Panel decides outline for Japan Post breakup
A key Japanese government panel on Friday decided on an outline of its plan to divide Japan Post’s operations into four companies after the public corporation’s full privatisation in 2017.
In the outline, the Council on Economic and Fiscal Policy stated that the four functions of Japan Post–its mail service, “Yucho” savings, “Kanpo” insurance, and over-the-counter operations–will be separated into four companies under a holding company.But the council failed to agree on most of the points at issue, such as the treatment of employees after they lose the status of public servants and which operations of the mail service will have nationwide universal coverage.
The panel is expected to wrap up a basic privatisation plan in September.
Meanwhile, the ruling Liberal Democratic Party, which is generally cautious about the privatisation, is looking to bring forward alternative proposals to those of the governmental panel, chaired by Prime Minister and LDP President Junichiro Koizumi.
According to the council’s outline, Japan Post, which was launched in April 2003 as an independent administrative agency, should be privatised in 2007 and the whole process of the privatisation should be completed in 2017.
Taro Aso, minister of public management, home affairs, posts and telecommunications, told a press conference after the panel’s meeting that in 2007, Japan Post would be transformed into a special corporation having all the four functions, as it is difficult to create a holding company at the start of the privatisation. A special corporation is a joint stock company owned by the government. Typical examples are JR group railway operators that have undergone the privatisation process.
According to the outline, the planned companies for postal savings and insurance will not receive government guarantees for new contracts after the full privatisation.
They will come under the safety nets of the banking and life insurance industries, Deposit Insurance Corp. and Life Insurance Policyholders Protection Corp. of Japan, respectively.
Old contracts with governmental guarantees will be managed together with new ones, and profits or losses on the old contracts will belong to the planned holding company.
