Basic Policy on Human Rights

The Nitto Group will continue its status as a company that highly values human rights

The Nitto Group respects human rights in accordance with international standards^*1 regarding human rights. The Nitto Group not only complies with the laws of Japan but also respects the laws and regulations of the nations and regions where its business activities take place. In the event of conflicts between internationally-recognized human rights and the laws and regulations of Japan or the nations and regions where its business activities take place, the Nitto Group will work to adhere to the international principles of human rights.

Concrete actions taken by the Nitto Group

• The Nitto Group Basic Policy on Human Rights applies to everyone who works at the Nitto Group, including all Nitto Group officers and employees. Furthermore, the Nitto Group requires all persons and corporations (business partners) engaged in the provision of Nitto Group products or services to comply with this policy.
• The Nitto Group works to eliminate confined labor, child labor, forced labor, and slave labor and labor arising from human trafficking, and to eliminate discrimination based on race, ethnicity, color, religious beliefs, gender, gender identity or expression, sexual orientation, nationality and lineage, mental or physical disability, age, health condition, marital history. Furthermore, the Nitto Group endeavors to promote diversity.
• The Nitto Group will fully understand this policy and conduct human rights due diligence^*2 as one foundational aspect of all business activities. The Nitto Group will not infringe upon human rights. Furthermore, the Nitto Group will fulfill its responsibility to respect human rights and ensure that its business activities do not create negative impacts on human rights.
• In the event any Nitto Group business activity is discovered to have a clear negative impact on human rights, or in the event the Nitto Group is found to clearly contribute to a negative impact through its customers or related parties, the group will work to remedy it through discussion and corrective actions.
• The Nitto Group will conduct appropriate training of officers and employees to ensure that this policy is effectively executed.

Hideo Takasaki
President & CEO
Nitto Denko Corporation

If there is any contradiction between the Japanese and translated versions of the Policy, then the Japanese version shall take precedence.

Nitto Group Policy on the Handling of Conflict Minerals^*3

Minerals produced in the Democratic Republic of the Congo (DRC) and neighboring African countries are in widespread use by industries around the world. Armed insurgents who receive funds and profit from this mining, directly or indirectly, are said to be heavily involved in internal strife accompanied by serious human rights violations in this region.

Under these circumstances, the U.S. Securities and Exchange Commission (SEC) reached a decision in August 2012 to make it mandatory for all concerned firms listed on the stock market in the United States to disclose information on their procurement of specified minerals (the "conflict minerals" in Note 3 below), beginning in 2014. Studies to this end are already widening throughout corporate supply chains, and specification of smelters in the distribution process is considered particularly important.

The process of confirmation to this end shall be implemented in conformance with the rules of the SEC and in accordance with requests from the Responsible Business Alliance (RBA) or other customer industry groups.

Promotion Structure

The Nitto Group addresses issues concerning human rights by establishing a dedicated department among the special function departments. To enhance the effectiveness of the initiatives in this regard, we set up a council composed of representatives from departments responsible for the promotion of ESG management as a whole, human resources, and procurement, as well as each geographical region, thus strengthening cross-sectoral collaboration. This council, structured with site-specific, region-specific, and global teams, manages human rights risks, develops relevant strategies, outlines necessary programs, and monitors the implementation and progress of these programs. This multilayered approach is tailored to accommodate the unique circumstances of each region and site. For more details on the council, please see the page on “Compliance”.

Human Rights Due Diligence

In line with the aforementioned approaches to human rights, the Nitto Group has built a human rights due diligence management system pursuant to the UN Guiding Principles on Business and Human Rights, with a view to preventing or reducing any negative impact that our business undertakings might have on human rights.

Human rights impact assessment

The Nitto Group identified potential human rights issues by reviewing the general situations, industry landscape, overview of our business, and an update of supply chains in regions where we operate from a broader perspective. For certain human rights issues, we identified issues that emerged from the findings of self-assessments conducted by Group companies in Japan and compliance surveys carried out by all Group companies. This impact assessment will not only be reviewed periodically, but will also be reevaluated in the event of major changes in the business portfolio, including mergers, acquisitions, etc.

Human rights impact assessment procedures

First, we reviewed key international norms and standards relating human rights and the scope of the entire Nitto Group's business and our suppliers to identify human rights issues relevant to the Nitto Group. Next, we assessed the severity and likelihood of occurrence about each human rights issue. Finally, we quantified and mapped the severity and likelihood of occurrence about these issues based on indicators published by international organizations and the results of internal self-assessments and compliance surveys. The identified human rights issues were reviewed in a workshop not only with domestic related parties, but also with persons overseeing human rights affairs in each area at overseas Group companies. During the workshops, we discussed issues unique to each region and identified human rights issues that require priority attention. We identified priority human rights issues based on insights from third-party experts and dialogues with stakeholders. Each specialized functional department formulates action plans and strengthens its efforts to address the priority human rights issues identified.

Priority Human Rights Issues

※Supply of medical products
We do not directly market medical devices or drugs or conduct clinical trials, and while we are aware of the significant impact on the health and safety of our patients and clinical trial participants, we do not identify this as a priority human rights issues here. We have established a committee within our company and are doing our utmost to ensure that patients and clinical trial participants are not negatively impacted.

Addressing priority human rights issues

Provision of adequate working conditions for workers

To help ensure appropriate working hours, a working hour management system using office entry/exit logs and computer logs has been introduced in Japan. All employees receive a training course on working hours to promote a better understanding of working hours and attendance management.

Reduction of negative impact on local community (environmental and social)

We are taking various steps to ensure that our water use does not affect anyone in the community. We are focusing on water reuse and zero liquid discharge (ZLD) in order to use water resources efficiently and minimize the impact on business activities of water supply restrictions due to abnormal weather, etc. At the Shiga Plant, we reuse wastewater and effluent generated at the plant using water treatment technology that utilizes our reverse osmosis (RO) membrane, which does not allow impurities other than water to pass through. The wastewater utilization rate will reach 90% from 2022 onwards. In order to promote environmental initiatives, the understanding and cooperation of each and every employee is essential. Therefore, we aim to continually raise environmental awareness through training and education programs.

Prohibition of forced labor and child labor

The Nitto Group Business Conduct Guidelines were published to guide everyone working for the Nitto Group around the world to share values and act ethically in compliance with laws and regulations in their business activities. In this statement, we state that we do not engage in labor involving human trafficking, confined labor, forced labor, slave labor, or child labor. In addition, we conduct a compliance survey in accordance with the Nitto Group Business Conduct Guidelines. Based on the results of this compliance survey, we formulate action plans and promote risk reduction initiatives at the Human Rights, Labor, and Ethics Council.

Creating a healthy and safe workplace for workers

With the aim of reducing all types of accidents and injuries to zero, the Nitto Group is currently committed to achieving “zero critical or serious accidents”, eliminating significant accidents including fatal ones. In order to achieve this goal, we are developing safety activities from three standpoints: “machine safety,” “safety perception,” and “safety procedures.”

Elimination of discrimination and inhumane treatment, including harassment

In accordance with the Nitto Business Conduct Guidelines, the Nitto Group prohibits inhumane acts that violate human rights, all forms of harassment including power harassment and sexual harassment, and unfair treatment or other acts that undermine the dignity of individuals. The Nitto Business Conduct Guidelines also state that any prohibited acts may be subject to disciplinary action. The Nitto Group informs employees of Basic policy on human rights by posting in the language of each country or region at all of its bases, including those overseas. We have also established Business Conduct Guidelines Day to raise awareness of human rights within the company. In addition, all employees are provided with sustainability education on all forms of discrimination and harassment including sexual harassment, and internal lectures are given by experts in the field of human rights.

Respect for freedom of association and the right to collective bargaining

We hold regular dialogues with employee representatives. Through thorough discussions, we work together to resolve issues.

Supply Chain Initiatives

The Nitto Group has established expectations regarding human rights for our partners in the Supplier Code of Conduct. We continuously promote awareness of the Supplier Code of Conduct and monitor compliance. If any issues arise, we request improvements to ensure the sustainability of our supply chain from a human rights perspective.

Stakeholder Engagement

We engage in dialogue with external experts in human rights to deepen our understanding of human rights in line with international standards and to strengthen our activities.

Monitoring

The Nitto Group monitors its own production sites and suppliers using multiple tools to conduct corrective activities for emerging issues and prevention for potential human rights issues.

In order to identify issues and take countermeasures, we conduct compliance surveys in accordance with the Business Conduct Guidelines. This survey identifies issues at each Group company and site. The compliance survey is conducted annually for all Group employees, and the results are compiled and fed back to each site and area. Based on the results of this compliance survey, an action plan is formulated, and the Human Rights, Labor, and Ethics Council promotes initiatives to reduce risks.

As a specific example, based on the results of the above survey, we found that 15 sites have issues with “harassment”, and we are currently taking corrective measures such as providing sustainability education including discrimination and harassment to employees at all of our sites.

Grievance Mechanism

The Nitto Group has established a system for monitoring the spread of compliance awareness with transparency. We have introduced and operated a whistle-blowing system for employees that allows them to file reports to both internal and external contacts. Discrimination and harassment incidents can be reported through this system. The Partner Hotline, as it is called, is also available for business partners, including those from subcontracting businesses and construction services. Both contacts keep whistle-blowers’ privacy strictly confidential, and anonymous reports are allowed. Respondents handle the reports thus made in line with confidentiality obligations. The operational rules of the system stipulate that whistle-blowers should never be treated unfairly and that no threat or reprisal against them should be tolerated.

We plan to establish a grievance mechanism that will be available to all stakeholders involved with Nitto Group.