CSR Report

2008
Corporate Social Responsibility ReportEditorial Policy
Japan Energy publishes a CSR report to disseminate
information regarding the company’s activities related to its
corporate social responsibility.
This report introduces our CSR activities inpetroleum-related businesses, ranging from petroleum
exploration to retail sales at JOMO service stations, focusing on
the three types of energy on which our Mission is based – theEnergy in People, of the Earth and of Society. We haveincluded special features that include interviews with people
involved in various activities.
We have also endeavored to address, to the extent
possible, the opinions expressed in the Third-Party Opinions
included in our CSR Report 2007, and those identified
through questionnaires, etc.

•Scope of the Report
This report focuses on the activities of Japan Energy
Corporation, with additional information regarding some
activities of the Japan Energy Group and group companies.
Financial data includes the Japan Energy Group’s consolidated
subsidiaries. Environmental data, the Medium-Term
Environmental Plan, and environmental accounting are for Japan
Energy Corporation and Kashima Oil Co., Ltd.

•Period Covered by the Report
This report covers CSR activities carried out during fiscal 2007
(April 1, 2007 to March 31, 2008). Some sections also coveractivities from April 2008.

•Reference Guidelines
In this report, we have referred to the Environmental Reporting
Guidelines (fiscal 2007 version), published by Japan’s Ministry of
the Environment. For environmental accounting, we have referredto the Ministry of the Environment’s Environmental Accounting
Guidelines (fiscal 2005 version) and the Study on the Introductionof Environmental Accounting in the Petroleum Industry (2000),
published by the Japan Petroleum Energy Center.

Differences between the Printed Report and the Report Posted on the Company’s Web Site
The CSR Report 2008 consists of both a printed report anda report posted on our web site. The printed reportemphasizes materiality – items that we believe will be ofparticular interest to society or that we consider important toreport – in a condensed and easy-to-read format.
The report posted on our web site contains detailed
information not included in the printed report, along withlinks to related web sites, headlines, and enhanced searchfunctionality.

http://www.j-energy.co.jp/cp/csr/report/2008/

Our company name, Japan Energy, represents our social mission of providing a stable supply ofenergy as “one of Japan’s leading energy companies,” while at the same time expressing the“energy” to develop new technologies and businesses. The abbreviation JOMO reflects both the“Joy of Motoring” and the “Joy of Movement.”
The sphere part of our corporate mark represents “the Earth,” with the gradual change in color
from blue to green expressing a crystal-clear global environment of water, plants and trees. The
square part 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 two elements symbolizes both adeep concern for the Earth and its environment, and the image of moving toward a new era.

2JAPAN ENERGY CSR Report 2008

CONTENTS

Top Message ........................................................................................................... 4
Mission and Business Principles ....................................................................... 6
Corporate Information ......................................................................................... . 7
Corporate Governance and Management ..................................................... . 8

CLOSE-UP

Energy in

Workplace in which
People AWomen
can Thrive.............................

10 Together with Employees

Energy of the

Earth

11

..................................................... . 14

CLOSE-UP

Preventing Global Warming 17......

Environmental Protection Policies, System and Targets ..... 20
Reducing Environmental Impact ........................................ . 22

16 Other Environmental Efforts
Energy of................................................. .

24

CLOSE-UP

to be a Company Trusted
Society Aiming
by Communities and Society 27......

Customer Care ......................................................................... . 30

26 Together with Society.............................................................

32

Third-Party Opinions ............................................................................................. 34
Explanation of Terms ........................................................................................... . 35

JAPAN ENERGY CSR Report 2008

3

Top Message

For a More Cohesive and Dynamic Society
Japan Energy is an integrated energy company with businesses ranging from the upstream areas ofpetroleum exploration, development and production to the downstream areas of manufacturing andsales of petroleum and petrochemical products. Our primary mission is to safely provide customers
with a stable supply of the energy required by industry and for people’s daily lives.

Our Roots are in Our Corporate Mission:“We Create Energy”
In April 1997, in order to continue to be trusted andvalued as a member of society, we established our
corporate mission – “We Create Energy” and “Five
Pledges” to achieve our Mission – as a common set ofvalues for all directors and employees to clearly show
the direction our company should take. “We Create
Energy” uses the term “Energy” from our company nameto express our profound desire “for a more cohesive anddynamic society” with a constant awareness of ourinvolvement with people, the earth and society to“activate the natural energy in people,” “use the energyof the earth wisely,” and “enhance the energy of society.”
Our business activities, which are based on thefundamental principle that “We Create Energy,” arethemselves CSR activities.

The Three Energies and Our CSR Activities• Activating the Natural Energy in People
Each of our employees and directors shares a common
purpose and strives daily to implement our corporate
mission.
In particular, this includes Japan Energy and JOMO
service stations and dealerships working together asTeam JOMO to implement customer satisfaction
management. From service station crew members to
top management, everyone shares a desire to serve
and achieve a superior level of customer’s satisfaction.
We are striving to create “Value Style stations” byproactively “developing stations that make customers
want to come again.” At the same time, we are working
to satisfy all customers by training our staff to be rich inhumanity in order to enhance the quality of ourcustomer service.
Moreover, the realization of customer satisfaction
leads to a favorable assessment of a company’s image
and brand, and such a high assessment from society inturn leads to more pride and joy for employees. In otherwords, “customer satisfaction management” can beenhanced through synergies between customer
satisfaction and employee satisfaction.
In addition, all employees at refineries and plants
participate in “Total Productive Maintenance (TPM).” Thisis one of the ways that the features and functions ofworkplaces, in a variety of business activities are utilized
to create a free and open workplace environment in

4JAPAN ENERGY CSR Report 2008

which each employee’s personality and capabilities are
given full rein and respect, and in which women and men
can further develop their own capabilities.

• Using the Energy of the Earth Wisely
Our main product is petroleum, which is a limited
resource that must be used effectively, and in addition,
its production and consumption place a significant
burden on the environment in areas like global warming.
The first commitment period of the Kyoto Protocol began
in 2008, and the Toyako G8 summit held in Hokkaido in
July highlighted the fact that this is a critical time for
efforts to prevent global warming. Japan Energy
considers the preservation of the global environment to
be one of our important management issues, and we areundertaking a variety of measures to prevent global
warming based on our Medium-Term Environmental
Plan, which sets specific numerical targets such as for
reductions in the amount of energy consumption.
One of our Five Pledges is to “Always give top
priority to safety and the environment.” Based on thispledge, we pursue energy savings and a reduced
environmental impact in all business activities and stagesof the supply chain, from petroleum exploration,
development and production and refining to distribution
and sales, and have established safety and crisis
management systems as part of our activities related tosafety and the global environment. At the same time, weare researching and developing next-generation energies
and aggressively bringing environmentally friendly
products to market, including biogasoline and other fueloils, lubricating oils and petrochemical products.
Japan Energy also stresses environmental
preservation in forests, which absorb carbon dioxide
emissions and are home to a variety of animal and plantlife, by providing funds for forest preservation incooperation with a local government and an NPO. Our
employees also actively participate in volunteer activities
for forest preservation.

• Enhancing the Energy of Society
Japan Energy has always worked to address the needsof society through its business activities as an energy
company. In addition, we contribute to society in theareas of promoting sports and culture, and aiding
children’s and special needs’ groups, as well as
proactively supporting employees’ volunteer activities.
The JOMO Children’s Story Award and the JOMOChildren’s Story Fund are two unique activities with aparticularly long history. Every year we accept
submissions of children’s stories for a picture book withthe theme of “heart-to-heart contact,” and this year willbe the 39th year for this activity. The JOMO Children’s

Story Fund was established in 1992 in cooperation withdealerships who purchase The Bouquet of Children’s
Stories, with proceeds going to the Japan National
Council of Social Welfare as an annual contribution.
These contributions support scholarships to allow
children in children’s homes, mothers and children’s
homes, and foster families to graduate from high schooland pursue higher education. We intend to continue torespond to the needs of society through similar
programs in the future.

Participating in the UN Global Compact
Japan Energy supports the 10 principles advocated by
the UN Global Compact on behalf of human rights, labor,
the environment, and anti-corruption. As a member ofthe local Japanese entity, the Global Compact Japan
Network, we work to resolve international problems
through our business activities, and share the successesof those activities with other member companies.

Taking CSR Further
Marking the 10th anniversary of the establishment of ourMission, we conducted an employee survey about CSR
awareness in June 2007. This showed that the level ofunderstanding and action with regard to CSR is not yet
at an adequate level, and that more effort than we hadforeseen will be required to fully instill our Mission. In lightof the fact that our internal structure was insufficient for
directly disseminating information from management,
giving meaning to our Mission, and conveying the resultsof CSR activities, from February 2008, executives visited
branches, refineries and plants to exchange ideas related
to the Mission and CSR with employees. With theexecutives providing explanations in their own words
directly to participants, employees gained a better
understanding of our Mission, and we expect this to leadto self-driven implementation by each employee.
We also began publishing the quarterly magazine
Energing in April 2008 to promote two-way communication
with employees. This magazine is further enhancing our
CSR activities by incorporating the opinions of employees.
Based on our Mission of “We Create Energy,” topmanagement and all employees will act in good faith as
good corporate citizens through open and highly transparent
communication with all stakeholders, with the aim ofachieving a sustainable society and growing as a company.
August 2008

Isao Matsushita
President and Chief Executive Officer
Japan Energy Corporation

JAPAN ENERGY CSR Report 20085

Mission and Business Principles
Our Mission, “We Create Energy,” indicates the company’s direction and goal and the sense of values andcommitment that all of our executives and employees must share. Our Business Principles consist of theFive Pledges, which are standards of action for implementing our Mission. Central to our CSR activities is
ensuring that all executives and employees carry out their day-to-day work with a focus on the Mission andBusiness 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 Earthwisely,We use thefully 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.

6

JAPAN ENERGY CSR Report 2008

Corporate Information
Corporate Profile
Name

Japan Energy Corporation

President

Isao Matsushita

Head office

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

Number of employees

2,490 (As of March 31, 2008)

FoundedDecember 1905

Main lines of business

Established

April 1, 2003

Capital¥48 billion (Wholly owned by Nippon Mining Holdings, Inc.)•Exploration, development and production of petroleum•Manufacture and marketing of gasoline, naphtha,
kerosene, gas oil, heavy fuel oil, LP gas and lubricating oils
•Manufacture and marketing of petrochemical products

Net Sales

Income Before Special Items(Unit: ¥100 million)

Consolidated

30,00024,121
20,000(Unit: ¥100 million)

Non-consolidated

27,55722,25831,939 30,292

900

Non-consolidated

799

819
616

600

10,000

678
523

300

0

0
2005

2007 (Fiscal year)

2006(Unit: ¥100 million)

Consolidated

2005

2006

2007 (Fiscal year)

Number of Employees

Operating Income
900

990

25,526

Consolidated(Unit: Persons)Non-consolidated

4,500

988 855

759
629

600

625

531

300

3,000

Consolidated

4,225

Non-consolidated *

4,196

3,999
2,519

2,476

2,490

1,500
0

0
2005

2007 (Fiscal year)

2006

2005

*

2006

2007 (Fiscal year)

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

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 ofpetroleum, petrochemicals, non-ferrous metals, andelectronic materials. Through these businesses, it carries
out its mission of the efficient, stable provision of

fundamental materials that support industries andindividual lifestyles around the world.
The Nippon Mining Holdings Group is involved in a wide
range of businesses. A unique corporate group with avariety of operations adapted to each field’s stage of growthand business characteristics, its activities include everythingfrom fundamental materials for infrastructure-building toleading-edge IT materials that drive the field of nanotechnology.
Japan Energy Group(Petroleum business)

Nippon Mining Holdings, Inc.

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

Items posted on web site
• Fiscal 2007 Performance•Total Assets•Primary Affiliated Companies•Organization Chart

JAPAN ENERGY CSR Report 20087

Corporate Governance and Management
Japan Energy operates under the holding company Nippon Mining Holdings, Inc., and carries out its CSR, corporate
governance, compliance, risk management and other activities pursuant to Nippon Mining Group policies.

Group Management System andCorporate Governance

Establishing System to StrengthenInternal Controls

Under the holding company Nippon Mining Holdings, Inc.,
Japan Energy operates as the core company responsible forthe group’s petroleum business.
The Nippon Mining Holdings Group oversees groupmanagement with the aim of increasing corporate value
through efficient management and the optimal allocation of
resources at the group level, while respecting the autonomyof each operating company’s business management.
Japan Energy and Nippon Mining Holdings work together
on a joint committee, the Nippon Mining Holdings GroupManagement Conference, to create consistent medium- andlong-term management plans. The two companies also havea basic contract related to management of the group thatclarifies the standards upon which Nippon Mining Holdings
manages and controls Japan Energy.
Japan Energy is also engaged in corporate governanceas a member of the Nippon Mining Holdings Group. Nippon
Mining Holdings’ fundamental policy with regard tocorporate governance is to separate group management
and business execution under a holding company structure
to effectively maintain group business control functions andmanagement transparency.
We have abolished the former Board of Directors andBoard of Auditors, and in their place we have established an
Executive Committee and an Auditors Committee as ameans of expediting decision-making and simplifying our
executive systems. The audit system was further
strengthened in June 2007, when we increased the numberof full-time statutory auditors.

Nippon Mining Holdings established the Internal Control
Promotion Department in April 2006 to address, prepare for,and ensure smooth operations concerning legal andregulatory revisions related to internal controls mandated by
the new Corporation Law, enacted in May 2006, and therequirement for an “evaluation system for internal controls
regarding financial reports” by listed companies from theirfiscal years beginning in or after April 2008 under the Financial
Instruments and Exchange Act (J-SOX). In addition, theGroup Internal Control Committee was established to allow
Nippon Mining Holdings and its core business companies,
including Japan Energy, to cross-organizationally discuss andexamine policy on such matters as system improvements togroup-wide internal controls, and to carry out the relatedplanning, documentation and evaluation.
Japan Energy has also established the Internal Control
Committee to establish a system for internal controls fromfiscal 2008.

Nippon Mining Holdings Group Mission
The Nippon Mining Holdings Group CSR Committee
formalized the Group Mission in May 2008.
The Nippon Mining Holdings Group Mission
incorporates Japan Energy’s Mission.

System for Promoting Our Mission andCompliance
Since establishment of our Mission in 1997, the Corporate
Principles Committee, chaired by the president, has made ita rule to meet once a month. Made up of officers
responsible for or supervising each department, thiscommittee examines issues related to our Mission and CSR.
The Compliance Committee was established in July
2003 as a subsidiary body of the Corporate Principles
Committee to set policies for companywide education andawareness activities, including at subsidiaries.
In addition, Mission promotion managers have been
assigned to all departments, plants and branches, and they
carry out activities based on the important themes related tocompliance and CSR that are designated each year.

System for Promoting Our Mission and Compliance
Nippon Mining Holdings Group Mission
To strive to achieve a stable and efficient supply of and theeffective utilization of resources, materials and energy, while
contributing to the creation of a better environment and asustainable society.

President & CEO

Mission promotion
managers in eachdepartment

Corporate
Principles
Committee

Mission promotion
managers ineach plant
Mission promotion
managers ineach branchBusiness offices(CSR Department)

Compliance
Committee

8JAPAN ENERGY CSR Report 2008

MissionConsultation
OfficeExternal Helpline

Semiannual reports on the status of these activities are
made to the Corporate Principles Committee and theCompliance Committee. The Compliance Committee also
carries out an annual companywide survey of the status ofcompliance, including at subsidiaries, and implements
measures as necessary.

Fundamental Compliance Policy
Established in May 2004, our Basic Compliance Rules state
that, led by our top management, all employees shallearnestly abide by laws, social norms and corporate
ethics. To this end, we have made it a basic policy tocontinuously upgrade our organizational culture and toensure a system that prevents misconduct and establishes
responsibilities while thoroughly clarifying the specificstandards to be maintained.
As a means of further enhancing and strengthening thegroup compliance system, Nippon Mining Holdings
established the Fundamental Group Compliance
Guidelines in May 2006, and the Nippon Mining Group
Compliance Committee is monitoring the status ofcompliance at the group level.
Participation in the United Nations Global Compact
Japan Energy has supported the United Nations Global
Compact and its 10principles in the fourareas of humanrights, labor, theenvironment andanticorruption since
July 2002.
Please refer tothe Global Compact
Japan Network
Internet site fordetailed information
regarding these 10
principles.

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 toprevent problems from ever occurring. 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.

Business Continuity Plan (BCP) in Eventof Major Earthquake
Japan Energy formulated a Business Continuity Plan in April
2004. This outlines basic policies related to business
continuity to prepare in the event a major earthquake wereto occur with Tokyo as the epicenter.
The purpose of this plan is to establish basic
responses to maintain business continuity in order to avoid
or minimize bodily harm to our stakeholders and damage
to their property, and to maintain operational continuity or
ensure the early return of important business areas. The
plan consists of three basic policies:(1) Make the safety of employees and other stakeholders a
top priority, and ensure recovery from the disaster andthe prevention 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 recoverfrom disasters.
In fiscal 2007, the company held an emergency
response drill at the Head Office. The drill simulated the
response to a major earthquake with Tokyo as the epicenterand included the summoning of the Emergency Response
Team under the leadership of the President.

http://www.ungcjn.org/(Japanese only)

Drill envisioning a major earthquake with Tokyo as the epicenter.

Items posted on web site
• Training Program for Protection of Personal Information• Asbestos: Survey and Measures• Disaster Prevention and Emergency Measures•Mission Consultation Office•Concrete Standards of Compliance• Reporting Accidents and Troubles• Information Security Management• Compliance Education

JAPAN ENERGY CSR Report 2008

9

Activating the Natural Energy in People
The imagination and creativity of each individual employee are a company’ssource of vitalization.
The foundation for this is a lively workplace for employees. At Japan Energy,
we are enhancing personnel and training systems based on the fundamental
principle that activating the energy in employees leads to the company’s
further development.
One element of this is our emphasis on creating an environment in which
women feel comfortable to work.

Cultivating imagination and creativity
Bringing satisfaction and joy
Striving to develop abilities• While fostering human strength,
we provide society with quality
products and show consideration
for families.

Realizing a Fulfilling
Job and an Active Life

• Gratitude and recognition fromfamilies and society• Sustenance for active lives

10

JAPAN ENERGY CSR Report 2008

CLOSE – UP

A Workplace in which Women can Thrive
Japan Energy strives to install systems and foster a culture in which women can freely express themselves
and utilize their abilities in a vibrant workplace.

Through a flat organization and transparent and fairpersonnel evaluations that respect and cultivate employees’
individuality and ambitions, Japan Energy strives to fullyenhance the abilities and aptitude of each employee.
This includes efforts to implement various systems andfoster a culture that offers women a workplace in which they
can thrive, and we have in fact been aggressively hiring
women for the past 20 years. Today we are seeing an
increase in the number of women in middle management,
and we look forward to having women join senior
management in the future.
In his 2006 New Year’s address, our president
advocated the creation of workplaces in which women
could fully participate, and we are promoting these efforts
organizationally on a companywide basis. The stage foractive participation by women is steadily expanding, and we
now have women participating in the head office study
program (at domestic universities) and working overseas.

Launching Projects Staffed Mainly by
Women
The project to create an easy-to-understand manualexplaining the system and framework related to childbirthand childcare was launched as a project staffed primarily by
women. In addition to being used by female employees
preparing for childbirth, the manual also contains information
for their supervisors and coworkers, and is laid out so that it
can be followed in all workplaces.
Female employee volunteers have also set up an
informal community on their own, which functions as avenue for people to converse freely regardless of position
and workplace.

Outline of Main Childcare Leave andNursing Care Leave Systems for EmployeesChildcare(1) Childcare leave
Leave may be taken until the child becomes 2 years
old. As a rule, this leave is unpaid, except for a
maximum of the first five days of the leave.
(2) Shortening of work hours
Employees may shorten their work hours by up to
two hours per workday until the child starts theirfourth year of elementary school.
(3) Child nursing care
Employees may take up to 5 days leave a year until
the child enters junior high school.
(4) Reserve leave* for child nursing care
Employees can take up to 5 days leave a year until
the child enters junior high school.

Nursing care(1) Nursing care leave
Employees may take up to 365 days leave per family
member.
(2) Shortening of work hours
Employees may shorten their work hours by up to
two hours per workday for up to 365 days per family
member.
(3) Reserve leave* for nursing care
Up to 30 days.
Reserve leave: Annual paid leave that was not taken and has expired* may
be accumulated and used for special purposes

Our activities

Please play an active role, to be a role model for the next
generation of women
Toshihiko Ogawa
General Manager, General Administration & Human Resources Dept.

When I worked at our U.S. affiliate, I noticed that women worked actively in many
departments. I am striving to create an environment in which it is even easier for women
to work, looking at the examples of leading companies in both Japan and overseas.
We are fortunate to have capable staff, and I hope to provide support so that they will
be able to fully realize their potential.

JAPAN ENERGY CSR Report 2008

11

Energy in People

Promoting the Creation of Workplaces
that Fully Utilize Women Companywide

Energy in People

1Participant in the Head Office Study Program (at Domestic Universities)

Aiming to be a strong, flexible woman who works
hard and takes care of her family

The Head Office Study Program was the main
reason I wanted to work at Japan Energy

Aiming to be a researcher who can assert
her own opinions

From the time I was in elementary school, I have always
wanted to “use the power of chemistry to preserve thenatural environment,” so I decided to go to a technical highschool. When I was deciding where to work, my homeroom
teacher told me that Japan Energy had a program tosupport employees who are high school graduates
go to university at night, so I definitely wanted
to join the company.
At the beginning of my second year with thecompany, from April 2008, I began using theHead Office Study Program, going to school
while also working, with the company helping to
pay for tuition, books, etc. The company is also
allowing me to schedule my work hours around classes.
I am majoring in chemistry in order to deepen myknowledge of industrial chemistry, which is what I studied
previously. I sometimes have late nights doing homework or
writing reports after I get home. In one sense it is toughphysically, but I am able to study in my field at anadvanced level, and receive encouragement from my bossand coworkers.

I’m still a beginner, in only my second year with thecompany, but I am completely devoted to my work. I reallylike the way my bosses and coworkers discuss conditions
for experiments – seriously but while also enjoying
themselves – and I look forward to being able toactively express my opinions.
During regular conversations, however, I
realize that, while they work very hard, theirfamilies and personal lives are very important
to my bosses and coworkers, even though
they are all men. I had thought of myself as thetype of person who would live only for my work,
but after working here I now also want to marryand have children. I hope to become a woman who isstrong and flexible, and able to skillfully balance thesegoals in the future.

Saeko Murakoshi
Joined Japan Energy’s Petroleum
Refining Research & Technology
Center (Saitama Prefecture) in 2007.
Working in the Refining Process
Group, conducting research anddevelopment in completely newprocesses for converting heavy fueloil to light oil.

12

JAPAN ENERGY CSR Report 2008

Japan Energy (Singapore)
Pte Ltd.
Joined Japan Energy in 2004,
now covering various areas
including sales agency
operations for jet fuel and coal,and exports of petroleum
products from Japan.

2Overseas Staff

Developing overseas markets through close
communication with business partners

Keeping up with world affairs in the centerof Southeast Asia’s petroleum market

Thinking about marriage and childcare,
I want to support those around me while I can

I was transferred to Singapore in April 2008, so I am still
studying new operations and businesses, but with thesupport of many people at the company I look forward tocoming to work every day.
Singapore is the center of the Southeast Asian
petroleum market, and my job is to take advantageof that geographic location to strengthen
relationships with our business partners anddevelop new relationships. Singapore is the
hub of Asia, and I enjoy being able to promptly
communicate partners’ needs to head officewhile keeping up with world affairs. At the sametime, it is difficult to take the huge amount of
information I receive every day and quickly decide
which information is useful, and what impact it will have.

When I joined the company, I hoped for a marketing
position in which I could communicate directly withcustomers and business partners. I also liked the idea ofan overseas posting, so I was very happy when I found outthat I could work in a marketing position in Singapore.
When I was assigned, the company’s in-house
language training program was very helpful.
I am an ambitious person, so in the future
I hope to get married and raise children while
also continuing to work. Fortunately, Japan
Energy strives to create a flexible working
environment for women. This could mean that I
will need to rely on the support of my coworkers
in the future, so now I want to actively give them mysupport while I am able.

JAPAN ENERGY CSR Report 2008

13

Energy in People

Miku Oshita (center),Energy in People

Together with Employees
Japan Energy operates under a personnel system that respects the desire of employees and evaluates performance
fairly and transparently, with the aim of creating a workplace in which all employees can realize their full potential.

Placement and Training that Respects
the ambitions of Employees
Japan Energy implemented a “Self-Declaration System” in
1999. Once a year, employees file a report with the General
Administration & Human Resources Department in which
they express their opinions on their particular skills andfuture career goals, and make requests regarding where
they want to work or other personal wishes.
Based on employees’ suitability or skills for particularjobs, and with consideration for their intentions and desires,we place them in jobs or on career paths that they findrewarding and that make the most of their strengths.

Number of Employees (fiscal year-end)(employees)

Women

Men

3,000

2,519
2,000

212

1,000

2,307

2,490

2,476
217

225

2,259

2,265

0
FY2005

FY2006

New University Graduates Hired(employees)

Men

Women

80

Creating a Workplace that Empowers
Women
We promote the creation of a workplace environment inwhich women can thrive, and the expansion of job
opportunities for women.
Along with increasing our hiring of women andproactively transferring them to broaden their experience,
we are working to create a climate in which female
employees can thrive by revising personnel systems andpromoting a common understanding of these systems
among all employees.

Re-Employment of Retired Workers

73

60
40

16

55
13

40
8

57

20

42

32
0

FY2006

FY2007

FY2008Men and Women in Management Positions (fiscal year-end)(employees)

600

Men

607

Women

645

699

1

4

599

641

4

400

With the enactment of the Law Concerning Stabilization of
Employment of Older Persons, Japan Energy introduced asystem for re-employing retired workers in fiscal 2006. All
employees retiring at the mandatory retirement age of 60
who wish to be rehired are eligible for this system. Thissystem allows employees to not only use the wealth ofexperience and knowledge they have built up over theyears, but also to pass on technologies to the next
generation of employees.
In fiscal 2007, 14 of the 19 employees who reachedretirement age were re-employed.

200

Employment of Persons with Disabilities

0

As of March 31, 2008, 32 employees (1.97% of theworkforce) were persons with disabilities. The corresponding
figure at the previous fiscal year-end was 1.86% of theworkforce.
We are taking steps to create a workplace environment
in which it is easy for persons with disabilities to work, andwill strive to raise this figure in the future by proactively hiring
people with disabilities.

FY2007695

0FY2005

FY2006

FY2007

Average Number of Continuous Years of Service (fiscal year-end)(years)

Men

Women

30

23.0

23.4

22.6

17.5

17.4

16.5

FY2005

FY2006

FY200720
10Percentage of Workforce with Disabilities (fiscal year average)
(%)

2.0

1.77

1.90

1.86

FY2006

FY2007

1.5
1.0
0.0

FY2005

14

JAPAN ENERGY CSR Report 2008

Occupational Health and Safety Efforts

Proper Management of Working Hours
Japan Energy strives to appropriately manage working
hours in order to ensure that our employees are in good
health, including the offering of a flex-time system. Both the
management and labor that are responsible for managing
the number of hours staff work, check the status ofbusiness operations in thorough detail. They also closely
monitor the number of hours worked and paid vacation taken.
The average number of hours worked per generalemployee in fiscal 2007 was 1,989 hours, and the numberof paid vacation days taken was 16 days.

Safety Awareness at All Sites
The general manager at each Japan Energy site personally
tours the site, looking for improvements that can be madeand instructing managers on ways to prevent labor
accidents.
Each worksite also conducts numerous safety activities.
These include near-miss awareness, in which workers
report things they are worried about or near-miss accidents;
and illustrated lesson sheets, which are diagrams of aworksite that workers study in order to try to find potential
points of danger.
In addition, sites that have experienced labor accidents
are required to make certain reports: accident surveys,
accident cause analysis sheets, and plans to prevent
accident reoccurrence. The table above shows the numberof accidents at Japan Energy (including Kashima Oil Co.,
Ltd.), including both those that resulted in lost work time
and those that did not, over the past five years.

Number of Labor Accidents(cases)

FY2003

FY2004

FY2005

FY2006

FY2007

Resulting inlost work time

0

1

2

0

1

Not resulting
in lost work time

2

3

3

3

0

Mental Health CareOur mental health care activities in the past have focused on
individual cases in which employees had to miss work formental health reasons. From fiscal 2008, however, we havesystematically established a mental health care program
based on the concepts outlined in the Ministry of Health,Labour and Welfare’s “Policy for Promoting the Mental
Health of Workers.” We proactively use outside specialist
institutions to assist us not only in caring for employees
who miss work, but also to manage companywide
prevention programs. The following are some of the major
measures to be taken:•Creation of a “Mental Health Promotion Plan”•Establishment of an in-house mental health counselingprogram•Use of an external helpline•Mental health education for management and general staff•Stress checks for employees

Nurturing the Next Generation
We have implemented various programs based on the Law
for Measures to Support the Development of the Next
Generation, which requires companies to establish specificaction plans to enable employees to balance work andchild rearing. A new, two-year action plan was put in placefrom April 2007.
Action Plan from April 2007
•Further augment programs
related to hiring and the work
environment, including extending
maternity leave.
• Take measures to make thereturn to work from maternity
leave easier.
Certification obtained from thedirector of the Tokyo Labor
Bureau in April 2007

Items posted on web site
• Fundamental Human Resource Policies • Sexual Harassment•Enhancement of Childcare and Nursing Care Leave Programs•Helping Employees Stay Healthy• Building Smooth Labor-Management Relations•Fair and Open Evaluation System• Training CurriculumJAPAN ENERGY CSR Report 2008

15

Energy in People

Japan Energy carries out comprehensive occupational
health and safety efforts at all sites and branches, based on
the safety and health management policy announced every
fiscal year by the president.
During fiscal 2007, we promoted activities to identify andameliorate potential causes of accidents and emphasized theprevention of accidents caused by human error. In addition,
each site supported occupational health and safety efforts for
employees with health concerns, through physical check-ups
and follow-ups with company doctors. We also ensured thatworking hours for all employees were appropriate.

Using the Energy of the Earth Wisely
In addition to providing a stable supply of energy, the effective use of energy
to protect the earth’s environment is one of Japan Energy’s importantmissions. We are making significant efforts to raise awareness of promoting
energy savings and reducing environmental impact, while at the same time
proactively installing and upgrading equipment at refineries and otherproduction facilities for greater energy efficiency.

From oil exploration
to transportation

At JOMO
service stations

In oil refining andmanufacturing

In offices andR&D center

When transporting
to service stations

Developing environmentallyfriendly products• Preventing global warming withenergy savings• Reducing waste material andeffectively using resources• Preventing water, soil and air pollution• Curtailing the use of harmful chemicals

Reducing theEnvironmental
Impact of
Our Business
Activities• For a beautiful
earth for posterity

16

JAPAN ENERGY CSR Report 2008

Preventing Global Warming
Japan Energy is promoting companywide measures to reduce greenhouse gas emissions,focusing on cross-organizational energy-saving activities at refineries.

Strengthening Environmental
Preservation Activities, Focusing on theThree Refineries Central to Production

Locations of Refineries,
Plants, etc.
Funakawa Works
R&D Center

Mizushima
Oil Reﬁnery

Kashima Oil Co., Ltd.;
Kashima Oil Reﬁnery
Sodegaura Lubricants Plant
Kawasaki LP Gas Terminal
Chita Oil Reﬁnery

Sulfur-free gasoline
manufacturing unit
(Mizushima Oil Reﬁnery)

Joint Ownership of Best Practices atThree Refineries
Each of our three reﬁneries manufactures petroleum
products with unique characteristics, but depending on the
product, there are also cases in which the same facilities
and processes are used. For these, the manufacturing
processes at the three reﬁneries are studiedcross-organizationally, and the most efﬁcient methods andprocedures with the greatest energy savings are
implemented at the other reﬁneries. This “Lateral Project”
was launched in 2004.
Exchanging information and pursuing commonalities
among the reﬁneries allows us to reevaluate facilities andprocesses from different angles, and this leads to new
discoveries and ideas. As a result, we have achieved
companywide joint ownership of best practices, whichmakes it possible to effectively introduce facilities andoptimize processes.
Furthermore, in cooperation with other oil reﬁning or
petrochemical companies operating near our reﬁneries, wehave begun implementing energy-saving measures acrosscompanies on an industrial-complexwide basis.

Our activities

Strengthening energy-saving efforts, with the aim offurther reducing environmental burdens
Masashi Sakura
General Manager, Refining Technology, Petroleum Refining Dept.

We recognize the importance of energy savings that lead to reductions in CO2 emissions,and have always worked aggressively in this area at our reﬁneries. We are currently
pursuing further energy savings, however, to achieve the targets in the Medium-Term
Environmental Plan. Speciﬁcally, we are strengthening efforts to reuse thermal energy
recovered from the exhaust from reﬁning units, installing control and support software sothat facilities will be operated more efﬁciently and reviewing reﬁning processes whenmajor construction is undertaken. In addition, the joint use of information related toenergy saving throughout the reﬁning division is leading to efﬁcient energy savings.
Going forward, as we strive to provide a stable supply of high-quality products,
we will naturally pay attention to safety, and also pursue a reduced environmental
impact through energy savings.

JAPAN ENERGY CSR Report 2008

17

Energy of the EarthOur reﬁning division, consisting primarily of our oil reﬁneries,
manufactures petroleum products including gasoline,
kerosene and gas oil as part of our mission to provide a stablesupply of energy. The division has another important mission,
however, and that is to protect the earth’s environment byinstalling energy-saving equipment and promoting efﬁcientmanufacturing technologies to prevent global warming.
Nevertheless, a closer look at the important issue of global
environmental protection clearly shows that more work is
required. We are taking a variety of energy-saving measures,
focusing on the three reﬁneries at Mizushima, Chita andKashima that are our production centers, and have set atarget of reducing the average of our unit energy consumption(energy consumed per unit of energy manufactured) between
2008 and 2012 to 8.59 (kℓ of crude oil / 1,000 kℓ) or lower.

Energy of the Earth

Measures to Prevent Global Warming at the Chita Oil Refinery

Promoting energy savings through a variety ofmeasures, from improvements in plants and facilities
to the creativity and imagination of employees
Efficiently Using Energy from an Optimal,
Companywide Perspective
The Chita Oil Refinery is the production center responsible
for manufacturing petrochemical materials, including thepolyester raw material paraxylene and the nylon raw material
cyclohexane. With demand for petrochemical products
growing, a major restructuring of operations was carried out
in June 2001 to optimize all of our refining facilities, andsince that time the refinery has specialized in the
manufacture of petrochemical materials.
We are also proactively taking steps to save energy,
including facility improvements. As part of the Lateral
Project, in May 2008 we reviewed the refining process flow.
The Chita Oil Refinery has a distillation unit to extract
high-purity benzene, toluene, xylene and paraxylene using
several distillation towers. By changing the operational flow
and consolidating the towers (see diagram), we succeededin significantly reducing the energy used in distillation.

Changes in the Refining Process Flow under the
Lateral Project
Before
A,B,C*
Raw material
containing
mixture ofA, B, C and D

A
B,C*

B
C

Distillation
tower

C,D

C
D

* Trace components

Reviewed process of distilling twice to extract
component A, reducing energy used in distillation
by distilling once
After
Raw material
containing
mixture ofA, B, C and DDistillation
tower

A
B

B,C,D
C,D

C
D

18

JAPAN ENERGY CSR Report 2008

Utilizing Employees’ Creativity andImagination for Safety and Environmental
Preservation

Energy of the EarthJapan Energy carries out Total Productive Maintenance(TPM), a program in which all employees participate toimprove safety and environmental protection. TPM activities
at the Chita Oil Refinery began in 1999. Among various
TPM activities, this refinery has been particularly active in“mechanical improvements,” in which the employees
devise and make their own equipment using their creativity
and imagination to enhance energy savings and safety. For
example, devices called “steam traps” are attached to theends of the steam pipes that wind through the refinery todischarge condensed water, but when these devices
break down, steam is exhausted and heat efficiency
declines. However, employees figured out that by attachinga bell to the end of the pipe, it would be possible to quickly
discover malfunctions during inspection rounds by thesound of the bell ring.
We have also installed operational support software
packages to monitor the operating status of manufacturing
facilities and to control operations automatically, and thedevelopment of this application was also one of our TPM
activities. By automating delicate controls, operational safety
was enhanced and the amount of steam used was reduced,
and monitoring of the heating efficiency of furnace burners
was strengthened, resulting in energy savings.
These TPM activities also make employees more
conscious with regard to saving energy.

TPM activity using
a display board

Steam trap inspection

Our activities

Striving to prevent global warming through energy
savings using both systematic “facility
improvements” and daily “TPM activities”
Katsuyuki Sasaki
Manager, Manufacturing Section, Chita Oil RefineryWe carry out two types of energy-saving activities: “facility improvements” and “TPM
activities.” Facility improvements produce major results, but at the same time, theyrequire that facilities be shut down while the upgrade is carried out, so we have no
choice but to do this at the same time as the periodical repairs that are required
every four years.
This makes daily improvement activities very important. To date, TPM activities
have resulted in numerous improvements, which taken together have steadily
yielded results. I want to continue to work to prevent global warming in the future, by
pursuing energy savings through both facility improvements and TPM activities.

JAPAN ENERGY CSR Report 200819

Energy of the EarthEnvironmental Protection Policies,
System and Targets
Japan Energy established an environment management system for the purpose of engaging in environmental
protection activities, 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 environment in all that they do.

Environmental Protection Policies
Japan Energy’s Mission states that we will “use the energyof the Earth wisely” and tne five pledges state that we will
“always give top priority to safety and the environment.” This
thinking was the basis for the creation of our environmental
policies, which guide us in protecting the environment,
reducing environmental impact, and making efforts invarious environmental problems.
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 and touse energy efficiently.
3. We will comply with all relevant laws and strive to attainenvironmental standards that earn the trust of thecommunity.
4. We will contribute to improvement of the global
environment through the research and development ofenvironmentally friendly products and technologies.

ISO 14001 Certification Status
Japan Energy complies with environmental rules andregulations that help the company improve its ability toprotect the environment.
All of our refineries and plants have received ISO 14001

certification, and we are currently using the fiscal 2004
version of the system. We have an organizational structurethat takes environmental protection into account in eachbusiness field and region in which we operate.

ISO 14001 Certified Sites
MizushimaFebruaryDate26, 1999
certifiedCertification
LRQA
body
YKA
Certification
0772494
Code

Chita
March
5, 1999

Funakawa Sodegaura Kawasaki
March
May
November27, 1998 18, 1998 21, 1999

JQA

LRQA

JQA-EM
0353

YKA
0771917

KashimaMarch
12, 1999

LRQA

JQA

JQA

771512JQA-EM
0427

JQA-EM
0373

Environmental Audits
In addition to regular reviews by ISO certification institutions,Japan Energy carries out regular internal environmental
audits (internal audits at each site and a comprehensive
audit carried out by headquarters) to maintain and improve
environmental management functions.

Environmental Education
Refineries and sales departments each carry out environmental
education to ensure that employees have a high level ofawareness and knowledge with regard to environmental issues.
One of these activities is the Companywide
Environmental Conference, which is held once a year anduses case studies that can be applied across the organization.

Environmental Accounting
We use environmental accounting to assess the effectiveness of our environmental management. Costs for products increased
in fiscal 2007, primarily because of higher fuel costs associated with the jump in crude oil prices.

Environmental Costs

Millions of yen

Item

FY2007

FY2006

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

41,53038,862

2. Direct cost of reducing environmental impact(1) Preventing pollution (air, water and soil pollution)

4,804

5,633

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

917

829

(3) Waste treatment, recycling

276

239

(1) Management activities

403

388

(2) Social activities

2722(3) Environmental donations and contributions

715

634

3. Cost of environmental activities

1,578

1,488

Total

50,25048,095Item

FY2007

FY2006

4. R&D to reduce environmental impact

Investment

Millions of yen

1. Costs to build and improve environmental protection facilities

3,511

2,981

2. Costs to maintain equipment (repair and upgrade)

17,838

14,544

21,34917,525Total

20JAPAN ENERGY CSR Report 2008

Medium-Term Environmental Plan for fiscal 2008-10
Japan Energy has formulated the following medium-term action plan to help prevent global warming and promote othermeasures to reduce the environmental impact of our activities in a variety of ways. This plan covers the entire group.
Reduce Air Pollutants(VOCs: volatile organic compounds)

Reduce Waste Matter•Unit energy consumption (average for fiscal 2008-12)•Amount of VOC emissions•Waste to landfill ratio at refineries and plants* Unit: kl of crude oil equivalent/1,000kl* From fiscal 2000 level

8.59 or lower

Reduced byat least• Amount of energy used for transportation
Reduced by at least 4% from fiscal 2006 level30 %• Amount of energy used at offices
Reduced by at least 10% from fiscal 2006 level

1% or lower• Promote separation and collection at offices• Amount of paper used at offices
Reduced by at least 10% from fiscal 2006 level

Other Activities•Soil Pollution Countermeasures: Monitoring at company-owned service stations
and delivery terminals, systematically converting underground tanks to double-hull•Managing emissions and movement of chemical substances: Reductions via
VOC countermeasures•Developing and expanding sales of environmentally friendly products andservices•Promoting green purchasing: Raising percentage of green purchasing for
office supplies, etc., to at least 80%•Promoting environmental contributions through forest preservation

Material Balance

INPUT

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

Fuel(Crude oil equivalent):

Transportation
280,000 kℓ

22.81 million kℓ
Crude oil processed:
Electricity purchased: 613 million kWh
Fuel used
1.81 million kℓ(crude oil equivalent):
21.13 million tons
Fresh water:
200 million tons
Seawater:

Fuel used(crude oil equivalent):
Electricity used:•Transport of crude oil
by tanker

Refining,
stockpiling•Refining andstockpiling at refineries

Distribution(transport in Japan)
55,000 kℓ
6.5 million kWh

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•Reduce volume, recycling of resources•Elimination of excavation, backﬁlling

Measures

Environmental impact•Air pollution•JOMO service stations
receive and sellgasoline

Amount sold

LPG:
1.188 million tons
Flammable oil: 6.076 million kℓ
Jet fuel:
592,000 kℓ
Kerosene:
2.496 million kℓ

760,000 tons

CO2 emissions:
SOx emissions:NOx emissions:
Soot anddust emissions:
VOC emissions:
COD emissions:
Waste to landﬁll:

5.39 million tons
4,552 tons
2,914 tons

CO2 emissions:
VOC emissions:

150,000 tons
2,801 tons

CO2 emissions:51.13 million tons

217 tons
1,910 tons
56 tons
1,027 tons

Measures

Environmental impact•Air pollution•Water pollution•Waste•Soil contamination

CO2 emissions:•Reduce fuel consumption•Transport to delivery
terminals and JOMO
service stations

Marketing

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

Gas oil:
4.257 million kℓ
Fuel oil A: 2.344 million kℓ
Fuel oil C: 2.780 million kℓ

Items posted on web site
• Environmental Management System• Details of Medium-Term Environmental Plan

JAPAN ENERGY CSR Report 2008

21

Energy of the Earth

Prevention of Global Warming,
Saving Energy

Energy of the Earth

Reducing Environmental Impact
As a producer and supplier of energy, we emphasize the reduction of environmental impact in a variety
of ways, including the prevention of global warming, in our business activities.

Prevention of Global Warming

Energy Conservation in Transportation

Contributing to the prevention of global warming, primarily
by promoting measures to save energy, is our basic idea.
We are working to reduce energy consumption at reﬁneries
and plants, in transportation, and in ofﬁces.

Japan Energy transports petroleum products by either landor sea. Land transportation is carried out by tank trucks andrailway tanker cars, while sea transport is carried out bycoastal tankers.
As shown below, we have for some time now been
increasing the capacities of our coastal tankers and tanktrucks in order to improve transportation efﬁciency, thereby
consuming less fuel. We will continue to work for further
energy conservation in transportation going forward.

Energy Conservation at Reﬁneries
The amount of energy used at reﬁneries ﬂuctuatessigniﬁcantly in line with changes in demand for products. We
manage this using an index called “unit energy
consumption” with a view to contributing to the reduction of
CO2 emissions through the efﬁcient use of energy.
Although progress was made in areas including the
reduction of ﬂare gas and the promotion of heat recovery inﬁscal 2007, facility problems at the Mizushima and Kashima
oil reﬁneries and test operation of new facilities installed at
the Kashima Oil Reﬁnery resulted in a higher unit energy
consumption.

Energy Consumption and Unit Energy Consumption

3,000

8.88
9.19

9.09
1,890

1,919

1,819

1,610

8.73

8.78

9

1,942

2,038

Target
8.59
8

7

0

0
FY2003

FY2004

FY2005

FY2006

24.3

24.3

23.6

6,000
5,042
4,000

23.3

4,126

4,795

5,095

23.2
5,139

5,382

Tank truck fuel consumption

100,000
80,00064,66260,00022

40,000

2,000

18

0

0

0

FY2003
FY2004

FY2005

FY2006

FY2007* The ﬁgures given in reports through last year were the company’s direct

Coastal tanker fuel consumption

72,71724

20,000 20,729

FY2003Large coastal tanker

105,03120

FY1990FY2007

120,000

Unit CO2 emissions (Unit: tons of CO2/1,000 kℓ)

CO2 emissions

8,000
24.1

Large tank truck

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

FY2007

Carbon Dioxide (CO2) Emissions and CO2 Emission Intensity(Unit: 1,000 tons)

FY2007

3,063kℓ/vessel

2,593kℓ/vesselFY19981,000

FY1990

FY1998

Unit energy consumption (Unit: kl crude oil equivalent / 1,000 kℓ)

9.39

2,000

18.6kℓ/truck

17.2kℓ/truck

Increased capacity oftankers (average ship size)(Unit: 1,000 kℓ crude oil equivalent)
Energy consumed

Increased capacity of tanktrucks (average truck size)

emissions, but this has been adjusted to account for energy purchased andenergy sold.

20,379FY2004

19,509FY200527,877
27,76015,801
15,326

FY2006

FY2007* Based on the Law Concerning the Rational Use of Energy, we changed themethod of calculation for energy consumption in ﬁscal 2006.

Energy Conservation in Ofﬁces
Ofﬁce employees work to conserve electricity by taking
steps in their immediate surroundings, including turning off
lights during lunchtime or in areas with no people, turning off
equipment that is not being used and controlling thetemperature of air-conditioning.

22

JAPAN ENERGY CSR Report 2008

Reducing Emissions of Air Pollutants

Reducing Waste Matter

Reducing VOCs (Volatile Organic Compounds)
Emissions

Refineries and Plants
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 the amount of waste through oil recovery,
dehydration, incineration and conversion to raw material for
cement, and we promote recycling by re-refining waste oil.
Through these efforts, we aim to reduce the amount of waste,
as measured by the waste to landfill ratio, to 1% or less.

Waste to Landfill *VOC Emissions(tons)(tons)

6,000

2,500
5,525

5,030

4,874

4,969

2,000

4,711

4,000

Target3,867(30% reduction)

3,000

1,500

5

2,388

5,470

5,000

Ratio (%)

Amount

4

1,945
3.5
2.9

1,241

1,000

1,603

1.9
FY2000 FY2003 FY2004 FY2005 FY2006 FY2007

1,027
1.5

1.3

500

0

3

1,129

1.2

Target 2
1%
or less 1

00FY2002 FY2003 FY2004 FY2005 FY2006 FY2007* Waste to landfill increased in fiscal 2004 because of unforeseen waste created

Conversion of Fixed-Roof Tank to Internal
Floating-Roof Tankby damage from high tides at the Mizushima Oil Refinery.

VOC

VOC
Oil deposited

Oil

Crude oil, gasoline,
naphtha•Air in tankexpands as
temperature rises•Internal air pushed
out as liquidsurface rises

Fixed-roof tank
VOCs from the stored oil evaporate and remain in the tank,
and when oil is deposited or expands from a rise intemperature, these compounds are released from the tank.
Air
Air
Floating roof
Oil deposited
Crude oil, gasoline,
naphthaOil
Internal
floating-roof tank

A floating roof covering the surface cuts the evaporation of
VOCs into the air in the tank, leading to a major reduction in
the VOCs emitted when oil is deposited.

Status of Waste
Waste to landfill
1.2%

Amount ofwaste reduced
48.9%

Recycled
49.9%

Environmental Efforts at Offices
In addition to the above activities at refineries and plants,
headquarters and branch offices aggressively work to
separate and collect waste, andto reduce the amount ofwastepaper.
JOMO service stations alsocollect waste oil and wasteelements that are emitted.

Items posted on web site
• Participation in Clean Development Mechanisms (CDM)• Environmental Impact Data (SOx, NOx, soot and dusts, water pollution)

JAPAN ENERGY CSR Report 2008

23

Energy of the Earth

VOCs contained in naphtha and gasoline are recognized asa significant cause of photochemical smog, and we havebeen working to reduce emissions of these compounds into
the air by our plants and facilities.
We plan to convert eight more tanks from a fixed-rooftank to a lower-emission internal floating-roof tank by theend of fiscal 2009. In fiscal 2007, one tank at the Funakawa
Works (Akita Prefecture) was converted.

Energy of the Earth

Other Environmental Efforts
In addition to minimizing the environmental impact of our business activities, we are promoting thedevelopment of environmentally friendly products and new types of energy, and working to protect forests.

Soil Contamination Countermeasures
JOMO service stations are regularly monitored for soil
contamination, and if contamination is discovered,appropriate measures, including public disclosure, are taken.

Efforts in the Funakawa Works
Soil remediation work on the premises of the Funakawa
Works as well as on neighboring company-owned land
began in fiscal 2001, and the work on the land outside thepremises has been completed. The work currently
underway inside the premises is scheduled for completionin fiscal 2010.

JOMO Service Stations
Soil Contamination Survey
JOMO service stations are evaluated for the risk of soil
contamination based on risk control measures for fuelleakage implemented in 2002. Soil gas surveys and boring
surveys are being carried out, beginning with stations
deemed at higher risk.
Secondary surveys had been carried out at 338 JOMO
service stations as of fiscal 2007, and we plan to continue
these surveys beyond fiscal 2007.
These surveys have identified 21 service stations as
requiring soil and groundwater cleanup, and thecontaminated soil isbeing restored at theselocations. Of these,facilities have been
repaired and pollutants
removed at six service
stations, and work is
proceeding at the
Soil contamination survey
remaining 15.
Preventive Measures
Along with soil contamination surveys and restoration
measures, preventive measures are being systematically
implemented to prevent leakage from underground tanks.
Many underground tanks at service stations have beenin place for a long time and could begin to deteriorate. We
are therefore working to reduce the risk of leakage andassociated soil contamination by replacing this undergroundequipment withdouble-walled tanks
and plastic pipes.
A total of 16 ofthese projects werecarried out during fiscal
2007.

Renovations installing double-walled tanks

Management of Chemicals and Harmful
Substances
Identifying and Managing Emissions andTransfers of Chemical Substances
The amounts of chemical substances handled, released, andtransferred at Japan Energy refineries and delivery terminals
that are covered by the PRTR Law are measured and reported.
Most of our chemical emissions are benzene andtoluene emitted from tanks and terminals. We strive to limit
chemical emissions into the environment through thepreviously mentioned measures to curtail VOC emissions.

Management and Appropriate Treatment of PCBs
Our refineries, plants, delivery terminals and R&D Center
appropriately store andmaintain capacitors (266 units)
and oils containing PCBs. We
plan to treat these in stages
over four years from fiscal
2009, and internal
Inside a storage facility
preparations are proceeding.

Promoting Green Purchasing
Petroleum products are an important source of energy, but
their use generates CO2 emissions. We therefore have
Green Procurement Guidelines for purchasing the additives(chemical raw materials) required for manufacturingpetroleum products, which set conditions for choosing the
suppliers from which we will do our purchasing. 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 also promote the purchasing of environmentallyfriendly office supplies, and have set a target of theseproducts accounting for 80% of all purchases.

Items posted on web site
• Information Disclosure on Release and Transfer of Chemicals• Wind Power Generation Facilities

24

JAPAN ENERGY CSR Report 2008

•Development of Technologies for Improving the Environment•Environmental Efforts at JOMO Service Stations

Environmentally Friendly Products
Developing Environmentally Friendly Products* ETBE (ethyl tertiary butyl ether): A gasoline component stock made frombioethanol.

Sulfur-Free Fuels
Sulfur-free gasoline and gas oil have a sulfur content of 10
ppm (0.001%) or less. Not only do they offer cleaner vehicle
exhaust; they also help curb global warming, contributing to
improved functioning and durability of the exhaust treatment
devices on environmentally friendly cars, and to improved
gas mileage.

Clean Energy R&D
Fuel Cell Systems
We have been researching fuel cell systems, which generate
electricity through an electrochemical reaction betweenhydrogen and oxygen, sincethe 1980s. We have been
taking part in large-scale
experiments with stationary
fuel cells, and have alreadyinstalled 104 JOMOECOCUBE fuel cell systems The JOMO ECOCUBE,
a residential fuel cell.
in homes.
Supplying Hydrogen Energy
In addition to developing kerosene desulfurization systems
and reforming catalysts for hydrogen manufacturing, we
continue to conduct R&D into highly efficient, compact“reforming reactors” using hydrogen separation membranes,
and an “organic hydride method” for safely storing andsupplying hydrogen in liquid form.
We also operate mobile hydrogen stations that are sent
to events to supply hydrogen to fuel cell vehicles.

Forest Volunteer Activities Have Continued
Since 2004
Japan Energy volunteers have been working to protect
forests since 2004. The first project was a red pine forest in
the Nakajo Field of Japan Energy Development Co., Ltd., in
Niigata Prefecture.
Since fiscal 2005, we have also been providing funds toprotect forests as a “forest foster parent” in Nagano andOkayama prefectures. Employees volunteer to participate inmaintenance projects with local residents to support forestsin these regions.
A total of 550 employees and family members
participated in sevenactivities in these three
forests during fiscal 2007.
In addition, as part of
the Nippon Mining HoldingsGroup, we have beenworking since fiscal 2006 to
maintain forests at the two
Takahashi JOMO Fureai-no-Moriformer mine sites in Japan. (Okayama Prefecture)“JOMO Forest Cup and Green Culture Festival”
Awards Ceremony Held
Japan Energy has begun sponsoring the JOMO Forest Cup
and Green Culture Festival picture show and composing
contest, with “forests” as the theme.
This festival aims to “promote awareness of theimportance of forests and achieve a society that is abundant innature,” and was first launched in fiscal 2007 by the NPO
Green Earth Center as a contest for elementary and junior highschool students. The first awards ceremony was held in Tokyoin December 2007, and nine elementary school children
received awards in the
picture story division, whilenine elementary and eightjunior high school students
received awards in thecomposing division. The
winners presented their“JOMO Forest Cup and Green Culture
Festival” Awards Ceremony
works at the ceremony.

Items posted on web site
• Environmental Considerations in Fuel Oils, Lubricating Oils and Petrochemical Products• Chemical Recycling of Plastic Wastes•Clean Energy R&D Details

JAPAN ENERGY CSR Report 2008

25

Energy of the EarthBiogasoline
Japan Energy began selling biogasoline (bio ETBE* blend), a
mixture of conventional gasoline andplant-based fuel (on a distribution trial basis), in
April 2007. As of June 2008, 10 JOMO service
stations were selling biogasoline.

Contributing to Society by Protecting
Forests

Enhancing the Energy of Society
Japan Energy has always been engaged in activities aimed at contributing tolocal regions and society, and among these activities, the JOMO Children’s
Story Award and the JOMO Children’s Story Fund have been particularly wellreceived. We consider it important for each director and employee to voluntarily participate in social contribution activities, and we support the volunteer
activities of our employees.

Legal compliancegoes without saying

Ensuring safety, frompetroleum explorationand development to sales

Striving to raise
the quality of
products and services

Contributing todevelopment oflocal communities

Carrying out fairtransactions

Supporting to children
at children’s facilities
and foster families• Fulfilling our responsibilities tosociety and stakeholders

Contributing to Local
Communities, Meetingthe Expectations of
Customers andBusiness Partners, andConforming to
Sicial Standards• Earning the trust of society and stakeholders• Being needed

26

JAPAN ENERGY CSR Report 2008

Aiming to be a Company Trusted by
Communities and Society
Recognizing that each director and employee is a member of the community and society,we contribute to society using our unique character.

Our Unique Social Contribution Activities

Japan Energy’s social contribution activities have a long
history, with the JOMO Children’s Story Award going backto the 1970s. These efforts were further strengthened withthe establishment of the Corporate Social Responsibility
Department in 2005 as a contact point to comprehensively
promote social contribution activities.
Going forward, the department will not only work toraise awareness of social contribution in all directors andemployees, but also develop a variety of activities incooperation with employees’ families and members of thecommunity.

“JOMO Science Class”
at R&D Center

JOMO Basketball Clinic

Our activities

Helping the next generation realize its dreams, and also contributing
to environmental protection through the effective use of thinned wood
Kiyonobu Yokokoji
General Manager, CSR Dept.

Our current system for promoting social contribution activities is based on our Mission,“We Create Energy,” and the “Five Pledges” toward that mission that were established in
1997. However, the JOMO Children’s Story Award has an unbroken history going back to
1970, showing that social contribution activities are an important part of who we are. The
JOMO Children’s Story Award was expanded to also cover social welfare in 1992, when the
JOMO Children’s Story Fund was jointly established with our dealers. In this way, we havesupported the realization of the dreams of the next generation for the past 16 years.
In addition, wood from forest thinning in Hara Village in Nagano
Prefecture is used to make the paper on which the Bouquet ofChildren’s Stories is printed. This contributes to the creation of healthy
forests in Japan so that the forests can absorb greater amounts of CO2.
We look forward to continuing to promote social contribution activities
in the future, as one way of implementing our Mission.

JAPAN ENERGY CSR Report 2008

27

Energy of Society

Japan Energy feels a strong sense of responsibility toward
communities and society to be a good corporate citizen. Even
though a company needs to pursue profits, it cannot meet the
expectations and gain the trust of communities and society
through that alone. We therefore engage in a variety of social
contribution activities, making use of our corporate culture andthe special features of our business “for a more cohesive anddynamic society,” as called for in our Mission.
For example, we help children – our future – grow rich inspirit by operating the JOMO Children’s Story Award, the
JOMO Children’s Story Fund and the JOMO Basketball
Clinic. We also emphasize support for people with special
needs and the victims of natural and other disasters.
In addition, our social contribution activities do not only
take place within the corporate organization. We consider it
important for all directors andemployees to be conscious of theirroles as corporate citizens and tovoluntarily participate in activities,
and we aggressively support
employees’ volunteer activities.

Strengthening Activities with the
Establishment of the Corporate Social
Responsibility Department

Energy of Society

JOMO Children’s Story Award and The Bouquet of Children’s Stories

The JOMO Children’s Story Award has been promoting“heart-to-heart contact” for 39 years,
and also supports the creation of healthy forests.
The JOMO Children’s Story Award also
Helps to Protect Forests
The JOMO Children’s Story Award is held every year, and2008 will be its 39th year. Original stories on the theme“getting along well with others” are collected from thegeneral public, with the best stories published as a collection
called The Bouquet of Children’s Stories. We receive many
wonderful stories containing the thoughts of individual
contributors, and this has been popular for many years.
The Bouquet of Children’s Stories is printed on “3.9Paper,” which uses wood from forest thinning. In the past,thinned wood* was often left in the forest, which made itdifficult for young trees to grow. The “3.9 Paper” businessmodel effectively uses thinned wood as a raw material for
paper, and in exchange the user of the paper pays the costof transporting the thinned wood from domestic forests.
This helps to protect domestic forests, which leads toincreased CO2 absorption, and also contributes toforestation by returning the profit from the thinned wood tothe forest owners.

* Thinned wood: The wood cut when thinning forests to give them more lightand promote their growth.

28

JAPAN ENERGY CSR Report 2008

Fostering the next generation and protecting forests
through the JOMO Children’s Story Award
The Bouquet of Children’s Stories

JOMO Children’s Fund

3.9 Paper(scholarship grants)(forest protection activity)

Children’s Fund

B-(2)-060008

Supporting the Dreams and Independenceof Children
The Bouquet of Children’s Stories is purchased bydealerships that operate JOMO service stations, Nippon
Mining Holdings group companies, Japan Energy affiliates,
directors and employees. In addition to being distributed tothe customers at JOMO service stations, the books are
donated by service stations, refineries and plants to schools
and preschools in their neighborhoods. Copies are alsodelivered to children’s homes, mothers-and-children’s
homes, and other social welfare facilities around Japan, as
well as to families with foster children. All sales are put into

the JOMO Children’s Fund, and donated to the Japan
National Council of Social Welfare at the awards ceremony
held every November. The donation for fiscal 2007 was ¥24
million. Using these donations, the council has established ascholarship fund to help children in children’s homes andsingle mother support centers, as well as foster children, toattend college or technical schools after graduating fromhigh school. To date, more than 1,200 children havereceived scholarships.
Along with giving a sense of comfort to the people whoread The Bouquet of Children’s Stories, the book also helps
children in financial need to become independent.

Looking to Japan Energy

National Foster Parent Association of Japan

Energy of Society

We are very grateful for the JOMO scholarshipprogram, which supports the desires of both foster
children and parents
Hiromichi Kinouchi, Director
Shogo Sakai, Secretary General
National Foster Parent Association of Japan

Foster care places children who, for a variety of reasons cannot live with their own
family, with foster families. Although some support for raising the children isprovided by the government, the financial burden on the foster parents is still
significant, and they are often not able to provide higher education after highschool. Nevertheless, many of these parents want to provide the children whowant to continue their education with that opportunity. In other words, higher
education is the wish of both the children and the foster parents. For this reason,
we are very grateful for the JOMO scholarship program, made possible by The
Bouquet of Children’s Stories.
We hope that in the future this program can be expanded to provide assistancenot only for entering college or technical school, but also to assist students while
they are in school. We look forward to reporting on children’s growth and the paths
they have taken after graduation to everyone who has helped to support them.

Thank-you letters fromscholarship recipients

Looking to Japan Energy

People of all ages enjoy The Bouquet of Children’s
Stories, while waiting at the service station or asa present.
Kenichi Aoki,
Manager, Ishii Service Station Kita-kanto Company, JOMO-NET Co., Ltd.

We make The Bouquet of Children’s Stories available for customers to read while
they wait to have their car serviced, and give them copies to use as present for theirfamilies and friends as presents. There is a large shopping center near our service
station, so on weekends and holidays we are visited by many families. People of allages, from children to grandparents, enjoy the book, and some look forward to its
publication every year. We also distribute copies to kindergartens and a children’s
hospital in our neighborhood, which makes a contribution to the local community.
I am very glad that we are able to support the dreams of children by purchasing
the Bouquet of Children’s Stories. I want to actively contribute to society, and would
like to see Japan Energy continue to develop similar activities.

JAPAN ENERGY CSR Report 200829

Energy of Society

Customer CareIn addition to improving quality, to provide high-value-added products, we also make every effort to work
together as one Team JOMO for “customer satisfaction management,” with the aim of creating JOMO service
stations that customers like and trust.

Strengthening the Quality Control System

JOMO CARDs (Light and Plus)

We feel very strongly that quality is the foundation ofcustomer satisfaction, and in 2006 we established agroupwide Quality Policy.

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 ongasoline and gal oil and 1 yen/liter on kerosene, with noannual membership fees. Besides the benefits forcustomers, this card also makes JOMO service stations
more competitive.

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

JOMO CARD Light

Based on this policy, the Liaison Meeting of Quality
Assurance Personnel was established as a cross-grouporganization, and at the same time an administrative
department was established in each product group, witheach of these departments carrying out its own quality control.
In order to further enhance the quality of fuel oil, ourmain product, the Fuel Oil Quality Assurance Committee
was established in March 2007. This committee designatesmajor issues with regard to fuel oil quality each year, andtakes appropriate measures to address those issues.
The following are the major quality assurance andcontrol issues designated for fiscal 2008, and related
measures are being implemented.
Squarely address environmental quality
Biofuels and sulfur reduction in fuels
Enhance quality control and assurance(1) Quality surveys at refineries and shared use of quality
information(2) Strengthen cooperation between marketing andtransportation divisions (strengthen and support
quality training)

Value Style: Pursuing Comfortable Spaceand the best Hospitality
We developed Value Style stations based on the concept ofcreating service stations that make customers want to havea visit, want to come in, and want to come back again. The
stations have a consistent exterior, and the interior has acompletely separated smoking area, a café and a children’s
area to create a comfortable atmosphere.
As of the end of March 2008, there were 613 Value
Style stations across Japan, and we plan to further increase
this number going forward.

Quality Control System
Liaison Meeting of Quality Assurance Personnel

President

Companywide
administrative
department(Petroleum
Refining Dept.)

Product group
administrative
departments(related divisionsat head office)Customers

Value Style station

Eachdepartment(branches,refineries, etc.)

Executive
Committee

Items posted on web site
• Status of ISO 9001 Certification•Customer Care for LP Gas Users• Human Resource Development (Instilling a Sense of Hospitality)

30

JAPAN ENERGY CSR Report 2008

JOMO CARD Plus

• Partnerships with Business Partners

JOMO Customer Center Puts Opinions
and Requests to Customer Service

JOMO service stations have had “Awareness” boxes since2005. Things that we see every day and casually take for
granted can lead to new discoveries if we just look at themfrom a different perspective. These new discoveries lead toawareness. The awareness can come from your impressions
or ideas, or from something you think could be done better.
When you start to think of awareness, you can anticipate
what customers need, and this leads to service andhospitality that goes beyond customer expectations.
Examples of awareness that our service stations haveacted on to improve customer service include lap blankets tomake customers comfortable while waiting, and when servicing
a car will require some time, calling customers on their mobile
phone when the work is finished so they do not have to wait on
the premises. Approximately 1,000 JOMO service stations
around Japan used the awarenessbox system during fiscal 2007.
We are distributing examples ofuseful suggestions to JOMO
service stations so they can beshared across the group, which
has the added benefit of raisingstation staff awareness andthereby raising the level ofAwareness Notes
customer-focused service.

We launched the JOMO Customer Center in July 1998 togather customer opinions and reflect these in our service.
Customers can call a toll-free number or send e-mail forvarious inquiries, and give us their opinions and ideas on
improvements that could be made.
These customer opinions and requests are put into a
database and are used in creating targets for future
improvements. We have also set up a dedicated web site toshare this information within the group, to further raise thelevel of customer service at JOMO service stations.

Mystery Shoppers Evaluate Service
Stations from a Customer Perspective
Since 1994, we have been conducting customer satisfaction
surveys twice a year at the roughly 2,000 nationwide JOMO
service stations.
Starting in October 2006, we have had consumers act
as “mystery shoppers” in order to get an unbiased,customer-centered view of things like fueling, maintenance,
customer service, shop facilities, and cleanliness. Based on
the results of those surveys, we hold study sessions forservice station managers with the aim of further improving
customer service.

Inquiries to the JOMO Customer Center (fiscal 2007)
Others2,595Promotional
campaigns
260

JOMO Card(requests forapplication forms,
Internet-related, etc.)
4,449

Total
10,512Claims (JOMO
Card, service atservice stations,
campaigns, etc.)
1,104Service station
information
301
Products
765

The Bouquet ofChildren’s Stories
1,038

Making JOMO Service Stations
Barrier Free
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 26 JOMO service stations with restrooms that provide fullwheelchair access.

•Price list signs: Yellow (barrier-free color) LED
A list of JOMO service stations withbarrier-free restrooms is available at

http://www.j-energy.co.jp/station/ss/ (Japanese only)JAPAN ENERGY CSR Report 2008

31

Energy of Society

Promoting “Awareness” from the View
Point of Customers

Energy of Society

Together with Society
As a corporate citizen 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.

Social Contribution Priorities and Support
Focus“Click Donation” Supports Sports for the
Disabled

Japan Energy has always worked to enrich and develop
society through social contribution activities.
In pursuing these activities, we focus our support on“children” and “people with special needs” in particular.

With the Click Donation system, visitors to our web site canclick on an icon, and Japan Energy will make a donation tovarious organizations corresponding to the number of clicks
at no charge to the person clicking on the icon. We supported
the Special Olympics from November 2006 to October 2007
and received 4,953,660 clicks during that period. A donationof ¥1 per click was made to the NPO Special Olympics
Nippon, and this supported the Japanese athletes who
participated in the World
Summer Games held in
Shanghai in October 2007.
The next Click Donation
campaign, called “Heading toBeijing!” runs throughSeptember 2008 and will
support sports for people
Click Donation Internet Sitewith disabilities.

Priority Areas and Main Focus of Support
1
JOMO Children’s
Story Award /JOMO Children’s
Story Fund2

3

Promotion of Sports

Disaster AssistanceChildrenPeople withdisabilities

1. JOMO Children’s Story Award / JOMOChildren’s Story Fund
Helping Children Become Independent
Members of Society
Please refer to the special feature on Page 28 for details of
the JOMO Children’s Story Award and the JOMO Children’s
Story Fund.

Click Donation
http://www.j-energy.co.jp/cp/society/click_tp.php

3. Disaster Assistance
2. Promotion of Sports
JOMO Basketball Clinic
The JOMO Basketball Clinic teaches children throughout
Japan the basic skills of basketball, and is taught by afull-time staff comprisingformer members of ourwomen’s basketball team, the
JOMO Sunflowers. A total of
54 clinics were held during
fiscal 2007, with 1,987 children
JOMO Basketball Clinic
attending.

Supporting Wheelchair Basketball
Tournaments
Japan Energy also helps promote wheelchair basketball as asponsor of the Japan Wheelchair Basketball Federation
Tournament (May), the national women’s and senior
tournaments (November), andwheelchair basketball clinics(September in Kumamoto,
November in Hokkaido). Our
employees also volunteered toassist with the operation of the
Wheelchair basketball clinic
May and November
sponsored by Japan Energy(Hokkaido)
tournaments.

JOMO Fureai Fund and other Disaster
Assistance
The JOMO Fureai Fund was launched in April 2006 toprovide assistance to disaster victims. Executives andemployees designate a fixed amount to be donated fromtheir salary, and Japan Energy matches this amount.
During fiscal 2007, the fund provided support to victims
of four natural disasters in Japan and overseas, including
the Noto Pennisula Earthquake in March and the Niigata
Prefecture Chuetsu Offshore Earthquake in July.
Support was also provided to victims of the earthquake
in Niigata in the form of portable gas stoves and gas
cartridges, drinking water, etc., provided through dealerships
in the stricken area.
As of the end of March 2008, there were 637
participants in the fund, and the amount raised during fiscal
2007 was ¥14,063,000.

Disaster Assistance Provided in fiscal 2007
Recipient

AmountApril

Noto Pennisula
Earthquake

Area

Central Community
Chest of Japan¥1,000,000

July

Niigata Prefecture Chuetsu
Offshore Earthquake*Japan Red Cross
Society¥11,063,000

AugustEarthquake in Peru

Japan Platform¥1,000,000

Japan Platform¥1,000,000

December Cyclone in Bangladesh

donations from three Nippon Mining Holdings Group companies,*theIncludes
Kitakanto Branch Office, and the Kashima Oil Refinery

32

JAPAN ENERGY CSR Report 2008

Community Activities
Community Cleanup

Fiscal 2007 Educational Activities in Pictures

R&D Center

Energy of Society

Japan Energy has a tradition of holding community cleanup
activities at its sites.
Approximately 850 employees took part in cleaning
activities during fiscal 2007, heldat the Mizushima Oil Refinery,
Chita Oil Refinery, Funakawa
Works, Sodegaura Lubricants
Plant, Kawasaki LP Gas
Terminal, R&D Center, Hokkaido
Branch and Kashima Oil Refinery
Let’s Clean (Hokkaido Branch)(Kashima Oil Co., Ltd.).

JOMO Nature Class

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,
and strive to improve
technologies for preventing
and fighting fires.
Firefighting teams fromJapan Energy’s R&D Center
placed first and runner-up in a
firefighting competition held by
the Toda City fire department
in October 2007.

JOMO I Love Science Class

Community Education Activities
Japan Energy sites hold tours for their local communities.
The R&D Center has been holding a “JOMO Science Class”
since 2004, making its testing facilities available for studentsof the Toda Municipal Niizo Elementary School. At therequest of Toda City, Japan Energy researchers have also
visited a local elementary school to teach JOMO I Love
Science Classes since 2007.
The center also makes use of the roughly 1,300 trees
and shrubs on its site to hold a JOMO Nature Class and
JOMO Neighborhood Exploration activities. Another of ourongoing activities to develop children’s interest in science is
the JOMO Planet School, which uses telescopes to teachbasic astronomy.

JOMO Planet School

Mizushima Oil Refinery

Tour for local residents(Takahashi City)

Tour for families of refinery
employees

Items posted on web site
• Participation in Minato-Net• Participation in Minato Eco-conscious Consortium• Opening Japan Energy Facilities to the public• Walk the World•Volunteer Leave Systems•JOMO Volunteer Network•Second-Hand Book Fair Charity•Collecting Items to Donate• Charity English Conversation Class• Support for Guide Dog Training Facilities• In-House Blood Donor Clinics• CO2 Reduction Activities by Employees and Executives

JAPAN ENERGY CSR Report 200833

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
LawyerChief 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 public prosecutor for
Investigation Dept., Secretariat of the Fair Trade Commission and public prosecutor, Tokyo
District Public Prosecutor’s Office, special detective, Hiroshima District Public Prosecutor’s
Office, and associate prosecutor, Nagasaki Public Prosecutor’s Office, in 2003 was appointed
guest professor at Toin University of Yokohama Law School. In 2005, became a professor oflaw at Toin University of Yokohama Law School and Director, Compliance Research Center ofToin University of Yokohama. In 2006, left the prosecutor’s office but continues to teach at Toin
University of Yokohama Law School and practices law.
Publications include: “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 being certified
as a counselor at Sophia University, worked as a counselor at Kanto Gakuin Junior andSenior 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 both companies’ and individuals’
involvement in philanthropic activities.
Publications include: Introduction to Philanthropy, published by Kainan Books
Enjoy Volunteering from Age 60, published by Nihon Kajo Publishing

The special features in this year’s CSR Report explain the company’s
activities in terms of the three energies, expanding on the Corporate
Mission of “We Create Energy.” Bringing the term “energy,” which isalso in the company name, to the forefront makes the report easy tounderstand and creates a strong, positive impression. The fact thatthe report covers not only Japan Energy but also explanations of CSR
activities related to the Nippon Mining Holdings Group’s mission
and governance structure, makes the report more persuasive.
The topics covered to explain the creation of the three energies are
the promotion of a workplace in which women can thrive for “Energy
in People,” reducing environmental impact through more efficient useof energy for the “Energy of the Earth,” and the JOMO Children’s
Story Award for “Energy of Society.” The use of these familiar, specificthemes makes the narrative easy to understand. This conveys the factthat the company is addressing current needs like empowering
female employees and addressing global warming, but not at theexpense of its ongoing social contribution activities. A variety of othertopics are also introduced, including improving the work environment,
environmental protection and customer satisfaction. These are also
important CSR activities for addressing the needs of the company’svarious stakeholders and achieving its Corporate Mission.
Compared with last year’s report, which featured
responsibilities and actions in the supply chain and dealt directlywith the company’s primary mission of providing a stable, safe andefficient supply of energy, however, I felt that this year’s report was
somewhat weak in terms of the company’s core business of“providing energy,” and focused more on peripheral activities.
Given today’s high prices for oil and other materials andheightened concern regarding energy procurement, the steady
execution of the basic mission of maintaining stable procurement
and supplies of energy is itself an important element of CSR. I
would have liked to see this addressed from a different
perspective from last year’s report.
CSR encompasses all activities through which companies
respond to the needs of society. Today, energy-related issues aresociety’s greatest concern, and overcoming various difficulties tomaintain business activities that contribute to a stable supply ofenergy is itself the most important “energy” for Japanese society.
I look forward to Japan Energy’s future activities as acomprehensive energy company.

This year’s booklet, with concentrated content and fewer pages,
lowers barriers for readers. The arrangement, with the top
message clearly stated at the beginning and the entire reportbased on the Corporate Mission, is easier to follow.
I also feel that in addition to consolidating what were separate
sections for separate departments, the presentation and wording
did not have enough cross-cutting discussion to give readers a full
picture. I like the fact that the report honestly and straightforwardly
addresses current conditions, but the environment and energy
section in particular was technical and difficult to understand, and I
don’t think it gives a clear picture to general customers. I would
have preferred simpler explanations. The fact that the company’s
core business is energy makes it necessary to take into accountthat non-specialists have a variety of different ways of looking atthese issues, and to clearly convey the company’s vision for the
future to a wide range of people.
The “Awareness Notees” discussed in the “Customer Care”
section is very valuable. Even though this is a unique activity, theexplanation was not very detailed and did not make a strong
impression. I believe a clearer picture of the flow of how manysuggestions are received and how they are used would express
the company’s plans and outlook for the future, and be moremeaningful as a forward-looking report.
Going forward, social contribution activities will need to become
more thoroughly instilled as part of corporate culture. Expanding
the scope of support of JOMO Fureai Fund to areas other thanthe disaster assistance could lead to greater participation by
employees in terms of both donations and volunteering.
Japan Energy should be very proud of the JOMO Children’s
Story Award. I found the section on this, and on the involvement ofservice stations to be very interesting. Even though people fromthe foster care association were featured, however, I think thatconveying the gratitude of the children and episodes that would
touch readers would give a fuller sense of the program’s
significance and possibilities for the future. In addition, if the generalpublic were able to participate in the activities of the JOMOChildren’s Story Fund, customers would get a better sense of thecompany wanting to “connect with society.” Stakeholders are
partners for the promotion of CSR. I hope that the report will createcontact points that allow Japan Energy to connect with society.

34

JAPAN ENERGY CSR Report 2008

Explanation of Terms
Term, Abbreviation

Explanation

XyleneAn aromatic hydrocarbon, it has two methyl groups (CH3) substituted in place of two hydrogen atoms inbenzene. There are three isomers of xylene: ortho, meta and para. Xylene is an oily liquid that is colorless,transparent, toxic and flammable. It is obtained from petroleum reformate and is a raw material for organic
solvents and synthetic resins.

Photochemical smog

The nitrogen oxide and hydrocarbons in car exhaust undergo chemical change when they react with theultraviolet rays from the sun in the atmosphere, 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.

Catalyst

A substance that remains unchanged itself but alters the speed of chemical reactions of other substances.
An example is the desulfurization of heavy 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 speedof chemical reactions.

COD contamination

An index for water pollution, COD (Chemical Oxygen Demand) is a measure of the oxidant required todegrade organic compounds in water. It is a major index for measuring pollution by organic compounds in
sea water and lake water.

SludgeSolid matter generated when deteriorated oil reacts with dissolved oxygen.

Denitration

The process and technology for removing nitrogen oxide from exhaust gas. 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 by causing a reaction between the sulfur and hydrogen, thus
removing the sulfur in the form of hydrogen sulfide. In addition to the desulfurization of petroleum products,
the removal of sulfur oxide from exhaust emitted during combustion is called flue gas desulfurization.

TolueneAn aromatic hydrocarbon, it has a methyl group (CH3) substituted in place of one hydrogen atom in benzene.
It is a toxic, colorless, flammable liquid with a distinct odor. It is obtained from distillation of coal tar and thebreakdown and reforming of petroleum. It is a raw material for dyes, explosives and synthetic resins. It is also
commonly used as solvent as a main ingredient in paint thinners, and 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 approximately 30° and 200°C.

Biogasoline

A regular gasoline blended with plant-based bio ETBE (ethyl tertiary butyl ether), a substance created bysynthesizing petroleum-based gas with ethanol, which is derived from plants like corn and sugar cane.
Biogasoline is a regular gasoline that has passed the standards of JIS (Japan Industrial Standards) and the
Quality Control Law (Law on the Quality Control of Gasoline and Other Fuels), and can be used as original
regular gasoline.

Particulate matter

The particles contained in the smoke from smokestacks.

BenzeneA colorless liquid with aroma, it is insoluble in water. Also known as benzol. It is extremely volatile and easily
ignitable. Because benzene is toxic, its use is restricted under Occupational Health and Safety Law and mustbe handled with care. Its molecular formula is C6H6 and it is the most basic substance of the aromatichydrocarbons.

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 2008

Published: August 2008
Publisher: Japan Energy Corporation, Corporate Social Responsibility Department
2-10-1 Toranomon, Minato-ku, Tokyo, Japan 105-8407
Tel: +81-3-5573-6696 (Corporate Social Responsibility Department)
Toll-free (in Japan): 0120-150-106 (JOMO Customer Center)
Fax: +81-3-5573-6784
URL: http://www.j-energy.co.jp/english

JAPAN ENERGY CSR Report 200835

2-10-1 Toranomon, Minato-ku, Tokyo,
Japan 105-8407
Tel. +81-3-5573-6696
http://www.j-energy.co.jp/english

Japan Energy supports a forest preservation initiative
sponsored by Japan’s Forestry Agency.
This CSR Report 2008 enhanced the use of thinned
wood from forests in Hara Village, Nagano Prefecture, Japan.
Making paper in this way preserves and expands forests,
which absorb CO2.
B-（2）- 060008

This report was printed using plant-based ink to reduce emissions of volatile organic compounds (VOCs), which contributeto air pollution, and using environmentally friendly waterless printing.