Human rights due diligence (human rights DD), grounded in the UN Guiding Principles on Business and Human Rights (UNGPs), has emerged as a core challenge in supply chain management for manufacturers. Japan's government formulated a National Action Plan on Business and Human Rights in 2021, and both METI and the Ministry of Foreign Affairs have published corporate guidelines. Meanwhile, Europe's CSDDD makes human rights DD mandatory for EU companies and exerts indirect compliance pressure on Japanese companies that supply them. The expectation is that companies establish systematic mechanisms to check whether human rights violations — including forced labor, child labor, discrimination, and restrictions on freedom of association — exist within their own operations or supply chains.
What Is Human Rights DD — Foundational Concepts
The international standard for human rights DD is the UN Guiding Principles on Business and Human Rights (UNGPs), adopted by the United Nations in 2011. The UNGPs define "the corporate responsibility to respect human rights" and call on companies to:
1. Commit to respecting human rights: Develop and publish a human rights policy approved by the board of directors 2. Conduct human rights DD: Identify, assess, and address human rights risks throughout the supply chain 3. Provide access to remedy: Establish mechanisms through which victims of human rights violations can file complaints and seek redress
The UNGPs are "soft law" rather than legal obligations, but the EU's CSDDD has introduced them as a legally binding framework, effectively elevating them to an international standard. The OECD also calls for UNGPs-aligned human rights DD under its Guidelines for Multinational Enterprises, increasing compliance pressure on companies in OECD member countries.
The Legal and Regulatory Background for Human Rights DD
EU CSDDD
Mandates human rights and environmental DD for EU companies with more than 1,000 employees and revenue exceeding €450 million. Risk identification, response, and monitoring throughout the entire supply chain become legal obligations, and non-compliant companies face civil liability. Phased enforcement from 2026 to 2028. Japanese suppliers have no direct legal obligation, but practical compliance pressure flows through European customers.
Japan's National Action Plan on Business and Human Rights
Formulated by the Japanese government in 2021. The stance is to 'encourage' (recommend, not mandate) large and listed companies to conduct human rights DD, but moves toward mandatory requirements are emerging in the next action plan from 2025 onward. METI and the Ministry of Foreign Affairs have published implementation guidelines, and adoption is advancing among major manufacturers.
US Uyghur Forced Labor Prevention Act (UFLPA)
Prohibits imports of products from Xinjiang under a rebuttable presumption of forced labor. Products using Xinjiang-origin cotton, polysilicon, tomatoes, and other materials face risk at US import. Japanese companies also face the need to verify whether Chinese-sourced materials contain Xinjiang-origin inputs.
UK Modern Slavery Act / Australia Modern Slavery Act
Require companies above a revenue threshold to disclose their efforts to address forced labor risk in an annual statement. The UK law applies to companies with global turnover exceeding £36 million, meaning some mid-tier Japanese companies may be covered through UK subsidiaries or business relationships.
The Four-Step Structure of Human Rights DD
Human rights DD as defined by the UN Guiding Principles and OECD Guidelines consists of four steps: identify → assess → address → disclose. Japan's guidelines (METI/Ministry of Foreign Affairs) follow this structure, and documenting that each step has been completed serves as evidence of conformance with international standards.
Step 1: Risk Identification and Assessment
Identify potential human rights violations in your own operations and supply chain. Starting points for identification include business relationships with high-risk countries or sectors (textiles, agriculture, mining, etc.), involvement of migrant or foreign workers, and multi-layered subcontracting structures. Combine desktop research (using country-level risk databases such as the Business & Human Rights Resource Centre), supplier questionnaires, and on-site audits.
Step 2: Response and Remediation Measures
Take remediation measures against identified risks. Direct company involvement requires immediate correction; risks arising through suppliers are primarily addressed through engagement (requesting and supporting improvements). The intensity of the response varies depending on the degree of involvement (direct involvement vs. contributing to another party's violation). When requesting improvements from suppliers, an approach of 'continuing the relationship while supporting improvement' is internationally preferred over 'terminate the relationship if improvement is not made.'
Step 3: Monitoring
Maintain a mechanism to periodically verify the effectiveness of remediation measures. Re-audits, questionnaires, and records of the number of grievance mechanism submissions and responses serve as monitoring evidence. Annual supplier self-assessments are widely adopted. On-site audits of high-risk suppliers are recommended annually or every two years; in practice, outsourcing to third-party audit organizations is realistic given cost constraints.
Step 4: Disclosure and Communication
Disclose the status of risk identification and response to stakeholders. Securities reports, CSR reports, and CSRD-compliant reports are the primary vehicles. Providing a grievance mechanism that affected parties (workers, local communities) can use directly, and disclosing its operation, is required. Disclosure is not about proving 'there are no problems' but about demonstrating 'that a response process is ongoing.'
Priority Areas for Action
Foreign Technical Intern and Specified Skilled Workers
Foreign workers widely employed in domestic manufacturing are internationally scrutinized for the risk of being placed under coercive conditions. Priority actions include ensuring employment terms are explained in workers' native languages, confirming the absence of fee-charging practices (worker-borne broker fees), and verifying accessibility of grievance mechanisms. Under international standards, 'not charging recruitment fees to workers' is one indicator used to assess forced labor risk.
Labor Conditions at Emerging Market Suppliers
Labor law enforcement standards differ across procurement partners in Southeast Asia, South Asia, and China. When sourcing minerals (cobalt, rare earths, etc.), child labor and forced labor risks at the mining stage are particularly high. Prioritizing suppliers holding third-party audit certifications such as SAI (Social Accountability International) or SMETA, rather than relying solely on supplier self-reported questionnaires, is a practical way to reduce procurement risk.
Grievance Mechanisms
The UN Guiding Principles require companies to establish grievance channels that affected parties can use directly. These must be multilingual, ensure anonymity, and guarantee protection from retaliation. Delegating operation to third-party organizations is increasingly common to strengthen effectiveness. Disclosing the number of submissions and response status in annual reports is recognized as evidence that the mechanism is functioning. Reporting zero submissions is not interpreted as 'no problems' — it may be seen as indicating that the mechanism is not working, which can lower assessments.
Developing a Human Rights Policy — Minimum Required Content
A human rights policy — the starting point for human rights DD — should be developed as a document containing the following elements in order to satisfy international standards as a first step:
1. The company's commitment to respecting human rights (declaration of conformance with international human rights standards) 2. Scope of application (own company, subsidiaries, suppliers) 3. Responsible department and executive (explicit identification of who is accountable for human rights DD implementation) 4. Engagement policy with affected parties (dialogue with suppliers, workers, and local communities) 5. Grievance mechanism (reference to the mechanism) 6. Evidence of board approval (approval date and signature)
An English-language version is necessary for responding to European customers, so drafting in both Japanese and English is recommended. The policy should be a clear, concise 1–2 page document — not a 10–20 page detailed manual — published on the company's website, which is the standard form of disclosure.
International standards for human rights DD do not demand a "perfect supply chain" — they call for "following appropriate processes." What matters is not proving that risk is zero, but being able to demonstrate through documentation that you have a process for responding to risk and are continuing to improve. "We found no human rights risks" is not evidence of human rights DD. "We searched for risks through this process and responded in the following ways" is what demonstrates conformance with international standards.