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Responsibility throughout the Value Chain

Procurement and Supplier Initiatives

Procurement and Supplier Initiatives

Responsible Procurement of Raw Materials

Purpose of activities Activities during fiscal 2019 Self-
assessment
Targets/plans for activities from fiscal 2020 onwards
  • Operating CSR Procurement Guidelines for the Procurement & Logistics Division
  • Supplier self-check sheets for existing suppliers were submitted by 264 companies (response rate: 70%)
  • Supplier self-check sheets for new suppliers were submitted by 99 companies (response rate: 100%)
  • Reviewed and assessed 254 suppliers
A
  • Rate of collection of Self-Check Sheet is 70% or higher
  • Assessed 206 existing suppliers
  • Reviewed 100% of new suppliers
  • Copper Product Raw Material Procurement Initiatives
  • Formulated and operated a policy on the responsible procurement of minerals
A
  • Operated a policy on the responsible procurement of minerals

Self-assessment grades A: Target achieved B: Target mostly achieved C: Target not achieved

Basic Approach

As a comprehensive materials manufacturer, we work in partnership with wide range of suppliers throughout the value chain, in an effort to improve added value and promote global procurement with an emphasis on stable product supplies and more competitive products.
Stable procurement is important in terms of reducing opportunity loss and maintaining consistent operations. We therefore aim to build close relationships with all of our suppliers, ensuring that all transactions are fair, avoid corruption, comply with the law and take into account issues such as human rights.

Operating CSR Procurement Guidelines for the Procurement & Logistics Division

In an effort to reinforce our organizational capabilities with regard to CSR priorities throughout the global supply chain, we have informed suppliers of the CSR Procurement Guidelines for the Procurement & Logistics Division and incorporated the guidelines into basic agreements.
The guidelines apply to all raw materials (excluding those for copper, cement and aluminum products) and equipment. They consist of a Basic Procurement Policy, which sets out the division’s responsibilities, such as respect for human rights, safety and health, and environmental protection, and our CSR Procurement Standards with which we require our suppliers to comply to secure product quality and safety.
To ensure the effectiveness of initiatives taken by suppliers, the division has been screening and evaluating suppliers since April 2016.
Before starting transactions with new suppliers, we request that they conduct self-evaluations using a Supplier Self-Check Sheet, which consists of items that assess their initiatives on social responsibilities related to human rights (such as child labor, forced labor, and unreasonably cheap labor) and procurement (including negative environmental impact), in addition to general items such as quality, cost and delivery. The division assigns scores according on their answers to the 12 evaluation items on the Self-Check Sheet.
Based on rules of the division, we request that existing suppliers evaluate themselves every other year using the Supplier Self-Check Sheet, thereby checking the progress of their initiatives. In addition, concerning major raw materials that must be managed on an item-by-item basis, the division evaluates the comprehensive performance by using the Supplier Evaluation Sheet, which consists of 28 evaluation items.
We provide feedback on the results of these evaluations to suppliers, including items that need improvement, and monitor them as needed.
In fiscal 2019, we collected Supplier Self-Check Sheets from 363 suppliers (99 new ones and 264 existing ones). We conducted screenings of all 99 new suppliers and periodic evaluations of 155 of the 264 existing ones.
The division’s priority activity in fiscal 2020 is to promote purchases from multiple suppliers of major raw materials, which were purchased from single suppliers, from the viewpoint of ensuring stable procurement.

CSR Procurement Guidelines for the Procurement & Logistics Division

[Basic Procurement Policy]

Open door/fair trade
The Procurement & Logistics Division opens its doors wide for all suppliers. We decide on suppliers based on fair assessments of quality, price, delivery time, management base and so forth, predicated on mutual trust for the sake of mutual prosperity. We conduct no unfair dealings.
Compliance with legislation and corporate ethics
The Division complies with legislation in Japan and abroad. We also do not act in ways that go against corporate ethics.
Safety and Health, environmental preservation and measures to combat global warming
The Division holds safety and health, environmental preservation and measures to combat global warming as priority tasks.
Respect for human rights
The Division respects the fundamental human rights of all persons involved.
Information security
The Division maintains as strictly confidential information obtained from the suppliers.

[CSR Procurement Standards]

Respect for human rights
To respect basic human rights, to not discriminate with regard to employment or treatment, and to not deal in child labor, forced labor or unfair low-wage labor.
Compliance with legislation and corporate ethics
To comply with legislation in Japan and abroad and to not act in ways that go against corporate ethics, including the provision or acceptance of inappropriate benefits and dealing with anti-social individuals or groups.
Safety and Health
To work to ensure and improve safety and health, such as by preventing occupational accidents.
Environmental preservation
To abide by legal environmental standards and to strive to preserve the environment, such as by disposing of industrial waste in an environmentally sound manner.
Information security
To establish an information management system, to implement measures to prevent the leakage of confidential information and to take special care to strictly manage obtained personal information.
Ensuring product quality and safety
To ensure the quality and safety required for the products.

Cement Product Raw Material Procurement Initiatives

Limestone is the principal raw material used in cement production. MMC procures the limestone for use in its cement plants from three Group-owned limestone mines in Japan and two overseas mines (in the United States and Vietnam). It seeks to build relationships of trust with the local communities in which it conducts limestone mining and transportation by implementing various exchange and cooperation activities, while also endeavoring to minimize noise and preserve the habitats of rare species.

Aluminum Product Raw Material Procurement Initiatives

In the Aluminum Business, we not only manufacture aluminum plates but have built a CAN to CAN recycling system, in which we procure and recycle used aluminum cans into a raw material. In addition, Mitsubishi Aluminum Co., Ltd., a Group company, procures materials such as new aluminum metal. We promote fair and impartial transactions with all of our business partners based on mutual trust, with awareness of the prevention of corruption, compliance with laws and regulations, respect for human rights and others.
We also proactively promote initiatives for fulfilling our corporate social responsibilities, such as protection of the global environment, by working with our major business partners in Japan and other countries.

Copper Product Raw Material Procurement Initiatives

We procure copper concentrate, a raw material for copper products, primarily from the overseas mines in which we invest, and while this places us in the position of a non-operator not directly involved in mine management, as a member of the International Council on Mining & Metals (ICMM) and a company engaged in global procurement activities, we hope to fulfill our sustainable development responsibilities.
If we have interests in a mine over and above a certain scale, we assign members of staff and go out of our way to engage in dialog with indigenous people and members of the local community, through advisory committees for example.
Moreover, our Metals Company requires the mining companies to comply with CSR loan and investment standards (if we are investing) and CSR procurement standards. We also check that those standards are followed, for example through regular questionnaire surveys, and if deemed necessary, we seek to understand and improve the situation. We include environmental preservation and respect for human rights as important matters to consider in our business processes as we manage our global supply chain.

Metals Company: Outline of CSR Procurement Standards

[Continual improvement of environmental performance]

  • Introduce and implement environmental management systems focusing on continual improvement.
  • Reduce negative environmental impact from mine development and operation.
  • Take into account protected natural areas and protect biodiversity.
  • Consult with stakeholders regarding environmental issues.

[Continual improvement of occupational safety and health]

  • Introduce safety and health management systems focusing on continual improvement.
  • Protect employees and contractors from occupational accidents. Implement disease prevention measures including local communities.

[Protection of basic human rights]

  • Prevent forced and child labor.
  • Eliminate harassment and discrimination.
  • Avoid forced resettlement, or provide compensation.
  • Protect indigenous people.
  • Manage and record complaints and disputes with stakeholders.
  • Eliminate any involvement, either direct or indirect, with militia or other armed groups in areas of conflict where there are concerns regarding human rights violations.

Metals Company: Outline of CSR Investment Standards

[Protection of basic human rights]

Protect the basic human rights of people impacted by our business operations. Consult with stakeholders regarding local community issues. Eliminate any involvement, either direct or indirect, with militia or other armed groups in areas of conflict where there are concerns regarding human rights violations.

[Mining and protected areas]

Identify and evaluate impact on cultural and natural heritage, and risks to biodiversity at every stage of our business. Develop and implement mitigation measures.

[Mining and indigenous people]

Understand and respect the society, economy, environment, culture and rights of indigenous people. Conduct social impact assessments with regard to indigenous people and provide appropriate compensation.

[Relationship with the local community]

Verify if there are any disputes or lawsuits with the local community. Engage in consultation and dialogue to explain business plans.

[Environmental preservation]

Conduct environmental impact assessments (EIA) and obtain appropriate permits. Set out specific policies to reduce the environmental impact of mine development and operation.

[Mineral resources and economic development]

Contribute to sustainable economic development at the regional and national level.

Environmental Impact Assessment for Zafranal Project (Peru)

Mitsubishi Materials Corporation joined Zafranal copper mine development project in Peru with Canadian mining company Teck Resources Limited and its subsidiary. Now the feasibility study is being carried out.
Compania Minera Zafranal S.A.C. (CMZ) operates the project. Mitsubishi Materials Corporation (MMC) has 20% share of the project and assigns personnel at the subsidiary established in Peru. MMC communicates closely with CMZ and works together in order to progress the project.
CMZ prizes the cultures, values, traditions and historical heritages of local communities, and has been establishing transparent and sincere long-term partnership with them. CMZ is having dialogues with local communities and additional stakeholders, and also conducting individual briefing, responding their inquiries. CMZ has been building public trust with taking in local opinions and needs through these activities.
In preparation for the legal process and to get approval of the Environmental Impact Assessment, CMZ is consulting with local communities, and undertaking environmental and social baseline studies in the project and related infrastructure areas.

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As a Responsible Business Operator Procuring and Smelting Minerals

From Conflict Mineral Management to Responsible Mineral Procurement Management

The United States’ Dodd-Frank Wall Street Reform and Consumer Protection Act requires all companies listed in the US to disclose whether their products contain “conflict minerals,” defined as gold, tin, tantalum and tungsten, along with details of reasonable survey on producing countries and the survey results, in an effort to prevent minerals mined in the Democratic Republic of Congo (DRC) or its neighboring countries from being used to fund the activities of armed groups responsible for human rights violations and other acts of violence. Recently, considerations are given beyond the scope of conflict minerals and from a broader perspective of responsible mineral procurement, mainly in EU countries. At present, cobalt and silver are also examined, and in tandem with movements of OECD and SEC, organizations such as RMI*1 and LBMA*2 have formulated guidance related to the issue of conflict minerals (responsible mineral procurement management).
As a responsible business operator smelting gold, silver, and tin, we promoted initiatives to respond to these global requirements, formulated a related policy, and disclosed it.

  • *1 Responsible Minerals Assurance Process (RMAP, formerly the Conflict-Free Smelter Program [CFSP])
  • *2 London Bullion Market Association (LBMA): The LBMA implements and oversees compliance with quality requirements for gold and silver bullion circulated in the market.

Metals Company (Initiatives with Respect to Gold, Silver, and Tin)

The Metals Company has pledged its support for a campaign to ensure a transparent flow of funds related to mineral resources, as promoted by the Extractive Industries Transparency Initiative (EITI)*1 since June 2011.
We began preparations for tackling the issue of conflict minerals in 2012, obtained certification in August 2013 for our compliance with the London Bullion Market Association (LBMA)*2 gold guidance and have had this certification renewed every year since. We have also started operations and obtained certification for our silver products.
Since February 2014, we have received annual certification of our conformance with the RMAP*3 of RMI*4 regarding tin.

  • *1 Extractive Industries Transparency Initiative (EITI): The EITI is a global framework established to improve the transparency of financial flows from extractive industries engaging in the development of oil, gas and mineral resources to the governments of resource-producing countries. Its aim is to prevent corruption and conflicts, and thus to promote responsible resources development that can facilitate growth and help to reduce poverty.  http://eiti.org/
  • *2 London Bullion Market Association (LBMA): The LBMA implements and oversees compliance with quality requirements for gold and silver bullion circulated in the market.  http://www.lbma.org.uk/
  • *3 Responsible Minerals Initiative (RMI)
  • *4 Responsible Minerals Assurance Process (RMAP, formerly the Conflict-Free Smelter Program [CFSP])

Contact the Responsible Minerals Control Hotline if you identify any act in violation of the provisions of our Responsible Minerals Control Policy.

Mitsubishi Materials Corporation Metals Company Responsible Minerals Control Policy

Establishment date: June 19, 2013
Last revised date (Rev.5): May 22, 2020

The Metals Company (hereinafter the "Company") engages in bullion manufacturing for gold, silver and tin. The Company does not procure materials originating from high-risk areas, such as conflict-affected areas, connected to human rights abuses, terrorist financing, money laundering and illegal trade. Also, the Company recognizes the importance of addressing Environment and Sustainability responsibilities in procurement of materials.   To rigidly maintain these practices, the Company has adopted a control system that follows the London Bullion Market Association (LBMA) guidance for gold and silver, and the Responsible Mineral Initiative (RMI) Responsible Minerals Assurance Process (RMAP) for tin and undergoes regular audits by third-party bodies. The Company hereby sets out its responsible minerals control policy applicable to gold, silver and tin as follows and will implement the following measures.

General Provisions
  1. The Company will respect human rights and avoid direct or indirect involvement with inhumane acts. For this purpose, the Company will not use suspicious minerals which may be connected to conflict-affected and high risk areas where armed conflict, widespread violence and other risks may harm individuals. Also, the Company will not procure suspicious minerals against its Environment and Sustainability responsibilities.
  2. The Company will immediately stop a transaction when its risk controls on material procurement detects that the minerals are connected to those in power in conflict-affected and high-risk areas, or suspicious against Environment and Sustainability responsibilities of the Company.
  3. The Company annually receives third-party assurance on its procurement of materials containing gold, silver and tin, and reports the audit results concerning gold and silver to LBMA and those concerning tin to RMI.
Control System and Responsibility
  1. The Company's headquarters deals with all operations for mineral control. Smelters and refineries do not procure materials independently.
  2. The compliance officer appointed by the Company assumes authority and responsibility stipulated in the control manual, including those for overseeing relevant sections and divisions and for operating the control system.
  3. The supply chain officer appointed by the Company assumes authority and responsibility stipulated in the control manual, including those for overseeing the entire control system and for regularly conducting management reviews.
Judgment Criteria for Material Procurement from Conflict-Affected and High-risk Area
The Company considers the procurement of materials containing gold, silver and tin as a high-risk when those materials are determined or highly suspected to be connected to the conflict-affected and high-risk areas defined by the Company where human rights abuses, terrorist financing, money laundering, illegal trade, and non-compliance with Environment and Sustainability legal requirements are present.
Implementation of Due Diligence on Material Suppliers
The Company will practice due diligence and perform risk assessments on all suppliers of materials containing gold and silver and all suppliers of materials containing tin. The Company will immediately stop a transaction when it is deemed by the supply chain officer as being high risk, as a result of the risk assessment.
Monitoring of Materials Purchased by the Company's Headquarters
  1. Materials purchased by the Company headquarters are supplied to smelters and refineries, which will check the actual goods and analyze the content of gold, silver, tin and/or other metals for every lot, to examine consistency with the information from suppliers provided in advance by the Company headquarters and to report the findings to the Company headquarters.
  2. The Company will effectively utilize the monitoring system for incoming materials, which has long been in place, for the purpose of responsible minerals procurement control at the Company headquarters and operate it as a system for the prevention of contamination with high risk minerals.
Operation of the Responsible Minerals Sourcing Control System
  1. The compliance officer will provide education and training to the relevant sections and divisions of the Company headquarters and to the smelters and refineries as needed.
  2. The compliance officer will perform at least one internal monitoring per year of the relevant sections and divisions of the Company headquarters and of the smelters and refineries to assess if operations are properly performed in accordance with the responsible minerals sourcing control system or if there are any deviances from the system.
  3. In the event of starting transactions with a new supplier for material procurement, the Company will ensure that the information is communicated to the compliance officer in an effort to prevent contamination with high risk minerals.
  4. The compliance officer will keep the records of all operations concerning responsible minerals sourcing control and retain them for five years. The relevant documents of the control manual will be revised as needed and properly managed.

Japan New Metals Co., Ltd. (Supervised by the Metalworking Solutions Company) (Initiatives with Respect to Tungsten)

Japan New Metals Co., Ltd., a Group company whose operations include tungsten smelting and refining, is revising its system for managing use of conflict-free minerals from the previous system under its Procurement Policy to one based on responsible mineral procurement. As a company smelting and refining tungsten in Japan, Japan New Metals Co., Ltd. carries out management to ensure that raw materials put into the smelting and refining process are ones conforming to the responsible mineral procurement guidelines. The company also carries out the similar management for raw materials purchased from external tungsten smelting and refining companies. The company will undergo an audit in 2020 for the renewal of its RMAP conformance certification, which it acquired in December 2014. It is taking initiatives with a view toward renewing the certification in accordance with the provisions of the responsible mineral procurement guidelines.

Procurement Policy of Japan New Metals Co., Ltd.Procurement Policy of Japan New Metals Co., Ltd.

MMC