Green Procurement

• 1. Background to the revision of the Green Procurement Standards
• 2. Overview of Green Procurement Standards Implementation
• 3.Green Procurement System

1. Background to the revision of the Green Procurement Standards

Chemical substances are essential to our society and life, but if they are not handled appropriately, they can have adverse effects on human health and the environment. From this perspective, an international summit-level agreement on long-term chemical management (WSSD goal) was reached in 2002, which states that "by 2020, chemicals will be used and produced in ways that minimize significant adverse effects on human health and the environment." In 2006, a set of action pointer (SAILM) was compiled to realize this goal. In response to this international movement, the newly enacted "registration, Evaluation, Authorization and Restriction of Chemicals (REACH)" was gradually implemented in Europe from June 2007, and in Japan, the drastically revised "Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc." (Chemical Substances Control Law) was fully implemented in April 2011.
Following the enforcement of the EU RoHS directive in 2006, we established our Green Procurement Standards for Materials in October of the same year, and have since asked our suppliers to cooperate in adhering to these standards. In order to respond to changes in circumstances based on these international agreements, we have reviewed our procurement standards and have now revised our Green Procurement Standards as attached.

These Procurement Standards have been reviewed from the perspective of emphasizing legal compliance in light of the recent strengthening of activities to execution international agreements, and will be implemented as follows. We ask all business partners, including cooperating companies, to understand and cooperate with these Procurement Standards.
The actual survey was conducted without using V5, but using JGP 4.2, the RoHS Declaration of Conformity, and the REACH Survey Sheet.

2. Overview of Green Procurement Standards Implementation

The Chino Green Procurement Standards classify chemical substances contained in procured products, parts, materials, equipment, consumables, etc., including preparations, into prohibited substances, controlled substances, monitored substances, and other substances. For substances in the three categories excluding "others," we are working on green procurement according to the Chino Green Procurement Standards as follows.

2.1. Prohibited Substances

In the "Material Green Procurement Standards" established in 2006, substances classified as "Level A" in JGPSSI Tool Ver.2 and Ver.3 were designated as prohibited substances. In JGPSSI Tool Ver.4, the "Level A" classification was abolished, but in this Green Procurement Standards, the substances are still prohibited according to the previous classification method. In this classification, the purpose of the prohibited substances other than the six substance groups regulated by RoHS is basically prohibited, and this revised version has been revised to allow operation that ensures legality. In JIG Ed2, Ed3 and JGP V4, various other revisions have been made, and the Chino Green Procurement Standards have also been revised to add HBCDD, beryllium oxide, and fluorinated greenhouse gases to the list of prohibited substances.

For Class 1 and Class 2 specified chemical substances, which are prohibited or severely restricted in their manufacture, use, import and export, there is no possibility that they are legally added to domestically produced parts without disclosure of content information, and even in such a situation, the latest revision has been made to prohibit all government ordinance-designated chemical substances for the designate chemical substances under the Chemical Substances Control Law, from the viewpoint that it is unreasonable to limit legal compliance measures to only a portion of the legal matters. As explained in the [Appendix Reference] of the Chino Green Procurement Standards, the possibility of these substances being added is considered extremely low, even in imported parts.

Compliance with RoHS regulations

The EU revised RoHS came into force in January 2013 and the CE display system was put into effect. Category 9 "Monitoring and control instruments," which was previously excluded from the scope of regulation, will also be subject to this New Approach system from July 2014 (July 2017 for our industrial products). Under this system, the collection of substance information is based on the EN50581 standard "Technical documentation for the evaluation of electrical and electronic products with regard to the restriction of hazardous substances," issued in September 2012, as follows:

1. Supplier Declaration or contract confirming that the content of restricted substances in materials, parts and assemblies is below the permitted limit and clarifying any exemptions;
2. Material Declaration, which provides information on the content of specific substances and any applicable exemptions;
3. Test analysis report

However, we also treat vendor information based on supplier information as valid. In addition, we recognize that JGP responses do not fall under the standard requirement declaration, but we will continue to use previous responses as information that meets our green procurement criteria.

2.2. Controlled substances

According to the Chino Green Procurement Standards, substances that fall into any of the following categories as shown in Table 2 of the Procurement Standards are considered controlled substances.

1. Three substance groups that were previously designated as "Level B" by the JIG and for which supply chain information was requested (the other substance groups reset from designate in line with the revision of the JIG)
2. Chemical Substances Control Law Class 1 designate Chemical Substances and Specified Class 1 designate Chemical Substances for which information can be obtained through MSDS
3. Ozone-depleting substances and fluorinated greenhouse gases that are exceptionally permitted to be procured to supplement existing facilities
4. Chemical Substances under the Chemical Substances Control Law, which is scheduled to come into force in April 2011, require businesses to make an effort to communicate information on substances contained in the substances, and Substances of Very High Concern (SVHC) on the Candidate List, which REACH requires suppliers of Articles, etc. to communicate information on substances contained in the substances (both excluding substances classified as prohibited substances).

Compliance with the REACH authorization system

In fiscal 2013, we reviewed the classification method that we had used up until then and revised it to focus on complying with Article 33 of the REACH regulation, as shown in the flow chart. The results of the classification were as follows.
The REACH authorization system started in August 2014, and plasticizers such as DEHP contained in polyvinyl chloride in our products will become subject to regulation from February 2015. We fear that in the future, the majority of authorized substances will be effectively banned for normal use within the EU. However, there are opinions outside the EU (including Japan) that these substances should be treated in the same way as normal SVHCs, and we intend to respond by taking into consideration trends in the domestic industry.

Classification table of SVHC on the REACH Candidate List and Chemical Substances Control Law Monitoring Chemical Substances

[Note] As of November 11, 2014, the total number of substances on the Candidate List up to the 11th SVHC classification is 155 (5 substances were added in FY2014).
The number of classification items in the table includes duplicate judgments using "or". The number of classification items listed in the table has been partially changed due to revisions to classification items implemented in fiscal 2013.

This classification process is planned to narrow down the scope of surveys of the supply chain for information on contained substances as much as possible, in order to reduce the burden on upstream businesses who are asked to participate in the survey. We ask that upstream businesses understand this point and cooperate with the survey.
Here, the items listed in the classification table refer to chemical substances that are managed to be either one of the following through operational measures such as reinvestigation, investigation sites, or design changes.
As of November 2014, three types of phthalate esters, DBP, BBP, and DIBP, have been designated as restricted substances on the Candidate List, but these three types of plasticizers are not normally used in polyvinyl chloride for wire coating.
On the other hand, DEHP is still used in many cable jackets and requires caution.

2.3. Monitored substances

Many of the materials, equipment, and chemical substances used in the manufacturing process are subject to legal restrictions, as shown in Table 3 of the Chino Green Procurement Standards. Chino calls these substances "monitored substances," and all other substances, except for those used for exemptions such as those used in commonly used household products, are subject to notification, registration, or permission systems, and we strive to ensure compliance with legal requirements by systematically monitoring them under the "Legal Compliance Monitoring Program." We have always asked our partner companies to take measures to ensure compliance with such laws and regulations, and these Procurement Standards now include the legal compliance efforts that were previously required separately as requirements, so we ask that you take appropriate action.

3.Green Procurement System

At Chino, we use Form 1 of the Chino Green Procurement Standards to investigate and evaluate the status of green procurement efforts in relevant internal departments in light of ISO 14001 requirements, etc., and provide necessary guidance based on the results.
In order to properly implement green procurement, we believe it is necessary for our partner companies to also establish a system with the same awareness and understanding as Chino and work on it. Therefore, we would like to expand the same investigation into Chino's procurement materials, and we ask for your cooperation.