The foundation of all activities: legal compliance, fair corporate activities
Policy
The Group will fully comply with all laws and regulations and conduct business fairly.
Awareness of Issues
Compliance with laws and regulations and fair corporate activities are the foundation of all of the Group’s activities.
We are working on the long-term development of the Group by not only legal compliance, but also the efforts of each employee to engage in their daily work with a strong sense of ethics as a code of conduct.
KPI
- Number of serious legal or regulatory violations: 0
(FY2023 result)
Ensuring Full Compliance Awareness
The Group carries out corporate activities in full compliance with laws and regulations. In the event of promulgation of or amendments to legislation pertaining to corporate activities, the Legal Department takes the central role of issuing internal bulletins and sharing their knowledge of these changes. In addition, in order to promote understanding of important laws and regulations, we posted explanatory articles in our company newsletter, and invited outside lecturers to give lectures to our employees. In July 2023, we invited a specialist lawyer to give a lecture on antitrust and bribery-related laws and regulations (including cartels, unfair trade practices, and bribery), which was attended by a total of 849 employees from Shin-Etsu Chemical and 48 Group companies in Japan and overseas. Then, from September to November 2023, we conducted a survey of all Group companies in Japan (45 companies) regarding compliance with antitrust laws and prevention of bribery, and no problematic cases were found. In addition, during the Japanese government's official Price Negotiation Promotion Months, we used the Company intranet to provide information to Group companies in Japan about the special distribution designation (“Specific Unfair Trade Practices when Specified Shippers Assign the Transport and Custody of Articles”) under Japan's Antimonopoly Act. We also provided information to overseas Group companies on corporate merger regulations in the US, EU, and China. In November 2023, 996 employees of Shin-Etsu Chemical and 27 Group companies in Japan attended the training course (web seminar) for promoting appropriate subcontracting transactions conducted by the Fair Trade Commission and the Small and Medium Enterprise Agency.
All of the officers and employees have submitted a written oath of compliance to the company. The oath covers compliance with laws, ethics, and company regulations, including compliance with antitrust laws and the prohibition of conflicts of interest. We have also established disciplinary measures to deal with any inappropriate action that may occur.
Officers and employees are stipulated to report to the "Compliance Consultation Office" if they discover a violation of laws and/or regulations.
The Compliance Consultation Office is a point of contact for consultation and reporting in the event of identifying suspected violations of laws, ethics, or company regulations in the course of business, or in the event of assuming any suspected violations to happen. Any Shin-Etsu Group officer, employee, adviser, staff member, contractor, or other employee and retiree can use this. We post the “Regulations of Compliance Consulting/Reporting System” on its intranet to inform employees. In addition, we revised the “Compliance Consultation and Whistleblowing Regulations” in June 2022 in response to revisions to the Whistleblower Protection Act, and translated them into 14 languages to disseminate them throughout the Group.
If a report is made to the Compliance Consultation Office, the department in charge of investigation will investigate the content of the report, and the company will take corrective measures as necessary after accurately grasping the facts. The confidentiality of peple seeking consultation and whistleblowers will be protected, and they will not be treated unfavorably for consulting or reporting.
Initiatives of Shin-Etsu Chemical
Audits are also carried out on Group companies not covered by J-SOX
The Auditing Department at the Shin-Etsu Chemical head office conducts audits of the status of operations of Group companies, including those that are not subject to the internal control reporting system for financial reporting (J-SOX) based on Japan's Financial Instruments and Exchange Law, and confirms that each of the subject companies' operations, such as cash and deposit control, purchasing, fixed assets and inventory management, and receivables preservation, are conducted under appropriate internal controls. We pay particular attention to antitrust laws and have established our own Antimonopoly Law Compliance Guidelines. The Auditing Department checks whether Group companies are not taking actions that violate antitrust laws. In addition, we conduct security export control audits for Group companies to ensure that each company's export control system is properly developed and operated. Furthermore, from the viewpoint of preventing fraud, we have implemented seal management audits to check whether the seals used to indicate the intention of the organization, including each company’s and department’s seal impression, are properly managed and used. At the same time, we confirm the management status of department managers’ individual seals for those who have the authority to permit payment.
Initiatives Aimed at Preventing Corruption
In the Basic Sustainability Policy, the group declare that we will conduct our corporate activities in compliance with laws. In 2015, we established the Anti-Bribery Regulations to clearly indicate that we will not be involved in any form of bribery. The scope of application of the Anti-Bribery Regulations is our officers, employees, and contract employees, and stipulates prohibition of bribery of public officials, non-public officials, etc., and disciplinary action.
In addition, by submitting a "Compliance Pledge", we thoroughly prevent the provision of unfair benefits and requests to public officials, customers, and business partners in Japan and overseas.
Furthermore, by making the status of compliance with ethics in general one of the items in personnel evaluations, we are working to raise employees' awareness of legal compliance. We also conduct regular internal audits for corruption, embezzlement and bribery.
For overseas group companies, we used the country-by-country corruption perception index published by Transparency International (an international non-governmental organization that tackles corruption issues) to determine the country, company size, business details, etc. Then, we conduct risk assessments related to anti-bribery and anti-corruption.
In July 2023, we invited a lawyer with expertise in anti-corruption to hold a lecture on preventing bribery, which was attended by a total of 849 employees from Shin-Etsu Chemical and 48 Group companies in Japan and overseas. In addition, from September to November 2023, we conducted a survey of all Group companies in Japan (45 companies) regarding prevention of bribery, and no problematic cases were found.
Related Information
Supporting GCNJ's "Tokyo Principles for Strengthening Anti-Corruption Practices"
The Group declares in the Basic Sustainability Policy that it is committed to conducting its corporate activities in a compliance with laws, and we are working to prevent corruption, including bribery. The “Tokyo Principles for Strengthening Anti-Corruption Practices” of Global Compact Network Japan (GCNJ) correspond with the Group's current policy and initiatives for preventing corruption, so we immediately decided to support them and became a signatory in February 2018. In addition, at the Anti-Corruption Annual Forum 2023, co-hosted by the Anti-Bribery Committee Japan (ABCJ) and the GCNJ in October 2023, we participated as a panelist in the panel discussion on the theme “Current Status and Prospects of Anti-Corruption Practices in Japanese Companies.”
We will continue to make it our principle to comply with laws and regulations and carry out business activities fairly, and work to conduct business in accordance with the Tokyo Principles and our internal anti-corruption regulations.
Export Control
In order to comply with export-related laws and regulations such as the Foreign Exchange and Foreign Trade Law, we have established the Security Export Control Regulations. In accordance with this regulation, we are working on the following:
- Classification, customer review, and transaction review when exporting products
- Internal audit
- Training officers and employees and providing instructions to Group companies
Cutting Ties with Anti-social Forces
The Group declares in its "Basic Policy on Internal Controls" that the Group shall adopt a firm attitude towards anti-social forces and shall take the measures necessary to cut itself off from any and all associations with them. In accordance with this policy, we developed internal systems under the leadership of the department in charge of managing these issues, and signed memorandums and letters of confirmation regarding the exclusion of anti-social forces with customers and suppliers. In addition, we are working closely with external specialized agencies.
Related Data
Aspect | Scope | Unit | FY2021 | FY2022 | FY2023 |
---|---|---|---|---|---|
Number of violators of the Anti-Bribery Regulations | Consolidated | Persons | 0 | 0 | 0 |
Total costs of penalties regarding corruption | Consolidated | Yen | 0 | 0 | 0 |
Number of reports to Compliance Consultation Office | Shin-Etsu Group | Number of reports | 9 | 8 | 11 |
Key Sustainability Issues
- The foundation of all activities: legal compliance, fair corporate activities
- Health and safety of employees and contractors
- Energy-saving, resource-saving, and reduction of the environmental impacts
- Product quality improvements and product safety control
- Promoting CSR procurement and the diversification of supply sources
- Respect for human rights, the development of human resources, and the promotion of diversity
- Respect for and protection of intellectual property
- Contribution to industry and social initiatives
- Accurate and timely information disclosure and communication with stakeholders