Last month, Mainichi Shimbun published an article noting that Japan is the only country in the G7 not to have a security clearance system (SCS) for handling classified information. The Government of Japan has sought to redress this, with Prime Minister Kishida Fumio instructing his Cabinet on February 14 to complete discussions in the next year or so on its implementation.
Expected to be submitted as part of legislation to the Diet next year, the prime minister explained that such an authorization system would contribute to seamless cooperation with allies and partners, as well as to secure and expand international business opportunities for domestic industry. While significant hurdles exist, its introduction would better allow Japan to navigate the increasingly competitive global environment and to shape the regional economic order.
The Bigger Picture—Motivations for Seeking Security Clearance System
Japan seeks a SCS—a process to grant government officials, contractors, and potentially researchers access to classified information—for three reasons. First, Tokyo envisions security clearance as another piece of the puzzle to attain economic security. Kobayashi Takayuki, the first and former minister in charge of economic security, stated that the primary objective of economic security is to “protect the lives and livelihoods of Japanese citizens.” In effect, Japan is coming to terms with a globalized world in which crises or shocks in other regions deeply affect the economy (think the war in Ukraine). This is also a world in which economic warfare, or actions designed to harm a country’s economy, is increasingly prevalent and threatens the economy. While security clearance would not dramatically contribute to this objective, it would supplement protection of breakthrough innovations and technological progress that keep businesses profitable and serve as the foundation for future economic growth.
Second, Tokyo believes that security clearance will ensure businesses remain competitive internationally and can be trusted by foreign partners to collaborate on cutting-edge research. Japanese firms have already reported cases in which they lost business opportunities due to foreign governments or partners requiring security clearance. This keeps Japanese firms out of projects that would otherwise benefit the country as a whole. Further, the lack of security clearance stymies innovation as only a select few can access classified information. In the defense industry, for example, only firms designated by the Ministry of Defense get access to defense technology. A SCS would increase the pool of actors that could help develop emerging technologies that in turn expand the country’s economic, military, and political strength.
Third, Tokyo views security clearance as an added layer of protection from technology theft amid intensifying global competition for dual-use emerging technologies. While not explicit, these measures are largely aimed at China, which has a track record of stealing and undercutting competitors in strategic sectors. In Japan, there was a case in 2020 in which a Japanese man was referred to prosecutors for selling the confidential manufacturing process of conductive fine particles from Sekisui Chemical Company to Chaozhou Three-Circle Group in China. Current laws only protect state secrets from nefarious actors, not private sector technology.
An Active Process to Contemplate Security Clearance
The accelerated consideration of security clearance is a result of intensifying global competition and concerns among Japan’s political and economic actors that the country is falling behind. However, it is not a simple reaction to recent trends—the process can be traced back to 2008, when METI stated in a report that Japan should establish a SCS from a security standpoint.
Progress on a sweeping SCS hit a wall due to reasons including privacy concerns, but the Act on the Protection of Specially Designated Secrets promulgated in 2013 introduced a clearance system for public officials. Under the Act, government personnel and employees of contractors are subject to inquiries about their past activities (criminal and disciplinary record, drugs, alcohol, mental health, etc.) and social circles (limited to relatives and cohabitants). Similar to the United States’ system, violators could face up to five years imprisonment for intentional disclosure and up to a year or a ¥300,000 fine for negligence.
As this only covered designated state secrets, the government turned its attention to private sector information. In 2020, under the late Prime Minister Abe Shinzo, the government outlined in its Integrated Innovation Strategy that it will “investigate forms of granting qualifications to people who handle important technical information” to promote industrial competitiveness, international joint research, and maintain Japan’s technological superiority. The Kishida Cabinet followed this path, stating in the new National Security Strategy that “the arrangement for information security will be further solidified” by the establishment of a new SCS. In this way, Tokyo has pondered for some time the introduction of a SCS to further its strategic interests.
The Debate Over Implementation
The business community has been a strong advocate for security clearance. In its opinion document on the Act Promoting Economic Security, the Japan Business Federation (Keidanren) wrote that Japan should aim in the mid- to long-term for an effective information security system that is trusted by partner countries. The Japan Association of Corporate Executives (Dōyukai) similarly urged the government to introduce a SCS as soon as possible to ensure Japan’s technological advantage. From their perspective, a standardized system on par with the likes of the United States and European states will help member firms compete and cooperate with top industry companies.
On the other hand, the oft-cited concern is privacy. Critics argue against invasive questions that may violate basic human rights. In all fairness, the Designated Secrets Act includes a provision that stipulates interpretation of the law cannot be expanded to “unfairly violate the fundamental human rights of citizens,” which is vague but provides the bare minimum protection from egregious lines of questioning.
Even if this were overcome, other challenges exist. First, there is the question of who conducts screening. In the United States, it is mostly the DOD, while in Australia, the government outsources to private research companies. The GOJ has indicated that the Public-Private Cooperation Council established under the Act Promoting Economic Security may serve this role; the LDP prefers the Cabinet Intelligence and Research Office. Second, there is scope—the GOJ plans to start issuing clearance on a smaller scale (tens of people; U.S. has around 4.2 million people with clearance as of 2019). It is likely to restrict clearance to key personnel working with emerging technologies but would have to adjust and expand as new technologies emerge. Third, time frame is a significant problem others like the United States experience. The process may take as long as one to two years to complete, during which time employees may have to work another job until clearance is granted. Given the acute budget and personnel constraints Japan faces, this is likely to be an even bigger challenge.
Work is already underway—a government expert panel met for the second time on March 14 to discuss challenges, while the LDP is reportedly preparing a proposal to the GOJ recommending swift implementation of a SCS. Swiftly implementing a SCS will serve not only Japan’s domestic economic goals but its ambitious foreign policy goal of building a free, open, and inclusive economic order that emphasizes fair competition and widespread cooperation. As University of Tokyo associate professor Sahashi Ryo cautioned, “what’s important to consider here is to make it an internationally acceptable framework that is based on a detailed design that includes a background check.”
Economic security has taken a front and center position in Japan’s national security and foreign policy strategy—the term appears in bilateral meetings and multilateral ones like the G7. A SCS would go a long way to boost Japan’s bid to effectively exercise its role as a leader in the Indo-Pacific region.
Rintaro Nishimura is a Tokyo-based Associate in The Asia Group’s Japan practice, where he researches and analyzes domestic political shifts, economic security, and technology policy developments. He was previously an Analyst in the Japan practice at the Washington, D.C. office. He graduated with a MA in Asian Studies (MASIA) at Georgetown University’s School of Foreign Service, focusing his studies on the U.S.-Japan alliance, economic security in the Indo-Pacific, and Japanese domestic politics. He has extensive writing experience, having published in the Georgetown Journal of Asian Affairs, Nikkei Asia, The Diplomat,The National Interest, Tokyo Review, and Asia Tech Observer. He has also been quoted in Reuters, Bloomberg, Voice of America, Al Jazeera, CNBC, and Taiwan Plus News. He can be found on Twitter (@RinNishimura) and http://rintaronishimura.com.
