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Third-party Evaluation and Independent Reviews

Basic Issues in JSR Group's Corporate Activity / Risk Management

FY :
Fiscal Year means the year starting April 1st.
For example, FY2016 means April 1, 2016 - March 31, 2017

1. Basic Philosophy

JSR Group believes that preventing a major crisis from occurring and minimizing its impacts on business activities is an important management role. The Group has formulated Risk Management Policies and established a Risk Management Committee through which it actively pursues risk management activities.

2. Risk Management System

JSR Group risk management is handled by the Risk Management Committee, which performs group-wide risk management and formulates response policies concerning actual and potential risks other than those arising in the normal course of business that are addressed in major conferences such as meetings of the Board of Directors*.

* Risks arising in the normal course of business that are addressed in major conferences, such as meetings of the Board of Directors are strategic risks that include those associated with capital investment and M&A.

Risk Management System

3. Risk Management Measures

(1) Risk Management

Since FY2009, JSR Group has fulfilled group-wide annual risk management procedures using its unique risk management system under the initiative of the Risk Management Committee. For each division of JSR Group companies in and outside of Japan, we identify and evaluate all potential risks, and formulate measures to control such risks. In FY2015, we revised risk identification methods after reviewing the validity of previous JSR Group risk management. Utilizing a risk map that represents level of business impact and frequency of occurrence, we identify risks that could have a significant impact on business continuity and organize them risks into the JSR Group Risk Factors. By monitoring and regularly reviewing risks that senior management has personally ascertained, we are building and maintaining a system for prevention and crisis preparedness.

(2) BCM Enhancement

1. We have published BCM procedures

Procedures which comprises BCM/BCP* systems in place for both peacetime and emergency situations.
These procedures define the BCM organization and the actual BCP, which includes stipulations on target recovery times, and BCP activation and cancellation standards. They also define the organizational structure that takes effect during activations of the BCP, and corresponding priority businesses and operations.

* BCM: Business Continuity Management/BCP: Business Continuity Plan
A BCP defines activities that need be conducted before the occurrence of an emergency situation that may threaten the survival of a company (large-scale natural disaster, explosion/fire, terrorist attack, etc.), judgment criteria and action guidelines that enable business continuity in the event of such emergencies, and other matters necessary for ensuring the continuity and early restoration of important businesses. BCM is a management system that has been developed to operate and continuously improve the BCP through a PDCA (plan-do-check-act) cycle.

2. Major Earthquake Preparations

JSR Group adopted a mid-term business plan in FY1995 concerning preparations for a major earthquake and has been conducting systematic activities to enhance those preparations. After FY2006, we began a seismic retrofitting project focused on high-pressure gas facilities in our plants, and installed an earthquake early-warning system at all JSR business sites. Based on lessons learned from the experience of the Great East Japan Earthquake, we are further reinforcing the anti-seismic capabilities of our buildings and implementing safety measures by incorporating the perspective of countermeasures against tsunamis. These initiatives are scheduled for completion by FY2020.

Yokkaichi Plant Administration Building

The Yokkaichi Plant Administration Building, completed in December of 2013, can withstand earthquakes of up to 600 Gals using two types of seismic isolators: laminated rubber and oil dampers. In addition, the lattice structure ground improvement method was used to prevent liquefaction to help further improve resistance to earthquakes. This building has warehouses in preparation for disasters and was designed to ensure enough space for the headquarter functions to continue in the event of disasters in the headquarter region (metropolitan Tokyo area). This building also functions as the Yokkaichi City Tsunami Evacuation Building for local residents.

Yokkaichi Plant Clean Room Building C

Completed in July of 2014, Yokkaichi Plant Clean Room Building C incorporates advanced soil liquefaction prevention measures and a seismic isolation structure to ensure the stable operation of precision instruments and resistance to earthquakes. Valuable equipment is installed in higher floors to prevent possible damage from tsunamis.

(3) Enhancement of Initial Response to Emergencies

1. Crisis Management Training

The Head Office’s crisis center during FY2016 crisis management drill

The Head Office’s crisis center during FY2016 crisis management drill

Members from the headquarters for accident & disaster control, with the President acting as the Director, conduct crisis management training once per year. In FY2016, JSR held a crisis management drill envisioning a scenario in which a Tonankai Earthquake (major earthquake centered on the Nankai Trough in the Enshu Sea or Kumano Sea) struck and caused damage in the Chukyo district. The Chukyo district includes Yokkaichi City, where JSR Group companies and their main factories are concentrated. We have drills of this nature each year since 2004 for the purposes of anticipating various potential risks and reinforcing the response of the crisis center in JSR Headquarters (Minato Ward, Tokyo) during times of crisis.
Some 50 people, including JSR's President, who serves as the crisis center's head, participated. The drill was executed using a "blind scenario" format* that focused on events that could occur on the day of a disaster. Each participant confirmed the personal and organizational actions that are demanded, including spontaneous information-gathering in an ever-changing situation and the establishment of response guidelines.
By conducting drills that anticipate a variety of potential disasters, we will continue to make the preparations needed to ensure safety, control damage, maintain business continuity.

* Blind scenario format
A drill format that gives participants a constantly changing disaster or damage situation based on an undisclosed scenario, and then asks them to independently consider, identify, and execute responses.

2. Disaster Management Training at Group Companies

JSR Group conducts disaster management and evacuation training and drills on a regular basis. It is imperative that we minimize the impacts of emergencies and ensure business continuity in such situations.

3. Safety Confirmation System

In FY2009, we introduced a safety confirmation system to promptly confirm the safety of our employees in the event of a large-scale earthquake or other disaster. In FY2011, we expanded the system's coverage to our Group companies and the families of our employees.

4. Infection Preparedness

In the case of an epidemic or the spread of influenza and other infections, we stockpile masks.
We also provide necessary information such as the announcement of flu outbreaks.

(4) Enhancing Information Security

JSR Group adopted an Information Security Policy and is working to implement appropriate information management by informing all personnel of the policy.

Information Security Policy

  • The JSR Group (the corporate group consisting of JSR Corporation and its subsidiaries) will observe laws and other social norms relating to the handling of information belonging to the Group and its customers, business partners, and other third parties, and will protect that information in appropriate ways.
  • The JSR Group will strive to develop and actively use its information assets for the efficient execution of its business. The Group's officers and employees will only use these information assets for the purposes of their work and within the scope of their authority.
  • The JSR Group will improve organizations and systems, provide education on information security, thoroughly disseminate this policy and related regulations, and implement measures to ensure information security.
  • The JSR Group will implement appropriate human, organizational, and technological measures and work to prevent unauthorized access to information assets from outside the company, as well as leaks, falsification, loss, theft and destruction of information assets.
  • If an information security-related problem occurs, the JSR Group will promptly identify the cause and take measures to minimize damage and prevent recurrences.
  • The JSR Group will periodically assess and review its information security measures to respond appropriately to changes in external environments.
Information security handbook

Information security handbook

JSR Group is continually working together with external experts to increase our level of security and protect corporate information assets from cyber-attacks. In FY2014, we issued an Information Security handbook to raise employee sensitivity to information leakage risks and help ensure that employees are aware of and follow rules regarding information security. We also conduct targeted attack drills using fake viruses to raise prevention awareness. In addition, we are engaged in raising awareness of the content in the Information Security handbook through e-learning and workplace meetings.

The information security incident drill

The information security incident drill

Additionally, in FY2016, we conducted our first "information security incident" drill (crisis management training to prepare for the possibility of an information leak).

(5) Strengthening Our Compliance Systems

Each JSR Group company defines legal compliance regulations that form the basis of the organization's legal compliance. Each company utilizes these regulations to review and improve legal compliance regularly. Each company also provides legal training to increase awareness of laws and regulations and improve commitment to compliance.
Laws and regulations that are particularly relevant to execution of business are identified as Overall Significant Laws and Legal regulations. We also concentrate on establishing individual systems to ensure compliance with these critical laws and regulations.
Moreover, we prepared the Japanese version of the Compliance Handbook in FY2012 and the Korean version in FY2015 to thoroughly publicize important points demanding compliance in Japanese and South Korean law. In FY2016 we prepared a new Chinese version of the Compliance Handbook that is based on Chinese law. It is issued to not only Group companies in China but also JSR departments that sell products, supply samples, or otherwise engage in business dealings with China. Through it, we are working to ensure thorough understanding and practice of legal compliance in China.