We conduct our business with the strong belief that compliance should constitute the cornerstone of corporate management and that we must not violate ethics or the rules of society in any aspect of operations. In 2003, in order to ensure the lawful and ethical conduct of business throughout our Company, we have created the "Sumitomo Chemical Charter of Business Conduct," which codifies the basic criteria for business conduct, and the "Sumitomo Chemical Business Conduct Manual," commonly called the "Compliance Manual," which sets forth concrete guidelines for all our employees, officers and Board members to follow. In order to achieve effective compliance management, we have established the Compliance Committee, which monitors and supports overall day-to-day compliance activities. For individual compliance items outlined in the Compliance Manual, special committees such as the Responsible Care Committee, the Antitrust Law Compliance Committee and the Internal Audit Working Group are working to ensure the compliance by our employees and others.

In addition, from the standpoint of strengthening consolidated management of Sumitomo Chemical Group companies and as part of our initiatives to establish solid internal control systems, we have been putting forth efforts to build and strengthen compliance systems in our consolidated Group companies operating both in Japan and overseas. We will continue to work in close cooperation with each of the companies to further enhance the compliance systems of the entire Group so that we will be able to gain the greater trust and confidence of society as a global company.

Sumitomo Chemical Charter for Business Conduct and Business Conduct Manual

We believe it is our social responsibility to conduct business to the highest ethical standards and act on our own responsibility. The "Sumitomo Chemical Charter for Business Conduct" spells out the basic guiding principles on which our compliance system is built. And the "Sumitomo Chemical Business Conduct Manual" has been developed on the basis of the Charter to provide specific rules for all our Board members, officers and employees to abide by in the performance of their respective activities, with a focus on our relations with society, customers, business partners, competitors, shareholders and investors, and employees.

Organizations for Compliance Management

The Compliance Committee monitors and supports the activities of the Company in ensuring that compliance-based management is always promoted in all operations throughout the Company. The Committee has the duty and authority to investigate and supervise legal and ethical compliance and call for corrective action as needed not only in Sumitomo Chemical itself but also in our consolidated Group companies both in Japan and overseas, currently totaling approximately 100 companies.

Speak-Up System

With the aim of preventing and resolving any violations of compliance, we have adopted an "open-door policy" that will help promote free and direct communication between superiors and subordinates in workplaces. There may be cases, however, where their immediate resolution through the ordinary channel of reporting to superiors appears difficult or impractical. In light of this, we have in place a "Speak-Up System" for our compliance program that enables employees and others working at our Company to report to the Compliance Committee or designated outside lawyers any violations or suspected violations of laws, regulations or Company rules. All information provided by an informant is kept strictly confidential, and the informant does not risk unfair treatment, such as dismissal, transfer or discrimination, for reporting incidents. The Speak-Up System aims at restraining illegal or unethical behavior as well as stimulating self-regulation against such behavior. In fact, we have been responding to each of the reports from informants promptly and in good faith in strict accordance with the purpose, objectives and procedures of this reporting system, thereby seeking further enhanced compliance management.

Promoting Compliance throughout the Sumitomo Chemical Group

We require consolidated Group companies to adopt compliance systems comparable to those of the Company, including the Compliance Manual and the Speak-Up System, in order to promote compliance-based management throughout the Group. With respect to overseas consolidated Group companies, we request each of them to create and adopt a Code of Ethics in place of the Company's Compliance Manual that reflects relevant laws, regulations and business practices legitimately followed in the countries in which they operate, and to build and establish an effective compliance system based on this Code. Nearly all of our current consolidated Group companies have introduced compliance systems. In order to further strengthen their compliance management, we are providing each of our consolidated Group companies with a variety of support, including those for educational programs, which we consider appropriate according to the status of operation of their respective compliance systems.

Recent Initiatives

In April 2008, we updated the Company's Compliance Manual to reflect legislative and other changes such as amendments to or new enactment of Japan's various laws, revisions of our Company rules, and society's greater emphasis on compliance. In order to ensure that our employees and others are fully informed of the updates and further raise awareness of compliance, we conducted basic compliance educational seminars throughout Sumitomo Chemical, including at our Works and Laboratories. In addition, we are supporting our consolidated Group companies in their efforts to enhance their compliance management, such as building systems that enable the timely updating of their Compliance Manuals for domestic companies or their Codes of Ethics for overseas companies in response to changes in laws, regulations and social conditions by means of, in the case of overseas companies, networking with local lawyers to acquire and examine the latest information on laws and regulations in their countries.