CSR Report

2006

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

1JAPAN ENERGY CSR Report 2006

Editorial Policy

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Top Message
Organization and Business Performance
Japan Energy’s Management Principles
Corporate GovernanceCompliance and Risk Management
Japan Energy Businesses and Products

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

Period Covered by the Report
This report covers the CSR activities for FY2005 (April 1,2005 to March 31 2006). Some sections also coveractivities in and after April 2006.

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

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FeatureOur Responsibilities andActions as an Energy
Company
Concern for the Environment
and SafetyThroughout theSupply Chain

Working for the Environment 19

Environmental Management
20
Preventing Global Warming
23
Environmental Efforts at Reﬁneries and Plants: Part 1
25
Preventing Air Pollution / Preventing Water Pollution /Proper Management of Chemicals
Environmental Efforts at Reﬁneries and Plants: Part 2
27
Reducing Waste, Increasing Recycling /Strict Soil Contamination Measures / Green Purchasing
Environmental Efforts at JOMO Service Stations
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Environmental Efforts in Products and Services
29
R&D into Environmentally Friendly Technologies and Products 31•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

Environmental Protection Highlights

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Local Nature Protection Contributions
Japan Energy Starts the Hara
Village JOMO Ayumi-no-Mori
Forest Project

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 efﬁcient, stable provision of
fundamental materials that support industries andindividual lifestyle around the world.
The Nippon Mining Holdings Group is involved in awide range of businesses. A unique corporate groupwith a variety of operations adapted to each ﬁeld’s stageof growth and business characteristics, its activities
include everything from fundamental materials forinfrastructure-building to leading-edge IT materials thatdrive the ﬁeld of nanotechnology.

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Working for theEnvironment

Japan Energy has been publishing an Environmental
Report Since 2003, and a Social and Environmental
Report in 2005. This year’s publication is called CSR
Report 2006.
This report details the company’s wide range of
petroleum-related businesses, from exploration of
petroleum to the sale of petroleum products at JOMO
service stations. We have also strived to present the
responsibilities and efforts of each of our business ﬁelds
in an easy-to-understand format.

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

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Social Contribution Highlights

Sports Promotion andCommunity Contribution

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Feeding the Spirit throughSports:What We Hope to Achievethrough ourBasketball Clinic

Nippon Mining Holdings Group
Nippon Mining
Holdings, Inc.

e

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

Site Report 2006
Third Party Opinions
Explanation on Terms••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

JAPAN ENERGY CSR Report 2006

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Together with Society

Editorial Policy

Top Message

Our Mission: Provide a Stable Supply of Energy.
We are Fulﬁlling our Social Responsibilities to the Earth andto Our Stakeholders.
We Believe that our Daily Activities,
All of which are Based on Our Missionof “We Create Energy,” in Themselves
Constitute CSR Activities.
In April 1997, we established our Mission: “We Create
Energy.” Our aim was to activate “Energy in people,” use
the “energy of the Earth” wisely and enhance the“energy of society” by making good on our Five Pledges.
Creating energy means using the three kinds ofenergy—the energy in people, the energy of the Earthand the energy of society—in a synergistic effect in orderto help realize a society that is warm and vibrant.
The Five Pledges represent promises that our directors
and employees have made to society regarding corporate
ethics and social contribution, environment and safety,
respect for individuality, a customer-ﬁrst approach andproﬁtable growth. These are promises that must guide us ineverything we do. Putting our Mission and Business
Principles into practice is what our CSR activities are all about.
In January 2005, we boosted our CSR capacities withthe establishment of the Corporate Social Responsibility
Department, which is dedicated to the planning andimplementation of all CSR activities based on our Mission.
Japan Energy carries out CSR activities with anemphasis on compliance, environmental protection,customer satisfaction and social contribution.

Boost Compliance Capabilities,
Be a Good Corporate Citizen
At Japan Energy, compliance is a prerequisite for all
business activities. We strive to achieve strict compliancesystems and education and training programs so thatevery one of our directors and employees earnestly abides
by laws, social norms and corporate ethics.
In 1999, we established the Antimonopoly Act
Compliance Promotion Committee (now called theCompliance Committee). In 2001, we opened the Mission
Consultation Ofﬁce, where employees could inquire or
report such matters as misconduct in the company. In
2004, we created the Fundamental Compliance Rules.
With the enactment of the Whistleblower Protection Act inApril 2006, we created the Reporting System Operational
Rules to improve our previous reporting system, including
setting up of a helpline outside the company. These andother measures will help us constantly improve the ethicalmentality of our organization, prevent misconduct, clarify
compliance-related responsibilities and ensure that all
directors and employees conduct themselves sensibly.

3JAPAN ENERGY CSR Report 2006

Carrying Out Business with Concern
for the Environment and Safety
Petroleum products constitute a valuable source ofenergy and petrochemical products an important sourceof raw materials. Large-scale consumption of these,
however, causes problems like man-made carbon
dioxide emissions that impact the Earth’s environment.
Accidents at our sites can also negatively impact the
local and global environment, so these must be
prevented by taking all possible measures.
In our Five Pledges, we state that we shall “Always
give top priority to safety and the environment.” As apetroleum company, it is only natural that we takeresponsibility for preventing problems like global
warming and air pollution through strict environmental
measures in all business processes, including
exploration, development and production of
petroleum, transportation, reﬁning and marketing. As
of 1999, all of our reﬁneries and plants were certiﬁed
for ISO 14001. Such efforts ensure that ourorganization has built-in systems for continuous
environmental improvement.
And since these sites handle large amounts ofdangerous substances and high-pressure gas, we havesystems for safety management and crisis managementin case of an accident.
We also develop technologies that protect theenvironment: our research and development includes
clean energy sources, fuel oils like sulfur-free gasoline
and sulfur-free diesel fuel, environmentally friendly
products in the lubricant and petrochemical ﬁelds andplastic chemical recycling. We are also obtaining
carbon emissions credits as part of efforts to prevent
global warming.
Japan Energy is also striving to protect domestic
forests, which act as carbon sinks. Working with local
governments and non-proﬁt organizations, we areproviding funds and employee volunteers for forest
protection and tree planting activities.

2006 is the Start of a New Era ofCustomer Satisfaction:
Producing JOMO Service Stations that
Make Customers Want to Come Again
Japan Energy and JOMO service stations anddealerships work as a team in pursuit of customer
satisfaction. Everyone—from service station crew to top
management—share a desire to serve and achieve thehighest level of customer satisfaction. We are striving tocreate what we call “Value Style” stations based on theprinciple of "producing stations that make customers
want to come again.” Another way we are satisfying ourcustomers is by training our people to be rich inhumanity to enhance quality of our customer service.

Contributing to Society through Sports,
Culture and Volunteering
Japan Energy is particularly active in its contributions tosociety through the promotion of sports and culturalactivities and assistance to children’s and special needs’
groups. We also support our employees’ volunteer
activities in the community.
Japan Energy’s longest-running initiative is the
JOMO Children’s Story Award. Every year, we gather
children’s stories from around Japan, and the mostoutstanding entries are awarded and published in the
Bouquet of Children's Stories. This year marks the 37th
edition of the awards.
Since 1992, our dealerships have purchased theBouquet of Children’s Stories, with proceeds going to
the Japan National Council of Social Welfare, which
carries on the JOMO Scholarship Grant for thechildren’s welfare.
We also promote sports through the JOMO
Basketball Clinic and physical activities for special needs
people through the Click Donation program.

UN Global Compact
Japan Energy takes part in the UN Global Compact andits local network, the Global Compact Japan Network,
working with other companies to solve problems andshare successes in international problems related tohuman rights, labor, the environment and anti-corruption.
We hope that this CSR Report 2006 will give you abetter understanding of Japan Energy’s CSR activities.
We welcome your frank and honest opinions andhope to reﬂect them in our CSR activities from now on.
July 2006

Isao Matsushita

President and Chief Executive Ofﬁcer,
Japan Energy Corporation

JAPAN ENERGY CSR Report 2006

4

Organization and Business Performance

We strive to develop new resources that will allow us to secureenergy sources and boost competitiveness. We also aim to
improve our proﬁt base and achieve sustainable growth.
Company ProﬁleFiscal 2005 Performance

Name

Japan Energy Corporation

Head ofﬁce

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

FoundedDecember 1905

Established

April 1, 2003

Capital48 billion yen (as of Sep. 25, 2006)
Wholly owned by Nippon Mining Holdings, Inc.

President

Isao Matsushita

Number of employees 2,519 (as of March 31, 2006)
Main lines of business Exploration, development and production of petroleum
Manufacturing and marketing of gasoline, naphtha,
kerosene, gas oil, heavy fuel oil, LP gas andlubricating oils
Manufacturing and marketing of petrochemical products

Organization (as of June 28, 2006)
Corporate Social
Responsibility Dept.
Environment &Safety Dept.
Business
Development Dept.
President & CEO

Corporate Planning& Control Dept.

Executive
Committee
Corporate Principles
Committee
Strategic Planning
Committee
Monthly Performance
Review Committee
Branding Strategy
Committee

Account &Tax Dept.
Information
Systems Dept.

Bio Research Center
Beijing Ofﬁce

Auditing Dept.
General Administration &Human Resources Dept.
Toda Administration Ofﬁce

Net Sales

Credit Dept.
Legal Dept.

Statutory
Auditors

In FY2005, sales volume of fuel oils was 29.91 million kiloliters,
about the same as the previous year. The price of our
products rose due to the continuing high level of crude oil
prices. Net sales were 2,225.8 billion yen, up 21% over theprevious year, and income before special items increased
18% to79.9 billion yen.
In the reﬁning division, the Mizushima, Chita and Kashima
reﬁneries continue to put safety and environmental protection
ﬁrst while continuing their highly efﬁcient operation. As part ofour efforts to protect the environment, the Mizushima andKashima reﬁneries began shipping sulfur-free regular gasoline(sulfur content below 10 ppm) and gas oil to JOMO service
stations, where these fuels went on sale throughout Japan in
April 2005.
In our marketing division, everyone from service stationcrew to top management share a “mentality of hospitality” aspart of our mission to manage our company with acustomer-satisfaction focus. Based on a policy of “producing
service stations that make customers want to come back," weare striving to create “Value Style” service stations.
In our exploration and production division, we’re engaged
in petroleum exploration, development and production
business in the Middle East, China, Southeast Asia, Oceania
and Japan.

(Units: Hundred million yen)

Exploration &Production Dept.

Auditors Affairs
Ofﬁce

SupplyCoordination dept.
AuditorsCommittee

20,000Distribution Center

Petroleum Reﬁning Dept.

Non-consolidated

24,121

25,00019,864

Logistics Dept.

Crude Oil & Products
Acquisition Dept.

Consolidated

17,510Kawasaki LP Gas Terminal

22,25818,40015,92815,000Petroleum Reﬁning Research& Technology Center

10,000

Funakawa WorksPetroleum Reﬁning
Engineering Center
Marketing Planning Dept.

Mizushima
Oil Reﬁnery
Chita
Oil Reﬁnery

5,000
0

FY2003

FY2004

FY2005

Sales Dept.
Hokkaido Branch
Ofﬁce

Commercial Sales Dept.
Petroleum RetailMarketing Dept.
LP Gas Dept.

Tohoku Branch
Ofﬁce

Operating Income

Kitakanto Branch
OfﬁceTokyo Branch
Ofﬁce(Units: Hundred million yen)

Industrial Fuel Dept.

Minamikanto
Branch ofﬁce

International
Marketing Dept.

Chubu Branch
Ofﬁce

Lubricants Order Center
Lubricants Research &Development Center

Chushikoku
Branch Ofﬁce

378

Mizushima
Oil Reﬁnery

300

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

0JAPAN ENERGY CSR Report 2006

855
759

600

Kyushu Branch
Ofﬁce

Sodegaura Lubricants Plant

5

988

923
900

Non-consolidated

Kinki Branch
Ofﬁce

Lubricants Dept.

Petrochemicals Dept.

Consolidated

296

FY2003

FY2004

FY2005

Primary Afﬁliated Companies
Petroleum exploration, development
and production
Japan Energy Development Co., Ltd.
Southern Highlands Petroleum Co., Ltd.
NMC Pearl River Mouth Oil
Development Co., Ltd.
Abu Dhabi Oil Co., Ltd.
United Petroleum Development Co., Ltd.
Crude Oil transportation
Nissho Shipping Co., Ltd.
Reﬁning and manufacturing of
petroleum products and related
businesses
Kashima Oil Co., Ltd.
Kashima Aromatics Co., Ltd.
Nikko Liqueﬁed Gas Co., Ltd.
Petrocokes Ltd.
Cactus Industry Co., Ltd.
Funakawa Kosan Ltd.
Oga Techno Co., Ltd.
JOMO Technical Research Center Co., Ltd.
Sanyo Kiki Kentei Co., Ltd.

Isewan Sea Berth Co., Ltd.
JS Initiative Ltd.
Transportation (in Japan)
Nippon Tanker Co., Ltd.
Toshin Yusosen Co., Ltd.
JLS Corporation
Chubu Sekiyu Yuso Co., Ltd.
Kinki Ekitai Yuso Co., Ltd.
Marketing of petroleum products,
LP gas and petrochemicals, andrelated businesses
JOMO-Net Sapporo Co., Ltd.
JOMO-Net Tohoku co., Ltd.
JOMO-Net Kita-Kanto Co., Ltd.
JOMO-Net Higashi-Tokyo Co., Ltd.
JOMO-Net Nishi-Tokyo Co., Ltd.
JOMO-Net Minami-Kanto Co., Ltd.
JOMO-Net Tokai Co., Ltd.
JOMO-Net Kansai Co., Ltd.
JOMO-Net Sanyo Co., Ltd.
JOMO-Net San-in Co., Ltd.
JOMO-Net Kyushu Co., Ltd.

Consolidated(Units: Hundred million yen)

Non-consolidated

990
878

900

Oil Stockpiling
Fukubi Oil Storage Co., Ltd.
Akibi Co., Ltd.
Kyodo Terminal Co., Ltd.
Okinawa Terminal Co., Ltd.
Other businesses
IS Japan Co., Ltd.
am /pm JAPAN Co., Ltd.
Overseas businesses
Irvine Scientiﬁc Sales Co., Inc.
Japan Energy (Singapore) Pte. Ltd.
Japan Energy (Oceania) PTY., LTD.
Japan Energy (U.K.) Ltd.
Japan Energy (Shanghai) Trading Co., Ltd.
Shanxi Japan Energy Lubricants Co., Ltd.

(as of April 1, 2006)

Interest-Bearing Liabilities

Income Before Special Items(Units: Hundred million yen)

J-Quest, Co., Ltd..
Asia Shoji Co., Ltd.
Nissan Sekiyu Hanbai Co., Ltd.
JOMO Retail Service Co., Ltd.
Ryoyu Oil Co., Ltd.
Asahikawa Sekiyu Co., Ltd.
Toyo Sekiyu Hanbai Co., Ltd.
JFE Shoji Sekiyu Hanbai Co., Ltd.
Iwami Kotsu Shoji Co., Ltd.
Inoue Shoko Co., Ltd.
Taiyo Koyu Co., Ltd.
Itochu Petroleum Sales Co., Ltd.
JOMO Support System Co., Ltd.
JOMO Enterprise Co., Ltd.
JOMO Guardian Co., Ltd.
JOMO Net Outsourcing Co., LTd.
JOMO Educational Information Center Co., Ltd.
Kyo-Pro Co., Ltd.
JOMO-Pro Kanto Co., Ltd.
Gas Net Co., Ltd.
JOMO Sun-Energy Co., Ltd.
Japan Energy Analytical ResearchCenter Co., Ltd.
Toa Tansan Co., Ltd.

Non-consolidated

Consolidated

7,540
799

7,500

600

6,847

6,438

680
5,000

360

2,957

300

237

0

FY2003

3,220

3,149

2,500

FY20040

FY2005

FY2003

FY2004

FY2005

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

Number of Employees

Total Assets(Units: Hundred million yen)

Consolidated(Units: Person)

Non-consolidated

Consolidated

Non-consolidated

11,963
12,000

9,000

9,925
7,803

10,496

9,841

4,500

4,254

4,225

4,180

8,388
3,000

2,694

2,623

2,519

6,000
1,500

3,000

0

FY2003

FY2004

FY20050

FY2003

FY2004

FY2005

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

JAPAN ENERGY CSR Report 2006

6

Japan Energy’s Management Principles

Putting Our Mission and Business Principles into Practice
Our Mission, “We Create Energy,” indicates the direction of our company is heading in. To create energy, all of our directors andemployees must share the same sense of values and commitment. Our Business Principles consist of the Five Pledges,
standards of action for implementing our Mission. Central to our CSR activities is the obligation of each and every director andemployee to carry out their day-to-day work with a focus on the Mission and Business Principles.
Japan Energy’s Mission and Business Principles (established April 1997)

Our Mission

WE CREATE ENERGY
For a more cohesive and dynamic society.

Energy in People

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

Energy of the Earth

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

Energy of Society

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

Our Business Principles

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

7

JAPAN ENERGY CSR Report 2006

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

Creating Systems that StrengthenInternal Control
Japan Energy’s goals are to speed up decision-making, make
operations more efﬁcient and clarify responsibilities. To this end,
we clariﬁed the difference between the board of directors’
functions and operating ofﬁcers’ execution functions.
In carrying out their functions, directors and employees areto abide by relevant laws, the company’s articles ofincorporation, our Mission, the Basic Compliance Rules andother in-house rules and notices. To make all this effective,
Japan Energy has numerous systems in place.
Ever since the establishment of our Mission in 1997, theCorporate Principles Committee (originally the Corporate
Principles Headquarters Meeting), chaired by our company
president (originally the Chief Ofﬁcer of the Headquarters), hasmade it a rule to meet once a month. Made up of ofﬁcers incharge or in supervision of each department, this committee
discusses company-wide issues related to our Mission and CSR.
The Compliance Committee was established in July 2003
as a subsidiary body of the Corporate Principles Committee
and sets policy on company-wide education and awarenessactivities and examines progress that each department ismaking in compliance. Both the Corporate Principles
Committee and the Compliance Committee are run by the
Corporate Social Responsibility Department.
In addition to the Corporate Principles Committee, threeother advisory bodies have been established: the Strategic
Planning Committee, the Monthly Performance Review
Committee and the Branding Strategy Committee. These
committees allow the company’s highest level of management toexamine critical issues with a specialized focus, thus allowing us
to improve the efﬁciency and transparency of our management.
Note: In line with the new Japanese Corporate Law , we abolished the Boardof Directors, Board of Auditors and Board of Executive Ofﬁcers, andestablished the Executive Committee and the Auditors Committee,
effective as of June 28, 2006.

System for Promoting Our Mission and Compliance
President & CEO

Mission promotion managers
in each department

Corporate Principles
Committee

Mission promotion managers
in each plant

Business ofﬁces(CSR Department)
Compliance
Committee

Mission Consultation
Ofﬁce

Mission promotion managers
in each branch

Helpline outside
the company

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

Participation in the United Nations Global Compact
Japan Energy supports the United Nations Global Compact(below referred as GC) and its 10 principles in four areas
including human rights, labor, the environment andanti-corruption. Through CSR activities based on our
Mission and Business Principles, we pledge to abide by the
10 principles of the Global Compact.
In May 2004, our Basic Compliance Rules consolidated
our promises for the prevention of child labor and forced labor,prohibition of unfair discrimination, environmental protection
and clean relations with politicians, government and otherpublic ofﬁces. Adherence to these rules by employees is
ensured by regular in-house education and training activities.
We also offer employees opportunities to raise theirawareness of global issues; for example, through activities
to raise money for NGOs that conduct education-support
in developing countries and through the sponsoring of
joint events with concernedorganizations that bring employees
close to important issues facing theworld today.
Please refer to page 46 for details about our
support for employees’ volunteer activities.

JAPAN ENERGY CSR Report 2006

8

Japan Energy’s Management Principles

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

Fundamental Compliance Policy

System of Implementation forCompliance

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

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

Concrete Standards of Compliance

Mission Consultation Ofﬁce for Internal Reporting

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

Part of efforts to promote our Mission. The ofﬁce responds
to questions, opinions and doubts expressed by directors
and employees, and hears complaints on in-housemisconduct and other issues based on our Fundamental
Compliance Rules.
Formulated in June 2004, the Whistleblower Protection
Act protects whistleblowers from dismissals, demotion,
salary cuts or other unfair treatment. Japan Energy strictly
prohibits organizational and personal reprisals on
whistleblowers and has written protection of whistleblowers
into its Basic Compliance Rules.
With enactment of the Whistleblower Protection Act inApril 2006, we strengthened our reporting systems by
establishing our Reporting System Operation Rules, which
detail basic policy, procedure and notes for the operation ofreporting systems. At this time, we also established the
Helpline outside the company.

Compliance Education
Japan Energy has always made compliance education an
integral part of education on the company Mission and
CSR. Our implementation policy is to take every opportunity
to honestly and frankly educate directors and employees sothat a spirit of compliance takes ﬁrm root in the company.
In FY2005, we implemented compliance education in the
training programs for new employees and newly appointed
managers. As well, each department of every Japan Energysite had a lecture by an outside expert aimed at Mission
Promotion Managers. With the start of the Personal
Information Protection Law in April 2005, we began a personal
information protection e-learning course for all employees.

19. Assurance of the security of company information
20. Appropriate management of exports
21. Prohibition of trading for speculative purposes
22. Rigorous crisis management

Compliance training at the Mission Promotion
Managers Meeting

9JAPAN ENERGY CSR Report 2006

Risk Management
Risk management is divided into risk assessment (preventative),risk control (dealing with problems) and risk communication(public relations). Japan Energy places particular emphasis on
risk assessment as a way to prevent problems from everoccurring. In FY2005, we introduced 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 safetyof processes.

Preventing Disasters,
Taking Emergency Measures
Japan Energy’s business involves the handling of large amountsof dangerous substances and high-pressure gases. That’s why
we take every opportunity for thoroughness and make it a toppriority to prevent disasters like ﬁres, explosions and work-related
accidents. We do this by thoroughly maintaining and ensuring theproper operation of facilities, and by conducting regular training for
employees including TPM (Total Productive Maintenance). In April
1997, we established the Risk Management Rules, which
describe systems for dealing with natural disasters like typhoons
and earthquakes as well as terrorist attacks.
In April 1975, we established the Disaster Emergency System
Guidelines, which detail the chain of command forcommunications and for rescue and repair operations in the eventof an accident at reﬁneries, plants, delivery terminals, duringtransportation by tank trucks or at ﬁlling stations or service
stations. These guidelines help employees properly and promptly
carry out disaster measures. They are also regularly checked
and updated to ensure that they are relevant and functional.
Occurrence of Emergency Situation
Initial response

Post-measures

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

Resolution ofsituation

Asbestos: Survey and Measures
In July 2005, we began a survey of asbestos use in our
reﬁneries, plants, delivery terminals, R & D Center, JOMO
service stations and other Japan Energy sites. As a result of thesurvey, every point of asbestos that was judged to be at risk ofdispersing into the air was either removed or given protective
covering. This work was completed by March 2006. We arecontinuing to carry out detailed surveys of all sites for thepresence of asbestos.
We are also removing asbestos-based insulation covering,and gaskets and other materials on machinery and pipes in our
reﬁneries and other facilities, and installing replacements that
contain no asbestos. Health check-ups of all current and former
employees carried out until March 2006 revealed no cases ofmesothelioma or other asbestos-caused illnesses.

Purpose of Our Mission Guidebook
Japan Energy takes every opportunity to stress the valueof its Mission and Business Principles, which represent thecodes of conduct for all directors and employees.
In April 1997, we established our Mission and Business
Principles and released the Mission and Business Principles
Instruction Manual. Shortly after, we established the
Corporate Principles Headquarters and began distributing a
pocket-sized booklet called the Mission Guidebook, which
explains our Mission and Business Principles.
Then, in 1999, we published a revised version of theMission and Business Principles Instruction Manual, and in
February 2002, came out with an 80-page Mission Guidebook
compiling all previous material and its explanations.
This guidebook is distributed to not only all Japan Energy
directors and employees but to group companies,business partners, relevant government agencies, tradeassociations and other companies in our industry. This is a
way of showing that Japan Energy is serious about acting
on its Mission and Business Principles. To ensure thatthese are always in the minds of all directors andemployees we held Mission Guidebook Explanation
Meetings at the head ofﬁce, branches and all other sites.

Dealing with a Disaster
If by some chance a disaster occurs at a Japan Energy site, thesite in question shall make the following documents; (1) adisaster survey report, (2) scheduling charts ofcountermeasures for the problem and a plan to prevent its
reoccurrence and (3) an analysis of the causes of the disaster.
These reports are sent to headquarters upon completion, where
they are examined by the Companywide Standing Committee
for Safety and Health. They are ﬁnally shared with the entire
company so that similar accidents can be prevented.

The Mission Guidebook

Main Content of the Mission Guidebook
Message from the President
Chapter 1: Significance of the Mission
1. What is the Mission?
2. Role and necessity of the Mission
3. Relation of the Mission to business activities
4. Social responsibility, corporate evaluation
and risk management
5. Corporate ethics
Chapter 2: Japan Energy’s Mission
1. How the Mission was established,
how it is progressing
2. Purport of the Mission
3. Purport of the Business Principles
4. Efforts to live up to the Mission
Chapter 3: Putting the Mission into practice
1. About Compliance
2. About social contribution
3. Business principles in each division
Chapter 4: Questions and answers

JAPAN ENERGY CSR Report 2006

10

Japan Energy Businesses and Products

All of the processes involved in our business of bringing
you petroleum products are carried out with the utmost
concern for the environment.
Petroleum Exploration, Development and Production

Crude Oil Transportation

Exploration
Seismic exploration

Test drilling and exploration wells

Ever since we successfully developedin the Omonogawa oil field, Akita
Prefecture in 1933, we have been
engaged in petroleum explorationand production (E & P) businesses
in Japan and around the world.
“Exploration” of petroleum uses
seismic waves to detect undergroundstructures, followed by the drillingof exploration wells. If petroleum
is discovered, the “development”
phase follows. This involves thedrilling of production wells and theconstruction of facilities forprocessing, storage, and offloading.
The final stage is “production.”
This petroleum development
business is carried out by Japan
Energy Development Co., Ltd. andother group companies.

Feasibility study

Development
Oil and gas ﬁeld development
plan determination
Drilling of production wells
Construction of the facilities forprocessing, storage and ofﬂoading
Production
Production

Crude Oil is transported by large
tankers (VLCCs, Very Large Crude
Oil Carriers), weighing more than
250,000 deadweight tons from theMiddle East to our refineries in astable, efficient manner. There areseven VLCCs in service, mainly
chartered from the group company
Nissho Shipping Co., Ltd. Allefforts are made to ensure safe
transport and minimal
environmental burden: safety-firstis foremost in all navigation, oil
pollution prevention measures aretaken, and advanced navigation
technologies reduce the amountof fuel needed for the tankers.

Crude oil and natural gas shipment

Japan Energy Group E & P Projects

OnshoreOffshore

NMC Pearl River Mouth Oil Development Co., Ltd.
(People’s Republic of China)
Japan Energy share: 95%

United Petroleum Development Co., Ltd.
(Qatar, United Arab Emirates)

Iburi-Oki

Japan Energy share: 35%

Sanriku-Oki

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

Southern Akita

Japan Energy share: 31.5%

Nakajo Gas Field,
Tainai Niigata
Sado-Oki

Murray Petroleum Co., Ltd. (Papua New Guinea)
Japan Energy share: 23.3%

Southern Highlands Petroleum Co., Ltd. (Papua New Guinea)
Japan Energy share: 80%

Universe Gas & Oil Company Inc. (Indonesia)
Japan Energy share: 12.48%

11

JAPAN ENERGY CSR Report 2006

Reﬁning andStockpiles at Reﬁneries

Crude oil from oil fields in Japan andoverseas is transported to our refineries,
where it is refined into gasoline and otherfuels. Refineries also play an importantrole by stockpiling petroleum for
emergencies.
Petrochemical products, lubricatingoils and LP gas are also manufactured inour refineries.

Production and storage of LP gas

Transportation in Japan(coastal tankers)

Fuel oils and otherproducts are transported
to domestic delivery
terminals by coastal
tankers.

Delivery Terminals
LP gas Secondary
Terminals

Marketing of
petroleum products

JOMO service stations
sell petroleum products
like gasoline and engine
oil, as well as wash andmaintain customers’ cars.
We are currently striving
to create “Value Style”
service stations, where
customers can enjoy theultimate service andcomfortable surroundings.

Marketing ofLP gas•Propane•Butane•Autogas

Production of lubricating oils

Petroleum products arereceived from tankers,
then stored and shipped.

Domestic transport(tank trucks)

Marketing of
lubricating oils
•Lubricating oils forautomobiles•Industrial lubricating oils
•Refrigeration lubricants•Others

Marketing of
petrochemical
products

Production of petrochemical products
Petroleum products aretransported overlandfrom refineries anddelivery terminals to
JOMO service stations
and customers.

•Paraxylene•Benzene•Normal paraffin•NS Clean•Heavy aromatic solvents•Others

JAPAN ENERGY CSR Report 2006

12

Feature: Our Responsibilities and Actions as an Energy Company

Concern for the Environment and Safety
Throughout the Supply Chain
Energy Solutions for People and the Environment—At Japan Energy, we offer a stable supply of the energy thatis indispensable for people’s everyday lives. We do this with an integrated supply chain that includes allprocesses: exploration development, and production of petroleum ﬁelds, reﬁning and storage, distribution andﬁnally the services we offer at our JOMO service stations. And an integral part of this entire supply chain isconcern for the environment and safety. Japan Energy is aware of its social responsibility as a corporate citizen
and does all it can to build a world where people can live in peace of mind.

Crude oil exploration,
development andproduction

Crude oiltransportation

Stable supply

Marketing of
petroleum products

Minimalenvironmental
impactSafetymanagement

Distribution( Transport in Japan)

13

JAPAN ENERGY CSR Report 2006

Reﬁning and,stockpiling

Crude Oil
Exploration,
Development
and Production

Long-Term, Stable Supply of Energy to
Resource-Scarce Japan and Other Countries

Our Responsibilities and Actions

Disposal of Associated Water into Subsurface
Formations Prevents Sea Pollution

Japan is one of the world’s largest energy consumers; however,the supply of energy from domestic natural resources is limited.
One of Japan Energy’s missions is, therefore, to provide long-term
stable supply of oil and natural gas that supports the industries
and communities in Japan and around the world.
Japan Energy Development Co., Ltd. (JED), a wholly owned
subsidiary of Japan Energy Corporation, is responsible for
exploration and production (E&P) of the hydrocarbon resources inJapan and overseas, including the United Arab Emirates, Qatar,
China, Papua New Guinea, and Indonesia. In carrying out the E&P
business around the world, JED’s primary objective is to take thenecessary precautions to prevent all accidents, injuries, andoccupational illness, and to protect the natural environment. JED
also maintains close relationships with host governments and local
communities to foster mutual understanding and cooperation.

In ADOC’s operations, crude oil is produced with a large amountof associated water, which contains oily components and solid
particles. To prevent sea pollution and to meet the strict emission
standards set by ADNOC, this water is properly treated anddisposed of into the subsurface non-hydrocarbon-bearing
formations at a depth of over 1,000 meters. The oily sludge
accumulated in the water treatment facility is properly managed
through an authorized waste management process. All suchmeasures are designed to ensure that none of the processes
causes environmental pollution.

Injection of Associated Gases into Oil-Bearing
Reservoirs Minimizes Air Pollution and Global Warming
Abu Dhabi Oil Co., Ltd., (ADOC), in which JED has a 31.5%
stake, operates three offshore oil ﬁelds in the Abu Dhabi Emirate.
In line with the Emirate’s Environmental Policy and Guideline,
ADOC has implemented two challenging environmental projects,
the Sour Gas Injection Project and the Zero Flaring Project, bothof which are intended to minimize the emission of sulfur dioxide
and carbon dioxide into the atmosphere.
The natural gas associated with crude oil production had
long been ﬂared because it had not been feasible to use. But
these ﬂares were considered to be a main cause of air pollution
and global warming. By implementing these environmental
projects, the associated gases have been collected,
compressed with high-pressure compressors, then re-injected
into the subsurface oil reservoirs at approximately 3000 meters
below sea level. The injection of the high-pressure toxic sour
gas was successfully initiated in 2000 and the remaining
associated gases were collected and injected into the oil
reservoirs by 2001, thus achieving “near zero ﬂaring” with asubstantial reduction of CO2 exhaust gas.
As a signiﬁcant achievement involving innovativetechnology, the Sour Gas Injection Project was honored by thestate-owned Abu Dhabi National Oil Company (ADNOC) withthe ﬁrst prize in the ADNOC 2000 HSE Awards.

Mubarraz Processing Facility for Abu Dhabi Oil Co., Ltd.

Safety through Equipment and Education
The Japan Energy Group maintains close relationships withhost governments and local communities, promoting
employment of locals and establishing a systematic Health,
Safety and Environmental Management System that ensuressafe, healthy, and environmentally friendly operations.
In addition, we have a shutdown system that allows ﬁeld
operations to be immediately stopped in case of emergency.
We strive to improve HSE performance by installing proper
equipment, implementing the systematic HSE Management
System, and holding regular training, education, and drills for
emergency responses.

JAPAN ENERGY CSR Report 2006

14

Crude Oil
Transportation

Thorough Safety in Tanker Navigation, andMinimal Environmental Impact in Cargo Operation

Our Responsibilities and Actions
We mainly use large tankers (called VLCC) to transport crude oilloads of approximately 300,000 kl per voyage to Japan.
Protecting the ocean environment by navigating safely is one ofour main responsibilities.
An accident of a tanker carrying large amounts of crude oil
can severely pollute the ocean. The IMO (International Maritime
Organization) has required that all crude oil tankers have adouble-hull construction by 2015 so that oil will not leak even if
the ship’s hull is damaged. Currently, six of Japan Energy’s seven
VLCCs have double-hull construction, and we plan to have allcompleted by March 2007.

What Group Company Nissho Shipping Co., Ltd.
Is Doing•Preventing Ocean Pollution, Streamlining Navigation, andReducing CO2 Emissions
Barnacles and blue mussels grow on the hull of a tanker, slowing
it down. To prevent this, Nissho Shipping Co., Ltd. used to paintthe ship’s bottom with paints containing organotin. The company
is now switching to paints without organotin, however, in order toprevent ocean pollution. It also abides by IMO rules by purifying
the ballast water (seawater) it takes on prior to departure before
disposing of it into the waters of the destination port, since
dumping such ballast water can damage the marine ecosystem.
The company also complies with International Convention for thePrevention of Pollution from Ships by strictly separating andtreating waste from the tankers.
We are also trying to ﬁnd efﬁcient tanker operation
technologies that reduce energy losses and thus improvenavigation fuel efﬁciency and reduce CO2 emissions. We use
electronic navigational charts, which utilize GPS to locate current
position, and weather routing, which uses real-time weather andmarine conditions information to select the best navigationalcourse. We also develop and improve on environmentally friendly
navigational technologies, such as electronically controlled engines
whose fuel injection and exhaust timing is controlled by computer.

15

JAPAN ENERGY CSR Report 2006

Double-hull tanker
Inner structure(inner hull)
Crude oil

Crude oilSingle-hullconstruction

Double-hullconstruction

Outer structure(outer hull)•Protecting Sailors and Maintaining Safe Tanker Operation in
the Event of Marine Accidents, Terrorist Threats, Piracy, andArmed Conﬂicts
All of Nissho Shipping Co., Ltd. tankers are equipped with
GPS-compatible devices (electronic navigational charts) giving
precise information such as location and ocean depth. The
company has also developed a Vessel Trafﬁc Management
System that uses maritime communication satellites todetermine operational conditions in real time, and a crew
management system for ensuring that tankers are operated by
the most competent crews. These are just some of the ways
we prevent maritime accidents and maintain safe navigation.
Other safety-related efforts include pre-boarding training
for all crew members, regular guidance for on-board
procedures and the dispatching of safety inspectors upon
arrival in port.
To cope with not only marine accidents but also piracy,
terrorist threats, and armed conﬂicts, Nissho Shipping Co.,
Ltd. has a communication systems network compatible with
the International Ship and Port Facility Security Code (ISPS
Code), a set of measures to enhance the security of ships
and port facilities. All tankers are equipped with Ship Security
Alert System (SSAS) for alerting the company, Japan Coast
Guard, or other relevant organs when the ship experiences asudden security threat. There is also a “pirate sensor” thatuses an optical sensor to trigger an alarm if suspicious ships
come close. All these measures ensure that tankers havethorough autonomous security to deal with threats like piracy
and terrorism.

Reﬁning andStockpiling

Our Reﬁneries: Reducing Environmental Impacts
and, Boosting Safety and Disaster-Prevention
Measures to Cover All Possible Emergencies

Our Responsibilities and Actions
The role of reﬁneries is to reﬁne crude oil and produce
petroleum products. They are also responsible for stockpiling toensure a stable supply of crude oil and petroleum products.
Japan Energy's three reﬁneries in Japan make safety, disasterprevention and environmental protection top priorities, and carryout Total Productive Maintenance (TPM) with the participation of
all employees.
Regarding safety and disaster prevention, reﬁneries have aﬁre-prevention organizational structure with the very latest
ﬁre-ﬁghting facilities, and carry out regular disaster-prevention
drills that prepare workers for any scale of disaster. As well,
reﬁneries are tied to local ﬁre-ﬁghting departments and police
departments through emergency networks in a system brings
together Japan Energy and local communities to ensure safety
in the event of a disaster. We also share information, such as
causes and solutions, on past disasters with the entire
petroleum industry to prevent such disasters from reoccurring.
On the environmental protection front, our reﬁneries are
certiﬁed for the ISO 14001 environmental management

Distribution(Transport inJapan)

standard and strive to reduce environmental impact in every
way possible. In addition to equipping facilities with devices toremove substances like sulfur oxides, nitrogen oxides and sootand dust, we purify wastewater using the active sludge method,
prevent water pollution, and reduce and recycle waste.
Because making
low-benzene gasoline andsulfur-free gasoline
requires reﬁneries to use
more energy compared toconventional gasoline
reﬁning, we try to make up
for this by saving energy
through methods such aswaste heat collection, heatcollection using heatexchangers and reductionof steam loss.
For more details on
refineries, see pages 21-30.
Sulfur-free gasoline production units

Transporting Products by Coastal Tankers,
Railway and Tank Trucks Efﬁciently andwith Minimal Environmental Impact

Our Responsibilities and Actions
The role of our distribution division is to safely transport
petroleum products from reﬁneries to delivery terminals and
JOMO service stations.
The products are delivered overland by tank trucks andrailway tanker cars, and oversea by coastal tankers, with thesafest, most efﬁcient transportation methods chosen based on
the routes and distances. Raising transportation efﬁciency is notjust about cutting costs: it also reduces fuel used and thus theamount of CO2 emissions that contribute to global warming.
Japan Energy has been using larger and larger tank trucks andcoastal tankers, and delivering by night to avoid metropolitan
trafﬁc jams, resulting in increased transportation efﬁciency andreduced fuel consumption every year.
We also offer safety education for tanker crews and drivers. We
also have intelligent safety devices to prevent accidents. For

example, to prevent mishaps caused by, accidentally ﬁlling akerosene tank with gasoline at a JOMO service station or customer
company, we have a device that automatically detects the type ofoil inside when a tank truck hose is inserted into the mouth of thetank, effectively preventing the mixing of different types of fuel.
For more on distribution, see page 24.

Filling a tank truck with a safety belt

JAPAN ENERGY CSR Report 200616

Marketing ofPetroleum
Products

Building Environmentally Friendly, Safe Service
Stations Where Customers Feel at Ease

Our Responsibilities and Actions

Preventing Air and Soil Pollution, Recycling
Waste and Wastewater

A JOMO service station’s role is to be a necessary part of thecommunity by providing a safe supply of the gasoline, gas oil,and kerosene that are essential to people’s day-to-day lives.
That’s why JOMO service stations are operated with theutmost concern for avoiding danger, with high standards ofsafety to deal with calamities like ﬁres or earthquakes, and withmeticulous daily checks and reviews, as well as legal inspections.
We also have a wide range of measures to protect theenvironment: we prevent the evaporation of gasoline and othervapors into the air and the leaking of such oils into the soil, andwe recycle waste and purify wastewater.
We are also working to give visitors to JOMO service
stations a comfortable, relaxing atmosphere through thedevelopment of attractive “Value Style” stations.

In February 2003, Japan enacted the Soil Contamination
Measures Law, which introduced legal mechanisms forsurveying soil pollution from speciﬁed toxic substances*1 andpreventing damage to health. These speciﬁed toxic substances
include the benzene in regular gasoline and the lead that used
to be contained in high-octane gasoline. But to expand themeasures to prevent not only leaks of gasoline but also fuels
like gas oil and kerosene, Japan Energy got together withspecialist companies both inside and outside the group toestablish the Japan Soil Solutions Group (JSSG). Through the
JSSG, all nationwide JOMO service stations do everything
possible to prevent leaks into the soil.
And to prevent air pollution, we have equipment forcollecting the hydrocarbon vapor*2 that is emitted during natural
vaporization of the liquid when discharging petroleum products
from tank trucks at JOMO service stations. We also recycle
waste including used tires, lubricating oils and batteries.
Another way we reduce environmental impact andeffectively use resources is to take the wastewater generated
from our car washes, purify it by separating the oil and sludge,
and reuse it for the car washes.

For more on “Value Style” stations, see page 38.

Thorough Safety Measures Make JOMO Service
Stations Community Lifelines in the Event of a Disaster
JOMO service stations are designed to comply with the safety
standards set under ﬁre defense laws and regulations, and all
facilities and equipment have built-in safety measures.
Apart from the service station’s entrance, there is a ﬁreproof
wall around the site, and the building itself is ﬁre resistant thanks
to the use of non-ﬂammable construction materials. Undergroundtanks for storing gasoline and other petroleum products have adouble-layer construction to prevent ignition or leaks, and they are
extremely earthquake resistant. The safety and strength of service
stations was proved during the 1995 Great Hanshin Earthquake inand around Kobe, Japan, when none experienced ﬁres or
structural damage. We are also building more and more service
stations that can act as community lifelines in the event ofdisasters, equipping them with private power generators to aid
emergency vehicles like ﬁre trucks and ambulances or watertanks that store drinking water for local residents.

For more on environmentally friendly JOMO service stations, see page 28.
*1 Speciﬁed toxic substances: Speciﬁed under the Soil Contamination
Measures Law, these are contained in the soil and are likely to damage
people’s health.
*2 Hydrocarbon vapor: If emitted into the atmosphere, this causes global
warming and photochemical oxidant (photochemical smog).

Soil pollution survey

Emergency Power Generating Facilities
To allow us to continue supplying gasoline and other products
at JOMO service stations in the event of a disaster-related
power outage, from June 2006 we began equipping somePrivate power generator

17

JAPAN ENERGY CSR Report 2006

Power switchboard

JOMO service stations with private power generators andpower switchboards to generate power during disasters.
This equipment will be able to power two or three dispensing
pump, two canopy lights (400-W mercury lamps) and two
indoor ﬂuorescent lights (40 W each), and supply fuel for theestimated four to seven days that power would be out due
to a disaster.
These emergency power generating facilities have been
installed in 36 JOMO service stations, mainly those close to urban
areas, with plans to expand this number to 100 in the future.

What the Customer Wants: The Ultimate
Service and Comfortable Surroundings
It goes without saying that JOMO service stations should offer
service that is known and trusted by the local community. We
train our people so that they offer customers the ultimate
service. We constantly strive for excellent customer service
through measures that include customer satisfaction surveys
focusing on treatment of customers and cleanliness, and staff
suggestion boxes that allow station staff to offer and shareideas for improving service.
In order to offer customers service stations that they ﬁnd
attractive and comfortable, we are currently creating what wecall “Value Style" service stations.
We’re standing in the customers’ shoes in creating service
stations that make them want to visit us and come back again
and again; service stations that offer customers a comfortable,
enjoyable experience.
We’re also converting service stations to barrier free zones,
with slopes going into the sales room and restrooms so thateveryone has access to the all our facilities.
And we’re adapting service stations to the needs or ourcustomers and particular areas by teaming up with businesses
in other industries to create totally unique facilities; some of ourservice stations, for example, have beauty parlors andlaundromats.

A female service station attendant serves
a customer

Magazine area

A Message to Japan Energy
Dealerships Rely On Further Support
From Japan Energy
Gas stations have traditionallyconcentrated on creating a lively
atmosphere. But since weadopted the “Value Style,” acustomer-oriented service
mentality has taken over at ourservice station. And this mentality
Toshihiro Nakai
has helped us increase the number
Station Manager JOMO-NETof customers, particularly women.
Higashi-Tokyo Co., Ltd.
We plan to focus even more on
educating our staff. In future, we hope to receive further
support from Japan Energy in the areas of sales
promotion, environmental protection, and safety.

Message from the Front Lines
CSR Through Team JOMOThe Petroleum Retail Marketing
Department supports store
management, sales promotion, andenvironmental and safety measuresat dealerships and JOMO service
stations across Japan. In future, weplan to carry out explanation andHiroshi Yamashita education activities, called TACS*,
Retail Support Manager
on retail support programs such as
Petroleum RetailMarketing Department
improved customer satisfaction andoperational improvement. This will
help Japan Energy and service stations—Team JOMO—
work together to boost CSR.
* TACS: Top of Area to Customers’ Satisfaction. Service stations aim forwhat customers consider to be the highest level of customer
satisfaction.

For more on JOMO service
stations, see pages 37-38.
A sales room in a “Value Style” service station

JAPAN ENERGY CSR Report 2006

18

Working for theEnvironment

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

Material balance

INPUT

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

Transportation
Fuel(crude oil conversion): 270,000 kl

Crude oil processed: 20.75 million kl
470 million kWh
Electricity:
Fuel(crude oil conversion): 1.74 million kl
Fresh water: 19.73 million tons
180 million tons
Seawater:•Transport of crude
oil by tanker

Reﬁning,
stockpiling•Reﬁning andstockpiling at
reﬁneries

Transportation
Fuel (crude oil conversion): 90,000 kl•Transport to delivery
terminals and JOMO
service stations

Marketing•JOMO service
stations receive andsell gasoline

Measures

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

Measures

Environmental impact•Oil spills•Hydrocarbon vapor

OUTPUT•Double hull tankers•Inert gas system

CO2 emissions:

700,000 tons

CO2:

4.59 million tons

Environmental impact

MeasuresSOx:4,363 tons

•Air pollution•Water pollution•Waste•Soil contamination•Tanks with ﬂoating roofs•Energy conservation•Desulfurization •Denitration•Wastewater treatment•Decrease in volume, recycling ofresourcesNOx:

2,879 tons

Measures

Environmental impact•Air pollution

Amount sold
Flammable oil 6.188 million kl
Jet fuel
635,000 kl

VOCs:
COD:

212 tons
4,961 tons
56 tons

Waste to landﬁll:

1,129 tons

CO2 emissions:

230,000 tons

•Decrease of fuel consumption

Measures

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

Soot and dust:•Collection of vapor•Wastewater puriﬁcation•Proper management•Pollution surveys

Kerosene 2.801 million kl
Gas oil
4.367 million kl

CO2 emissions: 36.87 million tons

Fuel oil A 2.833 million kl
Fuel oil C 2.595 million kl

Note: The above figures were calculated according to the LCA (life cycle assessment) method (an assessment of the environmental impact after measuring resource
consumption and emissions in all processes: manufacturing, use, and disposal of products.

19

JAPAN ENERGY CSR Report 2006

Working for the Environment

Environmental Management

Environmental Protection Policies
Japan Energy’s Mission states that we will “use the Energy of
the Earth wisely” and “always give top priority to safety andthe environment.” This thinking was the basis for the creationof our environmental policies, which guide us in protecting theenvironment and reducing environmental impact.
Environmental Protection Policies

1. We will strive to prevent pollution by considering
the environmental effects of all our operations.
2. To use resources wisely, we will strive to recycle
and use energy efﬁciently.
3. We will comply with all relevant laws and strive
to attain environmental standards that earn thetrust of the community.
4. We will contribute to improvement of the
global environment through the researchand development of environmentally friendly
products and technologies.

The Roots of Our Environmental Protection
Our environmental protection efforts can be traced backto 1914, when Kuhara Mining Co., our predecessor
company, spent a huge sum of money to build a giant
stack to prevent smoke hazards from the Hitachi Mine.
In the copper mining and smelting that could very well
be called the start of Japanese industry, every company
battled with the problem ofsmoke hazards. After muchtrial and error, a solution
was ﬁnally arrived at withthe construction of what
was at that time the world’s
tallest smokestack.

Giant Stack at the Hitachi Mine

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

ISO 14001 Certiﬁed Sites
Japan Energy complies with environmental rules and regulations
that help the company improve its ability to protect theenvironment.
By 1999, all of our reﬁneries and plants had been certiﬁed
for ISO 14001*. We have an organizational structure for planningand implementing regular environmental protection efforts—
using less energy, recycling, reducing waste, and preventing air
and water pollution—that are geared to the needs of each of
the business ﬁelds and regions we operate in.
* ISO 14001: An internationally accepted standard for environmental
management systems issued by the ISO (International Organization forStandardization).

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

Headquarters
Reports

Companywide Environmental
Conference

ISO 14001 Certiﬁed Sites
Mizushima

Chita

Funakawa Sodegaura Kawasaki

KashimaFebruary
Date certiﬁed 26, 1999
Certiﬁcation
LRQA
body

March
5, 1999

November27, 1998

March
12, 1999

JQA

LRQA

LRQA

JQA

JQA

Certiﬁcate
code

JQA-EM
0353

YKA
0771917771512JQA-EM
0427

JQA-EM
0373

YKA
0772494

Environmental Management SystemMarch
18, 1998

May
21, 1999

Reports

Branch ofﬁces

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

Reports Orders

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

JAPAN ENERGY CSR Report 2006

20

Working for theEnvironment

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

Working for the Environment

Environmental Management

Working for theEnvironment

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

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

Environmental Education at Reﬁneries
Environmental protection is an essential part of the TPM(Total Productive Maintenance) activities conducted at
reﬁneries. We have been offering environmental education
programs, and wecontinue to urge
employees to takethe environmentrelated certiﬁcation
programs we havebeen offering.
Training in the manufacturing division

21

JAPAN ENERGY CSR Report 2006

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

Companywide Environmental Conference
The Companywide Environmental Conference has been held
once a year from 2003 as an opportunity for employees ofJapan Energy and group companies to present and debateenvironment-related efforts and research.
About 100 took part in the FY2005 conference in
September at the Japan Energy headquarters. The six topics ofpresentation and debate included What Japan Energy is Doing
to Reduce Greenhouse Gases and Environmental Efforts at
Reﬁneries and Plants.

Companywide Environmental ConferenceEnvironmental Costs

Millions of yen

Item

FY2005

FY2004

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

30,02824,161

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

3,839

1,599

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

694

502

(3) Waste treatment, recycling

196

250

(1) Management activities

357

336

(2) Social activities

105(3) Environmental donations and contributions

607

676

3 Cost of environmental activities

4 R&D to reduce environmental impact

1,532

1,536

Total

37,26329,065Item

FY2005

FY2004

Investment

Millions of yen

1 Costs to build and improve environmental protection facilities

5,254

7,363

2 Costs to maintain equipment (repair and upgrade)

13,88512,806

19,13920,169Total

Effect•Atmospheric Improvements•Reducing resource consumption recycling•Reduction in sulfur oxide emissions
Sulfur produced: 182,395 tons/year•Reduction in benzene emissions
Benzene recovered: 48-ton increase (against FY1998)•Reduction in fuel use through energy conservation
Crude oil conversion: 67,868 kl (against FY1990)
Amount of used oil recycled•Crude oil conversion: 4,447 kl/year
By reducing the amount of resources used and recycling more, we saved
approximately 2.99 billion yen.

Calculation period: April 2005-March 2006
Scope of calculations: Japan Energy Corporation and Kashima Oil Co., Ltd.

JAPAN ENERGY CSR Report 2006

22

Working for theEnvironment

FY2005 Environmental Accounting
We use environmental accounting to assess the effectiveness of our environmental management.
We calculate environmental accounting by classifying items into three major categories: environmental costs, which are the expenses
for environmental protection activities; environmental investment, which includes investment for building and improving environmentally
related facilities; and effects, which means how well our environmental efforts have worked. Below are our environmental accounting
ﬁgures for FY2005.

Working for the Environment

Preventing Global Warming
The prevention of global warming is an urgent concern around the world. Under the Kyoto Protocol, which came into effect inFebruary 2005, Japan is obligated to reduce greenhouse gas emissions by 6% compared to FY1990 levels.
To contribute to these reduction targets, Japan Energy is pursuing a variety of actions.

Working for theEnvironment

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

Wind Power Generation Facilities
Japan Energy has begun generating
electricity from wind power, a newcleanenergy source. In March 2003,
we opened wind generation facilities
at the Kashima Oil Refinery and in
FY2005, these facilities generated
over 3.903 million kWh of electricity(crude oil conversion: 983 kl).

Wind power generation
facilities

Energy Conservation at Reﬁneries
Reﬁneries emit CO2 in several ways, such as through fuelcombustion in furnaces during crude oil treatment and throughreforming reactions during hydrogen production.
There were several factors behind the increase in fuelconsumption at our reﬁneries in FY2005: for example, we
treated a larger amount of crude oil, and we introduced deep
desulfurization unit for gas oil and gasoline with lower benzene
and sulfur content. There was, however, a 2% improvement inunit energy consumption*, to 8.76 kl crude oil/1,000 kl. This
was achieved through efforts such as the recovery of waste
heat from boilers, the recovery of heat using heat exchangers
and reductions in the amount of steam loss. We will continue
to strive to reduce CO2 emissions through these and otherenergy conservation actions.
* Unit energy consumption: There is a variety of facilities for reﬁning, and the
conﬁguration of these facilities differs among reﬁneries. Using an adjustment
coefﬁcient that matches the characteristics of the facilities at the reﬁnery, we
calculate the amount of energy used per unit of production. The smaller theunit energy consumption, the higher the efﬁciency.

Energy consumption and unit energy consumption
Energy consumption (Unit: 1,000 kl crude oil)
Unit energy consumption (Unit: kl crude oil/1,000 kl)

9.07

9.29

9.00

8.89

8.95

8.76

3,000

2,000

9

1,555

1,777

1,784

1,846

1,769

1,890

3

1,000

0

FY1990FY2001

FY2002

FY2003

FY2004

FY2005CO2 emissions (Unit: 1,000 tons)
Unit CO2 emissions (Unit: tons of CO2/1,000 kl)

21.83

23.79

22.64

22.19

22.02

21.28

4,489

4,606

4,355

4,593

6,000

4,551
4,000

3,740

0

24
18
12
6

2,000
FY1990FY2001

FY2002

FY2003

FY2004

FY2005* Unit CO2 emissions: The amount of CO2 emissions (tons) per 1,000 kl ofproduction. The smaller this ﬁgure, the less the CO2 emissions.

JAPAN ENERGY CSR Report 2006

0

Carbon dioxide (CO2) emissions and unit CO2 emissions

8,000

23

6

0

Petroleum products are transported either by land or by sea. Landtransportation is carried out by tank trucks and railway tanker cars,
while sea transport is carried out by coastal tankers.
As a result of efforts to boost distribution efﬁciency in FY2005,
tanker trucks used 4% less fuel than the previous year andcoastal tankers used 11% less.
Increased capacity of tanktrucks (average truck size)
17.2
kl/truck

18.7 kl/truck

FY1998FY2005Emissions Trading through JMD Greenhouse
Gas Reduction Co., Ltd.

Annual fuel consumption of tank trucks(kl)

22,683

21,74222,00020,72921,00020,37920,00019,50919,0000

FY2001

FY2002

FY2003

FY2004

FY2005

Increased capacity of tankers(average ship size)

2,593
kl/vessel

Large coastal tanker

2,998 kl/vessel

FY1998FY2005

Annual fuel consumption of tankers(kL)

113,217

120,000*1 Joint Implementation: System in which developed countries work together
on energy conservation projects, with credits for greenhouse gas emissions
transferred between them.
*2 Emissions Trading: A system in which developed countries buy and sellemissions credits.

Large tank truck

23,000

The Kyoto Protocol has what are called the Kyoto
Mechanisms, which recognize Clean Development
Mechanisms (CDM), joint implementation*1 and emissions
trading*2 as ways to reduce greenhouse gas emissions.
Under CDM, a developed country and a developing country
jointly carry out a project, for example an energy conservation
project, and the developed country gets credit for the resulting
reductions in greenhouse gases. Japan Energy’s efforts tocurb global warming include purchasing a large number ofinternational funds that invest in CDM.

100,052

105,03190,00072,71764,692

As part of efforts to reduce greenhouse gas emissions, in May
2006 we signed a contract to purchase 1.5 million tons of CO2equivalent emission credits from JMD GHG Reduction Co., Ltd.
(hereafter referred to as JMD), a company jointly establishedby JGC Corporation, Marubeni Corporation, and Daioh
Construction Co., Ltd.
JMD plans to carry out CDM business in which it recovers
and breaks down CFC, a greenhouse gas, emitted from a CFCsubstitute production plant in Zhejiang, China. Breaking down
this greenhouse gas CFC will yield 40 million tons of CO2equivalent emission credits.
Under this contract, which runs from January 2008 to June
2013, Japan Energy will obtain emission credits equivalent
to 300,000 t-CO2/year (approximately 7% of Japan Energy’s
annual greenhouse gas emissions).

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

60,00030,0000

FY2001

FY2002

FY2003

FY2004

FY2005

JAPAN ENERGY CSR Report 2006

24

Working for theEnvironment

Clean Development Mechanisms (CDM)

Energy Conservation in theTransportation Division

Working for the Environment

Environmental Efforts at Reﬁneries and Plants: Part 1
Japan Energy has measures for dealing with air pollutants (SOx, NOx, soot and dust, and VOCs) generated during reﬁning andproduction. We also have numerous puriﬁcation processes for wastewater, which contains oil and other pollutants,that is emitted from reﬁning facilities.

Working for theEnvironment

Preventing Air Pollution

Reducing Nitrogen Oxides (NOx)

Reducing Sulfur Oxides (SOx)Sulfur recovery and ﬂue-gas
desulfurization equipment

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

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

SOx Emissions

NOx Emissions(Tons)(Tons)

Regulatory limit (14,393 tons)

Regulatory limits (6,349 tons)
6,000

12,000
4,000
6,000

0

3,853

3,440

FY2001

FY2002

4,464

4,363
2,734

FY2003

FY2004

FY2005

Reducing Soot and Dust

Electrostatic precipitators

3,067

3,008

3,089

FY2001

FY2002

FY20032,879

FY2004

FY20052,000

0Reducing Volatile Organic Compounds (VOCs)

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

Hydrocarbon recovery facility

Soot and Dust Emissions

VOC Emissions(Tons)(Tons)

6,000
2,000

2,828

5,525

We have equipment and devices that
help prevent the release of volatileorganic compounds (such as benzene,
toluene, and xylene contained in naphtha
and gasoline).
•Use of ﬂoating roof tanks•Installation of equipment for recovering
VOC vapor during ofﬂoading

5,202

5,409

5,608

FY2001

FY2002

FY2003

5,146

4,961

FY2004

FY2005

Regulatory limit (1,914 tons)
4,000

1,000
2,000

0

25

192

203

205

197

212

FY2001

FY2002

FY2003

FY2004

FY2005

JAPAN ENERGY CSR Report 2006

0

FY2000Preventing Water Pollution

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

Wastewaterand rainwatercontaining
no oilRainwaterthat maycontain oil

Householdefﬂuent

Ballast water

Oil separatingtank

Wastewaterfrom production
units, oil tanks,and services

Wastewater from
special facilities(including
industrial waste)

Anaerobic
treatment facilities

Blow water
Flocculation andsedimentationtank

COD sludge loading(Tons)

Regulatory limit (310 tons)
300

Floatation tank

Cooling facilities

200

100

0

Activated sludge
process facilities*1

88

FY2001

48

51

56

56

FY2002

FY2003

FY2004

FY2005

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

Proper Management of Chemicals

Managing and Rendering PCBs Harmless

Activated carbon
absorption
facilities*2
Guard basin

Guard basin

WastewateroutletWastewateroutletWe have condensers (259) and PCB-containing oils (691 drums)
stored at our reﬁneries, plants, delivery terminals, and R&D center.
We plan to detoxify these between 2009 and 2012 andare currently undergoing early registration with the Japan
Environmental Safety Corporation (JESCO)* for this process.

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

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

Information Disclosure According to the PRTR Law
Of the substances released and transferred at Japan Energy
reﬁneries and delivery terminals, eight are designated by the
PRTR Law*. (See the site reports on pages 49-54.)* PRTR (Pollutant Release and Transfer Register) Law: Law for theregistration system of speciﬁed chemicals that are released into theenvironment. The aim of the law is to improve the management of chemical
substances.

JAPAN ENERGY CSR Report 2006

26

Working for theEnvironment

System for Treating Polluted Water

Working for the Environment

Environmental Efforts at Reﬁneries and Plants: Part 2

Working for theEnvironment

Japan Energy works to reduce waste to landﬁll by recycling waste and reusing resources. We are also carrying out as muchgreen purchasing as possible when we procure the chemical raw materials needed for petroleum reﬁning.

Reducing Waste, Increasing Recycling

Strict Soil Contamination Measures

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

We carry out regular soil contamination surveys on the sites of
all reﬁneries, plants, delivery terminals, former JOMO service
stations and other company-owned land. Any contamination
discovered is dealt with appropriately.
We completed backﬁlling work at the Funakawa Works andare in the process of treating the recovered soil.

Treating Soil Recovered at the Funakawa Works

Waste to Landﬁll*1(Tons)

2,388*2

2,500

1,816

2,000

1,945

1,500

1,241

1,129
Removing soil with a crane

1,000
500
0

FY2001

FY2002

FY2003

FY2004

FY2005*1 Our goal is for waste to landﬁll to be no more than 1% of all waste
generated.
*2 In FY2004, typhoons resulted in the generation of unforeseen waste (1,245
tons). Despite the increase in waste to landﬁll, however, we managed tomake effective use of 96.5% of all waste.

Gathering the soil inside the tank

Loading it onto trucks

Sorting the soil at an intermediate
treatment facility

Mixing the soil with calcium oxide

Status of Waste
Waste to landﬁll
1.3%

Reused45.4%

Amount ofwaste reduced
53.3%

Note: Includes 16,928 tons of recovered soil for treatment at the Funakawa Works.

27

JAPAN ENERGY CSR Report 2006

Green Purchasing
While petroleum products are an important source of energy,
their use gives off CO2 emissions. So, when we purchasethe necessary additives (chemical raw materials) for making
petroleum products, we strive to purchase raw materials withminimal environmental impact, because we believe that wemust do everything possible to reduce environmental impact
during production and use of petroleum products.
We gave our suppliers a questionnaire about their products
and the results were used to decide which suppliers satisfy ourcriteria for green purchasing. We have also clariﬁed our purchasing
demands and conditions and are calling on suppliers to beenvironmentally friendly in all aspects of their business.

Working for the Environment

Environmental Efforts at JOMO Service Stations
We work with our service station dealerships to recycle waste and reduce wastewater from car washes.
We also work to prevent soil contamination and stop emissions of vapor from gasoline and other substances.

Some JOMO service stations
have solar panels on the roof
for generating clean solar
energy. As of 2006, these solar
power systems were operatingon 16 service stations.
JOMO service station with solar panels

Developing Energy-Efﬁcient Lighting
In 2005, JOMO Enterprise Co., Ltd. tested energy-efﬁcientlamps, which were jointly developed with Toshiba Corporation,in currently-operating JOMO service stations. The results
showed dramatic energy savings, so starting in 2006 we areinvesting in replacing JOMO service station lamps. This will
reduce both electricity use and environmental impact.

Treating Waste According to Law
Waste oil and waste elements generated at JOMO service
stations are outsourced to JOMO Guardian Co., Ltd. to betreated according to law. Waste oil is recycled as mineraloil, and waste elements are incinerated at legally designatedtreatment plants. JOMO Guardian also gathers useful waste
treatment information and provides this to JOMO service
stations as needed.

Reusing Car Wash Water

Water recycling car wash machine

JOMO service stations use large
amounts of water in their car
washes. Water recycling devices
are installed to save and promote
the effective use of water. These
recycling devices allow us to reuse
about 80-90% of the wastewater.
It takes about 150 liters of water
to wash one car, so assuming thewater recycling rate is 80%, thatmeans we can wash four morecars with the water recycled fromwashing one car.

Preventing Soil Contamination
Since 2002, a year before the Soil Contamination Measures
Law went into effect, JOMO service stations have been regularly
carrying out risk control measures for fuel leakage. This involves
surveying the risk of oil pollution and then using survey results
to plan appropriate measures (such as removal of pollutants,
improvement of facilities, and strict monitoring). In FY2005, risk
control measures were carried out at 144 JOMO service stations.
To protect the soil around underground tanks at JOMO
service stations, we established the Japan Soil Solutions
Group (JSSG), which began offering comprehensive support
to this end in November 2004. We are also reducing risk byusing underground facilities of the highest level of safety, suchas double-wall tanks and resin pipes. In April 2006, all JOMO
service stations were givena soil protection measures
instructional video, anotherway to ensure that station
staff are fully able to protect
their environment.
Soil contamination survey

Fuel Oil Vapor Recovery
When tank trucks ﬁll JOMO service station tanks with gasoline
and other oils, vapors containing hydrocarbon escape. Besides
causing photochemical smog, this vapor sends foul odors into
the neighboring area and can harm the health of service station
customers and employees. That’s why JOMO service station
tank vents have recovery devices that send the vapor back into
the tank truck.
Relaxations in Japanese ﬁre regulations in 2005 allowed theinstallation of breather valves, which stop vapors escaping fromunderground tanks. In FY2005, we installed breather valves at
300 stations in the Kanto area and are in the process of doing thesame at service stations around the country.
How Vapor Recovery Works
Breather valve
Vent
Gasoline andother vapors
Tank truck

Car wash water recycling device

Purifying Wastewater
Surface wastewater at JOMO service stations passes througha small wastewater trough and is collected in an oil separatingtank where oil and sludge are removed.

Filling thegasoline

Recovery equipment

Gasoline

JAPAN ENERGY CSR Report 2006

28

Working for theEnvironment

Energy Conservation

Installation of Solar Panels

Working for the Environment

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

Working for theEnvironment

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

Sulfur-Free Fuels
Sulfur-Free FuelsSulfur-free fuel contains almost no sulfur. Japan
will soon enact regulations for gas oil (2007) and gasoline (2008)
that limit sulfur content to 10 ppm (0.001%) or less.
Japan Energy is well aheadof these regulations: we havebeen offering sulfur-free premium
gasoline since May 2002 andsulfur-free regular gasoline and gas
oil since January 2005.

Automobile Lubricating oils
•ECO Series: JOMO DELSTAR DH-2
This low-ash diesel engine oil is suitable for not only diesel engines
equipped with DPFs (for complying with exhaust regulations), but also for
all large diesel engines. It complies with the DH-2 standard (an engine oilstandard of the Japan Automobile Manufacturers Association, Inc. and
the Petroleum Association of Japan that covers
trucks, busses, and other diesel vehicles equippedwith DPFs).
In November 2005, we introduced DH-2LD, a
low-ash long-drain engine oil.
JOMO DELSTAR
DH-2LD•ECO Series: JOMO CNG Oil, JOMO GE Power Oil

Sulfur-free gasoline manufacturing
facility

Beneﬁts of Sulfur-Free Fuels
Not only does sulfur-free gasoline and gas oil offer
cleaner vehicle exhaust; it also contributes to improved
functioning and durability of the exhaust treatment devices
on environmentally friendly cars, and to improved gas
mileage. These fuels also reduce CO2 emissions and thus
help to curb global warming.
We educate customers on the beneﬁts of sulfur-free
products with informational posters at all JOMO service
stations.

Lowering Benzene Content in Gasoline
Since January 2000, we have reduced the amount of the suspectedcarcinogen benzene in gasoline from 5% to no more than 1%.

JOMO GE Power Oil•JOMO Dreamer Series
The 0W-20 engine oil was developed for the ultimate in environmental
performance and superior gas mileage.
Our existing products, the 0W-30, 5W-40,
and 10W-40, have all been qualiﬁeddesignatedfor the highest standard (SM grade) by of theAmerican Petroleum Institute (API). In September
2005, we added a newly developed product to the
JOMO Dreamer Series
Dreamer Series, a ﬂuid suitable for the majority ofJapanese metal V-belt CVT (continuously variabletransmission) vehicles.
JOMO CVT ﬂuid

Industrial Lubricating oils
•ECO Series: JOMO Bio Series

Reducing Vapor Pressure
To reduce evaporative emissions that may cause photochemicalsmog, we reduced summertime gasoline vapor pressure from amaximum of 78 kPa to 65 kPa.

Environmentally Friendly Lubricating oils
Japan Energy has provided environmentally friendly lubricantsunder the motto “Be gentle on people, the environment andresources.”
In February 2004, be began offering the JOMO ECO Series,
a lineup of products that responds to public demands for longer
product life, contribution for biodegradability and compliancewith environmental regulations.

29

JAPAN ENERGY CSR Report 2006

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

JOMO Bio Hydro

Made of full synthetic base oil, this lubricant has
superior oxidation stability and biodegradability,
so leaks cause minimum impact on the water andsoil. All of these products have been certiﬁed with
the Japan Environment Association’s Eco Mark.

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

Japan Energy has a wide range of petrochemical products,
including industrial detergents and industrial solvents. We are doing
everything possible to develop products that are environmentallyfriendly; for example we have responded to the needsdemands
from the public to eliminate chlorine, toluene, xylene, and othersubstances that harm human health and the environment.

Environmentally Friendly LPG
LPG (liqueﬁed petroleum gas) is an energy source with arelatively low environmental impact. Besides educating the
public on the beneﬁts of LPG as a clean energy source, Japan
Energy is striving to spread the use of environmentally friendly
energy supply systems using LPG, and the use of LPG vehicles.

Spreading the Use of Cogeneration Systems

This hydrocarbon detergent has superb cleaning and drying properties
and it can be used repeatedly. It is used for removal of metal processing
oil and particulates, and for draining water. It is also used as a substitutefor chlorine-based detergents.

Japan Energy is developing and promoting the use of gas
cogeneration systems using LPG. Residential gas cogeneration
systems (called the Ecowill in Japan) allow homes to generate
their own electricity and have a high 85% energy efﬁciency.
These beneﬁts, along with government subsidies for buyers,
have propelled the rapid spread of these systems.

•EM Clean

Promoting the Use of LPG Vehicles

Industrial Detergents•NS Clean

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

Industrial Solvents•Cactus Normal ParafﬁnThis industrial solvent has superb biodegradability and minimal odor, anddoes not contain toluene, xylene, or other aromatic hydrocarbons thatpollute the atmosphere.

•Cactus Solvent
We have a wide-ranging lineup of solvents that substitute for toluene orexylen, substances which are not covered by the PRTR Law.

LPG vehicles are seeing increasing use among Japanesenational and local government agencies as next-generation lowpollution vehicles: they give off exhaust that has no black smokeor suspended particulate matter (SPM) and extremely low levelsof nitrogen oxides and hydrocarbons.
To spread the use of LPG vehicles within the JOMO group,
we have since 1996 been offering subsidies to cover thepurchase price. The result has been an increase in the numberof these vehicles every year.

•TS Parafﬁn

JOMO LPG Cogeneration Study Group

Highly pure parafﬁn for use as a latent heat storage agent, it contributes
to reduced CO2 emissions and energy conservation, and is expected tosee increasingly wider use in the air conditioning, textile, construction,
and automotive industries.

Japan Energy holds regular gatherings of the LPG
Cogeneration Study Group with the aim of promoting andspreading the use of LPG cogeneration systems.
We held two such gatherings in FY2005. Attended bydealerships and others concerned with LPG cogeneration, themeetings featured demonstrations of the ECOWILL residential
cogeneration system, presentations on fuel cell experiments,
lectures by gas cogeneration equipment manufacturers, andopen discussions on major issues in the ﬁeld.
We plan to continue holding these study group gatherings
with the aim of contributing to protecting the Earth’s
environment through the spread of LPG cogeneration systems.
First meeting: July 13, 2005 (Attendees: Approx. 80)
Second meeting: February 14, 2006 (Attendees: Approx. 70)

Awards for Environmentally Friendly Products

Developing Technology to Clean Insulating Oil
Containing PCBs

Japan Energy and Nichiyo Consulting
and Engineering Co., Ltd. jointly
developed technology to clean
insulating oil containing PCBs. In May
2006, the two companies received
Japan Petroleum Institutethe FY2005 Japan Petroleum Institute FY2005
Award for Technical Progress fromAward for Technical Progress from the Japan Petroleum Institute (JPI)
the Japan Petroleum Institute (JPI) for the development of thistechnology to clean transformers and other equipment that use
insulating oil containing PCBs. This technology is used in our NS
Clean product. We also received the 6th Ozonesphere Protection
and Global Warming Prevention Grand Prix, Examination Committee
Special Prize for NS Clean, which contributes to the reduction of
1,1,1-trichloromethane, an ozone-layer depleting substance.
* We estimate that NS Clean contributes to a reduction of 50,000 tons of
1,1,1-trichloromethane per year, equivalent to approximately 25% of the total
during the peak demand period (ﬁscal 1993).

LPG Cogeneration Study GroupJAPAN ENERGY CSR Report 2006

30

Working for theEnvironment

Environmentally Friendly
Petrochemical Products

Working for the Environment

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

Working for theEnvironment

Clean Energy R&D

Fuel Cells

With the pressing need to diversify energy sources and create
an environmentally friendly, recycling-based society, there has
been an increasing focus on fuel cells, which generate efﬁcientand clean energy throughthe chemical reaction ofhydrogen and oxygen. Japan
Energy has been carrying out
in-house research into fuelcells since the 1980s.
The JOMO ECOCUBE, a residential fuel cell

Japan Energy Takes Part in Large Scale Experimentswith Stationary Fuel Cells
Japan Energy took part in large scale experiments withstationary fuel cells run by the New Energy Foundation (NEF) in
FY2005. We installed 30 fuel cell systems (JOMO ECOCUBE)
in homes and are currently gathering data on their operation.
This is what we have found so far:•Primary energy savings rate: 10-20%•CO2 emission reduction rate: 20-30%
We are continuing our participation through FY2006, withplans for the operation of 33 systems. These efforts will
prepare us for the inevitable widespread use of fuel cells.

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

Tank truck
Hydrogen transported as a liquid hydrideR

Hydrogenrefueling station

We have also developed technology for a complex
monitoring system that immediately detects leaks of hydrogengas at hydrogen refueling stations using three types of sensors(sound, gas, and image).

Environmentally Friendly Clean Fuels
CO2 in vehicle exhaust is a cause of global warming. To reduce this
impact, experts are seriously looking at carbon-neutral, biofuels
for automobiles. Japan Energy is fully participating in governmentsponsored experimental research projects on biofuels like ETBE*1,ethanol, and BDF*2. We are also moving full speed ahead on inhouse research to design higher-quality automobile fuels.
In the area of the promising future energy of hydrogen, weare researching highly efﬁcient bi-fuel engines*3 and the fuels
they will use.
Our research and development of effective ways toeliminate sulfur in fuel includes high-performance catalysts andabsorption. This is helping us make our sulfur-free gasoline andgas oil production more streamlined and efﬁcient.
*1 ETBE (Ethyl tertiary butyl ether): A gasoline component stock made frombioethanol.
*2 BDF (Bio Diesel Fuel): Diesel engine fuel made from renewable resources
such as vegetable oil.
*3 Bi-fuel engine: A single engine that can convert between using two types
of fuel.

Japan Energy in Major Trade Shows
We publicize our new energy technologies andenvironmental efforts by participating in trade shows. At
INCHEM TOKYO 2005, we joined a special booth on fuelcells and hydrogen production. We also took part in ENEX
2006, the 30th Energy & Environment Exhibition.
At INCHEM, we attracted signiﬁcant attention with our
JOMO ECOCUBE, the only actual working fuel cell at theentire show. Also popular was our exhibition and video
presentation of a hydrogen supply system that uses theorganic hydride method to efﬁciently store and transporthydrogen. All this made it apparent to show-goers thatJapan Energy is serious about the business of fuel cells.

•Hydrogen generated
and supplied(Methyl cyclohexane, etc.)

Aromatics recoveredR(toluene, etc.)

Houses31

JAPAN ENERGY CSR Report 2006

Factories

Japan Energy booth at INCHEM TOKYO 2005

Soil Remediation Technologies

We have developed soil contamination survey and remediation
technologies that give us a consistent system for carrying out
everything from soil survey to cleaning of the soil.
For soil surveys, we developed our own technologies
for measuring oil contamination on-site and for measuring
microorganisms in the soil.
We are also researching and developing technologies, suchas the use of bio-surfactants* to clean oil-contaminated soil andthe use of plants to purify the soil (called phytoremediation).

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

* Bio-surfactants: Derived from microorganisms, these biodegradable
surfactants are an environmentally friendly way to remove oil.

A Recycling-Based Society through the Chemical
Recycling of Waste Plastics
Every year in Japan, about 10 million tons of plastics aredisposed of and about 60% of them are recycled. But
because conventional recycling methods energy recovery
and mechanical recycling only produced low quality plastics,
the uses for these plastics were limited.
Japan Energy and the Plastic Waste Liquefaction
Industries Conference have developed a chemical recycling
technology, the ﬁrst of its kind in Japan, that upgrades lightthermal cracking oil derived from municipal waste plastics
into petroleum products (naphtha, etc.) at oil reﬁneries. The
greatest beneﬁt of this technology is that the plastic can beused repeatedly as new products, contributing to a society
in which no resources go to waste.
Japan Energy’s role in this cycle is to upgrade lightthermal cracking oil derived from municipal waste plastics into
petroleum products for the petrochemical industries using an
existing upgrading unit in the oil reﬁneries. To do this, we needhigh-quality light thermal cracking oil derived from municipal
waste plastics, so we established standards to be followed by
the company that is converting the plastic into oil.

We have developed a successful ﬂow scheme toco-process LTCO with petroleum in an oil reﬁnery anddemonstrated this utilizing an existing upgrading unit at theMizushima Oil Reﬁnery in April 2004. We have treated about
1,000 kl/year of light thermal cracking oil derived from municipal
waste plastics, and upgraded about 70% of the oil into
naphtha. We intend to keep on developing this system andtake it from the experimental stage to the business stage.
Figures for Waste Plastic Processing
FY
2004

Recycled: 60%

FY
2000 Recycled: 50%
025

3.3 million kl/year

Not recycled:
40%(Converted into waste
plastic oil: approx.
20.7 million barrels)

Not recycled: 50%
50

75

100

•Equal to 5 days worth of the crude oil processed in Japan in FY2003 (Approx. 4.1 million barrels/day*1)•Equivalent to amount of crude oil developed and produced in-house (Approx. 3.2 million kl/year*2)*1 From Petroleum Association of Japan Web site
*2 From Japan Petroleum Development Association Web site
Source: Plastic Waste Management InstituteChemical Recycling of Plastic Waste

Plastic garbage
Consumers

Petroleumcompanies

Cracked distillate

Takanori Kawanishi,

Nobuyuki Shiratori,

Petroleum Reﬁning Research& Technology Center

Senior researcher, Petroleum
Reﬁning Research &Technology Center

Plastic
manufacturers
Petrochemical
manufacturers

プラスチックゴミ
プラスチック
製品

NaphthaRefineries

容器包装
プラスチック油化プラント 事業者協議会
分解油JAPAN ENERGY CSR Report 2006

32

Working for theEnvironment

Developing Environmental Protection
Technologies

Environmental Protection Highlights

Local Nature Protection Contributions

Japan Energy Starts the Hara Village
JOMO Ayumi-no-Mori Forest ProjectIn addition to minimizing environmental impact from business activities, in April 2005 Japan Energy joined the
Adopt-a-Forest Operation promotedsponsored by Nagano Prefecture, Japan. We signed a contract with Hara
Village in Nagano Prefecture under which both sides will work together to preserve and replant the forest.

Adopt-a-Forest Operation Joins Private
Companies and the Local Government
Under Nagano Prefecture’s Adopt-a-Forest Operation, theprefectural government brings together municipalities owning
forest land and companies intent on protecting nature topreserve these forests in a cooperative effort among industry,
government, and residents.
The foster parent, in this case the company, and the foster

Japan Energy employees and family
members join in

33

JAPAN ENERGY CSR Report 2006

Planting mountain cherry seedlings

child, the municipality, sign a contract to protect the forests, which
absorb CO2. Besides investing money for forest upkeep, theprivate company sends employee volunteers to help protect theforests. There are currently about 20 municipalities in Nagano
Prefecture taking part in this project. Japan Energy and Hara
Village signed their agreement in April 2005, making Japan
Energy the ﬁrst foster parent company in the Suwa district of theprefecture. A ceremony to mark the signing of the agreement in
May 2005 was witnessed byvillage residents, prefectural
government ofﬁcials, andJapan Energy employees, all ofwhom joined in the planting of
600 Japanesewhite oak and ﬁrtree seedlings.
The signing ceremony

Employees, Families, and Village Residents
Join in Preserving Forests

A Message to Japan Energy

Hara Village and Japan Energy are working together on the
Hara Village JOMO Ayumi-no-Mori project. Japan Energy
provides the village with the funds for upkeep of the forest.
Employees and their families visit the village and work withvillagers to protect the forest, learning about what it means tolive with nature by strolling through the forest and harvesting
vegetables. Japan Energy considers this forest protection an
important part of its CSR activities. We will continue to urge
employees and their families to participate and hope to expand
our nature protection activities to other regions.
In August 2005, employees and family members gathered in
the Hara Village JOMO Ayumi-no-Mori to see how the planted
seedlings were coming along and remove weeds. In October,
about 40 people came to thin the forest and to prune trees.

“A Bouquet of Children’s Stories” Makes Useof Thinned Wood
Besides protecting forests, Japan Energy gathers the wood fromforest thinning for processing into 3.9 Paper* that is used for thebook “A Bouquet of TaleChildren’s Stories”.

B- (2) -060008* 3.9 Ppaper: When pronounced in Japanese, “3.9”sounds like “thank you.” Wood from the thinning offorests in Japan is used as raw material for making
paper. Because it costs money to transport thiswood, it is often left in the forest, inhibiting the
growth of young trees and decreasing CO2
absorption by the forest. To solve this problem, twopaper wholesalers, Ichise Co., Ltd. and Oji Paper
Group, developed the “3.9 Paper” business model
to make effective use of thinned wood and toprotect forests. Because the user of the paper
coves the cost of transporting the thinned wood, it
is feasible to use domestic thinned wood as raw
material for paper.

Using Domestic Thinned Wood to Make 3.9 Paper
Japanese forest (Hara Village)

Transportation cost burden

Wood chip plant
Chips formaking paper

Paper millPaper products

Distribution industry (Ichise)
Delivery

User (Japan Energy)

Processes to make domestic thinned wood suitable for paper

Transport thinned
wood and otherforest scrap

Hopes for a Lasting Legacy
Hara Village is made up of eight
settlements and is surrounded byforest. But with people around here
getting older, it was becoming
increasingly harder to take care of
the forest. Then, our village decided
to take advantage of a new initiative
Gyosuke Nakamura by the prefectural government,
Head of Agricultural,called the Adopt-a-Forest
Forestry, Commerce, andTourism Department, Hara Operation, to work with private
Village Officecompanies to preserve forests.
We began working with Japan Energy in April 2005 andin the spring of 2006 we conducted the fourth forest
preservation activity. Through forest preservation activities
and friendship exchanges, Japan Energy employees andvillagers have strengthened their friendship, so much so that
employees and their families often take part in village eventsin addition to the Adopt-a-Forest activities.
As well, the thinned trees from our forest are used tomake paper on which Japan Energy-published children’s
story books are printed. I sincerely hope that Japan Energy
starts more activities like this that leave something
concrete and lasting for the future.

Message from the Front Lines
Calling for More Participationfrom Employees
This is the third time for me to join
the forest preservation event carriedout with Hara Village. Before
starting this program, we had no
previous experience in tending
forests, so each time I go I realize
how much work it is.
Sayuri Osaka
I have even wondered how
Human resources, General
people like me with no knowledge
Affairs Department,
Kashima Oil Refinery,of forests can be of any use. But
Kashima Oil Co., Ltd.
still, I want to help out in some way,
so I join in. But there's another reason for taking part: thewarm hospitality shown to us by the residents of Hara
Village each time we visit, and the desire to once again meetcoworkers from other parts of our company.
I feel that working to maintain the forest and getting
together with village residents has raised our own awarenessof the natural environment. We’re calling on more
employees to join in to preserve nature and contribute to
the local community. The Kashima Oil Reﬁnery is currently
looking to get involved in similar community-based activities.

JAPAN ENERGY CSR Report 200634

Together with Society

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

Consumers
Localcommunities

Shareholders,investors

Japan Energy’s
main stakeholders

Employees

Oil producing
countries

35

JAPAN ENERGY CSR Report 2006

Dealerships

Material
suppliersTogether with Society

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

To provide customers with products and services that they
can use with peace of mind, the Japan Energy Group has had
its reﬁneries and plants certiﬁed for the ISO 9001 international
standard for quality management systems. As well, in June 1995,
we established our own proprietary quality standards in the formof rules for the implementation of quality control, quality assurance
and the prevention of product liability (PL) problems.
Since then, the Quality Subcommittee, which is made up ofquality personnel from each group company and our staff of R
& D Center, has been in charge of monitoring the group-wide
quality control situation and promoting employee education. As for
opinions and complaints from customers, these are shared over theentire group via the Liaison Meeting of Quality Assurance Personnel.
This allows the entire company to work together to further
quality control and improve quality-related activities. The Quality
Subcommittee sets annual policy in an effort to improve work
processes and raise the quality of products and services in eachgroup company. In FY2005, divisions worked together to improvetheir activities based on four priority tasks: eradication of qualityrelated problems; proactive compliance to quality regulations
for improvement of atmospheric environment; improve quality
competitiveness; and aggressive initiatives toward new fuels.
Starting in April 2005, JOMO service stations throughout
Japan began selling sulfur-free regular gasoline and gas oil(sulfur content below 10 ppm). Sulfur-free fuels result in lessenvironmental impact such as air pollution. And starting in
2005, we reduced summertime gasoline vapor pressure to 65
kPa to help reduce the occurrence of photochemical smog.
Such developments are part of our efforts to offer products withminimal environmental burden and maximum quality.
Our policy for FY2006 is to improve activities through fourpriority tasks: properly deal with quality problems; strictly comply
with quality regulations; improve quality competitiveness; andboost fundamental technologies.
ISO-certiﬁed companies
Liaison Meetings of Quality Assurance Personnels
President

General Manager, Reﬁning
Technology,
Petroleum Reﬁning Dept

Administrative
department

Each department(branches, etc.)
Customers

Executive Committee

Status of ISO 9001 certiﬁcation
Date ofcertiﬁcation
Certifying
institution
Certiﬁcation
numberMizushima

Chita

Funakawa

Sodegaura

KashimaJanuary
10, 1996

February
9, 1994

February
11, 1997

October
8, 1996

November17, 1995

LRQA

JQA

LRQA

LRQA

LRQA

0941885

JQA-0400

0957130

0955550

JQA-1042

Proper Management of Personal Information
Education and Training for All Employees
In April 2005, the Law Relating to Protection of Personal
Information (the Personal Information Protection Law) cameinto full effect. Prior to that, in March 2005, Japan Energy
Group established its Personal Information Protection Policy
and Fundamental Rules for Personal Information Protection.
This was accompanied by e-learning for all employees andexplanation meetings at headquarters and sites to ensure thateveryone manages personal information properly.
The Personal Information Protection Policy can be viewed
on our Web site.
WEB

http://www.j-energy.co.jp/guide/privacy/policy.php
Personal Information Protection Law Response Guide
We created the Personal Information Protection Law
Response Guide and distributed this to nationwide
dealerships and JOMO service stations, both ofwhich handle a variety of customer information. This
guide contains summaries of the law and important
points to keep in mind when handling personal
information.

Personal Information Protection in LP Gas Sales
In 2005, we created the Manual for Finding Potential LP Gas
Customers Using Personal Information. This manual includes results ofa survey on how personal information is handled
by LP gas companies, a summary of the Personal
Information Protection Law, and tips on proper
application of personal information protection
to service-related duties. As well as distributing
this manual, we held explanation meetingsand seminars on the importance of properly
handling personal information at LP Gas JOMO
Associations in each district.

Leak of Customer Data
In June 2005, a survey by Toyota Finance Corporation,
Japan Energy’s affiliate card company, found that somepeople masquerading as card owners had attempted tomake unauthorized purchases on the Internet using JOMO
Card Plus, a credit card issued by Japan Energy. This was
ascertained due to the fact that all the cards used withoutauthorization had been issued at the same JOMO service
station. Although prompt action prevented any purchases
being made on our customers’ accounts, we sincerely
apologize for any worry or inconvenience we caused them.
We have established a task force to deal with thisand we are working with Toyota Finance to determine thecause of the trouble so that such an incident does notoccur again. We are also working with relevant dealerships
to step up management and protection of customers’
personal information.

JAPAN ENERGY CSR Report 200636

Together with Society

Thorough Safety and Quality Control througha Group-Wide Organizational Structure

Together with Society

Together with Our Customers

Together with Society

Survey and Analysis of Customer
Satisfaction at JOMO Service Stations
Since 1994, we have been carrying out our CS Survey, asemiannual survey of customer satisfaction at our approximately
2,000 JOMO service stations (full service) across Japan.
Investigators visit JOMO service stations, where theyevaluate and grade the station on criteria such as fueling
operation, car wash, customer service, and station cleanliness.
Service stations must score at least 150 out of a possible 200
points so that we can achieve our goal of offering a uniformly
high standard of service to all of our customers around Japan.
In Internet surveys we have been carrying out regularly
since 1998, we ask Club JOMO members their opinions andwishes regarding the products and services we offer at JOMO
service stations.
An analysis of the FY2005 Internet survey gave us a detailed
picture of customers’ needs and we are translating this into
service that goes beyond their expectations.

(1) Level of satisfaction at JOMO service stations
Satisfied

Average

Not satisfied

Products

41%

48%

11%

Customer service

63%

32%

5%

Waiting room

45%

46%

9%

(2) What customers liked about Value Style service stations
Station is clean 17%
Good customer
service 13%
Cheap 7%
Self service available 7%

Good customer
service 18%
Good magazines
to read 9%

WomenFree beverages 9%

Can relax 5%
Nearby 4%
Easy access from the road 3%
Other 44%

Clean 9%Self service available 9%
Other 44%

Men

Impolite 20%
Women

Men

Insufﬁcient explanation 15%
Other 15%
No response 30%

37

JAPAN ENERGY CSR Report 2006

Unpleasant cigarettesmoke 15%Women

In July 1998, we opened the JOMO Customer Center to gather
customer ideas and reﬂect these in our service. Customers cancall a toll-free number and give us their opinions and ideas on
improvements that could be made.
These customer opinions
and requests are put into a
database and are used increating targets for future
improvements. We also
regularly fax JOMO service
stations a newsletter with
helpful customer comments.
The fax newsletter with helpful customer
comments

JOMO Customer Center

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

Calls to the JOMO Customer Center (FY2005)

Not kind/not attentive tocustomer needs 20%(4) Why customers were dissatisﬁed with the waiting room
Haven’t used it 14%
Smoking section not
sufﬁciently separated 10%
Small 9%Can’t relax 5%
Inconvenient forsmokers 4%
Other 41%
No response 17%

Customer service training

TEL(3) Why customers were dissatisﬁed with customer service
Employee attitude 23%
Employees too pushy 6%
No employee-customer
contact 5%Long waiting time andtrouble to make payment 5%
No towel to wipe windows 4%
Other 38%
No response 19%

Under our theme of “smile life with JOMO,” we are working tocreate stations that offer customers the highest level of service.
We are placing particular emphasis on the areas that customers
value most, such as customer service and station cleanliness. In
FY2003 we started our customer service training and in FY2004
cleanliness on-the-job training. So far, approximately 5,000
JOMO service station employees have taken this training.
As a result of these
efforts, the FY2005
CS Survey showed an
11.7 point increase over
FY2003 for customer
service and a 1.5 point
increase for cleanliness.

JOMO Customer Center Gathers
Opinions and Requests

Results of Internet Survey (FY2005)

Men

Improved Customer Service Manner
and Cleanliness by All Employees
including part-timers

Other 54%
No response 31%

Details
JOMO card(request for application forms, Web-related)
Claims (JOMO card, service at service station,
campaigns, etc.)

No. of calls % of total
3,708

43.5%

887

10.4%

Products

791

9.3%

Auto body care

18

0.2%

Campaigns

123

1.4%

Guide to service stations

387

4.5%

1,145

13.4%

Bouquet of Children’s Stories
Crank calls
Other
Total

219

2.6%

1,251

14.7%

8,529

100.0%

Value Style: A New Kind of Service
Station Offering Customers Comfort
and Convenience

Value Style station

Barrier-Free Design
JOMO service stations are incorporating universal design sothat all customers can use them easily and with peace of mind.
Main initiatives•Stairs and curbs: Ramps installed•Store entrance doors: Automatic or sliding doors•Restrooms: Wider space and handrails, Western-style toilets
Note: There are 27 JOMO service stations that provide full wheelchair access.

Entrance

Wheelchair access restroom

Inter-Industry Annexing
Japan Energy is collaborating with other industries to takeadvantage of the speciﬁc locations of JOMO service stations.
We continue to think of new ways to make JOMO service
stations more convenient and satisfying to our customers.
Inter-industry annexed shops•Beauty salons: 10 shops•Laundromats: 5 shops•Dry cleaner: 1 shop
•Fast food: 1 shop
•Boxed lunch: 1 shop
•Restaurants: 2 shops

Annexed laundromat

Annexed beauty salon

We want to bring more abundance andvalue to our customers’ lives

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

Features of Value Style Service Stations
Coherent Design with Improved Visibility
We are creating a uniform image and reducing the numberof posters and banners inside and out. We are also making iteasier for drivers tospot JOMO service
stations by having
pictures of familiar
mascot characters
illustrated on theroof of the sales
room and on
station signs.
Value Stations have a uniﬁed design

Space for Relaxation and Enjoyment
We have designed sales rooms with different sections so that
customers can relax as they wish. We also have a separatesmoking room so that non-smokers will not be bothered.
Sales room sections•Coffee section•Magazine section•Kids’ section (coloring books, etc.)•Relaxation corner (free massage chairs)•Bouquet of Children’s Stories section

Bouquet of Children’s
Stories section

Coffee section

JAPAN ENERGY CSR Report 200638

Together with Society

Value Style is a model that is based on the concept of creating
service stations that make customers want to have a look,want to come in, andwant to come again.
We began rolling out
these service stations
nationwide in FY2005
and plan to have 1,000
by FY2008.

Together with Society

Together with Our Business Partners

Together with Society

In our purchasing relationship with our business partners, we strive to create a win-win situation through a partnershipof fair and honest dealings.

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

Purchasing Process
Japan Energy

Nippon Mining
Procurement

Business
partner

Outsourcepurchasing duties
Sign basic purchase contract and secrecy agreement
PurchaserequestRequestestimate

Estimate

Issue
order form

Make andship products

Inspection, confirmation
Payment

DeliveryReceipt of
payment

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

Green Procurement Initiatives
Through green procurement, Japan Energy aims to create a recycle-based society, prevent global warming, and promote the 3Rs.
We survey all business partners and choose to deal with those whose efforts satisfy a certain level of environmental consideration.
Those who do not meet our criteria are urged to step up their environmental efforts.
For more on green procurement, see page 27.

39

JAPAN ENERGY CSR Report 2006

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

Open, Fair System of Evaluation
In 1998, Japan Energy established an open, fair, competencybased system of evaluation.
This system is made up of action standards (competencymodel) established for each job description and annual work
achievement targets, both of which are used as a basis forregularly evaluating the progress and achievement of employees.
In this system, employees and their superiors hold frank
discussions at the beginning and end of the ﬁscal year. This
offers a fair process in which both sides can agree on issues
and also provides the basis for revising employee work targets
and pursuing the necessary training to develop their skills.

Employment of the Disabled People
As of March 31, 2006, Japan Energy has 33 employees withdisabilities (representing 2.0% of all employees), and we will strive
to increase this number with the aim of staying above the legal limit(1.8% of all employees). To this end, we are working to create aworkplace conducive to making the most of disabled employees’
talents and increasing the number of jobs open to the disabled.

Number of Employees(employees)

Men

3,000

2,694
232

2,623
225

2,519
212

2,462

2,398

2,307

FY2003

FY2004

FY2005

Women

2,000
1,000
0

New University Graduates Hired(employees)

Men

Women

38

40

Job Placement and Human Resource
Training that Respects Employee Motivation
Under Japan Energy’s self-declaration system, once a year
employees voice their opinions on their particular skills andfuture career goals, as well as make requests regarding
where they want to work or other personal wishes. Basedon employees’ suitability or skills for particular jobs, and withconsideration for their intentions and desires, we place them injobs or on career paths that they ﬁnd rewarding and that makethe most of their strengths.

30
30
20

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

Re-Employment of Retired Workers
With the start of the Law concerning Stabilization of Employmentof Older Persons, in FY2006 Japan Energy introduced a system
for re-employing retired workers. All employees retiring at age
60 who wish to be rehired are eligible for this system. Thissystem allows employees 60 and older to use the experienceand knowledge they have built up over the years and pass theirvaluable skills on to the next generation of Japan Energy.

40
3

8

1

29

35

32

FY2005

FY2006100

FY2004

Ratio of Men and Women in Management Positions (Fiscal Year End)
(employees)

Men

607

A Workplace that Empowers Women

Together with Society

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

600
400

Women

600

1

1

602

4

606

599

598

FY2003

FY2004

FY2005200
0Average Number of Continuous Years Worked (Fiscal Year End)
(employees)

Men

Women

22.4

22.9

23.0

15.2

16.3

17.5

FY2003

FY2004

FY200524
16
80JAPAN ENERGY CSR Report 200640

Together with SocietyWith the Employees

Together with Society

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

Revision of Child Care Leave andFamily Health Care Leave Systems
Japan Energy has for some time now had childcare leaveand nursing care leave systems in compliance with Japanese

laws. But with the enactment of the Law to Promote Measures
to Support Fostering Next-Generation Youths in April 2005,
we have revised our childcare leave systems so as to allow
employees to ﬁnd a balance between work and childcare andto make it easier for women to continue working after having
children. In FY2005, 12 employees used their childcare leave (twoof these were men) and no employees used nursing care leave.

Revisions to Child Care Leave andNursing Care Leave Systems(1) Child care leave period extended from “until childbecome 1 year old” to “until child become 1 year and6 months old, or until the ﬁrst ﬁscal year end after thechild becomes 1 year old, whichever is longer (maximumof approximately 2 years).”(2) Maximum of 5 days paid leave during the childcare
leave period.
(3) The eligibility for child nursing care leave changed from“children who have not yet entered elementary school”
to “children who have not yet entered junior highschool.”(4) The period during which employees can shorten work
hours to look after children extended from “until thechild is 3 years old” to “until the child starts elementary
school.”Japan Energy Group Education System
Training by job category
Executive ofﬁcers

Nurturing of business leaders (selected employees)
In-house

External•Scheduled training 3 years
after joining company•Inter-industry
exchange training•New employee
training•Study at head ofﬁce•New employee training
Held by Human Resources Dept

41

•Education for marketing managers•Scheduled training 10 years after joining company•Education for administration managers•Study abroad

2 class
1 class

Trainingby job type

•Education for engineering managers

6 class•Correspondence courses•E-1 course•Training for new managers

7 class

3 class

Selfdevelopment
support•In-house language lessons, in-house English exam

2 class•Ofﬁce automation education•E-2 course•Financial analysis course

Management 4 classlevel
employees 3 class•SE-2 course•Project management course•SE-1 course•Business communication course

5 class•Marketing course

Japan Energy Management College

5 class
Generalofﬁce 4 classemployees

IT•Training sessions for corporate ofﬁcers

6 class

1 class

Open college(voluntary andselected applicants)

JAPAN ENERGY CSR Report 2006

Held by eachdepartment

The Law to Promote Measures to Support Fostering NextGeneration Youths requires companies to establish ways to help
employees balance work and childcare. In response to this law,
Japan Energy created a two-year action plan in April 2005. We
are implementing this plan and seeking to have it certiﬁed* by
the head of the Tokyo Labour Bureau.
* Certiﬁcation system: Companies that carry out consistent action plans andthat meet certain legal standards are certiﬁed by the head of the Labour Bureauof the prefecture in which they are based. This certiﬁcation gives companies theright to use a next-generation certiﬁcation logo on their products.

In addition to our two-year action plan, we have made thefollowing revisions to company policies regarding fostering thenext generation.

Revisions Related to Fostering the Next Generation(1) The maximum age for people eligible for a dependent
allowance was raised from 18 to 20.
(2) We have revised the dependent allowance and are providing
generous allowances to employees raising children.

Message from the Front LinesFive Days that Taught How Tough—and
How Important—Child Care Can Be
I took ﬁve days of childcare leavefrom January 5, 2006. Althoughjust eight days in total including
weekends, all the diaper changes
and baby baths were a valuablelesson in just how tough andimportant it is caring for a child.
I’ve heard that men in Japan
Koichi Matsushita take on average just 0.4% of theirPetroleum Reﬁning Researchallowable childcare leave. I hope
& Technology Center
that with more understandingof the workplace and a change in men’s thinking, we
will someday realize a society in which men can play animportant role in raising children.

Smooth Labor-Management
Relations Based on a Spirit of Mutual
Dependence and Mutual Trust
Under the union shop system, Japan Energy has an agreementwith the Japan Energy Labor Union (1,887 members as ofMarch 31, 2006) based on a spirit of mutual dependence andmutual trust. In the spirit of this agreement, the company strives

to improve the working conditions of union members and theunion works with management in solving problems related torunning the company. Such smooth labor-business relations
form the foundation of the company’s growth.

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

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

FY2001

FY2002

FY2003

FY2004

FY2005

1

0

0

1

2

3

6

2

3

3

Support for Employees’ Mental HealthJapan Energy also strives to maintain the mental health of its
employees. Mental health lectures by outside experts (sponsoredby Nippon Mining Holdings) offer employees the knowledge theyneed to keep themselves in a healthy state of mind.
The Health Insurance Union of Nippon Mining Group also
has a call center where employees can call to consult on
matters of health and medical care. Open 24 hours a day, 365
days a year, the call center responds to concerns on mental
and physical health and provides information on medical
institutions and nursing care.

JAPAN ENERGY CSR Report 2006

42

Together with Society

Initiatives to Support the Next Generation

Together with Society

Together with the Community
Based on our Mission of “aiming for a more cohesive and dynamic society,” we contribute to society through the promotion ofsports and culture and through support for Japan Energy employees’ volunteer activities.
In FY2005, we stepped up our efforts by prioritizing our areas of social contribution and by focusing our support on certain activities.

Together with Society

Clariﬁcation of Action Policies forSocial Contribution
Japan Energy has carried on the spirit of community
contribution learned in the 100 year history of Nippon Mining
Holdings and has earnestly contributed to society based on thecompany Mission and Business Principles.
In FY2005, we revised our social contribution thinking,establishing priority areas of contribution and clarifying the focus
of our support.
Our main focus is on art and culture through the longrunning JOMO Children’s Story Award, children’s welfare
through the JOMO Children’s Story Fund, sports throughthe JOMO Basketball Clinic, the disabled through the Click
Donation program, and victims of natural disasters throughour matching-donation program. Through these activities, we
support mainly children and the disabled.
We will continue to step up activities in our priority areas
and look into new approaches.

JOMO Children’s Story Award
In the winter of 1970, we gave customers who purchased our
kerosene a collection of children’s stories with the theme ofheart-to-heart communication. Our aim was to promote a warmand happy family life amidst the cold of winter. This was the
beginning of the JOMO Children’s Story Award.
In 1973, we began accepting children’s stories from thegeneral public. The response was so overwhelming that in 1976
we made it an annual event that has continued to today.
Outstanding entries from the public receive the JOMO Children’s Story Award and the best stories each year are compiled into theBouquet of Children’s Stories. These are distributed to customers
through JOMO service stations and dealerships and to local
schools, kindergartens, and day-care centers. For the 36th JOMOChildren’s Story Award in FY2005, we received 9,461 entries in thegeneral division (junior high school students and older) and 741
entries in the children’s division (elementary school children andyounger), for a total of 10,202 entries.

JOMO LP Gas Association jointly established the JOMOChildren’s Story Fund with the objective of using the Bouquetof Children’s Stories for worthy social causes. Dealerships,
afﬁliates, and Japan Energy Group employees purchase the
Bouquet of Children’s Stories and the proceeds go to children’s
homes and mothers’ and children’s homes around the country.
In FY2005, we donated 23 million yen to the Japan National
Council of Social Welfare, which provided scholarships to194
former residents of children’s homes and mothers’ andchildren’s homes.
Read about how the Bouquet of Children’s Stories is helping
preserve forests on page 34.

Supporting Sports for the Disabled
In April 2004, Japan Energy added the Click Donation section
to its Web site in support of sports activities for the disabled.
Each time a visitor to the Web site clicks the icon (limit of one
click per person per day), Japan Energy donates one yen to
sports organizations for the disabled.
In FY2005, we urged people to support Japanese athletes
training for the 2006 Paralympics in Turin, Italy and received
4,924,420 clicks on our Web site. This translated into a
4,924,420 yen donation from Japan Energy to the non-proﬁtorganization the Japan Paralympic Support Council. This money
went towards training and equipment for the athletes.
We’ve also support numerous sporting events forthe disabled in Japan, including the Japan Wheelchair
Basketball Federation (JWBF) championships (May), theJapan Wheelchair Basketball Federation (JWBF) national
junior championships (July), the Pipo Universal Marathon
Relay (September), and the Japan Wheelchair Basketball
Federation (JWBF) national women’s championships (October).
Since March 2006,
the Click Donation has
been collecting clicks insupport of the November
2006 Special Olympic
National Summer Gamesin Kumamoto, Japan andthe 2007 Special Olympics
World Summer Games inShanghai, China.

The Click Donation Web siteWEB

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

Click Donation destinations (FY2005)
The JOMO Children’s Story Award
Presentation Ceremony

The Bouquet of Children’s Stories

The JOMO Children’s Story Fund and JOMO
Scholarship Grant
In 1994, Japan Energy, the Nationwide JOMO Association (thesales network handling JOMO brand products), and Nationwide

43

JAPAN ENERGY CSR Report 2006

Organization

AmountJapan Ice Sports Federation for the Disabled (JISFD),
Japan Sledge Hockey Committee

1,000,000 yen

Ski Association of Japan for the Disabled

2,000,000 yen

Japan Sports Association for the Disabled(Japanese Paralympic Committee)

1,924,420 yen

Japan Energy directors and employees joined in a donation
campaign to raise funds for victims of the October 2005
earthquake in northeast Pakistan.
In this donation program, Japan Energy matches theamount donated by executives and employees. We donated a
total of 1,045,668 yen (522,834 from executives and employees
and the same amount from the company) to the NGO Japan
Platform, which sent this money to those suffering in Pakistan.
In April 2006, we established the JOMO Fureai Fund, inwhich a ﬁxed amount of the salary of executives and employees
is set aside in a savings account to be used to help future
victims of disasters. We hope this will be put to speedy use in
the case of a disaster.

Hara-mura-JOMO AyuminoMori(Hara Village, Suwa County, Nagano Prefecture)
May 28-29, 2005; 40 participants; tree planting (ﬁr tree and Japanese oak;
600 in total)
August 26-27, 2005; 20 participants; undergrowth removal
October 15-16, 2005; 40 participants; forest thinning, tree pruning

Support for the Japan Rescue Dog Association
Since December 2003, Japan Energy has opened the groundsof its site in Chigasaki City, Kanagawa Prefecture for the Japan
Rescue Dog Association to train its dogs. Formed after the 1995
Great Hanshin-Awaji Earthquake, this non-proﬁt organization
trains rescue dogs with the help of volunteer trainers.

Kurashiki Utsukushii Mori (Participated as Part of General Public)(Kurashiki City, Okayama Prefecture)
August 27, 2005; 20 participants from our company; undergrowth
removal, tree pruning

A rescue dog searches a building in asimulated rescue

Japan Rescue Dog Association training at
a Japan Energy site

Forest Conservation with Local Government
As part of our environmental conservation efforts, in FY2005
we began working with the local governments and non-proﬁtorganizations in prefectures such as Nagano and Okayama topreserve forests. Japan Energy employees and their families
volunteer in these activities, strengthening ties with local residents
and gaining a greater awareness of nature and the environment.

Nakajo Field of Japan Energy Development Co., Ltd., Nagaike Park
(Tainai City, Niigata Prefecture)
November 19-20, 2005; 35 participants; forest thinning, tree planting,undergrowth removal, park cleanup

See pages 33-34 for information on Japan Energy efforts in the
Ayumi-no-Mori forest in Hara-mura, Nagano.

Forest Volunteers
The Japan Energy Group strives to preserve the naturalenvironment of regions in Japan by having its bases work withlocal residents to protect forests. Employees and their families
volunteer in earnest to see that these activities are a success.
Takahashi-JOMO Fureai-no-Mori(Takahashi City, Okayama Prefecture)
March 18, 2006; 110 participants; raking leaves, pruning

JAPAN ENERGY CSR Report 200644

Together with Society

Disaster AssistanceTogether with Society

Together with the Community

Together with Society

Cleaning Activities
Japan Energy has for years now been holding community
cleaning activities at its sites.
In FY2005, approximately 800 employees took part incleaning activities held at the Mizushima Oil Reﬁnery, Chita
Oil Reﬁnery, Funakawa Works, Sodegaura Lubricants Plant,
Kawasaki LP Gas Terminal, R&D Center, Hokkaido Branch, andKashima Oil Reﬁnery (Kashima Oil Co., Ltd.).
For its outstanding cleaning activities, the R&D Center (inToda City, Saitama Prefecture) was awarded for the second
year in a row in the organization category of the Toda 530 Zero
Waste initiative awards.

Participation in Local Disaster Prevention
Activities
To ensure safety in local communities, Japan Energy reﬁneries
and plants cooperate with neighboring companies and local
governments in disaster prevention activities.
In FY2005, eight members of the ﬁre brigade of the R&D
Center took part in emergency response drills sponsored by the
Warabi police station. After the drill, the chief of police presented
the R&D Center with a certiﬁcate of appreciation.

Participation in Minato-Net
Japan Energy is part of a social contribution network ofcompanies and organizations in Minato Ward, Tokyo.
Representatives work together on events that enrich thecommunity and strengthen ties among their organizations.
In FY2005, eight employees of Nippon Mining Holdings
took part in a workshop titled “What Would You Do in a Major
Earthquake: What Earthquakes Have Taught Us About Disaster
Preparation,” held at the headquarters of NEC.

The R&D Center is honored for its contribution to zero waste

Science Classes and the JOMO Planet School
We’ve been holding science classes at the R&D Center for sixth
grade students from the nearby Toda City Niizo Elementary
School since 2004. These fun, informative classes include
quizzes and experiments that teach children about the basics ofpetroleum and environmental technologies.
In March 2006, we held the JOMO Planet School. In theﬁrst session, we sparked students’ interest in natural science byletting them observe the night sky through a telescope. There
were 43 students and parents from Niizo Elementary schooland six Japan Energy family members who came to observe
the moon, Saturn, and other celestial bodies.

Learning about science throughexperiments

45

JAPAN ENERGY CSR Report 2006

Observing the night sky in JOMO Planet
SchoolParticipants learn about measures to take in the event of a disaster

Opening Japan Energy Facilities to the Public
Japan Energy’s headquarters has since 1989 lent its gymnasium
to local kendo groups for practice. Since 1986, the Funakawa
Works has let locals use its Japanese archery ﬁeld.
Other Japan Energy reﬁneries and the R&D Center also
open sports facilities such as tennis courts, Japanese archeryﬁelds, and kendo training rooms to the general public.

Japan Energy Supports its Employees in their Volunteer Work
In August 2005, Japan Energy, Key Coffee, Inc., Japan Tobacco Inc., and Hitachi
High-Technologies Corporation held a charity concert and second-hand book fair. The
proceeds went to the non-proﬁt organization Child Fund Japan for its children’s education
support activities in the Philippines and were enough for each company to support two
years of schooling for one child.

English Conversation Charity
Japan Energy holds English conversation classes in Japan that help children in Thailand,Laos, and Cambodia enter school. Japan Energy employees and their families takeEnglish classes taught by an American teacher and the lesson fees go to Minsai
Center Japan, an NGO dedicated to helping the less fortunate in other countries get an
education. In FY2005, the R&D Center held three such courses and the lesson fees wereenough to send three children to school for one year.

Tochigi Guide Dog Center Cleaning Volunteers
Since the autumn of 2003, Japan Energy employees have been working as volunteers toclean up the Tochigi Guide Dog Center. In FY2005, a total of 50 volunteers took part incleanups held in spring and autumn. There are also donation boxes inside our ofﬁces insupport of dog training activities at the Dog Center. Starting in FY2006, JOMO-Net KitaKanto Co., Ltd. has donation boxes at its JOMO Service Stations in Tochigi Prefecture.

In-House Blood Donor Clinics
About twice a year, we sponsor blood donor clinics at headquarters and Japan Energysites. These provide the Red Cross with safe blood and give employees the chance to doa good deed. In FY2005, approximately 450 employees donated blood at six sites.

JOMO Volunteer Network
Established to support and promote employee volunteer activities, this network strives tocreate the engine for energy and dynamism in the community through volunteer work by
Japan Energy employees. Run by approximately 20 employees from headquarters andsites dedicated to volunteering, the network provides volunteer-related information andplans and implements in-house volunteer activities.

Collecting Items to Donate
In 1997, we began social contribution activities that anyone could easily participate in;namely, the collection of items such as used stamps and telephone cards to be given toNGOs. From January to May 2005, we collected erroneous postcards and used stamps
and donated them to the non-proﬁt organization Hunger Free World, a group working toalleviate world hunger. In March 2006, we collected unused telephone cards and otheritems for donation to the Darunee Scholarship Fund project run by the NGO Minsai
Center Japan. Through this, we were able to provide student grants to seven Laotian
elementary school students for three years.
As well, Japan Energy and four other companies participating in Minato-Net collect
PET bottle caps (polypropylene) and sell them to a recycling company, with the proceeds
going to the NGO Japan Committee for Vaccine for the World’s Children.

JAPAN ENERGY CSR Report 2006

46

Together with Society

Second-Hand Book Charity Market

Together with Society

Social Contribution Highlights

Sports Promotion and Community Contribution

Feeding the Spirit through Sports:
What We Hope to Achieve through ourBasketball Clinic
Part of our Mission is to “activate the natural energy in people" so that we can achieve a cohesive, dynamic
society. One way to do this is by promoting local sports.
To this end, Japan Energy has been holding its JOMO Basketball Clinic since 1995. Under this program,coaches and current and former players from the JOMO Sunﬂowers, the top women’s basketball team in Japan,
tour the country and teach children the basics of basketball.

More than 10 Years of Sharing withChildren All Over Japan
Begun in 1995, to promote basketball and promote exchange
between Japan Energy and local communities, the JOMO
Basketball Clinic features coaches and current and former
players from Japan’s top women’s basketball team, the JOMOSunﬂowers, touring the country to teach mainly elementaryand junior high school student’s basic basketball skills. In
FY2005, the tenth year of the program, we formed a full-timeteam consisting of former players and increased both thefrequency of sessions and the amount of material coached.
Selected teams receive special reinforcement courses

47

JAPAN ENERGY CSR Report 2006

covering a number of sessions, and one-day courses giveeveryone from children to adults the chance to master basic
basketball techniques while having fun. While sessions used
to be held four times a year, in FY2005 we held 69 sessions
attended by a total of 2,905 participants. And we gavechildren a dream to shoot for with special sessions led by Yuta
Tabuse (formerly of the Phoenix Suns), the ﬁrst Japanese everto play in the NBA. 2005 sessions were held in Chiba (July)and Tokyo (August) and 2006 sessions were held in Tokyo and
Hokkaido (May).
WEB

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

Message from the Front Lines

Keep on Giving Children Something toDream forIt’s Important to Have Something You Love

I ﬁrst heard about the JOMO
Basketball Clinic when my son
applied to join the Tabuse Clinic
held in 2005.
I currently coach the Mini
Basketball Team, a club of about 40
members. We practice at the gym of
Eiko Narita
Arai Elementary School, where theArai Mini Basketball ClubJOMO Basketball Clinic was held.
coach
At a JOMO Basketball Clinic,
the children are even more enthusiastic than usual,probably because they relish the chance to be taught bygreat players and coaches and are inspired to want tobecome great players themselves. And their dreams geteven bigger when they watch the players face off in an
action-packed game.
I think that when children get that involved in something,
their parents also become interested and this furthers
parent-child communication. If possible, I’d like to see
Japan Energy hold even more of these clinics so that morechildren can continue to have something to dream for.

I started playing basketball inelementary school. I played forJapan at the Atlanta and Athens
Olympics before retiring. Today, I
am a full-time coach with the
JOMO Basketball Clinic.
At the clinic, I instruct mainly
Taeko Oyama
elementary and junior high school
Full-time coach, JOMO
students. Recently, however, I hear
Basketball Clinicthat many schools, for one reason or
another, have to cut back on the hours that students can use
the gymnasium. This makes me feel sorry for the children.
That’s why during the clinics I make it a point to use the limited
time to convey the joy of basketball so that children will lovethe game and have a dream that they can continue to chase.
I hope to continue teaching more and more children
the importance of having something that you love doing.

Message from the Front Lines
Teaching the Joy of Ambition
Ever since I started playing
basketball in elementary school, I
have continued practicing because
I always wanted to get better.
Because I love basketball so much,
I was able to have the desire tocontinually improve myself.
Yuko OgaAt the clinics, besides teaching
JOMO Sunflowers
basic basketball skills, I want toalso teach children to love basketball and to understandthe joy they can get from the desire to improve. To this end,
I believe that I have to give them something to dream for:the desire to reach a certain level of play or to become liketheir favorite player. Finally, I want to have a good time withthe children and give them dreams and energy. (In fact, thechildren often energize me!)JAPAN ENERGY CSR Report 2006

48

Together with Society

A Message to Japan Energy

Site Report 2006
This site report provides an overview of Japan Energy’s reﬁneries, plants (sites), and R&D Center, as well as
environmental impact and related data for FY2005.
We are striving to reduce environmental impact from production according to the characteristics of each site,
such as products manufactured and scale of operations.

Funakawa Works (P52)

R&D Center (P53)
Kashima Oil Reﬁnery, Kashima Oil Co., Ltd. (P54)
Sodegaura Lubricants Plant (P52)
Kawasaki LP Gas Terminal (P53)
Chita Oil Reﬁnery (P51)
Mizushima Oil Reﬁnery (P50)

49

JAPAN ENERGY CSR Report 2006

Site Report 2006

Mizushima Oil Reﬁnery
Name

Mizushima Oil Reﬁnery

Location

2-1 Ushiodori, Kurashiki-shi, Okayama, Japan

Site land area

1,647,800m2

Date operations commenced

June 1961

Number of employees

385 (as of March 31, 2006)

Reﬁning capacity

205,200 barrels per day

An integrated reﬁnery that produces a full range of petroleum products,
including petroleum based fuel oils, normal parafﬁn, solvents, benzene,
xylene, and other petrochemicals, and lubricating oils.
The center of an advanced industrial complex, the reﬁnery is equippedwith all the advanced pollution control facilities needed to comply withstrict emission regulations. The neighboring Mizushima Plant ofPetrocokes Ltd. uses heavy fuel oil from Japan Energy to produce
petroleum coke and since April 1999 the two companies have been jointly
managing operations.

Controlled substances
Substance
Air

Regulatory laws, etc.

Details of regulation

NOx
Pollution prevention
agreement

SOx

Regulation of total
emissions

Particulate matter Air Pollution Prevention Law

Regulatory limit

Coverage

Regulation of concentration

Pollution prevention
agreement

Regulation of total
emissions

Units

Average

149.6

89.3

69.2

Petrocokes Ltd.

25.9

18.6

12.5

J Energy

187.8

58.1

37.5

Petrocokes Ltd.

28.7

9.1

4.5

For each facility

0.04-0.20<0.0005-0.190<0.01-0.104

365

154.4

100.1

Petrocokes Ltd.

NitrogenMaximum

J Energy

J Energy

Water COD
quality

Measured value(Daily average value
in parentheses)

J Energy
Petrocokes Ltd.

7

0.5

0.3

430

315.4

141.9

9

0.8

0.4

J Energy

30.5

6.5

1.7

Petrocokes Ltd.

0.9

0.03

0.02

COD

15 (10)

4.1-8.5

2.8-4.2

SS

40 (30)6.6-7.8

3.4-3.9

2 (1)

<0.5

<0.5

0.5

<0.1

<0.1

Phosphorous

Okayama Prefecture
regulations

Oil content

Regulation ofconcentration

Phenols
NitrogenPhosphorous

For eachdischarge point

Water Pollution
Prevention Law

Emissions

0.6-3.8

0.5-2.6(8)<0.1-0.1<0.1-0.1

g/Nm3

kg/daymg/lGreen procurement

Results of PRTR study
Substance

120 (60)16

Nm3/hourAmount transferred

Sum total

Air

Water

Waste

Ethylbenzene

0.2

0.0

0.0

0.2

Xylene

1.2

0.0

0.0

1.2

Toluene

5.6

0.0

0.0

5.6

Benzene

0.8

0.0

0.0

0.8

Dioxins

0.0

0.1

0.0

0.1

Notes: Rounded to the nearest tenth.
Substances with no emissions or transfers are not listed here.

Units

Segment
Paper

Tons

Mg-TEQ/year

Item

100%

Paper for forms

100%

Toilet paper

100%

Tissue paper

100%

Cardboard

100%

StationeryOfﬁce envelopes

Uniforms

Item

Copier paper

Business cards
Stationery

TargetAt least 90% (by value)of all items procured
should be green result

100%
99%
100%

Window envelopes

100%

Recycled toner100%

Work uniforms (overalls)

100%

Work gloves

100%

Fire extinguishers Fire extinguishers

100%

Note: Products are judged to be green based on the Okayama Prefecture Green
Procurement Guidelines.

JAPAN ENERGY CSR Report 2006

50

Site Report 2006

Chita Oil Reﬁnery
Name

Chita Oil Reﬁnery

Location

25 Kitahama-cho, Chita-shi, Aichi, Japan

Site land area

1,293,086m2

Date operations commenced

October 1973

Number of employees

102 (as of March 31, 2006)

A petrochemical-based reﬁnery that produces gasoline and other fuel oils,
aromatic products like paraxylene, cyclohexane and benzene, and avariety of solvents.
One of the newest reﬁneries in Japan, it is doing its best to preserve
the forested landscape that surrounds the premises.

Controlled Substances
Regulatory
laws, etc.

Substance
Air

Average amount of sulfur in fuel used

Details of
regulation

Maximum

Minimum

AverageAmount contained

NOx
SOx

Measured value

Regulatory limit(Agreement value)

Regulation of
total emissions

0.17

0.042

0.016

0.029

78.97

30.06

24.35

27.51

81.43

10.87

5.56

8.41

1,609

210

Units
%
Nm3/hourTons/year

Particulate matter

33.95

2.17

0.82

1.10

Kg/hour

Water Wastewater volume
quality COD

880

673

—

277

m3/hour

195

57.2

—

29.6

317

77.3

—

12.7

21

6.9

—

3.2
0.98

Regulation of
total emissions

SS
Oil content
Pollution
prevention
agreement

Phenols
COD

21

1.4

—

Maximum 20

6.3

—

—

Daily average 14

—

—

3.5

Maximum 20

10.0

—

—

Daily average 15

—

—

3.0

Maximum 1.0

0.5

—

0.5

Phenols

Maximum 1.0

0.1

—

0.1

Nitrogen

Daily average 20

1.1

—

0.4

Phosphorous

Daily average 2.0

0.2

—

0.1

SS
Regulation ofconcentration

Oil content

Kg/day

mg/l

Noise

55

47~54

dB (A)

Vibration

65

30~30

dB

Results of PRTR Study
Substance

Emissions

Amount transferred

Sum total

Air

Water

Waste

Xylene

2.8

0.0

0.0

2.8

1,3,5-trimethylbenzene

0.1

0.0

0.0

0.1

Toluene

3.9

0.0

0.0

3.9

Benzene

0.8

0.0

0.0

0.8

Notes: Rounded to the nearest tenth.
Substances with no emissions or transfers are not listed here.

51

JAPAN ENERGY CSR Report 2006

Units

Tons

Funakawa WorksName

Funakawa Works
162-1 Aza-Ashizawa, Funakawa-Minato Funakawa,
Oga-shi,Akita, Japan

Location
Site land area

280,608m2

Date operations commenced

March 1939

Number of employees

65 (as of March 31, 2006)

Produces top-grade, high-value-added petroleum-based lubricating oils.
The birthplace of our company’s oil reﬁning business, this site tackles
all environmental issues head on.

Controlled Substances
Substance
Air

NOx
SOx
Particulate matter

Water pHquality COD
SS
Oil content

Regulatory
laws, etc.

Details of regulation

Concentration regulations for each facility
Air Pollution
K-value regulations for each facility
Prevention Law
Concentration regulations for each facility

Pollution
prevention
agreement

Measured value

Regulatory limit

Maximum Minimum Average

Wastewater standards
under the Water Pollution
Prevention Law

Units

260

90~1088.76

0.48~3.66—

0.3

0.001~0.004

g/Nm3

ppm
—

5.0~9.0

8.2

7.3

7.8

60 (daily average 30)

12.5

3.8

7.2

160 (daily average 120)

70

24.0

2.5

7.5

200 (daily average 150)

5

2.8

0.2

0.8

0.5

<0.2

<0.2

<0.2

Phenols

5.0~9.0

—

mg/l

5
3

Sodegaura Lubricants Plant
Name

Sodegaura Lubricants Plant

Location

1 Kitasode, Sodegaura-shi, Chiba, Japan

Site land area

55,735m2

Date operations commenced

April 1969

Number of employees

9 (as of March 31, 2006)

Began operations in 1969 as Japan Energy’s supply base for lubricatingoils in East Japan. Using advanced blending technology, this site
produces a variety of lubricating oils for automotive, marine, industrial
and other purposes. Received ISO 14001 certiﬁcation early on, in 1998.

Controlled Substances
Substance
Water
quality

Regulatory laws, etc.

Regulatory limit

Measured value
Maximum

Minimum

AveragepH

6.5~8.6

8.4

7.2

7.7

COD

10

7.2

3.8

5.1

20

6

<4

4

1

<1

<1

<1

Nitrogen

—

7.5

0.3

5.0

Phosphorous

—

0.46

0.05

0.30

SS
Oil content

Pollution prevention agreement with
Sodegaura City

Units
—

mg/l

JAPAN ENERGY CSR Report 2006

52

Site Report 2006

Kawasaki LP Gas Terminal
Kawasaki LP Gas Terminal
5-1 Mizue-cho, Kawasaki-ku, Kawasaki-shi,
Kanagawa, Japan

Name
Location
Site land area

44,441m2

Date operations commenced

March 1968

Number of employees

15 (as of March 31, 2006)

The site’s facilities have been gradually automated since the 1980s and it is
now one of the ﬁve largest sites in Japan in terms of annual tank truck
shipment volume (680,000 tons). We are working towards ﬁve
environmental targets and goals. In the seven years since the site wascertiﬁed for ISO 14001, we have achieved steady environmental gains
through improved management and work processes, such as the reductionof electricity use and exhaust gas emissions. Our local environmental
activities include monthly cleanups of the public roads surrounding the siteand larger scale cleanups together with 14 other companies in the area.

Controlled Substances
Regulatory
laws, etc.

Substance
Water
quality

Measured value

Regulatory limit

Maximum

Minimum

Average

COD

130

20

12

16

BOD

130

9

9

9

120
38˚C or less and no more than 10˚C over the watertemperature where the wastewater is released.
Same as water temperature where wastewater is released.

8

2

5

24

9

17

25

10

17

Kanagawa
Prefecture
regulations

SS
Wastewatertemperature

Units

Mg/l

°C

Toda (R & D Center)
Name

Toda (R & D Center)

Location

3-17-35 Niizominami, Toda-shi, Saitama, Japan

Site land area

49,721m2

Date operations commenced

April 1959

Number of employees

134 (as of March 31, 2006)

This site carries out energy- and environment-related research including
next-generation clean fuels, while at the same time striving to protect andlive in harmony with the surrounding environment.

Controlled Substances
Substance
Water quality(sewage wastewater)

Regulatory laws, etc.

Regulatory limit

Average

600

11

<10

10.9

SS

600

12

<5

6.5

5

<1

<1

<1

240

14

<0.1

2.8

Toda City regulations

NitrogenPhosphorous

32

0.3

<0.1

0.14

Phenols

5

<0.02

<0.02

<0.02

Results of PRTR Study
Emissions

Amount transferred

Sum total

Air

Sewerage

Waste

Toluene

0.0

0.0

0.5

0.5

Xylene

0.0

0.0

0.2

0.2

Notes: Rounded to the nearest tenth.
Substances with no emissions or transfers are not listed here.

53

Minimum

BOD
Oil content

Substance

Measured value
Maximum

JAPAN ENERGY CSR Report 2006

Units
Tons

Units

mg/l

Kashima Oil Reﬁnery of Kashima Oil Co., Ltd.
Name

Kashima Oil Reﬁnery

Location

4 Touwada, Kamisu-machi, Kashima-gun, Ibaraki, Japan

Site land area

2,730,000m2

Date operations commenced

April 1970

Number of employees

338 (as of March 31, 2006)

Reﬁning capacity

200,000 barrels per day

An integrated reﬁnery producing a range of products from petroleum
products to petrochemicals like paraxylene. Raw materials and fuels goback and forth for processing between this, the central reﬁnery in theindustrial complex, and other petrochemical companies.
The Kashima industrial complex has an environmentally friendly andefﬁcient design: companies share utility service and waste treatment
facilities, and also own facilities for ﬁnal treatment of wastewater, andgreen areas for relaxation and recreation.

Controlled Substances
Regulatory
laws, etc.

Substance
Air

NOx
SOx
Particulate matter

Water
quality

Details of regulation

Concentration regulations for each facility—

48.0~64.7—

126.2~150.8

0.04~0.05—

5.8~8.6

COD
10

Ibaraki Prefecture
regulations Pollution
prevention agreement

Minimum

343

pH

SS

Measured value
Maximum

132

Regulation of total emissions

Pollution prevention
agreement

Point ofemission

Regulatory limit—10

Oil content
1

0.06

Offensive Hydrogen sulﬁdeodors Xylene

2

Average

Nm3/hour

0.001~0.033

g/Nm3

1GB

8.2

8.0

8.1

2GB

8.2

8.0

8.1

Central Road

8.3

8.0

8.1

West No. 2 Road

8.2

8.0

8.1

3CW

8.2

7.6

8.0

1GB

2.1

0.2

1.0

2GB

2.2

0.3

0.9

Central Road

3.9

0.4

1.1

West No. 2 Road

5.7

0.3

1.4

3CW

1.7

0.4

1.0

1GB

6.4

0.5

2.1

2GB

9.2

0.4

1.9

Central Road

7.3

0.5

2.3

West No. 2 Road

9.3

1.1

2.4

3CW

7.8

0.4

2.2

1GB

0.9

<0.5

0.6

2GB

1.0

<0.5

0.6

Central Road

0.9

<0.5

0.6

West No. 2 Road

0.8

<0.5

0.6

3CW

0.8

<0.5

0.6

—

<0.001
<0.1

Units

—

mg/l

ppm

Results of PRTR Study
Substance

Emissions

Amount transferred

Sum total

Air

Sewerage

Waste

Ethylbenzene

1.6

0.1

0.0

1.7

Xylene

18.0

1.5

0.0

19.5

1,2-dichloropropane

0.0

0.0

0.0

0.0

1,3,5-trimethylbenzene

0.1

0.0

0.0

0.1

Toluene

17.0

3.7

0.0

20.7

Phenol

0.0

8.1

0.0

8.1

Benzene

3.1

1.5

0.0

4.6

Notes: Rounded to the nearest tenth.
Substances with no emissions or transfers are not listed here.

Units

Tons

New Construction of Production Plant
for Petrochemical Products
Japan Energy, Mitsubishi Chemical Corp., and Mitsubishi
Corp. will invest approximately 70 billion yen to jointly
construct facilities for the production of aromatic products
and light naphtha made from condensate (natural gas
associated crude oil). The plant will be constructed inside
the Kashima Oil Reﬁnery of Kashima Oil Co., Ltd.
Overview of Joint Business
Main products: Paraxylene, benzene, light naphtha
Start of construction: September 2006 (operations
scheduled to start in November 2008)
Main operator: Kashima Aromatics Co., Ltd.

JAPAN ENERGY CSR Report 2006

54

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

Kanji Tanimoto

Ms. Yoko Takahashi

Professor of Graduate School ofCommerce and Management,
Hitotsubashi University, Doctor of
Business Administration

Chief Director of the Japan Philanthropic
Association

Personal history

Personal history

Completed doctorate at the Graduate School of Business Administration, Kobe University.
Worked as a professor at Wakayama University before joining the School of Business at
Hitotsubashi University in 1997.
Began current position in 2000.
Became Representative Director of NPO corporation “Social Innovation Japan” in 2005
Expertise: Corporate systems, “Corporations and Society”
Publications: ”CSR: Kigyou to Shakai wo Kangaeru “Thinking About Corporations andSociety”, published by NTT Publishing Co., Ltd. (2006)“Social Enterprise”, (Author and Editor), published by CHUOKEIZAI-SHA, INC. (2006)

Joined Japan Philanthropic Association in 1991.
Worked as secretary-general and managing director before assuming her present
position of chief director in June 2001.
Has a wide range of contacts in government, industry and nonproﬁt organizations, andworks with these in philanthropic activities that support both companies and individuals.

Compared to the previous report, this CSR Report 2006 shows
Japan Energy’s effort to present the environmental and social
aspects of its business activities in a manner that is easier tounderstand.
In 1997, Japan Energy established its corporate mission
and business principles. Understanding that the implementationof these leads to CSR action, in 2005 the company started the
Corporate Social Responsibility Department to give it the capacity
to implement CSR action across the entire company.
However, the CSR Report does not tell us how the content of
the mission and business principles are connected to things suchas management of the company and the tasks in the area of CSR.
By clearly explaining how CSR ﬁts into the company’s management
system and how it is put into action, Japan Energy could make its
CSR activities more accessible to readers of this report.
Although the CSR Report comes up short in this respect, Japan
Energy’s Mission Guidebook (published in 2002) shows the businessprinciples divided by each division. Based on this, the company
has a system, with the Corporate Social Responsibility Department
being the key body, in which key CSR themes are selected for eachdepartment, plans are announced to put these into action, andresults are announced (in a semiannual review). I think, therefore, thatthe company should explain this mechanism in its CSR Report.
By explaining what the company understands to be theconcrete CSR tasks at hand, and by giving a concise and easy tounderstand overall picture of the basic policies and annual themes
related to the environment and society, Japan Energy can make its
CSR activities accessible to a greater number of stakeholders.
This CSR Report explains mainly Japan Energy’s non-ﬁnancial
activities in the areas of environment and society over the past year.
CSR is not something separate from the company’s business, butrather a fundamental questioning of how the company conducts its
business. No matter what the CSR activities, they will eventually betied to a company’s performance, business structure and corporate
value. While this connection is pointed out in the company’s business
report, in the medium-term management plan and annual report of
Nippon Mining Holdings Inc., it is mentioned merely as supplementary
information. I hope that Nippon Mining Holdings and Japan Energy
will look into ways to make the report more consistent overall.

My ﬁrst impression was that this year’s report is more interactive
than last: it surveys the comments and level of satisfaction of
JOMO service station customers.
As well, readers are made aware of the tasks at hand forJapan Energy with sections called “Our Responsibilities andActions” for each process of the supply chain.
However, since the company went to all the trouble of listingdata for each of its sites, I wish it would have explained some ofthe environmental and social activities at each site in order to give
us some details of what they are doing. By including the activities
at each site and interviews with participants, future reports will
give us the warmth and energy of the people involved.
As well, in the area of air pollution prevention, the reportmentioned that FY2005 emissions increased. But it didn’t tell us
why or what Japan Energy is doing about this.
As for social contribution activities, the feature on thebasketball clinic had photos that captured the excitement at
the event sites and really allowed me to feel the enthusiasm of
this activity. However, although Japan Energy clariﬁed its policy
for social activities this year, this is not clear from the report. I
hope that in future Japan Energy will explain the scope of eachactivity, its relation to the company’s major ﬁelds, and the beneﬁts
it brings. This would make it easier to see the direction in which
Japan Energy is heading.
Although I always stress the importance of social contributions
through a company’s business, too narrow a focus will cause acompany to miss the people who need its help the most. Activities
like the JOMO Children’s Story Award meet such needs. Such
grassroots activities that have been going on for years are surely
the source of some interesting stories and people that Japan
Energy could highlight in future reports, thus giving readers anunderstanding of the true value of the company’s social contribution
activities. And for the JOMO Scholarship Grant awards, follow-up
news on and interviews with students would be effective in letting
more people know about this system. By presenting the company’s simple, grassroots activities or its business stance in a way that
captures the interest of the readers, I hope that Japan Energy will
inform both its employees and the general public about what it has
achieved, what it still has to do, and where it is heading.

55

JAPAN ENERGY CSR Report 2006

Explanation on Terms
Terms, abbreviations

Explanations

Aroma

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

Sound detection system

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

Activated sludge aerationequipment

A device that brings liquid and air into contact. Substances in the air (oxygen, etc.) are injected into the liquid, or dissolved gasses in thewater are emitted into the air. By bringing wastewater into contact with air and providing plenty of oxygen to the air, this device improves thecapacity of the aerobic microbes to break down sludge. The methods used by the device include agitating the air by blowing it, stirring theliquid to remove air from its surface, and dispersing the liquid into the air to give the two maximum opportunities for contact.

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

Environmental impact

The degree of inﬂuence on the environment.

Guard basin

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

Carbon neutral

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

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

kPa

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

Photochemical smog

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

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

Catalysts

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

COD contamination

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

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

Biodegradable

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

Denitration

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

Desulfurization

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

Hydrocarbon vapor
recovery unit

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

A DPF is a type of post-treatment technology. Installed between the engine and the mufﬂer, it has a ceramic ﬁlter that traps the particulate
Diesel particulate ﬁlter (DPF) matter in the exhaust from diesel engines.
TolueneAn aromatic hydrocarbon, it has a methyl group (CH3) substituted in place of one hydrogen atom in benzene. It is a colorless, ﬂammable liquidwith a distinct odor. It is obtained from the distillation of coal tar and the breakdown and reforming of petroleum. It is the raw material for dyes,
explosives, and synthetic resins. It is also commonly used as a solvent as a main ingredient in paint thinners. It is also known as toluol.

Naphtha

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

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 must be handled with care. Its molecular formula is C6H6 and it is the mostbasic substance of the aromatic hydrocarbons.

Delivery terminals

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

CSR Report 2006
Published: July 2006 (2nd Edition as of Oct. 2006)
Publisher: Japan Energy Corporation, Corporate Social
Responsibility Department

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

JAPAN ENERGY CSR Report 200656

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

Japan Energy supports a forest preservation initiative
sponsored by Japan’s Forestry Agency.
This CSR Report 2006 enhanced the use of thinned
wood from forests in Nagano Prefecture, Japan.
Making paper in this way preserves and expands
forests, which absorb CO2.
B-(2)- 060008

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