Supply Chain Human Rights Due Diligence
1. Policy (UN Guiding Principle 16)
We at Epson believe that respecting human rights in everything we do is essential to our corporate responsibility. This commitment is reflected in Epson's Management Philosophy and Principles of Corporate Behavior. We established Policies Regarding Human Rights and Labor Standards of the Epson Group in 2005 based on the United Nations Global Compact, and we have been practicing conduct aligned with the "United Nations Guiding Principles on Business and Human Rights" ("the UN Guiding Principles") adopted in 2011. In April 2019, we joined the Responsible Business Alliance (RBA), a non-profit organization that supports the rights and welfare of workers and communities affected by global supply chains, and we promote business activities in accordance with the RBA Code of Conduct together with our suppliers.
Epson is strengthening its human rights initiatives to respond to new challenges in a constantly changing global business environment. On April 1, 2022, we replaced the Policies Regarding Human Rights and Labor Standards of the Epson Group with a new Epson Group Human Rights Policy. This policy is based on the UN Guiding Principles and has been approved by the Seiko Epson Board of Directors.
Epson's human rights initiatives are spearheaded by Seiko Epson's DE&I strategic promotion department under the supervision of the officer in charge of human capital and well-being management. The DE&I strategic promotion department is addressing issues by building a network with corporate supervisory departments and with other relevant departments at Epson's global affiliates. Epson uses the Epson Group Human Rights Policy and the RBA Code of Conduct to identify human rights-related risks in its operations such as child labor, forced labor, other exploitative labor, abuses of workers' rights and unfair labor conditions, discrimination, and inhumane treatment including harassment. Seiko Epson and Epson Group companies conduct an annual CSR assessment survey to evaluate and mitigate these human rights and labor-related risks*. Workers and the labor union and other labor groups are important stakeholders, and Epson Group companies engage with them in genuine dialogue and discussions based on local labor practices and so forth.
*Results of the FY2021 and FY2022 CSR assessments showed that there were no major cases of human rights violations in the form of child labor, forced labor, discrimination, and the like, either at Epson or its Group companies.
We have been educating people, particularly in the human resources departments at Seiko Epson and Epson Group companies at home and abroad, about the RBA Code of Conduct and its requirements, and in FY2021 we also held study classes to familiarize members of the board, personnel in Seiko Epson's Head Office supervisory departments, and certain personnel at our global affiliates with the revised Epson Group Human Rights Policy.
In FY2022, employees at all Epson Group companies in Japan were required to take a mandatory course titled "Business and Human Rights."
Epson has set up the Epson Helpline and various other channels that can be used to report harassment, long working hours, and other concerns involving issues such as human rights and labor. All personnel are regularly notified of disciplinary actions and other actions taken by the company in response to incidents related to labor, harassment, and other forms of human rights abuses to prevent similar incidents in the future. Furthermore, Epson has whistleblowing systems that customers, investors, people in the local community, and other stakeholders can use to report grievances, which Epson then appropriately addresses.
In addition, we have established supplier whistleblowing systems at domestic and overseas affiliated companies to receive and respond to consultations and reports regarding human rights and labor from our business partners.
2. Human Rights Impact Assessments (UN Guiding Principle 18)
In accordance with the "UN Guiding Principles on Business and Human Rights", Epson continuously implements a process of "human rights due diligence". We identify potential or actual adverse human rights impacts, such as forced labor, child labor, harassment, and discrimination in the value chain related to business activities to develop, manufacture, and sell products, not only at group companies but also at business partners. We then investigate, analyze, redress, mitigate, or prevent the impacts.
The process for ensuring that human rights are respected in Epson's business is as follows:
- Establish policies, secure the commitment of top management, embed respect for human rights in the Group, and ask suppliers to uphold human rights, as well.
- Identify and assess adverse human rights impacts.
- Plan and stop, prevent, and mitigate adverse impacts.
- Monitor results and progress.
- Communicate and report performance.
- Provide for remediation
Specific contents of human rights due diligence are as follows:
(1) Establishing policies and making commitments
Epson Group Human Rights Policy (revised in 2022)
Epson respects the human rights set forth in the International Bill of Human Rights and in the ILO Declaration on Fundamental Principles and Rights at Work. Our human rights initiatives are compliant with the United Nations Guiding Principles on Business and Human Rights, and the RBA (Responsible Business Alliance) Code of Conduct. In particular, as a Regular Member of the RBA, Epson is obligated to observe the RBA Code of Conduct, which was established with reference to the foregoing international human rights norms.
In addition, we have established Epson Group Supplier Guidelines, which mirror the RBA Code of Conduct and are augmented by Epson's own policies. We communicate these guidelines to our suppliers and obtain from them a written agreement in which they consent to observe the guidelines.
(2) Method of identifying and assessing adverse human rights impacts
When we assess adverse human rights impacts, we focus particularly on employees, workers, and migrant workers, among all Epson stakeholders (customers, shareholders and investors, local communities, business partners, NGOs/NPOs, employees, etc.), since it is they who should be given the highest priority in terms of human rights.
|Impacts/risks of business activities
|Employees of Seiko Epson Corporation and Epson Group
|Freedom of employment (forced labor), young workers, working hours, wages and benefits, humane treatment (harassment, etc.), discrimination, freedom of association
|On-site service vendor employees
|Foreign migrant workers
Once a year, we have our business sites, Group companies in Japan and overseas, and suppliers complete a CSR self-assessment questionnaire.
(3) Assessment results and redressing/prevention
Through these assessments, we identify where human rights are adversely impacted and take actions to redress and mitigate them.
To identify adverse human rights impacts of suppliers and on-site service vendors, we ask them to complete a self-assessment questionnaire in which they assess themselves against each section of the RBA Code of Conduct (labor, health and safety, environment, ethics, and management systems) and in terms of respect for the rights of indigenous peoples and foreign migrant workers.
Epson continues to administer a CSR self-assessment questionnaire (SAQ) once a year to gauge how well Epson Group companies, business sites, and suppliers are conforming with the RBA Code of Conduct.
Moreover, major manufacturing sites voluntarily undergo the RBA's Validated Assessment Program (VAP) audit. These assessments help them accurately grasp how well they are conforming to the RBA Code of Conduct and identify issues for redressing and mitigation.
(5) Communication and reporting
Our efforts and progress in promoting respect for human rights are reviewed annually by management and disclosed online and released in Sustainability Report. We issue annual modern slavery and human trafficking statements in accordance with the laws of various countries, including the United Kingdom. These statements explain actions the Epson Group is taking to combat modern slavery.
In addition to "Epson Group employees," "dispatch workers," "onsite service vendor employees," "supplier employees," and "foreign migrant workers" who are given priority, we have established reporting systems and support centers for all stakeholders, including customers, investors, and local residents, to appropriately respond to all complaints.
3. Responding to identified human rights issues (UN Guiding Principle 19)
Suppliers are among the stakeholders for whom addressing adverse human rights impacts is a high priority, but since they are not part of the Epson Group, we have implemented separate programs specifically for suppliers worldwide.
(1) Communication of Code of Conduct and obtaining agreement by Supplier Guidelines
To ensure that the Epson Group Supplier Guidelines are understood by our suppliers, we provide the guidelines in six languages (English, Japanese, Chinese, Spanish, Portuguese, and Thai). The guidelines are available on our website, and Epson Group companies in Japan and abroad communicate the guidelines to all suppliers. We also obtain written agreement to observe the guidelines from major suppliers.
(2) Education through human rights seminars
We believe supplier understanding is essential for ensuring that human rights are respected throughout the supply chain. To help build understanding, in 2021 and 2022, we conducted human rights seminars facilitated by an expert consultant. These seminars helped to better educate suppliers about the requirements and issues surrounding business and human rights.
(3) Implementing due diligence through SAQ and corrective actions
Epson has been conducting supplier due diligence every year since 2016.
We use the SAQ, which confirms compliance with the Code of Conduct, to ascertain the status of respect for human rights at suppliers, and in addition to the implementation of human rights remedies, we provide feedback on matters that need to be addressed, request actions, and confirm completion of the actions at each supplier site. Whilst the RBA Code of Conduct covers a wide range of human rights issues, particularly the ones in Section A. "Labor", taking into account the ILO core labor standards and the principles of the United Nations Global Compact, we identify salient human rights issues and make addressing these issues mandatory. After analyzing the answers on the 2022 SAQ, we asked about 51% (173 sites) of direct material suppliers to take corrective actions and verified that 84% of the suppliers completed their corrective actions.
- Child labor (A2 in the RBA Code of Conduct)
- Forced labor (A1 in the RBA Code of Conduct)
- Proper management of working hours (a 60-hour maximum workweek and at least one day off every seven days) (A3 in the RBA Code of Conduct)
- Proper payment of wages (payment of the legal minimum wages and overtime wages, and timely payment of wages) (A4 in the RBA Code of Conduct)
- Humane treatment (no harassment) (A5 in the RBA Code of Conduct)
- Non-discrimination (A6 in the RBA Code of Conduct)
- Freedom of association and the right to collective bargaining (A7 in the RBA Code of Conduct)
- A safe and healthy work environment (B. Health and Safety in the RBA Code of Conduct)
(4) Remediation through supplier whistleblowing systems (UN Guiding Principles 22, 29 and 31)
All Epson Group companies worldwide have set up supplier whistleblowing systems that suppliers can use to report or consult about issues. Reports can be made anonymously and in the local language. Retaliation against whistleblowers is strictly prohibited.
We take steps to ensure that whistleblowing systems are easy to use for our suppliers' employees. We provide information about our whistleblowing systems in the Epson Group Supplier Guidelines and at supplier conferences, and we encourage their use. Reports can be made from the website, and at manufacturing sites employees of on-site service vendors can also use "suggestion boxes".
In addition, when we become aware of adverse human rights impacts through a report from a supplier employee or an audit, we provide support until a remedy is provided for.
Examples of Remediation
- Working hours were not recorded by an on-site manufacturing contractor due to a malfunction of the recording device, resulting in unpaid overtime wages for that period.
Remedial action: Verified the payment of the missing wages.
- An on-site security services company was not paying overtime wages or holiday allowances and was not granting days off.
Remedial action: Verified the payment of the respective allowances and the granting of days off.