Fostering an Enabling Environment for MSMEs to Promote Responsible Value Chains (FEE-RVC)

Background 

Decent work deficits in value chains pose serious challenges to building sustainable and resilient supply chains in Asia. In Japan and across Asia, efforts to promote responsible business conduct (RBC), including respect for human rights at work, remain slow. This is compounded by weak supply chain transparency, limited stakeholder engagement, and ineffective grievance mechanisms. A lack of awareness and resources—especially among micro, small and medium-sized enterprises (MSMEs)—is a root cause. While multinational enterprises (MNEs) face growing pressure to act across their supply chains, MSMEs can stay competitive and attract skilled workers by aligning human rights efforts with market demand.

Addressing these challenges requires joint action by government, employers, and workers’ organizations. Governments can create enabling environments through policies that promote responsible business and decent work. Respect for fundamental rights could also be made a condition for access to government-sponsored benefits. Such measures can drive RBC and competitiveness among MSMEs, particularly in local economies where local governments work closely with them.

Approach 

The proposed project will explore means to engage with local governments in their policies to support MSMEs in local economy and to help create enabling environment for RBC in value chains. This initiative will collaborate with employers’ and workers’ organizations as well as local financial institutions in identifying good cases of public-private cooperation that can be reapplied and promoted in other Asian countries. 

Outcome 1: An enabling environment for RBC and industry development with a specific focus on MSMEs is strengthened, by utilizing and enhancing the capacity of local government institutions and private financial institutions

Outcome 2: Workers’ organizations as well as employers’ organizations and MSMEs are empowered to promote RBC in practice responding to the expectation and environment fostered under Outcome 1, and collaborative network to address RBC-related challenges is established

Outcome 3: The capacities of government officials in host countries and exporting countries in Southeast Asia to promote RBC for MSMEs are improved

Outcome 4: Stakeholder’s understanding of RBC, including diverse challenges faced by MSMEs and MNEs, is increased to advance and diversify RBC practices through knowledge dissemination of global policy frameworks

Partner countries

Japan and Asia

Targeted SDGs