On October 21, 2021, Shionogi held an online dialogue with overseas experts to exchange views on its human rights initiatives.
In the dialogue, the participants exchanged opinions mainly on the impact assessment conducted by Shionogi in FY2021, and the things that need attention in advancing its efforts to respect human rights.
Neill Wilkins, Institute for Human Rights and Business (IHRB)
Neill is in charge of the IHRB Migrant Workers Program. In 2011, he took part in the formulation of the Dhaka Principles for Migration with Dignity, a set of human rights-based principles that highlight the particular challenges faced by migrant workers and companies who employ them.
He manages the Institute’s engagement with modern slavery issues and speaks regularly at events on forced labor, trafficking, and transparency legislation.
Camille Le Pors, World Benchmarking Alliance (WBA)
Camille leads the Corporate Human Rights Benchmark (CHRB) at WBA. She joined the CHRB in October 2016. Prior to this, she worked with the Business and Human Rights Resource Centre in London, the International Criminal Court in The Hague, and for an Overseas Member of French Parliament in London. She is responsible for controlling the research process, managing the relations with keystone companies, and developing and reviewing methodologies.
-About Shionogi’s risk assessment process
Human rights issues often occur systematically, making it difficult to address them all at once. This may be due to the business structure. Therefore, the process of how the described cases were prioritized and selected is important. It is commendable that you conduct workshops for risk assessment, involving both management and employees.
It is essential to have a system and process to ensure close internal engagement within the company. People who have noticed problems in the company are empowered. By finding such people and turning them into change-makers, you can create a flow to exercise leadership toward problem solving.
-About the survey on the labor situation of foreign workers in Japan
It is very good that you have collected information from those close to a person who may be directly affected, by conducting interviews with outsourcing companies related to one of your plants.
You said that outsourcing companies related to your plant have had technical intern trainees in the past. In the future, you need to confirm whether the trainees are the employees of the outsourcing company or of a company in a further tier. Providing information and sharing knowledge is important because your outsourcing company may be unaware of supply chain risks as an employer. The deeper you go into the supply chain, the more difficult it is for you to identify human rights risks for your company, and the higher the risk of human rights challenges become. In addition, it is necessary to clarify whether the trainee actually received skills training or whether the trainee’s entry to and employment in Japan was allowed in the first place to be used as cheap labor.
-About the survey on the labor situation in the raw material production area
It is good that you adopted a bottom-up approach to collect reliable primary information. As shown in the case of eucalyptus farmers in India, you can see that the value chain problems are serious and they lack transparency, and that there are various risk layers intricately entangled.
Rather than considering human rights and the environment separately, you perceive them as an inseparable one. The United Nations High Commissioner for Human Rights (UNHCR) recently stated that having a clean, healthy and sustainable environment is a human right.
I agree with Camille. The bottom-up method is a good approach, and we would like to use it as reference in the future. Another option is to consult experts who are dealing with similar challenges. For example, an approach taken by an expert on palm oil issues may help address the problems relating to eucalyptus farming. If an industry group like PSCI points out problems, it will help you in dialogues with farmers and negotiations with brokers.
-What things should we pay attention to in continuing to address human rights issues?
WBA chooses 2,000 most influential companies in the world as keystone companies and evaluates them using the factors related to the SDGs. From among seven transformations used to develop benchmarks, ‘Nature and Biodiversity’ and ‘Social’ transformations apply to pharmaceutical companies. On the Social transformation, assessment is made based on items such as decent work and ethical business conduct. Among the methodologies for evaluating companies, the one on the Social transformation has already been released and the one on Nature and Biodiversity transformation is currently under development. We believe that they will help companies understand the expectations of society.
Lately we often hear the term ‘just transition.’ The concept of just transition focuses on how companies identify the impact of business developments relating to climate change on society, There may be negative impacts such as unemployment with workers being left behind or other poor outcomes for workers or communities. The concept also focuses attention on existing management systems, including management decision making.
Investors do not place importance only on the net income or bottom line of a company. Rather, they watch closely how the company actually responds to human rights issues. It would be helpful to check, through CRT, PSCI and other channels, what investors use to evaluate companies.
Shionogi & Co., Ltd.:
Thank you for your valuable opinions. By actually implementing risk assessment and impact assessment, we found challenges relating to the complexity and transparency of the supply chain. Furthermore, as we promote our efforts on human rights, we have newly learned that such efforts may lead to the improvement in environmental issues and stabled supply. From the next fiscal year onward, we will further promote due diligence, and at the same time will collect information and hold direct dialogues in order to catch up on ever-changing human rights issues.