RESTRICTEDWORLD TRADE
ORGANIZATIONGPA/W/235
7 January 2003
(03-0015)
Committee on Government Procurement Original:  English
RESPONSES FROM JAPAN TO QUESTIONS FROM CANADA
Communication from Japan
Please find below Japan's responses to the question from Canada (GPA/W/212) regarding
Japan's notification (GPA/W/144-146) relating to th e East Japan Railway Company, the Central Japan
Railway Company, and the West Japan Railway Company.
Question
Japan has indicated in footnote 2 on page 7 of GPA/W/152 that the Japan Railway Public
Construction Corporation which is wholly-owned by the Government of Japan and which owns39.6 per cent of the shares in the Central Japan Railway Company and 31.7 per cent of the shares in
the West Japan Railway has "no intention of exercising effective control through stock ownership".
Does Japan have any plans to put legal measures in place to ensure that Japan Public Construction
Corporation and the Boards of Directors of the Central Japan Railway Company and the West Japan
Railway Company do not exercise their rights?
Answer
1. Regarding Japan Railway Construction Public Corporation
Under the existing Japanese laws, the Japan Railway Construction Public Corporation
(JRCPC) is not granted the right to exercise control or influence over the Central Japan RailwayCompany (JR Central) and the West Japan Railway Company (JR West) through its stock ownership
of these companies.  Therefore, it is not necessary to take further legal measures.  The relevant
stipulations are as follows:
(1) The purpose of JRCPC's stock ownership is not to exercise control or influence over
the JR Companies (including JR Central and JR West), but to dispose the shares in
order to gain a source for payments for annuity liabilities for the former employees of
the Japan National Railways, as provided in Article 13:1(1) and (2) of the Law
Concerning the Disposal of Debts and Other Matters of the Japanese National
Railways Settlement Corporation (hereinafter the "Disposal of Debts Law")(cf. Attachment).
(2) The scope of JRCPC's activities is limited to matters explicitly referred to in
Article 19 of the JRCPC Law and in Article 13 of the Disposal of Debts Law
(cf. Attachment).  To exercise control or influence over JR Central and JR Westthrough its stock ownership does not fall into the scope of JRCPC's activities because
it is not stipulated in the provisions of both laws mentioned above.
(3) Consequently, JRCPC has, in fact, never made use of its shareholder's position to
influence the decisions of JR Companies (including JR West and JR Central).GPA/W/235
Page 2
(Note: With regard to the shares of JR West, JRCPC has already selected two security companies as
lead managers in April 2002.  JRCPC is now observing stock market conditions in order to sell all its
shares in JR West as soon as possible.  With regard to the shares of JR Central, JRCPC is also
planning to sell all its shares as soon as possible, taking into account the conditions of the stockmarket.)
2. Regarding the Boards of Directors
The Government of Japan has no authority to exercise control or influence over JR Central or
JR West through the respective boards of directors.  Therefore, it is not necessary to take further legal
measures in this regard.  The reasons are as follows:
(1) The Government no longer has a right to approve the appointment or dismissal of
representative directors and statutory auditors of JR Central and JR West after the
Amendment to the Law Concerning Passenger Railway Companies and Japan Freight
Railway Company became effective on 1 December 2001 (cf. GPA/W/152, p.8).
With this amendment, the government has completely lost the authority to exercise
control or influence over the board of directors of JR Central and JR West.
(2) The Government is not able to control or influence the boards of directors through
former government officials acting as directors in both companies.  Regarding JR
West, there is no former government official among the directors of JR West.
Regarding JR Central, only one executive director is a former government official.Considering the fact that the board of directors of JR Central consists of 30 directors
(as of June 2002), the ratio of former government officials is extremely low.  Given
the fact that there are six executive directors on the board and their rank is under
chairman, president, two vice-presidents, and five senior executive directors, the said
former government official acting as an executive director is not in a position to exerta decisive influence on decisions of the board.GPA/W/235
Page 3
ATTACHMENT*
(Tentative Translation)
JAPAN RAILWAY CONSTRUCTION PUBLIC CORPORATION LAW (EXCERPT)
(Law No. 3 of 29 February 1964)
Article 19
1. For the purpose stipulated in Article 1, the Corporation1 shall conduct the following activities:
(1) construct railway infrastructure regarding the Shinkansen lines in accordance with the
Nationwide Shinkansen Railway Development Law (Law No.71 of 1970);
(1bis) conduct surveys relating to the construction of railway infrastructure of the Shinkansen
lines in accordance with the provisions of the Nationwide Shinkansen RailwayDevelopment Law;
(2) lease or transfer the railway infrastructure to entities which operate Shinkansen lines
constructed in accordance with subparagraph (1);
(3) undertake disaster restoration works relating to the railway infrastructure that the
Corporation has leased in accordance with subparagraph (2) or (5);
(4) construct railway or track infrastructure relating to railway or track lines (except for
Shinkansen lines) compatible with the standards specified in the relevant ordinances ofthe Ministry of Land, Infrastructure and Transport, and to undertake large-scale
improvement works specified in the relevant cabinet orders;
(5) lease or transfer the railway or track infrastructure that the Corporation has constructed
or on which it has undertaken large-scale improvement works in accordance with the
preceding subparagraph, to entities which the aforementioned railway or track
infrastructure;
(6) conduct activities incidental to the activities stipulated in subparagraph (1) through (5)
above.
2. Unless it prevents the Corporation from carrying out the activities provided in paragraph 1,
the Corporation may, with the approval of the Minister of Land, Infrastructure and Transport, conduct
the following activities:
(1) construct and manage offices, warehouses, stores or other infrastructure specified in the
relevant cabinet order, where construction together with elevated railway infrastructureis appropriate, on the land which the Corporation has purchased for the construction of
the railway infrastructure under subparagraph (1) or (4) of the preceding paragraph;
(2) undertake, on commission, railway works as well as surveys, measurements, designs,
inspections and research relating to railway works.
                                                     
* In English only.
1 The Japan Railway Construction Public Corporation.GPA/W/235
Page 4
3. The Corporation shall be subject to the standards specified in the relevant cabinet orders if it
conducts the activities stipulated in subparagraph (1) of the preceding paragraph.
LAW CONCERNING THE DISPOSAL OF DEBTS AND OTHER MATTERS OF THE
JAPANESE NATIONAL RAILWAYS SETTLEMENT CORPORATION (EXCERPT)
(Law No. 136 of 19 October 1998)
Article 13
1. In addition to the activities stipulated in paragraphs 1 and 2 of Article 19 of the Japan
Railway Construction Public Corporation Law (Law  No.3 of 1964, hereinafter referred to as the
"Corporation Law"), the Corporation2 shall conduct, for the time being, the following activities:
(1) pay the expenses or other liabilities that the Corporation shall bear in accordance with
Article 7 through 113;
(2) dispose the lands or other assets that the Corporation is to assume in accordance with
paragraph 1 of Article 2 of the Supplementary Provisions in order to earn necessary
sources to conduct the activities stipulated in the preceding subparagraph or other
activities;
(3) develop housing sites from the lands which the Corporation is to succeed in accordance
with paragraph 1 of Article 2 of the Supplementary Provisions, to develop facilities
relating to those sites, and to manage and transfer those sites and facilities, with a view
to effectively conduct the activity stipulated in the preceding subparagraph;
(4) conduct activities other than those stipulated in the preceding three subparagraphs
which are necessary to exercise the rights and discharge the obligations that the
Corporation is to assume in accordance with paragraph 1 of Article 2 of the
Supplementary Provisions;
(5) conduct activities incidental to those activities stipulated in each preceding
subparagraph.
2. In addition to the activities stipulated in paragr aphs 1 and 2 of Article 19 of the Corporation
Law as well as in the preceding paragraph, the Corporation may lend funds in accordance with the
relevant cabinet orders when it is especially necessary to effectively promote the activities stipulatedin subparagraph (2) of the preceding paragraph, as long as the Corporation conducts the activities
stipulated in the preceding paragraph.
3. In addition to the activities stipulated in paragraphs 1 and 2 of Article 19 and in the
preceding two paragraphs, the Corporation may, on commission, develop housing sites and related
facilities, and manage and transfer those sites and facilities (under condition that those activities are
conducted in conjunction with the activities stipulated in subparagraph (3) of the preceding
paragraph), as long as the Corporation conducts the activities stipulated in the preceding paragraph.
4. The Corporation shall obtain approval from the Minister of Land, Infrastructure and
Transport when it intends to conduct the activitie s stipulated in the preceding two paragraphs.
                                                     
2 The Japan Railway Construction Public Corporation.
3 Articles 7 through 11 are provisions regarding the responsibilities for the costs necessary for payment
of various annuities for former employees of the Japan National Railways.GPA/W/235
Page 5
Supplementary Provisions
Article 2
1. The Japanese National Railways Settlement Corporation shall be dissolved on the day when
this law takes effect.  Upon dissolution of the aforementioned Corporation, the Corporation4 shall
assume all rights and obligations of the aforementioned Corporation, except for those liabilities that
the government shall assume in accordance with paragraph 1 of Article 2 of this Law.
__________
                                                     
4 The Japan Railway Construction Public Corporation.