TOKYO — As China faces growing criticism for its treatment of Uighur Muslims, Japan has begun weighing a legal foundation for sanctions like those imposed by the U.S. and Europe, with implications for Japanese companies that might be unknowingly contributing to the problem.
Eleven Japanese companies were among the 82 well-known global brands named in a report in March by the Australian Global Policy Institute as those relying on factories that use forced Uighur laborers.
The report indicated that more than 80,000 Uighur workers were transferred out of the Xinjiang region, where China’s Uighur population is concentrated, to around 30 factories across the country.
Companies in the report, including Fast Retailing, maker of the Uniqlo casualwear brand, as well as Sharp and Nintendo, have denied any connection to forced Uighur labor.
“We do not have any business relationships with” the factories Uniqlo was linked to in the report, Fast Retailing asserted in a statement. Sharp has said it “disapproves of any forms of human rights violations” and would take action to curb any such abuses found at its suppliers, including cutting ties.
There has been a growing push, particularly in Western countries, to closely watch for human rights abuses in Xinjiang.
As awareness of the issue grows, the Japanese government has been fielding questions from domestic companies that operate in China about Tokyo’s official policy and whether doing business in Xinjiang could run afoul of it.
The U.S. in June passed the Uighur Human Rights Policy Act, which opens the door to sanctions against Chinese authorities involved in Uighur repression. Four people, including senior Xinjiang officials, and one organization had their assets frozen in July under this legislation.
The legal basis for the law stems from the Magnitsky Act, which the U.S. passed in 2012 to impose sanctions on corrupt Russian officials. The legislation is named after Sergei Magnitsky, a Russian lawyer who was arrested after investigating the fraud, and who later died in a Moscow prison.
The Magnitsky Act was amended in 2016 to apply to other countries besides Russia. In the European Union, European Commission President Ursula von der Leyen revealed in September plans for the EU to design its own Magnitsky Act.
There have been moves toward creating a Japanese version of the Magnitsky Act. The Japan Parliamentary Alliance on China, a group of lawmakers from across party lines, are now discussing submitting a bill to parliament.
Some within Japan’s National Security Secretariat, as well as the Ministry of Economy, Trade and Industry, also agree on the need for new legislation.
“Japan is too slow to act compared to the U.S. and Europe,” one ministry official said.
Japan’s current legal framework does not easily allow for economic sanctions based on human rights concerns alone. The government can freeze assets of foreign players or ban them from entering the country, but only under specific circumstances like abiding by United Nations resolutions.
For example, Japan imposed investment and trade restrictions on South Africa during its apartheid era, in response to U.N. resolutions and other factors.
Japanese government insiders think that without a U.N. resolution, sanctions on China over its treatment of Uighurs are unlikely. And China, a permanent member of the U.N. Security Council, would never allow a vote on such a resolution.
“Japan must create its own version of the Magnitsky Act that allows comprehensive sanctions in response to human rights issues, and update all other relevant legislation like the Foreign Exchange and Foreign Trade Act,” Akira Igata, a national security expert and professor at the Tama Graduate School of Business, told lawmakers working on the legislation in October.
There are hurdles to passing such a bill, starting with Chinese pushback against such legislation. Even if the bill is put into law, it remains to be seen how to verify human rights violations in another country. Designing such a framework will be a challenging task.
This problem also affects Japanese multinationals. If the corporations are perceived as lacking awareness of the human rights issue, their reputations could suffer.
Disney’s live-action film “Mulan” is a case in point. The credits included a message of thanks to the publicity department of the Chinese Communist Party Xinjiang Uyghur Autonomous Region Committee. A viral social media campaign ensued, urging people to boycott the movie.
International concerns over China’s human rights record mounted after Beijing imposed its national security legislation on Hong Kong this summer. If the U.S. and Europe further harden their stances, corporate Japan has no choice but to deal with the issue.
That said, the global supply chain is made up of multiple layers of subcontractors, making for a complex web of business relationships. Corporations will face the complicated task of uncovering exactly how far removed they are from human rights abuses.