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Responsible Care Report 2014
Responsible Care
02
Reporting on Responsible Care for 2014The pages to follow look at Tosoh’s corporate social
responsibility initiatives and their results.
Message from the President 03
Safety 05
Message from the Chairman of the RC Committee 09
Environment and Society 11
Governance 13
Human Resources 15
Key Data and References 16
RESPONSIBLE CARE 2014 OUTLINE
Tosoh has followed the 2013 Environmental Report Guidelines of the Japanese Ministry of the Environment in producing this RC report.
Period covered: April 2013 to March 2014 (a portion of the information also refers to fiscal 2015)
Companies covered: Unless otherwise indicated, the informa-tion in this RC report applies only to the parent company. The performance data on page 17 is for 18 manufacturing compa-nies of the Tosoh Group in Japan. The information on other activities includes all consolidated subsidiaries and affiliates.
Published: July 2014 Previous publication in July 2013; Next scheduled publication for July 2015.
Tosoh AIA, Inc.Tosoh SGM CorporationTosoh F-Tech, Inc.Tosoh Quartz CorporationTosoh Silica CorporationTosoh Speciality Materials CorporationTosoh Zeolum, Inc.Tosoh Ceramics Co., Ltd.Tosoh Hi-Tec, Inc.Tosoh Hyuga CorporationTosoh Finechem Corporation Tosoh Organic Chemical Co., Ltd.Tohoku Tosoh Chemical Co., Ltd. Toyo Polymer Co., Ltd. Nippon Polyurethane Industry Co., Ltd.Hokuetsu Kasei Co., Ltd. Rinkagaku Kogyo Co., Ltd. Lonseal Corporation
03
11
05
13
09
15
Responsible Care
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Message froM the PresidentOur objectives in fiscal 2015 remain to achieve results from our safety reform activities while continuing to expand our earnings. Each Tosoh employee must be aware of and take responsibility for the need to ensure safety at Tosoh operations. Collectively, they must work as a team for zero accidents to thereby avoid lost time at our operations.
Results from Safety Reforms Are Essential
An explosion and fire occurred at and shut down the No. 2 Vinyl Chloride Monomer (VCM) Plant at our Nanyo Complex in November 2011. We’ve been implementing safety reforms since August 2012, when we completed our investigation, to prevent another such incident. Reforms notwithstanding, some incidents have happened again. They are not, however, the result of insufficient know-how or defi-cient operating manuals, as was the case in November 2011. They stem from poorly man-aging equipment and plant maintenance. We have increased allocations of money and time for maintenance and are working to eliminate operating difficulties. We also insist on new perspectives in managing facilities and substantially more thorough risk assessments. To restore our reputation as a “safe chemical manufacturer,” it is necessary for Tosoh employees to confront safety issues and demonstrate safety reforms.
Our Mission Is to Contribute to Society through Our ProductsTosoh’s corporate mission is “to contribute to society through the chemistry of innovation.” Good management is essential. That requires a commitment to superior products and regard for the environment, safety, and health. Emissions must be minimal and the character-istics of chemical substances understood. These are our responsibilities if we wish to supply products that benefit society.
Corporate Philosophy
Contribute to a better society through innovations in chemistry
Responsible Care
04
Basic Principles Regarding the Environment, Safety, and Health
In all of its business activities, Tosoh Corporation will contribute to the advancement of society through continuous innovation in chemistry, leading ultimately to the supply of products and services that bring customer satisfac-tion. At the same time, Tosoh will continue to regard environmental protec-tion, safety, and health as top management priorities.
Action Policies
Basic Stance• Promote initiatives based on awareness of the need to comply with laws and reg-
ulations and self-responsibility
• Establish targets, formulate action plans, and implement actions with the partici-pation of all concerned
• Reflect audit results in future action plans
Environmental Protection Initiatives• Conserve energy and resources through the use of the smallest-possible quanti-
ties of resources to obtain the greatest-possible benefits
• Lower emissions and waste through improved manufacturing processes and operational management
Safety Assurance Initiatives• Prevent accidents and respond to disasters through facility safety management
• Maintain and manage emergency response capabilities through safety drills
• Eliminate accidents and disaster effects through the analysis of case studies
Product-Related Environmental and Safety Assurance Initiatives• Allow consideration for the environment, safety, and health to guide the product
design and development of manufacturing processes
• Undertake prior assessment during the development of new products and pro-cesses
• Ensure product safety through total quality management
Communication Initiatives• Provide safety management-related information for products and chemical sub-
stances
• Enhance public confidence through dialogue about business activities
We Must Coexist with Society and Build Mutual TrustCorporate viability hinges largely on our being a member of society overall. We must commu-nicate with the communities where we operate and aim for open and accessible places of busi-ness. Only then can we earn community trust and provide communities a sense of security. Tosoh will merge with Nippon Polyurethane Industry Co., Ltd. (NPU), in October 2014. Our principal manufacturing facility, the Nanyo Complex, is adjacent to NPU, and it and NPU will assume more prominent roles in our opera-tions and their surrounding communities fol-lowing the merger. As well, Tosoh and NPU will combine their safety, health, and environ-
mental initiatives and conduct the highest level of Responsible Care (RC) activities. Looking ahead, we reaffirm the viability of chemical companies. We will offer safe prod-ucts reliably and further develop our business with our stakeholders. The continuing guid-ance and support of stakeholders for our RC endeavors is welcomed and appreciated.
Kenichi UdagawaPresident
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safety
To Prevent Accidents from Happening AgainOn November 13, 2011, an explosion occurred at the No. 2 Vinyl Chloride Monomer (VCM) Plant at the Nanyo Complex. This caused a large inconvenience for nearby residents and
other related parties. To not forget about the accident and regain the trust of society, Tosoh is rebuilding itself as a safe chemical maker by implementing safety reforms.
Safety Assurance DeclarationObjectives• To ensure that Tosoh is a safe chemical manufacturer in which this sort of accident never happens
again.• To provide our employees with a safe workplace.• To ensure that Tosoh is a company in which local residents and others can place their trust.
Dedicated to Safety Assurance• President’s commitment
As Tosoh’s president, I reaffirm our company’s commitment to safety as the central pillar of our busi-ness. I will see to it that all necessary resources are deployed to ensure safety and I share the resolve of all of our employees to maintain safety.
• Creating a culture of safety We will overhaul our safety activities and put in place highly effective reforms to ensure that each and every employee proactively performs his or her job in a safe manner.
• Disclosure and use of information Our manufacturing complexes will provide accurate and prompt information to local residents about emer-gency situations. Safety and accident information will be put to the most effective use.
• Comprehensive education and training Tosoh will implement comprehensive education and training in technology and safety. We will rebuild our employee training system so that it flexibly and responsively matches the employee’s under-standing and expertise.
• Ongoing reform and improvement Safety assurance is not a one-time activity: We will ensure that all Tosoh employees remember this accident and work to make safety assurance their ongoing mission.
Post-accident tiMeline
Accident occurred
Accident Investigation and Response Committee formed
Safety Reforms Committee formed
Safety Reform Promotion Team formed
Reforms being implemented
Investigation and Response Committee find-ings made publicSafety reform pol-icies announced
november 13, 2011
november 25, 2011
february 2012 June 2012 august 2012 ~current
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Safety Reform Activities and IssuesTosoh has established accident-prevention systems at its plants that approach problems from plant and equipment, management sys-tems, and employee behavior perspectives. Yet, weaknesses persist, and, when they occur together, they can result in accidents. The Swiss cheese model of accident causation illustrates this. The holes in Swiss cheese represent systemic weaknesses. If those holes align, by coincidence, they’ll per-forate and compromise the system’s integrity, leading to the problems listed above.
Tosoh recognizes that safety is central to busi-ness operations and has allocated business resources to its safety improvement initiatives. The allocations begun in fiscal 2013 continue and have been secured again in fiscal 2015. That is a response to the rise in plant and equipment troubles in fiscal 2014 because of insufficient
voluntary inspections of non-code equipment. There are no legal requirements for such inspec-tions, but the rise in incidents has caused Tosoh to renew its thinking on equipment maintenance for fiscal 2015. And we voluntarily decided to increase our budget allocations for equipment maintenance expenses.
Tosoh implements on an ongoing basis plant safety manage-ment activities to determine latent deficiencies using hazard and operability (HAZOP) and other analytical methods. In addition, Tosoh inspects internal incidents and case studies of accidents at other companies to verify whether similar problems exist at Tosoh plants and have been overlooked. Our manufacturing sec-tions also plan to continually check whether past measures to improve safety remain effective or require changes.
Our complexes have diverse ongoing training programs to improve awareness and techniques from the bottom up. The need, however, for us to depend less on employee behavior for safety has emerged. So Tosoh will continue its activi-ties to “get each employee to prevent problems from occurring through his or her own actions.” In addition, we will push forward with further improvements to our equipment and manage-
ment systems. Safety measure improvement budgets have made it possible to quickly initiate these improvements.
*1 Danger Prevention Training: Small-group discussions before starting work to educate on risk factors at the workplace and in work processes, and on triggers to bring those risks out. The dis-cussions cover points of danger and important actions to take.
*2 Process Abnormality Training: Training to improve prediction and response to abnormalities in work processes, including predicting abnormalities, and analyzing their causes, effects, and solutions.
1. insufficient equipment maintenanceTrouble occurs because of inadequate inspection, maintenance, and renewal
2. insufficient awareness Trouble occurs because of the inadequate investigation of the fundamental causes of prob-lems based on case studies of incidents within the company and externally
3. accident-prevention system and overdependence on employee behaviorTrouble occurs because employees are depended on despite their low safety awareness. Awareness must increase and equipment and management systems need to be improved
MaJor issues
2. addressing insufficient awareness: toP-down activities at Main Manufacturing coMPlexes
3. addressing accident-prevention system overdependence on employee behavior: BottoM-uP activities at Main Manufacturing coMPlexes
Plant and Equipment Design
Plant and Equipment Maintenance
Abnormal ConditionsOperating TroubleWork Accidents
Management Systems (Education and Training)
Management Systems (Standards)
Employee Behavior (Procedure Deviation)
Employee Behavior (Presumptions)
swiss cheese Model
Plant and Equipment Design
Plant and Equipment Maintenance
Abnormal ConditionsOperating TroubleWork Accidents
Equipment Design
Equipment Maintenance
Abnormal ConditionsOperating TroubleWork Accidents
Management Systems (Education and Training)
Management Systems (Standards)
Equipment Design
Equipment Maintenance
Abnormal ConditionsOperating Troubles
Work Accidents
Management Systems (Education and Training)
Management Systems (Standards)
Employee Behavior (Procedure Deviation)
Employee Behavior(Presumptions)Profit
Operating andManagement Activities
Safe and Stable Operations
allocation ofBusiness resources
Safety Improvement Budgets Allocated to Plants (from FY2013)
Review of Plant and Equipment Maintenance and Repair Plan to Eradicate Operating Troubles and Work Accidents (from FY2015)
Abnormal Conditions, Operating Trouble, Work Accidents, Dissemination of Information
• HAZOP• FMEA (Failure Mode & Effect Analysis)• Incident Case Study• Disaster Assumption• Change Management
• Education and Training (Transmission of operating technology)
• KYT*1, PTY*2
• Training for Emergencies• Upgrading Safe Work Behaviors• Incident Case Studies
direct dialogue
insufficient improvements
1. addressing insufficient equipment maintenance: coMPany-wide toP-down activities
improvement Proposal
accident-Prevention system employee Behavior-Based defensive
(FY2013 Safety Measure Improvement Budget)
insufficient improvement
decision by Manager
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Product Safety Tosoh’s raw materials and products contain specified-use and restricted substances under Japan’s Fire Prevention Law, Law Concerning Poisons and Other Harmful Substances, and other laws. Ensuring safety each step along the way is essential in all operations, including
R&D, manufacturing, logistics, and quality assurance. Tosoh complies with safety require-ments under its RC goals of “chemical prod-uct safety,” “quality assurance,” “logistical safety,” and other internal directives.
safety and reliaBility
R&D
Logistics Quality Assurance
Production
R&D involves improving and developing products, from basic materials to cutting-edge technologies. Tosoh continues to develop products that meet customer needs on a daily basis.
Tosoh conducts training programs for the companies that transport its products. It aims to raise safety awareness and establish safe supply lines between itself and its customers.
Providing stable product supplies is a chemical com-pany’s main mission. When adding new equipment, expanding capacity, and maintaining and upgrading
facilities, the company establishes commit-tees to assure that safe operations are
achieved.
Safe Sourcing of Chemical ProductsTosoh engages in initiatives to comply with domestic and foreign legal regulations for the safe handling of chemicals. These include
assessing product safety and providing prod-uct information.
Tosoh Initiatives• Tosoh provides safety data sheets (SDS) along with its products to ensure the safe handling of its products
in accordance with unified international classification and labeling requirements known as the Globally Harmonized System of Classification and Labeling of Chemicals (GHS).
• Tosoh submits notifications, registrations, and applications in compliance with such domestic laws as the Chemical Inspection, Health and Sanitation, and Pharmaceuticals Laws.
• Tosoh complies with such foreign legal regulations as Europe’s Registration Evaluation Authorization and Restriction of Chemicals (REACH).
• Tosoh participates in the autonomous Japan Initiative of Product Stewardship (JIPS) movement promoted by the Japan Chemical Industry Association. JIPS aims to minimize the effects of chemical products on health and the environment.
ensuring the safety of new ProductsOur product development process includes in-house product safety screening to deal with new chemical com-pounds or products. These rules ensure the safety of employees and customers when handling from raw materials to final products. In developing a new product, our R&D, Manufacturing, Quality Control, and Sales Divisions partici-pate in screening meetings to confirm such issues as legality and manufacturing, quality control, transportation, and application methods.
Eco-Friendly Polyurethane Foaming Catalyst RZETA®
Amine catalysts are indispensable to the urethane foaming reaction that produces the polyurethane used in sponges and automobile seats. With current cata-lysts, the amine remains within the polyurethane even after the foaming reaction and is eventually released as volatile organic compounds (VOCs). These VOCs are responsible for the pungent odor that is one of the causes of car sickness and for the discoloration of other plastics, among other problems.
RZETA has the same catalytic reaction of traditional products, but it does not emit VOCs. Tosoh’s in-house inspection committees have ensured product safety. RZETA will contribute to a more comfortable life for users through applications in such daily-use products as automobile seats, furniture, and cushioning materials. A RZETA production plant is being constructed at the Nanyo Complex and is scheduled for completion in autumn 2014.
Tosoh has implemented a quality management system. It also emphasizes responding promptly to customer inquiries.
R&D
development Planning committee
design screening committee
divisional Product safety screening committee
Product safety screening committee
r&d stage commercialization stage
Responsible Care
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Preparedness for Major EarthquakesThe Great East Japan Earthquake of 2011 taught Japan’s Central Disaster Prevention Council and other groups that major earth-quakes might occur and cause serious damage even where tremors are rare. Meetings in March and August 2012 produced conclusions about earthquakes and tsunami based on anal-yses of the Nankai Trough using megaquake models. Those conclusions, published in December 2013 and March 2014, included maps and more indicating the impact of tsu-nami on Yamaguchi Prefecture, home to Tosoh’s Nanyo Complex, and Mie Prefecture, home to Tosoh’s Yokkaichi Complex.
The Nanyo and Yokkaichi Complexes com-ply with all legal requirements, including the Construction Standards, High-Pressure Gas Safety, and Fire Service Act. They are, with the exception of some electric power generation, designed to safely cease operation at a speci-fied magnitude of earthquake. Working groups at the complexes confirm equipment and facility earthquake resistance and formu-late tsunami and evacuation procedures—with priority on saving lives.
safe oPerations froM the Plant design stageAfter the decision has been made to launch a product, the next step is construction of a plant. Designing such a facility first requires that such details as the production processes, environmental impact and related laws, and the construction schedule are verified by the Technology Evaluation Committee established under the company’s rules. In compliance with the construction schedule, Tosoh must make submissions related to occupational health and safety and environmental impact to the relevant government authorities. Only then can construction proceed. Efforts are made to raise the safety awareness of workers with lectures, patrols, and other activities during daily checks on construction progress. In the final stages of construction, the plant must undergo an on-site inspection by government officials. Managers and others involved in the newly completed plant’s operations hold a pre-operations safety inspection. Commercial production commences following an on-site verification of conditions with an emphasis on safe opera-tions and the working environment for operators.
dePendaBly delivering Products to custoMersTosoh’s products are delivered to customers primarily by truck and ship. Because our products can contain sub-stances regulated under Japan’s Fire Services Act and Poisonous and Hazardous Substances Control Law, manag-ing their handling during transportation is vital. The Logistics RC Promotion Committee meets once every two months to discuss the verification of incidents, share information, and take steps to prevent repeats of incidents and to disseminate safety information. The committee comprises representatives of Tosoh Corporation; the shipper; the main logistics contractor, Tosoh Logistics Corporation, and other associated logistics companies. Its measures to alert people at cooperating companies about safety measures include regular patrols of product shipping areas and education and programs. Tosoh also has concluded a prevention and firefighting contract for Hazardous and Noxious Substances (HNS) with Japan’s Marine Disaster Prevention Center. This signifies Tosoh’s preparedness for emergencies when ship-ping harmful liquid substances including oil.
iMProving custoMer confidenceTosoh has acquired ISO 9001 certification, an international quality management standard, for its Nanyo and Yokkaichi Complexes. Our Bioscience Division, which handles in vitro diagnostic agents and medical devices, has also gained ISO 13485 certification, which covers standard requirements for medical devices. Tosoh seeks to improve product quality, reduce the number of claims against its products, and ensure that customers can use its products safely and with confidence. Among its efforts to ensure customer safety, the company issues safety data sheets (SDS) listing the dangers, characteristics, and handling methods for its products; provides product-safety pamphlets; and holds user training sessions. Our Bioscience Division, moreover, has established a Customer Support Center within the Tokyo Research Center that deals directly with customers’ inquiries or concerns.
Production Logistics
Quality Assurance
Production Capacity Expansion to Meet Growing Demand High-Silica Zeolites HSZ®
Tosoh increased its production capacity for HSZ at its Yokkaichi Complex in March 2013 to meet growing demand, particularly for application in catalytic convert-ers for diesel automobiles. Before construction began, the Technology Evaluation Committee approved the technological aspects of the job in November 2011. The safety of the facilities was then verified in a pre-
operations safety inspection before commercial produc-tion began in April 2013. The plant’s performance has been stable since. Demand for HSZ continues to grow. And Tosoh is expanding its production capacity at the Nanyo Complex, with completion targeted for September 2014. The Technology Evaluation Committee approved this expansion in March 2013. A pre-operations safety inspection awaits.
Marine Transport Safety All related personnel work daily to ensure safetyTosoh has more than 20 large and small docks handling approximately 4,000 ships annually. Our dock operators con-duct business mostly with overseas ships and are regularly in direct contact with oceangoing vessels. In so doing, they are required to comply with the International Convention for the Safety of Life at Sea (SOLAS), an international maritime safety treaty. In addition to concluding a written safety verifi-cation document containing safety information such as the cargo and the loading port, our dock operators must conduct regular training and monitor the ships before they dock. Our dock operators and other related workers hold safety training, for example, on oceangoing vessels while the ships
are docked, raising their level of safety preparedness. And part of their monitoring process involves mutually raising their own skill levels as well as the skills of ship staff through document-based inspections. Tosoh also participates enthusiastically in training carried out by Japan’s Coast Guard, police and firefighting organizations, and other groups. The Marine Transport Subcommittee established within the Safety Cooperation Society is formed by Tosoh and other cooperating companies that oversee domestic cargo ships. The subcommittee holds regular safety meetings to horizon-tally share information on or strategies for dealing with safe-ty incidents or the special properties of products. It also patrols visiting ships and awards safety commendations to ships with excellent safety measures.
Cleaning Performance Evaluation Lab for Industrial Solvent HA-IS16HA-IS16 is the highly safe, next-generation industrial solvent that we launched in fiscal 2013. It is nonflam-mable and does not contain halogens. It has also such high-performance properties as cleaning effectiveness, fast drying, and recoverability.
Tosoh established a dedicated performance evalua-tion lab for HA-IS16 at its Tokyo Research Center to pro-vide customers with an opportunity to test the product before introducing it in their cleaning systems and to provide after-sales service and other support. The lab has specialized equipment that simulates cleaning at different stages of the process. Customers are able to observe and thereby make their own trustworthy evaluations of the product.
Responsible Care
09
Following the explosion and fire at the Nanyo Complex’s No. 2 VCM Plant in November 2011, we have undertaken group-wide initiatives based on safety reform guide-lines drafted as a result of the accident investigation. Those initiatives include improving employee training and education, reviewing operating manuals, and identifying potentially unsafe production locations. We regret that these efforts have not elim-inated incidents, chiefly because of short-
comings in managing equipment and plant maintenance. Tosoh is committed to safety and has substantially increased its budget for plant maintenance. Translating commitment into action requires that each of us must raise our abilities to predict dangers, offer insights, and think of initiatives from new perspectives. Manufacturing products invariably emit chemical substances into the atmosphere, water, and soil. To lessen our environmental
Message froM the chairMan of the rc coMMitteeRC auditing discussions at Tosoh relate to day-to-day issues. Discussion outcomes are reflected in RC Committee policies, and ensuing activities are run through the plan-do-check-act (PDCA) cycle for refinement.
Purchasing and Logistics
Business Divisions
Research Centers
Manufacturing Complexes and Offices
RC Committees in Manufacturing
Complexes and Offices
Sections and Departments
Board of Directors President
RC Committee Secretariat RC Committee
Responsible Care Promotion System To promote its RC activities, Tosoh has estab-lished an RC Committee. The director responsible for the company’s Environment, Safety and Quality Control Division chairs the committee, and the committee’s members include general managers from Tosoh’s Purchasing and Logistics Division, operating divisions, manufacturing complexes and
offices, and research centers. Our RC Committee decides the RC activity plan for each year and reports it to Tosoh’s president, after which our Board of Directors makes the final decision on the plan. Our manufacturing complexes and offices then determine the details and carry out the planned activities.
impact, we must manage our chemical prod-ucts from development to production to use. And to safely and efficiently deliver prod-ucts to customer satisfaction, it is important that we thoroughly manage the logistics of their transport. We must at all times commu-nicate with the providers of logistics services to prevent distribution problems. We know that it is important for everyone who handles, uses, and is even remotely exposed to Tosoh products—including
employees, distributors, customers, and com-munity members—to act in concert. So we work to ensure such cooperation.
Yasuyuki KoieChairman of the RC Committee, Managing Director
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10
Results of RC Activities in Fiscal 2014 Objectives of RC Activities in Fiscal 2015
Priorities Priorities
Promoted Employee Participation in RC Activities Based on Safety Reform Initiatives Instill a Thorough Awareness of RC Activities in Each Employee
Safety and Disaster Prevention • Experienced six incidents despite safety reform measures across all corporate activities¨ Investigation of cause and prioritization
• Based on information issued by the public sector, prepared report on issues related to earthquake and tsunami policies that takes into account estimates of potential damage
• Strengthen the weakness in equipment management and plant maintenance that was the cause of trouble in fiscal 2015
• Implement medium- to long-term plans for dealing with earthquakes and tsunami
Environmental Preservation • Attained RC objectives (369 metric tons/year) for the emissions of substances covered by the Pollutant Release and Transfer Register (PRTR) system
• Achieved RC objectives (1,768 metric tons/year by 2015) for the volume of industrial waste for final disposal
• Promoted the disposal of equipment containing polychlorinated biphenyls (PCBs)¨ Made decision to complete the disposal of equipment containing high concentrations of
PCBs during fiscal 2014
• Continue managing the emissions of substances covered by the PRTR system
• Continue to reduce the volume of industrial waste for final disposal
• Complete the disposal of equipment containing high concentrations of PCBs and formu-late plans for the disposal of equipment containing lower concentrations of PCBs.
Chemical and Product Safety • Complied with new Japan Industrial Standards (JIS) requirements for safety data sheets (SDS)
• Prepared SDS and labels to comply with the transition to the Global Harmonized System of Classification and Labeling of Chemicals (GHS) system in Thailand and South Korea
• Continue to comply with new JIS requirements for SDS
• Make further progress in complying with restrictions regarding chemical substances in overseas markets
Quality Assurance • Witnessed a decline in claims regarding logistical quality because of strengthened over-sight and guidance. Experienced a claim because of deficiencies in process and plant maintenance
• Promote continuing quality assurance and continue to reduce claims among parties along the logistics chain through detailed claims analyses
Logistical Safety • Implemented measures to raise the awareness of product handling among concerned parties to deal with troubles when transporting goods
• Promote measures to reduce logistical problems based on analyses of issues and reduce problems related to route transport
Dialogue with the Public • Encouraged teamwork with communities
• To promote risk-related communications, prepared a pamphlet to educate the public on how to deal with leakages
• Continue to encourage teamwork with the community
• Offer clear information to stakeholders regarding risk
resPonsiBle care activities
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11
environMent and society
Input and OutputOur products are manufactured by reaction, cracking, and distillation. Tosoh’s power gen-eration plants and coal-fired boilers provide the electricity and steam, respectively, for reactions and cracking. We use industrial water and seawater to cool reactions.
We manage our generation of electricity and steam to balance our product output. We also manage our emissions to lessen the bur-den our production activities place on the environment.
INPUT OUTPUT
CO2 (based on fuel consumption)
CO2 (based on non-energy derived consumption)
CO2 (based on waste disposal fuels) N2ONOX
SOX DustPRTR-designated substances
565654
19420
7,320260292
millionmetric tons
millionmetric tons
millionmetric tons
millionmetric tons
tons
tons
tons
tons
tons
tons
tons
tons
tons
tons
CODPhosphorusNitrogenPRTR-designated substances
6601822855
Landfill wastePRTR-designated substances
1,4000
2.55 million
metric tons
• Coal• Oil coke• LNG, etc.
54.17 million
metric tons
• Industrial-use water• Water supply
6.45 million
metric tons
• Naphtha • Salt• Limestone• Ethylene, etc.
Products 6.48 million metric tons
Energy Consumption
Raw Materials
Water Consumption (Metric Tons)
Atmospheric Emissions (Metric Tons)
Soil Emissions (Metric Tons)
Water Emissions (Metric Tons)PlantsReactions, crackingDistillation, cooling
BoilersElectricity and
steam generation
Production Activities
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12
Communications ActivitiesLearning Opportunities for ChildrenEvery year, we invite children attending mid-dle schools in the areas neighboring the Nanyo Complex to visit its facilities. Students interact with Tosoh employees and thereby increase their understanding and interest in chemistry and the chemical industry as a potential career path. We also provide opportunities for other groups to visit the Nanyo Complex to similar-ly deepen an understanding of the chemical industry and specifically of Tosoh. Local chambers of commerce, for example, sponsor Summer Vacation Industry Tours for Children and Parents that, along with other group tours of primary and middle school students, visit the complex.
Opportunities for Interaction with ChildrenTosoh also passes on the specialized knowl-edge, skills, and experience of its personnel to schoolchildren and their teachers in the communities near the Yokkaichi Complex. In response to requests from local govern-ments, Yokkaichi Complex personnel teach chemistry in local classrooms, offer training courses for local school teachers, and conduct group plant tours for students and teachers to enhance the level of instruction in chemistry in schools throughout the neighboring communities. At the Yokkaichi Children’s Chemistry Seminar, held in August 2013, Tosoh personnel taught student attendees how to make bath powder using Tosoh’s sodium bicarbonate.
Effective Use of ResourcesTosoh makes a significant contribution to recycling in its operations and in the sur-rounding communities. The company collects waste produced on location and from house-holds and other companies near its operations and recycles it into new products. Tosoh is able to process much of its waste, such as coal ash, as raw materials at its cement plant. At the Nanyo Complex manu-
facturing hub, the company is able to process not only industrial waste from nearby com-panies but also household garbage from local communities. In fiscal 2014, Tosoh’s volume of industrial waste for final disposal amount-ed to only 0.4% of its industrial waste pro-duced. Tosoh will continue to use resources as effectively as possible.
Industrial Waste EmissionsWe dispose of and recycle almost all of our industrial waste. What we don’t process, we make available for use outside the Tosoh Group or dispose of in landfills. Before issuing a manifest on handling industrial waste, Tosoh double checks the
specifics of each waste disposal. Through our manifests, we supervise waste leaving our facilities on-site and confirm final waste dis-posal or reuse. We also annually inspect our disposal sites.
Recycled as raw material for cement
Recycled by Tosoh
345,500metric tons
Reused by Tosoh
8,600metric tons
Effective Use Outside Tosoh
43,500metric tons
Reused as fuel for cement plant, etc.
Waste used by commissioned recycling companies399,000
metric tons
Production of Industrial Waste
Landfill
1,400metric tons
Responsible Care
13
governance
corPorate governance organization(As of June 30, 2014)
Election/Resignation
Election/Resignation
Audits
Audits
AuditsAudits
Training
Reports
ReportsReport, Explanations
Discussion on important proposals
Training, Audits
ReportsControl
Instructions, Supervision
Consent on appointments and reappointmentsJudgment regarding appropriateness of accounting audits
Reports
Reports
Reports
ReportsReports
Instructions
Instructions
ReportsReports
Reports
Reports
Advise, Request
Advise, Request
Election/Resignation
Election/Resignation,Supervision
General Meeting of Shareholders
Board ofDirectors’ Meeting(13 directors, including
1 outside director)
Accounting AuditorsAuditor’s Committee
Office Meeting(4 auditors, including 2 outside auditors)
Directors & Auditor Reporting Meeting
(Reports on important matters)
ExecutiveCommittee Meeting(President, Senior Managing
Director)Deliberations on important
proposals, etc.
Management Reporting Meeting
(All Directors, Statutory Auditors, Division Managers and General Managers
of related departments)Reports on operating conditions,
explanations relating to decision pending
President
Group Companies
Divisions
Directors
Auditing Section
Internal Control Committee
ComplianceCommittee
Meeting of Auditors’ Committee Office Secretariat
Antimonopoly Compliance Committee
Export Supervision Committee
RC Committee
Tosoh is structuring to respond promptly to a changing business environment to thereby raise corporate value. We endeavor to manage our activities soundly and to a high degree of fairness and transparency. We have formed five corporate governance committees consisting of directors and gener-
al managers from across the Tosoh Group: Internal Control Committee, Compliance Committee, Antimonopoly Compliance Committee, Export Supervision Committee, and RC Committee. All five function to gain the trust of society.
Responsible Care
14
Internal Control CommitteeThe Internal Control Committee monitors Tosoh’s compliance with the financial report-ing requirements of Japan’s Financial Instruments and Exchange Act. Specifically, it supports the design and improvement of our internal controls. It assesses the effectiveness and, based on assessments by our Audit Office, the status of our internal controls and formulates plans. It also prepares and publicly issues internal con-trol reports. Its members are general manag-ers from related departments.
Compliance CommitteeOur Compliance Committee structures our compliance systems; formulates our corporate behavior guidelines; and prepares and imple-ments our compliance-related training, research, and fact-finding. In April 2014, it revised the parent company’s Japanese-language code of conduct and expanded it to the Tosoh Group. The new Tosoh Group Code of Conduct was produced in English and Chinese and establishes high standards for groupwide compliance. The committee also has established a com-pliance hotline to allow employees and others to anonymously report compliance-related indiscretions. In addition, it has a section on our intranet site highlighting the latest com-pliance-related developments. Also included are quizzes on compliance, real-life examples of compliance, and more to heighten employ-ee awareness of the importance of compliance.
The Tosoh Group Code of Conduct Basic PolicyEach of us will comply with all laws, internal regulations, and social mores related to our business activities.
Guidelines
1. Create workplaces where all employees can draw on their capabilities to the full-est (comply with laws, regulations, and norms in society and with rules of employment; respect human rights; forbid discrimination and harassment; and create a healthy workplace)
2. Respond to the expectations of customers, business partners, and shareholders (prevent bribery and corruption, comply with import and export laws and regula-tions and with antitrust laws and regulations, prohibit ties with antisocial ele-ments, and prevent insider dealings)
3. Contribute to the healthy development of society (promote environmental conservation and protection, maintain a safe and clean workplace, and raise the awareness of stewardship for social responsibility)
Responsible Care
15
Human Resources SystemTosoh’s human resources system strives to inspire and then reward employees who exhibit a pro-active attitude based on a strong sense of ownership.
Employee Education Programs
Tosoh has traditionally provided education and training programs to increase learning and interaction between company employees, cre-ate a stimulating workplace, and foster cre-ative leaders. These education programs include on-site training, manager and other rank-based training sessions, vocational classes, and classes that promote internationalization. After 21 years, Tosoh is once again providing this type of training program on ships. Three employees participated in a program in fiscal 2014 that visited Singapore, Malaysia, and Thailand.
Recruitment Policies Promote DiversityTransmitting technical skills from experienced to new workers is among Tosoh’s recruitment policies. So we reemploy people after they retire. We also employ women, and we employ physically challenged persons to the legally recommended 2.0% of our workforce.
Principles Creative Organization Enabling employees to realize their potential
Challenging Environment Applying a grading system for thorough employee evaluation
Impartial Treatment Rewarding employees who go the extra distance
huMan resource data
regular employees
newly hired personnel
reemployed personnel
average age of regular employees
average number of years worked by employees
ratio of employees leaving
Fiscal 20132,516 133
239 40.5 18.8 2.27%(195) (12)
Fiscal 20142,548 148
239 40.0 18.4 0.86%(203) (16)
Note: Figures in parentheses are the number of female employees.
huMan resources
Responsible Care
16
key data and references
(Billions of Yen)
Items Major activities Capital spending1 Current expenditures2
FY2012 FY2013 FY2014 FY2014
Costs within business area
1.34 2.30 0.85 11.51
Pollution prevention
Exhaust gas and waste-water treatment
0.24 1.44 0.69 7.00
Global environmental protection
Electric power and fuel reduction measures
0.60 0.44 0.10 1.86
Resource recycling
Raw material and waste product recovery
0.50 0.42 0.06 2.65
Administration Environmental manage-ment, impact assess-ment, environmental report publishing, envi-ronmental load auditing
0.03 0.02 0.05 0.47
Research and development
Environmental load reduction technology and environmental product development
0.19 0.03 0.01 1.14
Social activities Association fees, plant-ing, community contribu-tions
0.00 0.00 0.00 0.02
Other 0.00 0.00 0.00 0.07
Total 1.56 2.35 0.91 13.21
1. Expenditures on capital investments for environmental protection purposes.2. Expenditures related to such expenses as variable and labor costs for environmental protection purposes.
Environmental AccountingTosoh applies environmental cost-benefit accounting to quantify its environmental pro-grams. In fiscal 2014, because major projects were still ongoing, investments in environ-
mental preservation amounted to ¥910 mil-lion, or ¥1.44 billion less than in the previous year.
environMental Protection costs econoMic effects
safety investMents
(Millions of Yen)
Items FY2012 FY2013 FY2014
Financial gains Gains from reusing industrial waste from other companies, gains from sales of irregular prod-ucts
6.3 5.8 5.4
Cost savings
Energy Energy cost savings from energy efficiency 24.2 36.5 24.7
Resources Waste disposal cost savings from reduced resource use and recycling
47.8 16.1 27.3
Total 78.3 58.4 57.4
(Millions of Yen)
Items FY2012 FY2013 FY2014
Equipment improvements 336 1,176 965
Work safety and work environment improvements 74 192 176
Earthquake and other natural disaster measures 52 148 368
Other 6 36 45
Total 468 1,552 1,554
Safety InvestmentsSince the explosion at the No. 2 VCM pro-duction facility at the Nanyo Complex, which occurred in fiscal 2013, Tosoh has increased its
budget for safety measures and improvements as a company.
Responsible Care
17
Environmental ProtectionPreventing Atmospheric PollutionTosoh’s boilers and heating furnaces release the following substances into the atmosphere such as sulphur oxide (SOx), nitrogen oxide (NOx), and dust emissions. The company car-ries out its manufacturing operations while managing its emissions according to voluntary emission standards for these substances that are stricter than the emission levels set by law
and agreed on with local governments. There were nevertheless some emission problems in fiscal 2012 because of problems with the desulfurization equipment at the Yokkaichi Complex. After corrective measures, emission levels have returned to previous, acceptable levels. Tosoh is dedicated to improving the air quality at its manufacturing facilities.
SOx (Metric Tons per Year)
500
400
300
200
100
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
Dust (Metric Tons per Year)
400
300
200
100
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
NOx (Metric Tons per Year)
10,000
8,000
6,000
4,000
2,000
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
Products
0.74 million metric tons
Atmospheric Emissions
Water Emissions
Soil Emissions
Domestic GroupCompanies
(18 wholly owned manufacturingcompanies)
Raw Materials
1.1
Energy Consumption
Crude oil equivalent 250,000 kl
Water ConsumptionExcluding seawater
16
INPUT OUTPUT
million metric tons
million metric tons
CO2 (emitted by energy sources)
NOxSOx DustPRTR-designated substances
0.58 480200
27360
tons
tons
tons
tons
million metric tons
million metric tons
COD PhosphatesNitrogen PRTR-designated substances
1101.844
9
tons
tons
tons
tons
Landfill wastePRTR-designated substances
0.027 0 tons
inPut and outPut for grouP coMPany oPerations
Responsible Care
18
Industrial Waste DisposalTosoh’s Responsible Care (RC) target for its net amount of industrial landfill waste is 1,768 metric tons by fiscal year 2016. This target accords with the goal of a 65% reduction by fiscal 2016 from the fiscal 2001 level set by the Japan Federation of Economic Organizations (Keidanren). The company’s total landfill disposal, how-ever, has been increasing because of the expansion of the Yokkaichi Complex’s opera-tions. Tosoh nonetheless is making effective use of its resources to reach its target. During fiscal 2014, in fact, Tosoh began considering landfill disposal targets beyond fiscal 2016.
COD (Metric Tons per Year)
1,000
800
600
400
200
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
Nitrogen (Metric Tons per Year)
400
300
200
100
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
Total Industrial Waste (Metric Tons per Year)
5,000
3,000
2,000
1,000
0FY
4,000
’01 ’10 ’11 ’12 ’13 ’16’14
Nanyo Complex Yokkaichi Complex Company-wide target
Phosphorus (Metric Tons per Year)
40
30
20
10
0FY ’10 ’11 ’12 ’13 ’14
Nanyo Complex Yokkaichi Complex
Preventing Water PollutionWater used for industrial purposes, such as for cooling, by Tosoh’s manufacturing facilities is disposed of as wastewater into nearby bodies of water. The company manages its wastewa-ter emissions according to voluntary emission standards for these substances that are stricter than the emission levels set by law and agreed
on with local governments. In fiscal 2014, the company’s chemical oxygen demand (COD) and nitrogen emissions decreased because of the implementation of nitrogen emissions reduction investment at the Yokkaichi Complex and the closing of the No. 1 ethylene-amine production line at the Nanyo Complex.
Emissions of PRTR SubstancesTosoh is implementing various measures to reduce its emissions of Class I–designated substances covered by Japan’s Pollutant Release and Transfer Register (PRTR) under the nation’s Chemical Substances Law. The company’s Class I emissions totaled 347 met-ric tons in fiscal 2014, well in line with its RC target of less than 369 metric tons.
Emissions of PRTR Substances (Metric Tons per Year)
800
400
200
0FY
600
’10 ’11 ’11 ’12 ’13 ’14
After changes in designated substances under law
Nanyo Complex Yokkaichi Complex
Responsible Care
19
Prtr suBstances: eMissions and voluMesNANYO COMPLEX (Metric Tons)
Substance Atmospheric emissions
Water emissions
Soil emissions
Landfill disposal
Total emissions inside plant
Sewage disposal
Transport outside plant site
Vinyl chloride (chloroethene) 42.0 2.1 0.0 0.0 44.1 0.0 0.0
Vinyl acetate 5.6 5.5 0.0 0.0 11.1 0.0 0.0
Chloroform 2.1 8.2 0.0 0.0 10.3 0.0 0.0
1,2-dichloroethane 8.9 1.4 0.0 0.0 10.3 0.0 29.0
Ethylenediamine 2.9 6.6 0.0 0.0 9.5 0.0 0.0
1,4-dioxane 6.8 0.9 0.0 0.0 7.7 0.0 73.0
1,1,2-trichloroethane 6.9 0.4 0.0 0.0 7.3 0.0 43.0
Methacrylic acid 0.0 5.1 0.0 0.0 5.1 0.0 0.0
1,3-butadiene 1.8 1.5 0.0 0.0 3.3 0.0 0.0
Water-soluble zinc compounds 0.0 3.1 0.0 0.0 3.1 0.0 0.0
n-alkylbenzene sulfonic acid and its salts 0.0 3.0 0.0 0.0 3.0 0.0 0.0
Styrene 1.8 0.9 0.0 0.0 2.7 0.0 0.0
Triethylenetetramine 0.0 2.2 0.0 0.0 2.2 0.0 0.0
Tetraethylenepentamine 0.0 1.0 0.0 0.0 1.0 0.0 0.0
Dioxins (mg-TEQ) 12.0 73.0 0.0 0.0 85.0 0.0 0.0
41 other substances 3.3 1.6 0.0 0.0 4.9 0.0 253.7
YOKKAICHI COMPLEX (Metric Tons)
Substance Atmospheric emissions
Water emissions
Soil emis-sions
Landfill disposal
Total emissions inside plant
Sewage disposal
Transport outside plant site
n-hexane 170.0 0.3 0.0 0.0 170.3 0.0 1.2
1,2-dichloroethane 11.0 0.0 0.0 0.0 11.0 0.0 0.7
Cumene/Isopropylbenzene 8.5 0.0 0.0 0.0 8.5 0.0 0.1
Triethylamine 0.0 6.2 0.0 0.0 6.2 0.0 0.0
Vinyl chloride (chloroethene) 4.6 0.0 0.0 0.0 4.6 0.0 0.0
Vinyl acetate 3.7 0.8 0.0 0.0 4.5 0.0 0.0
Water-soluble zinc compounds 0.0 3.6 0.0 0.0 3.6 0.0 0.0
Xylene 2.9 0.0 0.0 0.0 2.9 0.0 5.7
Toluene 2.6 0.0 0.0 0.0 2.6 0.0 0.4
2,6-ditertialbutyl-4-cresol 1.8 0.0 0.0 0.0 1.8 0.0 0.0
Benzene 1.5 0.0 0.0 0.0 1.5 0.0 0.9
Dichlorodifluoromethane (CFC-12) 1.2 0.0 0.0 0.0 1.0 0.0 0.0
Chlorodifluoromethane (CFC-22) 1.0 0.0 0.0 0.0 1.0 0.0 0.0
Dioxins (mg-TEQ) 1.3 2.6 0.0 0.0 3.9 0.0 0.0
22 other substances 0.9 0.3 0.0 0.0 1.2 0.0 38.7
Responsible Care
20
Transport Volume (Million tons)
8
6
4
2
0FY ’10 ’11 ’12 ’13 ’14
Rail Ship Truck
CO2 Emissions and Basic Energy Unit (Metric tons) (Basic energy unit)
60,000
40,000
30,000
20,000
0FY
10,000
18
17
16
15
12
13
14
50,000
’10 ’11 ’12 ’13 ’14
Rail Ship Truck Basic energy unit
Transport Metric Ton-Kilometers (Millions of metric ton-kilometers)
1,400
1,050
700
350
0FY ’10 ’11 ’12 ’13 ’14
Rail Ship Truck
Imposing Logistics Environmental Measures In fiscal 2014, the metric ton-kilometers logged by our transport operations increased 13% year on year, to 1,151 million metric ton-kilometers.1 The heightened transport is attributed to an increase in the production volume of commodity goods, such as soda and vinyl chloride products, and naturally resulted in higher emissions. CO2 emissions neverthe-less rose only 6%, to 51,000 metric tons, because a high proportion of the increased production volume was transported by sea, resulting in lowering our CO2 emissions overall.
Tosoh ships a large proportion of its pro-duction by sea and therefore continues holding instructional meetings with sea transport companies on energy savings to further reduce its CO2 emissions. As a result of our increase in the proportion of goods shipped by sea, the cooperation of transport companies, and other measures, our basic energy unit in fiscal 2014 fell to 16.2, from 17.4 a year earlier, an improvement of 1%.2 Tosoh is committed to ongoing efforts to reduce its CO2 emissions.
Combating Global WarmingTosoh’s fiscal 2014 target for its basic energy consumption was 86.9% compared with fiscal 1991, an improvement of 0.6% from a year earlier. Although our basic consumption improved, our emissions of greenhouse gases, particularly CO2 released from primary fuel
consumption, increased by about 90,000 metric tons over fiscal 2013 levels, to 5.45 mil-lion metric tons. Tosoh will strive to reduce its energy use and greenhouse gas emissions through more efficient production processes and upgraded energy conservation activities.
Energy Consumption and Basic Unit(Crude Oil Equivalent, millions of liters) (Energy Consumption per Unit)
2,500
1,000
500
0FY
2,000
100
90
85
80
75
95
1,500
’91 ’10 ’11 ’12 ’13 ’14
Energy consumption Energy consumption per unit
Atmospheric Emissions of Greenhouse Gases (Millions of metric tons)
800
600
400
200
0FY ’10 ’11 ’12 ’13 ’14
CO2 from primary fuel consumption CO2 from non-energy derived consumption Other gases (N2O) CO2 from waste fuel consumption
1. Metric ton-kilometer = transported weight (metric tons) × distance transported (kilometers)
2. Basic energy unit = crude oil equivalent consumption amount (kiloliters) ÷ metric ton-kilometer
3-8-2, Shiba, Minato-ku, Tokyo 105-8623, JapanTel: +81 (3) 5427 5118 Fax: +81 (3) 5427 5198
[email protected] www.tosoh.com
