Sumitomo Chemical regards respect for human rights as part of the foundation for its business continuity. We are continuing to make a group-wide effort to address this as a material issue for management, and provide disclosures on our measures and progress. In order to accelerate its efforts on human rights, Sumitomo Chemical formulated the Sumitomo Chemical Group Human Rights Policy in April 2019, based on the Universal Declaration of Human Rights, the International Labor Organization Declaration on Fundamental Principles and Rights at Work, the Ten Principles of the United Nations Global Compact, and the United Nations Guiding Principles on Business and Human Rights. At the same time, we established the Human Rights Promotion Committee, a committee tasked with promoting our human rights initiatives. In order to pursue a group-wide effort to respect human rights, we are committed to ensuring that all Group companies in Japan and overseas are fully aware of the Human Rights Policy and take action on these principles.
Sumitomo Chemical Group Human Rights Policy (Effective April 1, 2019)
This policy was formulated based on the advice of outside human rights experts with practical experience.
Sumitomo Chemical Group (Sumitomo Chemical Co., Ltd. and its Group Companies) has put in place this Human Rights Policy (“Policy”) to demonstrate its commitment to international standards on human rights. All directors, executive officers and employees (“Personnel”) of the Sumitomo Chemical Group will uphold this Policy.
1. Our Position on Human Rights
- Compliance with Standards, Laws and Regulations
We support and respect international standards on human rights, such as the Universal Declaration of Human Rights, International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, and promote respect for human rights in line with the United Nations Guiding Principles on Business and Human Rights. Sumitomo Chemical Co., Ltd. is a signatory to the United Nations Global Compact and supports its Ten Principles, which include human rights and labor.
We comply with applicable laws and regulations in countries and regions where we operate, and where local laws and regulations conflict with international standards, we will seek ways to honor the principles of internationally recognized human rights.
- Respect for Human Rights in Our Business Activities
We do not discriminate against individuals based on employment status, age, sex, ethnic or social origin, ancestry, nationality, disability, religion, beliefs, marital status, or any other status. We do not tolerate any form of harassment, including sexual harassment or workplace bullying. We also respect fundamental labor rights including freedom of association and the right to collective bargaining, and prohibit forced labor or child labor.
We are committed to respecting human rights in our business activities and also strive to avoid contributing to infringement of human rights. In order to prevent and mitigate human rights risks related to our business activities, we will take necessary measures, including ensuring compliance with the Compliance Manual (the Sumitomo Chemical Code of Business Conduct) and other relevant policies and guidelines. We are also committed to understanding our impact on local communities and aim for harmonious coexistence with these communities.
We expect our business partners, including our suppliers, and other relevant stakeholders to act in line with the principles in this Policy, and we will seek ways to work with them to promote respect for human rights.
2. Our Approach to Human Rights Issues
- Providing Education and Raising Awareness
We will provide appropriate education and training to our Personnel so that this Policy is understood and effectively implemented.
- Human Rights Due Diligence
We will identify adverse human rights impacts, and seek to prevent or mitigate such impacts though our human rights due diligence framework.
- Responding to Identified Human Rights Impacts
We will engage with relevant stakeholders in order to address actual or potential adverse human rights impacts.
Where we identify that we have caused or contributed to adverse human rights impacts, we will endeavor to remediate such impacts through appropriate processes.
- Grievance Mechanisms
We have grievance mechanisms in place in the form of the Speak-Up Reporting System (whistle-blowing channels) in order to address concerns about activities that may adversely impact human rights or any other concerns raised about our business activities. These channels are available for anyone having involvement in Sumitomo Chemical Group’s business activities, including their business partners as well as Sumitomo Chemical Group Personnel and their families. We will continuously seek to optimize our grievance mechanisms.
We will report on our efforts to respect human rights including through our website, integrated report, Sustainability Data Book, and other relevant channels.
Announcement of the Group Statement Based on Human Rights Laws and Regulations
We at the Sumitomo Chemical Group, as a globally operating corporation, have announced a group statement on our efforts to address risks related to modern slavery and human trafficking in our business activities and supply chain. This statement is based on laws and regulations in various countries with regard to respect for human rights and the prevention of modern slavery and human trafficking, including the Modern Slavery Act of the United Kingdom, the Modern Slavery Act of Australia, and the California Transparency in Supply Chains Act of the United States.
Human Rights Promotion Committee
Sumitomo Chemical has established the Human Rights Promotion Committee as its organization for promoting activities in compliance with the Human Rights Policy. In order to plan and implement measures to respect human rights across the entire value chain, this committee consists of members from a broad range of related departments and functions. The senior executive officer in charge of corporate departments serves as chair, while from the business sectors, executive officers responsible for the Planning & Coordination Offices of their respective departments participate as committee members.
Roles of the Committee
- Promotion of awareness of human rights
- Formulation and implementation of measures regarding respect for human rights across the Group’s value chain, including:
- Formulation and publication of policies required by the Guiding Principles on Business and Human Rights and relevant national laws
- Identification of human rights issues across the value chain, assessment of risks, and implementation of measures, including remedies, that are appropriate for specific issues and their associated risks (human rights due diligence and relief efforts)
System and Committee for Promoting Respect for Human Rights
Based on its basic policy for respect for human rights, Sumitomo Chemical continues to take various measures to promote respect for human rights by working closely with its Group companies in Japan and overseas, while also engaging business partners.
Overseas, in particular, we are working with our regional headquarters in Europe, the Americas, China, and the Asia-Pacific region to ensure and promote compliance, including initiatives to protect human rights, based on our compliance system that we have established in accordance with respective local legal systems of the countries where we operate.
Examples of Initiatives
Our basic policy for respect of human rights is articulated in our Compliance Manual (Sumitomo Chemical Code of Business Conduct) and also communicated across through our intranet. In addition, our labor-management agreement makes it clear that an employee who damages the work environment for other employees through sexual speech and behavior, harassment, or other similar actions is considered violating our work regulations and thus subject to disciplinary action.
Under these principles, we value respect for an individual’s personality, prohibiting any action to disrespect or disparage an individual’s personality taken based on personal emotions or values or any harassment, bullying or similar speech or action.
We also prohibit all kinds of harassment, including power harassment and sexual harassment (including harassment to a person of the same gender and harassment to LGBTQ people regarding sexual orientation and gender identity).
In addition, we prohibit discrimination and does not allow any discriminatory action that is taken for reasons of employment type, age, gender, birthplace, ancestry, nationality, race, disability, religion, beliefs, marital status, or other such attributes and harms an individual’s dignity. We particularly make it clear that discrimination based on gender or a difference in sexual orientation or gender identity and discrimination against people with disabilities are prohibited.
Raising Employees’ Awareness of Human Rights
To ensure that each employee correctly understands and is fully aware of human rights issues, Sumitomo Chemical incorporates human rights in its employee education. We highlight human rights not only in the introductory training in which all employees participate after joining the Company but also in many other internal training programs, such as those for newly promoted employees (when promoted to a higher grade or a manager position), those for recruiting interviewers, and those for staff seconded from other companies as well as employees rehired after retirement.
In addition, we regularly implement awareness-raising training and initiatives at each site of our operations and each Group company.
Initiatives to Raise Awareness of Human Rights for FY2020
|Name and format||Purposes||Boundary||Sessions||Participants||Participation rate|
|Seminars and lectures on human rights Training based on the Sumitomo Chemical Group Human Rights Policy||
||Sumitomo Chemical||89||5,823 (cumulative total)||92.8|
|Sumitomo Chemical Group (42 major Group companies in Japan)||Approximately 180||Approximately 11,450 (cumulative total)||86.9|
In fiscal 2020, we provided opportunities for all Sumitomo Chemical Group employees and executives to learn about business and human rights through a website specifically for the Global Project, which is aimed at helping employees promote sustainability.
A total of 25,000 people took courses offered on the website, where they learn about the Company’s policies and initiatives related to human rights issues, such as modern slavery by answering questions.
Sumitomo Chemical has established a system in which employees can seek consultation on various kinds of harassment, including power harassment, sexual harassment, and maternity harassment, putting in place its harassment consultation office and consultants and guaranteeing confidentiality. In fiscal 2020, as in the past, there were no confirmed cases of significant negative impact on human rights or discrimination that might affect the continuity of the Sumitomo Chemical Group’s business.
Human Rights Due Diligence and Relief Efforts
With the aim of promoting respect for human rights in its business activities, the Sumitomo Chemical Group has established a system for human rights due diligence in accordance with the United Nations Guiding Principles on Business and Human Rights. Human rights due diligence is a continuous effort to identify potential negative impacts on human rights in the entire value chain that may be generated through the Group’s business activities, to prevent and correct the impacts, and to disclose information on these measures and their results. Sustainability Department, Legal Department, Procurement Department, and Logistics Department collectively serve as secretariat office for human rights due diligence, working with business sectors and other relevant departments to ensure that our entire value chain is assessed.
If it is discovered through our human rights due diligence that any negative impacts on human rights are occurring because of our Group’s business activities, or have been fostered by the Group’s business activities, we will redress or resolve those incidents through the appropriate procedures, in collaboration with related stakeholders.
Initiatives in Fiscal 2019
In fiscal 2019, we conducted human rights risk assessment (risk mapping) for Sumitomo Chemical and 162 consolidated group companies. With the help of external experts, we estimated potential human rights risks in each company based on their businesses, location (country and region), personnel composition, and the raw materials and products they handle. Then we examined how each company addresses risks, by referring to the results of internal audits and Responsible Care audits that had been conducted for the company. These processes were aimed to make our assessment objective and pertinent to actual situations.
For this risk assessment, we first set the four categories of society, environment, health and safety, and governance as major focal areas, and for each category, we determined items in detail for assessing risks. For example, in the category of “society,” we selected such diverse items as forced labor, child labor, discrimination, harassment, freedom of association, indigenous people, and cultural heritage. In other categories, we conducted risk assessment as to those items that we had addressed in audits, by examining them from a human rights perspective.
Initiatives in Fiscal 2020
We conducted a detailed investigation of 30 Group companies that were rated as having a relatively high risk in the human rights risk assessment (risk mapping) conducted in fiscal 2019 for Sumitomo Chemical and its Group companies.
[Document Inspection – Targets: 26 companies, in locations including China, India, Thailand, and Japan)]
Under the four categories: Society, the Environment, Health & Safety, and Governance, questionnaires were sent and answers were collected. The companies were asked whether they conducted any business activities with high human rights risks and about the implementation status of risk mitigation measures.
[On-site Inspection – Targets: 4 companies total, in China, Thailand, and Tanzania]
For the Group companies identified to have particularly high human rights risks, outside experts were appointed to conduct inspections including reviewing documents such as employment and wage regulation documents, conducting interviews with local employees (including temporary employees), and inspecting the work environment (including the remote investigation).
As a result of these investigations, we learned the following:
- Initiatives designed to mitigate human rights risks implemented at each company
- Environmental measures are being rolled out at a high level (all 4 companies)
- The basic procurement principles are translated into local languages and communicated to all primary suppliers (Tanzania)
- External attorneys are invited every year to conduct training for employees on regulations and the latest trends related to labor problems (China)
- Issues that need improvement
- Measures are taken as a practical matter, but mandatory matters for suppliers regarding human rights and labor are not specified in evaluation methods or standards (China, Thailand)
Fiscal 2021 Action Plans
The fiscal 2020 investigation did not reveal any issues with a significant negative impact on human rights; however, for the issues that were revealed, we will investigate their relevancy and background and then take preventive and corrective measures. We will also share the insights gained, including with Group companies not within the scope of the most recent detailed investigation, to facilitate the further mitigation of risks. In addition, we have striven to raise awareness of our human rights policy, which is the root of our respect for human rights, and will continue to do so through such activities as training, to ensure each Group employee gains a deeper understanding of our respect for human rights.
Sustainable Procurement with Respect for Human Rights
The Sumitomo Chemical Group is committed to building mutually-beneficial and sound relationships with its business partners. We ourselves do business in a fair, equitable and transparent way, while also promoting sustainable procurement efforts across the entire supply chain with respect for human rights and a firm commitment to compliance. In order to encourage our business partners to work on sustainability efforts, we have formulated the Sumitomo Chemical Group Sustainable Procurement Guidebook. We ask our business partners to respect human rights, prohibit harassment and inhumane treatment, eradicate discrimination in recruitment and employment, ensure equal opportunities and equitable treatment, comply with regulations on working hours, respect the right to organize, prohibit forced labor and child labor, and comply with minimum wage regulations.
Initiatives in Fiscal 2020
In fiscal 2020 in order to have a coherent understanding of the ESG risks in raw material procurement processes throughout our supply chain, we confirmed the status of our initiatives by sharing the Sumitomo Chemical Group Sustainable Procurement Guidebook with our major business partners, and collected the checklist filled out by each company. The results showed that 86% were considered sustainable procurement. (the sustainable procurement ratio), (as of March 31, 2021).
Fiscal 2021 Activity Plans
We will continue our efforts to ensure sustainable procurement, and continue to assiduously check the status of respect for human rights at our business partners, including whether or not they conduct any business activities with high human rights risks and the status of their implementation of risk mitigation measures.
Initiatives Related to High-Risk Raw Materials
The Sumitomo Chemical Group formulated the “Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials” in March 2020 to further promote efforts prohibiting the procurement of conflict minerals. Under the policy, the Group defines high-risk raw materials as those that having a high probability of negatively impacting human rights in the supply chain, including, but not limited to, tantalum, tin, gold, tungsten, cobalt, mica, graphite, and pulp. Depending on the characteristics of the high-risk raw materials, we promote initiatives aligned with the premise of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the OECD Guidance).
In fiscal 2020, in accordance with the Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials, we began an investigation into the usage status of high-risk raw materials within the Group in order to conduct prioritized due diligence of suppliers of high-risk raw materials.
In fiscal 2021, we will continue to request reports based on the Responsible Minerals Initiative (RMI) from suppliers of high-risk raw materials and steadily promote risk assessments.
Introducing Human Rights Clauses into Contracts
In fiscal 2020, we have formulated contract provisions that request understanding of and cooperation with our efforts to respect human rights, and have begun including them in our contracts with our business partners, including raw material suppliers, materials and equipments suppliers, logistics providers, and contract manufacturers.
In fiscal 2021, we will not only continue to sign contracts that include these human rights provisions, we will also respond in line with the procedures defined in these human rights provisions when negative impacts on human rights occur in our supply chain, or under the apprehension that such an impact has occurred.
Signed onto the Declaration of Partnership Building
Sumitomo Chemical supports the premise of the “the Council on Promoting Partnership Building for Cultivating the Future” promoted by Japan’s Cabinet Office and the Small and Medium Enterprise Agency and announced our Declaration of Partnership Building. This initiative aims to encourage the collaboration of large companies with small and medium-sized companies, promote measures to enhance productivity across the entire supply chain, and build mutually beneficial relationships between large companies and small and medium-sized companies. In its declaration, Sumitomo Chemical not only clarifies as one of its individual items that it will conduct trade in a manner that ensures fairness and transparency but also clarifies that it emphasizes human rights and compliance and is promoting sustainable procurement initiatives throughout the supply chain to enforce sustainability initiatives at suppliers.
Engaging in Human Rights Initiatives
1. Stakeholder Engagement Program hosted by Caux Round Table Japan
Since fiscal 2019, Sumitomo Chemical has participated in the Stakeholder Engagement Program hosted by Caux Round Table Japan, a non-profit organization, to better understand what circumstances can cause human rights issues and how business activities are related to human rights, as well as material human rights issues and the importance of considering human rights in business activities.
This program invites companies, non-government and non-profit organizations, and experts to discuss human rights due diligence that is required by the Guiding Principles on Business and Human Rights. The subject for fiscal 2020 was “Human Rights Issues by Sector (v.8)” formulated by the Nippon CSR Consortium in fiscal 2018. Participants engaged in sectoral discussion, referring to the human rights guidance tool created by the United Nations Environment Programme Finance Initiative (UNEP FI). (We participated in the discussion for the chemical, construction material, and manufacturing sectors.)
2. Human Rights Due Diligence Subcommittee hosted by Global Compact Network Japan
Since fiscal 2019, Sumitomo Chemical has engaged in the Human Rights Due Diligence Subcommittee hosted by the Global Compact Network Japan in order to promote human rights due diligence based on the Guiding Principles on Business and Human Rights.
In fiscal 2020, the subcommittee organized various initiatives such as seminars by experts, workshops for addressing
human rights issues in the time of COVID-19, and interviews with leading companies in this area. We will continue to deepen our understanding of human rights by engaging in various initiatives, and leverage the learning in the Group’s human rights promotion efforts.
We at the Sumitomo Chemical Group will observe our Human Rights Policy and work together as one to continue our efforts led by the Human Rights Promotion Committee to promote respect for human rights.