I. Introduction
Compliance, integrity and a responsible approach also concerning human rights and the environment are of utmost importance for Komatsu Germany. In line with worldwide Komatsu policies, we believe our "Corporate Value" is the total sum of trust given to us by society and all stakeholders. Komatsu Germany acknowledges its social responsibility as a good corporate citizen and is seeking to find appropriate solutions for ESG (Environmental, Social and Governance) issues through our core business activities and sustainable growth.
Against this background, Komatsu Germany takes the requirements of the SCDDA (which will be applicable on Komatsu Germany from 1 January 2024) very seriously.
II. Our Values and Principles
Komatsu Germany will comply with the laws and regulations of all countries where it conducts its business activities. Where established international human rights norm exists as well as national laws, we will follow the higher standard; where they are in conflict, we will seek ways to respect internationally recognized human rights to the greatest extent possible. Komatsu shall support and respect the protection of internationally proclaimed human rights and make sure that we are not complicit in human rights violations.
Through human rights due diligence based on the United Nations Guiding Principles on Business and Human Rights, we will implement measures for preventing or mitigating negative impacts on human rights. In addition, frameworks will be put in place to allow for corrective measures regarding activities that had a negative impact on human rights in line with applicable laws. The Management Board of Komatsu Germany is responsible for the implementation of the actions and requirements defined in this policy statement.
Komatsu Germany's supply chain due diligence is based on international human rights principles encompassed by the Universal Declaration of Human Rights, the United Nations (UN) Guiding Principles on Business and Human Rights and the ILO Core Labour Standards.
Furthermore, we acknowledge the following conventions:
• Minamata Convention on Mercury;
• Basel Convention on the Control of transboundary Movements of Hazardous Wastes and their Disposal;
• Stockholm Convention on Persistent Organic Pollutants (POPs Convention).
All the above declarations and conventions constitute the basis for Komatsu Germany’s business and reflects the values which Komatsu Germany aims to promote along its supply chain.
Komatsu Germany highlights the company’s commitment for the promotion of human rights and to protect the environment in its own business area and along its supply chain. Komatsu Germany does not accept violations of human rights or the environment.
To grow Komatsu Germany's efforts, we encourage business partners to do the same and to meet the expectations laid down in this policy statement with appropriate efforts.
Komatsu Germany is committed to take responsibility for its products, for its people and consequences from its business activities. Komatsu Germany protects communities and their environment and aims to eliminate any negative human rights impact.
In order to do so, Komatsu Germany implemented appropriate organizational measures to detect, prevent and minimize any risks identified including human rights risks and continuously reviews business operations for human rights risks and will react with appropriate preventive measures. In line with applicable Komatsu Germany policies and procedures, Komatsu Germany will take immediate action to prevent, end or mitigate any actual or imminent violation of human rights or environmental obligations.
III. Our Approach concerning the Protection of Human Rights and the Environment in the Supply Chain
Komatsu Germany respects all laws and regulations in force to protect human rights and that prescribe supply chain due diligence. Komatsu Germany uses due diligence as a means to identify and prevent human rights risks along its supply chain.
(a) Description of measures for effective risk management
Komatsu Germany has implemented a tailored human rights and environment-related risk management system, as required by Sec. 4 (1) SCDDA. This system includes conducting a risk analysis, implementing preventive measures, taking remedial actions, establishing a grievance mechanism, fulfilling due diligence obligations towards indirect suppliers, and meeting documentation- as well as reporting requirements. By integrating these measures, Komatsu Germany demonstrates its commitment to fulfilling due diligence obligations and promoting responsible practices throughout its supply chain in accordance with the SCDDA.
(i) Risk management system
Komatsu Germany has a dedicated human rights and environment-related risk management system in place with clear responsibilities for operational compliance. The Purchasing department (in KGC) and the Procurement department (in KGM) have assumed the overall responsibility for supply chain due diligence. Risk management procedures are designed to best react to dynamic and ongoing assessment of human rights risks. The Purchasing/Procurement department collaborates closely with all relevant internal stakeholders such as HR, Legal, Health & Safety, Environment and Compliance. The Purchasing/Procurement department and the appointed Human Rights Officer report on human rights risk and development to the Management Board of Komatsu Germany. Komatsu Germany ensures by appropriate means that the measures undertaken to protect human rights are properly documented and stored in order to fulfil all applicable reporting obligations.
Komatsu Germany recognizes the importance of engaging with suppliers, business partners, and other stakeholders to assess and manage risks effectively. Komatsu Germany will consult with independent external knowledge on human rights issues and respect dialogue and discussions with internal and external stakeholders to understand human rights related issues. This collaborative approach enables the identification of potential risks throughout the supply chain and promotes responsible practices among all stakeholders.
In addition, Komatsu Germany also considers environment-related risks that can ultimately affect human rights. The risk management system is also designed to manage and ensure compliance with applicable environmental regulatory requirements.
(ii) Risk analysis
Komatsu Germany has started to conduct human rights risks analyses on a regular basis. The risk analysis process will be repeated annually and is supplemented by ad hoc risks analysis in line with applicable law. Ad hoc risk analyses may be triggered due to the introduction of new products, projects, or business areas or from changes in business operations or strategic decisions. Komatsu Germany acknowledges the importance of assessing risks and taking appropriate measures in advance, especially when undergoing changes such as acquisitions or engaging with new suppliers. By integrating this evaluation into relevant processes, Komatsu Germany ensures that risk factors and necessary actions are considered.
The risk analysis covers Komatsu Germany's own business area and direct suppliers. Based on a structured approach, Komatsu Germany identifies and assesses risks prior to weighing and prioritizing those risks. The outcome of the risk analysis will be communicated to the Human Rights Officer and the Management Board on a regular basis.
Komatsu Germany is committed to develop the risk analysis process in the future in order to further enhance the understanding of human rights risks along the supply chain.
(iii) Preventive measures in own business area and vis-à-vis direct suppliers
Komatsu Germany has defined a set of preventive measures concerning its own business area and direct suppliers to promote human rights along the supply chain and minimize human rights risks. It implemented these human rights-related preventive measures into its compliance management system.
In line with applicable laws and regulations, preventive measures comprise, inter alia, the commitment of the Management Board expressed in this policy statement, the implementation of dedicated procurement strategies and purchasing practices and a supplier onboarding process which per design takes human rights and environmental aspects into account, as well as trainings for employees.
Komatsu Germany intends to further encourage collaboration with suppliers to promote human rights and mitigate existing human rights risks. Preventive measures vis-à-vis direct suppliers comprise, inter alia, contractual assurances regarding human rights and tailored trainings. Komatsu Germany expects its direct suppliers to appropriately address the human rights- and environment-related expectations laid down in this Policy Statement along the supply chain and its own suppliers. Preventive measures vis-à-vis direct suppliers are designed to empower direct suppliers to enhance the human rights situation not yet satisfactory instead of instantly banning them from the supply chain. Komatsu Germany will make risk-based use of contractual control mechanism (such as audits) to identify any deficiencies which would have to be remedied under a dedicated corrective action plan with precise deadlines. Komatsu Germany will continuously review and improve those preventive measures in light of the dynamic and ongoing risk management process.
(iv) Remedial actions
Komatsu Germany applies a zero tolerance policy regarding violations of human rights and the environment. Although Komatsu Germany has a dedicated risk management system in place to protect human rights and the environment to the best extent possible, even such risk management system cannot completely prevent any violation. In line with compliance best practices, Komatsu Germany has strong policies and procedures in place to detect violations of human rights and react appropriately.
If Komatsu Germany identifies or obtains substantiated knowledge of human rights violations resulting from or caused by Komatsu Germany’s business activities, Komatsu Germany will investigate immediately. Komatsu Germany is committed to provide for, or cooperate in, their remediation in order to immediately end or mitigate the violation based on internal guidelines and an escalation and remedial actions plan. Komatsu Germany will seek dialogue with direct suppliers and business partners to find a common solution and end or mitigate the violation. Komatsu Germany will use the entire set of contractual assurances to support the investigation or to bring the violation to an end. As ultima ratio, Komatsu Germany reserves the right to end a business relationship if the supplier or business partner does not take appropriate action to prevent, end or mitigate the violation.
(v) Grievance mechanism
In order for a company to earn and maintain the trust of society, the company must promptly identify and remedy any deficiencies it may have. In addition to a supervisor reporting system and auditing system, a whistleblowing system constitutes part of such "self-purification function".
Komatsu Germany fosters an open speak up culture to earn and maintain the trust of society. A trustworthy, easy to use and effective whistleblowing and grievance mechanism plays a vital role in doing so. Detailed information on the grievance mechanism can be found on the company website:
https://www.komatsu.eu/company/komatsu-germany-gmbh/sustainability
Komatsu Germany's compliance program facilitated the confidential reporting of known or potential violations of human rights and environment-related issues. Anyone inside or outside Komatsu Germany (including, but not limited to, employees of direct or indirect suppliers) can submit a report or grievance. Reporters can remain anonymous.
Komatsu Germany has made a clear commitment that it will never take any unfavorable action against any person because of his/her whistleblowing done in good faith. In addition, Komatsu Germany will appropriately use its influence on business partners to protect their employees along the supply chain from retaliation to the extent possible.
Komatsu Germany will take appropriate action to investigate any report and will involve the reporter throughout the handling of the report as appropriate. In particular, the receipt of the report will be confirmed to the reporter.
Handling of the report will be fair, neutral and independent. The reporter's identity and the report itself will be treated strictly confidential to the extent permitted by applicable laws and regulations. Komatsu Germany complies with applicable data privacy laws and regulations.
Violations can directly be reported to the Compliance Hotline operated by Komatsu Germany or by using the email or post reporting channels as published on the company website: https://www.komatsu.eu/company/komatsu-germany-gmbh/sustainability.
Komatsu employees can also report directly to the Komatsu Germany HR Department, their direct supervisor, the Komatsu Germany management or use another local reporting method.
(vi) Measures vis-à-vis indirect suppliers
To ensure the implementation of measures vis-à-vis indirect suppliers in cases of substantiated knowledge of violations of human rights-related and environment-related obligations, Komatsu Germany will implement appropriate preventive measures and take appropriate remedial actions to immediately end or mitigate such violations.
(vii) Documentation and Reporting
Komatsu Germany is committed to ongoing internal documentation of its due diligence efforts, ensuring compliance with the SCDDA. All relevant information and records are maintained for a minimum of seven years from their creation.
Annually, the company prepares a comprehensive report on its fulfillment of due diligence obligations during the previous fiscal year. This report is made publicly accessible, free of charge, on the company's website within four months after the fiscal year's end. It remains available for a period of seven years. The report includes clear and transparent information, such as the identification of any human rights- or environment-related risks or violations, and the measures undertaken to fulfill due diligence obligations. This encompasses aspects of risk management, risk analysis, prevention, remediation, and complaint procedures. Furthermore, the report evaluates the impact and effectiveness of these measures and draws conclusions for future actions.
(b) Priority human rights-related and environment-related risks
To be added based on the outcome of the first risk analysis.
(c) Expectations regarding human rights and environment protection to employees and suppliers
Komatsu Germany promotes clear expectations on the preservation and promotion of human rights and the environment in its own business area and along the supply chain. This relates in particular to
• prohibition of child labor,
• prohibition of forced labor and all forms of slavery,
• no disregard of occupational health and safety and work-related health hazards,
• no disregard of freedom of association, freedom of organization and the right to collective bargaining,
• prohibition of unequal treatment in employment,
• prohibition of the withholding of a fair wage,
• avoidance of destruction of natural resources (soil change, water pollution, air pollution and harmful noise emissions or excessive water consumption) through environmental pollution,
• no unlawful eviction of land rights and water,
• prohibition of hiring or using private/public security forces that may cause harm due to lack of instruction or control,
• no prohibited production, use and/or disposal of mercury (Minamata Convention)
• no prohibited production and/or use of substances within the scope of the Stockholm Convention (POPs), as well as non-environmentally sound handling of waste containing POPs,
• no prohibited import/export of hazardous waste as defined by the Basel Convention.
Komatsu Germany's sourcing is guided by international standards such as the UN Guiding Principles on Business and Human Rights, the UN Sustainability Development Goals (SDGs) and all applicable supply chain due diligence laws.
Komatsu Germany explicitly requires its Business Partners and their affiliates to adhere to these principles and to address these along their supply chains and towards their suppliers.
IV. Outlook on future Human Rights Strategy
Komatsu Germany is well aware that supply chain due diligence is a living process, which requires ongoing efforts and commitment. Komatsu Germany undertakes to continuously monitor and review the measures implemented for potential improvements to be adapted, if necessary. In particular, significant changes in the risk situation or specific indications that preventive measures' (including the grievance mechanism) and/or remedial actions’ functionality are significantly impaired might trigger additional actions by Komatsu Germany.
Komatsu Germany will continuously adapt and, if necessary, improve due diligence measures and review all implemented measures for effectiveness at least annually.
V. Contact Person / Internal Responsibilities for Human Rights Due Diligence
For KGC related questions, please refer to the Manager of the Purchasing Department.
For KGM related questions, please refer to the Manager of the Procurement Department.
