Regulatory Updates

Japan’s Public-Health Playbook: Legal Lessons from the Pandemic for the Next Crisis

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read
Slide mapping Japan’s pandemic legal framework: new crisis-management agency, law revisions, fiscal measures, digital-system gaps, and business action items.

TL;DR

  • COVID-19 exposed coordination gaps between Japan’s national command and local implementation, prompting a new Cabinet Agency for Infectious-Disease Crisis Management (2023).
  • Key legal pivots—Infectious Diseases Control Law revisions, fiscal mega-stimulus, “requests” versus enforceable orders—reshape how firms must plan for the next emergency.
  • Businesses should track central-and-local directives, update health policies after COVID-19’s shift to Category V, and prepare for digital reporting despite system limits.

Table of Contents

  • National Crisis Management: The Command Structure
  • The Crucial Role of Local Governments
  • Healthcare System Adaptations and Legal Adjustments
  • Regulating Activities and Protecting Rights
  • Fiscal Responses and Economic Consequences
  • Information Systems and Digitalization Challenges
  • Conclusion: Preparing for the Next Crisis

The COVID-19 pandemic presented unprecedented challenges globally, forcing governments to rapidly adapt legal and institutional frameworks. Japan's response involved a complex interplay between national directives, local government implementation, evolving healthcare regulations, fiscal measures, and the leveraging (and limitations) of digital infrastructure. Understanding this landscape is crucial for businesses operating in Japan, offering insights into potential impacts on operations, compliance requirements, and employee management during future public health crises.

National Crisis Management: The Command Structure

Japan's initial pandemic response relied heavily on existing legislation, primarily the Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response (often abbreviated as the "Special Measures Act"). However, the scale and duration of the COVID-19 crisis highlighted the need for a more centralized and specialized command structure.

Recognizing this, the Japanese government established the Cabinet Agency for Infectious Disease Crisis Management (内閣感染症危機管理統括庁, Naikaku Kansenshō Kiki Kanri Tōkatsuchō) on September 1, 2023. Reporting directly to the Prime Minister and Chief Cabinet Secretary, this agency is designed to serve as the central coordinating body for infectious disease crises.

Key Functions:

  • Centralized Planning & Policy: The agency takes the lead in planning government-wide responses and drafting policies during infectious disease emergencies.
  • Inter-Ministry Coordination: It holds the authority to coordinate actions across different government ministries and agencies, aiming for a unified national response. This addresses previous challenges where responsibilities were sometimes fragmented.
  • Integration with Health Expertise: While distinct from the Ministry of Health, Labour and Welfare (MHLW), the agency works closely with it. The MHLW retains core responsibilities for public health measures (testing, vaccination, healthcare system management, quarantine) and provides scientific and medical expertise to the Cabinet Agency. The establishment of the Japan Institute for Health Security (国立健康危機管理研究機構, Kokuritsu Kenkō Kiki Kanri Kenkyū Kikō) (planned for FY2025 or later, currently functions fulfilled by existing institutions like the National Institute of Infectious Diseases) aims to further strengthen the scientific basis for policy decisions by providing timely data analysis and research findings directly to the command structure.
  • Preparedness: The agency is also responsible for enhancing preparedness during non-crisis times, including developing response plans, training personnel, and coordinating drills.

For businesses, this centralized structure potentially means clearer communication channels and more consistent national directives during a crisis. However, the effectiveness of this coordination in practice, especially concerning swift decision-making and resource allocation, will be tested in future events.

The Crucial Role of Local Governments

While the national government sets the overall strategy, the implementation of pandemic response measures heavily relies on Japan's local governments – prefectures (都道府県, todōfuken) and municipalities (市町村, shichōson). Their responsibilities are extensive and include:

  • Public Health Center (保健所, Hokenjo) Operations: Health centers, typically managed by prefectures or designated cities, are on the front lines, handling tasks like contact tracing, testing coordination, patient consultation, managing home isolation cases, and vaccination logistics. The pandemic placed immense strain on these centers, often leading to overwhelmed staff and delays in service delivery.
  • Healthcare Coordination: Prefectural governments play a key role in coordinating healthcare resources within their jurisdiction, including securing hospital beds, managing patient transfers, and liaising with local medical associations. Challenges included balancing COVID-19 care with regular medical services and addressing regional disparities in healthcare capacity.
  • Implementing National Directives: Local governments are tasked with implementing measures based on national guidelines, such as requests for business restrictions (e.g., shortened hours, temporary closures) or public self-restraint (外出自粛, gaishutsu jishuku). This often required balancing national policy with local economic realities and public sentiment. Some local governments, like Tottori Prefecture, took proactive measures early on due to specific local vulnerabilities (e.g., limited medical resources, aging population).
  • Information Dissemination & Public Support: Providing timely and accurate information to residents, managing public inquiries, and implementing local support measures fall under the purview of local authorities. Communication methods varied, including websites, social media, and multilingual support.

The pandemic highlighted coordination challenges between national and local levels, and among local governments themselves. Differences in resources, interpretations of national guidelines, and local political priorities sometimes led to variations in response intensity. Businesses need to monitor both national directives and specific local government measures applicable to their operating locations. Establishing communication lines with relevant local authorities can be beneficial during a crisis.

The pandemic necessitated significant legal and operational adjustments within Japan's healthcare system. Key areas included:

  • Securing Medical Resources: Ensuring sufficient hospital beds (especially for severe cases), testing capacity, medical supplies (like masks and ventilators), and healthcare personnel was a primary challenge. Prefectural governments coordinated these efforts, often facing difficulties due to initial shortages and logistical hurdles.
  • Legal Amendments: The Infectious Diseases Control Law (感染症法, Kansenshōhō) underwent revisions in 2021 and 2022. These amendments aimed to strengthen the government's authority to secure healthcare resources, including enabling governors to issue directives or requests to medical institutions for cooperation (e.g., securing beds) and allowing public disclosure if institutions failed to comply without justifiable reasons. Penalties for individuals refusing hospitalization were also introduced, though their application raised human rights concerns.
  • Shift in Classification: In May 2023, COVID-19's legal classification under the Infectious Diseases Control Law was changed from "Category II equivalent" (requiring extensive public health intervention like isolation recommendations and full public funding for treatment) to "Category V," aligning it with seasonal influenza. This significantly impacted public health measures, shifting responsibility for infection control more towards individual judgment and making medical treatment subject to standard health insurance co-payments (though transitional public support measures were implemented).
  • Vaccination Rollout: The national government procured vaccines, while municipalities managed the logistics of administration, including setting up vaccination sites and managing appointments.

For businesses, these changes affect employee health management policies, sick leave procedures, and potentially healthcare cost burdens. The shift to Category V, while normalizing the situation, also means less centralized public health management, requiring businesses to potentially take a more active role in workplace infection control based on general guidelines rather than specific legal mandates for isolation.

Regulating Activities and Protecting Rights

Balancing public health protection with economic activity and individual liberties was a central tension during the pandemic.

  • Legal Basis for Restrictions: Unlike some countries that implemented strict lockdowns, Japan's approach primarily relied on non-legally binding "requests" (要請, yōsei) for businesses to shorten hours or close temporarily, and for individuals to refrain from non-essential outings. These were based mainly on the Special Measures Act. While compliance was largely voluntary, social pressure and cooperation subsidies played significant roles. Stronger "instructions" (指示, shiji) and potentially "orders" (命令, meirei) with penalties were legally possible under specific conditions (e.g., during a state of emergency) but used sparingly, partly due to legal and political complexities and constitutional concerns regarding freedom of economic activity (Article 22, 29) and movement (Article 22). Court challenges to such measures, though limited, did occur.
  • Human Rights Considerations: Quarantine measures for incoming travelers and isolation/stand-down periods for infected individuals and close contacts raised human rights issues. While necessary for public health, the legal basis, implementation consistency, and support for those affected were subjects of debate. The balance between public health necessity and individual freedom remains a critical point in evaluating pandemic responses. The pandemic also brought other human rights issues in the workplace to the fore, although not directly covered in the Jurist's pandemic feature itself (such as the separate case discussed regarding transgender employee rights).

Businesses faced significant uncertainty due to the reliance on "requests" and the varying levels of financial support tied to compliance. Future crises might see a push for clearer legal frameworks defining the scope and limits of government powers to restrict activities, alongside more robust and predictable support mechanisms.

Fiscal Responses and Economic Consequences

The Japanese government implemented substantial fiscal measures to mitigate the economic fallout of the pandemic.

  • Financial Support: Various programs were rolled out to support individuals and businesses, including direct cash handouts, subsidies for businesses complying with restriction requests (協力金, kyōryokukin), interest-free loans, rent support, and employment adjustment subsidies to help companies retain workers.
  • Funding Sources: These measures were largely financed through significant government borrowing, leading to a substantial increase in Japan's already high public debt-to-GDP ratio. Unlike the response to the 2011 Great East Japan Earthquake, which involved dedicated reconstruction bonds and temporary tax increases, the pandemic response did not include specific long-term financing plans beyond reliance on government bonds, facilitated by the Bank of Japan's monetary easing policies.
  • Economic Side Effects: While crucial for cushioning the immediate economic shock, the large-scale fiscal stimulus and monetary easing contributed to subsequent inflationary pressures, a global phenomenon exacerbated by supply chain disruptions and geopolitical events. Concerns remain about the long-term sustainability of Japan's fiscal position and the potential "side effects" of crisis-response spending becoming entrenched. The effectiveness and targeting of support measures also faced scrutiny, with analyses suggesting potential issues of over-inclusion or under-inclusion in some programs.

For businesses, understanding the types of government support available during a crisis and the conditions attached is vital. The long-term economic consequences, including potential future tax adjustments or shifts in monetary policy, also warrant attention for strategic planning.

Information Systems and Digitalization Challenges

The pandemic starkly revealed both the potential and the shortcomings of Japan's digital infrastructure and information systems in public health management.

  • Key Systems: Systems like HER-SYS (Health Center Real-time Information-sharing System on COVID-19) were rapidly deployed to manage patient data, and COCOA (COVID-19 Contact-Confirming Application) was introduced for digital contact tracing.
  • Challenges Encountered:
    • Data Collection & Sharing: Health centers often relied on manual data entry (e.g., faxes), leading to delays and errors in HER-SYS. Data sharing between national and local governments, and among different institutions, faced legal and technical hurdles, hindering timely analysis and response. Concerns about data privacy under existing rules sometimes impeded necessary data utilization, even in emergencies.
    • System Functionality & Usability: Both HER-SYS and COCOA faced criticism regarding usability, functionality, and technical glitches. COCOA, in particular, suffered from significant bugs (especially on Android devices) that rendered it ineffective for periods, eroding public trust. Development processes, often outsourced and potentially rushed, lacked robust testing and coordination.
    • Lack of Foundational Data Infrastructure: The difficulty in accurately identifying businesses for support payments highlighted the lack of comprehensive, standardized, and accessible government-held databases (base registries) for entities like businesses or establishments. This hampered efficient administration and fraud prevention.
    • Digital Divide: Reliance on digital tools also exposed disparities in digital literacy and access among the population and within government agencies themselves.
  • Lessons Learned: The experience underscored the need for robust, interoperable, and user-friendly digital public health infrastructure, clear data governance rules that balance privacy with public health needs (especially during emergencies), improved government IT procurement and development processes (potentially adopting more agile methods), and investment in foundational digital registries.

Businesses relying on government systems (e.g., for reporting, accessing support) experienced firsthand the frustrations of these digital shortcomings. Improvements in government digitalization are crucial for more efficient crisis response and smoother business interactions in the future.

Conclusion: Preparing for the Next Crisis

Japan's response to the COVID-19 pandemic involved significant efforts across multiple legal and administrative domains. The establishment of a dedicated national crisis management agency, amendments to health laws, large-scale fiscal support, and attempts at digital solutions represent key developments. However, challenges remain, particularly concerning national-local coordination, the precise balance between public health measures and individual/economic freedoms, long-term fiscal sustainability, and the urgent need for more robust and integrated digital infrastructure.

For international businesses operating in Japan, the key takeaways include:

  • Monitor Multiple Levels: Stay informed about directives from both the national government (including the new Cabinet Agency) and relevant prefectural/municipal authorities.
  • Adapt Business Continuity Plans (BCP): Factor in potential public health restrictions, supply chain disruptions, and the specific nuances of Japan's approach (e.g., reliance on "requests").
  • Employee Health & Safety: Update internal policies regarding health management, remote work, and support for employees, considering the shift in legal classifications for diseases like COVID-19.
  • Engage with Digital Systems: Be prepared to interact with government digital platforms, while being aware of potential limitations or challenges.
  • Understand Fiscal Context: Recognize the government's capacity and methods for providing financial support during crises, alongside the broader economic implications of fiscal measures.

The pandemic provided valuable, albeit difficult, lessons. Continued refinement of legal frameworks, administrative processes, and digital capabilities will be essential for Japan, and the businesses operating within its borders, to navigate future public health crises more effectively and resiliently.