By Fujimura Kohei
Messages posted by major mail-order cosmetics business operator DHC, based in Tokyo’s Minato Ward, on its official website have posed a challenge for retailers. The messages came under increasing criticism on social networking sites for violating human rights. But many companies that deal in DHC products took a wait-and-see attitude. The messages in question were viewable by the public until AEON Co. issued a statement against the remarks in June. Companies are being called into question with regard to how seriously they take their pledges to “respect human rights” amid the growing importance of the connection between business and human rights.
The problem started with a message posted by DHC under the name of its chairman and CEO on its official website in the autumn of 2020. The message included racist expressions in emphasizing the company’s superiority over its rival firm.
The Nikkei asked DHC to confirm the facts about the course of events, but DHC said in response, “We’d like to decline the interview request. ”
According to Siemple, a company based in Tokyo’s Shibuya Ward that offers consulting services on preventing online criticism from going viral, the DHC’s messages sparked growing criticism on Twitter in mid-December. The number of tweets related to the messages topped 100,000 a day when they were at their peak.
On the other hand, retailers that procure and sell DHC’s products continued to monitor the situation calmly without getting involved. An employee in charge of promoting environment, society, and governance at a major Japanese retailer says, “We can’t take independent actions in a way that stands out.”
The employee also said the fact that it was not a situation in which a defective DHC product was found and that “there are a certain number of customers who purchase DHC products” made the employee’s company think twice about responding to the incident. His company explains on its official website that it will “seek understanding from business partners” about its human rights policy enacted in the autumn of 2020. But it did not take any action in response to DHC’s messages.
Sales remain the same
A senior official of another major retailer says, “The trouble is that sales of DHC’s products are high.” A group affiliated with this retailer has also vowed to ask its business partners not to contribute to human rights violations. The official said the DHC issue “was discussed within the company,” but the retailer maintained its passive stance.
This raises the question of whether the latest incident affected the sales of DHC’s products. The “Nikkei POS,” which monitors sales trends at some 460 supermarkets across Japan, shows that DHC’s sales of nutritional supplements per 1,000 customers surpassed the level of July 2020, before the questionable messages were posted, during most periods. A similar trend was seen for the company’s skincare and makeup products for women.
Although retailers unanimously say, “We understood that the messages ran counter to the idea of respecting human rights,” they apparently hesitated to remove the hot-selling products from their store shelves.
A number of companies have begun to include respect for human rights in their guidelines in response to societal demands. The problem triggered by DHC revealed that regardless of their policies, it is difficult in reality for many companies to take action.
AEON stands up to DHC
One of the few exceptions is AEON. According to a statement released on June 2, AEON requested DHC to clarify its views on human rights. DHC had acknowledged the inappropriateness of the messages by May 31 and told AEON it would withdraw them.
AEON explained its actions by saying, “We judged that [DHC] agreed with and understood our basic human rights policy and decided to continue doing business with it.” In other words, AEON conveyed the message that it would “stop doing business [with DHC] if it continued to violate human rights.”
AEON told the Nikkei: “We received many inquiries about the messages. We will continue seeking to achieve a society where human rights are respected.”
DHC removed the messages in question from its official website, leading the industry to believe that the problem had been put to rest. But this does not mean a similar problem won’t happen again.
CEO Hanyuda Keisuka of Minato Ward-based Owls Consulting Group, who is well-versed in human rights and corporate management, says, “’Silence is golden’ does not apply to human rights.” Companies also have the option of calling attention to the issue and expressing their positions without removing products from store shelves. Hanyuda points out, “Companies are required to actively contribute to the creation of a society that is free of human rights violations.” (Abridged)