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Compliance System in Sumitomo Chemical Group

Compliance System

Sumitomo Chemical's Compliance System is built on a variety of organizational arms and operating programs. Among those are clearly-defined compliance rules and concrete guidelines to be observed by employees and Board members, and the Compliance Committee, a compliance surveillance organization that assumes responsibility to monitor, supervise and investigate the Company's compliance situation as well as handling or preventing incidents of compliance violation.

The Compliance Committee attaches the utmost importance to providing thorough education periodically to every employee toward ensuring strict compliance throughout the Company. To make the education effective, the Committee actively carries out various kinds of trainings and seminars from time to time for all employees at every workplace in the Company.

Another integral element of the Compliance System is a Speak Up System, under which an employee can report any violation or suspected violation of compliance by others in the Company to the Compliance Committee through specified hotlines provided both internally and externally. The Speak Up System helps the Committee to find out and rectify promptly the situation of violation, and it could also work effectively to discourage or prevent someone engaging in conduct in violation of compliance. To ensure compliance not only at the Company, but also throughout Sumitomo Chemical Group, the Company requests Group companies in Japan and abroad to build and operate their own compliance systems that are equivalent to that of Sumitomo Chemical.

Detailed activities are further outlined below.

Compliance Organization

The Compliance Committee is an across-the-board organization responsible for undertaking compliance-related activities, consisting of Chairman, nominated by the Company’s President, and several Members, along with Secretariat Office that is in charge of running day-to-day activities of the Committee.

The Compliance Committee supervises the situation of compliance at every workplace throughout Sumitomo Chemical. Should there occur any violation or suspected violation of compliance, the Compliance Committee will immediately investigate into its specific incident and take necessary measures to correct it swiftly. In addition, the Compliance Committee formulates and implements whatever measures useful for ensuring or promoting compliance, such as providing comprehensive or focused education programs periodically to each and every employee.

The Compliance Committee has the authority also to conduct investigation and supervision regarding the compliance situation of Sumitomo Chemical Group companies.

Speak Up System

Speak Up system is a system for whistleblowing, by which employees and Board members of Sumitomo Chemical, their family members, or employees and Board members of any Group company, trading partners or anyone having involvement in Sumitomo Chemical's business activities can report to Sumitomo Chemical’s Compliance Committee if he or she becomes aware of any violation or suspected violation of compliance within Sumitomo Chemical or any of its Group companies.

A reporting person may report to the Compliance Committee directly or through the external lawyer designated by the Compliance Committee. Upon receipt of reporting, the Compliance Committee will promptly investigate into the factual situation of the reported incident and take remedial actions as necessary.

The Compliance Committee gives the maximum possible consideration to the privacy of the reporting person and confidentiality of information, and also makes sure that the person having reported honestly will never be penalized in the Company because of the reporting, such as dismissal, transfer or other discriminatory treatment.

Sumitomo Chemical believes that the effective use of the Speak Up System will help the Company to find out conduct of violation in its early stage of development and take remedial actions therefor promptly, hence conducive to ensuring compliance throughout the Company.

For information on the reporting form to be used and specific contacts for reporting, please click here.

Compliance Education

In order for a company to enhance its corporate value, maintain trust of society and conduct business activities fairly, each and every member of the company must act by high ethical standards and with the clear awareness of being professional in respective fields of expertise. From this perspective, the Compliance Committee is providing a variety of educational materials and programs periodically to every member of Sumitomo Chemical, which include the following:

  1. Providing compliance guidelines for business conduct
    Sumitomo Chemical provides every employee and Board member with a Compliance Manual that sets forth specific compliance rules and guidelines to be observed in undertaking day-to-day business activities. The Compliance Manual is updated from time to time to reflect therein major changes having taken place in relevant laws, regulations, and other rules. The Manual addresses issues in such fields as (i) observance of laws and regulations, and response to demands of society, (ii) relations with customers, trading partners and competitors, (iii) relations with shareholders and investors, (iv) basic rules to observe at workplace (v) compliance with internal rules and treatment of corporate assets, for each of which relevant guidelines for conduct are provided along with information on the Company's internal sections for an employee to seek advice from if necessary.
  2. Conducting lecture-style education programs
    A lecture-style compliance training program is carried out for every member of Sumitomo Chemical periodically and on certain major occasions. For example, in addition to the periodical lectures and seminars, compliance trainings are provided to employees upon their first joining the Company and when they have reached certain major stages of their carrier path in the Company, such as upon promotion to higher positions. For effective education, general training programs that deal with various issues of compliance comprehensively are supplemented by individual programs that focus on specific subjects of particular importance.
  3. Enhancing education with e-learning training programs
    Starting February 2014, Sumitomo Chemical has been operating an e-learning training program for compliance training as part of its efforts to further enhance the compliance education. The e-learning training program enables employees to take part in interactive compliance trainings through their PCs at any time and wherever he or she may be. The e-learning training program is designed to make employees recognize, with use of specific case examples, that compliance violation could happen to anyone at any time in the course of his or her daily business activities. In addition, it purports to help employees renew their understanding that Sumitomo Chemical's 100-year history of constant business growth and development is founded on the long-cherished Sumitomo Spirit of over 400 years that is deep rooted in the Sumitomo's unwavering commitment to compliance.
    The combined use of the lecture-style training and the e-learning training will help employees to acquire correct and deeper understanding of what compliance is all about in day-to-day business settings.