Q&A ON BILLS FOR ENTRY OF PRIVATE FIRMS IN POSTAL SERVICES
A set of bills altering Japan’s mail delivery system cleared the House of Representatives on Tuesday, raising the likelihood the legislation will be put onto the statute book by July 31, when the current Diet session ends.
The bills would create a state-run public corporation next April to take over the state-run postal services — mail delivery, postal savings and life insurance.
The legislation would also allow private firms to access the huge mail delivery service market, although a set of harsh conditions on the qualifications and duties of would-be entrants set high hurdles.
The bills mandate that the private firms first become government-certified entities and consent to assuming the duties of handling almost all types of mail on a nationwide scale at the cost of large capital outlays, or operate in a limited scope dealing only with certain types of mail, such as express mail delivered by motorcycle.
The following is a set of questions and answers to clarify the nature of the new legislation that has left many puzzled over its significance.
Q – Why do the bills simultaneously seek to set up a public corporation to handle postal services and allow private firms to enter the same field?
A – In 1998, the Diet enacted legislation to have the Postal Services Agency hand over postal services to a state-run public corporation. In 2000, the cabinet approved a plan to allow private firms to start offering postal services when the public corporation is set up.
Q – What changes will occur when the proposed public corporation takes over postal services?
A – It becomes unnecessary to secure Diet approval for a budget for the new postal services pubic corporation each year. The entity will be managed on the basis of a four-year plan devised every four years. It will count on its own earnings to pay its expenses and costs without tapping the national treasury. Its books will be inspected on the basis of accounting standards identical to those for private firms. The minister of public management, home affairs, posts and telecommunications will have the authority to appoint the head of the public corporation.
Q – What is mandated by the central bill on mail services among the bills that cleared the lower house Tuesday?
A – Mail is defined as postcards and letters in envelops which are delivered by a postal service provider. Although the mail law basically mandates that mail delivery is a governmental privilege, the bill would enable private firms to deliver ordinary mail if they can live up to a string of conditions. They include a requirement for a new entrant to assume the duty of delivering even a single independent letter weighing up to 250 grams through its nationwide mail system even if the duty does not concern a more lucrative bundle of letters like direct mail.
Q – Why did the ruling Liberal Democratic Party (LDP) and some other parties initially oppose the bills?
A – The postal ministry has charged uniformly low rates for mail posted at any location throughout Japan by making up revenue shortages from postal services in sparsely populated districts or islands by funneling revenues from postal offices in densely populated cities. Some LDP legislators blasted the proposed legislation for opening the way for private firms concentrating on services in lucrative urban areas while ignoring the interests of citizens in sparsely populated areas. That would make it impossible for the proposed public corporation to maintain uniformly low rates for mail services in Japan in coming years.
Therefore, some LDP legislators persuaded the government to insert into the bills the phrase that says, The public corporation shall set up post offices on a broad area throughout this country. They are also worried about the stance of Prime Minister Junichiro Koizumi who has described the proposed entry of private firms into postal services as a first step in privatizing the three postal services areas.
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