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Japanese municipalities enact public contract ordinances to ensure working conditions

08 February 2012
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In December 2011 the cities of Tama, Metropolitan Tokyo, and Sagamihara, Kanagawa Prefecture, enacted public contract ordinances, as a result of which there are now four municipalities in Japan with such ordinances. The others are the cities of Noda, Chiba Prefecture, and Kawasaki, Kanagawa Prefecture, which enacted public contract ordinances in September 2009 and December 2010, respectively. In addition, the establishment of public contract ordinances is under consideration in such municipalities as Kokubunji, Metropolitan Tokyo, and Sapporo, Hokkaido.

Public contracts are contracts concluded by the state or local governments with private companies, including nongovernmental organizations, relating to trade, leasing, contracting, consignment, and so on. Against the background of a tight fiscal situation, due to such factors as the need for increased efficiency in public services, rising demand for cost reductions, and intense bidding competition for public contracts, there has been an increase in the number of low-price and low-cost contracts and orders. For this reason, the business conditions of companies receiving orders are deteriorating, which in turn is giving rise to the problem of lowering wages and working conditions for the people employed by them.

The International Labour Organization's Convention No. 94 on labour clauses in public contracts and Recommendation No. 84 clearly stipulate that measures must be taken to prevent the decline of wages and working conditions due to public contracts.

The ordinance of Tama in Metropolitan Tokyo stipulates "ensuring appropriate working conditions and endeavoring to achieve the stability of workers' livelihood" as a goal. The targeted businesses are subcontractors and reconsignments. and contracting businesses like one-master carpentry and dispatched workers themselves are included in this category as well. Regarding the lowest limit of remuneration for the work or for the services, the ordinance stipulates that amounts should be considered by dividing workers into skilled workers and others (and decided after hearing the opinion of a public contract council with the participation of worker representatives). Furthermore, in cases where a company receiving an order from a public contract changes, the ordinance significantly obliges the new company to make efforts to continue the employment of workers previously engaged in the project.

Japanese PSI affiliates including JICHIRO have been campaigning in cooperation with RENGO (Japanese Trade Union Confederation) since 2008 for the central government to enact basic legislation on public contracts and local governments to establish public contract ordinances. At the central level, we have engaged in policy consultations with the government and lobbied political parties, and at the local level it has held study meetings and lobbied political parties, local governments, and local assemblies. Clearly PSI affiliates and RENGO’s activities are steadily bearing fruit.

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