Privatised Japan Post to be under jurisdiction of Three government agencies

Units of a privatised Japan Post are expected to come under the jurisdiction of three separate government agencies to ensure equal competition with the private sector, government sources said.

Japan Post is currently under the supervision of the Public Management, Home Affairs, Posts and Telecommunications Ministry.

After privatisation, a 10-year process the government hopes to begin in 2007, only postal business would stay under the ministry’s jurisdiction, they said.

Japan Post’s distribution business is expected to be under the jurisdiction of the Land, Infrastructure and Transport Ministry, while the saving and life insurance businesses would come under the Financial Services Agency, the sources said.

The three government agencies would each supervise the various Japan Post businesses under their jurisdiction and make sure that regulations will be equal of those of private companies in terms of competition, they said.

The FSA is currently in charge of only conducting inspections over the postal savings and life insurance businesses of Japan Post. Some experts said those businesses should be put under the FSA’s jurisdiction, as are other financial institutions.

The distribution business, which will be added to the businesses of Japan Post after privatisation, would not have to provide universal service all over Japan as the current postal service is required, they said.

The Council on Economic and Fiscal Policy, the government’s key economic policy-setting panel, has adopted a draft basic policy for privatising Japan Post.

It calls for splitting the public corporation’s operations into four independent businesses — mail delivery, postal savings, life insurance and management of over-the-counter services at post offices — and putting them under a holding company.

It also says the government should privatise the entity in stages beginning in April 2007 and complete the process by 2017.