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Partnering With Suppliers

Main Activities and Results (Fiscal 2013)

Communication With Suppliers

On-site CSR Assessments of Suppliers Implemented

To date, NEC has conducted written surveys targeting suppliers using the Supply-Chain CSR Check Sheet, which is based on guidelines published by the Japan Electronics and Information Technology Industries Association (JEITA). In fiscal 2013, NEC prioritized human rights and occupational health and safety, areas which written surveys had revealed as being inadequate, in launching the CSR-PMR (CSR Process Management Review) assessment. This on-site CSR assessment program is designed to improve supplier management practices by addressing inadequacies. In fiscal 2103, NEC chose one domestic and one Chinese manufacturing contractor to conduct a trial of the CSR-PMR assessment. CSR staff, procurement staff, and local CSR personnel formed a team to conduct this multi-faceted assessment, which included interviews with the employees of these suppliers. A key feature is that assessments are not entrusted to third parties, but are conducted by trained NEC employees who visit suppliers and their sites for direct observations and face-to-face discussions.

Assessments are not unilateral, but are based on NEC and suppliers understanding one another's circumstances in keeping with a commitment to the concept of Co-Capacity Building in CSR, which seeks to raise respective CSR capabilities. In fiscal 2014, NEC is preparing to expand the on-site assessment program beyond China to manufacturing contractors in Thailand and India. Furthermore, NEC will accelerate the training of local assessors who are essential to conducting employee interviews as part of the CSR-PMR assessment.

New Year Business Partner Forum

NEC’s 2013 New Year Business Partner Forum was attended by 397 executives of 195 domestic and overseas suppliers. At the event, NEC’s president and vice president explained NEC’s business policies and policies on supply chain strategies, and sought the understanding of suppliers toward its CSR management practices. Particular emphasis was put on requesting suppliers to improve quality and reliability. These are top priorities for NEC, for which social infrastructure is a key business base.

Education and Training

Education and training for purchasing staff

NEC strives to maintain proper business execution by holding regular training sessions on procurement transactions for the purchasing staff of NEC Corporation and the NEC Group. We conducted training based on an annual plan prepared in advance. The plan covered training content closely related to purchasing tasks, such as corporate ethics and the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (the Subcontracting Act), and courses needed to enhance operational skills. In fiscal 2014, NEC plans to continue providing the same training.

e-learning training for onsite contracting and dispatch staffing

NEC conducts web-based training when it accepts employees from partner companies through on-site contracting or dispatch staffing. The training is designed to ensure that managers at each workplace understand the relevant requirements. By the end of fiscal 2007, NEC had completed training of all management personnel. Since fiscal 2008, all newly appointed management personnel have taken part in e-learning training every year. In fiscal 2013, NEC revised the training program following the enforcement in October 2012 of the amended Worker Dispatching Act. From fiscal 2014, NEC will provide e-learning training to all newly appointed management personnel using new e-learning materials reflecting legal amendments.

Training on the Subcontracting Act for Compliance Promoters

In the course of enforcing compliance with purchasing-related laws and regulations by NEC Group companies and meticulously addressing such laws and regulations, NEC has appointed Compliance Promoters specialized in purchasing-related laws and regulations at NEC Corporation and the NEC Group. These Compliance Promoters rigorously enforce legal compliance within the divisions of their companies.
In fiscal 2013, NEC provided training for Compliance Promoters specialized in the Subcontracting Act in September 2012, in an effort to upgrade their level of knowledge and skills. Furthermore, at the discretion of the Compliance Promoters, training on the Subcontracting Act was expanded to within the purchasing divisions of each company in order to rigorously enforce legal compliance.

Initiatives Addressing Individual Issues

Promoting green procurement

Since fiscal 1998, NEC has operated a green certification system based on the Green Procurement Guidelines that covers the procurement of not only hardware, but also software and services.
We have maintained a green procurement rate of 100% for product-related materials, excluding some supplies for internal use.
To comply with chemical substances regulations around the world, notably the European RoHS (Restriction on Hazardous Substances) Directive, China RoHS and European REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) Regulation, we continuously conduct chemical substance content surveys covering purchased items. On the other hand, measures to counter global warming are also an urgent priority. In fiscal 2013, NEC began calculating carbon emissions for purchased items.
In fiscal 2014, NEC plans to begin environmental impact reduction activities at upstream suppliers under Scope 3. Specifically, NEC plans to gauge the environmental impact of the entire supply chain by monitoring parameters such as the electricity usage of software contractors.

Strengthening information security

As a systems integrator of information systems that serve as crucial social infrastructure, NEC views strengthening and rigorously enforcing information security management as one of its top priorities. Purchasing divisions put particular emphasis on managing and raising the awareness of software contractors and other outsourcing partners.

To date, ongoing activities have included holding briefings on CSR and information security measures (15 briefings held in 10 locations across Japan, attended by about 1,800 companies); organizing seminars for information security instructors (attended by about 1,900 people from around 1,300 companies); conducting assessments of implementation status through document and on-site inspections (about 2,000 companies); and implementing rigorous management of subcontracting. NEC will continue to implement these measures. As a new support measure in fiscal 2013, NEC began publishing a newsletter summarizing information security-related information (three times a year).

Besides NEC’s briefings on information security measures, NEC has also been compiling security-related information useful to suppliers, such as pointers on preventing information security incidents based on seasonal themes such as the New Year’s festivities, as well as case studies. This information has been distributed to the information security divisions of approximately 2,100 companies.

Addressing the Issue of Mineral Resources that Fuel Conflict

Certain mineral resources, such as gold, columbite-tantalite (coltan), cassiterite, and wolframite, mined in the Democratic Republic of the Congo in Africa and adjoining countries have been reportedly used to help finance armed groups. These mineral resources may thus be responsible for triggering a rash of problems including tribal conflict, human rights abuses, and environmental destruction. In fiscal 2012, NEC clarified its policy for the Group as a whole. The Group’s policy is to ensure that no mineral resources obtained illegitimately in conflict regions shall be procured or used in NEC’s products. The NEC Group has also sought the understanding and cooperation of its suppliers in this regard by establishing the Conflict Mineral Guideline (for Suppliers).
Certain mineral resources, such as gold, columbite-tantalite (coltan), cassiterite, and wolframite, mined in the Democratic Republic of the Congo in Africa and adjoining countries have been reportedly used to help finance armed groups. These mineral resources may thus be responsible for triggering a rash of problems including tribal conflict, human rights abuses, and environmental destruction. In fiscal 2012, NEC clarified its policy for the Group as a whole. The Group’s policy is to ensure that no mineral resources obtained illegitimately in conflict regions shall be procured or used in NEC’s products. The NEC Group has also sought the understanding and cooperation of its suppliers in this regard by establishing the Conflict Mineral Guideline (for Suppliers). In fiscal 2013, NEC has joined the Industry Collaboration Team of the Responsible Mineral Procurement Study Group organized by JEITA and promoted activities, as in the previous fiscal year. Furthermore, NEC has replied to all requests for conflict mineral surveys from customers, and has a system in place to address this issue in coordination with sales and business divisions within the company.

Promoting Business Continuity Plan (BCP)

Amid the increasing complexity and sophistication of supply chains, NEC must fulfill its social responsibility to continuously supply goods and services as a company providing information and communications systems that serve as crucial social infrastructure. To this end, actions on two fronts are vital. NEC must implement preparedness measures while suppliers must promote business continuity plans (BCPs).
In the event that a damaging accident occurs in the supply chain, based on its business continuity plan (BCP), NEC will post “Information about Damage at Suppliers (operational status of plants, information on difficult-to-obtain materials, etc.),” which is gathered by each procurement division from suppliers, on an information-sharing database accessible to the entire company. NEC will make effective use of this database to exchange information so as to stabilize the procurement of materials, with the view to minimizing the impact of damage on its business operations.

In fiscal 2013, NEC began implementing integrated purchasing, production and logistics activities by forming the Supply Chain Measures Office as a virtual organization, with the view to enhancing its responsiveness to the entire supply chain. Furthermore, to remember the lessons learned from the Great East Japan Earthquake, NEC verified its BCPs through a Company-wide disaster response drill conducted in March 2013.

In fiscal 2014, NEC will work to enhance its ability to respond to disasters by using multiple suppliers, while improving its information sharing database.

Monitoring and Improvement

Compliance Hotline (for Suppliers)

The Compliance Hotline, a point of contact for compliance consultation and reporting, has been made available to suppliers since 2003. In coordination with the Internal Control Division, this mechanism provides an independent channel for transaction-related complaints and consultation by suppliers. The Compliance Hotline has been made easily accessible from NEC's website.

Internal Auditing for Onsite Contracting and Dispatch Staffing

We continued to conduct internal auditing activities in fiscal 2013 to further promote appropriate on-site contracting and dispatch staffing practices. In regard to ensuring appropriate dispatch staffing practices, NEC worked closely with personnel divisions to revise the audit details based on the amended Worker Dispatching Act. Internal audits conducted at NEC Corporation and the NEC Group revealed no major problems pertaining to on-site contracting and dispatch staffing practices.