Column A / Considering Business and Human Rights: What are Universal Human Rights?

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Considering Business and Human Rights:
What are Universal Human Rights?
GOTO, Kenta

1) Workers were represented by the Japanese Federation of Textile, Chemical,
Commerce, Food and General Services Workers’ Unions (UA Zensen). The Inter­national Labour Organization (ILO) office in Japan provided technical assistance inthe development of the guidelines. The author had the opportunity to participate in
the development process as one of the ILO’s advisors.
2) Guiding Principles on Business and Human Rights: Implementing the United
Nations’ “Protect, Respect and Remedy” Framework.

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In September 2022, the Japanese government released “Guidelines on
Respecting Human Rights in Responsible Supply Chains” to promote corporate efforts to respect human rights. One month earlier, “Guidelines
for Responsible Business Conduct for the Textile and Clothing Industryof Japan” was formulated by the Japan Textile Federation under the auspices of the Ministry of Economy, Trade and Industry. While the latteris specific to the textile sector, the industry still encompasses many subsectors from upstream to downstream, and the size of the actors varies
from small to large companies. The position of each company in the textile industry value chain is different, and the management issues they
face involve a variety of stakeholders. The fact that the guidelines weredeveloped through constructive dialogue between workers and employers was groundbreaking.1)
These guidelines are all based on key international standards
related to business and human rights (BHR), such as the Organization
for Economic Co-operation and Development’s (OECD) “Guidelines
for Multinational Enterprises on Responsible Business Conduct (MNE
Guidelines),” the International Labour Organization’s (ILO) “Tripartite
Declaration of Principles concerning Multinational Enterprises andSocial Policy (MNE Declaration),” and the United Nations’ “Guiding
Principles on Business and Human Rights (Guiding Principles)”2). The
development of those guidelines in Japan has been based on the growing
attention within the government on issues related to BHR since the inauguration of the Kishida administration.
Shortly before these movements in Japan, the Biden administration,
which also emphasized human rights, took office in the United States.

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1. Introduction.

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All businesses should recognize the intrinsic value and importance ofhuman rights and respect it in their daily operations, not because it is“required.” However, it may still be important to understand the broader
international political and economic context in which human rights issues
have evolved to become central to business activities. One example inwhich this has manifested itself is the Indo-Pacific Economic Framework(IPEF). The IPEF is one of the main policies of the Biden administration related to the Asian region, which, unlike previous regional trade
agreements, is now being discussed with an emphasis on “values,” suchas human rights. We will discuss IPEF in the final part of this column.
These broader international political-economic dynamisms will most
likely affect the institutional context in which businesses must operate
in the near future.3)
While the need for a technical response on BHR has been recognized,
the discussion and understanding of the significance and universality of
the issue of human rights, however, do not seem to have matured, atleast not in the Japanese business world. As such, this column will takea step back and think of what “human rights” would mean for contemporary businesses, particularly in a globalizing context where it should
be considered an issue that must be extended beyond the boundaries
of individual companies and countries connected in global value chains(GVCs). Why should companies located in Japan be concerned not onlywith human rights issues within the boundaries of their country or companies, but also with those of workers of foreign business partners andeven the local communities in which these partners operate? Given thecontext of GVCs, what is the underlying philosophy that mandates companies to bear responsibility for the human rights of workers of supplierswith which they have no direct contacts or contractual relationships? Inorder to address these questions, the next part briefly reviews how BHR
became a prominent issue in GVCs, and then reviews its core principles,by focusing on the concept of universal human rights. This column will
also discuss the challenges that this poses to businesses in the era of3) In “Kansai and the Asia Pacific Economic Outlook 2002,” the author reviewed thecurrent situation of “Business and Human Rights” in Japan from both institutionaland business perspectives, and discussed management issues related to the issue.
Please refer to Goto (2023) for details.

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globalization, and attempts to draw implications on the potential opportunities for Japan and Asia.

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BHR is an old but contemporary issue. Its origins date back more thanhalf a century to the 1960s, when the influence of corporations began toextend beyond national boundaries. The progression towards the free
trade regime at a global scale in the postwar era led to the internationalization of business activities by multinational enterprises (MNEs) indeveloped countries, which has been recognized as a major contributor
to the environmental and social problems in developing countries. It wasan era in which, for example, human rights violations under policies suchas the apartheid in South Africa were increasingly recognized as being
problematic, and companies doing business with such countries werecriticized. The MNE Guidelines and MNE Declaration were the international community’s response requiring businesses to respect humanrights (Yoshimura, 2021).
Economic globalization peaked during the rise of neoliberalism in
the 1980s and the post-Cold War period that followed in the 1990s.The
key characteristic of GVCs, which have evolved since, is that it intricately
connects firms from various countries with different factor endowments
through complex intra- and inter-firm relationships. Firms in developing countries with a comparative advantage in labor-intensive processes
participate in GVCs by undertaking such processes. Lead firms in developed countries that organize and manage GVCs have a strong influenceon the firms in other countries connected to them and on the local economies in which they operate. Therefore, when a human rights issue arises
in a company in a developing country connected to a GVC, the lead firmin the developed country that coordinates the GVC is held primarily
responsible. Such GVCs have developed most extensively in Asia, which
has also been the main driver of the region’s economic growth (Goto,2019).
BHR became a critical issue for businesses particularly when the
United Nations Human Rights Council unanimously endorsed the UN
Guiding Principles (UNGP) in 2011. This was largely driven by thePart Ⅰ

2. GVC Development and Human Rights

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widespread view that corporations in developed countries, including
Japan, have encouraged or been complicit in human rights abuses in
the process of improving their competitiveness through the formulationof GVCs. The UNGP include three requirements: (1) the obligation ofstates to respect, protect and fulfill human rights and fundamental freedoms; (2) the responsibility of businesses to comply with all applicablelaws and to respect human rights; and (3) to have in place appropriate
and effective remedy mechanisms and to guarantee access to them inthe event of human rights violations or non-compliance. It is important
to note that, while the protection or extension of human rights has traditionally been considered the role of the state, now the responsibility ofcorporations has also been clearly stated (Goto, 2023).
The UNGP requires businesses to respect the human rights particularly of the workers not only in their own companies in their homecountries, but also in their overseas operations. These include workersof their suppliers with whom they have no capital (ownership) relationships. The UNGP further stipulates the responsibility to respect thehuman rights not only of those workers of “direct suppliers,” but alsoof “indirect suppliers” with which they may have no direct contractual
relationships. In many cases, Japanese companies are in a position toconfigure and manage GVCs in Asia, and given their stronger position in
those chains, it is understandable that they are expected to lead responsible business practices by example. The UNGP, however, is asking for
more. Why should Japanese businesses be concerned and take action
when there are potential human rights violations of those workers ofbusiness partners in foreign countries, even when there are no directcontracts? To address this question, it would be useful to revisit the concept of universal human rights.

3. The Concept of Universal Human Rights
The Universal Declaration of Human Rights of 1948 states that “Allhuman beings are born free and equal in dignity and rights.” (Article 1)
and that “Everyone is entitled to all the rights and freedoms set forth in
this Declaration, without distinction of any kind, such as race, color, sex,
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property, birth or other status” (Article 2). As can be understood fromthe Declaration, human rights are inherently “international” (Yokota,
2021) and universal in nature. It would be useful to take a look at thisconcept, according to the views presented by Tsutsui (2022).
Humanitarianism is a concept similar to human rights, and includes
dimensions such as relief of the weak, equality, justice, freedom, and dignity. Institutions based on this concept have existed since ancient times.
For example, the Mesopotamian civilization’s Code of Hammurabi,
which was written in the B.C. era, reflects these values. Tsutsui, however,sees the current human rights ideals as transcending these humanitarianconcepts by virtue of their universality. The first key concept to understanding the nature of this difference is the distinction between in-groups
and out-groups.
The idea of natural rights, that people are born with inherent rights,
has existed since ancient Greece, and later took root in Western Europe
with the spread of Enlightenment thought. However, these natural rights
were applied to “members of society” as defined by social, political, andcultural factors, and were often understood in a limited manner. In otherwords, although people were considered to be born with rights, thescope of “people” was limited to in-groups such as “residents of a country” and “adult males within that country,” excluding people with specificattributes such as women and foreigners. The arbitrary treatment ofpeople who did not belong to such groups is evident in the history of theworld, including that of Japan. In fact, the distinction between in-groups
and out-groups is a characteristic that is widely seen in human society. It
has been considered the role of the state to give priority to the in-groupand to protect the lives and rights of its members. However, the concept
of universal human rights is revolutionary in the sense that it holds thatcertain human rights must be guaranteed to everyone, regardless of the
distinction between in-groups and out-groups.
It was not until after World War II that the concept of human rights asuniversal rights was established, which states that people must be guaranteed basic human rights simply because they are human beings. The
Universal Declaration of Human Rights, whose definition is cited earlier,
was the first to specifically define human rights as universal rights in
an international context. Tsutsui evaluates the universal human rights

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that emerged at this time as revolutionary and a landmark in the historyof mankind. Tsutsui also points out the 1970s, when interest in universal human rights grew rapidly in the international community, and the1990s, when institutions related to human rights began to take effectafter the Cold War, as important milestones in the promotion of universal
human rights. Understanding human rights as a universal concept in thisway makes it clear that distinctions between in-groups and out-groups,
defined by boundaries such as corporations and nations, cannot be reasons to neglect the respect for human rights.
Tsutsui further states that the second key concept that distinguishes
modern universal human rights from the humanitarianism of the pastis the exception to the principle of non-intervention in internal affairsof states. This means that if there is a violation of human rights inanother country against some of its citizens, it should not be ignored as
an internal affair of another country. The principle of non-intervention
granting exclusive sovereignty over its territory started since the Peaceof Westphalia in 1648, and domestic affairs has since often been regarded
as sacred for states. Therefore, given the reality of international politics,
the affirmation of intervention in internal affairs may only be a theoretical possibility. Nevertheless, under the universal human rights concept,
domestic human rights violations in the name of state sovereignty are
not allowed, at least in theory, and this concept itself has been groundbreaking. If this exclusion of non-intervention underlies the concept ofuniversal human rights in BHR, then companies overseeing GVCs willneed to take action toward human rights issues of those connected intheir value chains in distant countries, even when their connections
remain indirect. In other words, from the perspective of universal humanrights, it is essential that Japanese companies, as the lead-firms of GVCs
in Asia, take some action to improve the situation when there are humanrights violations in, for example, the labor conditions of suppliers withwhich they do not have direct contracts.

4. Challenges for Japanese Companies
On May 27, 2023, a ministerial-level meeting of the IPEF was held in
Detroit, MI, in the U.S. Unlike the Comprehensive and ProgressivePart Ⅰ
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Agreement for Trans-Pacific Partnership (CPTPP) or the Regional
Comprehensive Economic Partnership (RCEP), this U.S.-led initiative,
which includes 14 countries including Japan, does not address issues
related to market access such as tariff reductions. Instead, discussions
are underway in the four areas of “fair and resilient trade (Pillar I),”
“supply chains (Pillar II),” “clean economy (Pillar III),” and “fair economy (Pillar IV). Discussions in relation to IPEF are different because ofa strong emphasis on “values.”
At the Detroit meeting, it was announced that there had been an
agreement on Pillar II related to resilience of supply chains. However,there has been one issue in this agreement that has not received muchattention from the Japanese media, that being the establishment of an“IPEF Labor Rights Advisory Board” as a mechanism to ensure respect
and promotion of labor rights, based on a tripartite structure of government, workers, and employers. Labor rights are at the heart of the
BHR agenda, and the ILO’s core labor standards (10 conventions and
1 protocol in 5 areas, including “Recognition of the right to freedomof association and collective bargaining,” “Prohibition of forced labor,”“Prohibition of child labor,” “Elimination of discrimination,” and “Safeand healthy working environment”) are generally referred to as minimum rights to be respected. In Asia, however, BHR is not yet frontloadedin policy discussions. As there may be diverse reactions to human rights
issues, various challenges may rise when it comes to mainstreaming
BHR into practice.
In Japan, respect for human rights by businesses has so far remained
a voluntary requirement. However, in Europe and other areas, it is
becoming mandatory (Goto, 2023). Even if the IPEF negotiations proceed and a framework is agreed upon, it will not be enforceable unlessmember countries ratify the framework and enact it into domestic law.
Nevertheless, it is possible that such legal measures for businesses torespect human rights might be taken in Japan in the future.
If a legal framework would be established to respect human rights
and to conduct due diligence along their entire value chains, businesses
would most likely respond with strong incentives. However, we must
remember that it should be a natural obligation for those companies tooperate in a manner that fully respects human rights, considering the55

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magnitude of their influence. In addition, in light of the universality ofhuman rights, demands for respect for human rights and criticism of
human rights violations cannot be used arbitrarily in relation to specificcountries or companies, as discussed earlier. One of the main challenges to mainstream human rights in business practice is to design andimplement a mechanism for dialogue that is inclusive of a diverse set ofstakeholders in accordance with the principles of universal human rights
throughout the entire value chain.
Given these challenges, what can Japanese businesses offer, especially to their partners in Asia? In addition to formal regulations andrules, business practices aligned with respect for human rights can also
emerge in the pursuit of competitiveness without regulatory enforcement. In economic terms, they can be considered as institutions in forms
of informal equilibria. For example, Japanese management practices
often emphasize long-term, stable inter-firm and employment relationships, which may entail practices consistent with the ideas behind BHR(Goto and Arai, 2018; Goto, 2022). Whether these “good practices” canbe applied in other contexts, or the external validity of such specificcases, is of course a question that should be addressed. However, such
good “de facto” practices are often embedded as tacit knowledge in thedaily operations of Japanese companies, and sharing them with Asianpartners and adapting them to local contexts may provide new insights tomainstream human rights concerns into business strategies. Identifying
such good practices and reevaluating them from the BHR perspective
may have important implications.
References
Goto, K. 2023. “Business and Human Rights in the Era of Globalization”
in Kansai and the Asia Pacific: Economic Outlook 2022-2023, Osaka:
Asia Pacific Institute of Research, pp. 56-66.
Goto, K. 2022. Responsible Supply Chains in Asia: The Case of Japan’s
Electronics Industry. Tokyo: ILO.
Goto, K. 2019. What is the Asian Economy? Its Growth Dynamism andJapan’s Future (Japanese title: Ajia Keizai toha Nanika? Yakushin no
Dainamizumu to Nihon no Katsuro). Tokyo: Chuo-Koron Shinsha
Publishers (in Japanese).

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Goto, K. and Yukiko A. 2018. More and Better Jobs through Socially Responsible Labour and Business Practices in the Electronics Sector ofViet Nam. Geneva: ILO.
Tsutsui, S. 2022. Human Rights and the State: The Power of Ideas andthe Reality of International Politics (Japanese title: Jinken to Kokka
Rinen no Chikara to Kokusai Seiji no Genjitsu). Iwanami Shoten (inJapanese).
Yokota, Y. 2021. “The Meaning and Significance of International Human
Rights”(Japanese title: Kokusai Jinken no Imi to Igi) in Yokota, Y.
(ed.), New Introduction to International Human Rights (Japanese title: Sin Kokusai Jinken Nyumon), Horitsu Bunka Sha, pp. 8-25 (inJapanese).
Yoshimura, S. 2021. “Economic Activities and International Human
Rights”(Japanese title: Keizai Katsudo to Kokusai Jinken) in Yokota,
Y. (ed.), New Introduction to International Human Rights (Japanese
title: Sin Kokusai Jinken Nyumon), Horitsu Bunka Sha, pp. 182-198(in Japanese).

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Column A / Considering Business and Human Rights: What are Universal Human Rights?