I.Sustainable
socio-economic system and corporate social responsibility (CSR)
1. Background
As the influence of corporations in a globalized society augments,
the voice demanding CSR (corporate social responsibility) becomes
louder on many aspects, including the human right protection of
corporate employees, consideration for the health and safety of
consumers, and contribution to local communities.
In an attempt to encourage the voluntary adoption of CSRs by corporations,
various schemes have been devised, including OECD's Guideline
on multi-national corporations (1977), Global Compact proposed
by UN Secretary General Annan (1999), and GRI that requests parties
to submit environmental and sustainability reports. Many of multinational
corporations and society-conscious corporations in Europe and
US consider CSR as a core element of management along with the
provision of economic benefits to shareholders and consideration
to environment, and develop a consensus that the harmonized attainment
of these triple elements is essential for the development of a
sustainable society and the sustenance of corporations.
In Europe, the European Multi-Stakeholder Forum on CSR chaired
by the European Commission was formed in October 2002 with participants
from every social segment related to corporations such as business
communities, labor unions, consumer unions, and NGOs. In addition,
the Forum has observers such as the European Parliament, ILO,
OECD, UNEP, and is addressing the issue of social reform through
the dissemination of CSR.
As corporations deepening the sense of CSR and governments implementing
CSR promotion measures, a new social trend is emerging and growing
momentum, including SRI (socially responsible investment) to assess
corporate measures, execution of the right to vote, campaign to
boycott /buycott, shareholders' execution of voting right, awards
such as FTSE4GOOD, and attempt of rating certifications such as
SAS000.
While the recognition of CSR's significance and importance advances
mainly in the European and American societies and industries,
Japanese society in general has shown a low-key response toward
CSR, except the cases of some foresighted corporations. In some
cases, Japanese corporations entering a foreign market with the
diluted sense of CSRs, have met condemnation from NGOs for the
lack of CSR through their local business activities.
According to "The 15th Corporate White Paper" published by Keizai
Doyukai (Japan Association of Corporate Executives) in March 2003,
the importance of corporations taking socially responsible actions
begins to penetrate slowly into the minds of business leaders,
and the dissemination of CSR concept in the Japanese society seems
to shift from "why" to "how."
Including some multi-national corporations, many corporations
actively doing businesses in Japan advocate and practice the world's
top-class environmental consideration as their management concept.
These companies have greater advantages in their pursuit of attaining
the triple bottom-lines, and may present a model of an advanced
sustainable society to the global community, through their active
addressing of concrete measures for CSR.
A research committee on "Sustainable socio-economic system and
Corporations' Social Responsibility" was formed, in order to identify
what kind of a sustainable society model Japanese society and
market aim to build, what are the issues involved, how to proceed
to overcome such issues, and how to disseminate the messages embodied
in a model to a global community,.
2. Major review items
(1) CSR issues of Japanese corporations and the ways to overcome
them
The committee is to conduct case studies to identify what kinds
of issues exist between corporations and their stakeholders, and
what kind of measures can be taken to address them, under the
growing awareness of CSR concept in the Japanese Society. Also,
on the issues identified above, the committee is to address: corporations'
creative efforts needed to solve the issues; market's and society's
assessment of corporate actions and a way to provide supportive
approaches; and furthermore policy issues in creating a favorable
environment through support measures to encourage smoother resolving
of issues.
(2) Japanese type CSR model
In European and American societies, globalization trend coexists
with the tendency to seek national and regional identities. Each
society is asking corporations to adopt CSRs based on the value
standards that combine global universality and locally unique
standards.
The committee will address how the Japanese society, aiming to
realize further development and reform, is to derive what kind
of value standards, and on the basis of such standards what kind
of CSR actions will be required to corporations and it will further
search a way how corporations and societies relate to each other
in not so far future.
Especially, the committee will build a model that can be called
"Japanese style CSR model," which incorporates the factors to
encourage originality, as corporations are asked to address CSR
in a creative way for issues unique to each.
(3) Harmonized achievement of triple bottom-lines
Although corporations actively addressing CSR are winning the
social understanding such as seen in the dissemination of SRI,
to achieve triple bottom-lines (TBLs) of economic results, environmental
consideration, and the CSRs practices is still an extremely challenging
issue for corporations.
As symbolized by over 10,000 sites in Japan awarded the certification
of ISO 14000 series, environmental consideration taken by Japanese
domestic corporations is the world's top level, providing a huge
advantage toward the attainment of a sustainable society.
With such background, Japanese style CSR model to be developed
by this Committee will identify what management strategies are
required to maintain competitiveness, while fulfilling the harmonized
achievement of triple bottom-lines.
Name list of Committee
members ( in Alphabetical Order )
| Chair |
Kanji Tanimoto |
Professor, Graduate School of Commerce,
Hitotsubashi University |
| Member |
Nobuyuki Demise |
Professor, Faculty of Commerce, Meiji
University |
|
Masaatsu Doi |
Visiting Researcher, GISPRI |
|
Hiroaki Furuse |
Manager, External Activities, Corporate
Business Intelligence, Fuji Xerox Co., Ltd. |
|
Yasuyuki Hoshikawa |
Secretary General, The Kyoyo-Hin
Foundation |
|
Tsukasa Kanai |
Deputy General Manager, Pension Investment
Dept., The Sumitomo Trust |
|
Chieko Kanatani |
Representative, Women's Initiative
for Advancement in Japan |
|
Mariko Kawaguchi |
Senior Analyst, Industry Consulting
Dept., Daiwa Institute of Research Ltd. |
|
Yoshiki Midorikawa |
Chairman, Green Consumer Research
Group |
|
Hideki Morihara |
Secretary-General, The International
Movement Against All Forms of Discrimination and Racism |
|
Hitoshi Suzuki |
Department Manager, Social Contributions
Dept., Corporate Communication Div., NEC |
|
Naoto Ohmi |
Director of Policy Bureau, UI Zensen |
II.Harmonization between Trade and Environment
Background and purposes of the research
Today, there is a growing consensus that environmental issues
have reached beyond the scope of regional efforts and rather require
global scale approach. Moreover, the world economies that used
to prosper with international trade as the core of economies and
societies can no longer strive without addressing the very presence
of global environmental issues. The only way forward is to aim
for the sustainable development through the harmonization of trade
and environment. For this reason, we find heightened activities
in recent years to review and study the environmental aspect of
socio-economic systems.
In the face of such reality, the international community has already
shown some movements. At the Earth Summit of 1992, countries agreed
to apply environmental and trade policy treaties in a way to complement
each other so to achieve sustainable development. The foreword
of WTO agreement entered into force in 1995 included the words
"to protect and conserve environment" for the first
time. Moreover, the Doha Declaration adopted at the Fourth WTO
Ministerial Meeting held in November 2001 identified "environment"
as an important negotiation agenda of the future.
However, there is no denying that intense conflicts still exist
between developed and developing countries, and between trade
promoters and environmental protectionists, in areas such as how
to distinguish justifiable environmental protection measures from
disguised ones, or how to address trade restriction measures of
multilateral environmental agreements (MEAs) at WTO. Thus, the
issue of environment and trade is an extremely difficult theme
to build multilateral consensus.
With that fact in the background, GISPRI established the "Research
Committee on the Harmonization between Trade and Environment,"
for the purposes of identifying, sorting, and reviewing potential
problems involved in the relationship between WTO and the UN Framework
Convention on Climate Change (UNFCCC) and the Kyoto Protocol,
which are central to GISPRI's review of MEAs, as well as of avoiding
any conflict that may arise during the implementation process
of various domestic environmental measures to be introduced upon
the Kyoto Protocol's entry into force.
As the Kyoto Protocol is rumored to enter into force by next spring,
with the growing probability of ratification by Russia, each party
is actively searching a way to achieve their reduction target
through domestic measures, which are expected to have higher likelihood
to affect international trade. At this point, however, one cannot
really say that the relationship between the Kyoto Protocol and
WTO including their international negotiation processes has been
fully investigated, except in a case of few individual papers
published by the limited number of experts. Rather, the full investigation
has been hampered by the strong antipathy felt by developing countries
against WTO's addressing of environmental implication, since they
fear that "environmental consideration" can be used
by developed countries to cover trade protection measures. The
withdrawal of US, the largest CO2 emitting country, from the Kyoto
Protocol may further undermine WTO's efforts to address environmental
issues. Under this situation, the Committee plans to submit information
for the benefit of Japanese industries in their designing of basic
strategies, by reviewing potential issues pertaining to the relationship
between WTO and UNFCCC and the Kyoto Protocol, and identifying
what measures to be taken.
Organization of the Committee
Chaired by Mitsutsune Yamaguchi, Professor of Economics at Keio
University, the Committee is consisted of 6 members including:
Yoshinori Abe, Associate Professor of Law at Gakushuin University;
Jiro Tamura, Professor of Law at Keio University; Masato Dogauchi,
Professor of Law at the University of Tokyo; Ken Matsumoto, Executive
Advisor at the Center for Fair Trade and WTO Studies; and Shinya
Murase, Professor of Law at the Sophia University. In addition,
the officers of the Multilateral Trade System Department and Environmental
Policy Division of the Ministry of Economy, Trade and Industry
participate as observers.
The future course of the Committee
The Committee convened its first meeting on July 24, 2003, and
re-recognized the past efforts in the harmonization between free
trade and environmental protection, while reviewing the characteristics
of the Kyoto Protocol, and identifying various issues inclusive
of the fact that the purpose of the Kyoto regime itself may contradict
with free trade. In the future, the Committee will further clarify
the characteristics of UNFCCC and the Kyoto Protocol; determine
their relationship with WTO; reveal the relationship between Kyoto
Mechanisms and WTO and their potential problems; and deepen the
discussion on what measures Japanese Government can take in their
efforts to promote global warming measures based on the General
Principles to Promote Global Warming Measures, and on how extensive
the domestic measures can be taken to provide environmental effects,
depending on the interpretation of current WTO agreements under
the presumption of their continued application. The Committee
plans to meet five times before March 2004, and will summarize
their findings to a report.
III. How China Affects Japan after its Accession
to WTO, and Japan's Countermeasures
China has achieved outstanding economic growth through their reform
and openness policy adopted since 1980's, and it now faces a new
developmental stage with its accession to WTO in December 2001,
Beijing's hosting of Olympic Games in 2008 and Shanghai's hosting
of Expo in 2010. In other words, China has become the "global
factory," with their personal income growing significantly especially
among coastal region residents. Now the world is eying China not
only as the world's supply base but also as a gigantic market
for demands. For example, the number of cellular phone users has
grown rapidly to reach 200 million people by 2002, making China
the largest market for cellular phones. This certainly proves
the scale of magnetism China can offer as a consumer market.
Under such trend, the automobile industry, which epitomizes the
machinery industry of Japan, rushes to enter the Chinese market
in a competition to form joint ventures with Chinese companies.
Such movement certainly demonstrates their recognition of China
as the last remaining market of a gigantic scale.
However, there still remains certain degree of non-transparency
factors in China concerning their future directions for politics,
economy and society, for example the future moves of current Hu
Jintao / Wen Jiabao regime inaugurated in 2002, and the poorly-managed
initial response to SARS epidemics, which shook the world in early
2003. With China's accession to WTO, the world awaits with anxiety
what direct and indirect changes it imposes on China.
The Research Group on China's Accession to WTO and its Effects
on Japan started the study of China from fiscal 2002, and plans
to further intensify its study in fiscal 2003.
In the fiscal 2002, the Group studied mainly:
| (1) |
Assessment of changes in China after
its accession to WTO (trends of administration, politics,
and economy in China with its accession), and |
| (2) |
Trend of Chinese market, with a focus
on strategically important industries, on the basis of why
Japanese companies enter the Chinese market, and what kinds
of risks exist there, as well as the issues involved in
Japanese companies' strategy toward China.
|
In the fiscal 2003, the Group expects the need for broader-based
research activities regarding the entry into Chinese markets,
especially about the above item (ii). On top of such survey and
research, the Group plans to summarize the overall approach of
Japanese companies' strategy toward China, with the review of
a way to design supportive measures for Japanese companies that
explore strategies toward China.
To be specific, the Group will invite lecturers from individual
Japanese companies that have advanced to Chinese market, in addition
to the lecturers among the Group members, expand the scope of
hearing from such lectures, continue to survey and study the measures
taken by individual companies, and summarize the study based on
the following viewpoints.
| (a) |
Analyze the motivation of companies
to advance into China and their strategies with the addressing
of risks that may accompany the advancement into Chinese
market (based on the hearings from the management executives
of large and/or mainstream corporations, about the risks
involved in the protection of intellectual rights and the
collection of bills). |
| (b) |
What the private sector can do and
what it needs to do independently, as the strategies for
the advancement into Chinese market, and |
| (c) |
Policy support for the strategies
of advancement into Chinese market (the issue of risk evasion,
the designing of dispute resolving mechanism, etc.) |
As an effort to disseminate the Group's conclusion, we plan to
hold an open forum during the 14th GISPRI symposium to be held
on February 5, 2004.
As of July 16, 2003, the Research Group is consisted of the following
members:
Chair: Dr. C.H. Kwan, Senior Fellow, Research Institute of Economy,
Trade and Industry Tsugio Ide, Professor, Graduate School of Media
and Governance, Keio University
Dr. Fukunari Kimura, Professor, Faculty of Economy, Keio University
Dr. Jian Min Jin, Research Fellow, Economic Research Center, Fujitsu
Research Institute
Yasuhiro Goto, Columnist / Editorial Writer, Nihon Keizai Shimbun
Inc.
Shinji Shimahara, General Secretary, Japan-China Investment Promotion
Organization
Kenji Hattori, Professor, Faculty of Modern Chinese Studies, Aichi
University
Yasuhi Harada, Executive Research Fellow, Economic and Social
Research Institute, Cabinet Office, Government of Japan
Akira Furuya, Acting General Director, Itochu Management Consulting
Co., Ltd.
Masaki Yabuuchi, Director, China-North Asia Division, Overseas
Research Department, Japan External Trade Organization |
