We commissioned an external organization, the Global Alliance for Sustainable Supply Chain, and its subcontractor, the UK-based research institute RIGHTS DD Limited, to conduct a survey on "complicity in modern slavery".

Survey Target

Branch-equivalent companies of a certain minimum size among the 153 Group companies in Japan and overseas, including the head office, belonging to the Group's 11 business units^*1

• *1: 11 business units: (1) Aramid, (2) Carbon fibers, (3) Resin and Plastic Processing, (4) Film, (5) Composites, (6) Fibers & Products Converting, (7) Pharmaceutical, (8) Home Healthcare, (9) IT, (10) Material New Business, (11) Healthcare New Business.

The suppliers selected by the survey organization from among the suppliers with which the Teijin Group does business in the above 11 business units.

Survey Method

From qualitative information concerning the business characteristics and operating regions of the above-mentioned branch-equivalent companies and 18 suppliers, scores were given for human rights violation risks^* in each of the 11 surveyed businesses.

Survey Results

The results of the FY2018 human rights due diligence survey revealed that the Teijin Group's policy of respect for human rights is generally in conformity with principal international best practices. Furthermore, by comparing the business characteristics and operating regions of the Teijin Group's businesses, we were able to determine that human rights violations are relatively more likely to occur in the labor-intensive fibers and products business. In addition, in businesses identified as having a relatively high potential risk of human rights violations in the light of labor health and safety conditions and the situation in operating regions, as well as already implemented measures to prevent human rights violations, we are implementing inspections to detect whether human rights violations are occurring and continuing monitoring to prevent such violations.

• *Definition of "human rights violation risk" covered by this survey

1. This survey focused on "modern slavery," a term used to describe all human rights abuses including slavery, servitude, forced or compulsory labor, and human trafficking.

2. In this survey, the following factors were analyzed to gauge modern slavery risk:

• Highly competitive industries, with low barriers to entry and operations in jurisdictions with weak labor laws and ineffective union representation;
• Prevalence of low-skilled workers;
• High number of female workers;
• Documented cases of child labor;
• High proportion of migrant labor in the workforce;
• Documented cases of human trafficking;
• Documented cases of harmful employment practice;
• Documented cases of debt bondage;
• Operation in fragile or conflict affected areas;
• High proportions of refugees in the workforce;
• Operation in countries with highly repressive regimes;
• Industries in which low-skilled labor is used to carry out so-called "three D" jobs (dirty, dangerous, and difficult), such as work involving dangerous or physically arduous manual labor, work involving prolonged periods of repetitive motion, and work that is stigmatized or socially devalued. These jobs are typically carried out by migrants, minorities, or socially marginalized groups that are highly vulnerable to exploitation.

3. In this survey, the characteristics of "forced labor" are as follows:

• The illegal withholding and deduction of wages;
• The illegal confiscation of identity documents, such as passports;
• Debt bondage (Forced labor as security for debt repayment. It is said that more than 51% of workers engaged in forced labor are bonded by debts.);
• Forced overtime
• Various forms of coercion by employers or recruiters, such as verbal, physical, or sexual harassment;
• Labor patterns involving intensive work, long working hours, or the repetition of simple tasks that give rise to serious labor health and safety risks

Dialogues were held with international NGOs and other organizations, in collaboration with the Caux Round Table (CRT Japan), a third-party organization, and potential risks in human rights due diligence were assessed in accordance with the United Nations Guiding Principles on Business and Human Rights (November 2019-March 2020).

We explained to CRT Japan the flow of CSR procurement questionnaire surveys conducted by the Teijin Group since FY2014 and the process for improvement based on the survey results, all of which are conducted as measures to prevent and reduce human rights violations, such as human trafficking, forced labor, child labor, and discrimination.
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CRT Japan confirmed the appropriateness of the territories and number of companies covered by the CSR procurement questionnaire surveys and the effectiveness of the post-survey process by which Teijin Limited calls on business partners to make improvements.
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We identified potential human rights risks from business domains of the Teijin Group that significantly cause negative social impact and formulated measures to be implemented in FY2020 and beyond.

Measures addressing potential human rights violations

1. 1.Education and guidance for improvement for business partners
2. 2.Interviews with domestic processing consignees
3. 3.Review CSR Procurement Guidelines and survey items in response to the social conditions related to matters of human rights violations in the supply chain
4. 4.Promoting the CSR Procurement Guidelines among business partners
5. 5.Review of grievance handling mechanisms

Please see here for the specific CSR procurement initiatives of the Teijin Group

• CSR procurement

To follow up on the previous year, we conducted dialogues with international NGOs and other organizations with cooperation from Caux Round Table Japan (CRT Japan), a third-party organization. We also evaluated risks as part of our human rights due diligence in accordance with the UNGPs and took the following measures to address the risk of potential human rights violations.

1. 1.Education and guidance for improvement for business partners
   We conducted online seminars for the business partners of Teijin Frontier Co., Ltd., both in Japan and overseas (China, Vietnam, and Indonesia), which is active in the Fibers & Products Converting Business, which was identified in the FY2018 human rights risk assessment as posing the greatest risks.
2. 2.Interviews with business partners
   Interviews were conducted with processing consignees both in Japan and overseas for whom it was considered necessary to check on efforts with regard to human rights.
3. 3.Review CSR Procurement Guidelines and questionnaire items in accordance with the social conditions related to matters of human rights violations in the supply chain
   As a result of the FY2020 review, no material changes were made.
4. 4.Circulating the CSR Procurement Guidelines among business partners
   A CSR procurement questionnaire survey was again conducted in FY2020 for business partners both in Japan and overseas. In the result, the situation of human rights violations at our business partners has not confirmed.
5. 5.Review of grievance handling mechanisms
   Whistle-blowing reports filed in our existing whistle-blowing system are handled appropriately. Issues have started to be systematized on the assumption that a new reporting system aimed at employees of business partners will be introduced in the future.

The background and results of the above measures will be disclosed on the Teijin Group Modern Slavery and Human Trafficking Statement. Even amid the restrictions on activities due to COVID-19, we are promoting various online initiatives, including seminars in Japan and overseas and domestic auditing.

To follow up on the previous year, we conducted dialogues with international NGOs and other organizations in cooperation with cooperation from Caux Round Table Japan (CRT Japan), a third-party organization, and received the following comments.

1. 1.Confirm whether there are any problems (such as problems concerning the freedom of association, forced labor, child labor, and discrimination) in human rights areas that are of concern to the WBA and in particular the CHRB within the TFR supply chain management system.
2. 2.Determine the working conditions of foreign laborers who work for suppliers in domestic business and confirm whether any human rights issues have arisen (human rights due diligence and impact assessments).
3. 3.Take measures to introduce complaint processing mechanisms that are not limited to the Teijin Group but also include suppliers.
4. 4.Please make visible the management business-making process within initiatives based on the UNGPs.
5. 5.Look into more optimal forms of active information disclosure.

In response to these comments, we evaluated risks as part of our human rights due diligence process in accordance with the UNGPs and took the following measures to address the risk of potential human rights violations.

1. 1.With regard to human rights issues in the TFR supply chain management system, we confirmed responses to the questions concerning human rights in the results to the CSR procurement questionnaire survey, and in cases where responses were of concern, we confirmed the details. We then interviewed business partners, such as processing consignees in Japan and overseas, believed to require confirmation with regard to human rights initiatives and implemented practical improvement activities as necessary.
2. 2.We determined the working conditions of foreign laborers who work for suppliers in domestic business, and to confirm human rights issues relating to those workers, we conducted a survey of domestic and overseas business partners in accordance with the CSR Procurement Guidelines, as we did in the previous year. The results did not identify any human rights violations.
3. 3.Grievance handling mechanisms We are promoting the design of a reporting system for business partners and preparing for its specific introduction.

We are currently looking into making visible the management business-making process within initiatives based on the UNGPs and more optimal forms of active information disclosure, issues that were pointed out in the dialogues.

To raise awareness for human rights, the Teijin Group holds training sessions for all employees (including contract and dispatch employees) at each workplace during Corporate Ethics Month every October. In FY2020, we use the Corporate Ethics Handbook to hold discussions at each worksite on respect for human rights. Training participation rates in FY2020 were 91% in Japan and 98.5% overseas.

The Teijin Group has established a center for counseling and reporting and promotes its use. In FY2021, 125 consultations were received, of which 49 cases related to human rights (dissatisfaction with treatment, discrimination because of gender, etc., and sexual harassment). We investigated the facts in all of these cases. In those cases where specific issues were confirmed, we issued cautions and training for improvement and conducted monitoring so that there were no reprisals against whistle-blowers.

Identifying and analyzing potential risks based on comments received by our counseling and reporting center, we determine educational activities befitting the current situation and raise awareness of the importance of respecting human rights among all employees.