Non Profit Organizations in Japan are relatively small and less influential compared to those in the U.S. and Europe. One reason is the current legal structure.
Under the Civil Code, in order for public interest organizations to be incorporated, they must obtain a permit by the administrative agencies, which oversee the activities of such organizations. The agencies have a wide range of discretion and many citizens organizations do not apply for the incorporation procedure, hating the agencies intervention with their daily business. In addition, the agencies usually require significant amount of assets (for example, more than 3 million dollars) for incorporation, which makes it almost impossible for grassroots organizations to be incorporated under the Civil Code.
Finally, the Japanese Diet enacted a new Non Profit Organization Act called Specific Areas of Non Profit Activities Act and the law will be effective on December 1, 1998.
The new Act has the following features:
This Act significantly liberalizes the incorporation of public interest organizations which fall under the following 12 categories of citizenes activities specified by the Act.1) health care, medicine, and welfare
2) social education
3) community development
4) culture, art and sports
5) environmental protection
6) disaster relief
7) community safety
8) protection of human rights, and achieving peace
9) international cooperation
10) gender equality
11) child education
12) assistance of public interest organizations in the above 11 categories
The lawmakers intention is that these categories should include almost all kinds of citizens public interest activities and the administering agencies must interpret this provision as broad as possible. For example, we cannot find consumer protection in the above 12 areas but it is read to be included in human rights protection or social education. The watch dog organizations like Citizens Ombudsman should be interpreted as aiming social education through checking the tax spending by the government.
Of course, many citizen groups prayed for the introduction of a comprehensive Non Profit Organization Act. However, because there are already many organizations incorporated under the Civil Code and it takes time to change the basic law like the Civil Code, the lawmakers tried to limit the scope of the new law by specifying the area of activities while admitting liberal interpretation of the provisions.
The organizations can be incorporated by submitting certain documents required by the Act and the administering agencies must approve incorporation as far as they formally fulfill the requirements of the Act. The wide discretion of the agencies under the Civil Code is significantly excluded here. The basic requirements are as follows:
1) requirements related to the main purpose of organizationsa) The main purpose must fall under at least one of the 12 areas of the activities specified by the Act.
b) The main purpose must contribute to facilitate the interest of general public.
c) The purpose is not for profit.
d) The main purpose is not for religious activities.
e) The main purpose is not for political activities and political parties activities.
2) The organization is not a crime organization or not controlled by a crime organization or its members.
3) requirements related to the organizations membershipa) The organization does not have any unfair conditions for membership.
b) at least ten members
4) requirements related to directorsa) The number of paid directors should not be more than 1/3 of the total number of directors.
b) At least three directors and one auditor without any disqualification.
Tax exempted status is not given to the public interest organizations incorporated under the Act. The Act only has an additional clause, which says the Diet will review the Act and shall introduce necessary measures within three years. This clause is interpreted to mention the possibility of introduction of tax incentives in the near future.
The Act is far from the one originally expected by grassroots organizations. Many citizen groups are wondering whether there is any merit for them to become incorporated. However, this law has great impact on Japanese society and culture. Even though Japanese legal system for NPO is not yet matured, I hope this new law will encourage citizens to take part in variety of democratic activities including protection of our mother earth.