5 Promoting Resource Diplomacy along with Foreign Direct Investment in Japan

(1) Securing a Stable Supply of Energy and Mineral Resources at Reasonable Prices

A Current Situation Concerning Energy and Mineral Resources in Japan and Abroad

(A) Situation in the World

Structural changes in recent years have been seen in the international energy market with respect to three areas: (1) demand (consumption), (2) supply (production), and (3) resource selection. Regarding (1) demand, global demand for primary energy has shifted toward non-OECD member countries, primarily China and India. With respect to (2) supply, the U.S. became the world's largest producer of both oil and natural gas due to the “Shale Revolution,” and liberalization of export controls on crude oil in December 2015. The U.S. is promoting energy export policies such as further exports of U.S. liquefied natural gas (LNG). As for (3) resource selection, based on the fact that production and usage on energy account for about two-thirds of greenhouse gas (GHG) emissions, the transitions to cleaner energy resources such as renewable energy are accelerating. In addition, since the Paris Agreement on climate change was adopted in December 2015, companies have made their efforts to further advance toward low-carbonization. In 2021, numerous countries have announced goals to achieve carbon neutrality in the second half of the century, an indication of increasing momentum for decarbonization worldwide.

In oil markets, oil demand and prices have gradually declined since around February 2020 due to reduced movement of people and sluggish economic activity owing to the spread of COVID-19. In addition, a coordinated production cut by Organization of Petroleum Exporting Countries (OPEC) Plus broke down in March, sending oil prices dramatically lower, and in April the WTI futures price turned negative for the first time in history. Afterwards, OPEC Plus agreed to a coordinated production cut starting in May. Crude oil prices also gradually rose as excess supply abated, reaching their pre-COVID-19 level by February 2021. However, supply shortages appeared in the subsequent economic recovery from the pandemic, and oil prices exceeded their pre-pandemic levels to hit a three-year high in October.

Moreover, energy prices have shown signs of further increases following Russia's aggression against of Ukraine, which will have an unpredictable effect on energy market stability going forward.

(B) Situation in Japan

Since the Great East Japan Earthquake, the percentage of fossil fuels out of power generation in Japan has reached about 90% in 2012, up from about 60% before the earthquake, due to the shutdown of nuclear power plants. Japan's primary energy self-sufficiency ratio (including nuclear power), which relies on imports from overseas for almost all of its oil, natural gas, coal and other energy resources, dropped sharply from 20% before the 2011 earthquake to 6.3% in 2014. It remains at a low level compared to other OECD countries despite a recovery to 12.1% in FY2019. Furthermore, nearly 90% of crude oil imported by Japan comes from the Middle East. With regard to LNG and coal, Japan depends less on the Middle East for oil but almost completely on Asia and Oceania. Under the circumstances, efforts to secure a stable supply of energy at reasonable prices are becoming increasingly important.

At the same time, climate change response measures are also important. In October 2020, the Government of Japan announced its intention to achieve carbon neutrality by 2050, and in April 2021 pledged to achieve a 46% emissions reduction by FY2030 and announced its new reduction goal to continue making further efforts to realize a 50% reduction.

Against this backdrop, the Sixth Strategic Energy Plan, approved by the Cabinet in October 2021, lays out specific measures to be taken by 2030 with a continued focus on the principle of “3E+S,” which emphasizes energy source safety (Safety), ensuring of a stable energy supply (Energy Security), the economic efficiency of energy costs (Economic Efficiency), and environmental suitability from the point of view of climate and other elements (Environment).

B Diplomatic Efforts to Secure a Stable Supply of Energy and Mineral Resources at Reasonable Prices

Securing a stable supply of energy and mineral resources at reasonable prices are the foundation for a vital Japanese economy and the livelihoods of its people. MOFA has been strengthening diplomatic efforts with a focus on the following activities.

(A) Gathering and Analysis of Resource-Related Information at Diplomatic Missions overseas

“Special Assistants for Natural Resources” have been appointed to 60 diplomatic missions overseas in a total of 53 countries to work intensively on the acquisition and stable supply of energy and mineral resources with a view to strengthening the function of diplomatic missions overseas, as of September 2021. MOFA also calls for “Strategy Meetings on Natural Resources” every year, which bring together officials working at diplomatic missions in countries central to ensuring a stable supply of energy and mineral resources. In 2021, the meeting was held online on February 19 due to COVID-19 (see C (B) on page 305). In addition, MOFA has also been holding Regional Meetings on Energy and Mineral Resources for certain regions since 2017. At the 2019 meeting, held in Egypt, which was focused on the Middle Eastern region, participants discussed the importance of strengthening collaboration among MOFA, diplomatic missions overseas, and government-affiliated organizations, as well as Japan's policy for promoting energy and mineral resources, and renewable energy diplomacy effectively.

(B) Initiatives Prompted by Rising Oil Prices

With oil prices hitting a seven-year high in October 2021 and concerns that rising prices will hamper economic recovery from the pandemic, MOFA, at various levels, encouraged oil-producing countries to increase their supply and strengthened cooperation with consumer countries and international organizations.

More specifically, the Government of Japan has called on oil-producing nations for cooperation through talks between Foreign Minister Motegi and Foreign Minister Ahmad Nasser Al-Mohamed Al-Sabah of Kuwait on October 18, as well as during talks between Parliamentary Vice-Minister for Foreign Affairs Honda Taro and Ambassador of Kazakhstan to Japan Sabr Yessimbekov on November 8, while also requesting through diplomatic missions overseas and relevant ministries and agencies.

Furthermore, leaders have used multilateral frameworks such as ASEAN Plus Three and G20 Summits to coordinate with oil producing and consuming countries, while affirming the importance of energy market stabilization in outcome documents. In addition, relevant Director-Generals from MOFA held discussions with International Energy Agency (IEA) Executive Director Fatih Birol on November 9 and with International Energy Forum (IEF) Secretary General Joseph McMonigle on November 22 and strengthened coordination with these international organizations. Furthermore, in step with the U.S. and other relevant countries, the decision was made to sell a portion of state oil reserves to an extent that will not infringe on the current Oil Stockpiling Act.

(C) Making Use of International Fora and Rules

Japan makes active use of international fora and rules to coordinate and collaborate internationally toward achieving a stable energy supply. To achieve a realistic energy mix transformation amid an increasing momentum toward decarbonization around the world, Japan is communicating to the international community the importance of ensuring stability with critical mineral resources essential for both energy security and energy transformation.

In May, State Minister for Foreign Affairs Washio attended a webinar hosted by the International Energy Agency (IEA) on critical mineral resources and emphasized that achieving the goals of the Paris Agreement would require ensuring a stable supply of mineral resources necessary to support an accelerating energy mix transformation. He also stressed the necessity of rules based on universal values, in addition to the expansion of investment and promotion of innovation.

A G20 Energy and Climate Ministerial Meeting was held in-person in July, chaired by Italy, with State Minister for Foreign Affairs Washio in attendance from MOFA. At the meeting, ministers discussed issues such as cities and climate change, achieving a sustainable recovery, transitioning to clean energy, and energy poverty, and a Ministers' Communiqué was issued as an outcome document. In response to the destabilization of the global energy market caused by the spread of COVID-19, the Ministers' Communiqué affirmed the importance of international cooperation toward strengthening the energy system, and of achieving safe, affordable and sustainable energy access. Ministers also reaffirmed the importance of transforming the energy mix toward achieving 3E+S, which was established at the G20 Osaka Summit in 2019.

In September, State Minister for Foreign Affairs Washio attended the UN High-level Dialogue on Energy, an online meeting, aimed at promoting the achievement of energy-related targets (SDG 7) for the UN's 2030 goals (SDGs). This year, Japan served as a Global Theme Champion for “energy access,”⁴ one of the Dialogue's five themes. At the Dialogue, Mr. Washio spoke on how the spread of COVID-19 has brought to light many issues involving the stable supply of social services, including energy, and how it risked pushing back SDGs achievement. He also stated the importance of ensuring energy access as described in SDG 7, both for achieving sustainable development and economic growth amid the COVID-19 pandemic and for achieving human security. Later, he emphasized the essential nature of bespoke response measures due to energy situations differing for each country and region.

In September, State Minister for Foreign Affairs Washio attended a ministerial dialogue co-organized by the IEA and the Government of Oman concerning the energy mix transformation in the Middle East and North Africa. Along with talking about the good cooperative relationship that Japan has had for many years with the Middle East and North African nations in the energy field, he spoke on the importance of “promoting innovation” and “strengthening collaborative relations between countries” in achieving decarbonization and energy security as the world accelerates its efforts toward decarbonization.

• 4 Global Champions: Representatives from Member States in each of the themes are expected to be actively involved in activities such as spearheading discussions on themes and convening related meetings as part of the dialogue preparatory process.

C Major Efforts Concerning Energy and Resource Diplomacy in 2021

(A) Consideration and Launch of New Energy and Resource Foreign Policy

In January, State Minister for Foreign Affairs Washio attended the 11th Session of the Assembly of the International Renewable Energy Agency (IRENA), where he gave a speech about a path to carbon neutrality and issues involved in the mass deployment of renewable energy, as well as about Japan's initiatives. In the speech, he pointed out that every country has a different pathway to achieving carbon neutrality, and talked on the necessity of exploiting all available technologies and innovation, while deploying renewable energy to the fullest extent. He also emphasized the importance of helping developing countries decarbonize.

Mr. Washio also touched on the necessity of focusing not only on the benefits but also on the problems in the mass deployment of renewables. In particular, he noted the issues below to be addressed going forward: ensuring flexibility and evaluating overall power system costs, procuring mineral resources used in products such as batteries and motors, and addressing the mass disposal of disused solar panels and other equipment that will begin around 2030. He also expressed his expectation that IRENA members would utilize the Agency and collaborate on addressing these issues.

In May, Minister for Foreign Affairs Washio attended the 21st Meeting of the IRENA Council (online format) as chair. This meeting was an important gathering to discuss the direction of IRENA's projects, and more than 300 representatives from 97 countries and regions were in attendance.

State Minister for Foreign Affairs Washio as chair of the 21st Meeting of the IRENA Council (online meeting) (May, Tokyo)

(B) Strategy Meeting on Diplomatic Missions Overseas Concerning Energy and Mineral Resources

Every year since FY2009, MOFA has held meetings attended by Embassies and Consulates-General established in major resource-producing countries, relevant ministries, agencies and organizations, experts, and representatives from companies. These meetings have provided opportunities to discuss diplomatic initiatives for ensuring a stable supply of energy and mineral resources in Japan, formulate policy, and strengthen cooperation. This year's Strategy Meeting on Natural Resources was held on February 19, 2021, one day after MOFA held a webinar as part the FY2020 Seminar on Energy Security in Asia, entitled “Free, Open Indo-Pacific and the Current Situation on Energy and Mineral Resources” (see (C) below). Discussions at the Strategy Meeting were built on discussions during the seminar and saw participants exchange views on how to procure energy and mineral resources in Japan in response to the change of situations such as the spread of COVID-19 in the U.S., the inception of the new political administration in the U.S., and procurement methods of energy and mineral resources in Japan, in response to the changes in the state of affairs. The Strategy Meeting was attended by officials from more than 40 diplomatic missions and the Agency for Natural Resources and Energy in countries where Special Assistants for Natural Resources were appointed. Through the discussions, participants shared the recognition for the increasing importance of achieving a stable supply of critical mineral resources amid a transition period for the energy mix among the international community, as well as issues such as the importance of further strengthening mutual cooperation, accurately analyzing the environment surrounding energy and mineral resources in each country and region, and implementing related measures.

(C) Seminar on Energy Security in Asia

On February 18, 2021, with support provided by the Japan Business Federation (Keidanren), MOFA held a webinar entitled “Free, Open Indo-Pacific and the Current Situation on Energy and Mineral Resources” as part of the FY2020 Seminar on Energy Security in Asia. In addition to State Minister for Foreign Affairs Washio, Mr. Obayashi Takeo, Co-Chairman of the Committee on Foreign Affairs of Keidanren and the Chairman and Representative Director of Obayashi Corporation, also attended the meeting as a representative of Keidanren. Giving talks during the seminar were experts, representatives from international organizations, companies, and the press that work in the field of energy and mineral resources. Roughly 500 people registered and attended the seminar online from Japan and abroad. The seminar opened with Mr. Washio stating that the stable supply of mineral resources used for renewable energy would be key for the future as the international community rapidly transitions toward renewable energy. To accomplish this, he noted that it would be essential to collaborate and cooperate with all countries that believe in spreading universal values, namely fair markets, human rights protection, and transparent labor standards, guided by the concept of a “Free and Open Indo-Pacific.” He also spoke on the importance of addressing problems concerning mineral resources through public-private cooperation. After a video message on the subject of “The U.S. Presidential Election and the U.S. Policy on Energy and Mineral Resources” by Acting Assistant Secretary for the Bureau of Economic and Business Affairs Peter Haas and Deputy Assistant Secretary for the Bureau of Energy Resources Anna Shpitsberg, both at the U.S. Department of State, a panel discussion was held among experts and company representatives. Following this, Tim Gould, Head of the Division for Energy Supply and Investment Outlooks at the IEA, explained the role of critical minerals for the clean energy transformation during a talk on the “Energy Mix Transformation in the Indo-Pacific Region.” Experts and representatives from companies and the press then held lively discussions on the energy and mineral resources supporting the energy mix transformation, as well as future possibilities for coordination in the Indo-Pacific region.

(D) Start of Negotiations Concerning the Modernization of the Energy Charter Treaty

The Energy Charter Treaty (ECT), a multilateral treaty that entered into force in April 1998 (signed in 1995 and entered into force with Japan in 2002), was established as a legal framework for implementing the European Energy Charter, which called for promoting improvements based on market principles in the energy sector in the former Soviet Union and Eastern Europe following the collapse of the Soviet Union, as well as promoting trade and investment activities in the global energy sector. This treaty was signed by 52 countries and organizations mostly located in Europe and central Asia.

The ECT prescribes the liberalization of the trade and transit of energy source materials and commodities, the protection of investments in the energy sector, and other matters. It ensures a stable supply of energy from supply countries to demand countries, contributes to improving energy security for Japan, which largely relies on other countries for energy resources, and provides an important legal foundation for further improving the investment environment for Japanese companies overseas.

For this treaty, which entered into force more than 20 years ago in 1998, discussions have been held on making revisions to modernize the treaty considering factors such as the recent energy situation and current state of investment agreements. Full-scale negotiations, in which Japan also actively engaged, began in 2020, with discussions held on such wide-ranging issues as investment protection, dispute settlement and commodity transit. Japan has also contributed to the development of the ECT as the largest contributor of assessed donations. This includes serving as chair for the first Meeting of the Energy Charter Conference in East Asia, which was held in 2016, and hosting the 27th Meeting in Tokyo. In September 2021, Ms. Hirose Atsuko became the first Japanese national to become the Deputy Secretary General of the Energy Charter Secretariat, the administrative body for the ECT. She now contributes to strengthening the Secretariat's operations. (See the Column on page 307.)

(2) Ensuring Food Security

The global population in 2021 is estimated to be about 7.88 billion (prospects released by the UN FPA), and this is expected to increase mainly in Africa and Asia. Changes in the dietary habits of people in developing countries will require a rapid increase in the production of feed grains. In Japan, while the country's food self-sufficiency rate (calorie basis (published by the Ministry of Agriculture, Forestry and Fisheries)) has been on a downward trend in the long-term, it has been leveling out in recent years, reaching 37% in FY2020. Japan relies on imports for much of its food, and to ensure a stable food supply for its people, the country needs to achieve the optimal ratio of importing to stockpiling, primarily by increasing domestic agricultural production.

Amid expectations of a growth in food supply and demand in the medium- to long-term worldwide, Japan must work to increase the food supply globally to continue securing stable food imports. For this purpose, ensuring sustainable approaches is also required for increasing production while reducing environmental impact. Japan must also establish robust food security through efforts that include the creation of a stable agricultural produce market and trading system to protect against food price instability caused by poor harvest conditions, natural disasters, etc.

The spread of COVID-19 has had an impact on global food security. Supply chain disruptions have occurred as Russia and several other exporting countries have put export controls on grains and other products for reasons that include rising food prices in their countries, while logistics have been disrupted due to lockdowns in certain regions. According to the Food and Agriculture Organization of the UN (FAO), the number of people suffering from malnutrition worldwide increased by more than 100 million people in 2020 compared to one year prior as food access worsens due to economic decline and supply chain disruptions, and it is feared that there are now more than 800 million people suffering from malnutrition. The effects have been particularly stark on economically vulnerable regions, with the global prevalence of undernourishment reportedly having risen from 8.4% to 9.9%. Although the production of the world's staple grains and other produce is expected to be sufficient to satisfy demand, the importance of making the food supply chain more resilient has been noted in light of concerns over prolonged COVID-19 effects.

Furthermore, as Russia and Ukraine have been some of the world's largest exporters of grains and other products, Russia's aggression against Ukraine since February 24, 2022 has had a serious impact on the stable supply of grains to countries that heavily rely on grains from Russia and Ukraine, particularly developing nations in Africa, the Middle East, and Asia. Fears of grain supply shortages around the world have fueled trading price increases that have led to increased food prices. Russia's aggression against Ukraine has therefore exposed the vulnerabilities to food security posed by global supply chain disruptions and illuminated new problems.

■Message from Kikuchi Nobuyuki, Director, Resource Security Division

The “battle” to secure an executive post in an international organization started with one resume that was sent to the Ministry of Foreign Affairs.

Amidst efforts by the Government of Japan to increase the number of Japanese staff in executive posts in international organizations, Ms. Hirose's resume reached the Ministry of Foreign Affairs just as the recruitment for the position of Deputy Secretary General (the number two position) for the Energy Charter Secretariat was announced.

The most important thing to do was to find a strong candidate. Ms. Hirose's resume, submitted in response to staff recruitment for the Ministry of Foreign Affairs, happened to catch my eyes by chance. She was more than qualified to meet the requirements for the position of Deputy Secretary General, with her management experience in numerous international organizations, her track record of involvement in energy-related projects, as well as her qualifications as a lawyer and experience in international arbitration. I contacted her to find out more, and eventually supported her as a candidate for the office.

The Deputy Secretary General occupies a key position in the Energy Charter Secretariat, responsible for the management of budget and personnel affairs, and it is a highly independent position directly appointed by the Energy Charter Conference, the highest decision-making authority of the Energy Charter Treaty. This multilateral treaty addresses matters such as the liberalization of trade and transit of energy materials and products, and the protection of investments in the energy sector. Of course, there were also applications from strong candidates from other countries. The selection process for executive positions in international organizations is not only a battle of candidates' qualifications, but also an intense competition between the governments supporting the candidates. Resolving to do everything possible, a letter was first sent out under the name of the Minister for Foreign Affairs to impress upon the other member states the strong backing that Ms. Hirose had from the Government of Japan. Furthermore, we actively approached all the member states through Japanese diplomatic missions in these states. I personally requested senior officers of major governments for their support through video conferences, and actively appealed to the key countries by meeting their Ambassadors to Japan in person.

Our efforts were rewarded, and Ms. Hirose was appointed as the Deputy Secretary General by a unanimous vote. Currently, negotiations toward the amendment of the Treaty are ongoing, as is the formulation of new international rules in the energy sector. As many of the parties to this Treaty are European countries, it is significant that the second highest position in the Secretariat is occupied by someone who clearly understands the position of Japan and Asia.

■Message from Deputy Secretary General Hirose

I was appointed as the Deputy Secretary General of the Energy Charter Secretariat in 2021 and assumed office in September. Although it has not been long since I took up the post, I am already involved in the transitional period on various matters including the extensive amendment to the Energy Charter Treaty. My days are busy but very fulfilling.

The Energy Charter Treaty is not widely known among the general public, but it is the only multilateral treaty focused on the energy sector. It is a highly valuable treaty, and investment-related arbitration based on the Treaty has produced successful results for Japanese companies.

At a forum on energy cooperation with member states (the author is in the center)

At the office of the Energy Charter Secretariat

The Energy Charter Secretariat is responsible for the practical implementation of the Treaty, and it works with other international and regional organizations to promote international and regional cooperation in energy-related matters. Although the Energy Charter Secretariat is a small international organization, its staff come from Europe, Central Asia, and Africa, creating a workplace that offers the opportunity to be exposed to diverse cultures and languages. This, for me, is one of the attractions of the organization. I would like to be part of the effort to ensure that the Treaty contributes further to energy transformation and the promotion of renewable energy-related investments.

I have had the opportunity to work in various international organizations to date, and I cherish the countless encounters I have had with wonderful colleagues from countries around the world. I would like others to have similar experiences as I have had, and sincerely hope that an increasing number of people will aim to work in international organizations in the future.

A Cooperation in International Frameworks Concerning Food Security

Based on the situations involving food export controls, supply chain disruptions, and the growing starving population due to the impact of COVID-19, 2021 saw international interest in food security grow. This has also been reflected in international frameworks. With the goal of achieving SDG 2 (ending hunger, achieving food security and improve nutrition, and promoting sustainable agriculture), one of the UN's Sustainable Development Goals, discussions were held concerning changes to “food systems,” which consist of a series of processes related to the production, processing, transport, and consumption of foods.

In June 2021, a G20 Foreign and Development Ministers' Meeting was held in Italy in which food security was set up as a single theme for discussions. Foreign Minister Motegi emphasized the importance of promoting agricultural innovation, building a resilient distribution network, and achieving seamless international trade in food in order to realize a world without hunger. The meeting also saw the adoption of the Matera Declaration on Food Security, Nutrition and Food Systems, which calls for cooperation among all G20 members toward “Building Back Better” from the pandemic.

In September, under the leadership of UN Secretary-General António Guterres, the UN Food Systems Summit was held for the first time. The meeting was attended by leaders, ministers, and representatives from international organizations, private enterprises, and civil society of more than 150 countries. From Japan, Prime Minister Suga released a video message that emphasized the importance of an approach focused on improving food productivity while maintaining sustainability, maintaining and strengthening free and fair trade, and adapting measures for the different climate, natural features, and culinary culture of each country and region. Meanwhile, Japan hosted the Tokyo Nutrition for Growth Summit 2021 (see the Special Feature on page 271) in December and announced its intention to play a leading role in international efforts to improve nutrition worldwide, including eliminating hunger, as an issue faced by the international community.

B Cooperation with the Food and Agriculture Organization of the UN (FAO)

As a responsible member of the international community, Japan supports the activities of the FAO, a specialized agency of the UN in the fields of food and agriculture. Japan, a major donor to the FAO and the third largest contributor of assessed contributions, significantly contributes to strengthening global food security through efforts such as providing development assistance in the areas of food and agriculture, and creating international rules that include food safety standards. Japan also works to strengthen its relationship with the FAO, holding Annual Strategic Consultations and conducting seminars aimed at raising awareness for the FAO domestically.

(3) Fisheries (Tuna, Whaling, etc.)

As one of the major fishing countries and consumers of fishery products in the world, Japan, through relevant international organizations, actively contributes to the sustainable use of marine living resources.

Japan advocates the view that cetaceans are a part of marine living resources that should be utilized in a sustainable manner based on scientific evidence. Since the enactment of the moratorium⁵ on commercial whaling by the International Whaling Commission (IWC) in 1982, Japan had provided scientific evidence that certain whale species can be used sustainably, and had provided data obtained through scientific research and held dialogues aimed at resuming sustainable whaling operations. However, as it became evident that there was a considerable divide between countries that promote sustainable use of whale resources and those that oppose any form of whaling, and that there was no possibility at all of different views and standpoints on whale species coexisting within the IWC, Japan withdrew from the International Convention for the Regulation of whaling (ICRW) at the end of June 2019.

In July 2019, Japan resumed commercial whaling targeting large whales whose abundance had been confirmed. Whaling operations are currently restricted to Japan's territorial waters and its exclusive economic zone (EEZ), and are proceeding within the catch limits calculated in line with the method adopted by the IWC, which is based on the latest discussions by the IWC's Scientific Committee. Japan has been cooperating on the international management of whale resources in line with scientific knowledge, which includes providing data obtained from scientific research and whaling operations. Going forward, Japan will continue to coordinate with countries that support the sustainable use of fishery resources while steadily carrying out initiatives such as establishing objective catch limits based on scientific evidence and cooperating with international organizations.

The international community is strongly required to take urgent actions against illegal, unreported, and unregulated (IUU) fishing, which is also an objective of the SDGs. As a responsible fishing country, along with creating lists of IUU fishing vessels and designating conservation and management measures through Regional Fisheries Management Organizations (RFMOs), Japan has been actively working to combat IUU fishing by offering capacity building to developing countries, among other measures. (See the Special Feature on page 310.)

To effectively combat IUU fishing, Japan has been working to express its political commitment at various leaders' and ministerial level meetings and other opportunities to take action through coordination with the international community. Japan played a role in incorporating the importance of combating IUU fishing in the Leaders' Declaration of the G20 Osaka Summit in 2019, which Japan chaired. In 2021, the importance of tackling IUU fishing was confirmed in summit-level outcome documents of the G7, G20, APEC, and East Asia Summits, as well as in the Joint Statement of the 27th Japan-EU Summit. Japan emphasizes the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (PSMA), which stipulates rules for port states to take measures against IUU fishing vessels, including denial of port entry. To strengthen the effectiveness of the agreement, Japan has been encouraging Non-Contracting Parties to join the agreement at international conferences, including during the adoption of a resolution on “sustainable fisheries” at the 76th session of the UN General Assembly.

In the Central Arctic Ocean, it is necessary to prevent unregulated fishing in case fishing becomes viable in the future as ice coverage in that area has diminished due to global warming. 10 states and organizations, including Japan and five Arctic Ocean coastal states, signed the Agreement to Prevent Unregulated High Seas Fisheries in the Central Arctic Ocean in October 2018, and it entered into force in June 2021. Measures that include adopting the Joint Program of Scientific Research and Monitoring are expected to be adopted at meetings of the parties and other opportunities.

As one of the largest tuna consumer countries, Japan has joined RFMOs for tuna, and leads discussions on strengthening conservation and management measures (CMMs) at annual meetings and other occasions. Concerning the Pacific bluefin tuna, at the annual meeting of the Western and Central Pacific Fisheries Commission (WCPFC) in 2021, Japan proposed an increased catch limit to the extent that the resource rebuilding target would be achieved to a certain level based on scientific evidence. A catch limit increase of 15% was thereafter adopted for large fish, and the results of active efforts through international resource management are being shown. For Atlantic bluefin tuna, in light of the recovery of resource levels in recent years, the total allowable catch (TAC) for Atlantic bluefin tuna was increased in 2022 at the annual meeting of the International Commission for the Conservation of Atlantic Tunas (ICCAT), held in November.

With respect to Pacific saury, due to a decline in resources, an agreement was reached at a February 2021 annual meeting of the North Pacific Fisheries Commission (NPFC) to reduce the catch limit by 40%. Under such conditions, there was the lowest ever catch of Pacific saury, creating a need for more robust resource management at future meetings of the NPFC.

For Japanese eel, as in 2020, at an informal consultation on international cooperation in July led by Japan, Japan, the ROK, and Chinese Taipei agreed to establish limits on glass eel stocking in aquaculture ponds, and to hold regular meetings of scientists.

• 5 Moratorium on commercial whaling (approved by the IWC General Assembly in 1982): Suspended the lethal take of whales for commercial purposes. It directs to, no later than 1990, comprehensively evaluate the impact of the moratorium on whale resources, as well as to consider revisions to the moratorium and establish catch limits other than zero.

Illegal, unreported and unregulated (IUU) fishing refers to illicit fishing activities that violate national laws of coastal countries and international rules of operation. Putting an end to IUU fishing is also included under Target 14.4^(Note1) of the SDGs, and there is growing awareness that it is an issue that must be tackled by the international community as a whole. Damage caused by the recent IUU fishing of the Japanese common squid in the Sea of Japan not only causes significant problems for those engaged in Japan's fishery industry, but is also an issue that is directly related to our lives. There are various forms of IUU fishing, including unauthorized, unreported or misreported fishing, and fishing by vessels without nationality or vessels of non-members of Regional Fisheries Management Organizations (RFMOs) within RFMO waters.

An example of a fishing vessel reported as an IUU fishing vessel. Some signs that have been pointed out include the lack of a national flag and displays of the necessary ship identification information.

IUU fishing not only threatens the sustainable use of marine living resources, but is also related to various problems at sea and in coastal countries. For example, there have been many reports of human rights violation and abuse of crew working under harsh conditions on IUU fishing vessels. It has also been pointed out that overfishing by IUU fishing vessels in South America and Africa is putting pressure on the economies of coastal countries. It is also reported that IUU fishing vessels are becoming a hotbed for crimes such as drug smuggling and stowaways. To resolve these issues, taking measures to prevent IUU fishing is needed.

Against the backdrop of this situation, international cooperation on new initiatives to combat IUU fishing has been developing in RFMOs that Japan participates in, such as the International Commission for the Conservation of Atlantic Tunas (ICCAT), Western and Central Pacific Fisheries Commission (WCPFC), and North Pacific Fisheries Commission (NPFC), as well as in the Food and Agriculture Organization of the United Nations (FAO). For example, within the RFMO framework, efforts to introduce position monitoring systems for fishing vessels through the use of satellites are ongoing, and to create the lists of IUU fishing vessels. Japan is also contributing actively to these efforts including through the provision of information on illegal fishing vessels, which is collected from patrol boats and other sources.

With regard to IUU fishing around Japan, including that of Japanese common squid in the Sea of Japan, Japan has made use of various opportunities to call upon the relevant countries and regions in order to resolve the issue.

In the context of bilateral cooperation, Japan has been providing developing countries with fishery control ships or patrol boats to combat illegal operations, as well as training on IUU fishery countermeasures through ODA. From the perspective of international rule-making, the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (PSMA) was concluded in 2017, and Japan has been encouraging non-contracting parties to join the Agreement. At international conferences held in 2021, through Japan's tenacious appealing to the relevant parties, the importance of addressing IUU fishing was included in the outcome documents of leaders' level meetings including the G20, G7, and APEC, etc. The recognition of the importance of combatting IUU fishing has been noted not only in political documents, but also expanded to economic partnership agreements. For example, measures to address IUU fishing have also been clearly specified in international agreements such as the CPTPP, Japan-EU EPA, and Japan-UK EPA. The abolition of subsidies that may contribute to IUU fishing has also been recognized as one of the SDGs goals.^(Note2) With a view to prohibiting such subsidies, Japan is participating actively in fishery subsidy negotiations that are currently taking place in the WTO. In these ways, Japan is leading discussions in various international frameworks toward addressing IUU fishing.

Awareness among individual citizens is also important in promoting such diplomatic initiatives. It has been pointed out that fishery products derived from IUU fishing may circulate in the market and be consumed unconsciously by consumers. Therefore, consumption activities by individuals that pay attention to the sustainability of marine living resources can also help to deter IUU fishing. For example, individual consumers can check that the origin of the seafood they purchase is displayed appropriately, and consider purchasing seafood with marine eco labels that show the seafood has been caught in an ecologically-friendly manner.

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• (Note1) Target 14.4: By 2020, effectively regulate harvesting and end overfishing, IUU fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biological characteristics.
• (Note2) Target 14.6: By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to IUU fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation.

(4) Foreign Direct Investment in Japan

The “Council for Promotion of Foreign Direct Investment in Japan,” which has been held since 2014, is spearheading initiatives to promote activities for discovering and attracting investments while gathering opinions from foreign company managers. At the same time, Japan continues to respond to the needs of foreign companies by making further progress in implementing additional measures such as regulatory and institutional reforms and support measures that help improve the investment environment in Japan. Based on the “Five Promises for Attracting Foreign Businesses to Japan,” decided at the second meeting of the Council for Promotion of Foreign Direct Investment in Japan, held in March 2015, foreign companies have utilized the Investment Advisor Assignment System⁶ since April 2016 to meet with the relevant State Ministers in charge. As a result of efforts to achieve the target of “doubling (compared to 2012) the inward foreign direct investment stocks to 35 trillion Japanese yen in 2020,” as laid out in the Japan Revitalization Strategy approved by the Cabinet in June 2013, foreign direct investment stocks in Japan stood at 39.7 trillion Japanese yen as of December 31, 2020. However, the inward foreign direct investment stocks in Japan account for 7.4% of GDP (as of December 31, 2020), a level that remains low internationally when compared to the average for OECD countries, which is over 50%. Amid these circumstances, at the ninth meeting of the Council for Promotion of Foreign Direct Investment in Japan, held in June 2021, a new Strategy for Promoting Foreign Direct Investment in Japan was adopted as a medium- to long-term strategy to promote foreign direct investment in Japan, and a decision was made to aim to double the inward foreign direct investment stocks to 80 trillion yen by 2030 and reach 12% of GDP.

MOFA, along with implementing various measures adopted by the Council for Promotion of Foreign Direct Investment in Japan, has utilized diplomatic resources to engage in initiatives through diplomatic missions overseas and trade promotion by key government officials. MOFA has also strategically implemented various initiatives toward promoting foreign direct investment in Japan. The “Contact Points for Direct Investment toward Japan,” established at 126 diplomatic missions overseas in April 2016, have been collaborating with JETRO to conduct surveys of requests for improvements to Japanese regulations and systems, call for investments in Japan by making use of networks of contacts at diplomatic missions overseas, and hold events for promoting foreign direct investment in Japan, among other initiatives. Diplomatic missions conducted more than 570 cases of these activities in FY2020.

In Japan, MOFA held a Global Business Seminar in March 2021 (co-hosted with METI and supported by the Cabinet Office and JETRO) that focused on the possibilities of investment in the digital age and attracting investment into rural Japan. Lively discussions were held by approximately 190 participants that included experts and representatives from diplomatic missions in Tokyo, business groups and the chambers of commerce in Japan, ministries and local governments, and Asian, American, and European companies with a presence in Japan. The discussions centered on trends concerning the digital economy in Europe, India, and the U.S., the prospects for expanding investment through further digital innovation business, and the appeal of Japan and its rural areas for digital innovation business investment.

• 6 A system that seeks to prepare an environment in which foreign companies who have made important investments in Japan can easily consult with the Government of Japan through State Ministers and other officials from the ministries that oversee the main industries in which these companies engage.

(5) The Road to 2025 World Expo Osaka (Expo 2025 Osaka, Kansai, Japan)

Following the approval of a registration application for Expo 2025 Osaka, Kansai, Japan at the General Assembly of the Bureau International des Expositions (BIE) held in December 2020, Japan began activities to officially invite other countries and international organizations to participate in Expo 2025 Osaka, Kansai, Japan. MOFA is currently engaged in invitation activities to drive significant participation by other countries and organizations.

The “Division for the 2025 World Exposition in Japan” was created under the Economic Affairs Bureau of MOFA on September 28, 2021. The Division will be in charge of operations concerning Expo 2025 Osaka, Kansai, Japan, including invitation activities. On the same day, former Japanese ambassador to the Philippines Haneda Koji was appointed the Commissioner General of the 2025 World Exposition in Japan.

Expo 2025 Osaka, Kansai, Japan, is an event expected to draw many visitors from Japan and abroad and serve as an opportunity to broadly disseminate information about Japan's appeal. With the theme of “Designing Future Society for Our Lives,” it also aims to offer an important opportunity to further initiatives aimed at achieving the SDGs, which are all to be achieved by 2030. Japan will continue making a concerted national effort aimed at ensuring that the Expo inspires and surprises people around the world, while also energizing Japan as a whole.