Japan: Major consumer goods companies incl. Kao and UCC step up efforts to examine human rights and environment issues in supply chains
"Japan consumer goods sector buys into sustainable procurement" 24 October 2022
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Japan's top household goods maker Kao has introduced a feedback system to hear complaints about human rights violations and other issues from palm oil plantations, starting with those in Indonesia. Meanwhile, UCC Holdings will independently audit coffee bean purchases by its group company UCC Ueshima Coffee.
With consumers becoming more concerned about human rights and environmental issues, the two are focusing on the sustainability of operations, especially in emerging economies.
Kao introduced its feedback system in September, which allows Indonesia's small palm oil plantations to access a dedicated website to report illegal transactions and human rights violations by companies with which they work.
Reports will be relayed to Kao through the international human rights organization Caux Round Table. In response, the company will work with palm oil makers to implement changes.
Kao plans to introduce the system initially to 50 farmers in northern Indonesia and increase the number to 500 by 2025. The company says it is the first Japanese home products maker to offer such a system. In Japan, similar systems are already used by companies such as Fuji Oil Holdings.
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Kao wants to establish a system that allows monitoring of its supply chains. It is also working on an initiative to help Southeast Asia's plantations obtain socially and environmentally accepted certification for its palm oil production.
"Going forward, we plan to increase opportunities for Kao employees to visit the plantations," said Kao Managing Executive Officer Masakazu Negoro. "We will disclose information on reported incidents and how we responded to them on a regular basis so that other companies can learn from our experience."
UCC Holdings has introduced a system whereby independent entities audit its coffee bean supply chains. [...] Under the system introduced in spring, production and distribution processes are partially audited, with plans to increase the scope of audits in the future.
UCC has regularly inspected production locations in South America and Asia, and is now set to make it easy for independent organizations to become involved so that issues can be better addressed.
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"Improving small producers' living conditions and working environment is essential for making the coffee industry sustainable," said UCC Holdings Executive Officer Ryo Satomi, who oversees sustainability matters.
Lotte, another Japanese company, is examining its operations in Africa, where low wages and child labour in the cocoa bean industry have drawn international concern. Lotte has adopted a system to allocate some of the purchasing costs to support producers in addressing this issue, with plans to expand support to producers comprising about 80% of cocoa beans purchased by fiscal 2025.
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Yet another Japanese company, Meiji, launched an initiative in 2022 to support farmers' incomes by commercializing cocoa bean skins.
The moves by Lotte and Meiji come in response to growing consumer preference for goods produced under conditions deemed environmentally sustainable and that take into account human rights.
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