Public-private cooperation key to protecting secrets

Innovative technologies are causing massive changes — which can be likened to a revolution — not only in the economy as a whole but also in the security field. Every country is intensifying public-private cooperation in developing leading technological solutions. For example, artificial intelligence, quantum technology, and biotechnology, among others, could serve as game changers requiring the transformation of national security strategy and tactical formulation.

Further, technological breakthroughs in space, cyber and electromagnetic waves have led to the emergence of new theaters of warfare. They are fundamentally altering the norms of improving capabilities in the traditional military domains of land, air, and sea to ensure security in specified geographical areas of responsibility.

Put another way, what we are now witnessing can be said to be a situation in which “security has extended itself into economic and technological areas.” The first factor behind such a transition is the advent of innovative technologies such as AI and quantum technology capable of converting the ways nation-states, including their military affairs, are run and their people live their lives.

In the past, military technologies were transferred to the private sector for civilian use, as in the case of the internet. However, it is now overwhelmingly critical for armed forces to divert civilian technologies for military purposes. As a result, the ongoing change in the industrial landscape has become an increasingly vital aspect that cannot be overlooked.

Winning or losing in cyber warfare and other new forms of war depends on whether a country maintains its superiority in innovative technology. So, it is strategically imperative to retain enhanced technological self-reliance without depending on other countries for security-sensitive technologies that can be diverted for military use. This viewpoint should be reflected mainly in a country’s industrial policies.

There has been a marked increase in the potentiality and importance of applying civilian technologies to the defense ecosystem. Technologies that can be used for military applications exist in the network of government research and development institutions and the private sector. How such technologies should be safeguarded from being leaked or stolen is a matter of urgency that should be seriously addressed.

Security-sensitive tech

Let me now turn to the situation surrounding security-sensitive technologies and information. The threat of cyber-attacks is growing, be it an attack targeting a government entity or a private-sector one.

Japan’s core technologies that support its industrial competitiveness are constantly subject to attempts by unknown persons or groups to gain illegal access and steal them by all means.

The United States and China have been strengthening their respective economic security policies, giving rise to the decoupling of technologies and information between the two countries.

Nevertheless, international collaboration is underway elsewhere to develop new technologies. When employees of Japanese private-sector companies need to access information provided by their foreign partners, those employees may be required to gain security clearances.

A failure to obtain security clearances could impede information exchanges and advances in cooperation essential for international development projects. The more Japan, its allies, and like-minded nations undertake joint projects to develop leading technologies to ensure economic security and the more rigidly they keep technologies and information protected, the more likely the issue of failed security clearances is to embarrass all parties concerned visibly.

Establishing an adequate security clearance assessment platform is indispensable to promote international cooperation, while safeguarding classified technologies and information from a security standpoint is essential.

In Japan, the Law on the Protection of Specially Designated Secrets serves as the base for a statutory rule regarding security clearance assessment.

This law is meant to guard against the leaking of “specially designated secrets” that could jeopardize Japan’s national security. The heads of the relevant administrative organs of the government, among others, are empowered to designate specific secrets concerning defense, diplomacy, prevention of specified harmful activities — counterintelligence — and prevention of terrorist activities. Penalties include imprisonment of up to 10 years.

This law also governs those specially designated secrets provided to eligible private-sector contractors. This means that the law is also applied to enterprises in the private sector. To handle the designated secrets, employees of each eligible corporation need to undergo a security clearance assessment.

However, we have a large variety of secrets to be protected. They include:

1. Technologies and information the government offers to share with the private sector.

2. Technologies and information about international joint development.

3. Advanced technologies private-sector firms have developed independently.

Reasons for law revision

The Law on the Protection of Specially Designated Secrets aims to primarily protect such secrets held by government organs. Therefore, it has no architecture to cover all secrets in private-sector companies’ possession.

But, given that the government gets involved in numerous research and development projects in the private sector, there is much need to protect a wide range of secrets the government transfers to the private sector and information related to international joint development by designating them as “specially designated secrets.” To that end, the existing law should be revised to have a set of criteria to designate certain types of information as “specially designated secrets” and require persons, public and private alike, to go through security clearance to be authorized to handle such secrets.

What also worries me is that the current list of heads of the government’s administrative organs empowered by this law to designate specified secrets excludes certain cabinet ministers.

The education, science, and technology minister and the agriculture, forestry, and fisheries minister, for example, are excluded from the list. Japan should not allow any leakage of classified security-related information due to the absence of law-stipulated power to designate specified secrets on the part of the two ministers, who have jurisdiction over research activities at universities and the country’s biotechnological research efforts, respectively. The statutory framework excluding the two ministers, among others — meaning the existing ordinance for enforcing the Law on the Protection of Specially Designated Secrets — should be revised.

Even if the revisions are implemented as proposed, it will still not be enough.

As mentioned earlier, technologies and information that must be safeguarded for national security purposes are not necessarily solely in the government’s possession. Technologies and information developed by private-sector enterprises on their own should be securely protected when they are deemed to be especially crucial for national economic security.

Vital trade secrets

The Unfair Competition Prevention Law currently protects confidential corporate information in Japan. Pieces of corporate data are protected as “trade secrets” under this law, provided that they meet a set of three law-stipulated criteria: they are “useful” for business activities, such as manufacturing or marketing methods; are “kept secret”; and “not publicly known.” Penalties include imprisonment of up to 10 years.

As for the three criteria, the Economy, Trade, and Industry Ministry set a guideline for trade secrets management, clarifying the government’s official stances regarding each standard. The policy serves as the reference threshold for determining whether to apply the law’s penalty provisions.

Nonetheless, this law’s rules for regulating who should be allowed to access trade secrets and how such secrets should be handled remain fragmentary. In this regard, the government needs to establish a set of norms not only defining the qualifications and eligibility of persons holding trade secrets and how they are handled but also specifying how security clearance assessment should be carried out. Introducing clear-cut norms could encourage businesses to implement corporate governance practices while adhering to national economic security.

As for the preservation of trade secrets important for national security, one approach can be to install a security clearance assessment process within the framework of the Unfair Competition Prevention Law.

Of critical advanced technologies and information possessed by Japan, those vital for national security should be protected across the board, be they in the government’s or the private sector’s possession. This is a big plan for the government to achieve as part of its policy of ensuring national economic security.

As seen above, it is hard to say that Japan currently has a solid security clearance assessment mechanism concerning sensitive technologies and information in the hands of the private sector.

The government and the private sector are now required to cooperate and work together to resolve the issue of enhancing and improving the existing systems for safeguarding security-sensitive secrets and creating a security clearance assessment structure as an extension of such collective efforts.

Shigeru Kitamura

Kitamura joined the National Police Agency in 1980 after graduating from the University of Tokyo. He became director of Cabinet Intelligence in 2011 and served as secretary general of the National Security Secretariat from September 2019 to July 2021.