The wood used for making paper is an excellent resource that can be reproduced through sustainable forest management. When managed and used appropriately, forest resources can contribute to the prevention of global warming (by absorbing and fixing carbon dioxide), the conservation of water resources, and the preservation of biodiversity.
In the management and use of forests, we ensure that we do not participate in deforestation or illegal logging. We maintain and elevate our forest-related environmental values and at the same time we are aware that we must also fulfill our other social responsibilities such as respecting human rights and protecting labor and traditional rights in our forest operations.
Based on this understanding, the Oji Group established its Wood Raw Material Procurement Guidelines as part of the Oji Group Sustainability Action Guidelines for Supply Chains to promote the responsible sourcing of wood raw materials from all wood chips and pulp suppliers who share our commitment to the guidelines.
Furthermore, amidst growing social concerns about human rights issues and deforestation, the Oji Group revised its Wood Raw Material Procurement Guidelines in March 2023 to respond to these social issues.
We also communicate the content of revised guidelines to suppliers around the world by making both Japanese and English language versions and disclosing them on our website.

The Oji Group requires and verifies that all suppliers produce sustainable wood raw materials. We will implement responsible procurement by surveying wood raw materials from all suppliers to ensure traceability and only purchasing materials from properly managed forests. If the source or forest management status of the purchased wood is unknown or the wood does not conform to the following, we will engage in dialogue with the supplier and request improvements. We will not source from suppliers who do not make improvements.

1. Raw materials production area (logging area, forest ownership form, differentiation between plantation wood and natural forests)
2. Forest management method (applicable forestry laws, forest management regulations)
3. Acquisition status for forest certification
4. Avoidance of illegal logging (verification of forest certification, harvest permits, records of round logs received.)
5. Avoidance of genetically modified (GMO) wood
6. Avoidance of logging in High Conservation Value (HCV) Forests
7. Avoidance of raw materials associated with major social conflicts
8. Ensuring the protection of human rights and labor rights

We will also utilize forest certification systems FSC^™ or PEFC for verification. We will conduct the survey for imported wood chips on a per-ship basis. Domestic woodchips and pulp, which purchasing volume is smaller, will be surveyed once a year.

The Oji Group also manufactures FSC^™ certified products^*1 using woodchips that meet the requirements of FSC^™, such as FSC^™ certified wood and controlled wood^*2. Controlled wood must meet five requirements^*3 to be used as FSC^™ certified products (such as FSC^™ Mix label), which overlap with the Oji Group’s Wood Raw Material Procurement Guidelines.
Suppliers with FSC^™ CoC certification must be audited by a third party, and by utilizing these certification systems it is possible to ensure wood raw material traceability and the proper management at each step of the supply chains. The results of these audits are available for confirmation on the website.

• *1FSC^™ License code: Oji Paper Co., Ltd/FSC-C014119
• *2Controlled wood: Controlled wood is not FSC^™ certified wood, but can be mixed with FSC^™ certified material in products that carry the FSC^™ Mix label. Controlled wood be certified by a third-party organization after risk assessment on five requirements^*3 stipulated by FSC^™ certification bodies. Forest operators certified for controlled wood and organizations sourcing controlled wood are required to be audited annually by a third-party certifier.
• *3Five requirements: Meeting these requirements means not coming under, or being confirmed to be unlikely to come under, any one of the five categories below.
  1. Illegally harvested wood
  2. Wood harvested in violation of traditional and human rights
  3. Wood harvested in forests in which high conservation values (HCVs) are threatened by management activities (HCVs are areas particularly worthy of protection.)
  4. Wood harvested in forests being converted to plantations or non-forest use
  5. Wood from forests in which genetically modified trees are planted

Under the guidelines for procurement of raw materials, the Oji Group has established items to check the origin of raw materials, forest management methods, whether there is any illegal logging or mixed input of timber from high conservation value forests, and whether there is any infringement of human rights, among others.
We procure only raw materials from properly managed forests, with a requirement to check for illegal logging, infringement of human rights, and other criteria. Furthermore, we are able to trace back the origin of wood materials through the entire process from the forest of origin to the chip mill to the pulp and paper mill.
We monitor all suppliers of wood raw materials for compliance violations and disclose the results of our audits. In FY 2022, we procured 4,622 thousand BDT (dry weight tons) of domestic and overseas chips and 183 thousand ADT (wet weight tons) of purchased pulp, and we have received traceability reports (the response rate is 100%) from all suppliers (325 wood chip suppliers / 24 pulp suppliers inside and outside of Japan) to confirm "that the procurement is in line with the procurement guidelines for wood raw materials" by a third-party organization’s audit. The Oji Group has representatives in major countries from which it imports wood chips. These representatives inspect shipments, advise suppliers regarding quality, and meet with them. When wood chips are loaded onto a ship, the origins of the raw materials, forest management methods, and other details are confirmed, and a traceability report is prepared. The Oji Group verifies that its suppliers maintain forest certifications, logging licenses, and records of round wood received. As for domestic wood chips, the Oji Group has representatives in major cities across Japan who meet with suppliers. The origins of raw materials, forest management methods, and other details are confirmed, and traceability reports are prepared regularly.
If we discover some non-compliance cases with standards such as forest certification or wood raw material procurement guidelines, we will engage in dialogue with the supplier and request improvements. We will not source from suppliers who do not make improvements. And we will provide relevant information and best practice examples for such suppliers so that "suppliers are aware of the requirements they must meet and work to comply with certification standards and relevant laws and regulation."

The Oji Group visits local suppliers on a timely basis every year to check logging permits and related documents and inspect the actual logging areas and forests. We thus monitor the status of their compliance with the Wood Raw Material Procurement Guidelines and validate the traceability. Through these monitoring activities, we have built good relationships with our suppliers.

CENIBRA procures approx. 15% of its wood materials from small farmers outside from own forests. CENIBRA's long-term partnership with Brazilian farmers allows it to integrate local communities into its forestry operations, creating jobs and income, improving quality of life, and contributing to environmental protection and rural development. It can also reduce land concentration, enable community activities, and create and diversify income-generating opportunities for farmers.
This program brings resources to the municipality, promotes compliance with applicable laws and workers' rights, and strengthens neighborhood and community relations. In 2022, 566 farmers participated in the program through 1,025 contracts. A total of 19,135 hectares of plantations enrolled in the program are verified by CENIBRA as meeting the criteria for FSC™ controlled wood, including no conversion of natural ecosystems and no illegal logging in the past five years.

In March 2018, the Oji Group completed its registration as a Class-1 and Class-2 Registered Wood-Related Business Operator, which is stipulated in the Act on Promoting the Distribution and Use of Legally Harvested Wood (commonly known as the “Clean Wood Law”)^*1 that came into force in May 2017. When we procure wood raw materials or biomass fuels in the future, we will verify the legality of the procurement by conducting due diligence to prove the legality^*2 by working together with the Japan Paper Association.

• *1Aimed at encouraging the distribution and use of wood harvested in compliance with the laws and regulations of Japan or countries of origin and products made using such wood, this law stipulates the measures to be taken by wood-related business operators and the government of Japan, as well as the scope of the subject wood, etc. and wood-related business operators, method of registration, and other aspects. This law is therefore aimed at controlling the illegal harvesting of wood, which is an international problem.
• *2The due diligence for proving legality refers to minimizing the legal risks involved with wood through the following three processes.
  1. Collecting information about tree species, the country/region where the wood was harvested, and logging certification based on laws/regulations
  2. Risk assessment based on the information collected (initial risk assessment and detailed risk assessment)
  3. Measures for alleviating risk, including on-site investigations and the replacement of suppliers
     Where the risk is deemed high even after measures for alleviating it have been implemented or where it is impossible to take the measures, we refrain from purchasing the wood because there is a high risk that it is illegal wood.