Procurement Practices Procurement Practices

Materiality of Procurement Practices

• Approach to Materiality in Conflict Minerals
• Approach to Materiality in Supplier Labor Practice Assessment
• Approach to Materiality in Supplier Human Rights Assessment
• Approach to Materiality in Assessment of the Supplier Impact on Society
• Approach to Materiality in Environmental Assessments of Suppliers

Approach to Materiality in Conflict Minerals

Conflict minerals is not only regulated by the Dodd–Frank Wall Street Reform and Consumer Protection Act, but it is also a major problem faced by society as a whole. Advantest is no longer subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act after delisting its corporate stock in the United States in April 2016. However, Advantest remains engage in addressing the issue of conflict minerals, which also has deep ties to efforts conducted by industry groups.

Approach to Materiality in Supplier Labor Practice Assessment

Advantest considers the execution of its own businesses in accordance with human rights and labor practices important for a broad range of stakeholders, including our business partners.

Approach to Materiality in Supplier Human Rights Assessment

Advantest recognizes the influence it has as a company on human rights violations in part, material as well as manufacturing processes and it considers the broad protection of human rights even at our suppliers vital.

Approach to Materiality in Assessment of the Supplier Impact on Society

Advantest recognizes where the impact it has as a company even for compliance proposals and adherence to social norms in part, material as well as manufacturing processes and it considers the fulfillment of its social responsibility throughout the entire supply chain that includes all of its business partners vital.

Approach to Materiality in Environmental Assessments of Suppliers

Advantest considers the development of high-quality, safe green products vital by working from the perspective of environmental conservation in parts, materials as well as manufacturing processes.

Advantest Procurement Policy

The Advantest Group's CSR Policy pledges respect for our suppliers, places value on open communication with our suppliers, and emphasizes the maintenance of fair business relationships in accordance with relevant laws and regulations. We are also committed to sharing values and building collaborative relationships with our suppliers, toward our goal of achieving mutual growth.

• Advantest Procurement Policy

Organization to Promote Fair Trade (CSR Procurement)

In order to promote and manage fair trade we have established a department whose role is to check the purchasing department and we implement a once-yearly audit by Audit and Supervisory Committee to ensure that there are no problems and that normal trade practices are being followed. Also, every year we implement an internal control audit using an external organization and we were able to confirm again in fiscal 2016 that there were no problems.
Moreover, for outstanding orders, in addition to checking the status at the end of each month to ensure that there are no acceptance inspection omissions, for orders where the acceptance inspection is taking a long time we report the reason for this and the expected completion date to the Audit and Supervisory Committee.

Education for Practicing Fair Trade

Since fiscal 2010, we have held seminars on a subcontractors law, participation in which is not restricted to purchasing department staff. Moreover, we began employee e-learning about the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors in fiscal 2016 to raise greater awareness about this law. Almost 100% of our employees took this e-learning in fiscal 2016. We also implemented follow-up training with internal instructors to our purchasing business departments. In the future, we will continue to educate our employees in order to realize the principles of fair trade.

Social Responsibility in the Supply Chain

Implementation of questionnaire survey

Advantest has published its Procurement Policy and the Advantest CSR Procurement Guidebook on its homepage as a way of fulfilling its social responsibility in a supply chain that includes all of its business partners, and it asks these business partners to adhere to relevant laws and ordinances as well as social norms.

We evaluate our business partners on QCD* every quarter and carry out a CSR questionnaire annually for our business partners who largely impact procurement of Advantest. We feed the results back to the business partners to create a relationship where they can develop together with us.
For fiscal 2016 we carried out the questionnaire in March 2017 and obtained answers from each company regarding their approach to human rights, labor problems, health and safety, environmental conservation, fair trade, and intellectual property protection. The return rate for completed questionnaires was 100%. We were able to confirm that each company had established an overall policy and Code of Conduct for societal responsibility. We also determined that none of our business partners had problems related to aspects such as compliance and labor management. We will conduct another questionnaire in fiscal 2017 and confirm our business partners’ response to our purchasing policy.

* QCD: abbreviation of Quality, Cost, Delivery

• About Advantest Procurement Policy
• Advantest CSR Procurement Guidebook (PDF: 136KB)

Set up of inquiry and reporting window

During trade with our business partners, in the event that one of our employees infringes, or is suspected to infringe, on our Code of Conduct, a trade contract or a relevant law, we request that this is reported to the Contact Window on our website. In fiscal 2016 we did not receive any complaints. The reporter and their company would not be penalized in any way for reporting. Following an investigation, in the case that a problem is recognized, the action in question would be stopped and measures would be taken to prevent reoccurrence.

Response to Conflict Minerals

Implement of survey

At Advantest, in order to respond to Section 1502 (conflict minerals provisions) of Title XV of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations in the U.S., we are playing an active role together with the industry organization to address the conflict minerals problem.
Since 2013 we have been implementing an annual survey of our business partners regarding use of conflict minerals through a CFSI* report (conflict mineral reporting template (CMRT)) and releasing the results.

* CFSI: Conflict-Free Sourcing Initiative

Cooperation with industry bodies

In December 2012 we participated in the JEITA* "Responsible Mineral Procurement Review Committee" and we have been working together with industry organizations to promote conflict-free procurement and spread awareness.

* JEITA: Japan Electronics and Information Technology Industries Association