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Page 1: Social security and foreign nationals in Japan

This article was downloaded by: [Florida International University]On: 21 December 2014, At: 09:57Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

New Global DevelopmentPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rjcs19

Social security and foreign nationals inJapanHajime Takahashi aa Delegation of the Commission of the European CommunitiesPublished online: 31 Jan 2008.

To cite this article: Hajime Takahashi (1997) Social security and foreign nationals in Japan, NewGlobal Development, 13:1, 64-84, DOI: 10.1080/17486839708415642

To link to this article: http://dx.doi.org/10.1080/17486839708415642

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Page 2: Social security and foreign nationals in Japan

SOCIAL SECIJRITY AND FOREIGN NATIONALS IN JAPAN

Hajirne Takahashi Delegation of the Commission of the European Communities

ABSTRACT

Being the only Asian incniber of the club of industrialized countries like the Organixation for Economic Cooperation and Development (OECD) and G7 Summit and still an ethnically homogeneous country. Japan has developed an extensive network of social sccurity schemes against a varictv of historical. social. economic and political backgrounds. The internationalization of the Japanese cconomj. increased cross-boarder niovcnicnts of people and changes in international political climatc have begun to inject an international dimension into the Japanese social security system over the past two decades or so. I t was in this contest that Japan began to review the status of foreign residents i n the social security provisions.

This paper attenipts to clarifv the status of foreign nationals in Japan. legal and illegal alike. under the Japanese social security systcni while outlining the recent population movements into Japan and the state of foreigners in Japan. the implications of population movement on the Japanese social security system. and Japan's social security policy dileninias in translating the principle of equal treatment of foreign nationals into practice.

lNTRODlJCTION

Japan is an ethnically and linguistically homogeneous country with a long historical tradition. Its 126 million people live on the archipelago consisting of four main islands with its population density of about 33 1 per square kilometer by the Occupation authorities led to the transformation of Japan into a democratic demilitarized country. Post-war demilitarization, industrialization and urbanization created an economic Japan, and the economic development and the subsequent improvement in the living standards made the Japanese people more materialistic, which culminated during the bubble economic period in the second half of the 1980s. Japan has achieved a high level of Gross Domestic Product per capita (US$136,863 in IQ94), a low unemployment rate (3. I per cent in 1995), and an extremely stabilized inflation rate (-0. I per cent in 1995).

Japan has the longest life expectancy in the world (82.84 for female and 76.36 for male in 1995), which is accelerating the aging of its population, along with its declining birth rate (1 43 in 1995). In 1994, the proportion of the population over age 65 accounted for 14.1 per cent, but it is

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Crossing the Border: Social Securit? and Immigration 65

projected to reach 25.8 per cent in 2025, the highest in the world. Concentration of population into urban areas is another demographic problem for Japan.

Being one of the most industrially advanced countries in the world, highly urbanized and reliant on advanced technology and communications, Japan is now thoroughly integrated into the international system. At the same time, traditional patterns of social relations and social ethics remain a significant part of the contemporary picture. Elements of tradition - best exemplified by the traditional household, village society, and Confucian morality - have mixed with modernization with the rest of the modem world while at the same time retaining its own particular character (Kodansha, 1993)

Nevertheless, the collapse of the bubble where the Japanese stock market and real estate plunged also meant that the Japanese institutional systems - political, administrative, economic - which developed since the end of the war and even became the essence of the contemporary Japan have ceased to function effectively.

As confidence in the institutional systems began to be questioned, the values of the individuals have also begun to undergo changes. The Japanese society at present appears to be in the midst of self-reflection. One of the main questions facing the Japanese society is whether the Japanese being the people of a country which has become one of the biggest economic power in the world, are really enjoying affluence commensurate to the strength of their economy.

As the Japanese economy finds itself in the phase of low economic growth and businesses are struggling through the waves of structural changes, Japanese companies are no longer able to respond sufficiently to the expectations of their employees as they did in the past in terms of promotion and salary increases. Inevitably, the rationale to pursue the past pattern of company- oriented life is destined to decrease. More women nowadays are in a position of choosing to stay at home or go to the labor market. Children are also given more chances of not finding themselves in the so-called ‘war of entrance examination’. In the process that individuals demand more options and seek different ways of living, Japan has just begun transforming itself into a society where the value of diversity is more widely recognized instead of its past tendency to expect others to think and behave with a specific model. This new trend should certainly help make Japanese society more outward-looking and its policy orientation towards social security will not be no exception.

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66 New Global Development: JI&CSW

SOCIAL SEClJRITY SYSTEM IN JAPAN

Overview

The social security system in Japan is structured with a combined system of social insurance and social assistance. Social insurance covers medical insurance, pension insurance, employment insurance and accident compensation insurance whereas social assistance includes social allowance, public assistance and social welfare services (Takahashi and Someya, 1985; Foreign Press Center, 1988; Niraishi, 1987; Tokyo Metropolitan Government, 1995; Japan, Ministry of Health and Wdfare, I995a and 1995b).

Medical insurance is composed of employee insurance schemes and the National Health Insurance Scheme. The fonner covers private sector employees, seamen, national and local public servants and school teachers whereas the latter covers everyone who is not covered by any of the employee insurance schemes, namely farmers, self-employed persons, employees of very small businesses. and their dependents. Pension insurance is composed of the National Pension Scheme which covers everyone aged 20 or more and assures each individual of the Basic Pension (Basic Old-age Pension, Basic disability Pension, or Basic Survivor's Pension) and various employee pension schemes whicn are an addition over a i d above the Basic Pension and its cost is proportional to the employee's pay and met entirely by contributions shared evenly by the employer and employee in iiornial circumsTances. As for employment insurance, the current Eniployrneiit Insurance Scheme has been in operation since 1974 as an income insurance system to assure ordinary employees and daily workers of an income in the event of uneniployment whereas a separate eniployinent insurance scheme is available for seamen as part of the Seamen's Insurance. I n the field of accident conipensation insurance, four separate schemes provide insurance benefits to compensate workers for injuries, sicknesses, disabilities, or fatalities they have suffered on the job or while commuting as well as to finance worker welfare programs for facilitating the re-employnient of accident-affected workers and promoting the welfare of such workers and victims' survivors respectively covering ordinary workers, seamen, national goveniment employees and local government employees.

Included in the social assistance component of the Japanese social secunty system are the Child Allowance, the Old-age Health and Medical Care System, the Child Welfare and Mother-and- Child Welfare System, the Welfare Systems for the Aged and the Disabled, and the Daily Live Secunty System

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Historical Evolution

Historically, a modern form of general poor relief legislation was alreadj witnessed in Japan in the early 1930s. but it was only after the Second World War that modem social security legislation came into being b a d on Articlc 25 of thc 1946 Constitution. The Constitution confirmed the right of all people to maintain the minimum standards of wholesome and cultural living and called on the State to use its endeavors for the promotion and extension of social wclfarc and security. and of public h ~ i l t h . And i t was in the early 1960s that the foundation of the current network of social security schemes in Japan was laid with the implemcntation of its plan to achieve the uniicrsal coverage of thc people by mcdcal carc insurancc and pension schcnics. However. the schemes. the National Health Insurancc and the National Pension. covered those who had not been insured under thc employee insurance schcmcs. As a result. they gave rise to the Japanese characteristics of multiple institutional. organizational structurc in the Japanese systcni of medical insurancc and pension insurance. creating undesirable disparities betwccii different systems and institutions in terms of the Icvel of burdcn and benefit.

The high economic growth which continued until the first half of the 1970s enabled thc govcrnnicnt to makc thc qualitativc improvement with these social security schemes. The improvement took tlic shapc of raising of the gcncral level of benefits undcr medical insurance and pension schemes. the introduction of the Child Allo~vance Systcrn. and the inauguration of a s!,stcni of financial contribution by the National Trcasun to old-age medical carc and pollution-related medial carc. and the introduction of cnvironmcntal measurcs to prevent pollution and prescne nature.

Reform Initiatives

Thc widening benefit gap bctwcen diffcrcnt pension plans and the inadequate pension schcmcs for employees' spouses werc ahead! raised in thc 1080s as issues to be addressed urgcntl!. Thus. the far- reaching rcforni of the pension sTstcm w a s m;idc i n 1980 i n ;I hid to unify various pension schemes into a two-tiered ?stem. The 1980 rcfonu also introduced a shstcm of' volunta? subscription of the National Pcnsion. paving a way for. for cramplc. Japancse nationals li\ing i n foreign countries to subscribc tlic National Pension Schcnic.

The dsparitv in the Ic\,el of burdcn and benefit amongst diffcrcnt insurance schemes was also ivitncsscd in the Japanese n idca l insurancc s\..stcni wen aftcr the institutional achicvcnicnt of its universal coverage of the peoplc in 1961. The introduction of a systcni of frcc medical carc for the aged in 1973 resulted in a heavy financial impact on the national insurance sssterii. Thc provision of systematic medical senices with cffectiw interactions between hospitals and clinics also emcrgcd as the quality of m d c a l services had bccomc a matter of concern on the part of beneficiaries.. These Icd to the creation of the Old-age Health and M d a l Care System in 1 YX3 to provide persons aged 70 or older or 65 or more if they are bed ridden with an integrated public health and n i d c a l benefits in kind without rcgard to income in place of thc earlier system which had covered the medcal service costs incurred by aged patients entirely by public funds and then

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to the revision of the system in 1986. As a result, the level of benefits under each of the five alternative health insurance schemes surpassed 80 per cent of the medical care expenses, doing away with the moves towards the unification of the medical insurance schemes. The revision of the Medical Care Law in 1992 was an institutional attempt to coordinate the services provided by hfferent types of medical institutions according to their functions.

The question of how to finance the rapidly growing social security costs given the aging of the demographic structure in Japan and the increase demand for social security services as the overall standard of living went up already begun to be felt by Japan already in the 1980s. Under these circumstances, the government came up with a new long-term vision on social security (the so- called Welfare Vision) in 1988, which have led to the implementation of the ten-year Strategy for the Promotion of Health and Welfare of the Old People (the so-called Gold Plan) in 1989 and its revised five-year strategy (New Gold Plan) in 1994. The new targets under the New Gold Plan include increasing the number of home helpers from 86,000 in March 1995 to 170,000 and providing 290,000 beds (as against 207,000 beds as of October 1994) in special-care homes for the elderly by the end of the 1990s. The introduction of the Consumption Tax in 1989 was an attempt to start widening the base for tax revenues which relied overly on direct taxation, bearing in mind the forecast increase in social security costs w d ~ the rising number of the aged population.

The most recent reform initiatives as regards the social secunty system in Japan begun to address the question of how to respond to the social trend of declining birth rate and aging population as proposed in the Welfare Vision of 1988, resulting in the reform of the Medical Insurance System and the Old-age Health and Med~cal Care System as well as of the pension system in 1994. The salient features of the medical insurance reform were 1) the abolition of the system of nursing and caring activities by unqualified attendants at hospitals, 2) the introduction of a meal charge system to hospitalized patients, 3) the promotion of home medical care services not only for the elderly but also for patients suffering from intractable decease, and 4) the creation of a lump sum allowance system for child birth and caring, and 5) the exemption of the payment of the medical insurance premium during child care leave. The revision of the pension system was 1) to raise the starting age of pension payments from 60 to 65 in stages, 2) to make pension payments more flexible, and 3) to establish a system of income guarantee for those aged between 60 and 65 by linkrng work incomes after retirement to the amount of benefits (Japan, Ministry of Health and Welfare, 1994). The 1994 reform also addressed the long-standmg issue of the abandonment of pension insurance premiums by foreign residents in the event of their departure from Japan. Under the revised law, where the foreign resident in Japan who had paid premiums as Category 1 insured person of the National Pension Scheme for six months or more has returned home h o u t receiving any pension benefits, he or she may receive a withdrawal lump sum on request, which should be claimed d i n two years after returning home (Japan, Social Insurance Agency, 1995).

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FOREIGNERS IN JAPAN

Foreign Residents in Japan

The number of foreign residents in Japan as of October 1994 was 1,354 thousand persons, which represent 1.08 per cent of Japan's total population of 124 million. The number of foreign residents, which stayed in the order of 700,000 until the 1970s, began to increase after the turn into the 1980s. The current number of 1.4 million represented an increase of 8 1.2 per cent from 20 years ago and an increase of 61 .O per cent from ten years ago. Against this background were firstly an increased presence of foreign companies in Japan w d ~ a corresponding increase in foreign business expatriates and their families and secondly the internationalization of corporate activities of Japanese companies which led to the increased number of foreign nationals in Japan for the foreign language education of Japanese corporate employees and the vocational training in Japan of fbreign nationals employed by Japanese companies overseas (Iguchi, 1996; Takanashi, 1996). There was also the strong pressure in neighboring Asian and the Middle East countries for Japan to permit migrant workers, following the decline in demand for foreign workers in the Middle East oil producing countries.

The origin of foreign residents in Japan was Asia (77.6 per cent), South America (15.0 per cent), North America (3.9 per cent), Europe (2.4 per cent), Oceania (0.6 per cent), and Afnca (0.4 per cent). In terms of nationality, Korea (North and South) accounts for 50.0 per cent, followed by China (16.1 per cent), Brazil (11.8 per cent), the Philippines (6.4 per cent), the United States (3.2 per cent), and Peru (2.6 per cent). In terms of residency status, permanent residents accounts for 46.6 per cent, followed by spouse or children of Japanese national (17.1 per cent), long-term residents (10.1 per cent), college students (4.6 per cent), dependents (3.9 per cent), precollege student (2.8 per cent), entertainer (2.6 per cent), specialists in humanities/intemational services (1.8 per cent), trainees (1.3 per cent), engineers (0.3 per cent), spouses or children of permanent resident (0.5 per cent), skilled labors (0.5 per cent), instructors (0.5 per cent), intracompany transferees (0.4 per cent), religious activities (0.4 per cent), and others (6.1 per cent).

Foreign Population Movements Into Japan

The first mass influx of foreigners into Japan followed the Japanese annexation of Korea in 1910. The number of Koreans in Japan increased drastically as Japan escalated its military interference in China in the 1930s. The end of the Second World War and the conclusion of the San Francisco Peace Treaty produced a numerous number of foreign nationals in Japan, since Koreans and Taiwanese residents in Japan were no longer recognized as Japanese nationals. Koreans in Japan were estimated to exceed two million at the time of the end of the Second World War and some I .4 million Koreans eventually returned to the Korean Peninsula, creating a situation where some

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600,000 Koreans stayed in Japan with a special resident status. dimension to the question of foreign residents in Japan.

This fact has given a special

After the Second World War the legitimate movements into Japan of foreigners have occurred only on a limited scale. Nevertheless, these foreign population movements, albeit small in number, gave rise to political and social debates in Japan, questioning the legitimacy of the hitherto inward- looking immigration and social regimes of Japan being a homogeneous country

Political Refugees

Despite die Japanese ratification of the U N Convention of 198 I and the UN Protocol of 1982 relating to the Status of Refiigees and the subsequent revision of the Immigration Control Act in

the same year, Japan accepted few political refiigees The comprehensive action program agreed at the International conference on the Indo-China Rehgees of June 1989 paved a way for Japan to accept refiigees in earnest As of April 1996, 208 political refugees and 9,993 Indo-China rekgees wcre accepted by Japan as long-tern1 residents With the exodus of boat people showing signs of finally drying up, the Japanese government stopped considering applications for temporary shelter purposes and began handling as refugees only those designated by the refiigee treaty in

March 1994

Displaced Japanese W a r Orphans and Women in China

A number of Japanese nationals were left behind i n China, i n particularly Northeast China - then known as Manchuria, at the end of the Second World War After normalization of diplomatic relations between Japan and China in 1972, a governmental program to assist the displaced Japanese nationals in China including their invitation to Japan to search for the surviving members of their faniilies in Japan started i n 1981 Between 1973 and 1994 a total of 4,762 displaced Japanese nationals in China retiinled to Japan and the displaced war numbered 1,876 persons According to the Japanese Ministry of Health and Welfare, there are 1,980 displaced Japanese nationals still living in China as of March 1995, of which 988 have expressed their wish to return to Japan permanently (358 out of 646 displaced Japanese war orphans and 639 out of the 1,334 displaced Japanese women (Japan, Ministry of Health and Welfare ( 1 9 9 5 ~ )

Trainees

Japan started in April 1992 a govemment-private sector scheme to provide foreign nationals from developing countries with on-the-job training in Japan. The two-year program, which is run by the Japan International Cooperation Organization (JITCO), attracted publicity in Japan as it also

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had the aspect of alleviating the shortage of unskilled work force in Japan by circumventing the official policy of not accepting unskilled foreign workers. As of the end of 1994, the number of trainees totaled 17,305 persons of which China accounted for 56.1 per cent, followed by the Philippines (9.8 per cent), Thailand (9.1 per cent) and Indonesia ( 8 . I per cent)

College Students

The Japanese governnieiit started in I978 an international cooperation program to increase the number of foreigii students in Japan to 100, 000 by the year 2000 This, together with the increased job opportunities in Japanese-affiliated companies in home countries and the increased possibility of staying in Japan to find a job, through a change of residency status has led nationals of neighboring Asian countries to study at Japanese universities. As of the eiid of 1994, 6 I ,5 15 foreigi nationals were enrolled in Japanese iiiiiversities and colleges, and students from China and Korea accounted respectively for 56.Q per cent and 23 1 per cent.

Pre-college Students

I n 1988. the number of foreign nationals who came to Japan as Japanese language students with the hidden intention to work surged The Japanese goveminent successfiilly tightened its visa screening process at Japanese consulates overseas and its supervision over Japanese language institutions at home i n order to stop the new form of illegal work by foreign nationals At present, pre-college students are allowed to work for a maxiniuni of 20 hours per week Nevertheless, increased job opportunities in Japanese-affiliated companies in hoine countries and preparation for entering Japanese universities have still kept the number of foreign prc-college students i n Japan at a relatively hish level As of the end of 1904, such students totaled 37.653 persons of which China and Korea accotinted respectively for 73 7 per cent and I3 6 per cent

Foreign Workers in Japan

According to the Ministrv of Justice, 469,75 1 foreign residents in Japan including permanent and long-tenn residents of Korean origin have jobs as of the end of 1994 (Japan, Ministry of Justice, 1995) Assuming that most of the over-stayers are engaged in working actiwties Illegally, some 7.50,OOO foreigm nationals could be considered to be working In Japan as foreign workers in their broad sense

Foreign workers in Japan are classified into three categories. Those who come to Japan under one of working visas, nainely businessmen and professionals, Japanesedescent foreign nationals who enjoy a special residence status under the Japanese immigration regulations, and those who over- stay without any valid residency status (Japan, Ministry of Labour, 1995).

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The number of foreign residents who come to Japan with working visas is rising. As of October 1994, 105,000 persons were such residents, which represented an increase of 55.4 per cent From 1990. In particular, entertainers and specialists in humanities and international services constituted the majority accounting for 33.0 per cent and 23.5 per cent respectively, and they also showed marked increases since 1990 of 64.7 per cent and 71.7 per cent. The increase in specialists in humanities and international services (the holders of university art degrees) and that in engineers (the holders of university science degrees) is a reflection of the governmental policy to ‘admit as many foreign workers as possible who wish to be engaged in jobs requiring expert technology’ under its Basic Plan for Immigration Control and the Cabinet Decision of July 1992 entitled the 7th Basic Employment Plan. For the same reasons, the number of foreign business expatriates under the visa category of intracompany transferees has also increased.

The influx of South American nationals of Japanese descent into Japan begun to increase rapidly since 1990, following the revision of the Immigration-Control Refugee-Recognition Act, which came into force. The revision was aimed at streamlining the resident status of foreign nationals. This brought about a tightening of controls on illegal foreign workers, which were rapidly increasing against the background of the shortage of labor forces, especially unskilled workers, in Japan. Thus, the number of residents of South American nationals in Japan, which stood at 3,295 in 1986, rose to 70,532 in 1990. In particular, the number of Brazilian and Peruvian residents in Japan reached 56,429 and 10,279 respectively in 1990. As long as they can prove to be the second generation or third generation of a Japanese national, foreign nationals can be granted the visa status of long-term resident or that of dependents of a Japanese national, enjoyng free access to the Japanese labor market. In 1994, the number of South American residents in Japan totaled 203,840, ofwhich 159,619 were Brazilians and 35,382 were Peruvians.

The monitoring of illegal workers is not an easy task. An estimate based on the number of over- stayers suggests the presence of 106,000 illegal workers as of 1990, which rose to 287, 000 persons by 1995. It is presumed that there college and pre-college students also engage in unauthorized work.

IMPLICATIONS OF POPULATION MOVEMENT ON THE SOCIAL SECURITY

Immigration Policy of Japan

Under the 1951 Immigration Control and Refugee Recognition Act which was revised in June 1990, the basic policy towards the work engagementby foreign nationals is that Japan admits as many foreign workers as possible who wish to be engaged in jobs requiring expert technology, slulls or knowledge but it does not accept the engagement of unskilled labor by foreign nationals in Japan. Indeed, the revised Immigration Act lists up 16 types of residency status under which

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foreign nationals are authorized to engage in work activities. These are 1 ) diplomat, 2) official, 3) professor, 4) artistic activities, 5 ) religious activities, 6) journalist, 7) investorhusiness manager, 8) IegaVaccounting services, 9) medical services, 10) researcher, 1 1) instructor, 12) engineer, 13) specialist in humanitieshntemational services, 14) intra-company transferee, 15) entertainer, and 16) skilled labor. As the types of status of residence under which work activities are not authorized, the revised Immigration Act lists up I ) temporary visitor, 2) college student, 3) pre- college student, 4) trainee, and 5 ) dependent (Japan Immigration Association, 1990 and 1992).

Constitutional Provisions on Social Security

The Japanese defeat in the Second World War marked the beginning of a new democratic Japan and the Japanese legal system underwent a fundamental change including the promulgation of the new Constitution in 1946. The new Constitution proclaimed the residence of sovereignty wrth the people, respect for human rights and international cooperation, but it included no clear-cut provisions concerning the fundamental right of foreign nationals in Japan. In the Constitution, human rights are laid down in Chapter 3 on the rights and obligations of the people. However, the Constitution uses the expression ‘all of the people’ on the one hand and the expression ‘every person’ on the other at the level of individual provisions. In the past, it was explained that the expression ‘every person’ is used instead of ‘all of the people’ so that the constitutional provisions concerned may be applied also to foreign nationals (Hagino, 1979). However, case laws and the prevailing theory in this respect now are to apply the human right provisions of the Constitution not only to the Japanese nationals but also to foreign nationals in Japan except for those which can be interpreted to be addressed only to the Japanese nationals because of the nature of the rights concerned (Japan, Supreme Court, 1948 and 1978).

Of these constitutional provisions, Article 25 concerns the right to live and the state’s responsibility for social welfare and social security, providing:

All of the people shall have the right to maintain the minimum standards of wholesome and living. welfare and security. and of public health.

cultured In all spheres of life. the State shall usc its endeavors for the promotion and extension of social

The prevailing theory and court judgment concerning the applicability of this provision to foreign nationals in Japan are that the right to live is targeted only at the Japanese nationals and such welfare responsibility rests wrth their home country (Takafuji, 199 1).

International Treaties

Japan ratified the International Covenant on Economic, Social, and Cultural kghts in 1979. This requires signatories to recognize the right of everyone to social security, including insurance

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without discrimination of any kind as to race, color, sex, language, religion, political or other opinion, national OT social origin, property, birth or other status. But the actual translation of the principle of equality,of treatment of foreign nationals into practice in the field of social security was accelerated after Japan ratified the Treaty on the Status of Refigees in 1982. Nevertheless, Japan has not ratified Equality of Treatment (Social Security) Convention of 1962, which is the basic (LO convention guaranteeing the principle of equal treatment of non-nationals in the field of social security, and the United Nations International Convention on the Protection of the Rights of All Migrant Workers and members oftheir Families of 1990.

Social Security for Foreign Nationals

The following are the present state of application of lapanese social security systems to foreign nationals legally resident in Japan.

Social Insurance

All employee insurances such as health, pension, work accident and employment insurance schemes are applied regardless of nationality. Although foreign nationals were excluded until the 1980s from the application of state social insurance programs targeted at those individuals not covered by the employee insurance schemes, foreign national residents in Japan became eligible for National Pension Program in 1982 and for National Health Insurance Program in 1986 as long as they are authorized to stay in Japan for more than one year.

Social Allowance

At the occasion of Japanese participation into the Convention concerning the Status of Refkgees, nationality requirement was removed from Law for Child Support Allowance for Fatherless Families, Law for Special Child Rearing Allowance, and Child Allowance Law respectively in 1982. This enabled coverage to be extended to foreign nationals on the condltions that they are on the Alien Registry at a municipal office.

Public Assistance

The Daily Life Security Law itself is not applied to foreign nationals on the grounds that the right to live should be claimed only by Japanese nationals. Nevertheless, the government has been applyng the law to foreign nationals through the issuance of an administrative communication as a quasi daily life protection measures on the conditions that they are legitimate residents.

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No nationality requirement has been imposed since the inception of all the social welfare legislation such as Child Welfare Law, Law for the Welfare of the Physically Handicapped, Law for the Welfare of the Mentally Retarded, and Law for the Welfare of the Aged.

A stocktaking of the state of application of Japanese social security laws to foreign nationals, including illegal foreign workers as of 199 1 is given in the appendix.

SOCIAL SECURITY POLICY DILEMMAS

Equal Treatment in Principle

The principle of equal treatment of foreign nationals has largely been reflected in the Japanese social secunty legislation except for the Daily Life Security Law. Nevertheless, more than half of the social secunty legislation are not applied to irregularity foreign nationals in Japan (see Appendlx). Indeed, Japan has not ratified the International Convention on the Protection of the Rights of All Migrant Workers and Their Families adopted by the General Assembly of the United Nations in December 1990 which, among other things, requires the party countries to apply the principle of national treatment to foreign migrant workers (Article 27) and not to refuse ‘any medical care urgently required for the preservation of their life or the avoidance of irreparable harm to their health on the basis of equality of treatment . . . . . . by reason of any irregularity with regard to stay or “employment” article 28). However, the question remains as to whether nationallty requirement under the Daily Life Security Law runs counter to Article 2, Paragraph 2 and Article 9 of the International Covenant on Economic, Social and Cultural Rights of November 1966 which grantees everyone the right to social security wlthout dlscrimination of any kind. Japan ratified the covenant in 1979.

While illegal foreign workers are covered by the Work Accident Compensation Insurance, it is not rigorously applied. The enforcement of the revised Immigration Act in June 1990 which tightened the controls on illegal foreign workers by introducing, for example, a provision to penalize the employers and promoters of illegal foreign workers, has proved to be the main reason for the low level of their employers’ recourse to the Work Accident Compensation Insurance.

Although the National Pension Scheme extended its coverage to foreign residents when the nationality clause was abolished in 1982, there exist a number of aged foreign nationals who do not qualify for benefits because they became dlsabled before the abolition of the nationality requirement in 1982 or because they fail to meet the minimum contribution period requirements.

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The National Health Insurance Scheme is now open to those foreign nationals who are permitted to stay in Japan for one year or more, but there are a number who do not subscribe partly because they do not know about the scheme, because they are already covered by other health insurance systems or because they do not have the right residency status as illegal entrants. As a result, the medical care of uninsured foreign nationals is not regulated by the prescribed medical treatment fee rules, giving medical institutions some room to charge higher medical fees. There are also cases where foreign nationals cannot receive sufficient medical cares or even if they do receive such medical care, they cannot pay for the medical expenses, resulting in the serious question of unrecovered medical charges. Against the background of the growth in the amount of unrecovered medical fees was the guidance to local governments by the Ministry of Health and Welare in October 1990 not to apply the Daily Living Protection Law to over-stayers on the grounds that such application would encourage illegal employment.

The Social Costs

The growth in the amount of unrecovered medical fees is seen as an immediate example of increased social costs due to the population movements into Japan. In the case of Tokyo Prefecture-run hospitals, the amount of unrecovered medical charges totaled 74 million yen over 38 I cases during April 1986 and September 1992. At a time when Japan. was acing the influx of illegal foreign workers, the Ministry of Labor revealed in July I992 a trial estimate suggesting that if Japan received 500 thousand foreign manual workers, the cost to be born by the state and local governments could surpass I .4 trillion yen per year (Japanese Economic Journal, 1992). The trial estimate presupposes three phases of population movements in the case of where Japan had 500,000 foreign manual workers and apply the social security system equally to them, namely the period of single emigration at the outset, the period of settlement with their spouses (three-to-five years after the initial emigration) and the period of integration with children (five-to-ten years resulting in the extra population of two million). According to the trial estimate, such emigration would bring financial benefits to the state and local governments in the form of, for example, increased tax revenues, but it would increase social costs in the forms of, for example, decreased tax revenues through enlargement of indome tax exemptions and increases in expenditure items such as housing, as their stay in Japan becomes longer, resulting in the administrative cost of over 2.5 million yen per household. The Ministry used this trial estimate to publicly just@ its position of being discreet over the issue of accepting foreign manual workers in Japan.

Local Government Initiatives

As a means to practically cope with the situation where some of the old and disabled foreign residents in Japan are not covered by the National Pension Scheme, there are moves within local governments to provide them with welfare grants. As for disabled foreign residents, administrative

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Crossing the Border: Social Security and Immigration 77

responses at local government level was rather quick. In 1984, the city of Takatsuki of Osaka Prefecture triggered the moves to provide a special benefit for disable foreign residents. In February 1996, Shiga Prefecture started for the first time as a prefectural government an integrated system of welfare benefits to aged and disabled foreign nationals under which the prefectural government takes up 50 per cent of the payment of such a benefits by municipal, town and village offices to aged and disabled foreign residents not covered by the National Pension System in the form of subsidy.

As a means to face the reality of the question of unrecovered medical charges on uninsured foreign patients, there are also moves amongst prefectural governments to make budgetary appropriations for compensating part of the unrecovered medical charges. Based on the Daily Life Security Law, Gunma Prefecture initiated in April 1993 a system which makes up for 70 per cent of the unrecovered medical fee is borne by the prefectural government (49 peer cent), together with city, municipal and village offices(l4 per cent), and the employer (seven per cent). Kanagawa Prefecture has gone as far as to fully bear the unrecovered medical fee as long as emergency medical institutions are concerned. Moreover, Cities of Yokohama and Kawasaki resumed in April 1993 the application of the old law to compensate hospitals for the medical expenses oil behalf of persons falling ill on the street with a view to making up for the unrecovered medical charges on foreign nationals. As of 1994, a total of ten out of 47 prefectural governments including Tokyo and Osaka provided some form of compensation of the unrecovered medical charges for medical institutions.

Volunteer Group Initiatives

Volunteer groups have been the main players in assisting foreign nationals not covered either by public health insurance systems or by emergency aid under the Daily Health Security Law - the lowest form of public assistance for people who are in need and cannot pay medical expenses. Minatomachi Foreign Migrant Workers' Mutual Aid Scheme for Health (MF-MASH) in Yokohama was established in November 199 1 by three medical clinics, trade unions and citizens groups as a voluntary association so that foreign nationals, who pay a monthly membership fee of 2,000 yen, can receive medical treatment at the member clinics at the same benefit rate as the National Health Insurance, namely 30 per cent of the actual medical cost. Approximately 5,300 foreign nationals mainly from Asia, Africa and Middle East now participate in the mutual aid society (MF-MASH Steering Committee, Minatomachi Medical Center, 1991)'. A similar mutual aid society, Bright, was also created in Tokyo in March 1993.

Ministry of Health and Welfare Initiatives

It was only in 1995 that the Ministry of Health and Welfare made a visible move to look into the question ofmedical care of foreign nationals in Japan. m e Ministry's study group came up with

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two recommendations in May 1995: illegal workers should be admitted to the Health Insurance System as long as they are regular employees; and the state should give financial assistance to local govern- in respect of the cornpensation fbr unrecovered charges incurred from the emergency medical treatment of foreign nationals.

However, the ruling of 19 June 1995 by the Kobe District Court endorsed the state retirsal to pay its portion to the City of Kobe which made up fbr the fix of the medical treatment of a fbreign non- permanent resident based on the Daily Litk Protection Law, but Judge Tadao Tsujimoto pointed out the desirability of legislative steps to rescue people's litk irrespedive of nationality and status of residence.

Recovery of Paid Pension Insurance Contributions

As the contributions fbr the General Employees' Pension Insurance are paid at the time when personal income tax and local tax are levied at source, hreign nationals who are employed other than as daily or temporary workers by a business that regularly employs more than five persons automatically become the subscriber of this pension insurance, evtm if they know that they will not stay long enough to qualie as a beneficiary. This gave rise to the question of the so-called de fact0 abandonment of the paid pension insurance 4 b u t i o n s to departing foreign nationals. This practice accelerated when the abolition of nationality requirement fbr National Pension Insurance coverage fbrced fbreign nationals who were authorized to stay in Japan fbr more than one year to umtribute to the National Pension Insurance Meme. 'The 1994 revision of the pension insurance law comxted this irrational situation. A lump-sum withdrawal payment is now granted on request to those who have enrolled in Japanese public pension schemes fbr more than six months, who have never qualified as a beneficiary and who had left Japan since 4 November 1994". Nevertheless, those hreign business expatrktes who are temporarily resident in Japan tend to receive remuneration from their head offices, thus avoiding the double payment of pension and health insurance premiums in such a way as not to be subject to taxation at the source of income which is the case fix salaried employees in Japan.

Meanwhile, there exists no resideatial requirement fbr the insured persons, national or fbreign, in receiving the bendits abroad under the General Employees Pension Insurance Scheme, the National Pension Insurance Scheme, and Work Accident Compensation System.

Reciprocities Initiatives

Legally speakmg, even fbreign business expatriates who are already insured by nondapanese public pension plans, are still obllged to be covered-by the Japanese social insurance system as long as they live in Japan fbr more than one year in the absence of bilateral social security

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Crossing the Border: Social Security and Immigration 79

agreements to which Japan is a party. Japan has initiated negotiations for a pension agreement with the United States and Germany but they have not, as yet, come to any fruition.

CONCLUSIONS

Unfortunately, the implications of population movements have enjoyed no place in the long-tern development of Japan's social security system. The international dimension of the Japanese social security system has been confined to international cooperation, as part of official development assistance, including financial contributions to the World Health Organization. There are indeed a number of sectorial programs to promote international personnel exchanges, but their social security implications have been handled either on a case-by-case or ad hoc basis.

As the world is becoming more and more borderless in terns of goods, services and capital movements and Japan has been striving towards this direction as a country founding itself on external trade, it is now time that Japan moved a step forward at least in facilitating the sm& cross-boarder movement of people, as stated in the Basic Plan for Immigration Control of May 1992. The introduction of an institutional framework for social security and population movements, including one for bilateral social security agreements with foreign countries, would cerkiinly play a key role in it. In this sense, the Initiative for a Caring World proposed by Japanese Prime Minister Hashimoto at the Lyon G7 Summit in July 1996 under which the G7 countries pool the experience in social security with a view to resolving the common problems in this important policy area as well as to transferring the social security-related know-how to developing countries is welcomed. The Japanese experience in developing its own network of social security schemes in the process of post-war economic development as well as in its own historical and social contexts could be one source of reference for those countries who have or are about to develop their own social security systems.

The socialization of the problem of illegal foreign workers and the subsequent public debate on the advisability of accepting foreign unskilled workers in late 1980s and early 1990s contributed to the diffusion within Japan of the notion of living together with foreign nationals as neighbors. Indeed, a number of local authorities have taken steps to provide various forms of services to local foreign residents under the slogan of regional internationalization.

For the effective execution of social security schemes for foreign nationals in Japan, the question of linguistic barrier must not be underestimated. In view of the place the Japanese language takes up in the world and the fact that the extensive degree to which foreign languages are taught in Japan, there appears to be room for improvemqnt in the practical use of foreign languages on the part of those who are directly engaged in the administration and actual provision of social security services to foreign nationals in Japan. The moves amongst administrative bodies to open home

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pages on the Internet for provision of administrative information are expected to help public administration including social security policies better understood by non-nationals, as long as due care is to be given to linguistic questions. The opening of the first non-Japanese commercial radio station, Inter-FM, in the Tokyo Metropolitan area in April 1996 is also expected to take up such an important role of providing non-Japanese speakers with basic information about how comfortably and safely foreign nationals can lead their life in the second largest economic power in the world.

The emergent moves amongst local autonomies to open up their job opportunities to foreign residents in Japan can also be taken as an encouraging sign of regional internationalization (Japan, Social Insurance Agency, 1995). This is because the participation of foreign residents in local administration should certainly help improve the on-the-spot administration and operation of social security schemes in terms of the understanding of the actual needs of and communication with foreign residents in the local community. This would certainly contribute to the much needed internationalization of Japanese social security system as a whole.

' MI:-MAS1 I Stccririg Committee, Minatomachi Medical Center (1991). Information pamphlet A4inutmachi Foreign Afigmnf Worker5 Alutual Rid Sclreme for ffealth, Yokhama

"I 5. %* Social Itisurance Agency ( 1995), To All Non Japanese Leaving Japan, Tokyo.

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APP

END

IX

Tabl

e 1 :

App

licat

ion o

f Prin

cipal

Soc

ial S

ecur

ity L

aws t

o I

Alie

n re

gistr

atio

n at a

mun

icip

al o

ffice

is

requ

ired.

Ill

egal

fore

ign

wor

kers

la

ck th

e res

iden

ce re

quire

men

t to b

e an

insu

red p

erson

The p

rese

nce o

f em

ploy

men

t re

latio

nshi

p su

ffice

. N

o re

siden

ce

requ

irem

ent

Lim

ited t

o th

ose

plan

ning

to s

tay

in

, Jap

an fo

r one

yca

~ or m

ore.

Alie

n ~ re

gistr

atio

n at a

mun

icip

al o

ffice

is

' req

uire

d 07

-.

Nam

e

Nat

iona

l Pen

sion

1,aw

Yea

r I Yea

rnat

iona

lity

enac

ted

requ

irem

ent

1959

ab

olish

ed

1982

I I

General

Empl

oyee

s' Pe

nsio

n I

1941

I

1946

I I

Insu

ranc

e La

w

Nat

iona

lHea

lthIn

sura

ncc:

I

1938

I

1986

IA

W

Hea

lth In

sura

nce L

aw

1922

19

22

Wor

kmen

's A

ccid

ent

1937

Co

mpe

nsat

ion

Insu

ranc

e Law

Em

plo>

men

t Ins

uran

ce Law

)reign

Nat

iona

ls m

Japa

n A

pplic

abili

ty to

ille

gal I

Rem

arks

fo

reig

n wor

kers

No e

xcep

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thos

e Co

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und

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n em

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ees'

pens

ion

plan

an

d th

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epen

dent

p

UW

S

Yes

No No Ye

I

No

Those

fore

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wor

kers

who

hav

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st jo

bs ar

e ob

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to le

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he c

ount

ry

unde

r the

Imm

igra

tion

Cont

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aw.

Thus, f

orei

gn n

atio

nals

cove

red

by th

is

law

are

3 in

prac

tice,

lim

ited t

o pe

rman

ent r

esid

ents,

Sou

th K

orea

n re

sidtm

ts in

Japa

n, a

nd th

e fo

reig

n spouses o

f Japanese n

atio

nals

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Page 20: Social security and foreign nationals in Japan

82

New

Glo

bal D

evel

opm

ent:

JI&

CSW

No

Ali

m re

gist

ratio

n at a

mun

icip

al ofice

is re

quire

d.

Law

for C

hild

Sup

port

Allo

wan

ce fo

r Fat

herle

ss

Chi

ld A

llow

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Law

'119

82

Dai

ly L

ife S

ecur

ity L

aw

adm

inis

trativ

e

1961

19

82

mea

sure

s since 1

950

Chi

ld W

elfa

re Law

1947

19

47

Fam

ilies

I

Law

for t

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elfm

e of t

he

Physically'HandicappedHandicapped

Law

for t

he W

elfa

re of

the

Age

d I

I So

urce

: Tak

ato.

199

1.

1919

19

49

1960

19

60

Men

tally

Ret

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d

I

No

I Alie

n re

gist

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n at a

mun

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d.

I Alie

n re

gist

ratio

n at

a n

iuni

cipa

l otIi

ce

No

in J

apan

I excl

usio

nAby

the

Min

istry

of J

ustic

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sual

ly a

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d bu

t the

re ar

e cas

es of

Y

es

I excl

usio

n-by

the M

inist

ry o

f Jus

tice

I Usu

ally

app

lied b

ut th

ere a

re ca

ses o

f Y

es

I excl

usio

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the Ministry

of Ju

stic

e I U

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lv a

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es

I excl

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the

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istry

of J

ustic

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Crossing the Border: Social Security and Immigration 83

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Foreign Press Center 1988 Social Seciirity in .J~ipan (About Japan Series 17) Tokyo Foreign Press Center

Hagino, Y I979 (;aikokujrn no jinkcn (Human l<rghts of 14)reign Notionrrls) 7i)kq’o Kjv)ikil.shci

Iguchi, Y 1996 ‘Country Report - Japan’ in lniernational Migrcction rind 1,Lihoiir Mtirkc! in Asin -- Nationd I’olrcres rind Hegrond i ‘0-oprafion Tokyo Japan Institute of Labour

Japan Immigration Association 1990 A (iuidc t o Ihlry, Kcsidencc Lind I<~~gistrtition I’roccdiirLp\ in .Japan for koreign NLrtionol.\ Tokyo Japan Immigration Association

Japan Immigration Association 1992 Hasic I’lan for lmmigratron i ‘ontrol Tokyo Japan Immigration Association

Japan, Ministry of Health and Welfare 1995a Introduction o f the National Hetilih Insurance System. Tokyo Ministry of Health and Welfare

Japan, Ministry of Health and Welfare 199Sa Otitline of the Hcfurm ofl’ension Pension Bureau, Ministry of Health and Welfare.

Japan, Ministry of Health and Welfare 199Sb. Oittline u f the Pension stern, Pension Bureau

Japan, Ministry of Health and Welfare 199%. The 199.5 edition of- White I’aper on.Hetrlth and Welfare. Tokyo: Ministry of Health and Welfare

Japan, Ministry of Japan, Ministry of Labour 1995. I+br ]+)reign Nationals wishing to Work in .Japan, Tokyo: Ministry of Labour, Public Employment Security Office.

Japan, Social Insurance Agency 1995. To All NonJapanese 1,eaving .Japan, Tokyo: Social Insurance Agency

Japan, Supreme Court (1948) Cho case, December 28, Minsti. 4 ( I 2): 683

Japan, Supreme Court. (l978), 4 October 1978, Macreen case Hanrer .Jiho : 903

Japanese Economic Journal 1992. (Nihon Keizai Shimbun) 4 July: S

Kodansha (1 993). ‘Society.’ In .Japan An Illustrated t<ncyclopedia, Tokyo: Kodansha

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84 New Global Development: JI&CSW

M F-MASH Steering Committee, Minatomachi Medical Center I44 I Mincifornuchi lloretgn Migran! Worker’\ Mrrtital Aid Scheme for Hecrlth, Yokhama Minatomachi Medical Center Information Pamphlet

Niraishi, N I987 S o c i t r l Secitrity (Japan Industrial Relations Series) Tokyo Japan Institute of Labour

Takafiiji, A 1091 ‘Gaikokujin Rodosha to Wagakuni no Shakai Hosho Hosei (Foreign Workers In (kiikokyin Hodoshn to Shokni Ho\ho and Japanese Social Security Legal System) ’

(twrcign Workers c7nd Social Secitrity), Tokyo University of Tokyo Press

Takahashi, T and Someya, Y 1485 ‘Japan ’ In Dixon, J and Kim, H S (Eds ) Social Welflirc in Asiti London Croorn Helm

Takanashi, A 1996 ‘Migration Policies and International Cooperation - Issues Facing Japan and Other Asian Countries ’ In Internntional Migration and lnrhotrr Market in Asia - Nntionrrl l’olicic\ and I<egionol (’o-operation Tokyo Japan Institute of Labour

Takato, A 1991 ‘Gaikokujin Rodosha to Wagakuni no Shakai Hosho Hohsei (Foreign workers and Japanese Legal System of Social Insurance)’ In (iarkokyin Hodosha to Shakai Iiosho, 7ok-w Social Security Institute

Tokyo Metropolitan Government 1995 Oit!linc of Health Insurance, National Health ln.sztrancr. Nutiond I’cnsi on cind Iimplo-vces ‘ l’ension lnsitrance Sy.sterns Tokyo Tokyo Metropolitan Government

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