Background

Japan’s progress following the introduction of the UNGPs

Since the United Nations adopted the Guiding Principles on Business and Human Rights (UNGPs), countries around the world – particularly in Europe and North America – have made significant advances in integrating business and human rights considerations into their legal and policy frameworks. In contrast, Japan’s progress in this area has been notably slower. For instance, the United Kingdom introduced its National Action Plan in 2013, and throughout the 2010s, many European countries and the United States followed suit with their own National Action Plans. Legislative measures such as the UK’s Modern Slavery Act of 2015 and France’s Duty of Vigilance Law of 2017 further underscored the growing international emphasis on corporate responsibility for human rights. During this period, however, Japan’s government took limited action to address business and human rights concerns.

Despite this, significant social issues were emerging within Japan, particularly in the context of the Technical Intern Training Program (ginou jisshu seido). Foreign trainees were often required to pay excessive recruitment fees in their home countries and, upon arrival in Japan, faced poor working conditions and restrictions on changing employers, leading to cases of disappearance and exploitation. Additionally, Japanese companies with global operations became subject to foreign laws and regulations, either directly or through the expectations of their international business partners. Foreign companies, motivated by their own legal obligations or voluntary commitments to the UNGPs, began conducting human rights due diligence on Japanese suppliers. Consequently, Japanese companies found themselves compelled to address human rights issues to comply with legal requirements and fulfil their social responsibilities.

In response, a range of private sector initiatives emerged. The Japan Federation of Bar Associations published “Guidance on Human Rights Due Diligence” for Japanese companies in 2015. The Japan Business Federation (Keidanren) revised its Charter of Corporate Behavior in 2017 to include human rights provisions. In 2019, in collaboration with the BHR Lawyers Network Japan, the Global Compact Network Japan developed the “Engagement and Remedy Guidelines for Promotion of Responsible Business Conduct and Responsible Supply Chains,” providing practical guidance for Japanese companies on establishing and operating grievance mechanisms.

Building on these private sector efforts, the Japanese government began to take more active steps. The National Action Plan was formulated in 2020, followed by the issuance of the “Guidelines on Respecting Human Rights in Responsible Supply Chains” (the “Guidelines”) in 2022 – the government’s first comprehensive guidance in this field. In 2023, the Ministry of Economy, Trade and Industry published practical reference materials for the Guidelines, and the Ministry of Agriculture, Forestry and Fisheries issued guidelines for food companies on respecting human rights. The National Action Plan is scheduled for revision in 2025.

In recent years, serious human rights issues – including sexual abuse and sexual harassment – have come to light within Japan’s entertainment and media industries, drawing intense public scrutiny and sparking widespread societal debate. Many companies utilize celebrities in their advertising campaigns or place advertisements with these media outlets, making these issues highly relevant to a broad range of businesses. As a result, companies are increasingly compelled to address these matters as issues that directly affect them rather than as distant or abstract concerns. This heightened sense of urgency has led to greater awareness and engagement among corporate leadership. Consequently, it is anticipated that human rights issues will become one of the most critical management priorities for Japanese companies in the years ahead.

Current Landscape

Overview of the Guidelines

As noted above, the Japanese government established the Guidelines in 2022, drawing on the UNGPs and other international standards. The Guidelines apply to all business enterprises operating in Japan, regardless of size, sector, operational context, ownership, or structure, and call for respect for human rights within companies, their group entities, and their supply chains. The Guidelines define “supply chain” broadly, encompassing both upstream (procurement of raw materials, resources, facilities, and software) and downstream (sale, consumption, and disposal of products and services) activities.

The Guidelines set out three primary expectations for business enterprises:

• the establishment of a human rights policy;
• the implementation of human rights due diligence (HRDD); and
• the provision of effective remedies. These requirements are consistent with the UNGPs.

Current status of corporate human rights efforts

While a handful of large Japanese corporations began addressing human rights issues even before the UN Human Rights Council endorsed the UNGPs, the concept of business and human rights remains relatively new to most major Japanese companies. However, since the introduction of the Guidelines, there has been a marked increase in the number of companies initiating HRDD processes. According to a 2023 survey by Keidanren, over 70% of responding companies reported promoting efforts to respect human rights in line with the UNGPs, compared to just 36% in a similar survey conducted in 2020. The growing recognition of HRDD’s importance is further reflected in the initiatives of various government ministries.

Key issues for future progress

Despite the absence of legislation comparable to the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), many large Japanese corporations have implemented HRDD processes, particularly following the release of the Guidelines. However, small and medium-sized enterprises (SMEs) have generally lagged behind, even though their customers are increasingly asking them to respond to human rights questionnaires and address specific issues. Given their limited resources, public support will be essential to encourage and enable SMEs to undertake meaningful human rights initiatives.

Another area requiring attention is the development and effectiveness of grievance mechanisms. Even among large corporations, many have yet to establish their own grievance systems or participate in external mechanisms. Where such systems do exist, they often fail to function effectively. The UNGPs and the Guidelines emphasize the importance of early detection and remediation of adverse human rights impacts, but in practice, suppliers – especially those in overseas supply chains – are often unaware of these mechanisms.

Recent Trends and Developments

Impact of foreign policies, geopolitical tensions, and trade regulations

Japanese companies are increasingly affected by foreign policies and regulations, including European legislation such as the CSDDD and Battery Regulation and national laws like the UK Modern Slavery Act and the German Supply Chain Act. These impacts are particularly pronounced due to Japanese companies’ extensive business relationships with these jurisdictions.

Among these external influences, the ongoing geopolitical tensions between the United States and China present the most significant challenges, especially in the context of business and human rights. The Uyghur Forced Labor Prevention Act (UFLPA) enacted by the US government is a notable example. Japanese companies, especially those in the manufacturing sector, have established complex supply chains in China over many years. The UFLPA prohibits the import of products that originate from the Xinjiang Uyghur Autonomous Region, even in small amounts, which can lead to import bans in the United States. The current situation has highlighted the necessity for comprehensive tracing of supply chains that extends beyond just the first and second tiers of suppliers. Although it is theoretically possible to comply with the UFLPA by performing rigorous HRDD and demonstrating that forced labour is absent, the requirements for evidence are exceedingly high, making practical compliance quite challenging.

The UFLPA, as a special law under Section 307 of the Tariff Act of 1930, has heightened concerns about import restrictions on goods produced with forced labour. This issue extends beyond China; in Southeast Asia, Japanese supply chains often involve large numbers of migrant workers from countries such as Nepal and Bangladesh, where allegations of forced labour are increasing. As a result, products from these supply chains may also face import bans in the United States.

Addressing human rights issues in Asian supply chains and managing related regulatory risks in Europe and the United States have thus become urgent priorities for Japanese companies.

Legal developments in Japan

In recent years, notable legal developments in Japan have been seen in terms of business and human rights, particularly concerning migrant workers and corporate disclosure requirements.

A major development is the 2024 revision of the Technical Intern Training Program (Gino Jisshu), and the program will be revised as the “Employment for Skill Development Program” (Ikusei Shuro). The program’s purpose has shifted from international human resource development to securing labour for sectors facing shortages in Japan. The revision broadens the conditions under which foreign workers can change employers, tightens licensing requirements for supervising organizations, and strengthens inspection mechanisms. However, civil society groups and human rights experts have criticized the reforms as insufficient, calling for further measures such as abolishing recruitment fees, simplifying application procedures, increasing job mobility, and ensuring equal pay for equal work.

Another significant development is the 2023 amendment to corporate disclosure requirements for listed companies. The amendment mandates the inclusion of a new “Approach and Initiatives Relating to Sustainability” section in annual securities reports, covering governance, strategy, risk management, and indicators/targets. Disclosure of governance and risk management information is mandatory, while disclosure of strategy and indicators/targets is subject to materiality considerations. Companies must also disclose workforce diversity data, including the ratio of female managers, male employees taking parental leave, and the gender pay gap.

Forced labour issues in overseas supply chains

Japanese companies with supply chains in Southeast Asia face significant human rights challenges, particularly regarding the forced labour of migrant workers. Many migrant workers incur substantial debts to pay recruitment fees and are vulnerable due to their precarious status and cultural or linguistic differences, leading to situations of debt bondage and forced labour.

To address these issues, more companies are adopting responsible recruitment guidelines and requiring suppliers to use ethical recruitment agencies. JP-MIRAI, a Japanese organization promoting corporate respect for human rights, launched the Fair and Ethical Recruitment Initiative (FERI) and established the “Fair and Ethical Recruitment Guidelines for Migrant Workers” in 2024. Under this system, companies that ensure migrant workers do not pay recruitment fees – or pay no more than the maximum allowed – can be certified by JP-MIRAI. While the costs associated with fair recruitment can deter companies from addressing these issues, certification may help build trust with stakeholders and encourage greater investment in ethical recruitment practices.

Similar issues exist domestically in Japan, prompting government efforts to revise relevant laws and regulations. JP-MIRAI is also working with large companies to address migrant worker issues. However, adverse impacts in developing countries are often more severe due to weaker legal protections and limited economic resources, making forced labour risks a priority for Japanese companies.

UN Working Group report

In 2023, the UN Working Group on Business and Human Rights visited Japan to assess the country’s implementation of the UNGPs. In May 2024, it issued a report summarising its findings and recommendations. The report is a valuable resource for understanding how Japan’s human rights situation is viewed internationally.

The report acknowledges positive developments, such as adopting the National Action Plan and the Guidelines, as well as initiatives by businesses and industry associations. However, it also highlights ongoing concerns, including discrimination and harassment of vulnerable groups (women, LGBTQI+ individuals, persons with disabilities, indigenous peoples, minorities, migrant workers, and technical interns), the lack of effective remedies for victims of business-related abuses (notably in the contexts of the Fukushima Daiichi nuclear disaster, PFAS contamination, and the media and entertainment industries), limited awareness and capacity among businesses – especially SMEs – to conduct HRDD, and the need for greater policy coherence and government guidance.

Key recommendations include adopting mandatory HRDD legislation, establishing an independent national human rights institution, strengthening the OECD National Contact Point, addressing structural discrimination, providing comprehensive training on the UNGPs and the National Action Plan, ensuring human rights considerations in a just transition, and providing effective remedies for affected individuals and communities.

Grievance mechanism

As discussed above, establishing effective grievance mechanisms has become a critical challenge faced by the Japanese government and companies. Consequently, notable cross-company initiatives have been emerging within Japan’s private sector. A prominent example is the establishment of the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER). Founded in 2022, JaCER aims to provide a non-judicial platform for grievance redress and to serve in a professional capacity to support and promote the resolution of grievances by its member companies in accordance with the UNGPs. Since its inception, JaCER has garnered the support of a growing number of private enterprises, particularly large corporations, and its membership continues to expand. As a result, JaCER is increasingly playing a significant role in the landscape of grievance mechanisms in Japan, contributing to the development and implementation of effective remedies for business-related human rights impacts.

Outlook

As this article has discussed, Japanese companies have historically lagged behind their Western counterparts in addressing business and human rights issues. However, recent years have seen significant progress, and this momentum is expected to continue. Public awareness of business and human rights is rising rapidly in Japan, particularly in light of high-profile cases like those in the entertainment or media industry. As a result, companies are likely to face increasing pressure to respond proactively to these challenges.

A key issue moving forward will be extending these initiatives from large corporations to SMEs, which form the backbone of Japan’s economy. While major companies have made notable progress, widespread adoption among SMEs remains limited. Collaboration between the government and large corporations will be essential to promoting the uptake of business and human rights initiatives across the broader business community.

Another emerging challenge, especially from 2025 onward, is the growing divergence between European and U.S. approaches to ESG and DE&I. Differences in attitudes – and even the rise of anti-ESG and anti-DE&I sentiment – are becoming more pronounced. For Japanese companies, which often have substantial business relationships with both regions, finding an appropriate balance in their own initiatives will be a complex and significant issue.