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Japan

Legal framework

 

The legal framework analysis aims to provide general knowledge of the national cooperative legislation and of its main characteristics and contents, with particular regard to those aspects of regulation regarding the identity of cooperatives and its distinction from other types of business organisations, notably the for-profit shareholder corporation.

It aims to evaluate whether the national legislation in place supports or hampers the development of cooperatives, and is therefore “cooperative friendly” or not, and the degree to which it may be considered so, also in comparison to the legislation in force in other countries of the ICA region, or at the supranational level.

In addition, the research aims to provide recommendations for eventual renewal of the legal frameworks in place in order to understand what changes in the current legislation would be necessary to improve its degree of “cooperative friendliness”, which is to say, to make the legislation more favourable to cooperatives, also in consideration of their specific identity. This webpage presents a snapshot of the legal framework analysis results for Japan.

 

 

There is no one general regulation of cooperatives in Japan, but there are separate cooperative acts specifically dedicated to different kinds of cooperatives, which are regulated by different ministries. This research mainly deals with the Agricultural Cooperatives Act (ACA) and Consumer Cooperatives Act (CCA).

 

Main Laws relevant to cooperatives in Japan

 


Agricultural Cooperatives Act, 1947 - Dedicated to Agricultural cooperatives and is under the supervision of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and Financial Services Agency (FSA)

Consumer Cooperatives Act, 1948 - Dedicated to Consumer cooperatives and is under the supervision of the Ministry of Health, Labour and Welfare (MHLW)

Fisheries Cooperatives Act, 1948 - Dedicated to Fisheries cooperatives and is under the supervision of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and Financial Services Agency (FSA)

SME Cooperatives Act, 1949 - Dedicated to SME cooperatives and is under the supervision of the Ministry of Economy, Trade, and Industry (METI)

Act on Cooperative Banking,1949 - Dedicated to Credit cooperatives and is under the supervision of Financial Services Agency (FSA)

Shinkin Bank Act, 1951 - Dedicated to Shinkin Banks and is under the supervision of Financial Services Agency (FSA)

Labor Bank Act, 1953 - Dedicated to Labor Banks and is under the supervision of the Ministry of Health, Labour and Welfare (MHLW) Financial Services Agency (FSA)

Tobacco Growers Cooperative Act, 1958 - Dedicated to Tobacco Growers Cooperatives and is under the supervision of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and Ministry of Finance (FSA)

Forest-Owners Cooperative Act, 1978 - Dedicated to Forest-Owners Cooperatives and is under the supervision of the Ministry of Agriculture, Forestry, and Fisheries (MAFF)

Norinchukin Bank Act, 2001 - Dedicated to Norinchukin Bank and is under the supervision of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and Financial Services Agency (FSA)

 

The ICA principles of cooperative identity are explicitly referred to in cooperative law.


 

Cooperative friendliness

 

The degree of ‘cooperative friendliness’ of the Japanese cooperative legislation varies from sector to sector. The Agricultural Cooperatives Act has been friendly to agricultural cooperatives as a major tool to implement the agricultural policy together with subsidies and favourable tax treatment. The Consumer Cooperative Act has been unfriendly to consumer cooperatives under the pressure of small retailers resulting in stricter regulation on non-member trade.

 

Key recommendations for improvement

 

  • With due acknowledgment to the constraints, the organizational laws and business laws, need to be separated.
  • The extent of non-member trade to be stipulated by cooperative bylaws.
  • The cooperative laws need to enable multi-stakeholder membership.
  • The qualification of members in the Agricultural Cooperatives Act can be defined more loosely to enable non-farmers to join as regular members.
  • The operating area to be decided freely by cooperatives themselves in Consumer Cooperative Act.

 

Conclusions

 

There should be a national working group to examine the problems of existing cooperative legislation and develop a common strategy to improve the legal framework of cooperatives so that they can effectively contribute to the implementation of Sustainable Development Goals (SDGs).

 

 

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