Japan – Supply chain

By Daniel Morris | 4. June 2021

Chapter 1. Towards the Formulation of the National Action Plan (NAP) (Background and Working Process)

1. Introduction: Increasing International Attention to Business and Human Rights and the Need for NAPs

(4) In response to the growing awareness of business and human rights principles, there has been an increasing trend, primarily in the United States and Europe, to introduce legislation requesting business enterprises to respect human rights, including in supply chains.

(…)

(6) In response to the global trend, business enterprises are expected to demonstrate respect for human rights in business activities. Particularly, for business enterprises operating overseas, an international trend shows that business activities are evaluated in light of international standards, in addition to compliance with the laws and regulations of the countries where they operate. Consequently, business enterprises themselves are faced with a need to identify and address human rights-related risks in their business operations, including in supply chains.

(…)

(7) (…) In response to the COVID-19 pandemic, OECD and ILO indicated that COVID-19 exposed vulnerabilities in company operations and supply chains regarding working conditions. Considering these global trends, the Government believes that it is more important than ever to steadily implement the UNGPs and the NAP to ensure responsible business activities with a view to promoting further efforts to realize the SDGs based on the principle of human security.

 

 

Chapter 2. Action Plan

1. Fundamental Principles of the NAP

(…)

(4) With the globalization and diversification of business activities, business enterprises need to note that the international community demands business enterprises to not only implement good practices in business and human rights within their own organization, but also to respect human rights in their domestic and global supply chains. Accordingly, the Government will strive to develop concrete mechanisms to promote human rights within business, utilizing tools provided by international organizations, existing information disclosure frameworks, and initiatives for providing information to business enterprises.

 

2. Areas of the NAP

(2) Measures of the Government Promoting Corporate Responsibility to Respect Human Rights

A. Measures Related to Domestic and Global Supply Chains and Promotion of Human Rights Due Diligence Based on the UNGPs

(Existing framework/Measures taken）

With increased interest in responsible business conduct, the OECD Guidelines for Multinational Enterprises, which Japan adheres to, added a new chapter on business responsibility on respect for human rights in its 2011 edition. In addition, OECD has launched due diligence guidance specific to sectors such as minerals, agriculture, garments, and footwear. In 2018, the OECD Due Diligence Guidance for Responsible Business Conduct was published as a practical tool that businesses can use regardless of the sector. The Government has been engaged in promoting the above Guidelines and Guidance to businesses.

The ILO promotes dialogue and cooperation between business enterprises and stakeholders based on the ILO MNE Declaration, which is a guideline for achieving decent work through supply chains, and this is considered as an initiative that mutually supplements human rights due diligence. In this connection, the Government raises awareness of the ILO MNE Declaration.

… the Guidance for Collaborative Value Creation was published as a guideline for dialogue and disclosure on voluntary and proactive initiatives of companies on non-financial information, including ESG factors.

(…)

With respect to the environment, corporate initiatives are being promoted with the establishment of the Environmental Reporting Guidelines. In August 2020, the “Introductory Guide on Environmental Due Diligence along the Value Chains: Referencing the OECD Guidance” was issued as a manual, including points to note in conducting environmental due diligence in relation to risk management and value chain management stated in the Environmental Reporting Guidelines. The Guidelines state that human rights are integral to address some measures regarding environmental issues, and explains that environmental due diligence is required as part of responsible business conduct and integrated with human rights.

(…)

 

(Future measures planned)

(a）Publicize the NAP and raise awareness of human rights due diligence among Japanese business enterprises in cooperation with industry groups and other relevant bodies

  • Promote responsible business conduct by publicizing the NAP among corporations and raising awareness of human rights due diligence, including in supply chains, among industry groups and other relevant bodies. [All Ministries]

(b) Publicize the NAP and raise awareness of human rights due diligence to Japanese business enterprises operating overseas via Japanese embassies, consulates, and overseas offices of government-related entities

  • Publicize the NAP and raise awareness of human rights due diligence with possible cooperation with local agencies and organizations by Japanese embassies and consulates. In so doing, sufficient attention is to be paid to the issue of protection of human rights of workers in supply chains, including the socially vulnerable such as women and children. [Ministry of Foreign Affairs, Ministry of Finance, Ministry of Economy, Trade and Industry]

(e)Raise awareness on the Guidance for Collaborative Value Creation

  • Continue to boost efforts to raise awareness of the Guidance for Collaborative Value Creation, which is useful for holding dialogue and disclosure relating to non-financial information, including ESG factors for investors and corporate managers and directors. The Guidance can be used as a guide for voluntary and proactive initiatives of companies. [Ministry of Economy, Trade and Industry]

(…)

(h)Support initiatives by international organizations overseas

  • Continue to provide support for efforts, including voluntary contributions to the ILO, such as promoting decent work of workers at the lower tiers of global supply chains and disseminating good practices discovered through those activities. [Ministry of Health, Labour and Welfare, line Ministries]

 

(4) Measures regarding Access to Remedy

Judicial and Non-Judicial Remedy

(Future measures planned)

(…)

(c) Publicize activities and improve operation of the Japanese NCP under the OECD Guidelines for Multinational Enterprises

  • Enhance and facilitate cooperation among the three ministries in charge in accordance with the OECD Guidelines for Multinational Enterprises and perform appropriate functions as the Japanese NCP. In particular, make procedures more transparent, while securing fairness and impartiality, and continue public relations activities. In so doing, pay attention to the perspectives of gender and respect for human rights in supply chains. Cooperate with the Japanese NCP Committee comprising the Government, labour, and management, and seek advice from experts where necessary. [Ministry of Foreign Affairs, Ministry of Health, Labour and Welfare, Ministry of Economy, Trade and Industry]

 

Chapter 3. Government’s Expectations towards Business Enterprises

(…)

(2)The Government expects Japanese enterprises, regardless of their size and sector of industry, to respect internationally recognized human rights and the principles concerning the fundamental rights set out in the ILO Declaration; introduce the process of human rights due diligence based on the UNGPs and other related international standards; and engage in dialogue with stakeholders, including those that are part of supply chains. Furthermore, the Government expects Japanese business enterprises resolve issues through effective grievance mechanisms.