On Mar. 12, 2022, the Master of Business Administration Program at Vietnam Japan University and RILAP Institute completed the first RILAP special seminar series session. In this 2nd seminar, there were two main topics discussed: Human Rights Due Diligence from Risk to Chance for ESG/SDG and Subcontract Act.
For the first part, Prof. Yasunobu Sato (佐藤安信先生) from the University of Tokyo taught the content of Human Rights Due Diligence in the business sector and introduced his latest ongoing project on ensuring the human security index CSSI is currently.
Human rights due diligence is understood as an individual or organization responsible for conducting due diligence in enterprises to ensure human rights in enterprises and also in international financial transactions. Human rights protection does not exist only as a natural law but has been incorporated into transnational law and recognized and joined by many countries, including Japan. It is a pity that until now, Vietnam has not joined yet. However, it does not mean that Japanese companies investing in Vietnam do not respect human rights and implement human rights laws with factories in Vietnam.
Ensuring human rights is very important in manufacturing factories, especially the ones in developing countries. One of the examples is the secret investigation of Human Rights Now (Japan) at the manufacturing plants in China for Uniqlo. Here, the workers have to work in unsafe environments overtime, and wages that violate the country’s labor laws. Not only that, but the plant also applies a strict management process, and the trade union does not function properly. After receiving the report from Human Rights Now, Fast Retailing corporation, to be more specific Uniqlo, has improved the working conditions at production partners by introducing workplace monitoring at textile suppliers, improving auditing methods, and implementing training programs for factory workers and factory management.
For the second part, Prof. Eri Haru (土生英里先生) from Shizuoka University gave a speech on Subcontract Act and Corporate Compliance in Japan. This act has a former name Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors.
The purpose of the subcontract act is to “… ensure that transactions between main subcontracting entrepreneurs and subcontractors are fair and, at the same time, to protect the interests of the subcontractors, thereby contributing to the sound development of the national economy” (The subcontract act, Jun 1, 1956.)
In Japan, almost all large corporations like Mitsui Sumitomo implement their project via vendors and subcontractors who supply equipment or do a part of their projects. Therefore, the Subcontract Act does not only make sure main contractors meet their tender deadlines but also protects the benefit of subcontractors. As the Subcontract Act plays an important role in business, a company should understand the content of this Act in order to protect themselves besides monitor and auditing daily business practices to comply with the act to avoid a penalty of up to 500,000 yen.
Thanks to these legal lectures, MBA students of VJU had a better understanding of legal issues related to corporate compliance in Japan in particular and international law in general. Hopefully, in the future, we will continue to have the opportunity to exchange and learn useful knowledge from RILAP Institute.