Komatsu Environmental & Social Report 20092

Message from Top Management

Komatsu is pursuing endeavors to mitigate environmental impact,by placing the environment among our highest management
priorities.
Amidst the sudden changes in the global economic situation sinceautumn 2008, Komatsu inevitably experienced a significant correctionin its sales and profits for FY2008. Nevertheless the Basic Stance ofManagement at the Komatsu Group remains squarely focused onenhancing Quality and Reliability and thereby maximizing corporate
value. We consider corporate value to be the total sum of trust given
to us by society and all stakeholders, and we pursue business
operations firmly grounded in that philosophy.
Environmental activities
Even in the challenging management environment we now face,
Komatsu places measures to mitigate global warming and initiatives
to help build a resource recycling society among our highest management priorities. In our assertive endeavors on both the “offensive(proactive)” and “defensive (observant)” sides, we are proactively
reducing carbon dioxide (CO2) emissions in all aspects of business
operations throughout product lifecycles, from product development
to procurement, manufacturing, logistics, sales, and after-sales service, while observantly complying with the laws and regulations
enacted in each country and region along with our internal environmental policies and standards set voluntarily. In product development,

1

30 hybrid hydraulic excavators have been introduced to the Japanesemarket, with average CO2 emission reductions of some 25% during
operations. These vehicles have been so well received in the market
that we are confident in beginning a full-scale launch in the Chinese
market in FY2009. Whether developing hybrid electric forklift trucks,
AC servo presses, wire saws for making silicon wafers for solar cells,
or other innovative products, we will maintain our commitment todelivering products with meaningfully lower environmental impact. We
are also keen to pursue the utilization of biodiesel fuels for construction equipment and other future-oriented goals.
As for manufacturing operations, we decided to embark on areorganization of our global manufacturing facilities, notably throughthe transfer of some manufacturing operations from the Mooka andKomatsu Plants to the Ibaraki and Kanazawa Plants, which are adjacent to ports. This transfer will reduce CO2 emissions and logistics
costs. We continuously strive for groundbreaking energy-saving manufacturing techniques that advance our CO2 emission reductions during
the manufacturing process, epitomized by a method for partially enlarging shaft diameters into appropriate sizes without grinding down rods.
Our ongoing environmental activities go beyond our achievements
in CO2 emission reductions. During product development we arereducing or eliminating lead, mercury, and other substances of environmental concern and meeting the requirements of REACH, a new
EU regulation on chemical management that has come into force inEurope. Komatsu has moreover succeeded in making the counterweights in hydraulic excavators recyclable, thanks to cooperation with
the Japan Construction Equipment Manufacturers Association(CEMA). A number of environmental endeavors remain underway inmanufacturing operations, such as a shift to returnable packaging
and zero emissions activities, in which all wastes are recycled.
Maintaining strong cooperation with our subsidiaries worldwide,sales agencies and rental companies, and business associates
around the world, we bolster our activities for reducing environmental
impact based on still higher objectives.
Quality, safety, and compliance“Quality and Reliability” is the fundamental approach for us as a manufacturer placing Monozukuri (manufacturing competitiveness) at the core.
Komatsu strives to provide products, services, and systems that aresafe and innovative from the perspective of the customer. This enables
us to foster closer relations with customers as true partners. We areproviding products that the customer can use with a sense of assurance
for many years to come while offering customers recommendations richin IT and other practical knowledge ideal for their operating sites, assisting them in heightening productivity and safety levels.
Quality and Reliability and safety extend beyond providing products
and services that give customer satisfaction. They also impact theentire spectrum of the Komatsu Group’s corporate structure, busiCO2 Emission Reductions in
Manufacturing Operations(%)
100

CO2 Emission Reductions in
Logistics
100

100

90

72.7

60.7

60

58.8 or lessTarget for (FY)
2010

75.0
69.0

70
60
0

0
2008

100

80

50
2000

Comparison of Fuel Consumption
against Hybrid Hydraulic Excavators

70

70
0

President and CEO

908080.0 or less

Kunio Noji

100

90
80

For Komatsu to receive the trust of society, we continually reinforce
our corporate structure, disclose corporate information to society andall stakeholders, and engage in fully-fledged social contribution activities.
We at Komatsu, from management to every employee around theworld, value our relationship with our stakeholders and are determined
to contribute to the realization of a sustainable society, fully recognizing
the important obligation of fulfilling corporate social responsibility.

(%)

(%)

100

nesses, employees, and management. All Group employees champion ongoing reforms and improvements on the basis of the sharedguiding principles of The KOMATSU Way.
In November 2008, Komatsu became a signatory to the United
Nations Global Compact*. Komatsu has thoroughly implemented
compliance throughout the Group based on Komatsu’s Code ofWorldwide Business Conduct formulated in 1998. Now that morethan 75% of sales are recorded outside of Japan, we are attracting
greater attention to our practices in regions where we operate.
Komatsu will uphold the spirit of compliance across the Group, aspiring to maintain our standing as a responsible corporate citizen in fullrecognition of its commitments as a global corporation.

1990

2008

Target for (FY)2010

Standard
modelsAverage
Estimationof average measured
from actualuse
use in theJapanesemarket*The United Nations Global Compact is a voluntary code of conduct in the four areas of human rights, labor, environment, and anticorruption promoted by the United Nations for adoption by companies.
The Ten Principles of the Global Compact
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights within their sphereof influence; andPrinciple 2: make sure that they are not complicit in human rights abuses.
Labour Standards
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

2

2008 Highlights

Introducing the Hybrid Hydraulic Excavator
The PC200-8 hybrid hydraulic excavator, theworld’s first hybrid construction equipment,
achieves an approximately 25% reduction in fuelconsumption compared to the standard model.
Having launched sales in a limited number inJune 2008, Komatsu intends to produce 100
vehicles per month starting in October 2009.

Mitigating Climate Change in
Manufacturing Operations

Acquiring ISO14001 Integrated Certification
for the Komatsu Group in Japan

Komatsu has worked to achieve its medium- andlong-term targets, aiming at a 20% or more
reduction in CO2 emissions per unit of manufacturing value in manufacturing operations by
FY2010 compared to the FY2000 level. The
company had already attained its targets in
FY2006, and in FY2008 CO2 emissions per unitof manufacturing value decreased still further,showing a significant improvement at 27.3%
compared to the FY2000 level.

Komatsu acquired ISO14001 integrated certification, a widely accepted international standard forenvironmental management, for the Group in
Japan in May 2008 by adding the Head Office,Research Division, and other non-manufacturing
facilities not previously certified and major affiliates in Japan to its four plants that had alreadyacquired certification.

CO2 emission reductions perunit of manufacturing value(compared to FY2000)

Target for FY2010:

20% reductions
Results for FY2008:

27.3% reductions
ss P. 5

ss P. 16

ss P. 11

The Revolutionary Sigmadozer
Digging Blade

Undertaking Projects to Remove
Anti-personnel Landmines

Opening the Human Resources
Development Center in the Philippines

The Sigmadozer blade is a digging blade with ashape derived from breakthroughs in excavation
theory. It has brought 15% work capacity gains
for models with this blade compared to thosewith conventional blades.

In March 2009, Komatsu completed the “Projectfor Developing a Safe Village in Cambodia” being
undertaken jointly with the Japan Mine Action
Service (JMAS), a non-profit organization registered in Japan. This Special Story introduces adevelopment project to remove landmines andreconstruct local communities.

Komatsu places emphasis on developing humanresources around the globe to reinforce its
Monozukuri, or manufacturing competitiveness,and upgrading product support capabilities
encompassing the Komatsu Group. This topic
introduces one base fostering human resources,
the Komatsu Human Resources Development
Center in Manila, the Philippines.

ss P. 13

ss P. 21

ss P. 29

The Basic Stance of Management at the Komatsu Groupis that corporate value is the total sum of trust given to
it by society and all stakeholders. The Group conserves
the environment in business operations, emphasizes
compliance, holds dialogues with stakeholders, andcontributes to society through assistance for disasterrecovery and other means, all with the aims of sustained
growth and maximization of corporate value.
Executive Officers Supervising the Environment and CSR(from left):

Masao Fuchigami
Director and Senior Executive Officer, Supervising Environment,
Research, Design & Development and Quality Assurance

Kenji Kinoshita
Director and Senior Executive Officer, Chief Financial Officer
Supervising CSR and Corporate Communications & Investor
Relations

Masakatsu Hioki
Senior Executive Officer, Supervising Compliance, Legal Affairs,
Human Resources and Education and Safety & Health Care

3

Contents

Komatsu is pursuing sustainable material cycles
and local production for local consumption witha view to reducing CO2 emissions through theutilization of locally produced biodiesel fuels fordump trucks operating at local mines.

Message from Top Management . . . . . . . . . . . . . . . .. . . . . . . . . . . . 1
2008 Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 3

Environmental Activities

Reducing CO2 Emissions throughBiodiesel Fuels

Environmental Activities . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 5
Special Story 1
Mitigating Climate Change through Construction
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 5
Pursuing Environmental Management . . . . . . . . . . .. . . . . . . . . . . . 7
Mitigating Climate Change . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 13
Creating a Resource Recycling Society . . . . . . . . . . . . . . . . . . . . 17
Environmental Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Activities for Society

Activities for Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ss P. 14

Providing Recovery Assistance after the
Earthquake Disaster in Sichuan Province, China

Managerial Structure

Komatsu provides various types of assistance sothat areas impacted by natural disasters can recover as quickly as possible. The company donatesor lends construction equipment and facilities necessary for rescue and recovery activities. It also
makes monetary donations. Komatsu assisted theareas affected by the great earthquake in Sichuan
Province, China in May 2008 by providing monetary
donations, construction equipment free of charge,
and operators for the equipment.

Special Story 2
Activities to Remove Anti-personnel Landmines . . . . . . 21
Special Story 3
Creating Places Renowned for Cherry Blossoms andBeautiful Local Environments . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 23
Special Story 4
Komatsu’s Social Contribution Activities Around
the World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Developing Together with Employees . . . . . . . . . . . . . . . . . . . . . . 27
Communication with Stakeholders . . . . . . . . . . . . . . .. . . . . . . . . . . 31

Managerial Structure . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 33
The Basic Stance of Management . . . . . . . . . . . . . . .. . . . . . . . . . . 33
Enhancing Corporate Governance, Compliance,
and Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Working Together with Business Associates andCustomers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 36
Quality and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Data

ssP. 32

Data on Environmental Impact Resulting from
Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Environmental Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Environmental Data by Manufacturing Facility
in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 45
Environmental Data by Manufacturing Facility
outside Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 49
Environmental Impact Indicators by Region. . . .. . . . . . . . . . . 50
Environmental Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Environmental and Social Activities to Date &External Commendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Company Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 53
Independent Review on
Environmental & Social Report 2009 . . . . . . . . . . . . .. . . . . . . . . . . 54

Cover Photos
Components of the Komatsu Hybrid System
Top left:
Electric motor to swing the upper structure
Bottom left: Inverter, capacitor
Right:
Power generation motor(between the engine and the hydraulic pump)
See P. 6 for more information on the configuration of this system.

4

S p e c i a l

S t o r y

1

Mitigating Climate Change throughConstruction Equipment

The Day Hybrid Construction
Equipment Becomes Standard
Construction equipment becoming hybrid—this is a tale not of
the future, but of the here and now.
“Of course I had heard of hybrid cars.” “But I had never evenheard of hybrids in construction equipment.” “I wonder if thatsort of thing would even be possible.” “Construction equipmentthat runs on both electricity and light oil….” These are the reflections of the operators about the day this equipment first appearedat construction sites.
In October 2008, a PC200-8 hybrid hydraulic excavator began
working at a construction site about the size of an elementary
school playground in the city of Sodegaura in Chiba Prefecture,
Japan. Essentially, this is the construction equipment version ofa hybrid car, just as the name suggests. Only 30 of these special
hydraulic excavators exist anywhere in the world.
Directly in front of it, a truck carrying a load of dirt comes to a
halt. Almost as if tapping lightly on someone’s shoulder, thePC200-8 hybrid uses the tip of its shovel with great dexterity tocarve out a shape. Next it rotates its arm and upper structure
fully around, expertly gathering up the dirt that has toppledover.
In fact, electric energy is stored up during the series of movements in rotating. That is the secret of the hybrid. While it isusing the stored electricity, the engine works less, making its
fuel consumption drop dramatically. Carbon dioxide emissions
can also be reduced. This means it is eco-friendly. While results

5

may vary according to the jobsite or the type of operations, atthe Sodegaura site, the hybrid needed to be refueled only about
once every four days, an improvement over the normal rate ofonce every three days.
There is a small dock at this site, which is adjacent to Tokyo Bay.
The dirt removed from construction sites in Tokyo and Yokohama
is loaded onto ships carrying the loads of some 500 10-ton trucks
and transported all at once by sea. Naturally, transporting thisby truck would consume both time and fuel and might also bea cause of traffic congestion. Instead, this is an eco-friendly wayof transport that decreases fuel consumption and reduces CO2
emissions and costs. The yellow vehicle working silently seems
to be saying, “See? I really have what it takes to work here.”
Komatsu began developing hybrid construction equipment morethan ten years ago, before eco-friendliness or the global-warming issue came to be highly publicized. Cycles of research,
prototype making, and testing finally paid off in creating ecofriendly construction equipment that sacrifices neither performance nor power. The first 30 such vehicles are now on the job
in Japan. In 2009, several hundred more hybrid excavators will
join them, working at construction sites all around the world.
The vision sketched out so many years ago will soon come tobe—the day hybrid construction equipment becomes standard.

Environmental Activities

Electric power
assistance at the timeof engine acceleration

The upper
structure swing

The Komatsu Hybrid System
InverterPower generation
motorElectric motor toswing the upper
structure

Introducing a Limited Number of Hybrids
in Japan in FY2008
As a leading manufacturer in construction equipment, Komatsu isdetermined to contribute to conserving the global environment
through its commitment to reduce CO2 emissions. The company
was convinced that developing a hybrid model for the PC200-8
medium-sized hydraulic excavator series would be effective andmake an impact, as this series enjoys the greatest demand.
The first 30 hybrids were introduced at customers and KomatsuGroup rental companies in the Tokyo metropolitan area that cooperated in practical evaluations of the vehicles. A limited number weresold in Japan because FY2008 production was restricted in orderto enable adjustments to the future manufacturing system in lightof evaluations from the market*.
The operability and navigability of the PC200-8 hybrid are thesame as those of the non-hybrid model, except for the slight difference in sound during rotation between the electric and hydraulicmotors, and in fact customers using the hybrids have given equivalent evaluations to both types.
*The evaluation results of the vehicles introduced in limited numbers in Japan
indicate 31% less fuel consumption than non-hybrid models.

Utilizes electricity
discharged from thecapacitor when theengine accelerates

Recovers energy,
when swinging
slows down inloading operation

Capacitor

EngineEfficiently andinstantaneously
stores anddischarges
electric energy

The proprietary Komatsu Hybrid System recovers energy generated
when the upper structure reduces its speed while swinging, stores theenergy in the capacitor, and uses it to assist the power of the engine
via the power generation motor when the engine accelerates.
To ensure high reliability and durability, Komatsu manufactures allcomponents of the Komatsu Hybrid System in-house, except for thecapacitor cells.

The Shonan Plant, which manufactures components of theKomatsu Hybrid System

Pursuing Development outside Japan
More significant improvements in fuel consumption are expected
outside Japan, as vehicles are typically in operation for more hours
there than in Japan. In certain locations, fuel cost comprises anextremely high proportion of maintenance costs, leading to evengreater economic benefits from the PC200-8 hybrid.
In FY2009, Komatsu intends to introduce the hybrid throughout
the Japanese and Chinese markets, with test marketing to getunderway in other regions across the globe.

A first for Komatsu:
The PC200-8 hybrid is recognized
as the most outstanding product of 2008

Addressing Future Developments
Komatsu plans to produce 100 vehicles per month in Japan from
October 2009 and 300 vehicles annually in China in future years.
To respond to requests from society, the company is consideringdeveloping hybrids other than the hydraulic excavator and is currently moving forward with research and development in this area.

The PC200-8 hybrid was recognized with the Nikkei Business
Daily Award for Excellence in the 2008 Nikkei Superior
Products and Services Awards (selected from 240 products
featured in four newspapers owned by Nikkei Inc.)

6

Pursuing Environmental Management
Komatsu promotes environment-friendly activities throughout the entire Group to realize its vision of “What Komatsu
Can Do and What It Must Do” for the environment and the sustainable development of society.

Environmental Activities

Komatsu’s Relationship with the Environment
T Offering DANTOTSU products featuring outstanding performanceand hybrid construction equipment that drastically reduce customers’ CO2 emission amounts during the use stage as well as
environment-friendly products that support customers’ environmental conservation activities

In recognition of the fact that its business activities affect a numberof stakeholders, most notably the residents of the surrounding communities, the Komatsu Group is promoting activities that will reduce
environmental impacts. The Group has focused on the following
areas.
T Introducing environmental management systems (EMSs) centered on the Komatsu Head Office through ISO14001 integrated
certification, a widely accepted international standard for environmental management
T Reducing environmental impact in all business stages, fromdevelopment to manufacturing, logistics, sales, and after-sales
service

In line with the Komatsu Earth Environment Charter revised in 2003,
the Komatsu Group embarks on global initiatives across businessareas, with subsidiaries responsible for implementation. The Groupseeks to achieve the following fundamental principles: (1) Contributions
to realization of a sustainable society; (2) Simultaneous realization ofenvironmental and economic performance; and (3) Observance ofcorporate social responsibility.

Relationship of the Komatsu Group’s Business Activities with the Environment
0'%+ ( %$%$+ '%$#$)' $"-&'%*)(
and services
0 ') %$$%&') %$%)'$() %$
network for used components (parts),
information on “Reman” sales, etc.

Sales and After-sales Services0 ) + ) ((%$")$
safety and environmental
guidelines

aP. 13–15, 18
Sales andafter-sales
service agentsaP. 12Use
0*) %$%
environmental impacts
during the productusage stage
0'%+ ( %$%(%"*) %$(%'
customers’
environmental activities
0'%#%) %$%
fuel-efficient operation
0'%*)(*&&%'))'%*use of IT

Communications satellite

Sales and after-sales
service agents

Logistics
0 2 reductions inlogistics
0#&'%+#$)%
transport efficiency
0#&'%+#$)%
packing material

Komatsu
employee

Sales, Rentals, andAfter-sales Services
Products

aP. 16, 19

Development
0 $+ '%$#$)
%$%#0 ( $0 *#)'#)')(for development ofenvironmental
technology

Products

aP. 17, 39

Reuse of products
Local
community

Reuse

Reuse of parts

Komatsu
employee

Reuse

CustomeraP. 13–15

ReduceBusiness
associates

CO2

Procurement ofMaterials
0 '$&'%*'#$)ParticulatematterManufacturing

Remanufacturing of used components&')(/#$1*( $((aP. 12, 36

aP. 180 ) ) %$%" #)$
(energy conservation)0 ) +*) " .) %$%'(%*'(.'%# (( %$(0 $+ '%$#$)"' (!#$#$)0 " # $) %$%.'%*(# "(*()$(0'# $) %$%*(%%'$ 
chlorinated cleaning solvents

Recycling of materials(outsourcing)aP. 17

Recovery

Used vehicles

RecycleKomatsu
employeeaP. 16, 19–20, 43–44

Disassembly
Proper disposal ofwaste (outsourcing)

7

NOx

Use

Environmental Activities

Komatsu Earth Environment Charter (July 2003 revision)
Corporate Principles
1. Contributions to Realization of Sustainable Society
The Komatsu Group recognizes conservation of the earth’s environment for a sustainable society as among the most important tasks
for mankind in the 21st century.
The Komatsu Group endeavors to contribute to this task by actively integrating environmental conservation into all of its businessactivities. The Komatsu Group reaffirms its long-term commitment to this effort as an important management priority.

2. Simultaneous Realization of Environmental and Economic Performance
The Komatsu Group is committed to improving both environmental performance and economic efficiency, as a group of companies working
toward superior manufacturing for customer satisfaction. To this end, the Group constantly takes up the challenge of advancing technologies
to develop creative products that improve both environmental performance throughout the product’s life cycle and the product’s economic
performance at the same time.

3. Observance of Corporate Social Responsibility
Each company of the Komatsu Group seeks to be a respected corporate citizen of the local community in nations around the world.
Each company strives to fulfill its corporate social responsibility, including compliance with applicable laws and regulations on environmental conservation, as well as voluntary involvement and participation in community programs to address environmental concerns,
and through dialogue and coordination with regulatory authorities, local leaders, and the public. Each of the individual Komatsu Group
companies is responsible for fulfilling its independent legal obligations.

Guidelines for Corporate Activity
1. Framework for Global, Group-wide Environmental Management System
1) Production facilities of the Komatsu Group, already with ISO certifications, will work to maintain and improve their environmental management system, while other production facilities, yet to be certified, will strive to acquire ISO certifications as soon as possible.
The Komatsu Group will also work to introduce and improve an environmental management system in all business domains other than
production, and to implement a program of continuous improvement in environmental performance and in-house environmental auditing.
2) The Komatsu Environmental Committee develops environmental action plans for the Komatsu Group. Each division or affiliatedcompany of the Komatsu Group is responsible for establishing its own mid- to long-term targets based on Group-wide action plans
and for developing and implementing specific action plans.
The Komatsu Environmental Committee also develops common guidelines for an environmental manual for the Komatsu Group,and based on them, each division and affiliated company is responsible for providing for its own rules and procedures in accordancewith respective circumstances.

2. Development of Products and Technology with Superior Environmental Quality and Economic Performance1) The Komatsu Group seeks to develop and provide to customers superior products with world-leading environmental quality and economic
performance. The Komatsu Group seeks to meet or surpass emission control performance and other environmental requirements applicable toits construction and mining equipment products. The Komatsu Group establishes common mid-range technology development goals for eachbusiness domain, and each development center is responsible for promoting the development of such technologies in a planned manner.
2) The Komatsu Group seeks to develop and provide superior environmental products and systems designed to offer customers optimal solutions in their environmental conservation efforts.

3. Promotion of Zero Emissions
1) The Komatsu Group works to facilitate Zero Emissions manufacturing at all of its manufacturing facilities worldwide by extending
such activities as piloted and achieved at its manufacturing facilities in Japan.
The Komatsu Group also works to facilitate Zero Emissions and other environmental activities of its suppliers. To this end, theKomatsu Group seeks to expand its Green Purchase program and also offers technological support when suppliers may need to
introduce environmental management systems.
2) The Komatsu Group promotes reduction of environmental impacts of its sales and product support activities. The Komatsu Group
offers support to its distributor and affiliated rental companies in Japan by setting up model cases, providing environment-related
information, establishing environmental management guidelines and undertaking other activities. For distributors and affiliated rental
companies overseas, the Group also strives to extend similar activities, as appropriate considering their respective conditions.
3) The Komatsu Group works to improve life cycle assessment of its products and build a circulation-based business system designed
to reduce environmental impact throughout product’s life cycle.

4. Management of Environmental Risks and Observance of Corporate Social Responsibility
1) Each division and affiliated company of the Komatsu Group is responsible for observing applicable environmental standards andregulations of the country or region where it is located as well as its own internal policies and standards, and working to improveits capability to anticipate and address environmental impacts.
2) The Komatsu Group promotes the consciousness of Group employees to the importance of environmental conservation and the responsibility of employees to fulfilling the Komatsu Group’s commitment to this principle. To this end the Group also promotes education on
environmental conservation for employees and special training for environmental management and auditing personnel.
3) The Komatsu Group promotes disclosure of information concerning its performance of environmental conservation activities. Eachdivision and affiliated company of the Group promotes such disclosure as appropriate based on local circumstances.

8Environmental Activities

Environmental Action Plan and Results for FY2008
Environmental Management
Further
information
P. 11

Implementation policies

Objectives for FY2008

Results for FY2008

Medium- and long-term objectives

1. Strengthen environmental management
systems

Acquire ISO14001
integrated certification for
the Komatsu Group inJapan

6Acquired integrated certification for KomatsuGroup in Japan, including the Komatsu Head
Office6Expanded the scope of companies in Japan
included in integrated certification (Komatsu
Logistics Corp., Komatsu Cabtec Co., Ltd.)

Further expand the scope ofcompanies in Japan included in
integrated certification

Audit seven Group
companies in Japan notincluded in the ISO14001
integrated certification
Draw up and promote thePlan
Formulate a communication
plan and publish the report
Apply standard indices to
Komatsu Group facilities

6Audited seven Group companies in Japan notincluded in the integrated certification

Transition into cross-auditing to meetrequirements of integrated certification

P. 35

6Held 13 courses with over 7,300 participantsContinue to organize courses

P. 43

6Published the Japanese version in July and theEnglish version in August
6Compared the development of Komatsu’s four
manufacturing facilities by applying standard
indices for assessing environmental impact

Enhance quality of content; release
report earlier than in previous years
Apply standard indices across Group
manufacturing facilities—

Objectives for FY2008

Results for FY2008

Medium- and long-term objectives

Develop engine compliant
with Tier 4 emission
standards

DWorked to increase the types of equipmentwith engines compliant with Tier 3 emission
standards
DEngine compliant with Tier 4 emission
standards under development
DAchieved vibration exposure values for all
types of equipment
WWhole-body vibration: 0.5 m/sec2
WHand-arm vibration: 2.5 m/sec2

Develop engine and equipment
compliant with Tier 4 emission
standards in the U.S., Europe, andJapan, effective 2011

2. Environmental education and training:
6Carry out compliance and risk audits

6Implement the Plan
3. Environmental communication: Publish
an environmental & social report
4. Environmental accounting: Manage
operations using standard indices forassessing environmental impact

P. 51

Research and Development
Implementation policies
1. Reduce the environmental impact ofconstruction equipment
Develop low-emission construction
equipment

Meet noise and vibration standards

Reduce CO2 emissions fromconstruction equipment(Improve fuel efficiency of products)

Meet 2008 EU vibration
standards
WWhole-body vibration:
0.5 m/sec2
WHand-arm vibration:
2.5 m/sec2
Develop hydraulicexcavators, wheel loaders,bulldozers, etc.

Improve recyclability rate ofconstruction equipment

Improve overall recyclability
rate of construction
equipment

Strictly control and reduce substancesof environmental concern inconstruction equipment

Reduce hazardous
substances in construction
equipment by 50% compared to the FY1998 levels
Ban use of chromium (VI),
cadmium
Introduce separate
hazardous substances
control system for eachproduct type (to comply
with REACH regulations)

2. Reduce the environmental impact ofindustrial machinery
Develop environment-friendly forge
rolling machines

3. Reduce the environmental impact ofindustrial vehicles
Develop environment-friendly forklift
trucks
4. Provide solutions for customers’
environmental activities
Promote on-site recycling using mobile
crushers/recyclers/tub grinders

5. Promote reuse and recycling
Promote “Reman” business9

DMain achievements:
WWA470, 480 medium-sized wheel loaders:
15% reductions
WD65 medium-sized bulldozer: 25%
reduction(Fuel consumption reduced 10%; work
capacity enhanced 15%)
DRecycling of canned counterweights:
Became able to be classified as recyclable(thereby increasing the recyclability rate of
medium-sized hydraulic excavators from 78%
to 98–99%
DUse of chlorine-free hoses: Currently being
improved
DAchieved a 50% reduction in existing models

DMade all newly designed products chromium(VI)- and cadmium-free

Further
information

P. 13

Maintain compliance with EU Stage II—
standards on noise emissions fromoutdoor equipment, effective 2006, andstandards on noise exposure for
operators; maintain compliance with
2008 EU vibration standards
Reduce CO2 emissions by 10% by
P. 13
FY2010 compared to the FY1998 level

Achieve recyclability rate of 99.5% by
FY2010P. 17—
Achieve a 75% reduction by FY2010(for construction equipment underdevelopment, in compliance withupcoming standards)
Ban from January 2010

—

P. 43

DInitiated a control system for REACH-regulated Launch system by end of 2010
substances that covers global manufacturing
facilities

Improve energy efficiency of DDeveloped energy charge module (ECM)
Power consumption: Reduced up to 4%
AC servo presses
Capacity of transformers for presses:
Reduced as much as 40%

Expand number of AC servo press
modelsP. 15

Expand number of hybrid
electric forklift truck models

DExpanded number of models beyond 1-tonclass into 2-ton class models

Further expand number of models

P. 14

Expand scope of
application and promotesocial recognition of on-site
recycling engineering

DPromoted on-site recycling of construction
residuals at point of generation by mobile
crushers/recyclers/tub grinders

Expand range of machines in themobile crusher/recycler/tub grinders;
expand areas of applicability

P. 17

Expand and promote“Reman” business

DReorganized the “Reman” business globally(concentrated operations into five RemanCenters in regions with high demand forremanufactured parts)
DExpanded the range of items covered under“Reman” operations to include wheel motors,
hydraulic cylinders, etc.

Promote reuse and recycling throughfurther improvements inrecycling-related technologies for parts

P. 18

Manufacturing
1. Mitigation of climate change(energy conservation)
 7Make a 20% or more improvement by
FY2010 (average results from FY2008 to
FY2012) in the amount of CO2 emissions
per unit of manufacturing value from thelevel of achievement in FY2000 at the KomatsuGroup manufacturing facilities in Japan 7Curb the amount of CO2 emissions to theFY1990 level at the Komatsu Group
manufacturing facilities in Japan
2. Effective utilization of resources
 7Maintain or make further progress on
attainment of zero emissions at the KomatsuGroup manufacturing facilities in Japan
 7Achieve a reduction of more than 15% by
FY2010 in the amount of waste generated
per unit of manufacturing value from thelevel of achievement in FY2005 at the KomatsuGroup manufacturing facilities in Japan
 7Achieve a reduction of more than 10% by
FY2010 in the amount of water used perunit of manufacturing value from the level ofachievement in FY2005 at the KomatsuGroup manufacturing facilities in Japan
3. Environmental risk management
 7Implement voluntary reductions on therelease of chemical substances
Substitute reductions in the amount of
VOCs released, which accounts for the majorityof the amount of chemical substances released
 7Implement voluntary reductions on VOCs
Achieve reductions of more than 20% and
50% by FY2008 and FY2010, respectively,in the amount of VOCs released per unit ofmanufacturing value from the level ofachievement in FY2005
 7Undertake soil and groundwater remediation
at the Komatsu Group manufacturing
facilities in Japan 7Implement permanent measures required torenovate underground tanks in operationfor 20 or more years by the end of FY2001
at the Komatsu Group manufacturing
facilities in Japan

Objectives for FY2008

Results for FY2008

Medium- and long-term objectives

Improve 1% over previous
fiscal year

Set and achieve new targets
9Improved 27.3% from the level ofachievement in FY2000; attained a 7.3%
improvement over the previous fiscal year

Further
information

Environmental Activities

Implementation policies

P. 16

9Attained a 15% reduction in the total
amount of CO2 emissions compared to
the FY1990 level
Attain recycling rate of 99%
or more9Attained recycling rate of 99.0% acrossthe Komatsu Group

Improve 3% over previous
fiscal year

9Accomplished a 10.3% reduction in theamount of waste generated per unit ofmanufacturing value from the level ofachievement in FY2005

Improve 2% over previous
fiscal year

Maintain zero emissions; attain zero
emissions at the Komatsu Group
manufacturing facilities outside Japan
Achieve by FY2010

P. 19

9Accomplished a 17.8% reduction in theamount of water used per unit ofmanufacturing value from the level ofachievement in FY2005

Further promote reductions

P. 19

Establish a control systemfor chemical substancesand reduce amount of
released chemical
substances

9Accomplished a 21.2% reduction in theamount of VOCs released per unit ofmanufacturing value from the level ofachievement in FY2005

Achieve by FY2008 and FY2010

P. 20
P. 44

Complete all scheduled
remediation work

9Completed remediation work of all soil
Cleanup completed
and groundwater issues that had been
identified by FY2007
9Discontinued use of the underground
Address sequentially all undergroundtank after the conversion of a kerosene
tanks in operation for 20 or more years
boiler to a gas-fired type (scheduled to be
removed in the latter half of FY2009)

One tank requiring
renovations

P. 19

P. 20

P. 20

Procurement and Logistics
Implementation policies
1. Green procurement
 ,Promote improvements at suppliers
through the establishment of environmental
management systems and by specifying
matters that require environmental
consideration
2. Environmental conservation in logistics
 ,Promote reductions in traveling distances
and improvements in shipping efficiency
 ,Shift to means of shipping with low
environmental impact ,Promote “zero packaging”

Objectives for FY2008

Results for FY2008

Medium- and long-term objectives

Further
information

Provide guidance and=EMS certification acquired in FY2008 at
Reinforce linkages with suppliers’ EMSs P. 12
assistance for the acquisition all of the 126 business associates inof environmental management Japan that had been requested bysystem (EMS) certification
Komatsu in FY2006 to pursue certification
at all suppliers in Japan
Begin construction on
Kanazawa Plant No. 2 andimprove product shippingfrom new plants (increase
the size of shipping lots)

Promote modal shifts inshipping from trucks toinland ferries or rail

Increase the packaging
return ratio

Shift to electric-powered
forklift trucks=Commenced construction of the new
Kanazawa Plant No. 2 adjacent to theport of Kanazawa in Ishikawa Prefecture,
Japan, aiming at launch of manufacturing
operations in August 2009
=Increased the size of shipping lots by 4.3%
by making use of the Ibaraki, Kanazawa, andRokko Plants, which are adjacent to ports=Improved modal shifts in shipping acrossthe entire company by 1.4%, including
through the launch of inland shipping fortransport from the Rokko Plant to Osaka
port in Osaka Prefecture, Japan=Increased the packaging return ratio by
15% by making improvements in
cardboard containers and large-sizedboxes for shipping containers=Shifted to either hybrid electric or standard
electric-powered forklift trucks for logistics
in plants and increased the percentage ofelectric-powered vehicles by 4%; adopted
more hybrid electric vehicles

P. 16
Reduce CO2 emissions generated
through shipping and increase the size of P. 20
shipping lots by launching manufacturing
operations at the Kanazawa Plant No. 2(currently under construction) andtransferring some manufacturing
operations to the Ibaraki and Kanazawa
Plants, which are adjacent to ports
P. 16
Continue to promote modal shifts

Make improvements to achieve “zeropackaging”

P. 19

Reduce the number of gasolinepowered forklift trucks in use; adopt
more hybrid electric forklift trucks

P. 16

Sales and After-sales Services
Implementation policy

Objective for FY2008

Results for FY2008

Medium- and long-term objective

1. Encourage Komatsu Group sales agencies
and rental companies in Japan to reduce
their environmental impact

Enhance awareness of theenvironment througheducation and training
based on the Group’s
environmental guidelines%Conduct education and training at twocompanies%Carried out activities for improvement
through guidance provided during onsite
visits to 178 sites in total%Regularly issued the Safety andEnvironment Newsletter

Support environmental conservation
activities by Komatsu Group sales
agencies and rental companies inJapan based on the Group’s
environmental guidelines

Further
information
P. 12

10

Environmental Activities

Environmental Management Structure
Organizational Chart of the Environmental Management Structure
Research and development divisions

President and CEO

Manufacturing divisions
Corporate level control division(Environmental Affairs Department)

Sales and after-sales services divisions
Business units

Strategy Review Committee
The highest executive body to study
and review basic policies, plans, andstrategies involved in top-priority
corporate affairs. This committee
consists of the standing executive
directors.

Earth Environment Committee
This committee has ultimate authority
for approving Komatsu’s environmental
conservation measures. Its meetings
are held biannually. Its mission includes
formulating specific environmental
action plans based on the Guidelines
for Corporate Activity of the Komatsu
Earth Environment Charter anddetermining Komatsu Group’s overall
direction in environmental conservation.
Chaired by an executive officer in chargeof environmental management, it consistsof executive officers responsible forindividual divisions.

Global Safety andEnvironmental Affairs Meeting
Chaired by an executive officer in chargeof environmental management, thismeeting consists of officers responsible
for safety and environmental management
in Komatsu manufacturing facilities bothin and outside Japan. Meeting every two
years as a rule, it provides a platform toimplement policies and measuresformulated by the Earth Environment
Committee and to exchange information
related to environmental conservationworldwide.

Affiliated companies
Manufacturing facilities outside Japan
Research
Environmental Committee

Environment Management Groups

Development
Development Meeting

Environment Technology Working Groups

Manufacturing
Manufacturing Technology Meeting

Environment Management Personnel Liaison Council
Environmental and Energy Saving Working Groups

Logistics Meeting

Logistics Manager Liaison Council

Manufacturing Facility Environment
Management Committee

Environment Promotion Team

Procurement
Procurement Meeting

Procurement Control Manager Meeting

Sales and after-sales service
Komatsu Japanese Dealer Meeting

Liaison Council (After-sales service division in Japan)

Affiliated Companies’ Environmental
Management Conference
Environmental Management Conference
for Manufacturing Facilities outside Japan

Liaison Council (Rental division in Japan)

Acquiring ISO14001
Komatsu has been engaged in a Group-wide initiative to acquire
ISO14001 certification, an international standard for environmental
management systems, with a view to enhancing management quality through strengthening systematic steps towards environmental
conservation.
Since 1997 the Oyama Plant and other manufacturing facilities both
inside and outside Japan have been certified individually. In FY2005,
Komatsu Ltd.’s (the parent company’s) four plants (the Awazu, Osaka,
Mooka, and Oyama Plants) acquired integrated certification managed
by the General Manager of manufacturing division. This represented the firststep towards integrated certification for
the entire Group. As the second step, in
FY2007 Komatsu added its major affiliates in Japan and non-manufacturing
facilities not previously certified—notably
the Head Office, Research Division,
Techno Center, and Field Testing
Department—to the above four plants,
with integrated certification attained by
the Group in Japan in May 2008.
Upon completing the renewal audit inMarch 2009, Komatsu Cabtec Co., Ltd.

11

: Person in
charge ofenvironmental
management

and Komatsu Logistics Corp. were included in the integrated certification. The Group seeks to expand the scope of its integrated certification still further, covering Komatsu NTC Ltd. (including Lossev
Technology Corporation, Toyama Kiko Corporation, and D.S.K. Co.,
Ltd.), Komatsu House Ltd., Komatsu Construction Equipment Sales
and Service Japan Ltd., and Komatsu Rental Japan Ltd. in the future.

Environmental Education and Training
The Komatsu Group’s fundamental education system distributes the
responsibility for education such that the parent company develops
educational materials and provides educational services on commonly relevant academic issues for use by Komatsu Group companies, whereas instruction regarding more hands-on matters, including
unique features and points particular to individual divisions, are conducted by relevant divisions.
In FY2008, Komatsu administered the curriculum for environmental education and training in the same manner as in FY2007.
Additionally, the company organized an environmental training program for manufacturing engineers and an experience-oriented sessionthat also offered employees an environmental volunteering opportunity*. Komatsu encourages employees to obtain a suitable environment-related certificate recognized by public institutions.
*For example, some 120 employees of the Mooka plant worked as volunteers
to maintain the local forest in cooperation with the city of Moka’s environmental affairs section.

Komatsu convened the Fourth Global Safety and Environmental
Affairs Meeting in Japan from September 9 through 12, 2008. The
meeting was attended by 25 persons in charge of safety and environmental management representing 22 subsidiaries in 12 countries
outside Japan along with managers at Komatsu Ltd. Awazu, Osaka,and Mooka Plants and Komatsu Castex Ltd. Himi Plants in Japan.
The two-day meeting at the Head Office devoted, for the first time,
one day to occupational health and safety and another to environmental conservation for facilitating exchanges of views on concrete
themes.
After the meeting at the Head Office, participants toured the Mooka
and Ibaraki Plants on the third day and the Research Division in thecity of Hiratsuka, Kanagawa Prefecture on the fourth day, where they
could observe advanced research facilities for emissions and noise
reduction, among others.
The Komatsu Group intends to use this Meeting as an opportunity to form more robust frameworks for exchanges of views at the
global level.

water from washing vehicles.
In order to have all sales agencies and rental companies comply
faithfully with these guidelines, Komatsu held two sessions at agencies
and companies that had implemented the guidelines in FY2008 in
continuation of sessions held in FY2007, finishing the series of sessions at all relevant agencies and companies.
Komatsu provides cooperative assistance in reviewing the environmental aspects of operations, conditions, and equipment at relevantbusiness sites of agencies and companies, giving on-site guidance
and proposing remedial actions tailored to each site. This is done
through joint visits to each of these sites by persons in charge ofenvironmental management at Komatsu and its sales agencies andrental companies. In FY2008, 178 sites received this assistance.
Komatsu also gives advice on the introduction or improvement offacilities to support agencies and companies in making their facilities
more environment-friendly. A Safety and Environment Newsletter andother means are used to provide them with environment-related
information on a regular basis.
As a result of this assistance, awareness of the environment has
risen at agencies and companies and various improvements havebeen underway.

Environmental Activities

Holding the Fourth Global Safety and Environmental
Affairs Meeting

A station for washingvehicles with high walls tominimize the impacts on
the surrounding community of the sound andwater during washing(Fukuoka Nishi branch of
Komatsu Rental Japan
Ltd.)
Meeting at the Head Office in Tokyo

Supporting Suppliers in Introducing Environmental
Management Systems
To reinforce environmental management at suppliers, Komatsu
required its business associates to acquire certification in ISO 14001
or an alternate environmental management system (EMS) by FY2008.
Thanks in part to support from the procurement division at Komatsu,
all of the 126 business associates in Japan that had been requested
by Komatsu in FY2006 to pursue EMS certification had acquired it
by FY2008.

Tour of the Mooka Plant

EMS Certification Acquisition by Major Business Associates inJapan
FY2006

Supporting Environmental Activities at Komatsu Group
Sales Agencies and Rental Companies in Japan
Komatsu supports the environmental activities at Group sales agencies and rental companies in Japan through education and guidanceon ways to enhance their environmental management.
In April 2005, Komatsu introduced the Environmental Guidelines:
A Manual for Komatsu Sales Agencies and Rental Companies by
distributing it to its 33 sales agencies and 25 rental companies inJapan at the time. These guidelines compiled points and standards
to be observed for environmental issues directly pertinent to operations at sales agencies and rental companies such as waste treatment, waste oil treatment, oil management, and treatment of waste-

FY2007

FY200883*
Subcontracting
companies

33

31

19

43*

Companies
from which
Komatsu
procures goods

41
1
1
0

20

40

60

80
100
(Number of companies)*Companies that had been requested in FY2006 to acquire EMS certification

12

Mitigating Climate Change
Komatsu works to reduce CO2 emissions generated through its business activities while also deliveringfuel-efficient products that help customers promote their environmental activities.

Environmental Activities

Mitigating Climate Change through Products and Services
D65PX-16/D65EX-16 Medium-sized Bulldozer
Reducing Fuel Consumption and Streamlining
Operations Substantially
The D65PX-16/D65EX-16 medium-sized bulldozer adopts an automatic gear shifting power line with a lockup function. This power line
has the ultimate level of transmission efficiency, bringing substantial
reductions in fuel consumption. The automatic transmission, which
eliminates gear shifting shocks, selects the appropriate level of transmission speed for the operation being undertaken, making it possible
to run the dozer with the greatest efficiency at all times. These features
culminate in a 10% reduction in fuel consumption* for the D65PX-16/
D65EX-16 compared with previous Komatsu models.
Raising Work Capacity Dramatically
The D65EX-16 features the Sigmadozer blade, a breakthrough digging blade in which the middle section of the blade excavates andheaps up earth. The Sigmadozer blade increases the volume of dirt
concentrated at the central part of the blade and reduces the volume

falling away at the far ends of the blade. It also reduces the digging
resistance, making the movement of the dirt smoother and enablinglarge-volume dozing using only less power. Sigmadozer’s features
have brought 15% work capacity gains* for the D65EX-16 comparedwith previous Komatsu models.
(Sigmadozer blade available as an option)

WA470-6/WA480-6 Medium-sized Wheel Loader
The WA470-6/WA480-6 medium-sized wheel loader offers superior
productivity and economy. The latest fuel conservation technologies
are fully utilized to carry out highly efficient operations, through theconcept of the machine controlling itself optimally in keeping with its
operating conditions.
The newly designed hydraulic system reduces hydraulic losses
while state-of-the-art “ecot3” diesel engine technology lowers NOx
and PM emissions and decreases fuel consumption. The wheel
loader adapts a large-capacity torque converter, a mode selection
system for choosing engine-output settings and shift timing basedon types and conditions of operations undertaken, and an automatic transmission that is changed in line with axle pedal forces.
These features have improved fuel efficiency even during V-shapeloading operations and while moving. By combining such technologies and features, fuel efficiency has improved 15%* for the WA4706/WA480-6 compared with previous Komatsu models.
Using aluminum for the radiator has also enhanced the recyclability
rate, with 98.9% of the vehicle’s total components now recyclable.
*Internal test results compared with previous Komatsu models. Results mayvary during actual operations, according to operating conditions.

D65EX-16 mediumsized bulldozer

The Sigmadozer breakthrough digging blade
Sigmadozer blade

WA480-6 medium-sized wheel loader
Earth being
heaped up,
as viewed
from above

Conventional blade

Earth being
heaped up,
as viewed
from above

13

The world’s first hybrid electric forklift truck features two electric powersystems, conventional batteries and capacitors. By effectively storing
and reusing regenerative energy derived from deceleration and F/Rgear shifting, these systems can reduce power consumption by up
to 20% for 1-ton class models and up to 30% for 2-ton class models compared to Komatsu’s standard electric-powered forklift trucks.
Its inverter-type high-speed battery charger and sealed battery haveeliminated the shortcomings found in standard electric-powered
vehicles (for example, decreasing power as energy is consumed, short
operating times between charges, and cumbersome maintenancerequirements), achieving significant energy conservation and superior
performance capacity and functionality.

This forklift truck also features Komatsu’s proprietary hybrid driving
system, demonstrating outstanding durability and reliability even in
the most challenging operating environments. Its compact design
makes it the same size as a standard electric-powered vehicle for its
load capacity. Four hybrid electric models are now available in Japan:
the 1.5-ton and compact 2.0-ton models in the 1-ton class and the
2.0-ton and 2.5-ton models in the 2-ton class. As of March 31, 2009,
over 400 vehicles are in operation in Japan. Komatsu is marketingthese models with a view to future introduction in markets outside
Japan.
Degree to which the Hybrid Electric Forklift Truck Conserves Energy
1.5-ton gasolinepowered model

1.5-ton standard
electric-powered model

FB15HB-12 (hybrid
electric 1.5-ton model)

Total CO2 emissions
over five years

32,300 kg-CO2

Total CO2 emissions
over five years

10,400 kg-CO2

Total CO2 emissions
over five years

Achieved a
reduction in energy

20% usage compared tostandard electricpowered models

Hybrid electric forklift truck 2.5-ton model

Environmental Activities

Hybrid Electric Forklift Trucks

8,300 kg-CO2
Reusing regenerativeelectric energy efficiently
via capacitors
Reuse*Comparison using 1.5-ton forklift trucks
The CO2 coefficient has been taken from guidelines devised jointly by the Ministryof Economy, Trade and Industry and the Ministry of Land, Infrastructure andTransport of Japan (April 2006), for operating times of 4 hours/day, 240 days/year,
for 5 years. Komatsu test data has been used for fuel consumption volumes andvehicle load conditions. CO2 emission amounts may vary according to customers’
operating conditions.

Topic
Reducing CO2 Emissions through Biodiesel Fuels (BDFs)
Komatsu’s efforts to reduce CO2 emissions extend to using biodiesel
fuels (BDFs) made from plant oils for its construction and mining equipment. BDFs are produced from plants that absorb CO2 during theirgrowing stage, meaning they do not increase the amount of CO2 in
the atmosphere.
Komatsu has been helping to regenerate the tropical forests inIndonesia since 1993, primarily through reforestation of approximately
270 hectares of dipterocarp trees (mainly lauans). Applying thosereforestation techniques, the company is planting and cultivating jatropha and other plants that will become sources of BDFs on reclaimed
mining sites, harvesting their fruit for processing at a plant to produce
BDF. Confirmation testing is
expected to begin in FY2009 at
a mine in Indonesia to examine
among other objectives whether the fuel results in damage ordegradation to the engine. In
the testing, Komatsu uses a fuelcombining light oil and the BDF
produced from jatropha seeds

and other nonfood plants for dump trucks for mining (maximum load
capacity 90-ton class). In the future, by substituting BDFs for 20% of
the light oil to be used by about 1,000 trucks, Komatsu hopes toachieve approximately 200,000 tons of CO2 emission reductions, therough equivalent of the CO2 emitted by Komatsu Ltd. manufacturing
facilities annually.

Dump trucks for mining in operation

Jatropha fruit

14

Environmental Activities

Developing the Energy Charge Module (ECM) System
Komatsu’s AC servo presses utilize a power source regeneration
approach that returns the motor’s regenerative energy to the power
unit. These presses can attain reductions in energy consumption
during intermittent operations by up to 40% compared with conventional power presses with clutch brakes. Komatsu developed anenergy charge module (ECM) system for servo presses in September
2008, yielding further improvements in regenerative energy efficiency.
The company is planning to market the ECM system as the standard
option for its future servo presses.
An ECM system recharges a condenser module with regenerative
energy derived from the motor. It supplies that energy when a large
amount of instantaneous power is required, enabling the press to cut
peak power while curbing the amount of regenerative energy returning to the power unit and utilizing electric energy efficiently within thepress. Once the condenser has finished recharging, the regenerative

Developing Wire Saws for Solar Cells

energy from the motor is returned to the power unit as usual, so thatthe number of condenser modules mounted can be adjusted in linewith customers’ power needs.
Installing an ECM system allows for reductions in energy consumption of up to 4% compared with conventional systems, while thecapacity of transformers for the press can be reduced by as muchas 40%.

Large AC servo press

ECM system for servo presses

The Cutting Mechanism
Silicon ingot

Solar cells commonly use thinly sliced silicon wafers, and these wafers
are made with a device that cuts silicon ingots to high precision byrunning a wire called a “multi-wire saw*” at great speeds. Komatsu
NTC Ltd. enjoys the top market share in multi-wire saws for solar
cells both in Asia and worldwide, with shares of roughly 35% and
30% in those markets, respectively. Its latest models can slice wafers
at customers’ desired thickness with a high yield rate. Komatsu NTC’s
technology contributes to the manufacturing of high-quality solar cells,
whose demand are expected to expand further in the future partly
due to world trends in environmental policies.
*While generally referred to as “wire saws,” Komatsu calls them “multi-wiresaws” for their capabilities in slicing multiple wafers simultaneously.

Wires

Slices an ingot by running
the wires at high speeds

MWM442DM wire saw for solar cells

Developing the World’s Most Efficient
Thermoelectric Module
Thermoelectric modules are devices that apply the Seebeck effect,in which electric current runs between two pieces of different metals
that are connected and which have a temperature difference applied
to them at their point of contact. Komatsu displayed these modules
at the nano tech 2009 International Exhibition & Conference held at
the Tokyo Big Sight international exhibition center in Japan in February
2009, at which time Komatsu Group company KELK Ltd. beganmarketing them.
Thermoelectricity has attracted a great deal of attention as a nextgeneration renewable energy. Using this technology, the enormous
amount of waste heat given off by factories, power generation stations, furnaces, and other facilities can be recovered as electricenergy. In particular, waste heat generated constantly by factories
may be able to be used as renewable energy, a cheaper alternative
than solar power. As this technology comes into practical use invarious fields in the future, reductions are expected in emissions ofCO2, which contributes to global warming.

15

Basic Principle ofThermoelectric Modules

Heat converted
into electricity
Electric
current

N elements
P elements
Heat applied

Thermoelectric module

Reducing CO2 Emissions in Manufacturing Operations
To mitigate climate change, Komatsu has adopted as an indicator
CO2 emissions per unit of manufacturing value with regard to electricity, fuel gas, fuel oil, and any other type of energy used in its manufacturing operations. From 2007, the company has established evenmore stringent medium- and long-term targets, setting a target of a
20% or more reduction in CO2 emissions by FY2010 compared to
the FY2000 level.
In FY2008, Komatsu implemented improvements throughout thecompany, guided primarily by the All Komatsu Energy Saving
Working Group. As a result, CO2 emissions per unit of manufacturing value have decreased by 27.3% compared to the FY2000 level.
Once again Komatsu achieved its medium- to long-term targets
ahead of schedule.

Environmental Activities

Mitigating Climate Change in Business Operations
Partial Diameter Enlargement Processing Technology (JIKUHIDAI)Work piece (rod)Material setting

Rotation

Pressurization

Bending
Holder on therotating side

Holder on the pressurization
and bending side
Rotation

Pressurization

Under processing
through compression
and bending

Bending

Partial enlargementof shaft diametercompleted

CO2 Emissions(1,000 t)
100

400

100

100

Reducing CO2 Emissions in Logistics

91.8
86.8

350

324

90

85.6
82.0

78.7

316

300
271
250

239

288

287

78.4

276
72.7

71.6

80
80 or less70
70 or less

66.3

200

60
58.8

0

(FY) 1990

2000

2004 2005 2006 2007 2008

Target for
2010

0

Manufacturing value: The total production cost excluding direct material
cost, other facilities’ components, and procured components
Total amount of CO2 emissions of the entire Komatsu Group manufacturing
facilities in Japan
Index per unit of manufacturing value at Komatsu Group manufacturing
facilities in Japan (compared to FY2000)
Index per unit of manufacturing value at Komatsu (non-consolidated)
manufacturing facilities (compared to FY1990)

Main Initiatives in Manufacturing Division
Demand side %Cutting stand-by electricity of manufacturing equipment%Upgrading to high-efficiency production lines%Upgrading from cupola furnaces to electric furnaces%Refining drying processes (using low-pressure air blowers)%Introducing inverter-controlled pumps and motors%Adopting high-efficiency lighting to a greater extent
Supply side

Enlarged portion of the shaft

(%)
98.5

%Upgrading to high-efficiency facilities with utility features throughEnergy Service Company (ESCO) services%Distributing compressors%Changing the fuel for large-scale cogeneration facilities tonatural gas%Dismantling monogeneration facilities not implementing heatrecovery

Adopting Partial Diameter Enlargement Processing
Technology (JIKUHIDAI)
In conventional methods of manufacturing gear shafts, a rod the same
size as the greatest dimension of the gear section is ground down
to the appropriate size, generating a large amount of wasted materials and requiring a long processing time. In a newly adopted processing technology for partially enlarging the diameter of a shaft, only thegear section of a narrow rod matched to the diameter is enlarged tothe size of the gear diameter. By adopting this technology, narrower
materials can be used and reductions can be achieved in grinding
costs, processing times, and energy for processing.

Improving Product Shipping from New Plants adjacent
to Ports and Promoting Modal Shifts
In 2007 Komatsu completed the construction of its Ibaraki Plant
adjacent to the port of Hitachinaka in Ibaraki Prefecture, Japan and
Kanazawa Plant No. 1 adjacent to the port of Kanazawa in Ishikawa
Prefecture, Japan. In 2008 the company expanded the Rokko Plant
and adapted more barges for inland shipping to transport products
shipped from Osaka port, thereby reducing CO2 emissions throughthe shortening of shipping distances within Japan and increasing thesize of shipped units to large lots. As a result, the amount of CO2
emissions per unit of net sales generated through shipping decreased
by 9% in FY2008 compared to the FY2007 level, achieving a 15%
reduction compared to the 2006 reduction target base year under
the revised Law concerning the Rational Use of Energy of Japan.
Targeted and Actual CO2 Emissions per Unit of Net Sales
Generated though Shipping(t-CO2/
million yen)

400
366
353
340

366

350

327

342

314

311

300

300

0

(FY)

2006

2007

Actual CO2 emissions perunit of net sales

2008

2009

2010 Target for 2011

Targeted CO2 emissions perunit of net sales

Reducing CO2 Emissions in Production Logistics
Komatsu has shifted types of forklift trucks for loading and unloading
items during manufacturing operations at plants from conventional
gasoline-powered models to either standard electric-powered or
hybrid electric models. The percentage of vehicles having low environmental impact increased by 4% year over year. The company has
vigorously adopted more of the hybrid electric forklift trucks that
Komatsu developed first in the world, which require low amounts ofenergy. This helps improve work environments and the global environment.

16

Creating a Resource Recycling Society
Komatsu contributes to the creation of a resource recycling society by promoting on-site recycling through mobile crushers/
recyclers/tub grinders, recovering and remanufacturing used components (parts), and effectively utilizing waste derived frommanufacturing operations.

Environmental Activities

Providing Solutions for Customers
Promoting On-site Recycling
Komatsu offers high-quality, efficient solutions that harmonize with theenvironment to address environmental concerns facing society.
Promoting On-site Recycling through Mobile Crushers/
Recyclers/Tub Grinders
Komatsu’s mobile crushers/recyclers/tub grinders process lumps ofconcrete, exhumed earth, discarded wood, and other residuals generated at construction sites there onsite. Reusing these processed

residuals within the construction site has multiple merits. The volume
of waste generated can be reduced, cutting costs for transport anddisposal; fewer new materials need to be purchased, saving costs inresources and materials; and wastes are crushed and reduced involume, curbing CO2 emission and costs during transport.
Komatsu’s mobile crushers/recyclers/tub grinders are now in
operation at a large number of construction sites, helping solve theenvironmental and cost challenges facing customers at one stroke.

Tree felling
Recycling

Felled trees
Boulders

Unusable soil

Tree planting
on slopes
Mulching
materials
Roadbedmaterials

Banking

Paving

Improved soil

Mobile crusher

Effective Utilization of Resources in the Development of Products
Advancing the Recycling of Canned Counterweights
in Hydraulic Excavators
Since 1999, Komatsu has been working towards targets for threeenvironmental indicators of (1) the rate of CO2 emission reductions,(2) the recyclability rate, and (3) the rate of reduction in the amountof hazardous substances. Yet, canned counterweights in hydraulicexcavators had negatively impacted the degree of attainment ofoverall recyclability rate for excavators (less than 80%, compared to
the FY2010 target of 99.5%).
The company has considered various ways to address this issue,
such as proposals to use only iron-based recyclable materials forpacking contents or to establish a route for collecting used counterweights. However, none of these ideas had been implemented.
The Japan Construction Equipment Manufacturers Association(CEMA), of which Komatsu is a member, recently prepared a manual that specified means for indicating packing contents of canned
counterweights, dismantling the counterweights, and separating out
and reusing the packing contents, with a view to promoting therecycling of canned counterweights. The canned counterweights

about which the company had been concerned are now able to beclassified as “recyclable” through these newly established means. The
CEMA is currently certifying treatment companies capable of processing these items in accordance with the manual. Extending the number of certified companies will improve the actual rate of recycling of
canned counterweights.
While this process currently remains limited to Japanese operations, Komatsu intends to manage packing materials rigorously, giving
consideration to the EU REACH and other regulations.
Improvements in Recyclability Rate
Target for FY2010: 99.5%
Target for FY2005: 97.0%
HydraulicBefore improvements 78.0
excavator
with a canned After improvements
98.9
counterweight*
Other
construction
equipment0

Current state

98.2

70

80

*In the case of the PC200-8 hydraulic excavator

Demonstration test of counterweightdismantling
Left: Dismantling using a LaBounty
shear; right: dismantling using a guillotine shear

17

90

100 (%)

Promoting the Reman BusinessIn its “Reman” business, the Komatsu Group remakes used engines,
transmissions, and other key components of construction and mining
equipment into “remanned” components (parts) having the same
quality as newly manufactured ones and provides them back to themarket. The Group is promoting the “Reman” business at five RemanCenters around the world, with those in Indonesia and Chile serving
as global centers.
“Reman,” an abbreviation of “remanufacturing,” offers customers
the following benefits.
OQuality and performance guaranteed to be the same as thoseof new components
OLower cost for “remanned” components than new ones
OReduced construction equipment idle time through proper inventory levels of “remanned” components
OResource conservation and waste reduction through the reuse
and recycling of components
PT Komatsu Reman Indonesia Tbk (KRI), established in 2007 in
Jakarta, Indonesia, has begun to provide “remanned” components
globally, further bolstering the Group’s reuse and recycling activities.

Environmental Activities

Reuse and Recycling Activities
Future Steps
To further increase the reuse rate of used components (parts), theKomatsu Group is reducing the amount of disposed parts throughOexpanding the range of items covered under its “Reman” operations to include wheel motors, hydraulic cylinders, etc. forelectric dump trucks
Ofurther improving the usage rate of remanufactured parts throughthe development of parts made to suitable sizes or those
designed exclusively for future remanufacturing use, andOdeveloping recycling-related technologies such as spraying
technologies.
The Group is carefully considering the future of the “Reman” businessin China, Russia, India, and other regions not currently covered by its
existing Reman Centers to further advance recycling and reuse.
Reman Process
Inspection upon receipt

High-pressure cleaning

Disassembly

Component remanufacturing

Component inspection

Component cleaning

Component remanufacturing
Assembly

PT Komatsu Reman Indonesia, established in Jakarta, Indonesia

Providing Reman-related Information
The Komatsu Group has set up “Reman-Net,” networking Komatsu
Reman Centers around the world. The Group is actively using thisnetwork to develop “Reman” operations for reusing and recycling
components at the global level. IC tags and two-dimensional codes
are employed to manage items’ remanufacturing history and track
their quality and durability information. This important information isprovided as feedback to the Group for developing components withappropriate life spans.
Acquiring ISO14001 Certification for Reman Centers
The five Komatsu Reman Centers around the world have been pursuing ISO14001 certification to further environmental conservation.
Three of the centers have been certified and the remaining two centers in South Africa and Indonesia are working to attain it. These
centers advance environmental conservation through daily operations
and inspections for maintaining and renewing certification.

Assembly set-up

Assembly

Performance test
Final performance inspection
Painting

Final performance inspection

Factory shipment

18

Environmental Activities

Effective Utilization of Resources in Business Operations
Effective Utilization of Resources in Manufacturing Operations
Waste
In tandem with reducing the amount of waste generated during
manufacturing operations, Komatsu conducts zero emissions* 1
activities to use waste materials as resources. The company continued to achieve zero emissions in FY2008 through strict waste separation and utilization of waste materials as valuables*2, boasting a
recycling rate of 99.0%. Komatsu reduced by 10.3% the amount ofwaste generated per unit of manufacturing value compared with
FY2005 (a 6.5% reduction compared with the previous fiscal year),attaining its single-year target. In FY2009 Komatsu will encourage its
Group companies to redouble their waste separation efforts, with an
aim to achieving the company’s medium-term target of reducing by
FY2010 the amount of waste generated per unit of manufacturing
value by more than 15% from the 2005 level.
*1 Komatsu defines “zero emissions” as a waste material recycling rate of 99%
or more.
*2 “Valuables” in this report refers to materials that can be sold to external
companies.

Amount of Waste Generated by Komatsu and the Komatsu Group
Manufacturing Facilities in Japan(1,000 t)

(%)
200

40

200

38.2
30.4

30

33.0

34.1
29.8

29.8

150

113
20
99.2

99.8

99.2

99.2

95.9

48.5

10
0

100
99.2

(FY)

99.0

100

89.7

85.0
50

1998

2004 2005 2006 2007 2008

Target for 20100

Coverage of data: Komatsu Ltd. and the Komatsu Group manufacturing facilities
in Japan
Disposed amount
Recycled amountIndex per unit of manufacturing value (compared to FY2005)
Recycling rate*

reducing the amount of water used per unit of manufacturing value
by 17.8% compared with FY2005 through the reuse of water during
processing and the elimination of wasteful day-to-day practices. In
particular, the Oyama Plant introduced equipment to circulate cold
water for engine testing, reducing its usage amount by 54% per unitof manufacturing value in FY2008 compared with the previous fiscal
year. In the years to come Komatsu will make further attempts to
reduce the amount of water resources used.

Effective Utilization of Resources in Logistics
Improving Packaging
In FY2008 Komatsu kept up its efforts in returning and reusing
general-purpose containers, along with the shift to specialized shipping containers that has been underway for years. In addition toconventional returnable containers, a greater number of returnable,
reusable containers were used for replacement parts instead of disposable cardboard containers. Returned recyclable cardboard was
also employed as protective and cushioning material for parts, significantly lowering the amount of newly procured cardboard containers and cushioning material.
General-purpose containers destined for plants outside of Japan
have been introduced in a size tailored to the dimensions of the container modules and consequently increased the packaging return ratio.
The packaging return ratio of both specialized and general-purpose
shipping containers has jumped by 15.5%. In FY2009 Komatsu willcontinue to enhance its returnand reuse practices and expand
the range of items to be packed
with returned recyclable cardboard. The company will at thesame time increase the packaging return ratio of general-purpose containers destined forplants outside of Japan.
A returnable, reusable container*Recycling rate is calculated by dividing the amount recycled (including valuables) by the amount generated (including valuables).

Conserving Water Resources
Since FY2006 Komatsu has taken up a new medium-term target ofachieving a 10% or more reduction by FY2010 in the amount ofwater used per unit of manufacturing value compared with the
FY2005 level. The company has attained its medium-term target by
Amount of Water Resources Used by Komatsu and the KomatsuGroup Manufacturing Facilities in Japan(million
m3)
10

(%)
100

92.4

90.4

90.0

100

82.2
8.82

9
8.16

8.18

80

8.38

8

60

7.56

7

40

6

20

0

(FY)

2004

2005

2006

2007

2008

Target for 2010

Supply waterIndustrial water
Groundwater
Index per unit of manufacturing value (compared to FY2005)

19

0

Topic
Commencing Construction of Kanazawa Plant
No. 2
At the Kanazawa Plants adjacent to the port of Kanazawa in Ishikawa
Prefecture, Japan, construction was launched on Plant No. 2 in 2008
next to Plant No. 1, which began its operations in January 2007.
Manufacturing operations at Plant No. 2 are expected to begin in
August 2009. The Kanazawa Plants will assemble medium-sized andlarge presses and manufacture the largest super-large hydraulic excavators that Komatsu makes in Japan.
Manufacturing these machines on a site adjacent to the port will
reduce overland shipping costs and CO2 emissions during transport
substantially.

Environmental Risk Management
To minimize environmental risks accompanying manufacturing activities, Komatsu is committed tothoroughly implementing pollution mitigation and prevention measures in strict compliance with the legal
requirements of national and local authorities.

Komatsu Group companies are responsible for reporting environmental measurement results periodically and archiving them in strict compliance with applicable laws and regulations of national and local
authorities. In FY2008, the Komatsu Group experienced three minor
environmental infractions in Japan and for all cases corrective measures have been completed. The Group had no major accidents inwhich the environment was polluted in Japan.
Managing PCB Wastes
Komatsu conducts proper storage and management of PCB wastes
such as transformers in accordance with Japan’s Law Concerning
Special Measures Against PCB Waste and its Waste Disposal andPublic Cleansing Law.
With the Japan Environmental Safety Corporation (JESCO) starting PCB waste treatment in Japan in FY2008, Komatsu entrusted
treatment of its 79 drums of condensers containing PCBs to JESCO.
This figure includes 56 drums from the Head Office, eight from the
Mooka Plant, and 15 from the Komatsu Utility Tochigi Plant. The
company intends to arrange for early treatment of the remaining PCB
wastes in FY2009 and thereafter at JESCO’s various locations.
As of March 2009, the Komatsu Group as a whole possessed 596
drums of PCB wastes, including those in low concentrations.
Addressing Soil and Groundwater Contamination
The Earth Environment Committee has established guidelines inJapan for investigating the state of soil and groundwater. Komatsu
commences investigations in accordance with applicable laws andregulations at business units that are planned to be sold, closed, or
demolished and, if necessary, takes suitable measures under thesupervision of the local authority concerned. Komatsu also performed
voluntary investigations at business units currently in operation tocheck for contamination by organic chlorine-based chemical compounds (VOCs), which had in previous years been used in cleaning
solvents and otherwise.

Sadao Nozawa of the Oyama Plant Recognizedwith the Agency for Natural Resources andEnergy Director-General’s Award in Japan
Sadao Nozawa of the General Affairs Department at the Oyama Plant
was presented with the Agency for Natural Resources and Energy
Director-General’s Award at the FY2008 Month of Energy Conservation
awards ceremony in Japan. This award is in recognition of his efforts
at the Oyama Plant, namely, dramatic reductions in energy consumption through utilities improvements and other achievements madethrough the assertive use ofEnergy Service Company(ESCO) services; contributions
to the energy savings attainedby the Komatsu Group byarranging company-wide energy-saving working groups; andcontributions to energy conservation among numerous companies and organizations by
allowing external visitors to tour
the plant.

In 2005 Komatsu began surveying VOC contamination of soil andgroundwater in Japan at Group manufacturing facilities as well as at
its Research Division and other non-manufacturing facilities, with all
investigations completed by FY2008. All business units at which contamination was detected began remediation work. The company
chose remedial methods that could clean up the sites in as short atimeframe as possible.
Komatsu will execute reliable cleanup measures and maintain its
monitoring of site boundaries to ensure that groundwater exceeding
environmental standards is contained within the premises.

Environmental Activities

Promoting Compliance and Pollution Mitigation andPrevention

Status of Soil Cleanup in Japan
Business unit

Cleanup method

Excavation and removal, soil vapor
extraction, groundwater withdrawal
and aeration, bioremediation
Komatsu Excavation and removal,Plant
groundwater withdrawal andaeration, bioremediation
Osaka
Soil vapor extraction, air sparging,Plant
groundwater withdrawal andaeration, bioremediation
Oyama Excavation and removal,
Plantbioremediation
Shonan Excavation and removal,Plant
groundwater withdrawal andaeration
Excavation and removal,
Komatsu Utility
bioremediation
Tochigi Plant
Komatsu Awazu
Ltd.
Plant

Cleanup status
In process

In process

In process

Scheduled forcompletion in FY2009
In process

Remediation work inprocess

Surveys revealed no contamination for the following business units in Japan:
Komatsu Ltd. Mooka and Koriyama Plants, Research Division in Hiratsuka, Techno
Center in Izu, Field Testing Department in Nozu, Komatsu Utility Kawagoe Plant, andNo. 1 and No. 2 Plants of Komatsu Castex.

Renovating Underground Tanks in Japan
Komatsu is systematically replacing underground tanks in Japan inoperation more than 20 years with double-walled aboveground tanks
and eliminating or consolidating them. In FY2008 one tank subject torenovation at a Group company was taken out of use after the conversion of a kerosene boiler to a gas-fired type. This undergroundtank is scheduled for removal in the latter half of FY2009. Komatsu
will address sequentially underground tanks that newly pass the
20-year mark.

Promoting Local Production for Local
Consumption at Company Cafeterias
Komatsu has been promoting the local consumption of locally produced
foods in menu offerings at the company cafeterias of the Head Officeand business units in Japan through the use of ingredients grown nearby.
This initiative aims at promoting local industry and reducing CO2 emissions through improvements in logistics. The Head Office planned a
special menu under the theme of “a sampling of tasty dishes fromJapan’s Kanto region” while business units offered dishes featuringlocally harvested rice and vegetables seasoned with locally produced
condiments. The Head Office’s anago tendon (rice topped with deepfried conger eels) wasawarded the Judging Committee’s Special Prize(School and Company Cafeteria Category) in the Local
Production for Local Consumption Menu Contest
sponsored by the Ministryof Agriculture, Forestry and
Fisheries of Japan.
Anago tendon offered at the Head
Office cafeteria

20

S p e c i a l

S t o r y

2

Activities toRemove Antipersonnel
Landmines

Completing the “Project for Developing
a Safe Village in Cambodia” Spanning
Eight Months
Since January 2008 Komatsu has been supporting a community development project being undertakenby the Japan Mine Action Service (JMAS), a non-profit organization registered in Japan. This project
ranges from landmine removal to community reconstruction in areas suffering from the impacts ofanti-personnel landmines. In March 2009 the company completed its first joint initiative carried out
with JMAS, the “Project for Developing a Safe Village” in Battambang District, Cambodia.
A local child approaches a JMAS leader measuring a road and asks with curiosity “What are you doing?” (Location of photo is not an area with mines)

Overview of Komatsu’s Social Contributions in
Anti-personnel Landmine Removal to Date
March 1999

The Ottawa Treaty enters into force (total prohibition of theuse, stockpiling, production, and transfer of anti-personnel
mines)

August 2002

The Government of Japan indicates that demining machines
for anti-personnel landmines are exempt from Japan’s Three
Principles on Arms Exports and other restrictions

March 2003

Komatsu applies for public subsidies from Japan’s Ministry of
Economy, Trade and Industry and The New Energy andIndustrial Technology Development Organization (NEDO) andlaunches development of demining machines for anti-personnel landmines

2004–2006

Komatsu conducts onsite testing in Afghanistan and Cambodia
with support from Japan’s Ministry of Foreign Affairs

July 2007

Komatsu delivers its first demining machine to Afghanistan(delivered to a local NGO in Afghanistan on the basis ofJapanese government ODA)

January 2008

Komatsu signs an agreement with Japan Mine Action Service(JMAS), a non-profit organization registered in Japan

March 2008

Komatsu delivers its second demining machine to Cambodia(introduced to the local site through a training grant from theJapanese government)

June 2008

Komatsu delivers its third demining machine to its Cambodia
project (in the village of Reak Smey Sangha, Battambang
District; see this Special Story for more details)

October 2008 Komatsu delivers its fourth demining machine to its Angola
project (in the village of Mabubas, Bengo Province)
Early summer Komatsu to launch its Cambodia project (in the village of Kilo,
2009
Battambang District)

Komatsu’s D85MS demining machine for antipersonnel landmines

21

The Project Launched in 2008
The village of Reak Smey Sangha in the Battambang District,Cambodia is home to 300 people in 73 families. Other than the roads,
the entire village has been surrounded by mined fields. Some people
have made their living growing corn despite knowing that the fields
had landmines, because they did not want to leave the land where
they have lived for generations. A project was launched in July 2008
to remove the landmines buried in the extensive approximate 41
hectares surrounding the village by combining the operations of a
Komatsu’s demining machine for anti-personnel landmines withmanual mine clearance, to be followed by the reconstruction of a safe
village.
For the project JMAS stationed a project leader and staff membersin the area to work in cooperation with some 35 personnel from theCambodia Mine Action Centre (CMAC), which has a track record ofmanual demining. Komatsu provided free of charge a demining
machine for anti-personnel landmines and other related equipment
such as a hydraulic excavator and bulldozer for earth excavation andground leveling work. The company also donated funds for relevant
operations and provided product support through training the JMAS
and CMAC personnel in how to operate and maintain the equipment.
In the eight months since the project began, 49 anti-personnel
landmines were removed by the demining machine and 62 were

Training for CMAC personnel in how to maintain a demining machine for antipersonnel landmines through a detailed demonstration and hands-on work

(Left) An elementary school surrounded by mined fields. After demining, a newschool building and school grounds were constructed. (Right) The new schoolbuilding is made of concrete and its foundation is raised off the ground, enabling
the children to study without worry even in the rainy season.

Demining operations using the demining machine for anti-personnel landmines.
After demining, the land was reborn as farmland thick with corn.

removed manually. Demined land was converted into farmland andten ponds were built to retain water for agriculture. Roads aligned withthe farmland were newly constructed or repaired, improving accessboth within the village and with neighboring villages. The irrigation
system was upgraded by laying pipes to existing ponds to cope withthe water that inundates the roads during downpours, and the elementary school—a landmark of the village—was reconstructed.

then their parents voluntarily built the school fence, and other villagers
later contributed to the infrastructure development work. Over time,
the local residents came to the realization that they themselves would
need to maintain the roads and other facilities from now on.

Activities for Society

Formulating a Manual for Demining
This project was a first attempt for both JMAS and Komatsu to create a safe village through mechanization, from demining to developing the infrastructure necessary for daily life. The operation process
and its management are critical in carrying out safe and effective
demining and infrastructure development. Ensuring the safety ofworkers and local residents was a priority because incorrect usageof the demining machine and the construction equipment can be acause for danger in operations. It was also necessary to consider theenvironment and the desires of the local residents during the courseof operations. Work plans were made to avoid the rainy season, since
this area receives so much rain that operations become impossible.
As corn, a mainstay for the lives of the local residents, was being
grown in the mined fields, demining operations could not be launcheduntil the corn was harvested.
A model case for process management based on practical demining procedures was established as a result of considering the circumstances specific to the area while moving forward with the
project. JMAS formulated a manual incorporating process management methods for safe and effective demining and post-demining
infrastructure development. This manual also features overviews of
how to operate and maintain demining machines in ways appropriate
for various types of terrain and climate, making the contents usable
in other geographical areas.

Revitalizing the Village
Progress in reconstruction caused the flow of people and goods
within the village to change remarkably. Construction of the elementary school led the grounds in front of the school to become a place
for the villagers to congregate. Developing the roads made the number of children attending school to increase. Trucks transporting
goods could now enter the village, leading to the creation of a storage
area for corn. As interaction with residents of neighboring villages
increased, more general stores were built, with the village residents
bustling all around.
Pursuing Future Development
The project team succeeded in completing dangerous civil engineering work using a demining machine and construction equipment
without a single accident. This achievement brought confidence tothe local residents while heightening the motivation of CMAC personnel. The experience and know-how gained through this model projectwill be utilized in a comparable way in the Angola project now underway by JMAS as well as the reconstruction project scheduled to begin
in the village of Kilo in Battambang District, Cambodia early in thesummer of 2009.
Komatsu will continue to provide support to areas where reconstruction has come to a halt due to the impacts of landmines, making
them safe and then assisting in their development.

Cooperation from Village Residents
When the project was launched, response from village residents was
weak and cooperation was minimal. With the demining and civilengineering work involving dangerous and backbreaking physicallabor, even the village mayor showed reluctance to having the project
employ local residents. However, through interaction with village
residents it became clear that villagers were keenly aware of theimportance of developing schools and roads, which would enhance
the children’s education and their daily lives. Cooperation from village
residents came gradually. First, the children began picking up refuse,Children playing on demined land where a school is
to be constructed. In the past a landmine had beenfound a mere ten meters from the school. The manon the left holding the jump rope is JMAS project
leader Koji Ideta.

The market attracting people and goods, which has
become the center of the village of Reak Smey
Sangha since demining was completed.

Masahiro Sakane, Chairman of the Board of
Komatsu, participated in the ceremony to commemorate the completion of the project.

22

S p e c i a l

S t o r y3

Creating Places Renowned for
Cherry Blossoms and Beautiful
Local Environments
Flower viewing has been a greatly anticipated delight for theJapanese since ancient times, with a history stretching back as far
as the Heian era a thousand years ago. While people consider it only
natural for cherry trees, the trees central to flower viewing, to bloom
every spring, these trees are in fact quite delicate. Cherry blossoms
burst forth in spring as if mustering all at once the power they stored
up over the previous year, then fall to the ground a short time later.
With such quiet but extreme fluctuations, these trees require ongoing care, much like professional athletes.
As one of its contributions to society, Komatsu has been supporting the Flower Association of Japan, which nurtures cherry blossom
viewing places and cultivates local environments rich in flowers,
thereby fostering local areas of beauty and abundant greenery.
A yae-beni-shidare (Prunus pendula “Pleno-rosea”) bloomingin the Komatsu Head Office rooftop garden in Tokyo, Japan

23

The Flower Association of Japan, Founded in 1962
The Flower Association of Japan was established in 1962 to, among
various aims, nurture cherry blossom viewing sites under its goal ofusing flowers to uplift people in some way. Over the past 47 years,
the Association has grown more than 2.2 million cherry saplings,
donating them to parks, streets, schools, and many other recipients
all over the globe to help create beautiful local environments.
The Association also utilizes its accumulated expertise in thesetrees to preserve and revitalize them in cooperation with local residents who love cherry trees.

Preserving the genes of cherry trees that have evolved for as muchas a thousand years is also protecting assets with a deep link toJapanese culture. It can give comfort and foster bonds among local
residents that have been weakening against the backdrop of urbanization. Mindful of this importance, Komatsu will continue to support
the Flower Association of Japan.

The Yuki Farm
A major location in fostering cherry blossom viewing sites

Activities for Society

Preserving the Environment in Cooperation with Local
Residents
Cherry trees in the city of Kunitachi in Tokyo, Japan that the local
residents regard with great pride had become weaker owing largely
to recent changes in the environment. The Flower Association ofJapan was consulted on how to help the trees recover their vigor.
Cherry trees lose vitality when their roots are stepped on, because
the roots are less able to absorb nutrients. To bring back the trees’
vibrancy, the Association recommended the planting of Chinese
violet cress (blooming from March to April) around the roots to prevent
people from stepping on them. In the summer, after the Chinese
violet cress has finished blooming, it is cut back and placed aroundthe bases of the cherry trees as compost, and in the autumn, sulfur
cosmos (blooming from June to September) is then planted. In thisway, the Association’s advice provides for year-round managementof the cherry trees while also fostering the aesthetics of the surrounding environment. The local volunteer group Kunitachi Sakuramoricontinues to take care of the cherry trees.

and after five years that cherry tree has become truly uplifting for us,
with all of us sharing the happiness.” A single sapling has engendered
the sense of community shared by local residents.

The exhibition garden nurtures 350 varieties of cherry trees
planted by types. Visitors can enjoy cherry blossoms of different
varieties from March through December.

Local volunteers from Kunitachi Sakuramori taking care of the cherry trees

One of the Largest Cherry Tree Exhibition Gardens in
the World
The 83,000 m2 Yuki farm in the city of Yuki in Ibaraki Prefecture, Japanproduces some 30,000 cherry saplings annually, making it one of the
major locations in fostering the creation of cherry blossom viewing
sites. The farm boasts one of the largest cherry tree collections in
the world, with 350 types under cultivation in its onsite exhibition
garden.
Over the course of cultivation at the farm, the saplings are observed
to discover what type of environment is ideal for each variety ofcherry tree and which varieties are best suited for particular cherry
blossom viewing sites. When requests arrive from local areas hoping
to create a viewing site, the Association selects and provides appropriate varieties of saplings after considering the environment and how
the trees will be used. Most types of these cherry trees have beendeveloped through crossing with wild cherry trees. The farm is operated on the premise that it is important to sustain cherry tree genes
so that as many varieties can be enjoyed by the public as possible
while also ensuring the preservation of the descendents of varietiesthat have been admired since antiquity.
The farm offers visitors hands-on opportunities for planting, managing, mixing varieties, and other practical aspects of creating
cherry tree viewing sites. One community group that took home asapling remarked, “We started out cultivating our tree wondering ifthat single sapling would really grow, but after one year it bloomed,

Grafting is used to propagate and raise the cherry saplings.
Grafted saplings in their first year of growth are shipped throughout Japan after reaching 1 meter in height.

Research is underway to produce cherry saplings from tissue
cultures. The farm is accumulating techniques for large-scale
production of saplings.

24

S p e c i a l

S t o r y4

Komatsu’s Social
Contribution Activities Around
the World

In this era of significant change, sustainable growth can be achieved when a company aims to improve its business performanceand when the company undertakes activities which bring about trust from society along with it. A global company is expected tofulfill its social responsibility as a good corporate citizen in the regions it operates in. Komatsu works to be of assistance to society
in ways practicable for the company in communities around the world by reflecting local circumstances and listening to voices of
stakeholders.

C ase

1

India

India

Community Health Care and Education to Help People Live Safe and Anxiety-free Lives

L&T-Komatsu Limited (LTK) believes that helping the children of local
communities live safe and happy lives is the most important aspect
in social contribution. For this reason, the company focuses on education, health, and safety, based on its policy to support various
community welfare programs in health care, education, and ruraldevelopment. The company has been working on school development and community welfare programs in health care at Dyavarahallivillage since 2006. In March 2008, health examinations for general

25

health and vision testing were conducted for 125 residents of thevillage.
In December 2008, LTK Ladies Club, of which wives of LTK
employees are members, was established. The Club conductedhealth examinations for children who were unable to receive adequate
health care due to economic circumstances and for 54 women wholive in Dyavarahalli.

Dyavarahalli School building on which construction
work was finished in September 2008

School desks donated by LTK

A commemorative tree was planted at the timecomputers and desks were donatedCeremony marking the commencement of healthexaminations by LTK Ladies Club in January 2009

A child being examined

Health examination for women and children of
DyavarahalliC ase2South Africa

South Africa

Update on Social Contribution through Educational Support

From April 2008 to February 2009, the Centre issued a total of
313 certificates for numeracy, communication, and basic computer
skills.
The students are appreciative for the support from Komatsu and
DenRon, and they insist on expressing this gratitude at every prize
giving and at the end of last year. One of the students composed abeautiful song which was sung at the ceremony.
Song Composed by a Student

You Are the BestYou are the best
Nobody can go astray,
You lifted me from nowhere
You made me what I am.

Activities for Society

The Komatsu DenRon Community Development Centre, located in
the suburbs of Plettenberg in southern South Africa, was establishedin 2007 by Komatsu Southern Africa (Pty) Ltd. (KSAf) and its customer and materials/stone quarry company DenRon. DenRon was
experiencing a chronic shortage of skilled workers, and the center
was built as a solution to this problem by providing educational
opportunities to the local unemployed people who did not receive
satisfactory primary education or who were unable to go to school
during the apartheid era, and bring them to the minimum level necessary for employment.
Today, local recruiting agencies regularly contact the Centre witha view to assist in placing the students. The Centre is establishingitself in helping to improve the unemployment rate. Since inception,
the following has been achieved in terms of employment for thegraduates:
O16 learners worked for a major department store as casual
employees with five now being permanently employed
Otwo are permanent employees of a liquor distribution company
Otwo work for a franchise fast food outlet
Othree have become permanent employees of DenRon
Othree have become permanent employees of a hotel chain, oneof whom regularly attends the Centre’s certificates awards ceremony and gives motivational talks to the students
Othree commenced temporary employment with a local laundry
Oone has opened his own driving school and this is running successfully to date
Oone has started his own car wash in the local township
Oone has been permanently employed by the Department of Arts
and Culture as an actor and is part of the cast that presents
educational plays.

You brought me joy,
And made this world
A better place for me.
Thank you very much.
DenRon ndiyabonga
Komatsu ndiyabonga
The ball is now in my court
The key in my palm,
The fuel in my lamp has been filled
You’re the steppin’ stone, the apple of my eye
The wind in my sail.
Lyrics composed by Vuyokazi Nyhaba, 2008

C ase

3

United Kingdom

United Kingdom

Providing Vocational Training and Support to People with Disabililties

Northern Pinetree Trust (NPT) is a charity and community business,
which was established almost 20 years ago under a partnership led
by Komatsu UK Ltd. (KUK), to provide training and support to help
people with disabilities. The trust is based in the Pinetree Centre, which
is a building located at the front of the KUK site. NPT works acrossthe North East of England and helps people who have a physical,
mental, or learning disability and those who are disadvantaged in thelabor market because of their circumstances. It helps people to consider working for themselves in a small business where they can workaround their disability. The trust provides a range of support for its
clients including coaching training and access to a special loan fund.
Over the years, NPT has helped over 1,000 local people to start up
their own businesses, and the work of NPT within the community wasrecognized in 2008 with an award from Her Majesty Queen Elizabeth
II (The Queen’s Award for Enterprise Promotion).
KUK did not require the whole of the building, and so arrangements
were made for the upper floor of the building to be utilized to provide
low cost office accommodation to help the work of NPT. Employees
of KUK are proud to work for an employer who recognizes the valueof social contributions and social responsibility.

People receiving support and training

26

Developing Together with Employees
Komatsu endeavors to foster a safe and comfortable work environment by implementing measures to reduce
workplace risks and administering a personnel system that accurately reflects the abilities and achievements of
employees, an extremely important corporate asset.

Komatsu’s Relationship with Employees

Activities for Society

Enhancing the Quality and Reliability of Employees

Komatsu’s Initiatives

For a business, it is said that people, goods, money, information,and time are valuable assets and resources. Even if the other elements remain constant, if “people” change, the results will be different. Thus, people—the employees of Komatsu Group companies—
are an irreplaceable asset for the Group. Komatsu recognizes therole of the personnel system in enhancing the quality and reliabilityof the company’s human resources. It therefore endeavors to foster
a work environment with opportunities for challenges and creativity.
The company works to maximize the sum of trust given to it by its
employees.

Personnel System that Accurately Reflects Employees’
Abilities and Achievements
Personnel systems in Japan are typically based on the assumptionthat employees will work for a single company for many years.
Therefore, when designing a system, a company must keep in mind
the degree to which continuous employment should be considered.
Komatsu believes that personnel systems emphasizing length ofservice do not necessarily reflect employees’ abilities and achievements fairly. Instead, Komatsu has always strived to accurately
evaluate the performance of employees as individuals, incorporating
employees’ achievements and abilities into its personnel system as
the basis for fair evaluations.
Komatsu has been reinforcing this approach since 2003, revising
its systems for salaries, bonuses, retirement allowances, and otherpersonnel schemes accordingly.

Basic Policy on Global Human Resources
Personnel systems reflect the history and culture of each particularregion. It is therefore important to recognize and correctly understandthose differences. At the Komatsu Group, the basic policies for personnel systems common to all Group companies around the world
are found in Komatsu’s Code of Worldwide Business Conduct as
stated below. Each region uses these policies to formulate a personnel system that has a competitive edge over other companies.
Chapter 5 of Komatsu’s Code of Worldwide BusinessConduct(1) The uniqueness, character and privacy of individual employees
shall be respected.
(2) Employees shall be fairly appraised and treated. They will not be
unjustly discriminated against for reason of national origin, race,
religion, age, sex, disability or other factors. Should any form of
violation be discovered, such as sexual harassment or any otherunlawful employment practices, it will be investigated and appropriate actions will be taken.
(3) In developing and implementing personnel policies, accordancewith the understanding of employees must be ensured. Human
resource policies and procedures shall be disclosed to the employees as appropriately and fully as possible.
(4) In each region, the Komatsu Group will comply with the ordinances concerning the rights of employees.

In addition to these policies, the Group also prohibits the use ofchild labor, which is a problem in certain regions around the world.
Komatsu has set forth Komatsu’s Five Principles for Hiring,
namely: (1) the company does not consider age or gender in hiring
decisions; (2) the company does not consider national or regional
origins in hiring decisions; (3) the company does not consider religious
affiliation or beliefs in hiring decisions; (4) the company does notconsider the existence of disabilities that are not job performancerelated in hiring decisions; and (5) the company gives significant
consideration to work experience at other companies or in otherindustries in hiring decisions. Komatsu conducts its hiring practices
based on these five principles, which are disclosed on its website.

27

Formulating The KOMATSU Way and Extending TQM
Training Company-wide
As Komatsu has grown and developed, there has emerged a clear
sense of the corporate strengths that are “quintessentially Komatsu.”
The values and stances that support those strengths and the styleby which the company puts them into practice were set down in
writing in 2006 as The KOMATSU Way. Komatsu wants all Group
companies including those outside Japan to share these guiding
principles. The KOMATSU Way highlights the continuous reforms
towards greater Quality and Reliability, the importance of the individual workplace (genba), and the ability of employees at each levelto swiftly implement management policies and transfer them into
practice. Komatsu has long utilized Total Quality Management (TQM)
training to support employees in improving these capacities. The
company will expand TQM and The KOMATSU Way as common
educational tools that are shared by all employees globally.
Developing Human Resources Globally
The development of global human resources is an ongoing theme forthe Komatsu Group. The KOMATSU Way states that Komatsu recognizes anew that one of its vital strengths dwells in human resources development and employee vitality. It stipulates that based on thisrecognition, Komatsu should educate and train its employees globally to enhance their capabilities. All managers have substantial
responsibilities appropriate for their level. Top management must
foster their future successors; managers must train the people working under them.
A basic principle in human resources development is for individual employees to aim towards higher objectives and advance their own
careers. The personnel division establishes systems and infrastructure
to help employees attain their personal goals while assisting them inshaping their careers through education and training and scheduled
job rotations. The Komatsu Group intends to develop human resources
on a global, Group-wide basis by further bolstering investment inpeople who can sustain corporate growth over the years. In particular, the Group is organizing programs aimed at training employees ofGroup companies outside Japan as well as those of business associates, enhancing employees’ technical and technological capabilities,
and improving their abilities to address operational issues throughTotal Quality Control (TQC) training.

Creating a Safe and Comfortable Work Environment

Further Enhancing Diversity in the Workplace
Gender-equal Opportunity
Currently the number of women in managerial positions is low compared with the number of men, and Komatsu recognizes this as an
issue to be addressed. Childcare leave and shorter working hours areamong the working conditions that would contribute to an environmentthat facilitates productive careers, particularly for women. In 2007,
Komatsu acquired the Japanese Ministry of Health, Labour andWelfare mark designating companies that assist in the growth of thenext generation. Since then, the company has advanced discussions
on working conditions through the appointment of seven female
employees to a newly launched Panel on Fostering Future Generations.
The four major recommendations from the Panel were incorporated
into labor agreement revisions for FY2007, further improving the company’s approach in this area. These recommendations were: (1) allocating five days of special leave in cases of pregnancy by the employee,delivery by the employee’s wife, and childcare (such as to take careof a sick baby or toddler) by the employee; (2) extending the eligibility period of shorter working hours from March 31 after the child turns
age four to the child’s completion of the third grade at elementary
school; (3) providing monetary allowances for childcare leave beyond
the amount required under the law; and (4) providing financial support
to offset the costs of nursery schools and babysitters.
The number of female managers increased from 19 in March 2009
to 20 as of April 2009, and the number of employees taking advantage of the system for childcare leave increased from 25 in FY2007
to 31 in FY2008. Komatsu will continue to aim to bring about working conditions that take into account the needs of working parents.

Employing Persons with Disabilities
As of April 2009, 1.64% of employees at Komatsu were persons withdisabilities, a figure lower than the legal standard of 1.8%. Recognizing
the need to enhance its hiring rate of persons with disabilities, in April
2008 Komatsu established within the personnel division a Business
Creation Center designed exclusively to increase the hiring of persons
with mental disabilities. Ten such people are now employed at thisCenter, raising the rate of employment for persons with disabilities
compared to the previous year. Komatsu is determined to work to
employ more disabled persons in the years to come.

Activities for Society

For a company to create a safe and comfortable work environment,
it must treat employees fairly. Komatsu has already changed its personnel system to the kind described earlier that better incorporates
abilities and achievements. To ensure fair and appropriate evaluations
for each individual employee, in April 2004 the company organizedrefresher training for all managers on how to conduct evaluations.
Since then, evaluation training has been given to newly appointed
managers, backed by e-Learning based follow-up education. An
evaluation committee has been established jointly with the labor unionat each business unit to confirm that evaluations are conducted
properly. Komatsu has provided individual feedback on evaluations
to managers since 1998 and to non-managerial employees since2001. The company has also set up a consultation office throughwhich employees can express complaints and concerns.
Komatsu seeks to build a basis upon which employees can takeon greater challenges. The internal posting of personnel vacancies
was introduced in 1986, with positions now posted twice annually at
regular intervals. Additionally, Komatsu is fortifying the educational
programs that employees can participate in voluntarily both insideand outside the company.

management. These plans enforce appropriate numbers of working
hours by reducing overtime and encouraging employees to take morepaid annual leave.

Accommodating the Lay Judge System in JapanTo accommodate the lay judge system in Japan that commenced in
May 2009, Komatsu introduced a system for special leave in 2007
and held internal explanatory sessions for all managers in November
2008 before the first notices for lay judge candidates were sent out.
A total of 12 explanatory sessions were held at ten business units
across Japan, with about 1,200 managers participating. The company clarified its stance of proactively supporting employees selected
for service to participate in proceedings without worry and requested
each workplace to make preparations in assisting them.
Based on the principles set out below, Komatsu will lighten theburden of employees selected as lay judges and support them in
amply fulfilling these socially significant duties.
OKomatsu shall enhance employees’ knowledge of the system
as a whole, including such elements as not disclosing publiclythat one has been selected as a lay judge (or lay judge candidate)and maintaining the confidentiality of deliberations.
OKomatsu shall manage information that an employee has been
selected as a lay judge (or lay judge candidate) strictly at therelevant personnel section and shall not use it for any purpose
other than to allocate special leave.
OKomatsu shall give proper attention to mental health care forsuch employees once service as a lay judge has been completed and shall take appropriate steps in collaboration with anindustrial health medical advisor when necessary.

Enhancing a Work-Life Balance
Reducing the total number of actual working hours is one of key
aspects in achieving a healthy work-life balance for employees.
Komatsu has worked in coordination with labor unions on this issue
to formulate numerical targets. The company has brought down toan average level the workload of divisions that are chronically shouldering intense levels of operations by hiring more employees, both
newly graduated and experienced, and investing in necessary facilities
and equipment. Komatsu has each workplace formulate concrete
action plans in order to have it to seriously address working hours

28

TopicKomatsu’s Human Resources Development Rooted in Local Communities:
Strongholds for Developing Global Human Resources
Komatsu has established bases for fostering human resources around the globe. The company is reinforcing
its Monozukuri, or manufacturing competitiveness, and upgrading product support capabilities encompassing
the Komatsu Group while contributing to local development and employment.

Activities for Society

Chile

The Philippines

Establishing an Apprentice School to Provide
Specialized Technical Training to Young People

Upgrading the Technical Knowledge of Service
Engineers

Komatsu Cummins Chile Ltda. (KCC) has established an apprentice school to train young people as technicians specialized inmining equipment, covering both product knowledge and productsupport skills. The three-year course has already graduated 43
trainees, all of whom are now employed at KCC.
KCC also conducts a program in which students studying
electronics engineering visit KCC’s Reman Center and interact withprofessionals at the center’s electronic shop. Students are able toacquire practical and worldwide state-of-the-art technologies,
while KCC has the opportunity to train “from the cradle” thosetechnicians that have future potential with the organization.

At the Komatsu Human Resources Development (HRD) Center in
Manila, the Philippines, Komatsu is providing training to upgrade
the technical knowledge of Filipino service engineers working for
Komatsu at various sites worldwide. The center adopts a mediumto long-term viewpoint in systematically fostering service engineers
who can work around the world by recruiting new college graduates and helping them to master product support skills from abasic level. The curriculum includes Komatsu’s quality control andquality assurance system, expertise in knowledge of products, andtechnical service skills.
Courses are run in a facility owned by the Construction Manpower Development Foundation (CMDF), an auxiliary organizationof the Department of Trade and Industry (DTI) of the Philippines.
The Komatsu HRD Center further enhances the technicalservice skills of CMDF trainers,
dispatches instructors to CMDF,
and organizes training programsfor operators and mechanics
jointly with CMDF, thereby contributing to the Philippines’
human resources development
program.

Collaborating with Educational Institutions
Industry-Academia Collaboration
Komatsu has concluded industry-academia collaboration agreements to pursue leading-edge technologies collaboratively withfour universities in China and Japan, namely Shandong University
in China and Yokohama National University, The Graduate Schoolof Engineering of Osaka University, and Kanazawa University
Graduate School of Natural Science & Technology in Japan. The
company also held the Osaka University-Komatsu Joint Research
Symposium in cooperation with The Graduate School ofEngineering of Osaka University and a series called Lectures in
Cooperation with Society jointly with the School of Engineering of
The University of Tokyo. In convening these fora, Komatsu aims
to research technologies for an increasingly diverse society while
also nurturing human resources who will advance academic andsocietal developments.

29

Dispatching Lecturers to Universities and Engaging
in Joint Research in Japan
Komatsu dispatches lecturers upon request to instruct university
students in technology development and corporate management
being practiced at Komatsu. The company is also involved in joint
research to pursue state-of-the-art and future-looking technologies, after discussing the intersection of Komatsu’s “needs” andthe university’s “seeds.”

Hosting Plant Tours for Elementary and Junior HighSchool Students in Japan
Komatsu hosts social studies-related study tours for local elementary and junior high school students and organized tours forfamilies affiliated with The Japan Society of Mechanical Engineers
to provide children opportunities to see its plants and recycling
operations and learn more about construction equipment (see“Contributing to Local Communities” on P. 32 for details).

Health and Safety
Message from the Komatsu President Regarding
Health and Safety(1) The Komatsu Group shall, first of all, strive to “ensure a safe andcomfortable work environment” and “maintain and promote
employees’ health.”(2) The Komatsu Group shall promote “proactive occupational safety
and health activities” in order for all employees to achieve theabove conditions by working together as one team.
(3) Each and every person in a senior management position of theKomatsu Group shall acknowledge as top priority tasks the above
two matters and shall take the initiative in demonstrating theexecution of daily duties accordingly.

Overview of Health and Safety System
Komatsu Head Office
Organization 'afety and HealthAdministration
Department (CentralizedGroup-level office)' ealth Promotion Center'Human Resources
Department (CentralizedGroup-level office with
consultative services)

Meetings' " !!%
Committee' "!%"# 
Meeting' "!% !
ConferenceGroup companies and Komatsu divisions'lant managers, division head(managers supervising overall healthand safety)'Division head supervising generalaffairs and human resources' ndustrial health medical advisors,industrial health care staff, etc.
'ection head supervising health andsafety'Managers supervising health andsafety in each division, persons
assigned to the promotion of healthand safety, persons overseeing healthand safety, etc.
' mployees' !!%!!

Occupational Safety
In FY2008 the Komatsu and Mooka Plants acquired Occupational
Safety & Health Management System (OSHMS) certification, following
upon acquisition by the Awazu and Osaka Plants in FY2007. The
Komatsu Group has carried out assessments to anticipate risks
mainly through workplace small-group activities on safety aiming at“zero accidents.” The Group as a whole has been conducting compliance and risk audits on safety to confirm the state of compliancewith relevant laws and regulations. In FY2009 the Group will steadily
implement OSHMS at plants already certified and promote acquisitionof OSHMS certification at other Komatsu plants, while simultaneously fostering occupational safety mainly through “zero accidents”
small-group activities and upgrading safety-related education andtraining. The Komatsu Group is working to eradicate occupational
accidents throughout the entire Group.

(Frequency
rate)
2.0

1.85

1.95

1.90

1.83

1.43

1.5

1.12

1.11
1.0

0.81

0.5

0.43

0.50

0.33

0.40

(FY) 2004

2005

0

1.75

0.81
0.78

0.89
0.66
0.44

2006

2007

0.64

Activities for Society

Komatsu has been disseminating the Message from the Komatsu
President regarding Health and Safety throughout the entire KomatsuGroup. President and CEO Kunio Noji delivered the message that,for the Komatsu Group to foster companies and workplaces with nosafety incidents or illness, all employees must cooperate, managing
health and safety proactively and responding to relevant issues in aprioritized and timely fashion. The major points of his address wereas follows.

Incidence Rate of Occupational Accidents(Frequency rate of missed work)

0.58

2008

All industries
Komatsu (non-consolidated)
Construction and mining equipment manufacturing industry
Komatsu Group manufacturing facilities in Japan

Health and Safety Management at Komatsu Group Sales
Agencies and Rental Companies in JapanIn FY2004 Komatsu Group sales agencies and rental companies inJapan began creating management systems for occupational safety
and health. In FY2008 Komatsu continued follow-up activities to support them in this area.
Persons overseeing occupational health and safety at Komatsu
and its agencies and companies provided guidance on areas for
improvement through visits to relevant offices, maintenance factories,
and rental shops to verify firsthand the state of safety management
onsite. At agencies and companies where occupational accidents had
occurred, Komatsu gave assistance in determining the causes andformulating countermeasures and applied these measures to otheragencies and companies across Japan. Through joint efforts insafety education and training and risk anticipation the Komatsu Group
succeeded in reducing occupational accidents in FY2008, continuing
the decline achieved in FY2007.

Health Care
Physical Health Care
Besides the health checks for lifestyle-related diseases the company
has long provided, Komatsu has been taking further steps to preventthese diseases since FY2007, launching computer-based diagnostic
interviews and expanding the range of health checks. Beginning in
FY2008, Komatsu has been working to improve the health of employees in cooperation with its health insurance association to deliver
health-related guidance and awareness education and through theuse of external specialized institutions.
Mental Health Care
Over the years, the Komatsu Group has introduced mental healtheducation and awareness-raising programs while also providing counseling from mental health professionals and the Employee Assistance
Program (EAP), which makes use of external specialized institutions
to assist employees and their families throughout the Group in finding
solutions to their concerns. Komatsu will revamp the EAP in FY2009,
launching the Komatsu Health Consultation Hotline to provide allencompassing support by unifying physical and mental health careservices. The company has continued its computer-based stressdiagnoses and stress awareness education for self-recognition begun
in FY2007. In FY2009 Komatsu intends to utilize the results of stressdiagnoses to improve work environments still further.

30

Communication with Stakeholders
Komatsu takes advantage of various opportunities to communicate with stakeholders. As a responsible corporate citizen,
the company has undertaken social contribution programs to help bring about an enriched society.

Communication with Stakeholders

Activities for Society

Communication with Shareholders
Along with striving for high managerial transparency, Komatsu discloses information in a proper and timely manner through constructive
approaches to investor relations (IR) around the world. On the same
day that quarterly business results are announced, the company holds
explanatory sessions in Japan for institutional investors and securities
analysts and also releases this information on its website. Corporate
representatives visit institutional investors outside Japan, primarily in
the U.S. and Europe, to explain recent business performance andother critical information.
Shareholders’ Meetings
To furnish an opportunity to communicate with individual shareholders, Komatsu convenes shareholders’ meetings in major cities inJapan two to three times annually, with top management explaining
the company’s performance and management strategy. Shareholders’meetings were held in December 2008 in the cities of Sapporo in
Hokkaido Prefecture and Fukuoka in Fukuoka Prefecture with some
400 and 600 shareholders attending, respectively. A wide range ofquestions was answered, covering such topics as the business environment surrounding Komatsu and the company’s business performance and social contribution activities. Since their launch in 1997,
these meetings have been convened 27 times, with over 9,000
shareholders participating to date.

Communication with the Local Community
Each of the business units of Komatsu tries to harmonize its interests
with the local community and make itself open to society as a responsible corporate citizen. They host regular opportunities to interact withrepresentatives of residents’ associations from the surrounding community. For the community to gain a better understanding of theirbusiness activities, business units welcome representatives from thecity and prefecture to plant tours and meetings.
Communication with Employees
Two or three times a year, the President and CEO convenes a“Meeting with the President” at each business unit in Japan. Komatsu
top management explains the state of the company to all employees
at the unit, employing an active question and answer format. Thesemeetings are opportunities for top management and employees tointeract with each other directly. The content of these meetings heldat the Head Office in Tokyo is simultaneously transmitted by TV
broadcast to other business units in Japan and later published on
the company Intranet in English to share it with Komatsu Group
employees around the world.

Meeting with the President held at the Head Office in April 2009 on the day
after the announcement of term-end business results

Social Contributions

Shareholders’ meeting convened in Sapporo in December 2008

Plant Tour for Shareholders
Komatsu held plant tours in Japan for individual shareholders at the
Osaka Plant in Osaka Prefecture in September 2008 and the Awazu
Plant in Ishikawa Prefecture in March 2009, drawing about 60 and
100 participants, respectively. Attendees deepened their understanding of Komatsu by touring assembly plants for bulldozers, hydraulicexcavators, motor graders, and other types of equipment and watching demonstrations at the testing areas.

Basic Stance on Social Contributions
Komatsu holds the firm conviction that contributing to society leads
to raising its corporate value over the long term and the Group as awhole proactively engages in social contribution activities on a continuing basis to fulfill one part of its corporate social responsibilities.
Komatsu’s basic stance on social contributions (the purpose andthe five basic principles concerning social contributions) is as follows.
PurposeThe Komatsu Group and its employees will contribute to society as
members of the local community.

Basic Principles
Contributions shall be:
OConsistent
OIn the public interest
OVoluntary
OAcceptable by employees
ONot aimed at advertisement.

Plant tour for shareholders
held in Osaka in September
2008

31

Major Areas of Activities
Komatsu’s main activities for social contributions are in the following
areas.
OSupporting the Flower Association of Japan (see Special Story
3 on P. 23 for details)
OPromoting culture and education and local community developments
OPromoting sports
OProviding humanitarian assistance and recovery from disasters

Activities for Society

Contributing to Local Communities
Making Business Units Open to the Public
In addition to opening up its gymnasium, field, tennis courts, andvarious other recreational facilities, Komatsu hosts various events so
as to foster harmony and a spirit of coexistence with local communities.
Holding “Open House” Day
Komatsu convenes “open house” days at its business units on aregular basis, taking advantage of various events to enhance the local
community’s understanding of its business operations.
Running Kids’ Tour of Working Vehicles at the Komatsu
Techno Center
Twice a year, the Komatsu Techno Center in the city of Izu in Shizuoka
Prefecture, Japan runs a Kids’ Tour of Working Vehicles, which allows
the children to come into direct contact with large construction equipment. Through this tour Komatsu hopes to foster children’s dreams
and furnish an opportunity for parents and children to play together,
thereby encouraging deeper understanding towards construction
equipment and Komatsu’s corporate ideal.

The Komatsu Women’s Judo Club

Providing Recovery Assistance in Areas Impacted by
Natural Disasters
Komatsu provides various types of assistance so that areas impacted by natural disasters can recover as early as possible. The company donates or lends construction equipment necessary for rescue
and recovery activities. Komatsu also dispatches personnel andmakes monetary donations.
Providing Assistance after the Earthquake Disaster in
Sichuan Province, China
Komatsu Ltd., Komatsu (China) Ltd., and other subsidiaries in China
provided a total of 150 million Japanese yen in assistance towards
the great earthquake disaster that struck Sichuan Province, China on
May 12, 2008. This assistance incorporates among other things
monetary donations from these companies and local employees in
China and the provision of construction equipment and materials
along with operators for the equipment.

Kids’ Tour of Working Vehicles at the Komatsu Techno Center

Promoting Sports
The Komatsu Women’s Judo Club was founded in April 1991 tocommemorate the company’s 70th anniversary. The club has won thechampionship of the All Japan Company Judo Club Competition
seven times to date. Members of the club have also demonstrated
a record of excellence in individual competitions both in and outsideof Japan. The club gladly offers non-Japanese teams opportunities
to practice with its members, thereby contributing to the spread anddevelopment of judo around the world.
Ayumi Tanimoto participated in the under-63 kg class at the Beijing
Olympics in the summer of 2008, winning her second consecutive
gold medal, beginning with the Athens Olympics in 2004.

Ceremony in May 2008 to mark the shipping of the equipment to assist withdisaster recovery

Providing Assistance after the Earthquake Disaster inCentral Italy
The Komatsu Group provided assistance for recovery and reconstruction in the wake of the earthquake that struck Central Italy on April
6, 2009, primarily through its European subsidiaries and sales andafter-sales service agents.
Komatsu Europe International N.V. (Komatsu’s regional headquarters in Europe) and Komatsu Utility Europe S.p.A. (its manufacturingbase in Italy) contributed 220,000 euros (approx. 28.6 million Japaneseyen) through the Red Cross. Komatsu’s sales and after-sales service
agents in Italy also gave useful support to rescue operations at thedisaster site by lending three construction vehicles free of charge.

32

The Basic Stance of Management
As the cornerstone of its management, the Komatsu Group has been committed to enhancing Quality and Reliability throughstrengthening corporate governance and Monozukuri, or manufacturing competitiveness, in order to maximize corporate value.

The Basic Stance of Management

The KOMATSU Way

As the cornerstone of its management, the Komatsu Group is committed to enhancing Quality and Reliability in order to maximize corporate value. Komatsu considers corporate value to be the total sumof trust given to it by society and all corporate stakeholders.
This principle of Quality and Reliability not only applies to the
Komatsu Group’s products and services that bring satisfaction tocustomers, but also extends to all other aspects of the Group, including organizations, businesses, employees, and management.

The KOMATSU Way is a statement of values that all workers in the
Komatsu Group including those at every level of management shouldpass down in a lasting way at their workplaces and worksites. By
holding these values in common, the Group can build global teamwork that transcends nationalities and generations to amass and fortify the Komatsu Group’s “workplace (genba) capabilities”—the dynamism of all workers and the entire organization plus the ability to
improve their own workplaces and worksites. This in turn further
enhances Quality and Reliability, heightening the trust given to theGroup by society and all stakeholders.

Enhancing Quality and Reliability
In particular, the Komatsu Group has been working to strengthen
corporate governance and Monozukuri to enhance Reliability, asource of Komatsu’s strength.

Managerial Structure

Strengthening Corporate GovernanceTo increase its corporate value to the greatest possible extent, it isimportant for the Komatsu Group to design a framework in which theGroup can enhance its corporate value in a steadfast manner. Thistask calls for maximizing the total market value of Komatsu sharesand working to expand sales and profits as the company strives tofully satisfy a broad range of stakeholders, especially customers.
Top managers of Komatsu Group companies are expected to provide, through full awareness of corporate social responsibility (CSR),
solid management that avoids risk while continuously ensuring
Quality and Reliability in management. Moreover, managers are stepping up the revitalization of the Board of Directors—the core body forcorporate governance—and the establishment of an internal controls
system while enhancing the transparency and soundness of management.
All employees of Komatsu Group companies are expected not topostpone but to promptly work on solutions and corrections when
they discover issues and/or problems related to the rules in all business areas and domains.
Strengthening Monozukuri
It is critical for Komatsu as a manufacturer to promote reform basedon the Monozukuri concept in order to enhance its competitiveness.
Monozukuri means that the Komatsu Group has to rise to every
challenge in creating safe and innovative products in the spirit of unified teamwork. This teamwork incorporates every division and partner related to the value chain—the chain of entities through which
added value emerges—spanning from research, development, procurement, manufacturing, sales, and after-sales service divisions to
the management division as well as to business associates and sales
agents. The Group also emphasizes environmental friendliness in all
activities throughout the product lifecycle.

Disseminating The KOMATSU Way and Developing
Human Resources
The Komatsu Group has been disseminating The KOMATSU Way
and incorporating it into human resources development in eachGroup company around the world, with The KOMATSU Way Division
spearheading these activities.
To facilitate understanding of The KOMATSU Way, the Group convenes explanatory sessions at Group companies around the globe,
with the President and CEO and other executive officers in charge
visiting locations and providing explanations in person. The Grouphas made a video collecting employees’ personal experiences related
to The KOMATSU Way for Group personnel all around the world toview online. Each business unit promotes “The KOMATSU Way dissemination month” to enliven communication among workers, ensuring they take this spirit to heart.
The KOMATSU Way is based on corporate strengths that KomatsuLtd., a Japanese company, has embraced for years. To foster it atGroup companies outside Japan, Komatsu makes The KOMATSU
Way easy to understand and relevant to local conditions mindful ofdifferences among customs and cultures.
As concrete ways to strengthen worldwide employees’ ability to
improve their performance, the Komatsu Group uses the Total Quality
Management (TQM) nourished in the Group over the years along witheducation and training to raise the level of such professional capabilities as specific technological or specialist skills and managerial ability.
Practical training is also developed through debriefing sessions heldat each employee rank, with participants reporting on the skills they
have improved. Such sessions help employees to more fully acquire
the content of their education and training and utilize these newly
acquired skills during operations. In this way, the Group continues tonurture human resources capable of responding rapidly to changes
in their operational environments.

Global Management Seminar held in November 2008. Company executives
from Komatsu Group subsidiaries outside Japan gathered to discuss and reassess how to spread The KOMATSU Way and incorporate it into humanresources development. Participants each finalized a plan to foster practicaltraining once they returned to their home countries.

33

Enhancing Corporate Governance, Compliance, and Risk Management
Komatsu is strengthening corporate governance Group-wide to become a company that enjoys even greater trust from all its
stakeholders. Under the principle of “compliance comes first,” the company has established a framework to ensure thoroughcompliance with best practices in business.

Organizational Profile
In 1999 Komatsu Ltd. introduced the Executive Officer System and has
been working to separate management decision-making and supervisory
functions from executive functions within the confines of the law. At thesame time, the Company has maintained the Board of Directors with asmall number of members and appointed outside directors and auditors.
To improve the effectiveness of discussions in Board meetings, we havepromoted reforms in the operational aspect of Board meetings to ensure
thorough discussions of important management agendas and quick
decision-making.
Corporate Governance of Komatsu
Shareholders’ Meeting
Elect/Dismiss

Board ofCorporate
Auditors
Standing: 2
Outside: 3Elect/Dismiss

Elect/Dismiss
Auditreports

Audit

Office ofAssistants
to Auditors

Internal: 7External: 3

Recommend

Collaboration

Audit Dept. Internal audit
ReportAffiliatedcompanies

Advise/Suggest

Executive
Functions(30 Executive Officers,incl. 6 Directors)

Compliance
Committee, etc

International
Advisory Board

Collaboration
Agree with the selection/Decide the dismissal or the rejection of re-appointment/Confirm suitability or
independency of the independent public accounting firm.
Report audit results

Board of Directors and Directors
The Board of Directors meets every month and more often as needed.
[The Board met 15 times in the fiscal year ended March 31, 2009.] In
Board meetings, directors make decisions on management policies of theKomatsu Group, review and resolve important management matters, andstrictly control and supervise the execution of management duties by all
executive management personnel including the representative directors.
At present, of the 10 directors on the Board, there are three outside directors. When performing their duties, outside directors offer opinions andsuggestions from an independent position, based on their insight and richexperience. Their attendance rate at Board meetings is high, making
contributions to ensure transparent and sound management through theiractive participation in discussions.
Board of Corporate Auditors and Auditors
Komatsu Ltd. ensures that the number of outside corporate auditors
represents at least half of the Board of Corporate Auditors. There are fivecorporate auditors, of whom three are outside auditors. The Board of
Corporate Auditors makes decisions concerning audit policies, duty
assignments and other relevant matters. Each corporate auditor attends
Board of Directors meetings and other important meetings, audits theexecution of duties by directors, and conducts appropriate audits bymeeting every month and hearing the conditions of execution of management duties from the directors. [The Board of Corporate Auditors met 15
times in the fiscal year ended March 31, 2009.]
When formulating an audit plan, corporate auditors exchange views
with independent public accounting firm regarding audit policies, key matters, and main points with the aim to executing an effective and efficient
audit. Corporate auditors create opportunities to exchange audit-related
information with the independent public accounting firm as appropriate,including by attending audits of business units, affiliated companies, andother entities carried out by the independent public accounting firm,
deepening their mutual collaboration and making auditing flexible.
Collaboration between Corporate Auditors and the Internal
Audit Department
The Internal Audit Department, in cooperation with other related depart-

Remuneration for Directors and Corporate Auditors
In an effort to maintain an objective and transparent remuneration system,
the policy and levels of remuneration for Directors and Corporate Auditors
are deliberated by the Compensation Advisory Committee, which consistsof four external members and one internal member. Taking its recommendations into consideration, the remuneration for Directors is determined by the Board of Directors, and the remuneration for Corporate
Auditors is determined by discussions by the Corporate Auditors, respectively. The remuneration shall be subject to the resolution of the General
Meeting of Shareholders, which is required under the Corporation Act.
With regards to remuneration levels, comparison of other key, globally
active manufacturers in Japan is made by the Compensation Advisory
Committee and is reflected in its recommendations.
The remuneration for Directors is composed of a fixed, monthly remuneration and a variable remuneration linked to Komatsu’s consolidated
performance and stock price fluctuations. The variable remuneration ismade up of the annual bonus, reflecting business results, and stock
options, granted to give Directors the same perspective on earnings asshareholders, both of which have the purpose of motivating them to manage with the aim of enhancing corporate value. The remuneration for
Corporate Auditors only consists of a fixed, monthly remuneration
designed to support their independent position with authority to audit theexecution of duties by the Directors without getting fettered by the movements of corporate performance of the Company.

Managerial Structure

Komatsu sends
externaldirectors
and auditors.

Compensation
Advisory
Committee

ReportElect/Dismiss/Supervise

Internal
audit

Independent
PublicAccounting
Firm

Board ofDirectors

ments, regularly audits business bases and affiliated companies both inJapan and overseas, evaluates the effectiveness of their internal control,
reinforces their risk management, and works to prevent frauds and errors.
Corporate auditors observe audits by the Internal Audit Department, form
their own audit opinions, and give advice and recommendations to theInternal Audit Department.
In addition to reporting the audit results above to the Board of Corporate
Auditors, the Internal Audit Department maintains close and substantive
collaborations with corporate auditors, for example, by providing information to them on a routine basis.

International Advisory Board
In 1995 we established the International Advisory Board (IAB) to receive
objective advice and suggestions from outside experts for what Komatsushould work for as a global company. As a general rule, it meets twice ayear to discuss and engage in information exchange.

Improvement of Internal Control
System to Ensure Directors’ Execution of Duties
To ensure the efficient execution of duties by directors, we implement thefollowing:1) The Board of Directors meets every month and more often as needed.
It strives to maintain transparency and soundness of management
through the participation of outside directors. We have also established
the Regulations of the Board of Directors and the Standards for Agenda
of Board Meetings, thereby clarifying the matters on which the Board of
Directors should make decisions.
2) Together with the introduction of the Executive Officer System, we havedefined the separation of duties for directors, executive officers and senior
managers, and set up internal rules including the Regulations of DecisionMaking Authority, to ensure appropriate and effective execution of duties.
3) To promote efficient management of the Board of Directors, we haveestablished the Strategy Review Committee consisting of senior executive officers and senior managers. Based on the reviews of theCommittee, executive officers and senior managers execute their duties
within the authority delegated by the Board of Directors.
Framework to Ensure Appropriateness of Business
Operations of the Komatsu Group1) We have established the Regulations of Affiliated Companies and relevant rules to contribute to proper and efficient operation of Group management while respecting the independence of the management ofaffiliated companies. We have also positioned the Komatsu Code ofWorldwide Business Conduct as the code applicable to all companies

34affiliated with the Company. Based on these regulations and the codeof business conduct, each company of the Komatsu Group stipulates
various regulations for the proper promotion of duties.
2) Important committees of the Company, including the Compliance
Committee, Risk Management Committee and Export Control
Committee, take actions with the entire Group in view, and allow representatives of affiliated companies to take part in their meetings asneeded.
3) The Company makes particularly important affiliated companies regularly report to the Board of Directors of the Company on the status ofbusiness, including risks and compliance.
4) The Internal Audit Department of the Company audits each division of
the Company and implements or supervises auditing of major affiliatedcompanies that belong to the Komatsu Group. It also monitors andinstructs each affiliated company so that it will build its structure in conformity with the Company’s internal control and operate it correctly.

Managerial Structure

Basic Policy Pertaining to the Elimination of Antisocial Forces
It is the basic policy of the Company to prohibit the Komatsu Group fromhaving any relation whatsoever with antisocial movements or groups thatthreaten the order and security of civil society from the perspectives ofsocial justice and corporate social responsibility.
1) This policy is provided in the Komatsu Code of Worldwide BusinessConduct and diffused throughout the Company as well as each company of the Komatsu Group.
2) The Company works with police and other relevant external organizations to prevent the involvement of antisocial movements or groups inits management and quell any harmful effects they may bring about.
3) The Company is doing its utmost to collect information and receive
education training from external organizations, and shares information
throughout the Komatsu Group.

Promoting Compliance
Frameworks for Promoting ComplianceTo make certain that the entire Komatsu Group complies with the rules ofthe business community, Komatsu has appointed at the Head Office an
executive officer in charge of compliance and established the ComplianceDepartment to handle this issue exclusively. The Compliance Committee,
chaired by the President and CEO, deliberates the Group’s action policies
and important issues, while regularly reporting the state of compliancerelated activities to the Board of Directors.
Komatsu’s Code of Worldwide Business Conduct
The company has formulated Komatsu’s Code of Worldwide BusinessConduct (established in 1998 and revised six times to date) as a compilation of best business practices to be observed by officers and employeesof Komatsu Group companies all around the globe. The code addresses
fair business practices, non-discriminatory personnel systems, endeavors
for the global environment, appropriate information management, internal
control structure, and other topics. The text of the code has beenreleased to the public in its entirety.
Upholding Thorough Compliance
In order to achieve continual awareness among employees about compliance, the Group is working to raise their consciousness of best businesspractices by displaying in every Komatsu Group business unit posters listing The Five Principles of Compliance, a condensed version of Komatsu’s
Code of Worldwide Business Conduct. The Group fully engages in awareness-raising initiatives through a permanent web page dedicated to compliance on its intranet along with well-developed compliance-related education and training tailored to employees’ ranks and the types of operations for which they are responsible. The Group pursues early detection ofrisks and reforms at Komatsu business units and Group companies
through monitoring during the course of financial audits and complianceand risk audits. This monitoring covers areas ranging from compliancewith best practices in business to safety and environmental practices.
Internal Reporting System
Komatsu has established consultation offices both internally at Komatsu

35

Group companies and externally at law firms, collectively known as theBusiness Rule Consultation Offices, to respond to consultations or reporting from Group company employees pertaining to best business practices
or questionable actions. The Group fosters active consultations andreporting by clearly stating in Komatsu’s Code of Worldwide BusinessConduct and Group companies’ workplace rules that employees using
the reporting system will not be penalized.
The State of Compliance in FY2008
During FY2008, the Komatsu Group experienced no substantial compliance-related infractions or incidents.

Implementing Risk Management
Basic Principles and Structure for Risk Management
As Komatsu continues to make efforts to increase its corporate value, it
recognizes as major risks those risk factors that could threaten the company’s sustained growth, particularly compliance issues, environmental issues,
product quality concerns, accidents, and information security problems.
The company has adopted the following measures to counter these risks.
OKomatsu has established Risk Management Rules to correctly recognize and manage risks. The company has appointed personnel tooversee individual risks, further promoting the build-up of a solid
foundation for risk management.
OKomatsu has established a Risk Management Committee to devise
relevant policies for the entire Komatsu Group, evaluate and improveupon risk measures in place, and take control of risks when theyarise. The Risk Management Committee regularly reports on its
deliberations and activities to the Board of Directors.
OKomatsu will establish an emergency headquarters when serious risks
occur and implement appropriate measures to minimize damage.
Implementing a Business Continuity Plan for Komatsu
Komatsu has formulated a Business Continuity Plan (BCP)* to carry out
major operations without suspension, or restore them after only a shortsuspension, should a disaster or accident occur. The company conductedtraining drills at the Head Office, assuming an earthquake occurring
directly beneath the Greater Tokyo Metropolitan area. These drills aimed
to empower employees to take appropriate actions in the event of an
actual emergency. Komatsu’s manufacturing plants have used their BCPs
to strengthen the ability of buildings and equipment to withstand earthquakes and step up measures to cope with concentrated torrential rainfalls. Komatsu has established a committee to respond to the incidence
and spread of pandemic influenza. To help employees cope with the disease, an action manual has been developed covering prevention and outbreak periods, with education and training also underway to ensure morethorough understanding.
*A plan that systematizes major operations across the entire company suchthat they can continue without suspension or can be brought back after only abrief suspension.

Promoting Risk Management throughout the GroupTo reinforce the risk management structure across the Group, Komatsu isrefining the level of management at each Group company through explanatory meetings and study sessions on risk management and BCPs.
Additionally, Komatsu is strengthening its Group-wide system for communications in times of emergency by introducing emergency contact andsafety confirmation systems, broad-area wireless devices, and other useful tools.
Consolidating Information Security
With the Information Security Committee established in 2005 at the core,
Komatsu is developing a structure for information security for the entire
Group and implementing various control measures. The company distributes an Information Security Guidebook to all employees with a view toraising their consciousness of thorough compliance with rules. The company has also inaugurated explanatory sessions, education and training(e-Learning), and similar awareness-raising activities at its business units.
Komatsu revised its policy for personal information protection in February
2008, reinforcing its appropriate handling of such information.

Working Together with Business Associates and Customers
The Komatsu Group considers partnerships with business associates (suppliers) as the foundation for its business operations.
On another front the Group does its utmost to transform customers’ diverse aspirations into reality.

Working Together with Business Associates

Working Together with Customers

Partnerships with Business Associates
Relationships of trust with business associates (suppliers) form thefoundation of the Komatsu Group’s manufacturing operations.
Komatsu considers its business associates to be equal partners.
Throughout a long history of collaboration, the company and its business associates have overcome various difficulties by jointly addressing issues to realize solutions.

One of Komatsu’s primary missions is to enable customers, which
the company considers as partners, to realize their aspirations byproviding advanced technologies and sharing the value of new products that incorporate such technologies. Towards that end, information technologies factor heavily in the solutions Komatsu offers.

Supporting Suppliers in Introducing Environmental
Management Systems
Komatsu’s support for
suppliers in introducing
environmental management systems is covered
in detail on P. 12.

Representatives of the European and North
American Midori-kai groups participated in theround-table discussions for managers held in
November 2008.

Compliance, Health, and Safety
Komatsu’s commitment to thorough implementation of CSR procurement throughout the supply chain leads the company to ask all business associates to comply with Komatsu’s Code of Worldwide
Business Conduct. Komatsu is continually working to assess thestate of safety and quality at business associates through visits andother means for careful fact-finding and close communication, andproviding recommendations as necessary.
Nurturing Business Associates
Komatsu holds goals in common with its business associates,
together aiming to achieve ever-higher levels of quality, cost, anddelivery (QCD) through tireless endeavors for improvement. The company provides education and training in quality control (QC) activities
and manufacturing technologies. It also allows employees of Midorikai group companies to participate in the technical training provided
to Komatsu’s own employees, assisting these companies in fostering
future management. In taking a long-term perspective rather thanseeking temporary results, Komatsu takes an “agricultural” approachto procurement, nurturing companies of excellence much the waythat farmers raise crops. Ultimately, this will give rise to stability inproduct quality at Komatsu.

Managerial Structure

Organizations Facilitating Collaboration
The Komatsu “Midori-kai” group, an association of the company’sbusiness associates in Japan, has 162 member companies, which
supply roughly 70% of Komatsu’s total procurement in Japan.
Komatsu holds various events to foster communication with
Midori-kai group members, convening general conferences, roundtable discussions for managers, and New Year’s informal business
functions. These three annual meetings are attended by representatives from each Midori-kai group company as well as Komatsu’s top
management, providing a forum for interaction and exchanges of
opinions. In addition to the Komatsu Shantui Midori-kai group in
China that is already active, European and North American Midori-kai
groups have been launched, bringing total participation to more than150 companies outside Japan. Komatsu intends to establish an
association of business associates in Asia (other than Japan and
China) and strengthen global partnerships with business associates.

Developing an Autonomous Haulage System
Revolutionizing Mining Operations
Komatsu’s Autonomous Haulage System (AHS) allows for unmanned
operations of multiple super-large dump trucks. AHS can improve
the safety and productivity levels of mining operations while lowering
overall costs and enhancing environment-friendliness for customers.
A fleet control center monitors dump trucks featuring high-precision global positioning systems (GPS) and autonomous running functions akin to those of a robot. The center specifies the destination ofeach truck, and by receiving directions wirelessly, the vehicles run
autonomously along targeted hauling courses at the proper speed.
At the site for loading ore, a dynamic course generating system
known as a “path planner” is mounted on hydraulic excavators andother loading equipment, guiding the trucks to the location at which
they are to be loaded. Information about the course is also transmitted to the site for dumping the ore, enabling the trucks to dump it at
a designated location with certainty. Optimal fleet operations underthe AHS enable customers to lower their maintenance costs, energy
consumption, and CO2 emissions.
To ensure safety, the fleet control system prevents collisions withmanned vehicles in the same operating area. Should another vehicle
or a person happen to come within the vicinity of an autonomous
dump truck as it is running, the sensor for obstacles will activate andthe vehicle will come to an emergency stop.
Running a manned truck for mining around the clock requires four
to five operators per vehicle. Furthermore, many of the world’s mines
are located in harsh and remote areas for people to work in. Throughautomation, AHS saves a substantial number of worker-hours andstabilizes operations even in harsh regions such as highlands anddeserts.
AHS is one of Komatsu’s proprietary advanced technologicalproducts, addressing the customers’ requirement to stabilize theamount that can be transported per hour. Eleven dump trucks with
AHSs have been introduced to Codelco’s Gaby mine in Chile and fiveto Rio Tinto’s West Angelas mine in Australia, running without interruption around the clock.

Autonomous dump truck being loaded with
300 tons of copper ore

36

Quality and Reliability
To enhance Quality and Reliability, Komatsu has established a structure for providing high-quality products and services thatare innovative and safe, taking to heart the opinions of customers.

Enhancing Quality and Reliability
The fundamental principle of Monozukuri (manufacturing competitiveness) lies in Komatsu’s commitment to Quality and Reliability in orderto provide products—both hardware and software—that customers
are happy to own. To achieve this, Komatsu puts the customer firstas one of its Basic Managerial Policies, with the pursuit of maximum
customer satisfaction at the foundation. The company carries out acontinuous process of reform and refinement with all divisions responsible for putting this policy into practice, whether in development,
manufacturing, sales, after-sales service, or administration.
In practical implications, Komatsu includes the global environment,
quality assurance, and the education and training of human resources within the scope of its quality management and uses indices topromote such management.
Komatsu’s Principles Governing Quality Assurance
Komatsu has established the following principles on quality in its
products and services, which all subsidiaries and employees are
responsible for putting into practice.
Principles that Increase Quality and Reliability
Provide products, services, and systems that are environmentfriendly, safe, and innovative from the perspective of the customer.

Managerial Structure

Definition of Quality Assurance
The company has a responsibility to take actions that will ensure it isable to provide products and services that the customer can purchaseand use with a sense of assurance and satisfaction and use for many
years to come.
Principles Governing Quality Assurance(1) Putting customers first, being receptive to the views of the customer, and responding appropriately to the customer, thereby earning the customer’s satisfaction, are fundamental to the job of every
employee and constitute the responsibility of every employee.
(2) Complying with international standards and the legal requirements
particular to individual countries as a matter of course, and providing products and services that, from the perspective of the customer, have incorporated proper regard for safety and a sense ofassurance and that do not easily malfunction, are fundamental to
the job of every employee and constitute the responsibility of every
employee.
(3) Providing products and services that incorporate proper regard for
global environmental conservation is fundamental to the job of every
employee and constitute the responsibility of every employee.
(4) Providing products and services that are creative and provide
benefits to the customer is fundamental to the job of every
employee and constitute the responsibility of every employee.
(5) Giving the customer a sense of safety, assurance, satisfaction, andthe ability to use the product for many years to come is a sourceof happiness for every employee.

Mechanisms for Quality Assurance
At Komatsu, all employees in each division, from product planning todevelopment, manufacturing, sales, and after-sales service, share asense of working as a single unit to continually develop products thatare safe, innovative, and of high quality. Through a strengthening ofKomatsu’s unique Monozukuri system, the company is able to introduce competitive DANTOTSU products to the market and provide
services and systems with substantial features.
At each step of the development and manufacturing system, meetings are held to consider and evaluate the product. The product’s

37

suitability is then assessed andenhanced until the ultimate goalis attained. In this way, thecompany conducts quality
assurance activities that firmly
ensure Quality and Reliability.
Through such approaches
the company is able to strengthen safety assurance and satisfaction for customers while
simultaneously providing products and services that take theglobal environment into accountand comply with both international specifications and theregulatory requirements of individual countries.

Komatsu’s Mechanisms for
Quality AssuranceMarket trends!Assessing market trends

Product planning!Clarification of desired levelof quality!Formulation of productobjectives

Evaluation
meeting
Development!roduct planning and design!reation of a prototype,
testing to confirm quality

Structure for Quality
Assurance
Evaluation
The majority of Komatsu’s prodmeetingucts—construction and mining
equipment, presses, and forkManufacturinglifts—are used as manufacturing!Mass production prospects
equipment at customers’ sites!Mass productionof operation. These products
are expected to contribute to
Customer support
customers through a higher rateof operation and productivity! !After-sales service
over long hours every day. In
reflection of these product charCustomer satisfaction
acteristics, sales and after-sales!Collection of information on
service personnel at Komatsu
product quality in the market
visit customers to give detailed!Customer satisfaction
recommendations on products
surveysand their usage and conduct
maintenance activities. They then provide feedback to relevant divisions regarding the views and requirements that the customers havefor these products. The company has created a system to increasecustomer satisfaction through rapid responses to such information.
Moreover, Komatsu maintains a database on product quality in themarket so that the company can respond rapidly upon discovering aquality-related problem and have all the company’s sales and aftersales service divisions able to access the information they need tohelp remedy the issue.

Increasing the Degree of Customer Satisfaction
Based on its Principles Governing Quality Assurance, Komatsu has
piloted a variety of initiatives to increase customer satisfaction.
First, Komatsu believes it is extremely important to give serious
consideration to customers’ views and examine them on a continuous
basis. Consequently the company conducts regular customer satisfaction surveys, including post-launch field surveys. Komatsu uses
the results to improve both the products themselves and the structure
promoting quality assurance. The surveys help furnish new value tocustomers as the company develops DANTOTSU products that
anticipate customer needs in advance and delivers services with
distinct features.
Komatsu is able to raise the level of customer satisfaction throughthese approaches.

Komatsu’s Structure for Quality Assurance
Customers

Sales agencies

KomatsuPresident and CEO

Organization

Customers

Sales
agencies

Sales andafter-sales
servicedivisions

Quality Meeting

Quality Assurance Division
Development
division

Manufacturing
division

Product Safety
Committee

Anticipating customer needs in advance
Analysis of data
Visiting customers
0Productqualityissues0Customer
needs

Meetings with customers to exchange views on technologies
Customer satisfaction surveys
Surveys tracking vehicles in operation for extended hours
Solving problems appearing in information
regarding product quality in the market

Flow ofinformation

Information regarding
complaints
0 sense ofassuranceandsatisfaction

Sales and after-sales
service information
Vehicle operation
information

Development/manufacturing
Revision of processes
KOMTRAX (Komatsu
Tracking System forconstruction equipment)

0Providing products appropriate
for customer needs
0Compliance with safety andregulatory stipulations

Managerial Structure

Surveys Tracking Vehicles in Operation for Extended Hours*
Komatsu pursues improvements in product durability and reliability
through a system of surveys tracking vehicles in operation for extended hours. This allows the company to provide products satisfying thecustomer and consuming fewer resources. Komatsu personnel
physically take apart vehicles that have been in operation for extended hours at customers’ worksites in order to investigate durability,
reliability, and economic efficiency and analyze any reductions incapability and functionality. The company assesses whether or not theresults satisfy customers’ expectations and the degree to which theirdemands match product quality objectives at Komatsu. The company
designs proposals to rectify areas not achieving desired quality levels,
later integrating these proposals into product revisions or the development of new products. This process increases product durability andreliability and thus extends product lifecycles, leading to greater customer satisfaction and less resource consumption and waste.

Fulfillment of requirements

Database on productquality in the market

System for Assessing the Degree of Customer Satisfaction-Providing products appropriate for customer needs
Planning, development

Mass production-Customer support activities
Sales

Purchase and use of
products by customers

After-sales service

Surveys

Post-launch field surveys(Feedback)Post-launch Field Surveys and Feedback of Results
Komatsu’s post-launch field survey is part of its system for comprehensively assessing customers’ degree of satisfaction, with company
personnel visiting purchasers of newly launched products to request
product evaluations.
In concrete terms, these personnel listen to customers’ feedback
on a day-to-day basis regarding the degree of satisfaction towards
the quality and reliability of its products. The company pays carefulattention to the evaluations, views, and requests concerning its sales
and after-sales service and replacement parts. Komatsu processes
and analyzes the gathered data to decide upon objectives for
improvement. The resulting information is shared across the company, notably with top management, and provided as feedback todivisions at every step in the process, including development, manufacturing, and sales and after-sales service. With the means toimprove upon problems and revise the quality assurance system, thecompany can deliver products and services that satisfy customers.

0Principles for attaining
product quality
0Objectives regarding
product quality

1. Survey targets
 -Customers who have purchased
newly launched products orvehicles with recent modelchanges
2. Survey periods
 -Periods of between about six
and 12 months after productlaunches
3. Methods of conducting thesurveys -Visits to customers, interviews

4. Survey items(1) Degree of customer satisfaction(evaluations by owners andoperators)-Operator survey on capabilities andfunctions-Ease of maintenance, serviceability-ituation regarding replacement parts(2) Surveys of sales representatives(at sales agents)(3) Surveys of service representatives(at sales agents)

Evaluation of degree of customer satisfaction (Quality Meeting)*Defined as vehicles with an operating history of 5,000 hours or more38

Using IT to Support Customers throughout the Product
Life Cycle
Komatsu uses IT-based remote vehicle management systems known
as the Komatsu Tracking System (KOMTRAX) for conventional construction equipment and the Vehicle Health Monitoring System(VHMS) for large mining equipment to indicate the current state of
the vehicle’s “health,” its operating status, and other key information.
Using this information to improve vehicle quality or assess customer
needs for after-sales services, Komatsu provides customers support
throughout the product lifecycle by increasing vehicles’ rates ofoperation while decreasing their maintenance costs.
Quality Assurance Activities at the Global Level
Komatsu provides products of the highest quality at every location
throughout the world by fully implementing quality assurance activities
globally. For this purpose, the company aims for uniform technicaldrawings, manufacturing systems, inspection methods, informationcollection, and quality management across the globe.
Komatsu labels as “mother plants” certain global manufacturinglocations with product development capabilities. These plants serveat the center of worldwide development and manufacturing activities,
with their leading-edge technologies and techniques then transferred
to other manufacturing locations around the world. This improves
technology and enhances product quality, making them uniform
throughout the company.
Managerial Structure

Promoting Product Safety to Ensure Customer
Safety and Assurance
Komatsu puts safety and assurance at the forefront in its quality
assurance activities. The company has formulated Standards for
Product Safety and associated Principles and has all employees
comply with them in order to deliver products that are safe, provide
a sense of assurance, and can be used for many years.

Information System for Product Safety and Services
In seeking to get information on problems with product safety as earlyas possible, Komatsu has established an information system forproduct safety and promptly deals with issues.
It continuously strives to make improvements so that the company, including top management, can respond quickly through coordinated actions, including (1) assessing the cause of the incident andprocedures to be taken, (2) contacting the relevant governing authorities, (3) deciding to take remedial measures such as a recall of
products still on the market.
Standards for Product Safety(1) Compliance
The provision of products and services that comply with international standards and the legal requirements particular to individual
countries is fundamental to the job of every employee and constitutes the responsibility of every employee.
(2) Safety via prevention
The provision of products and services that are safe and provide
a sense of assurance, and do no harm to the customer is fundamental to the job of every employee and constitutes the responsibility of every employee.
(3) Security regarding accidents
The provision of products and services that minimize any injury
that might occur to a customer who has an accident is fundamental to the job of every employee and constitutes the responsibilityof every employee.
(4) Transparency
The ongoing provision of advance safety warnings after receiving
information from the customer and, in the case of a defect arisingin a product or service, prompt response measures and the provision of information, are fundamental to the job of every employee
and constitute the responsibility of every employee.
(5) Improvement of organizational climate
In order to create a corporate climate in which product safety isemphasized, the standardization of the safety management systemand safety techniques as well as ongoing efforts to improve them
are at all times fundamental to the job of every employee andconstitute the responsibility of every employee.

The Komatsu Information System for Product Safety
Customers, sales agentsInternal proceedings (analysis, formulation of response measures),Safety and regulatory affairs
Research division,Product development
WPerformance, reliability,Safety mastersystemWDevelopment-related Confirmation
evaluations of product Evaluation
safety, regulation value,etc.

,Information on accidents
occurring with customers,General information
received from customers

Relevant governing authorities,
relevant organizations

Quality assurance
division at each plant

Quality assurance
division at Head Office,Incorporation ofquality into products,Responses toregulatory issues
via manufacturing,sales

WProduct quality,System featuringpersons responsible Confirmation
Evaluationfor vehicle inspection
and safety

WRegulatory materials

Confirmation
Evaluation,Legally required
registrations/applications

WEvaluation of appropriateness of safety, safety
standards, etc.

,Information analysis,Analysis, verification,Consideration of response
measures,Information regarding productquality in the market,Audits of regulatory affairs,Remedial activities,Annual report covering
defective vehicle issues,Quality Assurance Meeting,Direct indication on
products,Modification of productmanuals, etc.
,Informing of customers(via sealed letter),Products recalls, repair

39,Determination of response
measures,Reporting to relevant
divisions,Prevention of recurrence, standardization,Implementation of response measures,Reporting and submitting
information to relevant
authorities as provided under
the law,Reporting to relevantorganizations

Providing Product Safety Information to Customers
Komatsu meets legal requirements for providing safety information tocustomers through (1) direct indication on products or in user’s
manuals, (2) direct explanations by sales and after-sales service
personnel, and (3) telephone consultations with sales and after-sales
service divisions at plants. The company seeks to address eachparticular situation, with, for example, engineers or top management
visiting customers as the situation might require.

Number of Incidents with Recall Notices Filed
Komatsu strictly oversees compliance with legal requirements. Shoulda defect somehow be found in its products or services, the company initiates prompt correction measures and moves forward withproactive information disclosure. The graph below indicates the number of incidents in which recall notices were filed. The company willcontinue to pursue safety to the greatest extent possible in the years
to come.

System for Dealing with Recalls
In recent years, customers have become more concerned about
product safety in general and product recalls in particular. To help
ensure product safety in the market, Komatsu is reinforcing its recallrelated organizational strength, comprehensive response capabilities,
procedures for prompt corrective measures, and proactive information
disclosure while employing increasingly rigorous monitoring.

Number of Incidents with Recall Notices Filed(for construction equipment sold in Japan)(Incidents)

21*

20

15
11

Procedure Governing Recalls(1) Proposal for rectification of the situation based on information
regarding the defect; decision regarding what measures the company will take towards the market(2) File notice with relevant authorities as provided under the law(3) Inform customers by appropriate means(4) Take appropriate corrective measures, including, for example,
repair, replacement, or refund

8

8
6

5

0

(FY)

2004

2005

2006

2007

2008

*The number of incidents shows an increase in FY2005, when Komatsu thoroughly
investigated product quality information from the previous five years and decided
voluntarily to file notices and take remedial action for ensuring the safety of vehicles
for transporting goods by road.

Managerial Structure

Means for Preventing Recalls(1) Strengthening of system for collecting information on productquality in the market(2) Promotion of technical verification of the problem involved in therecall and timely decision-making(3) Strengthening of check system that features persons responsible
for vehicle inspection and safety(4) Regular auditing of recall-related operations

1040

Data on Environmental Impact Resulting from Business Activities

Relationship between Business Activities andthe Environment
The Komatsu Group procures various parts and materials and,through the manufacturing process, utilizes the earth’s resources,
including raw materials, water, energy, and chemical substances,among others, to provide products to customers. Such businessactivities impact the environment at each stage in the process.
The Komatsu Group will continue to provide more highly valueadded products and services while assessing the environmental
impacts resulting from its business activities, formulating medium- andlong-term objectives, and introducing measures to reduce suchimpacts.

Environmental Impact Resulting from Business Activities of Komatsu Group Companies, including Facilities outside Japan (FY2008)

Direct Materials
Steel856,800 t

Input

Indirect Materials
Paints1,830 t*1
Lubricants
12,441 kR*1

Development

Procurement of Materials?2:.6321*28(3231=?)*7.,2?*).918*618&6,*87+36
development of environmental
technology?6**2463(96*1*28

EnergyElectricity
Heavy oil A
Kerosene
Light oil
Natural gas
LPG
Gasoline
LNG
Coke

698 GWh
10,000 kR
6,000 kR
12,000 kR
12 million Nm3
7,000 t500 kR
7 million Nm3
5,000 tWater Resources
Groundwater 7.3 million m3
Industrial water 0.2 million m3
Supply water 0.9 million m3

Manufacturing(27 Komatsu Group Manufacturing Facilities in and outside Japan)?.8.,&8.323+(0.1&8*(-&2,**2*6,=
Productconservation)
Product weight?++*(8.:*98.0.>&8.323+6*7396(*7>*63*1.77.327 (construction and?2:.6321*28&06.7/1&2&,*1*28
mining equipment)?0.1.2&8.323+-&>&6)397(-*1.(&079'78&2(*71
1,302,000 t?#*61.2&8.323+97*3+36,&2.((-036.2&8*)
Number ofcleaning solvents*2
products(construction andEnvironmental Risks
mining equipment)(Air, soil, and groundwater pollution)
62,116 vehicles
Measures for underground oil tanks Completed*1
Storage for PCB transformers
591 units*2
Groundwater observation wells
99 wells*2
Company on-site landfills
ClosedData

Output
Waste
Total amount generated
125,000 t*2
Substances under the Pollutant Release andTransfer Register (PRTR) Law
78.3 t*2

Waste Recycling
Recycling amount

Waste Disposal
Waste materials disposed by subcontractor
25,000 t*2(Company on-site landfill of waste materials
0 t)

Coverage of Data
*1 Komatsu manufacturing facilities*2 Komatsu Group manufacturing facilities in Japan*3 Logistics from procurement to sales related to construction equipment in Japan

41

Noise andvibration

100,000 t*2
Hazardous waste
manifests

Use in otherindustrial
sectors

Atmospheric Discharges
CO2
449,000 t-CO2
SOx
107 t
NOx
280 t
Substances under
the PRTR Law
979.6 t*2

Water-based Discharges
Wastewater
7.5 million m3*2
BOD emissions
17 t*2
COD emissions
22 t*2
Substances under the PRTR Law(public water areas)
0.0 t*2
Substances under the PRTR Law(sewerage)
0 t*2

CO2 emissions: Calculated by multiplying the amounts of electricity, heavy oil, etc. used (see Energy section of Input column)by the “CO2 coefficient” in each area. (In Japan, the coefficient for fuel is calculated in keeping with the Law
concerning the Rational Use of Energy [Revised] and the Mandatory Greenhouse Gas Accounting andReporting System that entered into force in April 2006. The coefficient for electricity is calculated in keepingwith the guidelines for calculation stipulated by the Ministry of the Environment of Japan in FY1999, which
are based on the Act on Promotion of Global Warming Countermeasures.)SOx emissions: Calculated by multiplying the “S content by percentage” (based on element tables of suppliers) by the amountsof heavy oil, kerosene, light oil, and coke used.
NOx emissions: Calculated by multiplying the “nitrogen oxide emissions units” (obtained at each Komatsu facility) by theamounts of heavy oil, kerosene, light oil, natural gas, and LPG used.
Emissions and transfer of substances covered by the PRTR Law: Calculated by the “content ratio of specific chemical substances” contained in indirect materials multiplied by the “discharge or transfer rate.” This calculation is based on the PRTR
Law, which was designed to mandate the disclosure of the amount of specific chemical substances released into the environment to promote the management of such substances.

EnergyLight oil

1,268 kR*3

Packaging
Steel
3,821 t*3
Resins53 t*3Wood, cardboard
6,078 t*3

Logistics
B!2 reductions in logistics
B3685<,3,4:5-:8(49658:
efficiency
B3685<,3,4:5-6(*104.
materials

EnergyElectricity, fuel

EnergyFuel

Indirect Materials, Oils

Indirect Materials, Oils

Sales and After-sales
Services
B"85<090545-,4<08543,4:-80,4+2?
products and services
B8,(:054(4+56,8(:0545-(transaction network for usedcomponents (parts), information
on “Reman” sales, etc.

EnergyFuel, electricity

Recovery andDisassemblyUse
B#,+;*:0545-,4<08543,4:(2impact during the productusage stageB"85<090545-952;:0549-58
customers’ environmental
activities
B"8535:0545--;,2,--0*0,4:
operation

B"8535:0545-A#,3(4C04
which used components(parts) are recovered,remanufactured, and suppliedback to the market

Data

Reuse of products
Reuse of parts
Recycling of materials(outsourcing)Atmospheric Discharges
CO264,900 t-CO2*3

Atmospheric
Discharges
CO2

Atmospheric
Discharges
CO2, NOx, diesel
particulate matter

Atmospheric
Discharges
CO2
Returnable
pallets

Waste oilproducts

Noise andvibration

Hazardous waste
manifests

Waste
disposal
Recycling conducted
at oil manufacturers

Use in otherindustrial sectors

42

Environmental Management

Environmental Education and Training
Courses in Environmental Education and Training in Japan (excluding general environmental courses)
Organizer No. Course name

TargetParticipants
FY2005 FY2006 FY2007 FY2008

Head
OfficeAdvanced environmental education (held every two years)
Overview of the ISO14000 series
Training of internal auditors/Refresher courses
Development and manufacturing (introductory)
Environmental training for manufacturing
engineers
Training new employees
Lectures on the environment, experience-oriented
education
Education for enhanced environmental
understanding (e-Learning)
Education to refresh environmental understanding (e-Learning)
Education in the basics of auditing
Overview of the ISO14000 series
Training of internal auditors
Training new employees
Regulatory education and personnel exchange
Specialist training

1
2
3
4
5
6
7
8

Environmental specialists (Komatsu and affiliates)
Administrators (Komatsu, affiliates, and business associates)
Environmental auditors (Komatsu, affiliates, and business associates)
Development and manufacturing staff (for second-year employees)
Assistant foremen, foremen, manufacturing engineers,
students of Komatsu Institute of Technology
New recruits
Komatsu Group managers and employees
Komatsu Group managers

28
42
30
56

—
29
60
73
50

50

66

89

125

186

227

468

308

1,329

767

—

—

1,294

19
36
51
97

—
32
41
139

Komatsu Group managers and employees
4,675
191
164
9
Managers and employees
269
241
371
153
1
Divisionsoverseeing 2
Managers and employees
62
0
2,138
302
environEnvironmental
auditors
232
76
30
59
3
mentalNew recruits
707
418
666
675
4
management
Managers and employees
590
1,084
788
1,276
5
at plants
Environmental conservation practitioners (persons involved in regulatory affairs, etc.)
553
277
113
1,776
6
In addition to the education and training courses listed in the chart above, Komatsu also held explanatory sessions in Japan at business associates regarding the introduction ofenvironmental management systems and at sales agents regarding the Group’s environmental guidelines (see P. 12).

Number of Persons Having Environment-related Certificate
Certificate name

Number of persons with certificate*

Pollution control administrators
Energy administrators
Environmental management
system auditors

FY2005

FY2006

FY2007

FY2008247 (60)
49 (11)209 (53)42 (14)192 (51)
39 (14)195 (49)40 (13)

8

7

8

8

*Figures in parentheses indicate the number of officers required.

Reducing the Use of Substances of Environmental Concern and Complying with the EU REACH Regulation
Data

Responding to the increase in environmental conservation awarenessaround the world, Komatsu has been making efforts from an earlystage to reduce the use of asbestos, lead, and other substances ofenvironmental concern. In FY1999, using chemical substancesbanned under Japan’s Law Concerning the Examination andRegulation of Manufacture of Chemical Substances Control and otherregulations in developed countries as a base, Komatsu stipulated its
own list of substances banned from use and substances approved
Substances of Environmental Concern Banned or to Be Reduced for Use in Products
Designation
BannedNumber of Name of substancesubstances
14

To be
reduced(subject tolimited use)

11

Substancesof Very High
Concern(SVHC)
under theEU REACH
regulation(15)0 )0 ))*&)0'""!#&(&#+&(&(&%)
!.(&!#&(&#+&(&(&%)  )0("!#&(&*!.#%
0("*!%&#$"%0 !(&$"+$10 $"+$1
0&#.(&$"%*"'!%.# 1'&#.(&$"%*
"'!%.#*!( 10&#..#"(&$*"
!.(&(&%)10(#+&(&&*%)+#&%""20!&(*!"%!#&("%*'("%)2
0 ")*("+*.#*"%&-"200(+(.0 ()%"0#%"+$
0.(&#+&(&(&%) )
0-(&$&.#&&%2
0*!%&#0-!#&(&%/%0 ") *!.#!-.#2"+*.#'!*!#*2%/.#'!*!#* 
+*.#'!*!#* 2
&$*)+")+((%*#.-$"%"% ,!*!(*&)" %**!
&##&,"% )+)*%),!"!$.+)"%&$*)+'(&+*)))+)*%)*&(+

0()%*"()%"'%*&-""()%"*("&-"*("*!.#()%*0 ") *!.#!-.#'!*!#* 2"+*.#'!*!#* 2%/.#+*.#'!*!#* 20!&(*!"%!#&("%*'("%)2
0 ")*("+*.#*"%&-"2*1 Scheduled to be banned from January 2010
*2 Substances newly banned or to be reduced

43

for use only in limited circumstances (see chart at left) and begancomprehensive control of substances of environmental concern. The
company has already reduced its dependence on substances
approved for limited use in keeping with its medium- and long-termtargets for development of environmental technology.
In response to the enactment of the EU regulation addressing
Registration, Evaluation, Authorisation and Restriction of Chemicals(REACH) in 2007, Komatsu reviewed the list of substances approved
for limited use and revised the designation of certain substances tobe “reduced” or “banned” as appropriate. Through cooperation with
suppliers, the company has initiated a system to strengthen controlof substances of environmental concern in products.
Control System for Substances of Environmental Concern
DesignSending informationon technical
CAD system
Control system fordrawings(technical drawings)
substances ofInputting specifications of substances environmental concern
Procurementof environmental concern contained in productsChecking for targeted
Sending
substances upon release
survey formsof technical drawings
Database for
Supplier A
parts subjectedChecking for targeted
to surveys
substances upon parts
registration
Supplier survey
management
Responding to survey
results
Summarizing information
Table listing
Supplier B
on targeted substances
substances of
Sendingenvironmental
concerncompletedGenerating summary
surveysfor model underBOM
development

Chemical Substance Control and Pollution Mitigation and Prevention
Names of Class I Specific Chemical Substances and the Amounts Released and Transferred by Komatsu and the Komatsu Group
Manufacturing Facilities in Japan (Handled amount of 1 ton or more)(Unit: tons)

NumberNameunder the
PRTR Law
Ethylene glycol
43

AmounthandledAmount released

Amount transferred

Water

Air

Soil

BuriedSewerage

716.6

0.1

—

—

—

—

Disposed

Chemically Amounttransformed contained inor eliminated products

5.5

—

710.9

311

Manganese and its compounds

700.4

1.1

—

—

—

—

11.1

0.0

688.2

63

Xylene

616.6

477.0

—

—

—

—

23.8

111.7

4.2

40

Ethylbenzene

379.3

316.9

—

—

—

—

13.2

48.3

0.9

227

Toluene

206.3

173.7

—

—

—

—

11.4

14.8

6.4

68

Chromium and chromium (III) compounds

111.2

0.0

—

—

—

—

1.3

—

109.8

346

Molybdenum and its compounds

49.8

0.0

—

—

—

—

0.0

0.0

49.8

231

Nickel

26.9

0.0

—

—

—

—

0.2

—

26.6

224

1,3,5-trimethylbenzene

19.6

8.1

—

—

—

—

0.2

0.7

10.6

69

Chromium (VI) compounds*

14.1

0.0

—

—

—

—

3.4

—

—

266

Phenol

11.2

0.0

—

—

—

—

0.0

—

11.2

100

Cobalt and its compounds

8.9

—

—

—

—

—

0.5

—

8.4

30

Bisphenol A type epoxy resin (liquid)

4.4

—

—

—

—

—

1.4

—

3.0

243

Barium and its water-soluble compounds

3.8

—

—

—

—

—

3.5

—

0.2

310

Formaldehyde

1.9

0.0

—

—

—

—

—

—

1.9

299

Benzene

1.9

0.0

—

—

—

—

—

0.5

1.3

16

2-aminoethanol

1.5

—

0.0

—

—

—

1.5

0.0

—

230

Lead and its compounds

1.4

—

—

—

—

—

0.6

—

0.8

*During chrome plating, chromium (VI) compounds become chromium (III) compounds. Therefore, the amount transferred and the amount contained in products are totaled in“chromium and chromium (III) compounds.”

Breakdown of the Amount of PRTR-related Substances
Released and Transferred by Komatsu and the Komatsu Group
Manufacturing Facilities in Japan

Changes in the Amounts of PRTR-related Substances Released* by
Komatsu and the Komatsu Group Manufacturing Facilities in Japan

Other 1.7%
Nickel 0.9%
Molybdenum 1.8%
Chromium and its
compounds 3.8%

1,400

Xylene 16.6%

5.0

5.0

Xylene 0.8%
Ethylbenzene 0.5%

(t)

(%)
120
1,453

101.4
1,626

3

800
0

2004

(FY)

90

78.8

Prohibited
substances
1,742

60

Substances tobe reduced
2,336(Numberof tanks)
60

30

2008

0

Substances to becontrolled properly
1,336

(%)
99

45

99

99 100 100 100 100 100

87
75

15

100
75

61

30

50
25

500

2007

Renovation of Underground Tanks in Operation More Than 20 Years
at Komatsu and the Komatsu Group Manufacturing Facilities in Japan36
50 or less2006

Index per unit of manufacturing value

Control Based on the Komatsu Guidelines for
the Control of Chemical Substances

51

1,321

1,000

2005

*Substances handled in quantities of 1 ton or more

1,693
95.4

4

Amount released

Toluene 0.4%
Manganese 0.4%
Other 0.6%
Xylene 3.9%

100

5
4.0

Data

Ethylbenzene 11.1%
Toluene 6.1%
Other 0.3%

Amount of VOCs Released by Komatsu and the Komatsu Group
Manufacturing Facilities in Japan

1,381

1,214

977

Note: Substances handled in quantities of 1 ton or more

1,500

1,288

952

1,000
Released
Remain into the air
attached to 34.1%
Amountproducts
transferred
57.0%(waste)2.7%
Chemicallyeliminated
6.2%

Other 0.1%
Toluene 0.5%
Ethylbenzene 1.7%

105.6

5.2

1,036

Ethylene glycol 24.8%

2,000

4.9

1,200

Manganese andits compounds 24.0%(kg/million
yen)
6

(t)

20

17

16

25
2

0

(FY)

2004

2005

2006

2007

2008

Target for 2010

Amount of VOCs released
Index per unit of manufacturing value (compared to FY2005)

0

0

1
0
0
0
0
0
(FY)1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0

Number of tanks renovated
Percentage of tanks renovatedNumber of tanks more than 20 years in operation: 143

44

Environmental Data by Manufacturing Facility in Japan
Overview

Manufacturing facility

Awazu Plant

Location

Komatsu, Ishikawa Prefecture

Hirakata, Osaka Prefecture

Mooka, Tochigi Prefecture

Main products

Small and medium-sized bulldozers, small
hydraulic excavators, small andmedium-sized wheel loaders, motor graders,large presses, armored vehicles, etc.

Large bulldozers, medium-sized and large
hydraulic excavators, mobile crushers/
recyclers/tub grinders (crushers, soil
stabilizers, tub grinders, etc.)

Large wheel loaders, dump trucks, axles

492/88Site/building area

(1,000 m2)(established in 1921)

Osaka Plant(established in 1952)

Mooka Plant(established in 1971)

Major Performance

971/225554/120

Number of employees

4,565

1,565

1,563

Date of ISO14001 certification acquisition

September 1997

July 1997

April 2000

*The number of employees includes
those working for Komatsu affiliates on
the premises.

*Established year means as Komatsu Group.

Environmental impact

Item

Actual value

Item

Actual value

Item*Refer to the Data on Environmental
Impact Resulting from Business Activities(PP. 41–42) for details on the methods
used to calculate amounts.
*Total emissions of waste are expressed
as a composite of the amount recycled(excluding valuables) and the amountdisposed.
*Recycling rate is calculated by dividing theamount recycled (including valuables) by
the amount generated (including valuables).
*Total emissions of BOD and COD are
calculated by multiplying the average
concentration by the amount ofwastewater.

Total CO2 emissions

51,352 t-CO2

Total CO2 emissions

38,532 t-CO2

Total CO2 emissions

13,373 t-CO2

NOx total amount

18,794 kg

NOx total amount

4,922 kgNOx total amount73,544 kg

SOx total amount

2,816 kg

SOx total amount

0 kg

SOx total amount561 kgTotal emissions of waste

3,647 tTotal emissions of waste

2,991 tTotal emissions of waste

818 t

Amount recycled

3,624 tAmount recycled

2,990 tAmount recycled

818 t

Recycling rate

99.5 %

Recycling rate

100 %Recycling rate

100 %BOD emissions

6,272 kg

BOD emissions

142 kg

BOD emissions

78 kg

COD emissions

10,244 kg

COD emissions

646 kg

COD emissions

425 kgEnergy consumption

Item

Actualconsumption

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Electricity

94,754 MWh924,630

Electricity

76,092 MWh739,567

Electricity

25,153 MWh

250,775

Heavy oil A

3,076 kr

120,283

Heavy oil A

203 kr

7,937

Heavy oil A

270 kr10,557

Kerosene

14 kr

506

Kerosene

65 kr

2,386

Kerosene

25 kr

881

Light oil

387 kr

14,787

Light oil

404 kr15,433

Light oil

913 kr

34,91592,973

LPG, et al.

156,838

LPG, et al.

Total

922,161

Total*The heat energy conversion factor is
calculated in keeping with the guidelines
for calculation stipulated by the Ministry of
the Environment of Japan in FY1999,
which are based on the Act on Promotionof Global Warming Countermeasures.

2,900,221 m3/year

Wastewater

LPG, et al.
Total

1,153,179*Data for the Awazu Plant include data for the
Komatsu and Kanazawa Plants and Komatsu
Engineering Corp. (Awazu).

122,877 m3/year

Wastewater*Data for the Osaka Plant include data for
the Rokko Plant.

Actual value

36,208 m3/year

Wastewater

8,799
305,927*Data for the Mooka Plant include data for
the Ibaraki Plant.

Data

Compliance Conditions to Major Regulations

Air
Item

Unit

Facility

Regulatedvalue

Actualvalue

Facility

Nitrogen oxides (NOx)ppm

Boiler180

98

Boiler150

17

Boiler

180

67

ppm

Heating furnace

180

30

Metal furnace

180

105

Diesel engine

950

470

ppm

Regulatedvalue

Actualvalue

Regulated
value

Diesel engine

950

660

Paint drying furnace

230

15

K-value regulation

17.5

1.59

Regulation of total
emissions (Nm3/h)

1.573

0.002

K-value regulation

8.0

1.73

Boiler0.3

0.003

Boiler

0.03

0.0056

Boiler0.3

0.005

Diesel engine

0.1

0.074

Facility

Actualvalue

ppm
Sulfur oxides (SOx)
Soot and dust

—
g/Nm

3

g/Nm3

Heating furnace

0.2

0.001

Metal furnace

0.1

0.013

g/Nm3

Diesel engine

0.1

0.008

Paint drying furnace

0.1

0.013

g/Nm3
*Regulated values are in accordance with the Air Pollution Control Law and local regulations.

Wastewater
Regulated value according to
the Water Pollution Control Law

Item

Unit

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum AveragepH

5.8–8.6

5.8–8.6

7.6

6.5

7.1

5.8–8.6

7.8

7.4

7.5

5.8–8.6

7.5

6.9

7.1

BOD

160 mg/r

80

56

ND

9.0

25

1.9

0.5

1.2

25

4.2

ND

2.2

COD

160 mg/r

80

69

1.1

7

25

7.8

3.1

5.3

120

30

3.8

11.7

Suspended solids (SS)

200 mg/r

120

37

ND

3

80

3.2

1.6

2.1

50

ND

ND

ND

Mineral oils

5 mg/r

5

2.1

ND

0.6

3

0.2

ND

0.2

5

ND

ND

ND

Copper

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

3

ND

ND

ND

Zinc

2 mg/r

2

0.3

ND

0.1

2

0.18

ND

0.12

2

0.1

ND

0.1

Nitrogen

120 mg/r

120

36

1.4

8.0

120

4.9

4.7

4.8

120

16.0

14.0

15.0

Phosphorus

16 mg/r

16

4.1

0.02

0.67

16

0.37

0.03

0.20

16

3.8

2.7

3.3

Cadmium

0.1 mg/r

0.1

ND

ND

ND

0.01

ND

ND

ND

0.1

ND

ND

ND

Lead

0.1 mg/r

0.1

ND

ND

ND

0.01

ND

ND

ND

0.1

ND

ND

ND

Chromium (VI)

0.5 mg/r

0.5

ND

ND

ND

0.05

ND

ND

ND

0.1

ND

ND

ND

Trichloroethylene

0.3 mg/r

0.3

0.011

ND

0.004

0.03

ND

ND

ND

0.3

ND

ND

ND

Tetrachloroethylene

0.1 mg/r

0.1

ND

ND

ND

0.01

0.0008ND

0.0007

0.1

ND

ND

ND

Dichloromethane

0.2 mg/r

0.2

ND

ND

ND

0.02

ND

ND

ND

0.2

ND

ND

ND

3 mg/r

3

0.007

ND

0.001

1

ND

ND

ND

3

ND

ND

ND

1,1,1-trichloroethane*Regulated values are in accordance with the Water Pollution Control Law and local regulations. *ND (“not detected”) indicates a value below the lower limit of detection.
*ND is considered to be the lower limit of detection when calculating the average.
*Other items are confirmed to be below the regulated value.

45

Converted to calorie
equivalents (GJ)Oyama Plant(established in 1962)

Koriyama Plant(established in 1995)

Shonan Plant(established in 1966)

Research Division(established in 1985)

Oyama, Tochigi Prefecture

Koriyama, Fukushima Prefecture

Hiratsuka, Kanagawa Prefecture

Hiratsuka, Kanagawa Prefecture

Engines for construction/industrial
machinery, diesel generators, hydraulicequipment, excimer lasers, etc.

Hydraulic cylinders, swivel joints, gear
pumps

Control equipment for construction andmining equipment, hybrid components,
thermoelectric modules, temperature control
equipment, etc.

R&D on business fields of the KomatsuGroup591/113296/19

40/2

195/0

2,500

391

546

191

May 1997

July 2002

March 2000

May 2008

Item

Actual value

Item

Actual value

Item

Actual value

Item

Total CO2 emissions

72,493 t-CO2

Total CO2 emissions

11,530 t-CO2

Total CO2 emissions

2,154 t-CO2

Total CO2 emissions

2,546 t-CO2

NOx total amount

65,621 kg

NOx total amount63,563 kg

NOx total amount

0 kg

NOx total amount612 kgSOx total amount

98 kg

SOx total amount

3,929 kg

SOx total amount

0 kg

SOx total amount

23 kg

117 t

Total emissions of waste

135 t

Actual value

Total emissions of waste

6,482 tTotal emissions of waste

1,110 tTotal emissions of waste

Amount recycled

6,482 tAmount recycled

1,110 tAmount recycled

117 t

Amount recycled

117 t

Recycling rate

100 %Recycling rate

100 %Recycling rate

100 %Recycling rate

86 %BOD emissions

2,005 kg

BOD emissions

60 kg

BOD emissions

1,905 kg

BOD emissions

8 kg

COD emissions

4,811 kg

COD emissions

230 kg

COD emissions

0 kg

COD emissions

23 kg

568,800 m3/year

Wastewater

Wastewater

18,902 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

17,358 m3/year

Wastewater

5,097 m3/year

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Converted to calorie
equivalents (GJ)Electricity

4,741 MWh

45,783

Actualconsumption

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Item

Actualconsumption

Electricity

100,878 MWh

979,165

Electricity

11,423 MWh

113,887

Electricity

5,539 MWh

Heavy oil A

271 kr

10,596

Heavy oil A

2,358 kr

92,198Heavy oil A

0 kr

0

Heavy oil A

18 kr

704

Kerosene

4,064 kr

149,149

Kerosene

0 kr

0Kerosene

0 kr

0Kerosene

83 kr

3,046

Light oil

2,744 kr

104,859

Light oil

0 kr

0Light oil

0 kr

0Light oil

47 kr

304,496

LPG, et al.

12,600573

LPG, et al.

6,738

Total

218,685

Total

58,047

Item

LPG, et al.
Total

1,548,264

55,224

LPG, et al.
Total

55,7971,776*Data for the Shonan Plant include data for
KELK Ltd.

Regulated
value

Facility

Actualvalue

Diesel engine

950

890

Gas turbine

70

21

Boiler180

81

Annealing furnace

200

40

Regulated
value

Facility

Cogeneration engine 760

Actual
value

640

7.0

2.81

K-value regulation

6.42

0.38

Diesel engine

0.1

0.050

Tempering (electric) furnace

0.2

0.003 or less

Boiler0.3

0.003

Baking (electric) furnace

0.2

0.003 or lessAnnealing furnace

0.25

0.01

Cogeneration engine

0.2

0.071

Electric furnace

0.2

0.001

Regulated
value

N/A

—

N/A

Actual
value

—

—

—

Facility

Regulatedvalue

Actual
value

624

240

Cold/hot water generator 390

Service generator

62

K-value regulation

11.5

0.2

Service generator

0.1

0.041

Cold/hot water generator

0.2

0.001

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

5.8–8.6

7.4

7

7.2

5.8–8.6

7.6

6.3

7.0

5.0–9.0

6.0

7.6

5.8–8.6

7.7

7.4

25

6.4

1.3

3.5

25

5.1

0.8

3.2

600

220

ND

67

10

2

1

1.5

25

15.6

3.9

8.5

40

15

8.7

12.2

—

—

—

25

6

2

4.5

50

16.0

3.2

8.4

50

7.9

1.7

4.5

600

120

ND

26

65

13

2

5.8

5

0.7

ND

0.5

1

ND

ND

ND

5

5

ND

1.3

5

1

1

1

3

ND

ND

ND

2

ND

ND

—

3

ND

ND

ND

1

ND

ND

ND

2

0.12

ND

0.06

2

0.07

0.07

—

2

0.03

ND

0.03

1

ND

ND

ND

—

—

—

—

120

25

25

—

—

—

—

—

120

—

—

—

—

—

—

—

16

2.6

2.6

—

—

—

—

—

16

—

—

—

0.1

ND

ND

ND

0.1

ND

ND

—

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

0.05

0.05

0.05

0.1

ND

ND

ND

0.1

ND

ND

ND

0.5

ND

ND

ND

0.5

0.05

0.05

0.05

0.3

ND

ND

ND

0.3

ND

ND

—

0.3

ND

ND

ND

0.3

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

—

0.1

ND

ND

ND

0.1

ND

ND

ND

8.5

—

Data

K-value regulation

Facility

7.6

—

—

—

—

0.2

ND

ND

—

0.2

0.002

ND

0.002

0.2

ND

ND

ND

3

ND

ND

ND

3

ND

ND

—

3

ND

ND

ND

3

0.002

0.002

0.002

46

Overview

Komatsu Utility Co., Ltd.
(established in 1968)
Tochigi Plant

Manufacturing facility

Komatsu Utility Co., Ltd.
(established in 1965)
Kawagoe Plant
Kawagoe, Saitama Prefecture

Komatsu Castex Ltd.
(established in 1952)
Himi Plant

Location

Oyama, Tochigi Prefecture

Main products

Forklift trucks, mini wheel loaders, peripheral
equipment for logistics

Mini excavators

Iron castings, steel castings, molds for
casting, etc.

Site/building area

(1,000 m2)

Himi, Toyama Prefecture

215/48

107/32403/63

Number of employees

1,213

7

801

Date of ISO14001 certification acquisition

February 1998

July 2002

January 2000
*Komatsu Castex Ltd. is the successor
company of the former Komatsu Ltd. Himi
Plant established in 1952.

*The number of employees includes
those working for Komatsu affiliates on
the premises.

Major Performance

Environmental impact

Item

Actual value

Item

Actual value

Item

Actual value*Refer to the Data on Environmental
Impact Resulting from Business Activities(PP. 41–42) for details on the methods
used to calculate amounts.
*Total emissions of waste are expressed
as a composite of the amount recycled(excluding valuables) and the amountdisposed.
*Recycling rate is calculated by dividing theamount recycled (including valuables) by
the amount generated (including valuables).
*Total emissions of BOD and COD are
calculated by multiplying the average
concentration by the amount ofwastewater.

Total CO2 emissions

8,587 t-CO2

Total CO2 emissions

2,582 t-CO2

Total CO2 emissions

65,488 t-CO2

NOx total amount

6,498 kgNOx total amount34,253 kg

NOx total amount

12,115 kg

SOx total amount

2,432 kg

SOx total amount821 kgSOx total amount

5,845 kg

Total emissions of waste

1,808 tTotal emissions of waste

263 t

Total emissions of waste 10,102 t

Amount recycled

1,791 tAmount recycled

263 t

Amount recycled

Recycling rate

99.5 %

Recycling rate

100 %Recycling rate

99.0 %

BOD emissions

973 kg

BOD emissions

436 kg

BOD emissions

3,169 kg

709 kg

COD emissions

409 kg

COD emissions

Energy consumption

Item

Actualconsumption

Item

Actualconsumption

Actualconsumption

Converted to calorie
equivalents (GJ)Electricity

11,828 MWh

114,983

Electricity

2,346 MWh

22,501

Electricity

122,049 MWh

1,216,829

Heavy oil A

1,008 kr

39,413Heavy oil A

418 kr

16,344Heavy oil A

2,591 kr

101,308

Kerosene

6 kr

220

Kerosene

0 kr

0Kerosene

1,429 kr

52,444

Light oil

92 kr

3,514

Light oil

88 kr

3,362

Light oil

LPG, et al.

17,545

LPG, et al.

5,321

LPG, et al.

Total

175,675

Total

47,528

Total

Actualvalue

Facility

Regulated
value*The heat energy conversion factor is
calculated in keeping with the guidelines
for calculation stipulated by the Ministry of
the Environment of Japan in FY1999,
which are based on the Act on Promotionof Global Warming Countermeasures.

COD emissions

146,246 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

Wastewater

41,714 m3/year

Wastewater

Converted to calorie
equivalents (GJ)

Item

9,838 t4,445 kg1,059,000 m3/year

0 kr

1,505,167

Data

Compliance Conditions to Major Regulations

Air
Item

Unit

Facility

Regulatedvalue

Actualvalue

Facility

Nitrogen oxides (NOx)ppm

Small boilers*

(260)

110

Cogeneration engine 950

650

Annealing furnace

200

37

Hot water boiler

100

Annealing furnace (small) 180

12

Calciners

1 or less

ppm

Regulated
value

180

ppm
Sulfur oxides (SOx)
Soot and dust

—
g/Nm3

Actualvalue

220

K-value regulation

7.0

1.37

K-value regulation

9.0

0.8

K-value regulation 17.5

5 or lessSmall boilers*

(0.5)

0.004

Cogeneration engine

0.1

0.044

Fuel sulfur (%)

0.96

0.13

Hot water boiler

0.3

0.017

0.01 or lessg/Nm3

Annealing furnace

0.25

g/Nm3

Annealing furnace (small)

0.2

0.01 or less

g/Nm3

Calciners

0.15

0.01 or lessg/Nm3

Arch furnace

0.1

0.01 or less

*Regulated values are in accordance with the Air Pollution Control Law and local regulations. *Regulated values of NOx, soot and dust are in accordance with self-regulatory measures, because these boilers are small.

Wastewater
Regulated value according to
the Water Pollution Control Law

Item

Unit

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum AveragepH

5.8–8.6

5.8–8.6

7.3

6.9

7.2

5.0–9.0

6.8

7.3

5.8–8.6

8.3

7

7.5

BOD

160 mg/r

25

11.2

2.1

6.7

600

130

1

29

25

3.2

1.8

2.7

COD

160 mg/r

25

11.4

2.8

4.9

600

48

1.5

18.3

120

7.1

2.2

4

Suspended solids (SS)

200 mg/r

50

14.8

2

5.4

600

220

ND

27.9

100

52

ND

10.0

Mineral oils

5 mg/r

5

ND

ND

ND

5

2.4

ND

1.7

5

0.9

ND

0.5

Copper

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

1

ND

ND

ND

Zinc

2 mg/r

2

0.38

ND

0.11

2

0.2

ND

0.18

1

ND

ND

ND

Nitrogen

120 mg/r

20

5.4

5.0

3.0

240

2.5

71.3

60

2.5

8.75

Phosphorus

16 mg/r

2

0.36

0.28

0.30

32

2.5

ND

0.6

8

0.22

ND

0.12

Cadmium

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Lead

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Chromium (VI)

0.5 mg/r

0.1

ND

ND

ND

0.5

ND

ND

ND

0.5

ND

ND

ND

Trichloroethylene

0.3 mg/r

0.3

ND

ND

ND

0.3

ND

ND

ND

0.3

ND

ND

ND

Tetrachloroethylene

0.1 mg/r

0.1

ND

ND

ND

0.1

ND

ND

ND

0.1

ND

ND

ND

Dichloromethane

0.2 mg/r

0.2

ND

ND

ND

0.2

ND

ND

ND

0.2

ND

ND

ND

3 mg/r

3

ND

ND

ND

3

ND

ND

ND

3

ND

ND

ND

1,1,1-trichloroethane

7.8

220

16

*Regulated values are in accordance with the Water Pollution Control Law and local regulations. *ND (“not detected”) indicates a value below the lower limit of detection.
*ND is considered to be the lower limit of detection when calculating the average.
*Other items are confirmed to be below the regulated value.

47

0134,586

Komatsu
Cabtec Co., Ltd.

(established in 1918)

Komatsu NTC Ltd.

(established in 1945)

Komatsu House Ltd. (established in 1971)

Ryuou-cho, Gamou, Shiga Prefecture

Nanto, Toyama Prefecture

Shinshiro, Aichi Prefecture

Cabs for construction equipment

Machine tools, sheet-metal machines,
semiconductor manufacturing equipment

Prefabricated structures for businesses

52/22

182/89

31/10

380

692

48

December 2007

June 1999

March 2002

Item

Actual value

Item

Actual value

Item

Total CO2 emissions

3,218 t-CO2

Total CO2 emissions

6,229 t-CO2

Total CO2 emissions

825 t-CO2

NOx total amount

144 kgNOx total amount— kg

NOx total amount

184 kg1 kg

SOx total amount

12 kg

SOx total amount

123 kgSOx total amount

Actual value

Total emissions of waste

297 t

Total emissions of waste

2,024 tTotal emissions of waste

106 t

Amount recycled

109 t

Amount recycled

1,936 tAmount recycled

106 t

Recycling rate

96 %Recycling rate

97 %Recycling rate

100 %BOD emissions

545 kg

BOD emissions

1,246 kg

BOD emissions

32 kg

COD emissions

406 kg

COD emissions— kg

COD emissions

Wastewater

97,554 m3/year

Wastewater

2,492,062 m3/year

Converted to calorie
equivalents (GJ)

Item

Actualconsumption

Electricity

15,881 MWh

Item

Actualconsumption

Electricity

5,661 MWh

Heavy oil A

0 kr

0

Heavy oil A

0 kr

Kerosene

78 kr

2,863

Kerosene

Light oil

116 kr

4,431Light oil

LPG, et al.

9,136

LPG, et al.

Total

72,870Total

56,440Converted to calorie
equivalents (GJ)

156,519

57 kg
6,471 m3/year

Wastewater
Item

Actualconsumption

Converted to calorie
equivalents (GJ)Electricity

724 MWh

7,215

0

Heavy oil A

72 kr

2,815

12 kr

440

Kerosene

0 kr

0

32 kr

1,222

Light oil

8 kr

298

270

LPG, et al.

5,552

Total

15,881

158,452*Data for Komatsu NTC Ltd. include data for the
Toyama and Fukuno Plants and Technical Center.

Regulated
value

Facility

Actualvalue

N/A

Facility

Regulatedvalue

Actualvalue

N/A

K-value regulation

17.5

0.033

Facility

Regulatedvalue

Actualvalue

Boiler

250

46

17.5

0.3

N/A

Boiler0.3

0.003

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

Regulated Actual value
value
Maximum Minimum Average

5.8–8.6

7.2

6.7

6.9

5.8–8.6

7.5

6.3

6.7

5.8–8.6

7.6

6.6

7.0

20

10

2

5.6

160

ND

ND

ND

160

22

0.5

5.9

20

6.9

1.4

4.2

—

—

—

—

160

60

2.4

15.1

20

9.7

0.9

3.1

200

7

ND

2.1

200

20

ND

4.0

—

—

—

—

—

—

—

—

5

1.0

ND

1.0

0.1

0.01

ND

0.01

—

—

—

—

—

—

—

—

0.5

0.15

0.01

0.05

—

—

—

—

—

—

—

—

8

6.3

0.9

3.3

—

—

—

—

120

36

0.7

10.4

Data

K-value regulation

N/A

0.6

0.5

ND

0.2

—

—

—

—

16

13

0.1

2.2

—

—

—

—

—

—

—

—

—

—

—

—

0.03

ND

ND

ND

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

48

Environmental Data by Manufacturing Facility outside Japan
The Americas
Overview

CMO

Manufacturing facilities

CANDIACPEORIANMO

Komatsu America Corp.

KMX

KDB

Hensley

Komatsu
Mexicana S.A. de
C.V.

Komatsu do
Brasil Ltda.

Hensley
Industries, Inc.

Chattanooga
Manufacturing
Operation

Candiac
Manufacturing
Operation

PeoriaManufacturing
Operation

Newberry
Manufacturing
Operation

Location

Tennessee,
U.S.A.

Quebec, Canada

Illinois, U.S.A.

South Carolina,
U.S.A.

Sahagún, Mexico

São Paulo, Brazil

Texas, U.S.A.

Main products

Hydraulic
Wheel loaders
excavators, motor
graders

Large wheel
loaders, large
dump trucks

Utility equipment(small construction
equipment)

Attachments forconstruction andmining equipment

Hydraulicexcavators,
bulldozers

Buckets, teeth,edges andadapters

283

259

502

136

176

857

April 1998

October 1999

March 2002

March 2004

September 2001

January 2002

—

7,833

7,181

20,680

2,015

2,780

27,56441,758153

Number of employees
Date of ISO14001 certification acquisition
Energyconsumption

Electricity

MWh

503

kr

268

—

73

—

15

458

Natural gas

thousand m3

1,200

629

2,765

15

—

—

3

LPG, et al.

t

—

—

472

—

Total energy consumption GJ

Heavy oil, light oil, et al.

LPG

26

LPG

10

LPG

19

LPG

Environmental
impact134,188

49,482

291,465

20,96827,997

172,943

417,128

t-CO2

7,258

1,289

24,526

1,157

1,505

3,827

23,114

Water consumptiont

10,796

8,361

38,214411

11,93028,166

93,861

Total emissions of waste

t

723

1,117

3,838

143

6

11,20737,780

KUK

KOHAG

KMG

KUE

KFAB

Komatsu UK Ltd.

Komatsu
Hanomag GmbH

Komatsu Mining
Germany GmbH

Komatsu Utility
Europe S.p.A.

Komatsu Forest
AB

Location

Birtley, United
Kingdom

Hannover,
Germany

Düsseldorf,
Germany

Este (PD), Italy

Umeå, Sweden

Main products

Hydraulicexcavators

Wheel loaders,compactors

Ultra-large
hydraulicexcavators

Utility equipment(small construction
equipment)

Forestryequipment

CO2

EuropeOverview

Manufacturing facilities

Number of employees

476

656

410

661

402

December 1998

September 2000

July 2002

November 2001

October 2003

MWh

5,494

5,852

7,355

3,494

2,890

kr

334

6

9

—

—

Natural gas

thousand m3

967

679

1,474

449

—

LPG, et al.

t

—

—

—

—

—

Total energy consumption GJ

94,031

81,538

123,570

41,422

12,742

Date of ISO14001 certification acquisition
Energyconsumption

Electricity
Heavy oil, light oil, et al.

Environmental
impact

Data

t-CO2

4,628

4,675

7,018

2,795

162

Water consumptiont

12,533

5,791

11,879

9,562

7,878

Total emissions of waste

t

816

1,016

5,203

1,315

367

CO2

Asia
Overview

KI

BKC

LTK

KIPL

KSC

KCCM

KCF

PT Komatsu
Indonesia Tbk

Bangkok KomatsuCo., Ltd.

L&T-Komatsu
LimitedKomatsu India
Pvt. Ltd.

Komatsu Shantui
Construction
Machinery Co., Ltd.

Komatsu (Changzhou)
Construction
Machinery Corp.

Komatsu (Changzhou)
Foundry Corporation

Location

Jakarta,Indonesia

Chonburi,
ThailandBangalore, India

Chennai, India

Shandong, China

Jiangsu, China

Jiangsu, China

Main products

Hydraulicexcavators,
bulldozers, wheel
loaders

Hydraulicexcavators

Hydraulicexcavators

Dump trucks

Hydraulicexcavators

Wheel loaders,hydraulicexcavators, motor
graders

Iron castings andfoundry molds forconstruction andmining equipment

Manufacturing facilities

783

444

677

120

417

247

291

June 2000

September 2001

June 1999—

December 2000

September 2000

December 1999

MWh

40,331

6,433

8,643

474

8,723

2,905

23,231

kr

2,530

657

506

133

1,133

1,276

334

Natural gas

thousand m3

—

—

—

—

41

—

—

LPG, et al.

t

105

—

—

48

Coal, LPG 5,698
449,185

Number of employees
Date of ISO14001 certification acquisition
Energyconsumption
Environmental
impact49

Electricity
Heavy oil, light oil, et al.

LPG

282

LPG

81

LPG

LPG

Total energy consumption GJ

497,986

98,397106,174

9,593

118,589

75,850CO2t-CO229,425

6,741

4,973

532

8,999

5,485

34,613

Water consumptiont122,42147,75960,07927,063

145,852

42,581

128,954

Total emissions of waste

t

9,573

835

3,017

121

984

1,181

16,172Notes
1. All data, except the number of employees, were derived from performances of all manufacturing facilities during FY2008. The number of employees was based on the companies’ data as ofMarch 31, 2009.
2. Conversion to CO2 and total energy consumption were based on statistical data of each region, country, and that of IEA for 2000.
3. Total emissions of waste are expressed as a composite of the amount recycled and the amount disposed.

Environmental Impact Indicators by Region

Environmental Impact Indicators and Environmental Accounting, Broken Down by Region
EnergyWater Resources

CO2(million
GJ)
7(millionm3)
8(1,000 t)

6.2

6

276.4

6

5

200

4

4

3

90.8

100

2

1.4

62.7

2

1.1

1

0.57

0.4
0

0
Japan

Asia
The
(excluding Americas
Japan)

Europe

Japan

0.19

Asia
The
(excluding Americas
Japan)

0.05
Europe

19.3
0

Japan

Asia
The
(excluding Americas
Japan)

EuropeEnvironmental Accounting (Expenses)

Waste(1,000 t)(millionyen)
30,000Recycled amount
Disposal amount

60

54.8

25,00050

25,20020,000

40
29.8

30

31.9

15,00010,000

20
8.7

10
0

300

7.57

Japan

Asia
The
(excluding Americas
Japan)

Europe

5,000
0

2,700
300
Japan

Asia
The
(excluding Americas
Japan)

1,200
EuropeCO2 Emissions by Scope
Scope 2

Scope 1
(1,000 t)(1,000 t)
200

95.0

80

160

60

120

40

181.4

Data

100

80
25.4

20
0

49.6
11.5

Japan

China

13.0

40
7.1

The EuropeAsia(excluding Americas
Japan andChina)

Scope 1: CO2 emitted directly by manufacturing
facilities (by using generators, boilers,
etc.)

0

Japan

23.7

30.2

China

The EuropeAsia(excluding Americas
Japan andChina)

12.1

Scope 2: CO2 emitted indirectly by manufacturing
facilities (by purchasing electricity)50

Environmental Accounting

Top figure: Komatsu and Komatsu Group manufacturing facilities in Japan(excluding Komatsu NTC Ltd. and Komatsu Cabtec Co., Ltd.)
Bottom figure: Komatsu Group manufacturing facilities outside Japan (excluding Komatsu India Pvt. Ltd.)

Environmental Costs (Investments and expenses)
Category

Investment
FY2007

Expenses
FY2007

FY2008FY2008Investment* Investment* Contents

Expenses* Expenses* Contents(millions of yen) (millions of yen)(millions of yen) (millions of yen)

(1) Business area cost

821
923

1,793
809

1. Pollution prevention
cost

502
587

785
333

2. Global environmental
conservation cost

222
312

3. Resource circulation
cost

3,413
2,305

4,158
2,004

1,031
610

935
540

877
466

:Investment for installation and conversion of pollution
mitigation/prevention facilities (installation of effluent
processing facilities, conversion of coating booths, etc.):Investment for implementing energy conservation
measures (installation of new ventilation systems,
etc.)

1,082
482

1,344
688

97
25

132
9

:Investment for reducing the volume of wastematerials (conversion of recycling facilities,
introduction of equipment for separating waste, etc.)

1,300
1,213

1,880
776

(2) Upstream/downstream
cost

0
65

1
17

280
902

226
955

:Reduction of the environmental impact of components, etc.
when shipping to outside Japan:Reduction of the environmental impact of mass-production units(3) Administration cost

14
0

18
0

668
594

630
308

(4) R&D cost

43
246

349
14

15,590678

18,444873:Cost of maintaining environmental management systems:Cost of creating green spaces and beautifying
manufacturing sites:Cost of R&D activities to reduce the environmental impact
of products:Cost of R&D activities to develop environment-friendly equipment(5) Social activity cost

11
8

0
0

5
25

8
13

(6) Environmental
remediation cost

0
0

0
0

1,264
45

1,722
49

888
1,243

2,162
840

21,221
4,548

25,188
4,202

Total

:Investment for beautifying manufacturing sites:Investment in research facilities for reduction ofenvironmental impact:Cost of maintaining equipment for mitigation/prevention of
air and water pollution and for noise and vibration
prevention (labor and depreciation costs):Cost of maintaining energy conservation facilities, such ascogeneration systems (labor and depreciation costs):Waste materials processing cost

:Cost of conducting surveys and remedial countermeasuresrelated to soil and groundwater contamination*All figures are rounded off to the nearest million yen.
Top figure: Komatsu and Komatsu Group manufacturing facilities in Japan(excluding Komatsu NTC Ltd. and Komatsu Cabtec Co., Ltd.)
Bottom figure: Komatsu Group manufacturing facilities outside Japan (excluding Komatsu India Pvt. Ltd.)

Environmental Effects
Environmental impact reduction effects

Economic benefits

Items ofenvironmental
impactTangible benefits

CO2 emissions

Reductionamount(t/year)Rate ofyear-on-yearchanges (%)

39,443–12.8

17,631

–9.3

Data
Water
consumption

Waste materials
generation

1,078,978–17.8–6,453

0.8

4,157

–13.1

–13,202

16.1

Type

Monetary value* Major activities(millions of yen)
AEnergy conversion, etc.

Energyconservation

677
51

Resource
conservation

1
18

Waste materials
reduction

21
132

APromotion of recycling through thoroughgoingsortingGain on saleof valuables

419
312

AReuse of furnace slag for roadbed materials

Other

7
9

Total

1,125
522

Avoidance benefits ofenvironmental risks(see Note below)

Contribution to profits(see Note below)

AThere were no accidents or
pollution in Japan during
FY2008 that led toviolations of the law.

AProceeds from mobile
recycling equipment

ANo litigation costs wererequired in Japan during
FY2008.

AProceeds from value added
due to reduced
environmental impact of
products (engines)
AProceeds from “Reman”
business*Figures are rounded off to the nearest million yen.

Effects on Society during the Product Use Stage*
Note: Komatsu used statements instead of numeral figures to describe the “Avoidance
benefits of environmental risks” and the “Contribution to profits.” The company willfurther develop concepts and ways to understand effects in these categories. The
sales amounts of businesses for content presented in “Contributions to profits” in
FY2008 are as follows:
AMobile recycling equipment business: 8.6 billion yen
A Engine business: 90.0 billion yen (Total for intra-Group sales from the Engine &Hydraulics Business Division)
A?#+2'3Bbusiness: 30.1 billion yen (Worldwide “Reman” business sales from April
2008 to March 2009)51

Environmental impact reduction effects Tangible benefits$Environmental impact reduction resulting
from on-site recycling methods$Environmental impact reduction resulting
from product operation$Waste components reduction resulting
from “Reman” business$Reduction of expenses for processing
waste materials$Savings in operating and maintenancecosts$Reduction of repair costs*Concerning the effects on society derived from product use by customers, themajor items of qualitative information are shown here as a reference.

Environmental and Social Activities to Date & External Commendations

Overview of Komatsu’s Environmental and Social Activities to Date
1962

OBegan continuous support for the Flower Association of Japan
since its founding

1990

OAnnual Directors’ Caravan for Inter-office Communication
launched

1991

OEarth Environment Committee established
OCompany name changed in Japanese public relations to“Komatsu,” with new corporate brand logotype

1992

OKomatsu Earth Environment Charter and Environmental Action
Plan formulated

1994

OFirst Environmental Report published
OBoard of Corporate Auditors established

1997

OOyama Plant becomes first in Japanese construction equipment industry to acquire ISO14001 certification

1998

OEthics Committee establishedOFirst edition of Komatsu’s Code of Worldwide BusinessConduct published

1999

OExecutive Officer system established; Board of Directors
reorganizedOCompensation Council established

2000

OAll four Komatsu manufacturing facilities acquire ISO14001
certification
OFirst Global Environmental Affairs Meeting convened
OEnvironmental Report again published; published annually
thereafter

2001

OCompliance Department established; Ethics Committee
renamed as Compliance Committee

2002

OAll seven Komatsu Group manufacturing facilities in Japanacquire ISO14001 certification
OAll four Komatsu manufacturing facilities attain zero emissions

2003

2004

OCorporate Social Responsibility Department established2005

OFirst European Health, Safety, and Environment Meeting
convened

2006

OGALEO series environment-friendly construction equipment
put on the market, satisfying Tier 3 emission standards, whichbecame effective that year
OAll Komatsu Group manufacturing facilities in Japan attain zero
emissions
OThe KOMATSU Way explicitly defined and promotion activities
launched

2007

OSeventh edition of Komatsu’s Code of Worldwide BusinessConduct published
OFB15HB-12 hybrid electric forklift truck put on the market

2008

OAgreement signed with Japanese NPO Japan Mine Action
Service (JMAS)
OEnvironmental education and training conducted in Japan for
personnel at Chinese subsidiaries
OBiodiesel fuel project launched
OThe Komatsu Group in Japan acquire ISO14001 integrated
certification
ODevelopment of PC200-8 hybrid hydraulic excavator
announced
OSigned the United Nations Global Compact
OParticipated in Japan’s Experimental Introduction of an
Integrated Domestic Market for Emissions Trading

2009

OCompleted the “Project for Developing a Safe Village in
Cambodia” with JMASOPBZ and PAS series of press brakes acquire MF Eco machine
Certification**The MF Eco machine Certification System is an eco-label establishedby the Japan Forming Machinery Association.

OEnvironmental Affairs Department established
OKomatsu Earth Environment Charter revised

External Commendations and Evaluations on Komatsu’s Environmental Conservation and Social Activities
Jun. OHonored with an 85th Robotics and Mechatronics Division Award from The Japan Society of Mechanical Engineers
Received the Robotics and Mechatronics Technological Achievement Award for the Komatsu Tracking System for construction equipment(KOMTRAX), IT-assisted construction system utilizing high-precision GPS, autonomous haulage system (AHS), and other technologicaladvancements in the field
OPC26MR-3 mini hydraulic excavator named Product of the Year in the European Rental Association (ERA)’s European Rental Awards 2008
appearing in the magazine International Rental News
OShinichi Kobayashi, Environmental Manager in the General Affairs Department at the Oyama Plant in Japan, recognized an award from
the Minister of the Environment of Japan in the Ministry of the Environment of Japan’s recognition of Contributors to Environmental
Conservation, etc. in FY2008
Jul. OD51 medium-sized bulldozer recognized as Silver Winner in the Industrial Design Excellence Awards (IDEA) co-organized by the Industrial
Designers Society of America (IDSA) and Business Week magazine
Sept. ORanked 44th among 422 companies in Japan in Nihon Keizai Shimbun newspaper’s 2008 Most Pleasant Companies to Work For
Nov. OChairman of the Board Masahiro Sakane awarded the Deming Prize for Individuals by the Union of Japanese Scientists and Engineers(JUSE)
Dec. ORanked 47th among 1,796 manufacturers in Japan in Nihon Keizai Shimbun newspaper’s 12th Nikkei Environmental Management Ratings
OKomatsu Head Office’s cafeteria awarded the Judging Committee’s Special Prize (School and Company Cafeteria Category) in the Local
Production for Local Consumption Menu Contest sponsored by the Ministry of Agriculture, Forestry and Fisheries of Japan2009

Jan. ORanked 17th among 100 companies in Japan in Nikkan Kogyo Shimbun Ltd.’s Fifth Annual Corporate Performance Rankings
Feb. OSadao Nozawa, Manager of the Environment and Energy Conservation Group in the General Affairs Department at the Oyama Plant inJapan, recognized with the Agency for Natural Resources and Energy Director-General’s Award in the FY2008 Month of Energy Conservation
organized by the Ministry of Economy, Trade and Industry (METI) of Japan
OPC200-8 hybrid hydraulic excavator given the Nikkei Business Daily Award for Excellence in the 2008 Nikkei Superior Products and Services
Awards sponsored by Nikkei Inc.
Mar. OReceived the Seventh Annual Award for Broadening of Individual Shareholder Base in Tokyo Stock Exchange, Inc.’s 2008 TSE Awards for
Listed Companies

Data

2008

Komatsu Ltd. is included in the Socially Responsible
Investing (SRI) indexes indicated below.

(As of September 2008)52

Company Profile
Company name:
Established:
Head Office:Representative:
Capital:
Net sales:(for the fiscal year** ended
March 31, 2009)

Komatsu Ltd.
May 13, 1921
2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan
President and Chief Executive Officer Kunio Noji
Consolidated¥67,870 million (US$686 million*) as ofMarch 31, 2009
Consolidated¥2,021,743 million (US$20,422 million*)
Non-consolidated ¥787,028 million (US$7,950 million*)

Number of employees: (as of March 31, 2009)
Consolidated
39,855
Non-consolidated
7,818
Consolidated subsidiaries in Japan
19,355
Consolidated subsidiaries outside Japan 20,500*U.S. dollar amounts are converted at the rate of ¥99 = US$1.00, the prevailingrate announced by the Federal Reserve Bank of New York on March 31, 2009.
**Komatsu’s fiscal years end on March 31. “FY2000,” for example, means from
April 1, 2000 to March 31, 2001.

Main lines of business Manufacture and sale of construction and mining equipment,(Komatsu Group):utility equipment (small construction equipment), forestry equipment, industrial machinery, etc.
Komatsu Group profile: Number of companies (consolidated subsidiaries) 164

Number of employees by region: (as of March 31, 2009)Japan
19,355The Americas
8,720
Europe and CIS
3,502
China
2,892
Asia (excluding Japan and China) andOceania
4,328
The Middle East and Africa
1,058(as of March 31, 2009)

Changes in Consolidated Sales(billion
yen)
2,000

Sales by Operation (FY2008*)

Sales by Region (FY2008)

Industrial machineryand others
277.0

Asia (excluding
Japan and China)
and Oceania
335.6

2,243.0
2,021.7

1,893.3
1,612.1

1,500

14%

The Middle East
and Africa
210.3
10%
22%

1,356.0

Japan
452.2

17%
1,000

2,021.7(billion yen)

2,021.7(billion yen)

500

China
236.2

86%

25%

12%

The Americas
503.4

14%
0
(FY) 2004

2005

2006

2007

2008
Construction andmining equipment
1,744.7*From April 1, 2008 to
March 31, 2009

Scope of This Report

Europe and CIS
284.0

Komatsu (parent company) manufacturing facilities, specifically the following five plants:
The Awazu Plant (including the Defense Systems Division, Industrial Machinery Division [Komatsu Plant, Kanazawa Plant, and Komatsu Machinery Corporation), the Osaka Plant, the Oyama Plant (including the
Koriyama Plant, Komatsu Cummins Engine Co., Ltd., Industrial Power Alliance Ltd., Komatsu Castex Ltd. [Oyama Plant], and GIGAPHOTON, Inc.), the Mooka Plant (including the Ibaraki Plant), and the Shonan
Plant (including KELK Ltd.).

Komatsu Group manufacturing facilities in Japan, specifically the above five plants and the following seven business units:
Komatsu Utility Co., Ltd. (Tochigi Plant, Kawagoe Plant), Komatsu Engineering Corp. (Awazu Plant), Komatsu House Ltd., Komatsu Castex Ltd. (Himi Plant), Komatsu Cabtec Co., Ltd., and Komatsu NTC Ltd.
(including Lossev Technology Corporation, Toyama Kiko Corporation, and D.S.K. Co., Ltd.)

Data

Komatsu Group manufacturing facilities outside Japan, specifically the 19 business units appearing in the world map below.
*Komatsu carries on business operations directly and through 164 subsidiaries and 43 equity method affiliates organized under the laws of countries throughout the world. In this report on environmental and social
activities, “Komatsu” and “Komatsu Group” are at times used informally to refer to the activities of all or some of the Komatsu family of companies, without regard to their separate legal identities.

Komatsu Forest AB

Komatsu America Corp.,
Peoria Manufacturing Operation
Komatsu UK Ltd.
Komatsu Hanomag GmbH

Komatsu America Corp.,
Candiac Manufacturing
Operation

Komatsu Shantui Construction
Machinery Co., Ltd.

Komatsu Mining Germany GmbH
Komatsu (Changzhou) Construction
Machinery Corporation
Komatsu (Changzhou)
Foundry Corporation
Bangkok Komatsu Co., Ltd.
Komatsu Utility
Komatsu India Pvt. Ltd.
Europe S.p.A.

Komatsu Group manufacturing
facilities in Japan
Komatsu (parent company)
manufacturing facilities
Hensley Industries, Inc.

Komatsu America Corp.,
Chattanooga Manufacturing
Operation

Komatsu Mexicana S.A. de C.V.

Komatsu America Corp.,
Newberry Manufacturing
Operation

L&T-Komatsu Limited
PT Komatsu Indonesia Tbk
Komatsu do
Brasil Ltda.

Major Changes since the 2008 Edition
EIn April 2009, the Construction Equipment Electronics Division was reorganized into the Production Division’s Shonan Plant, and in July 2008 Komatsu
Electronics, Inc. changed its name to KELK Ltd.
EEnvironmental data of Komatsu Cabtec Co., Ltd. and Komatsu NTC Ltd. have been covered beginning with FY2008, along with retroactive coverage of performance data.
EEnvironmental data of Komatsu India Pvt. Ltd. have been covered beginning with FY2008.
*With regard to activities for society, activities of Komatsu Group companies not mentioned above are also included.

53

Independent Review on Environmental & Social Report 2009

Regarding the Independent Review
Komatsu views the independent review process as crucial for ensuring the integrity andobjectivity of its Environmental & Social
Report. For that reason, Komatsu hasreceived an independent review from Deloitte
Tohmatsu Evaluation and Certification
Organization Co., Ltd., a member of theDeloitte Touche Tohmatsu Group. The
results are as represented below with regard
to the information appearing in theEnvironmental & Social Report 2009.
http://www.tohmatsu.com/teco/

Supplementary Explanation regarding the Conducting of Independent Review Procedures
As a supplementary explanation, the following provides an overview of the review procedures conducted during an independent review.
Supplementary explanation regarding independent review procedures
Step 1

Step 2

Step 3

Step 4

Step 5

Formation of plan
for review process

Execution of review

Reporting on review
results

Check of final versionof report

Submission of
independent review
reportIConfirmation of
items to be includedin the report

IReview of offices andpersons in charge
IInspections ofbusiness units

IReporting results ofreview (revisions andsuggestions)

IFollow-up on issues
identified during
Step 3

ISubmission of
independent review
report(1) Scope of information(2) Information collection
process(3) Information collection
method(4) Level of importanceof individual pieces of
information

IFinalization of items
to be reviewed andreview methodology

Executing a review at the
Head Office (with persons incharge of CSR in photo)

Executing a review at the
Shonan Plant

Supplementary explanation
regarding site visits tobusiness units
1. Business units visited inthis review:
1&$*)+*!
1 &%%#%*
1/$#%*

2. Visits to business units takeplace in a planned rotation.
Records for business units
not visited during thisreview were reviewed at* &$*)+*
!Executing a review at the
Oyama Plant

Notes from the Editor
QEditorial Policy for the FY2009 Report
Komatsu published its first Environmental Report in 1994 and has been
publishing one annually since FY2000, renaming it the Environmental &Social Report in FY2004. Komatsu has been publishing this report to disclose information about its activities to both conserve the global environment and fulfill its responsibilities to the greater society.
In the Environmental & Social Report 2009, Komatsu takes care tohave continuous coverage throughout the report, adopting the four key
terms of “CO2,” “global,” “balance,” and “social responsibility.” Along with
one “Special Story” on the environment, the FY2008 report features three
Stories focused on social contributions to stimulate greater interest
among the readers, a move forward from previous editions that had one
article on each topic. The current edition also aims at increasing readability by reducing the amount of text.

Q Period Covered
This report in principle covers the data for the period from April 1, 2008 to
March 31, 2009, though information for the period after April 1, 2009 isalso included in part.
Q Guidelines Used
I“Environmental Report Guidelines 2007” (Ministry of the Environmentof Japan)
I“The 2006 Sustainability Reporting Guidelines” (Global Reporting
Initiative [GRI])
Q Subsequent Reporting Schedule
IJapanese version: Expected July 2010
IEnglish version: Expected August 201054

Komatsu Environmental & Social Report 2009

The main text of this pamphlet was
printed on paper made with wood fromforest thinning. “Morino Chonai-Kai”(Forest Neighborhood Association)—
Supporting sound forest management.

This report was printed using soy ink.

CSR Department and Environmental Affairs Department
2-3-6, Akasaka, Minato-ku, Tokyo 107-8414, Japan
http://www.komatsu.com/CompanyInfo/csr/
Komatsu welcomes your comments.
E-mail: kankyo@komatsu.co.jp
CSR Department
TEL: +81-3-5561-2616
FAX: +81-3-3505-9662
Environmental Affairs Department
TEL: +81-3-5561-2646
FAX: +81-3-5561-2780

Komatsu has been participating in the national movement in Japanto mitigate climate change known as “Team Minus 6%.”
HEER090807 Printed in Japan

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