Responsible Mineral Procurement

Responsible Minerals Procurement

The considerations for responsible minerals procurement are heightened lately, following the enactment of The US Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. Especially the concern regarding conflict minerals (tin, tantalum, tungsten, and gold commonly known as "3TG") that are mined from the Democratic Republic of the Congo and surrounding areas and used by an armed group or anti-government force as a source of funds.
According to the Article 1502 of The Securities and Exchange Commission (SEC), companies listed on securities exchanges in the US are required to investigate/report usage conditions regarding conflict minerals that are mined from the Democratic Republic of the Congo and surrounding areas that are used by an armed group or anti-government force as a source of funds. EU Conflict Minerals Regulation will come into effect in 2021, The need and importance of responsible mineral procurement are expected to increase in the future. Faced with this new situation, ROHM Group sees sincerely facing important risks such as human rights violations in the supply chain to be its corporate social responsibility, and will make efforts to manage and mitigate these risks.

1.Policy

From the standpoint of the protection of human rights, ROHM Group makes it a rule not to use conflict minerals (tantalum, tin, tungsten, and gold) in target countries, where the conflict minerals are used as a source of funds by an armed group that has violated human rights in these areas, as materials for the Group's products.

Furthermore, we request that our business partners respect ROHM's policy not to use such minerals as materials for our products and to make efforts to comply with this policy.

[ROHM Group Compliance Rules]

• ROHM Group does not use conflict minerals that finance armed groups.
• ROHM Group will work to procure from conflict-free smelters certified by RMI, etc.
• In the unlikely event that we discover the use of conflict minerals to fund armed groups, ROHM Group will take immediate corrective action.

※RMI ：Responsible Material Initiative

2.Management System

ROHM Group's supply chain management division plays a central role in working with business units and suppliers to promote responsible mineral sourcing. He is also a member of JEITA, an industry group working to achieve responsible mineral procurement.We perform due diligence through CMRT (*) research to identify risks. Then, the mineral procurement status is reported to the management at the end of each fiscal year.In addition, we formulate a responsible mineral procurement plan based on company rules every year and manage its progress on a monthly basis.

*CMRT : Conflict Minerals Reporting Template

3.Responsible Mineral Procurement Survey

To ensure that customers can use ROHM products with peace of mind, the SCM Division plays a central role in conducting the following assessment processes in accordance with OECD Due Diligence Guidance(*).

*OECD Due Diligence Guidance : OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas

[Mineral Procurement Survey Process]

[3TG Survey Results]

In fiscal 2020, ROHM Group conducted a mineral survey of the materials it purchased. We carefully examined the responses to the questionnaire, and confirmed the responses to those suppliers who found deficiencies, in order to improve the reliability of the responses.

• Suppliers surveyed: 203
• Suppliers who obtained survey responses: 203
• Specified smelters: 263 companies for all minerals (Of these, 222 have obtained RMAP(*) certification for RMI.)

As of 2020, investigations have not confirmed the use of conflict minerals that finance armed groups.
ROHM will take corrective measures as soon as possible in the event that the use of conflict minerals, which are the source of funds for armed groups, is discovered in ROHM Group products.

*RMAP：Responsible Minerals Assurance Process

[Cobalt Procurement]

Cobalt is used in lithium-ion batteries, which are essential for electric vehicles, mobile phones, and laptops. The largest producer of cobalt in the world is the Democratic Republic of the Congo (DRC), which is mined using machine and human resources. In recent years, concerns have been raised about unsafe working conditions and child labor.
ROHM's CSR Procurement Guidelines establish labor and ethical policies that include the prohibition of all forms of forced labor and child labor. ROHM will promote responsible procurement of cobalt to increase the transparency of the cobalt supply chain.
Using the CRT provided by RMI, we conduct surveys every year to confirm the cobalt content, the country of origin, and the location of the smelter. ※CRT：Cobalt Reporting Template

[Results of Cobalt Survey]

Suppliers surveyed: 4
Suppliers obtaining survey responses: 4 companies, 100%

4.2021 Targets

ROHM Group has set a goal of 2021 to "build a system that can comply with laws and regulations related to responsible mineral procurement."In the near future, supply chain transparency will become mandatory, and managed risks (environmental destruction, human rights issues such as child labor, business integrity, etc.) and controlled minerals are expected to expand further.Even in such a situation, in order to promote responsible mineral procurement, it is essential to strengthen due diligence, educate and educate our suppliers, and establish and improve the system to promote these activities. Moreover, the achievement of responsible mineral procurement cannot be achieved without the efforts of the entire supply chain. Therefore, we have set the above goals in 2021. We will continue to carry out mineral surveys with the cooperation and trust of our suppliers, and strive for two-way communication such as grasping the procurement status and sharing information.

5.Cooperation with Industrial Associations

ROHM is a member of the JEITA Responsible Mineral Procurement Study Group, which was established in 2012 with the aim of collaborating with industry and establishing research methods for responsible mineral procurement.
Every year, we participate in responsible mineral surveys held by the Responsible Mineral Procurement Study Group, and work to penetrate the industry supply chain. In order to respond to growing international demand, we are promoting responsible procurement activities through industry activities, such as encouraging smelters that have not received RMAP (Refinery Audit Protocol) certification to undergo RMAP audits.

Green Procurement

Promoting ROHM Group's Green Procurement

ROHM Group recognizes the importance of natural capital as stated in its environmental policy, and has made the promotion of efforts that contribute to and take into consideration the global environment as an important management issue. Aiming for the sustained development of society without destroying the global environment requires recycling business activities with a lower impact on the environment. ROHM Group not only complies with environmental laws, regulations, treaties and international guidelines throughout the entire supply chain, but is also engaged in the procurement of environmentally friendly parts and materials.

As legal regulations on the management of chemical substances become increasingly stringent, ROHM Group has worked to increase the precision of investigations of chemical substances contained in the parts and materials it procures to promote green procurement. The Group has created a system for not procuring prohibited substances by screening the substances contained in parts and materials by referring to ROHM’s own standards and only registering those that meet the standards in the “Procurement System” as allowed products. Furthermore, in order to ask our business partners to conduct thorough management of chemical substances contained in products, ROHM Group issues green procurement guidelines and product chemical substance management standards, and asks them to confirm compliance with the designated standards for the parts and materials handled.

• Green Procurement Guidelines Rev.006
• Control Standard of Chemical Substances in Products Rev.001

BCP of Procurement

As part of the Business Continuity Plan (BCP), ROHM Group deepens its cooperation with business partners from normal times to maintain a system that can be quickly restored, and prepares alternative materials, so as not to interrupt customers' business even in emergency situations.

Definition of Risk in the Procurement Department

ROHM Group has established a Risk Management and BCM Committee to manage risk in each department. In addition to the four existing risks of quality, delivery, cost and compliance, the procurement Division also evaluates risks in stable supply and their impact, and checks the state of responses to the key risks identified each quarter.

Selection of Business Partners

As also asked in the Basic Stance Requested of Our Business Partners, information is shared across the entire supply chain, including our business partners, during times of emergency. We therefore select business partners who can do so and respond in a way that ensures a continuous supply. Furthermore, when entering into business relations, we respectfully ask our business partners for the understanding of our basic stance, and to submit written pledges.

• Basic Stance Requested of Our Business Partners

Implementation of BCP Survey

To make it possible to quickly check whether our business partners are affected by a disaster, their safety and the status of supply in the event of an emergency, the manufacturers and manufacturing sites of parts and materials procured are investigated and recorded in a database. Efforts are being made to obtain an overall understanding of the BCP conditions of the supply chain by expanding the scope of these investigations to secondary suppliers.

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  A more detailed database system for procured materials will be completed In FY2020 to speed up the response to emergencies