Current Issues report Toyota MNE

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Running head: CURRENT ISSUES REPORT 1 Current Issues Report: Toyota Motor Corporation (TMC) Case Name Professor Course Date

CURRENT ISSUES REPORT 2 Contents Abstract 3 Introduction 4 Toyota and Modern Slavery Human Resource Issue 4 The Impacted Stakeholders 5 Solutions 6 Conclusion 6 References 8

CURRENT ISSUES REPORT 3 Abstract The rapid rise of economic and industrialization expansion has prompted multinational enterprises (MNEs) to adopt measures to adapt to the changing and developing world. The competitive nature makes large multinationals compete to see who will make the highest profits in the industry. Unfortunately, the quest to make the highest profits has come at employees' expense. The MNEs exploit workers in the race among MNEs. They subject them to modern slavery practices like labor exploitation and forced labor to make the highest profits. The report addresses modern slavery in Toyota. According to a 2020 survey, the company subjects foreign and migrant workers to modern slavery practices among the manufacturers and suppliers. Toyota has addressed the problem by implementing the Responsible Acceptance of Foreign Workers to combat these practices. The solution is effective because it requires all manufacturers and suppliers to treat foreign workers with dignity and uphold their labor rights. However, the human resource department should seek to understand the actual experience of foreign workers among global suppliers and manufacturers to address these HR issues fully. TOC Key Words: Toyota, Modern Slavery, Foreign and Migrant Workers

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CURRENT ISSUES REPORT 4 Introduction Toyota Motor Corporation is a Japanese multinational automotive manufacturer. It is among the largest car manufacturers in the globe. Since its establishment in 1937, the manufacturer rapidly became a force in automotive production by producing and selling millions of cars annually. Today, the company sells over 10 million automobiles per year. It has more than 370,000 workers globally, and its core brands, Toyota and Lexus, are among the most popular cars in the world. Toyota Motor Corporation relies on global suppliers and manufacturing companies to develop, manufacture, and sell its automobiles. The manufacturing companies operate in twenty-one countries across Japan, Asia, the USA, Canada, Europe, the Middle East, Africa, and Latin America. The manufacturing companies and the suppliers are scattered around the world, although most of them are in Asia (Japan and China). The company has 9,849 suppliers, where 71 % are based in Asia and 19 % in Japan (Wada, 2021). Most Japanese manufacturers and suppliers rely on foreign workers to develop and manufacture Toyota automobiles. Toyota's 2020 survey indicated that foreign and migrant workers are susceptible to labor exploitation and forced labor. The survey showed that the risk of foreign workers' human rights violations is found within the manufacturers and their supply chains. The report focuses on the violation of human rights among foreign workers in Japanese manufacturers and their supply chains. It discusses modern slavery issues in Japanese manufacturers and suppliers, the impacted stakeholders, and the solutions implemented to address the human resource issue in the multinational enterprise.

CURRENT ISSUES REPORT 5 Toyota and Modern Slavery Human Resource Issue The 2020 Toyota Supplier Sustainability Report shows that foreign employees, including technical intern trainees, skilled employees, international students, and foreign workers, are vulnerable to modern slavery that comprises forced labor and labor exploitation. According to the report, most foreign technical intern trainees from Vietnam who work for Japanese automobile manufacturers and their supply chains pay exorbitant fees to enter Japan (Toyota, 2022). The manufacturers and suppliers also accept foreign technical trainees from Laos, Indonesia, Thailand, and China, who also pay high recruitment fees. In addition, foreign workers face actual forced labor, labor exploitation, and other forms of modern slavery. They are underpaid overworked, experience poor working conditions, and manufacturers and suppliers fight trade unions. Asian manufacturers exploit foreign workers by overworking them. They require Filipino and other foreign workers to manufacture a car every 9 minutes. Although the high production volume demonstrates high production efficiency among Toyota manufacturers, they treat workers like machines by overworking them. Moreover, the manufacturers are hostile towards labor unions ( Yoshida, 2021). Labor unions and Toyota management have clashed over the years, forcing employees to go on strike to force the company to address their concerns. The management challenges the formation of labor unions and refuses to recognize their existence. This has created a tenuous relationship between the manufacturers and labor unions, leading to many clashes. In Japan, manufacturers overwork foreign employees and migrant workers to the point of death. Many employees die due to exhaustion and overworking. They also work under poor conditions. Japanese Toyota manufacturers expose employees to poor working conditions and poor pay. They hire assembly employees on a temporary basis, which means they receive 60 %

CURRENT ISSUES REPORT 6 less pay than full-time employees ( di Cola & Werna, 2023). They work under sweatshop conditions, and manufacturers engage in human trafficking because they strip off foreign workers' passports and demand they work 16-hour shifts. They also engage in unfair and unequal labor rules by suppressing the freedom of association of foreign workers since they fail to recognize their labor unions. The 2020 report demonstrates that modern slavery is a persistent human resource issue facing foreign workers in Japanese Toyota manufacturers and suppliers. The Impacted Stakeholders The issue of modern slavery impacts foreign and migrant employees. The report acknowledges Japanese manufacturers and suppliers subject them to labor exploitation and forced labor. According to OHCHR (2023), people migrate to work in foreign countries because they perceive that it only enhances their social and economic circumstances. Foreign migrants, particularly irregular migrants, willfully execute dirty and dangerous jobs that the nationals refuse at the poor wages offered by unscrupulous employers. Foreign and migrant workers are vulnerable to labor exploitation due to manufacturers and intermediaries deceptive recruitment practices, poor social support systems, poor knowledge of the local culture, language barrier, restricted access to the legal system, and poor understanding of migration and labor laws (OHCR, 2023). In addition, legal status, high dependence on the job, and restriction of their freedom to exit the workplace expose them to labor exploitation and forced labor. Discrimination and xenophobia amplifies these factors. Foreign and migrant workers also face frequent human rights regarding the payment of wages and unfair pay, including unequal wages for the same work due to discrimination and other unfair labor practices. Document confiscation is another rampant human rights violation

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CURRENT ISSUES REPORT 7 that foreign workers experience. Employers confiscate migrant workers' passports and identity documents ( Ogawa, 2020). Migrants who depend on the job or their employers via sponsorship are vulnerable to abuse, even when the national laws prohibit such practices. They also face hardships in organizing and engaging in collective bargaining agreements. Some countries reserve the right to join a labor union for their nationals, while some companies prohibit foreign workers and migrants from joining a trade union. They are also vulnerable to labor exploitation due to their conditions and often accept to work for low wages in difficult and dangerous working conditions (OHCR, 2023). They also do not access health and other social services due to fear of detection, detention, and deportation. Lack of familiarity with local legislation and language makes foreign workers and migrants fail to access effective remedies. They lack access to the legal system, which exposes them to exploitation. In this context, modern slavery affects foreign workers and migrants. Foreign migrants and workers who work in Japanese Toyota manufacturers and supply chains face rampant labor exploitation, forced labor, and human rights violations (Wada, 2021). The 2020 human rights abuses report shows that these employees work under poor conditions, receive lower wages, pay high recruitment costs, and the manufacturers fail to recognize their trade unions. They are also overworked and subjected to human rights abuses such as document confiscation. Solutions The company recognized that these issues are rampant among its manufacturers and supply chains. It worked with stakeholders such as The Global Alliance for Sustainable Supply Chain to develop the Tokyo Declaration 2020 on Responsible Acceptance of Foreign Workers to promote the welfare of foreign workers and migrants. The 2020 declaration requires

CURRENT ISSUES REPORT 8 manufacturers and suppliers to ensure that foreign and migrant employees work under fair conditions (The Global Alliance for Sustainable Supply Chain, 2020). They should work without discrimination and be free from undeserving treatment. The manufacturers, suppliers, and recruitment bodies should create robust policies that uphold the human rights of foreign and migrant workers. The declaration also abolished recruitment costs and related fees that foreign workers paid to access training or work. It also required employers and recruitment agencies to write employment contracts and working conditions in the mother language of foreign employees and communicate them before foreign workers travel to work in Japan. The declaration also required them to guarantee the rights of foreign workers and banned confiscating their identification documents. In addition, the declaration required employers to pay foreign workers on the dates stipulated in the employment contract. It also required them to provide a safe and hygienic working environment to ensure their occupational safety and health. Additionally, it required employers to guarantee safe and sanitary living conditions. The companies should not also restrict their movement or paid vacation days. They should also enact procedures to ensure that these workers can change or leave their jobs freely. The declaration also required manufacturers and suppliers to establish reliable and effective grievance handling mechanisms. It should serve all foreign workers equally. The employer should also meet foreign workers travel expenses. The declaration provides a solution to the problem of modern slavery in Japanese Toyota manufacturers and supply chains. It guides them on the responsible acceptance of foreign and migrant workers. The company requires all manufacturers and suppliers to implement these guidelines to address the issue of modern slavery in the production process.

CURRENT ISSUES REPORT 9 Conclusion Modern slavery is a persistent problem that faces migrant workers in MNEs. As seen in the Toyota case, foreign workers are vulnerable to labor exploitation and other unfair labor practices. Manufacturers, suppliers, and recruitment agencies exploit their vulnerabilities to overwork, underpay, and violate human rights. The MNE recognized that it faces the problem and addressed it through the Tokyo declaration. The declaration affirms Toyota's stance to eliminate the modern slavery HR problem. The policy provides a robust framework for manufacturers and suppliers regarding how they treat foreign workers. It also sets high standards for honestly conducting Toyota operations. The declaration ensures that manufacturers and suppliers abide by the stipulated policies to enable Toyota to cultivate an ethical corporate culture. The declaration is available and accessible to all employees. The company supports and encourages all employees to review and understand it. It also encourages them to report infringements. The development of the Tokyo declaration is a right forward in the fight against modern slavery and will enable the company to address the HR issue. The HR department should conduct extensive investigations to understand the real situation of foreign workers in the supply chain in the post-pandemic era. The department should also promote collaboration among all stakeholders to enhance foreign workers acceptance. It should also conduct constant on-site audits to ensure manufacturers and suppliers adhere to the guidelines laid out in the Tokyo declaration. In addition, the HR should proactively initiate activities that advance human rights and strengthen collaboration among all regional business units to develop diligent mechanisms that identify human rights violation risks. Regional collaboration will enable manufacturers and suppliers to prevent and mitigate labor exploitation, forced labor, and other human rights violations among foreign workers.

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CURRENT ISSUES REPORT 10 References di Cola, G., & Werna, E. (2023). The International Labour Organization And Mega- Sporting. The Routledge Handbook of Mega-Sporting Events and Human Rights . Ogawa, R. (2020). Use and Abuse of Trafficking Discourse in Japan. Journal of Population and Social Studies [JPSS] , 28 , S106-S125. OHCR. (2023). Workplace Exploitation of Migrants . Retrieved 9 8, 2023, from https://www.ohchr.org/sites/default/files/Documents/HRBodies/CMW/Discussions/2014/ FrancoisCrepeau.pdf The Global Alliance for Sustainable Supply Chain . (2020). The Tokyo Declaration on the Responsible Acceptance of Foreign Workers in Japan . Retrieved 9 8, 2023, from https://media.business- humanrights.org/media/documents/4f2d3c37eac9a20de33e75349d743427c1fd95ea.pdf Toyota. (2022). Toyota's action taken for Forced Labour of Migrant Workers (Statement on the Modern Slavery Acts) . Retrieved 9 8, 2023, from https://global.toyota/pages/global_toyota/sustainability/human- rights/statement_on_the_modern_slavery_acts_en.pdf Wada, M. (2021). Detailed Overview of Toyota’s Human Rights Due Diligence . Retrieved 9 2023, 8, from https://global.toyota/pages/global_toyota/sustainability/report/hr/hr20_en.pdf Yoshida, M. (2021). The indebted and silent worker: Paternalistic labor management in foreign labor policy in Japan. Critical Sociology , 47 (1), 73-89.

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Current Issues report Toyota MNE

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