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Procurement

Supply chain management

Procurement BCP

As part of its business continuity plan (BCP), TEL collaborates with suppliers for disaster preparation. We maintain a database of suppliers’ production sites so that if a crisis arises, we can promptly identify impacted suppliers and quickly collaborate in recovery efforts. Following an earthquake or other disaster, we also survey suppliers registered in the affected location to assess impact to their operations. During fiscal 2017, about 17,000 supplier sites were registered, and post-disaster surveys were conducted six times. Following the Kumamoto Earthquake, the survey of impacted suppliers was carried out the same day. Consequently, our collaboration for recovery was quicker and smoother than at the time of the Great East Japan Earthquake. Also during fiscal 2017, we requested suppliers to evaluate their fire-prevention systems, and we shared this information internally along with activities to recover from fire damage.

According to a BCP survey of key suppliers (accounting for more than 80% of our procurement spend) improvements in overall rating level were observed at more than 32% of suppliers and improvements in the overall raw score were seen at more than 56%. Responses, results, and overall assessments were given as feedback to suppliers to promote further improvement.
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CSR procurement

TEL is committed to building and maintaining a robust and sustainable supply chain. In addition to sharing our Procurement Policy, Procurement Policy–Supplement, EICC Code of Conduct, and Guideline for Green Procurement, we also promote CSR activities with suppliers. Our promotion includes respect for fundamental human rights, strict compliance with labor laws and regulations, and reduction of environmental impact.

Since fiscal 2014, we have also conducted a CSR Survey with the aim of keeping track of suppliers’ engagement in CSR activities. During fiscal 2017, we conducted a supply chain CSR assessment based on the EICC Code of Conduct with key suppliers (accounting for more than 80% of our procurement spend). Improvements in overall rating level were observed at 17% of suppliers and improvements in overall raw score were seen at 59%. We provided responses, results, and overall assessments as feedback to suppliers and as support for their improvement activities.

The results of the survey showed that no suppliers were engaged in any of the practices given particular emphasis in the EICC Code of Conduct, namely child labor, forced labor, bonded labor, inhumane treatment, false reports, falsification of records, or bribery. Also, no suppliers had a sufficient number of employees* to be considered high risk in terms of compliance.

* 500 employees or more

Supply chain CSR process

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Conflict minerals

TEL regards taking action against conflict minerals1 an important part of corporate social responsibility. Our resolute goal is to eliminate the use of any parts or components with raw materials that include conflict minerals obtained through illegal exploitation, including sources with human rights violations or poor working conditions.

In fiscal 2017, we conducted our third annual survey on countries of origin and smelters of potential conflict minerals, using the Conflict Minerals Reporting Template (CMRT) developed by CFSI.2 As a result, we identified 237 CFSP3 compliant smelters, providing us confidence that 3TG sourced from these smelters were conflict-free. None of the materials procured were found to contain 3TG conflict minerals. This survey will continue every year, with the cooperation of suppliers, to further improve the quality and accuracy of the survey

1 Conflict minerals: 3TG (tantalum, tin, tungsten and gold)
2 Conflict-Free Sourcing Initiative (CFSI): Founded by members of the EICC and GeSI (Global e-Sustainability Initiative), the CFSI inspects 3TG smelters to certify they do not have conflict minerals
3 Conflict-Free Smelter Program (CFSP): The CFSP is promoted and led by the CFSI
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