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Waseda Institute for Corporation Law and Society (selected as a 2008 Global COE*)

Towards a Base for 21st Century Civil Society
Creating corporation law from Japan

The economic crisis which began with the collapse of the American subprime loan market in 2007 and the Lehman Brothers shock of 2008 has led to a series of losses throughout the world and caused a global recession that has no end in sight. From December of 2008 to the beginning of 2009, news in Japan was filled with reports of restructuring in factories throughout the country. In Tokyo's Hibiya Park, large numbers of people gathered at the temporary site of the "Year-End Camp for Temporary Workers", a sight which caused all Japanese citizens to feel uneasiness as they realized that the economic problems were very close to home.

The American type of free market economy has expanded globally, enveloping Europe and East Asia, as well as former Eastern bloc countries and developing countries. However, upon having reached this point, the contradictions and risks held by these economic principles have been revealed all at once. The current crisis has once again shown the world the limits of American financial system and capital market system, systems which manipulate a degree of freedom which borders on excessive.

Emergency Symposium: "General Review of the American Financial Crisis-Message from Japan" (January 31st, 2009; Waseda University Masaru Ibuka Auditorium)

The project "Creating a New Corporate Legal Framework for a Mature Civil Society-Restructuring Corporate, Financial, and Capital Market Laws and Asia's Challenge to the World" is run by the Waseda University Institute for Corporation Law and Society. This project has the large aspiration of constructing a mature civil society by exploring the forms of corporate legal systems and financial/capital market systems that coexist with, heighten, and respect to the fullest degree values such as justice over freedom and distribution, fundamental human rights, culture, history, ideologies, attractive cities, and care for the vulnerable. The project aims to create certain understanding regarding the true form of the American corporate legal system, which is upheld by the American legal system, to construct a full-scale theoretical model that overcomes the weak points of the American model, and to apply this theoretical model to serve the national interests of Asian countries (from the accompanying pamphlet). This program displays the spirit of Japan's unique ability to correctly indicate the systematic problems contained in the current financial crisis.

Professor Tatsuo Uemura, Director of the Waseda Institute for Corporation Law and Society

Why has this kind of concept been created? Specifically, what kind of activities and results are being developed? We discussed these questions with Faculty of Law Professor Tatsuo Uemura, who serves as Director of the Waseda Institute for Corporation Law and Society.

(*) Note: Global COE is a program of the Ministry of Education, Culture, Sports, Science and Technology (MEXT) that offers prioritized support for the formation of international outstanding education research centers. "COE" stands for Center of Excellence.

Amassing the vertically divided fields of law into an institute

The founding of the Waseda Institute for Corporation Law and Society can be traced back to 2003. Since the 1990s, Japan needed to establish social law to enable truly skillful use of capital markets, based on the experience of the collapse of Japan's economic bubble. However, the system was experiencing marked deterioration due to the burden of responding to unhealthy elements such as dealing with bad debt, handling corporate bankruptcies, and responding to the restructuring of venture corporations. The activities of the Waseda Institute for Corporation Law and Society began in the middle of this situation.

Approach of the Waseda Institute for Corporation Law and Society

"In the midst of this situation, in order to fundamentally reconstruct corporation law, we focused not only the relationship between corporations and the market, but also on the deep attentiveness that European and American corporations give to relationships with individuals, in other words the relationship with civil society. We decided that such decisive action was required for the regeneration of civil society in Japan, which is the most important issue confronting our country. The Waseda Institute for Corporation Law and Society was founded with the philosophy that the quality of civil society is truly established through the form of corporation law and capital market law." (Professor Uemura)

Another aim of the institute is to overcome boundaries between the different fields in the study of law and to firmly advance interdisciplinary activities. The study of law in Japan has developed into different vertically divided fields such as constitutional law, civil law, and labor law, and there has been very little focus on reciprocal relationships or human/intellectual exchange.

"The relationship between corporate law and labor law has been formed in close correlation in a number of foreign countries, but in Japan these two fields of law are treated as though they are different worlds. The layoff of temporary workers in Japan has been brushed aside using only the concept of contract freedom found in civil law. This could never occur in Europe or America. If this adverse condition is not overcome, there is no future for law in Japan and therefore no future for society. Our institute overcomes the boundaries between various field of law and performs horizontal research." (Professor Uemura)

The impetus for the founding of the institute was the application in 2003 to the MEXT's 21st Century Program. "As a COE, we wanted to have great aspirations and to create at Waseda an institute for reexamining the very foundation of Japan's legal society and study of law." (Professor Uemura)

The high aspirations of this bold proposal received a high evaluation and the institute was selected as a COE. Besides the Waseda Institute for Corporation Law and Society, only the University of Tokyo and Kyoto University directly handle the different fields in the study of law. Ultimately, the final evaluation given to the 5 year program of Waseda University resulted in the only instance of the highest rank, Rank A, being given. This led to the continuation as a Global COE Program from 2008.

(*) 21st Century COE is a central support program of the MEXT for the formation of global educational institutions. 21st Century COE began in 2002 as the initial program of a series of projects to support the establishment of COE programs at universities.

Examining and exceeding the law of Europe and America

21st Century COE proceedings "Corporations & the Creation of Law"(published from 2004, total of 14 volumes published)

The Global COE Program which began from 2008 is fundamentally a continuation of the system used in the 21st COE, but has introduced the new theme of "Creating a New Corporate Legal Framework for a Mature Civil Society"

?"From the perspective of a mature civil society, I believe that there is much to be learned from the legal systems of Europe in particular. In Japan, statutory law is considered as being at the pinnacle of legislation, and there is a trend to view statutory law as absolute. However, in Europe, there are many cases in which voluntary regulations and rules are stronger than statutory law.

Waseda University 21st Century COE library "Contents of Corporate Society & the Creation of Law" (Published scheduled for volumes 1 to 8. Volume 5 will be published at the end of March 2009. Nippon Hyoronsha Publishing)

For example, England has no written constitution. Instead, the historical spirit of law from the Magna Carta continues to exist even now as a base for civil society. Consciousness towards the law is firmly developed in the spirits of people, and society is equipped with the power to regulate natural through gentlemanly rules." (Professor Uemura)

The free market economy, which is considered to be the basic principle of the global economy, sometimes leads to bubble economies which possess no real substance. The collapse of these bubbles causes monumental market mistakes like the current crisis. However, Europe has experienced a variety of mistakes throughout its long history, and has acquired the skill to include unique rules in its brand of capitalism. There are many things to be learned from these unique rules. Waseda University possesses the strength of having many researchers who are experts in the condition of laws and legal systems of Europe.

"Almost no other countries can match Japan in the study of laws from foreign countries throughout the world and the development of a unique academic system which discusses those laws in the local language, in this case Japanese. From more than 100 years ago, Japan has used a third-party perspective to perform detailed examination of European and American laws. Our aim is to advance even into areas in which Europe and America have relied solely on lessons learned from experience and have not developed theory. We will then achieve understanding and assign theories for the laws of Europe and America. We also aim to exceed those laws by constructing corporation law that possesses a function to predict danger." (Professor Uemura)

Contributing to the corporation law of Asia

Signing ceremony for a 3-party agreement between the Law Committee of the National People's Congress, Waseda University, and the Tokyo Stock Exchange (December 2005, Beijing)

Another important mission of the institute is to contribute to the construction of corporation law in Asian countries. In China, a country which has rapidly liberalized markets, the development of corporation law is proceeding at a fast rate in recent years.

"Of course, China is looking at Europe and America in order to advance reforms. However, rather than learning directly from Europe and America, it is absolutely preferable to learn through Japan. For example, in no way does America have an objective understanding of its own laws. However, Japan has a firm objective view of such laws, and therefore there is value in learning through Japan. China is also starting to become aware of this value." (Professor Uemura)

Conference for Earthquake Response Systems & Response Research, held in Japan with participation from the Law Committee of the National People's Congress

In China, the Law Committee of the National People's Congress is the highest organization with the responsibility of establishing laws. Waseda University has participated in a wide variety of issues with the Law Committee, sometimes conducting a 3-party agreement including the Tokyo Stock Exchange depending on the issue. As of the present, Waseda has participated in issues such as the Securities Law, the revision of the Corporation Law, the Anti-Monopoly Law, the Insurance Law, the Intellectual Property Law, and Earthquake Response Law. Waseda University has acted as a hub that includes top-level Japanese researchers and experts in every field of law, and has cooperated with China to establish a variety of laws.

"Among the many issues, a series of thorough deliberations were held in China for three days, from morning to night, during the first establishment of the Securities Law and the Corporation Law. We act under the motto of "independence of education", so we were able to clearly convey matters which government-related parties are unable to explain, such as experience gained from Japan's mistakes. I think that this was a merit for China as well. For Japan, the grave effect we would experience from a failure in China far eclipses the effect of America's failure. For this reason, we want to help China as much as possible." (Professor Uemura)

Emphasizing activities as a comprehensive institute

Example of screen from the Asian Intellectual Property Precedent Database

The institute is also working on a project to create a database for Asian intellectual property precedents. Approximately 2,500 cases have already been accumulated, and the ability to search and view in English has drawn access from throughout the world. The institute is now advancing the concept of expanding to European precedents in the future, with the goal of creating an international standard in intellectual property precedent databases. This project has existed since the 21st Century COE and has already received high evaluation.

"The reason why we chose to describe ourselves as a comprehensive institute is because we wanted to emphasize policy proposal, information transmission, database projects and other think-tank activities in addition to research. We also want to contribute directly to the establishment of laws in Japan. Furthermore, we are actively organizing research meetings which include key persons from related government departments, such as the Financial Services Agency, the Ministry of Justice, and the Ministry of Economy, Trade and Industry." (Professor Uemura)

Why was a law research COE of this large scale formed at Waseda University and not at the University of Tokyo or Kyoto University? "To begin with, Waseda now possesses the passion to exceed existing frameworks and create new types of learning. Also, instructors from the Faculty of Law have come together, and there is great momentum towards the construction of a comprehensive organization for the development of researchers and legal professionals." (Professor Uemura)

Of course, this is not a project with a span of 5 or 10 years. The Waseda Institute for Corporation Law and Society aims to exceed the framework of the COE program in order to function as a comprehensive educational and research organization in the study of law, as well as a platform for the formation of legal systems in Japan.

Waseda Institute for Corporation Law and Society

The Waseda Institute for Corporation Law and Society receives support from the Global COE Program of the MEXT.

Waseda Institute for Corporation Law and Society

Waseda University School of Law

Waseda Law School, Waseda University

Waseda University Graduate School of Law

Waseda University Graduate School of Commerce

Waseda University Institute of Comparative Law

Waseda Institute for Advanced Study