At a time when concerns about value chain risks are growing, JX NMM has formulated a Basic Policy on Procurement and Green Procurement Guideline to purchase responsibly in the name of CSR Purchasing. When procuring materials, we confirm such matters as respect for human rights and ensuring the rights of workers, as well as absence of discrimination in hiring and work, elimination of forced labor and child labor, and compliance with the prohibition against purchasing conflict minerals.
CSR Purchasing Questionnaire Surveys
Starting in fiscal 2019, we began conducting CSR Purchasing Questionnaire surveys to ensure that we continue to fulfill our responsibilities to society across the entire supply chain in areas including respect for human rights, occupational health and safety, compliance, and environmental protection.
Based on the survey results, we will provide feedback to business partners as we strive to promote CSR activities throughout the supply chain.
Confronting the Problem of Conflict Minerals
"Conflict minerals" is the general term for minerals that are mined (illegally, in most cases) in conflict-affected regions, providing a source of funds for local armed groups. The use of these minerals may lead to the prolonging of conflicts and the expansion of human rights abuses and dehumanizing acts. Global moves to restrict trade of conflict minerals began in the late 1990s, and today various organizations have devised rules and programs.
In 2011, the Organisation for Economic Co-operation and Development (OECD) established the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, advising corporations and others to manage their own operations so as to avoid involvement in the trade of conflict minerals. In the United States, from 2013 the Dodd-Frank Wall Street Reform and Consumer Protection Act obligated companies listed on the U.S. stock exchanges to submit reports on their usage of specific conflict minerals (tin, tantalum, tungsten, and gold) to the Securities and Exchange Commission. The aim of such measures is to stop companies from using conflict minerals through information disclosure and social pressure.
In line with these global trends, industry organizations relevant to the Group (including the LBMA*1, RBA*2, and LPPM*3) have established monitoring programs for eliminating conflict minerals. These programs request that companies cooperate with surveys and undergo external audits by an independent organization.
- 1LBMA: London Bullion Market Association
An industry association composed of financial institutions and others that deal in gold and silver ingot. Inclusion on this association's Good Delivery List is viewed as a guarantee of high quality and reliability.
- 2RBA: Responsible Business Alliance
An alliance of companies formed with the aim of ensuring responsible conduct in the electronics industry supply chain.
- 3LPPM: London Platinum and Palladium Market
An industry association composed of financial institutions and others that deal in platinum and palladium ingot. Inclusion on this association's Good Delivery List is viewed as a guarantee of high quality and reliability.
Initiatives in the Gold, Silver, Platinum, and Palladium Supply Chains
JX Metals Smelting Co., Ltd. as a producer of gold ingots, and JX NMM as a producer of silver, platinum, and palladium ingots, have established and operate a management system for supply chain due diligence that calls for actions including the following to be taken.
- 1.Performing supply chain due diligence before purchasing mineral raw materials
(confirming the place of origin of the materials, assessing risks, confirming materials after delivery, confirming distribution route, preserving relevant documents, etc.)
- 2.Notifying suppliers of the policy on exclusion of conflict minerals
- 3.Conducting in-house education on supply chain due diligence and its background
- 4.Conducting internal audits and undergoing external audits
The implementation status of supply chain due diligence is audited by an independent organization specified by the LBMA and LPPM, and the results are reported to the LBMA and LPPM. As a result of following these procedures, the gold ingots produced at JX Metals Smelting's Saganoseki Smelter & Refinery, as well as the silver ingots produced at the Hitachi Works of JX NMM, are included on the LBMA's Good Delivery List. At the same time, the Saganoseki Smelter and Refinery and Hitachi Works have been included on the RMAP Conformant Smelters list compiled by the RBA and GeSI*4-recognition that they are taking proper measures to exclude conflict minerals.
- 4GeSI: Global e-Sustainability Initiative (a trade association of the information and communications technology industry in Europe)
The RBA and GeSI together created the Responsible Minerals Assurance Process (RMAP) certification program, based on their relationship with the electronic and communications equipment industries, where the risk of conflict mineral use is especially high.
Initiatives in the Tantalum Supply Chain
TANIOBIS GmbH, a producer of tantalum powder, implements a strict program of purchasing checks based on international standards for procuring raw materials from conflict-affected and high-risk areas. For example, TANIOBIS purchases materials with tags that the ITSCI*5 distributes and tracks to guarantee non-involvement in conflicts, child labor, or other human rights violations within conflict-affected areas. TANIOBIS also performs supply chain due diligence to confirm the tags. As a result of these initiatives, TANIOBIS has been included on the RMAP Conformant Smelters list in recognition that it is taking proper measures to exclude conflict minerals.
Since June 2019, moreover, TANIOBIS has begun implementing a supply chain due diligence system similar to the ITSCI, by means of the Better Sourcing Program (BSP) made available by the RCS Global Group, a global responsible sourcing auditor for the raw materials supply chain.
- 5ITSCI: ITRI Tin Supply Chain Initiative
An initiative by the International Tin Research Institute (ITRI), a global industry group for tin. Based on OECD Due Diligence Guidance, it works to enable due diligence from mines to smelters, and to encourage procurement from mines in conflict-affected areas that is free of involvement with local armed groups.