"Forced labor" refers to work imposed on individuals without their consent, constituting a serious violation of human rights. Ensuring that employment terms are clearly explained in a language the employee can understand is essential to confirm their voluntary agreement to the job.

Furthermore, practices like collecting fees, unjust deductions, or requiring the deposit of identification documents (e.g., passports, residency cards, or social security cards) can restrict employees’ freedom to leave and are not acceptable under Nitto Group policies.

Note:
Practices like collecting fees: Referral (placement) fees at the time of hiring, etc.
Unjust deductions: Forcing individuals to pay for uniforms, personal protective equipment, and training required for the job, etc.

"Child labor" refers to work performed by children who are under the minimum working age as defined by the laws of each country/region, or by the International Labour Organization (ILO). For example, in Japan, the Labor Standards Act prohibits employment until the completion of compulsory education (up to March 31 following the 15th birthday). Additionally, young workers under the age of 18 are generally prohibited from engaging in hazardous work or night shifts.

In countries where the minimum working age is not clearly defined, please follow the ILO’s standards.

If child labor is found, appropriate steps should be taken to support the child’s education and provide necessary assistance in a humane manner.

Note:
Hazardous tasks: Work involving exposure to harmful substances or performing at heights.
Night shifts: Typically defined as at least seven consecutive hours between 10 PM and 7 AM.

Excessive working hours can negatively affect the mental and physical health of workers, potentially leading to conditions such as depression, overwork-related illnesses, or even death. Therefore, it is crucial to manage working hours appropriately to protect workers' health and safety. For instance, the Responsible Business Alliance (RBA), a coalition aimed at supporting safe labor practices in supply chains, establishes a weekly working hour limit of 60 hours, while the International Labour Organization (ILO) sets this limit at 48 hours to enhance global labor conditions and living standards. Companies are expected to use such international standards as references when formulating their own policies.

Furthermore, in the interest of prohibiting forced labor, it is essential to ensure that all overtime work is performed voluntarily. Additionally, special consideration should be given to workers' circumstances, such as pregnancy or recent return from childbirth, by reflecting these factors in the arrangement of breaks and working hours, thus fostering a gender-inclusive work environment.

The "minimum wage" refers to the lowest legally mandated wage in each country/region. If welfare benefits are required by law, they must also be provided without any deficiencies. Wage reductions as disciplinary measures or unjust deductions are prohibited, adhering to the principle of "payment for work performed." Additionally, wages must be appropriate for the hours worked, and equal pay must be provided for employees performing the same work and possessing the same qualifications, ensuring no discrimination.

Pay slips must be clear, accurate, and written in a language and format that employees can understand to confirm the correctness of their compensation. Employers are also expected to explain the contents of pay slips when necessary.

Furthermore, for employees leaving the company, wages must be paid promptly and within the timeframe agreed upon during employment.

Employees’ human rights must be respected, and inhumane treatment such as physical or mental abuse, sexual harassment, power harassment, corporal punishment, verbal abuse, or any other form of harassment must be eliminated.

Discrimination refers to creating differences in opportunities or treatment in areas such as recruitment, promotion, compensation, and training based on factors unrelated to the individual’s ability, aptitude, or performance. Examples of discriminatory factors include race, ethnicity, nationality, place of origin, skin color, age, gender, sexual orientation, disability, religion, political beliefs, pregnancy, marital status, union membership, or genetic information.

When requesting pre-employment medical examinations, including health or pregnancy tests, it is recommended to clarify their purpose (such as ensuring a safe work environment) to avoid their use as a condition for employment.

Additionally, a reporting process must be established to allow employees to safely raise concerns about inhumane treatment or discrimination affecting themselves or others, ensuring that they feel secure in doing so.

Respecting employees' right to organize means ensuring that employees have the freedom to join labor unions and engage in collective bargaining or related activities without fear of retaliation, threats, or harassment. This should be done in compliance with the laws and regulations of each country/region.

Safety devices must be adopted for mechanical equipment used in work, unfavorable environments with chemical substances, dust, bad odor, noise, etc. which are harmful to the human body must be improved. In addition, it is necessary to provide protective equipment to workers in such an environment, establish and apply management standards, and educate workers.

The company is also required to establish a communication process that allows employees to feel comfortable communicating workplace safety concerns to the company.

Managing facilities to prevent accidents or disasters is fundamental. However, in case of emergencies, having a pre-established emergency response plan (ERP) is essential to protect employees' lives, health, and company assets. An ERP includes assigning roles and responsibilities, setting up emergency contact methods, and establishing procedures for communication and recovery.

Emergency response measures typically involve reporting incidents, notifying employees, setting up evacuation facilities, clarifying evacuation methods, storing emergency supplies like medicines and food, installing fire alarms and extinguishers, securing communication tools, and preparing recovery plans.

Training and education methods include conducting evacuation drills, posting evacuation routes and emergency procedures, and providing emergency response education such as fire safety and first aid. For facilities operating 24 hours, night-time drills are necessary to ensure employees can respond effectively in low-light conditions.

Reducing and preventing labor accidents and illnesses is key to creating a safe workplace. This means having systems and steps to encourage employees to report incidents, classify and record cases, investigate them, provide necessary treatment, find the causes, and take corrective actions to fix the issues. It's also important to support employees returning to work and ensure they are covered by workers' compensation insurance.

If employees are in immediate danger from a labor accident, the company must act quickly to keep them safe. The company should also check that similar risks won’t happen again at the site.

Additionally, it is important to complete any required procedures with administrative authorities in accordance with the laws of each country/region.

"Ensuring safety and health" includes not only maintaining cleanliness and hygiene but also meeting international housing standards and separating workspaces from rest areas.

Note :International Housing Standards:

Reference: Workers’ accommodation: processes and standards
https://www.ifc.org/en/insights-reports/2000/publications-gpn-workersaccommodation

Health checkups that meet the legal standards of each country/region help prevent and detect physical and mental illnesses from overwork early. This can improve work efficiency and ensure stable operations.

Compliance with laws and regulations regarding prohibited substances and disclosure requirements is mandatory. Companies should conduct necessary testing and retain records to confirm the presence or absence of such substances.

Hazardous substances in manufacturing processes, products, or waste must be managed to prevent adverse effects on humans and the environment. Then, an emergency response plan for accidents caused by hazardous substances must be developed and disseminated. Companies must also evaluate and, where necessary, take corrective action regarding waste processors and transporters to ensure compliance.

Companies should adhere to waste-related laws while implementing 3R principles (Reduce, Reuse, Recycle) to decrease environmental impact. Establishing resource-efficient management systems and promoting a circular economy are also crucial steps.

Air pollutants, such as volatile organic compounds, aerosols, corrosive substances, particulate matter, and combustion by-products, must be appropriately managed to minimize environmental harm.

Globally, there is concern about the decline of natural resources such as water and forest resources, and the degradation and loss of related natural and biodiversity resources. Therefore, companies are required to not only work to reduce the amount of natural resources they use, but also to understand their dependence on and impacts on nature and biodiversity throughout their entire business (value chain), identify the risks and opportunities related to their use of natural resources, and take action.

Evaluate the status of natural resource use and the environmental impact caused by your business, identify business areas and regions that need to be addressed as a priority, and then consider measures. Until now, environmental issues have focused on measures to address the impact that the environmental burden generated by companies has on the surrounding area. However, in recent years, when using natural resources, issues have arisen such as protecting the ecosystems surrounding the production areas as well as protecting the livelihood rights of residents with conflicting interests.

Fossil fuels, heat, electricity, and other energy sources should be used efficiently, with continuous efforts to promote energy conservation. While "greenhouse gases" include various substances, particular attention should be given to the seven gases identified under the Kyoto Protocol: carbon dioxide (CO₂), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). It is important to set voluntary reduction targets for these gases and consistently strive to achieve them.

To address the global challenge of climate change effectively, businesses are required to contribute to GHG reductions throughout the entire life cycle of their operations (value chain). Identifying activities with significant emissions from resource procurement to disposal allows for implementing targeted and effective measures.

Moreover, measuring and reporting GHG emissions should refer to international standards like the GHG Protocol, which serves as a globally recognized framework for calculating and reporting GHG emissions.

The Nitto Group has announced its commitment to "Nitto Group Carbon Neutral 2050," aiming to achieve a decarbonized society. Key initiatives include joining the international "RE100 (Renewable Energy 100%)" initiative, targeting 100% renewable energy usage in business operations, and adopting science-based targets (SBTs) certified by the Science Based Targets Initiative (SBTi). These efforts extend to Scope 3 emissions, promoting GHG management and reduction across the supply chain.

We strongly encourage our suppliers to align with Nitto Group’s policies by setting actionable targets, such as SBTs, and collaborating with us in advancing GHG reduction effort.

Permits and reports required by law may include the appointment of qualified managers as stipulated by regulations, notifications of specific facilities, and reports to administrative authorities prepared by such managers.

To ensure compliance with environmental laws, internal and external audits must be conducted to verify adherence to permitting requirements.

Engage in all business transactions with integrity and ethical conduct. Do not exploit your position as a purchaser or contractor to unilaterally determine or change transaction conditions in a way that constitutes unfair transactions with suppliers. Always base transactions with suppliers on fair contracts.

Maintain fair and free competition with competitors, avoid illegal acts such as cartels or bid-rigging, and never engage in unfair competition, such as unlawfully obtaining competitors’ trade secrets or misleading customers about other companies’ products.

Provide accurate information to consumers and customers about the specifications, quality, handling methods, and materials or chemical substances used in products and services.

Proactively disclose and provide information to stakeholders about the details of business activities, financial conditions, performance, and risks, regardless of legal disclosure obligations.

Establish and operate processes to ensure that information disclosed by the company is accurate and free from falsehoods or misleading content before publication. External audits and verifications can also be effective in ensuring the accuracy of information.

"Intellectual property" refers to patents, utility model rights, design rights, trademark rights, copyrights, trade secrets, etc. When developing, producing, selling, or offering products and services, be sure to thoroughly investigate in advance that there is no infringement of the intellectual property of others.

"Technology and goods which are regulated by laws, etc." refers to parts, products, technologies, equipment, software, etc., whose exports are regulated by the laws of each country/region based on international agreements (the Wassenaar Arrangement, etc.).

"Conflict minerals" typically refer to minerals such as tin, tantalum, tungsten, and gold (3TG), which are mined in conflict-affected or high-risk regions, including the Democratic Republic of Congo and surrounding countries. These minerals may serve as a funding source for armed groups, contributing to severe human rights abuses.

Furthermore, in recent years, there have been concerns that minerals such as cobalt pose similar risks to conflict minerals, and they may be required to be managed together.“” To verify the absence of 3TG and cobalt minerals associated with risks of funding armed groups or severe human rights violations, implement due diligence in accordance with the "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.".

The management systems for conflict minerals should be reviewed annually to ensure compliance and improved as necessary.

To ensure fair business practices, companies should educate employees and establish internal and external reporting channels to detect and address misconduct early. These systems must protect the confidentiality of whistleblowers and ensure they receive appropriate safeguards.

Careful handling of obtained information is essential, along with ensuring the safety of whistleblowers, including protecting their physical and mental well-being and prohibiting retaliation.

To ensure product safety, ensure traceability of materials, parts, process histories, etc., and establish a system to promptly identify the core of the problem, should any problem occur.

"Appropriate management and protection of confidential information" means that the confidentiality level, storage period, etc. are set appropriately for each type of confidential information to protect confidential information from leaks and unauthorized disclosure and use by managing confidential information such as storage methods, access restrictions, access records, etc.

"Threats to computer networks" refer to threats that leak information stored on a computer, due to a computer virus, spyware, or the like. As countermeasures, there are technical measures such as installing anti-virus software, applying security patches to computer OS (Windows, etc.) and applications, and isolating computers that store highly sensitive information from other computers. However, attackers are launching new attacks every day and continuous improvement activities are essential.

"Personal information" refers to information about a living individual that can be used to identify the individual. (This includes cases in which the individual can be identified not only by this information but also by matching it with other easily accessible information.)

Strict management of personal information is required, for example, in Japan under the Personal Information Protection Law, and in the EU under the EU General Data Protection Regulation (for example, setting the storage period of personal information). Information that no longer needs to be stored must be disposed of promptly using the necessary measures (for example, shredding paper documents, etc.).

To prevent the leakage or misuse of personal information, it is also necessary to establish an internal monitoring system for the protection of personal information.

A response system and procedures should be established in advance so there can be a swift response in the event of an incident related to information security, such as infection by a computer virus or information leakage, so that the relevant departments and companies can gather quickly to take measures to respond to the incident (understand the details of the accident, determine the scope of the impact, take primary measures, investigate the cause, take fundamental measures, etc.).

During emergencies, a system should be established to enable information sharing with your suppliers. Additionally, we request your cooperation in building a framework and system to share supply chain information and emergency response measures with the Nitto Group.

"Contribution activities for the international society and local society" refers to activities to support the community by utilizing corporate management resources. For example:

Please define the scope of activities that can be carried out, such as communication and partnerships with NPOs/NGOs and local communities, sharing various information, donation activities, employee volunteers, etc. and be proactive in working on social contribution activities.

To fulfill corporate social responsibilities and provide products that earn the trust of our customers, it is essential to reduce risks across the entire supply chain and maintain stable and continuous transactions. This requires management and cooperation not only with our primary suppliers (Tier 1 suppliers), but also with your suppliers (Tier 2 suppliers from our perspective) and further upstream suppliers (Tier 3 suppliers from our perspective).

We request your cooperation to ensure the thorough implementation of CSR throughout the entire supply chain.

As part of the management system, you are required to establish a PDCA (Plan-Do-Check-Act) cycle that includes policy formulation, clarification of roles and responsibilities, identification of risks and opportunities, setting goals and plans, developing operational control processes, creating training plans, evaluating performance, and implementing corrective actions.

When formulating policies, please consider including elements from this Supplier Code of Conduct. Terminology does not need to match perfectly. Additionally, ensure that policies are created in a language understood by all employees in your organization, and make efforts to communicate and disseminate them, such as through publication.

It is necessary to conduct risk assessments using hierarchical control measures to minimize risks and to continuously monitor the effectiveness of these measures (ensuring that risks are minimized).

To ensure the management system functions effectively, it is necessary to conduct awareness programs and training for employees. Based on the education plan formulated within the management system, establish a framework that provides:
1.Training required for each job position, and
2.Training to respond to emerging threats in a continuously changing environment.

Additionally, employee education must be conducted within 30 days of their hiring date. Training and awareness must be provided in a language that employees can understand before they begin their duties and should be conducted regularly thereafter to ensure understanding and retention.

To ensure the management system is functioning as intended, responsible personnel are required to evaluate (review) the management system at least once a year or immediately in the event of changes to the business environment.