Promoting CSR procurement

Basic Procurement Policy

This policy is ensured in the Group and posted on the website. We ask suppliers to understand the Basic Procurement Policy and the CSR Procurement Guidelines, and to incorporate the content of the Policy into their supply contracts. We held explanatory meetings of the guidelines for suppliers in July 2017 and January 2018. It was to ask suppliers for understanding and cooperation to our promotion of CSR procurement.We have also familiarized this guidelines to all employees of the group through the internal bulletins.

In January 2018, we established the Supplier Hotline to ensure the transparency and fairness of transactions between the Group and suppliers.

Shin-Etsu Group's Basic Procurement Policy

1.Legal compliance

As the most important of its management objectives, the Company conducts all of its business activities in a law-abiding spirit. Each and every staff member is made fully aware of corporate social responsibilities and they carry out their business activities in strict conformity with the law, business ethics and the various rules and regulations of the Company.

In its purchase and procurement activities, the Company acts in good faith and in a fair manner, and does not practice favoritism, nor make improper demands. In addition, based on mutual trust, not only between the Company and the suppliers that the Company directly procures from, but also with vendors in the linked supply chain, all those companies involved carry out their business activities in strict accordance with the principal labor standards of International Labor Organization (ILO), any laws and regulations related to protection of the environment andbusiness transactions including those of small- and medium-size enterprises.

2.Promotion of corporate social responsibility

The Company places primary importance on corporate social responsibility (CSR) activities.. For the promotion of CSR, the cooperation of all the Company’s suppliers is essential, and we ask you to comply with the Company’s policies in the areas listed below. At the same time, we will strive to maintain mutual trust and close, friendly relationships.

  • (1)Strive to strengthen and promote conformance with social norms, business ethics and laws.
  • (2)Place first priority on assuring safety, protection against disasters and effective environmental preservation(Cooperate in "Green" environmentally friendly purchasing and procurement activities, and at the same time, each person should have a consciousness of the importance of these issues.
  • (3)Conduct risk management activities such as paying attention for accurate and fair disclosure of information on assuring the delivery of safe and reliable products and taking speedy measures to deal with various contingencies
  • (4)Respect for humanrigths and promote anti-discriminatorypractice. Comply with the labor standards of the International Labor Organization (ILO) and prohibit unfair labor practices.
  • (5)Protect against the disclosure of classified information, personal confidentiality and respect the rights of the third party’s intellectual property.
  • (6)Pay attention to biodiversity preservation.
  • (7)Avoid the purchase of Minerals that are clearly involved in conflicts and human rights infringement in conflict-affected and high-risk areas(CHAHRA).

3.Supplier selection

The Company follows an open-door policy regarding its purchasing activities and globally seeks suppliers based on open, fair, impartial and equal-opportunity principles. The company selects suppliers in a rational and comprehensive manner, taking into consideration the following core considerations: 1. Globally competitive in product quality, price, delivery time and supply stability 2. Objective standards such as suppliers’ management stability, reliability and technological superiority. 3. Matters as mentioned in “2. Promotion of corporate social responsibility” above

4.Development and review of the suppliers

The Company provides suppliers with the essential information necessary for transactions and also cooperates with suppliers’ VA and VE improvement activities as well as in activities related to the maintenance and improvement of product and service quality. The Company also routinely or as necessary promotes evaluation and review of suppliers’ performance.

  • VA:Value Analysis, VE:Value Engineering
    Method for developing high value new products satisfying customers and improving existing products

Related Information

Shin-Etsu Group CSR Procurement Guidelines

Supplier Hotline

Employee Initiatives

Shin-Etsu Chemical Headoffice Mr.A, Mr.S , Purchasing Department

Shin-Etsu Chemical Headoffice
Mr.A, Mr.S , Purchasing Department

Working with Suppliers to Create a Sustainable Society

1.Please tell us about your job.
We are responsible for the procurement of electricity, gas and raw materials such as chemical products and pulp used by Shin-Etsu Chemical.

2.What were the motivations for the development of the CSR Procurement Guidelines (hereinafter referred to as the "Guidelines") in 2017?
The Purchasing Department has been working on CSR procurement for a long time and had a Basic Procurement Policy.We prepared Guidelines to explain the Basic Procurement Policy more specifically and to disseminate it both inside and outside the company.
The Guidelines were developed based on the 5.0 version of the EICC (now RBA)1 Code of Conduct, which was then the industry-standard. We added our own items, such as business continuity planning, to it. Through the development of the guidelines, we have clarified what we should keep in mind on CSR procurement as the procurement department and what we need to request to our suppliers.

3.What was the focus of the 2019 revisions?
The revised RBA Code of Conduct 6 in 2018 incorporated changes in the Guidelines. At the same time, specific examples of business continuity plans were provided to make the plan easier to understand.

4.Please tell us about your supply chain management plans for the future.
We have already asked our major suppliers to participate in briefing sessions and questionnaires based on these guidelines. By expanding the scope of the guideline, more suppliers will be informed of the guidelines, which will lead to stable, fair and impartial procurement.

  1. 1 EICC (currently RBA)
    A CSR Alliance for electronics industries. In 2018, it renamed to the current Responsible Business Alliance (RBA). It sets standards for ensuring that the work environment is safe, treating workers with respect and dignity, and carrying out environmental responsibilities, as well as ethical business practices, in industries with electronic or electronic components and in their supply chains.

Compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors

Staff members in charge of purchasing and procurement attend seminars on the Subcontract Act to gain an understanding of the Act. We also conduct regular internal audits of subcontracting transactions to ensure full compliance with the Subcontract Act. In addition, we make sure that all the subcontractors that are subject to the Subcontract Act are in full compliance by periodically checking the details of existing transactions and reports on new transactions.

Internal auditing for compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (December 2019, Shin-Etsu Chemical Kashima Plant)

Internal auditing for compliance with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors
(December 2019, Shin-Etsu Chemical Kashima Plant)

Responsible Sourcing of Minerals

In our Basic Procurement Policy, the Group has declared our dedication to eliminating minerals, that are clearly involved in conflicts and human rights infringement in conflict-affected and high-risk areas (CAHRA), from all product procurement. We ask that all suppliers adhere to this policy, and we regularly perform studies of pertinent minerals, tracking their production all the way back to the smeltery level.

Procurement Audit

By asking business partners to reply to a supplier CSR procurement questionnaire, we confirm whether they conduct business activities in accordance with the Group's CSR Procurement Guidelines. Additionally, we visit suppliers in Japan and overseas whenever necessary to carry out audits.

Procurement Conferences

The Purchasing Department holds a company-wide meeting every six months with all purchasing department personnel to discuss material procurement. This meeting is not only for reporting material procurement but also for training purchasing department personnel according to the Guidelines for CSR Procurement and checking the status of CSR procurement as well as learning the latest examples of CSR Procurement inside and outside the Company.

Procurement conference (September 2019, Shin-Etsu Chemical Head office)

Procurement conference (September 2019, Shin-Etsu Chemical Head office)

Control of Chemical Substances Used as Raw Materials

The Group checks the ISO 14001 acquisition status of business partners and considers giving a priority to do business with suppliers that have ISO certification so as to purchase materials of lower environmental impact. On making contracts on specifications for raw material supply, we work to confirm the following.

  • ・The suppliers' use of chemical substances that impact the environment in products and packaging, compliance with the relevant laws and regulations
  • ・Compliance with the RoHS Directive
  • ・Substance management using SDS / chemSHERPA