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The Non-Propfit-Organisation Law and related Reforms

Date interview: November 1 2016
Name interviewer: Paul Weaver
Name interviewee: Jill Miller
Position interviewee: Independent researcher


Reputation/legitimacy Providing alternatives to institutions NGOs New Organizing National government Interpersonal relations Experimenting Civil Society organizations Breakthrough Adapting

This is a CTP of initiative: Volunteer Labour Bank/Network (Japan)

This CTP concerns the Non-Profit Organisation (NPO) Law (1998). The NPO Law was one of a set of new laws in Japan, representing and contributing to a shift in national government policies concerning the framework within which the demographic and other challenges facing Japan might be better addressed. The NPO law concerned the role, status and governance of volunteers, mutual aid and community organisations; i.e. civil society organisations, non-profits and non-governmental organisations.  

The two main laws that changed the operating context for Japanese TimeBanking are the Non-Profit Organisation (NPO) Law (1998) and the Long-Term Care Insurance (LTCI) Law. The NPO Law is to promote specified non-profit activity. It gave greater status and social legitimacy to community groups, making it easier to establish and incorporate non-profit activities and making community organisations financially more viable. It was part of a package of regulatory reforms relating to work and activity in Japan. The LTCI Law, which impacted on TimeBanking in a different way (by changing how elderly care and financing for it are organised in Japan) is addressed as another CTP.  

Both laws were facilitated by the Community Welfare policy, which involved a shift in the political and societal perception of civil society organisations and volunteering. Together, these laws provided the legal and institutional framework for major shifts in social interpersonal relations and changes of roles and responsibilities in Japanese society. Nevertheless, implementation and actual social change has been achieved bottom-up through activities organised newly within this new governance framework by newly-legitimated and empowered community organisations. TimeBanks have been major actors both in pushing for this legislation and organising elderly care (and community-based care more generally) through TimeBanking mechanisms.  

The two laws together allowed for creating a new relationship between the public and private sectors. They have also facilitated and supported innovations in TimeBanking and vice-versa such that there is some co-development between innovations in the external governance arrangements and innovations in TimeBanking. Some of these variants involve money payments and constitute mixed currency models of TimeBanking. Some of these innovative models are used also for child care support as well as elderly support.  

Interaction and interplay in all directions is evident between the evolving external governance context, evolving societal challenges, evolving societal values beliefs and behaviours, and evolving models of TimeBanking. The changing opportunity context for TimeBanking favoured some TimeBanking models over others The more successful models (in terms of sustainability and dominance on the Japanese TimeBanking scene) involve a creative hybridisation of traditional values and modern needs. VLB/VLN lost ground to emerging new and more innovative TimeBanks through the 1990s and 2000s. Other models have overtaken VLB/VLN and (in some cases) institutionalised while VLB/VLN has withered.

Co-production

Civil society groups were seen as the main focus for bringing the law into being. The NPO law involved breakthrough instances of public participation in a legislative process previously dominated by the civil service. Both laws (NPO and LTCI) had input from non-governmental groups in the drafting period. This alone represented (for the first time in Japan) a move toward greater involvement in the legislative process from bodies outside government.  

Aided by the community welfare policy during the 1990s, a number of community groups became nationwide lobby networks. These included several TimeBanking organisations. A lead organisation was the Sawayaka Welfare Foundation (SWF). Its founder, Tsutomu Hotta, was recently retired from a senior governmental role, so had expertise, status and contacts in policy and law making. Hotta and other leaders of community groups undertook and were informed by their own independent surveys and research on societal challenges and the potential role of volunteer organisations. By the time drafting started on the NPO law, they had established themselves as critical participants in the process intent on creating a more enabling legal and regulatory framework for civil society organisations and voluntarism.  

The high status of Hotta within the policy process during his working career carried over to his post-retirement activities. He was an influential and respected figure who commanded authority and leadership credibility even when no longer in formal government service.  

The NPO law establishes a legal premise for citizens’ groups to form and to operate without strict bureaucratic supervision and sanctions. Initially, the law provided for registration of NPOs in 12 areas: health, medical care and welfare; social education; community development; culture the arts and sport; the environment; disaster relief; community safety; human rights and peace; international co-operation; equal treatment of women in society; sound nurturing of youth; and support for any of these. A further five categories were added later: information technology; science and technology; economic revitalisation; job training and employment; and consumer protection.  

With the passing of the law, a number of regional NPO support centres were set up to give professional assistance to applicants for incorporation, to raise the profile of applicants and to link them up with government agencies. One such centre provided support to over 60% of the NPOs incorporating from that area in the year following initiation of the NPO law. Even if the legal process has been simplified professional support to aspiring NPOs has encouraged and facilitated applications, including ones that otherwise might not be made.  

By far the largest number of NPOs established under the law work in the social welfare field. These NPOs include the TimeBanks. The TimeBanks were among the first groups to apply to become NPOs, seeing the laws as an important action that could give them greater legitimacy and improve their financial prospects. The NPO law paved the way for the emergence of many more TimeBanks and TimeBanking networks, each offering innovative and customised variants of TimeBanking, experimenting and adapting to the specifics of local needs and contexts and the ever-evolving Japanese context and providing alternative models and modes of meeting needs.  

Some of these have been more successful than others and some sustained longer than others. But the significance for VLB/VLN is that from first being the only Japanese TimeBank, VLB/VLN became one among many on the Japanese TimeBanking scene. From a recruiting perspective, the emergence of alternatives further diminished the relative attractiveness of the VLB/VLN, whose offer was still focused largely on middle-aged women and a ‘purist’ model of TimeBanking whereas the newer TimeBanks had broader appeal. They were able to recruit from other segments of the population (men, active retirees, etc.) and offered mixed-currency models of TimeBanking.  

The scope of socially acceptable lifestyles for both men and women in Japan had previously been very restricted, especially concerning responsibilities for providing care to the aged. Prior to the introduction of the NPO Law and the LTCI scheme, women were expected to give up any personal ambitions for activity outside the home (work, education, sport, recreation) if aged parents required care. This included quitting paid jobs. Women were expected to conform or face being stigmatised in their neighbourhoods. Equally, the coming of frailty in old age was feared as it brought the threat of dependency without the opportunity to engage in reciprocity.  

Before the 1990s, the main responsibility for aged care was assumed by both the Japanese government and the community to belong with the family. Only the small few without close relatives were deemed to be deserving of state assistance in old age. Families unable to cope with looking after their aged relatives frequently resorted to placing them in hospitals rather than nursing homes, for both cost and social reasons. No social disgrace was attached to hospitalisation, whereas placement in a nursing home was seen as a failure to live up to social ideals. But this compromised hospitals, which were becoming de facto places of long-term care. In the early 1990s, the Japanese hospital system had the longest patient stays of any system in the industrialised world.  

The change has been the shift from selective application of care benefits for a poor minority to universal application for all older Japanese needing care. This has involved overcoming the stigma and dishonour associated formerly with receiving help from outside the family. There has been a commensurate shift, therefore, in how Japanese people view the respective responsibilities of families and communities toward the aged.  

Volunteering has also provided a space for experimentation with alternatives to traditional societal roles and interpersonal relationships. “Gender roles have been as rigid in Japan as age roles have been. Both have been undergoing some transformation over the last decades as a number of Japanese manage to step outside them.”. TimeBanks have been part of this questioning and changing. Since the 1990s (i.e. the second and third wave of TimeBanking in Japan) they have become spaces where older men (as well as women) are encouraged to become carers. “That this has been espoused by two high profile male retirees who themselves have defied gender constraints by moving into volunteering has helped to make it more socially acceptable.” Also: “What is new (about the change) is that an older generation of Japanese is at its forefront”.  

The new legislation has benefitted TimeBanks through giving greater legitimacy to NPO activity. It has enabled them to further refine the citizen-style mutual volunteering model that they pioneered and to work out how to co-produce care services. The possibilities of care work have helped attract recruits in their 50s and 60s to Japanese TimeBanks and into training and certification as ‘carers’.  

In turn, TimeBanks have become major providers of training courses, certification and delivery of care under the scheme. TimeBanks, as civil society organisations, have also become leading researchers and sources of information for policymakers and businesses about the needs and wants of the aged. These activities provide a finance stream for the concerned TimeBanks and their members.  

Upon the passing of the NPO Law, the VLB applied for NPO status, but in doing so had to change its name as the word ‘bank’ was not allowed to be used for an NPO because of connotations with the conventional banking system. The VLB (Volunteer Labour Bank) was therefore renamed as the Volunteer Labour Network (VLN).  

The legislative changes empowered the more innovative TimeBanks, but the pioneer network (VLB/VLN) found its purist model undermined by newer variants. In the ensuing expansion and diversification of time exchange in Japan, VLN has lost out relatively and absolutely as more innovative TimeBanks have grown their membership and roles in society and (in some cases) institutionalised.

Related events

The Japanese Laws that regulated non-governmental associations up to 1998 were based on the Civil Code of 1896 and post WWII amendments. These required groups seeking legal status to apply to the ‘competent authorities’; i.e. government. This was a high cost, slow process, requiring significant capital assets. Legal establishment required wealth, but tax rules also put the wealth of individuals and their families at risk through membership of ‘private’ associations. Yet, without legal status, those representing social organisations lacked the social status essential in Japan to secure critical links with business and government. The post-war amendments also prohibited public funding of private groups. One reason that housewife-based mutual help groups for aged care needed to charge for their services in the 1980s and 1990s is attributed to their inability to gain public funding because they could not incorporate. Groups like the JCSA could only incorporate as NPO after 1998 and most were unable to apply until after 2000.  

The pre-1998 situation, therefore, was that most civil society organisations up to then were quasi-governmental or government-sanctioned organisations rather than bottom-up (grassroots) initiatives. The NPO law made it possible for more grassroots initiatives to become legally incorporated. From the perspective of TimeBanking, this led to the founding of many new TimeBanking initiatives and organisations and to a greater diversity of models of TimeBanking.  

Other laws passed around the same time have also facilitated greater flexibility in Japanese society, expanding the range of choices open to individuals across the life course. These include laws to promote greater gender equality and to provide access to leave from employment to care for children and the elderly. These laws were designed to enable greater and more flexible workforce participation by women and to enable women to progress to higher positions. The laws on care leave legitimate engaging in careers while being available also for family care on a needs-arising basis.  

Laws enabling men and women to take time off to care for family members challenge the previous gender stereotypes that formerly recognised only females in these roles. The Elderly Employment Stabilization Law, which obliges employers to raise or abolish mandatory retirement age, is another relevant piece of legislation, since it challenges received notions about older people being required to leave post and recognises that the active elderly can still contribute to society.  

These laws are responses to changes in society, but also provide impetus for further change in social relations. The context is one of a nation undergoing rapid demographic, social and economic change and experiencing growing alarm over the possible economic and social repercussions of rapid population ageing. Government was also seeking new ways to curb public spending, including by reducing the burgeoning cost of aged care by drawing on the labour reserve of retirees and others as ‘volunteers’. The retiree population offers a source of such helpers. The legislation thus paved the way for a society in which non-profit civil society organisations could assume an increasingly higher profile and could encourage the active elderly to join them with roles as ‘incentivised volunteers’. This contributed to the emergence of the (currently) unique Japanese innovation of ‘paid volunteering’.  

In the foreword to a 2001 White Paper on Volunteering, the Head of the National Economic Planning Agency commented on the NPO law as “respecting the social consciousness of participants in NPOs” and added that “circumstances seem to be shaking apart the job-linked society, which emphasis workplace connection in human relationships, replacing it by a new kind of society where people have more choice in terms of affiliations, with one such factor being volunteering.”.

The choice of topic for the White Paper – volunteering – reflects the degree of significance attached to it by the government agency, as its annual publication is “known for articulating major social trends”.  

The laws created opportunities for innovations in TimeBanking and time exchange. New forms of time exchange and new networks to promote these emerged. The field of time exchange activity in Japan expanded and diversified. Purist forms of TimeBanking (as practised by VLB/VLN) were less attractive than emergent forms, which upscaled more quickly. The emergent forms delivered quantitatively and qualitatively different levels and kinds of societal impacts, reaching more people. They were more salient for the kinds of societal changes and challenges that Japan needed to address.

Contestation

Political parties were under pressure in the wake of the Kobe earthquake (1995) to expedite measures to make it easier to establish and run civil society organisations. As discussed below, the Earthquake had demonstrated that civil society organisations and volunteers could play important roles in society in relation to societal challenges and (as Kobe demonstrated) even societal emergencies. Political parties were under pressure (including from the media) to remove restrictions that limited the opportunities for community organisations, mutual aid organisations and volunteer groups.  

The legal process around the NPO law took three years. Central issues included the number and types of groups to be covered, tax benefits for these groups, and the power of public servants to supervise and sanction the emergent groups. The NPO Law has, as its full title, the ‘law to promote specified non-profit activity'. Originally, it was planned for it to have the name of ‘Civic Activities Promotion Law’, but this was opposed by the Liberal Democratic Party as sounding too ‘anti-government’. The law finally passed by a unanimous vote in the House of Representatives. Amendments since then address the eligibility of incorporated NPOs to receive tax-deductible donations.  

Anticipation

The challenges of demographic change (falling birth rates and an ageing society) were anticipated by Mizushima long before they became a prominent societal or governmental concern. Her response was to develop TimeBanking as a mechanism through which members could donate care and support to carers working in institutionalised settings (formal residential care homes) and could also build time credits for mutual (i.e. within group) support, whereby active TimeBankers (mostly women) would care for frail TimeBankers in their own homes as they aged. This was the first ‘wave’ of TimeBanking in Japan. This model paved the way for at least two further waves of TimeBanking, based on variants of this model. These ‘variants’ were facilitated in upscaling or (in the case of the third wave variants) in establishing by the NPO and LTCI laws.  

Two aspects of the challenges of demographic change were recognised by government in the 1980s. One concerned the decline in the working age population, which necessitated bringing new entrants into the workforce, including women. The other concerned the increasing share of older people. The two were related, since in traditional Japanese society women were expected to care for the frail elderly. The first response of government to this challenge was to introduce the Gold Plan in 1989. This was a decade-long plan to ease the burden of elder care on women. Targets were set under the Gold Plan to increase the numbers of support carers, introduce qualification and certification schemes for care professionals, and provide day-care facilities for the elderly.  This first ‘solution’ of a public scheme with professional carers proved able only to deliver care to only a few of those most in need and was too costly to generalise. The replacement strategy based on the NPO and LTCI Laws took a completely different approach. It sought universal coverage and, to achieve this, drew on the middle-aged and active elderly (both men and women) as ‘volunteer’ carers, sometimes as ‘paid volunteers’.  

The background is that there had already been a more than doubling of volunteer numbers in Japan in the 1980s, leading some government advisory committees on welfare to endorse participatory welfare, which appeared to offer solutions for the envisaged crisis in aged care. The Ministry of Health and Welfare introduced a community welfare policy in 1993, targeting volunteering especially by housewives and healthy retirees. This marked a shift from seeing volunteering as an act of charity by the privileged for the benefit of the poor toward a new model of citizen-wide mutual aid. The efforts of associations – like Time Banks – as pioneers of new models of volunteering for reciprocal social insurance were already receiving official attention by the early 1990s.  

Additional impetus in this direction was given, however, by the 1995 Kobe earthquake and its aftermath, which spotlighted the important role of civil society organisations. The Kobe earthquake hit during a period of increasing public disquiet in Japan. For the first time in 38 years the Liberal Democratic Party had lost office in 1993 amid concerns for rising unemployment, real estate losses and other financial losses that damaged individual and family equity and unease over the future of pensions and medical care in an ageing society.  

Over 1.3 million volunteers and many civic society groups provided on the spot assistance when the earthquake struck. The media praised their efforts and criticised official responses. The contrast between voluntary organisation and government agency response was portrayed as ‘stark’ by media critics of government. Kobe was widely interpreted to demonstrate that citizens could contribute if they were allowed to do so and this was the narrative that propelled reform of external governance arrangements into the spotlight.  

It is arguable whether Kobe precipitated action or was used instrumentally to facilitate and legitimate action that would have been needed anyway. The Kobe earthquake certainly speeded up reform that would likely have emerged in time anyway. It provided a fertile context for the NPO and LTCI laws. Together these reformed the governance context and the opportunity field for TimeBanking. Suddenly, a type of activity – incentivised volunteering – that had not been greatly valued previously became respected and acknowledged as an important asset in addressing ageing and other challenges, thus giving impetus to revise the legislative framework. Following the disaster, the main political parties began to draft new NPO legislation.  

Developments in the non-profit sector in Japan in the 1990s therefore represented “a bottom-up movement toward civil society where citizens play a larger role in the promotion of the public interest rather than a top-down structure where government dictates the activities of non-profit and nongovernmental organisations.”

Learning

TimeBanking in Japan has been studied from both within and outside the concerned organisations and from within and outside Japan. The major external study is the PhD thesis of Jill Miller, which takes the perspective of learning how Japan has used TimeBanking to address its social, demographic and economic challenges and how changes in external governance arrangements have facilitated and legitimated (incentivised) volunteering. This has expanded and opened the body of learning from Japanese experience, which hitherto was largely known about only in Japan.  

The role of the NPO and LTCI reforms have been studied and lessons learned, especially about the roles played by the key leaders of the concerned organisations in co-creating the reforms and about the strengths and weaknesses of different variants of the basic TimeBanking model in respect to meeting different needs and suiting different contexts. It has helped that the leading advocates and practitioners had high status and strong/close connections with the establishment (i.e. leading roles in earlier careers in industry/business and/or government and law making, strong connections with the media, etc.) and that they have been demonstrably willing to engage actively themselves in the activities they advocate (e.g. by training and working as carers themselves), which has made them respected role models in the social changes they are pioneering.  

Some analysts of Japanese developments in TimeBanking have noted that the complexities and the specificities of the Japanese context and its dynamics are underestimated in often over-simplistic accounts that jump to often ill-judged conclusions about the generalisability and transferability of ‘the Japanese model’ to other situations. In practice there are many different Japanese models of TimeBanking and there has been a continuous dynamic interplay between the evolution of these, the Japanese context and societal change.  

TimeBanking organisations have become major providers of training programmes and certification for carers. Some Japanese TimeBanking organisations have gone on to establish themselves as research institutes and leading sources of knowledge on the aged and on ageing. They have become partners in policy development and to businesses that supply goods and services to the elderly. The more innovative variants of TimeBanking that have introduced mixed currency modes or other incentives to secure recruitment and have widened the set of groups in society they target or the services they provide have been more able to sustain and scale than ‘purist’ versions.

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