OSG GroupCSR Procurement Guideline

March 2024(3rd Edition)
OSG Corporation

Contents
・・・・・・・・・・・・・・・・・・・・・・・・・・・・・I.

IntroductionII.

OSG Group Procurement’s Basic Policies

1・・・・・・・・・・・・・・・・

2

・・・・・・・・・・・

4

III. Requests to Business Partners (detailed regulations)
1. Corporate Governance（1）

Establishment of CSR promotion system（2）

Establishment of internal controls（3）

Establishment of business continuity planning (BCP) system（4）

Establishment of a whistle-blower system（5）

Dispatch of CSR-related information inside and outside the company

2. Human Rights（1）

Basic attitude toward human rights（2）

Respect for human rights and the prohibition of discrimination（3）

Avoidance of complicity in (or contribution to) human rights abuses（4）

Respect and consideration for the life and culture of the local community andindigenous people

3. Labor（1）

Basic attitude toward labor practices（2）

Prohibition of discrimination in the workplace（3）

Provision of equal opportunities to employees regarding human resources
development and career advancement, etc.

（4）

Prohibition of inhumane treatment（5）

Payment of fair wages（6）

Fair application of working hours, time off, and paid time off, etc.

（7）

Prohibition of forced labor（8）

Prohibition of child labor（9）

Respect for the religious traditions and customs of the country of operation（10） Recognition of and respect for freedom of association and the right to collective
bargaining（11） Proper management of employee safety and health
4. Environment（1）

Basic attitude toward environmental initiatives（2）

Management of chemical substance indicated in laws and regulations, etc. inproduction processes, products and services（3）

Control and reduction of waste water, sludge and air emissions（4）

Sustainable and efficient utilization of resources (energy, water, raw materials, etc.)（5）

Reduction of GHG (greenhouse gases)

（6）Identification, management, reduction, and the responsible disposal or recycling ofwastes（7）

Initiatives related to biodiversity

5. Fair Corporate Activities（1）

Basic attitude toward fair business practices（2）

Establishment of appropriate relationships with local governments and public officials
in and outside countries where business activities are conducted（3）

Prevention of the giving and receiving of improper advantages with customers andtrade partners, etc., in sales and purchasing activities, etc.

（4）Prevention of competition law violations in sales activities, etc.

（5）

Rejection of relationships with antisocial forces/organizations（6）

Prevention of the unauthorized use of a third party’s intellectual property and of illegal
reproduction of copyrighted works（7）

Services for responding to complaints from outside the company and for consultations（8）

Prohibition of insider trading（9）

Prohibition of acts with conflicting interests

6. Quality and Safety（1）

Basic attitude toward product and service quality and safety（2）

Ensuring product and service quality and safety（3）

Appropriate response to product or service accidents and the circulation of defective
goods

7. Information Security（1）

Basic attitude toward information security（2）

Defense against attacks on computer networks（3）

Protection of personal information and privacy（4）Prevention of misuse of confidential information

8. Supply Chain（1）

Basic attitude toward the supply chain（2）

Use of raw materials not involved in conflict or crime (initiatives against conflictminerals)

9. Harmonious coexistence with local communities（1）

Initiatives to reduce damage to the health, safety, and sanitation of local communities
and residents（2）

Initiatives with contribute to the local community and residents and collaborate
towards sustainable development

Introduction
OSG Group sets our company mission as “While offering products and services that contributeto society, we will make consideration of the environment an essential task. We will follow societal
norms, and use our power through communication to harmoniously promote sustainable
development.” We believe it is most important for OSG Group to achieve this mission by
responding to the demands of society accurately, and to build a future with all stakeholders.
In order to do so, we must carry out healthy and highly transparent corporate management,
while enhancing our sensibility to social demands and changes on an organizational basis.
The environment surrounding us has been changing to put more focus on CSR activities
including the expansion of ESG investment.
Taking this into consideration, in December 2020, we established “CSR Procurement
Guidelines” as the guidelines for CSR activities expected of our business partners, aiming topromote CSR in our entire supply chain, in order to build stronger relationships of mutual trust.
Following this, we have conducted surveys with our business partners, trying to both understandcompliance with these guidelines and to disseminate them.
We request each business partner to establish a system to promote CSR activities based onthese guidelines, and in addition, to expand these guidelines to its suppliers and to make CSR
activities prevail in the entire supply chain.
We’d like to continue to work together with our business partners for mutual harmony andbenefit by further promoting CSR activities. Your understanding and cooperation will be highly
appreciated.
OSG Corporation
Procurement DivisionII. OSG Group Procurement’s Basic Policies
At OSG Group, we implement the following measures based on “Procurement’s Basic Policies” inour procurement activities.

●Open and Fair Transactions
OSG Group carries out fair and open transactions based on the principle of free competition andin accordance with the values of globality and openness. In order to establish relationships leading
to mutual growth, OSG Group and its suppliers make efforts to deepen mutual understanding andbuild relationships of mutual trust.

●Compliance with Laws, Regulations and Social Demands
Our procurement activities are carried out in compliance with laws, regulations, and social
norms. In accordance with social demands, we also develop our procurement activities with due
consideration to the environment, human rights, labor standards, health and safety, andinformation management.

●Consideration for the Environment
In order to protect the environment, we prioritize the purchase of environmentally-friendly
products (green procurement activities) and the use of suppliers who implement environmental
conservation measures in their manufacturing processes.

III. Requests to Business Partners (detailed regulations)
1. Corporate Governance（1） Establishment of CSR promotion system
Suppliers shall be required to comply with laws and regulations, follow social norms, meetthe expectations of society, and strive for the realization of a sustainable society with due
consideration not to cause negative impacts on society and the environment. Whiledisseminating this philosophy to their employees, they must carry out practical activities.
For this purpose, they need to establish a system to implement risk management for ESG(Environment, Social and Governance) related to CSR and to run a PDCA cycle (Plan, Do,
Check, Act).
（2） Establishment of internal controls
For the establishment of an organizational structure for healthy corporate management,
business partners need to internally prepare their management structures and systems tosecure the effectiveness and efficiency of doing business as a business partner, the reliabilityof financial reports, the compliance to laws and regulations related to business activities, andthe maintenance of properties.
（3） Establishment of business continuity planning (BCP) system
Business partners need to organize a system for the continuity or early recovery ofimportant operations and businesses when a disaster (natural disaster, great fire, terrorist
attack, etc.) occurs.
（4） Establishment of a whistle-blower system
Business partners need to have a system in which an employee who finds any complianceissue, including the violation of laws and regulations and fraud in overall business operationsof his/her company, or that any suspected act of such was carried out, or an employee
him/herself who has suffered infringement of human rights or labor rights, can directly report toand consult with a special department or external office. In such cases, the confidentiality ofsecrets shall be strictly observed, and such employees shall never be subjected todisadvantageous treatment.
（5） Dispatch of CSR-related information inside and outside the company
Business partners need to properly dispatch financial and non-financial information internallyand externally, in order to meet the demands of society and stakeholders (interested parties)
for transparency and accountability regarding their activities.

2. Human Rights（1） Basic attitude toward human rights
Business partners shall support and respect the protection of internationally proclaimed
human rights and make sure that they are not complicit in (or contribute to) human rights
abuses.
（2） Respect for human rights and the prohibition of discrimination
Business partners shall be responsible for making their own company decisions andconducting business operations with respect for human rights and without discrimination
based on race, nationality, sex, sexual orientation, age, family line, religion, nation, or
immigration status, etc. Nor shall business partners discriminate against children, aged
people, handicapped people, indigenous people, poor people or HIV/AIDS infected people,
etc.
（3） Avoidance of complicity in (or contribution to) human rights abuses
Business partners shall carefully consider that their company’s decision making, business
operations and products and services are never complicit in (or contribute to) human rights
abuses of consumers and a community’s people.
（4） Respect and consideration for the life and culture of the local community and indigenous
peopleFor the business partners that carry out business operations in regions where indigenous or
minority peoples live, it is an important issue to respect their original culture and history andconsider the rights of indigenous people by observing not only local laws and regulations but
also international standards. In addition, it is essential to conduct responsible business
operations in consideration of the affected community regardless of the issues of indigenous
people, for the maintenance of operation rights and the acquisition of permission andauthorization.

3. Labor（1） Basic attitude toward labor practices
Business partners shall be required to understand the principles of labor demonstrated ininternational models and apply them to the basic rules of workplace as a universal sense ofvalues.
Major international frameworks and models related to labor:

Universal Declaration of Human Rights, ILO Core Labor Standards, The Ten Principles of the
UN Global Compact, The UN Guiding Principles for Business and Human Rights, OECD
Guidelines for Multinational Enterprises, UK Modern Slavery Act, etc.
（2） Prohibition of discrimination in the workplace
During recruitment, business partners must not discriminate against anyone for any reasons
other than for reasonable elements such as the competence and aptitude of the person. These
reasons include race, nationality, sex, sexual orientation, age, family line, religion, nation,
immigration status, and existence of a handicap, etc.
（3） Provision of equal opportunities to employees regarding human resources development andcareer advancement, etc.
Business partners shall provide opportunities for promotion and obtaining training equally
without damaging fairness on grounds such as race, nationality, sex, sexual orientation, age,family line, religion, nation, immigration status, existence of a handicap, marital status,
physical conditions, etc.
（4） Prohibition of inhumane treatment
Business partners shall respect the human rights of employees and prohibit inhumane
treatment such as abuse, corporal punishment, harassment, etc.
（5） Payment of fair wages
Business partners shall observe the legal minimum wage in the country and the region inwhich they operate, conclude appropriate collective agreements on overtime work, etc. andapply extra wages and payment methods fairly.
（6） Fair application of working hours, time off, and paid time off, etc.
Business partners must observe the legal working hours or those agreed on in advance.
They shall manage the working hours of employees properly and provide the rights to acquire
paid time off, in addition to holidays at least one day a week.
（7） Prohibition of forced labor
Business partners shall not force anyone to work against the person’s will or allow any laborwith restrictions on the freedom to leave a job. They shall not compel any labor using unfair
constraining means, nor force overtime work.
In addition, they shall not confiscate workers’ identity documents or collect any deposits
unreasonably.
（8） Prohibition of child labor

Business partners shall not employ children younger than the legal working age in the
country and the region. They shall not allow any labor to spoil the health, safety and morals ofchildren.
（9） Respect for the religious traditions and customs of the country of operation
Business partners shall respect traditions and common practices of the country of operation,
as well as the religious traditions and practices of the employees, and consider how not tohinder such traditions and practices by providing equal work regulations.
（10） Recognition of and respect for freedom of association and the right to collective bargaining
Business partners shall respect the freedom for employees to associate without receiving
any retaliation, threat or harassment, to join the labor union and to conduct a protest
movement, and provide opportunities to talk between labor and management.
（11） Proper management of employee safety and healthBusiness partners shall understand the risks of accidents and chemical substances, noiseand odors harmful to the human body that may occur at work, and take proper safetymeasures (including legal inspections, protection measures, danger markings, handlingmanagement of chemical substances, measures for dangerous work, designation of protective
equipment, etc.) They shall also take measures considering the mental health of employees.

4. Environment（1） Basic attitude toward environmental initiatives
Business partners shall be required to establish a system to recognize and solve theenvironmental issues in their business processes. They shall be responsible for identifying andmanaging the factors having an impact on the environment.
Major international frameworks and models related to environment:
Rio Declaration on Environment and Development, The Ten Principles of the UN Global
Compact, ISO14001, Paris Agreement, Basel Convention
Major laws and regulations related to environment:
Japan: Environment Basic Act, Chemical Substance Control Law, Industrial Safety and Health
Act, Water Pollution Control Law, Water Resources Development Promotion Law, Law
Relating to the Prevention of Marine Pollution and Maritime Disaster, River Law, Waste
Management and Public Cleansing Law, Basic Act for Establishing a Sound Material-Cycle
Society, Various Laws for Waste & Recycling
USA: TSCA
EU: REACH (Registration, Evaluation, Authorization and Restriction of Chemicals)Korea: Toxic Chemicals Control Act, Occupational Safety and Health Act
China: Measures on the Environmental Management of New Chemical Substance
Taiwan: Occupational Safety and Health Act（2） Management of chemical substances indicated in law and regulations, etc., in production
processes, products, and services
Business partners shall not only control the chemical substances used in their products, butalso understand the amount of handling chemical substances and report to an administrative
body.
（3） Control and reduction of waste water, sludge and air emissions
Business partners shall set a voluntary target to reduce the size of its environmental load at
the same or higher level as that designated by laws and regulations. In addition, they shallwork on preventing the occurrence of pollution, monitoring and controlling waste water, sludge
and air emissions, and reducing the amount of outflow.
（4） Sustainable and efficient utilization of resources (energy, water, raw materials, etc.)
Business partners shall set voluntary targets to enforce saving resources and energy andeffectively utilize resources and energy continuously.
（5） Reduction of GHG (greenhouse gases)
Business partners shall set voluntary reduction targets for greenhouse gases including
carbon dioxide, methane and fluorocarbons as a measure against climate change, and workon reduction.
（6） Identification, management, reduction and the responsible disposal or recycle of waste
Business partners shall set voluntary reduction targets for wastes and work on reduction.
（7） Initiatives related to biodiversity
Business partners shall consider the direct and indirect impacts on the ecosystem causedby its business, and work on the maintenance of biodiversity and sustainable usage.

5. Fair Corporate Activities（1） Basic attitude toward fair business practices
Business partners shall be required to conduct fair activities in business processes to create
products and services (anti-corruption, responsible political involvement, fair competition,
exclusion of relationships with anti-social forces or groups).

Major international frameworks and models related to fair corporate activities:
The Ten Principles of the UN Global Compact, OECD Guidelines for Multinational Enterprises,
United Nations Convention against Corruption
Major laws and regulations related to fair corporate activities:
Competition law of each country: Antitrust Law (Japan), Antitrust Law (USA), European Union
Competition Law (EU)（2） Establishment of appropriate relationships with local governments and public officials in andoutside the countries where business activities are conducted
Business partners shall manage the reception of public officials for the prevention ofcorruption to maintain a healthy relationship between companies and public officials.
（3） Prevention of the giving and receiving of improper advantages with customers and trade
partners, etc., in sales and purchasing activities, etc.
Business partners shall maintain healthy relationships with customers.
（4） Prevention of competition law violations in sales activities, etc.
Business partners shall prevent unfair trade practices including collusion, cartels and theabuse of superior bargaining positions.
（5） Rejection of relationships with antisocial forces/organizations
Business partners shall exclude the relationships with gangsters and fixers of stockholders’meetings.
（6） Prevention of the unauthorized use of a third party’s intellectual property and of illegal
reproduction of copyrighted works
Business partners shall respect intellectual property rights including patent rights, copyrights
and trademark rights.
（7） Services for responding to complaints from outside the company and for consultations
Business partners shall have a system where a person concerned with their business or aconsumer who finds important risk information related to transactions with his/her own
company can directly report to or consult with a special department or external contact office.
In such cases, the confidentiality of secrets shall be strictly maintained and the reporting
person shall never receive disadvantageous treatment.
（8） Prohibition of insider trading
Business partners shall prevent people concerned in the listed company from buying andselling stocks of the said company by using company information not yet officially announced.

（9） Prohibition of acts with conflicting interest
Acts to harm company profits and derive personal benefit in situations with conflicting
interest between the employee and a company shall be prohibited.

6. Quality and Safety（1） Basic attitude toward product and service quality and safety
Business partners shall be required to secure the quality and safety of the products andservices provided through their business operations and take appropriate measures forcustomers and consumers when an accident occurs.
Major international frameworks and models related to quality and safety:
ISO9001, IEC/ISO Guide 51, EU New Approach Directives, HACCP
Major laws and regulations related to quality and safety:
Product Liability Law, Consumer Product Safety Act, Electrical Appliance and Material Safety
Act, Gas Business Act, Liquefied Petroleum Gas Act, Pharmaceutical Affairs Law, Radio Law,
Food Sanitation Act, JAS Law, Waterworks Law, Quality Labeling Act, Quality Assurance Act,Road Vehicles Act, Building Standards Act, Act against Unjustifiable Premiums and Misleading
Representations, etc.
（2） Ensuring product and service quality and safety
Business partners shall secure the quality and safety of products and services they supply
to the market[Utilization of each company’s own quality management system and certification by third
party organization (S mark, SG mark, ST mark, JIS mark, JAS mark, etc.)]（3） Appropriate response to product and service accidents and the circulation of defective goods
Business partners shall develop systems including the disclosure of information, reporting to
a competent office, product recall, and safety measures for suppliers, etc.

7. Information Security（1） Basic attitude toward information security
Business partners shall be responsible for properly managing and protecting information
obtained through business operations and take protective measures against threats on computersand networks.
Major related laws and regulations:

Penal Code, Basic Act on Cybersecurity, Act on the Protection of Personal Information, Act on
Prohibition of Unauthorized Computer Access, Act on Electronic Signature, etc.
（2） Defense against attacks on computer networks
Business partners shall take protective measures against the threat on computer networks
and manage how not to damage their own companies and other companies.
（3） Protection of personal information and privacy
Business partners shall properly manage and protect the personal information of customers,
third parties and employees.
（4） Prevention of misuse of confidential information
Business partners shall properly manage and protect the confidential information received
from customers or third parties.

8. Supply Chain（1） Basic attitude toward the supply chain
Business partners shall be required to fulfill their social responsibilities in their businessprocesses to create products and services. It is desirable to establish the CSR procurement policy
and to make it known inside and outside the company in order to implement CSR procurement not
only on their own but also throughout their supply chain.
Therefore, they are required to enact the provisions stated in each item of the SAQ known totheir own suppliers and delivery sources and practice penetration of their observance.
Major laws and regulations related to supply chain:
EU RoHS directive, REACH (Registration, Evaluation, Authorization and Restriction of Chemicals),
UK Modern Slavery Act, California Transparency in Supply Chains Act（2） Use of raw materials not involved in conflict or crime (initiatives against conflict minerals)
Purchase and usage of gold (Au), tantalum (Ta), tungsten (W) and tin (Sn), which are conflictminerals involved in inhuman acts by local armed groups in the People’s Republic of the Congoand its surrounding countries shall be prohibited, and investigation and confirmation shall be
performed on the suppliers.
Major related laws and regulations: Dodd-Franc Act

9. Harmonious coexistence with local communities

（1） Initiatives to reduce damage to the health, safety, and sanitation of local communities andresidents
Business partners shall promote initiatives to eliminate damages on the safety and health of
local communities and residents caused by the production process and product and service
operations.
（2） Initiatives with contribute to the local community and residents and collaborate towards
sustainable development
Practical examples:
Job creation and skill development, the right of priority to purchase local products andservices, the development of suppliers, etc.