For businesses operating in Japan, interacting with administrative organs is a frequent necessity. Transparency in governmental operations is vital, and Japan's primary legislation ensuring this is the Act on Access to Information Held by Administrative Organs (行政機関の保有する情報の公開に関する法律 - Gyōsei Kikan no Hoyū Suru Jōhō no Kōkai ni Kansuru Hōritsu), commonly known as the Information Disclosure Act (IDA). While this Act establishes a fundamental right to request government-held documents, it also contains crucial exceptions. A Supreme Court of Japan judgment on May 17, 2022, provided significant clarifications on one such exception related to protecting administrative operations and on the methodology for applying non-disclosure rules.

Overview of Japan's Information Disclosure Act

Enacted to promote a more open and accountable government, the IDA grants any person the right to request the disclosure of "administrative documents" (行政文書 - gyōsei bunsho) held by national administrative organs. Local governments in Japan also have their own information disclosure ordinances, often modeled on the national Act.

The core principle is disclosure. However, Article 5 of the IDA outlines several categories of information that are exempt from disclosure. These exemptions aim to balance the public's right to know with other vital interests, such as national security, public order, and the proper execution of administrative affairs.

Even when a document contains non-disclosable information, Article 6 of the IDA mandates partial disclosure. This means that if the non-disclosable portion can be "easily separated" (容易に区分して除くことができるとき - yōi ni kubun shite nozoku koto ga dekiru toki) from the rest of the document without rendering the remaining information meaningless, the agency must disclose the separable parts.

Focus: Article 5, Item 5 - Information Impeding Proper Administrative Execution

One of the most frequently invoked exemptions, and the one central to the Supreme Court's May 17, 2022, judgment (Case Nos. 2020 (Gyo-Hi) 340 & 341), concerns information that, if disclosed, would likely impede the proper execution of administrative affairs or事業 (事務又は事業に関する情報であって、公にすることにより、当該事務又は事業の性質上、当該事務又は事業の適正な遂行に支障を及ぼすおそれがあるもの - jimu mata wa jigyō ni kansuru jōhō deatte, kō ni suru koto ni yori, tōgai jimu mata wa jigyō no seishitsujō, tōgai jimu mata wa jigyō no tekisei na suikō ni shishō o oyobosu osore ga aru mono).

Within this broad category, the specific sub-item often relevant to businesses, and addressed by the Supreme Court, is information related to affairs like audits, inspections, regulatory enforcement (crackdowns), contract negotiations, or litigation. The rationale for this exemption (found in what was Article 5, Section 6(a) at the time of the case, now generally corresponding to Article 5, Item 5(i) after amendments related to the formation of the Digital Agency) is to prevent disclosure that could:

• Make it difficult to accurately ascertain facts.
• Facilitate illegal or improper acts.
• Make the detection of such acts difficult.

Typically, this has been understood to protect sensitive information such as confidential investigative techniques, informant identities, ongoing enforcement strategies, or negotiation tactics that, if revealed, would undermine the agency's ability to perform its duties effectively.

The Supreme Court Judgment of May 17, 2022: Key Clarifications

The Supreme Court case involved a request for documents related to a company that had been subject to inspections under the (now-defunct) Deposit Act and later regulatory action under the Act against Unjustifiable Premiums and Misleading Representations. The Consumer Affairs Agency had withheld certain "investigation-related documents" and "measure consideration documents." The Supreme Court's decision provided crucial interpretations on two main points:

Issue 1: Can "Objective Facts" Be Withheld Under the Administrative Operations Exemption?

A common point of contention in disclosure disputes is whether purely factual information gathered during an investigation can be withheld. The High Court, in this case, had leaned towards the view that objective facts (like investigation results or factual reports) should generally be disclosable, as their release wouldn't inherently enable evidence tampering or impede future investigations.

The Supreme Court took a more nuanced and agency-protective stance. It ruled that even "objective facts" can fall under this non-disclosure exemption if their disclosure would allow a reasonably astute party to infer sensitive aspects of the agency's operations, such as its "investigative focus (着眼点 - chakuganten), methods (手法 - shuhō), or points of emphasis."

The Court reasoned that if regulated entities could deduce these strategic elements from disclosed factual information, they might preemptively conceal or alter evidence in future similar investigations, thereby hindering the "proper execution of administrative affairs." This establishes an "inference test": the question is not just what the information is, but what it reveals about the agency's modus operandi. The assessment must be made on a case-by-case basis, considering the specific nature of the information and the potential for such detrimental inferences.

Issue 2: Defining the "Unit of Information" for Non-Disclosure Decisions and Partial Disclosure

The second critical issue addressed by the Supreme Court was the granularity required when applying non-disclosure exemptions. Administrative agencies sometimes withhold entire documents or substantial sections if any part is deemed non-disclosable. The High Court in this case had, for certain documents, assessed non-disclosability on the basis of coherent sections (e.g., "Section 1," "Section 2") as indivisible units.

The Supreme Court found this approach to be potentially flawed. It emphasized that if a document, or even a distinct section within it, contains multiple different pieces of information, the non-disclosability of each piece must be assessed individually. An agency cannot simply declare an entire block of information non-disclosable because it contains some exempt material. Instead, it must rigorously apply the principle of partial disclosure (Article 6 of the IDA).

This means agencies have a duty to:

1. Identify distinct pieces of information within a document.
2. Assess each piece against the non-disclosure criteria.
3. If some pieces are exempt, determine if they can be "easily separated" from disclosable pieces.
4. Disclose all separable, non-exempt information.

Withholding a larger portion requires a clear justification that the exempt information is so intertwined with the disclosable information that separation is not reasonably feasible. This ruling strongly reinforces the IDA's underlying principle of maximizing disclosure and places a higher burden on agencies to justify withholding information by conducting a detailed, segmented analysis rather than making blanket determinations for larger information units.

Justice Uga's Concurring Insights

A supplementary opinion by Justice Katsuya Uga further elaborated on these points. He stressed that information relating to audits or inspections should not automatically be presumed non-disclosable. A specific, individualized examination is always required to determine if disclosure would genuinely impede administrative operations. Regarding objective facts, Justice Uga highlighted that they might become non-disclosable if they allow the inference of "sensitive information" (機微な情報 - kibi na jōhō) whose revelation would be problematic. On the "unit of information," he underscored that to prevent the scope of non-disclosure from becoming unnecessarily broad, each distinct piece of information must be independently evaluated.

Practical Implications for Businesses

This Supreme Court judgment has several practical implications for businesses interacting with Japanese administrative agencies:

• When Requesting Information:
  • Be aware that even requests targeting seemingly factual data derived from government investigations (e.g., market surveys, summaries of findings from inspections) could be met with refusal if the agency can persuasively argue that releasing such data would reveal their investigative methodologies, priorities, or analytical focus.
  • It may be beneficial to frame information requests as specifically as possible, perhaps targeting raw data if feasible, though even this is not a guarantee of success.
  • If a request is denied based on the "inference" rationale, businesses should scrutinize the agency's explanation for how such inferences could genuinely harm future administrative operations.
• When Subject to Investigation or Providing Information to Agencies:
  • Understand that information your business provides to an agency, or information the agency gathers about your business, even if factual, could potentially be withheld from third-party disclosure requests if it meets this "inference of sensitive methods" test.
  • This ruling might afford agencies more leeway to protect the integrity of their ongoing or future regulatory activities.
• Challenging Non-Disclosure Decisions:
  • The Supreme Court's clarification on the "unit of information" is particularly helpful. If an agency withholds a large document or section, requesters can more strongly argue that the agency has not fulfilled its obligation under Article 6 to identify and release all separable, non-exempt portions.
  • Requesters can demand a detailed justification for why distinct pieces of information could not be severed. The burden is on the agency to demonstrate both the applicability of the exemption to specific parts and the difficulty of separation.

Balancing Transparency and Effective Governance

The IDA, and judicial interpretations like this one, attempt to strike a delicate balance. On one hand, transparency is crucial for accountability, public trust, and enabling businesses and citizens to understand and engage with governmental processes. On the other hand, administrative agencies require a degree of operational latitude and confidentiality to conduct effective investigations, enforce laws, and make sound policy without their strategies being prematurely compromised.

This Supreme Court decision refines this balance. It acknowledges that "objective facts" are not automatically disclosable if they serve as a backdoor to understanding an agency's playbook in a way that would undermine future effectiveness. Simultaneously, it tells agencies they cannot use an exemption for one piece of information as a pretext to withhold a larger, divisible set of information. The emphasis is on a careful, reasoned, and specific application of the non-disclosure rules.

Conclusion

The Supreme Court of Japan's judgment of May 17, 2022, offers important guidance on the application of the Information Disclosure Act. It clarifies that the exemption protecting administrative operations can extend even to objective factual information if its disclosure would allow harmful inferences about investigative strategies. More significantly for requesters, it reinforces the mandate for agencies to conduct granular assessments and maximize partial disclosure, rather than making overly broad claims of non-disclosability for entire documents or sections.

For U.S. businesses, this ruling highlights the nuances of Japan's information disclosure regime. While the right to access information is fundamental, the exemptions are applied with a view to protecting legitimate governmental functions. Understanding these interpretations is key to effectively navigating information requests and engaging with Japanese administrative bodies. It underscores the need for specificity in requests and a willingness to challenge non-disclosure decisions that appear to lack detailed justification, particularly concerning the separability of information.