Seminar Report

Japan: Support for SMEs should be a key focus for multinational businesses looking to strengthen CSR in supply chains

The ILO and OECD co-host a roundtable for Japanese businesses to discuss and share ideas concerning Corporate Social Responsibilities (CSR) and Responsible Business Conducts (RBC) in supply chains in Asia

News | 19 November 2019
[Photo above: Session held by the Responsible Supply Chains in Asia Programme]

Tokyo (ILO News) -Japanese businesses can continue to strengthen labour rights and other responsible business practices through supporting lower-tier suppliers in dealing with compliance costs and gaps in knowledge.  That was one of the conclusions reached by a roundtable on CSR and Responsible Business Conduct (RBC) held in Tokyo.

“When Japanese multinational enterprises (MNEs) promote CSR initiatives in Japan and abroad, accelerating actions to tackle issues in the supply chains as well as taking additional steps in the area of human rights and small and medium- sized enterprises (SMEs) are at the top of the list. Equally important is advancing management and labour dialogue in foreign operations,” said ILO Association of Japan representative, Kenichi Kumagai.  [Photo above: Mr. Kenichi Kumagai, The ILO Association of Japan]

It was a theme picked up by Emi Omura, a labour lawyer. She pointed out the limited resources available for small and medium sized supplier in supply chains and raised the needs that MNEs bear the cost of compliance with the ILS for small and medium sized enterprises. “One of the priority issues is to establish fair business practice between MNEs and the suppliers, in order to distribute and share costs incurred for strengthening responses to CSR challenges,” she said. “The process requires collaboration among multi stakeholders, including lawyers like us. Ensuring compliance with the International Labour Standards should be the first step to demonstrate Japan and the Asia region as more attractive markets for investment.”

The roundtable event on “Advancing international collaboration on responsible business conduct for sustainable supply chains in Asia”, was hosted by the ILO and OECD as part of the on Responsible Supply Chains in Asia (RSCA) programme.  The RSCA programme, funded by the European Union, aims to enhance respect for labour and human rights and the environment in supply chains in six Asian countries, including Japan.

Fredy Guayacan, RSCA Programme Manager explained to the nearly 100 delegates present that there are persistent deficits in the world of work in Asia as well as challenges to achieving Decent Work in global supply chains. He referred the participants to the International Labour Standards (ILS) and their alignment with other international guidance instruments as well. “Combined engagement, coordination and partnerships are the keys in addressing the complexity of labour governance in global supply chains,” he said. 

Engaging workers is important in implementing changes to supply chain policies and practice.  A point further emphasised by Kumagai.  He stressed the role of social dialogue in dealing with challenges in global supply chains. Among other worker based initiatives, he described the Global Framework Agreement (GFA), Global Works Council and other international collaborations. “The greatest challenge faced by the Japanese MNEs in their CSR efforts going forward is how they can operate their business in an appropriate manner across the global supply chains to the full extent,” he said.

The importance of tailoring approaches to the Asian context was also canvassed by delegates. “All the participants have reaffirmed the roles played by the International Labour Standards in promoting decent work in the global supply chains. The discussion on responsible supply chains should be based on the reality of the region. It is significant to have a common understanding on particular challenges faced by workers, MNEs and the suppliers in Japan and the Asia region,”  Omura said. [Photo above: Ms. Emi Omura, Attorney at Law (Labour)]

Due diligence in relation to supply chains, for instance in the sourcing of raw materials from high risk areas, was a theme of a session presented by the OECD at the roundtable. In this session, the OECD Due Diligence framework was elaborated with comments from representatives from European embassies in Japan as well as businesses and researchers. OECD explained that the Due Diligence Guidance applies to all raw materials, beyond just conflict minerals, and that various tools are available to help companies conduct supply chain due diligence. 

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The Responsible Supply Chains in Asia Project is a European Union-funded project developed in close collaboration with ILO and OECD that enables businesses to dialogue on challenges and opportunities in relation to corporate social responsibility/ responsible business conduct in six Asian countries – China, Japan, Myanmar, Philippines, Thailand, and Viet Nam. It uses as a basis for its research, outreach, policy advocacy and training internationally recognised guidelines on responsible business conduct, the OECD’s Guidelines for multinational enterprises, and the ILO’s MNE declaration.