Basic Policy and System
Basic Compliance Policy
The basis for the Sumitomo Corporation Group's compliance is to win the trust of society by practicing the Activity Guideline that states "to comply with laws and regulations while maintaining the highest ethical standards."
Accordingly, we follow our principles of "Giving First Priority to Compliance," which means that compliance takes priority over all activities of the Group and that we must never violate compliance as a result of giving priority to the pursuit of profit, and "Reporting Compliance Issues Immediately" or "Immediate Report," which means, in the event of a compliance problem, employees must report the situation without delay to their line manager, including the management level personnel, or to the relevant department of the Corporate Group.
Sumitomo Corporation Group Compliance Policy
The Sumitomo Corporation Group Compliance Policy was developed in March 2019 based on the previous Compliance Guiding Principles to clarify and adopt the basic policy above throughout the Group. Educational programs, such as seminars and e-learnings, are provided on a continuing basis with the aim of spreading and ensuring the adoption of the policy throughout the Group. Sumitomo Corporation also has the Compliance Manual in place and will review its effectiveness and propriety on a regular basis and revise the content of the Manual as necessary.
Compliance Management System
Aiming for more agile responses to compliance issues which arise in the Group, Sumitomo Corporation appoints a Chief Compliance Officer (CCO), who has ultimate responsibility for compliance. Further, the Compliance Committee, which plans compliance measures, includes the general managers not only of the Corporate Group but also of the Business Group, enabling it to examine such measures in a multifaceted way that reflects our actual business operations.
Our Group will actively continue to establish and improve the internal systems that realize our principle of "Giving First Priority to Compliance."
Overview of Speak-Up System and Various Points of Contact
Our internal rules stipulate and ensure that any issues or potential issues in relation to compliance must be reported immediately to their line manager, including the management level personnel, or to the relevant department of the Corporate Group (Immediate Report). Such issues include not only the violation of antitrust/competition laws or anti-bribery/corruption laws but also workplace misconduct, falsification of accounts, or harassment. Upon occurrence of such issues, we use collective efforts of the relevant departments and promptly take the optimum actions and measures on a case by case basis.
If reporting through the usual reporting line is difficult for some reason, we maintain a "Speak-Up System" * available to officers and employees, who face an issue, to report it to the Chief Compliance Officer through an internal or external hotline since November 2000.
- Sumitomo Corporation calls so-called whistleblowing system as "Speak-Up System." We use the term "Speak-Up" to positively encourage officers and employees "to have the courage to tell even a delicate subject" and believe that it is an appropriate expression for one of our compliance systems.
Our Speak-Up System provides, in addition to the Chief Compliance Officer (Compliance Committee Secretariat), various points of contact such as hotline service providers, outside lawyers, and Audit & Supervisory Board Members including Outside Audit & Supervisory Board Members, and it accepts any information report made by any of our officer and employee (including contract workers, dispatch workers and secondees, etc.) and any person who used to be our officer or employee within one year before the day on which the information report is made.
Status of Operation and Encouragement of Use of Speak-Up System
Under the Speak-Up System, an information report can be made anonymously, and the fact and details of the report are maintained in the strictest confidence, and it is ensured that the whistle-blower is not subject to disadvantageous treatment for making the report.
In the fiscal year 2021, the Compliance Committee of Sumitomo Corporation accepted 34 Speak-Up reports,* and we have settled each case appropriately after the fact-finding under the directions and instructions of the Chief Compliance Officer.
- The number of the Speak-Up reports herein does not include the number of “Immediate Report” submitted. As stated above, our Group basically adopts “Immediate Report” and ensures “Immediate Report” throughout the Group. Therefore, any issues or potential issues in relation to compliance are reported to the management revel mainly under “Immediate Report” system (reporting through the usual reporting line), and we use collective efforts of the relevant departments and promptly take the optimum actions and measures on a case by case basis.
Inquiries or reports submitted by outsiders through “Inquiry” etc on our website are handled by an appropriate department depending on the nature of the inquiry or report.
We take measures, including those listed below, to encourage the use of the Speak-Up System and to explain simply how the maintenance of strictest confidence and prohibition of disadvantageous treatment is ensured in practice in the Speak-Up reporting cases, thereby aiming at the improvement of the environment to ensure that the System can be used without worry.
- Seminars for officers and employees
- Posting on the Intranet of, Q&As of the Speak-Up System, motion video for informing of the Speak-Up System, and detailed explanations about the operation of the System for officers and employees
- Distributing messages from Chief Compliance Officer to officers and employees
- Distributing to all officers and employees "Speak-Up Cards" with an overview of the System as well as the contact details for the hotline
- Posting of posters about the Speak-Up System on all floors of our office and the Intranet, and other measures
The status of the operation of the Speak-Up System is periodically reported to the Compliance Committee, the Management Council, the Audit & Supervisory Board and the Board of Directors.
Operation of the SC Global Speak-Up system
The group-based Speak-Up system, which enables officers and employees of group companies both in and outside Japan to report compliance-related issues, has also been established and operated. We accept reports in 16 languages under this System.
Initiatives to Ensure Compliance
Appropriate responses to compliance violations and preventive measures
In case of a compliance problem, the Company, primarily through the Legal Department and the Legal Compliance Department with the aid of external specialists when necessary, and in cooperation with relevant departments in and outside of Japan, promptly takes steps to establish the facts and clarify the causes of the incident. Based on the outcome, we take corrective measures, disciplinary action, and recurrence preventive measures.
The Compliance Committee Secretariat annually keeps records of the details of the circumstances of compliance violations in the Group. These are analyzed, evaluated and used to plan future compliance measures. The results and details are deliberated at meetings of the Compliance Committee and then reported to and discussed by the Management Council, the Audit & Supervisory Board, and the Board of Directors. Thus, through this process of repeatedly improving and enhancing such measures while using the Plan-Do-Check-Action cycle, we strive to increase awareness of and ensure compliance throughout the Group.
Continuous education program initiatives
The Compliance Manual, which explains particularly important issues, such as anti-bribery/corruption, compliance of antitrust law, and security trade control, is communicated to all officers and employees of Sumitomo Corporation.
Both in Japan and overseas, we implement various education programs for each class of employee, such as new comers, newly appointed general managers, and newly appointed corporate officers, as well as provide e-learning programs about the theme according to the current situation for all officers and employees (including secondees and overseas workers) of Sumitomo Corporation every year, in order to promote and deepen understanding of the Sumitomo Corporation Group Compliance Policy and the Compliance Manual.
We also obtain the written pledge ensuring thorough compliance from all officers and employees of Sumitomo Corporation once a year, to confirm our Group's Activity Guideline that states "to comply with laws and regulations while maintaining the highest ethical standards." In addition to these regular activities, we hold seminars and training sessions on an ongoing basis as required under a specific theme, such as anti-bribery/corruption, compliance of antitrust law and subcontract law, security trade control, prevention of insider trading, and elimination of harassment.
In Business Group, Domestic Offices, and Overseas Regions, we provide relevant compliance training sessions, under the leadership of a compliance leader, depending on the characteristics of the Group or Region, thus engaging in attentive education program initiatives. We also implement a variety of support measures to reinforce compliance systems at Group companies, including deployment of e-learning content on the Sumitomo Corporation Group Compliance Policy to Group companies.
Based on the principle of "Giving First Priority to Compliance" and as stipulated in the Sumitomo Corporation Group Compliance Policy, the Group implements strict measures to prevent all forms of corruption. Specifically, we have established the Rules for Prevention of Bribery of Public Officials, which regulate the provision of entertainment, gifts, invitations, and donations to domestic and foreign public officials as well as the selection of agents, and conduct required internal review. In addition, taking into account revisions to the laws and regulations of each country, and advice from various external specialists, and changes in other social circumstances and other factors, we continuously review our internal rules, guidelines, and manuals. Further, we extend these rules and manuals to overseas offices and Group companies and encourage them to establish and implement a system appropriate for the bribery risk level of each company, and we also offer ongoing employee education, such as internal seminars, and work constantly to prevent bribery and corruption in Japan and overseas.
The Group's principles and policies in this regard are summarized in the Sumitomo Corporation Group Anti-Corruption Policy (enacted and announced in 2017). This Policy includes the following statement: "The Sumitomo Corporation Group will not commit bribery or conduct any activity raising the suspicion of bribing Japanese government or other public officials; and will as a principle prohibit its officers and employees from providing such officials with entertainment, gifts, or the equivalent. It will not make any offer, payment, promise to pay, or authorize the payment of any money or anything of value to any foreign government or other public official, for the purpose of influencing any act or decision of such official in order to assist it in obtaining or retaining business." This statement declares the Group's principles in relation to preventing bribery. Furthermore, through this Policy, we explain our anti-bribery system and our initiatives for the prevention of bribery to our business partners, and request their understanding and cooperation.
Measures for ensuring compliance with laws concerning antitrust and fair competition
We stipulate fair competition in the Sumitomo Corporation Group Compliance Policy and our policy for compliance with laws concerning antitrust in the Compliance Manual. We have also published a separate manual concerning antitrust/competition laws for our officers and employees that describes key considerations in daily dealings. Additionally, we endeavor to ensure, by measures such as regular internal training, that antitrust/competition laws are observed.
Security trade control and logistics compliance
As an integrated trading company, Sumitomo Corporation regularly implements various measures, on a continuing basis, to ensure that we comply with treaties and international frameworks related to international trade, as well as Japanese laws and regulations related to trading activities. Our group companies do likewise. We implement various measures related to security trade control to prevent weapons or products and technology for civilian use that could be converted to military use from falling into the hands of states or non-state organization (terrorists) which may develop weapons of mass destruction. We also provide internal rules, manuals, and guidelines, and provide training sessions, instructions and monitoring as needed to ensure compliance with laws and regulations related to tariffs and customs as well as those related to public order and safety.
Prevention of insider trading
To prevent violations of insider trading regulations related to our business activities as well as personal dealings by our officers and employees, we have established "Rules for Prevention of Insider Trading" as well as internal checking systems from various perspective. To ensure compliance with insider trading regulations as well as internal rules, we also provide, on a regular basis, internal training courses and other activities to raise awareness.