No. 43　2005

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Defend Article 9 of the Constitution and Turn the Tide in Favor of Better Living Conditions and Expansion of Workers' Rights

Japan Research Institute of Labor Movement
Takeshi OHE (Co-President)
Kazunori OHKI (Co-President)
Tomio MAKINO (Co-President)
Sihnji OHSU (Administrative Director)

January 1, 2005

We wish you happy new year to all Rodo-soken members and readers.

Rodo-soken observed its 15th founding anniversary in December 2004. We would like take this occasion to express our gratitude for your day-to-day support and cooperation, which has made it possible for us to achieve a lot of achievement in its work on theories of the movement as well as in making policy proposals.

We have entered 2005, the 60th year since the end of World War II, a crucial year for us particularly in connection with the situation surrounding the issue of the Constitution. Prime Minister Jun'ichiro Koizumi has said, "If the Constitution bans Japan from exercising the right of collective security, barring the Self-Defense Forces from joining US forces in wars outside of Japan, we should change the Constitution," thus publicly responding to the US demand. The prime minister, who is most responsible for the observance of the Constitution, is now in charge of compiling a draft constitution to be announced at the LDP convention in November on the occasion of the party's 50th anniversary. The Komei Party, which is the ruling coalition partner, is promoting constitutional revision by calling for some additions to be made to the present Constitution including changes in the war-renouncing Article 9. On the opposition side, the Democratic Party has made clear that it will publish its pan for constitutional revision by around March. In the Diet (Japanese parliament), forces that are in favor of Constitutional revision account for 90 percent. Meanwhile, realignments of US Forces in Japan and the Japanese Self-Defense Forces are underway. The Japanese SDF and military bases in Japan are being incorporated in the US preemptive attack policy. As part of this scheme, the United States and Japan are trying to relocate the US Army Corps I headquarters to Japan. The government is also rushing to lift Japan's arms export ban.

Major commercial media keep silent about these facts. They are rather uncritically reporting the government's outrageous moves toward adverse constitutional revision on the premise that the Constitution will be revised. They disregard the "Article 9 Association" and various other popular movements that are active in opposition to an adverse revision of the Constitution. All this clearly shows that there is no room for us to be optimistic about the present situation.

It should be noted that these attacks on the Constitution are in tandem with a large-scale attack on the living standards and rights of working people. The call for an adverse revision of the Fundamental law of Education is louder than ever before. The government has proposed abolishing the fixed-rate tax cuts scheme and is openly considering raising the consumption tax rate to 15-16 % from the present 5%. Other attacks include privatization of the postal services, promotion of municipal mergers and local finance reform that will reduce the state's role, introduction of a bid system for government/municipal services allowing for more private sector participation, and policy that will legalize traffic in internal organs. Concerning issues related to workers' living conditions and work, a series of adverse revisions are being promoted: the call for deregulation of overtime work rules; the so-called "white-collar exemption" that will force most office workers to work without work-time and other restrictions under the Labor Standards Law; total liberalization of the use of temp workers as well as the privatization of job placement work; and a policy proposal for denying the Spring Struggle - labor-management wage talks - and even collective labor contracts that cover workers beyond company boundaries. It is also well known that the government is planning to review welfare assistance, medical services, pension, nursing care, and other social services with a view to cutting services and force consumers to pay more for these services. The move toward adversely revising Article 9 of the Constitution is in parallel with the plans to adversely revise the constitutional provisions to guarantee democratic rights.

In a word, these moves to adversely revise the Constitution are a manifestation of the oppressive and plundering policies of the Koizumi Cabinet and the business sector undermining the Japanese people's living standards and peace.

The calls for the adverse revision of the Constitution is not in response to the people's needs; they are mainly echoing the US demands. This is an open secret. Japan's ruling circles are cooperating with the US Bush administration in implementing the Neo-Con policies, thus siding with the forces seeking to rule the world with the terror of armed attack. Their policy appears to be very effective and powerful, but the fact is that they are increasingly isolated from the world and is quickly losing influence. The democratic gains achieved by the Japanese people after the end of World War II are more enormous than people may imagine. International opinion opposing the Iraq War and wishing for world peace is growing more than ever before. Today, in the early part of the 21st century, it would be no exaggeration to state that the rightist policies promoted by the US and Japanese ruling circles will not succeed.

A broad range of people is rising in the growing movement in opposition to the anachronistic attacks. They are taking part in various creative forms of the movement, such as the "Article 9 Association," the Campaign to Collect Signatures from a Majority of the People to Stop the Adverse Revision of the Constitution, and the "Joint Center in Opposition to Adverse Constitutional Revision," which Rodo-Soken takes part in. Frankly, however, the movement is not developing fast enough to meet the present needs.

Rodo-Soken is an institute established with the aim of assisting the Japanese trade union movement and contributing to improvement of the people's living standards. In its 15th year Rodo-Soken will carry out a full-scale survey in cooperation with Zenroren to help empower the trade union movement on the occasion of the 50th anniversary of the Spring Struggle. We hope that this survey will be useful for organizing serious discussions aimed at improving Japanese workers' living standards as well as working conditions. To this end, we call on all Rodo-Soken members and readers of our publications to take pride in doing all we can to let the public know the meaning of the adverse revision of the Constitution in plain words. We call on you to participate in action to oppose adverse constitutional revision by displaying creativity, by capitalizing on every possibility and by showing your intelligence. Our action without doubt will prove to be very effective in having the Constitution embraced firmly and widely by the public and in turning the tide to improving living standards and basic rights.

Wishing Rodo-Sokan members and our readers all the best, we hope we can work together to fulfill these tasks.

A Critique of Nippon Keidanren's Position Paper on Management and Human Resources

Kazunori OHKI
Co-President, Rodo-Soken

1. Business leaders' opinion carries an extraordinary political clout

It has become customary for Japan's business sector to announce its policy in preparation for the annual wage talks with labor (Spring Struggle). They now maintain that the Spring Struggle is now nonexistent. The Japan Business Federation (Nippon Keidanren) late last year made public a policy paper compiled by its Committee on Management and Labor Policy. Entitled "Position Paper 2005 on Management and Human Resources - Management and Labor Working Together to Promote Further Reforms" (December 14, 2004), it put forward the basic stance corporate management should take in negotiations with labor in the spring of 2005.

Tightening grips on policymaking

The Nippon Keidanren position paper always draws attention from labor as well as mass media for the following reasons:

First, the position paper, which has a circulation of 60,000 copies (according to Nippon Keidanren), commands a large readership among not only those who are in charge of personnel affairs at Nippon Keidanren member companies, but also subcontractors doing business with large companies, as well as industrial organizations and local employers' organizations. Its readers also include union officials, in particular those at large companies, as well as labor researchers. It is internationally exceptional that the business sector's position paper is so widely read and has influence on the labor movement and the government's labor policy.

Second, the position paper's influence has been growing in parallel with the business sector's grip on politics during past several years.

Previously, a similar position paper stating how the employers should deal with workers' wage increase demands used to be published by the Japan Federation of Employers' Associations (Nikkeiren) which existed as the business circles' group specializing in the issue of the trade union movement including the annual Spring Struggle. In those days, the position paper already had strong influence. In May 2002, Nippon Keidanren came into being as a result of a merger between two major business organizations, Nikkeiren and the Japan Federation of Economic Organizations (Keidanren). The new organization set up the Committee on Management and Labor Policy, chaired by Masaharu SHIBATA (NGK Insulators, Ltd. chairman). Since the position paper began to be published by this committee, it has generally been seen as the policy paper from the general headquarters of the business sector, thus adding to its weight.

Thirdly, Nippon Keidanren takes on some characters that the old Keidanren did not:

1) The business sector has its influential members take part in the discussion of key Koizumi Cabinet policies at the Council on Economic and Fiscal Policy and the Council for Regulatory Reform, thus exerting considerable influence on policy-making.

2) By accepting U.S. and other foreign firms as members, Nippon Keidanren now functions as what may be called a "joint committee of multinational corporations." The Council for Regulatory Reform has a member who represents a foreign-owned company taking part directly in the policy making.

3) Since Toyota Motor Corporation Chairman Hiroshi OKUDA became Nippon Keidanren chairman, the financial circles' cost-cutting strategy has been accelerated more than ever before.

4) What's more, the business sector is taking a lead in unleashing a series of political attacks undermining living standards and threatening peace, including a drastic adverse revision of the whole systems of pension and other social services, a substantial increase in the consumption tax rate, the removal of the "Three Principles of Arms Export Ban," and drafting a revision of the Constitution.

5) Apparently with the aim of pushing ahead with these undemocratic policies, the business sector is using political donations as leverage for tightening control over political parties. It is now publicly attempting to put not only the executive branch but the legislative branch of government under its control.

Nippon Keidanren comprises only 1,300 companies

Apparently due to these changes in the character of the organization, as explained by Okuda, the position paper of the Committee on Management and Labor Policy has recently become increasingly vocal on all issues, ranging from labor policy to the falling birthrate, aging society, pension and social services, education, public security, and international affairs. It's like a policy statement of the "business sector's prime minister."

Isn't this strange? Nippon Keidanren is just another business group comprising only 1,306 large companies listed on the first section of the stock exchange (as of May, 2004). What made it possible for Nippon Keidanren to have such a big say on all major issues concerning national politicies, not to mention on labor problems?

The "Position Paper 2005 on Management and Human Resources" is composed of the following three parts:

　- Part 1. Current Business Environment
　- Part 2. Management and Labor Issues
　- Part 3. Leadership and Proactive Management.

Its disorderly compilation and ambiguous texts make it very difficult for readers to grasp the points. At any rate, let me walk you through the paper's points of argument.

2. Has Business Sector's Wage Cut Policy Changed?

Nippon Keidanren's position on the wage issue has three major problems. One is that it is trying to cut wages as much as possible.

At individual enterprises

Some media have reported that in the 2005 position paper Nippon Keidanren has begun to approve a wage increase, reversing its 2004 policy that called for holding down wages. The 2005 position paper includes descriptions that can be taken as Keidanren's acceptance of pay raise. It stated that "individual companies are free to decide to raise their wage levels according to labor-management agreement" and that "it would be necessary for companies that have improved business performance to give workers rewards for their efforts."

This implies that how absurd it is for large companies to pursue a policy of cutting workers' wages while reporting record profits and paying biggest ever dividends to shareholders.

However, business leaders certainly have not given up their policy of holding down workers' wages. The position paper points out the need for corporations recovering business performance to give workers rewards for their efforts with bonus. But it also says that there should be no pay raise that would lead to a long-term increase in fixed labor cost.

On basic wage hike, it says, "Given tough international competition and uncertain prospects for business performance, raising wages, already high by international standards, any further is not a realistic option." It also says, "[R]eviewing systems for the annual increment and retirement benefits is an important issue again this year." On the grounds that Japan's overall economic situation calls for wage control on a proper level, it calls for the policy of wage restraint to be maintained even in times of "business recovery."

This year's position paper, as in the last year's, calls for the strategy for promoting goals as a "true trading nation with human resources to support these efforts" to be maintained. Nippon Keidanren put forward this strategy in the "New Vision" published in January 2003, under the title of "JAPAN 2025: Envisioning A Vibrant, Attractive Nation in the Twenty-first Century." In a word, it aims to drastically change the way people work and live or to lower their levels, so that Japanese multinational corporate giants can make as large profits as possible in Japan as well as abroad. From this, it is clear that business circles are adhering to the wage-cut policy.

Impoverishment

Do they think that such a policy will be tenable in the 21st century world? In international comparison of wage levels, Japan no longer a top runner. It now ranks low among the major countries.

At a time when wage levels are improving in Asia, Europe and the rest of the world, Japanese workers are experiencing a non-stop wage cut offensive. In an international comparison of purchasing power parity, Japan is ranking as low as developing countries.

As personal consumption continues to decline and postal savings and bank deposits decrease, Japan is still unable to get on a track of economic recovery and is often criticized at international conferences for hampering the growth of the world economy.

Despite this, the business sector under Okuda's leadership is urging the government to do more to assist large corporations in cost reduction. This, however, is the way to further impoverish workers.

3. Business Leaders Go against World's Common Sense by Denying Collective Bargaining

In disregard of the growing contradictions, the corporate sector still clings to the merit-based wage system.

Empty argument

Reflecting the fact that many companies are facing various difficulties caused by the merit-based wage system, books criticizing this wage system are selling like hot cakes. This being the circumstance, the 2005 Nippon Keidanren position paper admits that there are many points to bear in mind in administering the merit-based wage system. Nevertheless, it maintains that the need now is to establish personnel and wage systems that accord with skills, results and degrees of contributions. But such systems will only have a devastating effect on the workplace.

How can the merit-based wage system produce results at a time when it is widely regarded as problematic? The solution Nippon Keidanren presents at best in its position paper is "introduction of a system commensurate with each company." It can offer nothing but such an empty statement, a clear demonstration that their wage policy is in deadlock.

What is more, the 2005 position paper denies outright the international common sense that management should decide on wage and working conditions through collective bargaining. This is also one of the rights of workers and their unions that have long been guaranteed in Japan.

Believe it or not, the position paper states that "a base wage increase in the sense of a yearly uniform base wage increase on the wage curve for all employees no longer performs in any meaningful way." It also says that an era of "'shunto' (annual labor-management negotiations - editor) over wage increase has ended." It says that "yearly management-labor negotiation should take on a new role by shifting its focus more on discussion-centered meetings, where the management and labor discuss various issues concerning enterprise management, and examine measures to perform their tasks." It goes on to say that the term "basic wage increase" which is a reminder of across-the-board pay increases of old days should be changed to "revision of wages."

These arguments should be seen as a de facto refusal of collective bargaining on labor contracts and a rejection of establishing social compact on wages and working conditions. Business circles intend to allow individual companies to determine wages and working conditions according to management's judgment and assessment.

Self-centered arguments

The position paper reiterates its opinion that in determining wages companies should take into account corporate performance, international competitiveness, employees' abilities, achievements and contributions to better business performance, and multi-track wage administration. These conditions are all beneficial to companies and in disregard of the working and living conditions.

The Nippon Keidanren Committee on Management and Labor Policy consists of 35 members, who are presidents, board chairs, honorary advisors, and executive advisors. Do they think that their anachronistic demands are acceptable at home and internationally, in particular by the International Labor Organization (ILO)?

To begin with, do they believe that Japanese workers support their self-centered argument? The fact that their policy is going astray and falling behind the times is explained by their wage policy. The biggest weakness of the business sector's wage policy is represented by their lack of vision to offer workers. They are unable to offer any plans that would lead to wage increases, better living conditions, or the establishment of social justice. Are the business circles qualified to talk of a private-sector-led "social reform"?

4. Inability to Hammer out Measures to Declining Field Ability

In Japan, the declining and collapsing technological base is a major industrial concern. Many companies, which used to take pride in their high precision and high technological standards, are now experiencing frequent accidents and increasing defective products. Trust in Japanese products is being eroded at home and abroad.

A Challenge in management strategy

The position paper concedes that there has been little improvement of the situation in which workers' capabilities and experience are declining on the ground and calls for efforts to restore and enhance them in each enterprise.

It also raises concerns over an increasing number of young people called job-hopping part-timers and NEET (young people not in education, employment or training). It warns that an increase in the number of young people without proper job skills could result in decreasing Japan's international competitiveness. But the business sector's awareness of the problem and its measures to deal with it are very inadequate. What's more, they are pushing ahead with policies that will only help exacerbate the situation.

For example, the position paper attributes the shortage of human resources to: (1) a lack of efficient communications in places of work, (2) difficulty in transferring skills to young workers due to the reluctance to hire young workers and to an increase in fixed-term employment, and (3) the decrease in human resource connected to mandatory retirement and job cuts carried out by corporations. But the paper does not refer to the root cause of the problem: corporate cost-cutting restructuring. In other words, it lacks recognition of the need to find ways to enhance job skills for all workers in the workplace.

While admitting that despite the recent "economic recovery," the situation remains tough for small- and medium-sized enterprises and local economies, the position paper apparently fails to recognize that this state of affairs represents a major cause of the declining manufacturing power.

This is why all they can propose are stopgap measures calling for improvement of workers' job skills, improvement of workplace communications, reevaluation of roles of managerial staff, appraisal of worker contributions with intellectual skills, and consideration of introducing a meister system. It has no measures to propose for dealing with the root causes.

The 2005 position paper states that it is extremely difficult to solely rely on cost-cutting strategy to compete with China, "the world's factory," thus admitting that it is wrong to try to win the competition solely through cutting costs. It also says that if Japan is to restore the manufacturing base, it to give priority to establishing the manufacturing base and maintaining good storage of "tacit knowledge." It also points out the need for enterprises to be attractive to workers as companies that give them worthwhile job opportunities and that this in itself can be a major factor for maintaining competent workers.

All these arguments should make it necessary to a reexamination of the cost cutting restructuring strategy and the merit-based wage system. In fact, some companies are beginning to review their policies.

In favor with multinational companies

However, the conclusion that the business sector led by Okuda arrived at was opposite to what I have stated above. They have made it clear that they will reform business structures in proactive restructuring efforts as a way to break the present stalemate.

What is "proactive restructuring?"

Judging from the position paper, it means a policy of tailoring Japan's industries and economy for the business sector and multinationals. It proposes three main ways to carry out "proactive restructuring" in the private sector. First, utilize "diversified workforce" to increase corporate competitiveness. Second, give U.S. and other foreign companies a wider market access to stimulate competition with domestic companies. Third, accept foreign workers and create a favorable environment for non-Japanese workers to get jobs.

Multinational giants have found that they can increase profitability by utilizing foreign capital and workforce and further consolidating or eliminating Japanese companies, while drastically cutting down on wages and working conditions and subcontractors' contract terms.

This is how the question of collapsing technological and manufacturing power is being ignored due to the policy of pursuing cost-cutting strategy as the highest priority. Business circles are to blam for their failure to deal with this serious problem, which is tantamount to a death sentence for all.

5. Increasing Non-regular Workers and Gutting the Labor Laws

The conditions of Japanese workers today are like those of British workers in the 19th century. Lawlessness is prevalent in all aspects, including working hours, wages, work-related accidents and diseases, and dismissals. Many workers are left without legal protection. Things are particularly serious because of a rapid increase in the number of non-regular workers, including part-timers, temporary workers and fixed-term contract workers. The situation is so serious that many people are trying hard to improve it.

Appalling policy proposal

The position paper acknowledges the growth of unstable employment, saying, "The use of non-direct employment, such as temporary workforce or labor contracts, is on the increase nowadays." This, however, leads to an absurd policy proposal. Using the increase in the number of non-regular staff in the workplace as a pretext, the position paper says that there should no longer be differentiation between regular workers and non-regular workers, and proposes that more flexibility should be applied to the use of full-time workers concerning work hours, location and workplace, breaking away from the conventional framework. Thus, full-time workers will also be treated in the same way as part-time workers.

In equity investment, one may use the method of "portfolio investment" that allocates funds to different stocks in order to maximize profit. The position paper emphasizes the importance of the need to "pursue optimal portfolio" in making the use of workers as effective as possible. It thus demands that law of the economy in the stock market be strictly applied to the use of workers.

The question here is that this way of using workers conflicts with the labor laws, including the Labor Standards Law, the Employment Security Law, and the Minimum Wage Law. The 2005 position paper for the first time called outright for gutting the labor laws. Below are a series of self-centered corporate demands:

1) Most white-collar workers on clerical, managerial, and sales jobs should be exempt from the Labor Standards Law provisions regulating working hours.

2) The present regulations that require companies using temporary workers to offer labor contracts to those working on a long-term basis should be abolished.

3) In the manufacturing sector, where the ban on the use of temporary staffing workers was lifted to some extent, employers should be allowed to use such workers for a longer period.

4) The increased Labor Standards Inspection Office oversight of working conditions, including working hours, could hamper the corporate efforts to increase international competitiveness.

5) The minimum wage by industry should be eliminated.

6) It is important to establish a system making it easier for workers to switch jobs. For this, deregulation (privatization) of job placement services should be considered seriously to enable private sector firms to take part in competitive bidding.

7) New legislation of labor contracts, now under consideration, should include drastic revisions of relevant labor laws, including the Labor Standards Law that inherit the relic of the Factory Law. This will make the labor laws consistent with the present conditions.

Repeated acts of contravening labor laws

 All this shows that business circles are now trying to make their illegitimate practices legitimate, instead of apologizing to the public for their repeated acts of contravening the laws.

The fundamental question here is that the business sector wants to abnegate the significance of social standards and industrial relations and even the importance of the Constitution. They say, "working conditions in enterprises should basically be decided through negotiation and consultation by labor and management acting autonomously." However, in a law-governed country, working conditions at individual enterprises are not determined only through labor talks. The constitutional provisions for human rights protection are the basis for labor regulations, and working conditions should be determined based on these laws. Further, working conditions must be determined through collective bargaining between companies and trade unions as fair social standards that override individual enterprises. This is the principle of industrial relations. The business sector led by Okuda is attacking this principle. This is nothing less than an attack on the supreme law.

6. Plunder of Public Assets by Opening Up Public Service to the Private Sector

Another pillar of "proactive restructuring" proposed in the position paper is "resolute execution of administrative reform" and "promotion of the private sector's participation in public services."

The position paper asserts that it is necessary to allow more private sector participation in public services based on the principle that any work that can be dealt with by the private sector should be left to the private sector. Allowing private sector firms to participate in bidding for public sector contracts is the effective way to promote it. This sounds reasonable. Let's examine the meaning of the policy of opening up public services to the private sector.

Corruption will deepen

 In August 2004, the Council for Regulatory Reform, which is under Prime Minister Koizumi's direct control, published a report entitled "Realization of a Private-Sector-Led Economic Society Through Opening Up of Government-Operated Services to Private Sector." It examines all government enterprises that could be consigned to the private sector. It concludes that most of the public services can be dealt with by the private sector, including payment of benefits, collection of fees for services, the maintenance, administration and management of public facilities, and work related to registration, statistical surveys, production, inspections, and certification.

In other words, most of the jobs done at government offices can be outsourced to for-profit companies using tax money. Most of the Council for Regulatory Reform members are executives of the companies that will benefit from the policy of opening up public services to the private sector.

What will happen if most of the public services are open to the private sector?

Many residents are concerned about the policy because: (1) the state and local governments will be relieved of their responsibility to safeguard public well-being; (2) the services will differ from company to company, and equality and fairness will not be ensured; (3) in the longer run, it will become more costly, and (4) graft and other corrupt practices will be even more rampant.

Privatizing public services such as the post office, which is meeting the needs of the public, will only cause unnecessary confusion and damage to the public. This is clear from the ongoing process of transforming state-run institutions into independent agencies. It is irresponsible to see public services and for-profit business under the same light in bidding for contracts for public services.

Why is Nippon Keidanren trying to allow the private sector to undertake public services? The answer is simple. Due to corporate "restructuring" assets that companies can plunder are decreasing, and they now want to take the ion's share in state and municipal assets and tax money. Economists describe the opening of public services to the private sector as "vivisection and trafficking internal organs" of the state and municipalities.

In a bid to carry out the policy of opening up public services to the private sector, the position paper demands a drastic reform of the system of state and local government employees. It states that only when government employees are put in the private sector environment, can they be ready to tackle genuinely courageous structural reform. This can be taken to mean that public sector employees can better perform their jobs under worsening working conditions and in unstable employment.

This clearly shows that the business sector understands nothing about the significance of "public services." The need now is to establish fair employment and working conditions in public services, and to use it as leverage to improve the working conditions for private sector workers.

In addition, the business sector is seeking to take money out of people's wallets. The position paper clearly states the need to raise the consumption tax rate in fiscal 2007 to 10 percent from the present 5 percent, and to 15-16 percent in the subsequent 5-6 years. It also advocates cuts in social welfare benefits.

Devastating effect on living conditions

 In Japan, the average personal savings rate has declined to six percent from around 23 percent, and the number of needy households is on the rise. It cannot be possible that business circles are not aware of devastating effects tripling the consumption tax rate will have on living standards. The main reason they give for calling for a consumption tax rate increase is the huge fiscal deficit. However, a massive tax increase without removing the causes of the fiscal deficit such as investment in unnecessary public works projects and payment of high-rate interests to banks will only increase deficit. A sizeable increase in the consumption tax rate is necessary just to enable large corporations, domestic and foreign, to continue to benefit from the nation's coffer.

Recently I read a book written by a foreigner, entitled "The Iron Kleptocracy: The Sun Never Rise Again." The title speaks for itself. Indeed, it reminds me of the national strategy of "structural reform" and opening public services to the private sector, as called for by the position paper.

7. Japan Falls Behind the World in Fulfilling Corporate Social Responsibility

Japan's large corporate executives use the analogy of the "Black Ships" (which came to Japan toward the end of the feudal period of Edo with the aim of ending Japan's isolation) to explain their present concerns about corporate social responsibility (CSR).

From the moment the European Commission in July 2001 published entitled "Promoting a European Framework for Corporate Social Responsibility," the concept of CSR was widely accepted as an international norm, urging corporations, particularly multinationals, to comply with the standards.

Lack of Understanding

Japan's business circles initially opposed CSR. They could not stand CSR's key provisions that corporations should operate by carefully taking into full account of the interest of shareholders, including employees, contractors, and local residents.

Later, they sent a team abroad to study this matter. Once they realized that it will be difficult to operate overseas without complying with CSR, they began to express willingness to put CSR into practice. The position paper refers to Corporate Social Responsibility at the top of the chapter on Leadership and Proactive Management, but their arguments reveal that do not really understand what CSR is.

First, the position paper describes CSR as a matter that exclusively concerns companies' "activities for public interests." This clearly is an ill-intentioned interpretation because the CSR is mainly about the standards governing industrial relations that include personnel management, safety and health, worker transfers, and the environment. Externally, it also deals with corporate responsibility to local residents, business contractors and subcontractors, and consumers. It also calls for corporate responsibility to defend and improve human rights situations. If CSR is to be applied to Japan, companies will have the responsibility to give shape to and fully implement the democratic provisions of the Constitution. Have those who drafted the position paper ever read the EU document?

Second, the position paper implies that business leaders believe that they can fulfill their social responsibility by adhering to the Charter of Corporate Behavior of their own making. But that is not so.

The need is to put into practice the publicly established standards. If Japan refuses to ratify many of the International Labor Organization conventions and turns a deaf ear to the United Nations Commission on Human Rights recommendations, they will never be trusted even though they emphasize their compliance with laws.

Third, business circles conspicuously lack a sense of responsibility for corporate frauds.

They cannot take corporate frauds as their own problem

 The position paper is not serious about corporate frauds, as clear from its way of describing the matter as "any corporate scandal that erupts..." Many Nippon Keidanren member companies have so far been involved in illegal activities; even the Nippon Keidanren chair's own company has been charged with such frauds as forcing workers to work overtime without pay, tax evasion, and a leakage of national examination questions. We must call into question the position paper authors' sense of heavy responsibility of corporations?

If it talks about corporate social responsibility, Nippon Keidanren must unravel the root cause of a series of corporate scandals and show their sincerity by publicly to carry out structural reform of member companies and itself.

8. Solidarity with Asian Countries and CSR

Business circles' response to CSR reminds me that executive of Japan's large corporations and business leaders fall behind the rest of the 21st century world. That is why they reveal the inability to show leadership in the nation's industries as well as in the economy.

Solution is not in sight

 For example, the position paper offers nothing to help solve the present problems facing local economies as well as small- and medium-sized businesses, although it more or less is aware of the present difficulty. In fact the position paper admits that small- and medium-sized enterprises are not necessarily on a recovery track, that they are facing the danger of hollowing out main urban areas, the breakdown of operational bases, overseas transfers of production bases, and the disintegration of communities. It also expresses concern that the decrease in population may exacerbate the already declining local economies.

The position paper also puts forward "promotion of economic partnership with Asia" and calls for a relationship of co-existence and co-prosperity to be established with China. How can Japanese business circles seek to establish co-existence and co-prosperity with China. Such a call contradicts their full support for Prime Minister Koizumi's persistent visits to Yasukuni Shrine, their promotion of arms exports, and their tacit approval of the defense plan that sees China as an imaginary enemy, not to mention their call for an adverse constitutional revision.

Nippon Keidanren in July 2003 published a report entitled "Labor-Management Relations in Asia," which focused on how to ensure the success of Japanese companies abroad. It had nothing to do with the quest for co-existence and co-prosperity.

Workers' demands

The position paper mentions nothing about its vision for realistic "economic partnership with Asia."

The last section of the position paper is devoted to the importance of corporate leaders' "aspirations." If we continue to leave Japan's economy to them, our society will face a real danger of collapse. In that event, Japanese people' may be forced to endure living conditions that are worse than those of animals.

However, corporate executives alone cannot run the country's economy and society. Knowledgeable corporate executives should bear this in mind. The main players are working people, who are the majority of the population. Corporate executives should focus their attention on workers' needs and concerns.

If in the 2005 Spring Struggle corporate executives are serious enough to try to listen to workers' demands and understand what lie behind the demands, it will pave the way for building industrial relations commensurate with an era of CSR.

9. For New Progress in the Spring Struggle in its 50th Year

Although the position paper calls for a shift of the labor-management negotiation style from "the 'struggle' of the traditional 'shunto' (literally meaning 'spring struggle') to more discussion-centered meetings," the 2005 Spring Struggle in its 50th year has started with vigor.

The plan of action put forward by the National Confederation of Trade Unions (Zenroren) states: "Trade unions are advancing steadily against any furious attacks from the government and business circles. In 2004, our movement successfully foiled business circles' attempt to lower the minimum wage, winning an increase in local minimum pay in 44 prefectures. In the struggle against the adverse revision of the Labor Standards Law, the union movement blocked the introduction of a provision that will give the employers freedom to dismiss workers. The campaign to eliminate unpaid overtime work has succeeded in having companies pay more than 23 billion yen in back pay for overtime work for one year. These are valuable results achieved recently by the trade union movement.

Professional baseball players, too

 The Professional Baseball Players' Association, the players' union, won a victory in its struggle last year. The trade union movement has grown stronger through the many years of struggles. The position paper reveals its complete lack of understanding of how strong popular movements are, including the trade union movement.

Certainly, the challenges facing the trade union movement today are not small.

First, we need to look at the fact that both union membership and the percentage workers in unions are in declines. In the five years between 2000 and 2004, the number of union members decreased by 1,516,000, and the estimated percentage of organized labor declined to 19.2 percent from 22.2 percent. Unions are too slow in recruiting new members, while many union members are now reaching retirement age, in particular among the baby-boomers. What is particularly grave is their failure to deal with the sharp increase in the number of part-time and other contingent workers and young workers' reluctance to join the union.

Second, the pressing task now is for trade unions to pass down the leadership of the union movement to young activists.

Third, many unions, in particular those large company unions affiliated with the Japanese Trade Union Confederation (Rengo), are under firm corporate control and influence. The point is that an increasing number of unions at large companies do not even present their demands, acting instead in harmony with business circles' strategy. This makes it even more urgent to stop unfair labor practices against workers who are union members and to establish trade union independence from capital.

The business sector, led by Nippon Keidanren Chairman Hiroshi OKUDA, makes self-centered proposals on the grounds that management and labor should act autonomously. This is made possible by the increasing corporate control of unions and by divisive ideological attacks based on the corporate-first principle, anti-communism, and neo-liberalism. Workers now need a unified development of the trade union movement.

Japan's working class has been waging the annual Spring Struggle in defiance of all difficulties. A recent survey found that about 80 percent of companies set up labor talks concerning wages and working conditions either with trade unions or with employees' representatives. This shows that the Spring Struggle has had influence on the workplace without union environment and that many unorganized workers are actually taking part in actions that take place as part of the Spring Struggle.

Signs of progress

The 2005 Spring Struggle has shown many signs of the movement's progress: (1) young workers are beginning to take active part in various campaigns; (2) more and more workers tell labor counselors that hey wan to establish or join a union; (3) with privatization and corporate restructuring going on, more and more workers are joining unions; (4) industrial federations have started to work seriously to organize non-full time workers; (5) the movement to demand that companies observe the Labor Standards Law and the Industrial Safety and Health Law and to call on companies to fulfill their social responsibility; and (6) regional federations are taking initiatives in carrying forward the movement to establish regional pay rates. All these indicate that the Spring Struggle is taking new steps toward achieving results.

The 2005 Spring Struggle revolves around the choice between two directions: one led by the government and business circles in trying to have the law of the jungle prevail and turn the Japan into war-fighting nation, and the other led by the movement of workers and the people to establish a safer, more equitable, and peaceful society.

The Joint Committee for the People's Spring Struggle, composed of Zenroren and other organizations, is calling on workers to rise in the historic Spring Struggle to defend the Constitution and win democratic change in Japan. The development of the struggle will publicly expose the arrogance and anachronistic nature of Nippon Keidanren's position.