JAPAN Trends and Developments Contributed by: Hideaki Roy Umetsu, Aki Tanaka, Aritsune Miyoda and Chihiro Tsukada, Mori Hamada
Recent Trends and Developments Impact of foreign policies, geopolitical tensions, and trade regulations Japanese companies are increasingly affected by foreign policies and regulations, including European legislation such as the CSDDD and Battery Regulation and national laws like the UK Modern Slavery Act and the German Supply Chain Act. These impacts are particularly pro - nounced due to Japanese companies’ extensive business relationships with these jurisdictions. Among these external influences, the ongoing geopolitical tensions between the United States and China present the most significant chal - lenges, especially in the context of business and human rights. The Uyghur Forced Labor Preven - tion Act (UFLPA) enacted by the US government is a notable example. Japanese companies, especially those in the manufacturing sector, have established complex supply chains in Chi - na over many years. The UFLPA prohibits the import of products that originate from the Xinji - ang Uyghur Autonomous Region, even in small amounts, which can lead to import bans in the United States. The current situation has high - lighted the necessity for comprehensive tracing of supply chains that extends beyond just the first and second tiers of suppliers. Although it is theoretically possible to comply with the UFLPA by performing rigorous HRDD and demonstrat - ing that forced labour is absent, the require - ments for evidence are exceedingly high, making practical compliance quite challenging. The UFLPA, as a special law under Section 307 of the Tariff Act of 1930, has heightened con - cerns about import restrictions on goods pro - duced with forced labour. This issue extends beyond China; in Southeast Asia, Japanese supply chains often involve large numbers of migrant workers from countries such as Nepal
and Bangladesh, where allegations of forced labour are increasing. As a result, products from these supply chains may also face import bans in the United States. Addressing human rights issues in Asian supply chains and managing related regulatory risks in Europe and the United States have thus become urgent priorities for Japanese companies. Legal developments in Japan In recent years, notable legal developments in Japan have been seen in terms of business and human rights, particularly concerning migrant workers and corporate disclosure requirements. A major development is the 2024 revision of the Technical Intern Training Program ( Gino Jisshu ), and the program will be revised as the “Employ- ment for Skill Development Program” ( Ikusei Shuro ). The program’s purpose has shifted from international human resource development to securing labour for sectors facing shortages in Japan. The revision broadens the conditions under which foreign workers can change employ - ers, tightens licensing requirements for supervis - ing organizations, and strengthens inspection mechanisms. However, civil society groups and human rights experts have criticized the reforms as insufficient, calling for further measures such as abolishing recruitment fees, simplifying appli - cation procedures, increasing job mobility, and ensuring equal pay for equal work. Another significant development is the 2023 amendment to corporate disclosure require - ments for listed companies. The amendment mandates the inclusion of a new “Approach and Initiatives Relating to Sustainability” section in annual securities reports, covering governance, strategy, risk management, and indicators/tar - gets. Disclosure of governance and risk man -
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