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Procurement and Supplier Initiatives

Responsible Procurement of Raw Materials

Purpose of activities Activities during fiscal 2022 Self-
assessment
Targets/plans for activities from fiscal 2023 onwards
  • Operating CSR Procurement Guidelines for the Procurement & Logistics Division
  • Supplier self-check sheets for existing suppliers were submitted by 108 companies (response rate: 66%)
  • Supplier self-check sheets for new suppliers were submitted by 98 companies (response rate: 100%)
  • Reviewed and assessed 219 suppliers
A
  • Rate of collection of Self-Check Sheet is 70% or higher
  • Assessed 200 existing suppliers
  • Reviewed 100% of new suppliers
  • Copper Product Raw Material Procurement Initiatives
  • Operated a policy on the responsible procurement of minerals
A
  • Operated and maintained 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.

Mitsubishi Materials Group Procurement Policy

Open Door/Fair Trade
When selecting suppliers, we provide a wide range of opportunities for all suppliers to engage in transactions.
We select suppliers based on fair and appropriate assessments of quality, price, delivery time, management base and so on, predicated on mutual trust for the sake of mutual prosperity. 
Legal Compliance
In conducting procurement operations, we comply with legislation in Japan and abroad.
Observance of Ethical Procurement
In conducting procurement operations, we do not engage in any inappropriate transfer of profits with suppliers.
Working Environment and Occupational Health and Safety
In conducting procurement operations, we strive to improve working environments and ensure occupational health and safety.
Environmental Protection and Decarbonization
In conducting procurement operations, we endeavor to protect the environment, apply every measure for the effective use and recycling of natural resources, and work toward decarbonization.
Respect for Human Rights
In conducting procurement operations, we respect the fundamental principles of human rights as declared internationally.
Information Security
In conducting procurement operations, we maintain strict confidentiality of information obtained from suppliers.

In conducting procurement operations, we promote CSR initiatives in all business activities, including the procurement of raw materials, development, production, distribution, consumption, disposal, and recycling of materials and products.

(Establishment date: December 1, 2021)

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 copper ores) and equipment. They consist of a Basic Procurement Policy, which sets out the division’s responsibilities, such as respect for human rights, legal compliance, occupational hygiene, and environmental protection, and in addition to these items, we require our suppliers to comply to secure product quality and safety, workers' rights, etc., which we state in our CSR Procurement Standards.
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 2022, we collected Supplier Self-Check Sheets from 206 suppliers (98 new ones and 108 existing ones). We conducted screenings of all 98 new suppliers and periodic evaluations of 121 existing ones.
The division's priority activity in fiscal 2023 is to promote the use of multiple suppliers of important raw materials and equipment, which have been purchased from single supplier, from the perspective of ensuring stable procurement.

Mitsubishi Materials Corporation CSR Procurement Guidelines

The Mitsubishi Materials Corporation is an ensemble of companies operating under the composite profile of a comprehensive basic materials manufacturer. We provide resources, basic materials and energy indispensable to modern lifestyles, and adhere to a corporate philosophy that emphasizes efforts that contribute to people, society and the Earth.
The Company's approach to CSR activities hinges on the idea of making this philosophy a reality, through the sincere fulfillment of the obligations and expected roles that society places on corporate citizens, disclosure and proper explanation of the Company's activities to stakeholders, and the pursuit of a deeper level of two-way communication with stakeholders, in order to promote greater mutual understanding.

Mitsubishi Materials Corporation's CSR Guidelines are composed of a Basic Procurement Policy and CSR Procurement Standards. The Basic Procurement Policy clarifies philosophies and standards to be upheld by the Company in executing its procurement duties, while the CSR Procurement Standards clarify standards that the Company requests its suppliers (and their suppliers) to observe and uphold.
These guidelines were established based on the understanding that CSR procurement is not something that can be completed as an internal effort, and that it will only be effective if efforts are made across the entire supply chain.

Basic Procurement Policy

Open Door/Fair Trade
When selecting suppliers, we provide a wide range of opportunities for all suppliers to engage in transactions. We select suppliers based on fair and appropriate assessments of quality, price, delivery time, management base and so on, predicated on mutual trust for the sake of mutual prosperity.
Legal Compliance
In conducting procurement operations, we comply with legislation in Japan and abroad.
Observance of Ethical Procurement
In conducting procurement operations, we do not engage in any inappropriate transfer of profits with suppliers.
Working Environment and Occupational Health and Safety
In conducting procurement operations, we strive to improve working environments and ensure occupational health and safety.
Environmental Protection and Decarbonization
In conducting procurement operations, we endeavor to protect the environment, and applies every measure for the effective use and recycling of natural resources, and works toward decarbonization.
Respect for Human Rights
In conducting procurement operations, we respect the fundamental principles of human rights as declared internationally.
Information Security
In conducting procurement operations, we maintain strict confidentiality of information obtained from suppliers

Mitsubishi Materials Corporation promotes CSR initiatives in all business activities, including procurement of raw materials, development, production, distribution, consumption, disposal, and recycling of materials and products.

CSR Procurement Standards

Respect for Human Rights
Suppliers shall respect basic human rights, to not discriminate with regard to employment or treatment, and to not engage in harassment, child labor, forced labor, human trafficking or unfair low-wage labor.
Compliance with Legislation and Corporate Ethics
Suppliers shall 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.
Fair Business Activities
Suppliers must not obstruct free competition, or engage in unfair competition.
Safety and Health
Suppliers shall work to ensure and improve safety and health, such as by preventing occupational accidents.
Development of Working Environment and Working Hours
Suppliers shall uphold the Labor Standards Act and endeavor to create a stable working environment, and comply with local applicable laws and regulations regarding employee's working hours, holidays, and vacations.
Freedom of Association
Suppliers shall recognize employees’ right to freely associate, or not to associate, complying with local applicable laws and regulations.
Environmental Preservation
Suppliers shall abide by legally established environmental standards and strive to preserve the environment, such as by preventing air, water and soil pollution, endeavoring to reduce greenhouse gas emissions, and processing and disposing of industrial waste in an appropriate manner.
Responsible Procurement of Mineral Resources
Suppliers shall consider the impact of raw materials, which can cause human rights violations and social problems such as environment destruction, in procurement activities, and take measures to avoid their use if there is concern.
Ensuring Product Quality and Safety
Suppliers shall establish a quality assurance system to ensure the quality and safety required for products, and provide accurate information about products.
Protection of Intellectual Property
Suppliers shall not infringe on the intellectual property rights of others in the course of business activities such as R&D, production or sales, etc., of products and services.
Information Security
Suppliers shall establish an information management system (organization and rules) and take measures to prevent leakage of confidential information obtained in connection with transactions. In particular, the handling of acquired personal information shall be strictly controlled.
Disclosure of Information
Suppliers shall disclose details of business activities and risk information, etc., as required by laws and regulations in a timely and appropriate manner. In particular, suppliers shall disclose information promptly, especially if there is a risk of affecting the continuation of transactions.
Protection of Whistleblowers
Suppliers shall establish an internal reporting system that ensures the protection of whistleblowers, together with a system that prevents retaliation for reporting.

Mitsubishi Materials Corporation hopes that suppliers will work to extend fair transactions based on the purport and spirit of these guidelines to their suppliers, and will work together to build a resilient and competitive supply chain.

(Last revised date: December 1, 2021)

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, to ensure a stable supply to smelters and refineries both in Japan and overseas,and while this places us in the position of a non-operator not directly involved in mine management, as a company engaged in global procurement activities, we hope to fulfill our sustainable development responsibilities.
We place importance on dialog with indigenous peoples and members of local communities. For example, we assign specific staff members to participate in the advisory committees of mines in which we have a certain scale of interests.
Moreover, our Metals Company requires the mining companies to comply with CSR 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. 
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 Initiative (RMI)
  • *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 on avoiding use of conflict minerals and have had this certification renewed every year since. We have also begun operations and obtained certification with regard to silver.
Since February 2014, we have received annual certification of our conformance with the RMI*3 of RMAP*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: 19th June 2013
Last revised date (Rev. 6): January 27, 2022

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 for procurement of materials. To rigidly maintain this practice, 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. Risks listed in “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas" AnnexII (listed below) are managed.
    ①Direct or indirect support to non-state armed groups
    ②Serious abuses associated with the extraction, transport or trade of minerals
    ③Public or private security forces
    ④Bribery and fraudulent misrepresentation of the origin of minerals
    ⑤Money laundering
    ⑥Payment of taxes, fees and royalties due to governments
    In addition, in accordance with LBMA's guidance on gold and silver, 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 to have a high relation to any suspected OECD Annex II risks(1.General Provisions (1)①-⑥) in conflict-affected and high-risk areas defined by the Company. The Company also considers the procurement of materials containing gold and silver as a high-risk when those materials are determined or highly suspected to be non-compliant with Environment and Sustainability legal requirements.
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 procurements 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)

In June 2021, Japan New Metals Co., Ltd., a Group company whose operations include tungsten smelting and refining, revised its system for managing the use of conflict-free minerals based on the Conflict Mineral Management Policy to the system based on the Responsible Mineral Procurement Management Policy, which has expanded its scope of control to a wider range of areas and minerals. 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. In November 2021, the company acquired the Responsible Minerals Assurance Process (RMAP) conformance certification, which was updated from the CFS Certification.

Responsible Mineral Procurement Management Policy of Japan New Metals Co., Ltd.Responsible Mineral Procurement Management Policy of Japan New Metals Co., Ltd.

RMAP certification obtained by Japan New Metals Co., Ltd.RMAP certification obtained by Japan New Metals Co., Ltd.

MMC