Leveraging Japan’s role as a major investor to promote responsible labour practices in global supply chains

Briefing note | 01 April 2021
Japan’s key role as a major investor in the Asia-Pacific region and beyond

Japanese multinational enterprises (MNEs) play a prominent role as international investors and increasingly operate through extensive networks of business relationship with other enterprises, creating and managing global supply chains. In 2017, approximatively 75,000 Japanese companies were registered as having overseas operations, the highest number ever.

By aligning their policies and practices with principles of the international labour standards and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), these enterprises have the potential to advance decent work not only within Japan but also in other parts of the world through their overseas operations.

Since 2014, the ILO has been collaborating with the Japanese employers’ organization KEIDANREN in engaging Japanese MNEs on the labour dimension of Corporate Social Responsibility (CSR) and responsible supply chain management. A number of national conferences and awareness-raising workshops were jointly organized, laying the basis for a number of international, national and industry level initiatives involving actors along global supply chains. In addition, the services of the ILO Helpdesk for Business on International Labour Standards have been operational in Japanese since 2015.

Promoting decent work in the supply chains of Japanese MNEs in Viet Nam and Pakistan

Engagement with Japanese companies on the labour dimension of CSR was strengthened in 2015 through the project: “More and Better Jobs through Socially Responsible Labour Practices in Asia” (or MNED project, in short) funded by the Government of Japan. The project aimed to encourage multinational enterprises to contribute positively to economic and social development and decent work through responsible business practices, with a special focus on the electronics sector in Viet Nam and the sports goods manufacturing industry in Pakistan.

The project foresaw activities both in Japan – the home country of the Japanese MNEs – combined with activities in the project countries (Pakistan and Vietnam), thus facilitating dialogues between home and host/producing countries. In collaboration with the Japanese electronics sector business association (JEITA), for instance, the ILO organized a series of roundtables in Japan with the headquarters of Japanese MNEs. These roundtables discussed the employment and labour challenges the Japanese MNEs faced in their overseas operations and the role that corporate policies and practices played in promoting decent work throughout the company’s own global operations and in raising awareness with their business partners on good labour practices.

In Viet Nam, the subsidiaries of Japanese MNEs have been active partners of the ILO MNED project. They participated in research activities, technical seminars, high-level policy dialogues and continued their engagement with Vietnamese stakeholders through the Electronics Business Coalition. This Coalition is an initiative of the Viet Nam Chamber of Commerce and Industry (VCCI) and the Viet Nam Electronics Industry Association (VEIA) launched in 2017 with technical assistance from the ILO to advance socially responsible labour practices in the sector through dialogue and joint action.

The home-host country policy dialogue that was held in Hanoi in June 2018 brought together representatives of the Japanese government, employers and workers organisations as well as the Japanese MNEs with representatives from Viet Nam as well as other important players in the electronics sector in Viet Nam. This dialogue facilitated the exchanges between all these actors of the lessons learned through the research and roundtable discussions both in Vietnam and Japan and what more was needed from the various actors to maximize the potential of the electronics sector in Vietnam as generator of decent jobs.

A historical partnership agreement signed with Tokyo 2020

In 2018, the ILO and the Tokyo 2020 Organizing Committee for the Olympic and Paralympic Games (Tokyo 2020) signed a unique partnership agreement to promote sustainability among the delivery partner companies of the Olympic and Paralympic Games Tokyo 2020. This agreement was the ILO’s first official partnership with an Olympic and Paralympic Organizing Committee and Tokyo 2020’s first partnership with a UN organization. The partnership aimed to encourage enterprises involved in the Tokyo 2020 Olympics to play a positive role in promoting decent work through Corporate Social Responsibility (CSR) and socially responsible labour practices based on the guidance from the ILO Tripartite Declaration of Principles on multinational enterprises and social policy (ILO MNE Declaration). Annual Sustainability Forums raised awareness on socially responsible labour practices and during which Tokyo 2020 Games’ delivery partners expressed commitment to sustainability and shared in exchanges with the Japanese government, employers’ organization and trade unions. The Tokyo 2020 website featured the partnership with the ILO and made available ILO resource materials to support the Games’ delivery partners in implementing socially responsible labour practices. The Tokyo 2020 Sustainability Plan and its accompanying Procurement Code referenced the ILO MNE Declaration and the Fundamental Principles and Rights at work. As part of the partnership, ILO and Tokyo 2020 developed a handbook on sustainable procurement to technically support the Games’ delivery partners in meeting the procurement requirements. In addition, “Fair Play – Decent Work for All through the 2020 Games” showcased socially responsible labour practices by the Games’ sponsor company. This partnership also gave an extra impetus to the efforts initiated in the context of the MNED project in the sports goods manufacturing sector of Pakistan.

Enhanced partnership to advance decent work in the electronics and auto-parts supply chains of Japanese MNEs

In 2018, Japan became a partner to the EU-ILO-OECD Responsible Supply Chains in Asia programme that aims to promote sustainable and responsible business practices into the operations of MNEs and their supply chains in six countries in Asia (China, Japan, Myanmar, Philippines, Thailand, Viet Nam). In partnership with the Japanese government, KEIDANREN, the industry associations (namely JEITA and JAPIA) and Japanese trade unions, the ILO conducted studies to document – based on the guidance of the ILO MNE Declaration - good practices among MNEs with supply chains in the electronics and auto-parts industries and facilitated the sharing of lessons learned through technical seminars. KEIDANREN has been an active partner of the ILO over the years and co-organized a number of technical seminars and dialogues to raise further awareness and promote responsible business conduct in the supply chains of Japanese MNEs.

Japan National Action Plan on Business and Human Rights

In October 2020, Japan adopted its National Action Plan on Business and Human Rights (Japan NAP) based on the UN Guiding Principles on Business and Human Rights and as called for by the Working Group on Business and Human Rights. The NAP references the ILO MNE Declaration as the important international guidance document for advancing decent work in supply chains, and the Government commits itself to its continued promotion. On the occasion of the adoption of the Japan NAP, stakeholders including the employers and workers organisations issued a joint comment. The ILO participated in the NAP development process as a member of the Working Group and of the Advisory Committee established for the elaboration of the NAP. The NAP spans from 2020 to 2025 and aims to contribute to the promotion and protection of human rights by promoting responsible business conduct. As the first NAP to be developed since the outbreak of the COVID-19 pandemic, it recognizes ”the importance of placing human rights at the center of counter-measures during the COVID-19 response and recovery period ”, and concurs with the ILO’s policy messages on the vulnerability of business operations and supply chains due to the pandemic.

Ongoing promotion of responsible business practices as a response to the COVID-19 pandemic

In the wake of the COVID-19 pandemic, ILO supported and partnered with KEIDANREN in providing technical assistance to Japanese MNEs in responding to the crisis and for building resilient global supply chains. ILO resource materials on Business and COVID-19 were widely made available. Over 100 MNEs attended a series of webinars in June and July 2020. Tokyo 2020 also widely disseminated ILO tools amongst the Games’ delivery partner companies via their website in multiple languages.

The commitment of the government, employers’ organization and trade unions in Japan as well as the engagement and collaboration with Japanese MNEs highlight the potential of a home country of multinational enterprises to promote good social practices and bring about change in labour practices in host countries of MNEs and their business partners.