Policy and Basic Approach
Sojitz believes that thorough compliance is essential to achieving sustainable growth and increasing corporate value, 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.
Constructing a Compliance Framework
Sojitz Group has established the Compliance Committee, an organization chaired by the Chief Compliance Officer (CCO). 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 HQ, 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 CCO meetings with the presidents of overseas bases and Group consolidated companies in Sojitz Group’s five overseas regions, 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.
Members of the Compliance Committee
The Compliance Committee is made up executive officers and led by a chairman appointed by the president & CEO.
(Current as of January 1, 2023)
Asterisk (*) indicates a Director
Double asterisk (**) indicates a Representative Director
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.
Sojitz has established multiple compliance hotlines for use by any Sojitz Group member or external party. The hotlines can be used for any compliance-related questions or concerns, or in the event that a Sojitz Group company or employee commits or is suspected of committing a compliance-related violation.
In addition, any Sojitz Group member or external party can use the "Contact Us about Compliance" contact form found on the Sojitz website.
In FY2021, 65 cases were called in through Sojitz’s compliance hotlines.
Response to Compliance-related Violations
In the event that a Group employee commits or is suspected of committing a compliance-related violation, all Sojitz Group employees (including contract employees) are required to act in accordance with the Sojitz Group Compliance Program by reporting the violation to a superior and seeking guidance regarding a response. Upon receiving a report, superiors must provide the necessary guidance to the reporting employee and promptly report the details of the incident to the chair of the Compliance Committee.
If a report is made, either internally within an organization or through the Compliance Hotline, the Compliance Committee’s secretariat will act under the guidance of the Committee chair to conduct a thorough investigation (including interviews with the reporting employee, suspected employee, and other relevant parties) in order to identify the cause and any responsible parties. The secretariat will consult with lawyers and other experts as necessary. The outcomes of the investigation will also be used to establish and implement new measures for preventing similar incidents from occurring in the future.
Sojitz Group has established the Internal Audit Department as a 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.
Every fiscal year, the Internal Audit Department creates a yearly auditing plan and selects the organizations that will be subject to auditing from among Sojitz HQ departments, bases in Japan and overseas, and Group consolidated subsidiaries. The Internal Audit Department then carries out its planned audits, with compliance being one category reviewed for each organization. In addition to these standard yearly audits, the Internal Audit Department also conducts separate internal audits of security trade control and anti-corruption compliance within Sojitz Group organizations.
Reports to the Board of Directors
A report is made each year to the board of directors on compliance measures, any instances of compliance violations, and compliance policy for the applicable fiscal year.
Instilling a Compliance Mindset
In order to ensure adherence to the Sojitz Group Corporate Statement, Sojitz has established the Sojitz Group Code of Conduct and Ethics—a set of decision-making standards that acts as the foundation for all of Sojitz Group’s business activities around the world. 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 25 languages, including Japanese and English, in order 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. Courses are also provided for specific groups including new employees, management-level employees, and employees on overseas assignment prior to their departure. These programs help Group employees (including contract 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.
The Sojitz Group Compliance Program is reviewed on an annual basis, while the Sojitz Group Code of Conduct and Ethics is revised at least once every five years. The latest revision of the Sojitz Group Code of Conduct and Ethics occurred in April 2022.
Sojitz Group Code of Conduct and Ethics
Enhancement of Anticorruption Measures
In recent years, the United States and other countries have tightened regulations against corrupt practices such as bribing or illicit gift-giving to government officials or between private companies, and corruption standards throughout the world are becoming stricter.
Sojitz formulated the Sojitz Group Anti-Corruption Rules in December 2012 and is actively engaged in anti-corruption initiatives. 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 by all Sojitz Group employees (including contract employees) in all countries and regions in which Sojitz Group does business.
As part of its anti-corruption efforts, Sojitz divides transactions into the following five categories: 1) providing/receiving gifts, entertainment, and travel, 2) hiring an agent, 3) making political contributions and charitable donations, 4) business acquisition, joint partnership, or other investment/loan activity, and 5) making a facilitation payment. Sojitz has established procedures for identifying and evaluating the risks associated with each transaction, and employees carry out these procedures prior to completing any transaction. 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 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 Group Anti-Bribery Policy
Sojitz Group Anti-Corruption Rules
ISO37001 Certificate of Registration
Sojitz is also a member of TRACE International, the world's leading anti-bribery standard setting organization. We initially received TRACE Certification (TRACE Certification ID: TC3151-4085) in November 2015. The membership and TRACE Certification 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
System and Specific Initiatives
1．Commitment and Compliance System
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
Sojitz has established the Security Trade Control Committee, an organization chaired by a representative director of Sojitz Corporation. The Sojitz Corporation Legal Department has been designated as the secretariat of the committee, and security trade control teams have been established within the Sojitz Corporation Legal Department and within 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 within the Sojitz Corporation Legal Department reports regularly to the Security Trade Control Committee.
Sojitz Group acknowledges that the following activities can potentially lead to the serious risks described in the previous "Compliance with Security Trade Controls" section. 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.
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.
The Sojitz Corporation Internal Audit Department conducts internal audits of Sojitz Group, including specific security trade control-related audits. Based on the Sojitz Sanctions and Export Controls Policy, the department determines the target organizations for each year and conducts security trade control audits in accordance with its 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.
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.
Sojitz Group strives to execute its tax obligations in a timely and appropriate manner as it develops business in countries around the world.
Status of Compliance-related Violations (FY2021)
The following is a breakdown of all compliance-related violations that occurred both in Japan and overseas in FY2021.
There were no serious violations of laws or regulations, such as cases of corruption (bribery, etc.), cease and desist orders from the Japan 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 compliance-related violations in FY2021
|Violations of internal regulations||27 cases|
|Problems in the working environment, including harassment||12 cases|
|Other minor legal violations||14 cases|
|Total: 53 cases|
Status of Compliance-related Trainings (FY2021)
Sojitz conducts trainings to instill a compliance mindset in all Group employees.
|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|
|Trainings for individual Group companies
(on topics including harassment prevention, anti-corruption)
|Harassment prevention seminar for Sojitz HQ managers||1 time|
In FY2021, Sojitz conducted an unconscious bias training as part of efforts to prevent harassment arising from unconscious bias and aid in the creation of a harassment-free workplace. The group training session was held for all Sojitz HQ general managers and featured a combination of case studies and workshops.
|Mandatory compliance e-learning for Sojitz HQ employees||Year round|
|Compliance e-learning for mid-career hires at Sojitz HQ|
|Insider trading prevention e-learning for Sojitz HQ employees|
|Anti-corruption e-learning for Sojitz HQ employees|
|Basics of harassment prevention e-learning|