1) OUR VIEW OVER PROCUREMENT 2) CSR PROCUREMENT CRITERIA 3) GREEN PURCHASING EFFORTS 4) STANDARD PROCUREMENT PROCEDURES
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1 PROCUREMENT POLICY 1) OUR VIEW OVER PROCUREMENT 2) CSR PROCUREMENT CRITERIA 3) GREEN PURCHASING EFFORTS 4) STANDARD PROCUREMENT PROCEDURES 1) OUR VIEW OVER PROCUREMENT DNP Fine Chemicals Co., Ltd. widely seeks partnerships with companies from which it can procure materials of superior quality that are offered at fair prices and can be delivered to meet its needs. Moreover, we will, together with its suppliers, endeavor to fulfill its corporate social responsibility (CSR) through a broad range of activities including complying with laws, engaging in efforts to preserve the environment, and providing proper labor conditions for its employees. OUR BASIC PROCUREMENT POLICY Fairness: Suppliers are selected based on the principles of fair competition, with the final decision being made in accordance with a comprehensive evaluation of such criteria as quality, advantages in price, reliability in meeting delivery deadlines, aftersales service, dependability, and technical expertise. Equal Opportunity: Procurement is not limited to transactions with existing suppliers. Active efforts should be made to purchase from suppliers, regardless of what country they are in, provided the products are high in quality and economical in price. Mutual Development: We shall engage in fair business transactions in order to build a bond of mutual trust with suppliers. Efforts shall also be made to enable us and its suppliers to mutually achieve growth. Social Responsibility: We believes that both we and its suppliers should fulfill their social responsibilities (CSR) through a broad range of activities including complying with all laws and regulations, understanding and abiding by all business practices, and without fail, taking into consideration proper labor conditions, conservation of natural resources, and preservation of the environment.
2 2) CSR PROCUREMENT CRITERIA OUR PROCUREMENT CRITERIA FOR MATERIALS Business activities today are serially linked, requiring the involvement of a number of companies to create a single product or service. In order for companies to fulfill their social responsibilities, every company involved in the product or service must recognize its social responsibilities and behave with integrity and in good faith. CSR(corporate social responsibility) efforts are being promoted by us extensively. With regard to CSR obligations for raw materials used by us, the cooperation of the suppliers is indispensable. In order to promote our CSR efforts and to achieve sustainable growth of society, our suppliers, and ourselves, we would like to ask for your understanding and cooperation regarding our CSR Criteria for Procurement described below. Our Vision of CSR We have defined its Management Concept in its vision to contribute to the creation of an intellectually active, rich, and 21st century society with emergent evolution. Our CSR can be defined as the realization of this Management Concept. In order to realize this goal, we have been acting on the belief that it is essential to have dialogs with each and every stakeholder, enabling us to continue to create new values, establish a creative corporate culture, and always act with integrity and sincerity. It is our sincere wish that through our earnest actions, such as providing useful products and services, the appropriate disclosure of information, carrying out fair and equitable transactions, promoting measures to create a good working environment for our employees, engaging in activities that contribute to society, and activities for the preservation of the environment, to resolve the various issues that our stakeholders face, we will be able to contribute to the sustainable growth of society. Our CSR Procurement Criteria At all of its branches and collaborating companies, we and the suppliers that provide us with raw materials abroad, shall carry out CSR (corporate social responsibility) efforts in the areas described below.
3 (1) Compliance with Laws and Social Norms * Establish corporate ethics policies and regulations, and promote measures to ensure compliance with laws and social norms. (2) Preservation of the Environment and Product Safety * Provide a safe, healthy, and sanitary environment for employees and neighboring residents. * Comply with related laws and regulations to strictly control all steps leading up to the final disposal of wastes. * Put priority on purchasing items that have a minimal environmental burden, including parts, raw materials, equipment and materials, and office supplies. * Proper management of chemical substances is conducted in compliance with various laws related to protecting the environment as well as our Management Criteria for Chemicals. (3) Compliance Regarding Labor-Related Matters * Equal opportunities for all employees, elimination of discrimination, and respect for and consideration of human rights are put into practice. * A system is in place and put into effect to prevent inhumane labor practices, such as child labor and forced labor. (4) Compliance Regarding Information Security * A very thorough system has been set up, comprised of a basic policy, internal regulations and other measures, as well as an educational and training program for the employees, to prevent the unauthorized release of information, such as personal information or confidential information obtained in the process of conducting business with other companies. (5) Protection of Inside Informants * An internal help desk has been set up where employees can bring their concerns, making it possible to prevent problems from occurring or to detect them in the early stages. Moreover, measures have been established to ensure that employees who bring up these problems do not suffer any retaliation.
4 (6) Compliance with Rules for Fair Competition * We carries out its corporate activities in compliance with business relevant laws and regulations as well as in accordance with the rules for fair competition. We believes the above mentioned CSR Procurement Criteria to be an essential requirement for carrying out business transactions. We will be checking periodically to ascertain to what degree these criteria are being observed. It is our sincere wish that all of our suppliers have a clear understanding of our CSR Procurement Criteria and make every effort to carry out their activities in accordance with the Criteria.
5 3) GREEN PURCHASING EFFORTS We have established the our Green Purchasing Policy and our Environmental Targets to promote efforts to purchase environmentally-conscious materials and products. Our Green Purchasing Policy We are fully aware of the critical role green purchasing plays in forming a market for environmentally-oriented products and how extremely effective green purchasing is in creating a sustainable society. Based on the guidelines described below and in collaboration with the relevant divisions, we are making efforts to promote green purchasing when procuring materials. (1) The conditions described below shall be taken into consideration when procuring materials. 1. Substances harmful to the environment or health are not contained. 2. Consumption of raw materials or energy is minimal. 3. Sustainable raw materials are used. 4. It is possible to recycle the material or use the material for a longer period than the hitherto used material. 5. When discarding the product, it is easy to process, treat, or dispose of. (2) When procuring materials, priority shall be given to ordering from suppliers that are actively promoting efforts to reduce environmental impacts. (3) When purchasing material, selection shall be made with priority given to products that bear the Eco Mark and in accordance with guidelines set forth by the Green Purchasing Network. With regard to the purchase of products that are not yet covered by the Eco Mark or the Green Purchasing Network guidelines, the conditions stipulated in Section (1) mentioned above shall be applied.
6 4) STANDARD PROCUREMENT PROCEDURES The flowchart below shows our standard procurement procedures. The actual procedures may differ depending on the item being procured. Customer Supplier Examination and evaluation of the proposal Evaluation Proposal/ Offer Submit documents containing details regarding specifications, estimate, etc. Prototype and Extract sample data evaluation for testing Approval Confirmation of Draw up specification If necessary. specification Approval by us Price negotiation Final evaluation Conclude agreement Place order Proposal contains specification, prices, lead time, and etc.
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