"Japan to set human rights guidelines for companies" 14 February 2022

The Japanese government will draft guidelines for human rights due diligence as early as this summer to help companies detect and prevent human rights violations in their supply chains, Nikkei has learned.

The guidelines will instruct companies on developing procedures for unannounced inspections to check for instances of forced or child labour in their supply chains.

By creating the guidelines, Japan hopes to close the gap with the US and European countries, which are already responding to human rights concerns, such as allegations of abuse against the Uyghur ethnic minority in China. Japanese companies lag their Western counterparts in this area and face the risk of being cut out of clients' supply chains if they fail to address human rights concerns.

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Koichi Hagiuda, Japan's economy minister, is expected to announce the government's new guidelines soon.

A survey conducted last year by the economy and foreign affairs ministries found that half of Japan's publicly traded companies do not do due diligence on human rights. Of those who do not, around 30% said they do not know how to conduct such investigations. The government aims to provide the guidelines as a reference for companies to encourage them to conduct due diligence voluntarily.

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One of the pillars of the upcoming guidelines will be developing inspection procedures. The guidelines are expected to lay out best practices for investigating potential rights violations. Examples are to include conducting interviews of suppliers' employees without the presence of their managers, and having third parties conduct snap inspections.

The guidelines will lay out principles for evaluating risks. They will also advise companies to ask their suppliers to take corrective action if there are instances of forced labour, and to cut ties with suppliers that fail to take such steps.

The guidelines will also define forced labour based on principles outlined by the OECD, or previous cases reported in the US or Europe.

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The Japanese government first aims to encourage companies to respond appropriately, following the guidelines to avoid being targeted for violations by Western countries. If these measures are not sufficient, the government will consider turning the guidelines into law.