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Implementation of human rights and labor monitoring

The Unicharm Group regularly conducts monitoring on suppliers regarding ESG using the Sustainable Procurement Guidelines for the purpose of identifying risks. It assesses the status of compliance, the labor environment (safety and health, fire safety, harassment, and discrimination), working hours, wages and employment, child labor, and environmental protection. Improvement activities are conducted together with suppliers if any risks are identified.

In fiscal 2019, the Group conducted monitoring at 74 supplier plants (100% of the target). We also conducted monitoring at 12 of our own plants and associate companies on the premises of our own plants in seven countries (Japan, China, Thailand, Indonesia, India, Brazil and Vietnam). We commenced monitoring in Japan as well in fiscal 2018, and monitored three of our own plants, as well as seven supplier plants.

Examples of observations at time of monitoring (supplier plants in China and India, own plant in Brazil)

Applicable countries Evaluation
Non-complying item Rectification guidance Improvement results
China D Inadequate attendance records and fire safety Onsite guidance for improvements in accordance with laws and regulations Confirmation of improvement through second follow up audit
Brazil B Eye washers not installed Guidance to install Confirmation of installation
India B Installation of insufficient fire extinguishers Guidance for installation of number in accordance with laws and regulations Confirmation of installation

Among these, an overview of the monitoring conducted in China is as follows. We requested the monitor target company to improve discovered contents that should be improved through onsite guidance and confirmed the results.

    Case of supplier facilities in China, rank D
    ・Regular monitoring: December 2018, rank D
    Improvement request: As working hours and salary details could not be confirmed due to lack of attendance records, record using time cards was requested. Also improvement requested as inadequate fire safety was confirmed(narrow evacuation routes, locked emergency exits, some emergency lights not installed, some evacuation lights not installed).
    ・Follow-up monitoring: April 2019, rank D
    ・Onsite guidance: May and July 2019
    Improvement request: As manager punched time cards and there were discrepancies between time card records and content of interviews with employees, working hours and salary details could not be confirmed, so biometric time card record that does not allow attendance record by proxy requested. Also improvement requested as inadequate fire safety confirmed again(some emergency lights not installed)
    ・Second follow-up monitoring: October 2019, rank B

Implementation of Quality Policy Briefing Session

The Quality Policy Briefing Session that is regularly held for suppliers was held in November 2017.This 12th Quality Policy Briefing Session was held to provide explanations on Unicharm's management philosophy, the approach towards CSR efforts, materials quality and materials distribution, safety, environmental consideration, the approach towards supply chain management, the revised Basic Policy of Procurement and Sustainable Procurement Guidelines and the newly established Policy on Human Rights in order to share information in an aim to foster a mutual understanding of sustainable procurement and strengthen cooperative efforts.

Additionally, we are promoting quality improvement activities together with our local suppliers related to a broad range of themes involving materials through meetings with overseas subsidiaries and suppliers from various countries, including the 3rd Quality Policy Briefing Session held in China in September 2014.

Quality Policy Briefing Session in Japan

Quality Policy Briefing Session in China

Initiatives to improve quality

A “Supplier Award” has been set at the Quality Policy Briefing Session to raise the motivation of suppliers towards improvement, under which suppliers are evaluated from five perspectives (stable quality, stable supply, safety, environmental burden and deliveries) and recognized for their outstanding contributions.

For the stability of materials quality, we narrow down priority themes and conduct intensive improvement with suppliers, resulting in acceleration of improvements. We will expand these efforts going forward as we work towards even further improvements in materials quality.

In addition, we regularly conduct quality audits on suppliers. In the audits, we confirm whether suppliers are in compliance with our requirements in all processes from raw materials management to shipment. If a non-complying item is discovered, we ask for the proposal of a rectification method, confirm the contents of the proposal and implementation of improvements and confirm the instilling of improvements in the next audit. We will make ongoing quality improvements in materials by repeating this cycle from auditing to the instilling of improvements.

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