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  5. Dealing with the Issue of Conflict Minerals

Dealing with the Issue of Conflict Minerals

We promote corporate social responsibility (CSR) throughout the supply chain, in an effort to strike a balance between improving social and environmental conditions, and achieving sustainable growth as a company. One of the most serious social issues in the world is that of conflict minerals from the Democratic Republic of Congo and its neighboring countries. The Nikon Group has adopted a basic policy of not using conflict minerals mined or intermediated by armed forces violating human rights in the area. In order to cut off funding to such groups, we have been conducting surveys in our supply chain since 2011 to determine policy compliance. In 2013, we formed a cross-departmental project team in the company and surveyed our main products with reference to OECD guidance*, using the Conflict Mineral Reporting Template published by the EICC/GeSI ("EICC/GeSI Template")*. We achieved a response rate of 90.5% in our 2013 survey, and continue to strive to achieve "conflict-free" Nikon products in cooperation with our procurement partners in 2014 and beyond.

  • *OECD guidance

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

  • *EICC/GeSI Template

    Conflict mineral survey template developed in conjunction between the Electronics Industry Citizenship Coalition (EICC), a coalition of the world's leading electronics companies, and the Global e-Sustainability Initiative (GeSI), a collaboration with members from major Information and Communication Technology (ICT) companies and organizations around the globe.

Policy and Management Systems

Policy on Conflict Minerals

In November 2011, we established the Policy on Conflict Minerals and determined to make efforts to avoid the use of conflict minerals mined or intermediated by armed forces. In July 2014, we revised the policy with more specific details as outlined below in order to reinforce our activities.

Policy on Conflict Minerals
Established November 2011, revised February 2013, and July 2014
In view of the situation that four minerals (conflict minerals: tantalum, tin, tungsten and gold) mined in the Democratic Republic of the Congo and its neighboring countries are used to finance armed groups, aggravating conflicts, human rights abuses and environmental destruction, Nikon shall not, with the cooperation of our Procurement Partners, use conflict minerals mined or intermediated by armed groups.
Operation Policy
Nikon will conduct and continue surveys in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
We request our Procurement Partners to understand and agree to cooperate with our Policy on Conflict Minerals. Our Procurement Partners are also encouraged to cooperate with the surveys and audits conducted by Nikon and to perform responsible procurement of mineral resources within its supply chain.
  • *The above policy is included in the supplement to the Nikon Procurement Partners' CSR Guidelines.

Announcement of our policy

We held explanatory meetings for our procurement partners from April to May in 2013, and 341 companies took part. We also held the same meetings for staff in procurement and other related divisions in Nikon.

Internal promotion framework

Based on our Policy on Conflict Minerals, we formed in January 2013 a cross-departmental project team in the company led by a Director, Member of the Board. The project team, consisting of members in procurement or CSR-related divisions and business divisions, played a central role in implementing the 2013 survey.

Supply Chain Survey

The subjects of our 2013 survey were core products of Nikon and components incorporated into products of SEC listed companies. We conducted the survey using the EICC/GeSI Template, which is regarded as the international standard. Almost all Nikon products have electronic components and circuits, and tantalum, tin, tungsten, or gold may be contained in them. We also visited several smelters and verified their activities as conflict-free smelters (CFS).

Major survey results

  Total Imaging Glass
Response rate 90.5%
(315/348 companies)
100%
(66/66 companies)
100%
(4/4 companies)
Number of EICC registered* smelters 164 163 10
  • *As of April, 2014

In the 2013 survey, Nikon procurement partners and some Nikon group companies were treated as Nikon's first(1st)-tier suppliers. The response rate was calculated on this condition.
EICC registered smelters refer to those specified as smelters by EICC. There were 215 registered smelters as of April 2014. The number of EICC registered smelters shown in Nikon survey results includes CFS. The accumulated number of smelters as answered by our suppliers with the templates was 911, and this includes companies that were not specified as smelters. Concerning the Glass Products, all of the smelters identified in the 2013 survey were EICC registered smelters (including CFS).

Risks confirmed in the 2013 survey and actions in 2014

We compared smelters identified in the 2013 survey against the list of EICC registered smelters. We requested procurement partners who did not provide a response to disclose their information. We found that we must promote cooperation with procurement partners further to recognize and specify more smelters. Risks revealed in the survey were studied by the operation committee in our internal project to decide action policies to take.
Nikon is a manufacturing company located downstream within the supply chain. The supply chain is wide-ranging, and its levels are deep and complicated. In the 2014 survey, we will strengthen our support for procurement partner education about EICC/GeSI template compliance. In addition, we will conduct intensive surveys into key products, components and materials at the upstream end of the supply chain through measures such as individual visits, in addition to surveys using EICC/GeSI Templates. For this purpose, we are planning to make more efforts to tackle this issue across all business divisions in our 2014 survey. Further, regarding glass products that are relatively upstream in the supply chain compared to other Nikon products, we will try to quickly determine smelters as one of the conflict-free oriented activities.

Promotion of CFS and cooperation with outside organizations

We are tackling this issue in cooperation with industry organizations and others. In November 2012, we participated in the study group "Responsible Minerals Trade Working Group" established by the Japan Electronics and Information Technology Industries Association (JEITA) to collect more information. We have engaged in industry group activities since then.
One of the essential steps in promoting conflict-free products is to increase the number of smelters around the world that are confirmed as having no connection with armed forces. That is why we joined in April 2014 the Conflict-Free Sourcing Initiative (CFSI; headquartered in Washington, D.C.), which is establishing the CFS Program.
We also value dialog and collaboration with NGOs and citizens' groups. In February 2014, we joined a mission to the US organized by the Council for Better Corporate Citizenship (CBCC; organization affiliated with the Japan Business Foundation (KEIDANREN)). We played our part in exchanging opinions with the human rights NGO Responsible Sourcing Network (RSN) and learned directly about RSN's position on this issue.
We will endeavor to engage in dialog and collaboration with NGOs, as we strive to procure mineral resources in a responsible manner and tackle human rights issues in the Democratic Republic of Congo and its neighboring countries.

Tin Mining in Indonesia

Serious issues concerning environmental destruction, human-rights infringements and inappropriate working conditions at tin mining sites in the Indonesian islands of Bangka and Belitung have been the subject of a report published by an international environmental NGO.
As stated in the Nikon CSR Charter and the Nikon Procurement Partners' CSR Guidelines, we have an on-going commitment to responsible procurement throughout our supply chain. As a general measure to address the issue of conflict minerals, we have been conducting a supply chain survey with reference to OECD guidance, and have been supporting the CFSI's programs to verify conflict-free smelters.
Even though Nikon does not procure tin directly from suppliers in this region, our latest survey result showed us that some Nikon products may incorporate tin that has been smelted or refined in Indonesia. The possibility that some of this tin might have originated in the Bangka-Belitung region is of great concern to us, and we consider this to be a serious matter.
As a part of our corporate commitment towards responsible procurement we will make our suppliers aware of, and request them to pay attention to the issues concerning tin mining sites in Indonesia. We will also make concerted efforts to improve the situation in Indonesia through our various activities in cooperation with industry groups, NGOs, suppliers or other relevant organizations.