Column (English)

To WTO and CSR (1): Why I became a lawyer (December 1, 2016)

Now that there is a little left to go for this year and a large number of people, including myself, feels that this year has passed by so quickly, I have decided to start this column on Asteri's website to share my thoughts on various topics, such as "why I became a lawyer," "my experience in the US/Europe and Japan," "the future of international trade" and "what CSR is (and could be) all about," etc. First topic will be on "why I became a lawyer" from which my thoughts and desire to work on WTO and CSR have originated.

When I was a highschool student in Japan, my dream job was to become an international journalist like Nobuhiko Ochiai. Among my peers who then enjoyed spending break time between classes on reading fashion magazines, I enjoyed reading "political" magazines and having discussion over "future of this country" and "international relations moving forward" as a pastime. My plan was to graduate highschool in Japan and attend University in the US to study its political/diplomatic strategy, but an opportunity opened up for me to attend the last year of my highschool in the state of Virginia in the US. 

Time passed and, while in the University, I put a lot of thought into my dream job after graduation. As I studied the field of international trade, I resonated with the movement of goods, services and people and its rule/policy making process at the global level. I also felt passionate about supporting cross-border transactions where business from different countries get connected. At the same time, I realized that understanding the content/context of a contract, in which terms and conditions agreed by all parties are stipulated, becomes fundamentally important in providing advise to and support the business. Thus, I decided to attend a law school in the US to become a lawyer. 

While in the law school, we attained general to specialized legal skills and knowledge, including hands-on training on moot court. Toward the end of my law school life, my desire to work at a law firm, where I could gain first hand experience on WTO rule making and international trade-related dispute resolution, led me to apply to Washington D.C. law office specialized in WTO-related litigations.

 

To WTO and CSR (2): Washington D.C. (December 3, 2016)

The first job I had after graduating from law school was at the law office in Washington D.C., in which its practice focused on WTO-related litigations and dispute resolution. Here, I would like to explain, albeit briefly, how the WTO is connected to and affects our daily lives.

The World Trade Organization (WTO) is an international organization based in Geneva, Switzerland, which was established for the purpose of facilitating “free trade.” Member countries express their intention to abide by the WTO rules, when conducting trade activities with other countries, by signing up for its agreements. In other words, it is like a private enterprise signing a contract with another company and, by doing so, both parties express their intention to abide by the terms and conditions set under the contract.

Becoming a WTO member country means that, for example, it cannot discriminate between its trading partners/countries by setting up a different set of terms/conditions against certain members. Putting a set of exemptions to this particular rule aside, how would this affect our daily lives?

For example, Nation X sets a rule that allows Nation A’s goods to be imported at a lower tariff (tax), but sets another rule that puts higher tariff on Nation B’s goods. As a result, it would be cheaper for X consumers to buy A’s goods than those of B, leading B’s goods to be unpopular in Nation A.       If, As a way of retaliation, B sets a higher tariff on X goods to be sold in Nation B, it could be more difficult for B consumers to access X goods. Transacting business in this manner, i.e., buying and selling of goods and services under “unfair” condition, may lead to limiting a number of option consumers could have and their level of economic “freedom” in transacting daily business.

As such, the WTO, TPP and other global rules often times closely connect to and affect our daily lives.

The first law office focused on WTO related litigations. During my time in Washington D.C., I personally and professionally reaffirmed the importance of the WTO, being the forum for global trade rule making and dispute resolution. The reason being: assuming this planet Earth is “Spaceship Earth” and we are the crew of the Spaceship Earth. Living on this spaceship makes us all realize that rules on certain part of the spaceship differ from those of other parts of the spaceship. A set of rules to which many of us agree would help facilitate the movement of goods, services and people to be transacted in a smooth and diplomatic manner. In this respect, I felt that the WTO is a forum where all this effectively and comprehensively takes place.

I wanted to study international trade law and economics from scratch and, as one of my colleagues recommended the World Trade Institute in Berne, Switzerland, I decided to apply for its master program. 

 

To WTO and CSR (3): Switzerland (December 6, 2016)

The World Trade Institute (WTI) was established in 1999 by the Universities of Berne, Fribourg and Newchatel and is based in Berne, Switzerland.  

I am a graduate of the Master of International Law and Economics (MILE) program at WTI and its 7th class (MILE 7). The MILE program annually accepts approximately 30 individuals from all over the world with various background, mostly lawyers and economists, some working for governments and some for private entities. Our MILE 7 class consisted of about 30 people, who were all highly competent and talented individuals, from 20 plus countries. Each week, the program selected and invited professors, private practitioners, researchers, etc. from around the world and they taught courses in different topics.    

As the end of the master’s program neared, I realized that the members of MILE 7 were not only my classmates, who shared the time and learning together at the WTI, but also became friends for life. Among many reasons for this realization was the fact that each of us is a passenger on the Spaceship Earth.

As described earlier in the column, common sense in one place may significantly differ in another place. In reality, there are times when/where it is difficult for individuals from the same country to understand each other. MILE 7 provided us with the place and time where people with different nationality, language, experience, background, etc. gathered and completed the specialized intensive program together (with exams given every Thursday afternoon that had to be turned in by Friday noon and this “routine” practically did not allow us to sleep on Thursday nights). To me, this environment helped create the relationship close to a comradeship among the classmates.

Earlier, I talked about the WTO being the forum where its member countries make agreement. Through my MILE experience, I reaffirmed my belief that the WTO, whose basic principle is to facilitate “free trade” within a set framework, would be a forum for discussion with the “same language,” transcending diverse culture and common sense that underlie its member countries.

At the time I completed the MILE program, I was working at one of the US subsidiaries based in Tokyo, Japan. As I returned to Tokyo from Switzerland, my thoughts wondered about the relationship between public and private entities conducting international business transactions on daily basis, the existence of international organizations such as WTO and their role and responsibility, and the possibility for incorporating global rule making to corporate strategy.

 

To WTO and CSR (4): Global rule making and business strategy (December 19, 2016)

Today, I thought of starting to write about CSR but decided to mention my thought on “global rule” and how it could affect our daily lives, i.e., specifically, how private entities may incorporate global rule making into their corporate management strategy and can utilize it to make positive global presence.

So what is “global rule” that directly affects our daily lives? As an example, there is privacy law in Europe, the basic principle of which is based on the concept not to misuse personal information (originated in Nazi Germany period during the world war II). As the law became effective in Europe, other countries such as the United States and Asian countries, including Japan, have followed suit. Why? In this day and age, where voluminous information is freely exchanged over Internet across borders, it has become fundamentally important for countries conducting business with Europe to enact law which is similar to and consistent with that of Europe.

Let’s now consider an example of automobile parts and, say, there is a new rule enacted in Europe regarding this particular “goods.” The rule says “for cars to be sold in EU countries, automobile parts must pass XYZ standard.” The parts manufacturers who export them to EU countries suddenly and inevitably face this new rule as a condition for doing further business moving forward. Otherwise, car manufacturers with whom these parts manufacturers have done business would not purchase “old parts not passed the new standard.” In order for parts manufacturers to sustain their business, additional facility investment is likely to be needed.

The global rule as such, incognizant on daily basis, can directly affect our lives. Private entities, not only those domestic parts manufacturers in the above example but also companies doing cross border transactions, need to conduct their business based on the global rules.

Bearing this in mind and incorporate it into the management strategy. Cooperation not only with the public sector but also with other private entities and stakeholders. How far can a company go, sustain its development and deal with the global business environment, whose fundamental business strategy is solely based on furthering its profit? What does sustainable development mean for private entities? This has been one of the questions on my mind ever since I became a lawyer, in a position to provide advice to companies.

 

To WTO and CSR (5): CSR (February 15, 2017)

The year 2016 has quickly passed and, as it is already February 2017, I want to start writing about CSR, which closely relates to "sustainable development" mentioned in the previous column.

What is the first thing that comes to your mind when you hear the word “CSR” and what is your understanding toward Corporate Social Responsibility? The history of CSR originates in Europe, where an unemployment rate of young generation significantly increased and became one of the major social issues years ago. The concept is based on the private sector’s initiative in trying to resolve such social issues, instead of leaving them only for the public sector/governmental policies to tackle. It also involves self-directed and self-motivated action of the private sector, together with their effort to face social issues and continuously ask questions like “what can our company do about them?”.

What are the principles and actions taken in Japan with respect to CSR these past years?

The first thing that comes to one’s mind, when he/she hears the word “CSR” in Japan, may be to “contribute to the society through volunteer activities.” For example, there is a business concept in Japan such as “good in all 3 directions”, i.e., the business is good for seller, buyer and society, which is similar to the concept of “win-win.” Another example could be social contribution through charity events. Or a company making healthy products, goods having low-impact on the environment, compliance with the law/regulation. All these could be considered as part of CSR actions.

As mentioned in the previous column on global rule making, the process through which “foreign concept” takes root in the society inevitably involves development within that society’s framework. This means the concept of CSR, which initially developed in Europe, changes its form to fit into the societal norm of, say, Japanese culture and business/social environment. The same applies not only to Japan but to all countries across the globe.

The same word (in this column, “CSR”) changes its form and, for instance, 10 different countries develop their own understanding of “CSR” and attend a global conference to discuss the future of “CSR.” What would happen then? Is there a difference between “taking self-motivated action to work on social issues by constantly asking what it can do” and “being compliant with the law and making “this” product so everyone is happy?”

I have started to put a lot of thoughts into this for the past few years and, at the foreign subsidiary where I used to work, I had an opportunity to participate in the annual study group held by the United Nations Global Compact Network Japan. I was one of the members of 7th graduating class named “Think about Tomorrow’s Business.”  The 7th graduating class comprised of 15 members from major Japanese corporations and, at the end of the year, we have separated into groups and made presentations on our study results.

Starting with the next column, in light of discussions from the seminars, we will examine the fundamental essence of CSR needed by the world moving forward. 

 

To WTO and CSR (6): CSR as Management Strategy (February 26, 2017)

The latter half of this series of 10 columns starts off by sharing the knowledge and experience I had from study group sessions at the UN GC Network Japan's "Think about Tomorrow's Business" as a member of the 7th graduating class. Over the course of 1 year, almost 10 or so individuals with diverse background and experience spoke on different topic each month.

The first speaker was Ms. Mariko Kawaguchi from Daiwa Institute of Research Holdings Ltd. Her presentation was titled "CSR as Management Strategy" and it gave us an opportunity to explore different, yet all closely connected, topics such as the history of the planet Earth, ever changing environment and mankind, contemporary way of working, sustainable way of living moving forward and what the future holds for the business. 

In the previous column, the starting point of CSR in Europe was described as a way for the private entities to contribute to resolving social issues when faced with the limitation of the public entity alone to tackle them. What would then be some of the actions to be taken by the private entities, in order for them to contribute to improving what's needed in the society?

Ms. Kawaguchi first made a comment on how CSR is comprised of various elements, such as environment, human rights, creation of employment, employee satisfaction, social contribution, compliance, etc. What CSR represents for a private enterprise is to reaffirm its internal as well as external aspects. Internal aspect means to examine and recognize the purpose for its business and existence. External aspect means to not only know “itself” but also to have deeper understanding toward the society in which it lives and conducts business (i.e., to reaffirm what the society needs in the current era). What’s important here is that these internal and external aspects keep changing on a constant basis. She gave us an example of “Shogyo Mujyo,” concept from Buddism teachings, and stated that societal value (e.g., customer needs) changes over a period of time and it is crucial for business to continuously be aware of such changes.

The most profound learning from her session was the necessity of maintaining the balance among 3 factors, in order for us to continuously be aware of this ever-changing world. These 3 factors (being a “worker,” “family member” and “member of the society”) help us to deepen our awareness in our daily lives. Ms. Kawaguchi introduced the concept of “submarine,” taking individual employees of a company as crewmembers of the submarine. The world they think they know is only limited to what is inside the submarine. There are few crewmembers who live and spend their lifetime knowing the existence of the world outside of what they see through windows of submarine, e.g., unlimited sky, deep ocean and firm ground with trees and other beings. She stated that, we humans are multifaceted and multidimensional beings, thus, it is important for a 2-dimensional “worker” to shift to the next level, i.e., a 3-dimensional “living being.”

My thoughts, after taking Ms. Kawaguchi’s “CSR as Management Strategy” session, lead to what is needed of the submarine (private entities where these crewmembers work), what is needed of individual workers, and what is needed of each “living being” as “family member” and “member of the society.” In addition, the process through which we look more deeply into ourselves applies not only to private entities but to us “living beings” in order to further develop our existing multidimensional and supple nature.  

Ms. Kawaguchi concluded that relying upon the 20th century concept of high economic growth is no longer viable, especially when we think about “sustainable development” for private entities, society and mankind in the future. Instead of aiming for an ever-increasing profit, the mission for private entities is shifting toward resolving social issues through their business. The profit, which has been the business objective, will inevitably become the means for resolving social issues.

Next column will examine how private enterprises have developed relationship with the society through their business and how that overall picture is and will be shifting moving forward.

 

To WTO and CSR (7): CSR 3.0 (March 26, 2017)

In this column, I want to share some key learnings from the session by Toshihiko Fujii, who also researches and proposes “global rule making and business strategy” which was the topic of column #4. Thus, this column will also examine how CSR is closely tied to the global rule making and the development of private sector’s business strategy.

Mr. Fujii first explained Japanese business sector’s general understanding toward the concept of CSR and how they have adapted it into their business practice as a phrase of foreign origin.

·       CSR 1.0: Many Japanese companies used to view CSR as “Our company contributes to the society through our products/services” (company products/services  society)

·       CSR 2.0: Companies start reacting to some changes in societal value (and what consumers need). This realization shifted to “Our company provides what the society needs through our products/services” (society  company products/services). 

·       CSR 3.0: Companies positively interact with the society and become the driving force in transforming the existing societal framework (company  society  products/services). 

In column #6, I shared Ms. Kawaguchi’s session on how it’s critical for private entities to constantly be aware of changes in the existing societal value. Further, Mr. Fujii’s session taught us the importance of private sector to be the driving force in resolving social issues, which, by their nature, change with the times, through their active participation to transform the existing social system, framework and rules.   

In column #4, an example on how the world of global rule making is closely connected with the development of business strategy. Another example would be the food industry. Some countries in Asia Pacific region, which adopt the EU food safety standard, choose not to import Japanese food products as they do not meet the EU standard. In this type of (existing) rule environment, Yakult, a Japanese corporation producing probiotic dairy products, has taken active strategic decision upon its entry into the global market. For example, upon its entry into the EU market, Yakult product initially did not meet the EU’s food category standard due to its higher level of sugar content. However, Yakult applied to the UN FAO for an approval and later successfully entered the EU food market.

Taking this session helped strengthen my belief, i.e., what is needed of business leaders moving forward is to have clear vision on how the society and the world (and the mankind living in it) should evolve, and to have an ability to communicate it to all stakeholders. It is possible for the private entities, and not the public sector, who have the energy, resource and ability to be the driving force in transforming the society.

As examples of transforming the existing social framework, the followings were discussed: 1) building a car/airplane back in the days when there was no automobile/airplane as a means of transportation, 2) Google Earth vs. existing privacy rules. Introduction of iPhone would be another example.

Transformation and innovation beyond our imagination. In the spirit of ever-changing time as such, the question becomes whether to develop and take strategic business decision based solely on what is needed “now,” as opposed to what “will” be needed in the coming future. There is a close connection between “transforming the existing societal framework by taking active strategic decision and communicating its strength and core values to the world” and “resolving social issues through its business,” which is the fundamental concept of CSR. Being constantly aware of the world outside the submarine, maintaining the motivation to create something new and having an ability to clearly communicate such willpower are the fundamental factors needed of private enterprises.

Starting with the next column (#8) to the last (#10), I will summarize those two different, yet closely connected, concept of global rule making (WTO) and CSR and make some propositions of the private sector’s role in shaping the global policies under the multilateral trading system. 

2020.08.05 Wednesday