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Environmental Management Sustainability Report 2007 Maintaining a Pleasant Working Environment Kobe Steel's personnel policies respect the personality and individuality of company employees while creating a lively and attractive working environment. We also work with Group companies in various ways to achieve one of the principles of the Kobe Steel Group Corporate Philosophy: "We support each employee in developing his or her abilities, while respecting mutual cooperation." Human Resource Development The goal of Kobe Steel's human resource development program is to foster employees' pride and help them find fulfillment in their work. To that end, it's important for every employee to have specific goals for personal growth and make progress in achieving those goals day by day. The company gives comprehensive support for this policy, with the expectation that every employee will grow and develop through constant study. Concerning career development, we have adopted a self-assessment system that provides a forum where management and employees can discuss future business goals and engage in career planning. On this basis, we engage in periodic job rotation that, while keeping the desires of the employee and the business needs of the company in mind, is implemented with the aim of fostering job skills. Also, to promote self-directed career development, we have instituted a personnel recruitment system. To help employees develop their abilities more fully, emphasis is placed on on-the-job training. This is supplemented with offline training programs aimed at improving employees' specialized abilities while accommodating different business capabilities, skills and abilities Personnel Benefits System Kobe Steel's system of personnel benefits is performance based. We have introduced an employee system that has employees set targets, as well as a formula for calculating pay and bonuses related to employee performance. Kobe Steel's system of personnel benefits emphasizes two evaluative criteria: an "employee system" that categorizes workers according to the targets they are expected to meet; and a "wages and bonuses" system, which is based on performance and looks at employees' roles and responsibilities. Eliminating Gender Bias Kobe Steel recognizes the importance of maintaining an employment environment in which diverse employees can fully exploit their individual abilities regardless of gender. To that end, we have actively implemented policies designed to create an environment in which women can give full play to their abilities. These include: 1) improving the work environment and culture; 2) reforming hiring, placement, and training programs; 3) providing assistance so that women can work while maintaining their families; and 4) providing networking help. In FY2006, we introduced a mentoring program for women engaged in corporate planning in order to provide psychological support for those developing careers and abilities. Support for Balancing Work and Childrearing In line with the Law for Measures to Support the Development of the Next Generation, which was promulgated in April 2005, Kobe Steel has formulated a Private-Sector Employer Action Plan designed to create a workplace where work and childrearing can be successfully balanced. "Libra" website that provides support for balancing work and home life Main Measures Implemented to Date - Training programs for managers aimed at helping them improve their attitudes concerning the priority of the workplace and rigid concepts of gender roles.   - Providing counseling services at each place of business concerning birth and childrearing, opening a website on the company intranet that offers assistance to working mothers, and creating a support system.   - Reviewing the leave-of-absence system making it possible to take annual paid leaves in half-day increments, and expanding the number of accumulated sick days and the scope of acceptable reasons for taking time off. Accommodating Diverse Values and Lifestyles To create and maintain a working environment in which employees can work securely over the long term, Kobe Steel has established various types of welfare support and care programs (including leave of absence) that they can use if they or their families need medical treatment or nursing care. These programs are matched to employees' individual life stages. Recognizing the diversity of values and lifestyles among our employees, we introduced in October 2006 the cafeteria-style Kobelco Cafe Plan that offers a flexible approach to the company's benefits package. Employing Older People Kobe Steel has introduced a Mature Employee Reemployment System as a way to reemploy workers after formal retirement. By continuing to make use of the skills and abilities of veteran employees, we hope those skills can be more easily passed to younger staff, and that the individual's enthusiasm for work will boost workplace vitality. Reemployment of Formally Retired Employees (FY2006) Employment of Disabled People The Kobe Steel Group actively promotes the employment of disabled people by such measures as holding periodic joint seminars on employment and is striving to make the workplace one where individuals can make full use of their abilities and work comfortably. In FY2006, disabled people accounted for 1.98% of the work force in Kobe Steel, superseding the ratio of 1.8% required by law. The company will continue with measures designed to increase this ratio further. Employment Ratio of Disabled People (Kobe Steel) Respect for human Rights To maintain a working environment where human rights are respected, and that is free of any sort of discrimination, the Kobe Steel Group runs educational programs on human rights, such as human rights awareness training for different management levels. We are also giving training to recruitment staff on unprejudiced recruiting. Preventing Sexual Harassment Kobe Steel's Guidelines for Business Conduct in our Corporate Code of Ethics clearly state that sexual harassment is unacceptable, and our labor contracts and rules of employment stipulate that sexual harassment will be met with disciplinary action. A system has been set up whereby a counselor is available in every working location for consultation on sexual harassment and swift action is taken. In addition, a Sexual Harassment Prevention Manual has been produced and training is also given as part of our training on human rights. These measures are intended to create a working environment that allows all personnel to work comfortably and with peace of mind. Sexual Harassment Prevention Manual Health and Safety Management Policy On the principle of "health and safety are fundamental to business management and take priority over all business activities", we run a range of different health and safety activities in order to ensure that the our employees are healthy and energetic, and can work safely and with peace of mind. Principles for health and safety - Employees arrive for work each day full of vitality and go home each evening with a smile.   - Employees are always vigilant of the safety of co-workers and help create a culture of caring about health.   - Product quality is boosted through safety activities. Safety In 1979 Kobe Steel started a drive to reduce accidents at work over the medium to long term. Since then, we have pursued safety activities, formulating a medium-term health and safety management plan every three years or so. This resulted in a big drop in the number of accidents and the frequency rate has stayed at a low level, although fiscal 2005 saw an increase of incidents. Therefore, since fiscal 2006, we have undertaken the following three activities to improve safety. 1. Proper understanding and strict observance of relevant laws, such as the Occupational Health and Safety Law, as well as in-house rules. 2. Operating arrangements that will prevent major disasters involving high-temperature molten materials, toxic gas, or falls and collapses. 3. New risks created by changes to the working environment or new processes or types of work should not be ignored. An on-site approach to identifying these risks and ameliorating conditions should be restored. (More complete risk assessment through frank discussions) As a result, in 2006 we saw an improvement in safety and will continue our efforts to reduce industrial accidents. Frequency Rate of Accidents that Halted Operations Health To create a working environment that gives full consideration to human health, we are improving our management system in both the physical and mental health areas. In the area of mental health, we are expanding a consultation system of consultation rooms where occupational counselors and specialist doctors can be consulted on any type of issue, as well as promoting mental health education at all levels. In the area of physical health, we are working to prevent the onset of lifestyle illnesses by ensuring that all staff have regular health check-ups and follow-ups. We are also striving to prevent work-related illnesses by dealing with changes in the working environment. A number of health-related issues have led to widespread public concern in wider society, such as the problem of asbestos contamination. It is our policy to deal with such matters in a thorough and sincere manner.