Bulletin No.17 December 2013

Post & Logistics 17Bulletin No.

December 2013

Revised Postal Privatization Reform Law Established New Japan Post Started from October 2012

01

The revised postal privatization law was passed in the Diet on April 27, 2012 and the New Japan Post started. In Japan, post, savings and insurance had been operated as an integrated state-run service for more than 130 years (90 years for insurance). However, the Koizumi cabinet was formed in 2004, and bills to privatize state-run postal services were enacted in 2005. With the establishment of these laws, the three integrated services of the postal services were privatized and split off. The split postal services downgraded user convenience and satisfaction. Moreover, for the Japan Post Group companies, the postal privatization was supposed to bring about the ability to compete with rival companies on an equal footing, as well as business freedom. The lack of strong business foundations, however, caused postal workers to lose work motivation.

In 2009, the Democratic Party of Japan (DPJ) won the general election and came to power, giving the Japan Postal Group Union (JPGU) an opportunity to make efforts toward postal reform. However, the 2010 Upper House election saw the ruling coalition parties lose their majority in the upper house. Consequently, the Diet became a “divided diet.” JPGU faced great difficulties in appealing for postal reform. We worked together with JPGU-friendly Diet members, and asked the three parties, the DPJ, the Liberal Democratic Party (LDP), and New Komeito to draw up a new postal bill. As a result, the three parties jointly submitted the Amended Postal Privatization Bill, which was passed in the Diet on April 27, 2012.

This law includes the following points: From October 1, 2012, (1) the mail delivery company and the post office company merge and the five-company system is reorganized into a four-company structure, (2) the Japan Post Group is obligated to provide the financial universal service, (3) the obligation to release all the shares of the postal bank and insurance company is eased, and complete privatization is set as a nonbinding target, (4) these two financial units pave the way for entering new business fields. This law emphasizes the importance of the integrated Japan Post Group, eliminates the defects inherent in the corporate split, and aims for the sustainable development of the Japan Post Group

companies. Moreover, in order to carry out a substantive integration of the newly established Postal Service Company and to reflect union members’ opinions on this change, JPGU and the management side set up a labor-management consultation body called “the labor-management committee for the new Japan Post.” In this consultation body, we discussed issues such as the new framework for the company, readjustment of working conditions, collective agreements, and many kinds of preparations.

The Japan Postal Group Union (JPGU) with its 240,000-strong membership pursues the “true happiness of the members,” and promotes the “free and democratic trade union movement” as the most important mission of our day. Therefore, in order for our members to have a brighter hope for the future and to reduce the negative impact of the split services, JPGU pressed the Diet to move for postal reform. The revised postal reform law was finally passed on April 27, 2012, and Postal Service Company was established on October 1, 2012. Together with our members, we are now putting our wisdom into creating a new Japan Post Group. JPGU will make its best efforts to organize a total of 300,000 members. When the Great East Japan Earthquake occurred, we received a huge amount of support from our overseas colleagues. As the JPGU, we thank everyone for their support and will continuously support the recovery and revival in the devastated areas.

Japan Postal Group Union (JPGU)

Japan Postal Group Union5-2-2 Higashi Ueno, Taito-ku, Tokyo, 110-0015 JapanPhone +81 3 5830 2655 Fax +81 3 5830- 2484 Website: http://www.jprouso.or.jp/en/index.html

Bro. Toshimichi Omata, JPGU President

Bulletin No.17 December 2013

Post & LogisticsPost & Logistics

1. A five-company system to a four-company structure

The Japan Post Network, operating the counter service, and the Japan Post Service, delivering mail and parcels, are unified into a new Postal Service Company. With this merger, the Japan Post Group was transformed into a four-company structure from a five-company structure. Unification resolved duplication in management and some wasteful operations, as well as securing integrated operation.

2. Financial universal service obligation on the bank and insurance company

The Japan Post Service is obligated to provide the postal universal service. With the establishment of the revised postal privatization law, the Japan Post Bank and Japan Post Insurance are also required to offer financial universal services. Moreover, the revised law obligates providing

A. After the privatization and corporate breakup on Oct. 1, 2007, the Japan Post Group offered various services under the five-company system. However, the negative effects of splitting the company caused inefficiencies and inconvenience for users. When the Great East Japan Earthquake occurred in 2011, workers of the mail delivery company in the tsunami-hit areas were unable to handle the services provided by the post bank and post insurance. These companies were unable to fulfill customer expectations. Thus, the postal reform law was required to eliminate inflexibility, maintain the provisions of three integrated services (mail, savings, and insurance), expand the companies’ businesses to new areas, and strengthen their operating foundations.

A. The merger of the Japan Post Service and Japan Post Network resolved the inconveniences caused by the corporate breakup. Moreover, bank and insurance services were required universal service obligations. This enabled the provision of more efficient and integrated services at post offices. In the wake of these changes, it was easier for post offices to start up new business services. Enhanced management freedom made it

New Organizational Structure and Key Points Revised Postal Privatization Law Q&A

the three postal services in an integrated manner in order to avoid the financial exclusion of rural areas.

3. Releasing shares of postal bank and insurance

The deadline for selling all the shares of the bank and insurance companies was abolished by the revised law. Instead, the new postal law has set the timing for the release of the shares of Japan Post Holdings and then two financial units as a non-binding target. When the Japan Post Holdings has completed disposal of at least half of the two financial companies’ shares, the additional regulations on new business services will be lifted and then the two companies will be allowed to enter new businesses through the simplified procedure of notifying the government of their intentions, rather than having to seek prior approval. With these changes, the two financial institutes will be able to carry out more flexible business management.

possible to consider and develop more new products and services.

A. At the point of the corporate merger, to avoid problems, the new company used the old companies’ systems, such as the wage scheme and personnel systems, since the period for preparation was very short. Thus, work practices, employment and working conditions were taken over by the new integrated company.

A. Prior to the launch of the new Japan Post Service Company, many preparations were required, such as the design of a new organization structure, readjustment of working conditions and collective agreements, and so forth. In order to realize a smooth merger of the two companies and carry out more effective postal reform, JPGU and the Japan Post Group set up a “labor-management committee for the new Japan Post,” in which JPGU and the company side exchanged opinions on basic policy for merging the companies and strengthening the management foundation.

Government

Japan Post Holdings

Japan Post Service

Japan Post Network

Japan Post Bank

Japan Post Insurance

Fully ownedAll shares to be

sold by the end of Sept. 2017.

Government

Japan Post Holdings

New integrated company formed from the merger of Japan

Post Network and Japan Post Service

Japan Post Bank

Japan Post Insurance

Wholly owned All shares to be released as soon as possible.

Oct. 2007 ~ Sep. 2012 Oct. 2012 ~

Universal service

Shares of bank and insurancecompanies

New businesses of thetwo financial units

New mail service businesses

Up to September 30, 2012 From October 1, 2012

Mail service Mail, banking, and insurance

Government approval required before selling off the two financial units.

Approval Report

Law obligates release of all sharesby Sept. 30, 2017.

Non-binding obligation on companiesto release all shares.

After disposal of more than half the shares of the two financial units, report to the government.

JP Group Company Form

Major Changes after the Revised Law

Q. Why was the revised law needed?

Q. How were post offices changed after enforcing the law?

Q. What kinds of changes occurred to postal workers?

Q. What kind of measures did labor and management take at the time of the integration of companies?

02 03

The revised bill passed in the upper house.

According to the new postal law, the Japan Post Group will go public by the fall of 2015. Preparations for this are now underway.

Currently, the national government owns the Japan Post Bank and Japan Post Insurance through Japan Post Holdings.

We must pay attention to questions regarding the timing for the Japan Post Holdings IPO.

According to the revised postal privatization law, the timing of the sales of Post Bank and Post Insur-ance shares should be a “non-binding target,” but around two thirds of the Japan Post Holdings shares must be sold out as soon as possible.

IPO of Japan Post Group

Bulletin No.17 December 2013

Post & Logistics

Corporatization Privatization

7,0007,000

6,0006,000

5,0005,000

4,0004,000

3,0003,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 20122011

250250

210210

190190

170170

150150

Insurance policiesInsurance policies

Bank balanceBank balance

Bankbalance

Bankbalance

InsurancepoliciesInsurancepolicies

Future Challenges

has had to operate its businesses under limited conditions. The JP Group must stabilize its business management while overcoming this reality. This is one of the JP Group’s greatest challenges for the future.

the post office network as service centers after the effectuation of the amended postal law. We therefore believe that the postal services should have business freedom. Lifting of the deposit limit of 10 million yen on life insurance and postal savings should be eliminated. The scope of business of the two financial institutes will be deregulated. Postal services should be able to compete on an equal footing with private sector companies when it starts new businesses.

After the enactment of the revised postal law, many problems caused by the corporate split will be eliminated. Due to market structure changes and other social factors, postal volume, postal bank balances and insurance policies have been decreasing. The JP Group has suffered from these structural problems. Simultaneously, the JP Group

Japan Post was corporatized in 2003 and privatized in 2007. From 2002 to 2011, mail volume decreased by about 14%; the Postal Bank balance by 25%; and the numbers of personal insurance policy holders by 46%. It is clear that the major products of the Japan Post Group companies have been in decline. Specific measures are needed if the company’s financial ability to maintain the universal service is not to be impaired. It is necessary to stem the downward trend in the postal service business. We have to make the three integrated services more flexible to secure profits for maintaining

JP Group-Holding Company

HoldingCompany

Postal Service

PostalNetwork

PostalBank

InsuranceCompany

158,492 2,687 17,731 12,103 21,259 118,349

Ordinary Income Compared with the previous year

-8,121(-4.9%)

-224(-7.7%)

-159(-0.9%)

-259(-2.0%)

-1,086(-4.9%)

-7,037(-5.6%)

12,251 1,257 478 322 5,935 5,293

Net Ordinary Income

Compared with the previous year

483 (+4.1%)

-100 (-7.4%)

578 (-)

-105(-24.5%)

173(+3.0%)

-20(-3.0%)

5,628 1,452 311 289 3,739 910

Net Income Compared with the previous year

939(+20.0%)

-62(-4.1%)

356 (-)

101(+53.7%)

391 (+11.7%)

233 (+34.4%)

The Amended Postal Privatization Law was enacted and this casts a bright light on the postal business. However, the mail delivery business continuously finds itself in difficult circumstances.

Under these conditions, the consultation council was set up for the purpose of the revitalization and sustainable development of postal services. Both sides have put their

heads together to deal with this issue.

Hard-working union members significantly contributed to the business performance of the Japan Post Service. Thus, in fiscal 2011, the Japan Post Service achieved a surplus on a single-year basis.

What is the “Special Labor and Management Consultation Council” for turning around the struggling mail delivery business?

Japan Post Group’s financial review and operational status Current situation of major products of the Japan Post Group companies

Corporatization Privatization

25,00025,000

35,00035,000

30,00030,000

20,00020,000

15,00015,000

10,00010,000

5,0005,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 20122011

400400

300300

350350

250250

150150

200200

100100

LettersLetters

LettersLetters

ParcelsParcels

ParcelsParcels

Decline in Letters and Increase in Parcels (2002-2012) Total Balance at the Postal Bank and Numbers of Insurance Policies (2002-2012)

Fierce Competition with Private Companies

service. The “home delivery mail service” offered by transportation companies is not viewed as “letters” as defined by postal law and private mail law. There are some cases in which neither the postal operator nor private mail delivery companies handle documents categorized as letters. The Japan Post Service is strengthening its business foundation through business efforts. At the same time, the Japan Post Service is taking active approaches to deepen public understanding with respect to “letters.”

Truck transportation companies drop DMs and booklets into letter boxes. This service is called the “home delivery mail service.” Japan Post has 53.8% and Yamato Express 41.0% of the market share. As for parcel delivery volume, Yamato Express and Sagawa Transport dominate the present market share with 42.7% and 38.9%, respectively. On the other hand, Japan Post has only 10.9% of the market share. One of the major reasons why the Japan Post Service is struggling is that the Japan Post Service is obligated to provide a postal universal

The Asia Pacific region cannot deny the impact of globalization. We have to keep our eyes on what is happening in Europe and the US, because the same situations might occur in this region soon. Thus, the UNI-Apro Post and Logistics Sector Committee collects information on the world trends in postal services, especially in Europe and the US. The information collected has been analyzed and shared with postal communities through the UNI World Post and Logistics Committee and the East Asian Postal Unions Forum.

JPGU is affiliated with UNI, which has 900 unions and 20 million workers in the world. Brother Toshimichi Omata, President of JPGU, is president of UNI-Apro Post and Logistics Sector as well as vice president of UNI-LCJapan. He exercises leadership from a global point of view to promote the international trade union movement both in and outside Japan. Many JPGU members took part in the 3rd UNI World Congress in Nagasaki as volunteer staff. JPGU continues to train union activists to work for the international trade union movement.

UNI-Apro Post and Logistics Sector JPGU’s international activities

Financial review of FY2012 (Year ended March 31, 2013) unit: 100 million yen

04 05

Bulletin No.17 December 2013

Post & Logistics

1. UNI-Apro East Asian Postal Unions Forum

Three postal unions in East Asia hold the UNI-Apro East Asian Postal Unions Forum once a year to discuss common labor issues and the postal service situation in East Asia. The 1st postal forum started in 2002, and the 11th forum was held in Seoul in 2013. The 2nd East

As with the seminars conducted in Thailand, seminars for postal unions in the Philippines and Indonesia are also held every year, with a new one being added in India. Participants learn and share knowledge about labor affairs and the postal service situation in each country. At the same time, they are encouraged to promote partnership-style labor and management relations in post offices.

JPGU has exchange programs with Chunghwa Postal Workers Union (CPWU, Taiwan), Viet Nam Union of Post and Telecom Workers (VNUPTW), and the National Committee of Defense, Postal and Telecommunications Workers’ Union of China (including the China Post Trade Union). Through these programs, we exchange information and discuss the challenges we face today.

In addition, the youth organization of JPGU Youth Network participates in the “Recycle Book Aid” as its international contribution activity together with an NGO. This activity started with the establishment of JPGU. The youth members are collecting books and other materials from members’ households across Japan. They then sell these to stores and donate all the proceeds to the NGO. In turn, the youth organization buys books for the NGO’s mobile libraries in Thailand. Moreover, youth members visit and carry out volunteer activities in Thailand.

With the help of the UNI liaison councils of the Philippines and Sri Lanka, JPGU Tokyo and JPGU Kanto have been conducting scholarship programs for the children of families of postal union members in these two countries.

The 13th UNI-Apro Post and Logistics/APPC Joint Seminar was held in 2012. These joint seminars are held every year at the Asia Pacific Postal College, a training center of the Asia Pacific Postal Union for young union leaders. After the APPC seminar finishes, the SEWU-THP Joint Seminar was held. Thailand Post union leaders and the APPC seminar participants attended this seminar and shared information and news of labor affairs in the region.

JPGU and UNI-Apro jointly organize a seminar for JPGU members to learn about the international trade union movement in English

Asian Trade Unions Forum was also held in Seoul. UNI member unions (not only postal unions but other sector unions as well) came together, talked, and shared common labor challenges in East Asia.

5. Other international activities

3. English seminar for JPGU members

4. JPGU sponsoring seminars for postal unions in the Philippines, Indonesia and India

2. JPGU sponsoring UNI-Apro Post and Logistics/APPC Joint Seminar, SEWU-THP Joint Seminar in Thailand

JPGU International Activities

every year. After FY2012, this seminar is opened to rank and file union members.

06 07

1, 2: The 11th UNI-Apro East Asian Postal Unions Forum in Seoul, 2013

9: Scholarship ceremony in the Philippines 10: Scholarship awarding ceremony in Sri Lanka, 2012

6: Seminar in the Philippines, 20137: Seminar in Indonesia, 2013

8: Seminar in India, 2013

4: A group presentation5: English seminar for JPGU members

3: UNI-Apro Post and Logistics/APPC Joint Seminar

1 2

3

6

7

8

4

5

9

10

Post & LogisticsPost & Logistics

to the decision made by the general meeting, matters related to its management and activities are discussed and implemented by the steering committee composed of 23 members from the 12 affiliates.

With 1,032,200 members, many Japanese affiliates hold key positions in UNI. Many of them are involved in UNI decision-making bodies, and in particular they are very much responsible for promoting UNI activities in the Asia-Pacific region. Since 2000, many overseas projects have been run by UNI-LCJapan. Seminars with national liaison councils in the various countries have been conducted, in close cooperation with UNI-LCJapan. UNI-LCJ Post & Logistics, namely, JPGU is playing a leading role in the most promising sectors in Japan.

UNI-LCJapan (UNI Liaison Council Japan) is the domestic council where UNI affiliates in Japan discuss their involvement in UNI activities and harmonize their opinions and positions. In conjunction with UNI consolidation, UNI-LCJapan was formed in January 2000 and has been growing its membership with determined commitment on organizing. As of February 2013, UNI-LCJapan consists of 12 trade unions as affiliates with a total of 1,032,200 members and carries out activities in close cooperation with UNI/UNI-Apro.

UNI-LCJapan convenes an annual general meeting in February of every year to discuss and make decisions on its activity programs and budget; its officers are elected at the general meeting every two years. Pursuant

What is UNI-LCJapan? A Domestic Consultation and

Coordination Body: UNI-LCJapan

UNI GlobalHeadquarters:Nyon of Switzerland

Sectors Regional Organisations Inter-Professional Groups

UNI Sectors(13 sectors)

Commerce, Finance,Graphical, ICTS, Media&Entertaiment andPost&Logistics, Sport etc.

Regional Sectors(Apro : 9 sectors)

〈Apro desk offices〉 Bangkok, Bangalore, Jakarta, Kathmandu, Kota Kinabalu, Seoul

UNI-LCJapan : UNI Liaison Council Japan

Tokyo Office

Japan Broadcasting Labour Union (NHK W

orker’s Union)(NIPPORO)

Japan Federation of Comm

ercial Broadcast W

orker's Unions (M

INPOROREN)

Japan Postal Group

Union (JPG

U)

The Federation of Inform

ation and Com

munication

Technology ServiceW

orkers of Japan(ICTJ)

Confederation of Japan Autom

obile Workers’

Unions (JAW

)

National Federation of Life

Insurance Workers’ U

nions (LIU)

Federation of ZENRO

SAI Trade U

nions (ROSAI RO

REN)

Federation of Labour Bank W

orker’s Unions

of Japan (ZENRO

KIN)

Federation of Non-Life Insurance W

orkers’ U

nions of Japan (FNIU

)

The Japanese Federation of Textile, Chemical,

Food, Comm

ercial, Service and General W

orkers’ Unions (UA ZENSEN

)

UNI Apro : Asia&Pacific regional organizationRegional headquarters : SingaporeUNI Apro : Asia&Pacific regional organizationRegional headquarters : Singapore

National Federation of Trust Bank

Employees’ U

nion (Zenshinren) -supporting m

ember

All Printing Bureau Labour U

nion(ZEN

INSATSU

)

Japan Federation of New

spaper W

orker's Unions

(SHIM

BUN

ROREN

)

Federation of Printing Inform

ation Media

Workers U

nion (PIMW

)

Zendentsu Kaikan 6F, 3-6 Kanda-Surugadai, Chiyoda-ku, Tokyo 101-0062 JapanTel: +81-3-3251-3374 FAX: +81-3-3257-0839 E-mail: lcjapan @ vesta.dti.ne.jp

UNI Liaison Council Japan (UNI-LCJapan)

08