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Japan Issues Guidelines for Customer Due Diligence to Respect Human Rights in Supply Chains

In a move aimed at promoting respect for international human rights standards, Japan’s Ministry of Economy, Trade and Industry (METI) has released its finalised guidelines on respecting human rights in responsible supply chains. The guidelines, published on September 13, set out METI’s expectations for Japanese entities to identify and prevent human rights-related abuses in their global supply chains.

Guidelines Overview

The guidelines apply to every corporate entity in Japan, regardless of size or sector, and cover internationally recognized human rights such as:

Freedom from forced labor and child labor
Freedom of association
Freedom from discrimination

Companies are urged to implement a human rights policy and conduct due diligence on potential adverse impacts on human rights throughout their supply chain.

Key Actions

According to the guidelines, companies should take three key actions:

Implement a human rights policy
Conduct human rights due diligence to identify, prioritize, and address potential adverse impacts
Establish remedies for addressing such impacts

The guidelines also emphasize the importance of leveraging influence over business partners and suppliers to prevent or mitigate adverse impacts.

Public Comments

Public comments on the draft guidelines were largely positive, with some recommending further expansion and detailed manuals to assist companies in implementing the measures. METI has indicated that it will consider these comments for future iterations of the guidelines.

Global Efforts

The release of the guidelines marks Japan’s first move towards codifying international soft law standards, joining global efforts such as:

EU’s draft Corporate Sustainability Due Diligence Directive
UN Guiding Principles on Business and Human Rights

The guidelines are non-binding but make clear that METI expects companies to have a process in place for identifying and addressing human rights-related abuses across their supply chains.

Relevance for Japanese Companies

For Japanese companies with global operations, the guidelines will be particularly relevant when considering compliance with laws mandating human rights or sustainability obligations that may impact their value chain.