JAPANESE

Together with Business Partners —CSR Procurement—

Our business partners, who are the suppliers of materials, parts, and components, are important partners that support Komatsu's manufacturing. Komatsu believes that engaging in CSR procurement will contribute to our business partners' expansion, and therefore endeavours to do so in cooperation with our partners.


Komatsu's Procurement Policy

Komatsu's basic policy is to produce products in the area where the said product is in demand. Out of the 41 plants that manufacture construction and mining machinery, 30 plants are located outside of Japan. In following with the manufacturing of machinery at an overseas plant, we are actively working on procuring parts and materials from the same area. Aside from engines and main components that are shipped everywhere in the world from Japan, and a few specific parts that are only supplied by specialized manufacturers, the overseas plants are on their own in terms of procurement, to promote local and optimal procurement for parts like sheet metal.


Business Partners Organization, Komatsu Midori-kai

Komatsu Midori-kai is an organization made up of our business partners, with 164 member companies in Japan, out of which the procurement amount is approximately over 75% of domestic purchasing goods. At the regular meetings where the management members of each company are present, such as the general assembly, general meetings, and New Years' special meetings, Komatsu's top executives explain our policies, emphasize the importance of CSR management, and ask for raising of awareness regarding CSR management.

Even overseas, in North America, Europe, and China, there are Midori-kai organizations made up of their main business partners. At the moment, the number of members in the North America chapter are 38 companies (procurement amount approximately 50%), in Europe 54 companies (approximately 35%), and in China 62 companies (approximately 90%). We hope that these Midori-kai chapters will take advantage of the characteristics of each region to further expand their business activities.


CSR Procurement Guidelines and Activities Support

Aside from our ongoing awareness campaign to all our business partners to comply with the CSR Procurement Guidelines (see below) established in August 2011, we are supporting individual initiatives.

With Japan's Komatsu Midori-kai member companies, we are making certain certifications, like ISO14001 and Eco Stage, mandatory, and directing and supporting efforts to get these certifications. In addition, as a part of the effort to reinforce occupational health and safety initiatives, we have implemented the Japan Industrial Safety and Health Association's Small and Medium-sized Enterprises Occupational Health and Safety Assessment for 97 companies, with Komatsu bearing the cost of the assessment fees, to ask each company to increase the level of safety on their sites.


Komatsu's Policy on Conflict Minerals

Komatsu has adopted a policy of not using conflict minerals produced by the Democratic Republic of Congo (DRC) or its neighbors (Angola, Central African Republic, Republic of the Congo, Rwanda, Southern Sudan, Tanzania, Uganda and Zambia) from our corporate social responsibility perspective.

During the regular meetings we hold with our suppliers at each Komatsu plant in Japan, we explain this policy as well as Komatsu's response to the conflict minerals issue and related requests to our suppliers. With the cooperation of suppliers, we are now conducting a country-of-origin survey to determine the location of origin of the conflict minerals we use.

Looking ahead, we will conduct a more detailed survey that includes refineries in its scope and continue taking steps to prevent the use of conflict minerals from the DRC and its neighbors and thereby restrict funding for military groups.

Risk Management for Procurement


Komatsu is strengthening its risk management system for procurement. Since FY2012, we have started conducting assessments in Japan, so that we would be able to quickly know the status of partner companies in the event of a disaster such as an earthquake or tsunami, and be able to continue procurement activities without delay, to minimize the effect on production. We input the location and production content for each of the over 20,000 sites of all our partner companies to create a database for "visualization," and assessed the degree of risk. In addition to considering prevention measures for each partner company that have higher levels of risk, the procurement staff will be able to consider risks from this aspect when considering new agreements, so that we can heighten the accuracy of the information.
In the event of an emergency, we will —as we did when the Great East Japan Earthquake happened— dispatch security personnel from our plant to our partner company to help support speedy production recovery.



(Established on August 30, 2011)

 

1. Operations for Sound Management

1) Build a system or operational structure designed to meet various risks.

2) Establish legal and transparent decision-making processes concerning management.

3) Conduct appropriate accounting procedures, tax filing and settlement of accounts.

4) Place importance on communication with stakeholders (customers, shareholders, business partners, employees, etc.).

5) Ensure that top management will be notified promptly when any abnormal condition develops and that your company will be able to promptly and accurately respond to the situation(s).


2. Thorough Enforcement of Compliance

1) Engage in business operations while complying with the laws and regulations as well as the rules of the Business Community of the host countries and regions.

2) Develop a corporate climate under the leadership of top management, which places top priority on compliance.

3) Build up compliance-responsive operations, according to the scale and characteristics of your company, designed to prevent your company, executives or employees from wrongdoings and to respond to any compliance-related problems promptly when they occur.


3. Product Safety, QCD and Technology Innovation

1) Comply with the laws and regulations concerning product safety and deliver products and services which will offer safety and peace of mind to customers.

2) In addition to maintaining the quality and cost competitiveness of products and services which your company delivers to customers, stand by the agreed upon date of delivery and supply your products in a stable manner.

3) Establish quality control operations.

4) Constantly engage in technology development and provide innovative, safe and environmental-friendly products and services.


4. Considerations for the Environment

1) Continue efforts to reduce environmental impact resulting from business operations.

2) Appropriately manage chemical substances contained in products.

3) Build up environmental management systems such as the ISO14000 series and "Eco Stage."


5. Measures to Respect Human Rights, Appropriate Labor Conditions and Occupational Safety and Health

1) Respect human rights.

2) Never get involved, directly or indirectly, in any child or forced labor.

3) Create a work environment where there is no discrimination or harassment in any aspect of employment.

4) Build up an occupational safety and health operational structure under the leadership of top management and create a work environment where all employees can work in safe and healthy conditions.

5) In addition to establishing a fair and just personnel system, pay attention to human resource development and employee education as well.

6) Give consideration to improving communication between top management and employees.


6. Fair Business Practices

1) Comply with all related laws and regulations and engage in free and fair competition and business transactions.

2) Respect intellectual properties of other parties and work to prevent infringement thereof. Appropriately handle information (including personal information) of your company and other companies.

3) Never accept inappropriate cash, gifts or other favors.

4) Carry out proper foreign trade transactions (goods and technologies) while complying with the related laws and regulations.

5) Never have any relationship with antisocial forces or groups.


7. Social Contributions and Co-existence with the Local Community

1) Engage in social contribution activities based on your company's management principle(s) and support employees' volunteer activities.

2) Place importance on co-existence with local communities which is the foundation of your business, and proactively support the growth of local communities.

 

Note: These guidelines will be revised as needed.