Working with Suppliers

Our Basic Stance

Suppliers are one of the valuable business partners for the Kawasaki Group’s business activities. It is essential that our procurement activities are conducted in line with our stance toward the concept of sustainability, which includes consideration for compliance, human rights, labor, occupational safety and health, and the global environment. To this end, we must work in cooperation with not only the entire Group but also our suppliers to actively promote sustainability initiatives throughout the entire supply chain. We will respond to the demands of our customers and society by identifying risks throughout the supply chain relating to human rights, labor, occupational safety and health, the environment, and so on and promoting sustainability activities together with our suppliers. 

The Kawasaki Group’s Policies for Material Procurement and CSR Procurement Guidelines

The Kawasaki Group’s Policies for Material Procurement and CSR Procurement Guidelines, which set forth our sustainable-procurement philosophy and our expectations for our business partners in that regard, were first issued in 2012 and revised in 2020. These policies and guidelines have been disseminated among related divisions, including Group companies, so that the Group is united in our promotion of sustainable procurement.
Furthermore, domestic and overseas subsidiaries engaged in procurement disclose their CSR procurement policies on their websites. Through such efforts, we pursue sustainable procurement on a global and Group-wide basis. Going forward, the Kawasaki Group will continue to promote sustainability initiatives throughout the supply chain in cooperation with suppliers.

Basic Policies
The Kawasaki Group conducts procurement activities based on the Kawasaki Group Mission Statement, the encapsulation of the Group’s management principles.

Fair and Impartial Procurement
We will provide broad and impartial opportunities for our business partners and will make selections with integrity and in good faith after conducting comprehensive and fair evaluations of quality, price, delivery schedule, technological development capabilities, and other such factors.

Relationships with Business Partners
The Kawasaki Group will take a long-term perspective as it strives to build relationships of trust with business partners based on mutual respect for one another’s vision and position with the aim of mutual enhancement of competitiveness and prosperity.

Compliance
We will observe related statutes and regulations as well as social norms. We will place information gained through procurement under appropriate controls and will take thoroughgoing measures to protect confidential information and prevent leaks.

Consideration for Human Rights, Labor and Occupational Safety and Health
We will advance procurement activities with consideration for human rights, the work environment, and occupational safety and health.

Harmony with the Global Environment through Green Procurement
We will advance procurement with consideration for the global environment with respect to the materials used in products.

In addition, we disclose the Kawasaki Group Policies for Material Procurement on our website to inform our business partners of our basic position on material procurement.

Scope of Policy Application

The Kawasaki Group and our suppliers

Structure

Procurement activities in our daily operations are carried out under the responsibility and authority of each internal company.
As a cross-company body, we hold the Procurement Department Head Meeting, attended also by the director in charge of procurement, twice a year. At this meeting, participants monitor the procurement-related KPIs set by each internal company, share their annual plans, and decide on common Group-wide procurement measures and policies, including those related to sustainable procurement.

The Kawasaki Group’s Supply-Chain Management

The Kawasaki Group CSR Procurement Guidelines, which can be viewed on our website, outline the Group’s approach to sustainable procurement and requirements of suppliers. These guidelines were first issued in 2012 and revised as Group policy in 2020.
The basic agreement that Kawasaki forms with suppliers includes provisions specifying that both parties should recognize the importance of corporate social responsibility and will voluntarily and proactively engage in business and social activities with due consideration given to the sustainable development of the environment and society. In fiscal 2020 we revised the aforementioned basic agreement by stipulating that suppliers should strive to comply with the Kawasaki Group CSR Procurement Guidelines. As a result, our collaboration with suppliers has advanced, and we are practicing sustainable procurement at a new level.
In addition, we hold lectures about sustainable procurement as part of in-house training, working to raise the sustainability awareness of employees in relevant positions.
Furthermore, domestic and overseas subsidiaries engaged in material procurement disclose their CSR procurement policies on their websites as suited to their specific businesses. Through such efforts, we pursue sustainable procurement on a global and Group-wide basis. Going forward, the Kawasaki Group will continue to promote sustainability initiatives throughout the supply chain in cooperation with suppliers.

Supply-Chain Risk Assessment

Since fiscal 2016 Kawasaki has conducted surveys of domestic and overseas suppliers to assess their compliance with the Kawasaki Group CSR Procurement Guidelines and evaluate our supply-chain risks. In fiscal 2016 we conducted a survey of domestic suppliers to assess their compliance based on these guidelines. About 1,400 suppliers responded to the survey. In addition, since fiscal 2018 we have conducted surveys of domestic and overseas suppliers, and in fiscal 2021 we implemented a survey of major suppliers in Japan and received replies from 395 companies.
These 39-question surveys question suppliers’ initiatives in each of seven categories, including CSR-related corporate governance, human rights and labor, the environment, fair corporate practices, and quality and safety.
Going forward, we will implement measures to strengthen our sustainability efforts throughout the supply chain based on the results of these surveys.

Capacity Building and Incentives for Suppliers

The Kawasaki Group procures materials across a wide range of fields organized into three groupings: Land & Air Transportation Systems, Motion Control & Motor Vehicles, and Energy & Marine Engineering. As necessary, each internal company provides training and implements recognition systems for the purpose of improving suppliers’ quality and delivery performance.

Thorough Compliance in Material Procurement

Each year, Kawasaki holds workshops for Group procurement divisions to ensure compliance with procurement-related laws and regulations, particularly the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (the Subcontract Act) and the Construction Industry Law. Of note, we maintain proactive measures not limited to procurement divisions to promote awareness and knowledge of the Subcontract Act, as outlined below.

  • In October 2009, we published a collection of examples of Subcontract Act violations, citing actual cases in which other companies had contravened this law.
  • In April 2013, we posted a checklist for compliance self-auditing pursuant to the Subcontract Act on our company intranet. This checklist functions as a tool for checking and correcting administrative activities prone to violations of the Subcontract Act.
  • Since fiscal 2011 we have held group training sessions every year, mainly for design and manufacturing divisions at our plants and major affiliated companies. A total of about 7,000 employees have received this training so far. In addition, in fiscal 2021 we implemented e-learning training to make as many employees as possible aware of the Subcontract Act; about 14,000 employees have taken this e-learning course so far.

Conflict Minerals

In December 2013, the Kawasaki Group posted its Policy Regarding Procurement of Conflict Minerals on its website. This policy states that the Group has no intention whatsoever of being party to conflicts or inhumane acts in the Democratic Republic of the Congo and neighboring countries through the procurement or use of the tin, tantalum, tungsten, and gold—the so-called conflict minerals—that are produced in these countries.
We also ask our suppliers to make similar efforts in the Kawasaki Group CSR Procurement Guidelines.
In fiscal 2021, based on customer requests, Kawasaki Motors, Ltd. carried out a survey of not only tin, tantalum, tungsten, and gold but also cobalt and duly conveyed the results.

Policy Regarding Procurement of Conflict Minerals

Armed groups that repeatedly commit inhumane acts such as killings, looting and sexual violence may derive capital from the four minerals of tin, tantalum, tungsten and gold (known as “conflict minerals”) being produced in the Democratic Republic of the Congo and its neighboring countries. As a result, there is a concern that these conflict minerals will lead to an escalation of problems.
The Kawasaki Heavy Industries Group has no intention whatsoever of being party to such conflicts or inhumane acts through the procurement or use of these conflict minerals in consideration of respect for human rights. Going forward, efforts will be made to tackle the issue of conflict minerals in close liaison with customers and suppliers.

Human Rights Efforts in the Supply Chain

Kawasaki has created the Kawasaki Group CSR Procurement Guidelines, which outline its requirements of suppliers, with the aim of promoting sustainability initiatives throughout the supply chain, such as human rights considerations and the prohibition of forced labor and child labor. These guidelines are published on Kawasaki’s website and distributed to suppliers. In fiscal 2020 we revised the basic agreements we form with our suppliers to include clear provisions mandating that they strive to comply with the Kawasaki Group CSR Procurement Guidelines. Additionally, we are asking our suppliers to step up their sustainability initiatives, including those advocating for human rights, by surveying our suppliers, hosting sustainability-themed briefings, and updating the provisions of the basic agreements.
Moreover, since fiscal 2018 we have been providing briefings to directly explain our concept of sustainability to our suppliers. At these briefings, we explain important issues in supply-chain management, such as human rights and environmental problems, and request suppliers to strengthen their sustainability initiatives. From fiscal 2018 through fiscal 2019 we held 10 such sustainability-themed supplier briefings, which were attended by a total of 1,000 people from 700 companies. Additionally, in fiscal 2019 we sent out a document titled “Toward the Further Promotion of sustainability Activities Involving the Entire Supply Chain” to our suppliers in Japan, aiming to facilitate collaborative initiatives.


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