Basic Approach to Compliance
Companies must not concern themselves with the pursuit of profit alone; rather, they are expected to develop their businesses while conducting themselves in accordance with social norms and contributing to society. Sojitz believes that thorough compliance is essential to meeting these expectations. We focus on instilling and establishing a compliance mindset among employees while making a Company-wide effort to enable cooperation and teamwork through daily communication among employees. However, there are no shortcuts to establishing corporate compliance.
Publicizing and Establishing the Compliance Mindset
The Sojitz Group’s Corporate Statement is honored through the Sojitz Group Code of Conduct and Ethics—a set of decision-making standards established to act as the foundation for all of Sojitz Group’s business activities around the world. The Sojitz Group includes many operating bases outside Japan, and therefore actively works to enhance understanding and practice of compliance not only in Japan, but at the global level. The Code of Conduct and Ethics has been translated into 23 languages, including Japanese and English to enable all Group employees in Japan and overseas to acquire a shared compliance mindset.
The Sojitz Group conducts a variety of compliance training
programs, such as e-learning to help Group employees deepen their understanding
of the Sojitz Group Code of Conduct and Sojitz Group Compliance Program,
as well as training seminars which focus on specific case studies.
The Sojitz Group Compliance Program will be reviewed on an annual basis, while the Sojitz Group Code of Conduct and Ethics will be revised at least once every five years. The latest revision of the Sojitz Group Code of Conduct and Ethics occured in April 2016.
The Compliance Committee, chaired by the Chief Compliance Officer (CCO), is at the core of activities to ensure adherence to laws, regulations and corporate ethics, in cooperation with the head office, consolidated Group companies, overseas sites and other parts of the Group. Compliance supervisors and assistants have been assigned to Sojitz’s domestic and overseas operating bases and consolidated Group companies in order to install a framework for compliance response at each office and promote educational activities and training programs, including those for locally-hired employees.
To help prevent and detect compliance violations early on, all Sojitz Group employees are made well aware of the Company hotline (reporting system) that provides access to the CCO and outside legal counsel; a consultation desk where Compliance Committee Secretariat members can be contacted; and the multi-lingual Sojitz Ethics Hotline, which is available 24 hours a day, 365 days a year.
Furthermore, we have a department specifically for conducting
investigations into compliance violations and taking steps to ensure
they do not happen again. We are strict in our response to compliance
infractions, including punishment based on the nature of the violation.
?Cease and desist order from the Japan Fair Trade Commission and other related government organizations?。?br> ?Suspension of business or operations due to a scandal?。?br> ?Criminal charges resulting from a compliance-related incident or accident?。?br>
Legal violations outside of Japan
?Participation in a price cartel?。?br> ?Bribery?。?br> ?Other legal violations?。?br>
?Number of cases involving violations: 48
However, there were no cases that had a major impact on business at the Sojitz Group.
Sojitz has set up the compliance hotline below for parties both inside and outside the organization to report any known or suspected violations of law or the Sojitz Group Code of Conduct and Ethics by Group companies or individual Group employees.
In FY2019, 52 cases were called in through Sojitz’s compliance hotlines.
In recent years, the United States and other countries have tightened regulations against corrupt practices such as bribing or improperly giving gifts to foreign public officials, and the level of standards demanded for prevention of corruption is increasing globally.
Sojitz formulated anticorruption rules in December 2012
and set out methods for preventing corruption in April 2013. Since
then, the Company has implemented full-scale initiatives starting
with the head office, where it began conducting e-learning focusing
solely on the prevention of corruption, employee training regarding
enforcement of its anticorruption rules, and other initiatives in
May 2013. At the same time, the Company began screening gifts, entertainment
and engagement of agents and other third parties, etc. that pose a
high risk of corruption.
In November 2019, Sojitz became the first Japanese company to obtain ISO 37001 certification (anti-bribery management system). Established in October 2016, ISO 37001 is attracting international attention as the new global standard that represents the best practices for companies to manage bribery.
Sojitz Group will continue to pursue the highest standards of bribery management. As a Group, we will work to reinforce an anti-bribery mindset and take proactive steps towards implementing and improving upon our anti-bribery management systems.
Sojitz Corporationof TRACE International, the world's leading anti-bribery standard setting organization. We initially received TRACEcertification (TRACEcertification ID: TC3151-4085) in November 2015. The membership and TraceCertification is updated annually.
Information pertaining to legal violations in Japan and overseas for FY2019 is listed below.
?Number of cases of discovered bribery: 0
?Amount of fines imposed for violation of anti-corruption laws: ￥0
A report is made each year to the board of directors on compliance measures (including anti-bribery initiatives), any instances of compliance violations, and compliance policy for the applicable fiscal year.
Sojitz, in developing Sojitz Group’s business worldwide, strives to execute its tax obligations in a timely and appropriate manner.
Security trade controls require compliance with applicable laws and regulations relating to export controls and sanctions. As a member of the international community, the Sojitz Group will comply with all applicable laws and regulations relating to export controls and sanctions to maintain international peace and security.
The Sojitz Group regards the possibilities of a loss of trust in the Sojitz Group, legal fines and penalties, prohibition or restriction of transactions such as exports, the loss of transactions with investors and business partners, and an inability to conduct transactions in certain markets and regions as a result of a violation of these laws and regulations as serious risks. We have, therefore, established a system to prevent these risks from occurring.
[System and Specific Initiatives]
1. Commitment and Structure
The Sojitz Group has established the "Sojitz Group Code of Conduct and Ethics" pursuant to which officers and employees are required to conduct their business activities with a full understanding of and in compliance with the laws and regulations that protect the common good of maintaining international peace and security. In addition to this, the "Sojitz Sanctions and Export Controls Policy" has been established wherein the president of our company first declares that the Sojitz Group firmly opposes the development of weapons of mass destruction and other security threats for the sake of international peace and security, and will comply with the laws and regulations related to export controls and sanctions. This Policy further establishes our basic policy with respect to systems and initiatives for compliance.
The Sojitz Group has established the Security Trade Control Committee (“Committee”), which is chaired by a representative director of the Sojitz Corporation. The Legal Department has been designated as the secretariat of the Committee, and security trade control teams have been established within the Legal Department at the Sojitz Corporation and within the Sojitz Group companies. These teams formulate policies and objectives related to security trade control, establish systems for implementing these policies, and formulate and roll out various measures while overseeing their implementation.
The security trade control teams exchange information and collaborate with each other, and the security trade control team in the Legal Department of the Sojitz Corporation reports regularly to the Committee.
2. Risk Assessment
The Sojitz Group considers that the following activities could create the serious risks mentioned at the beginning of this announcement, and it periodically evaluates these risks and reviews and examines countermeasures against them.
?Conducting transactions such as the export of controlled products without obtaining the necessary licenses;
?Conducting regulated transactions without permission; and
?Conducting transactions with restricted countries/regions or persons that are the target of restrictions without obtaining permission.
To identify these risks, we periodically review and assess whether we are dealing with controlled products in exporting countries or applicable third countries, engaging in regulated transactions, engaging in transactions or business activities with restricted countries and regions, or engaging in transactions with persons that are the target of restrictions.
When a risk is detected, it is immediately analyzed, the necessary measures are considered, and actions are taken such as the immediate suspension of transactions, the termination of contracts, and notification to the relevant authorities.
3. Internal Controls
In the Sojitz Group, each company has formulated its own internal compliance program based on the "Sojitz Sanctions and Export Controls Policy" and has formulated and implemented specific procedures for conducting security trade control. At the Sojitz Corporation, for example, when conducting exports and other transactions, approval must be obtained from a committee member in charge of transaction screening or the general manager of the Legal Department who has been delegated by the chairman of the Committee. In addition, when making investments, approval procedures are required in accordance with internal rules, and the Legal Department participates in these procedures as a deliberator to analyze, evaluate, and consider countermeasures against security trade control risks.
The "Sojitz Sanctions and Export Controls Policy" and the internal compliance programs are made known to all officers and employees through the company intranet and in-house training.
The Sojitz Group has established an Internal Audit Department under the purview of the Internal Audit Subcommittee, which is a subcommittee of the Sojitz Corporation's board of directors. This department conducts internal audits of the Sojitz Group.
As part of these internal audits, we conduct security trade control audits. Based on the internal audit rules, the Internal Audit Department determines the targets of audits each year and conducts security trade control audits in accordance with the annual audit plan. The Legal Department of the Sojitz Corporation cooperates with and exchanges information with the Internal Audit Department and participates in audits by the Internal Audit Department as appropriate. Risks detected through internal audits are shared with the Legal Department of the Sojitz Corporation. Countermeasures are discussed and implemented by the audited departments/companies with the assistance of the Legal Department of the Sojitz Corporation or the security trade control teams at the relevant Sojitz Group companies.
The Sojitz Group conducts training in accordance with the "Sojitz Sanctions and Export Controls Policy"?and the internal compliance programs.
The Legal Department of the Sojitz Corporation and the security trade control teams in the Sojitz Group companies design, plan, and conduct this training.
For example, training may include an overview of the Sojitz Group's security trade control policies and systems, an overview of applicable export controls (including U.S. re-export regulations), an overview of the sanctions resolutions passed by the United Nations and the laws and regulations passed by individual countries, the implications for the Sojitz Group for violations of these laws, precautions for officers and employees to take, and penalties for violations.