Supply Chain Management

Procurement Management

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, and conflict mineral investigations are expected to become increasingly necessary and important. 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.

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. If it is found that a conflict material used as a source of funds to support acts of human rights violations has been used as a raw material in ROHM Group's supply chain, we ask that our business partners immediately inform us and take corrective action, in accordance with our instructions, to establish a responsible supply chain.

Governing Structure and Responsible Sourcing of Minerals

With the procurement division playing a central role, ROHM Group is building a governing structure that is in accordance with the OECD Due Diligence Guidance.

A survey is carried out each year using the Conflict Minerals Reporting Template (CMRT) provided by the Responsible Minerals Initiative (RMI) to confirm matters, including whether conflict minerals (3TG) are contained. Investigations are made at the countries of origin, and smelters are identified. For cobalt, smelters has identified by using Cobalt Reporting Template (CRT). Based on the findings, risks are identified, and due diligence is exercised. The findings are reported to ROHM management, and future strategies and implementation plans are formulated.
ROHM Group has set the following 2020 targets for mineral procurement.

【2020 Targets】
  • Increasing the percentage of refiners with RMI’s RMAP certification among all refiners used by ROHM Group from the current level of 85% to 90% or more.
  • 100% collection of questionnaire responses from suppliers.

Realization of responsible mineral procurement cannot be achieved without involving the entire supply chain. ROHM Group will continue to conduct conflict mineral investigations through relationships of cooperation and trust with suppliers, in addition to working to communicate bidirectionally such as understanding the procurement conditions of our business partners and sharing information.

  • RMI:Responsible Minerals Initiative
  • RMAP(Responsible Mineral Assurance Process): Smelter audit process for the following
    • Target minerals: 3TG (gold, tin, tantalum, tungsten)
    • Target risk: OECD ANNEX II-based risk
      • Serious abuses associated with the extraction, transport or trade of minerals
      • Direct or indirect support to non-state armed groups
      • Public or private security forces
      • Bribery and fraudulent misrepresentation of the origin of minerals
      • Money laundering
      • Payment of taxes, fees and royalties due to governments
    • Target area: CAHRAs (Conflict-Affected and High-Risk Areas)
  • CMRT:Conflict Minerals Reporting Template
  • CRT:Cobalt Reporting Template

Cooperation with Industrial Associations

ROHM has been participating in the JEITA's "Responsible Minerals Trade Working Group" since its establishment in 2012, to cooperate and coordinate with industrial associations.
In order to respond to international norms and demands for the prevention of human rights violations such as child labor and forced labor, we have conducted smelters that have not been held a survey briefing session for suppliers or verified by a third-party audit program. We have been promoting responsible procurement activities through industry activities such as encouraging participation in RMAP.

Cooperation with Industrial Associations

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.

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.

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.

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