Procurement

Explanation Video for Business Partners

Basic Procurement Policy

Our company's procurement departments will conduct their activities based on the following basic procurement policies.

Compliance with laws, regulations and other social norms

In conducting purchasing operations, we will comply with relevant domestic and overseas laws, social norms, and internal regulations.

The person in charge of procurement has no private benefit in any business partner.

We never have any relationship with antisocial forces and organizations that threaten the order and security of civil society and will not respond to illegal or unjust demands.

Fair and impartial transactions

Purchasing operations shall be conducted based on reasonable standards, such as quality, delivery time and price, and shall be available to the public both in Japan and abroad.

Coexistence with the global environment through procurement

When conducting purchasing operations, we will pay attention to social conditions and demands, and give due consideration to environmental protection, resource protection, etc.

Strengthen partnerships with business partners

We aim for mutual development by establishing a relationship of trust with our business partners.

Management of confidential information

We will strictly manage information and personal information obtained through purchasing operations and use it only for the permitted purposes.

Requests to our Business Partners

With the aim of creating a world where dreams and hopes can be realized by people of today and the future in a safe, secure and affluent life, Kobe Steel will share a sense of social responsibility with its business partners and promote the following initiatives related to sustainability management throughout its supply chain.

We ask our business partners for their support and cooperation for following initiatives.

1 Compliance

(1-1) Compliance with laws and regulations

Comply with applicable laws and regulations in your country and the countries/regions in which you operate.

2 Human rights and labor

We will not only comply with relevant laws and regulations, but also refer to international human rights standards and respect the human rights of workers.

[Explanation]

"Worker" refers to people who work regardless of their type of employment or work, including full-time, temporary, contract, direct employee, and other types of workers.

International human rights standards to be referenced include "Universal Declaration of Human Rights" and "International Covenant on Human Rights" at the United Nations.

(2-1) Prohibition of Forced Labor

We do not use labor from coercion, detention, prison labor exploitation , slavery or trafficking.

We also protect the right of workers to leave or terminate their employment without forcing them to do so.

[Explanation]

Forced labor refers to (involuntary) labor performed by a person under threat of punishment or other punishment and against the person's free will. Elements of forced labor include the following:

①Threats and Intimidations (Example: A worker is required to pay a fine when he or she offers to retire.)

②Wage Garnishment (Example: an employer forces employees to store and save a portion of their salary.)

③Binding by Obligation (Example: Workers are borrowing money to pay high recruitment fees.)

④Excessive overtime (Example: Employees are forced to work overtime beyond legal requirements or labor-management agreements.)

⑤Physical and mental abuse (Examples: Violence, yelling, sexual harassment.)

⑥Prohibition of Movement (Example: restricting movement without any reasons such as health and safety or information security.)

Restraint or detention work refers to work that cannot be freely separated from employment. This includes debt binding, in which workers borrow money to pay high recruitment fees and cannot leave until they repay the debt.

Exploitation refers to the use of a superior position for unfair treatment, while exploitative prison labor refers to the situation in which prisoners are forced to work and are not paid adequate wages.

Slavery is defined by the U.S. State Department as modern slavery, including forced labor and trafficking for sexual exploitation. The British Contemporary Slavery Act defines a situation in which vulnerable people are unfairly exploited under forced labor.

(2-2) Prohibition of Child Labor and Consideration for Young Workers

We will not allow children under the minimum working age to work.

In addition, we will not allow young workers under the age of 18 to engage in dangerous work, such as night shifts or overtime, which may damage their health or safety.

[Explanation]

Child labor refers to activities or labor that, depending on their nature and performance, may harm the intellectual, physical, social and moral development of young people, making them unable to attend school, forcing them to drop out of school, or forcing them to balance work and study, thereby undermining their educational opportunities and sound growth.

ILO Convention 138, (1973), stipulates that the minimum age for engagement or employment must be no less than the age of completion of compulsory education and in no case less than 15 years old (The transition period can be set at 14 years of age as the minimum working age in developing countries with underdeveloped economies and underdeveloped educational institutions) . Also, the age at which young persons can work varies depending on the type of work. All countries must establish a minimum working age of 18 for hazardous work. However, such work can be undertaken from the age of 16 if:

  • Prior consultation was held with domestic labor-management organizations.
  • The safety, health and morals of young persons are adequately protected; and
  • ・Sufficient specific education or vocational training is provided in the field of activity.

Dangerous work means the following:

  • Work carried out in a pit, in water, at dangerous heights or in a limited space
  • Work involving the use of dangerous machinery, equipment or tools, or the manual handling or transportation of heavy materials
  • Work done in an unhealthy environment (E.G., exposure of the child to dangerous substances, factors or processes, or to temperatures, noise levels or vibrations detrimental to the health of the child)
  • Work under particularly difficult conditions, such as long hours of work, night work or work in which the child is unjustly confined to the premises of the employer

(2-3) Consideration for Working Hours

We will not work beyond the limits set forth by the laws and regulations of the area where our employees work, and will appropriately manage their working hours and holidays.

[Explanation]

Appropriate management refers to:

  • The number of prescribed working days per year shall not exceed the statutory limit.
  • The number of working hours per week including overtime does not exceed the legal limit. (However, disasters and other unavoidable emergencies are excluded.)
  • To grant the right to annual paid leave, maternity leave, and childcare leave as provided by law
  • the act of giving a break as prescribed by law
  • Conducting physical and mental health examinations in order to protect workers' health

(2-4) Adequate Wages and Benefits

We will comply with all applicable laws and regulations regarding compensation paid to workers (including minimum wage, overtime pay, and legally mandated allowances and wage deductions).

[Explanation]

Minimum wage is the minimum wage stipulated by the wage laws of the country of residence. This must be paid to the worker at an appropriate time without delay in accordance with the laws and regulations of the country in which it is located.

An unfair wage deduction refers to a wage deduction that violates work-related laws. For example, the cost of work clothes, the cost of personal protective equipment necessary for work, and the cost of cleaning uniforms are applicable. However, non-payment corresponding to the time when you are not working due to being late or absent is not included.

(2-5) Prohibition of Inhumane Treatment

We will respect the human rights of workers, and will not treat them inhumanely, including mental and physical abuse, coercion and harassment, or engage in any acts that may cause them to do so.

[Explanation]

Mental abuse is psychological violence against others, such as using inhumane expressions, harassment, neglect, or words that hurt self-esteem, resulting in harm to the mind and emotions.

Physical abuse includes violence and working in harsh environments.

Coercion means forcing a person to do something he doesn't want to do by threatening. For example, you can force them to work overtime.

Harassment is defined in the Equal Employment Opportunity Law as "Said worker suffers a disadvantage in his/her working conditions due to his/her employer's response to sexual harassment in the workplace, or said sexual harassment harms his/her working environment". "Roundtable Working Group Report on Bullying and Harassment in the Workplace" by the Ministry of Health, Labour and Welfare of Japan defines power harassment as "Acts that cause mental and physical pain or aggravate the workplace environment to persons who work at the same workplace beyond the appropriate scope of work, due to their superiority in the workplace, such as their position in the workplace and personal relationships".

(2-6) Prohibition of Discrimination

We will not engage in discrimination or harassment.

We will also give due consideration to the requests of workers concerning religious customs.

[Explanation]

In terms of wages, promotions, rewards, education, recruitment and employment practices, there shall be no conduct that could lead to discrimination on the basis of race, creed, color of skin, religion, nationality, language, ethnicity, sex, sexual orientation, gender identity, marital status, age, physical characteristics, illness, disability, social status, property or place of origin.

If a medical examination or pregnancy test impairs equality of opportunity or treatment, it will be a discriminatory act.

There are many different causes of discrimination.

  • Race and color of skin: Discrimination on the basis of belonging to a particular ethnic group and targeting ethnic minorities, indigenous peoples and tribal peoples.
  • Sex: Biology, function, or social differences between men and women. This includes discrimination on the basis of marital status, relation with spouse, family structure, and motherhood.
  • Religion: Discrimination on the grounds of being a follower of a religion or of expressing religious beliefs. Discrimination against atheists is also included.
  • Political views: Discrimination on the basis of policy views, affiliation to a political party, political or sociopolitical attitudes, civic activities or moral qualities.
  • Birthplace: Discrimination based on place of birth, family origin, or foreign origin. National or linguistic minorities, naturalized citizens, and descendants of immigrants from abroad are targeted.
  • Social status: Discrimination on the basis of social class, occupational category or caste.

(2-7) Freedom of Association and Right to Collective Bargaining

We respect the right of workers to organize as a means of realizing labor-management consultations on working conditions and wage levels, in addition to complying with local laws and regulations.

[Explanation]

Regarding collective bargaining, ILO Convention 98, (1949) requires that, in order to develop effective collective bargaining, enterprises recognize the organizations of representatives of workers for the purpose of collective bargaining, promote voluntary negotiations between employers and workers, and incorporate provisions concerning dispute settlement into collective agreements. The following activities are encouraged as specific corporate activities.

  • Providing necessary facilities for the formulation of effective collective agreements
  • To enable representatives duly delegated by workers to negotiate with management representatives who are empowered to make decisions on matters to be negotiated
  • Failure to threaten or intimidate retaliation with a view to unduly affecting the negotiations or impeding the exercise of the right to organize
  • Providing information necessary for meaningful negotiations

3 Health and Safety

In addition to complying with relevant laws and regulations, we will keep working on minimizing injuries and physical and mental illnesses associated with the work of our workers and to create a safe and hygienic working environment by paying attention to ILO safety and health guidelines.

(3-1) Occupational safety

We identify and assess risks to occupational safety and ensure safety through appropriate design, technology and management measures.

[Explanation]

Risk to occupational safety refers to the potential risk of accidents or health problems that occur during work due to electricity and other energy sources, fire, vehicles and moving objects, slippery and tripping floors, falling objects, etc.

Appropriate design, technology and control measures refer to:

① Elimination of risk factors or substitution for safe alternatives; ② engineering controls (Examples: Sensors to monitor hazardous areas, locking off of power sources supplied to machinery or equipment (lockout)); ③ operational controls (Example: Installation of a tag indicating prohibition of the operation of the energy shut-off device while the power source is shut off (Tag Out).); and ④ provision of personal protective equipment (Examples: Safety goggles, safety helmets, gloves, and other protective equipment).

(3-2) Emergency Preparedness

In preparation for emergencies such as disasters and accidents that damage human life and physical safety, we identify the possibility of occurrence, prepare action procedures for emergency measures that minimize damage to workers and assets, install necessary equipment, and provide education and training so that employees can take action in the event of a disaster.

[Explanation]

Emergency measures include, for example, emergency reporting, notification to workers, clarification of evacuation methods, installation of evacuation facilities, easy-to-understand exits without obstacles, appropriate exit facilities, storage of emergency medical supplies, installation of fire detection systems, installation of fire extinguishers, fire doors and sprinklers, securing of external communication means, and preparation of recovery plans.

It is also necessary to ensure that all employees in the workplace are fully aware of this fact. This includes, for example, the implementation of emergency response education (Include an evacuation drill) for workers, and storage and posting of emergency response procedures, etc. in easily accessible places in the workplace.

(3-3) Occupational Accidents and Diseases

We identify, evaluate, record, and report the status of occupational accidents and diseases, and take appropriate measures and corrective measures.

[Explanation]

Appropriate measures include systems and measures that facilitate workers' reporting, classification and recording of accidents and diseases, provision of treatment as needed, investigation of accidents and diseases, implementation of corrective measures to eliminate causes, and promote workers return to work. It also includes the implementation of necessary procedures for the administration in accordance with the laws and regulations, and the participation in workmen's compensation insurance.

(3-4) Industrial Hygiene

We identify and evaluate the risk of workers being exposed to harmful biological, chemical and physical effects in the workplace, and conduct appropriate management.

[Explanation]

Harmful effects include toxins, radiation, and substances that cause chronic disease (lead, asbestos, etc.). They may also be present in soot, steam, mist, or dust.

Also, if the noise or bad odor is significant, it is considered to be harmful to the human body.

Appropriate management includes, for example, establishment and operation of management standards, appropriate education and training for workers, and provision of appropriate personal protective equipment.

(3-5) Considerations for physically demanding tasks

We identify and evaluate physically demanding tasks and manage them appropriately so that they will not lead to occupational accidents or diseases.

[Explanation]

Physically demanding tasks include manual handling of raw materials, manual heavy lifting and other heavy labor, as well as lengthy repetitive and continuous work such as forceful assembly and data entry, and lengthy work in unnatural postures.

Appropriate management includes ergonomic work environments, regular breaks, provision of work aids, and division and cooperation among multiple workers. (It is also helpful to consider setting up the environment so that people can move properly and efficiently and to reduce accidents and mistakes.)

Ergonomics refers to the research field in which objects and environments are designed so that human beings can use them in the most natural movement and condition possible, and used for actual design. (It also includes setting up the environment so that people can move properly and efficiently, and reducing accidents and mistakes.)

(3-6) Safety Measures for Machinery and Equipment

We assess whether there are any safety risks associated with machinery and equipment used by workers in the course of their work and implement appropriate safety measures.

[Explanation]

Appropriate safety measures include the adoption of safety features such as fail-safe, fool-proof, interlock, and tag-out to prevent accidents or health problems that occur during work, installation of safety devices and barriers, and periodic inspection and maintenance of machinery and equipment.

(3-7) the Safety and Health of Facilities

We will appropriately ensure the safety and health of facilities provided for workers (Dormitories, cafeterias, restrooms, etc.).

Also, we secure an appropriate emergency exit in case of emergency in the dormitory.

[Explanation]

In order to ensure safety and health, it is necessary to maintain the cleanliness and hygiene of facilities and pay attention to the following points.

  • Drinking-water: Regulatory quality testing, safe drinking water (Water server, etc.)
  • Providing hygienic food: Clothing and medical examination for cooks, pest control, proper temperature management of food, certification of restaurant business, etc.
  • Toilets: Adequate number of clean toilet facilities, supply of toilet paper, etc.
  • Dormitories: Fire protection, emergency escape routes (exit), safe storage facilities for personal belongings (Provision of lockers with keys), adequate living space (The standard is 3.3 m2 or more per person.), ventilation, temperature control, proper lighting, etc.

(3-8) Safety and Health Communication

We provide education and training on appropriate safety and health information in a language and method that can be understood by workers regarding various job risks that workers may suffer.

We will also establish a system to provide feedback on safety issues from workers.

[Explanation]

Appropriate workplace safety and health information and education and training should be provided for any identified workplace hazards to which workers may be exposed (Including, but not limited to, mechanical, electrical, chemical, fire and physical hazards).

Safety and health information shall be clearly posted within the facility or located where workers can be identified and accessed. It must also be provided in a language that workers can understand.

Education and training should be provided to all workers prior to the start of work and periodically thereafter.

It also encourages workers to raise safety concerns. Education and training include proper use of personal protective equipment, emergency response, safe operation of machinery, and preparation before entering a hazardous environment.

Paragraph 43 of the ILO Declaration on Multinational Enterprises describes the creation of a culture of prevention based on labor-management dialogue.

(3-9) the Health Care of Workers

We will conduct appropriate health management for all employees.

[Explanation]

Appropriate health management refers to the prevention and early detection of employee diseases by conducting medical examinations at least at the level prescribed by laws and regulations.

It is also necessary to give due consideration to the prevention of health problems caused by overwork and mental health care.

4 Environment

We will actively respond to global environmental issues such as resource depletion, climate change, environmental pollution, and biodiversity, while giving consideration to local environmental issues in order to ensure the health and safety of people in the regions concerned.

(4-1) Obtain Environmental Permits and Reports

We obtain the necessary permits and approvals for our business in accordance with the laws and regulations of the location of our business, and we register and report to the government.

(4-2) Reducing Energy Consumption and Greenhouse Gas Emissions

We will strive to improve energy efficiency and work continuously to reduce energy consumption and greenhouse gas emissions.

[Explanation]

There are various types of greenhouse gases, and in particular, it refers to the six groups of substances specified in the Kyoto Protocol: carbon dioxide, methane, nitrous oxide, HFC, PFC, and SF6.

Continuous reduction activities include the establishment of voluntary reduction targets for six types of greenhouse gases, the formulation of plans, and the steady implementation of these targets.

(4-3) Emissions into the atmosphere

We will comply with relevant laws and regulations and implement appropriate measures to reduce the release of hazardous substances into the atmosphere.

[Explanation]

Hazardous substances released into the atmosphere include volatile organic compounds, aerosols, corrosive substances, particulates, ozone-depleting substances, and combustion by-products. Before the release of these substances, we analyze and monitor their contents, and based on the results, we release them after conducting necessary control and treatment. Measures include regular monitoring of the handling of emitted substances and the performance of treatment systems.

(4-4) Management of water

We will comply with laws and regulations, monitor the source, use and discharge of water, and conserve water.

All wastewater is characterized, monitored, controlled and treated as necessary before being discharged or disposed of.

We also identify potential sources of water pollution and conduct appropriate management.

[Explanation]

Water management involves monitoring water sources, uses, and emissions, conserving water, and managing pollution pathways.

Management of contamination pathways includes the absence of contamination in on-site waterways, protection from contamination (Example: No accumulation of stagnant water or oil near a storm drain), and the provision of emergency response equipment (Example: A shutoff valve or a water stop to stop the leakage or outflow of tap water or sewage due to a factory disaster or natural disaster, etc. In the event of a leak or overflow, a rainwater measure, a sewage basin or a reservoir is insufficient.).

(4-5) Effective Use of Resources and Waste Management

By complying with laws and regulations and managing waste appropriately, we promote reduction (cutback), reuse (reuse), and recycling (recycling), effectively use resources, and minimize waste generation.

[Explanation]

Even for the disposal of substances whose hazardous properties have not been identified, it is necessary to identify and control the waste, implement a systematic approach for responsible disposal or recycling, and strive to reduce it.

Disposal of substances must be carried out in compliance with the laws and regulations of the location of the business, and measures must be taken to minimize the waste of natural resources.

These measures include changing production facilities at the source, substituting materials, reusing resources, and recycling. In order to comply with laws and regulations, we will voluntarily set targets for our activities. Natural resources include water, fossil fuels, minerals, and the products of virgin and virgin forests. Prevention of environmental pollution leads to conservation of natural resources and is closely related to global sustainability.

(4-6) Control of Chemical Substances

In compliance with laws and regulations, chemical and other substances that pose a risk to human health and the environment are identified, labeled, and managed to ensure safe handling, transfer, storage, use, recycling or reuse, and disposal.

[Explanation]

For example, in Japan, it is necessary to manage chemical substances in accordance with the Chemical Substances Control Law, the Poisonous and Deleterious Substances Control Law, the Safety and Health Law, the Fire Service Law, and the PRTR Law. It is also necessary to consider the management of chemical substances in the manufacturing process.

(4-7) Management of Chemical Substances Contained in Products

We comply with all applicable laws, regulations and customer requirements concerning the prohibition or restriction of the use of specific substances in products.

[Explanation]

It is also necessary to consider the requirements of customers regarding substances contained in products.

  • Comply with the laws and regulations of the country of destination of the product.
  • In the final product, you have to be responsible for the parts that are incorporated into the product. Therefore, upstream firms need to provide downstream firms with the necessary information.

For example, when exporting to the EU, the RoHS Directive and the REACH Regulation fall under related laws and regulations.

It is also necessary to consider the addition, contamination and adhesion of substances in the manufacturing process.

5 Fair Trade and Ethics

We will not only comply with relevant laws and regulations, but also conduct business activities based on a high level of ethics.

(5-1) Anti-Corruption

We do not engage in any form of bribery, corruption, extortion, or embezzlement.

(5-2) Prohibition of Giving or Receiving Unreasonable or Improper Benefits or Facilities

We do not accept any promise or demand to accept any benefits or facilities provided as a means of obtaining unfair or inappropriate benefits. In addition, we do not offer or promise to offer bribes or other unfair or inappropriate benefits or facilities.

(5-3) Appropriate Information Disclosure

Disclose information on labor, health and safety, quality, environmental activities, business activities, organizational structure, financial position, and performance in accordance with applicable laws, regulations, and industry practices.

We will not tolerate falsification of records or false disclosure.

(5-4) Respect for Intellectual Property

We will create and manage intellectual property rights so that we can receive appropriate legal protection.

We will not infringe or misuse intellectual property of third parties.

[Explanation]

Intellectual property includes, in addition to intellectual property rights, trade secrets and technical know-how.

Intellectual property rights are defined by laws and regulations, and include patent rights, utility model rights, design rights, trademark rights, and copyrights.

(5-5) Conduct Business Fairly

We will engage in fair competition and advertising in our business activities.

[Explanation]

Fair competition means to observe the laws and regulations concerning fair competition and fair trade established in each country and region, and to promote fair and free competition without engaging in illegal acts such as restrictive agreements such as cartels and bid rigging, unfair trade practices, and improper labeling.

Fair advertising is defined as advertising that does not have an unauthorized purpose or provide false information.

(5-6) Protection of the Informant

We will appropriately treat information obtained through reporting as confidential and consider the anonymity of the reporter. In addition, any act of obstructing the reporting or any disadvantageous treatment of the reporting person shall be prohibited.

[Explanation]

Reporting is the reporting or disclosure of misconduct within the company and its supply chain.

Disadvantageous treatment includes, but is not limited to, changes in working conditions, such as unjust performance evaluations, remuneration, dismissal, and reassignment, and acts that harm the working environment, including harassment.

(5-7) Prohibition of the Use of Conflict Minerals

We will promote the prohibition of the use of conflict minerals.

[Explanation]

Conflict Minerals such as tin, tantalum, tungsten, gold and cobalt mined in conflict zones in the Democratic Republic of the Congo and neighboring countries.

Profits from the mining and trading of conflict minerals are a source of funding for armed and opposition groups, and the use of minerals from such areas has the potential to contribute to conflict, human rights abuses and environmental destruction.

6 Quality and Safety

We will continue to improve our quality management system to ensure the safety and quality of our products and services.

(6-1) Ensuring Product Safety

We will strive to ensure the quality and safety of our products and services in compliance with the relevant laws and safety standards of countries around the world.

(6-2) Establishment and Operation of Quality Management System

We will establish and operate a quality and safety management system by establishing clear standards and procedures to be observed in all processes from development to sales and after-sales service, ensuring their implementation, confirming their effectiveness, and taking corrective measures as necessary.

7 Information Security

We will strengthen information security by preventing the leakage of confidential and personal information.

(7-1) Defense Against Cyberattacks

Protect yourself and others from cyber attacks and other threats.

[Explanation]

Cyber attacks are, for example, malware infections through targeted e-mails or the like, or malicious websites that lead to the leakage of personal information , customer information, business partner information, confidential information, etc., or acts that cause damage such as encrypting important files.

(7-2) Protection of Personal Information

We will comply with relevant laws and regulations and appropriately manage and protect all personal information of suppliers, customers, consumers, employees, etc.

[Explanation]

Personal information is information about a living individual that can identify the specific individual by name, date of birth or other description contained in the information (Includes information that can be easily checked against other information, thereby identifying a specific individual.).

Proper management refers to the establishment and operation of a system for the overall management of personal information, including the creation of codes and policies to be observed by workers, and the formulation of plans, implementation of measures, audits, and reviews in accordance with such codes and policies.

Proper protection means not to acquire, use, disclose or leak personal information illegally or unfairly.

(7-3) Preventing Leakage of Confidential Information

We will conduct appropriate management to protect our own confidential information from leakage, and will also conduct appropriate management to protect confidential information received from third parties from leakage, while complying with the terms of the contract.

[Explanation]

Confidential Information generally refers to information disclosed in (contains electromagnetically or optically recorded data information) such as documents that have been agreed to be confidential, or information that has been orally disclosed after notification that it is confidential.

Proper management refers to the establishment and operation of a general management system for confidential information, including the creation of rules and policies to be observed by workers, and the formulation of plans, implementation of measures, audits, and reviews in accordance with such rules and policies.

Proper protection means not to acquire, use, disclose or divulge confidential information illegally or unfairly.

8 Business Continuity Plan

In the event that a company or its business partners are affected by a large-scale natural disaster, etc., we will prepare to resume production activities in a planned manner in order to fulfill our supply responsibilities, etc.

(8-1) Business Continuity Planning and Preparation

We identify risks that impede business continuity, evaluate risks from the perspective of business impact, etc., organize measures to respond to the assessed risks, and formulate a business continuity plan (BCP).

[Explanation]

The Business Continuity Plan (BCP) is a compilation of basic matters, actions, and procedures necessary to continue the company's activities in the event of a disaster.

9 Social Contribution

(9-1) Contributing to Society and Local Communities

We will voluntarily engage in activities that contribute to the development of international and local communities.

Page top