Supply Chain Management
As part of the CSR management that we promote together with our stakeholders, the Marubeni Group is aiming for CSR supply chain management with our business partners.
As a general trading company group that operates a wide range of businesses on a global scale, the Marubeni Group has built up supply chains in many different countries, including some developing countries where issues such as forced labor, child labor and degradation of the local environment may arise. To address these situations, the Marubeni Group sees supply chain management as an important CSR issue for continued sound business practice, and works diligently to prevent these problems and to raise awareness of the issues.
Basic Supply Chain CSR Policy
Marubeni established its Basic Supply Chain CSR Policy in October 2008, and published it on our website and in our CSR Report.
We revised the Policy in December 2011, and established a system to ask all our existing and potential long-term business partners to cooperate in the above aims by providing to them explanations on all policy revisions in a number of ways, including briefing sessions, personal communications and mail delivery.
Under this system, beginning in January 2012, we are communicating our revised Basic Supply Chain CSR Policy to all our long-term business partners, including those with whom we are planning to enter into a trading relationship.
Measures against Noncompliance with Supply Chain Labor Standards
Marubeni has formulated measures against noncompliance with supply chain labor standards, at the link below.
Measures against Noncompliance with Supply Chain Labor Standards (12KB)
Supply Chain Management Education / Training
Aiming to ensure appropriate implementation of supply chain management principles, Marubeni provides e-learning programs on this theme, including supply chain labor standards and other important issues, for its executives and employees. The total attendance numbered around 2,500 as of December 2011. The training programs will continue to be annually updated.
Survey on Supply Chain CSR
To confirm the status of compliance with the Basic Supply Chain CSR Policy, particularly regarding human rights and the work environment, Marubeni conducts surveys on its suppliers using 2 methods, questionnaires and on-site inspections, including interviews by Marubeni representatives.
Questionnaires
In February 2011, we conducted a survey that covered 16 suppliers that conduct trade of products for which there were concerns of undesirable labor practice risks at the time of manufacture in countries designated as human rights concerns by the FTSE4Good Global Index, a leading index for socially responsible investment (SRI)*.In the survey, we provided a questionnaire to collect responses on 7 themes, including human rights of laborers (prevention of child labor, forced labor, and other related issues), environmental conservation and fair trade. If specific issues were raised, we requested further details on each of them .Based on the questionnaire, we discovered no violation of our Basic Supply Chain CSR Policy.
*Socially Responsible Investment (SRI):
Investment based on companies’ fulfillment of social responsibility as a deciding factor.
On-Site Inspections
Marubeni dispatches representatives to visit applicable suppliers and confirms their compliance status by using a checklist prepared for the Basic Supply Chain CSR Policy, interviewing responsible managers and inspecting manufacturing sites.
Marubeni has conducted on-site inspections of overseas suppliers as part of its supply chain management, starting from fiscal 2011. In fiscal 2012, we performed inspections on 2 suppliers of coffee bean products.
(1) PT. Sarimakmur Tunggal Mandiri (Lampung City, Sumatera, Indonesia) Lampung Plan
A visiting inspection was conducted on PT. Sarimakmur Tunggal Mandiri, an Indonesia-based supplier of coffee beans and spice products that the company harvests, dries, sorts and sells. A site inspection was performed on a plant in Lampung, which included an interview with the plant manager.
These sound labor-management relationships have helped the company to achieve a high employee retention rate, with many employees exceeding 10 years of continuous service. Regarding workplace amenities and facilities, individual lockers and a company cafeteria, among others, have been introduced to enhance comfort and satisfaction relating to the work place.
Measures to secure safety and health in the work site include a total of 50 workers systematically assigned to clean the working area within the plant to keep it clean and tidy at all times. As a way of addressing possible risks of work-related injuries and diseases, the company pays for relevant social insurance programs that cover its employees, including non-regular staff. Also, the company makes adequate environmental conservation efforts, which are subject to a periodic on-site inspection conducted by the local authorities. No serious issues have thus far been detected.
(2) Simexico Daklak, Ltd. (Buon Ma Thuot City, Daklak Province, Vietnam)
A visiting inspection was conducted on Simexico Daklak, Ltd., a Vietnam-based coffee beans supplier that engages in a range of related processes from harvesting and sorting/grading to export. A plant inspection was performed together with interviews conducted with four management representatives (the president, vice-president, deputy manager of export/import marketing and the business planning manager).
Simexico Daklak has been commended by the Vietnamese President, which is the nation’s highest honor, in recognition of its superior business activities, particularly in terms of legal compliance. Our survey confirmed that an appropriate system has been developed to check on compliance with local laws and regulations, including those related to labor standards, which are subject to an on-site inspection conducted periodically by the local authorities. One major exemplary practice the company engages in is setting the minimum recruitment age at 20, which is above the legal requirement, and ensuring that no one below that voluntary standard is employed. Currently, the youngest worker is 23 years old. Regarding working conditions such as wage and work environment, collective bargaining is conducted based on proper labor-management negotiations.
In order to confirm and improve workplace safety and hygiene, a dedicated department has been established to address related issues, and takes a number of appropriate measures. Specifically, workers are instructed to wear masks while engaged in line operations, and written safety and hygiene principles and precautions are posted at proper locations within the plant to raise employee awareness. Also, the company pays for a social insurance program for its employees.
Simexico Daklak’s CSR efforts are highly evaluated and have received a number of international recognitions(*), including UTZ Certified Good Inside, Rain Forest Alliance, Common Code for Coffee Community (4C), and Good Agriculture Practice (GAP), among others. Also, as part of its social contribution activities, the company donates coffee seedlings to local farmers every year in a bid to help enhance coffee growing technology and environmental conservation. This fiscal year, approximately 30,000 plants were donated.
* There are a number of accreditation bodies that assess the management performance and capabilities of business and other organizations in areas such as the environment (protection/preservation/restoration of the natural environment, including biodiversity and rainforest ecosystems), employment (guaranteed minimum wages, employee welfare, work training), and product/service safety (traceability). Using their own criteria, each of these bodies reviews a broad spectrum of relevant efforts made by applicant organizations, including producers and suppliers, and certifies them for appropriate activities that meet required standards.
(3) Conclusion
In the 2 surveys above, no violation or inappropriate practice was detected. We will continue to conduct regular on-site inspections.
<Year ended March 31, 2012>
(1) Wonderful Saigon Garment Co., Ltd. (Ho Chi Minh City, Vietnam)
An on-site inspection was conducted for Wonderful Saigon Garment Co., Ltd., a Vietnam-based manufacturer of a range of working uniforms. Interviews with the president and factory managers as well as a factory inspection were performed.
Our survey confirmed that the company has an appropriate system in place to check on legal compliance with local laws and regulations, including those related to labor standards. For instance, they use official identification documents to identify the age of new employees to ensure no cases of underage labor (below the age of 18). Regarding working conditions such as wage and work environment, we confirmed that appropriate consultations and negotiations are held between labor and management.
As measures for securing safety and health in the workplace, written safety principles and precautions are posted at proper locations within the factory to raise employee awareness, and workers are instructed to wear masks and gloves while engaged in line operations. In addition, factory facilities are equipped to protect the health of employees (e.g., air conditioners and electric fans are installed to control workplace temperature in areas that are subject to higher temperatures).
In an effort to address the issue of environmental conservation, the company conducts a semiannual survey on discharged water, waste disposal and other issues, and reports the results to the local authorities.
(2) Thai Textile Development and Finishing Co., Ltd. (Samutprakarn Province, Thailand)
An on-site inspection was conducted for Thai Textile Development and Finishing Co., Ltd., a Thailand-based textile dyeing company specializing primarily in thick fabrics. Interviews with the president, the vice president and factory managers as well as a factory inspection were performed.
Prior to Marubeni’s inspection, the company underwent similar inspections by other companies on CSR-related issues, particularly environmental issues, product quality and the work environment.
Our survey confirmed that the company has an appropriate system in place to check on legal compliance with local laws and regulations, including those related to labor standards. For example, official identification documents are used to identify the age of new employees to ensure that no one below 18 is employed. To ensure a comfortable work environment, opinions and requests are regularly collected from employees and efforts to improve the workplace are made.
In addition, a worker training program has been developed. For instance, the personnel section provides orientation training for every new employee prior to their assignment to specific sections.
In order to confirm and improve workplace safety and health, the company holds an occupational safety and health meeting on a regular basis.
Efforts towards environmental preservation are made throughout the company. Specifically, an individual is assigned to every site to manage environmental issues, and measures are taken to recycle or reuse material that is discharged during the textile dyeing process with the goal of reducing waste.
(3) Conclusion
In the 2 surveys above, no violation or inappropriate practice was detected. We will continue to conduct regular on-site inspections.
Message from a Local Supplier
Shinji Sakai, President
The on-site inspection provided us with a good opportunity to examine our own management systems and practices from a different perspective. We will use the findings of the inspection to further strengthen our management, prevent noncompliance, and, ultimately, to continue to maintain sound business practices.
