3[Special Feature] Social Problems of Our World―How TDK Meets the Challenge

Society and environmental
considerations in the
supply chain

participants listened attentively to her talk, which
described the unimaginably wretched conditions in thatcountry, and afterwards made such comments as, “I wasreally shocked to hear about what is happening in the
Democratic Republic of the Congo.” Once again, they
acknowledged TDK’s heavy responsibility to address theissue of conflict minerals.
The following is a summary of Ms. Taniguchi’s speech.

The Social Problems behind Conflict Minerals:
The Human Rights Situation in theDemocratic Republic of the Congo
As a midstream company, TDK recognizes the importance of promoting CSR throughout the supply chain.
Following the enactment of the Dodd-Frank Act in the United States in 2010, TDK has been promoting its response
to conflict minerals. Here we report on an explanatory meeting held in April for all responsible personnel in TDK
which covered conflict mineral countermeasures and the social problems behind these efforts.

The social situation surrounding
conflict minerals
Conflict minerals are mineral resources produced illegallyin the Democratic Republic of the Congo andneighboring countries. These mineral resources havebecome a global issue, because they are a source offunding for armed groups and fuel conf licts andviolations of human rights. The US Financial Regulatory
Reform Act (Dodd-Frank Act) - enacted in July 2010 toimprove accountability and transparency in the financial
system - aims to sever the financial sources of armed
groups by making it obligatory for listed companies in theUnited States to declare information on their use of thefour minerals* produced in these regions.
A final rule stipulating the details of the legislation wasapproved in August 2012, and the Act went into effect in2013. Thus, in order to fulfill their obligation to disclose
information, it has become essential for listed companies
in the United States to carry out surveys of their supply
chains. For components manufacturers, including TDK,

sincere efforts to respond to the issue of conflict minerals
and to disclose information to customers is now anessential condition for the continuation of business.
*Tin, tantalum, tungsten, and gold

The human rights situation in theDemocratic Republic of the CongoThirty-four people attended the explanatory meeting,including those responsible for the conflict mineral
response in each business group and other relatedpersonnel. Before the sharing of information on thespecific countermeasures, the organizers thought it was
extremely important for participants to learn about thebackground to the legislation, in other words, tounderstand what is currently happening in the Democratic
Republic of the Congo, and to learn about thebackground to the affluence we enjoy. Therefore, TDK
invited Ms. Reiko Taniguchi of Amnesty International
Japan to the meeting to speak about the human rights
situation in the Democratic Republic of the Congo. TheParticipants listening to Ms.Taniguchi’s speech

21T D K C S R R E P O R T 2 013

B ac kg ro u n d to th e c o nf l i c t m i n e ra l
re g u l ati o n: th e w retc h e d s i tu ati o n i nth e D e m o c rati c R e p u b l i c of th e C o n g o
The background to the conflict mineral regulation is theserious violation of human rights that is rampant in theDemocratic Republic of the Congo. The Democratic
Republic of the Congo has been called "the country thathas everything except peace." It is a treasure house ofnature with abundant natural resources and wildlife. But
because of the conflict involving these abundantresources, it is one of the poorest countries in the world
and conditions there are terrible. Among them, theviolation of human rights, and especially sexual violenceagainst women, is a serious problem. Even today, nearlya decade after the end of the Second Congo War, thereare said to be more than 1,100 incidents of sexual
violence every day. Even compared with the chaos inother conflict regions, sexual violence here is prominentand extreme. There were an estimated 200,000 victims
during the war, and the number of victims since the war
is said to be more than 400,000.
One of the reasons why terrible conditions arecontinuing even after the war has ended is the delay inpostwar stabilization. In the Democratic Republic of theCongo, the UN stabilization mission is not functioning,
and the perpetrators of crimes are rarely brought tojustice. Indeed, even investigations of incidents do notmake much headway.
A major reason for the deterioration in public security isthat armed conflicts have broken out over mining rights inthe mining regions. The armed groups force nearby
villagers and children, at gunpoint, to work and mine theminerals. These minerals are then smuggled out and theproceeds used to purchase weapons and ammunition. Inorder to maintain their control of the mining regions, theybring in more weapons and ammunition and enlist childsoldiers, thereby further escalating the conflict. It is avicious circle.
Companies are certainly not unconnected to thisterrible situation. The Congo war, which took the lives of
5.4 million people, was a conflict over resources. Afterthe war was over, the United Nations named and blamed
more than 20 European and US companies operating in
Africa in such fields as finance and transportation forfanning the fires of conflict. Unfortunately, this fact was
not reported widely in Japan at the time. The attitude ofJapan is completely different to that of Europe and theUnited States, who place extreme importance on crimes
against humanity. The United States was moved intoaction out of the belief that the violation of the humanrights of women and children, who are innocent and haveno means to resist, is a threat to humanity as a whole.
The Dodd-Frank Act, enacted to regulate financial
service practices, also contains important measures toend the violation of human rights in connection withfinancial systems. We do not know how effective theMs. Reiko Taniguchi
Fundraising Coordinator,
Amnesty International Japanobservance of this law will be in changing the humanrights situation in the Democratic Republic of the Congo,
but without doubt it is an important first step towards
improving the situation. It is ver y meaningful for
J a p a n e s e c o m p a n i e s, af te r l e a r n i n g a b o u t a n dunderstanding the conditions behind the legislation, tocontribute.

T D K ’s r e s p o n s e to c o n f l i c t m i n e r a l s
TDK commenced conflict mineral countermeasures in2010 and, taking note of the final rule and industry
trends, has been laying the groundwork for a specificresponse. In light of the final rule, adopted in August
2012, and industry trends, TDK has been revising its
setup, roles, and survey methods. Furthermore, in April
2013 the TDK Group established a policy on conflictminerals* stipulating the basic stance of
1.not purchasing, either directly or indirectly, any
minerals that could become financial sources forarmed groups in the Democratic Republic of theCongo and neighboring countries and, if such
purchases come to light, taking steps to eliminatethem;
2.implementing a comprehensive survey across thewhole supply chain; and3.endeavoring to solve common issues in cooperation
with industrial organizations.
In th e ex pl a nator y m e eting, pa r ti cipa nts s ha re d
information about specific methods and unanimously
affirmed their intention to make a sincere response fromnow on.
*Details of the policy are carried on the TDK website:

http://www.global.tdk.com/csr/social_responsibility/csr02210.htm

Congo War1960 Independence
1965 Administration of Joseph
Mobutu takes power

1994 Rwandan Genocide
1996–1997 First Congo War
1998–2003 Second Congo War

Republic ofthe Congo(the “Great War of Africa”)

T D K C S R R E P O R T 2 013

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3[Special Feature] Social Problems of Our World―How TDK Meets the Challenge

Society and environmental
considerations in thesupply chain

F Y 2 0 13 A c t i v i t y R e p o r t

TDK Steadily Evolves CSR Activities
with the Aim of Solving Social Problems
In order to tackle social and environment problems using the full weight of the whole supply chain, collaboration within industry circles andwith others is essential. CSR Promotion Office General Manager Sachiko Nagahara talks about TDK’s efforts so far and plans for the future.

Fulf illing our responsibilit y as a
midstream company
Generally speaking, companies in the electronics
industry have supply chains extending around the world.
Responding to labor, human rights, and environmental
problems, which could occur anywhere in the supply
chain, is an important theme that TDK should tackle. In
the belief that our mission is to firmly understandconditions within the company and our sphere ofinfluence, to make improvements, and to establish a
setup for preventing risks, TDK conducts activities
based on the three pillars of self-checks, on-site audits,and training.
Since TDK is a midstream company in the supplychain, it has the position of both supplier and buyer. As a
supplier providing products to customers, we carry out
self-checks on the activities of our company and groupcompanies and report on this to customers. As a buyer,
we request responses to a CSR checklist in order tounderstand the labor, occupational safety, environmentaland ethics conditions of our business partners. We also
conduct on-site audits in order to get an objective
understanding of these conditions. So far we haveconducted such on-site audits at TDK’s main production
sites, but from fiscal 2013 we plan to widen the scopeand carry on-site audits at more locations.
Re garding training we are continuing to of fe re-learning programs on ethics and CSR in general, andin Februar y 2013 we held a workshop in Japan topromote understanding of the EICC (Electronic Industry
Citizenship Coalition) code of conduct. The aim of theworkshop was to give participants an understanding of
the code of conduct’s contents so that they canappreciate the background to the questions in the CSR
checklist and come up with even better corrective
measures. In the future, we would like to hold thisworkshop not only in Japan but also in China and othercountries. We would also like to convey our thinking
about CSR, including the EICC, to suppliers.
Conflict minerals have become a major problem in theworld. TDK established a policy and declared that it
would make the utmost efforts to use only minerals
unrelated to conflict in the supply chain. Furthermore, inorder to inform related personnel about how mineral
resources are a source of funding for armed groups in
the Democratic Republic of the Congo and are fuelingconflicts and human rights violations there, we invited

23T D K C S R R E P O R T 2 013

Ms. Reiko Taniguchi of Amnesty International Japan to
speak about why conflict mineral countermeasures arenecessary. Thanks to her lecture, which delved beyond
the usual working-level talk, participants were able tounderstand the background to the issue.
Based on the recognition that the violation of thehuman rights of women and children in the Democratic
Republic of the Congo poses a threat to humanity as awhole, legislation was enacted in the United States. I
believe it is extremely significant for TDK, acting on thebasis of this legislation, to sincerely tackle the issue of
conflict minerals and to disclose such information tocustomers.
TDK cannot solve major social issues alone. But
through its activities in industrial organizations, and incollaboration with the electronic components industry as
a whole and with others, it can contribute to theformation of a society-wide movement. Although there isno end in sight, we will steadily evolve our activities inorder to close the gap between the present realities ofsociety and the ideal social situation.

Promotion of CSR Procurement
CSR procurement, which is also TDK’s purchasing
policy, is an important issue for our company. Since TDK
is a component maker, it is necessary for us not only topromote our own CSR from our standpoint as a supplier,but also to require CSR of our business partners.
For this purpose, we request our business partners torespond to a CSR check list using the SupplierPartnership System.*1 The 60 items on the checklist
questionnaire which are centered on human rights andlabor, the environment, fair trading and ethics, andinformation security, are matters that TDK believes to be
especially impor tant among those stipulated in theSupply-Chain CSR Deployment Guidebook of the Japan
Electronics and Information Technology Industries
Association (JEITA). In order to make business partners
aware of the issues and increase their motivation tomake improvements, after they answer the questions theresults are immediately displayed on a monitor.

Supplier Par tnership System

TDK Group
Materials Divisions
HQ

TDK Web ServerBusiness information•Basic Agreement •Memorandums
Contract •Delivery Contracts•Green Procurement Standards•Payment Method Notices •Others

CSR Check SheetDivisions

Overseassites

Supplier Evaluation

Businesspartner

Bulletin Board
Mail Distribution Confirmation
Distribution/Acceptance Management(General)Procurement Specifications Issue/Acknowledgement*1 Supplier Partnership System: A web-based system for consolidated management of business information, distribution of procurement
specifications, and shared management of contracts and other data which conventionally were kept as paper-based documents or stored
on magnetic media. For both the suppliers and TDK, it leads to the speeding up and increased efficiency of work.

No. of c ompa nie s re pl y ing to CSR
c h e c k l i s t a n d r e p l y r a t i o ( g l o b a l ) *2

No. of c ompa nie s re pl y ing to CSR
c h e c k l i s t a n d r e p l y r a t i o (J a p a n) *2

3,320 85% 1,567 98%*2 As of end of May 2013

R e s p o n s e to C o n f l i c t M i n e r a l sFollowing the US Securities and E xchange
Commission’s adoption of a final rule relating to thedisclosure of conflict minerals in August 2012, TDK
undertook a revision of its setup and compiled apolicy on conflict minerals for the TDK Group. TDK
also makes efforts to solve common issues in theindustr y by par ticipating in JEITA’s Responsible
Minerals Trade Working Group.
Details of the TDK Group’s policy on conflictminerals are available on the TDK website:

Sachiko Nagahara

General Manager, CSR Promotion Office,Administration HQ, TDK Corporation

http://www.global.tdk.com/csr/social_responsibility/csr02210.htm

Strengthening the Foundation ofCSR Activities and CSR Responseto Customers
The TDK CSR Self-Check has
been implemented at the TDKGroup’s main production sites
every year since 2009, andon-site CSR audits are carriedout at some sites. In China inparticular, efforts are being
made to strengthen measuresagainst child labor andinvoluntary labor.

*KPI figures shown above are representative data only, provided as a measure of the progress of related items.
For further KPI figures, please visit our website.

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