Thorough Risk Management || KOBE STEEL, LTD.

Accurately identifying and minimizing environmental risks and conducting effective management and auditing

The Kobe Steel Group is active in reducing the environmental risks that accompany its business activities, based on a full understanding of the risks, and manages risk through established and regular procedures. Efforts are ongoing to ensure strict compliance with laws and regulations and to strengthen environmental management through environmental audits and similar activities.

Environmental Management and Audits

In addition to introducing ISO 14001 and other environmental management systems (EMS) at Kobe Steel works and plants and conducting internal audits, we also commission independent certifying organizations to carry out inspections. Our Environmental Control and Disaster Prevention Department in the Head Office meanwhile conducts annual documentary and onsite audits in accordance with internal regulations. In fiscal 2010, documentary and onsite audits were conducted at all 12 of our works and plants.

We conduct companywide documentary surveys at Group companies every year. We also introduce EMS and implement independent management activities at sites subject to serious environmental risks. In fiscal 2010, Head Office conducted onsite surveys at 12 sites operated by 12 different companies.

We conduct onsite audits at Kobe Steel works and plants and onsite surveys at Group companies with the assistance of outside consultants, so as to ensure objectivity and accuracy.

Environmental audit at the Kakogawa Works

Environmental verification survey at Kobelco Construction Machinery

Government Recommendations and Guidance in fiscal 2010

Although no serious violations of environmental legislation were identified at Kobe Steel or any Kobe Steel Group company during fiscal 2010, we did receive recommendations and guidance from government authorities on a number of occasions.

Government Recommendations and Guidance

	Air	Water	Other
Kobe Steel	2	3	0
Group companies	1	3	0
Total	3	6	0

Examples of Government Recommendations and Guidance

*	Irregularities were identified in relation to notification regulations under the Air Pollution Control Act and other legislation. Appropriate remedial action has been taken.
*	The results of wastewater sample analysis carried out onsite by government inspectors found levels in excess of permitted limits. The relevant facilities have been improved and employees retrained in response.