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APAC Edition
26th June 2024
 
THE HOT STORY
Aeon to take on 4,000 skilled overseas workers by fiscal 2030
Aeon plans to take on 4,000 skilled workers from overseas, amid major labour shortages in Japan's food service sector. The Japanese retailer, which operates supermarket chains such as Peacock Store, Maruetsu and My Basket, currently employs about 1,500 specified skilled workers group-wide, most of whom work at food processing facilities that supply the group’s outlets. “Currently, our biggest management issue is definitely the labour shortage", a company spokesperson said, adding that the company has started hiring foreign workers from Indonesia under the specified skilled worker program for janitorial jobs. The workers are trained overseas through the company’s local subsidiary in Indonesia, with cooperation from local language schools and the Indonesian government; on arrival in Japan they are given assistance with accommodation and logistics. 
HEALTH & SAFETY
Deadly fire exposes harsh conditions migrant workers face in South Korea
Foreign workers in South Korea, particularly those from China, face dangerous and deadly work conditions. This week's factory fire in Hwaseong, which claimed the lives of 22 workers, most of whom were ethnic Koreans from China, has spotlighted the harsh conditions migrant workers face. South Korea has been increasing the number of foreign workers it accepts to fill low-paying, dirty, difficult, and dangerous jobs that locals avoid. However, these workers are nearly three times more likely to die in work-related accidents compared to South Koreans. The factory where the fire occurred is said to have had safety shortcomings, including thin metal walls and combustible materials near an exit door.
LEGAL
Hong Kong slams U.S. downgrade in human trafficking report
Hong Kong has criticized the United States for downgrading its ranking in the annual Trafficking in Persons Report. The U.S. State Department placed Hong Kong on the Tier 2 Watch List, citing a lack of increased efforts to combat human trafficking. The Hong Kong government called the move "utterly unfair, misconceived, and not substantiated by facts." A government spokesperson stated that human trafficking has never been prevalent in Hong Kong and that there is no evidence of the city being actively used as a destination or transit point for trafficking. The report also downgraded Mainland China and Macau to Tier 3, indicating a lack of significant efforts to combat human trafficking. Hong Kong was upgraded to Tier 2 last year for its increased investigations and prosecutions of traffickers. The government conducted around 11,000 initial screenings in 2023, resulting in the identification of only three victims. The government emphasized that the low number of victims does not indicate a prevalent or widespread issue. Hong Kong also defended its legislative framework, which includes over 50 legal provisions targeting human trafficking.
Indian farm labourers demand end to 'slavery' in Italy
Thousands of Indian farm labourers in Italy are demanding an end to "slavery" following the death of a worker. Satnam Singh, who was working without legal papers, lost his arm in a work accident and was allegedly abandoned by a roadside by his employer. The incident has shed light on the exploitation of undocumented migrants in the agriculture sector. The workers are paid an average of €20 a day for up to 14 hours of labour. The Italian government has been trying to reduce the number of undocumented migrants while increasing legal migration pathways for non-EU workers. However, there is still a shortage of labourers to meet farmers' needs.
TECHNOLOGY
UN chief urges tech giants to take responsibility for harmful products
United Nations Secretary-General António Guterres has called on big consumer technology firms to take responsibility for any damage caused by their products. Mr. Guterres warned that these companies, which he declined to name, have the power to mitigate harm to people and societies around the world, and urged them to change business models that profit from disinformation and hate. He emphasised that opaque algorithms contribute to information bubbles and reinforce prejudices, including racism and discrimination. Mr. Guterres launched a set of UN global principles for information integrity as a starting point to combat misinformation, disinformation, and hate speech. He also called on advertisers, PR agencies, and media outlets to play their part in promoting responsible practices. Mr. Guterres urged governments to ensure regulations uphold human rights and respect freedom of opinion and expression.
REGULATION
Japan's MUFG Bank penalised for violating client confidentiality rules
Japan's financial regulator has penalised Mitsubishi UFJ Financial Group Inc.'s flagship banking unit, MUFG Bank Ltd., and two joint ventures for violating client confidentiality rules. The Financial Services Agency (FSA) has ordered MUFG Bank, Morgan Stanley MUFG Securities Co., and Mitsubishi UFJ Morgan Stanley Securities Co. to improve their operations. The FSA's investigative arm, the Securities and Exchange Surveillance Commission, found that the three entities had inappropriately exchanged client information at least 26 times to win business. The scandal has shaken confidence in Japan's largest banking group, leading some clients to take their bond underwriting business elsewhere. The banking industry has long lobbied for eased restrictions, arguing that it would better serve clients' interests if lenders and their group brokerages can offer products and services together.
CORPORATE
Shein files confidential paperwork ahead of possible London listing
Shein has confidentially filed papers with Britain's markets regulator for a potential London listing, according to two anonymous sources speaking to Reuters. The Chinese-founded company, valued at $66bn, is moving ahead with what could be one of the largest IPOs globally this year; it would reportedly prefer to float in the US, but elected officials there have expressed concerns about the use of forced labour in Shein’s supply chain and its use of a US tax law exemption known as de minimis. Under the provision, packages valued at less than $800 are not charged import duties and aren’t subject to the same levels of oversight from US customs. The UK Labour Party, widely expected to form the country's next government after a general election on July 4th, has met with Shein, and has reportedly offered support for its potential London listing.
ECONOMY
Increase in protectionism slows global economy, warns OECD
The Organisation for Economic Co-operation and Development (OECD) has warned that an increase in protectionism is slowing the global economy by impeding international trade in services. Over the past decade, there has been a 25% rise in barriers to online sales of services as countries add extra hurdles to communications infrastructure and data connectivity. The OECD estimates that freeing up trade in services could give the global economy a $1tn boost.
INTERNATIONAL
Labour to create new UK employment watchdog
The main opposition Labour party in the UK - which is expected to comfortably win next week's general election - says it will create a watchdog with "real teeth" that has the power to prosecute and fine companies which breach the rights of their employees as part of its plans to strengthen workers' rights. Angela Rayner, the party's deputy leader, plans to establish the Fair Work Agency to oversee these proposals. The agency would have the authority to levy fines, inspect workplaces, lodge civil proceedings, and bring forward prosecutions. It aims to enforce rights like holiday pay, sick pay, and parental rights. Under the plans, existing bodies such as the Gangmasters and Labour Abuse Authority, the National Minimum Wage unit, and the Employment Agency Standards Inspectorate will be amalgamated into the new Fair Work Agency. “Under the Tories, the enforcement of workers’ rights is fragmented, overburdened and overstretched. That’s bad for workers, for businesses and for our economy,” Rayner said. “Allowing those who don’t even pay the national minimum wage off scot-free only encourages a race to the bottom. Employers who want to do right by their workers are being badly let down, finding themselves undercut by those who refuse to play by the rules.”
More Americans with disabilities are employed, thanks to remote work
People with disabilities have particularly benefited from the rise of remote work, with record levels of entry into the US workforce over the past three years. According to the Economic Innovation Group, the share of disabled employees working fully remote was 12.6% in Q1 2024, compared to 10.6% of employees without disabilities. John O'Neill, director of Disability Employment Research at the Kessler Foundation, states that working from home and other adjustments have provided individuals on the margins of the labour market with the opportunity to join it. However, disparities still exist. People with disabilities are twice as likely to be unemployed compared to their nondisabled counterparts. They are also overrepresented in low-paying jobs. The pandemic has sensitized employers to the usefulness of accommodation practices, and the tight labour market has further contributed to these changes. Overall, job sharing and flexible hours are seen to have become game-changers for disabled workers in the US.
Irish businesses become 'reluctant landlords' for staff
Amid a housing crisis, Ireland's businesses are buying and renting properties to provide accommodation for their employees. The local services industry is particularly affected due to high housing costs and lower wages compared to the multinational sector. Food wholesaler Musgrave, for example, which employs over 40,000 people, making it Ireland's largest private sector employer according to its website, has approximately 50 properties available for staff. It owns less than 10 of those, people familiar with the matter said. The housing deficit in Ireland is a result of stagnation in the construction sector since the 2008 financial crash, along with planning constraints, supply bottlenecks, population growth, and a near-capacity economy. “I'm aware of a significant number of operators across the country, from small nursing homes to the large groups, all renting or purchasing properties,” Bank of Ireland's health sector head Grainne Henson observed, adding that the onerous nature of supplying housing for workers was making some operators “reluctant landlords.”
OTHER
Mainland Chinese retail brands struggle in Hong Kong
Several mainland Chinese retail brands in Hong Kong are closing their doors due to intense pressure, high rents, and fierce competition. Lemon tea brand LMM and mainland restaurant Radish Southward have both closed their Hong Kong locations after a short period of operation. Jo's Cha, a tea brand from Guangzhou, is also experiencing a decline in demand. The high commercial property rents in Hong Kong pose a constant threat to retailers. Rents for high street shops in prime districts have risen 15% in the first quarter. Mainland Chinese brands entering the Hong Kong market need to adapt to local tastes and consider the locations they select. Many of these brands have struggled to acclimatise themselves to the local market and have found it hard to convince customers to buy their products.
 


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