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Human Rights Due Diligence and Labour Unions


The February 26 issue of NIKKEI BUSINESS introduces several labour and management initiatives collectively titled “New Challenges Beyond Conflict and Cooperation.” Among these are the following regarding corporate labour and management efforts to address human rights issues.

Companies often under pressure from shareholders and investors tend to put off efforts that are not directly related to their own profitability.
On the other hand, labour unions are more likely to move towards realizing initiatives for the protection of labour rights and equality. They are in a better position to pursue so-called social justice and social fairness. As a result, they are often proactively able to deal with issues that management may perhaps want to get involved in, but find it difficult to do so.

In recent years, there has been a demand for companies to contribute to solving social issues by advocating for the Sustainable Development Goals (SDGs). At the forefront of this is the response to human rights risks. These risks are not just within a company itself, but also in its supply chain, where human rights issues may lurk. Overlooking these issues, despite their existence, could lead to significant backlash and damage to brand value.

One company on the brink of such risk was M Corporation, a major sports equipment retailer. With the help of its labour union, M-Union, the company was able to conduct human rights due diligence and prevent human rights violations in its supply chain. (Quotes above.)

Let’s look at RENGO (Japanese Trade Union Confederation)’s site RENGO ONLINE to see specifically how M Corporation’s labour and management are addressing human rights issues.

Human rights due diligence was advocated in the United Nations Guiding Principles on Business and Human Rights (UNGPs). The Global Framework Agreement (GFA) is expected to be utilized as a framework for its implementation. The GFA is an agreement and conclusion by which multinational corporations, Global Union Federations (GUFs), the relevant enterprise-based labour unions, and the relevant industrial federations agree to act on the basis of universally recognized principles, such as compliance with the ILO Core Labour Standards, and to work together to promote them at the global level. Global companies around the world are concluding such agreements. In Japan, labour and management at Company T in 2008, Company M in 2011, and Company I in 2014 concluded GFAs.

The M-Union president said the following.

“Company M holds an annual meeting to exchange information among the four parties involved in the agreement. If the union side has any information, it is presented at the monthly labour?management consultation, and the union also participates in the company’s CSR reporting meetings. The most effective aspect is the handling of individual cases. When problems arise, they are often pointed out by NGOs, and almost simultaneously, information comes from UA Zensen and IndustriALL. In response, M-Union assesses the local situation while exchanging information with the company to address the issues. I feel that the four parties working together under the GFA are making progress in improving the workplaces of suppliers.”

One example of preventing human rights violations in advance is the issue concerning a cooperative factory in Thailand.

“There was an accusation from an NGO regarding poor living conditions in the employee dormitories. An on-site investigation was conducted by the four parties involved. The factory is located near the border with Myanmar, and the majority of employees are from Myanmar. Indeed, the employee dormitories were in poor condition. Improvements were made, including abolishing the dormitories and providing housing allowances.
The accusations from the NGO were wide-ranging. They included dismissals during factory relocation, unfair labour practices, wages, contaminated water supply, inadequate locker rooms, and so on. In all of these cases, the accusations are delivered based on the value judgments of developed countries, so it is often difficult for the parties involved to know what the best way to improve the situation is.
When various problems actually occurred in the supply chain and we were forced to solve them, we chose the Global Framework Agreement. The global situation and grassroots information of the international labour movement has a different level of realism. Its network is powerful, and cooperation with local industrial organizations and labour unions can be a great help in solving problems.”
(From a talk by the M-Union president.)

For companies, human rights issues have been primarily centered around the reputational risk of facing negative campaigns from non-governmental organizations (NGOs). However, in 2011, with the adoption of the “Guiding Principles on Business and Human Rights” by the United Nations, it was explicitly stated that companies have a responsibility to respect human rights.

In Europe and the United States, there is a high awareness of human rights due diligence, and legislation and obligations have already been advanced in many countries. It is reported that as of 2018, over 120 multinational corporations have entered into Global Framework Agreements (GFAs) as a framework for promoting human rights. However, in Japan, corporate interest in human rights is not necessarily high, and compared to overseas, there is a delay in the legislative framework regarding human rights in business. The number of companies that have entered into GFAs remains at three.

In rapidly aging Japan, maintaining an adequate workforce is no easy task. Regardless of preferences, further expansion into overseas markets is inevitable, and the multinationalization of employed workers will continue to progress domestically as well. This signifies a further advancement of corporate internationalization. In such an employment and labour environment, human rights issues are highly valued. It is clear that human rights will become an important issue in future labour?management efforts.