Murata and People

Responsibility to and Actions Concerning Suppliers

Murata observes all laws and ordinances in its procurement, and expects the same compliance, along with due consideration for the community and environment, from its suppliers as they conduct their corporate activities. We believe that Corporate Social Responsibility (CSR) procurement helps to build mutual trust and prosperity.

Basic approach to procurement

A Procurement Policy Based on Fairness, Impartiality, and Sincerity

At Murata, we believe it is important to establish relations of trust and prosperity with our suppliers. In our procurement operations, we ensure a spirit of courtesy, fairness, impartiality, and sincerity, respect for laws and ordinances, avoidance of private conflicts of interests, and conformity with social ethics. Throughout the supply chain, we try to ensure that our corporate activities take into account community and environmental needs.

Murata provides its suppliers with information regarding its basic approach to procurement and transaction methods via a business transaction guidebook and a Murata Procurement Department website. In accord with the following basic approach to procurement, our buyers conduct transactions with our suppliers in a fair, just, and sincere manner.

  • Murata’s buyers will responsibly carry out procurement operations, practicing good manners and following the dictates of common sense.
  • Murata’s buyers will maintain friendly relationships with suppliers, but have no personal interest with them.
  • Murata’s buyers will accomplish dealings in compliance with all relevant laws, rules, in-house regulations, and societal norms.

Link: Procurement Policy

Basic Attitudes that Murata Requires of Suppliers

By providing guidance enabling suppliers to continuously improve quality themselves, Murata increases the quality of product procurement (raw materials and equipment), enabling it to and improve its own product quality levels.

When the number of abnormalities discovered in products from a supplier reaches a certain level, Murata discusses the matter with the supplier and sets improvement topics and targets. Progress reports are compiled regularly. Murata also performs annual or more frequent analyses and appraisals of quality management competence, responsiveness to cost, lead time, and technology requests, and financial position. We pinpoint overall points for improvement and develop topics.

  • Compliance with laws and regulations as well as social norms
  • Promotion of sound business management
  • Emphasis on quality, lead times, and stable supply
  • Emphasis on initiatives targeting reduced environmental impact (green procurement)
  • Emphasis on value engineering activities
  • Emphasis on information disclosure
  • Emphasis on measures to accelerate material procurement
  • Observance of confidentiality
  • Emphasis on IT application
  • Elimination of antisocial forces
  • Promoting “Responsible Minerals Procurement”

For more detailed explanations of these items, please visit:Link: Our Expectations of Suppliers

Legal compliance in procurement

Thorough legal compliance in our training, operational diagnoses, and systems

As a company with a compliance-oriented management, Murata insists on observance of laws and ordinances relating to procurement. In particular, we organize ongoing briefing sessions to give employees a full understanding of the terms of the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (Subcontract Act) to prevent violations due to lack of awareness.

In fiscal 2019, we worked to promote education on the Subcontract Act and our internal control system. We held 60 training sessions on these subjects for related departments, including representatives of affiliated companies. We also used e-learning and e-tests to inform employees about purchase requests and conducted education on the Subcontract Act and the internal control system. In the future, by carrying out such training on a continual basis, we will make steady efforts to raise employee awareness even further. In addition, by managing the entire chain of our procurement operations in our procurement system, and by controlling those operations in the system itself, Murata has put in place a structure to prevent violations of laws and regulations from occurring.

About the Subcontract Act

The Act against Delay in Payment of Subcontract Proceeds, Etc.
to Subcontractors (Subcontract Act) prohibits the outsourcer from using its advantageous standpoint to the detriment of the legitimate interests of the subcontracted business operator.

Diagnosis of the legality, efficiency, and propriety of procurement operations at Group Companies in Japan and abroad

At Murata, the Office of Internal Audit and accountants establish items to be examined and assess the operations of materials procurement departments throughout the Group worldwide. Following procedures for operational diagnosis planning, implementation, reporting, improvement progress management, and compilation of the final report, we diagnose the legality, efficiency, and propriety of procurement operations.

To ensure maximal rigor in procurement, we give regular training to employees in all the kinds of legislation relating to procurement transactions to keep up and deepen their understanding and awareness of the legal issues.

Supplier consultation window

Window for consultation on improper conduct

Suppliers can use a consultation service in the event of apparent legal violation or social impropriety arising in dealings with Murata.

This serviceis a company hotline email, directly to the manager of the Procurement Division. The dedicated e-mail address will be provided to suppliers at the start of the transaction.

We are bolstering our stance on compliance by continually urging suppliers to make use of this service when appropriate.

CSR procurement

“We contribute to the advancement of society by … being trustworthy and, together with all our stakeholders, thankful for the increase in prosperity.”

This is a quote from Murata’s Philosophy.

This phrase is a foundation of the ideas that we see as most important as we work to advance our business together with our suppliers.

With honesty, fairness, and transparency as the guiding principles of its procurement activities, Murata has always sought to build partnerships with its suppliers, working to realize mutually satisfying and prosperous relationships based on the Murata Procurement Policy.

Going forward, we will seek to further enhance this principle in order to realize prosperity for all of our stakeholders, without changing its essence in any way.

We are actively working to reduce supply chain CSR risks in relation to procurement, such as prohibition of child labor, forced labor, and gender or religious discrimination, and responsible procurement of minerals.Murata is currently focusing efforts on the following three areas:

  • We have formulated a Murata CSR Charter, which rests on the foundation of the Murata Philosophy, and, based on this, a statement of “Our Expectations of Suppliers,” and we request our suppliers to comply with both.

  • When we open an account with a supplier, we conclude a CSR Agreement, and we request the supplier to agree to pursue their business activities in conformity with the Code of Conduct of the Responsible Business Alliance (RBA).

  • Since 2017, we have been employing a “CSR Compliance Checklist.” In addition to enabling our suppliers to self-assess their level of compliance with our CSR requirements, these checklists also make issues visible. By sharing the results of CSR compliance checks with Murata, our suppliers are able to engage in two-way consultations regarding issues and corrective measures, enabling them to realize more efficient and fundamental solutions to any issues that have been discovered. We periodically conduct these activities each year, and we intend to continue to do so going forward.

We believe that in order to effectively put these initiatives into practice, it is important for us to avoid simply making unilateral demands on our suppliers. Rather, we work together with our suppliers, based on the partnerships that we have built up with them.

In recent years, we have been required to expand the scope of these CSR activities from companies with which we are directly involved to our entire supply chain. Based firmly on the spirit of the Murata Philosophy, we will continue in our efforts to realize mutually satisfying and prosperous relationships with our stakeholders, working to build long-lasting trust and solid partnerships, expanding the scope and increasing the sophistication of our CSR procurement as we strive to realize a supply chain that all of our stakeholders can have confidence in.

Percentage of suppliers that have undertaken CSR Agreements (as of March 31, 2020)

Japan 97%
Outside Japan 92%

CSR procurement that responds to environmental issues

Based on the Responsible Business Alliance (RBA) Code of Conduct, Murata decides on suppliers after presenting them with a list of environmentally-friendly items for implementation.*1
In addition, we ask that our suppliers sign and comply with a letter of consent regarding our CSR procurement policies and code of conduct.*2
We also work to survey and identify the status of compliance with CSR principles, including those related to environmental issues, at our existing suppliers. In our previous survey, we surveyed approximately five hundred companies, and verified that there was no need for auditing or concrete action.
Going forward, we will continue these surveys regularly, and we will conduct audits and apply other measures to any suppliers that survey results show are in need of improvement.

  • ∗1

    Environmentally-friendly Items for Implementation by Murata’s Business Partners (Excerpt)
    Social responsibility in relation to the environment based on local laws
    Reduction of emissions and runoff: Efforts includingmonitoring, control, and treatment of air and water pollution
    Efforts to conserve resources and energy through the establishment of voluntary targets and the realization of efficient use
    Reduction of greenhouse gas emissions
    Minimization of consumption of water
    Establishment, operation, and maintenance of an environmental management system
    Management, reduction, and recycling of waste
    Reduction of resource use, recycling, and the setting of voluntary targets for conservation of resources
    Business activities that consider biodiversity

  • ※2

    Letter of Consent regarding Murata’s CSR Procurement Policies and Code of Conduct

Signed when suppliers open an account to do business with us, this letter signifies their consent in conducting activities based on the Responsible Business Alliance (RBA) Code of Conduct.
Murata also participates in the following membership-based organization in order to cooperate more closely with our industry.

Membership-based organization:(JEITA)Japan Electronics and Information Technology Industries Association別ウィンドウで開く

Promoting “Responsible Minerals Procurement”

Serious violations of human rights have become a social problem in mineral procurement, and interests in responsible mineral procurement are rising.

Murata regards this as part of our corporate social responsibility (CSR) efforts, and conducts surveys and provides information in compliance with the industry standards based on our responsive policies. Furthermore, as an internal framework, the CSR Management Committee, chaired by a Representative Director, shares information with top management on activities, progress, and any issues regarding responsible mineral procurement, and makes any resulting decisions.

Response to Customers Requirement for our Supply Chain Information

In response to requests from our customers for our supply chain information, we provide information using the CMRT (Conflict Minerals Reporting Template) issued by the RMI (Responsible Minerals Initiative). We also regularly conduct surveys on our suppliers to keep the information updated. We continue to carry out our efforts to reduce risk and make our supply chain transparent by working together with our suppliers for improvement. This entails reviewing reported information in line with the internal standards prescribed based on the OECD Due Diligence Guidance and carrying out corrective measures, as necessary.

Responsible mineral procurement policy

  • 1.

    Working within the framework of CSR procurement activities based on the Murata Manufacturing CSR Charter

  • 2.

    Building a management framework in accordance with the OECD Due Diligence Guidance.

  • 3.

    Using the above mechanisms to promote the responsible procurement of minerals used by Murata, such as by preventing the financing of armed groups as part of the minerals supply chain for gold, tin, tantalum, tungsten, and cobalt, etc., protecting human rights, and promoting fair trade, through continued efforts to use low-risk components and materials. Also, refusing to conduct procurement from companies that are clearly involved in conflicts or human rights violations

  • 4.

    Conducting sensible and efficient procurement in a sincere manner, based on industry standards, and in close collaboration with industry organizations

  • 5.

    Sharing information regarding minerals that are obtained through the supply chain with partner companies as quickly as possible

Murata Manufacturing Co., Ltd. is also a member company of the Responsible Minerals Trade Working Group at Japan Electronics and Information Technology Industries Association (JEITA), and of RMI. We are proactively working on issues that are difficult to solve as an individual company, such as creating industry-wide frameworks as a member of industry organizations.
We also participate in the JEITA-sponsored Responsible Minerals Sourcing Inquiry Briefings as a lecturer.

Due to the EU’s Conflict Minerals Regulation that will become effective in 2021 and growing awareness of human rights issues, the scope of responsible mineral procurement is being further extended to more risks, regions, and minerals. Murata is currently preparing our response to these developments in cooperation with industry peers. We are planning to provide stakeholders with supply chain information based on industry standards regarding response to new risks such as Annex II risks*1 and OFAC*2 regulations, and new areas such as the use of minerals from CAHRA*3 and cobalt usage. We have already initiated efforts for a transparent supply chain of cobalt for some products.

Despite the increasing difficulty of responding to the expansion and changes in various requirements, Murata will continue to actively address these issues. It is also our intention to ensure the transparency of our supply chain and to soon realize CSR procurement including responsible mineral procurement by closely cooperating with our customers, suppliers, and the industry, more than ever.
We will continue to assure our stakeholders of safety and security by advancing and realizing these initiatives.

In addition, to enable cooperation with our industry, Murata is participating in the
JEITA Responsible Mineral Trade Working Group (別ウィンドウで開く)
and RMI (別ウィンドウで開く)

  • ∗1:

    Annex II risks
    Risks of a serious negative impact that may arise in relation to unearthing, trading, handling, or exporting minerals from conflict affected, and high-risk areas

  • ∗2:

    Office of Foreign Assets Control

  • ∗3:

    Conflict Affected and High Risk Areas