The Otsuka group contributes to the health of people around the world by continuously creating new value, and recognizes that in order to continue sustainable growth, all business activities must be founded on respect for human rights. Based on this, we promote human rights initiatives across the group and work hard to consistently meet those responsibilities.
The Otsuka group joined the United Nations Global Compact (UNGC) in 2016, and the next year signed the Women's Empowerment Principles (WEPs), which were jointly formulated by the UNGC and UN Women as a set of principles based on which companies should voluntarily promote the active participation of women. In addition to declaring our support for these initiatives, we will pursue the fulfillment of our corporate philosophy with an awareness of how social responsibility, including consideration for society and the environment, is integral to our businesses. In 2020, we formulated the Otsuka Group Human Rights Policy in accordance with the United Nations Guiding Principles on Business and Human Rights. Based on this policy, we are promoting human rights initiatives across the Otsuka group.
1. Formulation of Human Rights Policy
The Otsuka group of companies recognizes that respect for human rights in every aspect of our business activities must be the premise upon which we build to meet the expectations of our stakeholders, create new value, and contribute to the health and wellbeing of people all over the world as we continue to grow sustainably. The Otsuka group supports and respects international covenants governing human rights as set forth by the United Nations International Bill of Human Rights (the Universal Declaration of Human Rights; the International Covenant on Civil and Political Rights; the International Covenant of Economic, Social, and Cultural Rights) and the standards established by the International Labor Organization (ILO) in the Declaration on Fundamental Principles and Rights at Work. We also support and respect the United Nations Guiding Principles on Business and Human Rights. As a signatory of the United Nations Global Compact, we support and respect the Ten Principles. Considering the content of these principles, we formulated the Otsuka Group Human Rights Policy in December 2020, and enacted it in March 2021. In formulating the policy, we conducted a human rights risk assessment* of Otsuka Holdings and the seven main operating companies. In the assessment, we organized, analyzed and identified the human rights risks that we should address throughout the value chain, taking into consideration the human rights issues specific to the Otsuka group, including those in the pharmaceutical and food industries, cases of risks that materialized in regions globally, and the group's business characteristics. Based on that assessment, we identified the salient human rights issues in the Otsuka group. We plan to continuously disclose our concrete initiatives for these issues on the Otsuka Holdings website.
* Risk assessment: Identification and assessment of adverse impacts (i.e., risks); the first step in due diligence.
Human rights initiatives are necessary in various areas. In the Otsuka group, three departments—the Internal Control, Human Resources and Sustainability Promotion departments—cooperate to promote initiatives for respecting human rights, under the Otsuka Group Human Rights Promotion Leader (an Otsuka Holdings director).
The Otsuka group also regularly conducts interviews at group companies on human rights risks, and has a system to continuously monitor and address human rights risks group-wide. By practicing the PDCA cycle outlined below, we make ongoing efforts to resolve the Otsuka group's salient human rights issues.
3．Salient Human Rights Issues in the Otsuka Group
In the Otsuka group, human rights assessments of Otsuka Holdings and the seven main operating companies* were conducted from 2019 through 2020. Based on the results, we identified the Otsuka group's salient human rights issues described below, which express our commitment to stakeholders.
*Otsuka Pharmaceutical, Otsuka Pharmaceutical Factory, Taiho Pharmaceutical, Otsuka Warehouse, Otsuka Chemical, Otsuka Foods, and Otsuka Medical Devices
1) Related to Our Patients and Consumers
Otsuka Group contributes to the health and wellbeing of people throughout the world, through the creation of innovative products and services. As a total healthcare company seeking solutions for health-related issues, we recognize our responsibility to patients and consumers, always prioritizing the quality and safety of our products, and reinforcing our supply chain. When issues regarding our products or services become apparent, we will collaborate with relevant departments to collect and analyze information and develop appropriate responses, enabling us to continue to provide our valued customers with better products and services.
2) Related to Management and Employees
As a signatory of the United Nations Global Compact, we are committed to the elimination of forced labor and the abolition of child labor, as we aim to create comfortable work environments in which human rights are fully respected. To maintain fair and open workplaces, we strictly prohibit discrimination and harassment. As a total healthcare company, we strive to provide workplace environments in keeping with the principles of health and productivity management, in which management and employees are encouraged to take the initiative in developing and maintaining their own health.
3) Related to Our Business Collaborators
In keeping with the principles of the United Nations Global Compact, we share our concerns for human rights, labor, environment and anti-corruption with our business collaborators and engage in ongoing dialogue and consultation to ensure respect for human rights across our entire supply chain.
4) Related to Society
We believe that efforts to reduce environmental issues are closely related to the issues surrounding human rights, and we will proactively and continuously engage in initiatives that benefit local communities and general society.
5) Related to Our Stakeholders
To fulfill our responsibility to respect human rights, we recognize the importance of ongoing dialogue and will proactively seek opportunities to engage with diverse stakeholders. We are also working to establish contacts and grievance mechanisms to address any human rights issues that may come to light.
4. Initiatives in 2020
The Otsuka group recognizes that supply chain transparency is a particularly high-priority risk as a manufacturer whose operations extend from research and development to production and marketing. Therefore, we share with our business partners our consideration for human rights, labor, the environment and anti-corruption measures, and in 2020 we strengthened our sustainable procurement to further promote respect for human rights. Specifically, we implemented the following initiatives.
- Revision of Otsuka Group Procurement Policy
- Establishment of Otsuka Group Sustainable Procurement Guidelines
- Conducted a common SAQ (Self-assessment Questionnaire) created by Global Compact Network Japan at 46 companies. Additionally, a new human rights item was added to the common SAQ based on the results of a human rights risk assessment.
- For business collaborators, we gave a presentation to 73 companies on sustainable procurement, including human rights.
Once a year, group employees of all subsidiaries attend training based on the Otsuka Group Global Code of Business Ethics. In 2021, we provided training on the content of the Otsuka Group Human Rights Policy.
The establishment of an internal whistleblowing system that is independent of management, and oversight by management of the status of that system's operation is a requirement of Japan's Corporate Governance Code, and the need for such a system is emphasized as a mechanism for quickly uncovering illegal or inappropriate behavior or information disclosure. At Otsuka Holdings and domestic and overseas group companies, we have established internal reporting systems within the group (including for human rights issues) and at the offices of an attorney that can be accessed safely and anonymously. Through this hotline, we work to ensure that any improper acts, including acts of bribery, as well as violations of policies, laws and regulations, can be quickly uncovered and corrected. Rules for accepting reports extend beyond fulltime employees to include contract, dispatched, and parttime employees. Information about whistleblowers and their reports is strictly managed in order to prevent any negative repercussions. Information on the operational status of the internal reporting systems at major group companies is regularly reported at meetings of the Board of Directors of Otsuka Holdings.
The Otsuka group, as a signatory company of the UN Global Compact, is part of the Human Rights Due Diligence Working Group,1 Human Rights Education Working Group, Supply Chain Working Group, and WEPs Working Group2 of Global Compact Network Japan (GCNJ), and together with other participating companies and organizations, obtains knowledge that can be used in the Otsuka group's initiatives.
- 1Participating companies engage in activities and share information useful in their own concrete initiatives, using as reference the seven WEPs principles, which contribute to enhancing the international competitiveness of GCNJ signatory companies and improving gender equality in Japanese society.
- 2Promotes the efforts of each company through lectures by experts, progress assessments of company initiatives, workshops, group work and other activities to learn together about human rights due diligence initiatives based on the United Nations Guiding Principles on Business and Human Rights.