[Priority issue 1] Raise Compliance Awareness and Ensure Risk Management

As the Fujifilm Group’s business operates on a worldwide basis, many of our employees visit overseas offices or live in foreign countries on business. Therefore, it is increasingly important to ensure the safety of such employees from a variety of risks, including diseases, natural disasters, political instability, and terrorist attacks.

As a part of such overseas risk management, the Fujifilm Group is well-prepared for handling unexpected incidents by having a clear chain of command and line of contact for both normal and emergency situations throughout the HR Department, the Compliance and Risk Management (CP&RM) Department, and with local companies. When particular risks are anticipated based on news media and information arriving from the Ministry of Foreign Affairs and embassies, we promptly submit appropriate alert notices to our employees.

In 2015, the HR Department and the CP&RM Department developed our Overseas Risk Management Policy. Also, the risk management-related information included in the Business Trip and Overseas Assignment Manual has been compiled into a separate booklet, the Overseas Safety Management Action Manual, which has been distributed to all employees being assigned overseas and their family members, and also to business travelers. The booklet explains the importance of adopting a “self-defense” attitude and encourages employees to make their own decisions to protect themselves from risks. The manual also explains concrete responses they should follow against different types of risks.

The Fujifilm Group continues to promote risk management among employees through enhancing safety manuals and conducting drills.

Musculoskeletal disorders (MSDs) are common workplace-related injuries, in which people experience chronic musculoskeletal pain in the back, lower back, and arms, regardless of their industry or type of work, presenting issues for occupational health and safety in the U.S. and Europe. In Fujifilm Group companies in the U.S., injuries derived from MSDs increase as the production line workers became older. Also, the recovery period of those suffering injuries becomes longer, resulting in direct and indirect costs for the companies.

As a part of the countermeasures for this issue, FUJIFILM Holdings America Corporation (HLUS) and FUJIFILM Manufacturing U.S.A., Inc. (FA) have introduced health and safety programs called “FUJIFILM Fit” and “FUJIFILM ErgoFit.” The programs consist of various activities to reduce MSDs, including an exercise promotion campaign that encourages participation in group exercises, stretching, and other brief during-work exercises, as well as an improvement plan for the work environment and work-related processes. These programs successfully eliminated injuries caused by MSDs in FY2015, producing a significant result of zero workplace accident costs. The programs also encouraged employees to continue their healthy habits in their private lives.

These programs are now in place in other group companies, and we plan to further expand and permeate good health practices across even more workplaces.

The major earthquake that hit Kumamoto Prefecture, Kyushu, on April 16, 2016, caused significant damage to the production line at FUJIFILM Kyushu (FFQ), located in Kikuyo-cho. FUJITAC, Fujifilm’s polarizer protective film used in LCDs, boasts a 70% share of the world market, and more than 40% of this film is produced in FFQ. A breakdown at FFQ could have serious consequences for the world’s LCD production, and therefore an immediate assessment of plant damage and the possibilities for business continuity were needed following the earthquake.

Fujifilm had already reinforced its disaster countermeasures after the Great East Japan Earthquake in 2011. All of our group companies collaborated in organizing a disaster recovery system and have continued to improve it, while conducting regular emergency drills. Our BCP specifies the formation of an Emergency Management Team (EMT) in the event of a major disaster. The EMT comprises various departments, which gather general disaster information and specific information on damage within the Fujifilm Group, in order to take appropriate responsive actions. In the case of the Kumamoto Earthquake, the EMT was formed within four minutes of the occurrence of the preliminary earthquake on April 14. The team immediately started checking the safety of FFQ employees and gathering damage information utilizing the systems for initial response or the safety checks of employees. The first disaster report to management was made within 30 minutes.

Following the preliminary earthquake on April 14, FFQ stopped all production lines and started a line check in order to restart them by the 16th. However, the major earthquake then occurred in the early hours of the morning of the 16th, severely damaging the production lines. To recover the lines as soon as possible, a request was submitted to a specialist company to assess the factory’s structural soundness by 6 o’clock in the morning, and their diagnoses were completed by that evening. Production line experts from other Fujifilm Group’s factories arrived in Kyushu on that same day and started further line inspections and recovery work from the following day. From the 16th, (then) President Nakajima led the emergency management headquarters, and the President, relevant executives, managers, EMT members, and FFQ staff members held a video conference each morning to share information and discuss response measures.

The Fujifilm Group stores emergency supplies in Osaka, Toyama, Minami-Ashigara, and Omiya, and the first goods had been dispatched from Osaka on April 15, arriving at FFQ on the following day. FFQ had already prepared itself with information equipment that could be used as a support for the Tokyo Headquarters’ EMT. This was intended as a countermeasure to a disaster occurring in the Tokyo and Kanagawa area, such as an earthquake in the Tokyo metropolitan area, etc. FFQ is also equipped with an off-grid power generation system and an anti-seismic emergency warehouse that stores emergency supplies. These preparations helped the prompt startup of the emergency management headquarters and quick decision-making. As for the support for the local community, we delivered drinking water and food on the day following the earthquake. Further, waterproof sheeting stored at Fujifilm production sites in preparation for emergency facility protection against ash falls in the event of an eruption of Mount Fuji, was useful for supporting the community. In response to a request from the Kumamoto Prefecture government, we offered our sheeting to Mashiki and Kosa in Kami-Mashiki County, and Ozu in Kikuchi County, and other supplies to Kikuyo, thereby contributing to recovery activities by the local authorities.

Production of FUJITAC requires an extremely clean environment and high precision operations that does not permit errors to the scale of a submicron (1/10,000 millimeter). These production lines are actually large-scale pieces of high-precision equipment and it usually takes two months to restart operations. However, the speedy initial response and earnest support from the entire group enabled FFQ to restart a part of their production within two weeks, and to resume full operations by the end of April, resulting in the achievement of complete recovery on May 22, earlier than our original plan. The promptness of this recovery was also highly praised by many of our customers.

As the corporation’s business activities are increasingly connected to global supply chains and, in turn, the world economy, the range of the influence caused by disasters and the risks is getting wider, and making BCP measures ever more important. Taking account of our experience of the Kumamoto Earthquake, the Fujifilm Group is further enhancing its BCP measures to remain a corporation with a strong resilience against disasters and shouldering its full responsibilities as a global supplier.