Current situation in Japan regarding Human rights violations and remedies in the global supply chain
1 What is the Global Supply Chain?
Globalization of the economy and labor market and development of communication and information technology, logistics, and transportation systems stimulate cross-border production, investment, and trade, create employment, promote human, cultural, and intellectual exchange, and enrich people’s lives. However, individuals and communities can also be detrimentally affected by human rights abuses and environmental destruction in the process of “multinational corporations and global supply chains” (“GSCs”), in which companies from Western countries and mainly developed countries such as South Korea and Japan are able to expand their operations to Southeast Asia and South Asia, where costs of the labor force and raw material are lower.
2 Human Rights Violation in the process of cross-border business transaction.
GSC is a cross-border, superimposed production, and sales process in which a local factory transfers its production base to the region and further outsources part of the production process to a subcontractor. The GSC is said to be prone to human rights violations and environmental destruction, including labor exploitation at production sites, due to economic disparities and poverty. However, because there is no direct employment relationship between the top companies and the affected workers, because the top companies are located in different countries from the workers or subcontractors, and because a number of contractors intervene between the top companies and the workers, the top companies are not directly responsible for management and supervision and for human rights violations. It is difficult to hold them legally accountable. In other words, the negative aspect of the GSC, as a symbol of a global economy that transcends national boundaries, is that it creates gaps in legal remedies, and those gaps create a vicious cycle that makes it even more difficult to comply with the law and protect workers’ rights in the workplace.
3 Are there any legal initiatives addressing human rights violations in the process of Global Supply Chain?
Certainly, there are international conventions to ensure decent work and human rights, and each country has its own labor legislation and judicial remedy system. However, the international conventions cover the countries that are party to them and do not impose obligations on individual companies. The implementation of the Convention is left to the legal systems of each country. In addition, national labor laws and jurisdictions are only in force within their respective countries. At present, there is a lack of adequate remedies and effective preventive measures, including judicial remedies, for human rights violations that occur in the course of the cross-border GSC.
4 The Ruggie Principles
To remedy this situation, on June 16, 2011, the United Nations Human Rights Council unanimously approved the recommendation of the Guiding Principles on Business and Human Rights (the “Ruggie Principles”). The Ruggie Principles comprise 31 principles, but are underpinned by three pillars: the obligation of states to “protect” human rights, the responsibility of businesses to “respect” human rights, and access to “remedies”. While most international legal norms impose obligations on state parties, the Ruggie Principles are groundbreaking in that they impose responsibilities on corporations. The Ruggie Principles have also raised awareness among society and businesses, and society has become more critical of companies that do not respect human rights. Boycotts and prosecution campaigns by human rights advocates in many countries have taken a heavy toll on corporate profits as well as corporate images. In Europe and the United States, cases of labor exploitation, child labor, and environmental destruction that occurred in Southeast Asian countries have been brought to the courts in Europe and the United States, where the top companies’ headquarters are located, and in some cases, large amounts of compensation have been imposed.
5 Current situation in Japan
Japanese companies are also making various efforts to educate local labor unions and subcontractors from the perspective of corporate social responsibility (CSR) and preventive measures. However, once the damage has been done, there are various issues that need to be addressed. Many of the victims are poor and often do not realize that they are being exploited. Even when it comes to judicial remedies, there are many obstacles, such as who has the right to be a party, how to gather plaintiffs, who pay the legal fees, which country’s courts to bring the case to, and which country’s laws to apply. In addition to the judicial remedy system, victims may also be able to access a judicial remedy by establishing an administrative national human rights institution or an in-house complaint body. There is also a National Contact Point (NCP) under the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises that can be used in Japan as an international complaint body. The Guidelines for Multinational Enterprises are guidelines for multinational companies to voluntarily recommend that they behave in a responsible manner expected of them. It sets out standards and principles for responsible corporate behavior in a wide range of areas, including human rights, employment, and labor relations, and the environment. The NPC is expected to be an effective remedy, but there have been only seven complaints to the NCP in Japan between 2000 and 2016. Five of the petitions are from overseas. Compared to the more than 40 cases filed in the U.S. and the U.K. during the same period, the NPC is far from being fully utilized.
As the number of foreign workers in Japan and the relocation of Japanese companies’ production bases to other countries increases, the awareness of “business and human rights” will spread, and it is expected that the number of international lawsuits in which Japanese companies are accused of human rights violations abroad, in addition to claims to the NPC, will increase.