Q: Japanese Administrative Rulemaking: What Are "Legally Binding Orders" (Hōki Meirei) vs. "Administrative Rules" (Gyōsei Kisoku) and Their Impact on Businesses?

Japanese Attorney at Law - Bengoshi L.L.

• 10 min read

Businesses operating in Japan navigate a complex regulatory environment shaped not only by statutes enacted by the Diet (Japan's parliament) but also by a vast array of rules, standards, and guidelines issued by administrative bodies. Understanding the different categories of these administrative pronouncements is crucial, as their legal force and impact on business obligations can vary significantly. This article focuses on the critical distinction between "legally binding orders" (hōki meirei - 法規命令), which directly create enforceable rights and duties for businesses, and "administrative rules" (gyōsei kisoku - 行政規則), which are primarily internal directives but can still exert considerable practical influence.

The Necessity and Nature of Administrative Rulemaking (行政の規範定立 - Gyōsei no Kihan Teiritsu)

Modern governance demands that administrative bodies establish general and abstract norms to implement and supplement framework legislation passed by the Diet. Several factors necessitate this administrative rulemaking:

  • Complexity and Technicality: Many regulatory areas (e.g., environmental protection, financial services, product safety) involve highly technical details that are impractical for the Diet to legislate comprehensively.
  • Need for Flexibility and Promptness: Administrative agencies often require the ability to adapt rules to changing circumstances or emerging issues more rapidly than the formal legislative process allows.
  • Specialized Expertise: Agencies possess specialized knowledge and expertise within their respective domains, enabling them to formulate detailed and appropriate standards.

The broad term for this activity is gyōsei no kihan teiritsu (administrative norm-setting) or, more traditionally, gyōsei rippō (administrative legislation). These administrative norms are generally classified into two main categories based on their legal effect on the public, including businesses.

Legally Binding Orders (Hōki Meirei - 法規命令): Rules That Directly Create Rights and Obligations

Hōki meirei are general and abstract rules established by administrative organs that possess external legal effect, meaning they directly create, alter, or extinguish the legal rights or obligations of citizens and businesses. These are considered part of the "law" (hōki - 法規) that businesses and individuals must comply with, and their violation can lead to sanctions.

Requirement of Statutory Basis

A fundamental principle of Japanese administrative law, stemming from the "law's creative power of legal norms" (hōritsu no hōki sōzōryoku - 法律の法規創造力), is that only the Diet, through statutes, can inherently create new legal norms that bind the public. Therefore, hōki meirei must be issued on the basis of a specific delegation of authority from a statute enacted by the Diet. An administrative body cannot, on its own initiative, create new legally binding obligations for businesses without such statutory empowerment.

Types of Hōki Meirei

Based on the nature of the statutory delegation, hōki meirei are often distinguished into:

  1. Delegated Orders (Inin Meirei - 委任命令): These orders are issued when a statute delegates authority to an administrative organ to establish new substantive rules that elaborate on or fill in the details of the statutory framework. They effectively create new rights or obligations within the boundaries set by the delegating statute. For example, a statute might outline a general licensing requirement, and a delegated order could specify the detailed criteria, standards, or conditions for obtaining that license.
  2. Executive Orders (Shikkō Meirei - 執行命令): These orders are issued to prescribe the procedures and detailed means necessary for the execution or enforcement of existing laws or other hōki meirei. They are not supposed to create new substantive rights or duties but rather to facilitate the implementation of existing ones. Examples include specifying the format of application forms, procedural timelines, or methods of inspection. While theoretically distinct, the line between a delegated order creating substantive content and an executive order merely detailing implementation can sometimes be fine.

Forms of Hōki Meirei

Hōki meirei are issued by various administrative bodies under different names:

  • Cabinet Orders (Seirei - 政令): Issued by the Cabinet (Article 73, item 6 of the Constitution; Article 11 of the Cabinet Act).
  • Orders of the Cabinet Office (Naikakufu Rei - 内閣府令): Issued by the Prime Minister for affairs under the jurisdiction of the Cabinet Office.
  • Ministerial Ordinances (Shōrei - 省令): Issued by individual government ministers for matters within their ministry's jurisdiction (Article 12 of the National Government Organization Act).
  • Rules of External Bureaus (Gaikyoku Kisoku - 外局規則) and Independent Administrative Commissions: Some external bureaus or independent administrative commissions (like the Fair Trade Commission or the National Personnel Authority) are empowered by their establishing laws to issue rules with binding legal effect.
  • Rules of Local Government Heads and Committees: Heads of local public entities (governors, mayors) and certain local administrative committees can also issue legally binding regulations (kisoku - 規則) within the scope of their authority and as permitted by the Local Autonomy Act and other laws.
  • Public Notices (Kokuji - 告示): While many public notices are merely informational, some kokuji can function as hōki meirei if they are issued under statutory authority to establish general and binding standards. A notable example is the national curriculum guidelines (gakushū shidō yōryō - 学習指導要領) issued by the Minister of Education, Culture, Sports, Science and Technology. The Supreme Court, in the Den-en Chofu High School discipline case (January 18, 1990), recognized that these curriculum guidelines, despite being issued as kokuji, possess a legally binding character for public schools and their teaching staff concerning educational content and methods.

Limits on Delegated Legislation

While delegation of rulemaking power is necessary, it is not unlimited:

  1. Prohibition of Blanket Delegation (Hakushi Inin - 白紙委任): Statutes cannot grant administrative bodies unfettered or overly vague rulemaking authority. The purpose, scope, and content of the matters to be delegated must be defined with reasonable clarity in the delegating statute to ensure that the administration remains within the legislature's intent. The Supreme Court's decision in the Sarufutsu case (November 6, 1974), which upheld a broad delegation to the National Personnel Authority to define and restrict political activities of public servants, has been a subject of academic debate regarding whether it adhered strictly enough to this principle.
  2. Orders Must Not Exceed the Scope of Delegation: Any hōki meirei that goes beyond the specific authority granted by the enabling statute, or that contradicts the statute itself, is considered ultra vires and invalid. Courts can and do invalidate such orders.
    • For example, in the Pharmaceutical Internet Sales Regulation case (Supreme Court, January 11, 2013), a Ministry of Health, Labour and Welfare ordinance that broadly prohibited the internet sale of certain categories of non-prescription drugs was held invalid. The Court found that the enabling provisions of the Pharmaceutical Affairs Act did not provide a sufficiently clear delegation of authority to impose such a sweeping ban, particularly given the legislative history and the impact on pharmacists' professional discretion and consumers' access.
    • Similarly, in the Prison Law Enforcement Regulation case (Supreme Court, July 9, 1991), a provision in the Prison Law Enforcement Regulations that categorically prohibited visitation between inmates and minors under the age of 14 (with limited exceptions) was struck down. The Court reasoned that the enabling Prison Law authorized regulations concerning the manner of visits (e.g., time, place, supervision) but did not delegate the power to implement such a broad, status-based prohibition on who could visit.

Impact on Businesses

Hōki meirei are of direct and critical importance to businesses. They establish enforceable legal requirements, standards, and obligations. Compliance with relevant cabinet orders, ministerial ordinances, and other legally binding administrative rules is mandatory, and failure to comply can result in administrative sanctions, civil liability, or even criminal penalties. Businesses must actively monitor and understand the hōki meirei applicable to their industry and operations.

Administrative Rules (Gyōsei Kisoku - 行政規則): Primarily Internal Directives

In contrast to hōki meirei, gyōsei kisoku are rules established by administrative organs that generally lack external legal binding force on citizens or businesses. Their primary purpose is to guide the internal operations, decision-making, and exercise of discretion within administrative bodies and between different levels of administration.

No Statutory Basis Generally Required

Because gyōsei kisoku do not, in principle, create new legal rights or obligations for the public, their issuance does not typically require a specific statutory delegation of rulemaking power. They are often seen as an inherent part of an agency's power to manage its own affairs and ensure consistent application of the law by its officials.

Forms and Types of Gyōsei Kisoku

Gyōsei kisoku can take various forms and serve different internal purposes:

  1. Instructions (Kunrei - 訓令) and Circulars (Tsūtatsu - 通達): These are common forms of internal directives issued by superior administrative organs to subordinate organs or officials.
    • Kunrei are general instructions on official duties.
    • Tsūtatsu are typically more specific communications conveying interpretations of laws or regulations, guidelines for exercising discretion, or instructions on administrative procedures.
  2. Interpretation Guidelines (Kaishaku Kijun - 解釈基準): Often issued as tsūtatsu, these provide the official interpretation of laws or hōki meirei to be followed by officials within the issuing agency or ministry, aiming for uniform application.
  3. Discretionary Standards (Sairyō Kijun - 裁量基準): These are criteria established by an agency to guide its officials in exercising discretionary powers granted by law (e.g., in deciding whether to grant a license, how to set the amount of a discretionary fine, or what conditions to attach to an approval).
  4. Guidelines (Yōkō - 要綱): These are often less formal than tsūtatsu but can be influential. National and local governments use yōkō for various purposes, such as outlining the conditions for receiving subsidies, guiding private land development projects (takuchi kaihatsu shidō yōkō - 宅地開発指導要綱), or establishing procedures for specific programs.
  5. Rules for the Use of Public Facilities (Eizōbutsu Riyō Kisoku - 営造物利用規則): These are rules governing the public's use of state- or locally-owned facilities like schools, libraries, parks, and hospitals. While traditionally sometimes viewed as internal rules under the now-obsolete "special power relationship" theory, modern understanding often treats them as having external effect, sometimes akin to contractual terms or even local ordinances if they impose significant restrictions.

The Nature and Impact of Circulars (Tsūtatsu)

Tsūtatsu are a particularly noteworthy form of gyōsei kisoku.

  • Internal Binding Force, External De Facto Influence: While theoretically only binding on subordinate administrative officials, tsūtatsu often have a powerful de facto influence on the public, including businesses. Officials will almost invariably adhere to interpretations and guidelines set out in tsūtatsu from their superiors. This has led to the phenomenon sometimes criticized as "administration by tsūtatsu" (tsūtatsu gyōsei - 通達行政), where practical regulatory reality is significantly shaped by these internal documents.
  • Not a Direct Source of Law for Citizens: Legally, tsūtatsu are not considered a source of law that directly creates rights or obligations for citizens or businesses. The Pachinko Machine Tax case (Supreme Court, March 28, 1958) clarified this: if a tax authority makes a tax assessment based on an interpretation of law contained in a tsūtatsu, the lawfulness of the assessment depends on whether that interpretation itself is correct according to the statute, not on the tsūtatsu as an independent source of law.
  • Potential Relevance to Legal Principles: Despite their internal nature, consistent application of a tsūtatsu followed by an unexplained deviation in a particular case could potentially raise issues under the principle of equality or the protection of legitimate expectations, although courts are generally cautious in giving external legal effect to tsūtatsu.

Discretionary Standards and the Administrative Procedure Act (APA)

The Administrative Procedure Act (APA - 行政手続法 Gyōsei Tetsuzuki Hō) has brought greater transparency to certain types of discretionary standards:

  • Agencies are required to establish and publicly disclose "application screening standards" (shinsa kijun - 審査基準) used when deciding on applications for permits, licenses, etc. (APA Art. 5).
  • Agencies must also make efforts to establish and publicly disclose "adverse disposition standards" (shobun kijun - 処分基準) that guide their decisions on imposing sanctions or other unfavorable actions (APA Art. 12).
  • While these published standards are typically gyōsei kisoku, they provide businesses with important predictability. Courts, while not strictly bound by these internal standards, will consider their rationality. An agency's deviation from its own published standards without a justifiable reason can be a factor in finding an administrative action unlawful. This was suggested in the Personal Taxi case (Supreme Court, October 28, 1971), which emphasized the need for concrete licensing standards and fair procedures in selecting among multiple applicants.

Impact of Gyōsei Kisoku on Businesses

Although gyōsei kisoku are not "law" in the same direct sense as hōki meirei, businesses cannot afford to ignore them. They offer crucial insights into:

  • How an agency interprets and intends to apply relevant laws and hōki meirei.
  • The criteria an agency will likely use when exercising its discretion.
  • The procedures an agency will follow.
    Understanding relevant tsūtatsu, published discretionary standards, and yōkō can help businesses anticipate agency actions, structure their compliance efforts, and engage more effectively with regulators.

To ensure that administrative rulemaking remains within legal bounds and is conducted fairly, several control mechanisms exist:

  1. Procedural Controls:
    • Public Comment Procedure (意見公募手続 - Iken Kōbo Tetsuzuki): Since a 2005 revision, the APA mandates a public comment procedure (also known as "pabukome" from "public comment") for the formulation or amendment of most hōki meirei (including legally binding kokuji) and for important gyōsei kisoku such as application screening standards, adverse disposition standards, and administrative guidance standards (APA Chapter VI). This procedure requires the rulemaking agency to publish a draft of the proposed rule and related materials, solicit public opinions for a specified period (usually 30 days or more), and then consider the submitted opinions before finalizing the rule. The agency must also publish the finalized rule, the opinions received, and its response to those opinions. This process enhances transparency and provides an avenue for businesses and other stakeholders to provide input.
    • General Principles for Orders (APA Art. 38): This article, also added in 2005, stipulates that orders (a term covering various hōki meirei) must conform to the purpose of their enabling laws and that agencies should review their necessity and appropriateness after enactment in light of changing circumstances.
  2. Judicial Review:
    • No Direct Abstract Review (Generally): Unlike in some legal systems, Japan generally does not permit direct "abstract review" of administrative rules themselves (i.e., challenging a rule's validity before it is applied in a specific case). Such rules are typically not considered "administrative dispositions" (shobun) that are subject to revocation actions under the ACLA.
    • Indirect (Concrete) Review: The primary method of judicial control is indirect. If a business is subject to a specific administrative disposition (e.g., a license denial, a sanction) that was based on an allegedly unlawful hōki meirei or, in some rare instances, an improperly applied gyōsei kisoku, the business can challenge the disposition in court. In the course of this litigation, it can argue that the underlying rule is invalid (e.g., because it exceeds the scope of statutory delegation, is unconstitutional, or is arbitrary). If the court agrees the rule is invalid, the disposition based on it will likely be overturned.
    • Actions for Declaration (Kakunin Soshō - 確認訴訟): In certain circumstances, it might be possible to seek a judicial declaration regarding the illegality of a rule's application or its invalidity, particularly if it creates ongoing legal uncertainty directly impacting the plaintiff's rights or legal status.
  3. Advance Confirmation Systems (事前確認手続 - Jizen Kakunin Tetsuzuki):
    As a proactive measure, many Japanese government agencies have established "advance confirmation procedures" (often referred to as a "no-action letter" system - 日本版ノーアクションレター制度). Businesses can formally inquire with the relevant agency about how existing laws and regulations would apply to a specific, planned business activity. The agency provides a written response, which, while generally not legally binding in an absolute sense, offers significant practical assurance and helps businesses avoid unintentional violations. These inquiries and responses are often made public (with confidential information redacted) to enhance transparency and predictability for others.

Conclusion: Distinguishing Direct Obligations from Guiding Principles

For businesses operating in Japan, the distinction between hōki meirei (legally binding orders) and gyōsei kisoku (administrative rules) is fundamental. Hōki meirei create direct, enforceable legal obligations and businesses must ensure full compliance. Violations can lead to formal sanctions. Gyōsei kisoku, while primarily internal to the administration, provide crucial insights into agency interpretations, enforcement priorities, and the likely exercise of discretion. Ignoring them can lead to misunderstandings, delays, and practical difficulties in dealing with administrative bodies. Effectively navigating the Japanese regulatory system requires careful attention to both types of administrative norms, understanding their respective legal statuses, and leveraging opportunities like public comment procedures and advance confirmation systems to engage with the rulemaking process and seek clarity.