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2025.04.15

[For Companies] What are the Japanese Government's Human Rights Guidelines? Due Diligence Response for Supply Chains

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One of the challenges that companies have faced in recent years is the need to "get it right" throughout the supply chain.respect for human rightsis rapidly gaining attention. In Europe, companies are increasingly required to conduct human rights due diligence (DD), and related regulations are being strengthened in Asia and the United States. Japan is no exception, and has established guidelines for business and human rights protection in 2022. In all business activities, including those of suppliers and cooperating companies, respect for human rights is becoming the new standard for reducing management risks and building a trusted brand.

This article is the first part of a series of articles on respect for human rights and corporate responses. The Japanese government has developed a "Guidelines for Respecting Human Rights in Responsible Supply Chains, etc.The following is a summary of the important points of the "Human Rights" section, along with related information that Japanese companies should be aware of. Why is respect for human rights necessary? What is the scope of the issue to be considered? and other questions, this report provides useful hints for those in charge of Japanese companies.

1. Background and Importance of the Japanese Government Guidelines on Respect for Human Rights

'TheGuidelines for Respecting Human Rights in Responsible Supply Chains, etc.(Hereinafter,Guidelines for Respect for Human Rights) was formulated by the Japanese government in September 2022. Based on international standards such as the UN Guiding Principles, the OECD Guidelines for Multinational Enterprises, and the ILO Declaration on Multinational Enterprises, it was produced to help companies doing business in Japan understand and promote concrete and easy-to-understand approaches to respect for human rights. METI is next,Practical Reference MaterialsThe Guidelines for Respect for Human Rights are designed to provide Japanese companies with a comprehensive understanding of the Guidelines and to promote respect for human rights in Japan. In order to deepen your understanding of the Guidelines for Respect for Human Rights, it is recommended that you refer to the underlying international standards.

1.1 International Standards and Corporate Responsibility

The Guidelines on Respect for Human Rights cites the Guiding Principles on Business and Human Rights released by the United Nations in 2011 as an example of an international standard. Subsequently,ILO* (International Labour Organization) and ... and OECD** (Organization for Economic Cooperation and Development) The Japanese government has also published and revised guidelines based on the UN Guiding Principles, and it is becoming an international standard for companies to respect human rights through their business activities. The Japanese government also supports this trend, and has announced that it will establish theAction Plan on Business and Human Rights****" was formulated. Furthermore, in 2022, based on this action planGuidelines for Respect for Human Rightsis now available to the public.

* The Tripartite Declaration of Principles on Multinational Enterprises and Social Policy (ILO Declaration on Multinational Enterprises), revised in 2017, refers to the obligation of states to protect human rights and the responsibility of companies to respect human rights.

** The OECD Due Diligence Guidance for Responsible Business Conduct, adopted in 2018, is the first reference document on due diligence relevant to all types of businesses and all sectors of the economy in all countries. The guidance complements related materials already published by the OECD to help companies conduct due diligence on responsible corporate behavior in individual sectors such as agriculture, mining, clothing and footwear, and finance, as well as in their supply chains.

*** The action plan is based on five main components: (1) Promotion of understanding and awareness of "business and human rights" among governments and local governments; (2) Promotion of understanding and awareness of "business and human rights" among companies; (3) Promotion of understanding and awareness of human rights throughout society; (4) Development of mechanisms to promote respect for human rights in the supply chain (4) Development of mechanisms to promote respect for human rights in the supply chain; (5) Development and improvement of remedy mechanisms.

1.2. why is respect for human rights required now?

As the UN Guiding Principles* indicate,Companies have a responsibility to respect human rights as an entity that conducts business activities.The company's responsibility is to ensure that the company is in compliance with all applicable laws and regulations. Fulfilling this responsibility is not merely a matter of legal compliance and social responsibility, but also has a positive impact on management. This is because by promoting respect for human rights, companies can reduce the management risks they face.

Currently, especially in Europe, national laws requiring companies to respect human rights are being introduced. The United States is also strengthening its laws and regulations on human rights violations, including injunctions against imports on the grounds of forced labor. In light of these international trends, many Japanese companies are also strengthening their efforts toward ESG**-conscious management and achievement of SDG 16. In particular, through cooperation with related companies, including suppliers in the Asian region, they are working to improve worker skills, occupational health and safety, and establish constructive labor-management relations, building relationships of trust. These efforts related to "decent work "*** and constructive labor-management relations also contribute to preventing, mitigating, and correcting negative impacts as required by international standards.

Furthermore, even companies that do not have international operations have global connections through their supply chains, making efforts to respect human rights essential. In addition, the promotion of respect for human rights requires industry-wide cooperation, rather than a single company's efforts. In particular, companies with abundant human and economic resources are expected to play a role in supporting the efforts of other companies. However, efforts in the form of unilaterally imposing burdens may entail legal risks, so careful handling is required.

The next section describes in more detail the requirements listed in the Guidelines for Respect for Human Rights.

* The UN Guiding Principles require not only corporations but also governments to take appropriate actions to protect human rights. In other words, they indicate that efforts to respect human rights should be undertaken by the public and private sectors as a whole society.
** The Principles for Responsible Investment, an investor initiative in conjunction with the United Nations Environment Programme and Finance Initiative (UNEP FI) and the United Nations Global Compact (https://www.unpri.org/download?ac=14736 (ESG) advocates "responsible investing" (policies and practices to incorporate ESG factors into investment decisions and active ownership), and cites modern slavery and child labor as examples of "social" ESG factors.
*** "Decent work" as defined by the ILO refers to work that is rewarding and humanizing, specifically productive work for all that guarantees freedom, equity, security and human dignity.

The following article explains in detail why it is important to implement ESG management in the supply chain. This article introduces the latest trend of incorporating not only environmental measures but also perspectives such as human rights awareness and corporate governance. The article is composed of three articles, each of which delves deeply into the necessity of ESG management from different perspectives, so please take a look at it.

aiESG, [Part 1] The Environmental and Social Impact of Supply Chains - Sustainable ESG-Oriented Supply Chains: A Strategic Imperative for Modern Business.

aiESG, [Part 2] What are the main drivers from the three perspectives of academia, business and citizens - Sustainable ESG-oriented supply chains: a strategic imperative for modern business.

aiESG, [Part 3] Steps, Responses, and Trends - Sustainable ESG-Oriented Supply Chains: A Strategic Imperative for Modern Business.

2. What companies are covered by the Guidelines on Respect for Human Rights? Scope of Respect for Human Rights Initiatives

The Guidelines for Respect for Human Rights are not legally binding. However, all companies (including sole proprietors) doing business in Japan are required to follow the Guidelines for Respect for Human Rights based on international standards. It should be noted that appropriate responses are expected regardless of the size or industry of the company.

These guidelines apply not only to the company and its group companies, but also to its domestic and international supplier chain* and other business partners**.(including companies in their supply chain and indirect business partners). Therefore, Japanese companies are encouraged to actively promote and maximize their efforts to respect human rights.

*The term "supply chain" refers to the "upstream" involved in procuring and securing the raw materials, resources, equipment, software, etc. needed for the company's products and services, and the "downstream" involved in the sale, consumption, and disposal of products and services.

**"Other Business Associates" are other companies that are not in the supply chain but are related to the company's business, products, or services.

In addition, the Guidelines consist mainly of the following components. In particular, the requirements of the Guidelines are set forth in "Each Section 3," "Each Section 4," and "Each Section 5," which are the important parts when companies utilize the Guidelines in practice.

Each theory 1	Introduction.
Each theory 2	Overall picture of corporate efforts to respect human rights (general overview)
Each theory 3	Human Rights Policy
Each theory 4	human rights DD
Each theory 5	relief

Table 1: Composition of Guidelines for Respect for Human Rights

3. Initiatives for respecting human rights that should be implemented by companies

Companies are required to implement the following three initiatives to fulfill their responsibility to respect human rights

"Developing a Human Rights Policy."(each theory 3)
Human Rights Due Diligence ("Human Rights DD")(each theory 4)
Relief."(Each Item 5): Necessary if your company causes or contributes to negative impacts on human rights.

Another important aspect of these efforts is to engage in ongoing dialogue with relevant parties (stakeholders*) (see Table 1). Incorporating stakeholder views will enhance the effectiveness of a company's human rights response.

* Stakeholders are interested parties (individuals or groups) who are or may be affected by a company's activitiesrefers to the following. Examples include business partners, their own and group companies, employees of business partners, labor unions and worker representatives, consumers, civil society organizations (NGOs), industry associations, human rights defenders, neighborhood residents, indigenous peoples, investors and shareholders, and national and local governments.

The "remedy" is applicable when the company's business, products, or services have an adverse impact on human rights. However, while the company concerned is responsible for supporting the remedy, it is not legally obligated to take direct remedial action.

Table 2: Overview of Corporate Initiatives for Respect of Human Rights (adapted from "Guidelines for Respect of Human Rights in Responsible Supply Chains, etc." (p. 7))

In the following, we will discuss each of these issues.

3.1. each section 3:Human Rights Policy

What is the Human Rights Policy?A clear statement of the company's commitment to fulfilling its responsibility to respect human rights, both to internal and external stakeholders.refers to the following. Companies are expected to state internally and externally a human rights policy that meets the five requirements shown in Table 2.

Approved by the management team, including the head of the company

Prepared with reference to professional information and knowledge from inside and outside the company

Clearly states the company's expectations regarding respect for human rights for employees, business partners, and other parties directly involved in the company's operations, products, or services

Publicly available and communicated internally and externally to all employees, suppliers, and other interested parties.

Human rights policies thrive in the business policies and procedures necessary to embed human rights policies throughout the enterprise.

Table 3: Five Requirements for Human Rights Policy (prepared by aiESG based on "Guidelines for Respecting Human Rights in Responsible Supply Chains, etc." (p.13))

Under the Guidelines for Respect for Human Rights, the human rights policy isIt does not necessarily have to be a stand-alone document named "Human Rights Policy"It is considered to be aWhat is important is that the requirements of the guidelines are substantially metIt is. However, to the outside world, the content of the policy is equivalent to the human rights policy.Should be clearly indicatedIt is also stated that

In addition, when developing and publishing a human rights policy,It is critical that corporate commitments, approved by management, provide clear and comprehensive guidelines that determine the company's actionsIt is. This will help communicate the company's respect for human rights both internally and externally, and lead to effective initiatives.

3.1.2 Points to Consider in Developing a Human Rights Policy

The Human Rights Policy represents the company's basic approach to respect for human rights and is closely related to the company's management philosophy. Therefore, it is important to incorporate diverse perspectives, both internal and external, in the formulation of the plan.

Specifically,Departments within the company(e.g., sales, human resources, legal and compliance, procurement, manufacturing, corporate planning, R&D),Stakeholders who are knowledgeable about their industry, raw material suppliers, and sourcing countries(e.g., trade unions and worker representatives, NGOs, employers' organizations, industry associations).Dialogue and consultationIt is recommended that the company conduct a Such a process will lead to a more effective human rights policy that is in line with the reality of the company.

3.2.Each theory 4: Human rights DD

Due diligence (DD) is not a one-time effort,Ongoing through a cyclical process(See Figure 1). Companies should be aware of the human rights issues that may affect them andPolicies must be developed that are in line with the actual situation.

Especially when group companies have offices in different countries, human rights DDs in those countries areIt is important for the head office and local group companies to work together.It is. However, compliance with the laws and regulations of each country does not necessarily mean that a company is fully fulfilling its responsibility to respect human rights.Legal compliance and respect for human rights are not necessarily synonymous, and companies need to promote initiatives that maximize respect for internationally recognized human rights.

Figure 1: Means and processes in due diligence, adapted from OECD document (p.21)

In the following,Human rights DD process shown in Table 1("Identification and Assessment of Negative Impact" → "Prevention and Mitigation of Negative Impact" → "Assessment of the Effectiveness of Efforts" → "Explanation and Information Disclosure") and explain its important points.

Scope and Response to "Negative Impact"

The Guidelines on Respect for Human Rights define "negative impacts" that companies should address, based on international standards (UN Guiding Principles, OECD Guidelines for Multinational Enterprises, ILO Declaration on Multinational Enterprises, etc.). Negative impacts are broadly classified into the following three categories

a.Firm Causes Negative Impact (Cause)
　i. the activity of the enterprise itself has a stand-alone negative impact; or
b.Companies contribute to negative impacts (Contribute)
　　(1) When a firm's activities combine with the actions of other firms to cause negative impacts.
　　(ii) When the activities of a company cause, promote or motivate negative impacts on other companies.

c.Directly Linked to Negative Impacts
　　Although the companies are not causing or fostering negative impacts,
　　Businesses, products, and services directly linked to negative human rights impacts through business relationshipsIn case of.

Negative impacts that a company should be aware of include not only those that have already occurred, but also potential negative impacts.All of these are subject to human rights DD, and companies are required to take the following actions

Take precautionary measures before negative impacts occur
If any negative impact should occur, efforts should be made to prevent its recurrence.

Thus, human rights DD is more than just risk management,An important process for companies to achieve sustainable managementIt is. Each company is expected to promote appropriate initiatives in line with its own situation.

First Steps in Human Rights DD: Identifying and Assessing Negative Impacts

The first step in human rights DD is,Identifying and assessing negative human rights impacts in which the company is or may be involved(see Figure 2). In this identification and evaluation process,Extremely beneficial dialogue with stakeholders such as employees, labor unions and worker representatives, civic groups, and neighborhood residentsIt is.

Also, when assessing negative impacts on human rights,Individuals who are particularly vulnerable or belong to groups or ethnic groups at high risk of social exclusionThe potential negative impact on the environment is to be given due consideration. Furthermore,Companies are responsible for preventing and mitigating negative impacts on human rights even beyond their secondary business partners with whom they do not have direct transactions.It is important to

Figure 2: Human Rights DD Process (Created by aiESG with reference to the Guidelines for Respect for Human Rights)

Human rights DD is not something that can be completed once implemented,Requires regular evaluation and review to keep pace with ever-changing human rights conditionsIt is. Companies go beyond the initial assessment,The impact on human rights must be repeatedly assessed and gradually delved into.

Priorities for response are determined based on the severity of the negative impact on human rights, and priority must be given to those with the highest severity. The Guidelines for Respect for Human Rights indicate that the severity of these impacts should be determined based on three criteria: scale, scope, and difficulty of remedying the negative impact on human rights.

Prevention and mitigation of negative impacts

In order to fulfill their responsibility to respect human rights, companies are required to endeavor not to cause or promote negative impacts on human rights in their business activities. In addition, for negative impacts that have already occurred,It must be prevented or mitigated by taking appropriate measures.

Respect for human rights is a result ofReduction of corporate management riskAlthough it may lead toMain objectives are prevention and remedy of negative human rights impactsIt is important to recognize that the

The measures that companies should consider to address negative human rights impacts are largelyTwo casesThe data can be divided into the following categories.
　　　(1) If your company is causing or contributing to negative human rights impacts
　　　　Companies should take the following steps to prevent or mitigate negative impacts
　　　　a. Ensure that activities that cause or contribute to negative impacts are stopped; and
　　　　 Ensure that similar effects do not recur in the future.
　　　　　　Example: Review product design to reduce or eliminate the use of hazardous substances.
　　　　b. If immediate cessation is difficult for contractual or legal reasons, prepare a process chart for cessation of activities, and
　　　　Seek a phased cessation

　　　(2) When the company's business is directly related to the negative impact of human rights
　　　　Even if your company is not directly causing the negative impact,Related businesses and products,
　　　　If the impact is occurring through the serviceto prevent and mitigate negative impacts.
　　　　A response is required.
　　　　Companies are situational,Exercise influence over the companies you are influencing,
　　　　or other efforts to strengthen and support influence.should be done.

Suspension of transactions is considered as a last resort

As a measure to mitigate negative impacts, "trading haltIn the Guidelines for Respect for Human Rights, although there is a "Guideline for Respect for Human Rights,Suspension of transactions should be carefully considered as a last resort.

First,Prioritize efforts to prevent and mitigate negative impacts while maintaining relationships with suppliers and related companiesshould be done. Because,Suspension of transactions can be a means of resolving the relationship between your company and the negative impact, but it does not resolve the impact itself.This is due to the following reasons.

The suspension of transactions may also create new human rights risks. For example,

Suspension of trading makes it difficult to monitor negative impacts.
The other company's business deteriorates and the employment of its employees is threatened.

Considering these risks, companies should first consider suspending transactions beforeWork with partners to implement improvementsIt is important to

Evaluating the effectiveness of initiatives and continuous improvement

Companies must ensure that theirPeriodic evaluation of whether the company is effectively addressing the identification, assessment, prevention, and mitigation of negative human rights impacts, and continuous improvement based on the results of this evaluationis required.

When conducting an assessment, it is important to collect extensive information and base the analysis on appropriate indicators whenever possible. This is because the impact on human rights can be difficult to quantify,Establishing appropriate indicators, both qualitative and quantitative, and evaluating them from multiple perspectivesis required.

Also,It is also useful to incorporate the effectiveness assessment into relevant internal processes. For example, we have traditionally implementedAdding a human rights perspective to procedures for environmental and health and safety audits and site visitsBy doing so, we can continue to promote consideration of human rights as part of our corporate activities.

Responsibility to Respect Human Rights and the Importance of Information Disclosure

companies that they are fulfilling their responsibility to respect human rights.Explain and disclose appropriate information.is required. disclosure of information on respect for human rights, even if instances of human rights violations are identified,It does not impair corporate value.Rather,Ensuring transparency and demonstrating a commitment to improvement will enhance corporate value.

Key Points of Information Disclosure

When disclosing information, companies should keep the following points in mind

Provide basic information on human rights due diligence (DD)
- Clearly explain how the company is addressing negative impacts, its processes and policies.
Description of how to address significant negative impact risks
- Indicate how the company is taking steps to prevent or mitigate against serious human rights risks that it may face.
Transparency in responding to specific human rights impact cases
- The content of the report should clearly indicate what action was taken in specific human rights impact cases in which the company was involved and allow for evaluation of the appropriateness of the response.

Like this,It is important to go beyond mere provision of information to demonstrate that the company's efforts are appropriate and to build a relationship of trust with stakeholders.

3.3. Each Item 5: Remedies

Remedy refers to the process of reducing or restoring the negative impact on human rights, or the process of doing so. Companies.If your company is found to be causing or contributing to negative human rights impacts through its activities, you must implement remedies or cooperate in their implementation.

On the other hand,When a company's operations, products, or services are directly related to a negative impact but are not causing the impactTo,Companies are required to play a role in supporting relief, but are not obligated to actually implement the relief.

at timesIf the state provides a remedyThere are Specifically,judicial meansLitigation in the courts as,non-judicial meansThese include the individual labor dispute resolution system of the Ministry of Health, Labour and Welfare (MHLW) and the National Contact Point of the Ministry of Foreign Affairs, the Ministry of Health, Labour and Welfare (MHLW), and the Ministry of Economy, Trade and Industry (METI), based on the OECD Guidelines for Multinational Enterprises. However, these means are not always effective. For this reason, companies are encouraged to establish their own "Grievance Redress MechanismIt is desirable to have a "M". and is desirable.

Role and design of complaint mechanisms

A "grievance mechanism" is a mechanism that affected stakeholders are aware of and have confidence in.The The company responds to complaints promptly and appropriately,It is important to aim to achieve direct relief.

The following are some of the key points that companies should address

Establish or participate in grievance mechanisms
- Set up your own grievance mechanism
- Participate in grievance mechanisms provided by industry associations, etc.
Be accessible to a wide range of stakeholders
- Make it available to all potentially affected stakeholders, including not only your own employees, but also those of your business partners and local residents.
Comply with international human rights standards
- The grievance mechanism should be designed to address not only domestic issues but also internationally recognized human rights issues.

legitimacy	The grievance mechanism is operated in a structured manner and has the confidence of stakeholders who are expected to use the mechanism.
availability	All stakeholders who are expected to use the grievance mechanism are informed and appropriate assistance is provided to those who have obstacles to its use from the perspective of, for example, language used, literacy skills, fear of reprisals, etc.
predictability	Clear and well-known procedures are provided that clearly state the approximate time required for each stage of the grievance process, and clarify the type of procedure, its outcome, and how to monitor its performance.
fairness	Endeavoring to ensure that grievants have reasonable access to the sources of information, advice and expertise necessary to participate in the grievance mechanism in a fair, informed and respectful manner.
transparency	Provide the grievant with a full explanation of the course of the proceedings and sufficient information to gain his/her confidence in the effectiveness of the proceedings and to respond to the public interest at issue.
conformance	Ensuring that both the outcome of the grievance mechanism and the remedy are compatible with internationally recognized human rights concepts
Sustained source of learning	Improve grievance mechanisms and use related measures to draw lessons for preventing future grievances and human rights violations
Based on dialogue.	Consult with stakeholders who are expected to use the mechanism on the institutional design and outcomes of the grievance mechanism and focus on dialogue as a means to address and resolve grievances