January 10th, 2013

Caux Round Table

Nippon CSR Consortium

Draft Version for Public Consultation
10th – 30th January 2013
Nippon CSR Consortium, Human Rights Due Diligence Workshop

Invitation to Comment on Human Rights Issues by Sector

The Nippon CSR Consortium, which consists of more than 40 members from companies,

NPO/NGOs and academia, welcomes written comments by all interested stakeholders on this draft andon the following questions in particular. In making comments, please be as specific as possible,
including identifying the relevant section or example being discussed. Please send comments toinfo@crt-japan.jp by the closing date of Wednesday 30th January 2013 (Japan Standard Time), with asubject line of “Human Rights Issues by Sector Feedback”. Please also continue to monitor the website
for further updates.
Does the discussion paper identify the most serious and the most likely impacts andissues that companies in each sector may have regarding human rights?

Please advise the major challenges that companies in each sector are facing in respect ofhuman rights. Are there good practices in addressing these human rights challenges that
could be built on in developing the forthcoming guidance on corporate responsibility ineach sector?

What form should the forthcoming guidance, which will be published in March 2013,
take in order to add the greatest value in advancing respect for human rights?

Unless expressly requested otherwise, submission of written feedback will be posted on the Caux

Round Table Japan’s website http://crt-japan.jp/ with each commentator’s submitted name andorganisational affiliation.
Aim: It is the Nippon CSR Consortium’s intention to produce practical and useful guiding

documents for businesses, which is not intended to be legally binding, in order to facilitate
implementation of the UN Guiding Principles. While the paper takes particular account of thesituation and experiences of Japanese businesses, it aims to be as globally relevant as possible.
Methodology: The draft’s development has been informed by the views of a wide range of

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stakeholders, including representatives from companies, NPO/NGOs and academic institutions, as well

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as other experts. Following the comment period, final versions of the documents will be revised,completed and posted on the Caux Round Table Japan’s website in March 2013.

Hiroshi Ishida
Executive Director, Caux Round Table Japan

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Caux Round Table

Table of Contents

1. Introduction .......................................................................................................................................... 4
1.1. Purpose of the Project ...................................................................................................................... 4
1.2. The process for identifying sector-specific human rights issues ...................................................... 4

2. The details of the discussion and the identified key human rights issues by sector ............................... 6
2.1. Manufacturing .................................................................................................................................. 6
2.2. Chemicals and Pharmaceuticals ....................................................................................................... 8
2.3. Information, Communication and Technology .............................................................................. 10
2.4. Logistics ......................................................................................................................................... 13
2.5. Apparel and Textiles ...................................................................................................................... 16
2.6. Food and Retail .............................................................................................................................. 18
2.7. Paper and Printing .......................................................................................................................... 21
2.8. Finance ........................................................................................................................................... 24

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1.

Introduction

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1.1.

Purpose of the project

The Nippon CSR consortium was established by more than 40 members from companies, NGO/ NPOs,
academic institutions, and experts on September 2012, aiming at promoting the integration of humanrights into business operations among Japanese companies. Moreover, it also aims at expressing
Japanese companies’ concerns about human rights, and realising more effective and efficient corporate
activities that meet global standards by listening to and communicating with others such as CSR
initiatives, business associations, NGO/NPOs, and communities, at home and abroad. (Please refer to
Caux Round Table Japan’s website http://crt-japan.jp/ for further information about the Nippon CSR
Consortium.)

In order to achieve these goals, the Nippon CSR consortium has been carrying out various activities,
including workshops on business and human rights, which have been held several times a month. The
activities comprise the following four points: 1. identifying and assessing any actual or potentiallyadverse human rights impacts such as human rights violations, through corporate activities or as a resultof their business relationships, 2. integrating and acting upon the findings, 3. tracking responses, and 4.
communicating how impacts are addressed with the affected stakeholders1. This paper, “Draft Version
for Public Consultation: Invitation to Comment on Human Rights Issues by Sector”, will be open to the
public as the outcome of the first of these points.

Any comments on the draft from related stakeholders would be greatly appreciated. To reflect thecomments, the final paper will be issued on March 2013.

1.2.

The process for identifying sector-specific human rights issues

The Nippon CSR Consortium is working towards identification of sector-specific human rights issues,
using the Human Rights Guidance Tool issued by the UNEP FI in 2011 as reference. The process anddetails of the discussion that took place are as follows. This summary reflects points made by different
speakers during the discussion, but does not imply that all participants endorse all points. Many of thepoints reported in this summary are statements of opinion and should not necessarily be taken as fact.
No remark will be attributed to a specific participant or the organization.



Worksheet A in which human rights issues possibly relevant to their sectors are listed (Appendix 1)
is based on the “Identifying the human rights issues and expectations relevant to business (based

1

Refer to: Hurights Osaka. 2012. Bisinesu to Jjinke nikansuru Sidougensoku: kokusairengou ’hogo soncho, kyusai’furemuwakuno jisshino tameni [PDF] Available at: http://www.hurights.or.jp/japan/img/guiding_principles_digest.pdf.
[Accessed January 10th, 2013].

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on internationally recognised standards and voluntary initiatives)” in the Guidance Tool issued by

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the UNEP FI in 2011. It was distributed to the participants.

Each member examined which issues could have significance to their sectors, and at which point
the issues exist in the value chain, and marked ● for them. Moreover, they also discussed whichissues are likely to have “no relevance” or “less relevance” and marked ▲ for them in Worksheet
A.



CRT Japan arranged these answers by sector. Then, Worksheet B was created by adding theoutcomes of the Worksheet A to UNEP FI Human Rights Issues by Sector.

Using Worksheet B, the participants discussed a) key sector specific human rights issues, b)
potentially significant human rights issues that are not appeared on Worksheet B, and c) the value
chain that would be relevant to the key human rights issues at the workshop.



Representative persons from ten sectors presented the outcomes of their discussion in their group.
Academics, experts, and NGOs gave them feedback at the workshop.

The paper, “Draft Version for Public Consultation: Invitation to Comment on Human Rights Issues
by Sector” was written up by adding the comments from academics and experts to the outcomes ofthe discussion in the workshop. The draft has been translated into English, Chinese, and Spanish
and issued for public comments. The public comments period is between January 10th and January
30th 2013.

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The details of the discussion and the identified key human rights issues by sector

2.1.

Manufacturing

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2.

The members basically agreed with the contents written on Worksheet B. Some additional
points were raised as follows.
On discrimination: gender discrimination, the need for promoting the appointment of women.

On child labour: possible risks of using child labour in supply chains that have expanded acrossAsia

On freedom of association and collective bargaining: the need for reducing the gap between regularand non-regular workers, union members and non-union members.



On conflict minerals: the need for adequate consideration of human rights violations related toconflict mineral.



On consumers: positive commitments to the promotion of responsible marketing.

Key human rights issues in the manufacturingsectorConcrete issuesCore
operation/
Supplychain

Working hours

 Working hours of foreign workers at
manufacturing sites in Japan and Asian
workers in the development unit may not be
controlled well.
 Unpaid overtime work

Health andsafety Severe incidents causing death or injury
especially within research and development,
as well as manufacturing sites.
 Long working hours may cause healthproblems, in particular, mental healthproblems.
 Health and safety issues in the supply chain(e.g. conflict mineral)

During work Gender inequality in training and promotion(discrimination against female workers).

Redundancy
and dismissal

 Foreign workers may possibly be dismissed
without due cause.

Child labour

Worst forms ofchild labour There may be possible risks in supply chains
across the Asian continent.

Forced orcompulsory
labourForcedovertime

 Foreign technical interns in Japan may beforced to do extra work.

Freedom of
association andcollective
bargaining－ Possible inequality between regular employees
and non-regular employees, and between
union members and non-union members.
 Possible absence of proper unions as
representative of workers despite the existenceof the right to collective bargaining

Workplaceconditions

Discrimination

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Community

Society andgovernment

Consumer

Resources
Security

Relations withgovernments

Relations withcustomers

Use of natural
resources
Non-stategroups andsecurity
payments
Relations tostates with poor
human rights
records
Bribery andcorruption

Health andsafety The rights of workers may not be sufficiently
ensured under the union shop system.
 Abuse and pollution of water and land atfactories and sites.
 Possible diversion of funds to non-state groups
during procurement. (e.g. conflict mineral) Possible diversion of funds to non-state groups
during the procurement process. (e.g. conflictmineral) Possible risks of bribery and corruption whenentering into a contract, as well as of being
involved in corrupt practices when receiving
orders from government.
 Making positive impacts on changing
consumer behaviours (e.g. conducting
responsible marketing).

What the representative of the group reported:
We basically agreed with Point I-1 (Workplace conditions), though there are likely to be diverse issues
concerning this point. As for Point I-2 (Discrimination), although there is no check mark (●) for gender
discrimination on the paper, we concluded that Japanese companies should take this point into account,since Japanese companies are less advanced, compared to Western companies, in terms of theappointment of women. The problem is that most companies have such systems, but it is not usedproperly or effectively. We are not quite sure whether this should be dealt with as a human rights issue
or a management issue, but in either case, the gap should be bridged. Next, with regard to Point I-3-k,which is the worst forms of child labour, we changed the check mark from “▲” to “●”, because there
seems to be considerable concerns in the supply chain in other Asian countries. No additional comment
was given on Point I-4 (Forced or compulsory labour). With respect to Point I-5-q (Freedom to associate
and to bargain collectively), the rights to freedom of association and to bargain collectively are ensured
at headquarters in Japan, but, even so, there are likely to be considerable disparities between regular
workers and irregular workers, as well as between union members and non-union members. We thinkthat it is a weakness of Japanese companies, and therefore we checked a mark “●” for this. Then, on therest, we basically agreed all, including Point II-1 (Resources) and II-2 (Security) in which conflictminerals are mentioned. However, as for the last point, consumer issues, we would like to check a mark“●”, because it is what Japanese companies, especially we manufacturing companies, have not yet
actively committed. We could do more, particularly in research, development and sales, for meeting
consumer needs and providing desirable service.

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2.2.

Chemicals and Pharmaceuticals

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The members basically agreed with the contents described on the Worksheet B, but some additional
points were raised as written below.
In the pharmaceutical sector: The rights of study participants may possibly not fully be consideredwhen conducting clinical trials.

In the chemical sector: local people’s lives may possibly be threatened by accidents and hazardous
materials produced at plants, and may be relocated from their residences.

Key human rights issues in chemical sector

Concrete issuesCore
operation/
Supplychain

Workplaceconditions

Health andsafety Risks of skin injuries and cancers posed by theuse of chemical materials.

Community

Resources

Use of natural
resources

 Progressive increase in discharge and leak ofhazardous materials, water and air pollution at
manufacturing sites as well as duringtransportation.

Access to land

Voluntary
relocationconsultation
andcompensation

 Inadequate compensation on relocation may
create tensions with local communities whendeveloping sites, which may endanger the safetyof both corporate and community members.

Key human rights issues in pharmaceuticalsectorConcrete issuesCore
operation/
Supplychain

Workconditions andothersHealth andsafety The use of chemical compound or/and
pharmaceutical products is likely to endanger
the health and safety of employees.
 During the clinical development stage ofpharmaceutical production, the health and safetyof study participants may not be managed
properly at contact research organizations.

Community

Resources

Use of natural
resources

 Sourcing natural compounds that are essential
for drug development may possibly heighten
tensions between companies and local
communities. Especially (e.g. Bio-Piracy;
deprive benefit of community through a patentmonopoly for compound made from medicinal
plants which historically diffuse within a local
community)

Community
investment－

 Having positive impacts on public health suchas rising awareness on diseases and ensuring
access to medicine.

Relations withRelationswith poor Support for public health in state/ local
community may be misused for their politicalSociety and経済人コー円卓会議日本委員会〒150-0031 東京都渋谷区桜丘町 29-33 渋谷三信マンション 505 号室
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government

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Consumergovernments

human rights
recordRelations withpatients

Health andsafetypurposes such as propaganda Taking positive actions towards the fight against
counterfeit medicines Report delay on adverse drug reactions anddelay in recall may endanger health and safetyof patients

What the representative of the group reported:
We basically agreed with the human rights issues written on this sheet. We discussed whether there areother issues, and in what sense these issues should be understood.

In the pharmaceutical sector, the rights of study participants are seriously taken into consideration andprotected when conducting a clinical trial. In various actions for protecting the rights of study
participants, monitoring and assessing of how the contractor operates in the clinical trial will be a key
point. Pharmaceutical Affairs Act in Japan, and global rules and industry initiatives are developing andthe process and framework to identify risks are being built up.

With respect to chemical industry, we discussed about the interpretation of Point II-3 (Access to land),because there was an anonymous comment about this. It is the comment on Point II-3-g, “Voluntary
relocation-consultation and compensation”, saying that “In the development of new production sites orcompany premises, companies may deprive local people of their means of livelihood, resources, andproperty. If compensation including the amount and distribution is insufficient, tensions between thecompany and local communities may be heightened (in the chemical sector)”. Though we could not get
the exact meaning of this comment due to the absence of the person who wrote it, the possible
interpretation was put that the chemical sector could threaten people’s lives by causing accidents andproducing hazardous materials that could involve associated relocation, consultation, and compensation.
Nuclear plants were taken as an example that may violate the rights of local people in this context.

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2.3.

Information, Communication and Technology

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The participants highlighted those issues listed below, while illustrating the characteristics of ICT sector
as a relatively-new industry, the invisibility of its products and services, and the labour-intensive natureof its work.
Long working hours and related health problems. The cause of the problems is not likely to be
simple but instead is complicated, since it is often observed that employees voluntarily work longhours from a sense of responsibility to customers and deadlines.

Because of the characteristics of the ICT sector, namely it being a relatively-new industry, large
amounts of collaborative work with partners, and increasing offshore services and development,
ensuring freedom of association and the rights to collective bargaining in the supply chain,especially among overseas suppliers, may need particular consideration.

Possible risks of being involved in bribery and corruption through offshore activities.



Possible risks of violation of the privacy rights and the rights to freedom of speech and expression,
especially in the communication sector.

Key human rights issues in ICT sector

Concrete issuesCore
operation/
Supplychain

Working hours

 Long working hours (including attendance atweekends) and unpaid work in the process of
system development, during the busiest period(e.g. pre-release time) and in the case there arenumbers of design changes.

Health andsafety Health problems, especially mental healthproblems, may be raised because of the long
working hours described above.

Discrimination

During work Gender inequality in training and promotion(discrimination against female workers).

Freedom of
association andcollective
bargaining

Conflict withlocal law

 Freedom of association and the rights tocollective bargaining may not be fully ensured
in the supply chain.

Protection andstorage of
personal data－ There may be risks of leaking personal data
both at the company and subcontractors.

Resources

Use ofinfrastructure

Community
investment－

Relations withgovernments

Bribery andcorruption

 Having a positive impact on local communities
such as improving local infrastructures throughthe establishment of ICT network system.
 Making a positive impact on local
communities through provision of information
and ICT service, such as enhancement of local
people’s lives by improving the digital divide.
 There may be risks of being involved inbribery and corruption, notably in offshore
market research, and sales and marketing

Community

Society andgovernment

Workplaceconditions

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Consumer

Relations withcustomers－(especially in ICT service provision forgovernmental agencies.) Privacy rights and the rights to freedom ofspeech and expression may possibly beviolated. (Especially related to thecommunication sector)

What the representative of the group reported:
Though we could not discuss all the topics, we began our discussion by talking about the characteristicsof the ICT sector. Firstly, the ICT sector is a relatively-new industry. Secondly, its product and services
are likely to be invisible because of the characteristics as network systems. This invisibility makes its
relationships with other actors in business activities difficult to identify. On the other hand, it also has alabour-intensive nature. These are likely to be characteristics of the ICT sector in general.

On the preconditions, long working hours and related health problems were recognized as the biggest
issues. However, when it comes to the background of this, it is not likely that they feel “forced” to work,
rather they voluntarily work for long hours, sometimes just before getting sick, from a sense of
responsibility to customers and deadlines. Thus, the problem may not be so simple but is more
complicated.

In addition, the fact that ICT sector is relatively new is related to issues concerning unions. Unlike
those sectors that have well-established union systems, we need to consider this point from now. In
addition, our work often involves collaboratively working with external parties and partners, andtherefore, we need to take into consideration the fact that our work is not limited within the company.

Generally speaking, these issues tend to be picked up from the perspective of system engineering. In thediscussion, some members from financial sectors raised a question about how ICT sector members
judged the significance of the issues, saying it may be almost impossible to identify concrete issues as“sector-specific” human rights issues in the ICT sector, because the tasks considerably vary between
project management, infrastructure-related work, and sales and marketing. To this question, ICT sector
members replied that it is difficult, but they basically adopt the perspective of system engineering.
As for community issues, there was no further mention on the use of electricity at the data center. On
the other hand, the members from ICT sectors mentioned that there may be bribery and corruption in
relation with government, and possible risks of the offshore activities that cannot be checked or have notbeen checked yet.

In addition, governments may impose regulations and restrictions concerning network systems, and ICT
companies may be forced to accept those governmental controls, such as censorship in Egypt and China.
Moreover, there may also be risks of being involved in bribery and under-the-table deals attendant in the

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11relationships with certain governments. How to deal with these problems was regarded as a big

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problem.

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2.4.

Logistics

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The issues identified as key issues are as follows.
Long working hours, health and safety issues at the site and in the supply chain. Especially at thesite, employees could be forced to work long hours because of unexpected and uncontrollable
situations. There are also some risks of workplace accidents caused by the use of heavy machineryand handling of heavy goods at the site such as a freightliner terminal. Moreover, long working
hours may cause mental health problems.



Discrimination by gender and academic qualification in Japanese companies.



Potential risks of economic loss caused by the existence of huge industrial unions enjoying
considerable influence.

Environmental risks in the upstream of the supply chain concerning fuel procurement

Provision of armed security by states against pirates and related human rights risks (Shipping).

Potential risk of being involved in bribery and corruption in order to avoid paying expensive
anchor costs. e.g. facilitation payment

Key human rights issues in logistics sector

Concrete issuesCore
operation/
Supplychain

Working hours

 Long working hours may happen, especially at
the sites and subcontractors.

Health andsafety Workplace accidents could possibly occur atsites including a ship under operation and afreightliner terminal, where heavy machinery
is used and heavy goods are handled(Shipping).
 Risks to employee safety in the areas where
pirates operate (shipping).
 Long working hours may cause mental healthproblemDuring work Possible discrimination in training andpromotion by gender and educational
backgrounds.

Redundancy
and dismissal

 The requests of part-time and irregular workers
for open-ended employment contracts may not
be fully considered.

Resources

Use of natural
resources Environment, air, and water pollutions, as wellas the destruction of habitat diversity, may
happen in the supply chain of fuelprocurement.

Security

State provisionof security

 Possible risks of excessive power exercise bynational navies deployed against pirates.
 Armed security personnel on board a ship may
exercise excessive power toward sailors andpirates.

Community

Workplaceconditions

Discrimination

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Caux Round Table

Society andgovernment

Relations withgovernments

Bribery andcorruption

 Possible risks of being involved in bribery andcorruption such as facilitation payment.

What the representative of the group reported:
As for core operation and the supply chain, written on the 1st page, Topic I-1-a (Working hours) andI-1-c (Health and safety) could be big problems for logistics companies. At the site, workers often face
unexpected and uncontrollable events, but they have to deliver goods on time. In such a case, theirworking hours inevitably become longer. There are also some cases where the order is given out to
subcontractors because there may be possible risks. As regards I-1-c (Heath and safety), both ships andtrailers haul very heavy goods, and therefore, the health and safety of the workers at such sites isregarded a big problem. Mental health problems of office workers also came up recently.

As for Point I-2 (discrimination), we discussed and concluded that discrimination by gender andacademic qualification may be an issue among Japanese companies. With regard to Point I-2-g(Redundancy and dismissal), although we did not have a concrete example, we supposed that it could beconcerned with the contracts of irregular workers, such as little consideration on employment duration
at expiration of the initial period.

As for Point I-5-r (Freedom of association and collective bargaining- conflict with local law), there isnot such a case in Japan, but some overseas countries have huge industrial unions enjoying considerable
influence. Companies are likely to have some concerns about being affected by such unions.
As for II-1-a (Use of natural resources), though the logistics sector inevitably needs fuel, we purchasethis from oil giants and large trading companies, which are exposed to international concerns and try to
pay attention to the human rights impact of business activities. However, there may be various
unresolved issues, especially in the upstream of the fuel supply chain.

Then, perhaps of particular concern for shipping, pirates are a big issue concerning Point II-2-c (State
provision of security). The coasts of fragile countries, such as Somalia, are very dangerous. This could
raise significant human rights issues.

As for Point III-e (Bribery and corruption), because efficient management of logistics network covering
all over the world is the first priority of logistics companies, there may be possible operations at the sitein order to avoid obstacles.

Finally, as regards to Point III-a (Operation in countries in conflict), III-b (Entry pre and post conflict),
and III-c (Relations to states with poor human rights records), the news does not come through until
Tokyo, we suppose there may be some problems when operating in such regions. Moreover, in

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association with economic sanctions on Iran and Syria, we are often asked about our business in these

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countries from financial institutions. This may also show the relation between our business and humanrights.

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2.5.

Apparel and Textiles

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A representative person explained that key human rights issues in the apparel and textile sector could be
divided into three themes, which were workplace conditions including wages, working hours, andaccident prevention, child labour, and forced labour. Moreover, changing consumer’s minds andpromoting ethical marketing are presented as future challenges for the sector.

Key human rights issues in apparel and textiles
sectorConcrete issuesCore
operation/
Supplychain

Working hours

 Long hours working may be caused by setting
production schedules that presuppose overtime
work, and undertaking actions to meetdeadlines in sewing process.

Wages

 Pressure from buyers on cost reduction may
result in ignorance of minimum wage
legislation.

Health andsafety Education on safety and health, including
emergency drill, may not be conducted or may
not be conducted properly.

Child labour

Minimum age

 Children under the minimum age may workwithout confirming identification papers orbased on forged papers.

Forced orcompulsory
labourForcedovertime

 Immigrant workers in China and foreign
trainees in Japan may be forced to do overtime
work.

Community

Resources

Use of natural
resources Discharging of hazardous material fromleather tanneries and dye houses may pollute
rivers, and may damage local people’s health.

Consumer

Relations withcustomers

Health andsafety Making positive impact towards changing
consumer’s mind, and creating ethicalmarketing (e.g. promoting fair trades)

Workplaceconditions

What the representative of the group reported:
Through the discussion, key human rights issues in the apparel and textile sector were divided into threethemes, which were workplace conditions including wages, work hour, and accident prevention,
previously explained by Ms. Aonuma, and child labour, and forced labour. I suppose that these threethemes are recognized as human rights issues despite differences in industry segments. When it comesto the reason why such issues arise, the cause varies widely. For example, sewing is the last bastion for
meeting deadlines, and therefore, sewing workers are likely to be pressured to finish up in short period.
If they cannot achieve a short-time delivery, this means that they cannot meet the deadline, and theycannot manage their business. On the other hand, some subcontractors accept orders beyond theircapacity. The situation seems to be difficult to solve, because it is not likely to be right to make them

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16just give up the orders. I learned that each member in this group is trying to address these issues at sites.

Caux Round Table

There is an additional point that someone added to the sheet. It is consumer issues. The members
attending today also pointed out the importance of creating ethical marketing. This means that
fundamental change could not be achieved without changing consumer’s minds. It can be said thatcreation of ethical marketing is a challenge concerning all the industries, but especially for the appareland textile sector, it could be a big theme that we need to take into account in the future.

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17

2.6.

Food and Retail

Caux Round Table

Indications provided are as follows.


Production is often concentrated, such as seasonal products, in our sectors. Forced overtime work
may be observed in the busiest periods.

Freedom of association and the rights to collective bargaining may not be fully ensured in the
countries where unions are not allowed.

Consumer and employee related human rights issues may be likely to be prioritized in the retailsector, while the food sector may need to consider human rights issues concerning raw materials(e.g. agricultural products or fishery products) additionally.
The group members also shared their concerns about how to deal with the situation where
deterioration of public security occurs in an entire state, and also where the company has relatively
limited influence on suppliers.

Key human rights issues in food and retail sector

Concrete issuesCore
operation/
Supplychain

Working hours

・ Long hour working may be a burden at the
manufacturing factories (supplier) where
private brand products are made and within
logistics networks that distribute the goods.

Health andsafety・ Fatal and non-fatal incidents and injuries in
production process including handlingsourcing material, and in handing chemical
substances in supply chain

Discrimination

During work

・ Foreign workers may not be ensured access tosafety education because of language barriers.

Child labour－

・ Child labour of children under the minimum
age and forced labour may possibly occur at
suppliers of raw materials, for example
agricultural and fishery products

Forced orcompulsory
labour－・ Production is often concentrated, such as
seasonal products, in our sectors. Forced
overtime work may be observed in the busiest
periods.

Freedom of
association andcollective
bargaining

Conflict withlocal law・ Freedom of association and the rights ofcollective bargaining may not be fully ensured
based on international laws in the country
where unions are not allowed.

Resources

Use of natural
resources

・ Agricultural production and fish hauls in thecommunities which run small operations may
be decreased because of large-scalecommercial agriculture and fishing, and the
local ecological system may be affected
negatively.

Community

Workplaceconditions

・ Culturally/ historically/ religiously important

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18

sites for local communities or indigenous
people may be damaged.

Caux Round Table

Security

State provisionof security

・ Lack of a balance of securities provided bystate, sometimes securities may exercise
excessive power, or may not ensure enoughand adequate security.

Access to land

Title to land

・ Especially when constructing large stores,
titles to the land of local people or indigenous
groups may be ignored.

Society andgovernment

Relations withgovernments

Bribery andcorruption

・ Bribery and corruption may be required whena company expands its business and develops
a new store and plants need to gain approval
and licenses for marketing and manufacturing.

Consumer

Relations withcustomers

Health andsafety Promoting responsible marketing, especiallygiving consideration to consumer health inalcohol and tobacco sales, and on consumer
safety in use of electricity devises and toys.
 Low quality addictive substances andinadequate labeling may cause consumers’
health risks.

What the representative of the group reported:
Concrete examples were raised for the issues checked with a mark “●” in advance.

The topic without a check mark but for which we doubt the possibility of human rights violation isforced overwork in the category of forced labour. In our sectors, there is some peak time when
production concentrates, for example, the making of seasonal products. At such times, we necessarilyurge suppliers to deal with the demand, otherwise business cannot carry on. We discussed that thissituation could possibly produce forced labour.

In addition, as regards Point I-5 (Freedom of association and collective bargaining), there may also berisks if a company does business in a country where unions are not allowed.

There are two additional points that we considered possible risks. As for the use of resources
categorized as issues concerning communities, we think that the resale of out-of-date meals and reuse ofsuch meals by bringing out from a disposal field carried out beyond company’s control, could be risks
that may harm consumer health. However, how much responsibility we have on our private brands
seems a matter of contention.

In addition to that, safety could also be a problem. There may be risks of a sudden deterioration of
public security across entire states, which the company needs to deal with.

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Caux Round Table

Compared to the Western companies, it seems to be difficult for Japanese companies, which purchasegoods on a smaller scale or through trading companies, and whose amount of deals is much smaller than
the gigantic companies, to carry out exactly the same activities. Thus, how to keep to voluntaryagreements or global standards will be a future challenge in our sector.

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20

2.7.

Paper and Printing

Caux Round Table

The issues identified as key human rights issues in the paper and pulps sectors respectively are as
follows.

Paper:
As the paper sector has a strong impact on both the upstream and downstream of the value chain, it
is likely to confront various human rights issues.

Printing:Foreign workers may not be ensured access to safety education because of language barriers andmay work long hours.



There could possibly be long working hours and child labour in the supply chain such as in Asian
factories where products for give-away campaigns are made.



Cancer risks caused by using chemical materials and health risks caused by noise.



Huge amounts of personal data are stored by printing companies. Despite strict controls, there may
be possible risks of the leakage of personal data.

Prison labourers may be used in the supply chain without receiving adequate payments.

Key human rights issues in paper sector

Concrete issuesCore
operation/
Supplychain

Workplaceconditions

Health andsafety There may be possible risks of accident whenlogging and operating heavy machineries

Discrimination

During work Workers may be subject to lack of equal
opportunity for education, training andpromotion due to gender discrimination or/and
nationality discrimination

Community

Resources

Use of natural
resources

 In term of forest resources, the rights ofindigenous people and local communities may
not be fully considered. Especially in the casewhere a company purchases woodchips rather
than sawing from company-owned forests,
there may be possible risks of the company
being involved in human rights violations
related to logging.

Access to land

Title to land

 Lack of formal tenure arrangements, or tenure
based on historical use rather thandocumentation can lead to traditional rights
being overlooked.

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Key human rights issues in printing sector

Caux Round TableCore
operation/
Supplychain

Consumers

Concrete issues

Working hours

 Working long hours in sales and marketing, inthe factory, at suppliers and subcontractors.

Health andsafety Potential cancer risks caused by usingchemical materials in enclosed spaces with lessventilation and in printing factories.

Discrimination

During work Foreign workers may be subject to lack ofhealth and safety education due to language
barriers.

Child labour－ There could possibly be child labour within
the supply chain (at subcontractors, and Asian
factories where products for give-away
campaigns are made)Forced orcompulsory
labourPrison labour Prison labourers may be used for
manufacturing of calendars, exam papers, andaluminum batches and they may not be paid
adequately.

Relations withcustomers

Protection andstorage of
personal data There may possibly be a leak of personal datathat the printing company acquires to produce
products such as credit cards.

Work
conditions

What the representative of the group reported:
I will talk about the paper and printing sectors separately because related human rights issues are likely
to be different.

Though the academic member joining in our discussion suggested that all the issues could apply to thepaper industry, in our discussion, some specific issues including natural resources, indigenous people,
and working conditions were raised. I suppose that not only printing companies but also every otherkinds of company uses papers, yet none of us have verified whether the paper company distributing
paper to us ensures human rights.

When it comes to sourcing, there are mainly two routes: sourcing from company-owned forests andpurchasing woodchips. The former may be traceable and controllable, but the latter is difficult to traceback and this problem may lead to human rights abuse being undetected. This characteristic of theindustry drives the institutionalization and promotion of Forest Stewardship Council (FSC) certification.

With the respect to the paper industry, working long hours is obviously a problem. Even the company
which receives the order must work overtime, so subcontractors and sub-subcontractors may naturally
be forced to work long hours too. Moreover, when tracing back to sub-sub-contractors, there may be
more issues concerning foreign workers. For example, they are subject to a lack of safety education and経済人コー円卓会議日本委員会〒150-0031 東京都渋谷区桜丘町 29-33 渋谷三信マンション 505 号室
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22instructions due to discrimination related to the language barrier.

Caux Round Table

In addition, there was also an indication regarding the supply chain. At the printing companies, we
receive orders for campaign gifts/ goods/ sales promotion items, and these goods are often outsourced
and made in other Asian countries where the manufacturing involves a long chain of suppliers at low
cost. Because of the complexity and length of this supply chain, we have not been able to assess
information on what human rights issues above involved.

There are two more issues. The first one is health and safety. As bile duct cancer risks in the printing
industry were in the news recently, use of large amounts of chemical materials in printmaking andprinting factories could cause such health problems. Noise could also be an issue. In addition to working
long hours, the printing sector is likely to have risks concerning health and safety.

In addition, you may not know, but printing companies have great quantities of personal information.
Probably, ten million pieces of data are stored at the major printing companies in Japan. To prevent theleakage of this personal information, we are paying special attention to the data storage.

A participant indicated that the printing industries provide the largest amount of work to prisoners while
they are in prison.

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23

2.8.

Finance

Caux Round Table

Indications provided are as follows.


Though working hours and workplace conditions are obviously important issues, they
are distinguished from other human rights issues as internal issues.

The most significant issue in the financial sector is the consideration of human rights
issues with regard to investment and loan decisions. Consideration for ESG(Environment, Society, and Governance) aspects in screening and monitoring is
especially needed, but there is no clear standard for how far and on which issues afinancial institution should carry out screening and monitoring.

Key human rights issues in the financial sector

Concrete issuesCore
operation/
Supplychain

Working hours

 Working long hours as customer’s needs andoperations diversify, and increase in
non-routine work

Health andsafety Long working hours may cause illness
including mental health problems

Discrimination

During work Possible gender discrimination in training andpromotion

Access to land

Title to land

 Lack of regulations for protecting landownership, such as hypothec in regards tofinancial transactions, may lead toinfringement of human rights.
 There may be risks regarding lender’s
responsibilities concerning credit mortgages.

Community
investment－

 Having positive impacts on job creation andaccess to education through microfinance.
 Having positive impacts by dealing financial
products designed to support infrastructure
improvement in developing countries.

Relations toinvestments,
loans, andindividual
investors－

 Human rights are not fully considered when
conducting screening and audits in regard tofunds and investment. Compliance with the
Equator Principles

Community

Customer

Workplaceconditions

What the representative of the group reported:
I would like to introduce the major point of our discussion. Firstly, as regards to money laundering,
though the issue has a significant importance for both human rights and our business, it is regulated as acompliance matter that we cannot ignore in our operations, and therefore, we think that money
laundering is not treated in the same way as other issues.

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24With respect to working hours and workplace environment, they should of course be taken into account,

Caux Round Table

but could be treated separately as internal issues like diversity and discrimination.

The biggest question for us is how to judge investments and loans. Financial sectors have impacts onsociety indirectly. This characteristic seems to make it more difficult to deal with human rights issues
because our impact is indirect, but, at the same time, there may be more things we could do. This point
raised a fierce discussion.

As regards screening on investment and loans, financial and compliance screenings are obviously
conducted. Some other issues, such as role of working conditions and the environment, came to beconsidered at each company. However, despite the existence of these practices, they are not conductedaccording to a clear ESG standard. The present status is that investigation is conducted but standards are
not established.

Unlike screening, monitoring involves continuous improvement, which is a grey zone in the financial
sector. The background to this is that obviously audit comprises issues concerning the environment,
workplace, and human rights, but there is a difficult question on how far financial institutions should
conduct audits. On the other hand, the Equator Principles, UNEP FI, PRI, and Principles for Financial
Action for the 21st are voluntary rules in the financial sector that seek for standardization of the scopeand contents of ESG issues including human rights issues. However, this has not been clearly
established nor mainstreamed yet, so each financial institution tries to differentiate themselves byshowing what and how they conduct audits, and this is a challenge for the future in the financial sector.

Experts: I have been interested CSR within the financial sector and I have learned about that today. I
think that the difficulties of CSR in the financial sector come from its characteristics of having productsthat do not have a specific “goods character”. In other words, it is difficult to associate their productswith issues. If it is the case of the textile sector, it could associate their products with the dyeing process
and attendant chemical materials, yet, money could not evoke any images. Paradoxically, this generality
requires the financial sector to have sensitivity toward what society is interested in. The Equator
Principles could be the very example of what society is interested in. This means that the financial
sector is quite likely to get stuck in their CSR activities, confusing what they should do, if they do notfundamentally understand what globally recognized right actions are beyond such established rules.

Itis not financial institutions themselves but their counterparts who decide what they should do. I think
this makes it difficult to carry out CSR in the financial sector.

END

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25Appendix 1
Worksheet A
1. Please select issues which have significance to your sector and mark ●. Please also identify issues which have no relevance or less relevance to your sector and mark ▲ in the "Selected Issues ● or ▲" column.
Three issues of ● and three of ▲ from Section Ⅰ: Core Operation / Supplly Chain, and also three issues from each of Section Ⅱ: COMMUNITIES and Ⅲ: SOCIETY AND GOVERNMENTS. A total of 12 issues should be selected.
2. Regarding the issues you marked ●, please select the related value chain and mark ●. Multiple marks are allowed.
3. Please write concrete points for significant issues (●) with each issue number, while also stating the reasons for marking ▲ with each issue number.
These human rights issues are based on the “Identifying the human rights issues and expectations relevant to business (based on internationally recognised standards and voluntary initiatives)” in the Guidance Tool issued by the UNEP FI in 2011.

Ⅰ. CORE OPERATION / SUPPLY CHAIN
事業 / サプライチェーン

1. Workplace conditions
職場における待遇

2. Discrimination
差別3. Child labour
児童労働aWorking hours
労働時間

b

Wages
賃金

c

Health and Safety
健康および安全dDisciplinary practices
懲戒処分e

Recruitment
採用f

During work
従業時gRedundancy and dismissal
整理解雇、解職

hRisks to children
危険な作業や雇用i

Minimum age
最低年齢

jWorking hours and conditions of employment
労働時間と労働条件kl

4. Forced or compulsory labour
強制労働

5. Freedom of association and collective
bargaining
結社の自由と団体交渉権©Caux Round Table Japan

2. Only for the significant issues, select the related value chain and mark ● (multiple marks allowed)
Funding

Facility
Construction

Research

Development

Procurement

Production

StorageTranspor Sales andtationMarketingConsume/Use

Disposal

OthersWorst forms of child labour
最悪の形態の児童労働
Employment of young workers
18歳未満の若年労働者の雇用mPrison labour
囚人の作業もしくは役務

nDeposits and papers
雇用にあたり保証金や文書の提出を求める搾取oForced overtime
強制的な残業p

Trafficking of workers
人身売買q

Freedom to associate and to bargain collectively
結社の自由と団体交渉権r

Conflict with local law
国内法で認められていない場合の措置

3. Which are significant issues to your sectors? Please select three issues from section Ⅰ, and fill in theissue number and concrete points related to each issue below.
● Issue No.

1. Select
Issues● or ▲

Concrete points

3. Which issues are not relevant or less relevant to your sector? Please select three issues from section Ⅰ, and fill in the issue number
and the reason below.
▲ Issue No.

The reason you marked ▲1/2

Appendix 1
Worksheet A
1. Please select issues which have significance to your sector and mark ●. Please also identify issues which have no relevance or less relevance to your sector and mark ▲ in the "Selected Issues ● or ▲" column.
Three issues of ● and three of ▲ from Section Ⅰ: Core Operation / Supplly Chain, and also three issues from each of Section Ⅱ: COMMUNITIES and Ⅲ: SOCIETY AND GOVERNMENTS. A total of 12 issues should be selected.
2. Regarding the issues you marked ●, please select the related value chain and mark ●. Multiple marks are allowed.
3. Please write concrete points for significant issues (●) with each issue number, while also stating the reasons for marking ▲ with each issue number.
These human rights issues are based on the “Identifying the human rights issues and expectations relevant to business (based on internationally recognised standards and voluntary initiatives)” in the Guidance Tool issued by the UNEP FI in 2011.

Ⅱ. COMMUNITIES
コミュニティ

1. Resources
資源

2. Security
治安

3. Access to Land
土地へのアクセス

4. Community investment
コミュニティへの投資

a

Use of natural resources
天然資源（水や土地等）の利用b

Use of infrastructure
インフラ（道路、電気、上下水道等）の利用

c

State provision of security
国家による警備の提供

dNon-state groups and security payments
非政府勢力への支払い

eDetainment
拘束f

Title to land
土地の所有権g

Voluntary relocation - consultation and compensation
自主的な土地移転を促す協議と補償

hForced relocation
強制移住aOperations in countries in conflict
紛争国における事業b

Entry (pre and post conflict)
紛争前および紛争後の国への進出

c

Relations to states with poor human rights records
人権に対する認識が低い国との関係

dMoney laundering and transparency
マネーロンダリングと透明性

eBribery and corruption
賄賂と腐敗

3. Which are significant issues to your sectors? Please select three issues from section Ⅱ&Ⅲ, and fill in
the issue number and concrete points related to each issue below.
● Issue No.

©Caux Round Table Japan

2. Only for the significant issues, select the related value chain and mark ● (multiple marks allowed)

1. Select
Issues● or ▲

2. Only for the significant issues, select the related value chain and mark ● (multiple marks allowed)

Funding

Facility
Construction

Research

Develop Procurem
Production
ment
ent

StorageTransport Sales and Consume/
Disposalation
Marketing
Use

Others－ －Ⅲ. SOCIETY AND GOVERNMENT
社会と政府

Relations with Governments
政府との関係

1. Select
Issues● or ▲

Concrete points

Funding

Facility
Construction

Research

Develop Procurem
Production
ment
ent

StorageTransport Sales and Consume/
Disposalation
Marketing
Use

Others3. Which issues are not relevant or less relevant to your sector? Please select three issues from section Ⅱ&Ⅲ, and fill in the issue number
and the reason below.
▲ Issue No.

The reason you marked ▲2/2