Japanese Bank's Involvement in Labor Rights Violations

Wednesday, January 1, 2014

Japan - This paper illustrates the gap between seven Japanese banks’ policy and its implementation in terms of labor rights. Fair Finance Guide Japan’s scores of labor rights sector are relatively high as Japanese financial institutions refer to many international labor sector standards. However, Fair Finance Guide International’s research shows that these standards to not typically align with their real-world implementation. It is thus critical to conduct a fact-finding survey that can quantify this important difference in order to demonstrate what the implementation problems are and how they may be fixed.

This survey uses four different Japanese leading companies that the seven aforementioned Japanese banks invest in in order to demonstrate said difference: DAISYO Corporation, Yamada Denki, Watami Corporation/Watami Food Service Corporation (Watami Food Systems Corporation), and Zensho Corporation. Each of these companies have received negative media attention in either the short or long term for their shoddy labor standards implementation and should thus recognize the problems being caused by their shortcomings.

According to our research, six of the seven Japanese companies have financed approximately 300 billion JPY to the four companies written above. Regarding the gap between labor standard policy and implementation, due to the fact that Mitsubishi UFJ FG, Mizuho FG, Sumitomo Mitsui do not have any policy besides project finance, this survey found no inconsistency between policy and implementation. However, owing to the huge amount of money these banks loan out, it is crucial that they create such policies as soon as possible and disclose them to the public. On the other hand, in the case of Sumitomo Mitsui Trust HD, there is a clear gap between policy and implementation as they have invested in Zensyo Corporation, who has denied the right of their employees to collectively bargain while Sumitomo Mitsui Trust HD encourages companies they invest in to ensure the right to collectively bargain.


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