Some Points for"Independent AdministrativeCorporation" SystemJuly 1999
byToshiaki Matsuda
Management and Coordination Agency
Government of Japan-1-Comparison between
the Independent Administrative Corporation in Japanand the Executive Agency in the United Kingdom
As legislative system concerning public administration are different between Japan and theUnited Kingdom, it is not easy to make a simple comparison of government systems in bothcountries.
Nevertheless, we can find some points in common between independent administrativecorporations and the British executive agencies. Both are introduced to separate
policy-making functions and policy- implementing functions, and to improve the efficiency
and quality of services toward the people by granting more autonomy and responsibilities to acorporation and also to ensure the transparency of the operation. Both systems are similar inthese respects since the executive agency system in the United Kingdom gave a hint ininventing this new system in Japan.
There are also some differences between two systems. Independent administrative
corporations are corporate bodies independent of the Government, while British executive
agencies are a part of the national government. Moreover, employees of some independentadministrative corporations have the status as public servants, while employees of every
executive agency are public servants.

Differences between the Systems of the Independent Administrative Corporationand the Executive Agencyzzzz

An independent administrative corporation has a status of corporate body independent
from the Government. Each executive agency in the United Kingdom is an integral partof the national government organization.
There shall be two kinds of independent administrative corporations; one withemployees with the status as public servants, and the other with employees who shall notbe public servants. All the employees of British executive agencies are public servants.
To ensure the objectivity of the evaluation of the performance of independentadministrative corporations, they are subject to independent evaluations by theEvaluation Committee, to be established in the Ministry of General Affairs, in addition to
the evaluation by supervising ministries. The United Kingdom does not have suchdouble-check organizations for executive agencies.
Independent administrative corporations have legal obligations to publish wide-ranging
matters such as business operations and financial affairs. British executive agencies do
not have such legal obligations.

The views expressed are those of the author and do not commit or necessarily reflect those of the Government ofJapan. The author thanks Mr. Masahiro Horie, Director-General of the Statistical Standards Department for hisvery valuable advice and suggestions. Without his advice, this paper could not be produced.

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Criteria of Government Activities to be Transferredto the Independent Administrative Corporation System

89 activities and organizations were selected, in the Cabinet Decision titled "Fundamental
Plan for Streamlining and Efficiency of the Government" of April 27, 1999, to be transformed
into independent administrative corporation system. They were decided through deliberations
in earnest by the Administrative Reform Council, followed by impartial and fair considerationin the Government, based on the criteria stated in the Final Report of the Administrative
Reform Council and the "Basic Law for the Reform of Ministries and Agencies".

To put it concretely, government activities that meet the following three conditions areselected to be transferred to independent administrative corporations.
1.

The activities that should be implemented without fail from public point of view,

2.

The activities that need not be directly implemented in the name of theGovernment, and3.

The activities that may not be implemented if they are left to the private sector.

In connection with the above-mentioned condition 2, whether or not specific activities needbe directly implemented in the name of the Government are judged mainly byexamining
whether such activities are:1.

the exercise of public authority to directly and forcibly limit the rights of thepeople,

2.

invalid unless executed in the name of the Government, and3.

directly related to the management of national crises.

-3-Comparison between the Independent Administrative Corporationand the Public Corporation in Japan
Public corporation is defined, by the way how it is established, as a corporation establisheddirectly by law or a corporation established through the special procedure provided by aspecific law. There are currently 81 public corporations as of April 1999. Each of them wasestablished to meet specific policy needs of the time, and there is no basic law that prescribes
the basic system common to all the public corporations. Naturally, therefore, there areconsiderable variety among public corporations in their activities, management, relationshipwith supervising ministries, and so on.
Independent administrative corporations would have fallen into the aforementioned categoryof "the public corporation" since an independent administrative corporation is establishedthrough special procedure provided by a specific law. However, the independentadministrative corporation is introduced as a new category of legal entity in that all theindependent administrative corporations are subject to a common set of rules provided by"General Law for the Independent Administrative Corporation".
Comparison between the two categories is difficult because there are few common
characteristics among public corporations. However, it could be said that independentadministrative corporations have three main features as compared to existing public
corporations in general.
1.
To promote flexibility and autonomy, the executives of independent administrative
corporations are given more discretion in implementing the activity and management of thecorporation. For example, while most public corporations are subject to annual approval ofbusiness plans by the supervising ministry, independent administrative corporations must ask
for approval of business plans according to the medium-term targets for the term of three tofive years set by the supervising ministry.
2.
To promote transparency in accounting, independent administrative corporations
must comply with corporate accounting standards and, unlike most public corporations, musthave their accounts audited by certified public accountants.
3.
To promote result-oriented improvement, the General Law provides that anevaluation committee to be set up in each supervising ministry should evaluate the activities
of an independent administrative corporation annually and for the term of the medium-range
targets, and the supervising ministry shall take appropriate measures based on the evaluation
at the end of the term. In addition, the Evaluation Committee of the Ministry of General Affair,at the end of the medium-range term, gives advice to the supervising minister on necessary
measures including changes and discontinuation of business of the corporation based on its
evaluations.

-4-Government Activities Transferred toIndependent Administrative Corporations(Tentative translation)

Transferred in April 2001:(Cabinet Office)•National Archives(Ministry of General Affairs)•Communications Research Laboratory•
Fire Research Institute(Ministry of the Treasury)•National Research Institute of Brewing(Ministry of Education and Science)•National Aerospace Laboratory•
National Research Institute for Metals•
National Institute of Radiological Sciences•
National Research Institute for Earth Science and Disaster Prevention•
National Institute for Research in Inorganic Materials•
National Institute for Special Education•
National Science Museum•
National Language Research Institute•National Research Institutes of Cultural Properties•
National Center for University Entrance Examination•
National Olympic Memorial Youth Center•
National Youth Houses•
National Children's Centers•
National Women's Education Center•
National Museums•
National Museums of Modern Art•
National Museum of Western Art•
National Museum of Art, Osaka(Ministry of Welfare and Labor)•National Institute of Health and Nutrition•
Research Institute of Industrial Safety•
National Institute of Industrial Health(Ministry of Agriculture, Forestry, and Fisheries)•National Agriculture Research Center•
National Institute of Agrobiological Resources•
National Institute of Agro-Environmental Sciences•
National Institute of Animal Industry•
National Grassland Research Institute-5-•
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National Institute of Fruit Tree Science
National Research Institute of Vegetables, Ornamental Plants, and Tea
National Research Institute of Agricultural Engineering
National Agricultural Experiment StationNational Institute of Sericultural and Entomological Science
National Institute of Animal HealthNational Food Research InstituteJapan International Research Center for Agricultural Sciences
Forestry and Forest Products Research InstituteNational Fisheries Research InstituteNational Research Institute of Aquaculture
National Research Institute of Fisheries Engineering
National Farmers Academy
National Fisheries UniversityFertilizer and Feed Inspection Stations
Agricultural Chemicals Inspection Station
Center for Quality Control and Consumers Service
National Center for Seeds and Seedlings
National Livestock Breeding Center
National Forest Tree Breeding Center
National Salmon Resources Center(Ministry of Economy and Industry)•Research Institute of International Trade and Industry•
National Institute for Advanced Interdisciplinary Research*•
National Research Laboratory of Metrology* and Weights and Measures TrainingInstitute•
Mechanical Engineering Laboratory*•National Institute of Materials and Chemical Research*•Osaka National Research Institute*•
National Industrial Research Institute of Nagoya*•
National Institute of Bioscience and Human Technology*•Geological Survey in Japan*•Electrotechnical Laboratory*•
National Institute for Resources and Environment*•Hokkaido National Industrial Research Institute*•
Kyushu National Industrial Research Institute*•
Shikoku National Industrial Research Institute*•Tohoku National Industrial Research Institute*•
Chugoku National Industrial Research Institute*•
National Center for Industrial property Information•
National Institute of Technology and Evaluation•
International Trade Insurance(Ministry of National Land and Transport)•Development Public Works Research Institute•Ship Research Institute•Electronic Navigation Research Institute-6-•
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Port and Harbor Research Institute
Traffic Safety and Nuisance Research InstitutePublic Works Research Institute
Building Research InstituteMarine Technical CollegeInstitute for Sea Training
Schools for Seamen's Training
Civil Aviation College(Ministry of the Environment)•National Institute for Environmental Studies

Transferred in April 2002:(Defense Agency)•
Labor management and other businesses concerning Japanese employees working for theU.S. Forces

Transferred no later than in the first half of the year 2002:(Ministry of National Land and Transport)•Motor Vehiecle Inspection (at inspection offices)

Transferred in April 2003:(Ministry of General Affairs)•
Statistics Center (excluding Statistical Training Institute)Transferred in the first half of the year 2003:(Ministry of the Treasury)•Mint Bureau•
Printing Bureau (including affiliated hospitals)

Transferred in the fiscal year 2004:(Ministry of Welfare and Labor)•
National Hospitals and Sanatoriums
Notes:
Organizations with an asterisk (*) are currently research institute of the Agency of Industrial
Science and Technology, Ministry of International Trade and Industry.
Underscored are corporations with employees without the status of civil servants and the rest
are corporations with employees with the status of civil servants.

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