Sojitz Corporation

CLOSE

Governance

Compliance

Policy and Basic Approach

Companies must not concern themselves with the pursuit of profit alone; rather, they are expected to independently regulate their activities as they develop business, adhere to social norms, and contribute to society. Sojitz believes that thorough compliance is essential to meeting these expectations, and we therefore implement various company-wide initiatives for instilling a compliance mindset among employees. There are no shortcuts to establishing corporate compliance, and Sojitz Group seeks to further ensure that all employees are aware of and educated on compliance matters through sound, consistent implementation of the initiatives described below.

Sojitz Group strives to work with integrity, build trust, and achieve a high level of balance between our interests and the interests of our stakeholders in order to contribute to society through our business.

Sojitz Group Code of Conduct and Ethics

Sojitz Group Code of Conduct and Ethics

Sojitz reviews and revises the Sojitz Group Compliance Program each year. Sojitz also reviews the Sojitz Group Code of Conduct and Ethics a minimum of once every five years The latest revision of the Sojitz Group Code of Condact and Ethics occurred in April 2022.

Constructing a Compliance Framework

Sojitz Group has established the Compliance Committee, an executing body under the supervision of the president & CEO. The president & CEO appoints a chief compliance officer (CCO) to chair the committee. Sojitz assigns designated compliance managers and advisors to operating bases in Japan and overseas and to consolidated Group companies in order to maintain a coordinated system for complying with laws, regulations, and business ethics standards that connects Sojitz headquarters, operating bases in Japan and overseas, and consolidated Group companies. Sojitz also conducts compliance-related educational activities and training programs, including those for locally hired employees.

In addition to these initiatives, Sojitz promotes a shared awareness of compliance and facilitates the regular exchange of views on future policies through various channels, such as meetings between the CCO and the presidents of overseas bases and Group consolidated companies, and liaison meetings for the compliance staff from consolidated Group companies in Japan.

In order to prevent and detect compliance violations at an early stage, Sojitz encourages employees to carry out the standard reporting, communication, and consultation as they perform their work duties. Sojitz has also introduced an internal reporting system that includes a hotline for contacting the CCO and outside legal counsel; a help desk for contacting the Compliance Committee’s secretariat; and the multi-lingual Sojitz Ethics Hotline, which is available 24 hours a day, 365 days a year. All Sojitz Group employees are thoroughly informed of these resources. Specialized departments conduct fact-finding investigations in the event of a violation of the Sojitz Group Code of Conduct and Ethics.

Sojitz’s Reporting Requirements and Maintenance of Compliance Systems

In order to ensure a solid foundation for Sojitz Group’s compliance systems, employees are required to promptly report all known or suspected violations of any law or regulation. Sojitz strives to address any violations as an organization and has put measures in place to prevent similar incidents from occurring in the future.

コンプライアンス体制図

Reports to the Board of Directors

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 that fiscal year.

Members of the Compliance Committee

The Compliance Committee is made up executive officers and led by a chairman appointed by the president & CEO.

Committee Chair
  • Executive Officer, CCO, Legal Department, Internal Control Administration Department
Members
  • Executive Vice President*, CFO
    Executive Management of General Accounting, Business Accounting,
    Finance, IR, Financial Solutions
  • Executive Vice President*,
    Advisor to the President Executive
    Executive Management of Business Group (Automotive, Aerospace & Transportation Project, Infrastructure & Healthcare), and East Asia region
  • Executive Vice President
    CISO, Executive Management of Legal, Internal Control Administration, ERP Transition
  • Senior Managing Executive Officer,
    Executive Management of Business Group (Metals, Mineral Resources & Recycling, Chemicals, Consumer Industry & Agriculture Business, Retail & Consumer Service)
  • Managing Executive Officer, COO, Human Resources Department, General Affairs & IT Operation Department
  • Executive Officer, COO, Corporate Planning Department, Corporate Sustainability Office, Portfolio Transformation Office
Observers
  • Audit & Supervisory Board Member (full-time)
  • General Manager, Human Resources Dept.
  • General Manager, Secretariat Dept.
Secretariat
  • Legal Dept.

(Current as of April 1, 2022)
*Representative Director

Internal Reporting System

Sojitz has established multiple compliance hotlines for use by anyone within or outside of Sojitz Group. The hotlines can be used for any compliance-related questions or concerns, or in the event that a Sojitz Group company or employee violates or is suspected of violating any law, regulation, or the Sojitz Group Code of Conduct and Ethics.

Internal Reporting System

Initiatives

Sojitz recognizes the importance of its social responsibilities. We strive to maintain the highest ethical standards and integrity, always giving due consideration to social norms, customs, and cultures, and conducting fair and transparent business activities in line with all laws and regulations. Sojitz’s compliance initiatives for achieving these goals are detailed below.

Instilling a Compliance Mindset

Sojitz Group includes many operating bases outside Japan and therefore actively works to enhance understanding and practice of compliance not only in Japan, but throughout the world. The Sojitz Group Code of Conduct and Ethics has been translated into 26 languages, including Japanese and English, to enable all Group employees in Japan and overseas to acquire a shared compliance mindset. In addition to the Sojitz Group Code of Conduct and Ethics, Sojitz has established the Sojitz Group Compliance Program, which includes detailed procedures for ensuring thorough compliance practices. Sojitz conducts a variety of compliance trainings, such as e-learnings based on international standards and seminars which focus on specific case studies. These programs help Group employees deepen their understanding of the Sojitz Group Code of Conduct and Ethics and Sojitz Group Compliance Program, and prevent disparities from arising among Sojitz Group employees’ awareness of compliance issues.

Enhancement of Anticorruption Measures

In recent years, the United States and other countries have tightened regulations against corrupt practices such as bribing or illicitly giving gifts to foreign public officials, and corruption standards throughout the world are becoming stricter.

Sojitz formulated the Sojitz Group Anti-Corruption Rules in December 2012 and the Sojitz Group Anti-Bribery Policy in March 2019, and is actively engaged in anti-corruption initiatives. According to Sojitz’s policies, Sojitz Group employees are prohibited from bribing any third party (including but not limited to government officials). Sojitz upholds all anti-corruption laws and regulations, including Japan’s Unfair Competition Prevention Law, the United States’ Foreign Corrupt Practices Act, the United Kingdom’s Bribery Act 2010, and establishes standards to ensure compliance in all countries and regions in which Sojitz Group does business.

Sojitz Group Anti-Bribery Policy

Sojitz Group Anti-Corruption Rules

ISO37001 Certificate of Registration

As part of its anti-corruption efforts, Sojitz conducts screenings for activities that carry a high corruption risk, such as provision/receipt of gifts or travel, or engaging an agent. In addition, Sojitz periodically conducts dedicated anti-corruption internal audits in order to confirm that the Sojitz Group Anti-Corruption Rules are being implemented in everyday business activities, and the results of these audits are used to create trainings and other educational materials for employees. Sojitz is working to create a system that ensures that the effectiveness of all anti-corruption measures.

In November 2019, Sojitz became the first Japanese company to obtain ISO 37001 certification (anti-bribery management system). Established in October 2016, ISO 37001 has attracted international attention as a new global standard that describes the best practices for preventing bribery.

TRACE International認証Sojitz is also a member of 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.

Compliance with Security Trade Controls

Security trade controls require businesses to comply with applicable laws and regulations relating to export controls and sanctions. As a member of the international community, Sojitz Group complies with all export controls-related laws and regulations in order to maintain international peace and security.

A violation of any of these laws and regulations could potentially result in loss of trust in Sojitz Group, legal fines and penalties, prohibition or restrictions on business transactions including exports, the loss of business relationships with investors and business partners, and exclusion from conducting transactions in certain markets and regions. Sojitz considers these potential outcomes to be serious risks and has established a system for ensuring that these risks do not materialize.

Sojitz Sanctions and Export Controls Policy

1.Commitment and Structure

Sojitz has established the Sojitz Group Code of Conduct and Ethics. The document requires that Sojitz Group employees fully understand and comply with all laws and regulations put in place to maintain international peace and security, which represent a worldwide standard on which to conduct business. Sojitz has also established the Sojitz Sanctions and Export Controls Policy. The policy begins with a message from Sojitz’s president & CEO stating that in the interest of maintaining international peace and security, the company firmly opposes the development of weapons of mass destruction and any other security threats, and promises to uphold all laws and regulations relating to export controls and sanctions. The document then details Sojitz Group’s basic policy on its systems and initiatives for maintaining compliance with these laws and regulations.

Sojitz Sanctions and Export Controls Policy

2.Risk Assessment

Sojitz Group acknowledges that the following activities can potentially lead to the serious risks described in the “Compliance with Security Trade Controls” section above. Sojitz periodically assesses these risks and carries out reviews of the measures in place to prevent them.

  • Conducting transactions such as the export of controlled products without obtaining the necessary licenses
  • Conducting regulated transactions without permission
  • Conducting transactions with countries, regions, or persons that are subject to regulations without obtaining permission

In order to identify these risks, Sojitz periodically assesses the following: whether Sojitz is handling controlled products in a country of export or third-party country; whether Sojitz is conducting regulated transactions; whether Sojitz is conducting transactions or business activities in a restricted country or region; and whether Sojitz is conducting transactions with persons that are subject to regulations.

When a risk is detected, Sojitz promptly analyzes the risk, considers the necessary measures, and takes action such as immediately suspending transactions, terminating contracts, and notifying the relevant authorities.

3.Internal Controls

Each Sojitz Group company formulates its own security trade control regulations based on the Sojitz Sanctions and Export Controls Policy, and creates and implements specific procedures for conducting security trade control. At Sojitz Corporation, for example, when conducting exports and other transactions, approval must be obtained from a Security Trade Control Committee member in charge of transaction screening or the general manager of the Legal Department who has been delegated by the chairman of the Security Trade Control 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 security trade control regulations are made known to employees through the company intranet and through trainings.

4.Audit

Sojitz Group has established the Internal Audit Department as secondary organization of the Sojitz Corporation Board of Directors under the jurisdiction of the Internal Audit Subcommittee. This department conducts internal audits of Sojitz Group.

A portion of the audits conducted by the Internal Audit Department are in regards to security trade controls. Based on the internal audit rules, the 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 Sojitz Corporation cooperates and exchanges information with the Internal Audit Department and participates in audits as necessary. The Internal Audit Department shares risks detected through internal audits with the Legal Department. Countermeasures are discussed and implemented by the audited departments/Group companies with the assistance of the Legal Department or the security trade control teams at the relevant Sojitz Group companies.

5.Training

Sojitz Group conducts trainings for employees based on the Sojitz Sanctions and Export Controls Policy and security trade control regulations.

The Legal Department of Sojitz Corporation and the security trade control teams at Sojitz Group companies design, plan, and conduct these trainings.

Examples of potential training topics include: an overview of 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 Sojitz Group violations of these laws, precautions for employees to take, and penalties for violations.

Initiatives for Preventing Money Laundering and Racketeering

Sojitz Group does not associate with any force that directly or indirectly threatens the order and safety of the public through criminal acts such as fraud, extortion, money laundering, bribery, narcotics, and terrorism, nor does Sojitz Group associate with any party suspected of involvement in such activities. Sojitz’s basic policy to respond resolutely to any unreasonable demands, including through legal means, is detailed in the Sojitz Group Code of Conduct and Ethics. Sojitz Group employees are also required to carry out the following measures: conduct due diligence when engaging an agent or deliberating on an investment or loan project, stay well informed of anti-crime measures including those found in the Anti-Social Force Response Manual (Japan), and include clauses for the exclusion of anti-social forces in contracts with clients.

Tax Policy

Sojitz Group strives to execute its tax obligations in a timely and appropriate manner as it develops business in countries around the world.

Sojitz Tax Policy

Performance

Violations of Sojitz Group’s Code of Conduct and Ethics

Below is a breakdown of all violations of the Sojitz Group Code of Conduct and Ethics, including violations of laws and regulations both in Japan and overseas, in FY2020. There were no serious violations of laws or regulations, such as cases of corruption such as bribery, cease and desist orders from the Fair Trade Commission or other government agencies, suspension of operations or business due to misconduct, criminal charges due to compliance-related incidents or accidents, or detection of overseas price cartel incidents.

Breakdown of the violations of Sojitz Group’s Code of Conduct and Ethics in FY2021

Violations of internal regulations 27 cases
Problems in the working environment, including harassment 12 cases
Minor legal violations other than the preceding items 14 cases
Total: 53 cases

Use of Compliance Hotlines

In FY2021, 69 cases were called in through Sojitz’s compliance hotlines.

Status of Compliance-Related Trainings (Results from FY2021)

Sojitz conducts trainings to instill a compliance mindset in all Group employees.

Online trainings

Pre-overseas dispatch training 12 times
Specialized pre-overseas dispatch training 11 times
Fundamentals training for mid-career employees 2 times
New employee training 1 time
Training for employees in charge of compliance at Group companies 3 times
Harassment prevention and anti-corruption for Group company employees 10 times
Harassment prevention seminar for Sojitz HQ managers 1 time


*During FY2021, to prevent harassment arising from unconscious bias and to aid in the creation of a harassment-free workplace, we conducted unconscious bias training, which included case studies and workshops, in a group training session for all head office general managers. We also held web-based harassment prevention seminars for all head office managers.

e-Learning

Mandatory compliance e-learning for Sojitz HQ employees Year round
Training for Mid-career Hires at Sojitz HQ
E-learning course on insider trading prevention for new Sojitz HQ employees
E-learning course on anti-corruption for new Sojitz HQ employees
E-learning course on harassment prevention for new Sojitz HQ employees and Group company employees

Page top