Using Public Roads or Facilities in Japan for Business: Understanding the Basics of "Public Property Law" (Kobutsu Ho)

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

Businesses operating in Japan frequently interact with various forms of public property—from relying on public roads for logistics and employee commutes, to utilizing public utilities that run under or over public land, to potentially seeking to use public spaces for events or setting up shop within government-managed facilities. The body of legal principles and rules governing these "public things" is known as Kōbutsu Hō (公物法), or Public Property Law. Understanding its basics is crucial for businesses to ensure compliant operations, secure necessary usage rights, and understand their entitlements and obligations concerning such property.

What is "Kōbutsu" (Public Property) in Japanese Law?

In Japanese administrative law, kōbutsu (公物) refers to tangible things that have been directly provided by an administrative entity (such as the state or a local government) for a specific public purpose. This definition distinguishes kōbutsu from:

  • Assets held by public entities but not directly serving a public purpose (e.g., land held purely for investment, or government office supplies). These are often referred to as "ordinary property" (futsū zaisan - 普通財産) if publicly owned, or simply private things (shibutsu - 私物).
  • Intangible assets like intellectual property, even if publicly owned.

A key aspect is the dedication to a public purpose. The ownership of the underlying asset is not the sole determinant. While most kōbutsu are state-owned (国有財産 - kokuyū zaisan) or locally government-owned (公有財産 - kōyū zaisan) and fall under the category of "administrative property" (gyōsei zaisan - 行政財産) as defined in laws like the State Property Act or Local Autonomy Act, it is also possible for privately-owned property to be designated or used as kōbutsu if it's officially dedicated to public use (e.g., a privately-owned road made available for general public passage, known as shiyū kōbutsu - 私有公物).

The concept of kōbutsu is also closely linked to "public structures" (kō no eizōbutsu - 公の営造物) under Article 2 of the State Redress Act, which pertains to liability for defects in such structures.

Types of Kōbutsu

Kōbutsu are broadly classified into two main categories based on their intended use:

  1. Public Use Property (Kōkyōyō-butsu - 公共用物):
    These are kōbutsu that are directly available for use by the general public without needing special status or affiliation.
    • Examples: Public roads, rivers, navigable waterways, public parks, public squares, harbors.
    • These correspond roughly to "public use administrative property" (kōkyōyō zaisan) under property management laws.
  2. Official Use Property (Kōyō-butsu - 公用物):
    These are kōbutsu used directly by administrative entities themselves for the performance of their official functions or for specific public enterprises, and are not generally open for direct, unmediated use by the public in the same way as kōkyōyō-butsu.
    • Examples: Government office buildings (庁舎 - chōsha), public schools, public hospitals, official vehicles, research facilities.
    • These correspond roughly to "official use administrative property" (kōyō zaisan).

This distinction is important because the rules governing access, use, and the types of permissions required can differ significantly between these categories.

The manner in which public property can be used varies widely depending on the type of kōbutsu and the nature of the intended use.

A. Use of Public Use Property (Kōkyōyō-butsu)

This category has several modes of use:

  1. Free Use / Ordinary Use (Jiyū Shiyō - 自由使用 or Futsū Shiyō - 普通使用):
    This is the most basic form of use, allowing the general public to utilize the property in a common way consistent with its public purpose, without needing specific permission from the administrator.
    • For Businesses: This means company vehicles can use public roads, employees can walk in public parks during breaks, etc., just like any other member of the public.
    • Limitations: Such use is not absolute. It must be within the property's intended scope (e.g., not obstructing a road) and is subject to general laws and "public property police" regulations (e.g., traffic rules on roads, park regulations).
  2. Permitted Use (Kyoka Shiyō - 許可使用):
    This involves using public use property in a manner that exceeds ordinary free use but is still considered compatible with its primary public purpose. Such use typically requires a specific permission (許可 - kyoka), which is an administrative act, from the property administrator.
    • Examples Relevant to Businesses:
      • A restaurant seeking permission to set up outdoor sidewalk seating.
      • A company organizing a promotional event or a market stall in a designated public square.
      • Temporary occupation of a portion of a road for construction access or material storage related to an adjacent private project (subject to road laws).
    • The application process, conditions attached to the permission (duration, area, method of use), and fees are usually determined by specific laws governing the type of property (e.g., Road Act, River Act, Parks Act) and local ordinances.
  3. Patented Use / Special Use (Tokkyo Shiyō - 特許使用 or Tokubetsu Shiyō - 特別使用):
    This form of use grants an exclusive or special right to utilize public property, often for a longer term and potentially in a manner that is not directly part of the ordinary public use. It typically requires a "patent" or "concession" (特許 - tokkyo), which is a more substantial administrative act than a simple permission.
    • Examples Relevant to Businesses:
      • Utility companies obtaining rights to lay and maintain pipelines, cables, or conduits under or over public roads or land.
      • Private companies being granted concessions to build and operate specific facilities within public parks (e.g., a restaurant, a sports facility).
      • A private railway company obtaining the right to use public land for its tracks.
    • Granting a tokkyo shiyō often involves a greater degree of administrative discretion in selecting the user and determining the terms, as it confers a more significant and often exclusive right. The legal distinction between kyoka shiyō and tokkyo shiyō, like the doctrinal distinction between kyoka and tokkyo as types of administrative acts, can sometimes be nuanced and subject to interpretation based on the specific statute. A Supreme Court judgment on April 10, 1962, indicated that even "patented users" might not have absolute exclusivity against all other forms of public use.

B. Out-of-Purpose Use (Mokuteki-gai Shiyō - 目的外使用) of Administrative Property

Primarily concerning official use property (kōyō-butsu), "out-of-purpose use" refers to permitting the use of administrative property for a purpose different from its primary, designated public function, provided such secondary use does not impair the original purpose. Similar provisions can also apply to public use property under specific laws.

  • This is regulated by laws like the State Property Act (Article 18, Paragraph 3) and the Local Autonomy Act (Article 238-4, Paragraph 7).
  • Examples Relevant to Businesses:
    • A private company obtaining permission to operate a staff cafeteria, a convenience store, a coffee shop, or an ATM within a government office building, public hospital, or university campus.
    • Using a public school's gymnasium or grounds for community events run by private organizations outside of school hours.
  • Permission for out-of-purpose use is an administrative act and is typically granted for a limited period, often involving payment of a usage fee. The Supreme Court (February 5, 1974) has characterized the rights granted under such permits as generally weaker than, for example, private leasehold rights, and inherently subject to withdrawal if the property is needed for its primary public purpose. This case also dealt with the scope of loss compensation if such a permit is withdrawn.

Kōbutsu are subject to several special legal principles that differentiate them from private property:

  1. Commencement and Cessation of Public Use Status:
    Property typically becomes kōbutsu through a formal act of dedication or "commencement of public use" (kōyō kaishi kōi) by the administrative entity. Conversely, for a kōbutsu to lose its public character and be treated as ordinary property (e.g., to be sold), a formal "cessation of public use" (kōyō haishi kōi) is generally required. An administrative entity must have some form of legal title (e.g., ownership, leasehold) to validly dedicate property to public use (Supreme Court, December 4, 1969).
  2. Restrictions on Private Rights (Principle of Inalienability - Fuyūtsū-sei):
    Traditionally, kōbutsu were considered inalienable (fuyūtsū-sei - 不融通性), meaning they could not be freely bought or sold in private transactions, nor could private rights (like mortgages or acquisitive prescription/adverse possession) be established over them. The idea was that "private law principles should not intrude upon public property."
    • Acquisitive Prescription: This strict doctrine has been somewhat relaxed. The Supreme Court, in a landmark decision on December 24, 1976, held that acquisitive prescription of property that was once kōbutsu is possible if its public purpose has completely and definitively ceased both de facto (in reality) and de jure (in law). This is sometimes referred to as an "implied cessation of public use" (mokuji no kōyō haishi). However, if the property continues to maintain its physical form and function as public property (e.g., a road that is still visibly and functionally a road), acquisitive prescription is generally denied.
  3. Impact of PFI/PPP Legislation:
    Modern legislative developments, such as the Act on Promotion of Private Finance Initiative (PFI Act), have introduced more flexibility. This Act, for instance, allows administrative property used in PFI projects to be leased to private sector partners for extended periods, modifying traditional notions of inalienability to facilitate private investment and operation of public facilities.

Responsibilities and Management of Kōbutsu

The administrative entity responsible for a kōbutsu has several key duties:

  • Public Property Management (Kōbutsu Kanri): This involves maintaining the kōbutsu in a state suitable for its public purpose, ensuring its functionality, and managing its use. Failure to properly manage a kōbutsu leading to defects that cause harm can result in state liability under Article 2 of the State Redress Act.
  • Asset Management (Zaisan Kanri): This perspective focuses on preserving the financial or asset value of the publicly owned property. Decisions related to asset management can be subject to scrutiny, for example, through residents' suits under the Local Autonomy Act if improper financial dealings are alleged.
  • Public Property Police (Kōbutsu Keisatsu): This refers to the function of maintaining order and safety in the use of public property. This is distinct from the physical management of the property itself. For example, the Road Traffic Act governs how roads are used (traffic rules, speed limits – a police function), while the Road Act governs how roads are managed (construction, maintenance – a property management function). A business needing to, for instance, temporarily close a road for a large delivery might need permission under both frameworks.

Dispute Resolution and Remedies for Users

Users of public property who face issues related to its use or administrative decisions concerning it have several potential avenues for redress:

  • Challenging Denials of Use Permits: If an application for permitted use (kyoka shiyō) or patented use (tokkyo shiyō) is denied, the applicant can typically challenge this denial through the Administrative Complaint Review System or by filing revocation litigation in court.
  • Obstruction of Free Use: If a party's free use of public property (e.g., access via a public road) is unlawfully obstructed by another private party, civil remedies such as an injunction or damages may be sought in court (Supreme Court, January 16, 1964).
  • Standing to Challenge Administrative Decisions Affecting Kōbutsu: If an administrative decision affects a kōbutsu (e.g., a decision to close a public road), users may have standing to challenge that decision in court. Traditionally, users under "free use" were considered to have only a "reflective interest," limiting their standing. However, a Supreme Court decision on November 24, 1987, concerning an unclassified public road (satōdō), recognized that in "special circumstances" where the decision causes severe disruption to a person's daily life, standing to sue might be granted. This approach aligns with the considerations in Article 9, Paragraph 2 of the Administrative Case Litigation Act.

Practical Implications for Businesses

A working knowledge of Public Property Law is essential for businesses in Japan in various contexts:

  • Securing Necessary Permissions: Businesses may need permits or concessions to use public land or spaces for their operations – for installing utilities, outdoor advertising, temporary structures for events, or establishing access routes to their premises.
  • Understanding Terms of Use: When granted permission to use public property, it's vital to understand the terms, conditions, duration, and fees associated with that use.
  • Operating Facilities on Public Land: Businesses operating under concessions (e.g., restaurants in parks, service areas on highways) are subject to the specific rules governing those kōbutsu.
  • Development Projects: Property development adjacent to or impacting kōbutsu (e.g., roads, rivers) requires careful attention to public property boundaries and regulations.
  • "Out-of-Purpose Use" Opportunities: Identifying possibilities for leasing space or providing services within official-use properties (e.g., retail outlets in government buildings or transport hubs) can be a business opportunity.
  • Liability: Understanding the government's liability for defects in public structures (under SRA Article 2) can be relevant if a business suffers damage due to poorly maintained public infrastructure.

Conclusion

Japan's Public Property Law (Kōbutsu Hō) provides a complex but essential framework governing the designation, use, and management of assets dedicated to public purposes. From the roads and utilities that underpin daily commerce to the public facilities that may host business activities or serve employees and customers, kōbutsu are an integral part of the business environment. For companies operating in Japan, appreciating the different categories of public property, the varying types of usage rights (free, permitted, patented, and out-of-purpose), the special legal characteristics such as restrictions on private ownership claims, and the avenues for resolving disputes is key to ensuring compliant operations and strategically leveraging opportunities related to these public assets.