Ask Enhesa Vol. 14: Focus On Japan

by Enhesa 10 Oct. 2018

Featuring contributions from Hiromi Tasaki, Reiko Sakai, Kengo Okuda and Tjeerd Hendel-Blackford.

You asked and we answered!

Enhesa’s team of multilingual regulatory analysts are committed to providing quality insight and analysis around the latest EHS news and developments via our Enhesa Flash, webinar series, and blog posts. In response, our team often receives a variety of questions regarding the broad realm of the EHS topics we cover. To meet this demand, we launched “Ask Enhesa”, a reoccurring blog series where our senior thought leaders will take the lead in answering all of your most relevant and topical EHS questions.

Let’s get started…

What is the status of GHS implementation in Japan?

Japan implemented the GHS 4th revised edition of 2011 as specified in the Japanese Industrial Standards (JIS) Z 7253: 2012 – Hazard Communication of Chemicals based on GHS-Labelling and Safety Data Sheet (SDS).

What are the latest policy and regulatory developments around climate change in Japan?

Japan has not issued any significant regulations or proposals related to climate change in recent years, except for the energy efficiency requirement of new non-residential buildings that took effect on April 1, 2017.

However, Japan has recently revealed the following climate change-related policy plans with a timeframe nearing 2030 or even 2050:

1) Paris Agreement and climate change in the mandated report to the UNFCCC in the “Intended Nationally Determined Contributions (INDC),” “Biennial report,” “Long-term strategies” and other related documents.

Japan as a ratifying member of the Paris Agreement aims to reduce its carbon emissions by 26 percent and 80 percent by 2030 and 2050, respectively, in comparison to the 2013 levels. Japan has not made clear of any regulatory measures to achieve these goals. However, in the “Long-term Climate Change Countermeasures Platform Report” of  April 7, 2017, it emphasizes particularly on anticipated technological innovations in areas such as renewable energy development and use, energy efficiencies in industrial processes and buildings, energy management systems. This can translate into possible deregulation or incentives for technological innovations regarding climate change.

2) Kigali Amendment and the phase-down of hydrochlorofluorocarbons (HCFCs) in the  “Ways to Regulate HFCs hereafter, based on the Kigali Amendment to Montreal Protocol” report of October 6, 2017.

Japan has not ratified the Kigali Amendment as of February 2018, but Japan will likely ratify and pass legislation within 2018. Developed countries, including Japan, are required to phase-down HCFCs starting January 1, 2019; companies manufacturing or importing HCFCs into Japan will likely have to reduce the amount, in gradual phases, by 2035.

3) Fuel cell technology and hydrogen fuel development in the and “Hydrogen Basic Strategy” of  December 26, 2017.

Japan aims to become an energy independent nation by 2050 through the innovations of fuel cell technologies or hydrogen fuel incorporated into forklifts, vehicles, industrial manufacturing processes, and fuel cell batteries. Companies can expect further deregulations surrounding fuel cell technology in the coming decades.

Have there been any recent high-profile enforcement cases in Japan?

We regularly spot examples. Here are just a few from recent months:

  1. A court case following the death of an overworked employee concluded October 6, 2017, with a small fine of JYP 500,000 (USD 4,400) imposed. The fine was imposed for violations of the Labor Standards Law; it was a criminal court case. However, the violating company had already paid compensation in January 2017. Although it was not publicly disclosed, the January compensation is believed to have been USD 1.4 million for a different case of death from overworking back in 1991.

More info for the most recent case:

More info for 1991 case, but court decision made in 2000:

  1. Vehicles have been recalled due to untrained workers conducting completion inspections.

Example 1:

Example 2:

  1. A new employee of advertising agency committed suicide following overwork in 2015 as indicated in her will. The company is currently in trial.

More information:

More information:

  1. An utomotive parts company’s defective airbags led to increased numbers of traffic deaths and widescale product recall. The company recently filed for bankruptcy following the lawsuits.

More information:

More information:

Do you have an example of how a Japanese company roll-out an EHS compliance program globally?

Yes! Omron provide a great example. Mr Motoo Ohara, Sr. General Manager, Environment Innovation Center, Global Manufacturing Innovation explains Omron’s approach to implementing a global approach:

MO: “As a first step, we chose to carry out pilots on two sites (China and Malaysia). Having completed the pilot, we swiftly realized the necessity of having a global EHS compliance management— we gradually expanded the program to cover other countries and sites.

When implementing the compliance management, we told each site that we were going to implement the EHS compliance management program with budget from headquarters. We asked them to participate in the program by using the Enhesa Audit Scorecard as a self-assessment tool. Ideally, we would have sent someone from HQ to help each site carry out their self-assessment, but that was unrealistic— so we asked each site to do the self-assessment by themselves.

We informed sites that this was a corporate program, funded by HQ and with tools provided by HQ, and asked them to carry out the self-assessment.  Fortunately, we have not had any major opposition or complaints to this approach from any of the Omron Group companies concerned.

When we conduct third-party compliance audits by Enhesa, we explain to each site that the purpose of doing the compliance audit is to identify any compliance gaps and to reduce non-compliance risks due to misinterpretation or lack of knowledge. In addition, we purposefully did not use the word “audit,” but instead referred to it as an ‘assessment;’ we tried to remove any negative connotation that might be associated with an ‘audit.’

I personally think that because we are doing this global EHS compliance management program using a corporate budget, each group company has been more receptive to the corporate governance executed by HQ.”

What would your advice be to other Japanese companies considering implementing a global EHS compliance program?

MO: “What works best depends upon each company’s structure and culture. However, if I dare to say something particular to Japanese companies, first, you need to understand there would be huge risks if you practice your business internationally with a Japanese mindset. In my opinion, Japanese laws are based upon the premise of assuming good, while overseas laws, particularly in Western countries, are based upon the premise of assuming bad. Therefore, Japanese laws are relatively less stringent compared to laws in some other countries. Laws are also more enforced more strictly, in terms of penalties, in other countries. The laws are also very complicated and complex.

In the past, when the laws were not changing as rapidly as they are today, you may have been able to manage global regulatory compliance just using internal resources. However, in today’s world, where laws are changing so rapidly and becoming more complex, it is almost impossible to keep track of law changes and manage compliance without using experts.

Now, how to select the best regulatory experts? There are many ways to hire experts. We, Omron, have chosen Enhesa because Enhesa offers EHS compliance support services as a comprehensive packaged service including regulatory information, a compliance verification tool, regulatory monitoring, as well as on-site compliance audits—and we have found this to be a great benefit to us.

Yes, you can hire experts as employees, but this leaves you very little flexibility as their salaries are a fixed cost. However, if you outsource to experts like Enhesa, the outsourcing fees are not fixed cost and it give you more financial flexibility in case of financial difficulties. If you consider the benefits of using outsourced experts, I think there is a significant value to using outsourced expert services.”

Feel free to contact Enhesa if you would like the complete case study or other examples of how companies implement an EHS compliance program.

What services does Enhesa provide to help Japanese companies?

Enhesa provides services to help Japanese multinational companies be aware of, and stay in compliance with, their environmental, health and  safety (EHS) legal and regulatory obligations, wherever they operate or put products on the market. Enhesa can currently offer services in over 280 jurisdictions around the world and offer 4 specific service lines:

  • Compliance Intelligence – Enhesa’s EHS Regulatory Compliance Intelligence provides clear consolidated summaries of regulations and requirements, per jurisdiction. The Enhesa Compliance Intelligence service allows you to identify the regulations and requirements that are applicable to you and assess compliance against them, either through self-assessment or a full audit, and continue to manage on-going compliance through frequent updates that track changes.
  • Regulatory Forecaster- Enhesa’s EHS Regulatory Forecaster service allows companies to easily and efficiently keep track of emerging regulatory issues (laws, proposals and policies) in the jurisdictions they operate in.
  • Expert Support ServicesOffered as an optional addition to Enhesa’s Compliance Intelligenceand Regulatory Forecaster services, the Enhesa Expert Support Services are delivered through in-house resources and an approved partner network. These services provide additional rollout/implementation, training, compliance management, and compliance verification support to enhance your global EHS compliance programs at the corporate, regional and site levels.
  • Product Compliance - The Enhesa Product Stewardship Services help you to ensure that your products are in compliance with the relevant applicable environmental laws, wherever you place them on the market. Through our in-house team of regulatory analysts, Enhesa is able to provide analysis, advice and standardized service offerings covering virtually any jurisdiction on earth.