Can Japanese Companies Help Uphold Human Dignity in Burma?

In July 2018, Domini addressed a letter to its 45 Japanese holdings about conducting business in Burma exactly one year after Burmese military-led violence drove nearly one million Rohingya people out of the country (see our 2017 issue paper and blog on the history and business risks). We focused on Japanese companies because of their substantial foreign direct investment into Burma1 as well as their government and private support for Japanese business expansion in Burma.2 The responses we received showed that while some companies are being proactive to protect human rights, many still lack sufficient policies and programs to fulfill their obligations under the UN Guiding Principles on Business and Human Rights (UNGP).

Today’s situation in Burma still fragile

After two years, more than 740,000 Rohingya remain in Cox’s Bazar, a refugee camp in Bangladesh now being referred to as an “open-air prison” after the Bangladeshi government decided to build a barbed-wire fence around the camp.3  Although Bangladesh and Burma initiated repatriation in consultation with the United Nations High Commissioner for Refugees and deemed 3,450 people eligible to return, not one refugee showed up.4 As the NGO Human Rights Watch has explained, although refugees want to go home, they fear doing so under the current conditions.5

Some Japanese companies have existing policies in relation to human rights issues in Burma

In accordance with UNGP, we believe that companies, including Domini, have a responsibility to respect human rights by conducting appropriate due diligence to understand whether or not they may be directly or indirectly connected to human rights abuses in their global operations and, if so, to take appropriate action. Our letter asked the Japanese companies about their policies and procedures for evaluating risks of human rights violations and remediation processes when human rights abuse allegations arise.  

More than 60% of the contacted companies responded to our survey indicating a sensitivity to potential risks associated with operating in Burma. While nearly one quarter acknowledged either direct or indirect involvement in Burma, the firms’ approaches to managing those risks varied widely. Although approximately two-thirds of the responding companies have policies or procedures in place to detect and/or prevent contributing to human rights abuses in Burma; only about one-third have an explicit due diligence process in place to assess human rights risks before entering a business venture. Of the policies described, 23% refer to the UN Global Compact and 19% refer to the UNGP.  

A few Japanese companies are leading the way

Thirty-three percent of the responding companies reported having some program for engaging local communities or enabling the remediation of adverse human rights impacts. Some of the best practices we identified include:

  • Annual meetings with local communities
  • Project-specific local engagements
  • Programs aimed at remediating any negative impacts caused by the company
  • Programs to prevent recurrence of negative impacts

We shared these results with each of the 45 companies initially contacted and encouraged them to refer to the UNGP when constructing their policies and procedures and to consider some of the best practices highlighted above. Finally, we pointed out the gap between policy and practice: strong policies must be supported by programs, processes, and people to ensure that appropriate actions are taken. 

Room to improve and Domini to pursue its engagement effort

While a few Japanese companies are ahead in fulfilling their responsibility to respect human rights, most companies still lack processes and programs to identify risks and avoid contributing to human rights violations in Burma.  We will continue to monitor the human rights risks of companies doing business in Burma and engage with key actors in addressing these issues. 

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DSIL Investment Services LLC (DSILD) distributor, Member FINRA.

Domini Impact Investments LLC (Domini) is the Funds’ investment manager. The Funds are subadvised by unaffiliated entities.

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