Managing Human Rights Risks: a guide for investors on applying the Japanese Guidelines on Respecting Human Rights in Responsible Supply Chains with respect to modern slavery

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Background

Human rights are the basic rights and freedoms every human being is entitled to enjoy without discrimination. All businesses, including investors, have a responsibility to protect human rights in line with international standards and increasingly, regulation globally. Where investors and their investee companies fail to protect human rights, they face potential legal, reputational, financial and operational implications. In September 2022, the Government of Japan published Guidelines on Respecting Human Rights in Responsible Supply Chains (the Due Diligence Guidelines). The expectations for business action in the Due Diligence Guidelines apply to all internationally recognised human rights, including human rights relating to freedom from modern slavery.

Key takeaways

  • Human rights are the basic rights and freedoms every human being is entitled to without discrimination. They aim to ensure everyone is treated with equality, dignity and respect.
  • All businesses, including investors, have a responsibility to respect human rights, which is enshrined in the UN Guiding Principles on Business and Human Rights (UNGPs) – the global standard for managing adverse business impacts on human rights. Under the UNGPs, businesses are expected to: publicly commit to respect human rights; undertake human rights due diligence which helps them to know and show that they are respecting human rights; and have processes in place to enable remediation where appropriate.
  • The Due Diligence Guidelines, published in September 2022, aim to support Japanese businesses to meet their responsibility to respect human rights, including human rights related to freedom from modern slavery.
  • The term ‘modern slavery’ is used to describe especially severe exploitive practices that can occur in the workplace, such as servitude, forced labour, debt bondage, trafficking in persons and the worst forms of child labour. The prevalence of modern slavery means that this issue is likely to affect the operations and value chains of many businesses around the world, including investors and their investee companies.
  • The Guidance Note includes information on understanding and managing human rights risks, an overview of the Japanese Due Diligence Guidelines, modern slavery risks and practical recommendations for investor action in line with the expectations set out in the Due Diligence Guidelines. 

This Guidance Note aims to provide practical guidance on how investors and other businesses can apply the general expectations set out in the Due Diligence Guidelines, using modern slavery as a specific example. The information in this Guidance Note can also be used by investors and other businesses outside of Japan to inform their modern slavery and broader human rights risk management.