(3) Basic Action for E&R Guidelines
Basic Action for "Engagement" and "Remedy" Guidelines
for Promotion of Responsible Business Conduct and Supply Chains
This Basic Action lists ten actions that Japanese companies can implement with the goal of ensuring
access to remedies through dialogue on issues and complaints related with responsible businessconduct raised by stakeholders while complying with the Guiding Principles on Business and Human
Rights (hereinafter referred to as the "Guiding Principles") and implementing due diligence for RBC
in line with the OECD MNE Guidelines and its Due Diligence Guidance and the ILO MNE
Declaration.
In accordance with Principle 31 of the Guiding Principles, this Basic Action is based on eighteffectiveness criteria for grievance mechanisms: (i) Legitimacy; (ii) Accessibility; (iii) Predictability;(iv) Equitability; (v) Transparency; (vi) Compatibility with internationally recognized human rights;(vii) Continuous Learning; and (viii) Engagement and Dialogue.
Actions based on this Basic Action will promote responsible business and supply chains to theextent that Japanese companies can exercise their influence, as well as initiatives in accordance withthe SDGs (Sustainable Development Goals), ESG (Environmental, Social and Governance)
Investments, and the Corporate Governance Code.
It is desirable that Japanese companies first introduce and expand their grievance mechanisms basedon this Basic Action, and then improve such mechanisms upon periodic review and reference to the“Engagement” and “Remedy” Guidelines for Promotion of Responsible Business Conduct and Supply
Chains (hereinafter referred to as the "Engagement and Remedy Guidelines") and the "Guidelines on
Development of Collective Grievance Mechanisms (Grievance Centers) (hereinafter referred to as the"Guidelines on Development of Grievance Centers").

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(3) Basic Action for E&R Guidelines
Commentary on the Basic Action for “Engagement” and “Remedy” Guidelines
1. Accept complaints related to responsible business conduct including international humanrights and supply chains.
・ Many Japanese companies have already clarified their policies to respect the human rights ofstakeholders, and have established internal reporting systems and complaint handling systems in orderto respond to complaints from legal compliance and quality control perspectives. Nonetheless, there
are not many Japanese companies that have taken on complaints pursuant to Guiding Principles 29-31
related to new "Business and Human Rights" issues related to human rights, including the protectionof gender equality and minorities, and issues related to the supply chain (including a wide range ofvalue chains and investment chains).
・ Companies that support this Basic Action should pay attention to issues related to responsible
business conduct including international human rights and the supply chain and accept complaints
pursuant to Guiding Principles 29-31 from the perspective of compliance with Guiding Principle 31(vi): Compatibility.
[Reference: Chapter 1 of the Engagement and Remedy Guidelines]

2. Designate persons and departments responsible for handling complaints and stakeholder
engagement within the company.
・ To clarify the locus of responsibility for handling complaints and ensuring legitimacy of Guiding
Principle 31(i), the company should designate a Complaint Handling Manager and a department
responsible for handling complaints and dialogue within the company.
[Reference: Chapter 2, Section 1, Article 1-2 of the Engagement and Remedy Guidelines]
3. Establish a contact point for receiving complaints and stakeholder engagement and disclose itto the public.
・ In order to ensure the accessibility of the grievance mechanism described under Guiding Principle
31, a contact point for receiving complaints and dialogue should be established and disclosed
externally.
[Reference: Article 10, Section 3, Chapter 2 of the Engagement and Remedy Guidelines]

4. Establish grievance mechanism procedures and disclose them to the public.
・ To ensure the predictability of the complaint process in Guiding Principle 31(iii), grievancemechanism procedures should be established and disclosed externally.
[Reference: Section 3, Chapter 2, Article 10 of the Engagement and Remedy Guidelines]

5. Prevent conflicts of interest in grievance mechanism procedures and ensure equitability.
・The company should prevent conflicts of interest and ensure equitability in grievance mechanism
procedures so as to ensure equitability in grievance mechanism procedures under Guiding Principle2(3) Basic Action for E&R Guidelines
31(iv).
・ This is also required by the Consumer Affairs Agency's "Guidelines for Business Operators
Regarding the Establishment, Maintenance and Operation of Internal Reporting Systems Based on theWhistleblower Protection Act".
[Reference: Chapter 2, Section 1, Article 5 of Engagement and Remedy Guidelines]

6. Prevent disadvantageous treatment such as retaliatory actions against complainants.
・ The company should prevent adverse treatment such as retaliation for complaints so as not toimpede accessibility under Guiding Principle 31(ii).
・ This is in line with the purposes of the Whistleblower Protection Act. The Consumer Affairs
Agency's "Guidelines for Business Operators Regarding the Establishment, Maintenance andOperation of an Internal Reporting Systems Based on the Whistleblower Protection Act" provide that"it is desirable to take necessary measures to prevent whistleblowers from being dismissed or treateddisadvantageously when they receive reports from the relevant affiliated companies or business
partners."[Reference: Chapter 2, Section 3, Article 13 of Engagement and Remedy Guidelines]

7. Disclose the status of complaint handling and stakeholder engagement to the extent possible.
・ The status of complaint handling and dialogue shall be recorded and disclosed to the extent possible
to ensure transparency, in accordance with Guiding Principle 31(v): Transparency.
[Reference: Chapter 2, Section 5, Article 26 of Engagement and Remedy Guidelines]

8. Engage in dialogue with stakeholders and utilize independent experts in handling complaints
and resolving issues.
・ Dialogue with stakeholders is important from the viewpoint of Guiding Principle 31(viii):
Engagement and Dialogue. The use of independent experts is also important to ensure (i) Legitimacyand (iv) Equitability under Guiding Principle 31 regarding the grievance mechanism process.
Therefore, companies that support this Basic Action should engage in dialogue with stakeholders andutilize independent experts in handling complaints and resolving issues.
[Reference: Chapter 2, Section 1, Articles 3, 4 and 6 of Engagement and Remedy Guidelines]

9. Review and improve the grievance mechanism on a regular basis while referring to theGuidelines.
・ In order to make the complaint process under Guiding Principle 31 a source of continuous learning,
the company should periodically review and improve its grievance mechanism based on the results ofstakeholder dialogue (stakeholder engagement) and audits, and by referring to Engagement andRemedy Guidelines.
・ This action is fundamental, and the company should establish a grievance mechanism in accordance3(3) Basic Action for E&R Guidelines
with Engagement and Remedy Guidelines based on its proficiency.
[Reference: Chapter 2, Section 6, Article 30 of Engagement and Remedy Guidelines]

10. Share the status of complaint handling and dialogue within the company, including
management.
・ The company should record and share the status of complaint handling and dialogue internally inorder to make complaint handling under Guiding Principle 31 a continuous source of learning, toproperly evaluate negative impacts on human rights, and to conduct effective human rights due
diligence. In particular, sharing the status of complaint handling and dialogue with management as
necessary is useful for practicing stakeholder-friendly corporate management. Companies that endorse
this Basic Action should share the status of complaint handling and dialogue within the company,
including management and should be reported to the board for particularly serious problems.
[Reference: Chapter 2, Section 6, Article 31, Engagement and Remedy Guidelines]※ Utilize collective grievance mechanisms and dialogue procedures (e.g., Grievance Centers)
when appropriate.
・ Depending on the size and circumstances of the company, it may be more useful to use collective
grievance mechanisms and dialogue procedures than to develop a grievance mechanism at individualcompanies. Guiding Principle 29 allows companies to participate in collective grievance mechanisms
while developing their own mechanisms. Therefore, participants in this Basic Action should utilize
collective grievance mechanisms and dialogue procedures (e.g., the Grievance Center) whenappropriate.
[Reference: Grievance Centers Guidelines]

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