Basic Policy

The Sumitomo Forestry Group participated in the UN Global Compact in 2008, formulated the Sumitomo Forestry Group Human Rights Policy in July 2019, and revised in April 2023. We comply with international human rights bills (Universal Declaration of Human Rights and International Covenants on Human Rights), the International Labour Organization (ILO) Core Labour Standards, and the United Nations Guiding Principles on Business and Human Rights. The Sumitomo Forestry Group also participates in the UN Global Compact, its Japan local network (including the HRDD subcommittee) and the World Business Council for Sustainable Development (WBCSD). In addition, the "Sumitomo Forestry Group Code of Conduct", which is based on these international norms, states respect for human beings and the realization of a healthy workplace. In addition, the Code calls for the respect of the human rights of all individuals, including women, children, indigenous people, minorities and other socially vulnerable people and stipulates that there will be no discrimination whatsoever on the basis of race, ethnicity, nationality, gender, religion, ideology, disability, sexual orientation, gender identity or other. The Code also does not permit forced labor or child labor in any form.

The Group is also working to disseminate its policies to its business partners, and is conducting human rights due diligence and respond to human rights risks in an effort to fully grasp and mitigate any risk related to human rights. Where necessary, we will provide as much support as possible to our business partners in their efforts to respect human rights.

Implementation of Due Diligence and Managing Material Risks

Through human rights due diligence, Sumitomo Forestry Group identifies factors that may have a negative impact on human rights and works to prevent or mitigate them.

Internal Sustainability Survey at the Sumitomo Forestry Group

Since fiscal 2012, an Internal Sustainability Survey is conducted every year at each of the Group companies to review their sustainability initiatives including the human rights. The Sustainability Committee reports the survey results to the Board of Directors and improves the human rights due diligence process of each subsidiaries. In fiscal 2022, the Sumitomo Forestry Group conducted an annual survey on human rights training and the relevant help desks for 59 primary Group companies in Japan and overseas (29 companies in Japan and 30 companies overseas). As a result, 49 of these companies are conducting human rights training and 46 have setup a help desk while 59 are engaging in measures to mitigate risk to human rights. For each supplier, we strive to prevent human rights infringements through conducting surveys and face-to-face interviews.

Based on this survey, in fiscal 2022 there were no reports of human rights violations as defined in the Sumitomo Forestry Group Code of Conduct.

Respect for Human Rights Through Sustainability Procurement

The Sumitomo Forestry Group conducts fair and responsible procurement under the Sumitomo Forestry Group Procurement Policy which obligates suppliers to protect human rights, workers' basic rights as well as preventing corruption. For procurement of imported materials, the Group ensures through surveys for more than 200 suppliers whether rights of workers and local communities in the areas where raw materials of the supplies are procured from have not been violated; whether adequate consideration is made during logging to the suppliers. Based on the risk categories, the Group also engages in interviews and on-site inspections with any suppliers where measures to mitigate risks were deemed necessary. Furthermore, in fiscal 2022, in order to promote awareness for human rights issues, a study session on "Human Rights and Supply Chain" was held for personnel in charge of wood procurement within the Sumitomo Forestry Group.

Identifying and Managing Human Rights Risks

In order to strengthen initiatives in human rights due diligence, each business division maps risks associated with stakeholders in value chain and identifies important human rights risks for each group. In addition, we reviewed the mapping in fiscal 2020, considering the impact of spread of new coronavirus infection as a new risk factor.

We identified important risks as follows: The Environment and Resources Division - "Infringing indigenous or community land rights and managing related laws" as well as "Occupational safety and health management in mountain forests (dangerous work, etc.)". The Timber & Building Materials Division - "Infringing indigenous land rights", "Occupational safety and health management at factories (fires, dust explosions, etc.)", and "Child labor at planted forests (including dangerous operations)". The Housing and Construction Division and the Overseas Housing and Real Estate Division - "Labor conditions of migrant workers (forced labor, etc.)".

Regarding the identified risks, we take measures to reduce and correct risks for each business. For example, we have identified more risks in fiscal 2020, of which we have verified the condition of respect for human rights of foreign technical trainees which is the particular importance and of major social interest in Japan. Third-party agencies gathered feedback from partner building contractors and organizations supervising technical trainees, verified materials, and interviewed technical trainees from overseas learning skills in Japan. As a result, we confirmed there were no major human rights violations. In fiscal 2021, regarding "respect for rights of indigenous peoples and communities", in order to further reduce risks and build better relationships with stakeholders in the business development areas, we reviewed the operational status of grievance mechanisms and points to be corrected in the overseas resource environment business. As a result of online review conducted by a third-party organization, we verified that continuous consultations with government agencies and communities have been conducted by operating appropriate grievance mechanisms at three overseas tree planting sites in Indonesia, Papua New Guinea, and New Zealand. On the other hand, it was found that it is necessary to improve initiatives such as expanding external information disclosure and reflecting it in the mechanism through dialogue with rights holders. In fiscal 2022, the Sumitomo Forestry Group Human Rights Policy was revised with input from third parties to ensure that business partners are committed to respecting human rights and to comply with international guidelines.

We will further establish measures and implementation plans for prevention, avoidance, mitigation, and correction for each stakeholder, and will implement PDCA to improve our initiatives in the future.

New Business Plan Human Rights Risk Assessment

In planning new businesses and projects, Sumitomo Forestry conducts risk assessment for the entire supply chain. Social aspects, such as human rights considerations for workers and other stakeholders, are also covered in the assessment.

Operation and Maintenance of the Grievance Mechanism

Sumitomo Forestry recognizes the importance of the grievance mechanism (complaint handling mechanism) and offers grievance hotlines. We will continue to develop internal and external hotlines to help prevent human rights violations and take necessary measures to remedies when human rights violations occur.

Sumitomo Forestry Group Human Rights Impact Analysis Map

(Revised in July 2020)

Respect for Human Rights in Overseas Forest Management

The following are examples of Sumitomo Forestry Group's overseas forestry business initiative as part of its stakeholder engagement and grievance mechanisms.

Initiatives in Indonesia

For forestry business in Indonesia's West Kalimantan, the Company signed an advisory agreement with International Finance Corporation (IFC), the World Bank's group institute in 2012. Sumitomo Forestry conducted inspections of its operational properties with the IFC to examine whether plans for use of commercial land were being implemented properly considering the rights of indigenous people and protection of cultural heritage as well as livelihood of local residents, which are indicators in the High Conservation Values Forests (HCVF) that has drawn great attention in recent years.

Sumitomo Forestry Group held stakeholder meetings inviting such stakeholders as local community members, neighboring concessions and businesses, academics, NGOs, and government officials; in 2013 to share the outcome of the surveys and in 2015 prior to the logging to deepen stakeholders' understanding about the business and environmental considerations.

In 2018, the Group built a grievance mechanism with the help of the IFC in PT. Wana Subur Lestari (WSL) and PT. Mayangkara Tanaman Industri (MTI. P.T. Kubu Mulia Forestry (KMF) has also been under the same mechanism since 2022. The mechanism has two grievance channels: The first allows local residents to share their opinion in writing with WSL, MTI and KMF, while the second provides WSL, MTI and KMF the opportunity to conduct local visits with local residents to collect community voices. WSL, MTI and KMF respond to any grievances from local residents from both routes within seven business days, with the approval from the management.

Initiatives in Papua New Guinea

Open Bay Timber Ltd. (OBT) in Papua New Guinea has also put in place a complaint box in which anyone from the area regardless of whether from within or outside of the company can post a complaint or comment. OBT received several complaints for example about wages in 2020, and it properly responded to any of these complaints requiring action after careful investigation. Because this complaint box does not only receive feedback from employees but also local residents and other third parties, trust in OBT has grown thanks to a means to share one's own thoughts with the company.

Initiatives in New Zealand

Tasman Pine Forests Ltd. (TPF) in New Zealand registers any important exchanges with local residents, partner companies and other stakeholders in a stakeholder registry. Communication with a recognition of the past background helps to build smooth relationships.

Human Rights Training

The Sumitomo Forestry Group provides lectures about human rights in its new employee training in Japan. We also require all Group employees with access to the intranet to take the "Work and Human Rights" module in e-learning every year with the intention to promote respect for human rights and a workplace where no discrimination is permitted (completed with a test score of at least 80%). This training course also includes curriculum to enhance awareness and understanding about people with disabilities, foreign nationals, LGBTQ and other minorities. In fiscal 2022, 12,232 employees of whom 5,611 and 6,621 belong to the parent company and Group companies, respectively, took the class. Sumitomo Forestry also incorporates classes about human rights in its training for new general managers. The effort in raising human right awareness via e-learning and training opportunities will be continued into the future.

Initiatives in the United States

In the United States, federal and state laws prohibit any employment discrimination for reasons such as race, gender, religion, birthplace, or health condition. Sumitomo Forestry Group companies in the United States strive to share the same philosophy in prohibiting discrimination and providing fair opportunities, by including these topics in the employee handbook.

Prevention of Harassment

Sumitomo Forestry makes its policy on sexual harassment, workplace bullying and maternity harassment clear, having included in its Employment Regulations, under one category of rules to be observed by employees (discipline on the job), a provision prohibiting such harassment as well as disciplinary standards. The Sumitomo Forestry Group Code of Conduct also prohibits all forms of harassment and this is communicated via the internal website, employee handbooks and handouts, as well as through various group training programs and e-learning programs on harassment. Furthermore, the Group distributes an email to every employee from the Personnel Department every six months to raise awareness about stopping all harassment.

Since fiscal 2000, a "Harassment Hotline" has been set up within the Personnel Department to ensure that consultations are handled appropriately. In fiscal 2022, we reviewed four cases that were consulted at the "Harassment Hotline ".

Each of the group companies in Japan and overseas also engages in various other measures, such as consultation hotlines to report harassment and discrimination in the workplace.

Sumitomo Forestry incorporates classes about harassment in its training for new general managers. We also strive to raise employee awareness through basic knowledge of harassment and courses on preventive measures by utilizing e-learning that can be used by group companies.