International Data Governance Advisory Committee (1st)

In order to realize an integrated data economy (ecosystem) in Japan and overseas, we will hold a committee meeting with the aim of strengthening public-private cooperation related to international data distribution and utilization, aiming to collaborate between the Institutional Arrangement for Partnership (IAP) launched under the OECD, efforts to realize Data Free Flow with Trust (DFFT) in other parts of Institutional Arrangement for Partnership (IAP), and efforts related to Japanese data strategies and data governance.

Overview

Date and Time: Monday, March 25, 2024 from 8:00 to 9:00
Location: Digital Agency Government Office
Attendees
- Chairman: KONO Taro Minister for Digital Transformation
- Members: Inadani, Endo, Ohashi, Kojima, Tsuji, Nanbu, Hanzawa, Fukasawa, Yamamoto (* in alphabetical order)
Secretariat
- International Strategy, For the public Group, Digital Agency
- Ministry of Economy, Trade and Industry, International Affairs Office
Agenda:
1. Opening
2. Proceedings
  1. An opening statement
  2. Remarks by Commissioner private sector
  3. Statement by the Panel of Experts
  4. Free discussion
  5. Closing Remarks
3. Adjournment

Materials

*The seating chart will be kept private.

Minutes

1. Explanation of Opening Remarks (Minister Kono)

Since former Prime Minister Abe proposed DFFT (Data Free Flow with Trust) at the Davos Forum in 2019, Japan has been leading international discussions toward the realization of regulation, standing between the contrasting stances of Europe and the United States toward DFFT and taking into account data governance trends in the People's Republic of China and other countries. Partly as a result of this, after agreement was reached at the G7 Minister for Digital Transformation Meeting and the Hiroshima Summit in May last year, the establishment of a new DFFT framework called the Institutional Arrangement for Partnership (IAP) under the OECD was approved at the OECD Meeting in December last year. At the OECD Ministerial Conference to be held in May this year, it is important for Japan to lead discussions on the DFFT Road Map as the Chair.
The Government of Japan will take the voices of Japanese stakeholders, including private sector companies, seriously, and reflect them in discussions on international data governance. By doing so, we hope to build an international competitive environment based on the business models of domestic companies and launch a data economy zone.
In Europe, there are moves to expand European rules to other countries in exchange for access to the internal market by formulating a regulation premised on the utilization of such a platform in parallel with the development of a data distribution platform such as GAIA-X. If such moves continue, there are concerns about the impact on global supply chains in the future. On the other hand, the United States, which has a large domestic platformer, has not shown a stance on data governance at the national level, but in recent years, the federal government has been shifting to a policy of leading data governance.
In order to improve international competitiveness, it is important for Japan to build a data strategy and a data governance framework that reflects the opinions of domestic companies. In addition to cooperation with related ministries and agencies, it is desirable to work on the formation of a data economy zone and a data ecosystem as a common Issue for industry, academia, and government while collecting opinions from companies.
As one of the future efforts, we believe that it is necessary to issue guidelines for corporate data governance, including security and data utilization, as early as this autumn.

2. Remarks by Mr. private sector, Member of the

Issue on Cross-Border Data Transfer Associated with Global Corporate Activities

We would like to see efforts made to make regulation in foreign countries more transparent about data distribution. At present, there are cases in which each company engaged in cross-border transfer of data takes measures beyond those specified in law in order to suppress risks after conducting sufficient investigation of law on its own. It is ideal that coordinated regulation is conducted between countries, but even if the overall picture of the application status of regulation in each country is clarified, there is an advantage for companies that excessive risk measures are unnecessary in addition to the reduction of investigation costs.
At present, when providing products and services overseas, we are developing our businesses while investigating the legal regulation of each country. However, there is a concern that the legal regulation of each country will become more complicated in the future. In particular, the regulation of distribution and use of 3D topographic data and personal data is strict in many countries. In addition, due to the progress of technology, the law of the type of data that has become available in recent years may not be able to catch up.
More and more countries are restricting the removal of data from their countries. It is not practical for companies to install servers in each of these countries, so it is a Issue to respond to such a situation. In addition, cybersecurity, etc. for installing servers in the field is also a Issue common to each country.
With the globalization of business and recruitment activities, the differences among countries in the data-related regulation, such as personal data protection and government access, have become Issue. We expect the Government of Japan to take the lead in establishing standards for the data-related regulation in Asia. In addition, since such efforts will take time, we would be very grateful if companies would first promote the consolidation and dissemination of information on the legal systems of each country.
When expanding business overseas, cooperation with platforms in each country may be considered. In this case, it is very important to discuss data governance such as data items to be exchanged with the platform and IDs to be used.

Opinions on Promoting International Data Governance

At present, the EU is leading the discussion toward digitalization of product information including supply chains. In the formulation of such a global framework, it is desirable that domestic intentions are reflected as much as possible. Therefore, we would like Japan to be actively involved in the discussion along with the United States so that the EU standards do not become international standards.
At present, the EU is planning to introduce a framework of digital IDs that can uniquely identify companies, employees, and cargo involved in trade, and Japanese companies will respond to this in Issue. We would like to see Japan, mainly in Digital Agency, engage in international negotiations in cooperation with Asian countries so that Japanese companies will not be disadvantaged by utilizing opportunities such as the IAP.
Discussions on international data governance should not be conducted by G7 alone, but should involve many countries, including those in G20.
The promotion of data distribution and utilization will improve the productivity of society as a whole and lead to the realization of high value-added that contributes to the solution of social Issue not only in developed countries but also in emerging countries. It would be good if the company could continue to promote its own efforts as an important Issue and support discussions at the IAP.
In facilitating cross-border data distribution, it is necessary to ensure the distribution of high-quality data by advancing three efforts in a balanced manner: formulation of rules, security of Trust, and standardization. In particular, multilateral efforts are always required in international standardization. In addition to standardization of data itself, standardization of network safety and reliability may be promoted to realize more secure and reliable data distribution.
In order to realize free data distribution and utilization, in addition to the formulation of a common framework for data protection and privacy, it is important to pay close attention to trends in countries regarding the improvement of literacy, standardization, data portability, etc. In addition, it is also important to formulate a neutral mechanism to ensure the authenticity of data and an international framework for technologies for identity verification and privacy protection.
In the discussion of international standardization of data, it is necessary to define the objectivity and quality of data, the data acquisition environment, etc. This may eventually lead to the definition of requirements required for sensors that acquire data, and attention should be paid to the wide range of influence.
With regard to methods for cross-border transfer in compliance with the regulation of each country, it is desirable to consider specific technology implementation methods and standardization.

Opinions on the promotion of domestic data governance

In promoting data connections, it is necessary to build a framework that can return value to those who possess it. It is also desirable to consider policies that support business operators, etc., who have not made progress in digitalization.
Access to data and portability rights are expanding as a basic concept of consumer protection in the digital age. However, with the exception of data from specific industries, access to data held by companies providing services that are highly beneficial to the public, such as finance, electricity, gas, and transportation, has not been institutionalized in Japan, creating a gap with countries that are moving forward with institutionalization.
Since there is a Issue that needs to be solved in the actual operation, such as the consideration of incentives for companies that provide data and the formation of consensus on the utilization of information with a high public interest, it is necessary to promote governance and standardization with many parties concerned while utilizing frameworks such as the Ouranos Ecosystem worked on by METI.
In the future, with the spread and development of advanced technologies such as AI, it is expected that the value of data will further improve. Therefore, it will be important to develop rules for domestic data governance, including requirements for taking data related to domestic business overseas and servers to handle it.

3. Remarks by the Panel of Experts

Opinions on Promoting International Data Governance

Since it is clear that it is important to make efforts to increase transparency regarding data-related laws and regulations in other countries, it may be necessary to discuss specific methodologies in the future.
In the EU, the Data Law has already been passed, and industrial data and non-personal data are positioned as public goods, and companies are obliged to provide them. In order for Japan not to lag behind in international discussions in the future, it is urgent to actively promote discussions on the positioning of industrial data and non-personal data and the vision of data governance in Japan.
In addition to a cross-sectional review of Japan's data-related legislation, it is necessary to review the legal system from a functional perspective, with a view to utilizing advanced technologies such as Privacy-Enhancing Technologies (PETs), and to examine Japan's data governance from both legal and technical aspects. In addition, by bringing Japan's data governance to the forefront in forums such as the IAP, it may be possible to win over many countries and push back the regulation that other countries are trying to advance.

Opinions on the promotion of domestic data governance

Data governance is a crucially important foundation in the social implementation of advanced technologies. In particular, a data collaboration foundation is essential for utilizing data using AI and IoT. It is important to consider data governance from the perspective of maximizing the benefits of technologies while emphasizing risk governance of advanced technologies.
It is also important to consider the perspective that new value will be realized through the use and distribution of data and the creation of new businesses, such as the improvement of the safety of the working environment at the site through the digitalization insurance system. Concrete benefits may be shown by considering the new value brought about by data.
In order to understand the needs of domestic stakeholders, it is important not only to listen passively to the needs of companies and industry groups, but also to have strategic hearings with companies, such as understanding potential needs while disseminating information and providing information by the government. In addition, it is also necessary to build specific incentives for companies to be proactively involved in the realization of DFFT.
In addition to industry-academia-government collaboration, the perspective of the user is also important. Since the subjective feelings of the user cannot be ignored, especially in discussions about Trust, it is also necessary to consider means to collect the opinions of the user.

4. Free Discussion

High priority country / area in terms of interoperability

Some ASEAN countries have a Issue in responding to the GDPR (General Data Protection Regulation), and there is a move to advance a new framework such as the CBPR (Cross Border Privacy Rules). As described above, there is a possibility that we can cooperate with countries and area that are exploring initiatives different from those in Europe. However, it is desirable to advance bilateral discussions first because multilateral discussions on data distribution rules are difficult. In this regard, if there is a country or area that we think is a high priority, we would like to hear your opinions. (Minister Kono)
- Europe is forming a system in which it is impossible to enter the European market without complying with GDPR, and it is difficult for Japan to counter this situation alone. However, since the United States has not shown a stance to compete with Europe in the data domain, it is desirable for Japan to develop a data distribution system from Asia. In particular, India has a large population, and it is desirable to build a cooperative relationship.
- In addition to its large market size, India is moving to take the lead in the Global South. We believe that significant value can be created by cooperating with India in data distribution efforts.
- The United States and Europe, which have already formed rules, are difficult, but Southeast Asian countries can be candidates. In particular, Indonesia, which has attracted attention from foreign countries in recent years, is considered to be an important partner.
- In the area of trade, ASEAN countries are building platforms, and Thai countries in particular are considering the practical use of such platforms. On the other hand, it is necessary to promote digitalization and data connections in a manner that is competitive with the United States and China, which have large trade volumes.
- In order to counter European rule-making, it is important for Asia, including India and Indonesia, which are influential countries, to form a common opinion.
- While paying attention to the trend of Europe, which is strongly promoting rule-making, standardization should be promoted in anticipation of Asia, which has a large market, and then efforts should be made in such an order as to promote development toward the Global South, which has future growth potential.
- African countries may not be a big market yet, but some are feeling Issue about following the EU and Chinese regulation. It would be good if Africa could show the direction of data distribution and be interested in Japan's initiative.