corporate governance/internal control - 荏原製作所 · 2020-03-02 · corporate governance at...

Corporate GovernanceAt EBARA, we think it is of the utmost importance to enhance corporate governance and to continue to improve it, so that we can be thought of as a reliable company by our stakeholders and continue contributing to society.

Corporate Governance StructureBased on Japan’s Companies Act, EBARA has established a governance structure comprising of the Board of Directors, the Audit & Supervisory Board, and an Independent Auditor.

Board of DirectorsThe Board of Directors, the highest business decision-making body and the supervisory functions, is composed of 12 members (all Japanese men), and 4 of these are independent Outside Directors who have no special interest in EBARA. The outside directors provide advice and supervise operations from an independent standpoint to enhance the validity of the decision-making process. The position of Chairman of the Board of Directors is held by a board member who does not have the right to represent the company, so as to maintain distance from the President and Representative Director. From the standpoint of diversity, the company is considering the appointment of women and persons of foreign nationality as directors in several years.

Audit & Supervisory BoardThe Audit & Supervisory Board is composed of five members, three of whom are Outside Audit & Supervisory Board members with no stake in EBARA. Based on auditing plans and auditing principles drawn up by the Audit & Supervisory Board, it audits the execution of management duties by the Directors. At the same time, it exchanges information and opinions with the Representative Director and with the Independent Auditor to ensure the effectiveness of auditing activities.

Discretionary Governance StructureEBARA has established a number of discretionary governance structures to separate the company’s business execution and management/supervision, speed up the business decision-making process and enhance the supervisory functions of the Board of Directors.

Discretionary Governance

StructureRole in Corporate Governance

Executive Officer System

The company has separated the decision-making and management/supervision functions of the Board of Directors and the functions of the Executive Officers, who are in charge of the conduct of operations of business division.

Nominations Committee

This committee ensures transparency and objectivity in the selection of Directors and Executive Officers. More than half the members of the committee are Outside Directors and the resolutions are made by majority vote.

Compensation Committee

This committee ensures transparency and objectivity in the determination of their compensation. More than half the members of the committee are Outside Directors and the resolutions are made by majority vote.

CSR Committee

The company established the CSR Committee to receive reports periodically from the responsible division about overall CSR initiatives, including compliance and internal control, and to provide directions for improvements as required. Directors (including Outside Directors), Full-Time Audit & Supervisory Board Members, and members of the internal audit division attend the meetings of the committee.

Outside DirectorName Reason for appointment

Akio MikuniTo use his extensive knowledge and expertise as a specialist in corporate credit rating and financial markets to benefit the business management of the Company.

Sakon UdaTo use his extensive knowledge and expertise as a specialist in business management strategy to benefit the business management of the Company.

Masao NamikiTo use his extensive experience and expertise as a senior executive of a listed company to benefit the business management of the Company.

Shiro KuniyaTo use his specialist knowledge and insight as an attorney to benefit the business management of the Company.

Outside Audit and Supervisory Board MemberName Reason for appointment

Yoshihiro Machida

To use his insight as a university professor specializing in corporate auditing and internal control to benefit the auditing issues of management and the performance of Director's duties.

Fumio Takahashi

To use his specialist knowledge and insight as a certified public accountant to benefit the auditing issues of management and the performance of Director's duties.

Tadashi UrabeTo use his specialist knowledge and insight as an attorney to benefit the auditing issues of management and the performance of Director's duties.

Corporate Governance Reporthttp://www.ebara.co.jp/en/ir/policy/corporategovernance.html

Outline of EBARA’s Corporate Governance Framework As of April 2014

Cooperation

Exchange of Information and Opinions

General Meeting of Shareholders

Board of DirectorsPresided over by the Chairman

President and Representative Director

Executive Officer Meeting

Subsidiaries and Affiliated Companies

Reporting

Selection/Dismissal Selection/DismissalAuditing

Exchange of Opinions

Auditing

Supplementary Assistance

Selection/Dismissal/Surveillance

Guidance/ Transmission of Information

Company/Corporate

Guidance

Support for Management and Operational Execution

Management Meeting

Risk Management Panel

CSR Committee

Management Planning Committee

Disclosure Committee

Nominations Committee

Compensation CommitteeAudit & Supervisory Board

Independent Auditor

Advice, directions for im

provement

Internal Audits

Corporate Audit DepartmentDepartment

of Audit & Supervisory Board

Members' staff

Selection/Dism

issal

ReportingReporting

Reporting Reporting

Reporting

Reporting

10 EBARA Group CSR Report 2014

The EBARA Group conducts business with a high standard of ethics.

ISO 26000

INDEX

Consum

er issuesO

rganizational governanceC

omm

unity involvement

and development

Fair operating practicesThe enviro

nment

Labo

ur practices

Hum

an rights

Corporate Governance/Internal Control

Organizational governance

Executive CompensationPolicies regarding the compensation of Directors of the Board are deliberated by the Compensation Committee and put to a vote in the Board of Directors meeting. The compensation of Audit & Supervisory Board members is discussed and decided in meetings of the Audit & Supervisory Board.The Company’s remuneration system for Directors is closely linked with the business performance of the Company and designed to encourage the execution and supervision of operations in line with the Company’s management philosophy and to strongly motivate them to achieve the medium-to long-term management strategies. Outside directors who are in a position independent from the execution of operations are paid fixed compensation.In setting compensation for Audit & Supervisory Board members, consideration is given to the workload assigned to full-time versus part-time Audit & Supervisory Board members, and compensation for individual Auditors is determined in discussions between Audit & Supervisory Board Members.

Amount of Compensation Paid to Directors of the Board and Audit & Supervisory Board Members (FY2013)

PositionTotal

Compensation (millions of yen)

Compensation by Type (millions of yen)

Basic compensation Bonus Stock

options

Directors of the Board (13 members) 512 278 123 110

Outside Directors (4 members)

48 48 No set system

No set system

Audit & Supervisory Board members (5 members)

81 81 No set system

No set system

Outside Audit & Supervisory Board members (3 members)

32 32 No set system

No set system

Internal ControlEBARA established systems and adopted internal rules and puts them into practice to ensure the appropriateness of its operations in accordance with the Internal Control Basic Policy adopted by the Board of Directors in 2007 with the aim of ensuring compliance with the Companies Act and Financial Instruments and Exchange Act.

Internal Control Basic PolicyUnder the Internal Control Basic Policy, operational-level directors conduct internal control self-audits and evaluations at the end of each fiscal year. In such self-audits and evaluation, directors conduct assessments concerning the establishment and operational status of internal control systems within the EBARA Group, and if any issues are identified, the Internal Control Department formulates a responsive policy and reflects it in the internal action plan for the following fiscal year.In FY2013, internal control assessments were conducted on the companywide level in accordance with the Internal Control Basic Policy as a measure for ensuring the legitimacy of

operations by Group companies including non-consolidated companies in Japan and overseas. The companywide internal control assessments evaluate the status of internal controls at each group company from the perspective of six fundamental elements of internal control ((i) control environment, (ii) risk assessment and response, (iii) control activities, (iv) information and communication, (v) monitoring, and (vi) IT responses). In conjunction with the companywide internal control assessments, interviews of managers are conducted and the status of management in each company is confirmed from the perspective of internal control. With regard to overseas group companies, under the Internal Control Basic Policy and the provisions of applicable internal rules relating to internal control, we developed the internal control summary tables, based on the companywide internal control assessments, interviews with local managers, internal control self-audits and evaluations performed by directors, and data from audits conducted by the Corporate Audit Department. In addition, internal control related issues and risk management topics were identified from such internal control summary tables.

Risk ManagementThe Risk Management Panel (RMP), which comprises the president as its chairman and full-time directors as members, was established to oversee risk management throughout the EBARA Group. Risk Management Committees (RMC), subordinate organizations of the RMP, undertake responses to risks in each Group company. The RMC of each company reviews projects determined to pose significant risks such as contracts for large amounts and projects involving application of advanced technologies. In the case of such projects that are determined to require deliberation from a companywide perspective, the RMP reviews countermeasures. In addition, inter-organizational headquarters, committees, and the like are established to address specific issues such as security trade control, environmental management, and responding to antisocial forces as well as implementing measures to avoid compliance breaches including violations of the Construction Business Act and the Subcontracting Act.

EBARA Group risk management system

Specific Risk/Cross-sectional Committee

Board of Directors

Risk Management Panel

Each subsidiary Each division

Company/Corporate Risk Management Committee

11EBARA Group CSR Report 2014

ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Org

aniza

tiona

l gov

erna

nce

Basic Approach to Risk ManagementOur fundamental stance on risk management is to minimize risks that arise in relation to the Group’s internal controls and risks relating to business caused by external environmental factors in the course of the EBARA Group’s global business activities. This stance is based on the CSR Policy, which is one aspect of Ebara Way, a key concept in the Group’s ethics systems.To minimize risks that impede the sound and continued development of EBARA and Group companies, we adopted and put into practice the Risk Management Standards as a statement of frameworks and procedures for controlling the occurrence of risks and minimizing the harm caused by risks that do occur.

Risk Management Measures Pursuant to the Risk Management Standards

(1) Systematically identify and assess risks that impede the sound and continued development of the EBARA Group, implement countermeasures to minimize those risks, and make continuous improvements❶ Compliance risks❷ Financial reporting risks❸ Sales project risks❹ Loan and investment loss risks❺ Environmental risks❻ Other business risks

(2) Establish, maintain, and improve business continuity strategies to prepare for the occurrence of the following crises.❶ Countermeasures against data breaches❷ Countermeasures against large-scale disasters❸ Countermeasures against epidemics

One risk management measure undertaken in FY2013 was having top management of all domestic and overseas Group companies make anti-corruption declarations based on an awareness of the importance of preventing corruption (particularly preventing bribery of foreign government officials) in all EBARA Group companies. Each Group company adopted an anti-corruption policy and detailed anti-corruption rules and took efforts to spread anti-corruption programs and raise awareness of risks through compliance training.

Business Continuity Management SystemEBARA Group products, technologies, and services serve as the cornerstones of many aspects of society, industry, and consumers’ lives through water and sewer facilities, wastewater pump facilities for preventing flooding, waste incineration facilities, electric power plants, plants for making steel, chemicals, semiconductors, and other products, hospitals, commercial buildings, apartment buildings, and more. The mission of the EBARA Group is to provide products and services for maintaining or rapidly restoring these functions in the aftermath of a major disaster. Under the EBARA Group’s

Business Continuity Plan, supporting the restoration of facilities crucial to people’s lives and property is our highest priority as a core task.To carry out this mission described, the EBARA Group created a Business Continuity Management System (BCMS). During an incident, we put into action the following three types of plans under the BCMS with the highest priority on protecting human life.

① Initial Response Plans： Plans for gaining control of the situation by evacuating, ensuring people’s safety, and so on.

② Business Continuity Plans： Plans for rapid resumption of core business activities

③ Business Recovery Plans： Plans for the full recovery and normalization of all business activities.

During normal times, the Business Continuity Management Committee chaired by the president plays a central role in disseminating information on and verifying each plan through measures such as training and drills, gathering the latest information and technologies, and making continuous improvements.In FY2013, training on confirming the safety of each employee during an emergency, which previously was conducted on a regional or organizational level, was implemented simultaneously by all domestic Group companies for the first time, enhancing employee familiarity with the employee safety confirmation system and other means of emergency communications and verifying their effectiveness. We also took measures to reinforce the physical aspects of systems such as distributing emergency priority mobile phones to executive officers and disaster response coordinators, reinforcing communications and power supply systems in general headquarters, and introducing rapid earthquake emergency reporting systems in all plants.Going forward, we will further enhance the range of training and drills, conduct further development of the physical aspects of these systems, and continue to make improvements. We also aim to establish BCMS at overseas subsidiaries.

Information SecurityInformation and communications technology is positioned as key infrastructure supporting the development of business activities. We are working to reinforce security management of electronic information at Group companies in Japan and overseas so that we can engage in effective communications with stakeholders while protecting information, a valuable asset for our business activities. In FY2013, we prepared survey items concerning current conditions at overseas Group companies and started conducting a survey. We plan to expand survey target companies in FY2014 and later. We will investigate and implement measures to ensure that security levels throughout the entire EBARA Group are the same as those in Japan.


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

The EBARA Group conducts business with a high standard of ethics.Corporate Governance/Internal Control

Organizational governance

Reorganization of Information Security RulesIn May 2014, we completed a reorganization of internal rules, operating procedures, and manuals relating to information security with the aim of contributing to an enhancement of information security safety, reliability, and flexibility. “The Basic Rule on Information Security” is positioned as the highest rule on information security policy. Based on this policy, we revised and revoked rules and procedures from the perspective of strengthening information security to facilitate responses to changes in the IT environment.

Ensuring Communications during Disasters and EmergenciesWe use webmail, external portal sites, the employee safety confirmation system, and other measures as means of confirming the safety of employees and rapidly gathering and disseminating accurate information during disasters. By using outside services, we enhance the reliability of communication means to ensure internal and external communications even when business operations are suspended as a result of a disaster. The employee safety confirmation system supports rapid responses and status confirmation using mobile phones and smartphones. We are working to further develop information and communications infrastructure so that we can contribute to the rapid restoration and normalization of business following a disaster.

Measures to Enhance the Safety of Electronic InformationWe take ongoing measures to prevent data breaches and impairment of operations caused by unauthorized software or access to information systems. In particular, we are taking countermeasures against malware and targeted threats, which are rapidly increasing in number and cannot be entirely prevented using earlier methods.

● Restrictions are placed on how PCs can be used to prevent security issues.

● User training and education is being enhanced.● Monitoring of communications logs from equipment used for

communicating with external networks and countermeasures based on analytical surveys are being reinforced.

In addition, we are strengthening various measures to prevent external data breaches and the improper use of information in the event malware or other infection occurs.

Future Risk Management MeasuresIn FY2014, in addition to responding to individual risks that occur, we will formulate and implement measures from the perspective of foreseeing and preventing risks based on our policy of reinforcing risk management measures to minimize risks throughout the Group.We used internal control summary tables based on data gathered from companywide control assessments, interviews of Group companies, and other sources implemented through FY2013, and identified the following items as key risk management issues for which measures should be established and implemented with a primary focus on overseas Group companies.

1. Further permeation of Ebara Way (founding spirit, corporate philosophy, CSR Policy)

2. Legal compliance (prevention of bribery, elimination of relationships with anti-social forces, fair trade, environmental compliance, security trade control, occupational health and safety, human rights)

3. Development and implementation of internal controls (formulation of internal control policies, establishment of internal control organizations, creation of internal control operational plan tables, self-inspections by directors, formulation of rules on officer work duties and authority, permeation of the Code of Conduct)

4. Development of risk management systems (creation of the Risk Management Panel and Risk Management Committee and development of whistle-blower system)

5. Crisis response (information security, crisis management)

We will break down the identified issues into concrete action items, create action plans and coordinate with the internal control divisions and corporate divisions of each company while determining priorities to develop and implement measures for each Group company.In Japan, we will work with corporate-related divisions of branches and sales offices nationwide (including affiliates) to address risk issues such as hazardous and chemical substance management, environmental management, compliance with the Construction Business Act and fair trade practices and regulations, and harassment to identify risks in advance and prevent them.


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Org

aniza

tiona

l gov

erna

nce

EBARA Group technologies, products, and services support the development and the creation of safe, secure, and enriched societies around the world.

Ventilating tunnels

◆ Fans

Supplying water to support everyday life

◆ Water Supply Units

Removing dust from steel plate surfaces at steel plants

◆ High Pressure Pumps

Transporting water in amusement parks and aquariums

◆ Standard Pumps

Reducing and recycling waste

◆ Municipal Waste Incineration Plant

Providing air conditioning in facilities

◆ Centrifugal Chillers



ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

1. The EBARA Group recognizes that it exists to support society, industry, and infrastructure.

Consum

er issues

Transporting water for agriculture

◆ Agricultural Pumps

Protecting cities from floods

◆ Drainage Pumps

Pressure feeding process gas at petrochemical plants

◆ Compressors

Safely transporting liquid natural gas (LNG)

◆ Cryopumps

Creating clean environments necessary for healthcare and food industries

◆ Dry Vacuum PumpsFlattening the surface of wafers used in semiconductors

◆ CMP Systems

Transporting water to facilities using seawater

◆ Fabricated Duplex Stainless Steel Pumps

Supplying high-pressure, high-temperature water to power plant boilers

◆ Boiler Feed Pumps


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Con

sum

er is

sues

Medium-Term Management Plan E-Plan2013: Results and Issues

The EBARA Group positioned the period of the medium-term management plan, “E-Plan2013” (FY2011 - FY2013), as “the term to establish a more solid and stable business structure” and focused on strengthening its management foundations while achieving stability in generating profit. Specifically, the Group moved forward with establishing an optimally located production and supply system based on its regional strategies while focusing on expanding the functions of the corporate headquarters in line with the globalization of its business domains, and rolling out its productivity innovation activities in Japan and overseas. As a result of these efforts, the Group maintained steady growth of sales, operating income, and the operating income ratio during the plan term, improved its financial standing, and achieved a certain level of success in solidifying its management foundation. However, the Group has not been able to fully capture the growth of markets and industries because of external environmental factors including the effects of foreign exchange rates, the Great East Japan Earthquake, and the prolonged deflation that has plagued the Japanese economy as well as inadequate growth-oriented investment and insufficient progress in implementing various policies.

EBARA Group Corporate Ethics and Medium-Term Management Plan

Positioning of the Medium-Term Management Plan within Corporate EthicsAs discussed on page 8, the EBARA Group’s corporate ethics are based on three concepts representing Ebara Way — the Founding Spirit; the Corporate Philosophy; and the CSR Policy — and are systemized on the level of individual conduct in the Code of Conduct to create content with universal application.Within this corporate ethics framework, the medium-term management plan is a business plan for carrying out business activities that contribute broadly to society by providing superior technologies and service related to water, air, and the environment, based on the higher-level concepts of the Ebara Way. The ideas that form the basis of all policies and measures specified in the medium-term management plan are linked to Ebara Way.

The EBARA Group’s Business Environment and Medium-Term Business PlanThe Group continues to see rising demand for the development of social and industrial infrastructure—including energy and water infrastructure and environment-related facilities—and for highly efficient equipment, machinery, and systems as the components of such infrastructure. This rising demand is attributable to population growth centered on emerging countries, higher living standards accompanying the economic development in such countries, and aging infrastructures in industrialized countries. These social needs correspond exactly to the Group’s business domains. Thus, addressing such needs through solutions based on products and services is the Group’s social mission. That is to say, the Group inherently aims to fulfill its corporate social responsibility by advancing business activities, acting at all times with a high degree of efficiency based on global social reasoning and norms while maintaining harmony with the global environment. E-Plan2016, the recently adopted new medium-term management plan covering the three years from FY2014 to FY2016 is an expression of the fundamental framework for those activities.

1. Promoting “regional production for regional supply” in priority areas and establishing optimally located production and supply system from a global perspective— Moving with the Tides of Change —

2. Working to enter new markets by expanding core businesses domains— Aiming for Solid Growth —

3. Aiming to optimize “monozukuri” (manufacturing) processes through scientific approaches— Internalizing Ceaseless Productivity Innovation

into the Corporate/Organizational Culture —4. Expanding the functions of the corporate headquarters in

keeping with the globalization of business domains— Restructuring Group Management through

Strengthening Group Headquarters/Global Headquarters Functions —

The basic policies for the Group as a whole under themedium-term management plan

Bases founded during E-Plan2013

Fluid Machinery ＆ Systems BusinessPrecision Machinery Business

Production BaseService ＆ Support ／ Sales BaseStrategic Priority Area

China （Tianjin）／ 2011China （Tianjin）／ 2011China （Xian）／ 2013China （Xian）／ 2013

China （Yantai）／ 2013China （Yantai）／ 2013

Russia ／ 2013Russia ／ 2013

Korea ／ 2012Korea ／ 2012Korea ／ 2011Korea ／ 2011

United States （PA）／ 2011United States （PA）／ 2011

United States （TX）／ 2011United States （TX）／ 2011Thailand ／ 2013Thailand ／ 2013

UnitedKingdom ／ 2011UnitedKingdom ／ 2011

Italy ／ 2011Italy ／ 2011

UAE ／ 2011UAE ／ 2011UAE ／ 2014UAE ／ 2014

E-Plan2013: Results and Issues

Results●Achieved the establishment of an optimally located production

and supply system based on its regional strategies▶ New bases for service & support business▶ New production bases founded on close relationship with

customers

● Rolled out its “productivity innovation activities” both in Japan and overseas

● Expanded the functions of the corporate headquarters in line with the globalization of its business domains

● Improved its financial standing and achieved a certain level of success in solidifying its management foundation

Issues● Achieved only a part of the numerical targets

● Foreign Excange Rate External Factor ● Great East Japan Earthquake ● Prolonged deflation in Japan

Internal Factor ● Insufficient growth-oriented investment ● Failure to implement measures in a timely manner

◆ The Group has not been able to fully capture rapidly-expanding overseas markets and growth of industry, against the intention of business expansion

To be realized by next E-Plan


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


Consum

er issues


Medium-Term Management Plan E-Plan2016

Vision for the EBARA GroupThe E-Plan2016 defines the vision of what we want to become for the Group in order to clarify its practical image, recognizing the medium- to long-term vision shared throughout the Group as “ensuring its standing as a global top-tier manufacturer of industrial machinery” through the development of business activities. We will also undertake the individual measures specified in the medium-term management plan with a sense of urgency.

▶ In pursuing business development on a global scale, establish a high profit-generating structure that maximizes our global presence.

▶ Solidify the position of all businesses in their respective business domains. In the pumps businesses, in particular, we will ensure the Company’s position as one of the world's top three pump manufacturers upon establishing M&A as a viable management option.

▶ Establish an environment that maximizes the capabilities of each employee, regardless of gender, nationality, or other factors, and adopt a system that properly rewards the exercise of such capabilities.

Basic Groupwide PoliciesThe Company has positioned the term of E-Plan2016 as a turning point to a stage of “growth.” By prioritizing quantity (sales) in overseas markets and quality (operating income) in the Japanese market, the Company, through the flexible and focused utilization of both internal and external resources, intends to effect change and accelerate growth in a timely manner. Through these efforts, the company aims by the final year of the plan (FY2016) to reach a point where it will be able to grasp a clear view of the path leading to the vision of what it wants to become by FY2019. To this end, it has established the following four items as fundamental policies.

I. Steadily capture the growth in global market into the Company’s business

II. Become a service provider that targets the entire lifecycle of the product / plant

III. Continuously enhance our core competence (technologi-cal capabilities) as an industrial machinery manufacturer

IV. Enhance the management infrastructure that supports global business expansion

E-Plan2016 Numerical TargetsThe EBARA Group maintains the positioning of return on invested capital (ROIC) specified in E-Plan2013 as a key management indicator and will make efforts to improve ROIC. The target we seek to achieve in FY2016 is 7% or higher. To achieve this target while maintaining a balance between financial stability and the efficient utilization of capital, we will set the D/E ratio, a measure of stability, and return on equity (ROE), a measure of efficiency, as key management indicators and will work to improve the balance.

Relation between E-Plan2016 and Social Mission of the EBARA Group Roadmap for Achieving the Group Vision

Quantity (sales) in overseas

market

〈Ebara Way〉Founding Spirit■ Contribute to the betterment

of society with “enthusiastic and sincere hearts that make the best use of inventiveness”

Corporate Philosophy■ Extensive contribution to

society by providing superior technology and services related to water,air, and the environment

CSR Policy

“Vision of what we want to become “

E-Plan2013 E-Plan2016

FY2017-FY2019FY2011-FY2013 FY2014-FY2016

Quality (operating income) in the

Japanese market

Change and acceleration of growth in a timely manner

Flexible and focused utilization of both internal and external resources

ⅡBecome a service

provider that targets the entire lifecycle of

the product / plant

ⅠSteadily capture the

growth in global market into the

Company’s business

Ⅲ Continuously enhance our core competence (technological capabilities) as an industrial machinery manufacturer

Ⅳ Enhance the management infrastructure that supports global business expansion

ROIC: 7% or higher

D/E Ratio (Stability):

0.4 - 0.6

ROE (Efficiency): 11% - 12%

Ensuring its standing as a

global top-tier manufacturer of

industrial machinery

The term to establish a more solid and stable

business structure

A Turning point to a Stage of “Growth”

Business Scale Expansion

Medium-Term Management Plan

(E-Plan2016)

Showing a Fundamental Platform Business

Conduct shall Follow

Increasing Social Needs■�Social�needs�fit�exactly�what the

Group’s business domains cover■�Fulfill�Corporate�Social�Responsibility�(CSR)�throughout�the�conduct�of�business

Rising Living Standards by Economic Development

Aging Social Infrastructures in Industrialized

Countries

☆ D e m a n d f o r S o c i a l a n d I n d u s t r i a l I n f r a s t r u c t u r e (energy-/ water-related etc.)

☆ D e m a n d f o r h i g h l y -e f f i c i e n c t e q u i p m e n t / s y s t e m s

Growing Populations in Emerging

Countries

Founding Spirit

Corporate Philosophy

CSR Policy

Management Policies

Business-Specific Policy

Code of Conduct

Vision of what we want to become in six years (as�of�the�end�of�March,�2020)

Basic Groupwide Policies of E-Plan2016


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts

Con

sum

er is

sues


Fluid Machinery & Systems Company

The Fluid Machinery & Systems

Company adopted as its

fundamental policy "striving to

become a truly global company

that continuously grows" from

the E -Plan2013 and positioned

the plan term as a period for

building business structures that

can reliably pursue world-

leading status in key business

areas. We set as a priority issue

achieving competitive

superiority in global markets

from a medium- to long-term

perspective, built overseas regional oversight functions in China,

Southeast Asia, and the Middle East, expanded sales and service

sites, enlarged sales network through organic collaboration by

overseas sales companies and domestic and overseas plants, and

reorganize the domestic pump business.

In recent years social needs for energy and water infrastructure have

been growing at an increasing pace, particularly in emerging

countries, and the Fluid Machinery & Systems Company will fulfill

its social responsibilities through business activities that respond to

demand for social infrastructure such as oil and gas facilities, electric

power, water supply, construction, and wastewater drainage. Under

the E - Plan2016, we will expand our presence (share) in global

markets by pursuing a larger scale of business in continuously

growing overseas markets. To achieve this, we will enhance our

product capabilities to supply the quality, prices, and delivery times

that meet customer needs and generate service business throughout

the product lifecycle. We will make every effort to provide the

products and services that customers around the world want with

enthusiasm and sincerity.

Message from the Company's President

Atsuo OhiPresident

Fluid�Machinery�&�Systems�Company

Europe and AfricaEbara Pumps Europe S.p.A.Sumoto S.r.l.Ebara Pompy Polska sp. z o.o.Ebara Espana Bombas S.A.Ebara Pumps RUS Limited Liability Companyand others (8 firms in total)

Southeast Asia and OceaniaEbara Vietnam Pump Company LimitedP.T. Ebara IndonesiaEbara （Thailand） LimitedEbara Pumps Malaysia Sdn. Bhd.Ebara Engineering Singapore Pte. Ltd.Ebara Benguet, Inc.Ebara Pumps Australia Pty. Ltd.Ebara Thermal Systems （Thailand） Co.,Ltd.and others (10 firms in total)

Middle EastEbara Pumps Middle East FZEand others (4 firms in total)

South AsiaKirloskar Ebara Pumps Limitedand others (2 firms in total)

China and East AsiaEbara Machinery （China） Co., Ltd. EBARA MACHINERY ZIBO CO., LTD.EBARA GREAT PUMPS CO., LTD. YANTAI EBARA AIR CONDITIONING EQUIPMENT CO., LTD.EBARA DENSAN (KUNSHAN) CO., LTD. EBARA DENSAN (QINGDAO) TECHNOLOGY CO., LTD.Ebara Fluid Machinery Korea Co., Ltd.and others (13 firms in total)

North AmericaEbara International CorporationElliott Companyand others (7 firms in total)

South AmericaEbara Industrias Mecanicas e Comercio Ltda.and others (2 firms in total)

JapanEBARA CORPORATIONElliott Ebara Turbomachinery CorporationEbara Refrigeration Equipment & Systems Co., Ltd.EBARA DENSAN LTD.EBARA MATERIAL CORPORATIONEbara Hamada Blower Co., Ltd.Ebara Byron Jackson Co., Ltd.and others (12 firms in total)

Main Sites of the Fluid Machinery & Systems Company

In FY2013, we accelerated global development.The Fluid Machinery & Systems Company provides many products and services for facilities that support the living environment of people and regional industry in Japan and many other parts of the world. Through the efforts of sites established around the world, we are steadily developing ties to business in these regions and engaging in customer-oriented activities.

Examples include large coal-fired electric power generation, LNG combined cycle thermal power generation in China and East Asia, the oil and gas markets and electric power markets in North America, agriculture and urban development in Southeast Asia and Oceania, and desalination of seawater in the Middle East. Going forward, we remain committed to contributing, through the provision of products and services, to solving issues in regions around the world rising in conjunction with rising energy and water demand.



ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

Consum

er issues

2. The EBARA Group innovates to supply technologies, products, and services that delight its customers.

Pump BusinessResponding to Customer Expectations through Close Community TiesEbara International Corporation (EIC) — which manufactures, sells, and services cryogenic pumps for the liquid natural gas market in North America — marked 40 years since the start of business, Ebara (Thailand) Limited (ETL) — which sells and services fluid machinery products such as standard pumps in Thailand in the southeast Asian region — reached the 20 year mark since its foundation, and EBARA GREAT PUMPS CO., LTD. (EGP)—which manufactures, sells and services large pumps and turbines in China — reached its 10th year since establishment.

Furthermore, during FY2014, in the pump business, we established sales and service sites in Russia, the Middle East, Southeast Asia, and other regions, and in the chiller business, we established a site in Southeast Asia. In the compressor and turbine business, we took measures to enhance service functions at sites in China, the Middle East, India, and other regions. In the pump business, compressor and turbine business, and chiller business, our core businesses, we will continue working to increase installations by overseas sites while providing products that meet regional needs and reinforcing precise service and support to the useful to our customers around the world and further accelerate the globalization of the fluid machinery and systems business.

Providing Solutions to water treatment problems in BahrainWe participated in the Japanese Technologies for Water Environment and Sewerage Workshop held in January 2014 in Bahrain. The workshop was proposed when a Bahrain government official visited Japan and was co-hosted by the Bahrain Ministry of Works, the Japanese Ministry of Land, Infrastructure, Transport and Tourism, the Bahrain-Japan Friendship Society, and the Embassy of Japan in Bahrain as one aspect of investigations into means of solving the water treatment issues that Bahrain is confronting. Currently, 350,000 m³ of sewage is generated each

day, far in excess of the 200,000 m³ per day of domestic processing capacity, and untreated sewage is discharged into the ocean, causing water pollution. At the workshop, five Japanese companies including EBARA gave presentations related technologies for addressing this issue. The company introduced its sewage pumps and explained about passable grain size and types of bladed impeller and their protection. The workshop was attended by approximately 120 persons including government agency personnel, water treatment project contractors, and consultants and generated high levels of interest.

Lecture on Pumps conducted for Customers and Unitra, EMC’s Distributor in MongoliaIn September 2013, Ebara Machinery (China) Co., Ltd. (EMC) held a lecture on pumps in Ulan Bator, Mongolia. During the morning session, the lecture targeted employees of Unitra Co., Ltd., a sales agent in Mongolia, and sales personnel, and the afternoon session was for customers. Unitra conducts sales in Mongolia mainly of machine tool pumps made in Japan, Europe, and the U.S. and became an EMC distributor in 2013. The lecture served to strengthen relationships with Unitra personnel and raised their knowledge of EBARA products. Since EMC signed the distributorship agreement with Unitra, it has received orders for approximately 80 pumps, and the lecture led to new orders. EMC plans to continue holding such lectures in the future.

A�Unitra�sales�office

A�scene�from�the�lecture

40th�Anniversary�of�EIC’s�Establishment

A�scene�from�the�workshop


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Con

sum

er is

sues

Production Innovation ConferencesWe are implementing production innovation programs to improve production activities and raise efficiency so we can provide products to customers at appealing prices in a timely manner. We held group-wide Production Innovation Conferences in July and September 2013. At the July conference, personnel involved in operations at all plants in China gathered at EBARA DENSAN (KUNSHAN) CO., LTD. (EDKM) with the participation of the Haneda Office through live teleconference to share information on the results of productivity improvements made at each plant in China since the Basic Training Conference held in June 2012.

Quality Improvement MeasuresTo raise competitiveness in increasingly global markets in the future, it is necessary to optimize production locations and product supply from the perspective of regional production for local supply. Each production site must build highly efficient production systems while supplying high-quality products. A conference was held at an Ebara Boshan Pumps (now EMZ) plant in China in FY2013 to raise quality. At the conference, the causes of product defects were analyzed and participants discussed

prevention of re-occurrence and confirmed their commitment to undertaking measures to continuously raise quality while exchanging information. Each plant will continue quality-enhancement measures by implementing quality management based on ISO 9001 to meet the expectations of customers. Going forward, they will respond to increasing globalization, reinforce collaboration among production sites even further, and achieve even greater improvements in quality.

Enhancing Procurement CapabilitiesAn international procurement conference for the pump business was held at the EBARA head office in November 2013. 36 employees including participants from the procurement divisions of nine overseas Group companies attended the conference. The purpose of the conference was to share information on best practices relating to procurement operations among pump manufacturing sites and to reinforce the procurement organizations in order to contribute to reduce cost. If cost can be reduced, the Group will be able to provide products and services to customers at more attractive prices.After confirming the roles that procurement must play in the Medium-Term Management Plan, each participating company gave a presentation on its own procurement policies and issues related to operational practices. The presentations were followed by an active question and answer session and an exchange of opinions.

At the Global Procurement Conference, EPE made a presentation on its procurement activities, such as the methods of procurement used and the indicators used to evaluate supplier’s performance.The procurement conference was a great opportunity to know each other’s companies, to understand the best purchasing practice and share information about suppliers. The idea to create a supplier database where each company can access is a synergy that can create advantage for all the group in order to achieve the planned targets. I think it is mandatory for the EBARA Group to standardize the KPI (Key Performance Indicator) in order to have the same supplier evaluation method.

Diego PonzaEbara�Pumps�Europe�S.p.A.�(EPE)�(Italy)

Achieving Management Targets by Generating Synergy Effects

VOICE

I attended the Production Innovation Conference and gave a presentation on production innovation targets, implementation of 5S management, VSM analysis, and DDT production at EMZ (formerly Ebara Boshan Pumps Co., Ltd.).By participating in this conference, I learned about the features of products from other companies, production methods, and the status of production innovation implementation and studied examples of beneficial production innovation methods at other companies.Also, through dialogue with personnel from other companies during the conference, I investigated with others methods of solving product shortfalls that occur during production, raising production efficiency, and improving product quality, producing positive results.I will work to continue implementing production innovations, promote fixed positioning at pipe-laying sites and high-pressure pump assembly flow work, improve work efficiency and product quality while reducing costs, and raise the company’s market competitiveness.

Wang Dong Bing�Production�and�Procurement�Division

EBARA�MACHINERY�ZIBO�CO.,�LTD.�(EMZ)

Raising Corporate Competitiveness through Production Innovation

VOICE


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

The EBARA Group conducts business with a high standard of ethics.2. The EBARA Group innovates to supply technologies, products, and services that delight its customers.

Consum

er issues

Compressor and Turbine Business

Compliance TrainingThree years after the January 2011 integration of Elliott Company in the United States and Elliott Ebara Turbomachinery Corporation in Japan, the Elliott Group, which handles the compressor and turbine businesses, has more than 2,600 employees from many different countries. To ensure that the entire multi-national workforce has a full understanding of compliance, Elliott Group conducts compliance training via its intranet in nine languages including English and Japanese, and the Elliott Group Code of Conduct is posted on a website in multiple languages. In addition, officers and employees responsible for compliance conduct on-site compliance training at business sites in each country. Training was conducted at the Taiwan and Singapore offices in June 2013 and in the Sodegaura plant in January 2014 with 424 employees participating.

Measures to Raise Customer SatisfactionThe performance of compressor and turbines used at oil and gas plants is becoming even more advanced and consequently requires after-sales service to ensure stable operation of products. After sales service is becoming increasingly more important than ever. Elliott Group is strengthening the development of field service personnel in the Asia-Pacific Region where many of its customers are located. Elliott Group’s Sodegaura facility plays a central role in service within the region; service sites are located in India, Singapore, Taiwan, and China. We plan to increase the number of field service personnel from 47 as of April 2014 to 50 by the end of 2014. In an effort to train new service personnel and enhance the skills of current personnel and reinforce service structures, we have been, for at least three years (since 2011) conducting training that includes in-house basic and practical training as well as practical on-the-job training at customer sites. As of April 2014, twenty-eight service personnel have completed the applied training course. As a result of these efforts, our work during a major periodic inspection and modification project undertaken by a customer in China in 2013 was highly rated as a result of the exceptional skills and teamwork of our service personnel. In fact, Elliott Group received an award as a best supplier. We will continue to build on these types of measures so we can achieve even higher levels of customer satisfaction.

Contributing to Local Society as a Good Corporate CitizenIn 2011, Elliott Group launched the Elliott Leadership Development Program (ELDP) to train the next generation of leaders. Under this program, community-based social contribution activities by employees are encouraged and supported. In October 2013, twenty-four employees from around the world participated in a volunteer program intended to provide food to several hundred people in underprivileged households living within in the geographic area near Langley High School in Pittsburgh, Pennsylvania. The employees supported a process of packing fruit and vegetables for about two hours and delivered food bags by car to senior citizens and disabled persons, providing more than 6,800 kg of fresh food to 330 households. Elliott Group contributes to the development of local communities through this type of program.

I was appointed president in April 2014.Elliott Group is deeply involved in growing energy markets and supplies products that are positioned among the most

important equipment for oil and gas related plants. Our products are characterized by extremely high reliability and efficiency, and customers in countries around the world require timely after-sales service.Under the E-Plan2016, we conduct global “economic activities based on a keen sense of ethics and high-quality communications” in accordance with the EBARA Group CSR Policy and the Elliott Group Code of Conduct. The entire Elliott Group remains committed to contributing to international society by acting as a good corporate citizen and providing outstanding products and optimal after-sales service that achieves high levels of customer satisfaction.

Elliott Ebara Turbomachinery Corporation’s CSR Policy

Compliance�training Elliott�employees�who�participated�in�the�volunteer�program

Kazuro Takamura PresidentElliott�Ebara�Turbomachinery�Corporation


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Con

sum

er is

sues

Chillers BusinessEbara Refrigeration Equipment & Systems Co., Ltd.(ERS) and YANTAI EBARA AIR CONDITIONING EQUIPMENT CO., LTD. (YEACE) in China are the main manufacturing bases for the chillers business. The company supplies high-efficiency thermal energy systems and products including chillers and cooling towers that take into consideration both comfortable HVAC＊1 environments in commercial buildings and plants around the world as well as the global environment and provides high quality service and support.

New Base Established in ThailandEbara Thermal Systems (Thailand) Co., Ltd. (ETST) was established in Bangkok, Thailand in April 2013 as a new base to respond to rising demand for chillers and other thermal energy systems as commercial building construction increases along with economic growth in Southeast Asia.ETST conducts refrigeration equipment business that covers everything from sales, service & support including installation, testing, repair, and maintenance. Based on product, service, and support technologies developed in Japan, the company will provide even more appealing products and services that meet the needs of customers expanding business in Southeast Asia.

Energy-Saving Screw Modular Chiller LaunchIn 2013, ERS launched a screw modular chiller with improved function that provides less space, energy-saving and achieves distribution of the risk of failure, compared to centrifugal chillers.

Total EngineeringIt is estimated that air conditioning equipment accounts for about 40% of energy consumed by buildings (estimate by ERS), and reduction of energy consumption, carbon dioxide emissions, and running costs relating to air conditioning equipment is an important issue for our customers. To address these issues, we conduct total engineering including equipment diagnoses, proposing optimal systems, providing energy solutions that include installation construction, and provide service and support to maintain optimal operation after installation.

Remote Intelligent Service Systems (RISS)ERS proposes a remote monitoring system to customers. The system remotely monitors the operating status of equipment on behalf of customers 24 hours a day, reducing operating management load. In addition, accumulated monitoring data can be used to propose operating plans that will lead to a more comfortable HVAC environment. Safe, secure, and economical operational support is provided, including predictive functions that can detect signals of HVAC equipment failures, systems for providing rapid and appropriate services using monitoring data in the event a failure occurs, and proposals for more effective maintenance plans from the perspectives of life cycle costs and energy savings.

Improved-Function�Screw�Modular�Chiller

Remote�Intelligent�Service�System

Equipment Diagnosis

Solution

Customer Issues

Customer Support Services

Proposal of Optimal System

Remote Monitoring

Center

Chillers perform work under heavy loads

on a daily basis

Customer

Ebara Refrigeration Equipment &

Systems Co., Ltd.

Remote monitoring

Commands

Dispatch of Service Personnel

＊ 24-hour service （including nights and holidays）

Emergency Dispatch＊

Total Engineering

＊1：【HVAC】��Heating,�Ventilation,�and�Air�Conditioning


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


Consum

er issues

Precision Machinery Company

Since the Precision Machinery

Company was founded, we have

been committed to providing

excellent technologies and

exceptional service in the water,

air, and environmental sectors in

relation to all customer

manufacturing processes, and

we continue to make efforts in

these areas.

During the three years of the

E-Plan2013, we provided

optimal technologies,

particularly to meet the demand for green technology in the market

(such as energy saving and environmental preservation). As a result,

our products, tailored to needs and the times, have been broadly

accepted by customers, and we have established a track record of

success.

Going forward, we will provide products and environmental

technologies required by an information society that is undergoing

rapid and unceasing development and that are suited to the times—

such as the Internet of Things (IoT)—while achieving customer

satisfaction and contributing to society and the earth.

The hurdles regarding customer technology and service requirements

are becoming higher every year, and consequently, achieving perfect

customer satisfaction is not possible. It is demanding requests,

however, that educate us. I ask for your continued support and

guidance in the future.


Manabu Tsujimura President

Precision�Machinery�Company

Ebara Precision Machinery Europe GmbH

EBARA CORPORATION

SHANGHAI EBARAPRECISION MACHINERY CO., LTD

Ebara Engineering Singapore Pte. Ltd.

Xian Ebara Precision Machinery Co., Ltd.

Ebara Precision Machinery Korea, Inc.

Ebara Technologies IncorporatedEbara Precision Machinery

Taiwan Incorporated

EBARA FIELD TECH. CORPORATION

11 support shops1 overhaul plant

11 support shops3 overhaul plants

2 development, design, and manufacturing sites

3 support shops1 overhaul plant

1 support shop1 overhaul plant

1 support shop1 overhaul plant

5 support shops1 overhaul plan

7 support shops1 overhaul plant5 support shops

1 overhaul plant

Main Precision Machinery Company Business Sites

Supporting Semiconductor Advances, Responding to Customer Needs

The markets for mobile devices such as smartphones and tablet PCs and for the infrastructure (cloud) that supports communications by these information devices are growing rapidly.The Precision Machinery Company, whose customers are

primarily manufacturers of the semiconductors, LCDs, and solar cells that play central roles in these products and technologies, develops and manufactures systems and equipment for the semiconductor industry and vacuum machinery to meet the needs of its customers.The company will provide manufacturing systems and equipment that can keep up with the rapid advances in semiconductors and achieve the product functions that


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Con

sum

er is

sues

customers want in a timely manner. As a part of those operations, the company promotes reductions in environmental impact through green procurement, chemical substance management, measures to address the conflict mineral issue, reduction and recycling of waste, overhauling equipment, and other measures while using customer comments as feedback for each phase of the process to raise quality as indicated in the diagram below. By doing this, we gain the confidence of customers and meet their expectations. Some of our customers are members of the Electronic Industry Citizenship Coalition (EICC), an electrical and electronic industry trade organization, and consequently, they engage in activities in accordance with the Code of Conduct adopted by the EICC, and the company acknowledges the Code and supports these efforts and engages in various activities.

Quality Assurance

Raising Productivity through Cooperation with Suppliers

The EBARA Group makes collaborative efforts with suppliers in its day-to-day production activities to raise productivity, reduce burdens, and improve quality. We raised efficiency in the delivery of procured goods by adopting a milk run method, a system where we make the rounds of multiple suppliers to pick up goods, and have undertaken production innovation measures to reduce packaging burdens through the introduction of reusable bags. In all instances, we have relevant suppliers participate in the earliest stages of investigations and implement measures in collaboration with them. We also hold suppliers meetings concerning chemical mechanical polishing (CMP) systems and dry vacuum pumps to reinforce communications and collaboration by coordinating responses to market trends and supporting production innovation measures. In addition, we commend those suppliers that provide particularly helpful cooperation with regard to QCD: enhancing quality (Q) that meets customer expectations, achieving optimal cost (C) performance, and making reliable deliveries (D) and supply that provide assurance to customers. Going forward, we

will continue to issue monthly production forecast data, provide information on developments in day-to-day operations and our initiatives, and take action to prioritize good communications so that we can work in concert with suppliers.

Enhancing Quality through Group-Wide Global Systems

Products such as CMP systems and dry vacuum pumps must operate 24 hours a day, 365 days a year. This means that it is necessary for us to provide highly reliable products and services (such as overhauls and maintenance) under rigorous quality control standards and cooperate on a global scale to meet customer expectations.To make timely responses and reduce costs, we need to develop overseas production sites and locally procure production components and service parts based on the concept of regional

The conference was a great opportunity for engineers from dry pump overhaul service sites in various countries to gather and discuss shared issues and goals from their unique cultural and value perspectives. Japanese, English, Chinese, and other languages were used during the discussions, but there was no sense of awkwardness, and it seemed that we were all speaking the same language. I hope to again have this type of opportunity to interact with and learn from other engineers in the future so I can make improvements and provide even better overhaul services.

Chen Chin ChewPrecision Machinery Division

Ebara Engineering Singapore Pte. Ltd.

On Participation in the Borderless Dry Pump Overhaul Technical Conference

VOICE

Supplier Commendations

Development and

designProcurement Production

Sales and Use

Maintenance Support

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is the world’s largest independent semiconductor foundry. Our mission at EPMT is to conduct business by building a win-win relationship with TSMC and gaining their trust.We recently worked with customers to supply and install a number of CMP systems at TSMC’s new plant, and in November 2013, we received the Fab14 Ramping Support Award. Winning this award was not the result of my individual efforts, but the efforts of all cooperating team members, and I am grateful to them. Even though we won an award, this does not mean that we have reached the end of our work, but merely a transit point for further efforts.

Eric LinSemiconductor Equipment Dept.

Ebara Precision Machinery Taiwan Incorporated (EPMT)

Building Win-Win Relationships with Customers and Reinforcing Support Capabilities.

VOICE


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


Consum

er issues

production for regional supply. To maintain the quality of locally-procured parts and production goods, we are standardizing and codifying production and service operations; training workers at overseas sites engaged in production, quality control, service, and so on; auditing and providing guidance on local procurement; and implementing measures to maintain uniform product and service quality levels globally.We held a dry pump overhaul technical conference in 2013. Six employees from Japan and 12 employees from six overseas sites gathered to report on the status of overhaul operations and pump operating conditions following delivery. The participants shared information and exchanged ideas on solving problems and raising quality. We will continue conducting such measures in the future.Group global structures are raising quality and working to supply products and services with quality that meets customer expectations.

Meeting Customer Expectations by Raising Productivity

We have been undertaking production innovations for four years with the aim of raising productivity and reducing lead times in order to enhance customer satisfaction. Assembly lines have been changed from a multi-piece manufacturing flow to a one-piece manufacturing flow, and we have established production systems based on an awareness of linking all divisions and processes from order to shipment. As a result, the dry vacuum pump manufacturing department has cut manufacturing lead times by 75%, while the CMP system manufacturing department reduced manufacturing

lead times by 40% and halved manufacturing man-hours.The knowledge gained from these measures has been used with gas abatement systems as well, and manufacturing man-hours have been cut in half.We will continue to raise the quality of production processes and meet customer expectations by implementing production innovations.

Meeting Customer Expectationsby Ensuring Safety

Under the slogan “Safety First!,” we are creating an occupational health and safety management system (OHSMS) to ensure that all employees can work in a healthy and safe environment.The Kumamoto District, a CMP system production plant, acquired OHSAS 18001 certification in 2008 and became the first EBARA site to introduce an OHSMS to its operations. Other business districts are following Kumamoto’s lead in promoting health and safety programs in compliance with OHSMS and reinforcing safety management systems.Preventive safety was positioned as a priority topic in FY2013, and risk assessment training was conducted according to the positions and roles of management supervisors and on-site workers as a means of enhancing the risk sensitivity of employees. To effectively reduce and eliminate potential product risks (sources of danger) during the development and design stages, we formulated new product safety design rules and continuously worked to enhance product safety in ways that will raise customer trust.

Environmental Preservation MeasuresTo achieve EBARA Group environmental goals, the Precision Machinery Company also undertakes companywide measures.To enable all employees to become involved in environmental preservation measures, each year that organizational restructuring is conducted, all company organizations are assigned to environmental management blocks (there were 45 blocks in FY2013).Within these blocks, organizational heads are environmental management block managers. Block managers take courses on environmental performance reviews, environmental risk management, and other topics and work with block members to propose and carry out environmental measures that will lead to reductions in environmental impact in line with their block operations. A wide range of environmental programs are implemented, and in FY2013 a number of measures were taken to reduce the volume of water and chemicals used in development operations, producing significant results.

We conduct i-Support activities in order to provide the highest-quality after-sales services to customers. As a part of these activities, we established a project team to accumulate detailed data on information systems concerning products delivered to customers, after-sales service histories, parts replacement histories, and so on and to use that data. By doing this, we aim to strengthen collaboration between relevant head office departments and service sites, provide timely after-sales services, and make proposals for preventive maintenance, thereby meeting customer needs, providing high-quality service, and raising customer satisfaction.

Taijiro TaguchiCustomer�Support�Group

EBARA�FIELD�TECH.�CORPORATION

Providing High-Quality After-Sales Services through i-Support Measures

VOICE

One-piece�manufacturing�of�the�CMP�System


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


Con

sum

er is

sues

Environmental Engineering Company

Under the E-Plan2013 Medium-

Term Management Plan, we

were able to generate robust

profits in the domestic market,

particularly in the stable O&M＊1

business. Our main issue for the

future is to realize new orders to

maximize profit by operational

improvements challenge steadily

linking demand for facility

reconstruction in Japan.

The new E-Plan2016 Medium-

Term Management Plan states

that our vision for 2019 is to "stand in a leading position in the

market in terms of market share, profitability, and business efficiency

for the construction and operation of waste incineration facilities in

Japan" and sets targets for the next three years. The plan specifies

two basic policies: (1) strengthen stable revenue base while

maintaining and expanding business opportunities and profit in the

domestic market, and (2) improve productivity and profitability by

improving business efficiency. In accordance with these policies, the

five following priority issues are identified.

① Maintain and increase the number of customers, sales, and income

in the Japanese market; ② reinforce field competitiveness through

area-based management and expand market share and range of

business fields; ③ raise competitiveness by standardizing incinerator

product and creating design packages; ④ reinforce the

competitiveness of Ebara Qingdao Co., Ltd. (a wholly-owned

subsidiary of Ebara Environmental Plant Co., Ltd. in China) as a key

component manufacturing base; and ⑤ increase competitiveness by

strengthening and expanding related businesses.

The area-based management referred to in item ② above is a

program for raising customer satisfaction by using our extensive

experience with operational management as a strength to propose

and carry out solutions that meet customer needs through

collaboration among various internal sections. I am confident that by

doing this, we will gain customer trust, expand the scope of our

outsourcing business fields, and secure orders from new customers.


Tetsuji FujimotoPresident

Environmental�Engineering�Company

HokkaidoPublic: 9

TohokuPublic: 10; Private 5

KantoPublic: 27; Private 15

KinkiPublic: 13; Private 3

ChubuPublic: 31; Private 11

Chugoku, ShikokuPublic: 19; Private 4

Kyushu, OkinawaPublic: 7; Private 2

EEP Deliveries in Japan (facilities in operation)

＊1：【O&M】��Operation�and�maintenance�including�operations,�management,�maintenance,�and�inspection.

Ebara Environmental Plant Websitehttp://www.eep.ebara.com/en/


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


Consum

er issues


Environmental Engineering and the Needs of Society

Ebara Environmental Plant Co., Ltd. (EEP), which conducts environmental engineering, provides total services from waste incineration facility design and construction to operation, maintenance, and facility management. The business environment of the waste incineration business has changed substantially compared to before the 2011 Great East Japan Earthquake; disposal of debris caused by the earthquake is proceeding, but electric power shortages have given rise to increased interest in the utilization of waste for generating electricity, and there is new demand for development of waste incineration facilities positioned as regional disaster preparedness centers. Also, as local governments face difficult financial conditions, demand to extend the life of existing facilities so they can be used for longer periods for stable waste processing is rising. It was under these circumstances that in FY2013 EEP received multiple orders for facility construction and long-term facility operation projects (DBO＊1 projects) as well as numerous orders to perform construction extending the life of existing facilities.

Local Production for Local Supply by Using Waste to Generate ElectricityApproximately 25% of all waste incineration plants in Japan have electric power generating facilities. The total rated generating capacity is approximately 1,700 MW (according to General Waste Disposal and Treatment Conditions (FY2012), Ministry of the Environment). Japan is currently experiencing a shortage of electric power, and consequently, disposal facilities with generating facilities are attracting attention as distributed power sources. EEP is a Power Producer and Supplier (a PPS operator＊2) and is purchasing excess power generated by waste incineration facilities and returning it to communities, thereby playing a role in local production for local supply of electric power.The prototype for the local production for local supply scheme for electric power was the Warabi Toda Eisei Center in Saitama Prefecture, which was mentioned in the 2013 CSR Report. Operation and management of the Center is outsourced to EEP, and the total electric output of the Center is purchased by EEP and supplied to the city halls of Warabi City and Toda City and to seven elementary schools in Warabi City. In FY2013, EEP signed a new basic agreement concerning local production for local supply of electric power generated from waste with the Hirosaki Area Environmental Maintenance Association. The Association is a special district authority organized by Hirosaki City, Hirakawa City, Owani Town, Fujisaki Town, Itayanagi Town, and Nishimeya Village. The basic agreement entered into with the Association provides for purchase of the total electric output of two waste incineration plants in Hirosaki City whose operation and management is outsourced to EEP, supply of that power to facilities within the Association's territory including other waste incineration plants and sewage treatment facilities as well as a special district authority, the Hirosaki City Hall,

schools, and other facilities.EEP completed construction of an Environmental Center in Hiratsuka City, Kanagawa Prefecture under a DBO contract at the end of September 2013, transferred possession of the facility, and commenced a 20-year operating project in October. Under the project, general waste from Hiratsuka City, Oiso Town, and Ninomiya Town is incinerated and the heat produced is used to generate 5,900 kW of electric power, and power not consumed by the center is supplied to neighboring areas. All of the incineration ash is supplied to Chubu Recycle, an EEP subsidiary, and other ash recycling companies for melting and resource recovery.＊3 As a result, the facility does not generate any landfill waste and has achieved zero emissions.The fishery processing industry in Kesennuma City in Miyagi Prefecture suffered extensive damage from the 2011 Great East Japan Earthquake. As part of its recovery projects, EEP is cooperating as a PPS operator with efforts by a fishery processing industry association to rebuild Kesennuma as a smart city＊4 EEP purchases electric power generated from waste incineration plants in neighboring areas and supplies power to marine product processing plants affiliated with the association. Operations began in FY2013. A portion of the waste used to generate electricity is biomass, and therefore the generation of electricity from waste is carbon dioxide neutral with regard to the biomass portion, making the power much greener than thermal and other forms of electric power generation. By using this type of green power, EEP is contributing to reducing the carbon dioxide emissions of the city.By promoting the local production for local supply scheme in the generation of electric power using waste, EEP is supporting efforts to position waste incineration facilities as regional energy centers.

Continuously Meeting the Expectations of Customers

In response establishment to the EBARA Group business continuity management system (BCMS), EEP is also developing its own BCMS. The Business Continuity Management Committee chaired by the EEP president and the Disaster Management Committee, a subcommittee that undertakes specific action, are reviewing and developing an incident management plan (IMP) and business continuity plan (BCP)for responding to disasters.In FY2013, the EBARA Group introduced a system to confirm the whereabouts and safety of employees as a first response to disasters, and conducted a drill using the system. In particular

Signing�of�the�basic�agreement�with�Hirosaki�area�entities

＊1：【DBO】�Design,�build�and�operate.�A�method�whereby�a�public�body�raises�funds�and�outsources�design,�construction,�and�operation�to�a�private�company.＊2：【PPS�operator】�Power�producer�and�suppler＊3：【Resource�Recovery】�A�material�recycling�method�for�recovering�zinc,�copper,�nickel,�and�other�metals�from�waste�material.＊4：【Smart�City】�An�environmentally-conscious�city�that�efficiently�uses�electricity�and�maximizes�resource�savings�throughout�the�city�by�using�environmental,�informa-

tion,�and�other�technologies.27EBARA Group CSR Report 2014

ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts

Con

sum

er is

sues


employees who conduct operations at facilities where the company provides operation services work in shifts, and many employees are dispatched to construction sites on a business trip basis, and as a result, making sure that their whereabouts and safety can be confirmed efficiently is essential for the subsequent continuation of business. The results of the drill showed that there are still issues to be resolved concerning the rapid confirmation of employee safety, and the company is currently making improvements.We are also creating a mechanism to report on the status of damaged facilities where the company provides operation services and creating systems for efficient recovery and other measures so that regional waste treatment can be continued even in the event of damage caused by an earthquake or other disaster. Development is proceeding for crisis management systems at facilities where we offer operation and facility management services in consultation with customers based on their approaches to measures during a disaster. Specific plans call for establishing a basic policy, implementing plant preparations, formulating plans, and conducting training and drills in anticipation of an earthquake with an intensity of five or greater on the Japanese scale, an accident such as a fire, explosion, or release of chemicals, or a forecast of a mass outbreak of a new strain of influenza. We are creating mechanisms for taking these actions and making continuous improvements at the approximately 70 facilities where we offer operation and facility management services nationwide.

Health and Safety Measures and Improving QualityThe company undertakes daily measures and conducts training and drills based on the idea of safety first to eliminate occupational accidents at all plant construction sites and facility operation sites. The company is working to establish a mindset where common sense such as conducting comprehensive training when starting work at a new site and prohibiting employees from working alone is accepted as a matter of course. An occupational accident that occurred in FY2013 at a worksite was used in training to identify the problem factors in the work that led to the accident occurred and for implementation of countermeasures in other sites, and in addition to checking manuals and procedures for the same kind of work, all work manuals were reviewed to determine if other work procedures also posed similar risks. As a result of these efforts, inadequacies in work manuals were reduced. In addition, a program was established where a team of specialists examine monthly reports from each worksite to determine if there are any technical issues present, and if there are, the team investigates countermeasures. These measures are expected to raise service operation quality and lead to higher customer satisfaction.Furthermore, standardization is being undertaken with regard to design, operations, and maintenance. Standardization of design was raised in the E-Plan2013 Medium-Term Management Plan covering the period until FY2013 with the aim of raising design quality. Standards for incinerator design were established and series were created for certain types and sizes. Further enhancements will be made to the design standards and the creation of series for all types and sizes will be completed in the future. Standardization of operating and maintenance technologies started in FY2013, and plans call for the process to

continue this fiscal year and later. These standardization measures will serve as a foundation for health and safety and raising quality, and EEP will implement a steady PDCA cycle of implementation and review.

CSR Action Plan for FY2014Under the Environmental Engineering Company FY2014 CSR Action Plan, the following measures are being implemented: (1) building a BCMS and establishing a scheme of its continual administration; (2) maintaining a system of crisis management at the facilities for which we undertake operational management under contract at about 70 locations nationwide and improving on the scheme continually; and (3) promotion of local production for local supply of electric power generated from waste.

I believe that in order to raise the quality of services and facilities where the company provides operation and facility management services, the most important thing is that problems that occur at the plant should not be handled solely by personnel at the site, but companywide support should be provided. Starting in FY2013, we made substantial improvements to our monthly reporting system to recognize in greater detail the operating status of the plant. The revised reports include information on waste treatment volumes, utility consumption amounts, and the environmental performance of its emissions as well as information necessary for preventing any deterioration of operational status.As a result of the improved monthly reporting system, we are now able to compare the operating status of all facilities where we provide operation and facility management services, and in cases where the information indicates that a problem is likely to occur, we can share the information with relevant divisions and provide support at the earliest possible time to prevent the problem from occurring.With regard to problems that are common to all facilities, we are preparing operating manuals on those problems that are caused by operating procedures, and with regard to problems that arise from maintenance issues, we are reviewing maintenance frequencies and methods. In addition, we are providing feedback to engineering departments concerning problems that arise from design to prevent reoccurrences and taking measures to build systems that can pursue better designs.I am confident that these measures will result in significantly higher service quality.

Kazuo Takano Deputy�Center�Manager

Technical�Center,�Ebara�Environmental�Plant�Co.,�Ltd.

Proactive Measures to Raise Service Operations Quality and standardize

VOICE


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


Consum

er issues


ComplianceTo gain the trust of stakeholders as a good corporate citizen, the EBARA Group defines compliance as not only observing laws and regulations, but also putting into practice in good faith internal regulations and other rules, social norms, and common and good sense.

Compliance SystemTo ensure the practice of fair and ethical corporate activities, various compliance systems including the CSR Committee (see page 8) have been created to conduct compliance management.In addition, the EBARA Group Compliance Network meets twice annually to share information within the Group and report on the status of individual compliance measures.With regard to compliance with laws and regulations including the Construction Business Act, Subcontracting Act, and Foreign Exchange Act, a specialized division takes measures to ensure that employees throughout the Group are familiar with statutory provisions and establishes systems for confirming proper compliance.

Compliance Liaison SystemIn FY2007, compliance liaison officers (60 employees at each business site, branch office, and Group company) were appointed to serve as nearby consultants on compliance-related issues and to raise awareness of compliance. Each compliance liaison officer undergoes training twice annually, and skill development is conducted to support information sharing and compliance education.With the aim of bolstering the activities of the liaison officers, in FY2013 they were subject to evaluation of the results of their activities, additional members were appointed and existing members were re-appointed, and their areas of responsibility and the details of the system were reviewed. The planning and implementation of training and other measures regarding worksite risks by liaison officers raises employee awareness of compliance even further.

EBARA Group Code of ConductThe EBARA Group Code of Conduct was adopted as a set of standards for conduct by Group officers and employees in compliance with laws and regulations based on a strong sense of ethics.The Code of Conduct was revised in FY2013 to support compliance not only with the laws and regulations of each country, but also practices shared throughout the EBARA Group on a global scale. In conjunction with the revisions, training on corporate ethics was conducted at 47 business site in Japan.Training at overseas Group companies is conducted through visits from EBARA head office personnel as well as training programs made available on the Group intranet.

Whistle-Blowing DesksEBARA has established a variety of internal consultation resources available to whistleblowers to promote rapid improvement and resolution of

legal violations and questionable conduct by organizations and individuals. In addition to a compliance consultation desk operated by an outside attorney provided in consideration of the confidentiality of consulting employees, a harassment consultation counter operated by a specialized division and an audit and supervisory board member helpline for consulting with audit and supervisory board members are also available. In FY2013, a total of 35 inquiries were made. The details of some of the consultation matters were used, with the consent of the consulting individual, as case studies, with summaries and information on the resolution made available to employees with the aim of preventing reoccurrence.

Raising Awareness of ComplianceTo confirm the status of compliance awareness among employees, EBARA carries out a survey of all officers and employees in Japan each year and conducts training to continuously raise awareness of compliance. The survey results confirm that having managers act as models with regard to compliance serves to raise compliance awareness among employees.In FY2013, personnel from the EBARA head office Compliance Department visited 70 sites in Japan and conducted training to raise compliance awareness among employees at the domestic branch offices and sales offices of subsidiaries that merged with EBARA in 2012.

Do you act with a priority on compliance at all times?

Implementation of Compliance-Related Training (FY2013)

Training topics Number of training sessions held Training sites Number of

participants Details

Training conducted at the request of individual divisions

4 times Group companies, other sites 182 Compliance and

other topics

Training based on survey results 16 times Group companies,

other sites 461 Harassment

Branch office and sales office training 96 times Branch offices

and sales offices 1,145 Compliance and other topics

Corporate ethics training 47 times

Head office, branch offices, other locations

1,001 Corporate ethics (Ebara Way)

CSR training E- learning, other topics

EBR and domestic subsidiaries 8,628 Corporate ethics, human

rights, other topics

Business site training 6 times Districts 292Preventing reoccurrence of problems

Manager training 1 times Head office 45 Training by outside instructors

New employee training 2 times Head office, districts 74 Compliance, other topicsNew management-level employees 1 times Head office 94 Human rights, other topics

［%］

［Fiscal Year］2008 2009 2010 2011 20122007 2013

60

30

0

90

Moderately, priority for compliancePriority for company profit under any circumstances

Priority for compliance under any circumstancesModerately, priority for company profit

Total percentage prioritizing compliance



ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce

Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts

3.The EBARA Group operates in a spirit of free and fair competition.

Fair

oper

atin

g pr

actic

es

Anti-CorruptionEBARA defines anti-corruption as the prohibition of bribery, promotion of fair and open competition, and elimination of all dealings with anti-social forces. We adopted a Basic Policy on Anti-Corruption, and based on the policy, we created and carry out an Anti-Corruption Program as a mechanism for preventing bribery, unfair competition, and dealings with anti-social forces.

Overview of the Anti-Corruption Program

1. Declaration by the Company's Top management.2. Preparation of internal regulations3. Familiarization and Education regarding Anti-Corruption4. Establishment of consultation hotline5. Implementation of internal audits6. Creation of cooperative systems with external expert

organization

The president issued an anti-corruption declaration based on the Basic Policy on Anti-Corruption.

Following EBARA's lead, domestic Group companies have instituted anti-corruption programs based on the Basic Policy on Anti-Corruption and are taking necessary measures according to their specific business circumstances. Overseas Group companies too have defined specific action items and are taking action based on the EBARA Group Basic Policy on Anti-Corruption according to the conditions in each country. In FY2013, measures were taken by overseas Group companies

with a priority on implementing anti-corruption programs as a part of compliance training.

Prohibition of Unfair CompetitionEBARA Group prohibits unfair competition and established a specialized organization to check on the status of compliance. There were no major violations in FY2013.

Trading Monitoring SystemA specialized division continuously monitors trading from the perspective of compliance with the Subcontracting Act, Construction Business Act, and Anti-Monopoly Act thereafter reporting the results of its findings to EBARA's management to ensure that fair trade practices are conducted. Information concerning areas that require improvement is shared with the relevant divisions and the progress of improvements is monitored.

◆ Overview of Subcontracting Act Monitoring

Periodic monitoring of four duties and 11 prohibitions is conducted as a parent business organization specified in the law, vouchers are used to chronologically confirm processes from requesting quotes to payment, and if any improper procedures are identified, guidance on making improvements is provided, and implementation of the improvements is confirmed.

◆ Overview of Construction Business Act Monitoring

Vouchers are used to chronologically confirm processes from requesting quotes to payment, construction system logs are maintained, and appropriate assignment of engineers is confirmed. In addition, operating status is confirmed based on rules revised by Ministry of Land, Infrastructure, Transport and Tourism (MLIT) notification.

【Examples】

① We confirmed proper implementation of payment in cash of amounts equal to labour expenses as recom-mended by an MLIT notice on proper subcontracting agreements and subcontracting payments and on rigorous work execution management.

② In accordance with a recommendation from the MLIT concerning countermeasures against non-enrollment in social insurance by securing statutory fringe ben-efit expenses, EBARA investigated the status of social insurance enrollment by subcontractors, encouraged un-enrolled companies to enroll, and conducted comprehensive implementation of accompanying standard quotations.

◆ Overview of Anti-Monopoly Act Monitoring

In accordance with EBARA's Detailed Rules on the Preven-tion of Bid Rigging, we chronologically confirm the intent to bid on public-bid projects, cost estimates, and deter-mination of the bid amount. We also conduct individual hearings for projects with high rates of bidding success and confirm order placement and acceptance records with other companies in the same industry to ensure that participation in bids is proper.

Anti-Corruption Programshttp://www.ebara.co.jp/en/csr/

fair-practices/blocking-anti-social.html

A new Anti-Corruption Law came into effect in Brazil at the end of January 2014, and strict legal compliance at the same levels as in Europe and the U.S. is now required. Following compliance training in March 2013, we conducted an anti-corruption program seminar for all employees and sales representatives in January 2014. At that time, we explained the EBARA Group CSR Policy and established among all personnel a shared sense of responsibility and pride as members of the EBARA Group.We have little experience with internal control systems and are still finding our way, but personnel responsible for internal controls as well as executives and employees from each division are actively undertaking the formulation of new rules and risk management. I feel that we have raised the ambitions of each employee to make our firm a much better company.

Kiyoshi Ichikawa�President

Ebara�Industrias�Mecanicas�e�Comercio�Ltda.�(EIMCO)

Raising Awareness of Anti-Corruption by All Employees

VOICE


ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

The EBARA Group conducts business with a high standard of ethics.3. The EBARA Group operates in a spirit of free and fair competition.

Fair operating practices

http://www.ebara.co.jp/en/csr/fair-practices/blocking-anti-social.html

Dissociation from Anti-Social ForcesEBARA has created systems to prevent the providing of any economic profit, benefits, favours, etc., whatsoever to anti-social forces for any reason or engaging in any activities that provide profit for anti-social forces.

(1) The Company, with the cooperation of external specialized agencies, centrally manages and accumulates information on antisocial forces, and has established the Anti-social Forces Countermeasure Headquarters to promote initia-tives toward the exclusion of ties with anti-social forces.

(2) The Company, upon performing checks on suppliers and making judgments about the qualities of shareholders, severs any ties with groups and entities once they are de-termined to be antisocial forces. This process is reported at the regular meeting of the Anti-social Forces Countermea-sure Committee and other meetings, and the Company ensures that information is shared within the Group.

(3) The Company has established clauses to exclude or-ganized crime groups in contracts so as to be able to promptly sever ties with its suppliers, once the suppliers are determined to be involved with antisocial forces or any other similar entities.

(4) To deal with false claims, at each business location, branch office and branch sales office, a manager respon-sible for preventing false claims has been appointed. This manager periodically conducts the necessary education and training and prepares the necessary manuals in order to teach the employees methods on how to deal with false claims appropriately, including cases in which contact is initiated by anti-social forces.

Political ContributionsEBARA complies strictly with the Political Funds Control Law and other applicable laws and regulations and does not make any unlawful donations or bribes. Even in the case of lawful political contributions, the details of the political activities are confirmed in advance, and political contributions are provided only in cases where a determination is made that the contribution is appropriate in terms of contributing to local communities and the like.

Fair Trading PracticesThe EBARA Group adopted the EBARA Group Procurement Policy and the EBARA Group CSR Procurement Guidelines and conducts fair trade practices in accordance with these policies and guidelines.

◆ Outline of the EBARA Group Procurement Policy

1. Provide fair and equitable opportunities2. Economic rationality3. Confidentiality4. Mutual trust5. Social Trust6. Green procurement

◆ The EBARA Group CSR Procurement Guidelines

1. Compliance

2. Consideration for human rights, health and safety3. Environmental conservation4. Ensuring proper quality, price, delivery and safety5. Improvement of technical capabilities6. Information disclosure7. Information security8. Protection of intellectual property9. Anti-corruption

10. Dissociation from antisocial forces

The EBARA Group Procurement Policy and the EBARA Group CSR Procurement Guidelines are accessible on our website. We also established a CSR procurement inquiry desk for submitting opinions and [email protected] Procurement Operations Liaison Committee will periodically review the CSR Procurement Guidelines based on the needs of the times.

Implementation of CSR Procurement QuestionnaireIn FY2013, we conducted a CSR procurement questionnaire of our main suppliers to confirm the status of compliance with the CSR Procurement Guidelines. The questionnaire contained questions regarding individual items of the guidelines and other CSR-related topics so that we can understand the status of efforts taken by suppliers concerning compliance with the guidelines.We plan to expand the scope of the survey and to continue to confirm CSR efforts taken by suppliers. When necessary, we will request suppliers, whose CSR measures are lagging, to make improvements.

Results of CSR Procurement Questionnaire�(Points�out�of�a�total�of�50)

Materials Procurementhttp://www.ebara.co.jp/en/csr/fair-practices/procurement-policy/

50 points

45 and ab

ove but

less than

50 points

40 and ab

ove but

less than

45 points

35 and ab

ove but

less than

40 points

30 and ab

ove but

less than

35 points

25 and ab

ove but

less than

30 points

20 and ab

ove but

less than

25 points

15 an

d above but

less than

20 points

10 an

d above but

less than

15 points

Less

than 10

points

［Suppliers］

0

2

4

6

8

10

12

14

16

18


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts

3. The EBARA Group operates in a spirit of free and fair competition.

Fair

oper

atin

g pr

actic

es

EBARA Group environmental objectives (FY2020) Achievements in FY20131. Environmental Conservation Activities in Our Daily Business① Keep voluntary standard values for environmental laws and regulations such

as water pollution prevention, air pollution prevention and the like.Each office and business site worked on pollution-prevention and achieved all quantitative standards.

② Continuously reduce the amount of waste output produced from each office and business site. Maintain a waste material recycling rate of 95% or higher. Maintain a final waste landfill rate of less than 3%. Completely comply with the legal terms stipulated in the Construction Waste Disposal Consignment Contract. Utilize recognition system about reliable industrial waste disposers.

Achieved a material recycling rate of 92.6%.The final landfill disposal rate of 7.0% did not achieve the target.Disposal outsourcing agreements with reliable waste disposers were rigorously adhered to and use of the certification system for reliable disposers was encouraged.

③ Continuously reduce CO2 emissions Reduced emissions by 3.1% from FY2012.④ Reduce water usage by 30% from the FY2000 level. Reduced usage by 3.1% from FY2012.

Reduced usage by 15.1% from FY2000.⑤ Continuously reduce emissions of PRTR Law controlled substances.

Reduce VOC emissions by 30% from the FY2000 level.Reduced PRTR emissions by 6.7% from FY2012.Reduced VOC emissions by 9.3% from FY2000.

⑥ Identify and minimize environmental risk impact involved in R&D planning and in the planning, installation and operation of facilities at all offices and business sites.

Each office and business site worked on pollution-prevention through environmental audits.No environmental pollution accidents caused by construction.

2. Contribution to Environmental Conservation in Business Activities⑦ Set and implement policies and goals for achieving the industry’s leading

environmental performance per each product.Environmental considerations (reducing energy usage, miniaturization, etc.) were implemented with regard to many products and services based on customer requests.

⑧ Build and run a framework for managing information about the chemical substances found in procured components and communicating information about the chemical substances found in finished products for customers.

Planning is underway for collecting information on and managing chemical substances in procured products used in application services starting in FY2015.

⑨ Reduce the environmental load through a products lifecycle by continuous reanalysis of technological standards of paints, ingredient materials, etc. from a LCA standpoint.Establish and implement standards for topics of environmental concern in the CSR procurement.

The Basic Guidelines on Safety and Environmental Design (Internal Standard No. UB1101) are being implemented to reduce the environmental impact of products. Use of asbestos and paint with hexavalent chromium or lead is prohibited in procured products.

⑩ Enhance the availability of products designed for use in the global warming prevention field.a Dry vacuum pumps for solar cell manufacturingb Desalination pumps and equipmentc Nuclear power plant pumpsd Energy-saving standard pumps driven by high-efficiency motorse High-efficiency chillersf Biomass utilization operations

Ultra-high-efficiency three-phase AC induction motor compliant with the top-runner program under the revised Energy Saving Law were named Top Runner Motors and the lineup of products using those motors was expanded.In the environmental engineering field, measures are being taken to encourage the use of renewable energy through utilization of feed-in tariffs (FIT) and power producer and supplier (PPS) programs at generating plants with long-term operations outsourcing agreements.

3. Efforts for Environmental Management⑪ Run the environmental management system across the EBARA Group and

continuously apply revisions to standardize the system rules in operation.Link environmental management systems to the other management systems such as systems of energy management, occupational safety and health, and quality management.

The Tochigi District acquired ISO 14001 certification on November 26, 2013.All EBARA CORPORATION offices and business sites maintained ISO 14001 certification.Branches and sales offices (36 sites) outside the scope of the ISO 14001 certification of Ebara ET and EYH, which later merged with EBARA, were incorporated into the scope of certification of the Haneda Office.

⑫ Thoroughly manage environmental risk by continuous implementation of second-party audits throughout major business sites of the EBARA Group in Japan and overseas.

Corporate environmental audits of nine organizations in Japan were conducted and necessary improvements were completed.The environmental risks of each organization were assessed and flexible environmental management is conducted.

⑬ Establish an enhanced sense of ecology among all employees in the EBARA Group through promoting education concerning biodiversity, and environmental contribution activities.

A green area was developed within the Fujisawa District site with the participation of employees and four nature observation meetings were held.

⑭ Continuously disclose environmental information associated with business activity by the CSR Report, especially the enhancement of environmental assessment information on products.Continuously increase sales of environmental label certified products.

Issued the EBARA Group CSR Report 2013.Other systematic measures are in the preparatory stage.

⑮ Make contributions to society, such as environmental technology seminars, by utilizing technical knowledge developed through the EBARA Group’s business activity and environmental activities.

The EBARA Hatakeyama Memorial Fund conducted technology seminars in Southeast Asia.

1. The EBARA Group is striving to create a society in which nature and technology are in harmony.

2. The EBARA Group endeavors to conserve the global environment through its technology,product and service supplying.

EBARA Group Environmental Vision

EBARA Group Environmental Vision



ISO 26000

INDEX

Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights

4. The EBARA Group strives to improve the global environment.

The environm

ent

Major Environmental Performance Data

＊1：【Environment�Control�Committee】�The�highest�decision-making�body�concerning�environmental�policy�in�the�EBARA�Group.＊2：【PDCA】�A�system�for�continuous�improvement�through�repeated�implementation�of�the�Plan-Do-Check-Action�process.

EBARA Group Environmental ManagementEnvironmental Management InitiativesEBARA conducts environmental management by integrating the environmental management of individual offices and business sites, which have primary responsibility for preventing pollution, with the environmental management of Group companies, which encourage environmental consideration with regard to products.EBARA and the EBARA Group conduct environmental management in accordance with ISO 14001. The Tochigi District, which mainly performs repair of products, acquired ISO 14001 certification on November 26, 2013.EBARA merged with three consolidated subsidiaries on April 1, 2012. The sales offices of these consolidated subsidiaries located throughout Japan were not included in the scope of the ISO 14001 certification, and accordingly, measures to include them within the scope of certification of the EBARA Haneda Office

continued in FY2013. As a result, 36 of the sales offices were included within the scope of certification by the end of March 2014. Plans call for the remaining 30 sales offices to be included in the Haneda Office’s scope of certification by the end of FY2014.

Understanding Environmental Management Condi-tions at Overseas SitesAs air pollution and other environmental issues become more serious in emerging countries, environmental laws and regulations are being revised and strictly enforced, increasing the need for environmental risk management at overseas sites.The Environment Control Committee＊1 adopted as EBARA Group policy the acquisition of certification under ISO 14001 at all production sites worldwide, compliance with laws and regulations, and improvement of environmental management through implementation of PDCA.＊2 The Committee also conducted questionnaire surveys to confirm the status of environmental management at all EBARA Group sites.

Change in CO2 emissions(Electric�power�and�fuel-derived) Change in material recycling rate and the final landfill disposal rate

Change in emissions of VOC out of substances controlled by the PRTR Law

Change in emissions of substances controlled by the PRTR Law

[In 1,000t]

0

10

20

30

40

50

60

20122011201020092000

40.740.7

2013

37.437.438.638.641.541.541.341.3

45.045.0

[Fiscal Year]

Group consolidated companiesEBARA

2012201120102009

95.895.8 96.796.7 98.698.6

3.63.6 2.62.6 1.21.2

2013

98.698.6

1.21.2

92.6※92.6※

7.0※7.0※

Target： more than 95％

Target： Less than 3％

0

100

80

20

10

90

［%］ Material recycling rate Final landfill and final disposal rate

[Fiscal Year]

20122011201020092000

60.760.7

2013

48.148.154.854.853.453.4

72.672.680.580.5 Target： 64.4

［t］

0

20

40

60

80

100

[Fiscal Year]


20122011201020092000

46.946.9

2013

44.744.754.054.0

45.745.7

68.168.1

80.580.5

［t］

0

20

40

60

80

100

Target： 56.3

[Fiscal Year]


◆��Material�Recycle�Rate:�[Material�recycling�amount�/�� (Material�recycling�amount�+�Final�landfill�disposal�amount)]�×�100%

◆�Final�landfill�disposal�rate(�Final�landfill�disposal�amount�/�waste�amount)�×�100%◆�Final�landfill�disposal�amount:�Includes�the�amount�of�untreated�waste�directly�land-filled�and�the�amount�of�residue�landfilled�without�being�reused�after�intermediate�treatment.

※�Sludge�that�could�not�be�separated�was�released��from�some�business�sites�and�offices,�resulting�in�a�deterioration�of�the�material�recycling�rate�and�the�final�landfill�disposal�rate.

◆�Since�we�set�our�target�back�in�FY2000,�we�have�been�using�an�emission�coefficient�of�0.357�kg/kWh,�in�compliance�with�the�enforcement�order�regarding�the�Law�Concerning�the�Promotion�of�Measures�to�Cope�with�Global�Warming,�which�came�into�effect�in�2000.

◆�PRTR�Law:�Pollutant�Release�and�Transfer�Register�Law◆�Discharged�Amount:�The�amount�discharged�into�the�environment�such�as�into�the�air,�water,�and�the�soil. ◆�VOC:�Volatile�Organic�Compounds

Detailed information concerning the environment is available on the EBARA website: Environmental Preservation Initiatives

http://www.ebara.co.jp/en/csr/env/data/

For details, see our websitehttp://www.ebara.co.jp/en/csr/env/


ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts


The

envi

ronm

ent

Mean Global Warming CountermeasuresEnergy-saving measures using energy monitoring systems continue to be implemented at production sites. The Kumamoto District switched its nitrogen supply from a nitrogen gas generator to cylinders, reducing energy consumption.Sales offices reduced carbon dioxide emissions by updating heating, ventilation, and air conditioning (HVAC) equipment (10 offices) and power receiving and transforming equipment (five offices) to cut energy consumption.The EBARA fleet of corporate vehicles was reduced by 22 from 709 (in March 2013) to 687 (in February 2014) to curtail the use of automobiles and encourage the use of public transportation. Hybrid vehicles account for 120 of the 687 vehicle fleet (17.5%). In addition, the EBARA Fujisawa District installed a photovoltaic system with a total capacity of 300 kW.

Chemical ManagementAs a result of revision of the EU RoHS Directive,＊1 some EBARA products are now subject to the directive. To clarify whether products are in compliance with or exempt from the directive, we prepared a CE Compliance Declaration and an opinion concerning CE mark compliance and exemption from application. In order to certify compliance with the RoHS Directive and the absence of substances subject to the directive (lead, hexavalent chromium, cadmium, mercury, PBB, or PBDE) in products, compliance with the EN 50581 EU standard is required. To comply, we are currently developing management rules concerning chemical substances used in products.We plan to introduce in FY2014 an internet-based service that will reduce the work burdens involved in investigating the chemical substances present in procured products. In preparation, we held repeated meetings with internet service hardware manufacturers, determined installation specifications, estimated installation costs, and investigated installation work processes in FY2013. With regard to surveying chemical substances included in products, we reflected in the Green Procurement Standards matters concerning which we

want supplier cooperation and took measures to make sure suppliers are familiar with them, leading to improved survey efficiency and higher response rates by suppliers.

Responses Regarding Conflict Minerals＊2

Those EBARA’s products that are considered production equipment are exempt from Article 1502 of the U.S. Financial Reform Act (the Dodd-Frank Act). To explain simply to customers the background as to why they are exempt, we prepared the Opinion on Responses Regarding Conflict Minerals. Also, regarding products which are subject to the Act, we disclose the necessary information to customers and strive to comply with the said Act.

Normalization and Streamlining of Waste Disposal OperationsEBARA offices and business sites do not dispose of waste material, but outsource all disposal. Offices and business sites comply strictly with laws and regulations concerning the outsourcing of waste disposal and take measures to increase operational efficiency. Specific measures include the introduction of electronic manifests and widespread use of model waste disposal outsourcing agreements prepared by the legal divisions and the environmental management divisions. Also, introduction of an internet-based service to check contractual provisions required by statute proceeded and arrangements were completed at main offices and business sites in Japan by the end of FY2013.The more than 60 nationwide branches and sales offices of subsidiaries that merged with EBARA in 2012 concluded more than 150 waste disposal outsourcing agreements. To efficiently and appropriately renew and review the agreements with disposal companies while ensuring compliance by each branches and sales offices with waste disposal laws, we investigated the introduction of a service to perform all waste disposal outsourcing operations on behalf of the Company. Acting in cooperation with a leading waste disposal firm with a nationwide network of more than 1,000 collection and transportation, intermediate processing, and recycling companies, the service outsources all operations to industrial waste disposal companies including supporting contract execution operations, submitting requests for waste collection to collection and transportation companies, preparing and managing electronic manifests, and conducting internal audits and reliability surveys of disposal companies. As a result, the waste disposal outsourcing and management operations of EBARA branches and sales offices was greatly reduced and appropriate disposal is reliably performed in accordance with laws and regulations.

March 13, 2014 news (Japanese site only)http://www.ebara.co.jp/news/2014/20140313.html

Photovoltaic�modules�viewed�from�above�the�Fujisawa�District

＊1：【RoHS�Directive】�A�law�governing�the�use�of�specified�hazardous�materials�in�electrical�and�electronic�devices.＊2：【Conflict�Minerals】�Minerals�concerning�which�Article�1502�of�the�U.S.�Financial�Reform�Act�requires�the�disclosure�of�information�on�use


ISO 26000

INDEX


Consum

er issuesO


omm

unity involvement

and development


nment

Labo

ur practices

Hum

an rights


The environm

ent

Proper Disposal of PCB WasteMany EBARA business sites store large quantities of low and high concentration PCB waste. In FY2013, in internal coordination committee met four times and PCB waste disposal companies visited four sites to confirm on-site disposal conditions with the aim of steadily disposing of PCB waste. EBARA aims to dispose of all stored PCB waste by about 2019.

PCB Waste Disposal Results in FY2013◆ 205 drums with low-concentration PCB oil stored at the

Sodegaura District◆ 41 and a 2500 kVA transformer with high-concentration PCB

stored at the Tochigi District

Biodiversity Preservation Measures at the Fujisawa DistrictThe Fujisawa District, which has a green space of more than seven hectares, conducted a vegetation survey starting in FY2011 to preserve biodiversity and identified 128 species of plants in 51 families. In FY2013, a Green Space Development and Nature Observation Group made up of employees met four times to enhance and preserve biodiversity.The green space development included thinning of stone oak and other trees, elimination of black locust, and invasive species, and cutting of brush that became overgrown during the summer. This allowed for greater sunlight, and the grassy area was expanded. In conjunction with learning about biodiversity, participants also held nature observation meetings to observe trees from the perspective of an insect, make an acorn flute, build a rhinoceros beetle pasture, and conduct other activities. In addition, the trees removed for thinning were used to build walkways and steps. Through these measures, biodiversity in the Fujisawa District green space has increased and interest in biodiversity among employees is higher.

Future DevelopmentsIn his message in the CSR Report 2013, President Maeda stated, “CSR activities may be defined as practice and confirmation, by each and every employee, to see that the corporate economic activities are in accordance with social logic and standards, at harmony with the global environment, and always efficient.” In accordance with this approach, effective maintenance and management of ISO 14001 certification in Japan as well as efficient management of waste material are among the outstanding issues concerning which we will review existing mechanisms.To respond promptly to the adoption and revision of environmental laws and regulations in Japan and other countries and to conduct reliable environmental risk management and pollution prevention, we will actively investigate outside collaboration.For overseas Group companies, in FY2014 we will set the prevention of pollution and public waters and the atmosphere and rigorous waste management as basic policies. We will also encourage the acquisition of ISO 14001 certification and maintain strict compliance with environmental laws and regulations.

Removal�of�stored�PCB�(EBARA�Tochigi�District)

Employees�use�scythes�to�cut�weedy�brush

Building�steps



ISO 26000

INDEX

Co

nsum

er is

sues

Org

aniza

tiona

l gov

erna

nce


Com

mun

ity in

volv

emen

t an

d de

velo

pmen

tFa

ir op

erat

ing

prac

tices

The

envi

ronm

ent

Lab

our

pra

ctic

esH

uman

rig

hts

The

envi

ronm

ent

corporate governance/internal control - 荏原製作所 · 2020-03-02 · corporate governance at...

Documents