Chiyoda Group Contractor and Supplier Expectations

Introduction

Chiyoda Group is committed to building partnerships to create value through collaboration with business and supply chain partners. Our aim is to enhance our operations in pursuit of 'harmony between energy and the environment' while contributing to a healthy, prosperous and sustainable society, and sharing values defined in the 'Chiyoda Group CSR Basic Policy'. We therefore also encourage business and supply chain partners to share and promote our CSR Basic Policy values within their business activities.

We have compiled the following provisions to support Contractors and Suppliers in our business dealings and request they understand and comply with these initiatives. We also encourage our Contractors and Suppliers to advocate these provisions within their own supply chains.

1. Respecting Internationally Recognized Laws and Standards

Contractors and Suppliers must respect internationally recognized laws and standards, in addition to those of their home country and the countries and regions where they conduct business. In cases where local laws and standards do not meet those that are internationally recognized, Contractors and Suppliers will strive to respect international norms as much as possible.

2. Human Rights and Labor

Contractors and Suppliers must comply with applicable laws and regulations and respect international human rights standards, including the 'Universal Declaration of Human Rights'^*1 and the International Labor Organization (ILO) 'Declaration on Fundamental Principles and Rights at Work'. ^*2

1. Prohibiting Forced Labor
   Contractors and Suppliers must not use forced or bounded labor, exploitative prison labor, or labor obtained by slave or human trafficking. They also must not force workers to work and must maintain the right of workers to terminate employment.
2. Prohibiting Child Labor and Respecting the Rights of Young Workers
   Contractors and Suppliers shall not employ children under the age of 15, the age at which compulsory education is completed or the minimum working age in the country or region where workers are employed, whichever is highest. Contractors and Suppliers shall not allow young workers under the age of 18 to perform hazardous work that is likely to jeopardize their health or safety, including the right to work or overtime.
3. Reasonable Working Hours
   Contractors and Suppliers shall not allow workers to exceed the maximum working hours set by local laws and regulations and shall appropriately manage working hours and 'days-off' according to internationally recognized laws and standards.
4. Adequate Wages and Allowances
   Contractors and Suppliers shall comply with applicable laws and regulations regarding payment for work (including minimum wage, overtime payments, allowances and deductions required by law).  Contractors and Suppliers shall pay wages that allow workers to support their basic needs (a living wage). 
5. Prohibiting Inhumane Treatment
   Contractors and Suppliers shall respect worker human rights and shall not engage in actions that inflict mental or physical abuse, coercion, harassment or any other inhumane treatment that undermines individual dignity or deteriorates the workplace environment. Clear disciplinary action policies and procedures shall be established and communicated to workers in advance.
6. Prohibiting Discrimination
   Contractors and Suppliers shall not engage in discrimination in any employment practices, including wages, promotions, compensation and termination, based on race, nationality, ethnicity, skin color, age, gender, sexual orientation, gender identity, religion, beliefs, disability, marital status, pregnancy, political affiliation or union membership. Contractors and Suppliers shall consider requests from workers related to religious customs within appropriate boundaries.
7. Freedom of Association and Right to Collective Bargaining
   Contractors and Suppliers shall respect the rights of workers to freely associate with, and engage in, collective bargaining of workers in compliance with applicable laws and regulations in their home country and the countries and regions where they operate. Contractors and Suppliers will appropriately communicate with employees to address issues related to work conditions. 
8. Respect and Consideration for Local Communities and Cultures
   Contractors and Suppliers shall operate their business in a manner that respects the lives and cultures of local communities affected by their business operations.

3. Health and Safety

Contractors and Suppliers shall consider standards, such as the ILO's health and safety guidelines, to minimize injury and illness in the workplace and maintain safe and heathy working conditions, in addition to complying with relevant laws and regulations.

1. Occupational Safety
   Contractors and Suppliers shall identify and assess risks regarding occupational health and safety and maintain the same through appropriate design, engineering and administrative controls.
2. Emergency Preparedness
   Contractors and Suppliers shall identify the possibility of emergency situations, such as natural disasters or accidents, that may adversely affect human life or safety, establish emergency procedures to minimize harm to workers and property, install required equipment and conduct training and drills, such that the required responses can be implemented.
3. Occupational Injury and Illness
   Contractors and Suppliers shall identify, assess, record and report the status of any occupational injury or illness and implement appropriate countermeasures and corrective actions.
4. Industrial Hygiene
   Contractors and Suppliers shall identify and assess worker exposure to the hazards of physically demanding tasks and appropriately control such work such that it does not lead to any occupational injury or illness

4. Environment

Contractors and Suppliers shall actively address environmental problems such as resource depletion, climate change and pollution, and address regional environmental problems considering the health and safety of relevant local communities.

1. Establishment and Operation of an Environmental Management System
   Contractors and Suppliers shall establish and operate an environmental management system and promote environmental preservation activities through continuous improvement.
2. Environmental Permits and Reports
   Contractors and Suppliers shall comply with applicable laws and regulations of their own country and the country or region where they operate, obtain necessary permits and approvals for their business activities and suitably register and report to the related government and/or authorities.
3. Reducing Energy Consumption and Greenhouse Gas Emissions
   Contractors and Suppliers shall address energy efficiency and continuously strive to reduce greenhouse gas emissions and energy consumption.
4. Preventing Pollution
   Contractors and Suppliers shall comply with applicable laws and regulations and implement necessary and appropriate measures to prevent harmful emissions and release of pollutants.
5. Effective Utilization of Resources and Waste Management
   Contractors and Suppliers shall comply with applicable laws and regulations and implement appropriate management systems to promote the 3Rs (Reduce, Reuse, Recycle) to ensure effective utilization of resources and minimize waste.
6. Chemical and Hazardous Substance Substance Management
   Contractors and Suppliers shall appropriately manage chemicals and hazardous substances according to applicable laws and regulations.

5. Fair Trading and Ethics

Contractors and Suppliers shall conduct their business activities based on peak ethical standards, according to applicable laws and standards.

1. Preventing Corruption
   Contractors and Suppliers shall not be involved in bribery, corruption, blackmail or embezzlement in any form whatsoever.
2. Fair Business Conduct
   Contractors and Suppliers shall comply with relevant laws and regulations and shall not engage in cartels, bid rigging or other unfair restraints of trade, or any other acts that impede free and fair competition.
3. Prohibiting Inappropriate Provision and Improper Benefit
   Contractors and Suppliers shall not provide or accept any promises, propositions or approvals as a means of obtaining bribes or any other illicit or inappropriate benefit.
4. Respecting Intellectual Property
   Contractors and Suppliers shall not unlawfully obtain, use or infringe on the intellectual property right of their customers or third parties.
5. Using Raw Materials with No Involvement in Conflicts or Crimes
   Contractors and Suppliers shall not use raw materials for procurement of goods that are a result of conflicts or crimes, such as those that serve as a source of funding for illegal armed forces or criminal organizations.
6. Eliminating Relationships with Anti-Social Forces
   Contractors and Suppliers shall not have any relationship with anti-social forces such as organized crime groups and crime syndicates, and shall not accept any unreasonable demands from such anti-social forces. Contractors and Suppliers shall not intentionally engage in terrorist acts, drug trafficking, money laundering or other organized crime and shall take care not to be complicit in such crimes.  
7. Trade Control
   Contractors and Suppliers shall comply with laws and regulations related to trade control and economic sanctions and shall conduct transactions in an appropriate manner.
8. Prohibiting Insider Trading
   Contractors and Suppliers shall properly manage insider information handled by their company and implement the required education and preventative measures to ensure that employees do not engage in any conduct that constitutes insider trading.
9. Prohibiting Conflict of Interest
   Contractors and Suppliers shall prohibit their employees from engaging in conduct to benefit themselves or a third party at the expense of the interests of the company.

6. Safety and Quality

Contractors and Suppliers shall ensure safety and quality in providing their products and services and will provide accurate information on their products and services in a timely and appropriate manner.

1. Safety of Products and Services
   Contractors and Suppliers shall fulfill their responsibilities by ensuring that their products and/or services meet safety standards according to applicable laws and regulations.
2. Quality Management
   Contractors and Suppliers shall comply with laws and regulations applicable to the safety and quality of their products and services, and will establish and operate a quality management system while striving for continuous improvement.
3. Accurate Information on Products and Services
   Contractors and Suppliers shall provide accurate information on their products and services to eliminate misunderstanding.

7. Information Security

Contractors and Suppliers shall strengthen their information security by preventing confidential and/or personal information leaks.

1. Protecting Personal Information
   Contractors and Suppliers shall comply with relevant laws and regulations and appropriately manage and protect supplier, customer, consumer and employee personal information.
2. Preventing Leaks of Confidential Information
   Contractors and Suppliers shall appropriately manage and protect their own confidential information and that received from customers and third parties.
3. Cyber Attacks
   Contractors and Suppliers shall endeavor to implement protective measures against cyber-attacks and implement appropriate management policies to prevent damage to the company and others.

8. Business Continuity Planning

Contractors and Suppliers shall strive to identify and evaluate risks that may hinder business continuity and establish a Business Continuity Plan (BCP) by anticipating adverse circumstances and emergency situations that may impact their business activities.

9. Establishing Management Systems

Contractors and Suppliers shall endeavor to establish management systems to monitor and manage risks related to the above provisions.

10. Supply Chain Management

Contractors and Suppliers shall notify the requirement for each of the above provisions to their suppliers and strive to establish processes to promote an understanding of, and cooperation with, each provision.

11. Establishing Grievance Mechanisms

Contractors and Suppliers shall endeavor to establish grievance mechanisms, including a whistleblowing system, accessible to stakeholders, including workers and suppliers, for the prevention and early detection of misconduct in their company and supply chains. Under such grievance mechanisms, Contractors and Suppliers shall take the measures required to ensure whistleblower confidentiality is strictly protected and that they are not subject to any prejudicial treatment.