Business andHuman Rights
Corporate Japan
Rises to the ChallengeContents
1. Turning Points● Human Rights Over Time
● Spotlight on Corporations● Road to Consensus

2. Dissecting the Corporate Responsibility● The Three Pillars of the UN Guiding Principles● Three Pillars of Corporate Responsibility:
Cause, Contribution and Linkage● Addressing a Corporate Human Rights Impact: What to do● Human Rights Due Diligence● Learning from Leading Companies

3. Corporate Japan Rises to the Challenge● A Spirit of Cooperation and Coexistence● Changing Times, Changing Management● Rising to the Challenge: People-centred Global Business

4. From Dissemination to Implementation● Embedding the Principles● Knowing and Showing

1| Business and Human Rights - Corporate Japan Rises to the Challenge

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Japanese companies and human rights
When attending international conferences on CSR, I have heard
people remark on the lack of attendance by Japanese companies,
and moreover that it is unclear what Japanese companies are
doing in respect of CSR. As someone that is well acquainted withJapanese companies’ steady efforts in the CSR field, I find thisregrettable. By way of example, I know of a Japanese company
that conducts detailed surveys to gain greater insight into theiroverseas supply chain, and when they identify any human rightissues, they discuss these with the supplier involved. By carefully
explaining to the supplier how a lack of respect for human rights
will negatively impact its own business, the company tries toaddress the issue together with the supplier.

Toshio Arima
Chairman of the board,
Global Compact Network Japan

There are 14 working groups currently active within the Global
Compact Network Japan, over which I preside. One of these, the
Human Rights Due Diligence Working Group, put together thisbooklet in collaboration with EY Japan to present examples ofJapanese best practices.
I hope this booklet goes some way to helping people understandhow Japanese companies are making efforts with respect tohuman rights.
I believe that Japanese companies can effectively address humanrights-related issues by actively engaging in dialogue with theirstakeholders around the world.
On 25 September, the United Nations adopted the Sustainable
Development Goals. These 17 goals, agreed upon by all of the UN
member nations and regions, form a common world language.
The SDGs apply to both developed and developing countries
and encourage the private sector to exert their power to solve
the challenges facing us. By working towards these 17 goals andparticipating in global sustainable growth and development,
Japanese companies can also unlock new business opportunities.
In addition, Japanese companies can make great leaps in terms ofengagement with a variety of international stakeholders. Each of
the 17 goals concern human rights, either directly or indirectly.
Thus I firmly believe that the SDGs provide an opportunity
for Japanese companies to have a more dynamic exchange of
opinions with overseas stakeholders.
Lastly, I would like to express my sincere appreciation to theparticipants of the HRDD WG and EY Japan. They have spentmuch time and energy on this great work.

Business and Human Rights - Corporate Japan Rises to the Challenge |2

Keiichi Ushijima
EY Japan
Climate Change and Sustainability
Services Leader

As business expands globally and markets become increasingly
borderless, the diverse social and environmental challenges
facing the international community are becoming ever more
complex. These challenges are no longer the exclusive domain of
governments: just as they affect corporate management - whether
directly or indirectly - corporations are expected to play their partin seeking solutions. Further, technological advances have shedlight on previously hidden social issues, and some companies haveattracted critique when perceived as profiting at the expense ofpeople or the environment. These issues are a wake-up call for
those managers who have taken excessively short-term approaches
and/or deemed regulatory compliance sufficient to meet social
expectations. Companies that cannot respond appropriately to thesesocial shifts and consequent changes in the business environment
will increasingly find themselves shut out of markets. National
borders have lost their significance other than as political boundarylines; for multinational corporations in particular, corporate social
responsibility requires ethical approaches that transcend borders.
While environmental issues such as chemical pollution andglobal warming were placed at the forefront of the international
community’s agenda in the 1990s, global momentum aroundbusiness and human rights picked up later in the 2000s. Significant
milestones occurred in 2010 with the publication of ISO 26000 andthe enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act in the US. Thereafter the “watershed moment” camein 2011 with the UN Guiding Principles on Business and Human
Rights.
In Japan, human rights have historically been understoodas referring to discrimination, particularly in the context of
employment. However, as Japanese businesses become increasingly
multinational, they are coming to recognize human rights issues inareas other than employment, such as within their supply chains.
After the Great East Japan Earthquake in March 2011, global value
chains were temporarily disrupted as many Japanese companies’
manufacturing sites were crippled by the earthquake and tsunami.
However, some companies were able to restart operations at theirfactories a mere two weeks later and to resume virtually all of
their production in under two months. The traditionally long-term
relationships that Japanese companies have fostered with their
suppliers have been credited with not only reducing long-termcosts and increasing quality, but also with building a resiliency thatfacilitated the swift restoration of global value chains after the dual
disasters.
In this publication, in collaboration with Global Compact Network
Japan, we review these issues from the perspective of Japanesecompanies; in particular we discuss the growing awareness of the
UN Guiding Principles on Business and Human Rights and present
approaches to their implementation that recognize respect forhuman rights as a management issue. I hope that by highlighting
real-world examples of companies going beyond the theory andaddressing these challenges in practice, this publication will provide
our readers with some ideas that will be useful in their futureendeavors.

Special thanks to the companies
below for their cooperation in thedevelopment of this paper.
● Adecco Ltd.
● AEON CO., LTD.
● Ajinomoto Company, Incorporated● ALL NIPPON AIRWAYS CO., LTD● ASAHI GROUP HOLDINGS, LTD.
● Astellas Pharma Inc.
● CASIO COMPUTER CO., LTD.
● Cre-en Inc.
● Daiwa Securities Group Inc.
● DIC Corporation● Fuji Electric Co., Ltd.
● Fuji Xerox Co., Ltd.
● Fujitsu Limited● Hitachi, Ltd.
● ITOCHU Corporation● INPEX CORPORATION● Kirin Company, Limited● KONICA MINOLTA, INC.
● LIXIL Corporation● Mitsubishi Heavy Industries, Ltd.
● MITSUI & CO., LTD.
● NEC Corporation● Nihon Unisys, Ltd.
● NORITZ CORP.
● NYK LINE● Recruit Holdings Co., Ltd.
● Resona Holdings, Inc.
● Sojitz Corporation● Sumitomo Corporation● TOPPAN PRINTING CO., LTD.
● TOTO LTD.
● Ushio Inc.
● Yamaha Corporation● YAMATO HOLDINGS CO., LTD.

Business and Human Rights - Corporate Japan Rises to the Challenge |4

1. Turning Points

5| Business and Human Rights - Corporate Japan Rises to the Challenge

Human Rights Over Time
There is an increasingly rare, but still lingering misunderstanding thathuman rights are somehow a “western” concept, first appearing in the
French constitution or that of the American revolutionary states; while
they received their familiar form in these documents, in reality, the ideathat people had rights inherent to their status as a human being appears
in the history of China, as well as Persia, Iraq and Afghanistan as early as
the Code of Hammurabi of 1800 BC.1
In Japan, human rights, or more accurately the Japanese word “jinken”,
has traditionally taken on a slightly restricted meaning since its
introduction in the 17th century, representing either the general concept
of “consideration for others”, or more specific issues of workplaceharassment and/or the rights of specific “discriminated communities”2.
（This is discussed in detail on page 23.）However, in recent years,
concerted efforts by civil society groups have highlighted the true
meaning of human rights, as the universal, fundamental principles andstandards that aim to secure dignity and equality for all.
Of course, the most famous expression of human rights is the Universal
Declaration of Human Rights（UDHR）of 19483, which arose fromthe ashes of World War II amidst the pleas of “never again”. The text
drew heavily on ideas from the Enlightenment in the West, however
an influential Chinese member of the drafting committee told the UN
General Assembly in 1948 that many influential western thinkers onrights were guided by Chinese ideas:

In the early 1990s, the concept of “Asian values”, emphasizingcollectivism and non-democratic governance, was advanced by some
Asian leaders as a contrast to so-called “Western” concepts of universal
rights. This approach was in turn heavily criticized by other prominent
Asian voices, who emphasized the diversity of Asian nations.9 Howeverin 1993, the international community gathered at the Vienna World
Conference on Human Rights and adopted the Vienna Declaration and
Program of Action, which reaffirmed all States’ commitment to the
UDHR.
Today the peak UN human rights body is the Human Rights Council,
made up of 47 States periodically elected to the position.（Japan was
most recently an elected member for the period 2013 to 2015.）This
Council has many functions, including undertaking the Universal
Periodic Review, whereby every single member state of the UN must
undergo an assessment of their human rights situation every four
years. It was this Council at which the UN Guiding Principles wereunanimously endorsed in 2011, as we discuss on page 8.

“In the 18th century, when progressive ideas with respect to humanrights had been first put forward in Europe, translations of Chinese
philosophers had been known to, and had inspired, such thinkers
as Voltaire, Quesnay and Diderot in their humanistic revolt against
feudalism”.4
The UDHR is the most translated document in the world. It contains 30
articles that set “a common standard of achievement for all peoples and allnations”. It was adopted in the General Assembly by a vote of the members
in 1948, with 48 in favor, none against, and eight abstentions.5 As the
UDHR defines the meaning of the words “fundamental freedoms” and“human rights” in the United Nations Charter, it is binding on all member
states and moreover has entered into customary international law.
Following the UDHR, various legal instruments elaborating the rights
and duties contained in the UDHR were drafted and adopted, such as
the International Covenant on Civil and Political Rights（“ICCPR”）and
the International Covenant on Economic, Social and Cultural Rights（“ICESCR”）in 1966. Together, these documents are known as theInternational Bill of Human Rights.6 International agreements between
states, such as the Bill of Rights, are designed to be implemented innational legal systems: ratifying states have a duty to make sure thatthey are reflected and enforced in national law and practice.7
Regional conventions and charters of human rights have also been
agreed and ratified, such as the 1950 European Convention on Humanrights, 1969 American Convention on Human Rights and 1981 African
Charter on Human and Peoples’ Rights.8

Business and Human Rights - Corporate Japan Rises to the Challenge |6

1. Turning Points

Spotlight on Corporations
Human rights protection has traditionally been the remit of state
governments. The key human rights treaties negotiated after theSecond World War and during de-colonisation were by - and about states. Since this time, however, the world has changed: globalisation,
deregulated trade and the transfer of traditionally state-based services（such as security and the management of natural resources）tocorporations has led to companies having an increased ability to affectthe environment and the rights of individuals, both positively andnegatively.
The notion that companies should not abuse human rights can betraced back to key moments in our history. Directors of a German
company were found guilty of war crimes after the Second World War
for constructing a plant next to the Auschwitz concentration camp with
the intent to use inmates as slave workers.10 The Sullivan Principles
were developed to promote corporate social responsibility during theanti-apartheid movement. In 1984, the McBride Principles formed acode of conduct concerning fair employment for US companies doing
business in Northern Ireland.
Notwithstanding, even up to the 1990s, it was considered by many
either that the protection of human rights could remain entrusted tostate governments, or, as Milton Friedman famously wrote in 1970, that“the social responsibility of business is to increase its profits”.
However, civil society campaigns in the mid-1990s focused onallegations of human rights abuses by or on behalf of resourcecompanies and the use of “sweat-shops” by apparel companies indeveloping countries. As many of the objectionable activities alleged
were within the laws of the countries concerned, civil society expressed
concern about the impact of official corruption and a “race to thebottom” as developing countries competed with lower regulatory
standards to attract multinational corporations. In an environment
in which governments were unable or unwilling to protect theirpeoples’ rights, they argued, companies must still uphold international
standards.
The mid-to-late 1990s saw the emergence of industry codes of conduct,such as the Apparel Industry Partnership Code of Conduct in 1996. A
watershed moment took place in 1999, when UN Secretary General
Kofi Annan called for a “global compact” of shared values between
business and the UN in order to “give a human face to the global
market”.11 This led to the establishment in 2000 of the voluntary
initiative now comprising over 8,000 companies and 4,000 non-businessparticipants, known as the UN Global Compact（“UNGC”）. The first of
the ten principles to which members of the UNGC commit states that“businesses should support and respect the protection of internationallyproclaimed human rights”. This inclusion was particularly significant
as a majority of the member companies from developing countries
reported that their membership of the UN Global Compact was theirfirst encounter with corporate social responsibility（“CSR”）practices.
12
It is worth noting that the inclusion of human rights in the UNGC
principles marked a departure from standard conceptions of CSR that
did not include human rights.

7| Business and Human Rights - Corporate Japan Rises to the Challenge

Following the launch and expansion of the UN Global Compact, key
watershed moments have been the endorsement and widespreaddissemination of the UN Guiding Principles on Business and Human
Rights and the commencement of discussions aimed at a binding treaty.
These are discussed in detail in the following pages.
In addition, domestic legislatures are increasingly creating binding
law in relation to corporate respect for human rights. In the UK, theCompanies Act 2006 requires that company directors have regard to theimpact of the company’s operations on the community and “quoted
companies” must include information about human rights issues/policies in their strategic reports. Further, the UK’s Modern Slavery Act
2015 provides that subject commercial organizations must prepare aslavery and human trafficking statement annually detailing, among
other matters, their due diligence processes in relation to slavery andhuman trafficking in their operations and supply chains. In the UnitedStates, the California Transparency in Supply Chains Act of 2010 requires
certain businesses to disclose the efforts they are making, if any, toeradicate human trafficking and slavery from their supply chains.
For responsible companies, the avoidance of legal sanctions is asecondary motivation - first and foremost, corporate respect for humanrights ensures that they, at a minimum, do not harm the individuals
and communities that are impacted by their activities. Moreover, in
2015, leading companies know that respecting human rights● brings commercial benefits, through increased investment, access towider procurement and top-quality recruits as well as reputational
benefits;● allows them to better anticipate and manage operational andregulatory risks, and be well positioned to comply with future legal
and regulatory requirements; and● can avoid costly company-community conflicts by securing their‘social license to operate’.13

Road to Consensus
The United Nations Guiding Principles on Business and Human
Rights（“Guiding Principles”）represent a “watershed moment” inthe field of business and human rights. The endorsement of the
Guiding Principles by the United Nations Human Rights Council in2011 was a groundbreaking event in the history of the UN: it was
the first international document that clearly identified a “corporate
responsibility to respect human rights” and was also unanimously
endorsed by the Human Rights Council’s 47 member states representing
all the regions of the world. With that endorsement, companies are
now formally recognized as important actors in the context of the UN’s
foremost human rights institution. However, behind the achievementof this international consensus is a story of over twenty years of
painstaking work by those involved.
The former UN Commission on Human Rights, composed of 53
member states and the precursor to the current Human Rights Council,
commenced discussions about the need to regulate the activities oftransnational companies in the late 1980s. In 2003, the Commission
debated a document received for its approval entitled the “Norms on
the Responsibilities of Transnational Corporations and Other BusinessEnterprises with Regard to Human Rights”. The document contained
language to impose new international obligations on companies
in a broad range of areas from human rights（e.g. labor rights andthe elimination of discrimination）
to environmental and consumer
protection. Due to the divergent views on the new framework between
developing and developed countries, as well as business and civilsociety, discussion on the Norms at the UN reached a stalemate.
In 2005, Harvard professor John Ruggie was appointed the UN SecretaryGeneral’s Special Representative for Business and Human Rights ina bid to break the impasse. To build meaningful consensus among
stakeholders, he proposed a completely new approach — the Guiding
Principles, which have become the authoritative global standard forStates and business to prevent and address the risk of adverse impacts
on human rights linked to business activity. The Guiding Principles
themselves are not, however, a new legal framework; rather they are
a set of principles which outline existing international human rights
norms and standards relevant to business, and which clarify the
responsibilities of companies in the area of human rights.

of” it. On the other hand, the term “endorse” is the UN’s strongest
expression of support. UN intergovernmental bodies rarely “endorse”
reports or guidelines prepared by appointed UN experts; the factthat the Human Rights Council unanimously endorsed the Guiding
Principles is reflective of the significant and broad-ranging support fromrelevant stakeholders, including governments, business communities,
investors and civil society that the Principles enjoy. This unanimousendorsement by the Human Rights Council strongly legitimized the
Guiding Principles as international standards which encapsulate a nearconsensus within the international community, and made them a key
factor in shaping the focus of discussions about business and humanrights among states, business communities and civil society.
Nevertheless, not all countries were fully satisfied that the Guiding
Principles went far enough. For instance, during the June 2011 session
at which they were endorsed, Ecuador, an elected member of theCouncil at that time, recognized their importance but repeatedlyemphasized the persisting need for a stronger legal framework toappropriately regulate activities of transnational corporations andprovide a remedy to the victims of corporate human rights impacts
around the globe. Taking into account such views, the Council decided
to include the phrase “further progress can be made [on the Guiding
Principles]”14 in its final decision to endorse the Guiding Principles,
acknowledging the need to continue the discussion. The efforts ofcountries including Ecuador to advocate for discussions towards a treaty
covering these issues came to fruition at the Human Rights Council in
2014, three years after the endorsement of the Guiding Principles. We
discuss this in detail on page 29.

In developing the Guiding Principles, Professor Ruggie has been widely
credited with what had been thought impossible – achieving broad
support amongst states, business and civil society through a consultative
process aimed at ensuring their support and understanding. A credit tothese efforts, the Guiding Principles were ultimately endorsed by the
Human Rights Council in June 2011.
The use of the term “endorse” by the Human Rights Council in
expressing its support（in this case unanimous support）of the Guiding
Principles is significant. When reports or guidelines prepared byappointed UN experts are submitted to the Human Rights Council
for consideration, the Council carefully selects the terms it uses inorder to differentiate the level of support the document receives.
For instance, if few countries are in support, the Council would not“welcome” or “support” a document, but rather “note” or “take note

Business and Human Rights - Corporate Japan Rises to the Challenge |8

2. Dissecting
the Corporate
Responsibility

9| Business and Human Rights - Corporate Japan Rises to the ChallengeThe Three Pillars of the UN
Guiding Principles
The Guiding Principles on Business and Human Rights comprise a set of
31 principles grouped under three “pillars”, namely,● Pillar 1: The state duty to protect human rights;● Pillar 2: The corporate responsibility to respect human rights; and● Pillar 3: Access to remedy.

UN Guiding Principles on Business and Human Rights

The State duty to
PROTECT human rights

The corporate responsibility to
RESPECT human rights

Access to REMEDY

Principles and Rights at Work. The International Bill of Rights
is comprised of the Universal Declaration on Human Rights,
the International Covenant on Civil and Political Rights and theInternational Covenant on Economic, Social and Cultural rights.
The Principles expressly acknowledge that smaller companies may
have more informal policies and processes than their larger peers.
To assist them, the European Commission has published a Guide tohuman rights for small and medium-sized enterprises.15 Notwithstanding, theresponsibility to respect human rights applies equally to companies
regardless of factors such as their size or sector: small companies canstill have severe impacts.
The responsibility of companies under the Guiding Principles is not
limitless: Pillar 2 sets the boundary for corporate responsibility as
those impacts that the company causes, contributes to, or to which thecompany is “directly linked”. These terms are discussed in detail on
pages 11 to 12.
Moreover, the Guiding Principles provide express expectations ofresponsible companies, namely, that they
● establish and publish a human rights policy commitment that is
approved at the most senior level of the business;

Pillar 1 is primarily addressed to governments, and sets out theelements of the State’s duty to protect citizens from human rights
abuses by corporations. It reflects the fact that the duty to protect
individuals from human rights abuses lies with the State in which theabuse occurs.
The “duty to protect” requires the State to take appropriate measures
to prevent, investigate, punish and redress human rights abuse bycompanies through effective policies, legislation, regulations andadjudication. An example of one of the principles of Pillar 1 is below.
Principle 2 States should set out clearly the expectation that all businessenterprises domiciled in their territory and/or jurisdiction
respect human rights throughout their operations.
Pillar 2 provides that corporations have a responsibility to respecthuman rights, whether or not they have a domestic legal obligation to
do so. This pillar is known as the “corporate responsibility to respect”
and exists independently of the State’s ability and/or willingness tofulfil their human rights duties. The responsibility to respect in pillar 2
is closely mirrored by the obligation of UN Global Compact companies
to “support and respect the protection of internationally proclaimed
human rights”.

● undertake human rights due diligence（see page 15）; and● put in place processes to enable them to remediate any adverse
impacts to which they contribute.

A common concern of responsible companies seeking to comply with
the Guiding Principles is how to do so in difficult contexts, such aswhere local laws or customs conflict with human rights principles.
In such cases, businesses should respect the Principles to the greatest
extent possible, taking advice from specialists and stakeholders within
the company and from credible independent experts. By so doing,
companies can be an important force for incremental positive change insuch contexts, rather than reinforcing an undesirable status quo.
Pillar 3 contains the duty and the responsibility, respectively, of States
and companies to remedy adverse impacts. For example,● States must take steps to ensure that those affected by corporate
human rights abuses in their territory or jurisdiction, have access toremedy（Principle 25）.
● Companies should establish or participate in effective operationallevel grievance mechanisms for individuals or communities who may
be adversely impacted by their activities（Principle 29）.

The Guiding Principles provide that businesses should respect“internationally recognised human rights” which means, at aminimum, the rights expressed in the International Bull of Human
Rights and the principles concerning fundamental rights set out in
the International Labour Organisation’s Declaration on Fundamental

Business and Human Rights - Corporate Japan Rises to the Challenge |10

2. Dissecting the Corporate Responsibility

Three Pillars of Corporate Responsibility:
Cause, Contribution and Linkage
The Guiding Principles do not set companies a limitless responsibility
for all human rights impacts suffered by those around them. Merepresence in, and/or paying tax in a given country, for example, does notmean that a company is responsible for human rights abuses that takeplace in that country.16
Rather, they set out three situations in which the company issufficiently close to a human rights impact so as to be responsible for it,
and therefore required to prevent, mitigate or remedy the impact. The
three situations concern impacts that the company may
I. cause, or
II. contribute to through its own activities,
as well as those which may be
III.directly linked to its operations, products or services by its business
relationships.
A company causes or contributes to an impact through its own
activities.（“Activities” is understood to include both actions as wellas omissions. For example, if a company’s failure to act legitimizes
or encourages an abuse by another party, it would be considered tocontribute to the impact.）

Causing an impact“Causing” an impact is largely a question of common sense. Wherea company forbids employees to marry or mandates their choice ofreligion, employs child labour or pollutes the land of nearby farmers
and thereby destroys their livelihood, it causes a human rights impact.

Contributing to an impact
On the other hand, “contribution” requires slightly further explanation.
The Guiding Principles do not go into great detail in relation to what
is meant by “contribution” to a human rights impact. However, the
OHCHR’s interpretive guide provides further insight.17
The Interpretive Guide provides that an enterprise “may contributeto the impact through its own activities – either directly（“b” in the
below diagram）or through some outside entity（“a” in the below
diagram）.
A. Complicity
Contribution to a human rights impact “through some outside entity”
refers to the concept of “complicity”.18 It is worth noting that UN Global
Compact companies also pledge to avoid being complicit in humanrights abuses as Principle 2 of the Compact.
Complicity is defined under the laws of many States as “knowingly
aiding or abetting an abuse”.19 In some States, the courts will find that aperson or company is complicit if they “should have known” about an
abuse, or were “willfully blind” to its occurrence.
In the context of the Guiding Principles, a broader, non-legal meaning
can also apply, whereby the company is complicit if it benefits insome way from abuses committed by others. The most common
examples include abuses carried out by government security personnel
guarding corporate facilities, or where a company profits from thesale of products such as weapons or earth-moving equipment used by

Source: Adapted from The Corporate responsibility to
Respect Human Rights: An Interpretive Guide, p.16
（OHCHR, 2012）11| Business and Human Rights - Corporate Japan Rises to the Challengegovernments to carry out human rights abuses. Ultimately, in practice,whether or not a company is complicit would be decided in the court ofpublic opinion. The more a company can do to proactively “know andshow” that it is not complicit in any abuses, the better.
B. Cumulative Impacts
Cumulative impacts refers to a scenario in which a human rights
impact experienced by the affected person or group is the total,
or cumulative, result of the actions of both the company and athird party/ies. Put another way, one company’s business activities
contribute incrementally to a total human rights impact caused by theactivities of multiple actors.
In this scenario, each company’s individual impact does not constitute ahuman rights impact on its own, but when combined with the impactsof other companies or actors in the same sector or region, human rights
are negatively affected.20
The most common examples of cumulative impacts arise in the context
of environmental pollution leading to a human rights impact. This may
occur, for example, where companies operating near a water source
each pollute only a small amount, but their cumulative impact on theright to sanitation, for example, of the surrounding community, rises tothe level of a human rights impact. A non-pollution example given in
the OHCHR’s Interpretive Guide is where a company is one of several
companies “targeting high-sugar food and drinks at children, with an
impact on child obesity”.21

Directly linked to an impact
Companies may find themselves directly linked to an impact throughtheir products, services or business relationships. The most common
example of the latter is where a company’s supplier is abusing
human rights, perhaps by forcing employees to work overtime or
discriminating against migrant workers. Sometimes the company willfind that it is unwittingly linked to an impact through its products. For
example, GE found that its ultrasound technology was being used to
selectively terminate female fetuses in parts of rural India.22

Business and Human Rights - Corporate Japan Rises to the Challenge |12

2. Dissecting the Corporate Responsibility

Addressing a Corporate Human Rights Impact:
What to do
In order to identify whether the company has or may cause, contribute toor be directly linked to an adverse human rights impact, it should conduct
human rights due diligence of its existing and planned operations. This isdiscussed in detail on page 15.

Where the company is one of many actors contributing to a problem, andtherefore a cumulative impact is at issue, the company needs to ensurethat it is at least not part of the problem, and ideally, is part of a solution.
In such circumstances it should:

Once the company identifies an issue, the action it takes depends on thecompany’s relationship to the impact. The chart in the next page untangles
Guiding Principle 19, which provides guidance as to the considerations
companies should take into account.

● ensure that risk assessments the company undertakes include
cumulative impacts;

Where the company is causing or may cause an impact, it will be within its
power to cease or prevent the impact. Where the company is contributing
to an impact, or directly linked to an impact, other actors are involved andthe situation becomes more complex. For responsible companies such as
those reading this publication, this kind of impact may be more likely thandirect causation.
In this context, the Guiding Principles require that a company ascertains
and uses its leverage to try to prevent or mitigate the impact. “Leverage”
here means the company’s ability to effect change in the wrongful practicesof the other actors23: for example, a supplier, a government, or, as in the
GE example on page 12, the doctors wrongfully using the ultrasoundequipment. If the company doesn’t have a lot of leverage with the actor
concerned, it should try to increase it.24 Incentives or capacity building
may be offered to suppliers; collaborative corporate action can pressure agovernment acting wrongfully.
However, difficult questions arise when a company finds it is directly
linked to an impact and it cannot increase its leverage. Although a
company doesn’t have a responsibility to remedy an impact to which it isdirectly linked, the Guiding Principles require the company to undertakesome soul searching and examine whether the business relationship is truly
crucial, given the risks from continuing to do business with an entity that is
abusing human rights. In some cases, the company will be unable to justify
continuing its involvement with the supplier.
As regards contribution, in the case of actual or potential complicity inhuman rights impacts, further guidance can be found in the UN Global
Compact’s explanatory materials for Principle 2. Helpful suggestions
include:● making a human rights assessment of the situation in countries where it
does, or intends to do, business so as to identify the risk of involvementin human rights abuses and the company’s potential impact on thesituation● establishing clear safeguards to ensure that if financial or material
support is provided to security forces, these are not then used to violate
human rights; and● privately and publicly condemning systematic and continuous humanrights abuses.25

13| Business and Human Rights - Corporate Japan Rises to the Challenge● take unilateral action to cease or prevent its contributions to the
cumulative impact（for example, where the company is one of many
actors contributing to a water shortage, it should first seek to lessen
its own usage, noting that so doing can lead to efficiency gains for thecompany）; and/or● establish or engage in collaborative initiatives to address cumulative
human rights impacts.26

Adapted from Guiding Principles on
Business and Human Rights, Principle 19.
Prepared by Ashleigh Owens

Business and Human Rights - Corporate Japan Rises to the Challenge |14

2. Dissecting the Corporate Responsibility

Human Rights Due Diligence
The Guiding Principles require that companies both “know and show”
that they respect human rights. In today’s world, it is insufficient tosimply state that the company intends to respect rights; responsible
companies need to have in place policies and procedures to make surethat they do, and be forthcoming in communicating their progress to the
public.
As such, included within the operational principles of pillar 2 of the
Guiding Principles - that is, the “corporate responsibility to respect” - isthe responsibility to “carry out human rights due diligence”. Humanrights due diligence（“HRDD”）is “an ongoing management process thata reasonable and prudent enterprise needs to undertake, in light of its
circumstances…to meet its responsibility to respect human rights.”27
HRDD is arguably the central element of the Guiding Principles andoffers the potential to move from post-abuse naming and shaming ofcorporate offenders to proactive, preventative action.28
The due diligence process should be ongoing, drawing on internal and/or independent external human rights expertise and involve meaning
consultation with stakeholders.29 The process will vary in complexity withthe size of the company, the risk of severe human rights impacts and thenature and context of operations. The key steps are as follows:

human rights impacts involves the prioritization of business’ limited
time and resources. As such companies should prioritise action based ona consideration of（a）potential severity, noting that this is considered from theperspective of affected stakeholders; and（b）the likelihood of the impact occurring.31
The below figure gives guidance as to how to prioritise corporate action
once actual and potential issues have been plotted on a graph in light of（a）and（b）above. As is clear from the chart, there is a bias in favourof acting even where there is a low likelihood of the impact occurring, if
the impact would be severe.

Human Rights Risk Map for Prioritising Action 32● Identifying and assessing human rights impacts: Taking proactive, ongoingsteps to understand how existing and proposed activities may cause
or contribute to actual or potential human rights impacts, as well has
how the business’s operations may be directly linked to such impacts.
● Integrating findings: Integrating findings across relevant internalfunctions and processes.
● Taking action: As discussed in detail on page 14, the appropriate action
will depend on the business’s relationship to the impact.
● Tracking effectiveness of response: Monitoring and auditing processes
should track ongoing developments.
● Communication: Externally communicating how the business hasaddressed adverse impacts. Reporting and assurance is discussed on
pages 30 to 31. UN Global Compact participants are required to submit
an annual Communication on Progress that includes their activities inrelation to respect and support for human rights.30
Nearly all companies will have in place some kind of risk assessmentand management system. However, it is vital to be aware of the
key difference between HRDD and more familiar risk management
processes: in the latter, risk is most often assessed from the perspectiveof risk to the company, whether financial, reputational or otherwise.
However, HRDD assesses risk from the perspective of the affectedstakeholders, that is, from the perspective of those who may be
adversely impacted. This is a subtle yet crucial distinction: a company
may consider, for example, the risk of a certain indigenous successfully
protesting aspects of its operations as very low; however, if that group isfacing a human rights impact from the operations, HRDD would assess
the risk as severe.
The drafters of the Guiding Principles were well aware that addressing

15| Business and Human Rights - Corporate Japan Rises to the Challenge

Figure 2 : Human Rights Risk
Map for Prioritising Action

Learning from Leading Companies
Human Rights Policies and Human Rights Due Diligence
Programs
As discussed in detail on page 10, the Guiding Principles provide thatcompanies should establish a human rights policy, undertake humanrights due diligence, and put in place processes to remediate any adverse
impacts that they may cause. This chapter examines elements of humanrights policies and due diligence frameworks through the lens of four
leading companies. A Japanese company operating globally is included
within these four examples.
Human rights policies take many forms and there is no definitive
template. Some companies choose to produce a stand-alone statement,
while others integrate their position on human rights into thecompany’s existing suite of standards literature; there are advantages
and disadvantages to either choice. However, pursuant to the Guiding
Principles, the policy should, at a minimum, contain（1）an explicit commitment to respect all internationally recognizedhuman rights standards（2）information on how the company will implement thiscommitment, including through undertaking human rights due
diligence; and（3）the scope of the policy, including the company’s expectations of
personnel, business partners and other relevant parties.
In addition to these core elements, a policy will often contain, forexample, more than one of the following components:（1）the relationship of the policy to existing policies/guidelines;（2）reference to specific salient human rights issues;（3）reference to compliance with local laws and responses to local lawsthat are weak or contradictory;（4）reference to elements of the company’s relationships withstakeholders; and（5）a description of remedial measures, including grievancemechanisms.
Many companies create two-part policies that first set out theircommitment to respect human rights, and then detail concrete issues
such as how they will respond to particular human rights issues and/or how they will avoid complicity when dealing with third parties（e.g.
governments）
who have the potential to bring about negative impacts.
Leading companies formulate human rights policies after having gained
a clear understanding of the potential impacts related to their industry,
regions of operation, business partners and products.
When it comes to determining the scope of application of the policy,
leading companies normally require that their suppliers as well as
members of their business group comply with their policy and many
will transpose this requirement into supplier contracts, or require that
suppliers sign supply chain codes.
When local laws are weak or contradict international standards, theGuiding Principles require that companies strive to comply with thehigher standard. Leading companies often make this explicit in their
human rights policy. In practice, implementing this commitment

can present challenges as the company seeks to uphold international
standards whilst maintaining positive relationships with hostgovernments and/or operating in contexts in which international
standards are rarely applied. There is, of course, no “silver bullet” inrelation to this question. Leading companies build a record of goodpractices by engaging in dialogue with stakeholders and experimenting
with new approaches. Above all, they use transparency as a strategy tomaintain trustworthiness and accountability – proactively and honestly
communicating on challenges they face.
The table on pages 17 and 18 summarizes the approaches taken by thefour leading companies to these various essential and optional elementsof a human rights policy.

A framework for systematic human rights due diligence
The table on page 19 shows a summary of certain aspects of the due
diligence processes undertaken at four leading global companies. In all
four examples the companies concerned created a framework for humanrights due diligence designed to apply across their global operations. In
terms of implementation, they began in priority areas, recognizing that
it is not usually possible to immediately implement due diligence acrossall enterprises and regions. Priority areas are determined by identifying
regions and/or business activities at risk of being negatively impacted byhuman rights issues, based on the severity and likelihood of the impacts.
For example, as Company A carries out human rights due diligence, itprioritizes countries that the FTSE4Good Global Index has identified ashaving human rights concerns. As a major player in the food industry, it
has identified in advance which of its production and sales regions are
high-risk zones for human rights, and is implementing more thoroughdue diligence in these regions. In addition, the company has establisheda department at its global headquarters to oversee evaluation of humanrights impacts, installed an officer in each region who is responsible forthese evaluations, and emphasized cooperation between headquarters
and regional offices in the company-wide implementation of due
diligence. The company’s due diligence process is summarized below.

1. Identify both apparent and latent human rights risks
2. Evaluate human rights risks
3. Decide responses to identified issues at the regionaland company-wide levels
4. Implement and track corrective measures, share
information internally and externallyIn addition, Company A works to raise awareness of human rights by
widely sharing lessons from individual incidents within the company.
Company B is implementing due diligence primarily with regard to its
suppliers. The company is a global leader in the consumer goods industry
and markets a range of products worldwide. NGOs have previously
demanded that it take responsibility for human rights abuses in its supply
chain. From the perspective of both ensuring the company’s sustainability
and lessening its negative impact on human rights, the supply chain was
the aspect of the business that demanded the most attention. In contrast toCompany A, Company B has not established a human rights department orofficer. Instead, it is implementing a cross-departmental program that
Business and Human Rights - Corporate Japan Rises to the Challenge |16

2. Dissecting the Corporate Responsibility

Elements of a Human Rights Policy

Human Rights Policy Content

17

Company A

Top comittment

How the company sees human rights

Commits to operate with respect for the rights of the people the company does
business with and the people along the value chain

The position of thepolicy within corporate
standards

Does the policy have hierarchy over other standards, policies
or corporate philosophies within the company?

Not specifically mentioned

Reference toInternational Human
Rights Standards

A reference to international human rights standards, namely
the International Bill of Human Rights

OECD Guidelines for Multinational Enterprises
The UN Guiding Principles on Business and Human Rights
The Core Conventions of the International Labour Organisation（ILO）
10 Principles of the United Nations Global Compact

Implementation: Theprocess of conducting
HRDD and education/
training

How will the policy be implemented within the company’s
PDCA cycle?
How will education/training be provided to persons coveredby the policy?

Company commits to:Continuously improve operations; andEnsure practices are continuously upgraded
if improvement is required
Notes that if the Supplier fails to comply with the company’s policies, it will impact
the ability of the Supplier to work with the company

Coverage/Application tobusiness partners

To whom does the Policy Apply to?
Do you expect business partners and businesses within yoursupply chain to Respect these Human Rights as well?

Suppliers and the company’s parent, subsidiary or affiliate entities
A “supplier acknowledgement” of the Supplier Code must be signed by anauthorized representative of the Supplier and then returned to the requestingpurchasing department

Legal compliance andconflicts with laws

How will the company deal with situations where nationallaws conflict with human rights standards?"

Expects the supplier to adhere to all applicable laws and regulations and also
strive to comply with international standards, industry standards and bestpractices.

Stakeholder RelationshipCommitment to engage with stakeholders

Stakeholder engagement identified as of fundamental importance; results fromstakeholder dialogues incorporated into human rights due diligence program.

Grievance mechanism（Provision of Remedy）

How should violations or suspected violations of the policy
be reported?

Lists contacts to whom human rights concerns can be reported

Specific Human Rights
IssuesKey human rights issues that the company has identified as
particularly relevant to the company/industry| Business and Human Rights - Corporate Japan Rises to the Challenge

Addressed in detail in a separate Human Rights Impact Assessment Report（The company lists specific salient human rights issues on its website such as
child labor, compliance violations, consumer privacy and anti-corruption）

Company B

Company C

Company D

Acknowledges that businesses only function in societies where
human rights are protected and respected

Commits to promote respect for fundamental humanrightsPledges not to infringe on human rights and address
negative human rights impacts throughout its
business relationships and operations

Contains over-arching principles which are embedded into thecompany’s policies and systems

Not specifically mentioned.

Expresses the company’s mission and vision, and also
supplements the code of conduct and CSR Policy

UN Guiding Principles on Business and Human Rights
International Bill of Human Rights
International Labour Organization’s Declaration on
Fundamental Principles and Rights at WorkOECD Guidelines for Multinational EnterpriseFounding signatory to the United Nations Global Compact

Universal Declaration of Human Rights

The International Bill of Human Rights
The International Labour Organization’s Declaration
on Fundamental Principles and Rights at WorkThe UN Guiding Principles on Business and Human
RightsWill conduct due diligence to identify and address salient
risks, as well as use leverage in relation to relationships andpartnerships
Manage risks by integrating responses to the company’s
due diligence into policies and internal systems, acting
on the findings, tracking actions, and communicating withstakeholders about how impacts are addressed
Acknowledges human rights due diligence is an ongoingprocess（Company C publishes a separate report with a list ofquestions and answers related to human rights issues
of: child labor, forced labor, working conditions andimpact on communities）

Commits to developing and implementing humanrights due diligence. Processes will include identifying
and assessing potential and actual human rights
impacts and taking action to mitigate risk. Will also
track the effectiveness of the process, as well as
develop and implement processes to communicate
findings externallyExpects business partners to adhere to the company’sbusiness principles
Will only work with suppliers who implement the Responsible
Sourcing Policy

Subsidiaries and controlled affiliates in which thecompany owns more than 50 percent of the voting
rights, or has the right to control the entity, arerequired to adopt and follow company policies

Applies to all officers and employees of the company
and its subsidiaries, and also expects business
partners as well as other parties involved in thecompany’s products, services and operations torespect human rights

Where national law and international human rights standards
differ, the company will follow the higher standard; where they
are in conflict, the company will adhere to national law, while
seeking ways to respect international human rights

Not specifically mentioned.

Adheres to national law and regulation in whereoperations take place, but will find ways to honor
principles of international human rights when there
are conflicts between national law and international
standards

Recognizes the importance of dialogue with stakeholders andcommits to communicate
Refers to employees, workers, shareholders, investors,
customers, consumers, the communities in which the company
operates and civil society groups.
Pays particular attention to individuals or groups who may be
at greater risk of negative human rights impacts due to theirvulnerability or marginalization
Recognizes that women and men may face different risks

Recognize the importance of the promotion andprotection of human rights throughout the world andthe constructive role business and civil society can playin advancing these goals

Committed to engage in dialogue with and consult
with relevant external stakeholders on addressing
human rights impacts

Place importance on the provision of effective remedy
wherever human rights impacts occur through company-based
grievance mechanisms
Encourage employees to speak up, without retribution, about
any concerns they may have, including through grievancechannels

Not specifically mentioned.

If the company identifies that it has causes orcontributed to a negative human rights impact, it
will provide for or cooperate in processes to provide
remediation

Acknowledges high human rights risks in certain countriesof operation, and responds to it by additional due diligence toassess and address them

Key salient issue is impacts on local communities
caused by major infrastructure-project financing（Further salient human rights issues are listed
elsewhere on the company's website, including
human trafficking, conflict minerals, specific countries
in which the company will not do business and theempowerment of women in the Middle East）（Sustainability report notes the challenges
surrounding procurement in emerging markets,
including potential impacts on economies,
environment and societies. Company D commits
to maintain a dialogue with suppliers in emerging
markets, including creating and sharing guidelines
with them）

Business and Human Rights - Corporate Japan Rises to the Challenge |18

2. Dissecting the Corporate Responsibility

aims to ensure respect for human rights in all aspects of operations andby employees at all levels. Furthermore, in 2011 the company launcheda country risk matrix in cooperation with an external organization. Thismatrix serves as a basis for evaluating suppliers. Suppliers are required tosign on to the company policy, implement self-evaluations, and undergo
audits. Company B’s procurement department is in charge of carrying out
the program.
Company C’s business strategy prioritizes operations and investment
activities in emerging markets. Its human rights policy and procedures
also center on enterprises and investment activities in emerging markets,
including countries in which the rule of law is less developed. In thepast, a product produced by Company C was used, contrary to its
intentions, to carry out abuses of human rights in one such country.
Based on this experience, even prior to the endorsement of the Guiding
Principles, on Business and Human Rights, the company had begun
to strengthen its human rights efforts. The company’s human rights
policy identifies each of its key stakeholder groups and sets out concrete
programmes and processes to implement the company’s responsibility
to respect their rights. The human rights risk assessment templateused by the company includes questionnaires tailored to each type of
stakeholder, from employees to local community members to suppliers.
The company’s implementing procedures for its human rights policy
make clear that the top-level executives in each region bear a heavy
responsibility and that employees posted in developing and emerging
countries must undergo training on respecting the human rights ofcustomers and business associates in the region in which they will work.
Company D’s leading human rights programme has its origins in lessons
learned from past experience. The company was the target of a campaign
demanding that the company take responsibility for human rights abusescaused by a supplier company. In 2013, Company D began to identify
Company A

and asses human rights risks in its operations in six ASEAN countries. It
established its own group human rights due diligence guidance a year
later. As the company prioritizes supply chain management in its global
risk management strategy, it developed a global supply chain databaseand appointed procurement officers in each region of operation to
oversee local procurement. Additionally, in order to give employees
access to global perspectives and best practices, the company actively
incorporates and shares the views of its CSR division members across its
global operations. It leverages the challenges faced in specific regions asa means of awareness-raising and to strengthen future human rights due
diligence methodologies.
In order for companies to meet the expectations set out in the Guiding
Principles, an understanding of the context of the company’s operations,and the risks inherent in these contexts, is essential. This understanding
can be achieved by drawing on internal and expertise, monitoring
developments in the region and industry - such as issues faced bypeers - and engaging proactively and intelligently with stakeholders.
Although there is no definitive formula for conducting human rights
due diligence, above four companies have the following characteristics
in common.
（1）They commenced human rights due diligence in areas that theyfirst determined as a priority based on an informed understandingof their business context and the risks inherent in their markets ofoperation;（2）They established a company-wide human rights due diligenceprogram framework and implemented it in cooperation with
relevant regions.
Establishing a unified, group-wide due diligence framework - that is alsosufficiently flexible to be responsive to local contexts - is a key step.

Company B● Prioritizes countries identified

Structuralconsiderations● Established department at
global HQ to oversee evaluationof human rights impacts, andinstalled an officer in eachregion responsible for impact
assessments● HQ and regional offices
cooperate to implementcompany-wide due diligencecross-departmental program,with rationale that this greater
facilitates company-wide
responsibility for respect forhuman rights

officers in each region are
required to comply with astandard set of procedures fordue diligenceeach corporate unit suchas human capital, sales
and procurement form acommittee on human rights
initiatives● The committee and eachbusiness unit jointly
collaborate to promote
human rights activities

Stakeholder
Engagement● Internal guidance for human● “Stakeholder engagement”,● Human rights policy identifies● Internal guidance for humanrights due diligence developed
jointly with a third party
organization● On-site interviews with local
management, as well as
farm workers, trade union
representatives and local
communities are performed
during human rights impact
assessment● Input from external andinternal stakeholders isincorporated in final impact
assessment report

including consultationand dialogue, is one of thecompany’s five focus areas forhuman rights activities● Undertakes periodic
engagement with third parties
including a research instituteand NPO to better understandits potential human rights
impacts● Information from externalsources such as governments
and international agencies
is incorporated into its due
diligence processeach of its key stakeholder
groups and sets out concrete
programmes and processes
to implement the company’s
responsibility to respect theirrightsrights due diligence developed
jointly with a third party
organization● Shares local business andhuman rights challenges andlearning across the global
operations as a means ofawareness-raising

19

suppliers● No specialized department:| Business and Human Rights - Corporate Japan Rises to the Challenge● Program focuses on

Company D

Due diligence
priority areas

by FTSE4Good Global Index
as areas of concern for humanrights● Due diligence focusses on

Company C
enterprises and investment
activities in emerging markets● Compliance and business● Analyzed and evaluatedhuman rights risks in six of
the ASEAN countries● Representatives from

Sharing
36 Japanese companies from a variety of industries comprise the
Global Compact Network Japan’s Working Group on Human
Rights Due Diligence. Themes guiding its activities include how
Japanese companies should interpret human rights in light oftrends in international business and human rights and how toapproach due diligence based on the UN Guiding Principles on
Business and Human Rights. Member companies participate
in workshops and have dialogue with human rights experts
with the aim of identifying strategies to address human rights
challenges. Key focal points include exposing companies tointernational perspectives on human rights issues and how toharness ingrained elements of Japanese business culture, suchas the importance of mutually beneficial relationships withbusiness partners and surrounding society. The ultimate goal
is for member companies to take what they learn from thesesessions and make use of it in their own human rights due
diligence activities.

Business and Human Rights - Corporate Japan Rises to the Challenge |20

3. Corporate Japan Rises
to the Challenge

21| Business and Human Rights - Corporate Japan Rises to the Challenge

A Spirit of Cooperation and Coexistence
Japanese companies with deep historical roots have long counted
socialization and mutually beneficial relationships among their
management values. They grew together with their suppliers even if
they had no capital ties, treating them as part of their business groupwhile regularly sharing their technology and vision for management
and policy. Executive managers of the companies atop these ecosystems
also recognized their responsibility for the livelihood of their suppliers’
employees.
One such example of this is the effort put into cultivating humanresources at major Japanese auto and electronics makers – embodied
by a belief passed down at those companies that “building things meansbuilding people.” They have also formed communities with the suppliersin their groups, which now number in the tens of thousands, sharing
their company vision and technology as they work together to improve
product quality.
Sumitomo Group, one of the former zaibatsu（lit. “financial clique”:
Japanese business conglomerates that rose to prominence in the
Meiji Era）, has passed down the values described above during thefour hundred years since its foundation in the form of Sumitomo’s
Business Philosophy. One principle of this philosophy is jiri rita, kōshi
ichinyo（“benefit for self and others; private and public interests are
one and the same”）, which means that Sumitomo’s business must
not only benefit itself, but the country and broader society as well. In
other words, companies should always emphasize the public good andstakeholders rather than just their own profits.

Japan thus entered the industrial age grounded in these commercial
practices. The scarcity of both land and resources in Japan engendereda business model involving the earning of foreign currency throughexports. After the war, the main proprietor of this model was the
manufacturing industry, in which steel, automobile and electricalappliance makers exported high-quality, technologically-advanced
goods. The large companies at the apex of these industries built
large ecosystems including the small and medium enterprises in the
periphery. Such ecosystems not only created a great deal of employment,
but they went as far as playing a role in the social welfare of thecommunity. Cities dependent upon such companies as the nucleus of
their community are known as kigyō jōkamachi（lit. “company castle
town”）in Japan.
Japan was lifted up out of the aftermath of the war on the backsof these companies, who were in turn supported by the small andmedium enterprises under them. As such their executives minded theirposition atop the pile and assumed broad responsibilities, including
for the well-being of even far-flung suppliers’ families and thedevelopment of the community. Whether or not it was called “corporatesocial responsibility”, they took responsibility for ordinarily public（government）affairs as a matter of course.

Another example is offered by Yamato Holdings, a group which has
been in business for over a century. Its Company Precepts place central
importance on people: the first precept is that “we ‘all’ represent thecompany,” meaning that “employees are regarded not simply as ‘humanresources’, but as individuals who benefit the company. Above all,we respect the individual” Yamato is attempting to evolve beyond its
mainstay distribution business to become a logistics and lifestyle support
solutions provider. This business innovation is made possible by strong
community ties through services closely tailored to each region and apeople-centric corporate culture which espouses cooperation, solidarityand harmony.
So where does this mentality find its origins? The Japan of 400 years
ago was a feudal society under a policy of sakoku（lit. “locked country”）
which nominally isolated the country from the outside world. This boundfarmers to their land, and regional communities formed around villages.
This resulted in the formation of a collective identity which emphasized
the good of the community over a respect for the diversity of individuals.
Since merchants could not journey to faraway lands, they made theirenterprise sustainable by building large networks of regular customers
and commerce was built on a foundation of trust and reputation among
the local community.

Business and Human Rights - Corporate Japan Rises to the Challenge |22

3. Corporate Japan Rises to the Challenge

Changing Times, Changing Management
In contradiction with the traditional concern for social welfare evident
at Japanese corporations, we have seen at the same time lingering
remnants of an historic domestic human rights issue known as the “dōwamondai”: roughly, “the dōwa issue”. The roots of the dōwa issue date backto the Edo period in 16th century Japan, a time in which commercial
activities prospered. Given its complexity, the issue illustrates theamount of time and understanding it requires to root out a pervasive
discrimination issue.
One theory is that the dōwa issue originated in the class system thatprevailed during the Edo period. Despite the official repeal of this classsystem in 1871（during the Meiji era）, social discrimination continued
against people living in certain buraku（“settlements”）associated withlower social status in this class system. The areas incorporating these
settlements became known as “dōwa areas”.
In 1922, the Zenkoku Suiheisha（lit. “national levelers’ association”）
was formed to stand up for the rights of burakumin who were thoseindividuals and families discriminated against for reason of theirliving in dōwa areas. Protests were held across Japan. Finally, in 1969,
the “Special Operational Countermeasures on Dōwa Issues Law” wasenacted in order to prohibit discrimination against the burakumin andimprove conditions in dōwa areas.
In 1975 it came to light that a number of companies had bought a
special booklet purporting to list the dōwa areas and had used it to reject
job applicants that had grown up in those areas.33 Thereafter in 1998 alarge Japanese research company was exposed as having investigatedthe backgrounds of job applicants for 665 other companies.34
Awareness about discrimination against burakumin grew among
businesses and broader society to an extent that the Special Operational
Countermeasures on Dowa Issues Law was ultimately able to be repealedin 2002.
Meanwhile, from 1970s the waves of business globalization cameto crash at the shores of Japanese companies as well. Trade frictions
between the US and Japan in the 1980s prompted Japanese companies
to seek recognition as corporate citizens in the US by establishingfoundations and actively investing in activities which contributed to
local communities. In a sense, this was an opportunity for an overseas
trial run of Japanese business philosophy, namely, that a company
should be a good corporate citizen before it is a commercial entity. These
activities were formative for the current CSR research conducted inJapan.
Japan’s economy remained strong amidst these trade frictions, andbusinesses began to supplement their traditional export-oriented
business model with new manufacturing bases in overseas markets. This
period also saw the traditional relationships between large automobileand electrical appliance manufacturers and their suppliers begin to
unravel, as overseas markets sought higher local content ratios fromcompanies expanding their business there. Japanese companies’ intricate
web of business relationships, referred to as keiretsu in Japanese, began tochange.
From the second half of the 1990s, manufacturers began in earnest to
relocate their factories to developing countries in which inexpensive
23| Business and Human Rights - Corporate Japan Rises to the Challenge

labor could boost price competitiveness. Although exporting theJapanese way of building things - “monodzukuri” - abroad represented an
important contribution to employment and economic growth in foreign
markets, for Japan, it led to a “hollowing-out” of the economy.
Today, the developing countries to which manufacturers worldwide
moved their factories in search of inexpensive labor are in the midst ofa transformation from the factories of the world to emerging markets.
This transformation has brought with it a rise in wages, lessening theimpact of the incentives that originally drove offshoring. Meanwhile,
there remains a tendency for Japanese companies to pursue cost-cutting
in a manner that is out of step with changes in the global businessenvironment. The inability to adapt to such changes represents a risk
from the perspective of business and human rights.
Although their cloistered domestic business relationships havecertainly helped to create long-term value in terms of improved productquality and development, long-term cost savings and cooperation on
environmental issues, the sheltered nature of Japanese companies canhinder their ability to adjust to changes in the external environment.
For example, despite the international community’s growing focus on
workers’ rights and occupational health and safety in the supply chain,Japanese client companies were lax in their confrontation of the issue.
However, revelations of child labor in the supply chains of well-known
sporting goods manufacturers in 1997 sparked interest in supplier labor
issues in Japan as well, setting off increased awareness around CSR moregenerally.
As such, a growing number of companies have begun to tackle labor
issues in their overseas supply chains – an issue they originallyconsidered to be the sole concern of the suppliers themselves –as part ofa more enlightened CSR strategy that aims to reach standards above andbeyond minimum legal requirements.
At the same time as they began to consider issues in their overseas
operations, in the 2000s a domestic human rights issue demanded
the attention of Japanese companies - namely, “harasumento”（“harassment”）. The Japanese use of the term differs slightly tothe original English. In addition to the globally understood issue of
sexual harassment, the Japanese word also incorporates other specificcategories of “pawā harasumento”（“power harassment”）
that reflect
pervasive concerns within the Japanese workplace, such as “alcoholharassment”（senior staff forcing juniors to drink alcohol at company
events) and “maternity harassment”（workplace discrimination against
pregnant women and the intimidation of those trying for a child）. Thistype of harassment or workplace bullying, involving the misuse of power
and authority by those in senior positions, has involved some cases sosevere that victims have committed suicide. The number of reported
cases of workplace bullying grew from 14,665 in 2004（9.2% of all cases
reported to the prefectural labor department）to 62,191 in 2014（26%）,
and it holds the dubious honor of being the subject on which guidance ismost sought from the Ministry of Health and Labor Welfare.35 However,these figures should be read in the context of an increased awarenessof harassment/workplace bullying at Japanese companies, and greater
efforts to highlight and address the issue.

Rising to the Challenge: People-centred
Global BusinessMeeting Global Standards
As discussed herein, in recent years Japanese companies have beenchanging their traditional business model from an export-oriented
approach to localizing their business in overseas markets. As they
foster closer ties with these local markets, they have started to aim
beyond regulatory compliance in each country, and are beginning totake cohesive action on human rights in harmony with international
standards, taking steps to meet their responsibilities as global corporate
citizens. Some examples of these efforts follow.
Aeon became the first Japanese retailer to obtain SA8000 certificationin 2004. Today, in addition to respecting the fundamental humanrights of its employees, Aeon views its suppliers as equal partners andcontinuously strives to also improve labor conditions and respect humanrights in its supply chain.
Recognizing one of its most salient potential impacts, INPEX, a Japanese
resource developer, began producing an annual Reconciliation Action
Plan in 2013. INPEX develops crude oil and natural gas in Australia,
and the Plan set out its goal of respecting the indigenous peoples andtheir cultures and building a stronger relationship of trust in Australia.
The plan is a means for INPEX to conduct its business while respecting
indigenous Australians, and to do so it provides for specific actions inthree major areas: “relationships”, “respect”, and “opportunities”. The
initiatives in the plan and their progress levels are revised and reported
on every year.
Konica Minolta, a diversified manufacturer in business technologies,
healthcare, and industrial businesses, joined the EICC（Electronic
Industry Citizenship Coalition）in 2013. The company is utilizing thestandards and tools of the EICC,（which align with internationallyaccepted human rights principles such as the Universal Declaration of
Human Rights and the standards of the International Labor Organization（ILO））, to broaden the scope of its CSR activities across supply chainsvital to its business. These activities involve not only production facilities
and suppliers, but the broader distribution value chain as part of a joint
initiative with DHL Supply Chain Ltd.
Casio Computer Company has been taking stock of potential humanrights impacts since 2012, using ISO 26000 as a guide. In order tostrengthen its due diligence, Casio sought the advice of experts and, inFebruary 2014, created its own tool for checking the status of humanrights, utilizing the Danish Institute for Human Rights’ Human Rights
Compliance Assessment Quick Check as a reference.
In 2014, Fujitsu publicized the “Fujitsu Group Human Rights Statement,”
which clarifies both its support of international human rights standards
as well as its responsibilities as an information and communication
technology（ICT）company, and sets out its commitment to performing
human rights due diligence. The policy was prepared in adherence to the
Guiding Principles on Business and Human Rights.
Recruit Holdings, whose main businesses are its Marketing MediaBusiness, HR Media Business and Staffing Business, has developed
a human rights policy and begun broad, human rights-themed
stakeholder engagement coinciding with the global expansion of its
business. Recruit offers “Opportunities for Life” to society through its

corporate philosophy of “a bright, vibrant future where people canchoose their own life path.” In this way, the respect for human rights
becomes embedded in the core of the company’s business, rather thansimply being treated as a discrete matter of risk or management quality.
As we can see from the above examples, Japanese companies operating– or intending to operate – in the competitive global environment
have begun to work on going above and beyond traditional Japanesepractices and regulatory compliance, towards internationallycompetitive levels of management quality.

Creating a Market for Respect for Human Rights
Japanese companies have enjoyed world-leading longevity. There are
more than 50,000 companies over 100 years old in Japan; 3,886 of themare over 200 years old. 36 To achieve this extraordinary longevity they
were required to employ sustainable management practices by adjusting
to various changes in local operating environments and striving toachieve harmony with local society. Thus a people-centric businessphilosophy and commitment to community spread from local outposts
through entire corporate entities, resulting in the emergence from thebottom up, rather than the top down, of businesses geared towards
solving various social and human rights issues.
Today, diversified values, globalized business and information
technology’s magnification of the influence of civil society are all factors
in the shift from profit-centric to people-centric management.
Japanese companies offer many examples of business models in whichinvestment in long-term relationships with suppliers, customers, andcivil society ultimately contribute to improvement in sustainablebusiness and management quality, technological innovation and lower
long-term costs.
Now in Japan we are seeing the early stages of efforts by some companies
to create a market in which respect and support for human rights is asource of added value.
Itochu Corporation’s Pre Organic Cotton Program is a prime example
of inclusive business. Genetically modified（GM）seeds and pesticides
have been used heavily in India since the Green Revolution in the 1960s.
However, the overuse of these pesticides has placed a heavy burden on thehealth and finances of cotton farmers, many of whom are poor. Itochu’s
textile company launched its Pre Organic Cotton Program in 2008 withthe aim of improving this situation through business. The Pre Organic
Cotton Program guarantees the purchase of cotton grown during the twoyear transition period from the start of organic farming methods until theacquisition of organic farming certificates, provides guidance on organic
cultivation using non-GM seeds and supports the farmers’ transition toorganics. In addition to reducing the negative environmental and healthimpacts from chemical fertilizers and pesticides, it reduces the financial
burden on farmers. The program became the first activity（at the timeof application）by a Japanese company to be approved as a response to
the United Nations’ Business Call to Action（BCtA）, an initiative thatchallenges companies to develop innovative business models that achieveboth commercial success and development outcomes.

Business and Human Rights - Corporate Japan Rises to the Challenge |24

3. Corporate Japan Rises to the Challenge

The Pre Organic Cotton Program also provides an insight into how a
trading company can effectively incorporate CSR into its business model.
Itochu branded the cotton purchased during the transition period（prior to formal certification as organic）as “Pre Organic Cotton” andmobilized the entire value chain, including apparel and retail. Rather
than employing short-termism and pursuing cheap procurement, thecompany considered its “enlightened self-interest”: a business modelprioritizing the improvement of the health and welfare of farmers andthe farming environment provides dual benefits to the company in theform of a sustainable and stable long-term procurement option withcommensurate boons to shareholder value.
The Ajinomoto Group is a major Japanese food manufacturer, whoseGroup Philosophy is to “create better lives globally by contributing tosignificant advances in Food and Health and by working for Life.” The
Group’s business is premised on using its expertise to contribute to
global sustainability, stable food resources and healthy living while
recognizing the mutually reinforcing relationship between them.
The Ajinomoto Group’s Ghana Nutrition Improvement Project was
launched in 2009 as part of initiatives to commemorate its centenary,and involves leveraging the enormous amount of knowledge aroundfood and amino acids the Ajinomoto Group has accumulated since its
founding to address the rights of children living in poverty. Specifically,
it involves the development of affordable supplements to bolster thenutritional balance of weaning children in Ghana.
Over 4.1 billion people - across the world（roughly 60% of the population）
have an annual income of less than USD3,000. Most of these low-income
earners live in developing countries, including those still facing serious
problems related to delayed growth and high infant mortality rates.
Ajinomoto Group has conducted studies since 1995 to examine the effectof Lysine, an essential amino acid, on the improvement in nutrition,
immunity and health of people in low income countries. In advancing
the project in Ghana, Ajinomoto Group collaborated with Ghanaian
government institutions, the University of Ghana, international NGOs andcompanies, and was able to harness this cooperation to cultivate a value
chain that addresses the needs of stakeholders, from local manufacturing
to awareness raising around nutritional issues, to the architecture of its
distribution model.
Meanwhile, Astellas addresses the issue of access to healthcare in
impoverished regions. This includes their endorsement of a clinicalresearch fellowship program led by the World Health Organization,
International Federation of Pharmaceutical Manufacturers &Associations and the Bill and Melinda Gates Foundation. The programaims to facilitate research into infectious diseases in developing
countries; Astellas has taken on medical researchers from diseases
endemic countries as fellows since 2011.
In the information technology field, IT product and service provider NEC
has tackled the issue of personal information leaks, which is a common
concern following recent developments in ICT and the increasing use of
big data. NEC has developed technology to reduce the risk of individuals
being identified without impairing the value of big data. The technology
has garnered attention as a solution which can mitigate negative effects

25| Business and Human Rights - Corporate Japan Rises to the Challenge

on human rights without compromising the social benefits of cuttingedge technology.
Many Japanese companies have been hard at work studying the United
Nations Guiding Principles on Business and Human Rights since theiradoption in 2011. Perhaps the greatest challenge for Japanese companies
is re-conceptualizing the definition of “human rights” to that understoodat the international level. That being said, there are many points thatcan be learned from Japan’s sustainable management style such as astrong commitment to the community and the value ascribed to longterm relationships. Whether or not Japanese companies can leverage thismanagement philosophy, built upon the people they cultivate, to meetglobal expectations in the field of human rights will be tested on the
global stage.

Practicing
Global Compact Network Japan’s Working Group on Human
Rights Due Diligence holds an annual workshop - facilitated by
EY Institute - which introduces members to the methodologies,
tools and thought processes necessary to apply the UNGPs
and implement human rights due diligence at their respective
companies.
The workshops walk members through a series of humanrights due diligence processes to address potential adverse
impacts of their business activities and/or business relationships
on the human rights of their stakeholders. This includes
impact identification（step 1）
, impact analysis pursuant toconsiderations of likelihood of occurrence and severity（step 2）,
mapping /visualization and prioritization based on the former
analysis（step 3）, and development of remedial measures（step 4）
. The diversity amongst member companies, including
their industry affiliation, facilitates a vigorous discussion inwhich members can brainstorm a wide variety of potential
adverse impacts on human rights. This makes for an invaluable
opportunity to promote awareness and spark the creativity of
everyone involved.

Business and Human Rights - Corporate Japan Rises to the Challenge |26

4. From Dissemination
to Implementation

27| Business and Human Rights - Corporate Japan Rises to the ChallengeEmbedding the Principles
Incorporation of Guiding Principles in other laws, standards
and guidelines
The Guiding Principles are not of themselves a legally binding
document: aggrieved individuals or groups cannot bring corporations
to an international court or tribunal for breach of the principles.
However, although the Guiding Principles may be said to be “soft” law,they “harden” as they are incorporated in other laws, standards andguidelines.
The Guiding Principles have been incorporated into the updated
Guidelines for Multinational Enterprises of the Organization for
Economic Cooperation and Development, the human rights chapterof the Guidance on Social Responsibility from the International
Organization for Standardization（ISO 26000）and the revised
Sustainability Framework and Performance Standards of theInternational Finance Corporation（the private sector arm of the WorldBank Group）. The IFC documents influence the standards applied byprivate banks involved in project finance.
In the Asia Pacific region, the ASEAN Intergovernmental Commission
on Human Rights is drawing on the Guiding Principles in its work: forexample, the nexus between business and human rights was selected
as a key issue in its 5-year work plan（2010-2015）.37 In China, the2013 “Sustainable Business and Investment in the Global Context:
Rights, Risks and Responsibilities” conference in Beijing attracted 200
participants for a practical business-to-business discussion on sustainablebusiness and human rights. Further, the China National Textile andApparel Council has published a report on grievance mechanisms in theindustry using the Guiding Principles as a primary framework.38
Corporate uptake continues to climb. The UN Working Group on
Business and Human Rights conducted a survey in 2013 of 153 business
representatives from 39 countries and found that● the majority of the sampled businesses were aware of the Guiding
Principles; and● half of the sampled businesses have a public statement of humanrights.39
Many sector groups have published their own guide to applying the
Guiding Principles in their respective industries, for example that of
IPIECA（oil & gas sector）, A4ID（legal profession）and UNEP Financial
Initiative（finance sector）. The European Commission has preparedsector guidance on implementing the Guiding Principles in the oil andgas, employment and recruitment and information and communication
technology sectors.40
The Leaders’ Declaration issued at the G7 summit held in Germany inJune 2015 emphasized the commitment by the G7 nations to respecthuman rights. It called for efforts by governments to set up National
Action Plans in line with the Guiding Principles（see next section）and
encouraged enterprises to enhance transparency and accountability byimplementing human rights due diligence and promoting labour rights
and environmental protection in their global supply chains.

Business and Human Rights - Corporate Japan Rises to the Challenge |28

4. From Dissemination to Implementation

Knowing and Showing
National Action Plans on Business and Human Rights

A Business and Human Rights Treaty?

A considerable number of governments across the world have either
published or commenced drafting National Action Plans to implement
the Guiding Principles. A National Action Plan is a government
document expressing a commitment to the implementation of the
Guiding Principles as well as specific measures the state will take in linewith the three pillars of the Guiding Principles, namely the “state duty
to protect human rights,” the “corporate responsibility to respect humanrights” and “access to remedy.”

There are also discussions underway about the possibility of a newinternational legal framework in the field of business and human rights.
Three years after the endorsement of the Guiding Principles, the United
Nations Human Rights Council made the decision in 2014 to initiate
an open-ended consultation process to draft a binding treaty on this
topic. The decision was supported by a majority of developing country
member states of the Council（whereas many developed countries were
opposed）, reflecting the re-emergence of developing countries’ long-heldcontention that a new international legal framework is needed to more
effectively prevent corporate-related human rights abuse and ensure
victims have access to a remedy.

In 2013 the UK became the first government in the world to launch a
National Action Plan on business and human rights. The plan outlines
eight key expectations of UK companies including that they comply
with all applicable laws and respect internationally recognized humanrights wherever they operate, seek ways to honor the principles ofinternationally-recognized human rights when faced with conflicting
requirements, consult people who may potentially be affected by theiroperations and emphasize the importance of behavior in line with the
Guiding Principles to their supply chains in the UK and overseas. It also
sets out what the UK government is already doing as well as its planned
actions in the future to this end.
In the outcome document of the June 2015 G7 summit meeting, leadersof the G7 states also welcomed the efforts to set up “substantive National
Action Plans.” Among the G7 states, the UK has already launched its
National Action Plan and Germany, France and the US have initiatedprocesses to draft theirs.

Overview of National Action Plan Processes（As of March 2016）
Already produced

In the process of development or expressedcommitment to the development

UK

Argentina

Malaysia

The Netherlands

Azerbaijan

Mauritius

Italy

Belgium

MexicoDenmark

Chile

Mozambique

Spain*

Czech Republic

MyanmarFinlandGermany

Portugal

Lithuania

GuatemalaSlovenia

SwedenGreeceSwitzerland

NorwayIrelandUSA

Colombia

Jordan*Subject to approval by the Spanish Council of Ministers
Source: “State national action plans”,The Office of the United Nations HighCommissioner for Human Rights（OHCHR）;
http://www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx

29| Business and Human Rights - Corporate Japan Rises to the Challenge

The inaugural session of the treaty consultation process was held from
6 to 10 July 2015 in Geneva. It was primarily a brainstorming session atwhich representatives from government, business, academia and civilsociety exchanged their initial thoughts. It is not yet clear how long thetreaty drafting process will take, nor what will be its outcome. However,
if a treaty is prepared, it is likely to require states who choose to become
signatories to enact or strengthen domestic regulation concerning
human rights and business. Japan and many other western developed
countries do not support the idea of creating new international legal
obligations in the area of business and human rights. However, thedrafting process continues notwithstanding.
Of course, many states are choosing to tighten regulatory requirementseven without such a treaty. As just one example, Eurozone companies
over a certain size are required by law to disclose information on theiractivities related to human rights.41
Moreover, even where regulation is absent, it is becoming increasingly
necessary for companies to collaborate with stakeholders to meet risingsocial expectations, including by developing human rights policies
and implementing human rights due diligence. Indeed, despite theunanimous endorsement of the Guiding Principles at the UN, NGOs
continue to highlight cases of human rights abuses by companies inwhich victims are left without remedy. As such, pressure on Japanesecompanies from the international community to adequately address any
human rights impacts is likely to increase, and an increasingly tightly
woven fabric of legal requirements may be imposed on them to do so, in
particular if they operate in developing countries that ratify such a newtreaty.
As a part of the drafting process, the UN and the international
community will undoubtedly focus their attention on whether
companies are making adequate progress on accountability in the areaof human rights. If the weight of opinion is that the Guiding Principles
are not sufficient in persuading companies and governments to takeadequate measures, proponents of a binding treaty may be successful ingarnering support for the tightening of regulations on businesses. Will
companies be able to implement the Guiding Principles effectively? The
international community is closely looking at how the private sector willaddress this challenge.

Disclosure

Human Rights Reporting Framework

As we have seen in the previous sections, the Guiding Principles requirethat companies both “know” and “show” that they respect human rights.
Companies aim to “know” about their respect for rights by conducting
human rights due diligence（discussed on page 15）. The requirementthat companies also “show” their respect for rights provides a measureof transparency and accountability, as well as encouraging companies topublically share successes and challenges for the benefit of their peers.

In order to assist companies with disclosure, and to streamline theprocess, the world’s first comprehensive guidance for companies toreport on how they respect human rights, namely, the Human Rights
Reporting Framework, was released in London in February 2015. The
framework consists of eight overarching questions（each with one ormore supporting questions）and four information requirements. To
address “reporting fatigue”, questions are cross-referenced with initiatives
including GRI G4 and the Integrated Reporting Framework. Companies
are asked to focus on their “salient” human rights impacts, that is, thoserights that are at risk of the most severe potential negative impacts.

Principle 21 of the Guiding Principles states that companies should
communicate externally on how they address human rights impacts andwhere operations or operating contexts pose risks of severe human rights
impacts, companies should report formally on how they address these
impacts. The same principle provides further guidance on corporate
communications, noting that they should:（a）be of a form and frequency that reflect an enterprise’s
humanrights impacts and that are accessible to its intended
audiences;（b）provide information that is sufficient to evaluate the adequacyof an enterprise’s response to the particular human rights impact
involved; and（c）in turn not pose risks to affected stakeholders, personnel or tolegitimate requirements of commercial confidentiality.
In this way, the Guiding Principles provide civil society, investors andothers with the tools to measure progress by business in meeting their
responsibility to respect human rights.
What does this mean for Japanese companies? Many Japanese companies
lag slightly behind their global peers when it comes to trumpeting their
CSR achievements. Many will say that they are generally reluctant toreport publically on work in progress, preferring to wait until a project iscompleted to a high standard before releasing information publically.
However, the necessity for corporate transparency and best practice
sharing is drawing increasing international focus and civil society
initiatives that rank companies on the basis of publically available
information are proliferating. Examples include the Access to Medicine
Index 42, Behind the Brands’ Scorecard 43, the Corporate Human Rights
Benchmark44, and the Ranking Digital Rights initiative, which released in
November 2015 a ranking of 16 major Information and Communication
Technology（ICT）companies on how they respect users’ rights to free
expression and privacy.45
Moreover consumers and long-term investors increasingly seek moredetailed information from companies on how they address their
responsibility to respect human rights. Indeed, the new Reporting
Framework is supported by sixty-seven investors representing USD$3.91
trillion assets under management. As such, many companies are seeing
the benefit in increased disclosure, even of work in progress.

The key focus of the new Reporting Framework is to “demonstrateongoing improvement”. The Framework’s reporting principles expressly
acknowledge that respect for human rights is “not a finite process thatcan be reported as completed”. Noting that many companies will not beable to report against all of the criteria immediately, the Framework setsa minimum threshold of 12 questions “designed to be attainable by any
company that has begun to address human rights within its business”, andencourages companies to “work towards answering all of the supporting
questions and improving the quality of their responses over time”.
In light of this and with support as necessary, Japanese companies
should be able to begin highlighting the excellent work that is underway
in Japan.
Several leading multinational companies are already utilising the
Framework. In April 2015, Ericsson issued the first report from an ICT
company based on the Framework.46 In June 2015, Unilever became
the first company to produce a detailed, stand-alone report using the
Framework.47 In its press release the company noted that “we have along way to go and we cannot do this alone - but being honest about thechallenge we face is crucial to making progress.”Three other early adopters - H&M, Nestle and Newmont - are also
partnering with non-profit Shift to apply the Framework to theirreporting. According to the latest report from Shift, over 30 companies
in total have begun using the Framework, whether for their externalreporting process or as a tool for improving their internal human rights
management systems. Examples of the latter include utilising theframework to inform the drafting of a human rights policy; to structure
an internal gap analysis; to support training for suppliers and as a tool inbuilding awareness amongst senior leadership.
The drafters of the Reporting Framework expect that it will both assist
individual companies to report beyond minimum legal requirements
and, more broadly, contribute towards the dissemination of corporate
best practices in respect for human rights. In the context of the ongoinginter-governmental discussion around a legally-binding international
instrument on business and human rights, reporting initiatives such as
this one play a key role in highlighting the effectiveness of the Guiding
Principles and improving public recognition of responsible corporate
activities. Furthermore, as more stock exchanges and socially responsible
investors express their interest in the Reporting Framework, it moves
ever closer to becoming the standard for human rights disclosure.

Business and Human Rights - Corporate Japan Rises to the Challenge |30

4. From Dissemination to Implementation

Independent Assurance
The Guiding Principles note that, “independent verification of humanrights reporting can strengthen its content and credibility”.48 Anotherword for independent verification is “assurance”. Independent firms
have long provided assurance services over corporate reporting,including over assertions made by companies concerning theirenvironmental and social impacts. Assurance of human rights related
assertions draws on this experience, but also requires additional expert
knowledge of the human rights field.
Concurrent with the drafting and release of Human Rights Reporting
Framework, discussions have been ongoing with various stakeholders
to develop a Human Rights Assurance Framework based on the Reporting
Framework. In June 2015, consultations took place to discuss the key
components and desired overall direction of the Assurance Framework.
At the time of writing, the final text of the Assurance Framework isenvisaged to be released in early 2016.

The Reporting Framework and Implementation Guide is available fromwww.ungpreporting.org

The final Assurance Framework will be the basis upon which
independent external assurance providers express their assurance
opinions as to whether a company has adequately prepared its humanrights reporting in accordance with the Framework. The Vision for Human
Rights Assurance（“Vision”）released by RAFI in April 2015 sets out the
purpose of and key challenges envisaged for human rights assurance.
It states, among other things, that meaningful assurance will need not
only to verify whether a company’s reported human rights policies
and processes exist, but also to consider whether they are “effective”.
Providers will start with “limited assurance” but move towards“reasonable assurance” where possible.
Providers of assurance opinions will need to give “fuller and moreinsightful information on the assurance process and findings”, that
is, a reasonable level of information about the assurance process, thekey issues identified and recommendations made to the company. The
opinion should also reflect any material omissions or misstatementsin the company’s report. To this end, the Vision notes that assurance
providers must be those companies/individuals with demonstrated
knowledge, skills and capacity to conduct a human rights assurance,with general assurance skills and technical expertise in the relevant
industry.
A first draft of practitioner guidance for assurance providers was
prepared for multistakeholder consultation in autumn 2015, and theguidance is expected to be published in 2016.

31| Business and Human Rights - Corporate Japan Rises to the ChallengeImplementing
In 2008, the Japan Federation of Bar Associations（“JFBA”）
published its Guidelines on Corporate Social Responsibility（“CSR Guidelines”）. Following the adoption of the UN
Guiding Principles, which require companies to treat respectfor human rights as a legal compliance issue wherever they
operate, the JFBA published, in 2015, the Guidance on Human
Rights Due Diligence（“Guidance”）as an extension of the
CSR Guidelines. Global Compact Network Japan’s Working
Group on Human Rights Due Diligence held dialogue with
the JFBA throughout the drafting process, providing input inparticular in respect of the content addressing the introductionof a CSR clause. Guaranteeing the protection of human rights
in the supply chain. As a result, the objective of introducing
a CSR clause was clearly defined within the Guidance, as thepromotion of continuous cooperation and healthy relationships
between buyers and suppliers. This clarified the importance of
creating mutually beneficial relationships within the Japanesebusiness scene. Based on this input, the Guidance clearly sets
out the objective of such a CSR clause – namely, to promote
cooperation and joint improvement efforts between both buyer
and supplier. This highlights that at the core of these efforts are
Japanese companies’ traditional strengths in the creation of a
spirit of cooperation and coexistence.
The Working Group is currently making use of the Guidance incollaboration with the JFBA to develop case studies including
issues related to migrant workers and land expropriation.

Business and Human Rights - Corporate Japan Rises to the Challenge |32

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Guiding Principles, Principle 19, Commentary.

24.

Guiding Principles, Principle 19, Commentary.

25.

the explanatory materials to “Principle Two: Human Rights” United Nations
Global Compact website, https://www.unglobalcompact.org/what-is-gc/mission/
principles/principle-2

26.

Ashleigh Owens of EY Japan has prepared detailed guidance on addressing
cumulative impacts for the UN Global Compact’s Business Dilemmas website,
http://hrbdf.org/dilemmas/cumulative-impacts

27.

OHCHR 2012, The Corporate responsibility to Respect Human Rights: An Interpretive Guide,
United Nations, New York and Geneva, p. 17, p. 6

33

| Business and Human Rights - Corporate Japan Rises to the Challenge

41.

European Union Non-Financial Reporting Directive（2014/95/EU）

42.

“the Access to Medicine Index”, website, www.accesstomedicineindex.org/

43.

“Scorecard”, Behind the Brands, website, www.behindthebrands.org/en-us/scorecard

44.

“Corporate Human Rights Benchmark（CHRB）”, website, http://www.ihrb.org/
our-work/corporate-human-rights-benchmark.html

45.

“Ranking Digital Rights”, website, https://rankingdigitalrights.org/

46.

“Ericsson Sustainability Report 2014: Technology for Good programs benefit four
million globally”, website, http://www.ericsson.com/news/1910657

47.

“HUMAN RIGHTS REPORT 2015”, Unilever, website, https://www.unilever.com/
Images/slp-unilever-human-rights-report-2015_tcm244-437226_1_en.pdf

48.

Guiding Principles, Principle 21, Commentary

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