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In Japan, recycling-related regulations have been tightened in recent years, including the introduction of a system of charging for shopping bags. Companies doing business in Japan need to understand Japan’s recycling-related laws and regulations and properly fulfill their obligations when applicable. This article provides the overviews of Japan’s recycling-related laws and regulations regarding the containers and packaging under the Law for Promotion of Sorted Collection and Recycling of Containers (the “Recycling Act”) and the Law on Promotion of Effective Utilization of Resources (the “Resources Utilization Act”) that companies should particularly keep in mind.

I. Subject Matter: Specified Containers and Packaging

Certain business operators must fulfill obligations such as recycling, promotion of waste containers and packaging, and labeling obligations with respect to the “specified containers and packaging” under the Recycling Act and Resources Utilization Act. Thus, first question to comply with these obligations is what are “specified containers and packaging”.
In general, “specified containers and packaging” mean containers and packaging of goods which become unnecessary when the relevant goods have been consumed or when the relevant containers and packaging have been removed from the goods. It is sometimes not straightforward to apply this definition. Here are some examples:

・Labels, stickers, seals and tapes, etc. that are not considered to “contain” or “wrap” materials generally do not fall under the “specified containers and packaging”; whereas stickers on bottles fall under such definition, if they cannot be separated from the bottles

・Packaging for samples generally do not fall under the “specified containers and packaging” because samples are not “merchandise”; whereas bags for product instructions fall under such definition, because the product instructions are part of the merchandise

・Storage cases for jewelry generally do not fall under the “specified containers and packaging”; whereas cartridges of disposal camera films fall under such definition, because the cartridges in the latter example will be unnecessary when the product is consumed, but storage cases in the former example will not be unnecessary even when they are separated from the products.

II. Recycling Obligation under the Recycling Act

A. Scope
1. Target Businesses: Designated Manufacturer/Users
Certain business operators called “designated manufactures/users” doing specific acts with respect to the specified containers and packaging described above, which are made of certain materials, must fulfill the recycling obligations. Specifically, designated manufacture/users include three categories of businesses that are (i) specified container users, (ii) specified container manufactures, and (iii) specified packaging users . Specified container/packaging users ((i) and (ii) above) include businesses that (a) use specified containers/packaging for products to be sold, (b) import products put into specified containers or wrapped by specified packaging, or (c) entrust a third party these acts. Specified container manufactures include businesses that (a) manufacture specified containers, (b) import specified containers, and (c) entrust a third party these acts.
Please keep in mind that some importing activities are included in the scope of the regulations. As above, although a broad range of businesses are subject to the recycling obligation, there is an important exemption – the small businesses that fall within the requirements (both requirements of annual sales and number of employees) as described in the table below are exempted from the recycling obligation.

2. Materials of Specified Containers and Packaging
Only containers and packaging made of certain materials are subject to the recycling obligation:

・Specified containers and packaging made of plastic

・Specified containers and packaging made of paper (excluding paper cartons for beverages and alcoholic beverages (non-aluminum) and containers and packaging made of corrugated cardboard)

・PET bottles for beverages, alcoholic beverages and specific seasonings

・Glass containers

B. Obligations
1. Recycling Obligation
If a business operator falls within the target businesses that are “designated manufactures/users” described above, it must fulfill the recycling and record keeping obligations under the Recycling Act. Designated manufacturers/users must recycle certain amounts of specified containers and/or packaging every fiscal year pursuant to the ordinance of the competent ministry. Businesses may fulfill the recycling obligation through either of the following three routes.

▪ Self-collection route Collect waste containers and/or packaging by themselves based on the approval from the competent minister

▪ Designated organization route Contract with a Designated Organization and fulfill obligations under such contract including payment of recycling fee

▪ Own recycling route Entrust recycling to a third-party recycling business operator, either on its own or by entrusting it to another party The second “designated organization route” is often used, where the recycling fee will be calculated as below:

Self Calculation

Simplified Calculation

2. Record keeping obligation
Designated manufactures/users also need to fulfill the record keeping obligation under the Recycling Act. They must keep books, describing matters specified by the order of the competent ministry with regard to the sale of goods using specified containers, manufacture, etc. of specified containers, or sale of goods using specified packaging, and recycling of waste containers and packaging that conform to the sorting standards. Further, they must preserve those books for 5 years.

III. Obligations to Promote Reduction of Waste Containers and Packaging under the Recycling Act

A. Obligations of Designated Container/Packaging Users
In addition to the recycling obligation above, if a business falls within the certain categories of businesses called “designated container/packaging users”, it must fulfill obligations to promote reduction of waste containers and packaging discharged through rationalization of use of containers and packaging.

“Designated container/packaging users” mean business operators, which use containers and packaging in their business and conduct various retailing business specified by Cabinet Order as a business type for which reduction of excessive use of containers and packaging and other rationalization of use of containers and packaging are particularly necessary: such as retailing of merchandise, textile/clothes, beverage, automobile components/accessory, furniture/fixture/machinery and appliances, pharmaceuticals/cosmetics, books/stationary, sports goods/leisure, items/instruments, and tobacco/cigarette.

Designated container/packaging users must set targets for reducing the basic unit of use of containers and packaging, and systematically implement measures to achieve these targets. Importantly, in 2020, the new system of charging for shopping bags was introduced, where the designated container/packaging users must charge a fee for the use of plastic shopping bags with handles to be used for carrying purchased goods, with the exceptions of shopping bags with a thickness of 50 micrometers or more, those containing 100% marine biodegradable plastic, or those containing at least 25% of biomass plastic that meet requirements specified by the ordinance. Also, the designated container/packaging users shall promote reduction of emissions of containers and packaging through other activities such as:

・Promote the reduction of container and/or packaging emissions by charging a fee for the use of non-plastic shopping bags

・Offer premiums for consumers declining the use of containers and packaging

・Promote the use of bags that are reusable, etc. Other requirements designated container/packaging　users fulfill include the following:

・Provide information (e.g., presenting information that contributes to the promotion of reduction of waste containers and packaging discharged at stores.)

・Establish an internal system (e.g., appointing a person in charge, and providing training for employees.)

・Consider safety and functionality of containers and packaging

・Grasp the status of implementation of rationalization of use of containers and packaging, etc. 　

・Cooperate with related parties in order to effectively implement measures

B. Additional Reporting Obligation of Large Container/Packaging Users
Further, the designated container/packaging users (limited to specified container users or specified packaging users) that use at least 50 tons of containers and packaging in the previous fiscal year of the relevant fiscal year (the “large container/packaging users”), such large container/packaging users must report to the competent minister every fiscal year the matters specified by the order of the competent ministry, for instance, the amount of containers and packaging used and the state of implementation of measures they have worked on to promote reduction of waste containers and packaging discharged through rationalization of use of containers and packaging.

C. Enforcement
If designated manufactures/users subject to the recycling obligation fail to fulfil such obligation, they are subject to the guidance and advice, recommendations by the competent minister, public announcement of non-compliance, and order by the competent minister to take measures pertaining to the recommendations.
A designated manufacturers/user that has violated such order is punished by a fine of not more than 1,000,000 yen.

IV. Obligation under the Law on Promotion of Effective Utilization of Resources (“Resources Utilization Act”)

A. Identification Mark Requirement
In addition to the obligations under the Recycling Act, specified containers and packaging made of certain materials as listed below are subject to the obligation of identification mark under the Resources Utilization Act:

・Containers and packaging made of plastic

・Containers and packaging made of paper (exclude paper cartons for beverages and alcoholic beverages (non-aluminum) and containers and packaging made of corrugated cardboard)

・PET bottles for beverages, alcoholic beverages and specific seasonings

・Steel cans for beverages and alcoholic beverages

・Aluminum cans for beverages and alcoholic beverages

Please note that the materials of containers and packaging subject to the identification mark obligation under the Resource Utilization Act are different from those subject to the recycling obligation under the Recycling Act, and it is important to understand correctly what the subject matters of each obligation are.
Further, specified containers and packaging listed below are subject to the voluntary identification labeling, although that is not a legal obligation.

・Paper cartons for beverages and alcoholic beverages (non-aluminum)

・Containers and packaging made of corrugated cardboard Target businesses such as manufacturers to produce containers, business entities who instruct the manufactures of containers and packaging or to import and sell containers and packaging, shall display the identification marks on the target containers and packaging pursuant to the relevant laws and ordinance. The format requirements of such marks are specified in the relevant ordinance of Ministry, but the marks generally used are as follows:

See, website of Ministry of Economy, Trade and Industry pamphlet_mark_gimu.pdf(meti.go.jp), last visited on February 7, 2024.

In the case of business operators that import and sell goods put into specified containers or wrapped by specified packaging, the importer shall display the identification marks in either of the following case:

a. When such business operators manufacture or order such containers or packaging outside Japan by themselves, or when it is possible for them to directly or indirectly instruct the material, structure, use of its own trademark, etc., of the containers or packaging; or b. When Japanese language is indicated on the containers and packaging by means of seals, labels, etc.

B. Enforcement
If a business operator subject to the identification mark obligation fails to fulfil such obligation, it is subject to the recommendations by the competent minister, publication of non-compliance, and order to take measures pertaining to the recommendations. A business operator that has violated such order is punished by a fine of not more than 500,000 yen.

Contact
Akiko Araki
Managing Partner of Araki International IP&Law Attorney-at-law (Japan and California)
akiko.araki@arakiplaw.com
CV: https://arakiplaw.com/our-people/araki/

Notice: This newsletter does not provide any legal advice, and thus it does not create any attorney-client relationship with the recipients. If you have any questions on any particular matters in relation to this subject matter, please contact AIL directly.