Japanese businesses might operate on a global scale, but foreign firms often run into a wall — the language barrier — when trying to understand the ins and outs of this nation’s legal system.

Foreign enterprises and governments alike have often found it difficult to understand Japan’s legal system because of the overall dearth of translated legal texts. This language barrier and foreign firms’ inaccessibility to the rules have been blamed for hampering investment in Japan.

The government is trying to rectify this problem. To enhance transparency of the legal system and boost the confidence of the international community, the Justice Ministry on April 1 launched the Web site Japanese Law Translation.

It offers translations of laws and ordinances based on a newly compiled dictionary of Japanese-English legal terminology that will serve as a de facto standard for legal translations.

In just two months, the site, the result of a five-year government effort to translate and compile the dictionary, is receiving an unexpected amount of traffic, according to the ministry.

“There is still lots to do, but we’ve made major progress” to improve the situation, said Noboru Kashiwagi, a professor of law at Chuo Law School in Tokyo who led the panel of experts putting together the dictionary.

The bilingual dictionary features some 3,700 legal terms and phrases. The site also covers more than 180 laws that have been translated based on the dictionary, and more translations of laws are on the way.

The materials can be downloaded, or users can search the laws or legal terms by keywords or with other information, including numbers given to specific regulations, the area of law and the name of the ministry enforcing the law. The translated names of all existing laws and regulations have been compiled.

Before April, a tentative government Web site that hosted the existing translations got 126,000 visits a month. In just a month and a half after its launch, the new Web site already had 626,000, said Tai Oya, an official at the Justice Ministry’s Judicial System Department handling the project.

“We didn’t expect this much traffic,” Oya said, adding that a significant amount of hits were from overseas. At the same time, the ministry has also received responses from domestic viewers, including a foreign resident who said the Web site has made it easier for him to understand the details of the laws that apply to his life in Japan, Oya said.

Kashiwagi said simply having the laws translated may not immediately lead to a rush of investments in Japan, but raising the credibility of the legal system will pay off in the long run.

Even though it’s viewed as an interesting and premium market, direct investment in Japan remains small compared with Western countries. Many reasons have been cited, including differences in business practices. But the lack of legal texts accessible in English was definitely a factor, according to Peter van den Heuvel, minister-counselor who leads the trade section of the European Union’s Delegation of the European Commission to Japan.

Taking public procurements as an example, van den Heuvel underscored the complexities foreign firms face.

“There are lots of levels of legislations. You have the central government, the big cities, the townships and villages,” he said. “All kinds of rules and regulations are set by the different public bodies. And not having that in English is extremely cumbersome for foreigners.”

Foreign businesses are thus obliged to hire Japanese lawyers or foreign lawyers fluent in Japanese, which makes it much more costly to set up a business or explore cooperative ties with Japanese firms, van den Heuvel said.

English translations of some laws did exist, but they were the fruit of efforts by both the public and private sectors, which invested their time and money out of necessity.

But because there was no standard reference, the terms used in the translations were inconsistent and there was no entity checking the accuracy of the translations.

In some cases, foreign businesses opted not to apply the Japanese law as the governing law for an agreement, posing a disadvantage to Japanese companies, said Kashiwagi, who worked at the legal affairs division of the trading house Mitsubishi Corp. before entering academia.

“When a Japanese company is making a purchase from an American company, for example, the one making the purchase is legally in the superior (position), but the American side would not want to agree to make the Japanese law the governing law of the transaction because they think it lacks transparency,” Kashiwagi explained.

“But if the American law becomes the governing law, it can be difficult for the Japanese corporation to predict a problem because there could be rules the Japanese side is unaware of,” he said.

Thus, Japanese firms would also have to hire lawyers with the legal background of the countries whose laws applied to the business deal.

“The situation was a disadvantage to Japan’s competitiveness,” Kashiwagi said.

The government also faced problems because of insufficient translations of legal texts, especially when it came to providing legal technical assistance to developing countries, said Oya at the Justice Ministry.

Nations the government has been supporting, including Cambodia and Vietnam, are working to develop basic laws, including civil codes. But because of the lack of English translations of Japan’s laws, the Japanese specialists involved had to provide the interpretation, he said.

The translation project became part of ongoing judicial reforms, and Kashiwagi and a team of experts spent five years compiling the standardized Japanese-English legal glossary data, deciding which laws to translate and how to make them more accessible to the world.

Legal terms may not have precise corresponding words in the other language, but Kashiwagi said in those cases, the experts held discussions, choosing words and phrases that native speakers would have the best chance of understanding.

The government plans to have 440 laws and related regulations translated by the end of March 2011. From there, it will be up to each ministry to decide which of their laws to translate based on their needs and budget, Oya said.

Van den Heuvel of the European Commission called the new Web site a good start very much welcomed by the international community but said more must be done, including translating rules pertaining to laws and even Diet deliberations to understand the reasoning behind the laws.

“It would make the system more transparent, clear and reliable,” he said. “But then you will be looking at so much more text, and it is an enormous body of work when you start at the legislative process and regulations and the law at the top.”

However, the EU makes the effort of translating its laws into 23 official languages.

“In Europe we do all these things for the interest of consumers in the end. Because the consumer needs to have the best product for the lowest price. The more inefficiencies you can remove in the system, the more it’s in the interest of consumers because there will be less waste, less cost involved,” van den Heuvel said.

Kashiwagi believes Japanese laws should also be translated into Chinese, Spanish and Portuguese. “But for the time being, we (are using) English,” he said.

“We have so many international transactions, and there are so many people traveling to Japan, and there are also many people coming to work here as well. On top of this, we live in the era of the Internet,” Kashiwagi said. “What is written in a law must be (imparted) to all parties involved, and not just be aimed at those who understand Japanese.”

The Web site is at www.japaneselawtranslation.go.jp/

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