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There is growing interest in the international community in corporate social responsibilities. Amid this rising trend, the Hitachi Construction Machinery Group is promoting CSR activities throughout the entire supply chain, including suppliers. In doing so, we believe it is important to share the same CSR awareness with our business partners to prevent supply chain risks.
In January, 2017, Hitachi Group revised its “Hitachi Group CSR Procurement Guideline the 3rd Edition”. In this revision, the “Hitachi Group Code of Conduct” (http://www.hitachi.com/about/corporate/conduct) based on “Code of Conduct Version 5.1” by the Electronic Industry Citizenship Coalition (EICC), has been incorporated into the Guideline. Distributed to our suppliers as a reference for CSR code of conduct and standards, this Guideline is expected to be fully implemented by all our suppliers.
Through a designated selection process, suppliers shall be evaluated by product quality, reliability, delivery, price, suppliers’ business stability, technical development ability, fair and occupation, elimination of all forms of forced and compulsory labor, environmental preservation activities, social contributions, good working environment, and recognition of social responsibilities with partners. (These policies are specified in “Guidelines for Procurement Activities”.)
For new suppliers, we revamped procedures for in-house screenings in November 2017 in order to reinforce compliance efforts. These rigorous screenings are carried out on new suppliers and include provisions in consideration of environmental and social criteria, such as anti-bribery measures.
Business operations are becoming increasingly more global, there is a growing possibility that procurement risks along the supply chain could very well trigger management issues. At Hitachi Construction Machinery, we take steps to catch and alleviate these risks as best as possible before they become significant.
In 1998, the Hitachi Group was the first in the industry to compile its fundamental policy regarding procurement of environmentally friendly parts and products and its requirements to suppliers in the publication “Green Procurement Guidelines” and to implement green procurement with its suppliers. The Green Procurement Guidelines stipulate for compliance items relating to supplier environmental preservation activities (establishment of environmental management systems, recommended certification standards, etc.) and items relating to reduction of the environmental of goods supplied to the Hitachi Group (resources saving, energy saving, recycling, proper management of chemical substances contained in products, dissemination of suitable information, etc.).
We note that since FY2015, the Hitachi Group has been directly conveying information to suppliers, face-to-face. In May 2018, Hitachi Construction Machinery (China) and 2 Hitachi Construction Machinery (China) suppliers attended a CSR and green procurement presentation in Guangzhou which was conducted for Hitachi Group partners in China.
Starting FY2010, the Hitachi Construction Machinery Group began conducting a Supplier CSR Survey, as the first step to implementing CSR procurement. The survey covers seven areas: human rights, labor, safety and health, the environment, fair business practices, and ethics, quality, safety, information security, and social contribution.
Starting in FY2014, we poured energies into the group implementation of the supply chain CSR survey. As a result, the survey was given to the suppliers of Hitachi Construction Machinery (China), one of our overseas group companies. In FY2017, the survey based on new guidelines was conducted. We address continuous improvement.
Going forward, HCMC plans to continue to implement CSR surveys, including CSR audits. We aim to work with our suppliers so they can push forward with improvement activities. In addition, we plan to promote initiatives to establish a supply chain business continuity plan.
In accordance with the Hitachi Group Conflict Minerals Procurement Policy, the Hitachi Construction Machinery Group conducts dialogue with suppliers on the non-use of conflict minerals.
As a member of the Hitachi group, the policy for procurement departments in all Hitachi Construction Machinery Group companies have always been and will continue to be to ensure that procurement activities do not result or aid in conflicts within the same region and that the armed groups described above do not benefit from those activities, while continuing responsible procurement activities of minerals that are not related to the conflicts in the region based on local laws. Additionally, we will continue to support the practice of due diligence based on the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” among companies. With these in mind, Hitachi Group would like to request all our suppliers to utilise the Conflict Minerals Reporting Template developed by EICC/GeSI※1 to continue checking the country of origin and supply chain of minerals, and also to procure from the CFS (Conflict Free Smelter)※2 listed within.
※1 EICC-GeSI: Nonprofit organization of members in the information and communications technology (ICT) industry.
※2 Conflict-Free Smelter: A smelter or refinery that does not handle conflict minerals.
Hitachi Construction Machinery Group works with its main suppliers to encourage implementation of an Environmental Management System (EMS), ISO 14001, EcoStage, and other practices to promote CSR activities throughout the entire supply chain along with suppliers.
In FY2017, we attained a Green Supplier Rate of 100%, the same as in FY2016. This rate reflects the percentage of suppliers that have acquired EMS certification. In addition, to comply with environmental regulations, we are still requesting suppliers fill in the JAMA* sheet and return them to us.
In fiscal 2017, we carried out investigations in accordance with the release of the 18th Substances of Very High Concern (SVHC) by the European Chemicals Agency. We will now conduct regular follow-up and seek to increase our collection rate.
Going forward, we plan to continue to ask suppliers to participate in the JAMA sheet survey and turn in their completed JAMA sheets.
*JAMA sheet: Industry standard data sheet to collect information on chemical substances included in products and parts as stipulated by the Japan Automobile Manufacturers Association.
Hitachi Construction Machinery aims to build and maintain partnerships with its suppliers. To this end, suppliers with which it has ongoing business transactions are invited to become members of either the Chikuhou-kai (61 corporate members) or the Tokiwa-kai (44 corporate members). (current as of April 2018).
These two organizations host a wide range of activities to promote understanding of Hitachi Construction Machinery policies and efforts concerned with safety, quality and environment.
This includes joint lectures, presentations on examples of streamlining, skill competitions, and mutual safety inspections. In addition, monthly supplier presentations are held, in which Chikuhou-kai and Tokiwa-kai suppliers also participate, and each supplier is asked to promote CSR activities.
Joint seminar in progress