Environmental Risk Management

During the latter half of the 1980s, soil and groundwater contamination by a chlorinated organic solvent was detected in some of our manufacturing sites. Since then, we have been implementing comprehensive measures to deal with this problem. In fiscal 1992, we issued the Manual for Preventing Contamination of Soil and Groundwater, which we have since used as our basis for all surveys conducted and preventative actions undertaken. In fiscal 1996, we completely discontinued the use of chlorinated organic solvents and in fiscal 2000 we compiled the Guide for the Prevention and Management of Environmental Pollution to thoroughly promote preventive measures. In response to the enhancement of environmental laws and regulations, such as the publication of criteria for the implementation of soil and groundwater pollution-related surveys and countermeasures by the Environment Agency (present Ministry of the Environment, Japan) in 1999, and the enforcement of the Soil Contamination Countermeasures Law in 2003, we reinforced our measures to survey and prevent contamination by volatile organic compounds (VOC) and heavy metals in fiscal 2003. Wherever contamination has been detected, we immediately implement remedial measures, including the introduction of latest technologies such as the bio-purification system for soil reclamation utilizing microorganisms, hold explanatory meetings and voluntarily make an announcement about the contamination through the media, as well as following the instructions of local authorities.

As specific measures for soil and groundwater, we conduct historical surveys through on-site inspections and interviews, in addition to surveying the use of VOCs and heavy metals at our sites. Further, we conduct surface soil surveys at all our sites, excluding those where none of the specified substances were ever used. In sites where pollution levels exceed the standard levels in the surface soil surveys, we conduct detailed borehole surveys to identify the boundaries of the contaminated areas and take appropriate remedial measures. As a result of conducting surveys and implementing measures based on our Soil and Groundwater Risk Management Policy in fiscal 2003, we were able to place all soil and groundwater risks under management supervision at our manufacturing and non-manufacturing sites targeted for soil and underwater investigation within fiscal 2004.

At the same time, in response to the expansion of the targeted sites following business reorganization, although we have implemented further measures to ensure compliance with the Policy, we still have sites that have pollution levels exceeding the standard levels: 49 sites out of 194 sites in Japan and 7 sites out of 172 sites outside Japan. At these sites, we have been promoting measures to purify soil and groundwater in order to meet the requirements to place all soil and groundwater risks under management supervision.

As a result of these measures, we were able to completely purify soil and underwater at 40 sites by theend of fiscal 2008.

Outside Japan, we are promoting thorough legal compliance in individual countries. In countries where such legal systems are not well established, we are implementing voluntary measures based on our Soil and Groundwater Risk Management Policy.

• * Number of sites investigated in fiscal 2008 (including five sites still under investigation)