Although Unicharm avoids various risks by closely communicating with business partners, it also implements procurement activities with a focus on crisis management in addition to communication in supply chains throughout the world in response to dramatic changes in awareness and regulations relating to human rights and the environment. In addition, Unicharm conducts a supplier risk assessment when starting new business transactions overseas to determine in advance whether it is an appropriate business partner. While regularly monitoring labor environment after business transactions are commenced, we are ready to establish a sound understanding and dissemination of Unicharm's stance and approach toward procurement including compliance with laws and social imperatives and due consideration to human rights and labor and thus call for the cooperation of the partners in environmental and ethical areas.
Moreover, the Unicharm Group aims to build a sustainable supply chain based on the “Unicharm Group Policy on Human Rights” and the “Sustainable Procurement Guidelines”. In May 2018, Unicharm Products Co., Ltd., a production subsidiary in Japan, as well as local subsidiaries in Thailand, Indonesia, Taiwan-Greater China, China, India, Saudi Arabia, Brazil and South Korea began taking part in Sedex. Sedex provides the world's biggest platform for managing risks related to labor practices (labor standards, health and safety, environment and business ethics). In July 2020, the Group as a whole will join Sedex with plans to operate the platform throughout the Unicharm Group. Ahead of joining Sedex, we have implemented regular SMETA audits* (an audit scheme provided by Sedex) at our own production sites and that of some suppliers in efforts to respect the human rights of employees and improve the working environment.
- SMETA(Sedex Members Ethical Trade Audit) is an audit scheme formulated with the aim of improving corporate ethics in global supply chains with the participation of leading global retailers and food companies.
Supplier risk assessment
For new suppliers, we ask that suppliers understand the Unicharm Group Policy on Human Rights and the Sustainable Procurement Guidelines and conduct a risk assessment using the independently developed new supplier risk assessment table. In high risk regions, we also monitor the labor environment in advance together with assessing risk.
For existing suppliers, we conduct a regular supplier assessment in accordance with the annual plan. We have established the regular Unicharm Supplier Award that commends suppliers based on the results of these assessments and the explanation of the assessment items and standards at the awards ceremony also boosts the awareness of improvements by all suppliers.
Initiatives aimed at education and penetration
The Sustainable Procurement Guidelines are distributed to suppliers and the intent of these guidelines is explained in an aim to achieve a sustainable society throughout the supply chain.
We held seminars on procurement at distribution warehouses and the factories of suppliers in addition to our plants in 2016, 2017, 2018, and 2019 for the education and penetration of the guidelines and the sharing of health and safety in the workplace. Seminars were held in nine countries (China, Thailand, Indonesia, Vietnam, India, Brazil, South Korea, Japan and Malaysia; 17 of our own plants) at 52 supplier factories for a total of 527 people.
Labor environment monitoring initiatives
Unicharm conducts monitoring of the labor environment while cooperating with our own plants and supplier factories. Through this monitoring, it is possible to identify issues related to long working hours, occupational safety, wages and building safety and encourage efforts towards improvement. Addressing issues of long working hours at factories, if a point to note related to long working hours is discovered, the details of that point are verified and appropriate measures are taken in cooperation with factories. In particular, monitoring of the labor environment is essential for achieving improvements in productivity and quality in an environment where the human rights of employees are respected and the safety of employees is protected.* Unicharm works towards these goals through strong partnerships with suppliers.
Monitoring is regularly conducted by external organizations before new transactions and after the commencement of transactions. This monitoring program was consolidated into the SMETA from October 2017, under which monitoring is conducted based on global standards for effective risk management.
- Please see Initiatives for details.
External auditors visit our own plants and supplier factories that Unicharm has a direct contract with, and conduct monitoring. Monitoring starts with an opening meeting and includes observation of related facilities such as the factory, cafeteria and dormitory, interviews with factory employees and the employees of associate companies on the premises, meetings with management and checks on the required documents. Lastly, a closing meeting is held and points to note confirmed in the monitoring are explained to management. At a later date, management will be requested to create an improvement report and commit to improvement.
The monitoring results are scored on a 5-level ranking from A to E. If a point to note is confirmed when the rank is B to E through monitoring, Unicharm will conduct an analysis on the root cause of the problem, encourage the formulation of an appropriate improvement plan and provide support for resolution of the problem. If improvements at the factory are not made within the prescribed deadline, a visit is made to the factory and instructions are provided so that a rank of B or above can be acquired.
If a point to note is detected through monitoring, efforts are made to improve together with the factory.
Monitoring assessment framework