Supply Chain Management

Supply Chain Management

Supply chain management

The Oji Group’s raw materials for paper and paperboard products are recyclable resources derived from wood resources. For many years, we have been promoting sustainable forest management to avoid running out of renewable wood resources. Currently, the Oji Group owns and manages 190,000 hectares of forest in Japan and 380,000 hectares of forest overseas (of which 250,000 hectares are planted). In addition, our post-consumer paper and paperboard products are also recyclable wood resources. The Oji Group uses approximately 4.08 million tons of wastepaper every year, and the recovered paper utilization ratio in FY2018 was 64 percent.

Based on this background, the Oji Group has recently formulated a sustainability strategy aimed at a sustainable society through resource circulation centered on forest resources in the value chain. We are committed to contributing to the realization of a truly enriched and sustainable society through a range of benefits that are provided or created through our business activities.

Identification of environmental and social issues in the supply chain

The Oji Group has established the Oji Paper Group Partnership Procurement Policy and the Wood Materials Procurement Guidelines for the procurement of wood resources, and we have implemented the procurement of wood raw materials while strengthening our cooperation with suppliers in each country and region.; The Oji Group has identified the following environmental and social issues in our supply chain:

  • Compliance with laws, regulations, and social standards and fair trade;
  • Environmental management, waste reduction, addressing climate change, biodiversity, and water resource management;
  • Protection of human and labor rights, occupational health and safety;
  • Building relationships of trust with stakeholders.

For this reason, the procurement division conducts risk assessments and monitors for suppliers of wood chips and purchased pulp made from forest resources. Through these activities, we have been working to improve environmental and social issues throughout the supply chain. For reference, the procurement flow of imported chips, which accounts for 80% of the procurement volume of wood chips, is shown below.

Identification of environmental and social issues in the supply chain

Risk assessment for suppliers

The procurement department conducts due diligence in advance for new suppliers:

  1. Confirming the supplier’s general information (location, presence/absence of forest certification,
    country of origin/region, tree species, composition of raw materials, etc.) in documents;
  2. Conducting national and regional risk assessments based on the forest certification system,
    corruption recognition index (corruption recognition index, CPI),
    and FAO deforestation rate in the country or region;
  3. Checking local suppliers (forest owners, wood builders, chip factories, etc.) for compliance with legal regulations.

As a result, the procurement department selects suppliers identified as low risk. To date, there is no record of procurement from suppliers determined to be high risk or potential risk.

Monitoring of existing suppliers

The Oji Group has representatives in the main country from which it imports wood chips. These representatives confirm raw material origins, forest management methods, forest certification, logging licenses, and received records of round wood when wood chips are loaded to ship. Representatives then provide suppliers with training on the Partnership Procurement Policy and Wood Raw Material Procurement Guidelines required by the Oji Group through quality guidance and business meetings.
In addition, the procurement department conducts traceability of all wood chips and imported pulp procured annually, and through a third-party audit, confirms that all procurements are carried out in accordance with the Guidelines for Procurement of Wood Raw Materials, and that there is no violation of the requirements required for traceability. These results are published on the website. The procurement department has also conducted annual audits of the Law Concerning the Promotion of the Utilization and Distribution of Legally Logged Timber (Clean Wood Law)* by the Japan Paper Association, and there have been no serious violations or points to be noted.

  • *Clean Wood Law: Japanese only.

Building trust with stakeholders

The Oji Group is one of the suppliers for paper and paperboard, and also one of the customers of wood raw materials. Accordingly, the procurement department must respond to a customer’s request as a supplier if the customer makes a request regarding the legality and traceability of the raw material. We have submitted the abovementioned documents to customers every time, and there have been no requests for further data provisions or examples of violations to date.
The Oji Group also holds regular meetings with forest certification organizations and NGOs. For example, we sell forest certification products in collaboration with WWF Japan and Oji Nepia Co., Ltd.
The Oji Group interacts with forest certification organizations on a regular basis, and when certification standards are revised or risks are reviewed, we conduct training such as providing notification of revisions to procurement department staff and suppliers. The Forest Certification Committee, which is chaired by the Director responsible for raw material procurement, consists of the Raw Materials Procurement, Paper and Paperboard Manufacturing and Sales Division, and the Corporate Sustainability Department. It meets twice a year to share the status of efforts to address environmental and social issues related to the supply chain, and discusses and implements improvement measures.