In July 2021, Ethical Consumer viewed Rakuten Kobo’s website for information on how the company managed workers' rights in its supply chain. A ‘Human Rights Policy’ document was found and a web page titled Human Rights.

Supply chain policy (Poor)
A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.
Rakuten Kobo stated that it did not use child labour in its business operations and had a zero tolerance for use of child labour by any third party. The company referred to children under 16 years of age but stated "or the applicable minimum legal age, whicever is higher" so was considered to have an adequate policy.
Regarding forced labour, the company stated that it had a zero tolerance policy for use of forced labour by any third party that engages in business relations with the Rakuten Group.
The company had an adequate non-discrimination policy.
Regarding wages, the company stated that it strived to meet wage levels that satisfy basic needs of employees but did not mention a living wage.
Regarding working hours, the company failed to provide any policies which limited the working week to 48 hours and 12 hours overtime. It also did not mention any policy related to freedom of expression.
Overall, the company received a poor score for its supply chain policy.

Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's labour standards, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
Although Rakuten Kobo did state that it was committed to promoting human rights through active multi-stakeholder engagement it did not provide adequate detail or policies on this.
The company stated that it had “confidential whistleblowing mechanisms” in place which relate to violations of human rights policy regulations. On its Human Rights webpage the company stated that there was a Supplier Hotline available for reporting violations but this appeared to be for suppliers of Rakuten Mobile only.
The company did not appear to have any systematic engagement around labour standards wiith Trade Unions, NGOs and/or non-for-profit organisations.
As Rakuten Kobo did not have an adequate policy on stakeholder engagement, it received a poor rating.

Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
On its Human Rights webpage, Rakuten Kobo did state that it conducted human rights assessments in its supply chain, referring to its tier 1 suppliers. However, it did not provide sufficient details around this.
Due to its lack of policies related to auditing and reporting, Rakuten Kobo received a poor rating.

Difficult issues (poor)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers meeting labour standards, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
As Rakuten Kobo had none of these things, it received a poor rating for its approach to difficult issues.

The company did not have adequate publicly available information on any of the above, therefore it received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark in this category.

Reference:

Human Rights Policy document Rakuten Kobo Inc (10 August 2021)

According to the Advertising Standards Agency website a ruling against Rakuen Europe Sarl was upheld on 1 June 2016 for advertising a product likely to cause offence.
The ad was for www.rakuten.co.uk and was seen in March 2016 on bt.com. The ad featured a product called the "UNT Two-Tone Mug" and showed a picture of the mug, which had a dark blue C-shaped handle and the letters 'UNT' printed in dark blue after it.
Complainants challenged whether the ad was likely to cause serious offence.
Responding to the complaint, Rakuten Europe S.à r.l (Rakuten) said that due to the characteristics of the product, it did not display the offensive word in its entirety and it had therefore passed their technical filters. Upon notification of the complaints, they asked their display partners to ‘blacklist’ the product which meant ads for it would not appear again in advertising space on websites provided by ad networks. BT also apologised to customers and removed the ad from their website.
The ASA upheld the complaint and ruled that the ad must not appear again in its current form.
This reference is for information only.

Reference:

ASA Ruling on Rakuten Europe Sàrl (1 June 2016) (17 August 2018)

In September 2021 Ethical Consumer viewed Rakuten's website global.rakuten.com for the company's conflict minerals policy. The company manufactured e-readers. It had no published conflict minerals policy, other than one paragraph in an undated document titled Rakuten Group Sustainable Procurement Instruction that was found through an internet search. This stated only: "Prohibition of Conflict Minerals - We avoid the use of conflict minerals, which are connected to environmental degradation and human rights violations. In order to procure minerals in a responsible manner, we collaborate, and in the case where concerns are raised, we take action to cease the procurement and use of conflicts minerals."

Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, notably in the eastern provinces of the Democratic Republic of Congo (DRC). The minerals in question are Tantalum, Tin, Tungsten and Gold (3TG for short) and are key components of electronic devices, from mobile phones to televisions.
Ethical Consumer expected any company manufacturing electronics to have a policy on the sourcing of conflict minerals. Such a policy would articulate the company's commitment to conflict free sourcing of 3TG minerals and its commitment to continue ensuring due diligence on the issue. The policy should also state that it intended to continue sourcing from the DRC region in order to avoid an embargo and show evidence of membership or financial support to organisations developing the conflict free industry in the region.

Rakuten’s policy did not meet any of these criteria. As a result the company received Ethical Consumer's worst rating and lost a whole mark under the following categories - Habitats and Resources and Human Rights.

Reference:

Rakuten Group Sustainable Procurement Instruction (6 September 2021)

In July 2021, Ethical Consumer viewed the family tree on the Hoovers website for Rakuten Kobo Inc which stated that the company had operations in Manila, Philippines.
At the time of writing Ethical Consumer considered the Philippines to be governed by an oppressive regime.
A search of the company's website also showed that it had a Development Center in China.
At the time of writing Ethical Consumer considered each country listed to be governed by an oppressive regime. The company therefore lost a half mark in the Human Rights category.

Reference:

Generic Hoovers ref (5 January 2021)

In September 2021, Ethical Consumer viewed Reuters website and viewed an article dated 10th March 2021 titled "Google and Viber review adverts for Myanmar military-backed telecoms firm". The article explained that Viber, which is a messaging app owned by Google and Rakuten, had advertisements run by a Mytel; a Myanmar telecoms company partially owned by the army. The article stated that Rakuten was reviewing these advertisements and that "Following the publication of the Reuters story, Viber said on Wednesday it was stopping all advertising in Myanmar temporarily".

This reference is for information only.

Reference:

Google and Viber review adverts for Myanmar military-backed telecoms firm (March 2021)