

“You can freeze the ba with a single word,” he said. “You have to know the best timing for talking about money because it is an unwritten [rule] that

talking about money can be a little rude. You have to sense that your counterpart is ready and willing to talk about it. And if he is not, you have to wait until later, possibly in a letter or through an intermediary.

“Building a good working relationship with a Japanese is all about developing the skill to sense the ba; and you must remember that we are not comfortable if we feel we are being forced to say yes or no immediately,” said Suzuki.

The language barrier implicit in ba can even be overcome, Suzuki believes, by being a keen observer of the situation in which a businessperson may fi nd himself. While a Westerner might talk

and listen in turn with those around him, for example, a Japanese will be focused on the situation around the table as much as on the words that are being spoken, making sure that the others present feel involved or at ease.

“We Japanese are good at having a bird’s-eye view of the whole ba and how everything is progressing,” he said.

Similarly, according to Suzuki, there is a skill in delivering bad news without disrupting the ba. If the person who is breaking the unpleasant news is trusted and respected, then what is said can be accepted by the group; if the word is delivered by an unknown outsider, however, then the reaction is likely to be very different.

“And if you are able to develop this skill of sensing ba, then a Japanese business colleague will see you as easy to work with,” added Suzuki. “On the other hand, acting aggressively will generally destroy the ba.”

There is a little aside to that rule, however, as Japanese people tend to have respect for someone who is clearly very self-confi dent and assertive, and will override the ba, partly because Japanese “experience brain-freeze and don’t know how to say no” in that situation, said Suzuki.

The key to using this tactic in business is to not do it very often, as that will label you otherwise as a diffi cult person to work with. ■

ACCJ EVENT


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ACCJ Independent Business Committee Chairman Doug Jackson


The ACCJ sometimes issues recom-

mendations on how Japan might

improve its corporate governance and

fi nancial markets: proposals to require

the adoption of independent directors,

more time to examine proxy materials,

the disclosure of exact voting results at

shareholder meetings, and the like.

But we must always keep in mind

two obvious facts: (1) as recent events

in the U.S. market have made clear,

our own systems and laws are by no

means perfect; and (2) if Japan can

(as it sometimes has) make systemic

innovations that are better, then bully

for Japan, and the U.S. should consider

adopting them, in turn.

Policy debates on corporate gover-

nance are not an argument about who

has the better system. Rather, they

should be an attempt to foster collabo-

ration and new thinking that can

improve the credibility and stability

of all markets for all investors, at a time

when none of us can afford to be petty.

After all, in the historical timeline

of human endeavors to refi ne more

effective systems for fi nancial

regulation and corporate

governance, mankind is

only just entering the

bronze age, as it were.

While I may point out that

my spear is a little sharper

than yours, that improve-

ment alone may not be

enough to fend off the

wolves. I should also be

interested to know how

you learned to throw

yours so accurately …

or better still, to work

together to learn to

forge iron.

There are many aspects of

Japanese law and management

that we can learn from, and

hopefully even improve upon.

We should keep on the lookout for them.

Pop quiz: comparing the U.S. and

Japan, in which country can shareholders

who wish to nominate director candi-

dates easily get that proposal inserted in

the proxy materials that the company

sends out to all shareholders? The correct

answer is Japan. In the U.S., if a share-

holder would like to nominate a slate

of directors that it believes will be more

responsible than the existing board’s

handpicked nominees, it will generally

have to mount a costly proxy solicita-

tion contest. So costly, in fact, that more

than 99% of the board slates proposed

by management are completely uncon-

tested. There are no alternative candi-

dates to pick from.

Unfortunately, if you believe that

the U.S. legal system always comes out

on the side of supporting “shareholder

democracy,” you will sometimes fi nd

yourself wrong and embarrassed, even

if you are rightfully proud of your sharp

bronze spear.

This is why both SEC Chairman Mary

Schapiro and the State of Delaware (home

to half of U.S. public companies) recently

moved to learn from many other global

markets and change the law and regu-

lations on “access to the proxy” in the

U.S. In fact, Schapiro thought the topic

was so important that she said as early

as her nomination hearing in January,

“There are about 40 of the largest markets

outside of the United States that allow

investors or shareholders of some size

and of some duration access to the proxy.

I think it’s time for the United States to

step into that club.”

Conversely, if you believe that most

Japanese institutional and corporate

shareholders take suffi cient advantage

Nicholas BenesTIME FOR HUMILITY, LEARNING, AND INNOVATION

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今こそ、謙虚な姿勢で学び、刷新を

社外取締役制度の導入、委任状資料の精査す

る時間を与えること、株主総会での正確な投票

結果の開示など、コーポレートガバナンスや金

融市場の面で日本が改善できそうな事項につ

いて、折に触れてACCJは提言を行ってきた。

　しかし、当前の事実ながら、忘れてはいけな

いことが2つある。第1は、最近の成り行きから

明らかなように、米国の制度や法令とて完璧で

はないこと。第2は、日本が組織的刷新を成功

させ、優れた制度を生み出した場合には（過去

にも実績はある）、米国も日本を見習うべきか

を逆に考慮すべきだという点である。

　コーポレートガバナンスを巡る政策論議は、

お互いの制度の優劣を競うのではなく、むしろ

協調関係と新たな思考を育み、全ての投資家の

ために市場の信頼性と安定性の向上を図るもの

でなければならない。今は些事にかまける時で

はないのである。

　そもそも、金融規制やコーポレートガバナン

スに関する取り組みは、人類史に置き換えて言

えば青銅器時代にやっと到達した程度である。

いかに自分の槍が鋭くても、それだけでは狼の

群れを追い払うことはできない。隣人の優れた

点についても学び、できれば協力して鉄の鍛造

法を見出すことが進歩への近道だ。

　日本の法令や経営には、米国にとって参考

になる点が多々あり、改良につなげることがで

きるかもしれない。そうした点を見逃してはな

らない。

　クイズを1つ。企業から全株主に送付される

委任状資料に、簡単に取締役候補を指名する提

案を記載できるのは、日米どちらだろうか。正

解は日本である。現行の取締役会が推薦する候

補者ではなく、より信頼できる候補を株主が指

名したい場合、米国では、一般的に巨費を投じ

て委任状勧誘合戦を展開しなければならない。

このため、実際には、経営陣が提案する候補者

の99％以上がそのまま承認されてしまう。

　米国証券取引委員会も最近になって、メア

リー・シャピロ委員長の主導の下、いわゆる「

委任状アクセス（委任状資料を通じて株主が

取締役候補指名を行う権利）」に関する法規変

更に乗り出している。

　逆に、日本の機関投資家や法人株主が、株主

や受益者などの保護のために会社法で認めら

れている株主権利を十分に活かしているのか

と言われれば、異議を唱えなければならない。

「もし権利が十分に活かされているなら、株主

総会における投票行動の開示が義務づけられ

ても何ら問題ないはずだ。米国で投資信託に

義務づけられているような透明性があっても良

いはずだ」と言わざるを得ない。

　金融庁もこれに着目し、最近になって投票行

動の開示義務化を検討しはじめており、この点

は大いに評価したい。体面を重んじ、株式の持

ち合いが盛んな日本では、これが、あらゆる利

害関係者を保護する機能を委任投票に持たせ

るための最良の方法ではではないだろうか。

　目下の世界金融市場の崩落がもたらした数

少ないメリットの一つは、世界中の国々におい

て、規制機構やガバナンスの枠組みを改善する

きっかけを与えたことである。日米が互いや他

国に学ぶことができれば、それぞれの制度の改

善にとどまらず、制度間格差を解消して取引費

用の削減や市場の効率化を実現できる。そうな

れば、今の危機的状況から抜け出すトンネルの

出口の光はもっと間近に見えてくるだろう。

ニコラス・ベネシュ：M&A専門コンサルティング

会社の株式会社ジェイ・ティ・ピー代表取締役。

ACCJ対日直接投資委員会委員長、FDIタスクフ

ォース委員長。過去には、日本の内閣府にFDI政策

について提言する対日投資有識者会議の委員など

を歴任。ACCJ理事も経験している。

ニコラス・ベネシュ

OPINION LEADER

of the strong shareholder rights that the

Company Law confers upon them to

protect their own shareholders, benefi cia-

ries, deposit-holders, and policyholders,

then I will beg to differ by saying: “Well

if they are, then they will not mind if the

law requires them to disclose how they

voted at shareholder meetings. Let trans-

parency and sunlight prevail, just as U.S.

law requires for mutual funds.”

To its great credit, the FSA recently

fl oated this very idea. In shame-based,

cross-shareholdings-prone Japan, this

seems the best way to ensure that

proxy voting will actually protect all

stakeholders rather than entrench

incumbent management and mutual

back-scratching customs.

One of the few good things about

the current collapse of global fi nancial

markets is that it gives countries around

the world a reason to improve aspects of

their regulatory apparatus or governance

frameworks that had become out-of-

touch with changes in the markets, or

simply got stuck in their ways. If in this

process the U.S. and Japan can keep

learning from each other-and other

countries-we will not only improve our

systems, but converge them as well,

thereby lowering transaction costs and

increasing market effi ciency. The light at

the end of our current crisis tunnel will

draw nearer, sooner.

Nicholas Benes is President of JTP Corporation, an M&A advisory boutique. He is also Chair of the ACCJ Foreign Direct Investment Committee, was Chair of the FDI Task Force, and was a member of the Japan Investment Council’s Expert Committee, which advised the Japanese Cabinet on FDI policy. He also previously served as a member of the ACCJ Board.


Companies in Japan are assessing the impact of the fi nancial crisis on their key operations, including funding, revenue and counterparty relationships.

Pension plans should be viewed as a source of potential risk, according to Ken Wong, director of

Human Capital at Ernst & Young Transaction Advisory Services Co., Ltd. (E&Y TAS) in Tokyo, including the possibility of asset mixes in portfolios becoming misaligned, and of exposure to sharp changes in interest rates.

Such misalignment may happen when volatile, signifi cant moves in the market for equity and fi xed income tilt the plan of asset mixes away from an optimal portfolio. The outcome could be that the pension plan fails to serve its original purpose. Consistent underperformance by plan assets could result in signifi cant funding defi cits that require greater contributions to the plan in the future.

In the wake of last year’s subprime fi asco and this year’s full-fl edged fi nancial crisis, the total value of company pension funds in the U.S. is believed to have fallen by more than $250 billion. According to a November 19, 2008 article in the New York Times, companies are asking Congress to exempt them from having to replenish the funds. Firms such as 3M, Alcoa, DuPont, IBM, Nortel, Northrop Grumman, Verizon and Whirlpool, on the other hand, already have frozen one or more of their pension plans.

Falling interest rates reduce the discount rate applied to assess plan liabilities, thereby heightening the risk. The discount rate, however, is intended to help allocate fairly the costs of a retirement plan across generations of shareholders, management and employees—to the satisfaction of the regulators. To the contrary, reducing the calculated rate can signifi cantly raise pension plan liabilities and pension-related expenses, resulting in weakened corporate balance sheets and reduced reported earnings.

Fears about the real economy in Japan also have manifested themselves in a slide in the stock markets. October 27, 2008, for example, saw the Nikkei 225 dip to 7,162.90 points, the lowest level since October 1982. As of the end of October, the representative barometer of investor confi dence in corporate well-being was down 50.5% since peaking in July 2007, and off 41% since the start of 2008.

If the Nikkei 225 continues at this current level, according to Wong of E&Y TAS, it may impact the funding and cash-fl ow requirements for pension funds at the next valuation cycle. However, he is reluctant to say what kind of levels Japanese shares need to maintain in order to avert such funding issues—citing the variance in the pension plan asset mix and funding positions at each company. “Many companies may not know the extent of the deterioration,” says Wong. “What we are really suggesting here is that companies should take action to fi nd out.”

Discussions should be held with key fi gures including, but not limited to, plan actuaries, administrators and investment managers. For example, an actuary can apply mathematical, statistical, economic and fi nancial analyses in comprehending a wide range of practical business problems, including uncovering the fl aws in the liability valuation of a long-term pension plan.

The dangerous outcomes of not dealing with these heightened risks include plan insolvencies, along with signifi cantly negative implications regarding cash fl ow and accounting practices. Wong recommends that the fi nancial health of existing plans be reviewed immediately in order to confront these pitfalls.

“The pace of change resulting from the fi nancial crisis means [that] a review of the fi nancial health of the plan should be carried out immediately,” he says, “in order to review current investment performance and asset mix, and assess whether rebalancing may be required.”

Also, discussions with the plan’s investment advisors will reveal whether their views on expected asset returns have changed, adds Wong, and determine whether changes in the portfolio mix are required.

He also urges monitoring more often. The portfolio should undergo monitoring on a quarterly basis using the latest available asset information, says Wong, instead of the most common annual frequency.

During a crisis, assessing pension plan fi nancials in a timely manner is crucial. One drawback to greater frequency, however, is the time required for actuarial valuations on plan liabilities.

If they have not done so already, companies should consider establishing a process whereby the plan actuary performs sensitivity and stress tests based on key economic assumptions including discount rates and projected asset returns, says Wong.

Plan funding and accounting valuations apply only one set of assumptions. For the accounting valuation, this is typically the company’s “best estimate for the future.” In most cases, companies just ask the actuary to perform the “minimum” amount of work—meaning a single assumption set—in order to comply with accounting and funding rules. But, in order to appreciate changes in the plan’s fi nancial health under different economic conditions, Wong counters that companies should ask the actuary to run the valuation on various assumption scenarios—on a regular basis.

“Typically, the focus would be on either changing the discount rate, salary increase or expected rate of return on plan assets,” says Wong, “as these assumptions have the greatest fi nancial impact on pension plan fi nancials—especially in times when these can change drastically as a result of a crisis.

“Asking your plan actuary to perform sensitivity analysis using last year’s valuation results can prove to be enlightening,” he adds.

Pensions: Crisis ManagementEXPERT ADVICE ON MANAGING SUPERANNUATION IN JAPANBy Martin Foster


Stress testing is similar to sensitivity testing, but uses a set of unlikely—“extreme” or “catastrophic”—assumptions. This approach is akin to carrying out regular exercise drills in light of events considered unpredictable, but which can and do occur, such as fi res and earthquakes.

“Stress testing allows the company to test that [the] appropriate monitoring processes are in place,” says Wong, “and will work in case of emergencies or crises.”

Companies looking for more sophisticated approaches to monitoring pension plans may want to consider Asset Liability Modeling studies. “These studies aim to model both future plan assets and liability cash fl ows,” he says, “and the interaction between the two—over a large number of possible economic scenarios.”

What works for larger businesses, however, might not necessarily apply to smaller companies, which remain the backbone of the Japanese economy.

Companies that employ 4-299 employees in the manufac-turing sector, and have paid-in capital of less than ¥300 million, account for 99.7% of all companies in Japan, according to the Establishment and Enterprise Census 2006 by the Small and Medium Enterprise (SME) Agency. Staff at SMEs also account for 69% of company employees throughout Japan.

SMEs and the self-employed in Japan typically do not sponsor a pension plan, but instead make promises about retirement benefi ts to staff and paying “as-they-go”—out of operating cash fl ow—when employees retire or leave. While SMEs are unlikely to face investment risk for their pension plan assets, says Wong, there is a potential cash-fl ow risk to the employer. Furthermore, in a crisis, companies looking to downsize will have to factor in the cash required to pay out benefi t promises for accrued retirement benefi ts to those employees being earmarked.

However, Japan labor laws make it diffi cult for companies arbitrarily to lay off employees. Subsequently, many companies pay a severance benefi t, in addition to any retirement benefi t,

in order to “convince” employees voluntarily to retire. Such an additional cash requirement can be sizeable, especially since, in most cases, a company could be operational and fi nd it diffi cult justifying the downsizing to begin with.

Cash-fl ow requirements, therefore, remain the most critical to monitor, particularly their impact on working capital and the SME’s ability to continue operating effectively through a crisis.

SMEs without an external plan are likely to provide a tax qualifi ed pension plan (TQPP)—most commonly administered by insurance companies and trust banks. TQPPs, however, face government legislated termination by 2012, and any new plan options could have signifi cant funding implications. Introduction in Japan of an equivalent 401(k) retirement plan, for example, typically requires defi cits in TQPP funding to be made good fi rst with cash injections. Wong says such plans should be explored and planned ahead of the 2012 enactment.

Since Japanese fi nancial institutions have not been immune to the heightening global fi nancial crisis, SMEs also should check up on their plan administrator and their provider in terms of fi nancial viability, as well as ongoing capacity to administer the pension plan.

By some estimates, many assets portfolios have experienced losses of 50% or more in the past few months. Companies aside, that drop is also hurting individuals planning for their own retirement.

“Perhaps the best thing to do right now is to do nothing,” says Tony Collins, branch representative of IFG Asia Limited, based in Tokyo. “Selling out now is simply crystallizing losses.”

Collins offers advice to which institutional investors would have been wise to adhere before the crisis—when they were piling into securitized products.

“Diffi cult though it may be, clients should focus on the long term and not the current markets,” he says. “Above all, investors should ensure they are diversifi ed across the asset classes.”

Amid the fallout from the previous reckless investment spree, companies—and anyone planning for a pension—need to take stock before moving forward. ■

PENSIONS: CRISIS MANAGEMENT

“Many companies may not know

the extent of the deterioration.”

Ken Wong

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Martin Foster is a freelance journalist based in Tokyo.


Here comes the

Up-cycle

Slowly but surely Japan is enter-

ing a virtuous economic cycle.

Yes, that’s right—get ready for

positive surprises. Not only will

we see economic growth exceed-

ing downbeat expectations. More

importantly, we are poised to see the

beginning of a multi-year up-cycle in

productivity and corporate profi t growth.

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Why the optimism? Both macro and micro factors are coming into play. On the macro side, all the conditions for a powerful cyclical growth cycle have come together. Most important is the fi rst improvement in Japan’s terms of trade in over fi ve years. Clear-speak: corporate input costs are currently falling almost three times faster than output prices. This lays a powerful foundation for profi t-margin expansion. Whether it is car companies benefi ting from lower steel prices, construction companies benefi ting from falling cement prices, or retailers fi nally able to expand their footprint by snapping up cheaper rents or even bargain discount real estate for new store expansion. That’s right, falling prices can be a good thing. For macro Japan—given that the country has to import all its energy and commodities—the recent global defl ation cycle has signifi cantly improved the country’s competitiveness.

On top of global windfalls, corporate Japan has also been extraordinarily busy to restructure operations. Yes, cost cuts have been radical. Labor costs, which basically account for 60-70% of most companies’ cost base, are falling at an unprecedented rate. Summer bonuses, which typically account for about 15-20% of annual labor costs, are set to be slashed by 22% for manufacturing companies. Add to this the never-before-seen cuts in employ-ment and the windfall cost-savings from expensive baby-boomers dropping into retirement; and a forecast for labor costs falling as much as 10% this year is not unreasonable. Make no mistake, a meaner and leaner Japan is emerging. By late summer, I expect a steady stream of good news on corporate profi tability surging.

To be sure, there is a dark side to Japan Inc. cutting costs and restructuring aggres-sively. First, it cuts into domestic demand. Clearly, consumer demand is under pres-sure because of the radical labor market adjustment. The second side effect is more problematic. The current round of restructuring actually increases the future export-dependency of Japan. The produc-tivity gap between an ever-more effi cient industrial sector and a domestic economy ensnared in stifl ing rules and regulations is poised to widen in coming years.

To be clear, the productivity gap will widen, but not primarily because the ser-vice sector is refraining from restructuring or cost cutting. Any economist, however,

will tell you that productivity growth is almost impossible to come by without improved top-line growth. Here, industrial companies have the benefi t of a global demand recovery directly pulling up incre-mental sales. Domestic-focused companies are stuck, waiting for trickle-down from

government policy or, eventually, the boost in consumer confi dence that starts once the industrial companies commence paying better bonuses and begin hiring again.

Not all is lost on the home front. First of all, Japanese banks will benefi t from the industrial recovery. Before long, loan demand will pick up as industrial compa-nies begin to invest again in inventories. Moreover, as profi ts rise and bankruptcy risk recedes, credit costs for banks will start to come down. Banks really are entering a sweet spot in the cycle. Add to this the increasingly daring merger and acquisi-tion strategies now pushed by the mega banks and you cannot but be optimistic on the outlook for future profi t generation by the major banks in Japan. Interestingly here, the strategies pursued are a complete break with the past convoy system, where basically all banks followed similar strate-gies. One of the mega banks is entering a very signifi cant capital alliance with an American bulge bracket investment bank, while another one is aggressively buying up domestic-focus fi nancial service compa-nies. Japanese banking is starting a new era, with greater competition and clearly different business strategies unfolding.

What about policy? Sure enough, Prime Minister Aso is doing all he can to ensure a maximum feel-good factor right around the time of the upcoming general election. Various supplementary policy packages have been passed by the Diet and, from this summer, public demand should add as much as 2% to domestic growth. Ironi-cally, this active policy support will coin-cide with the positive, albeit unintended, consequences of a previous policy mistake. Remember that Japan drastically tightened construction codes in the fall of 2007? The net effect was a drop of almost 60% in new construction starting up last year. While terrible at the time, and signifi cantly adding to Japan’s recession, the net effect has been a sharp drop-off in supply of new homes and condominiums. As such, Japan never developed much of an excess supply, excess development overhang in contrast to America, China and Dubai. Now that new homebuyer incentives are coming in, I expect a good recovery in construction and real estate activity.

All said, Japan is ready for a solid growth cycle. In the initial stages, we could even see GDP growth surging as much as 5-6% in some quarters this year. Of course, that’s not the underlying run-rate Japan will deliver over the coming 5-10 years. I expect this to be closer to 2%. However, do not underes-timate the recov-ery potential of Japan Inc. ■

JESPER KOLL WRITES

“We are poised to see

the beginning of a multi-year

up-cycle in productivity and corporate profi t

growth.”

Jesper Kollis President and CEO of Tantallon Research Japan.


Seeing imminent revenue losses on the horizon as the global fi nan-cial meltdown continues, Bob Blue, senior vice president at the New York headquarters of a leading U.S.

company, calls the fi rm’s Japanese subsid-iary. His message: Downsize staff by 20% to save on operating costs.

The subsidiary’s HR director groans in dismay, trapped between head offi ce fi at and local realities. How can she explain that restructuring in Japan bears little resem-blance to restructuring in the U.S., and that the process is nowhere near as malleable?

Maybe you’re facing the same unpleasant task she is—or will be soon. To answer your head offi ce persuasively, you’ll have to be able to describe several local busi-ness phenomena, including why Japanese unemployment remains so low despite the radical drop in the economy; what hand-cuffs Japanese fi rms in the downsizing mode, and what they do to cope. We’ll

get into all of those aspects here, and tell you how the ACCJ advocates altering the landscape.

First, just how dire is the economic down-turn here? One indicator, the Japan Center for Economic Research, says Japanese stock prices plunged even further than U.S. prices. The center cites two causes. One is that U.S. fi nancial institutions sold massive chunks of their Japanese shareholdings to secure cash. The other cause is that foreign investors reversed past carry-trade positions they’d built by borrowing low-interest yen funds for investment in non-yen products, thereby prompting the yen to appreciate against other currencies.

A yen on steroids has further eroded earnings at export-oriented Japanese companies. Many Japanese exporters rely heavily on the U.S. market, and consump-tion has slowed considerably there, espe-cially in cars and electronics. The U.S. Department of Commerce reports that

domestic GDP dropped 6.2% between October and December 2008. That’s bad; but Japan’s GDP dropped nearly twice that amount—12.1%—during the same timeframe. Yet, while U.S. unemployment climbed from 6 to 6.9% during the last quarter of 2008, unemployment here has hovered just over 4%.

So what’s odd with this equation? Given Japan’s drop in GDP, you’d expect more unemployed than the 4.1% the Japan Statistics Bureau of the Ministry of Internal Affairs and Communications reported for January 2009, a fi gure that has since risen to 4.4%.

Employment Law in JapanThe answer is that Japanese labor laws have shaped the employment contract into some-thing that is unrecognizable to Americans. Japanese lifetime employment has its roots in the 1930s when there was little employee loyalty and Japanese companies had a hard

Restructuring in a RecessionACCJ OBSERVATIONS ON JAPAN’S EMPLOYMENT ENVIRONMENT.By Tish Robinson, Ph.D. Photos by Michael S. Feather


time nailing young employees’ shoes to the fl oor. In exchange for low wages relative to their productivity early on in their careers, employees were rewarded with job security until retirement at age 55.

Over time, job security—in the form of lifetime employment, which became a social contract—became preferred over higher wages early in one’s career. The lack of a lateral job market for mid-career hires, since most Japanese companies don’t even consider hiring workers mid-career, reinforced this preference for long-term employment. Through the 1980s, long-term employment also accounted for, in large part, Japanese employee preference for Japanese employers over foreign companies offering higher paying positions.

The courts have since codifi ed the social contract of lifetime employment as “not fi ring people”—except for socially accepted reasons. This ruling came about, in part, because the courts sympathized with termi-nated workers since they had no lateral job market as an alternative.

Specifi cally, Japanese employment law requires companies to meet four conditions to justify staff cuts. First of all, the company must be facing a high level of economic or operational necessity. Jay Ponazecki, partner, and Toshihiro So, counsel, of Morrison & Foerster, Ito & Mitomi note that “companies may have to demonstrate that they are actually facing such necessity by disclosing fi nancial information to their employees.” Other ACCJ members concur, “In general, the fi rm’s books must show sustained business losses for two to three years. It is possible, however, to close down divisions that are loss leaders even if the company as a whole is healthy.”

The second condition to commence layoffs is that the company must demon-strate it has explored and implemented alternative cost-cutting methods, and that trimming staff is a last resort. Third, the company must prove that reasonable and objective criteria were applied to deter-mine who was to be let go. Those criteria include performance, skill set requirements, and survival of the business. HR directors, however, say that sagging profi ts are the strongest motivator.

The fourth criteria to be met for staff cuts is that the company must exhibit due dili-gence by providing evidence that it dealt in good faith with the employees terminated, and that those chosen clearly understood the situation.

Solutions other than layoffsWith such stringent legal requirements for employee reduction, Japanese fi rms typi-cally employ several holding actions before shedding full-time employees, probably to demonstrate that all other cost-reduction avenues have been explored.

“The most common alternative is to solicit voluntary resignations by offering early retirement packages,” says Keiko Suzuki, president of Footsteps, an HR consultancy. Backing up that assertion, the Nikkei Shimbun reports that, between September 2008 and February 2009, at least 117 listed companies asked nearly 20,000 full-time workers to retire early. Only 5,200 have accepted.

“A second alternative often involves cutting overtime and wages, and tempo-rarily shutting down manufacturing lines, focusing instead on meeting to work on total quality improvements,” notes Noriko Sato, an independent human resources development consultant. Illustrating this approach, Toyota, Nissan and Honda have put forth work-sharing plans to maintain full-time jobs by reducing pay and working hours. Toyota, Nissan and Mazda also take one or two production holidays per month, trimming base wages by 20%. Japanese law requires that factories pay workers 60% of their salary on those days.

As a third alternative, companies look to lower or freeze hiring before considering layoffs. However, as pointed out by Simon Childs, managing director of CDS, a leading executive search fi rm: “Companies risk losing their competitive edge and need to be vigilant for opportunities to upgrade the quality of managerial staff even in times of recession.

“Not every manager is equipped with enough resilience, leadership and fore-sight to weather this storm,” he says, “and smarter companies see that and seek to capitalize and gain market share through

selective talent acquisition toward when the economy rebounds.”

A fourth alternative to downsizing is transferring full-time employees to a supplier or affi liate. Nissan, for example, sent nearly 200 full-time workers to affi li-ated parts suppliers last winter. Mitsubishi Motors will have sent over 100 employees to affi liated dealers this past spring.

Another alternative to downsizing is trimming operations outside Japan. For example, the NEC Group will eliminate 12,000 jobs overseas in fi scal 2009. NEC TOKIN Corporation plans to cut 9,000 full-time positions in its Chinese, Vietnamese and Thai factories, and eliminate 450 jobs in Japan (among 2,800 domestic full-time workers) by pushing for early retirement.

Shifting the burden to non-regularsSince terminating regular full-time employees is so problematic, Japanese fi rms have also been employing more temp staff, contract and part-time staff, and outsourcing more work to subcontractors—to achieve more fl exibility and make labor costs variable. Demonstrating this tactic, Toshiba reduced its temporary workforce by about 4,500 in this way, letting employees’ contracts lapse in March 2009; in addition, the company reassigned full-timers to different divisions, reduced overtime, and reviewed work arrangements.

Vicki Beyer, co-chair of the ACCJ Labor Mobility Subcommittee, observes: “Japa-nese companies often address losses by not renewing fi xed-term contracts of temp staff and other contingent workers.”

As a result, Japan’s current level of non-regular (part-time, contract and temp staff) employees is around 34.5%. The Japan Center for Economic Research points out that, in this regard, Japan exceeds Germany (26.2%), Britain (25.3%), and the U.S. (17.3%).

In fi scal 2009, NEC will withdraw 9,000 jobs involved in tasks such as software development that formerly were outsourced to subcontractors—handling the work in-house instead.

Public anger is deepening about the acute vulnerability of non-regular workers such as temp staff or haken (dispatched) workers and contract employees. In

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response, the Japanese government is attempting to tighten the regulations and enforce existing laws related to contingent workers. Citing the Dispatched Worker Law, the government is seeking to protect employees by requiring businesses to review the categorization of workers between general work and 26 professional work titles, and offer jobs to temp staff who have been employed by the company for one to three years.

The government is also constructing a sturdier safety net for unemployed workers by relaxing eligibility requirements and criteria for unemployment insurance and other benefi ts. The Ministry of Health, Labour and Welfare’s Labor Policy Advisory Council has recently announced establishment of a study group on fi xed-term employment. The move aims to provide more protection to workers by removing the upper limit of the contract term, or establishing a general rule of equal treatment of such workers as with regular staff—which amending the part-time worker law last year did for part-timers. The government will likely bolster protection for non-regular workers if the Democratic Party of Japan takes the next general election and supplants the ruling LDP.

Labor mobility, diversifi ed workforce Shoko Kimijima, co-chair of the ACCJ Labor Mobility Subcommittee, notes: “It’s in the interests of both fi rms and workers to promote fl exibility and mobility in the Japanese labor market in response to a globalized business environment and the need for a diversifi ed workforce.

“Collectively, we would also benefi t from a liberalized system that allows employers

to reward diversifi ed talent, a better safety net for the unemployed, increased pension portability, and more transparency and fl ex-ibility in restructuring.”

The ACCJ subcommittee has four specifi c recommendations: liberalize contingent worker regulations, modernize work hour regulations, enhance transparency and fl exibility in restructuring, and construct more portable and attractive pension plans.

On the fi rst issue of liberalization, the subcommittee proposes eliminating bureaucratic rules and enforcement, which vary by regional labor bureau, from time to time. For work hour regulations, the subcommittee advocates a U.S.-type white-collar exemption system, which would enhance the fl exibility of work styles, and build confi dence and independence in the workers. Controlling their working hours could result in improving work/life fl exibility, as well as productivity and effi ciency on the job.

The subcommittee also recommends a compensation system for disputed termina-tion, and transparency in dismissal stan-dards, along with observing sound business judgment when it comes to layoffs. There is also a call to build better pension plans; the subcommittee advocates higher tax-deductible contribution limits, increasing employee contribution limits to a corpo-rate-type plan, and putting in place more mechanisms to handle the transfer and independent management of individual account balances.

Focusing on productivity“Lifetime employment may be sustainable in a developing economy or during protracted periods of economic growth,

where companies are continuously growing and able to provide employment for increasing numbers of people,” notes an ACCJ member. “However, lifetime employment can choke corporate fl exibility in mature economies, or in periods of economic stagnation or contraction. And it ends up creating a bi-modal society of ‘haves’ [lifetime employees] and ‘have-nots’ [non-regular contract and part-time employees].”

A lawyer offers this succinct summation: “What has been lost is the piece of the employment contract that centers around results and white collar productivity in exchange for pay. Somewhere along the line, the employment contract arrived at pay in exchange for showing up for work [and often putting in long hours].

“So it is no longer pay for the work produced, but rather almost a job as a property right, which has resulted in reducing white collar productivity in Japan. People need to work smart rather than just show up.”

The Japanese employment contract is under challenge and, until it changes, the restructuring in Japan will remain radically different from that in the U.S. ■

Expertise and support were provided by Vicki Beyer and Shoko Kimijima, ACCJ Labor Mobility Subcommittee Co-Chairs. To share your obser-vations, please e-mail Tish at [email protected]

Tish Robinson is ACCJ HR Committee Vice Chair and a Professor at Hitotsubashi University.

MIN

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Japan Unemployment Rate

4.8

4.6

4.4

4.2

4

3.8

3.6

Percentage of the Labor Force 4.8%

3.8%

3.9%

3.8%

4% 4%

4.1%

4%

4.1%

4%

3.8%

4%

4.3%

4.1%

4.4%

Apr/08 Jul/08 Oct/08 Jan/09 Apr/09ACCJ Labor Mobility Subcommittee Co-Chair Shoko Kimijima

RESTRUCTURING IN A RECESSION


19th interiorlifestyle

June 3-510:00-18:00 (last day: -16:30)www.interior-lifestyle.com/en/

The fair includes high-end and luxury products from around the world (19th Ambiente Japan); kitchen, cooking, furnishing, decorating items and home accessories (11th HomeDesign); and home textiles (9th Heimtextil Japan). At the core of the over 27,000 visitors from more than 35 countries/regions are home furnishing retailers and department store buyers meeting over 600 exhibitors (including designers, architects and contractors) from more than 30 countries/regions. It’s a chance to experience the fl avor of Japa-nese lifestyle trends.

Tokyo Big Sight, West 1-4 & Atrium, Odaiba, Tokyo Waterfront, Kokusai-tenjijo Station, Yurikamome

Muscle Musical

June 3, 6-7, 13-1412:00 & 16:00 (3rd: only 19:00)www.musclemusical.com/english/schedule.html

Running since February, this is the last month currently slated for this season’s brand-new show entitled “Treasure”—an adventurous story of a treasure hunt that would surely deliver an enthusiastic shock to the world of entertainment. As with each season’s other themes, performers (having passed grueling auditions) carry out acrobatic feats, often involving tight coordination and timing with each other, which are both physically demanding and oftentimes perilous. Billed as the only mu-sical in the world with no singing or dialog.

Muscle Theater (850 seats, incl. handi-capped wheelchair section), Yoyogi Koen, Shibuya Station

11th SSFF & ASIA 2009

June 5-www.shortshorts.org

The Short Shorts Film Festival & Asia in Tokyo is recognized (since Sep 2004) by the Associa-tion of Motion Picture Arts and Sciences as a qualifying festival for the annual Academy Awards. George Lucas has been a major supporter since 1999; and Martin Scorsese, Hong Kong director Johnnie To, Sofi a Coppola and many other fi lmmakers also are valued supporters. Rare short fi lms by Jane Campion, Roman Polanski, Tim Burton and many more have been showcased.

MBE 611, 3-28 Kioicho Chiyoda-ku, Tokyo, JR Harajuku Station


EVENTS LINE-UP

JALTCALL 2009

June 5-7http://jaltcall.org/

JALT is a special-interest group supported by The Japan Association for Language Teaching.

Toyo Gakuen University, Hongo Campus, Suidobashi Station, JR Sobu Line

Great Japan Beer FestivalJune 6-7http://www.beertaster.org/

Organized by the Japan Craft Beer Asso-ciation and the BeerTaster Organization, the festival offers samples (50cc) of over 120 local and international craft brews, including the winner of the Japan Beer Cup, for one entrance fee. More than 30,000 attendees imbibe.

Yebisu Garden Place, Ebisu, Ebisu Station, Tokyo Metro Hibiya and JR Yamanote Lines

3rd TradeTech Japan 2009June 8-10www.wbresearch.com/tradetechjapan/

This year, in addition to the new all-Japanese Heads of Trading Buy-Side Summit, there is greater interactivity planned through roundtables, a polling of TradeTech’s networking business

exchange, greater original and incisive content, and more Japanese speakers.

Over 600 senior buy-side trading professionals from leading institutions and hedge funds are expected to attend this limited-capacity (pre-registered) event and exhibition.

The Westin, Tokyo, Yebisu Garden Place, Ebisu Station, Tokyo Metro Hibiya or JR Yamanote Lines

INTEROP Tokyo 2009June 8-12Conference, 10:00-18:00 (10th & 11th: -20:00)Exhibition (10th-12th), 10:00-18:00 (10th: 10:30-; 12th: -17:00) www.interop.jp/en/index.html

A leading global technology event brings together ICT (information & communications technology) and business leaders—150,000+ visitors, representing all sectors of the business technology industry, from over 75 countries—to see all of the latest technologies in action. There are more than 300 exhibitors, 70+ sessions, and live demonstrations of tomorrow’s business solutions.

Makuhari Messe, Chiba, Kaihin-Maku-hari Station, JR Keiyo Line

IS-Tokyo 2009 June 15-18www.comp.tmu.ac.jp/IS-Tokyo/

The International Conference on Performance-based Design is focusing on “Earthquake Geotechnical Engineering - from case history to practice.” Leading researchers and practitioners discuss issues and exchange knowledge associated with seismic performance-based design in light of well-instrumented case histories from recent destructive earthquakes.

Tsukuba International Congress Centre, Tennodai, Tsukuba, Ibaraki, Exit A4, TX Tsukuba Station, Tsukuba Express Line, and then campus bus (every 20 min) from bus stop #1

13th ASCJ 2009

June 20-21www.meijigakuin.ac.jp/~ascj/

The Asian Studies Conference Japan emphasizes interdisciplinary scholarly exchange on Asia in an English-language format to broaden communication among Japan-based researchers and scholars of other countries, from diverse disciplines and backgrounds. Last year, 320 participants attended 36 sessions, with a total of around 140 papers presented.

Sophia University, Yotsuya campus, Tokyo, Yotsuya Station; JR Chuo, or Tokyo Metro Marunouchi or Nanboku Lines

Renewable Energy 2009 Tokyo FairJune 24-26 9:30-17:30www.renewableenergy.jp/english/index

Japan’s latest products, technology and information concerning new energy is introduced through the conference, academic corner, events, workshops and exhibition. Concurrent event is PV Japan 2009. Close to 45,000 visitors and 400 exhibitors.

Makuhari Messe, Chiba, Kaihin-Makuhari Station, JR Keiyo Line

David Umeda is Senior Editor at Paradigm


Women in Business

(WIB) Committee Chair

Mari Nogami shared

her great experiences

with participants at

this event in 2008.

WIB will also feature

some interesting

events for participants

of the 2009 ACCJ

Kansai Charity Walk &

Festival in Osaka.

4th Annual ACCJ Kansai Charity Walk and Festivalin OsakaSaturday, October 3, 10:00-15:00

Under this year’s theme, “Improve the Environment for

Working Women in Japan,” the ACCJ Kansai Charity

Walk and Festival in Osaka continues to grow in size

and impact since its establishment in 2006. Last year’s

record-breaking number of participants—over 2,000—enabled ACCJ

Kansai to donate ¥8.5 million to local NPOs and charitable organiza-

tions such as for family support, life-work balance, women’s educa-

tion and development, counseling and training programs.

The ACCJ Kansai Community Service Committee and Women in

Business Committee collaborate to carry out the Corporate Social

Responsibility initiative—emphasizing how leveraging women is a

key element to grow the business in Japan.

We are looking forward to your attendance, donations and collabo-

ration for the ACCJ Kansai Charity Walk and Festival in Osaka.

Contact: ACCJ Kansai offi ce. Tel: 06 6345 9880

www.accj.or.jp/user/293/Kansai/

OUT AND ABOUT

ACCJ Event Highlights Photos By Ryan Armstrong

ACCJ Special Leadership Forum and Farewell PartyA very special Leadership Forum dinner buffet was held on May 18 at the Tokyo American Club to say farewell to long-time ACCJ Vice President Mark Schwab, who is leaving Japan. The ACCJ thanked him for his energy and contributions during his nine years as a member of the ACCJ and wished him well in his new role as Senior Vice President Alliances, International and Regulatory Affairs at United Airlines, Inc.’s Headquarters in Chicago.

ACCJ Asia Business Committee Chair Philip Jones and B2B Co-Chair Craig Saphin

ACCJ Direct Marketing Committee Chair Joseph Peters and Telecommunications Subcommittee Chair James Hutchison

ACCJ Transportation and Logistics Co-Chair Jeff Bernier, Vice President Mark Schwab, CEO Forum Chair Charles Duncan, Governor Mitsuyo Teramura, and Transportation and Logistics Co-Chair Jeremy Goldstrich.


Given the current economic situation, many companies are looking at a variety of ways to reduce costs. But that being said, should it be corporate environmental programs that pay the price? While it may be tempting to reduce expenses associated with socially responsible initiatives, there are many

reasons why continued focus on sustainability is not just needed to survive, but also essential to improve the long-term performance of your company.

Future Proofi ng: Climate Change RiskAs countries, including Japan, struggle to meet Kyoto Protocol targets, particularly given the rapidly depleting supply of oil, it is reasonable to expect further changes in legislation, imposed effi ciency standards and caps, carbon taxes, insurance costs, and market demand changes. It remains to be seen if these measures will be adequate to stabilize and reduce greenhouse gas (GHG) emissions, but it is certain that regulation will intensify and companies will need to be prepared.

For example, the risks associated with regulatory, physical and behavioral climate change must be identifi ed, closely monitored, and be addressed in the corporate business and planning strategy for long-term sustainability. Companies have come a long way in identifying and responding to climate change risk, which will hopefully continue as we move through this period of fast-paced environmental reform. As risks and corresponding legislation evolve, it is important to tap the Committees when engaging in shaping policy and future regulation through the Chamber’s advocacy efforts.

With an increased demand for corporate governance and transparency, it is also necessary to continue to disclose climate change positions, response strategies, risk and targets inside overall Corporate Sustainability Reports. Companies must work to not only demonstrate regulatory compliance and environmental risk management, but also go beyond this and show a strong commitment to the environment in a manner that is strategic and value-based. Stakeholders, consumers and future employees inevitably will become more green-savvy, so it is crucial to sustain efforts in this area in order to maintain a good corporate reputation.

Financial Gains The Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) has indicated that improved energy effi ciency will play a key role in arresting climate change and meeting climate

stabilization targets. ACCJ member companies, especially those with property assets or related to the transportation and industry sectors, should not abandon environmental initiatives, but rather take advantage of the opportunity for fi nancial gains through resource reduction.

Effective management and investment in energy-effi cient technologies can typically reduce carbon emissions and energy costs by up to 40%—though the fi rst step to realizing these fi nancial gains is in understanding your resource use. Armed with a clearer picture of performance and how your carbon is spent, it’s often easy to identify no-cost and low-cost items—often related to behavior, current practice and operations—to implement, with immediate or short-term payback.

True resource management, however, requires a long-term commitment—but not necessarily an immediate outlay of capital. The strategy entails implementing medium- and long-term items in a manner that makes the most sense for your company and its bottom line. Resource effi ciency can lead to dramatic cost reductions, as well as the lowering of GHG emissions, and has been documented extensively by a wide range of multinational companies, including some very good precedents set by fellow ACCJ companies.

As companies improve effi ciency and become more sophisticated about the management of greenhouse gases, additional fi nancial incentives will be provided through the creation of carbon credits. While precise schemes are still being defi ned, it can be said that abatement policies have clear economic benefi ts. There are many smart companies who are managing their carbon today to realize gains in operational effi ciency and the hope of gaining further rewards in the near future. These companies understand that sustainable strategies can offer necessary, immediate and long-term solutions to a world that continues to fi ght climate change and improve the environment for generations to come, even in these times of economic uncertainty.

Given what’s at stake, we hope that you will become an active participant in the Environmental Committee programs, and let us know what we can do to help your company reach its long-term sustainability goals.

Rebecca K. GreenChairACCJ Environmental Committee

ENVIRONMENTAL SOLUTIONSSpecial Advertising Section

Future Proofi ng Today – Help Connect Sustainability to Profi tability


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Bovis Lend Lease is a world leader in the delivery of sustainable buildings. Our standing as one of the few construction fi rms regularly listed on the Dow Jones Sustainability Index demonstrates our company’s long-held commitment to the environment, expressed through our desire to work with clients in the development of high-quality sustainable properties—be it offi ce space, residential communities, high-tech or other industrial facilities.

With over 20 years of experience in Japan, BLL combines international expertise with our detailed understanding of the local construction sector, to deliver properties that can contribute positively to the environment by minimizing energy consumption, waste generation and C0

2 emissions, while achieving commercial objectives.

With both LEED AP and CASBEE certifi ed staff, BLL offers a range of environmental and construction project-management services for companies wishing to develop sustainable spaces—from site selection and contamination assessment and remediation for new property acquisition through to sustainability evaluations (gap assessments), design and design management services, and building rating-tool assessments for new constructions or retrofi ts.

Contact us today to fi nd out how you can achieve commercially responsible, sustainable results.

Ecocert-QAI Japan Ltd.Tel: 03-5413-7330E-mail: [email protected]: www.ecocert.qai.jp/

Ecocert is an environmental certifi cation body founded in 1991 and recognized by government authorities in more than 80 countries including Japan.

Ecocert is actively involved in environment protection and social responsibility. Its wide range of certifi cation services—organic cosmetics, fair trade, organic textiles, organic farming, and organic cleaning products—makes this company a key player in sustainable development.

As an international certifi cation body, Ecocert has been accredited to ISO Guide 65 by governmental authorities, ensuring complete confi dentiality, independence, impartiality, and competence in the delivery of its services. The Ecocert name and seal are registered trademarks worldwide, and trusted by consumers, businesses, industry and governments.

The Ecocert Standards for Natural and Organic Cosmetics defi ne and promote a higher level of quality for cosmetics in general, maximize the use of organic ingredients, ensure the use of true natural ingredients by setting minimum content requirements.

The standards cover ingredients, formulations, manufacturing processes, packaging material, labels, quality assurance, handling practices, sanitation practices, environmental stewardship and record keeping.

Manufacturers, distributors and brand owners wishing to use the Ecocert name on labels and marketing material must be certifi ed by Ecocert.

Please contact our Japanese subsidiary, Ecocert-QAI Japan Ltd., for further details.

Logistique JaponTel: 03-5722-7500Fax: 03-5722-7502Web: www.ecover.co.jp (Japanese)Web: www.ecover.com (other languages)

Logistique Japon is the exclusive distributor for ECOVER products in Japan.

ECOVER is an international company that produces ecological laundry and cleaning products based on renewable plant-based materials and minerals. The ECOVER concept is based on excellent cleaning and sustainable quality. Long before the current ecological awareness, ECOVER realized that sustainability was essential in the long term. ECOVER considers the environment as an inseparable part of the economy. Negative effects on the environment are reduced to the minimum by stimulating and conducting research into new technologies and raw materials. In its own laboratories ECOVER has developed ecological products that are perfectly comparable to conventional products in terms of cleaning performance and user-friendliness. And this environmental concern does not just apply to the products of ECOVER—from production to packaging, ECOVER always chooses a sustainable ecological approach.

ECOVER can be found in major supermarkets, drugstores, Natural Lawson and health food stores.

Toyota Motor CorporationWeb: www.toyota.co.jp/en

Since its foundation, Toyota has conducted business with “contributing to the development of a prosperous society through the manufacture of automobiles” as a guiding principle. “Contributing to the development of a prosperous society” means “contributing to the sustainable development of the Earth.”

Sustainable development of the Earth will require achieving compatibility between environmental preservation and economic growth. Technological innovation holds the key to this, and it is people who create and use technology.

The various issues that humanity now faces, such as environmental issues, are complex and diffi cult matters that will require the entire world to work together. We believe that the only path to solving these issues is mutual respect for people, trusting the power of human knowledge, and unceasing improvement and technological innovation. Toyota hopes to combine the respective strengths of people and technology to contribute to the creation of a prosperous, low carbon society.

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When John Kamm set up the All Nations Society in Japan in 2003, he received threatening phone calls and public criticism from the heads of other funeral services companies and crematorium operators.

Today, his company—providing pre-plan-ning for funeral services—is an accepted part of the industry here. But he knows his latest venture is going to attract the same kind of hostility that he fi rst encountered six years ago.

In March, 37-year-old Kamm got his new promotional literature from the print-ers. He launched a new Web page offering families whose request for an autopsy had been turned down by a hospital to have the chance for a full investigation into cause of death. It would be carried out privately—a service that no one else had ever tried before in Japan. The system was to be introduced in late spring.

“There have been reports in medical journals that suggest that as many as 30% of discoveries made in autopsies played a signifi cant role in the death of the patient—but were not apparent when the person died,” says Kamm.

“That’s quite a high number; and in Japan I would say there is a possibility that it is even higher because there has been a resistance from hospitals and doctors for autopsies to be carried out,” he says.

Initially, Kamm planned to freeze the bodies for transport by air to Guam, where Dr. Aurelia Espinosa, the chief medical examiner for a large swathe of the eastern Pacifi c, would carry out the procedure at the Guam Memorial Hospital. After much

scrupulous searching, Kamm was able to locate a qualifi ed medical examiner in Tokyo who shares with the families of the departed the belief that they have the right to know the truth as to cause of death. Kamm has contracted Dr. Yoshinobu Sato to perform autopsies on his behalf. Dr. Sato works at Kyorin Teaching Hospital, and has the facili-ties to perform complete autopsies.

Kamm anticipates only a handful of requests initially. As Japanese people begin to ask more probing questions of their doc-tors when procedures go wrong, he believes more will avail themselves of his services.

“This is a big issue here and it’s going to get even bigger,” says Kamm, pointing out that family investigations have implica-tions for the legal profession and insurance companies as well.

At present, there are two types of autop-sies carried out in Japan. The fi rst is when foul play is suspected, in which case a full investigation is required by law. The second case is called a family-ordered autopsy—and, Kamm says, these are “extremely hard to get.”

From his perspective, “hospitals basically refuse to do them. The family has the legal right to request them, but the hospital will reply that it’s not their policy.”

The reason is that Japan’s tight medical circles do not want to see their reputations damaged, according to Kamm, which would be the inevitable result of an increased number of autopsies revealing medical mis-takes—and leading to a rise in the number of malpractice suits fi led.

The idea of private autopsies was some-thing Kamm considered three years ago, but met objections to his plan from the medical industry here. Such opposition, however, is something that he has had to face ever since setting up his funeral business in Tokyo back in 2003.

“In 1984, the Federal Trade Commis-sion jumped into the industry in the United States and introduced regulations; and while I’m generally opposed to regulations being imposed on any industry by the govern-ment, in this case, it made a lot of sense,” says Kamm. “It was easy to get someone who was grieving over the loss of a loved one, someone who is at their lowest ebb,

to sign anything if they were encouraged to do that.”

The result was that urns that would retail at $100 were being sold to the families of the deceased with a $4,000 price tag. And that’s the way it remains in Japan, according to Kamm.

The average Japanese funeral costs $24,000, he estimates, although the All Nations Society will perform a similar service for around half that fi gure—albeit without the fee for a Buddhist monk or the grave plot, which are amongst the highest items in funeral costs.

For a monk to come and pray at the family home for several hours can cost as much as $10,000, including the payment for a Buddhist name that the deceased will take with him or her to the afterlife. Made up of fi ve, seven or 11 kanji characters, the longer the name, the higher the price. The cost of a crematorium’s services in Tokyo is around ¥50,000, around 10 times the cost of the same procedure outside the capital. Yet, the potential earnings from this sector are “gigantic,” points out Kamm. With a popula-tion of 127 million and assuming that 1% of the population dies each year, he says, multiplied by the average cost of a funeral service of $25,000, the domestic market is worth a potential $31 billion a year.

Surprisingly, he points out, it is the white-collar professionals—doctors, CEOs and politicians—who want simple rites in the end, while the families of blue-collar workers tend to prefer the elaborate services with all the trimmings.

The trend in recent years, he has found, has been for smaller, “family funerals,” with a dozen or so people present. That sector now accounts for about 70% of his business.

Despite the potential for sleight of hand in Japan’s death business, Kamm does see signs of positive change.

“Before the legal changes in the U.S., pre-planning services for funerals were not popular, but they have taken off since then,” he says. “Regulation is coming to the Japanese industry and we are the fi rst to be able to offer a pre-planning service, so we are prepared.”

Autopsy Service

FDI PORTFOLIO



Globalization touches every corner of the earth. As Japan powers down in the economically gloomy climate, it’s worth remembering ramifi cations could be felt even in the Peach State. Japan is the largest international investor in the state of Georgia, according to the state’s Department of Economic Development. An

economic partnership began in 1973 when the Georgia State Department of Industry, Trade and Tourism Offi ce opened in Tokyo. A total of 352 Japanese companies now operate in this southeast corner of the U.S. Some $7.2 billion has been invested in Georgia by Japanese businesses employing a staggering 33,653 people.

Meanwhile, Japan is the fi fth-largest market for Georgia’s exports, accepting $1.2 billion worth of goods and services in 2007.

Keith Rogers, manager of special projects at the Georgia Department of Economic Development, is keen to point out the state’s logistical merits that include Hartsfi eld-Jackson Atlanta International Airport, the world’s busiest airport and leading air cargo center. Georgia is also home to the Port of Savannah, the fourth-busiest and fastest-growing container terminal on the East Coast. Georgia’s air and road network ensures that 80% of U.S. markets are no more than a two-hour fl ight—or a two-day truck haul—away. With this infrastructure in place, the state continues its efforts to attract Japanese investment, particularly in the fi elds of automotive, advanced manufacturing, aerospace, bioscience, agri-forestry, communications and logistics.

The Japanese Chamber of Commerce of Georgia, based in Atlanta, organizes educational seminars that assist Japanese companies with their policy-making endeavors.

“The Japanese job market is in a very depressed state in most industries, but business such as healthcare and online companies

that deliver cost savings to consumers are thriving,” says Kevin Gibson, managing director of recruitment consultancy Robert Walters Japan K.K.

In its Asia Job Index report for the fourth quarter of 2008, Robert Walters tracked advertisement volumes for professional positions across the leading job boards and national newspapers in Japan, China, Hong Kong and Singapore. Key fi ndings include the total number of job advertisements placed

in Q4 declined by 15% between October and December, and

this decline was sharpest in Singapore at 41%. The drop was exacerbated by the worsening economic climate—and this also translated into candidate sentiment. According to Robert Walters, many candidates, especially the best ones, showed a reluctance to change jobs, preferring to remain in positions in which they felt more secure and confi dent.

“We are in uncharted territory when it comes to predicting an upturn in the overall jobs market, as there are so many extreme views right now. It will, however, be extremely hard for foreigners who do not speak Japanese to secure roles in the short term,” explains Gibson. There is good news, nonetheless. “We do recommend staying in Japan if you can, as it will be a long time before companies will look to relocate people into Japan; and if you are here and available, you will be at an advantage.”

Job Trends

Georgia Draws


Thaicom Plc, a major communications company based in Thailand, has marked its full-scale entry into the communications business here through the establishment in April of the IPSTAR Japan Gateway.

With a base station located in a mountainous area of Saitama Prefecture (Oganomachi, Chichibu), and four lines available from IPSTAR’s dedicated broadband satellite, the service will cover all of Japan except for a few remote islands. The fi rm is currently installing a large communications antenna at its Oganomachi station.

While Internet connectivity continues its uptrend in Japan, and there is gradual progress toward greater broadband usage, the latter service remains unavailable in

certain mountainous regions and other zones. For example, approximately 860,000 households nationwide were

without access to broadband services as of the end of March 2008. According to JETRO, the government has targeted 510,000 of these households in its infrastructure improvement plans. Also in this strategy outlined by the Ministry of Internal Affairs and Communications, the remaining 350,000 households must rely on satellite access for broadband connectivity. They reportedly can enjoy access using IPSTAR’s dedicated broadband satellite. Monthly fees are expected to be around ¥3,000-4,000.

With plummeting department store sales and a burgeoning supermarket price war, it is clear that the Japanese retail sector has been heavily hit four months into an offi cial recession. Amidst the turmoil, news of rising sales through convenience stores has provided a rare crumb of comfort, according to analysis of the sector by Euromonitor International.

According to the Japan Franchise Association, 2008 sales rose by nearly 7% on the previous year to ¥8 trillion, including the fi rst same-store sales rise in nine years at an impressive 5%, states Euromonitor, a UK-based marketing research company that has its Asian headquarters in Singapore.

A key factor in this strong performance has been a change in tobacco legislation. From July 2008, only holders of an electronic Taspo card—short for tobacco passport—have been able to buy cigarettes from Japan’s ubiquitous vending machines. The cards are designed to crack down on under-age smoking, and are only issued to consumers aged 20 or over. Rather than applying for a card, which involves fi lling an application form and providing proof of identifi cation and a photograph, many of Japan’s 26 million smokers have simply started buying tobacco products from their local convenience

store—and are picking up other purchases on their way to the till. Euromonitor offers research into 300 different consumer sectors in

80-205 countries worldwide—including into fi nancial cards, tobacco and packaged foods—and analyzes market performance, key trends and developments that are driving growth in an industry sector.

Conbini Sales

FDI PORTFOLIO

Contact Nicole Fall at nicole@fi vebyfi fty.com if you have ideas for this column.

Thai Connects


It is good to stand out in a crowd, believes Christian Hassing.

The director and general manager of the Mandarin Oriental, Tokyo has witnessed a steep increase in

the number of luxury-end hotel rooms available in the city since its opening 3½ years ago in Nihonbashi, preceding the arrival of The Ritz-Carlton Tokyo (2007), The Peninsula Tokyo (2007) and Shangri-La Hotel, Tokyo (2009).

Yet, despite the added competi-tion in this hospitality sector, Hassing believes that his hotel has some key advantages over its rivals.

“We are slightly different to most other hotels, where between 55 and 60% of revenue is generated from their rooms,” says Hassing. “We have taken a different route by offering a very exclusive assort-ment of suites—we only have 179 guest

rooms and suites—but we have no less than eight food and beverage outlets that are doing very well, in addition to very large banqueting and wedding facilities.”

That means the hotel derives fully 67% of its revenue from dining—making it unique among other Mandarin Oriental properties and competitor companies in Asia.

Hotels, like most other businesses, have been affected by the global economic downturn; but instead of seeing declining numbers of guests, the Mandarin Oriental, Tokyo has merely seen a shift in the business mix to which it caters.

“Since our location is within Tokyo’s fi nancial district, the majority of our clients have traditionally been fi nance-related; but fortunately—because of the strong support of the local market—we have been able to expand our leisure

guest mix,” says the Danish national. Representatives of the pharmaceutical

industry and domestic trade have taken up the guest slack left by the shrinking fi nance business sector, while conference and meeting rooms are still in demand among

DIRECTOR AND GENERAL MANAGER OF THE MANDARIN ORIENTAL, TOKYOBy Julian Ryall Photo by Tony McNicol

Christian Hassing

BIOGRAPHYChristian Hassing

Age: 53 ■

Nationality: Danish ■

Born: Vienna, Austria ■

Education: Danish Hotel College from ■

1971-1977 Married: To April (U.S. citizen) ■

Children: Daughters Nina, 22; and ■

Michelle, 24Languages: Danish, German, English, ■

NorwegianHobbies: Luxury travel, good food and wine; ■

also enjoys exploringCareer: Worked in 14 luxury hotels on ■

three continents, holding General Manager positions for the past 20 years


BUSINESS PROFILE

consultants and those invested in revital-izing Japan’s various business sectors.

There may be a downturn, but it does have its silver lining. The 16–18% decline in volume from the fi nance industry has been offset by the domestic leisure side of the equation, which has witnessed an 8% increase and resulted in 63% occupancy last year, one of the highest room rates in town.

The domestic market provides the lion’s share of visitors, with 39% of the hotel’s guest room business from Japan, while clients from the United States account for 19%, some 13% from Hong Kong and 11% from Great Britain.

“We also believe that with the economic downturn, many Japanese became concerned, which caused them to skip longer foreign holidays for luxury stays closer to home,” says Hassing.

And luxury is what they get.Clearly aware of the old adage

that fi rst impressions count, archi-tect Cesar Pelli created a 38-story tower in which the hotel’s lobby occupies the top fl oor and offers stun-ning views across the metropolis.

The core principle of the hotel is the creation of a “sense of place,” says Hassing, which bridges Nihonbashi’s historical links with Edo (1604-1868, now Tokyo) to the ultra-modern present. Sleek glass and steel are softened by constantly fl owing water, as well as other hints of woodland and H

2O, feature on the 37th

fl oor, home to the Michelin-starred and French-inspired Signature restaurant.

Original fabrics, designed by Reiko Sudo, express traditional colors, patterns and textures for wallpapers, carpets and upholstery. Floors are of bamboo or carpet and walnut wood.

These are extended to the guest rooms, on the 30th to 36th fl oors, all with fl oor-

to-ceiling windows overlooking the city below. Many suite bathrooms have a similarly impressive vista. Guests on the east side have the pleasure of watching the sun rise over the Pacifi c; those on the opposite side can watch the sun set over the Imperial Palace and Mt. Fuji beyond.

Another key attraction of the hotel is its award-winning spa, which, in keeping with the company’s Oriental heritage, makes the best use of a range of Asian-inspired techniques and philosophies—including the shiatsu-inspired kiatsu treatment and an azuki bean and sea salt scrub—in its nine treatment suites.

The Cantonese restaurant Sense also has been recognized for its excellence with a Michelin star, and its dim sum is particularly recommended. Other dining options include the Italian restaurant Ventaglio, the Asian-inspired K’shiki, the ever-popular Michelin-awarded Tapas “molecular bar,” the Oriental lounge and the stylish Mandarin Bar.

The company’s broader approach to doing business is paying off in other markets and four new Mandarin Oriental hotels will be opening their doors to guests before the end of the year—in spite of the current economic climate—in Barcelona, Macau, Marrakech and Las Vegas.

“Rather than dropping our prices, which is what a lot of other hotels are doing in these challenging times, we are focusing on upholding quality while emphasizing the added value of the highest levels of our Oriental heritage and service culture,” says Hassing. “Brand-defi ning advertise-ments continue across the Group, but here in Tokyo we have taken the approach of promoting our special ‘sense of place’ with

cultural packages and opportunities that promote Japan, Tokyo and the Nihonbashi district as the original center of the city.”

The approach is apparently paying off, as the ratio of return visitors has increased steadily since the hotel opened—and stands at 24% as of last year.

Hassing and his staff are most defi nitely not averse to competition at the very top tier of the luxury hotel business. As in other industries, ambitious rivals will always keep an enterprise on its toes.

“When considering other major ‘capital’ cities, like London and New York, there are a lot more luxury hotel rooms avail-able there than we have here in Tokyo,” he says. “For example, in 2004, there were around 780 rooms in the top luxury hotel category; and even though this has risen to 1,930 rooms now, and the 147% growth sounds substantial, Tokyo’s top luxury hotel room inventory is still less than in other comparable international cities.

“We feel that the new competition helps the industry, as it provides increased awareness about the destination—and also elevates the general service levels within the industry, which enhances the overall guest experience within the luxury hotel business as a whole,” adds Hassing.

“Yes, the other luxury hotels are our competitors, but they cater to other parts of the city in their own ways,” he continues. “We are very fortunate to be in this historical part of Tokyo, and will continue to fulfi ll our remit of creating an exclusive and trendy place to stay, or just indulge in gourmet dining or our spa experiences.” ■


SNAPSHOTMandarin Oriental, Tokyo

Number of staff: 425 ■

Established: October 2000; hotel opened in ■

December 2005Location: Nihonbashi ■

Turnover: $82 million ■

Main business: Hospitality, luxury ■

accommodations, food and beverage Major clients: 48% corporate, 52% leisure ■

[email protected] ■

www.mandarinoriental.com ■

MA

ND

AR

IN O

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NTA

L, T

OK

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We are giving away 3 copies of Globalization. Simply e-mail [email protected] by June 19. The winners will be picked at random. Winners of The Return of Depression Economics and the Crisis of 2008: Robert Marsh, UPS; Randy Krieger, Ford Japan Limited; Eric W. Sedlak, Jones Day.

By Bruce C. Greenwald and Judd KahnJohn Wiley & Sons, Inc., 186 pp, $29.95Reviewed by Tom Baker

With its gag title, Globalization n. the irrational fear that someone

in China will take your job, sounds like an anti-anti-globalization

polemic. But the arguments made by Columbia University

Prof. Bruce C. Greenwald and coauthor Judd Kahn, also his

collaborator on two earlier business books, are less humorous

and more complex than one might expect from such a cover.

Encompassing multiple aspects of the world economy,

the closest the book comes to a single, sweeping argument

is that globalization, even in its current form, is not

unprecedented, and that its impact is far less

dramatic than either its proponents or its

detractors would have us believe.

“Countries Control Their Fates” is one of

the chapter titles, and it becomes a mantra

in the text. The authors attribute the

rise of China and India, for example,

to internal reforms rather than global

trends. They note that “countries that

had been their peers—impoverished and

underdeveloped—only two or three

decades ago [such as] Argentina, Mexico,

[and] Ghana” did not similarly prosper,

“even though the same international

conditions, the same global markets,

were equally available to them.”

As further evidence that local

conditions are defi nitive, the authors

show that seemingly universal

policy prescriptions, such as the

privatization of state enterprises, have

differing results in different countries.

Productivity growth in state-owned

phone companies, for example, rose

after privatization, where those

companies had been ineffi cient,

such as in Australia; but often

declined where the companies were already run well, such as in

South Korea.

What about fears that countries with cheap labor will

undermine the industrial base of more developed nations? While

U.S. manufacturing jobs have been on the decline over the past

few decades, domestic manufacturing output has actually risen

dramatically. The authors attribute most of the job losses to

improved effi ciency rather than foreign competition.

In any case, Greenwald and Kahn note that manufacturing,

like agriculture before it, is shrinking in relative terms as services

continue to grow in importance. Arguing that most services

are not exportable, the authors predict that international trade

will account for a smaller slice of the world’s economic pie in

the future. The book says this will hurt developed countries,

like Japan that “try to sustain signifi cant employment in

manufacturing”; while having less impact on countries like the

United States that “embrace a service-centered economy.”

In an effort to keep the manufacturing sectors healthy, Japan

and some other countries have run ever-larger current account

surpluses. Nations such as South Korea, on the other hand, have

moved in a similar direction to avoid overexposure to foreign

debt, which could lead to a repeat of the fi nancial

crises of the 1990s. Since the U.S. dollar is the

world’s reserve currency, other nations’ surpluses

are balanced out by the U.S. current account

defi cit. Looking at Britain’s experience when the

pound was the favored reserve currency, the

authors say this is one aspect of globalization

that does, indeed, threaten U.S. jobs.

So it seems that countries do control their

fates—except when they can’t. ■

Tom Baker is a staff writer at The Daily Yomiuri.

BEHIND THE BOOK

Globalizationn. the irrational fear that someone in China will take your job


Advocacy Update

ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s offi cial position on a specifi c issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda.

ACCJ Supports Comprehensive Pharmaceutical Pricing Reforms that Promote Innovation

Pharmaceuticals Subcommittee Valid Through January 2010

RecommendationThe ACCJ calls for the Government of Japan (GOJ) to: 1) Implement comprehensive reform of the phar-maceutical pricing system in a way that promotes long-term investment in the health of the Japa-nese people and the promotion of effi ciency and innovation in the pharmaceutical industry; 2) Abolish anti-innovative pharmaceutical pricing practices, including special repricing for market expansion and biennial price revisions; 3) Not implement price revisions annually. Any short-term fi scal benefi t in the form of reduced expenditures for pharmaceu-ticals that come from these anti-innovative pricing practices are more than cancelled out by their cumulative negative impact on patient access to innovative medicines and innovation in the pharma-ceutical industry. Until comprehensive pricing reform is adopted, steps that would further erode the prices of patented products should not be pursued.

Increase Focus on Prevention, Early Detection and Wellness in Japan’s Health Care PolicyHealthcare CommitteeValid Through January 2010

RecommendationThe American Chamber of Commerce in Japan (ACCJ) encourages the Government of Japan (GOJ) to increase its focus on prevention, early detection, and wellness in its health care policies, including by creating incentives for people to adopt healthy lifestyles and promoting appropriate use of the latest and most effective vaccines, medicines, medi-cal technologies and services available. Focusing on health care spending and health care profes-sional efforts earlier in the disease continuum can facilitate early intervention, improve the quality of life for patients, increase the productivity of the workforce, and achieve multifold cost savings and effi ciency gains for the overall health care system.

Improve Shareholder Voting Access and Disclosure to Enhance Corporate Governance and Boost the Credibility of Japan’s Public MarketsForeign Direct Investment CommitteeValid Through February 2010

RecommendationThe American Chamber of Commerce in Japan (ACCJ) calls on the Government of Japan (GOJ) and Japanese stock exchanges to improve access by domestic and foreign investors to the proxy vot-ing process and information on shareholder vote results by:1. Requiring participation by all publicly listed

Japanese companies in an electronic share-holder voting system;

2. Extending the minimum notice period between the dissemination of proxy materials and share-holders meetings to at least four weeks in the case of public companies (the Company Law currently requires a minimum notice period of two weeks); and

3. Requiring publicly listed Japanese companies to promptly and publicly disclose the results of shareholder voting for each resolution, including the number of votes cast in favor and against each resolution and the number of abstentions.

These steps are needed to make investing in pub-licly listed Japanese companies more attractive and convenient. Improvements in the efficiency, transparency and accountability of shareholder voting would encourage shareholder democracy and better corporate governance, enhance value for all shareholders in publicly listed Japanese companies, benefit stakeholders of financial institutions, and increase the dependability and credibility of Japan’s public markets.

The ACCJ believes that these measures are needed in Japan in order to address the perception that many institutional shareholders of Japanese companies are “cross-shareholders” that do not act to maximize value for all shareholders, as well as to address the issues raised by the unique historical evolution of Japan’s capital markets and the clustering of shareholders meetings in a single week in June.

Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp


ACCJの「意見書」は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であり、提言活動の中核を成しています。現行の政策や、日本又は米国政府で検討中の政策、二国間もしくは多国間で協議中の政策についてだけでなく、新たな関心を高めるために現在日本政府の課題となっていない問題についても意見を述べています。

イノベーションを促進する薬価制度の抜本的改革への支援医薬品小委員会

2010年1月まで有効英語正文

提言在日米国商工会議所（ACCJ）は、日本政府に対し、(1)日本国民の健康と医薬品産業の効率性・イノベーションの向上に対する長期的な投資を促す形での薬価制度の包括的改革の実施、(2)市場拡大に伴う薬価特別再算定や隔年の薬価改定を含む、イノベーションを阻害する薬価算定の仕組みの廃止、(3)薬価の毎年改定の導入断念を要求する。このようなイノベーションを妨げる薬価の仕組みを使った薬剤費支出の削減がもたらす短期的な財政メリットよりも、患者の革新的医薬品へのアクセスや医薬品産業のイノベーションに対する長期的な悪影響の方がより深刻である。薬価制度の包括的改革が実行されるまで、特許期間中の製品の価格をさらに蝕むような措置は検討されるべきではない。

日本の医療政策において、予防、早期発見、健康増進に重点的取り組みをヘルスケア委員会


提言在日米国商工会議所（ACCJ）は、日本政府が、医療政策において予防、早期発見、健康増進の取り組みを重点強化することを要望する。具体的には、国民が健康的な生活習慣を実践するインセンティブを創出することや、最新かつ有効なワクチン、医薬品、医療技術や医療サービスの適切な利用を推進することを期待する。疾病の初期段階に対して医療費や医療従事者の取り組みを集中することによって、早期の治療を促進し、患者のQOL(生活の質)を改善し、労働者の生産性を高め、医療制度全体に関わるコストの削減や効率性の改善を実現できるのである。

コーポレートガバナンスを強化し、日本の公開市場の信頼性を高めるために、株主による議決権行使へのアクセスと情報開示の改善を提言対日直接投資委員会


提言在日米国商工会議所（ACCJ）は、日本政府および日本国内の証券取引所に対し、国内外の投資家が株主議決権代理行使過程および実際の株主議決権行使結果の情報へよりよくアクセスできるよう、以下のような改善策を提言する。1. 日本のすべての上場企業に対して、電子投票による株主議決権行使制度への参加を義務付けること

2. 議決権行使の参考資料の配布と株主総会の間に設けられている通知期間を、公開会社の場合には少なくとも4週間に延長すること（現行の会社法は、最低2週間の通知期間を義務付けている）、ならびに

3. 日本の上場企業に対して、賛成投票数、反対投票数および棄権票数の内訳を含め、各議案に対する株主の議決権行使状況の結果を迅速かつ公に開示することを義務付けること

これらの措置は、日本企業に対する投資をより魅力があり、容易なものとするために必要なものである。株主の議決権行使における効率性、透明性および説明責任を改善することにより、株主民主主義およびより優れたコーポレートガバナンスを促し、日本の上場企業の全株主の価値を高め、金融機関のステークホールダーの利益となり、日本の公開市場の信頼性と信認性を向上させる。ACCJは、日本の企業の多くの機関投資家株主が株

主価値を最大化するための役割を果たしていない「株式持合い株主」であるという認識と、日本の資本市場の独特な歴史的展開および6月の一週間に株主総会が集中しているという問題に取り組むため、広範な義務付けが必要であると確信する。

ACCJが公表した意見書の全文は、 www.accj.or.jp のアドボカシーセクションでご覧頂けます。

I had the pleasure and privilege of joining the American Chamber of Commerce in Okinawa (ACCO) for their May meeting. They invited me down to speak about develop-ments in the economy and in the ACCJ, but I think the real reason for their kind invitation was to show off southern

hospitality. The Okinawa Chamber has a history that is just fi ve years shorter than our own. Many, or perhaps most, of their leaders are independent business people who have succeeded as entrepre-neurs in an environment that is both alike and different from our own here on mainland Japan. In some areas, such as selling within the U.S. military system, I think many of our members could learn from their compatriots in Okinawa. And the ACCO folks welcome the chance to help out in this area. They are also eager to fi nd ways to cooperate with other American chambers in the region and, in that regard, we all should think about ways we can work together. I encourage you all to visit Okinawa and while you’re there to take in an ACCO meeting and experience the hospitality.

Ambassador Mondale was in town last month and some of us were able to visit with him. As always, his conversation was insightful and witty and his support of the Chamber unfl agging. He was in town for the Mansfi eld Foundation Board meeting that he chairs and had used his time in Tokyo to meet with his contacts in Nagatacho. In his meetings, Ambassador Mondale said he found Japanese offi cials to be refreshingly open to new ideas and sugges-tions on policy prescriptions. We too have found this to be true; particularly so in our discussions with offi cials in preparation for the release of the Internet Economy White Paper. Political ferment can be confusing but it is also an opportunity. And it means that our advocacy with the Japanese government will be critical over the coming months. We also will need to remind the American administration that this is a key time to engage Japan.

In our advocacy, ACCJ has been and will continue to be outspoken about our concern that there is an emerging trade architecture in Asia that does not include the United States. We are not against greater integration of Asian economies, quite the contrary. But we would be against formation of trading blocks where the U.S. is excluded or marginalized. In this context, I think we should also note that in early May there was renewed energy behind the creation of an Asian Monetary Fund, as predicted in the February issue of the Journal (AMF Back on the Table, page 34). As with greater Asian economic integration, the ACCJ has not developed a position on the merits or demerits of the AMF. But it would be a bad idea for our politicians to be unaware of the potential impact of these developments and for us not to watch these developments closely to see how they might affect us. So we will be bringing this message with us on our Washington Doorknock. ■

Old Friends, New Ideas

IN THE FINAL ANALYSIS

Samuel H. Kidder is ACCJ Executive Director.

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