CSR Report

2007
Corporate Social Responsibility ReportEditorial Policy
Japan Energy published an Environmental Report in 2003 and 2004. It published a Socialand Environmental Report in 2005 and last year published it as the CSR Report to reﬂect awidened scope of coverage. This report details the company’s wide range of petroleum-related
businesses, from exploration of petroleum to the sale of petroleum products at JOMO service
stations. We have also strived to present the responsibilities and efforts of each of our businessﬁelds in an easy-to-understand format.

Scope of the Report
This report covers basically the activities of Japan Energy Corporation. Financial data, however,
covers Japan Energy Group consolidated companies. Environmental data and environmental
accounting cover Japan Energy Corporation and Kashima Oil Co., Ltd.

Period Covered by the Report
This report covers the CSR activities for FY2006 (April 1, 2006 to March 31, 2007). Somesections also cover activities in and after April 2007.

Reference Guidelines
In this report, we referred to the Environmental Reporting Guidelines (FY2003 version), publishedby Japan’s Ministry of the Environment, and the Sustainability Reporting Guidelines 2002,
published by the Global Reporting Initiative (GRI). For environmental accounting, we referred to
the Study on the Introduction of Environmental Accounting in the Petroleum Industry (2000),
published by the Japan Petroleum Energy Center.

Nippon Mining Holdings GroupThe Nippon Mining Holdings Group, through its holding company Nippon Mining Holdings, Inc.,
carries out two major businesses: petroleum (Japan Energy) and metals (Nippon Mining & Metals
Co., Ltd.). It is a comprehensive resources and energy group active in the ﬁelds of petroleum,
petrochemicals, non-ferrous metals, and electronic materials. Through these businesses,
it carries out its mission of efﬁcient, stable provision of fundamental materials that support
industries and individual lifestyles around the world.
The Nippon Mining Holdings Group is involved in a wide range of businesses. A uniquecorporate group with a variety of operations adapted to each ﬁeld’s stage of growth andbusiness characteristics, its activities include everything from fundamental materials forinfrastructure-building to leading-edge IT materials that drive the ﬁeld of nanotechnology.

Nippon Mining Holdings Group
Nippon Mining Holdings, Inc.

Japan Energy Group (Petroleum business)
Nippon Mining & Metals Group(Resources and non-ferrous metals business)
Independent operating companies andfunctional support companies

1

JAPAN ENERGY CSR Report 2007

Contents
3
5
7

Top Message
Corporate Information
Management
Our Mission and Business Principles, Corporate Governance,
Compliance and Risk Management

Feature 1 Our Mission as an Energy Company

11

Petrolean Exploration, Development andProduction of Crude Oil, Crude Oil Transportation
Reﬁning and Stockpiling, Manufacturing of Petroleum Products
Transportation in Japan, Delivery Terminals
Marketing of Petroleum Products

13
15
17
19

Working for the Environment

21

Our Responsibilities andActions in the Supply Chain

Environmental Management
Efforts to Prevent Global Warming
Environmental Efforts at Refineries and Plants: Part 1

22
25
27

Preventing Air Pollution, Preventing Water Pollution Proper
Management of Chemicals

Environmental Efforts at Refineries and Plants: Part 2

29

Reducing Waste, Increasing Recycling/Strict
Soil Contamination Measures and Green Purchasing

Environmental Efforts at JOMO Service Stations
Environmental Efforts in Products and Services
R&D into Environmentally Friendly Technologies and Products

30
31
33

Together with Society

35

Together with Our Customers
Together with Our Business Partners
With the Employees
Together with the Community

36
39
40
43

Feature 2 As a Corporate Citizen

47

Third Party Opinions
Explanation on Terms

51
52

Nurturing the Next Generation andProtecting the Environment

The site report is placed in the homepage

WEB

http://www.j-energy.co.jp/sitereport/

Our company name, Japan Energy, represents our social mission of providing a stable supply of energy as one ofJapan’s leading energy companies. It also represents the “energy” that we put into developing new technologies andnew businesses.
JOMO, our corporate brand name, is an abbreviation meaning the “Joy of Motoring” and the “Joy of Movement.” Thesphere part of our corporate mark represents the Earth, with a gradual change of color from blue to green representing ourcrystal-clear environment of water, plants, and trees. The square part of the corporate mark represents the sky above us,
with the gradual change from reddish orange to yellow representing the dawn of a new era. The combination of these twoelements symbolizes both a deep concern for the Earth and its environment, and a picture of moving towards a new era.

JAPAN ENERGY CSR Report 2007

2

Top Message

Our Mission: The Stable Supply andEffective Use of Energy.
Fulﬁlling our Social Responsibilities
to the Earth and to our Stakeholders,
We Aim for Sustainable Growth.

Japan Energy’s Social Mission
Petroleum accounts for the majority of Japan’s primaryenergy sources. This inexpensive, stable energy source
has contributed to Japan’s economic development. It
will continue to play an important role as a source ofprimary energy in the 21st century due to its economy
and accessibility.
At Japan Energy, our aim is to contribute to advancing
society and improving people’s lifestyles. To this end, we
operate our business based on environmental protection
and safety, providing a stable and efﬁcient supply of energy
and raw materials centered on petroleum products andpetrochemical products, and ensuring that energy is used
efﬁciently and in effective new ways.

Our Roots Lie in our Corporate
Mission: “We Create Energy”
In April 1997, we established our Mission, “We Create
Energy,” along with our “Five Pledges,” a guide to put
this mission into practice. Our mission represents the
direction and stance Japan Energy must take to achieve
its aim of helping realize a society that is warm andvibrant. This aim can be achieved by using three kindsof energy in a synergistic effect: activating “Energy inpeople,” using the “energy of the Earth” wisely, andenhancing the “energy of society.”
The Five Pledges represent promises that our
directors and employees have made to society regarding
corporate ethics and social contribution; environmentand safety; respect for individuality; a customer-ﬁrst
approach; and proﬁtable growth. These are promises
with the society that must guide us in everything we do.
Putting our Mission and Business Principles into practice
is what our CSR activities are all about.

3

JAPAN ENERGY CSR Report 2007

In January 2005, we boosted our CSR capacities
with establishment of the Corporate Social Responsibility
Department, which is dedicated to the planning andimplementation of all CSR activities based on our
Mission.
Japan Energy carries out CSR activities with anemphasis on compliance, environmental protection,customer satisfaction, and social contribution.

Be a Good Corporate Citizen
At Japan Energy, compliance is a prerequisite forall business activities, with all employees earnestly
abiding by laws, social norms, and corporate ethics. By
having everyone from our top management to generalemployees share an understanding of our goals,
Mission and Business Principles, and by emphasizing
deep and transparent communication with our
stakeholders, we aim to realize a sustainable society
and grow as a company.

Carrying Out Business with Concern
for the Environment and Safety
Petroleum products constitute a valuable source ofenergy and petrochemical products are an importantsource of raw materials. Large-scale consumption ofthese, however, causes problems like man-made carbon
dioxide emissions that impact the Earth’s environment.
Starting in 2008, countries must meet targets forgreenhouse gas emissions under the Kyoto Protocol.
Meanwhile, accidents at our sites can negatively impact
the local and global environment. We are therefore
fully aware that we must at all costs continue to makeenvironmental protection and safety an integral part ofour business activities.

In our Mission, we state that we will “use the energyof the Earth wisely.” In our Five Pledges, we state that
we shall “Always give top priority to safety and theenvironment.” As a petroleum company, it is only naturalthat we take responsibility for preventing problems likeglobal warming and air pollution in the energy processesof our petroleum business, from petroleum exploration,
development, production, and transportation, to reﬁning
and to marketing,as well as throughout the entire supply
chain. That’s why we carry out business with the utmost
care for environmental protection and safety: we pursue
energy efﬁciency and reduced environmental impact,
and we have systems for safety and crisis management.
All of our reﬁneries and plants are certiﬁed for ISO
14001, thus ensuring that our organization has built-in
systems for continuous environmental improvement.
We also develop technologies that protect theenvironment: our research and development includes
clean energy sources, fuel oils like sulfur-free gasoline
and sulfur-free gas oil , environmentally friendly
products in the lubricant and petrochemical ﬁelds,
and plastic chemical recycling. As part of our efforts
to prevent global warming, we are obtaining CO2equivalent emissions credits and looking into starting
Clean Development Mechanism (CDM) projects. We
have also joined the rest of the industry in starting trial
sales of bio-gasoline.
Japan Energy is also striving to protect domestic
forests, which act as carbon sinks. Working with local
governments and non-proﬁt organizations, we areproviding funds and employee volunteers for forest
protection and tree-planting activities.

Keeping All Channels of Communication
Open with Stakeholders Such as
Customers and Employees andBoosting Customer Satisfaction
Japan Energy and JOMO service stations anddealerships work as a team in pursuit of customer
satisfaction. Everyone—from service station crew
to top management—share a desire to serve andachieve the highest level of customer satisfaction.
We are striving to create “Value Style” stations basedon the principle of “producing stations that makecustomers want to come again.” Another way we aresatisfying our customers is by training our people tobe rich in humanity in order to enhance the qualityof our customer service. At the same time, therealization of customer satisfaction is tied to a highassessment of a company’s image and brand, andsuch a high assessment from society in turn leads
to more pride and joy for employees. In other works,
customer satisfaction and employee satisfaction are acollaborative effort. We will continue to strive to create
a free and open workplace environment in which each

employee’s personality and capabilities are given full
rein and respect, and in which women and men fromall backgrounds can work stress-free.

Contributing to Society through Sports,
Culture, and Volunteering
Japan Energy is particularly active in its contributions
to society through the promotion of sports and culturalactivities and assistance to children’s and special needs’
groups. We also support our employees’ volunteer activities
in the community. Now in its 38th year, the JOMO Children’s
Story Award is our company’s longest running social
contribution activity. Every year, we gather children’s stories
from around Japan, and the most outstanding entries areawarded and published in the Bouquet of Children’s Stories.
Since 1992, our dealers have purchased copies of the
Bouquet of Children’s Stories, with proceeds going to theJapan National Council of Social Welfare, which carries on
the JOMO Scholarship Grant for children’s welfare. We also
promote sports through the JOMO Basketball Clinic andphysical activities for special needs people through the click
donation program. We will continue to focus on these key
areas as well as look into new ways to contribute to society.

UN Global Compact
Japan Energy takes part in the UN Global Compact andits local network, the Global Compact Japan Network,
working with other companies to solve problems andshare successes in international problems related tohuman rights, labor, the environment, and anti-corruption.

Taking CSR Further
2007 marks the 10th year since we established ourMission and Business Principles. In addition to looking
back on what we have done and how well it has taken
root, this ﬁscal year will see us re-familiarize ourselveswith our Mission and Business Principles and strive toachieve them by fully understanding and putting into
action our CSR activities. As President and CEO, I willlead by example by reafﬁrming my commitment to CSR.
We hope that this CSR Report 2007 will give you abetter understanding of Japan Energy’s CSR activities.
We welcome your frank and honest opinions and hope
to reﬂect them in our CSR activities from now on.
August 2007

Isao Matsushita
President and Chief Executive Ofﬁcer,
Japan Energy Corporation

JAPAN ENERGY CSR Report 20074

Corporate Information

Corporate ProﬁleFiscal 2006 Performance

Name

Japan Energy Corporation

Head ofﬁce

2-10-1 Toranomon, Minato-ku, Tokyo, Japan 105-8407

FoundedDecember 1905

Established

April 1, 2003

Capital48 billion yen
Wholly owned by Nippon Mining Holdings, Inc.

President

Isao Matsushita

Number of employees 2,476 (As of March 31, 2007)
Main lines of business Exploration, development and production of petroleum
Manufacturing and marketing of gasoline, naphtha,
kerosene, gas oil, heavy fuel oil, LP gas andlubricating oils
Manufacture and marketing of petrochemical products

Organization (As of June 28, 2007)
Corporate Social
Responsibility Dept.
Environment &Safety Dept.
Business
Development Dept.

President & CEO

Corporate Planning& Control Dept.

Executive
Committee

Bio Research Center
Beijing Ofﬁce

Accounting Dept.
Corporate Principles
Committee
Strategic Planning
Committee
Monthly Performance
Review Committee
Branding Strategy
Committee

Information
Systems Dept.
Auditing Dept.
General Administration &Human Resources Dept.
Toda Administration Ofﬁce
Credit Dept.
Legal Dept.

Statutory
Auditors

Auditors Affairs
Ofﬁce

Exploration &Production Dept.
SupplyCoordination Dept.

AuditorsCommittee

Net Sales

Logistics Dept.
Crude Oil & Products
Acquisition Dept.
Petroleum Reﬁning Dept.

Demand for petroleum products was overall down slightly, with
fuel oils sales volume of 28.75 million kiloliters, down 3.9%
over the previous year. The price of our products rose due tothe continuing high level of crude oil prices. Consolidated sales
were 2,755.7 billion yen, up 15.2 % over the previous year, andconsolidated income before special items decreased 15.5 % to81.9 billion yen, mainly because of the shrinking effect of cost
reduction by inventory valuation due to the rise in crude oil price.
In the reﬁning division, the Mizushima, Chita, and Kashima
reﬁneries continue to put safety and environmental protection
ﬁrst while continuing highly efﬁcient operation. At the Mizushima
reﬁnery, we have ﬁnished the reinforcement of delayed coker
unit in April 2007, in order to make the unit bottomless becauseof the movement towards bottomless (zero heavy fuel oil C) torespond to changes in demand of products.
In our marketing division, everyone from service station crew
to top management shares a “mentality of hospitality” as part ofour mission to manage our company with a customer satisfaction
focus. We are aiming to achieve excellent service and create
service stations that are the most competitive in their regions
through our Value Style service station initiative in which we create
stations that make customers ﬁrst want to come and try us andthen make them want to come back. In October 2006, we newly
issued our JOMO Card Light with no annual member charges.
In January 2007, we jointly established Japan Biofuels Supply
LLP with other companies in our industry. In April 2007, webegan pilot sales of bio-gasoline that contains ethyl tertiary butyl
ether (ETBE), a synthesis of bio-ethanol.
In our exploration and production division, jointly with othercompanies in our industry, we are exploring and developing
petroleum and natural gas in the Middle East, China, Southeast
Asia, Oceania, and Japan.

(Units: Hundred million yen)

Distribution Center

Funakawa WorksPetroleum Reﬁning
Engineering Center
Marketing Planning Dept.

Mizushima
Oil Reﬁnery
Chita
Oil Reﬁnery

Commercial Sales Dept.

Hokkaido Branch
Ofﬁce

20,000Non-consolidated

27,55730,000Petroleum Reﬁning Research& Technology Center

Consolidated

24,121
19,86425,52622,25818,40010,000

Tohoku Branch
Ofﬁce

Petroleum RetailMarketing Dept.

0

Kitakanto Branch
Ofﬁce

Service Station
Development Dept.

FY2004

FY2005

FY2006

Tokyo Branch
Ofﬁce

LP Gas Dept.
Kawasaki LP Gas Terminal
Industrial Fuel Dept.

Minamikanto
Branch ofﬁce
Chubu Branch
Ofﬁce
Kinki Branch
OfﬁceInternational
Marketing Dept.

Chushikoku
Branch Ofﬁce

Lubricants Dept.
Lubricants Order Center

Operating Income(Units: Hundred million yen)

1,000

Kyushu Branch
Ofﬁce

Consolidated

Non-consolidated

988

923
759

855

759
629

750

Lubricants Research &Development Center

500

Sodegaura Lubricants Plant
Petrochemicals Dept.

Mizushima
Oil Reﬁnery

Notes: The Kitakanto Branch, Tokyo Branch and Minamikanto Branch do not oversee the business of theIndustrial Fuel Department, International Marketing Department and Lubricants Department.

5JAPAN ENERGY CSR Report 2007

250
0FY2004

FY2005

FY2006

Primary Afﬁliated Companies (As of April 1, 2007)
Petroleum exploration, development
and production

Toshin Yusosen Co., Ltd.
JLS Corporation
Chubu Sekiyu Yuso Co., Ltd.
Kinki Ekitai Yuso Co., Ltd.

Japan Energy Development Co., Ltd.
Southern Highlands Petroleum Co., Ltd.
NMC Pearl River Mouth Oil Development Co., Ltd.
Abu Dhabi Oil Co., Ltd.
United Petroleum Development Co., Ltd.

Marketing of petroleum products and LP gas,and related businesses

Crude oil transportation
Nissho Shipping Co., Ltd.
Reﬁning and manufacturing petroleum products
and related businesses
Kashima Oil Co., Ltd.
Kashima Aromatics Co., Ltd.
Nikko Liqueﬁed Gas Co., Ltd.
Petrocokes Ltd.
Cactus Industry Co., Ltd.
JOMO Mizushima Techno, Inc.
Funakawa Kosan Ltd.
Oga Techno Co., Ltd.
JOMO Technical Research Center Co., Ltd.
Sanyo Kiki Kentei Co., Ltd.
Isewan Sea Berth Co., Ltd.
Toa Tansan Co., Ltd.
JS Initiative Ltd.
Transportation (in Japan)
Nippon Tanker Co., Ltd.

JOMO-Net Tohoku Co., Ltd.
JOMO-Net Kita-kanto Co., Ltd.
JOMO-Net Higashi-Tokyo Co., Ltd.
JOMO-Net Nishi-Tokyo Co., Ltd.
JOMO-Net Minami-Kanto Co., Ltd.
JOMO-Net Tokai Co., Ltd.
JOMO-Net Kansai Co., Ltd.
JOMO-Net Sanyo Co., Ltd.
JOMO-Net San-in Co., Ltd.
JOMO-Net Kyushu Co., Ltd.
J-Quest Co., Ltd.
Asia Shoji Co., Ltd.
Nissan Sekiyu Hanbai Co., Ltd.
JOMO Retail Service Co., Ltd.
Shin-Hokkou Oil Co., Ltd.
Ryoyu Oil Co., Ltd.
Asahikawa Sekiyu Co., Ltd.
JFE Shoji Sekiyu Hanbai Co., Ltd.
Iwami Kotsu Shoji Co., Ltd.
Inoue Shoko Co., Ltd.
Taiyo Koyu Co., Ltd.
Itochu Petroleum Sales Co., Ltd.

Income Before Special Items(Units: Hundred million yen)

Kyo-Pro Co., Ltd.
JOMO-Pro Kanto Co., Ltd.
Gas Net Co., Ltd.
JOMO Sun-Energy Co., Ltd.
Toyo Sekiyu Hanbai Co., Ltd.
JOMO Support System Co., Ltd.
JOMO Enterprise Co., Ltd.
JOMO Guardian Co., Ltd.
JOMO Net Outsourcing Co., Ltd.
JOMO Educational Information Center Co., Ltd.
Japan Energy Analytical Research Center Co., Ltd.
Oil Stockpiling
Fukui Oil Storage Co., Ltd.
Akita Oil Storage Co., Ltd.
Kyodo Terminal Co., Ltd.
Okinawa Terminal Co., Ltd.
Other businesses
IS Japan Co., Ltd.
am/pm JAPAN Co., Ltd.
Overseas businesses
Irvine Scientiﬁc Sales Co., Inc.
Japan Energy (Singapore) Pte. Ltd.
Japan Energy (Oceania) PTY., LTD.
Japan Energy (U.K.) Ltd.
Japan Energy (Shanghai) Trading Co., Ltd.
Shanxi Japan Energy Lubricants Co., Ltd.

Interest-Bearing Liabilities

Consolidated

Non-consolidated(Units: Hundred million yen)

Consolidated

990
878

1,000

799
680

750

7,500

819
616

Non-consolidated

6,894

6,847

6,438

5,000

3,220

3,149

500

3,280

2,500

250
0

FY2004

FY2005

FY20060

FY2004

FY2005

FY2006

Note: Consolidated interest-bearing liabilities are those of the Nippon Mining Holdings Group.

Total Assets

Number of Employees(Units: Hundred million yen)

12,0009,000

Consolidated

8,388(Units: Person)

12,363

11,963

10,496

Non-consolidated

9,841

10,173

4,500

3,000

Consolidated

Non-consolidated

4,225

4,180

3,999
2,623

2,519

2,476

6,000
1,500

3,000
0

FY2004

FY2005

FY20060

FY2004

FY2005

FY2006

Note: The number of non-consolidated employees includes those dispatched to afﬁliates.

JAPAN ENERGY CSR Report 2007

6

Management

Mission and Business Principles
Our Mission, “We Create Energy,” indicates the direction and the goal our company is heading, and sense ofvalues and commitment all of our directors and employees must share. Our Business Principles consist of theFive Pledges, standards of action for implementing our Mission. Central to our CSR activities is every director
and employee to carry out their day-to-day work with a focus on the Mission and Business Principles.

Japan Energy’s Mission and Business Principles (Established in April 1997)

Our Mission

WE CREATE ENERGY
For a more cohesive and dynamic society.

Energy in People

We activate the natural, placing a high value
on individual imagination and creativity.

Energy of the Earth

We use thewisely,fully aware that the global environment forms the basis for mankind’s present and future existence.

Energy of Society

We enhance theby continually improving corporate performance and credibility,and discharging responsibility as a corporate citizen to discover new values
and additional areas of growth.

Our Business Principles

FIVE PLEDGES
To achieve our mission, we will:
Communicate openly about our policies, programs and performance,
and always act as a good corporate citizen.
Always give top priority to safety and the environment.
Foster a work environment based on teamwork
and a can-do spirit to offer innovative technologies, products and services.
Accurately identify and fully satisfy the ever-evolving needs of our customers.
Strive to achieve corporate growth through sustainable earnings
in close cooperation with our group of companies.

7

JAPAN ENERGY CSR Report 2007

Corporate GovernanceBy putting its Mission into practice, Japan Energy is fulﬁlling its role as a good corporate citizen.
As an important part of this, we are ensuring effectiveness and transparency in our management.

Creating Systems that StrengthenInternal Control
In line with the new Japanese Corporate Law enacted in May
2006, we set out a general framework for a system that would
allow us to comply with the stipulations of the law. The basic
policy of the frame work is to establish our internal control
system. In June 2006, we abolished the Board of Directors,
Board of Auditors and Board of Executive Ofﬁcers, and in theirplace established the Executive Committee and the Auditors
Committee. This new system allowed us to speed up ourdecision-making and simplify our executive systems. In June
2007, we increased the number of full-time auditors, thus
strengthening the auditors system.
Based on the above-mentioned basic policies, directors
and employees abide by relevant laws, articles of incorporation,
our Mission, the Basic Compliance Rules and other in-houserules and notices. To make all this effective, Japan Energy has
systems as mentioned below.
Ever since establishment of our Mission in 1997, theCorporate Principles Committee (originally the Corporate
Principles Headquarters Meeting), chaired by our company
president (originally the Chief Ofﬁcer of the Headquarters), hasmade it a rule to meet once a month. Made up of ofﬁcers incharge or in supervision of each department, this committee
discusses company-wide issues related to our Mission and CSR.
The Compliance Committee was established in July 2003
as a subsidiary body of the Corporate Principles Committee.
This committee ensures thorough compliance by setting policy
on company-wide education and awareness activities andexamining the progress that each department and subsidiaryis making in compliance. Both the Corporate Principles
Committee and the Compliance Committee are administrate by
the Corporate Social Responsibility Department.
In addition to the Corporate Principles Committee, three otheradvisory bodies have been established: the Strategic Planning
Committee, the Monthly Performance Review Committee andthe Branding Strategy Committee. These Committees allow
the company’s highest level of management to examine criticalissues with a specialized focus, thus allowing us to improve the
efﬁciency and transparency of our management.
System for Promoting Our Mission and Compliance
President & CEO

Mission promotion managers
in each department

Corporate Principles
Committee

Mission promotion managers
in each plant

Business ofﬁces(CSR Department)
Compliance
Committee

Mission Consultation
Ofﬁce

Mission promotion managers
in each branch

Helpline outside
the company

Group Management System
Japan Energy and Nippon Mining Holdings, Inc. work together ona joint committee, the Nippon Mining Holdings Group Management
Conference, to create medium- and long-term management plansthat both sides can agree to. The two companies also have a basic
contract related to management of the group that clariﬁes thestandards on which Nippon Mining Holdings manages and control
Japan Energy. These standards separate group management
and execution of businesses, effectively securing group business
control functions and management transparency.
In April 2006, the Internal Control Promotion Department wasestablished in Nippon Mining Holdings, Inc. to help the Nippon
Mining Holdings Group prepare its operations for smooth andsystematic compliance with the new laws and revisions of current
laws; for example, revisions to the Corporate Law and the Japaneseversion of the SOX Law (Financial Instruments and Exchange Law;
scheduled to go into effect in 2008). As well, the Group Internal
Control Committee was established to allow Nippon Mining
Holdings, Inc. and the core business companies, including Japan
Energy, to cross-organizationally discuss and examine policy onthings like system improvements to group-wide internal controls,
and to carry out the related planning, documentation and evaluation.
Japan Energy and its subsidiaries share duties on the Japan
Energy Group Management Conference whose aim is to create
uniﬁed medium- and long-term management plans. Another goal of
the committee is to respect the autonomy of afﬁliates based on theRules for Control and Operations of Afﬁliates while at the same time
improving the overall strength of the group and thus helping thepetroleum business segment grow and operate more efﬁciently.

Participation in the United Nations Global Compact
Japan Energy has since July 2002 supported the United
Nations Global Compact (below referred to as GC) and its
10 principles in the four areas of human rights, labor, theenvironment and anti-corruption.
When we established our Basic Compliance Rulesin May 2004, we codiﬁed our commitment to theprevention of child labor and forced labor; prohibition of
unfair discrimination; environmental protection; and clean
relations with politicians, government and other publicofﬁces. Adherence to these rules by employees is ensured
by regular in-house training activities.
We also offer employees opportunities to raise theirawareness of global issues; for example, through activities toraise money for NGOs that conduct education-support forchildren in developing countries and through the sponsoring of
joint events with concerned organizations
that bring employees close to important
issues facing the world today.
Please refer to the GC home page fordetails of the GC 10 principles.
WEB

http://www.unic.or.jp/globalcomp/JAPAN ENERGY CSR Report 20078

Management

Compliance/Risk Management
For Japan Energy, compliance is the major prerequisite in all business activities. Our basic policies,
concrete standards and systems of implementation are all set in rules and we are striving to promote compliance.

Fundamental Compliance Policy

System of Implementation forCompliance

Established in May 2004, our Basic Compliance Rules state
that, led by our top management, all employees shall earnestly
abide by laws, social norms and corporate ethics based on
our Mission. To this end, we have made it a basic policy tocontinuously upgrade our organizational culture and create asystem that prevents misconduct and clariﬁes responsibilities.

Japan Energy’s activities are run by the Compliance Committee,
which was established as a subsidiary body to the Corporate
Principles Committee in July 2003. The Compliance Committee
establishes policy on compliance education and awarenessactivities for the entire company. Every six months, thecommittee examines and evaluates the progress that company
divisions are making on key compliance-related efforts.

Concrete Standards of Compliance

Mission Consultation Ofﬁce for Internal Reporting

Based on our Fundamental Compliance Policy, we set thefollowing 22 criteria as concrete standards that directors
and employees must adhere to in all that they do. The Basic
Compliance Rules state that directors and employees must
adhere to these to other relevant laws and regulations.
Starting in FY2006, we expanded the criteria to all groupcompanies and in March 2007 checked the state of compliancewith these.
Concrete Standards of Compliance (22 Criteria)
1. Adherence to the Antimonopoly Act
2. Prohibition of insider trading
3. Environmental protection
4. Safety management
5. Adherence to the Unfair Competition Prevention Law
6. Fair relations with politicians, public agencies and public officials
7. Consumer protection
8. Disclosure of information and accountability
9. Dealing with anti-social forces
10. Appropriate accounting
11. Fair reporting of working hours
12. Prohibition of receipt of gifts
13. Prohibition of unfair discrimination
14. Prevention of sexual harassment
15. Protection of personal information

Part of efforts to promote our Mission, this ofﬁce responds toquestions, opinions and doubts expressed by employees, andthe ofﬁce also hears complaints on in-house misconduct andother issues based on our Fundamental Compliance Rules.
In FY2006, there were three cases of consultation related toissues like coworker relations.
Based on the Whistleblowers Act, which was formulated
in June 2004, Japan Energy strictly forbids any retaliation
against whistleblowers reporting things like misconduct.
These protective measures are written into the Fundamental
Compliance Rules.
To further improve this reporting system, in April 2006,
we established our Reporting System Operation Rules, which
stipulate basic policy, procedures and items of note for operationof the reporting systems. We also added helpline outside thecompany, as a supplement to the Mission Consultation Ofﬁce forInternal Reporting, which had been responsible for taking reportson misconduct inside the company. This new helpline is operated
by a law ofﬁce to take reports from directors and employees(including dispatched employees).

Compliance Education
Japan Energy has always made compliance an integral part ofeducation in the company Mission and CSR. Our implementation
policy is to take every opportunity to honestly and frankly educate
directors and employees so that a spirit of compliance takes ﬁrm
root in the company.
In FY2006, we implemented CSR and compliance educationin the training programs for new employees and newly appointed
managers. As well, we held a training program by an outside
expert aimed at Mission Promotion Managers from all department
and site of Japan Energy.

16. Prevention of child labor and forced labor
17. Prohibition of conﬂicts of interest
18. Prohibition of private usage of company properties
19. Assurance of security of company information
20. Appropriate management of exports
21. Prohibition of trading for speculative purposes
22. Rigorous crisis management

9

JAPAN ENERGY CSR Report 2007

Risk Management
Risk management is divided into risk assessment (preventative),risk control (dealing with problems) and risk communication(public relations). Japan Energy places particular emphasis
on risk assessment as a way to prevent problems from everoccurring. We use the HAZOP* method at our reﬁneries, which
are the sites that present the greatest risk.
*HAZOP: Hazard and Operability Study. A method for analyzing the safety of processes.

Information Security Management
Japan Energy distributes the Information Security Guidebook to
all directors and employees. This guidebook stipulates our Basic
Information Security Rules and Information Security Standards,
and is also a compilation of the rules that must be adhered to in
all daily work.
Once a year, the Information Security Committee conducts
information security audits. In the FY2006 audits, committee
members checked each division to see how well they werehandling classiﬁed information and taking measures for computersand other ofﬁce equipment to protect such important information.
Measures were taken to ﬁx any problems that were discovered.

Preventing Disasters and Taking
Emergency Measures
Japan Energy’s business involves the handling of large amountsof dangerous substances and high-pressure gases. That’s why
we take every opportunity for thoroughness and make it a toppriority to prevent disasters like ﬁres, explosions and workrelated accidents. We do this by thoroughly maintaining andensuring the proper operation of facilities, and by conducting
regular training for employees including TPM (Total Productive
Maintenance). We also have our Risk Management Rules,
which describe systems for dealing with natural disasters liketyphoons and earthquakes, as well as terrorist attacks.
Particularly, concerning on accidents at reﬁneries, plants,
delivery terminals, during transportation by tank trucks or at
ﬁlling or service stations, we established the Disaster Emergency
System Guidelines, which detail the chain of command forcommunications and for rescue and repair operations in suchcases, thus ensuring that employees properly and promptly
carry out disaster measures. We also have regular disaster drills
and communication drills to ensure that the entire system isfunctioning as it should.
Occurrence of Emergency Situation
Initial response

Establishment andFirst reporting andoperation of emergency
establishment of local
countermeasures
response headquarters For a critical
headquarters

as well as continuing necessary business areas or at least
ensuring their early return. The following three basic policies
cover a large-scale disaster.
(1) Make the safety of employees and other stakeholders a
top priority, and ensure recovery from disaster and theprevention of a reoccurrence of the disaster.
(2) Do everything possible to continue supplying products tocustomers and business partners as needed.
(3) In line with our social responsibility as a petroleum company,
contribute to helping local communities recover from disasters.
As part of our efforts to coexist with and contribute to
local communities, in the event of a large-scale disaster, we
strive to supply petroleum products and we do all we can tosupport people affected and help the stricken regions recoveras soon as possible. As part of this, by March 2009, we plan tohave 100 JOMO service stations equipped with private power
generators so they can continue supplying fuel in the event of apower outage.
*BCP: Business Continuity Plan

Asbestos: Survey and Measures
We surveyed whether asbestos had been used in our reﬁneries,
plants, delivery terminals, R&D Center and JOMO service
stations. Any points that were judged to be at risk of dispersing
asbestos into the air were either removed or given protective
covering by March 2006. We continue to carry out detailed
surveys of all sites for the presence of asbestos.
We are also removing asbestos-based insulation coveringand gaskets and other materials on machinery and pipes in our
reﬁneries and other facilities, and installing replacements that
contain no asbestos.
We also carried out health check-ups of all current andformer employees who had worked at the affected sites. As aresult of these check-ups, it was determined that one employee
suffered from an asbestos-related illness. We reported this tothe labor disaster authorities as required.

situation

Post-measures

Resolution ofsituation

Business Continuity Plan (BCP) in
Case of Large-Scale Disaster
In April 2007, Japan Energy established its Business Continuity
Plan (BCP*), which stipulates basic policy for keeping ourbusiness going even if there is a large-scale disaster.
The Business Continuity Plan outlines measures for avoiding
or minimizing bodily harm to our stakeholders and to their property,

Gasoline Leak from an Underground Tank at a
JOMO-Afﬁliated Filling Station
In April 2007, it was discovered that regular gasoline
leaked from one of the underground tanks at the JOMOafﬁliated JOMO201 Fukuoka Inter-Station.
For some reason, on April 1, 2007, the tank in question
developed a hole, and until April 5 about nine liters of
regular gasoline leaked out. We reported this to the proper
government authorities, removed the tank, collected theleaked oil, and began replacing the polluted soil withcompletion scheduled for early August.

JAPAN ENERGY CSR Report 200710

Feature 1
Our Mission as an Energy Company

Responsibilities and Actions in the Supply Chain
At Japan Energy, we interact with the Earth and people through the energy that we provide. In order to delivera stable supply of the energy that is so vital to people’s lives, Japan Energy has a consistent supply chain thatcovers everything from exploration and development and production of petroleum to marine transportation,
reﬁning and stockpiling and distribution, and ﬁnally to provision of various services via JOMO service stations.
A common theme throughout this entire supply chain is concern for the environment and safety. Fully awareof its social responsibility as an energy company, Japan Energy aims to contribute to a society where people
can live in peace of mind.

Exploration, development andproduction of petroleum

Reﬁning and stockpiling at reﬁneries

Manufacture and stockpiling of LP gas
Crude oil transportation
Manufacture of lubricating oils

CSR To-Do List

Manufacture of petrochemical products•Secure energy and provide it on a consistent basis•Produce, operate and transport energy safely•Reduce environmental burden in production,
operation and transportation•Grow in harmony with oil producing countries

CSR To-Do List
•Ensure safe, disaster-free production•Minimize environmental burden during production•Maintain and improve the quality of petroleum products•Provide petroleum products on a consistent basis•Conduct R&D in environmental technologies andproducts•Live in harmony with local communities

11

JAPAN ENERGY CSR Report 2007

Japan Energy Group Bases

Petroleum development
projects

Iburi-oki

OnshoreOffshore
Overseas

Abu Dhabi Oil Co., Ltd.
(United Arab Emirates)

NMC Pearl River Mouth Oil Development
Co., Ltd. (People’s Republic of China)

United Petroleum Development Co., Ltd.
(Qatar, United Arab Emirates)
Universe Gas & Oil Company Inc.
(Indonesia)

Southern Highlands
Petroleum Co., Ltd.
(Papua New Guinea)

Funagawa Ofﬁce
Sanriku-oki

Southern Akita
Tainai, Niigata(Nakajo Gas Field)
Sado-oki

R&D Center
Kashima Oil Co., Ltd.
Kashima Oil Reﬁnery

Mizushima Oil Reﬁnery

Sodegaura Lubricants Plant
Kawasaki LP Gas Terminal

Murray Petroleum Co., Ltd.
(Papua New Guinea)

Chita Oil Reﬁnery
Domestic Bases

Transportation in Japan (Coastal tankers)

Delivery Terminals, LP Gas Secondary Terminals

Marketing of petroleum products

Marketing of LP gas•Propane•Butane•Autogas

Marketing of lubricating oils
Domestic transport (Tank trucks)•Lubricating oils for automobiles•Industrial lubricating oils
•Refrigeration lubricants•Others

Marketing of petrochemical products•Paraxylene•Benzene•Normal parafﬁn•NS clean•Heavy aromatic solvents•Others

CSR To-Do List
•Ensure safe, disaster-free transportation•Minimize environmental burden during production•Provide petroleum products on a consistent basis

CSR To-Do List
•Offer products and services that are environmentallyfriendly•Ensure safe, disaster-free JOMO service stations•Minimize environmental burden at JOMO service
stations•Provide comfortable environments and services•Pursue excellence in customer service

JAPAN ENERGY CSR Report 2007

12

Feature 1 Our Mission as an Energy Company

Responsibilities and Actions in the Supply Chain

Exploration, Development, and Production ofPetroleum Resources/Crude Oil Transportation
The Japan Energy Group has been involved inpetroleum exploration and development projects inJapan and overseas. We also operate the large tankers
for crude transportation from the Middle East to Japan.
The top priorities in these businesses are always Safety
and Environmental Protection, however, the energy
conservation utilizing the advanced technology is also
the important mission of the company.

CSR To-Do List
•Offer a stable supply of energy•Produce, operate and transport energy safely•Reduce environmental burden in production,
operation and transportation•Grow in harmony with the oil producing countries

The Mission of an Energy Development Company: Grow in Harmony with
Oil Producing Countries and Develop Earth-Friendly Energy
Efforts on Reducing Environmental Loadin Offshore Oil Field
NMC Pearl River Mouth Oil Development Co., Ltd., inwhich Japan Energy Development Co., Ltd. (JED) has a
stake, works through its local operator, JHN Oil Operating
Company, to operate offshore oil ﬁelds in the South China
Sea. This joint China-Japan project was commenced in 1985
and has been producing petroleum in 1993.

JHN, in cooperation with its partner in China, CNOOC
Limited*, strives to reduce energy consumption. Under the
11th ﬁve-year plan formulated at the end of FY2005 by thegovernment of the Peoples Republic of China, reductionof energy consumption is a major goal. JHN set a target of
reducing energy consumption 12.35% against FY2005 by
2010. The ﬁrst year assignment was achieved in FY2006.
The company continues to work towards achieving the goalsof the country’s ﬁve-year plan.

Proportion of interests
CNOOC: 25%
NMC Pearl River Mouth Oil
Development Co., Ltd.: 15%
Two Japanese companies:
30% each

Japan Energy Development Co., Ltd. (JED)Japan Energy subsidiary (100%)

NMC Pearl River Mouth Oil Development Co., Ltd.

Total production volume in
the Lufeng 13-1 oil ﬁeld
FY2005: 3,440,000 barrels

Japan Energy Development Co., Ltd. (JED) subsidiary (95%)

JHN Oil Operating Company
20% stake in NMC Pearl River Mouth Oil Development Co., Ltd.
and 40% stake in each of two Japanese companies

Operations company in the Lufeng 13-1 oil ﬁeld

13

JAPAN ENERGY CSR Report 2007

Lufeng 13-1 oil ﬁeld

Our Expectations

As a Responsible International Citizen, I Hope to Contributeto Mankind and Society through Japan-China Cooperation
Mr. Ying Ye Rong, JMC Chinese Side Chief Representative of JHN from CNOOC Ltd.
CNOOC has been working on the joint China-Japan project in Lufeng 13-1 with a realization of
the responsibility to society. We are currently working in the areas of safety management, energy
conservation, and environmental protection, and are particularly interested in advanced Japanesetechnologies for energy conservation. The management know-how of Japanese companies is
extremely helpful in safety management; the 5S activities (Sort, Set in order, Shine, Standardize,and Sustain) have been praised by CNOOC and are gradually being applied in other operatingcompanies in the oil ﬁelds. We at CNOOC have been working with Japan Energy on this joint
project for almost a quarter of a century, and we will continue to deepen our relations as we strive
to contribute to mankind and society as responsible international citizens.

Crude oil production generates associated water, whichcontains oily components and solid particles. Putting thisback into the ocean would be polluting, so countries are
currently working on setting strict emission standards.
JHN abides by the strict emission standards of China’s
State Oceanic Administration and treats associated waterby removing oily components. It is also incorporating newtechnology and working on improving its crude oil production
process in order to the total amount of emissions.
The company has also set a target of reducing total
emissions by 28% over the next ﬁve years.
* CNOOC Limited: A subsidiary of China National Offshore Oil Corporation(CNOOC), CNOOC Limited explores and develops offshore oil ﬁelds. It possesses
interests on the China side of the joint Japan-China project, and also plays therole of overseer as a representative of China’s national oil interests.

Maintaining Good Relations with Oil
Producing Countries through Social
Contribution
JHN works with CNOOC to contribute to society in the formof support for the needy, education, and disaster relief.
As part of educational support, in FY2006 JHN contributed
to a charity project to expand an elementary school in theneedy region of Kaili City, Guizhou Province. It also donatedto a charity for disaster relief on the outskirts of Zhanjiang
City in the south of Guangdong Province, which was directly
hit by a typhoon. Through such work, the company strives todevelop good relations with local communities.

NICHIOH, a large double-hull tanker

Safe, Environmentally Friendly
Transportation by Large Tankers
When transporting crude oil in large tankers, we strive
for safety and environmental protection. Highly efﬁcientnavigation technology helps reduce CO2 emissions, anddouble-hull tankers ensure that there are no oil spills even
if the outer hull is damaged. A Vessel Trafﬁc Management
System uses maritime communication satellites to ensurethat both crew and ship are protected.

JOMO Efforts

Ensuring a Stable Supply of Energy through Safe,
Environmentally Friendly BusinessYuji Shiozawa, General Manager, Development and Production Dept.,
Japan Energy Development Co., Ltd. (JED)The Development and Production Department in JED is responsible for the drillingof exploration wells, the planning and implementation of ﬁeld development projects,
and subsequently management of production operations. In recent years, the conceptof health, safety and environment (HSE) has become increasingly important in E&P
projects worldwide. JED’s operating afﬁliates are implementing a systematic HSEmanagement system in order to maintain stable and consistent operations and tomeet the regional and global HSE requirements.

JAPAN ENERGY CSR Report 200714

Feature 1 Our Mission as an Energy Company

Responsibilities and Actions in the Supply Chain

Reﬁning and Stockpiling/Manufacturing
Petroleum Products
Crude oil from oil producing countries is transported toour reﬁneries, where it is reﬁned into gasoline and otherfuels. Here we also produce petrochemical products,
lubricating oils and LP gas. Another important roleof reﬁneries is to stockpile crude oil and petroleum
products and ensure their stable supply. At the Japan
Energy Group’s three domestic reﬁneries, all employees
take part in TPM (total productive maintenance) inwhich the top priorities are safety, disaster prevention
and environmental protection.

CSR To-Do List
•Ensure safety and disaster prevention in production•Reduce environmental burden in production•Ensure and improve quality of petroleum products•Ensure a consistent supply of petroleum products•Conduct R&D into environmental technologies andproducts•Live in harmony with local communities

Promoting TPM Activities in Pursuit of “Reform People and Equipment”
10 Years of Grassroots Activities Steadily
Reduce Accidents and Disasters
Japan Energy’s Mizushima Oil Reﬁnery embarked upon its
TPM activities in 1997. At that time, there was increasing
competition spurred by relaxations of restrictions in theindustry, and the price gap between heavy crude oil andlight crude oil had decreased dramatically; this cancelled out
the beneﬁts, and therefore the proﬁts, that the Mizushima
Oil Reﬁnery had previously enjoyed thanks to its strengthof processing heavy crude oil. As well, there were a seriesof technical problems. It was in April 1997 that the reﬁnery
started its TPM activities aimed at ensuring safety, raising
proﬁtability and training personnel.
Put simply, the goal of TPM is to reform people andequipment. To this end, base heads lead overlapping small
group activities at all employee levels and with everyone’s
participation, with the aim of creating an organization
focused on constant improvement and employee education,an organization that eliminates everything, with noexceptions, causing problems or wasted production. In the
10 years since our TPM activities began, people have come

15

JAPAN ENERGY CSR Report 2007

to think differently, and now there is no barrier between
manufacturing and maintenance. There has also been adramatic decrease in problems thanks to thorough analysis
of equipment breakdown. Since the introduction of TPM,
such targets that reﬁning costs and manpower to be cut in
half have been achieved. The reﬁnery has also expanded useof the key performance indicators (KPI) method and is more
active in exchanges with the local community and othercompanies in the industry.
TPM activity achievements in FY2006 include no explosions,Inspection during a regular maintenance checkOur Expectations

Passing on TPM to the Next Generation
Phd. In Engineering

Hayatoshi Sayama, Representative of Process Management Institute,professor emeritus at Okayama University

The Mizushima industrial complex experienced numerous accidents until about 1985. The causeof most of these accidents was equipment malfunction. What was needed to ensure safety ofequipment was TPM. But a major change in thinking was necessary to start TPM, so managers
had to ﬁrst take the initiative and repair, clean and maintain equipment in order for TPM to takeroot from the ground up. In future, the Mizushima Oil Reﬁnery must educate new employees
about this tradition of TPM and instill in them a spirit of TPM.

ﬁres, leakages or other accidents, and no labor accidents
among employees at the Mizushima Oil Reﬁnery.
There have also been successes in reducing environmental
burden from business, as well as community contributions in
the form of volunteer activities to protect forest.
Future aims are for zero labor accidents at afﬁliates andcontractors, improvement of disaster prevention systems
and crisis management, and the building of security control

system. These efforts,
rooted in safe andconsistent operations,will help us become
one of the most
proﬁtable reﬁneries inJapan and the restof Asia.

Measuring environmental levels of benzene

Japan Energy Receives 2006 Japan Petroleum
Institute Award
Japan Energy and Sud-Chemie Catalysts Japan, Inc.
were joint recipients of the Japan Petroleum InstituteAward for the development of gas-phase chlorine removal
technology using zinc-oxide-based absorbents in the
catalytic reforming process.
This technology gives long-term, consistent removalof chlorine-based
compounds, which
corrode the catalytic
reforming devices
that are key tomanufacturing
gasoline baseproducts and aromatic
products like xylene
Plaque for the Japan Petroleum Institute Awardand benzene.
Sulfur-free gasoline production units

JOMO Efforts

Safety and Improvement is in Our Genes:
Pass these on to the Next Generation
Yutaka Yamamoto, Head of Educational Center and TPM Promotion Division,
Mizushima Oil Reﬁnery

In carrying out our TPM activities, we stress the passing on of our traditions of sensitivity tosafety and awareness of improvement. We must foster leaders who can conduct TPM activities
in coordination with other reﬁneries. At the same time, because employee satisfaction leads tocustomer satisfaction, we hope to use TPM activities to build an environment in which Japan
Energy employees can work with pride.

JAPAN ENERGY CSR Report 200716

Feature 1 Our Mission as an Energy Company

Responsibilities and Actions in the Supply Chain

Domestic Transportation/Delivery Terminals
Safely transporting petroleum products, which are
dangerous substances, from reﬁneries to delivery
terminals and JOMO service stations is a matter ofgreat responsibility. Transportation is done on water bycoastal tankers, and on land by tank trucks and railway
tanker cars. The delivery terminals have the role of relay
stations, storing the petroleum products coming from
reﬁneries before shipping them off to JOMO service
stations. Emphasis is not only on ensuring safety but
also on minimizing environmental burden throughefﬁciency of transportation.

CSR To-Do List
•Ensure safe, disaster-free transportation•Minimize environmental burden during transportation•Provide petroleum products on a consistent basis

As Relay Stations, We Stress Safety and Environmental Protection in
Providing JOMO Service Stations with Petroleum Products
Delivery Terminals in Japan

Thorough Daily Equipment Inspections
and Safety Monitoring

Wakkanai
Rumoi
KushiroWest Port
Hachinohe

Niigata East Port

SakataOnohamaKanazawa

Asaka

Hiroshima

Amagasaki

OigawaKeihinFunabashi
Tagonoura

The Keihin Delivery Terminal provides the approximately 400
JOMO service stations in the Kanto region with petroleum
products like gasoline, gas oil, kerosene and grease. It has
38,600 kℓ tank capacity (11 tanks), and two piers capable ofhandling 5,000-kℓ and 2,000-kℓ class tankers. This is Japan
Energy’s largest deliver terminal in terms of shipment volume,with 1.18 million kℓ shipped in FY2006.
Every day, the Keihin Delivery Terminal carries out safetycontrol, inventory control, facilities control and delivery
control. The terminal is particularly diligent in measures
to ensure that the risks from dangerous substances andaccidents are kept to theabsolute minimum. Activities tothis end include improvementof loading facilities for storage
tanks and tank trucks, safety
monitoring by dedicated staff
during cargo handling, static
Inspector carries out a safety check

17

JAPAN ENERGY CSR Report 2007

Our Expectations

Provide Petroleum Products with Care and Safety
Ms. Miyuki Chiba, Driver, Head Sales Ofﬁce, Maruwn Transport Keihin Co., Ltd.
I love driving tank trucks and have been doing so since I was 20. My delivery area covers Tokyo,
Kanagawa and Saitama. I am particularly concerned with safety when working and insidedelivery terminals and delivering. A while ago, I received an email from a customer complimenting
me on how I delivered to JOMO service stations in a careful, pleasant manner, and received acommendation from Japan Energy as a result. I will continue to take the utmost care in my workand hope that Japan Energy will continue to ensure safety at delivery terminals so that I candeliver products with safety and precision.

electricity prevention
measures for facilities atrisk of ignition, regulardisaster prevention drills
and monthly safety
meetings with managersof transportation
Filling a tank truck with safety belt
companies.
For loading facilities for tank trucks, there is a hatch
management system for computerized reservation ofdeliveries and hatch allocation. This allows us to accurately
load the right petroleum product, be it gasoline or kerosene,
onto the proper tank trucks.
Environmental measures include double-layer roofs forstorage tanks that prevent hydrocarbon vapor* from entering
the atmosphere.
* Hydrocarbon vapor: If emitted into the atmosphere, this causes global warming
and photochemical oxidant (petrochemical smog).

Storage tank and pipeline at the Keihin Delivery Terminal

Maximum Safety and Minimum Environmental Burden for Transportationin Japan
The Safest, Most Efﬁcient Transportation
Methods
Every year, we have been gradually reducing the amount offuel used for transportation: in addition to choosing the safest
and most efﬁcient transportation method depending on thedestination and distance, we are using increasingly larger
tank trucks and coastal tankers, and improving transportation
efﬁciency through measures like night delivery. We are also
taking safety measures that include training crew and drivers
and installing devices that automatically prevent oil mixing ontank trucks.

JOMO Efforts

Our Aim: Strict Equipment Management and
Absolute Safety
Toshio Matoba, Manager, Logistics Department, Keihin Delivery Terminal
Safety and environmental efforts are not simply limited to the delivery terminal: they must
extend as far as delivery to JOMO service stations. Our delivery terminal has contracts withthree transport companies (a total of 60 tank trucks) with whom we work to provide drivers
with training courses on safety and environmental actions they can take during delivery,such as turning off truck engines when the vehicle is not moving. Priority is placed on strict
management of equipment at the delivery terminal, with staff conducting daily inspection
rounds of the facilities. I believe we must continue to manage our equipment and educate
workers so that we can fulﬁll our responsibility as a delivery terminal.

JAPAN ENERGY CSR Report 200718

Feature 1 Our Mission as an Energy Company

Responsibilities and Actions in the Supply Chain

Marketing of Petroleum Products
JOMO service stations provide customers with petroleum
products like gasoline and engine oil in a safe manner.
Stations have high safety standards for dealing withdisasters or earthquakes, and they conduct meticulous
safety checks regularly. They also have thoroughenvironmental protection measures for preventing gasoline
vapors from escaping into the atmosphere, preventing soil
pollution from leaks, and recycling waste material. And
now, we are promoting Value Style stations where we canhelp people’s life at the community and provide visitorswith excellent hospitality and a relaxing atmosphere.

CSR To-Do List
•Offer products and services that are environmentallyfriendly•Ensure safe, disaster-free JOMO service stations•Minimize environmental burden at JOMO service
stations•Provide comfortable environments and services•Pursue excellence in customer service

Operating Safe Service Stations and Minimizing Environmental Burden
Safe Operation and a Lifeline for theCommunity in the Event of a Disaster
JOMO service stations are designed to comply with thesafety standards set under ﬁre defense laws and regulations,and all facilities and equipment have built-in safety measures.

Apart from the service station’s entrance, there is a ﬁreproof
wall around the site and the building itself is ﬁre resistant
thanks to the use of non-ﬂammable construction materials.
Underground tanks for storing petroleum products havedouble-layer construction to prevent leaks, and they are
extremely earthquake resistant. We are also building more

Major Environmental and Safety Measures at JOMO Service Stations•How hydrocarbon vapor recovery system works•Foam extinguishingsystem•Structure of double-walled
underground tank
Tank nozzle

Breather valve

Nozzle with
detection equipment

Vent
Gasoline andother vapors
Tank truck
Filling thegasoline

Liquid (fuel oil, etc.)
Leak detector tube
Leak detector sensor

Exteriorshell FRP
Gasoline

Hydrocarbon vapor recovery

19

JAPAN ENERGY CSR Report 2007

Detector
layer

Interior shellsteel plate

JOMO self-service stations that handle gasoline and gas oil have foam extinguishing systems.
A chemical agent is mixed in with the water for extinguishing. This solution is sprayed onto the burning
surface, where the ﬁre is put out by the smothering effect of the foam and the cooling effect of the water.
Note: Within the red circle is the nozzle for the foam extinguishing solution.
(These must be installed at self-service stations).

Our Expectations

More Chances to Talk will Lead to Better Service
Mr. Shun Tomura, Manager, JOMO Urawa-Omagi Station, JOMO-Net Nishi-Tokyo Co., Ltd.
When we ﬁrst introduced the Value Style concept, I was a little confused about the change inthe store and facilities. But as a result of things like customer surveys provided by Japan Energy
and the mystery shopper program*, staff are more aware, they interact with customers much
more professionally, and they offer customers service that is truly satisfying. In future, I would liketo see Japan Energy provide things like information on other service stations and come up withproposals that reﬂect customer opinions.
* Mystery shopper program: Twice a year, an ordinary customer enters a JOMO service station anonymously without
advance notice and checks and evaluates things like customer treatment and facilities.

service stations that can
act as community lifelines
in the event of disasters,
equipping them with private
power generators to aid
emergency vehicles like ﬁretrucks and ambulances.
Private power generator
Japan Energy is working
with companies both inside and outside the group to create

measures for preventing leaks of petroleum products into
the soil. As measures for preventing air pollution, we haveequipment for collecting hydrocarbon vapor, and we also
recycle waste including used tires, oil and batteries. Singlewalled tanks that have been underground for 30 years begin
to deteriorate, so we are gradually implementing plannedsafety measures; these include upgrading tanks to doublewalled tanks and equipping the interior of the tanks withﬁberglass reinforced plastic (FRP) lining starting in FY2007.

Boost Sales at Dealerships. Raise Customer Satisfaction Even Further
Supporting Improved Service at JOMO
Service Stations
Because it goes without saying that JOMO service stations
should offer service that is known and trusted by the local
community, we are continually striving to offer excellent
customer service. These efforts include customer satisfaction
surveys focusing on treatment of customers and cleanliness,
staff suggestion boxes and employee training aimed atoffering customers the ultimate in service. It’s all part of ourefforts to build Value Style service stations around Japan thatgive customers an attractive, comfortable atmosphere.
We also try to help our dealerships and other business
partners sell more. To this end, we carry out TACS (Top of Area
to Customers’ Satisfaction) activities aimed at helping business
partners offer higher quality service and thus boost sales.

Value Style service station

JOMO Efforts

Training Programs Aim for Satisfaction Among
Dealerships and End Users
Naoki Kasuya, Retail Support, Petroleum Retail Marketing Dept.
In our retail support business, it is important that our dealerships make a proﬁt and instill
end users with trust in JOMO service stations. That is why I believe it is important for our
department to deepen communication with customers through daily inspection activities.
We make our management more customer-service centered supporting sales staff withtraining programs that cover topics like maintenance techniques, product knowledge anda spirit of hospitality.

JAPAN ENERGY CSR Report 200720

Working for theEnvironment

Working for the Environment
Protecting the environment in all business activities is a top priority for Japan Energy,
whose energy-related activities include reﬁning and marketing petroleum products.
In our Mission, we state that we will “use the energy of the Earth wisely.”This means pursuing energy conservation and lessening environmental impact, and developing andspreading the use of technologies and products that protect the environment.

Material balance

INPUT

Business activities
Exploration,
development& production•Petroleum exploration,•Air pollution•Water pollution•Wastedevelopment &production

Transportation
Fuel(crude oil conversion): 290,000 kℓ

Crude oil processed: 21.66 million kℓElectricity:
471 million kWh
Fuel(crude oil conversion): 1.76 million kℓFresh water:
22.86 million tons
Seawater:
180 million tons

•Transport of crude
oil by tanker

Reﬁning,
stockpiling•Reﬁning andstockpiling at
reﬁneries

Distribution

Fuel(crude oil conversion): 50,000 kℓ(transport in Japan)

Measures

Environmental impact•Zero gas ﬂaring•Wastewater treatment•Oil spill prevention•Waste treatment•Recycling of resources

Measures

Environmental impact•Oil spills•Hydrocarbon vapor•Double hull-tankers•Inert gas system

Environmental impact

Measures•Air pollution•Water pollution•Waste•Soil contamination•Tanks with ﬂoating roofs•Energy conservation•Desulfurization, denitration•Wastewater treatment•Decrease in volume, recycling of resources•Elimination of excavation, backﬁlling

Measures

Environmental impact•Air pollution

Amount sold•Air pollution•Water pollution•Waste•Soil contamination

690,000 tons

CO2
4.72 million tons
4,552 tons
SOx
2,830 tons
NOx
180 tons
Soot and dust:
4,969 tons
VOCs*
51 tons
COD*Waste from delivery terminals, other
1,603 tons
Waste to landﬁll

CO2 emissions

140,000 tons

Measures

Environmental impact

MarketingCO2 emissions•Decrease of fuel consumption•Transport to delivery
terminals and JOMO
service stations•JOMO service
stations receive andsell gasoline

OUTPUT•Collection of vapor•Wastewater puriﬁcation•Proper management•Pollution surveys

1.200 million tons
LP gasFlammable oil 6.085 million kℓ
2.526 million kℓ
Kerosene
652,000 kℓ
Jet fuel

CO2 emissions 49.60 million tons

Fuel oil A 2.594 million kℓ
Fuel oil C 1.998 million kℓ
Gas oil
4.197 million kℓ

Note: The above ﬁgures were calculated according to the LCA (life cycle assessment) method (an assessment of the environmental impact after measuringresource consumption and emissions in all processes: manufacturing, use, and disposal of products).
Note: CO2 emissions were calculated using the Greenhouse Gas Emission Measuring and Reporting Manual, published by the Ministry of the Environment.

21 JAPAN ENERGY CSR Report 2007

Working for the Environment

Environmental Management

Environmental Protection Policies
Japan Energy’s Mission states that we will “use the energy of
the Earth wisely” and “always give top priority to safety andenvironment.” This thinking was the basis for the creation of
our environmental policies, which guide us in protecting theenvironment and reducing environmental impact.
Environmental Protection Policies
1. We will strive to prevent pollution by considering theenvironmental effects of all our operations.
2. To use resources wisely, we will strive to recycle anduse energy efﬁciently.
3. We will comply with all relevant laws and strive toattain environmental standards that earn the trust of
the community.
4. We will contribute to improvement of the global
environment through the research and developmentof environmentally friendly products and technologies.

The Roots of Our Environmental Protection
Our environmental protection efforts can be traced back to
1914, when Kuhara Mining Co., our predecessor company,
spent a huge sum of money to build a giant stack toprevent smoke hazards from the Hitachi Mine.
In the copper mining and smelting that could very
well be called the start ofJapanese industry, every
company battled with the
problem of smoke hazards.
After much trial and error, asolution was ﬁnally arrived
at with the construction ofwhat was at that time theworld’s tallest smokestack.
Giant smokestack at the Hitachi Mine

Environmental Management System
The Global Environmental Committee was established to carryout company-wide environmental protection activities that follow
rules and guidelines.

ISO 14001 Certiﬁed Sites
Japan Energy complies with environmental rules and regulationthat help the company improve its ability to protect theenvironment.
All of our reﬁneries and plants have been certiﬁed for
ISO 14001* and we are currently using an environmental
management system based on the FY2004 version. We have anorganizational structure for planning and implementing regularenvironmental protection efforts—energy saving, recycling,
reducing waste, and preventing air and water pollution—that are
geared to the needs of each of the business ﬁelds and regions
we operate in.
* ISO 14001: An international accepted standard for environmental management
systems issued by the ISO (International Organization for Standardization).

Environmental Management System
Highest levels of management
Offering opinions
Global Environment Committee
Reports
Companywide Environmental
Conference

Headquarters
Reports

Companywide Environmental
Ofﬁcers Conference

ISO 14001 Certiﬁed Sites
Mizushima

Chita

Funakawa Sodegaura Kawasaki

Kashima

Date
Februarycertiﬁed
26, 1999
Certiﬁcation
LRQA
body
Certiﬁcate
YKA
code
0772494March
5, 1999

NovemberMarch
27, 1998 18, 1998

May
21, 1999

March
12, 1999

JQA

LRQA

LRQA

JQA

JQA

JQA-EM
0353

YKA
0771917771512JQA-EM
0427

JQA-EM
0373

Reports

Branch ofﬁces

Environment & Safety
Department
Central Environmental Strategy
Promotion Committee(General environmental audits)

Reports Orders

AuditsOfﬁcesEnvironment & Safety Ofﬁce(Department in charge ofenvironmental issues)
Environment & Disaster
Prevention Committee(Internal environmental audits)

JAPAN ENERGY CSR Report 2007

22

Working for theEnvironment

To ensure that our business activities do not harm the environment, we have built an environmental
management system, and all of our reﬁneries and plants are ISO 14001 certiﬁed. We also have environmental
education programs that make employees aware of the importance of protecting the Earth in all that they do.

Working for the Environment

Environmental Management

Working for theEnvironment

Environmental Audits
To ensure that the company’s environmental management
system is being properly run and maintained, Japan Energy
undergoes regular reviews by ISO certiﬁcation institutions andcarries out its own audits.
Our in-house environmental audit system consists of acomprehensive audit carried out by headquarters (once a year)
and an internal audit conducted at each Japan Energy site.
Both are carried out according to auditing methods set out inour outlines for environmental auditing and internal auditing.
Any problems
discovered in thereviews and audits are
immediately remedied.
Follow-up audits arethen conducted toensure that the solutions
were in fact suitable forthe problem.
A review by an ISO certiﬁcation institution

Environmental Education
We believe that environmental management starts withenvironmental education. That’s why we strive to ensure that
employees are aware of environmental issues and have theknowledge needed to take action.

Environmental
Education at
Reﬁneries
Environmental protection
is an essential part ofTPM (total productive
maintenance) activities
conducted at reﬁneries.

Training in the manufacturing division

23 JAPAN ENERGY CSR Report 2007

In addition to offering environmental education programs
that form the foundation of our environmental protection efforts,
we urge employees to take the environment-related certiﬁcation
programs we have been offering; these include pollution control
and energy management.

Environmental Education in the Marketing Division
Our marketing division, together with dealerships and sales
companies that operate JOMO service stations, has introduced
the TACS*1 program and the JOMO Lube Power Up Program*2,
whose aims include improved gas mileage and reduced car
exhaust. These programs educate JOMO service station staff
about offering customers products and services like high-quality
gasoline and lubricating oils and maintenance that are suitable
to their cars.
*1 TACS: Top of Area to Customers’ Satisfaction. JOMO service stations
aim for what customers consider to be the highest level of customer
satisfaction.
*2 JOMO Lube Power Up Program: Education and certiﬁcation programs toraise salespersons’ knowledge and maintenance techniques for lubricatingoils. Those completing the program are certiﬁed as JOMO Oil Masters. Thissystem was introduced in 1995 and was approved as a business career
system by Japan’s Ministry of Labour (now the Ministry of Health, Labourand Welfare).

Companywide Environmental Conference
The Companywide Environmental Conference has been held
once a year since 2003 as an opportunity for employees ofJapan Energy and group companies to present and debateenvironment-related efforts and research.
About 100 took part in the FY2006 conference in
September at the Japan Energy headquarters. The four topics
of presentation and debate included Case Studies in Zero
Emissions and Efforts to Reduce Wastewater.

We use environmental accounting to assess the effectiveness of
our environmental management.

Although we succeeded in decreasing environmental costs
through energy conservation measures, increases in fuel costs
due to rising crude oil prices resulted in an overall increase inenvironmental costs.

Environmental Costs

Millions of yen

Item

FY2006

FY2005

1 Environmental costs for products (decreasing sulfur content of heavy fuel and gas oil, improving gasoline quality)

38,39830,0282 Direct cost of reducing environmental impact
5,633

3,839

(2) Protecting the global environment (preventing global warming)

829

694

(3) Waste treatment, recycling

239

196

(1) Management activities

393

357

(2) Social activities

1910(3) Environmental donations and contributions

684

607

(1) Preventing pollution (air, water, and soil pollution)

3 Cost of environmental activities

1,488

1,532

Total

47,68237,263Item

FY2006

FY2005

1 Costs to build and improve environmental protection facilities

2,981

5,254

2 Costs to maintain equipment (repair and upgrade)

14,544

13,885

17,525

19,1394 R&D to reduce environmental impact

Investment

Millions of yen

Total

EffectAtmospheric improvements

Reduced resource consumption, recycling•Reduction in sulfur oxide emissions
Sulfur produced: 192,328 tons/year•Reduction in benzene emissions
Benzene recovered: 47.3-ton increase (against FY1998)•Reduction in fuel use through energy consumption
Crude oil equivalent: 32,439 kℓ (against FY2005)•Amount of oil recycled
Crude oil equivalent: 4,544 kℓ/year
By reducing the amount of resources used and recycling more,
we saved approximately 1.78 billion yen.

Calculation period: April 2006-March 2007
Scope of calculations: Japan Energy Corporation and Kashima Oil Co., Ltd.

JAPAN ENERGY CSR Report 2007

24

Working for theEnvironment

FY2006 Environmental Accounting

Working for the Environment

Efforts to Prevent Global Warming
The prevention of global warming is an urgent concern around the world. In 2008, the ﬁrst commitment periodof the Kyoto Protocol begins. Japan is obligated to reduce greenhouse gas emissions 6% by 2012 compared
to 1990 levels. To contribute to these reduction targets, Japan Energy is pursuing a variety of actions.

Working for theEnvironment

Basic Policy to Prevent Global Warming
For some years now, Japan Energy has been working to
reduce emissions of CO2, a greenhouse gas, through efforts
focused on energy conservation. In particular, we have set
unit energy consumption targets that are among the mostambitious in the industry.
Besides reducing fuel consumption in production processes
at reﬁneries and plants and during transport, we are also
improving gas mileage for cars by developing sulfur-freegasoline and gas oil, and high-quality lubricating oils.

Wind Power Generation Facilities
Japan Energy has begun generating
electricity from wind power, a newclean energy source. In March 2003,
we opened wind generation facilities
at the Kashima Oil Reﬁnery and in
FY2006, these facilities generated
3,685 million kWh of electricity (crude
oil equivalent: 928 kℓ).

Wind power generation
facilities

Energy Conservation at Reﬁneries
Reﬁneries emit CO2 in several ways, such as through fuelcombustion in furnaces during crude oil treatment and throughreforming reactors during hydrogen production.
In FY2006, we increased our fuel consumption at reﬁneries
due to the larger amounts of crude oil treated. However,thanks to energy conservation efforts like the recovery of heatfrom furnaces, the recovery of heat using heat exchangers,
and limits on the air supplied to furnaces, unit energy
consumption*1 improved to 8.73 kℓ crude oil/1,000 kℓ, a 1.7%
improvement over the previous year.
We will continue to strive to reduce CO2 emissions throughthese and other energy conservation actions.
*1 Unit energy consumption: There is a variety of facilities for reﬁning, and the
conﬁguration of these facilities differs among reﬁneries. Using an adjustment
coefﬁcient that matches the characteristics of the facilities at the reﬁnery, we
calculate the amount of energy used per unit of production. The smaller theunit of energy consumption, the higher the efﬁciency.

Energy Consumption and Unit Energy Consumption*2
Energy consumption (Unit: 1,000 kℓ crude oil equivalent)
Unit energy consumption (Unit: kℓ crude oil equivalent/1,000 kℓ)

9.39

9.23

3,000

2,000

1,610

1,834

9.09

1,890

9.19

1,819

8.88

1,919

8.73

9

1,942

8

7

1,000

0

0
FY1990FY2002

FY2003

FY2004

FY2005

FY2006

Carbon Dioxide (CO2) Emissions and Unit CO2 Emissions*2
CO2 emissions (Unit: 1,000 tons)
Unit CO2 emissions*3 (Unit: tons of CO2/1,000 kℓ)

22.6

22.6

22.5
21.7

23.1

8,000

21.3

20

6,000
4,000

22

3,787

4,590

4,702

4,454

4,682

4,728
18
16

2,000

0

0
FY1990FY2002

FY2003

FY2004

FY2005

FY2006*2 The calculation method has been revised based on the calculation method
for greenhouse gas emissions in line with revisions in the Law Concerning
the Measures to Cope with Global Warming.
*3 Unit CO2 emissions: The amount of CO2 emissions (tons) per 1,000 kl ofproduction. The smaller this ﬁgure, the less the CO2 emissions.

25 JAPAN ENERGY CSR Report 2007

Energy Conservation in theTransportation Division
Japan Energy transports petroleum products by either land orsea. Land transportation is carried out by tank trucks and railway
tanker cars, while sea transport is carried out by coastal tankers.
As shown below, we have for some time now been
increasing the capacity of our coastal tankers and tank trucks
in order to improve transportation efﬁciency and consequently
consume less fuel.
The Law Concerning the Rational Use of Energy was revisedand enacted in April 2006. In line with this, Japan Energy has
been working even harder to conserve energy.
Increased capacity of tanktrucks (average truck size)

Large tank truck

17.2 kℓ/truck

18.6 kℓ/truck

FY1998FY2006

Increased capacity of tankers(average ship size)

Large coastal tanker

2,593kℓ/vessel

2,981kℓ/vessel

FY1998FY2006

Energy Consumption of Tank Trucks and Coastal Tankers
Transporting Fuel Oil*(kℓ)

Tank truck fuel consumption

113,217
100,000

Coastal tanker fuel consumption

105,03180,00072,71760,00064,66240,00020,00021,742

20,72920,37919,50927,76015,8010
FY2002

FY2003

FY2004

FY2005

The Kyoto Protocol has what are called the Kyoto Mechanisms,
which recognize Clean Development Mechanisms (CDM), joint
implementation*1 and emissions trading*2 as ways to reducegreenhouse gas emissions.
Under CDM, a developed country provides a developing
country with technology or capital, and credit for the resulting
emissions in greenhouse gases goes to the developed country.
Japan Energy’s efforts to curb global warming include purchasinga large number of international funds that invest in CDM.
*1 Joint implementation: A system in which developed countries work
together on energy conservation projects, with credits for greenhouse gas
emissions transferred between them.
*2 Emissions trading: A system in which developed countries buy and sellemissions credits.

Emission Trading through JMD Greenhouse
Gas Reduction Co., Ltd.
As part of efforts to reduce greenhouse gas emissions, in May
2006, we signed a contract to purchase 1.5 millions tons ofCO2-equivalent emission credits from JMD GHG Reduction
Co., Ltd. (hereafter referred to as JMD), a company jointly
established by JGC Corporation, Marubeni Corporation, andDaioh Construction Co., Ltd.
JMD plans to carry out CDM business in which it recovers
and breaks down CFC, a greenhouse gas, emitted from a CFCsubstitute production plant in Zhejiang, China. Breaking down
this greenhouse gas CFC will yield 40 million tons of CO2equivalent emission credits.
Under this contract, in the ﬁrst commitment period of the
Kyoto Protocol (from 2008 to 2012), Japan Energy will obtainemission credits equivalent to 300,000 t-CO2/year (approximately
7% of Japan Energy’s annual greenhouse gas emissions).

Japan Energy Invests in Japan Greenhouse
Gas Reduction FundIn December 2004, we invested $1 million in the Japan
Greenhouse Gas Reduction Fund (JGRF).
The fund was jointly established by the Japan Bank forInternational Cooperation, the Development Bank of Japan andprivate Japanese companies. This fund purchases emission
credits generated by greenhouse gas reduction projects indeveloping countries and Eastern Europe and distributes theseamong investors in the fund.
By investing in this fund, Japan Energy supports projects
that reduce greenhouse gas emissions.

FY2006* Based on the Law Concerning the Rational Use of Energy, we changed themethod of calculation for energy consumption in FY2006.

JAPAN ENERGY CSR Report 2007

26

Working for theEnvironment

Clean Development Mechanisms (CDM)Working for the Environment

Environmental Efforts at Reﬁneries and Plants: Part 1
Japan Energy has environmental measures for dealing with air pollutants (SOx, NOx, soot and dust, and VOCs)
generated during reﬁning and production, and wastewater containing oil and other pollutants that is emitted
from reﬁning facilities. We also do all we can to decrease such emissions.

Working for theEnvironment

Preventing Air Pollution

Reducing Nitrogen Oxides (NOx)

Reducing Sulfur Oxides (SOx)

We use low-sulfur fuel in our furnaces
and boilers. As well, emission-reducing
devices on facilities have allowed us toachieve emissions that are 35% below
regulatory limits.
•Use of low-sulfur gas and heavy
fuel oil•Installation of ﬂue-gas desulfurization
devices

Sulfur recovery and ﬂue-gas
desulfurization equipment

SOx Emissions

Furnaces and boilers use low-nitrogenfuel. As well, emission-reducing
devices on equipment have allowed
us to achieve emissions 50% below
regulatory limits.
•Use of low-nitrogen fuel oil•Installation of low-NOx burners•Installation of ﬂue-gas denitrationequipment
Flue-gas denitration equipment

NOx Emissions(Tons)(Tons)

Regulatory limit (14,393 tons)

Regulatory limit (6,349 tons)

6,000

12,000

4,000
6,000

3,440

4,464

4,363

4,552

FY2005

FY20063,089

FY2002

FY2003

2,828

2,879

2,830

FY2004

FY2005

FY2006

2,000

2,734

0
FY20023,008

FY2003

FY20040Note: In FY2004, ﬁgures were lower because of shut-down of equipment
due to damage from high tides (Mizushima Reﬁnery) and an accident(Kashima Reﬁnery).

Reducing Soot and Dust

Reducing Volatile Organic Compounds (VOCs)

Reﬁnery furnaces and boilers use
more fuel gas than heavy fuel oil. For
boilers that use larger amounts ofheavy fuel oil, we installed facilities that
reduce the soot and dust generated,thus achieving emissions that are 15%
below regulatory limits.
•Installation of electrostatic
precipitators

Electrostatic precipitators

Soot and Dust Emissions

We have equipment and devices that
help prevent the release of volatileorganic compounds (such as benzene,
toluene, and xylene contained in
naphtha and gasoline). By FY2010, weplan to have replaced nine ﬁxed-rooftanks with ﬂoating-roof tanks.

Hydrocarbon recovery facility

VOC Emissions(Tons)(Tons)

6,000
2,000

Regulatory limit (1,914 tons)

5,525

5,296

5,470

FY2000FY2002

FY2003

5,030

4,874

4,969

FY2004

FY2005

FY2006

4,000

1,000
2,000

203

205

197

212

180

FY2002

FY2003

FY2004

FY2005

FY200600Note: Above ﬁgures are emissions for the entire Japan Energy(including delivery terminals).
Note: The amounts of sulfur oxides (SOx), nitrogen oxides (NOx), soot and dust, and volatile organic compounds (VOCs) will depend on the amount of crude
oil processed, the type of fuel used, and under what conditions the equipment is operated.

27 JAPAN ENERGY CSR Report 2007

Preventing Water Pollution
Wastewater Management at Reﬁneries and Plants
As shown in the diagram on the right, we have proper
wastewater treatment systems with type of treatment dependingon whether it contains oil or sludge. On the process lines, we
control wastewater by checking indicators such as chemical
oxygen demand (COD), which shows how polluted the water is.
These indicators vary depending on the volume of wastewater,something we are striving to reduce.

Wastewaterand rainwatercontaining
no oilRainwaterthat maycontain oil

Householdefﬂuent

Ballast water

Oil separatingtank

Wastewaterfrom production
units, oil tanks,and services

Wastewater from
special facilities(including
industrial waste)

Anaerobic
treatment facilities

Blow water
Flocculation andsedimentation
tank

COD Sludge Loading(Tons)

Regulatory limit (310 tons)

300

Floatation tank
200

Cooling facilities

100

48

51

56

56

51

FY2002

FY2003

FY2004

FY2005

FY2006

Activated sludge
process facilities*10Note: The Kashima Oil Reﬁnery is not included here because its waste istreated at the Ibaraki Prefecture Kashima Sewerage Ofﬁce’s Fukashiba
Treatment Plant.

Activated carbon
absorption
facilities*2
Guard basin

Guard basin

WastewateroutletWastewateroutletProper Management of Chemicals
Managing and Rendering PCBs Harmless
We have condensers (262) and PCB-containing oils (691 drums)
stored at our reﬁneries, plants, delivery terminals, and R&D center.
We plan to detoxify these over the four years between 2009
and 2012 and are currently undergoing early registration with theJapan Environmental Safety Corporation (JESCO)* for this process.

* Japan Environmental Safety
Corporation (JESCO):
Established in April 2004 as a
special company wholly owned by
the government, JESCO has takenover the duties of PCD waste
treatment from the former Japan
Environment Corporation.

*1 Activated sludge process facilities*2 Activated carbon absorption facilities

Inside a storage facility

Information Disclosure on Release and Transfer ofChemicals
Regarding chemical substances handled, released, and transferred at
Japan Energy reﬁneries and delivery terminals, the amounts of thosethat are covered by the PRTR Law*1 are measured and reported.*2*1 PRTR (Pollutant Release and Transfer Register) Law: Law for theregistration system of speciﬁed chemicals that are released into theenvironment. The aim is to improve the management of chemical substances.
*2 For details on the amounts of each substance released and transferred,refer to the Japan Energy home page.

See our Web site for environmental data on each of our sites.
WEB

http://www.j-energy.co.jp/sitereport/

JAPAN ENERGY CSR Report 2007

28

Working for theEnvironment

System for Treating Polluted Water

Working for the Environment

Environmental Efforts at Reﬁneries and Plants: Part 2

Working for theEnvironment

Japan Energy works to reduce waste to landﬁll by recycling waste and reusing resources. We are also striving toprevent soil pollution at reﬁneries and plants and are carrying out green purchasing when procuring raw materials.

Reducing Waste, Increasing Recycling

Strict Soil Contamination Measures

The waste generated at reﬁneries includes a wide range ofsubstances: waste oil, sludge, waste acid, waste alkali, dust
collected from electrostatic precipitators, used catalysts, andconstruction materials. We reduce as much of this as possible:
for example, we recover oil from waste oil and sludge, and we
dehydrate or incinerate sludge. We also try to put this waste toeffective use. For example, we re-reﬁne waste oil, make sludge
and dust into the raw material for cement that can be used as
roadbase, and separate the remains of construction material
such as scraps of metal and concrete.

We carry out regular soil contamination surveys on the sites of
all reﬁneries, plants, delivery terminals, former JOMO service
stations and other company-owned land. Any contamination
discovered is dealt with appropriately.

Waste to Landﬁll*1(Tons)
2,500
2,000

Treating Soil at the Funakawa WorksAt the Funakawa Works, in FY2001 we began soil remediation
work on the premises as well as on neighboring companyowned land. Work on the company-owned land outside thepremises, which began ﬁrst, was completed in FY2005.
As much of the recovered polluted soil as possible wasrecycled; for example for use as raw material for cement.

2,388
*2

1,945
1,603

1,500

1,241

1,129

1,000

*3

500
0
FY2002

FY2003

FY2004

FY2005

FY2006*1 Our goal is for waste to landﬁll to be no more than 1.0 % of all waste generated.
*2 In FY2004, damage from high tides (Mizushima Reﬁnery) resulted in thegeneration of unforeseen waste, and waste to landﬁll subsequently increased.
*3 In FY2006, waste to landﬁll increased due to soil recovered for treatment at
the Funakawa Works.

Green Purchasing

Status of Waste
Waste to landﬁll
1.5%

Reused60.3%

Amount ofwaste reduced
38.2%

Note: Includes 36,622 tons of recovered soil for treatment at the Funakawa Works.

29 JAPAN ENERGY CSR Report 2007

Loading intermediate treatment soil onto the ship (to deliver as raw material for cement)

While petroleum products are an important source of energy,
their use gives off CO2 emissions. So for purchasing thenecessary additives (chemical raw materials) for making
petroleum products, we have Green Procurement Guidelinesthat we use to choose from which suppliers we will purchase.
This green purchasing is based on our belief that we must do
everything possible to reduce environmental impact during
production and use of petroleum products.
We have also clariﬁed our purchasing demands andconditions and are calling on suppliers to be environmentallyfriendly in all aspects of their business.

Environmental Efforts at JOMO Service Stations
We have been working with our service station dealerships to recycle waste and reduce wastewater fromcar washes. We also have been working to prevent soil contamination and stop emissions of vapor fromgasoline and other substances.

Introducing Energy-Efﬁcient Lighting
In 2006, JOMO service stations started introducing energy-efﬁcient
lighting systems that were jointly developed by JOMO EnterpriseCo., Ltd. and Toshiba Corporation. The resulting reductions inelectricity use help us reduce impact on the environment.
In FY2006, we introduced these lighting systems at 89
JOMO service stations. We expect to have 161 stations using
this lighting as of FY2007 and 250 as of FY2008.

Installation of Solar Panels
Some JOMO service
stations have solar panelson the roof for generating
clean solar energy. As ofthe end of March, 2007,
these solar power systems
were operating on 16
service stations.

JOMO service station with solar panels

Treating Waste According to Law
Handling of waste oil and waste elements generated at
JOMO service stations is outsourced to our afﬁliate company
JOMO Guardian Co., Ltd. for treatment as industrial waste.
The company properly deals with all industrial waste by, forexample, recycling or treating it in accordance with laws.
JOMO Guardian also selects reliable subcontractors toensure that strict manifest systems are applied and that all
waste data is kept track of.

Reusing Car Wash Water
Because JOMO service stations use large
amounts of water to wash cars, we haverecycling equipment that allows us tomake effective use of our water resources
by recycling between 80% and 90% of
the wastewater. It takes about 150 liters ofwater to wash one car, so assuming thewater recycling rate is 80%, that means
we can wash four more cars with thewater recycled from washing one car.

Since 2002, a year before the Soil Contamination Measures
Law went into effect, JOMO service stations have been
regularly carrying out risk control measures for fuel leakage.
In 2002, using the NERA (Network Environmental Risk
Assessment), each and every JOMO service station was
surveyed for soil contamination risk. Starting with high-risk
stations, all stations underwent soil gas surveys and boring
surveys (secondary survey). Based on these results, we took
measures including removal of pollutants, improvement offacilities, and strict monitoring.
As of FY2006, 295 JOMO service stations underwent
secondary surveys, with 21 judged as requiring cleanup of soil
and groundwater. Two of these stations have already repaired
facilities and removed pollutants, with work in progress at theother 19. Plans are for surveys at 100 more stations in FY2007.
To protect the soil around underground tanks, we are reducing
risk by using underground facilities of the highest level of safety,
such as double-wall tanks and resin pipes. In April 2006, all
JOMO service stations were given a soil protection measures
instructional video, another way to ensure that station staff are
fully able to protect their environment.
Japan Energy also participates in the Japan Soil Solutions
Group (JSSG), an alliance of companies in the ﬁeld of soil
environment protection, through which we offer comprehensive
support to JOMO service stations in soil environment efforts.
In FY2006, 410 JOMO service stations judged to be at risk
under NERA assessments were
given a questionnaire asking
what they are doing to properly
manage their undergroundtanks. Based on the results ofthis questionnaire, in FY2007
we plan to consult individually
Soil contamination survey
with all service stations.

Fuel Oil Vapor Recovery

Water recycling car washmachinePurifying Wastewater
Surface wastewater at JOMO service stations is collected in an
oil separating tank where oil and sludge are removed.

When tank trucks ﬁll JOMO service station tanks with gasoline
and other oils, vapors containing hydrocarbon escape. Besides
causing photochemical smog, this vapor sends foul odors into
the neighboring area and can harm the health of service station
customers and employees. That’s why since 1990 JOMO
service station tank vents have had recovery devices that send
the vapor back into the tank truck.
In line with relaxed Japanese ﬁre regulations allowing the
installation of breather valves to stop vapors from escaping, we
installed these valves at 300 stations in the Kanto area.

JAPAN ENERGY CSR Report 2007

30

Working for theEnvironment

Preventing Soil Contamination

Energy Conservation

Working for the Environment

Environmental Efforts in Products and Services
Japan Energy provides a wide range of products, including fuel, lubricating oils, and petroleum products.
We strive to develop and supply products whose use will have minimal impact on the environment.

Working for theEnvironment

Environmentally Friendly Fuel Oil
At Japan Energy, our goal is to provide environmentally friendly
products; for example gasoline and gas oil that reduce thegreenhouse gas CO2 and toxic substances in vehicle exhaust.

Automobile Lubricating Oils
ECO Series: JOMO DELSTAR DH-2

Biogasoline
In April 2007, Japan Energy began selling biogasoline (bio ETBE
blend), a mixture of conventional gasoline and plant-based fuel(on a distribution trial basis).

JOMO DELSTAR DH-2LD

This diesel engine oil complies with the DH-2
engine oil standards that cover vehicles equippedwith DPFs (diesel particulate ﬁlters). We also have along-drain engine oil product (DELSTAR DH-2LD).
These low-ash products are suitable for not only
diesel engines equipped with DPFs but also for all
large diesel engines without DPFs.

ECO Series: JOMO CNG Oil/JOMO GE Power Oil

JOMO GE Power Oil

JOMO service station selling biogasoline

JOMO Dreamer Series

Sulfur-Free Fuels
Sulfur-free fuel contains almost no sulfur. In Japan, regulations
that limit sulfur content to 10 ppm (0.001%) or less wereenacted for sulfur-free gas oil in 2007. Similar regulations will
be enacted for gasoline in 2008. Sulfur-free gasoline and gas
oil contribute to curbing global warming. Not only do they
offer cleaner vehicle exhaust; they also contribute to improved
functioning and durability of the exhaust treatment devices onenvironmentally friendly cars, and to improved gas mileage.
Japan Energy is well ahead of these regulations: we havebeen offering sulfur-free premium gasoline since May 2002 andsulfur-free regular gasoline and gas oil since January 2005.

This high-performance oil with superb oxidation
stability is suitable for engines using compressed
natural gas (CNG) or liqueﬁed petroleum gas(LPG). It is a high-end, long drain engine oil witha low ash content and so it cuts down on postcombustion deposits, thus contributing to reduced
maintenance costs.

JOMO Dreamer Series

The JOMO Dreamer Series comprises motor oil,automobile diesel oil, ATF (automatic transmissionﬂuid) oil, and CTV (continuously variable transmission)oil. Of the motor oils, there is OW-20, an oil offering
the ultimate in environmental performance andgas mileage, as well as our existing products of
OW-30, 5W-40, and 10W-40, which have all been
designated for the highest standard (SM grade) of
the American Petroleum Institute (API).

Industrial Lubricating Oils
ECO Series: JOMO Bio SeriesThis lubricant series have biodegradability, so leakscause minimum impact on the water and soil. They
have superior oxidation stability full synthetic oils.
All of these products have been certiﬁed with theJapan Environment Associations’ Eco mark.

Lowering Benzene Content in Gasoline
Since January 2000, we have reduced the amount of thesuspected carcinogen benzene in gasoline from 5% to no morethan 1%.
JOMO Bio Hydro

Reducing Vapor Pressure
To reduce evaporative emissions containing hydrocarbons that
may cause photochemical smog, we reduced summertime
gasoline vapor pressure from a maximum of 78 kPa to 65 kPa.

ECO Series: JOMO Hydlux SES
This ultra-energy-efﬁcient hydraulic oil contributes
to energy savings in hydraulic equipment.
In addition to energy savings, this superbly
performing product offers wear resistance, long
life, and reductions in sludge. It went on sale in
October 2006.

Environmentally Friendly Lubricating Oils
Japan Energy has provided environmentally friendly lubricantsunder the motto “Be gentle on people, the environment,
and resources.” As part of this, in February 2004 we beganoffering the JOMO ECO Series, a lineup of products that offer
longer product life, biodegradability, and compliance withenvironmental regulations.

31

JAPAN ENERGY CSR Report 2007

JOMO Hydlux SES

JOMO Hydlux HP
This hydraulic oil has high temperperature ﬂash point of at least 250ºC andis thus designated as ﬂammable liquid and not a dangerous substance,
under Japanese ﬁre laws. Its superior qualities include energy efﬁciency,
wear resistance, long life, and reductions in sludge.

Environmentally Friendly
Petrochemical Products
Japan Energy supplies a wide range of petrochemical products
including industrial detergents and industrial solvents. We arecontinuously developing environmentally friendly products, suchas non-toluene, non-xylene solvent, and making every effort toeliminate substances that are restricted by the Occupational
Health and Safety Law and the PRTR Law from our products.

Industrial Detergents
NS Clean
Used for removal of metal processing oil and particulates, for draining
water, and as a substitute for chlorine-based detergents, thishydrocarbon detergent has superb cleaning and drying properties andcan be used repeatedly.

Spreading the Use of Residential Cogeneration
Systems
Japan Energy is working to spread the use of residential gas
cogeneration systems using LPG. Residential gas cogeneration
systems (called the ECOWILL in Japan) allow homes togenerate their own electricity and use the heat generated bythis for water and space heating. With a high energy efﬁciencyof 85% and covered by government subsidies for buyers, thesesystems are enjoying rapidly growing popularity.

Promoting the Use of LPG Vehicles
LPG vehicles are seeing increasing use among Japanesenational and local government agencies as low-pollution
vehicles: they give off exhaust that has no black smoke orsuspended particulate matter (SPM) and extremely low levels of
nitrogen oxides and hydrocarbons.
Starting in FY2007, to spread the use of LPG vehicles in
the JOMO Group, we began offering subsidies to switch fromdiesel vehicles to LPG vehicles. This combines with national
government subsidies in efforts to meet our targets for the useof LPG vehicles.

EM Clean
Used to complement NS Clean, this highly-soluble hydrocarbon detergent
is effective in removing stubborn pitch, wax, urethane, and epoxy resin.

Industrial Solvents
Cactus Normal ParafﬁnThis industrial solvent has superb biodegradability and minimal odor, andcontains almost no toluene, xylene, or other aromatic hydrocarbons thatpollute the atmosphere.

Cactus Solvent
We have a wide-ranging lineup of toluene or xylene solvent substitutes
that are not covered by the PRTR law.

JOMO LPG Cogeneration Study Group
Since 2005, Japan Energy has held the LPG Cogeneration
Study Group for dealerships and others to help spreadthe use of LPG cogeneration systems. As in FY2005, twosession of the study group were held in FY2006, featuring
demonstrations of the ECOWILL and presentations onfuel cell experiments, case studies from dealerships, andlectures by city gas companies. Participants praised theevent for the valuable information it provided.
Third meeting: August 24, 2006 (Attendees: Approx. 60)
Fourth meeting: February 14, 2007 (Attendees: Approx. 70)

TS ParafﬁnHighly purity normal parafﬁn used for the latent heat storage materials(phase change materials). By using these materials, energy consumption
and CO2 emissions can be reduced. TS parafﬁn is now broadly introduced
to the ﬁeld of the air-conditioning system, textile and clothing, building
materials and automobile.

Environmentally Friendly LPG

LPG Cogeneration Study GroupLPG (liqueﬁed petroleum gas) is a clean energy sources witha relatively low environmental impact compared to other typesof fossil fuels: it emits little CO2 and almost no SOx and NOx,environmentally harmful substances. And because it can betransported in containers, it can be taken to disaster-stricken
areas, making it an easily distributable source of energy. Besides
educating the public on these features and beneﬁts of LPG,
Japan Energy is striving to spread the use of environmentallyfriendly LPG energy systems and LPG vehicles.

JAPAN ENERGY CSR Report 2007

32

Working for theEnvironment

Refrigeration Compressor Oil
In 1989, we introduced the world’s ﬁrst synthetic polyol-ester based
refrigeration compressor oil that complied with CFC restrictions. Our
products now enjoy the top share of the Japanese and world markets.

Working for the Environment

R&D into Environmentally Friendly Technologies and Products
We work to protect the Earth’s environment through research and development of technologies for clean
energy and environmental protection.

Working for theEnvironment

Clean Energy R&D
Fuel Cells
With the pressing need to diversify energy sources and create
an environmentally friendly, recycling-based society, there has
been an increasing focus on fuel cells, which generate efﬁcientand clean energy throughthe chemical reaction ofhydrogen and oxygen.
Japan Energy has been
carrying out in-houseresearch into fuel cells
since the 1980s.

Japan Energy is taking part in the national government’s
JHFC (Japan Hydrogen & Fuel Cell Demonstration Project), andwe have opened a hydrogen refueling station, which will supply
hydrogen to fuel cells, in the Funabashi area of Chiba Prefecture
in Japan. We have also developed technology for a complex
monitoring system that immediately detects leaks of hydrogengas at hydrogen refueling stations using three types of sensors(sound, gas, and image).

The JOMO ECOCUBE, a residential fuel cell
Mobile hydrogen refueling station

Japan Energy Takes Part in Large-Scale
Experiments with Stationary Fuel Cells

Environmentally Friendly Clean Fuels

Since FY2005, Japan Energy has been taking part in largescale experiments with stationary fuel cells run by the New
energy Foundation (NEF). We installed 30 fuel cell systems(JOMO ECOCUBE) in homes in FY2005 and 40 in FY2006
and are currently gathering data on their operation.
This is what we have found so far:•Primary energy savings rate: 10-20%•CO2 emission reduction rate: 20-30%
We are continuing our participation in FY2007, with plans
to install 34 fuel cell systems. These efforts will prepare us
for the inevitable widespread use of fuel cells.

Hydrogen Energy Supply System
Fuel cells run on hydrogen, and we have researched anddeveloped a way of storing and supplying hydrogen in liquid
form, called the organic hydride method. Using hydrogenchemical reactions, such as those with toluene and methyl
cyclohexane, to transport the hydrogen, this method can be
carried out with existing infrastructure.
Hydrogen Storage and Supply System Using the Organic
Hydride Method
Hydrogenrefueling station

Refinery•Hydrogen storage

Tank truck
Hydrogen transported as a liquid hydrideR•Hydrogen generated
and supplied(Methyl cyclohexane, etc.)

Aromatics recoveredR(toluene, etc.)

Houses33

JAPAN ENERGY CSR Report 2007

Factories

CO2 in vehicle exhaust is a cause of global warming. To reduce
this impact, experts are seriously looking at carbon-neutral biofuels
for automobiles. Japan Energy is fully participating in governmentsponsored experimental research projects on biofuels like
ETBE*1, ethanol, and BDF*2. We are also moving full speed ahead
on in-house research to design higher-quality automobile fuels.
From April 2007, as a support project for the Ministry of Economy,
Trade and Industry, we began selling a regular gasoline, calledbiogasoline, blended with ETBE (on a distribution trial basis).
In addition, we are looking into ways to improve the quality ofgasoline in order to meet the needs of automobile engines thatare being developed using numerous technologies to improvegas mileage. As for reducing sulfur content, we are carrying out
research and development into effective ways to eliminate sulfur
in fuel, including high-performance catalysts and absorption.
This is helping us make sulfur-free gasoline and gas oil
production more streamlined and efﬁcient.
*1 ETBE (Ethyl tertiary butyl ether): A gasoline component stock made frombioethanol.
*2 BDF (Bio Diesel Fuel): Diesel engine fuel made from renewable resources
such as vegetable oil.

Soil Remediation Technologies
We have developed soil contamination survey and remediation
technologies that give us a consistent system for carryingout everything from soil survey to cleaning of the soil. For soil
surveys, we developed our own technologies for measuring
oil contamination on-site and for measuring microorganisms
in the soil. For puriﬁcation of soil, we are also researching anddeveloping technologies, such as the use of bio-surfactants toclean oil-contaminated soil and the use of plants to purify the soil
(called phytoremediation). We are also looking into the feasibilityof using bio-surfactants to clean up oil spills on the ocean.

Reducing the Environmental Impact of Reﬁneries
To reduce the environmental impact of our reﬁneries, we areresearching ways to keep machinery clean and automaticallymeasure and monitor advanced processes (called online
sensing technology). The goal of all this is to reduce fuelconsumption and CO2 emissions.
As another way to reduce waste and environmental impact,
we are researching the feasibility of recycling spent catalysts.

Participation in Eco Products 2006
Japan Energy took part in Eco Products 2006, a
comprehensive fair for environmentally related products andservices. Our purpose was to educate the general public
about our efforts to protect the environment. In addition to
our organic hydride method, which is gaining attention as
an efﬁcient way to store and transport hydrogen, we usedminiatures and instructional panel displays to introduce
efforts like the JOMO ECOCUBE residential fuel cell system,
residential refrigerators that help prevent global warming byusing a refrigeration lubricant, chemical recycling technology
for plastic waste, and our reforestation program.
We also had a section where visitors could experiencemotor oil viscosity and the heat-storing effects of latent
heat storage materials, and a section where visitors could
make paper crafts using 3.9 Paper (environmentally friendly
paper). The result was an enjoyable way for families to learn
about what Japan Energy is doing for the environment.

A Recycling-oriented Society through theChemical Recycling of Waste Plastics
The amount of the waste plastics in Japan reached toabout 10 million tons/year. About 60% of the waste
plastics are recycled already, but conventional recycling
methods are energy recovery and mechanical recycling
such as producing low-quality of the plastics.
Japan Energy and Plastic Waste Liquefaction Industries
Conference have developed the chemical recycling
technology that upgrade light thermal cracking oil derived
from municipal waste plastics into petroleum products(naphtha, etc.) in the oil reﬁneries for the ﬁrst time in Japan.
The greatest beneﬁt of this technology is that the plastic
can be used repeatedly as new products, contributing to asociety in which no resources go to waste.
Japan Energy’s role in this process is to upgrade lightthermal cracking oil derived from municipal waste plastics
into petroleum products for the petrochemical industries
by an existing upgrading unit in the oil reﬁneries. To do this,we need high-quality light thermal cracking oil derived frommunicipal waste plastics, so we established standards to befollowed by the company that is converting the plastic into oil.
We have developed a successful ﬂow scheme to coprocess light thermal cracking oil derived from municipal waste
plastics with petroleum in an oil reﬁnery and demonstrated thatutilizing an existing upgrading unit at Mizushima Oil Reﬁnery
in April 2004. The upgrading technology of thermal cracking
oil derived from municipal waste plastics will be extended
to that of the whole fractions of thermal cracking oil derived
from waste plastics, we aim to make this on commercial
basis. Japan Energy will continue its efforts to provide
environmentally friendly products by developing gasoline
and gas oil that emit minimal CO2 and which contribute to
reduction of hazardous substances in exhaust gas.
In August 2006, for the development of this chemical
recycling technology and for efforts towards its practicalapplication, Japan Energy received the TechnologicalAchievement Award from the Research Association
for Feedstock Recycling of Plastics in recognition ofcontributions to a sustainable society.
See the Japan Energy home page for details on the TechnologicalAchievement Award.
WEB

http://www.j-energy.co.jp/cp/release_new/2006/20060828_1330.php

Chemical Recycling of Waste Plastics

Consumers

Waste plastics(Plastics waste)

Plastic wasteliquefaction industries(Conference)

Thermal cracking oil

Plastic
manufacturers

Eco Products 2006

Petrochemicalindustries

Naphtha

Oil refineryJAPAN ENERGY CSR Report 2007

34

Working for theEnvironment

Developing Environmental Protection
Technologies

Together with Society
There are many stakeholders who support the business activities of Japan Energy.
We are well aware of the necessity of ongoing compliance so that we can continue to be a trusted
and indispensable member of the community.
We also do our utmost to be a good corporate citizen through environmental conservationand social contribution activities.
And we support our employee’s participation in these activities
because we believe that such volunteer action is important in fostering the “energy in people”
and contributing to the “energy in society.”

Consumers
Localcommunities

Employees

Shareholders,investors

Japan Energy’s
main stakeholders

Oil producing
countries

35

JAPAN ENERGY CSR Report 2007

Dealerships

Material suppliersTogether with Society

Together with Our Customers

Boost Quality Control through a New
Quality Policy in Line with Our Mission

Education and Training on Proper
Management of Personal Information

Japan Energy strives for uniﬁed operations with Kashima Oil
Co., Ltd., its group reﬁning company. In June 2006, Japan
Energy and Kashima Oil established a common Quality Policy
for reﬁneries.
This Quality Policy describes the building, maintenance, andimplementation of proper quality management systems basedon the ISO 9001 quality management system.
In our quality control system, there are administrative
departments for each product group under the supervision of
the General Manager of Reﬁning Technology in the Petroleum
Reﬁning Department, with each of these departments carryingout its own quality control.
The General Manager of Reﬁning Technology in the
Petroleum Reﬁning Department oversees quality control of fueloil, our main product. To boost this quality control, in March
2007 we established the Fuel Oil Quality Assurance Committee.
The committee held its ﬁrst meeting that same month to startquality control improvement activities.

In April 2005, the Law Relating to Protection of Personal
Information (the Personal Information Protection Law) cameinto full effect. Prior to that, in March 2005, Japan Energy
Group established its Personal Information Protection Policy
and Fundamental Rules for Personal Information Protection.
This was accompanied by e-learning for all employees andexplanation meetings at headquarters and sites to ensure thateveryone manages personal information properly. In September
2006, we established the Information Security Self-Audit system
for all employees, which allows us to see how well employees
understand and are abiding by personal information and othersecurity-related rules.

Quality Policy
1. The Japan Energy Group will aggressively
tackle environmental problems by developing,
manufacturing, and consistently providing
environmentally friendly petroleum products.
2. The Japan Energy Group will build and maintain aproper quality management system based on the ISO
9001 quality management system.
3. The Japan Energy Group will aim to eliminate all
quality-relate problems with a thorough quality control
system covering everything from manufacture or
petroleum products to their storage, delivery and sale.

Quality Control System

General Manager, Reﬁning
Technology,
Petroleum Reﬁning Dept

Administrative
department

Each department(branches, etc.)
Customers

Executive Committee

Status of ISO 9001 certiﬁcation
Date ofcertiﬁcation
Certifying
institution
Certiﬁcation
numberWEB

http://www.j-energy.co.jp/guide/privacy/policy.php

Customer Care for Users of Our LPG
Since FY2005, Japan Energy has been conducting activities
whose pillar is the improvement ofcustomer satisfaction. We conductcustomer care surveys* (questionnaires
for customers), created yearly plans forthe improvement of our service, which we
implement and follow up, and carry out
Logo for the customer
customer satisfaction activities based on
satisfaction activities of
the LP Gas Division
the PDCA (plan, do, check, act) cycle.
* Customer care survey: In FY2006, 25 companies (41 sites) took part, with
4,700 responses to the questionnaires.

Error in Repairing Weighing Machine at JOMO Afﬁliate
Filling Station Results in Erroneous Bills

Liaison Meeting of Quality Assurance Personnel
President

See the Japan Energy home page for our personal information protection policy.

Mizushima

Chita

Funakawa

Sodegaura

KashimaJanuary
10, 1996

February
9, 1994

February
11, 1997

October
8, 1996

November17, 1995

LRQA

JQA

LRQA

LRQA

LRQA

0941885

JQA-0400

0957130

0955550

JQA-1042

In April 2007 at the JOMO Gotemba Interchange Higashi
Station, a mistake was made in repairing a weighing
machine, resulting in overbilling of fuel for 278 customers.
This accident was the result of the repair company
installing the wrong part in the weighing machine, withthe result being that one of the regular gasoline pumps
mistakenly measured the amount of gasoline. We
contacted customers who had used credit cards and
JOMO cash cards. For other customers, we put up posters
at the station and an announcement on our home page,
offering an apology and a return of the amount overbilled.

JAPAN ENERGY CSR Report 200736

Together with Society

Besides raising quality in order to give customers the very best products, we are offering them comfortable
service stations and the ultimate service under the slogan “smile life with JOMO.” Our goal is excellent
customer service and attractive service stations that have an atmosphere distinct to JOMO.

Together with Society

Together with Our Customers

Together with Society

JOMO Cards (Light and Plus)
We introduced the JOMO Card Plus in 2002 for theconvenience and economy of our customers. In October 2006,
we introduced the JOMO Card Light, which entitles customers
to extra beneﬁts like a discount of 2 yen/liter on gasoline and1 yen/liter on kerosene, with no membership fees. Besides the
beneﬁts for customers, this card also makes JOMO service
stations more competitive.

JOMO Card Light

Value Style: Comfort and Hospitality
We developed Value Style Stations based on the conceptof creating service stations that make customers want tohave a look, want to come in, and want to come back again.
The stations have a uniﬁed exterior look, and the interior
is designed with furniture, music, and smells that create acomfortable atmosphere.
There are currently 543 Value Style stations all over Japan,
with plans to increase this to 1,000 by FY2008. We also hold
Value Style Forums at nine locations around Japan. At Value Style
Forums, we conduct awareness activities aimed at achieving thehighest level of hospitality, with case studies and presentations on
outstanding instances of customer service, check-ups on Value
Style standards, and analysis of customer assessments.

JOMO Card Plus

Field Communication Program (FCP)The aim of Japan Energy’s Field Communication Program (FCP)
is to provide customers with reliable maintenance products.
This program aims to create a relationship in which customers
seek advice from JOMO service station staff by having staff
initiate natural interaction with customers and carry out honest
inspections of customers’ cars without trying to sell them things
they don’t need.

We want to bring more abundance andvalue to our customers’ lives
The Value Style logo shows two little birds perched on a branch with a leaf.
These are the “birds of happiness” and they are always together.
They are a symbol of happiness and continually hope that our customers
keep on smiling.
The leaf represents nature and consideration for the environment.
This logo expresses the goal of the Value Style concept: that customers
come to our service stations in complete peace of mind.
Note: “Value,” “Value Style,” “smile life,” and “smile life with JOMO” areall registered trademarks of Japan Energy Corporation and theirunauthorized use is prohibited.

Field Communication Program

Mystery Shopper Program Surveys
Customer Satisfaction from the Viewof the Customer

Kids’ section

Since 1994, we have been conducting customer satisfaction
surveys twice a year at the 2,000 nationwide JOMO service
stations. Starting in October 2006, we had consumers act as“mystery shoppers” in order to get an unbiased, customercentered view of things like fueling, maintenance, customer
service, shop facilities, and cleanliness. By assessing JOMO
service stations from the customer’s point of view and reﬂecting
survey results in our service, we are raising the level of service
we offer to customers.
Hospitality with a smile from staff

37

JAPAN ENERGY CSR Report 2007

Coffee section and separated smoking roomValue Style and other JOMO service stations have hadsuggestion boxes since 2005. Things that we see everyday
and casually take for granted can lead to new discoveries if
we just look at them from a different perspective. These new
discoveries give birth to suggestions. These suggestions cancome from your impressions or ideas about something, or fromsomething you think could be done better. When you start tothink of suggestions, you can guess what customers need, andthis leads to service and hospitality that goes beyond customer
expectations. Examples our service stations have come up
with for improved customer service include stools for smallchildren in the washrooms and reading glasses for the elderly.
In FY2006, 900 JOMO service stations around Japan used thesuggestion box system.
Efforts planned include the faxing of suggestion box casestudies to JOMO service stations and the sharing of suggestion
box information, initiatives that will have the added beneﬁt ofraising station staff awareness and thus raising the level ofcustomer-focused service.

These customer opinions and requests are put into
a database and are used in creating targets for future
improvements. We also regularly fax JOMO service stations a
newsletter with helpful customer comments.
TEL

JOMO Customer Center
0120-150-106 (toll-free in Japan; M-F, 9:00 a.m.-5:00 p.m.)

Customer Extras at JOMO Service Stations
Barrier-Free Design
JOMO Service Stations are incorporating universal design sothat all customers can use them easily with peace of mind.
Main initiatives•Stairs and curbs: Ramps installed•Store entrance doors: Automatic or sliding doors•Restrooms: Wide space and handrails, Western-style toilets
Note: There are 30 JOMO service stations that provide full wheelchair
access.

•Price list sign: Uses yellow (barrier-free color) LED

Boost Employee Development(Mentality of Hospitality)
In addition to training in handling customers and cleanliness,
we also offer regular classes in Value Style hospitality andcustomer service suggestions. Taking these courses helps instillin employees a mentality of hospitality.
Entrance with slope

JOMO Customer Center Puts
Opinions and Requests to WorkInter-Industry Annexing

In 1998, we opened the JOMO Customer Center to gather
customer ideas and reﬂect these in our service. Customers cancall a toll-free number and give us their opinions and ideas on
improvements that could be made.
Calls to the JOMO Customer Center (FY2006)
Details

No. of calls

JOMO card (requests for applications forms,
Web-related)

4,193

Claims (JOMO card, service at service stations,
campaigns, etc.)

952

Products

719

Auto body care
Campaigns
Guide to service stations
Bouquet of Children’s Stories
Crank calls

Wheelchair access restroom

Japan Energy is collaborating with other industries to takeadvantage of the speciﬁc locations of JOMO service stations.
We continue to think of new ways to make JOMO service
stations more convenient and satisfying to our customers.
Inter-industry annexed shops•Beauty salons: 9 shops•Laundromats: 5 shops•Dry cleaner: 1 shop
•Fast food: 1 shop
•Coffee shops: 3 shops•Restaurants: 2 shops

6
131
384
1,213
270

Other

1,719

Total

9,587

Annexed Laundromat

Annexed beauty salon

JAPAN ENERGY CSR Report 200738

Together with Society

Suggestions from a Customer’s View

Together with Society

Together with Our Business Partners

Together with Society

In our purchasing relationships with our business partners, we strive to create a win-win situation througha partnership of fair and honest dealings. We also conduct green procurement: the purchasing of products
and raw materials with minimal impact on the environment.

All purchasing functions of the Japan Energy Group areoutsourced to Nippon Mining Procurement Inc., the purchasingarm of the Nippon Mining Holdings Group.
This company was established in July 2005 to carry out
group-wide purchasing for the Nippon Mining Holdings Group.
The company complies with all relevant laws in conducting
purchasing in a fair and highly transparent manner. Based on
the purchasing policies below, we strive to build a partnershipfounded on mutual trust with all of our business partners.

Communication with Our Business
Partners
Nippon Mining Procurement Inc. has a contact site on theJapan Energy home page for gathering opinions and requests
from business partners online. If responding to these requires
the assistance of Japan Energy, Nippon Mining Procurement
and our relevant division work together to deal with the matter.
In September 2006, an integrated purchasing system was
begun for bulk purchasing for the Nippon Mining HoldingsGroup. With the introduction of the WEB-ED function (an online

electronic data exchange system) and the standardizationof dealings with approximately 4,500 business partners, ourpurchasing is now much more efﬁcient.
Before starting this integrating purchasing system, we
held meetings to explain it to business partners, where we
distributed a guide outlining things like material transactions andbasic rules for purchasing. This guide is available on the Japan
Energy home page.
WEB

http://www.shinnikko-pr.co.jp/cp/purchase/pdf/torihiki_shiori.pdf

Database of Material Suppliers
Nippon Mining Procurement has a material suppliers databasethat it has business partners update regularly with the latest
product information. Besides allowing for the sharing ofpurchasing information with business partners, it provides away to further develop the win-win situation by expanding
business opportunities.
WEB

http://kobai.wa-sabi.ne.jp/co/kobai/supplier/info.asp

Nippon Mining Procurement Purchasing Policies
Role
1. We will provide the group company of the Nippon Mining Holdings Group with the necessary materials and services in the most efﬁcient and stable manner.
2. We will contribute to the competitiveness of the group company of the Nippon Mining Holdings Group by working with the company to reduce the costof the materials to be purchased.
3. We will conduct business with high levels of precision, speed and transparency so that we can gain the trust and satisfaction of the group company of
Nippon Mining Holdings Group.
4. We will share information with the companies of the Nippon Mining Holdings Group in order to make both parties aware of the progress and results ofthe purchasing process and thus strengthen the purchasing functions of the Nippon Mining Holdings Group.
5. We will make purchasing information available to business partners so that we can offer the maximum number of business opportunities.
Course of Action for Purchasing Deals
1. Transparency: Purchasing deals will be carried out in an open manner from start to ﬁnish.
2. Fairness: Selection of suppliers will be carried out based on fair evaluations.
3. Rigorous legal compliance: During purchasing deals, we will comply with all related regulations, and will not only observe the individual clauses ofeach law, but will also adhere to the spirit of the law.
4. Environmental protection: We regard the environment as the most important thing, and endeavor to “purchase green.”
5. Mutual trust: We will build relationships of trust with our suppliers, based on equal partnerships.
6. Ethics: The person in charge of purchasing will keep fair relationships with business partners based on a rigorous ethical viewpoint.
Our Promise to Business Partners (Fundamental Rules for Purchasing Deals)
1. Fair entry opportunities: We will provide companies that wish to trade with us fair opportunity to do so, and will respond to any proposals earnestly.
2. Fair evaluation: Selection of suppliers will be conducted based on a fair evaluation of product quality, price, delivery schedules, performance and other factors.
3. Clear speciﬁcation of purchasing procedures: We clearly publicize the Course of Action for Purchasing Deals, the Fundamental Rules for Purchasing Deals,
registration procedures for new suppliers, various procedures from ordering through payment, and the contact details for the person in charge as well.
4. Management of conﬁdential information: We will strictly manage information received in the course of purchasing operations and ensure maintenanceof conﬁdentiality.
5. Disclosure of the reasons behind selections: Where suppliers are not selected in tenders or competitive bids, we will clearly inform them, if requested,of the facts and reasons behind our decision.
Note: See page 29 for details of Green Procurement.

39

JAPAN ENERGY CSR Report 2007

Together with SocietyWith Employees
Japan Energy strives to build a workplace where each employee can use his or her abilities to the fullest.
Our human resource system evaluates employees openly and fairly and respects their motivation.

Japan Energy has four fundamental human resource policies.
(1) Place people in jobs or job rotations based on their speciﬁcskills and to develop their abilities.
(2) Evaluate and reward employees based on their performancein an open, fair manner.
(3) Establish labor conditions commensurate with the company’s
capacities and have prompt, systematic response to social
needs.
(4) Offer sufﬁcient opportunities for employees to develop theirskills through education.

Open, Fair System of Evaluation
In 1999, Japan Energy established an open, fair competencybased system of evaluation. This system is made up of action
standards (competency model) established for each job
description and annual work achievement targets, both of which
are used as a basis for regularly evaluating the progress andachievement of employees.
In this system, employees and their superiors hold frank
discussions at the beginning and end of the ﬁscal year. This
offers a fair process in which both sides can agree on issues
and also provides the basis for revising employee work targets
and pursuing the necessary training to develop their skills.

Job Placement and Human Resource
Training that Respects Employee Motivation
Under Japan Energy’s self-declaration system, once a year
employees contact our General Administration & Human Resources
Department and voice their opinions on their particular skills andfuture career goals, as well as make requests regarding where
they want to work or other personal wishes. Based on employees’
suitability or skills for particular jobs, and with consideration for theirintentions and desires, we place them in jobs or on career paths
that they ﬁnd rewarding and that make the most of their strengths.

from employees. The company has strict policies and measures for
dealing with offenders, and these are written in the company rules.
Management also inform and educate employees on these matters.

Re-Employment of Retired Workers
With the start of the Law Concerning Stabilization of Employmentof Older Persons, in FY2006 Japan Energy introduced a system forre-employing retired workers. All employees retiring at age 60 who
wish to be rehired are eligible for this system. This system allows
employees 60 and older to use the experience and knowledge
they have built up over the years and pass on their valuable skills
to the next generation of Japan Energy. In FY2006, seven of the
12 employees who reached the retirement age were re-employed.
Number of Employees (ﬁscal year end)
(employees)
3,000
2,000
1,000

2,623
225

2,519
212

2,476
217

2,398

2,307

2,259

FY2004

FY2005

FY2006

New University Graduates Hired(employees)

Men

Women

60

55

40

38

20

40

3

13

8
42

35

32

FY2005

FY20060
FY2007

Ratio of Men and Women in Management Positions (ﬁscal year end)
(employees)

Men

600

607

400

In July 2005, we began getting a consensus among department
heads at headquarters and holding hearings for female
employees in order to better understand how to create a
corporate culture and systems conducive to boosting women’s
participation in Japan Energy. Our goal is to create a workplacein which women can do their jobs unconstrained and haveaccess to a wider range of job opportunities.

200

Sexual harassment is a socially unacceptable act. Our measures
to deal with this serious issue include leaﬂets on the sexual
harassment and councilors that give advice to and hear complaints

Women

0

A Workplace the Empowers Women

Sexual Harassment

Men

Women

1

600

645
1

4

606

599

641

FY2004

FY2005

FY20060

Average Number of Continuous Years Worked (ﬁscal year end)
(year)
24

Men

Women

22.9

23.0

23.4

16.3

17.5

17.4

FY2005

FY200616
80
FY2004

JAPAN ENERGY CSR Report 200740

Together with Society

Fundamental Human Resource Policies

Together with SocietyWith Employees

Together with Society

Employment of the Disabled
As of March 31, 2007, Japan Energy had 29 employees withdisabilities (representing 1.82% of all employees) and we will
strive to increase this number with the aim of staying above thelegal limit (1.8% of all employees). To this end, we are working
to create a workplace conducive to making the most of disabled
employees’ talents and increasing the number of jobs open to
the disabled.

Education for All Employees
Japan Energy believes that people are a company’s greatest
resource. That’s why we encourage directors and employees tofurther their abilities through training programs.
It is with this belief that we established the Nippon Mining
Management College to foster the next generation of Nippon
Mining Holdings Group leaders. With the aim of grooming
Japan Energy’s business leaders, we offer a full range ofcourses for employees selected from all management levels,from department managers to executives.
In the area of skill development, we have group education
for all levels, from new employees to executives. In addition,
employees can join our range of other programs: the open
college, available to anyone with a desire to better themselvesin a number of skill areas; correspondence education, which
covers foreign languages, certiﬁcation programs and practicalcourses; and study abroad programs that send employees
to business schools overseas with the aim of molding
internationally minded managers.
As well, education about our corporate principles andCSR activities is a required part of training programs for each
employee level.

Initiatives to Support the Next
Generation
The Law to Promote Measures to Support Fostering NextGeneration Youths requires companies to establish ways to help
employees balance work and childcare. In response to this,Japan Energy created a two-year action plan in April 2005 andachieved its targets as of April 2007. This allowed us to havethe plan certiﬁed* by the head of the Tokyo Labour Bureau. We
established another two-year plan starting in April 2007.
* Certiﬁcation system: Companies that carry out
consistent action plans and that meet certain
legal standards are certiﬁed by the head of theLabour Bureau of the prefecture in which they
are based. This certiﬁcation gives companies theright to use a next-generation certiﬁcation logo
on their products.

41

JAPAN ENERGY CSR Report 2007

Childcare Leave and Nursing Care
Leave Systems for Employees
Japan Energy has for some time now had childcare leaveand nursing care leave systems in compliance with Japanese
laws. But with the enactment of the Law to Promote Measures
to Support Fostering Next-Generation Youths in April 2005,
we have revised our childcare leave systems so as to allow
employees to ﬁnd a balance between work and childcare andto make it easier for women to continue working after having
children. In FY2006, 15 employees (including 2 men) used theirchildcare leave and no employees used nursing care leave.

Outline of Main Childcare Leave andNursing Care Leave Systems
Childcare(1) Childcare leave
Leave can be taken for a period either until the childbecomes 1 year and 6 months old or until the ﬁrst ﬁscal
year end after the child becomes 1 year old, whicheveris longer. (From October 2007, this is scheduled to beextended for a period until the child is 2 years old). Asa rule, this leave is unpaid, except for a maximum of 5days from the start of leave.
(2) Shortening of work hours
Employees can shorten working hours for a period until
the child starts elementary school. (From October 2007,
this is scheduled to be extended for a period until thechild starts fourth year elementary school). A workday
can be shortened by up to 2 hours.
(3) Child nursing care
Employees can take up to 5 days leave a year until thechild enters junior high school.
(4) Reserve leave for child nursing care (scheduled to startin October 2007)
Employees can take up to 5 days leave a year until thechild enters junior high school.
Nursing care(1) Nursing care leave
Employees can take up to 365 days leave per family
member.
(2) Shortening of work hours
Up to 365 days per family member. A workday can beshortened by up to 2 hours.
(3) Reserve leave* For nursing care
Up to 30 days.
* Reserve leave: Annual paid leave that was not taken and has expired
can be saved up and used for a special purpose.

The Value of Childcare Leave for Fathers
In September 2006, I took ﬁve daysof childcare leave for the sake ofmy second son, who was born inJuly 2006. This gave me a chance
to think about the signiﬁcance offathers participating in childcare.
Yasuhiro Yoshida Of course it helped take some ofthe physical burden off my wife.
Toda Administration Ofﬁce
But more than that, I think it was
important to empower my wife with the knowledge that
she is not alone in raising our children.

I Used the Shorter Work Hours System
After Returning to WorkI used the childcare leave system
until my child was 1 year and 4
months old. After returning towork, my child was in a daycarethat closed early, so I was worried
about being able to leave work
early enough to get to the daycare.
Atsuko Miura
Luckily, I could take advantage ofGeneral Affairs Manager,
the shorter work hours system toGeneral Administration &Human Resources Deptleave the ofﬁce early. Thanks to thehelp of my co-workers and our company’s support systems,
I am now a working mother who picks up my child everyday.

Smooth Labor-Management
Relations Based on a Spirit of Mutual
Dependence and Mutual Trust
Under the union shop system, Japan Energy has an agreementwith the Japan Energy Labor Union (1,808 members as ofMarch 31, 2007) based on a spirit of mutual dependence andmutual trust. In the spirit of this agreement, the company strives
to improve the working conditions of union members and theunion works with management in solving problems related torunning the company. Such smooth labor-business relations
form the foundation of the company’s growth.

Occupational Health and Safety Efforts
In the area of occupational health and safety, based on thesafety and health management policy announced every ﬁscal
year by the president, Japan Energy carries out thorough efforts
at all sites and branches. In FY2006, besides emphasizing
the prevention of accidents caused by human error, eachsite offered support, such as through company doctors, toemployees with health concerns in physical check-ups, andensured that all employees were getting their proper amount ofworking hours.

Proper Management of Working Hours
Japan Energy constantly and properly manages working hours.
We inspect our system of operations to ensure all employees
are in good health, both labor and management thoroughly
monitor the state of things like employee working hours andamount of paid leave taken, and offer a ﬂex time system.

Safety Awareness at All Sites
At each Japan Energy site, the general manager personally
tours the site, looking for improvements that can be made andinstructing managers on ways to prevent labor accidents.
Each worksite also conducts numerous safety activities.
These include near-miss awareness, in which workers reportthings they are worried about or near-miss accidents; andillustrated lesson sheets, which are diagrams of a worksite thatworkers study to try and ﬁnd potential points of danger.
As well, sites that have experienced labor accidents are
required to make certain plans: accident surveys, accident cause
analysis sheets, and plans to prevent accident reoccurrence. The
table below shows the number of accidents at Japan Energy(including Kashima Oil Co., Ltd.), both those that resulted in lostwork time and those that did not, over the past ﬁve years.
Number of Labor Accidents
FY2002

FY2003

FY2004

FY2005

FY2006

Resulting inlost work time

0

0

1

2

0

Not resulting inlost work time

6

2

3

3

3

Health, Labour and Welfare Minister’sCommendation, Encouragement Prize Recognizes
Japan Energy’s Outstanding Safety and HealthJapan Energy’s R&D Center was commended by Japan’s
Health, Labour and Welfare Ministry for outstandingachievements in the ﬁeld of safety and health. This award
is in recognition of the R&D Center’s record of outstanding
safety achievements based on approximately 25 years
without an accident or calamity.

Helping Employees Stay Healthy
The Health Insurance Union of Nippon Mining Group has a callcenter where employees can consult on matters of health andmedical care. Open 24 hours a day, 365 days a year, the callcenter responds to concerns on mental and physical health andprovides information on medical institutions and nursing care.

JAPAN ENERGY CSR Report 200742

Together with Society

Employees Who have Taken Childcare Leave
and Nursing Care Leave

Together with Society

Together with the Community
Based on our Mission of aiming “for a more cohesive and dynamic society,” we contribute to society throughthe promotion of sports and culture and through support for Japan Energy employees’ volunteer activities.

Together with Society

Social Contribution Priorities andSupport Focus
In order to make the most of our social contribution efforts, wehave established priority areas of contribution and have clariﬁed
the focus of our support.
Priority Areas
1 JOMO Children’s Story Award, JOMO Children’s Story Fund
2 Promotion of Sports
3 Disaster Assistance
Support Focus
1 Children
2 The disabled
In FY2006, based on these priority areas and focus of
support, we continued and boosted a number of activities wehave been conducting for some time now.

37th JOMO Children’s Story Award
Every year since 1976 we have been accepting children’s
stories from the general public, with the best works awarded
and published in the Bouquet of Children’s Stories.
For the 37th JOMO Children’s Story Award in FY2006, wereceived 8,067 entries in the general division (junior high school
students and older) and 804 entries in the children’s division(elementary school children and younger), for a total of 8,871.
Of these entries, 33 outstanding examples were awarded,
and the 18 honorable mention stories were printed along with
illustrations in the 37th edition of the Bouquet of Children’s
Stories. All entries received a copy of the book, and copies
were also given to children’s and mothers and children’s facilities
around Japan.

of book sales to the Japan National Council of social Welfare,which provided scholarships to 212 former residents of children’s
homes and mothers’ and children’s homes, as well as toresidents of foster homes, when they enter university, college,or trade schools.
Support for foster homes is at the request of the National
Foster Parent Association of Japan, and Japan Energy will offer
its support under a three-year trial.

JOMO Basketball Clinic throughout Japan
Begun in 1995 to promote basketball and exchange between
Japan Energy and local communities, the JOMO Basketball
Clinic features players and coaches and current and former
players from Japan’s top women’s basketball team, the JOMOSunﬂowers, touring the country to teach mainly elementaryand junior high school students basic basketball skills. In
FY2005, the tenth year of the program, we formed a full-timeteam consisting of former players and increased both thefrequency of sessions and the amount of material and cources
to be chose. Selected teams receive special reinforcement
courses covering a number of sessions, and one-day courses
give everyone from children to adults the chance to masterbasic basketball techniques while having fun. While sessions
used to be held four times a year, this was dramaticallyincreased starting in FY2005, and in FY2006 we held 57
sessions attended by a total of 2,161 participants. And we
gave children a dream to shoot for with special sessions led by
Yuta Tabuse (formerly of the Phoenix Suns), the ﬁrst Japaneseever to play in the NBA. 2006 sessions were held in Tokyo and
Hokkaido in May.
In March 2007, the JOMO Sunﬂowers won the 8th
W-League basketball championship, their ﬁrst title in three years
and their 11th in the team’s history (including championships in
the former Japan Basketball League).
WEB

The JOMO Children’s Story Award
presentation ceremony

The Bouquet of Children’s Stories

The JOMO Children’s Story Fund and JOMO
Scholarship Grants
In 1994, Japan Energy, the Nationwide JOMO Association,
and Nationwide JOMO LP Gas Association, the sales networks
handling JOMO brand products, jointly established the JOMOChildren’s Story Fund with the objective of using the Bouquetof Children’s Stories for worthy social causes. Dealerships,
afﬁliates, and Japan Energy Group employees purchase the
Bouquet of Children’s Stories and the proceeds are used forchildren under children’s homes, mothers and children’s homes
and foster homes around country.
In FY2006, we donated 24 million yen from the proceeds

43JAPAN ENERGY CSR Report 2007

http://www.j-energy.co.jp/jomo_clinic/

Full-time staff teach skills

JOMO Dream Challenge Project,
Jr. NBA Japan TeamWith the joint sponsorship of NBA Japan, Japan Energy held
the JOMO Dream Challenge Project, Jr. NBA Japan Team.
Jr. NBA is a social contribution program held as part of NBA
activities starting in 2001, through which children are taught
basic basketball skills as well as social skills like teamwork andsportsmanship.

Supporting Sports for the Disabled
Japan Energy added the Click Donation section to its Web site
in support of sports activities for the disabled.
Each time a visitor to the Web site clicks the icon, Japan
Energy donates an equivalent amount to sports organizations
for the disabled (limit of one click per person per day).
In FY2006, Japan Energy donated to the Special Olympics,
international organization providing sports training and athleticcompetition to people with intellectual disabilities by click
donation system.
We also support the Japan Wheelchair Basketball
Federation (JWBF) championships (April) and the Sports
Federation for Persons with an Intellectual Disability (INASFID)
Basketball World Championships (October). JOMO volunteers
also helped out at wheelchair basketball tournaments in April
and December.
Tabuse (formerly of the
Phoenix Suns), the ﬁrst Japaneseever to play in the NBA. 2006
sessions were held in Tokyo and
Hokkaido in May.
In March 2007, the JOMOSunﬂowers won the 8th W-League
basketball championship, their ﬁrst
title in three years and their 11th
in the team’s history (including
championships in the former
Click Donation Web site
Japan Basketball League).
WEB

http://www.j-energy.co.jp/cp/iety/click_tp.php

Click Donation Destinations
Organization

Special Olympics
NipponPeriodAmount donatedMarch 20, 2006 –November 5, 2006

3,741,508 yen(For operational costs fornational summer games)

November 6, 2006 –March 31, 2007

2,180,999 yen(Support funds for the Japanteam at the 2007 Special
Olympics World Summer
Games in Shanghai)Disaster AssistanceJapan Energy executives and employees joined in a donation
campaign to raise funds for victims of the huge earthquake
occurred May 2006 in central Java.
In this donation program, Japan Energy matches the amountdonated by executives and employees. We donated a total of
1,070,592 yen (535,296 yen from the employees and the sameamount from the company) to the NPO Japan Platform, which
use this money to help those suffering people in Java.
In April 2006, we established the JOMO Fureai Fund, inwhich a ﬁxed amount of the salary of executives and employees
is set aside in a savings account to be used to help future
victims of disasters. As of the end of March 2007, 582 hadjoined in this fund, with a total of 946,100 yen saved.
After an earthquake in March 2007 on Japan’s Noto
Peninsula, the money from the Fureai Fund was put to use for theﬁrst time to help the victims. 500,000 yen was used from the fund,with Japan Energy matching this amount, for a total of 1,000,000
yen. In April, we donated this to the Central Community Chest ofJapan to support its disaster volunteers program.

Cleanup Activities
Japan Energy has for years now been holding community
cleanup activities at its sites.
In FY2006, approximately 800 employees took part incleaning activities held at the Mizushima Oil Reﬁnery, Chita
Oil reﬁnery, Funakawa Works, Sodegaura Lubricants Plant,
Kawasaki LP Gas Terminal, R&D Center, Hokkaido Branch andKashima Oil reﬁnery (Kashima Oil Co., Ltd.).

Local cleanup by R&D Center employees and their families

Participation in Local Disaster Prevention
Activities
To ensure safety in local communities, Japan Energy reﬁneries
and plants cooperate with neighboring companies and local
governments in disaster prevention activities.
In FY2006, the R&D Center joined in the emergency disaster
drill jointly held by Warabi police department and the Toda ﬁredepartment at the center.

JAPAN ENERGY CSR Report 200744

Together with Society

In August 2006, out of junior highschoolboy applicants from around
Japan, 12 were selected in two
rounds to form a Japan team. JOMO
offered comprehensive support in theform of full-time coaches from the
JOMO clinic to lead basketball camps
and a tour of the US. In January
2007, a team of 12 ﬁrst and second
year junior high school students went
Playing against the US teamto the US to play against teams fromNew York and New Jersey. Although Japan lost both games,
the team members had an experience they will never forget.

Together with Society

Together with Society

Together with the Community

Science Classes and the JOMO Planet School

Opening Japan Energy Facilities to the Public

We’ve been holding science classes at the R&D Center for
sixth grade students from the nearby Toda Municipal Niizo
Elementary School since 2004. In September 2006 we held
the third class for 88 students on the three themes of nextgeneration energy and reducing environmental burden,
environment protection concerning engines, and technology
for seeing the unseen. In January 2007, on a request from the
Toda City Education Committee, we sent four researchers fromthe R&D Center to teach at the committee-held JOMO I Love
Science Classes (held at Toda Municipal Miyamoto Elementary
School for 68 ﬁfth grade students). On the theme of the color
related to petroleum, we introduced the students to familiar
petroleum products and our environmental protection efforts.
And with the goal of stimulating children’s interest in naturalsciences through observation of the night sky, we hold the JOMO
Planet School. Heldin September 2006
and March 2007, thetwo sessions wereattended by a total of120, including children
and their parents from
Niizo Elementary School,
Japan Energy employees
I Love Science Classes
and their families.

Japan Energy’s headquarters has since 1989 lent its gymnasium
to local kendo groups for practice.
Other Japan Energy sites, such as reﬁneries and the R&D
Center, also open sports facilities such as tennis courts, Japanesearchery ﬁelds and kendo training rooms to the general public.

Participation in Minato-Net
Japan Energy is part of a social contribution network ofcompanies and organizations, called Minato-Net, in Minato
Ward, Tokyo.
Representatives work together on events and informationexchanges that enrich the community and strengthen ties
among their organizations.
In May 2006 in Shiba Park, Minato-Net held its 19th event,which aimed to get participants to appreciate the nature ofTokyo’s Minato Ward. A total of 150 participated, including
residents and people working in Minato, as well as six employees
and family members from Nippon Mining Holdings Group.

Participation in minato eco-conscious consortium
In May 2006, Japan Energy took part in the Minato eco-conscious
consortium (mecc). The event was an experiment in whichbusinesses, residents, and the government of Minato Wardwork together on environmental problems and create a “Minato
model” as an example for the rest of Japan.
In November 2006, mecc held the Companies and theEnvironment Expo, at which Japan Energy had a booth
introducing its environmental activities. As well, our employees
gave talks on our CSR activities.

45

JAPAN ENERGY CSR Report 2007

Supporting Employee Volunteer
Activities
We aim to make Japan Energy executives and employees
vital members of local communities who can help drive thecreation of new dynamism and energy in society. To this end,
we encourage employees to volunteer by offering systems to
support volunteering, providing information on volunteering andrunning our own volunteer programs.

Volunteer Leave Systems
In April 1996, Japan Energy established an international
volunteer leave system. With the aim of supporting employees
who want to participate in volunteer activities run by internationalorganizations, the Japanese government, or other groups,
employees can take between six months and two years off, andreceive the equivalent of 70% of their salary as aid money. Sofar, no employees have taken advantage of this system.
As well, in April 2002, we introduced a volunteer time-off
system under which employees can use up to three days a yearof accumulated paid leave (see page 41) for volunteer activities.
In FY2006, 16 employees took a total of 20 days time off,
including to work in forest preservation work.

JOMO Volunteer Network
We established the JOMO Volunteer Network in June 2004
to further participation in volunteer activities. Employees
enthusiastic about volunteering become members of the
network and spur volunteering in their workplace. There isalso a home page for employees with information on volunteer
opportunities inside and outside the company as well asfeatures on employee volunteer activities. The Network serves
to invigorate and widen JOMO volunteer activities.

Second-Hand Book Fair Charity 2006: “Summer
Second-Hand Book Caravan”
In August 2006, Japan Energy, Key Coffee, Inc., Kikkoman
Corporation, Japan Tobacco Inc. and Hitachi High-Technologies
Corporation held a charity concert and second-hand book
fair. The proceeds went to the non-proﬁt organization Child
Fund Japan for its children’s education support activities in thePhilippines and were enough for ﬁve companies to support one
child each for two years of schooling. In 2003, Japan Energy

In-House Blood Donor Clinics
Once or twice a year, we support blood donation by our
employees at headquarters and other sites. These provide the
Red Cross with safe blood and give employees the chance to
do a good deed. In FY2006, approximately 500 employees
donated at six sites.

Walk the World
Japan Energy employees take part in the charity
second-hand book fair

Charity English Conversation Class
Japan Energy holds English conversation class jointly with NGO
Minsai Center Japan that help children in Thailand, Laos, andCambodia enter school. Japan Energy employees and theirfamilies take an English class taught by an American teacher
and the lesson fees go to Minsai Center Japan, an NGO
dedicated to helping the less fortunate in other countries get an
education. In January
2001, charity English
conversation class were
held for the children of
R&D Center employees,with the proceeds
enough to send one
junior high school
student in Thailand to
Learning English through games
school for one year.

Support for Guide Dog Training
Since the autumn of 2003, Japan Energy employees have beenworking as volunteers to clean up the Tochigi Guide Dog Center.
In FY2006, a total of 55 employees participated in the usual two
cleanups in April and November.
There are also donation boxes inside our ofﬁce in support ofdog training activities at the Guide Dog Center. As well, JOMONet Kita-Kanto Co., Ltd. has donation boxes at its JOMO
service stations in Tochigi Prefecture.
These activities
yielded a total of 192,275
yen worth of donations
in FY2006. And ﬁve
employees from Japan
Energy’s Hokkaido
Branch volunteered at an
event in April 2006 heldby the Hokkaido Guide
Cleanup at the Tochigi Guide Dog Center
Dog Association.

Japan Energy takes part as a councilor in activities of the Japan
Association for the United Nations World Food Programme(WFP). We co-sponsored Walk the World, a charity event put
on by the WFP in May 2006, with Japan Energy and family
members (total of ﬁve persons) taking part. This event washeld simultaneously
around the world withmore than 700,000
participants, withproceeds going to aschool lunch program
to provide opportunities
for needy children to go
to school.
The event was held simultaneously around the world

Collecting Items to Donate
In 1997, we began social contribution activities that anyone
could easily participate in; namely, the collection of items suchas used stamps and telephone cards to be given to NGOs.
From January to May 2006, we collected erroneous postcards
and unused stamps and donated them to the non-proﬁtorganization Hunger-Free World, a group working to alleviate
world hunger. In March 2007, we collected unused telephonecards and other items for donation to the Darunee Scholarship
Fund project run by the NGO Minsai Center Japan. Throughthis, we were able to provide student grants to three Laotian
elementary school students and one Cambodian student.
As well, Japan Energy and four other companies participatingin Minato-Net collect PET bottle caps (polypropylene) and sellthem to a recycling company, with the proceeds going to the NGO
Japan Committee for
Vaccine for the World’sChildren. In FY2006, ﬁve
companies collected a
total of 860 kg, resulted
in 902 yen of donation.
Although it seems likea small amount, it isenough to provide polio
vaccine for 45 children. Collecting stamps and cards for donation to NGOs

JAPAN ENERGY CSR Report 2007

46

Together with Society

held its ﬁrst secondhand book fair as aneasy way for employees
to get into volunteering.
This was followed by anart exhibit and concert
together with member
companies of MinatoNet. This led to theevent in its current form.

Feature 2
As a Corporate Citizen

Fostering the Next Generation andProtecting the Environment
Through long-running voluntary programs like the JOMO Children’s Story Award and the JOMO Basketball Clinic,
employee volunteers join with local communities in environmental and other social contribution activities.

The JOMO Children’s Story Award: Fostering the Next Generation and Protecting the Environment

JOMO Children’s
Story Award

JOMO Children’s Story Fund
(Scholarship Grants)

3.9 Paper(Forest Conservation)

Children’s Story Fund

B-(2)- 060008

Through the Bouquet of Children’s
Stories, Japan Energy Contributes
to Environmental Protection and theBetterment of Communities
To realize our Mission of “We Create Energy,” we do all we
can to contribute to society. Efforts to this end include longrunning voluntary programs like the JOMO Children’s Story
Award and the JOMO Basketball Clinic, in which we workwith dealerships and local citizens in ever-widening social
contribution activities.
In 1992, together with our dealerships we establishedthe JOMO Children’s Story Fund (at that time called the
Kyoseki Bouquet of Children’s Stories Fund). The aim was tomake the Bouquet of Children’s Stories effort beneﬁt society.

47

JAPAN ENERGY CSR Report 2007

Dealerships, Nippon Mining Holdings Group companies
and Japan Energy employees purchase the Bouquet ofChildren’s Stories and give them to customers and children
in the community. Money from sales of the book goes into
the JOMO Children’s Story Fund, which goes to the Japan
National Council of Social Welfare.
To make the 280,000 copies of the Bouquet of Children’s
Stories that we publish every year requires more than 70 tonsof paper. So, we introduced the 3.9 Paper system, under which
we work with Hara Village in Nagano Prefecture in an initiative
called the Adopt-a-Forest Operation to make effective
use of wood from thinning forests while helping preserve
forests. In this way, the JOMO Children’s Story Award helps
create a circle of community contribution and environmental
preservation that meets the needs of today’s society.

Our Expectation

Helping Today’s Children—Tomorrow’s Leaders—Achieve
Their Dreams
Mr. Masaru Sasao, General Manager of Child Welfare Dept., Japan National Council of Social Welfare
The Japan National Council of Social Welfare receives donations from the JOMO Children’s
Story Fund, which we use to provide scholarships under the JOMO Scholarship Grants. 2007
was the 15th consecutive year we received donations from the JOMO Children’s Story Fund,which we used to help many children achieve their dreams through donations to children’s
homes and homes for single mothers. The JOMO Scholarship Grants are now in its fourth year,
and we use this to support the children who need it. I hope that Japan Energy continues andexpands its social welfare efforts.

JOMO Children’s Story Fund: Putting theBouquet of Children’s Stories to Work in
the Community
Dealerships, Nippon Mining Holdings Group companies, andJapan Energy employees purchase the Bouquet of Children’s
Stories, with proceeds going to the JOMO Children’s Story
Fund, which we donate to the Japan National Council ofSocial Welfare every year in November at the JOMO Children’s
Story Award presentation ceremony.
Through the Japan National Council of Social Welfare,donations go to children at children’s home and single
mothers’ homes around Japan as scholarships to help themattend school and start the road to independence. Whowill receive donations each year is decided by a committee
made up of members from Japan Energy, the Japan National
Council of Social Welfare, the Zenkoku Jido Yogo Shisetsu
Kyogikai, the Zenkoku Boshi Seikatsu Sien Shisetsu Kyogikai
and the National Foster Parent Association of Japan.

JOMO Scholarship Committee

Scholarship recipients have a variety of future dreams
and the support from the JOMO Children’s Story Fund puts
them on the road to achieving these dreams. Japan Energy
will continue to support future generations through the JOMOChildren’s Story Award and the JOMO Children’s Story Fund.

Pamphlet explaining the scholarship fundJAPAN ENERGY CSR Report 200748

Feature 2 As a Corporate Citizen

Fostering the Next Generation and Protecting the Environment

With 3.9 Paper System, We Make Use ofWood from Thinning of Forests

3.9 Paper Used for the Bouquet of Children’s
Stories of the JOMO Children’s Story Award

Many forests in Japan suffer from lack of funding and lackof manpower to preserve. Selling the wood from thinning offorests could be used to fund forest preservation, but because
it costs money to transport this wood, it’s difﬁcult to get itfrom the forests. But leaving forests would mean that thinning
could not be carried out and forests would die, or even if
thinning could be carried out, the thinned wood has to be left
in the forest and the forest would deteriorate. Through ourforest preservation activities, we saw an opportunity to correct
this situation: that’s why we joined the 3.9 Paper initiative,
which supports forest
preservation activities.
Not only does this protect
the nearby forests; ithelps them grow so thatthey can act as effective
carbon sinks and prevent
Thinning wood from forests is used to make paper global warming.

The Bouquet of Children’s Stories, a collection of stories
entered in the contest for the JOMO Children’s Story Award,
is distributed to customers via JOMO service stations anddealerships, as well as donated to local schools, nurseryschools, kindergartens and other welfare facilities.
Since FY2005, we have used 3.9 Paper to print theBouquet of Children’s Stories. The 3.9 Paper project meansthat through our partnership with Hara Village, Nagano
Prefecture in the Adopt-a-Forest Operation, we can makeeffective use of 80 tons of thinned wood a year, helping
preserve forests andcontributing to the absorptionof CO2. The Bouquet ofChildren’s Stories helps
protect the environment while
educating readers of thisThe 36th edition of the Bouquet ofbook about the importance ofChildren’s Stories was the ﬁrst to use
preserving our forests.
3.9 Paper

3.9 Paper
A system for using wood fromforest thinning as raw material
for paper. If effective use can bemade of this wood, this helps
preserve forests. But the problem
is that thinned wood only fetches
a low price, so it is usually left in
the forest, which hinders younger
trees from growing. To solve this problem, Ichise Co., Ltd., apaper wholesaler, and Oji Paper Co., Ltd., developed the 3.9
Paper business model to make effective use of thinned woodand to protect forests. Because the user of the paper covers
the cost of transporting the thinned wood, it is feasible to use
domestic thinned wood as raw material for paper.
3.9 Paper system
Japanese forest (Hara Village)

Pay Transportation cost

Wood chip plant
Chips formaking paper

Paper millPaper products

Distributor (Ichise)
Delivery

User (Japan Energy)

49JAPAN ENERGY CSR Report 2007

Coordinate domestic thinned wood
to be raw material for paper

Transport thinned
wood and otherforest scrap

5th Japan Sustainable Management Awards
Environmental Value Creation Pearl AwardIn March 2007, at the 5th Sustainable Management
Awards, Japan Energy received the Environmental Value
Creation Pearl Award.
These awards were started in 2002 by the Mie
Prefectural government to recognize examples ofsuperb environmental management among companies
and organizations, with a committee of academic
experts selecting the winners. The award comprises ansustainable management section and an environmental
value creation section. In addition to environmental
products, services, and business models, the latterrecognizes contributions to the creation of newenvironmental value (social change and environmental
culture) as a result of environmental protection efforts thatlead to a movement towards lifestyle changes. This award
recognizes the initiative to save Japan’s forest through
3.9 Paper, proposed by Ichise, which uses thinned
wood as raw material for paper. The award goes to four
companies: Japan Energy and Zephyr Co., Ltd., whichmake use of the 3.9 Paper; and Ichise and Oji Paper,
which take the wood chips
from the thinned wood andmake paper. Japan Energy
will continue making useof 3.9 Paper in efforts tocontribute to Japan’s forests,
important carbon sinks in theﬁght against global warming. Environmental Value Creation PearlAwardForest Volunteer Activities Started in 2004
Since 2004, Japan Energy volunteers have been working
to protect forests. The ﬁrst project was a red pine forest of
the Nakajo Field of Japan Energy Development Co., Ltd.
in Niigata Prefecture. In 2005, we took part in the Nagano
Prefectural government’s Adopt-a-Forest Operation. In thisprogram, the Nagano government acts as matchmaker,
bringing together private companies intent on protecting
the environment and municipalities possessing forest land,
to create a joint forest preservation effort among private
enterprise, government, and local citizens. The “adopting
parent,” the private company, and the “adopted child,” themunicipality, sign an agreement, with the company providing
funds for the preservation of forests, which act as carbon
sinks, as well as volunteers. In April 2005, Japan Energy
signed an agreement with Hara Village, making this the ﬁrst
Adopt-a-Forest effort in the Suwa region.
In 2006, we signed an agreement with a non-proﬁtorganization in Okayama Prefecture to protect the area’s

Ayumi-no-Mori (Nagano Prefecture)

JOMO volunteers and their families in Hara-mura JOMO

deteriorating forests.
In FY2006, a total of 440 people, including Japan Energy
volunteers, took part in seven forest preservation sessions inthese three areas.
See the Japan Energy home page for details of these activities.
WEB

http://www.j-energy.co.jp/cp/csr/

Takahashi JOMO Fureai-no-Mori (Okayama Prefecture)

Planting red pine seedlings in a nearby park

Forest Preservation Begun on Site of Former Nippon Mining Holdings Group Mine
Japan Energy’s connection with this forest goes back about 100 years to ourcompany foundation. At the Hitachi mine (Ibaraki Prefecture), the original entityof Japan Energy, we constructed a giant smokestack to deal with the problem ofsmoke. We also planted 10 million trees such as cherry trees: this could be called theroots of our CSR activities. The Nippon Mining Holdings Group manages a numberof closed mines around Japan. Because of the size of these lands, we have notbeen able to properly preserve all the forests. As part of the Nippon Mining HoldingsGroup, we are determined to return to nature these mines that blessed our ancestors
with natural resources, so we have decided to begin revitalizing these forests. At theformer Takatama mine in Koriyama City, Fukushima Prefecture, we began work in2006 on preserving the forests (area: approximately 130 ha) together with the local
foresters’ union. We will spend the next several years preserving the forest throughthinning and other activities.
In May 2007, in Hakodate City, Hokkaido Prefecture, at the site of the former
Kameda mine (area: approx. 250 ha), we planted 7,500 seedlings of white oak andbeech trees on 3 ha with the cooperation of the local foresters’ union. In addition toa ﬁve-year forestation plan, we plan to continue forest preservation activities such as
removing weeds.

The former Kameda mine

Tree planting with the local foresters’ union

JAPAN ENERGY CSR Report 200750

Third Party Opinions
To make this CSR Report a more effective means of communicating our CSR activities,
we asked two outside experts for their opinions.

Mr. Nobuo Gohara

Ms. Yoko Takahashi

Professor, Toin University of Yokohama
Law School
Director, Compliance Research Center,Toin University of Yokohama

Chief Director of the Japan Philanthropic
Association

Personal history

Personal history

Graduated from Department of Science, Tokyo University
Appointed public prosecutor in 1983. After working at positions including publicprosecutor for Investigation Dept., Secretariat of the Fair Trade Commission and publicprosecutor, Tokyo District Public Prosecutor’s Ofﬁce (assistant manager of the Hachioji
branch), in 2003 was appointed guest professor at Toin University of Yokohama Law
School. In 2005, became a professor of law at Toin University of Yokohama Law School
and Director, Compliance Research Center of Toin University of Yokohama. In 2006, left
the prosecutor’s ofﬁce and became a full-time professor and research center head.
Publications: “Legal Compliance Will Ruin Japan,” published by Shincho Shinsho (2007)“Corporate Law and Compliance” (author and editor), published by Toyo Keizai Shinposha (2006)

After graduating from Tsuda College, worked as a high school teacher. After beingcertiﬁed as a counselor at Sophia University, worked as a counselor at Kanto Gakuin
Junior and Senior High School. Joined Japan Philanthropic Association in 1991, where
she worked as secretary-general and managing director before assuming her present
position as chief director in June 2001. Has a wide range of contacts in government,
industry and non-proﬁt organizations, and working with them, she supports bothcompanies and individuals to be involved in philanthropic activities.

Japan Energy’s Mission of “WE CREATE ENERGY” and its “Five
Pledges” towards this Mission represent a basic CSR policy
rooted in the special characteristics of companies in the petroleum
industry, and they also are the starting point for compliance fromthe viewpoint of meeting society’s demands. It’s unfortunate that
this Mission and Five Pledges are hidden among the Top Message
that covers two pages. I think that having the Mission at the very
beginning, followed by the president’s feelings on this, would havemore of an impact for readers inside and outside of Japan Energy.
The section Responsibilities and Actions in the Supply
Chain gives CSR to-do lists for each business group, as well
as expectations from stakeholders and responses from Japan
Energy managers. This makes this section rich in information.
Reading the content, I was impressed at how each division puts
the Mission and Five Pledges to work in their activities.
In Working for the Environment, Japan Energy introduces themany efforts it is undertaking in response to the most important
CSR task of a petroleum company: environmental protection.
However, I wish this section had touched on the subject of “peaceof mind,” an increasingly important issue of today’s corporate
society. It’s not only a matter of environmental pollution levels andwhether these harm people’s health: what the public wants is forcompanies to carry out thorough environmental management andaccurately record pollution data. An indication of this is the public’s
criticism of the recent spate of cases in which large companies
alter or cover up data. That is why companies must have ways toguarantee the appropriateness of their environmental management.
In this respect, I wish that Japan Energy had referred to theEnvironmental Management Guidelines on Preventing Pollution for
Businesses, which was published by the Ministry of Economy, Tradeand Industry and the Ministry of the Environment in March 2007.
I also think that to further expand CSR activities, it is necessary
to show the relation between the Nippon Mining Holdings Group’s
overall CSR activities and the Japan Energy Group’s CSR activities.
I was interested in the forest preservation activities at former mines,
but I would like to see what other Nippon Mining Holdings Group
companies are doing as well as an overall picture that includes
things like how these activities are being coordinated.
I hope to see Japan Energy vastly expand the CSR activities
that it has carried out over the past 10 years under the Mission of“WE CREATE ENERGY.”

Compared to last year, it appears Japan Energy put more
steadfast effort into showing us the people involved and letting us
hear what they have to say.
However, the report merely gives the current situation. Rather
than simply a report of activities, I think that it would be a richer
CSR report if it included targets and commitments for next year.
On the environmental side, the report clearly shows the effortsof Japan Energy. For CO2 emission, while many companies simply
give unit energy consumption, Japan Energy gains trust points
by giving total emissions. The reduction of CO2 emissions toprevent global warming is an urgent and serious task, one in which
everyone, including all stakeholders, must take part. Accordingly,
Japan Energy should choose technical words that everyone,
not just specialists in the ﬁeld, can understand, since spreadingawareness means giving everyone a chance to understand.
In the “With Customers” section, I think Japan Energy shouldtell us exactly how they deal with and use customer complaints
within the company, since this is vital to gain our trust. In the “With
Employees” section, in addition to ﬁgures on numbers of female
managers, having details of efforts like mentor programs would allow
to see where the company is heading in the area of empowering
female employees. With mental health becoming a major social
issue and companies pressed to take appropriate measures to deal
with this, it is unfortunate that Japan Energy did not touch on this
topic. If the company has no deﬁnite programs in this area, it should
assess the situation and quickly take the appropriate measures.
In the area of social contribution, the JOMO Children’s Story
Award is highly signiﬁcant. Not only does it contribute to society
but it is a source of pride for employees. This could also lead to anumber of other activities. However, it’s hard to understand Japan
Energy’s overall system of social contribution, and the individual
activities are lacking in variety overall. Maybe changing the layoutof presentation would help.
In future reports, I would like to see more about activities atservice stations. From the view of customers, the service station
is where they come in contact with JOMO. By giving examplesof outstanding service stations as a means of communicatingwith customers, Japan Energy can show its stakeholders how
valuable a partner they are. I hope that Japan Energy offers agreater depth of information in order to create a report that shows
the public what the company is all about.

51

JAPAN ENERGY CSR Report 2007

Explanation of Terms
Terms, abbreviations

Explanations

Aroma

Short for aromatic compound. The major aromatics include benzene, toluene, and xylene.

Sound detection system

A system that uses sound to detect hydrogen leaks. Leaks are detected by analyzing sounds picked up by a microphone.

Activated sludge method

Activated sludge, made up mainly of bacteria, protozoa and metazoan, works to purify wastewater through the break-down, aggregation,
absorption and deposition of the organic substances in wastewater.

Activated charcoal
absorption tankAn advanced treatment method that uses activated charcoal to remove substances such as soluble organic substances, COD, chromaticity,
surfactants and offensive odor components. It is used following biochemical treatment or when reusing secondary efﬂuent.

Environmental impact

The degree of inﬂuence on the environment.

Guard basin

An impounding basin at the ﬁnal stage of a wastewater treatment system, it functions to separate minute amounts of oil and to temporarily
store water in the case of a problem with the upstream wastewater treatment facilities. The guard basin has an oil detection device at its
mouth, so if wastewater containing oil enters, it is detected and the cutoff valve closes. This prevents wastewater containing oil from being
discharged to outside of the site.

Carbon neutral

Plants take in CO2 through the process of photosynthesis. This means that the CO2 emitted into the atmosphere by the burning ofplant-based fuels was CO2 that was originally in the atmosphere before being absorbed by plants through photosynthesis. It is consideredthat there is no net emission of CO2 into the atmosphere.

XyleneAn aromatic hydrocarbon, it has two methyl groups (CH3) substituted in place of two hydrogen atoms in benzene. These are three isomers ofxylene: ortho, meta and para. Xylene is an oily liquid that is colorless, transparent, toxic and ﬂammable. It is obtained from petroleum
reformate and is the raw material for organic solvent and synthetic resin.

kPa

A pascal (PA) is an international system of units (SI) representing pressure. One pascal is equal to one Newton per square meter. The unit for
air pressure is kilo pascal (kPa). (Kilo=1,000)

Photochemical smog

The nitrogen oxide and hydrocarbons in car exhaust undergo chemical change when they react with the ultraviolet rays from the sun in theatmosphere, thus producing photochemical smog. Oxidants are air pollutants and one of the main components of photochemical smog.

Sulfur-freeReducing the sulfur content in gasoline and gas oil to 10 ppm or less.

Catalysts

A substance that remains unchanged itself but alters the speed of chemical reactions of other substances. An example is the desulfurization ofheavy fuel oil, which commonly uses the hydrodesulfurization method. High-temperature, high-pressure heavy fuel oil is injected with hydrogen,subjecting it to solid catalysts inside the reaction chamber. A hydrocracking reaction of the sulfur compounds results in the sulfur being removed
as hydrogen sulﬁde. Catalysts have a life span and are replaced when they lose their ability to alter the speed of chemical reactions.

COD contamination

An index for water pollution, COD (Chemical oxygen demand) is a measure of the oxidant required to degrade organic compounds in water. It is amajor index for measuring pollution by organic compounds in sea water and lake water.

SludgeAs oil deteriorates, it reacts with dissolved oxygen, resulting in a polycondensation product called sludge.

Biodegradable

Organic substances are broken down by microorganisms into water and CO2.

Denitration

The process and technology for removing nitrogen oxide from exhaust. The most common method of denitration is the ammonia catalytic
reduction method in which ammonia is used as a reductant.

Desulfurization

Reducing the sulfur content of petroleum stock by causing a reaction between the sulfur and hydrogen, thus removing the sulfur in the formof hydrogen sulﬁde.

Hydrocarbon vapor
recovery unit

Equipment for removing the hydrocarbons in the hydrocarbon vapor that is emitted when petroleum products are ﬁlled into or discharged
from tank trucks. An absorbing solution such as kerosene is brought into contact with the vapor, thus absorbing and removing it. Thisequipment prevents the dispersion of hydrocarbon vapor into the air.

TolueneAn aromatic hydrocarbon, it has a methyl group (CH3) substituted in place of one hydrogen atom in benzene. It is a colorless, ﬂammableliquid with a distinct odor. It is obtained from distillation of coal tar and the breakdown and reforming of petroleum. It is the raw material fordyes, explosives and synthetic resins. It is also commonly used as solvent as a main ingredient in paint thinners. It is also known as toluol.

Naphtha

Also known as unreﬁned gasoline (intermediate gasoline), it is mainly used as a raw material for petrochemical products. It has a fractional
distillation range of between about 30 and 200°C

Biogasoline

A regular gasoline blended with bio ETBE (ethyl tertiary butyl ether), a substance created by synthesizing isobutene, a type of petroleum-basedgas, with ethanol, which is derived from plants like corn and sugar cane. Biogasoline is a regular gasoline that has passed the standards ofJIS (Japan Industrial Standards) and the Quality Control Law. Biogasoline can be used as original regular gasoline.

Particulate matter

The particles contained in the smoke from smokestacks.

Quality Control Law

Short for the Law on the Quality Control of Gasoline and Other Fuels. Prescribes the quality of gasoline and diesel oil sold at gas stations.

BenzeneA colorless liquid with aroma, it is insoluble in water. Also know as benzol. It is extremely volatile and easily ignitable. Because benzene is toxic,
its use is restricted under Occupational Health and Safety Law and must be handled with care. Its molecular formula is C6H6 and it is the mostbasic substance of the aromatic hydrocarbons.

Delivery terminals

A relay station where products reﬁned at reﬁneries can be efﬁciently delivered to where they will be consumed. Stockpiling at delivery
terminals has advantages such as ensuring a stable supply and reducing distribution costs.

CSR Report 2007

Published: November
Publisher: Japan Energy Corporation, Corporate Social
Responsibility Department
2-10-1 Toranomon, Minato-ku, Tokyo, Japan 105-8407
TEL: +81-3-5573-6089
FAX: +81-3-5573-6784
Toll-free (in Japan): 0120-150-106 (JOMO Customer Center)
URL: http://www.j-energy.co.jp/

JAPAN ENERGY CSR Report 200752

2-10-1 Toranomon, Minato-ku, Tokyo,
Japan 105-8407
Tel. +81-3-5573-6089
http://www.j-energy.co.jp/

Japan Energy supports a forest preservation initiative
sponsored by Japan’s Forestry Agency.
This CSR Report 2007 enhanced the use of thinned
wood from forests in Nagano Prefecture, Japan.
Making paper in this way preserves and expands
forests, which absorb CO2.
B- (2) - 060008

This report was printed using environmentally friendly waterless printing and soy ink.