Material Procurement

Relationship with Business Partners

The Purchasing Headquarters exercises overall control and adjustment over the purchase in general of the prescribed raw materials, fuel, machines, and equipment installed in the buildings of the Company's plants and domestic and overseas affiliates.


When executing business operations, we endeavor to comply with the laws, regulations, and social norms at home and abroad, while asking our suppliers to do likewise. Specifically, we ask suppliers to enter into basic agreements on transactions under which both parties agree to respect human rights, assure safety and health, and protect the environment.

Material Procurement

The Company selects new suppliers to purchase from in accordance with our own internal criteria. We decide to transact business according to the required procedures after making an equitable and fair determination in light of all criteria. In addition, we think it is important to constantly build mutual ties that build confidence in our suppliers, which results brings mutual benefits to both parties.


When starting transactions, we check to see whether our procedures fall under the Act against Delay in Payment of Subcontract Proceeds, etc., to Subcontractors. If we find that the Act applies to our procedures, we respond by bringing our procedures into compliance with the Act and the internal rules of the Company. By the same token, if the existing transactions are subject to the Act, we promptly take action to comply.

The Company has internal rules to verify whether any given raw materials are in compliance with the internal and external regulations related to chemical substances. Such substances are not adopted unless they are in compliance. If compliance is ascertained, purchase specifications including such items are drawn up. Then, the raw materials to be used will comply with the chemical substance regulations because the in-house rules do not allow them to be registered without the purchase specifications. Meanwhile, looking into the newly established rules is being worked on together with the other relevant departments inside the Company.


The Purchasing Headquarters audit all raw materials suppliers. In many cases, an audit is conducted at the same time as the Production and/or Quality departments conduct their audits. The items for audit and the criteria for determination are developed at Headquarters' option with their research focused on a stable supply. Checking on the suppliers' situations, including their companies as a whole, the applicable business, raw material procurement, equipment location, production worksites, workers, relationship with the Company, and other factors, the Purchasing Headquarters makes a comprehensive decision. If any improvements are necessary, the Company draws suppliers' attention in writing to the items requiring improvement, while requesting that they respond with a due date for the action indicated.


Procurement Policy

The group companies of Sumitomo Bakelite Co., Ltd. adhere to the following rules and principles when carrying out procurement activities, in order to accomplish our corporate social responsibility (CSR) goals, with cooperation of our suppliers.

Fair Transaction

  • We select new suppliers on a fair and equitable basis.
  • We work to build and maintain equal and trusting relationships with our suppliers and to conduct transactions of mutual benefit.

Stable Procurement

  • We consider it important that our suppliers endeavor:
(1) to maintain a proper quality and enhance the level of technology;
(2) to keep delivery date;
(3) to price competitively; and
(4) to ensure stable supply.
  • The Company will separately establish contingency plans which include rules for reducing risks involved in procurement of raw materials and for actions to be taken if these risks occur.

Sustainable Procurement

  • We will conduct our procurement activities in respecting international standards as well as only in compliance with local laws and regulations with respect to the items such as human rights, labor, health and safety, ethics, and the environment. At the same time, we will request our business partners to take similar measures.

Major Sustainable Procurement Items

(1) Human rights, labor, safety and health
  • prohibition of inhumane treatment such as child labor, forced labor, discrimination, and harassment
  • payment of appropriate wages (above minimum wage and meeting living wage) and allowances
  • appropriate working hours management and securing holidays
  • respect for freedom of association and the right to collective bargaining, etc.
  • implementing responsible minerals sourcing (understanding the country of origin and distribution process, promoting sourcing from certified smelters and processors)
  • ensuring occupational safety and health
(2) Ethics・Information Security
  • promotion of fair and free competition (compliance with antitrust laws, etc.)
  • anti-corruption (anti-bribery, compliance with money laundering and terrorist financing regulations, elimination of relationships with anti-social forces, etc.)
  • personal information protection, prevention of leakage of confidential information
(3) Environment
  • preservation of the global environment
  • initiatives to reduce environmental impact and address climate change
  • reduction of energy consumption and greenhouse gas emissions
  • pollution prevention (air, water, soil)
  • use of sustainable water resources
  • waste reduction and effective use of resources (reduce, reuse, recycle)
  • biodiversity conservation initiatives
  • We establish "Green Procurement Guideline" and carry out green procurement as an initiative for reducing environmental impact.

Information Management and Control

  • We proactively disclose information that is deemed necessary for transactions to an extent possible.
  • We strictly control and manage information provided by our suppliers and keep it confidential as requested.

Protection of Intellectual Property Right

  • We consider intellectual property rights to be one of the most important management assets and protect our own rights accordingly. Likewise, we respect the rights of others.

RBA Code of Conduct

  • RBA (Responsible Business Alliance) Code of Conduct serves as a de facto standard to ensure that working conditions in the electronics industry supply chain are safe, that workers are treated with respect and dignity, and that business operations are environmentally responsible and conducted ethically. We are not a member of the RBA, but a large number of our customers are. Therefore, we make our best effort to comply with the RBA Code of Conduct, when carrying out procurement activities.
  • We request our suppliers to carry out their business activities in accordance with the RBA Code of Conduct.

Sustainable Procurement Survey

  • As part of our initiatives in FY2023, we conducted a questionnaire survey among 114 major suppliers that account for the top 90% of raw materials purchasing results in each segment, and received responses from 107 suppliers (94% response rate).
  • This survey was conducted in using the "Responsible Business Conduct Guidelines / Self-Assessment Questionnaire Detailed Version" developed by JEITA (Japan Electronics and Information Technology Industries Association). And the self-evaluation therein was conducted in 9 areas - "1. Compliance with Laws and Regulations and Respect to International Norms, 2. Human Rights and Labor, 3. Health and Safety, 4. Environment, 5. Fair Trade and Ethics, 6. Quality and Safety, 7. Information Security, 8. Business Continuity Planning, and 9. Establishment of Management System” - with rating each item on a scale of 10 to 100.
  • As a result of this survey, we requested the 16 target suppliers whose responses include items that fall below the prescribed criteria to make improvements, and we will establish a system that allows for more appropriate procurement.

Survey Results

Items Average Score Items Average Score
1.Compliance with Laws and Regulations and Respect to International Norms 92 6.Quality and Safety 99
2.Human Rights and Labor 86 7.Information Security 78
3.Health and Safety 87 8.Business Continuity Planning 76
4.Environment 96 9.Establishment of Management System 82
5.Fair Trade and Ethics 91 Average of all Items 88

Initiatives to Responsible Mineral Sourcing

Promoting Responsible Mineral Sourcing

  • It is concerned that the use of minerals such as tin, tantalum, tungsten, gold, cobalt, and mica that are mined in "Conflict-Affected and High-Risk Areas (CAHRAs)" such as the Democratic Republic of the Congo (DRC) and its adjoining countries may lead to financing armed groups, human rights violations including forced labor and child labor, environmental destruction, money laundering, corruption, tax evasion, and other fraudulent activities ("OECD Annex II Risks").
  • Our group will conduct appropriate assessments (due diligence) based on the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD DD Guidance)“ to ensure that the use of minerals that could lead to fraudulent activities are not used in our group's products.

Responsible Mineral Sourcing Policy for Group of Sumitomo Bakelite Co., Ltd.

  • We, Group of Sumitomo Bakelite Co., Ltd. is committed to promote responsible mineral sourcing in taking the following actions, in order to prevent “financing armed groups, human rights violations including forced labor and child labor, environmental destruction, money laundering, corruption, tax evasion, etc. (OECD Annex II Risks)” in the "Conflict-Affected and High-Risk Areas (CAHRAs)" such as the Democratic Republic of the Congo (DRC) and its adjoining countries when using raw materials and parts containing tin, tantalum, tungsten, gold, cobalt, and mica:
    ・We will manage our supply chain appropriately in accordance with the “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD DD Guidance)“.
    ・We will request our suppliers to source the covered minerals from smelters/refineries that comply with the Responsible Minerals Assurance Process (RMAP) promoted by the Responsible Minerals Initiative (RMI).
    ・We will use the covered minerals that are not associated with the OECD Annex II Risks, even if they are produced or refined from CAHRAs. It does not mean that we will not use any covered minerals produced or refined/refined from CAHRAs uniformly.
    ・We will request for corrective action through our suppliers, if we discover the possibility of the OECD Annex II Risks in our supply chain. We will consider the possibility of suspending transactions depending on the status of corrective action.
    ・We will share our group's "Procurement Policy" and "Responsible Minerals Sourcing Policy" with our suppliers, will request our suppliers to provide information regarding smelters/refineries through the supply chain, and will strive to engage in dialogue and collaboration with our suppliers to contribute to eliminating and reducing the OECD Annex II Risks under CAHRAs.

Framework of Initiatives

  • Our group implements initiatives in line with the "Five-Step Framework for Risk-Based Due Diligence in the Mineral Supply Chain" in the OECD DD Guidance.
    【STEP 1 Establish strong company management systems】
    ・Our group established the "Responsible Minerals Sourcing Policy for Group of Sumitomo Bakelite Co., Ltd." and establishes a system to manage whether or not there are any of the OECD Annex II Risks in CAHRAs for the covered minerals contained in our group’s products, by using the industry standard methods (Conflict Minerals Reporting Template (CMRT), Extended Minerals Reporting Template (EMRT) and RMAP issued by RMI).
    【STEP 2 Identify and assess risks in the supply chain 】
    ・Our group regularly identifies the raw materials and parts that require investigation from the raw materials and parts we purchase, and conducts investigations to identify smelters and refineries using the CMRT/EMRT issued by RMI. In such investigation, we confirm whether or not tin, tantalum, tungsten, gold, cobalt, and/or mica is intentionally added or used, confirm the country of origin, and identify the smelter/refinery (including confirming whether it is listed on the RMAP compliant smelter/refinery list).
    ・Both CMRT and EMRT are designed so that the answer unit can be selected from "①Company," "②Product (or List of Products)" or "③User defined." However, in order to confirm the smelter/refinery of the minerals contained in the parts and materials used in our group's products reliably, we request our suppliers to respond by specifying the products.
    ・In addition, our group conducts similar surveys when adopting new raw materials.
    【STEP 3 Design and implement a strategy to respond to identified risks 】
    ・In order to continuously reduce risks, our group regularly develops a responsible mineral sourcing survey plan, updates the latest information, and conducts re-surveys.
    ・If there is a concern that some supplier uses a smelter/refinery with the high OECD Annex II Risks, our group will communicate the details of such risk and proceed with appropriate measures for improvement while consulting with such supplier.

    Additionally, if the relationship between such supplier and the OECD Annex II risk becomes clear, we will consider suspending transactions with such supplier.

    【STEP4 Carry out independent third-party audit of smelter/refiner’s due diligence practices】
    ・Our group requests its suppliers to procure target minerals from the smelters/refineries listed on the RMAP compliant smelters/refineries list. The audit to become an RMAP compliant smelters/refineries must be conducted by an independent third party.
    【STEP 5 Report annually on supply chain due diligence】
    ・Our group will publish a report on our responsible mineral sourcing activities on our website.

Survey Results

  • FY2023 Responsible Minerals Sourcing Survey Results
    【 Tin, Tantalum, Tungsten, Gold (3TG) 】
    ・Our group conducted a survey using CMRT of 16 suppliers that handle 34 product numbers of raw materials and parts containing or adding tin, tantalum, tungsten, and gold (3TG). The CMRT response rate was 100% and the RMAP compliant smelter usage rate was 100%.
    Tin Tantalum Tungsten Gold 3TG Total
    Number of raw materials/parts 31 2 34
    Number of suppliers 13 2 1 16
    CMRT response rate 100% 100% 100% 100%
    Total number of smelters/refineries 98 2 1 101
    RMAP conformant smelters 98 2 1 101
    usage rate of RMAP conformant smelters 100% 100% 100% 100%
    Note) Survey target: Raw materials and parts procured by Sumitomo Bakelite Co., Ltd. and its subsidiaries (excluding Vaupell Holdings Inc. and its subsidiaries)
    Note) Multiple smelters/refiners may be used for the same supplier and raw materials.
    【 Cobalt, Mica 】
    ・Our group conducted a survey using EMRT on 8 suppliers that handle 8 product numbers of raw materials and parts that containing or adding cobalt or mica. Although the EMRT response rate was 100%, there are issues that are difficult for our group to address alone, such as the following:
    - Some suppliers may not cooperate with disclosure of smelter/refinery information because the investigation is not required by laws and regulations; and
    - The number of RMAP conformant smelters/refineries for cobalt and mica (especially mica) is small.
    Cobalt Mica
    Number of raw materials/parts 4 4
    Number of suppliers 4 4
    EMRT response rate 100% 100%
    Note) Survey target: Raw materials and parts procured by Sumitomo Bakelite Co., Ltd. and its subsidiaries (excluding Vaupell Holdings Inc. and its subsidiaries)
    Note) Multiple smelters/refiners may be used for the same supplier and raw materials.

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