Regulating Waste Disposal Facilities in Japan (Part2): Challenging Permit Conditions and Seeking Revocation by Third Parties

Part 1 of this series discussed the challenges businesses face when their applications for industrial waste disposal facility permits in Japan are met with non-acceptance or rejection based on extra-statutory administrative guidance. This Part 2 shifts focus to situations where a facility is already permitted and operating, but problems arise concerning its management, environmental impact, or the operator's continued suitability. Specifically, it examines the legal avenues available to affected third parties, typically nearby residents, to compel regulatory authorities (prefectural governors) to take enforcement action—such as issuing improvement orders, suspending operations, or even revoking the facility's permit—under Japan's Waste Management and Public Cleansing Act (廃棄物の処理及び清掃に関する法律 – Haikibutsu no Shori oyobi Seisō ni Kansuru Hōritsu, hereinafter "Waste Management Act" or "WMA").

Grounds for Regulatory Intervention: When Can a Permit Be Revoked or Corrective Orders Issued?

Once an industrial waste disposal facility permit is granted under Article 15 of the WMA, the operator is subject to ongoing obligations. The WMA empowers the prefectural governor to intervene if these obligations are breached or if the operator's circumstances change significantly. Key grounds for such intervention include:

1. Failure to Meet Technical or Maintenance Standards (WMA Article 15-2-7, Paragraph 1, Item 1):
   Industrial waste disposal facilities must continuously comply with technical standards for their structure (as per the permit application) and for their maintenance and management (維持管理の技術上の基準 – ijikanri no gijutsujō no kijun). These maintenance standards are detailed in Ministry of the Environment Ordinances (e.g., Article 12-6 of the WMA Enforcement Regulation for final disposal sites, covering aspects like leachate management, prevention of scattering/run-off of waste, and groundwater monitoring). If a facility fails to meet these standards (e.g., leachate is found to be leaking and contaminating on-site groundwater, even if not yet exceeding off-site discharge limits), the governor can issue an order to improve the facility or its operational methods, or suspend its operations for a specified period.
2. Loss of Operator Capability (WMA Article 15-2-7, Paragraph 1, Item 2):
   The applicant's technical and financial capabilities are assessed at the permit stage (WMA Article 15-2, Paragraph 1, Items 3 and 4). If the operator subsequently fails to meet these capability standards (e.g., faces severe financial distress like tax delinquency, rendering them unable to properly manage the facility), the governor can likewise issue improvement or suspension orders.
3. Operator Disqualification (Kekkaku Jiyū – 欠格事由) (WMA Article 15-3, Paragraph 1, Item 2, read with Article 14, Paragraph 5, Item 2):
   The governor may revoke the permit if the operator (or its directors/key personnel if a corporation) falls under any of the disqualification grounds listed in WMA Article 14, Paragraph 5, Item 2. These grounds are extensive and include:
   • Conviction for violating the WMA or certain other environmental laws, resulting in a fine or imprisonment, within five years of completing the sentence or probation (Sub-item (a)).
   • Having had a WMA permit revoked for certain serious reasons within the past five years (Sub-item (d)).
   • Being an adult ward or person under curatorship; bankruptcy without restoration of rights (Sub-items (b), (c)).
   • Involvement of organized crime groups (Sub-item (f)).

It's important to note that the issuance of these orders (improvement, suspension) or the revocation of a permit are generally discretionary acts by the governor. This means the governor is not automatically obligated to take the most severe action even if a ground exists, but must exercise their judgment reasonably.

Residents' Recourse: Direct-Type Mandatory Action Litigation

When nearby residents believe that an industrial waste disposal facility is causing environmental harm or that its operator has become unsuitable, and they perceive that the prefectural governor is failing to take adequate regulatory action, their primary legal remedy under administrative law is often a direct-type mandatory action suit (直接型義務付け訴訟 – chokusetsu-gata gimuzuke soshō). This is provided for in Article 3, Paragraph 6, Item 1 of the Administrative Case Litigation Act (ACLA).

Scenario: Residents (P₁-P₁₀) living near Company A's permitted industrial waste final disposal site observe signs of environmental problems, such as suspected leachate leakage and the detection of hazardous substances in on-site groundwater. They also learn that Mr. Y, who was a representative director of Company A at the time the permit was obtained and heavily involved in its establishment, was subsequently convicted of a serious WMA violation (e.g., illegal dumping) related to another company he managed. This conviction became final while Y was still a director of Company A, though he resigned shortly thereafter. The residents have urged Governor B to act, but no decisive measures (like suspension or revocation of Company A's permit) have been taken.

The residents could file a direct-type mandatory action suit to compel Governor B to issue an appropriate disposition against Company A, such as an improvement order, a business suspension order, or a permit revocation.

Meeting the Requirements of ACLA Article 37-2 for Mandatory Action

To succeed, the residents must satisfy several key requirements under ACLA Article 37-2, Paragraph 1:

1. "A certain disposition should be made" (一定の処分がされるべきであること – ittei no shobun ga sareru beki de aru koto): This involves demonstrating that the factual and legal grounds for the governor to issue the desired administrative order (e.g., revocation) actually exist.
   • Facility Defects/Maintenance Standard Violations: Residents would need to present evidence (e.g., from environmental monitoring data) showing that Company A's facility is violating technical maintenance standards under WMA Article 15-2, Paragraph 3 (as detailed in ministerial ordinances, e.g., concerning leachate control and groundwater protection). This would trigger the governor's power to issue orders under WMA Article 15-2-7.
   • Operator Disqualification: This is a more complex but potent argument. If Mr. Y's conviction for a WMA violation occurred while he was a director of Company A, residents can argue that Company A itself (through its then-director) falls under the disqualification grounds of WMA Article 14, Paragraph 5, Item 2(a). The fact that Y subsequently resigned may not "cure" this past disqualifying event that occurred during his directorship, especially if his influence or the corporate culture he fostered remains. The purpose of these disqualification clauses is to ensure the integrity and trustworthiness of entities handling potentially hazardous waste. A company whose leadership has been involved in serious WMA violations may be deemed unfit. This would be grounds for permit revocation under WMA Article 15-3.
   • Financial Incapacity: If evidence shows Company A is in severe financial distress (e.g., significant tax delinquency, inability to fund necessary maintenance or emergency measures), this could demonstrate a failure to meet the financial capability standards under WMA Article 15-2, Paragraph 1, Item 4 (detailed in Ministerial Ordinance Article 12-2-3, Item 2), potentially justifying orders under WMA Article 15-2-7.
   • Abuse of Discretion by Inaction: Since the governor's powers to issue these orders are discretionary, the residents must also argue that the governor's failure to act, despite these established grounds, constitutes an abuse of discretion. This might be argued if the risks are severe and ongoing, and the governor's inaction is "markedly lacking in rationality." In serious health or environmental risk situations, the scope of discretion to not act can shrink considerably.
2. "Grave harm that will be caused by the absence of the disposition... and that harm cannot be avoided by other appropriate means" (その処分がされないことにより生ずる重大な損害を生ずるおそれがあり、かつ、その損害を避けるため他に適当な方法がないとき):
   • "Grave Harm" (Jūdai na Songai): For residents, this would be argued as a direct and substantial threat to their health, safety, and living environment from potential or actual pollution (e.g., contamination of local water sources by leachate spreading off-site, noxious odors, risk of exposure to hazardous substances). Courts tend to take risks to human life and health very seriously when assessing "grave harm."
   • "No Other Appropriate Means":
     • A revocation suit by the residents against the original permit granted to Company A is likely time-barred if the permit was issued years ago and the current problems have only recently come to light or worsened.
     • Direct civil litigation (e.g., a private nuisance injunction) against Company A is possible. However, it might not be as effective or comprehensive as compelling administrative action. An administrative order can impose specific technical requirements, ongoing monitoring, or a complete cessation of operations backed by stronger enforcement powers.
     • A state compensation suit only provides monetary relief after harm has occurred and does not prevent future harm.
       Therefore, compelling the administrative authority to exercise its statutory regulatory powers is often argued as the only effective preventive public law remedy for the residents.

Standing (Genkoku Tekikaku) for Residents (ACLA Article 9)

Residents living in the vicinity of the waste disposal facility must establish their "legal interest" to bring such a mandatory action suit.

• The Waste Management Act's overall purpose, stated in Article 1, includes "the preservation of the living environment and the improvement of public health."
• The permit criteria (WMA Article 15-2) and the grounds for issuing improvement/suspension orders or revoking permits (Articles 15-2-7, 15-3) are all designed to prevent environmental pollution and protect public health.
• Therefore, residents whose health or living environment faces a direct, substantial, and foreseeable threat from the facility's improper operation, dangerous condition, or the operator's unsuitability are generally found to have the necessary legal interest. This aligns with precedents like the Monju Reactor Case (Supreme Court, Third Petty Bench, Judgment of September 22, 1992, Minshu Vol. 46, No. 6, p. 571), where residents near a nuclear facility were granted standing based on safety concerns.

Scope of Assertable Grounds (Non-Applicability of ACLA Article 10, Paragraph 1 Limitation)

An important procedural point favors plaintiffs in mandatory action suits. When third parties (like residents) file a revocation suit against a disposition issued to someone else (like the permit issued to Company A), ACLA Article 10, Paragraph 1 generally limits the grounds of illegality they can assert. They can typically only argue that the disposition is illegal because it violates legal provisions that are specifically intended to protect their own individual interests, not general public interests or interests that primarily concern the addressee of the disposition (e.g., the operator's financial burden).

However, this limitation in ACLA Article 10, Paragraph 1 does not apply to direct-type mandatory action suits. In seeking to compel the governor to take action against Company A, the resident plaintiffs can assert any ground that would render the governor's failure to act illegal. This means they can argue that the governor should act because:

• The facility is violating technical standards (directly impacting their environment).
• The operator has become legally disqualified due to a director's WMA conviction (even if this is primarily a matter of public trust and regulatory fitness, it makes continued operation under the permit unlawful, triggering the governor's duty to act for the public good which includes residents' safety).
• The operator lacks the financial capacity to manage the site properly (again, a public interest concern that also impacts residents if it leads to environmental neglect).
  This broader scope of assertable grounds makes the mandatory action suit a powerful tool for third parties seeking enforcement of regulatory laws.

The Complexities of "Director Disqualification" Post-Resignation

A particularly thorny issue in the hypothetical scenario is whether Director Y's resignation after his conviction for a WMA violation (committed while he was a director of Company A) "cures" any disqualification for Company A.

• The WMA's disqualification clauses (Article 14, Paragraph 5, Item 2(a)) apply if an "officer" (yakuin – 役員, which includes directors) has been convicted.
• The residents would argue that the disqualifying event—the commission of the offense by a director leading to conviction—occurred while Y was in office, thus tainting the company's permit at that time. The purpose of these clauses is to ensure that entities holding permits for potentially hazardous facilities are operated by persons and under a corporate culture of high integrity and compliance. A subsequent resignation might be seen as an attempt to circumvent the regulatory intent. The focus is on the company's fitness as demonstrated by the conduct of its leadership during their tenure.
• The company might argue that the disqualification attached to Y personally, and his resignation removes the taint from the company.

Courts would need to interpret the WMA's provisions in light of their purpose: to prevent entities associated with serious legal violations from continuing to operate facilities that pose risks to the public and the environment.

Conclusion

Residents living near industrial waste disposal facilities in Japan who are concerned about environmental contamination or improper management are not without legal recourse if they believe regulatory authorities are failing to act. The direct-type mandatory action suit under the ACLA provides a significant, albeit demanding, tool to compel prefectural governors to enforce the Waste Management Act by issuing necessary improvement orders, business suspension orders, or even permit revocations. Success in such litigation hinges on clearly demonstrating the existence of statutory grounds for administrative intervention (such as facility defects or operator disqualification), the grave harm posed by continued regulatory inaction, and the lack of other effective means of redress. Importantly, residents pursuing mandatory action can broadly argue any grounds that render the agency's failure to act illegal, leveraging the full scope of the WMA's protective provisions to safeguard their living environment and public health.