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Risk Management/Compliance

Compliance

Stance on Compliance

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Nabtesco Group Code of Ethics, Handbook for the Nabtesco Group Code of Ethics

To strengthen the Group-wide and global compliance system, the Nabtesco Group has established the Nabtesco Group Code of Ethics.

The Legal & Compliance Department, which is in charge of compliance issues, fulfills a central role by increasing employees’ compliance awareness in addition to fostering their compliance with laws and regulations in order to enhance the Group’s corporate value over the medium- to long-term. The Nabtesco Group Code of Ethics defines actions that each officer and employee should take to realize the corporate philosophy in his/her business activities from compliance perspectives. The Nabtesco Group Code of Ethics is reviewed once a year.

In order to help each officer and employee deepen their understanding of the Nabtesco Group Code of Ethics and take actions that are in line with it, we have prepared a Compliance Handbook, which is used for compliance education and awareness-raising activities. The Nabtesco GroupCode of Ethics and the Compliance Handbook is available in nine languages (Japanese, English, Simplified Chinese, Traditional Chinese, Korean, Thai, German, Italian and French) on Nabtesco’s website.

We also conducted on-site education activities at all Nabtesco Group companies outside Japan to disseminate the Nabtesco Group Code of Ethics. Going forward, we will ensure that the Nabtesco Group Code of Ethics is understood and embraced by employees through group-based on-site training in Japan and overseas, as well as programs for e-learning.

 Scope of Application 

Implementation of the Nabtesco Group Code of Ethics

  1. (1)Behavioral Requirements for Directors, Officers and Employees
  2. (2)Behavioral Requirements for Executives and Managers
  3. (3)Reporting a Violation of this Code
  4. (4)Discipline
  1. General Standards
  2. Relationships with Company  
    1. (1)Respect for Human Rights
    2. (2)Discrimination and Harassment
    3. (3)Building Safe and Positive Workplace Environments
    4. (4)Political and Religious Activities
    5. (5)Conflicts of Interest
  3. Fair and Honest Business Activities
    1. (1)Fair Transactions
    2. (2)Anti-bribery, Gifts and Entertainment
    3. (3)Trade Control
    4. (4)Relationship with Politics and Governments
    5. (5)Relationship with Anti-Social Forces
  4. Management of Company Assets and Other Property
    1. (1)Management of Company Assets
    2. (2)Management of Confidential Information
    3. (3)Management of Financial Information
    4. (4)Protection of Personal Information
    5. (5)Protection and Respect for Intellectual Property
    6. (6)Insider Trading
  5. Relationships with Society
    1. (1)Relationships with Society
    2. (2)Disclosure of Company Information
Corporate Communications Department, Compliance Promotion Department, 1, 2

Enhancement of the Compliance System

According to the Rules for the Group Compliance Promotion System, our Compliance Committee deliberates the basic policies and important issues related to the compliance system. This committee, which includes external experts among its members, serves as an advisory board to the Board of Directors.

In addition, by appointing Chief Compliance Officers and Compliance Officers who support the chief officers for all of our administrative departments, in-house companies and Group companies within and outside Japan, we are enhancing our compliance system on a group-wide and global scale. We held a Compliance Liaison Meeting to enable the Chief Compliance Officers and Compliance Officers to share information and exchange opinions, both in Japan and in all overseas regions where we conduct business (China, other Asia region, North America and Europe).

Furthermore, local in-house lawyers are deployed at Shanghai Nabtesco Business Management Co., Ltd. in China and Nabtesco Europe GmbH, the European regional headquarters in Germany. This, through close collaboration with the headquarters Legal & Compliance Dept., enhance a global legal and compliance system.

Compliance Promotion System
Compliance Promotion System

Whistleblowing System

In Japan, we have an internal contact point (the Legal & Compliance Dept.) and external contact points (law firms and specialized companies) in place to implement the Whistleblowing System (Nabtesco HotLine). Through this system, we have been taking measures for the prevention, early detection and correction of any misconduct, such as bribery, the formation of a cartel, or harassment. The system may be used by officers and employees (including fixed-term job-specific employees, temporary employees, part-time employees and trainees) of the Nabtesco Group companies in Japan.

In addition, to ensure that all employees are aware of the system, we have been featuring it on employee portal sites and in the Compliance News, an internal newsletter, while at the same time distributing posters and cards

In FY2019, approximately 40 consultation requests were received through the system. Each request was handled appropriately after conducting a fact-finding investigation. Whistleblowing report is periodically escalated to the Compliance Committee by Legal and Compliance Dept.

On the overseas side, we introduced a scheme to handle whistleblowing information sent from certain Group companies in China in FY2017, Group companies in Europe, North America, and Southeast/South Asia in FY2018. The schemes are in operation in every area in which we have operations bases.

These schemes ensure that whistleblowers are not treated unfairly and their privacy is protected.

Whistleblowing System (Nabtesco HotLine) in Japan
Internal Reporting System (Hotline) in Japan
  • *Report reception time
    Within the company weekday 9:00 am~5:30 pm / Outside the company (a law firm) weekday 10:00 am~6:30 pm / Outside the company (a specialized company) weekday 9:00 am~9:00 pm
Global Whistleblowing System (Nabtesco Global HotLine)
Global Internal Reporting System (Hotline)
Nabtesco Corporation, Compliance Promotion Department, 3, 1, 2

Promotion of Compliance

Compliance Education

The Group provides various types of position-specific and theme-specific compliance education through group-based on-site training and e-learning, among other methods, to foster employees’ compliance awareness.

Various Types of Compliance Training
Position-specific Training

We incorporated compliance training into position-specific training and provide them to employees on a position-by-position basis. (The number of employees who received this training in FY2019 was 334).

Breakdown of Position-Specific Training
  • Training for Newly Appointed Executive Officers
  • Training for Newly Appointed Senior Managers
  • Training for Newly Appointed Managers
  • Entry-Level Problem-Solving Training
  • Upper-Level Problem-Solving Training
  • Training for Newly Employed MidCareer-Hire Employees
  • Training for Candidate Foremen
  • Training for Newly Employed New Graduates
Theme-specific Training

Additional training that we offered in FY2019 is prevention of sexual harassment training provided in Japan.
On the overseas side, we visited Group companies located in Asia (excluding China) and provided group-based on-site training to ensure that the Nabtesco Group Code of Ethics is fully understood and shared by local employees. In addition, we raised employee awareness of anti-bribery, the risk of which is high from a regional perspective, while at the same time updating employees on the Global Whistleblowing System (Nabtesco Global HotLine system).

FY2019 Results (Group-based training)
Training content Area in which training was provided Number of employees who received training
Prevention of sexual harassment Japan 1,383
Nabtesco Group Code of Ethics, anti-bribery and Global Whistleblowing System Asia (excluding China) 240
Sexual Harassment Prevention Training Sexual Harassment Prevention of Sexual Harassment Training
入社2年目研修Code of Ethics, Anti-Bribery and Global Whistleblowing System (Asia)

We have been using e-learning to provide compliance education since FY2011 to ensure that more officers and employees have an elevated awareness of compliance and repeatedly engage in voluntary learning. In this fiscal year as well, we offered e-learning courses on the Antitrust Law, anti-bribery, the prevention of insider trading, security export control and the Subcontract Act. In addition, in FY2019, we provided training through e-learning regarding prevention of sexual harassment.

eラーニング画面E-learning Page
FY2019 Results (e-learning)
Training content Area in which training was provided Number of employees who received training
Prevention of sexual harassment Japan 4,232
Security export control (applicability assessment) Japan 449
Security export control (Basics) Japan 940
Subcontract Act Japan 1,413
Anti-bribery Japan 848
Prevention of insider trading Japan 52
Antitrust/Competition law Japan 314
Anti-bribery China 106
Prevent Cartels Asia、Europe、North America 286
Nabtesco Group Code of Ethics Germany 29
Compliance Meeting

With the enhancement of employee awareness of compliance in mind, we ensure that compliance meetings are held once a year at workplaces to freely discuss compliance-related themes. In FY2019, 4,259 employees attended these compliance meetings.

Compliance Awareness Survey

We have established every October as corporate ethics month internally and distribute a CEO video message on compliance every year, while also conducting a compliance awareness survey to understand the degree of compliance awareness.
In FY2019, we conducted the survey covering Group companies operating in Japan and certain Group companies in China, which included the participation of 4,519 employees.
 

Promotion of Compliance at Overseas Group Companies
  1. China
    中国の内部通報制度周知ポスターChina's whistleblowing system publicity poster

    In FY2019, we provided e-learning courses on the prevention cartels and anti-bribery. In addition, we conducted a Chinese version of the compliance awareness survey for the first time. Furthermore, we distributed posters and cards highlighting the whistleblowing system in China to ensure that the system is fully understood and shared by local employees. Moreover, we publish a bi-monthly newsletter on compliance in Chinese and strive to enhance employee awareness of compliance.

  2. Asia (excluding mainland China)
    Compliance Newsletter in the Thai language.Compliance Newsletter in the Thai language.

    In FY2019, we visited Group companies operating in Asia and provided group-based on-site training to ensure that the Nabtesco Group Code of Ethics is fully understood and shared by local employees. In addition, we raised employee awareness regarding anti-bribery, the risk of which is high from a regional perspective, while at the same time updating employees on the Global Whistleblowing System. We provided e-learning courses on the prevent cartels. In addition, we publish a bi-monthly compliance newsletter in the Thai language to enhance local employees’ awareness of compliance.

  3. Europe

    In FY2019, we provided e-learning courses under the theme of the prevent cartels and the Nabtesco Group Code of Ethics. Through this training, we sought to ensure that the Nabtesco Group Code of Ethics is fully understood and shared by local employees, while also updating them on the prevent cartels and anti-bribery as well as the introduction of Nabtesco Global HotLine System. Going forward, we will continue to make efforts to facilitate their understanding though the utilization of e-learning and other measures.

  4. North America

    In FY2019, we provided e-learning courses on the prevent cartels. Furthermore, we held a compliance liaison meeting in the United States first time, to share information and exchange opinions regarding compliance.

  5. Training for Overseas Postings

    In collaboration with the Human Resources Department, we provide training on legal risks specific to the host country to employees preparing for overseas assignments on an as-needed, individual basis. In FY2019, the training was offered to employees assigned to China, Asia, the United States and Europe.

Information Dispatch and Enlightenment Activities

Corporate Ethics Month
FY2019 Corporate Ethics Month Poster (Survey on Compliance Awareness)FY2019 Corporate Ethics Month Poster (Survey on Compliance Awareness)

Since FY2011, we designated every October to be Nabtesco Group Corporate Ethics Month and have been conducting a campaign, led by top management, to enhance the compliance awareness of employees at each workplace of the Nabtesco Corporation and its domestic Group companies.

In FY2019, we distributed a video message from the CEO regarding compliance internally, including to Group companies in Japan and abroad. In addition, we distributed messages from the presidents of each Group company and each in-house company for domestic employees. We conducted a Compliance Awareness Survey covering employees of the Nabtesco Corporation, Group companies in Japan and certain Group companies in China, with 4,519 employees responding to the Compliance Awareness Survey.

Activities

To raise employees’ compliance awareness, we used the intranet as well as handouts to disseminate information to all employees. Going forward, we will continue to engage in educational activities.

Examples of Main Activities Conducted
  • Posting of initiatives for compliance in One Nabtesco, a global in-house newsletter (published twice a year in two languages: English and Chinese)
  • Publication of the newsletter on compliance (issued monthly in the Japanese language and bi-monthly in the Chinese and Thai languages)
  • Inclusion of case studies featured in the “Let’s study compliance together” training program in the domestic internal newsletter.
  • Issue of collections of cases and guidelines regarding compliance

Anti-Corruption Measures

Initiatives on Anti-Corruption Measures
FY2019
Set the guidelines on entertainment and gifts for Group companies in Japan. Provided Group companies in Japan, China and other Asia region with anti-bribery education
FY2018-
Implemented in-house regulations and guidelines, applicable to all Nabtesco group companies (domestic and overseas)
FY2017-
Scheduled to provide all Nabtesco Group employees with anti-bribery education
FY2016-
Established the Nabtesco Group Code of Ethics and the Nabtesco Group Anti-Bribery Policy
FY2014-
Signed the United Nations Global Compact
Basic Anti-Bribery Policy

We have the Nabtesco Group Global Anti-Bribery Policy in place, considering the elimination of risk of bribery as one of the important areas of compliance. Applicable to Nabtesco Corporation and all its Group companies in and outside Japan, this policy clearly prohibits any acts of bribery including facilitation payments, requires the establishment of internal rules and guidelines regarding entertainment and gifts, and rules out any engagement with third parties who may pose a bribery risk. In addition, this policy is published on the website of Nabtesco Corporation in nine languages (Japanese, English, Simplified Chinese, Traditional Chinese, Korean, Thai, German, Italian and French), along with a message from the CEO.

Furthermore, all Group companies must ensure that their internal anti-bribery regulations and guidelines are maintained based on this policy.

Anti-Corruption System

If any Group company, whether based in Japan or abroad, notices any situation that is actually, or likely to be, in violation of its internal anti-bribery regulations, it is obligated to report it to the General Manager of Legal & Compliance Dept. as well as to Chief Compliance Officers and Compliance Officers of each in-house company and Group company, and then take steps appropriately according to the instructions given by the relevant managers.

To enter into a new contract with any intermediaries such as a business partner or sales agent, we make the necessary and appropriate investigations in advance and refrain from concluding contracts with any intermediaries that are actually, or likely to be, involved in bribery. More specifically, according to the guidelines, we select intermediaries through due diligence including careful examination from the perspectives of country risk and contact with public officials, among other factors. By going through these processes, we conduct prior investigations of bribery risks. On top of that, we take additional measures such as the inclusion of anti-bribery clauses in relevant contracts.

Anti-Corruption Activities

We are working to anti-bribery across the group by rolling our basic policy to each Compliance Officer in each group company, in Japan and abroad, as well as promoting compliance education and the creation of internal standards and guidelines at each group company.

In particular, from FY2017 to FY2019, we visited our facilities overseas to ensure that the basic anti-bribery policy is fully understood by the employees of every overseas Group company and conduct an assessment regarding the bribery-related risks faced by each Group company.

We have been participating in the Anti-Corruption Subcommittee of the United Nations Global Compact and workshops on the investigation of misconduct sponsored by the Business Ethics Research Center (BERC). Through these efforts, we actively engage in exchanges of opinions and information with other companies.

Nabtesco Corporation has not been fined for any bribery offense since its establishment in FY2003. We have made no political donations since 2003.

In FY2019, there were no employees disciplined due to engagement in corruption, including bribery.
In FY2019, costs were 0 yen for penalties, penal regulations and amicable settlements pertaining to corruption.

Prevent Cartels

Initiatives on Prevent Cartels
FY2019
Provided e-learning to prevent the formation of cartels at Nabtesco Corporation and its subsidiaries in Japan and abroad
FY2016 - FY2017
Conducted awareness-raising activities (inhouse seminars, training of executive officers, e-learning, etc.)
FY2015
Established the Code of Conduct to prevent Cartels
FY2013
Published the Global Antitrust Compliance Guidebook

To ensure compliance with antitrust/competition laws and regulations on an international scale, Nabtesco Corporation established the Global Antitrust Compliance Guidebook in FY2013 in Japanese, English and Chinese.

In FY2015, we stipulated the Code of Conduct to Prevent Cartels, a set of internal rules that defines the practices that are prohibited, rules on contact with competitors, authority of audits by the Legal & Compliance Department and the Business Auditing Department, among others. Then from FY2016 to FY2017, all group companies in and outside Japan established their respective codes of conduct to the same effect.

We have been making efforts to provide training programs on the prevention of cartel activities as well. Training programs provided after FY2013 include explanatory meetings on the Global Antitrust Law Compliance Guidebook held on a companywide basis including the group companies in Japan and abroad (FY2013 and FY2014), training on measures to prevent cartel activities provided at a meeting of executive officers (FY2016), and training for e-learning provided to eligible members of sales departments company-wide and those of the group companies in Japan and abroad to prevent cartels (FY2016 ~).

Corporate Communications Department, Compliance Promotion Department, 1, 2

Compliance Committee Message from Outside Corporate

Zenzo Sasaki, Outside Corporate Auditor (Attorney at Law, Harumikyowa Law Office) Zenzo Sasaki, Outside
Corporate Auditor (Attorney at Law,
Harumikyowa Law Office)

In recent years, a series of incidents of noncompliance have been reported, threatening the existence of many prominent corporations. This has heightened the global business community’s awareness that compliance is a critical basis for ensuring sustainable corporate growth and strengthening competitiveness.

The Nabtesco Group Code of Ethics defines compliance not only as complying with laws and internal rules (manuals, guidelines and other operational rules) but also as meeting needs of stakeholders (customers, employees, business partners, shareholders and local communities) through acting in compliance with ethics and social norms.

As a prerequisite for expanding its global business operations, the Nabtesco Group needs to reinforce its compliance system in such a way as to encompass its overseas Group companies. The Compliance Committee, which was established in FY2016 as an advisory body to the Board of Directors, deliberates on the basic policy and priority issues related to the Group’s compliance system. As an independent member of the Committee, I deliver opinions from an external point of view to ensure the effectiveness of internal control of the Group.

In order for the Nabtesco Group to achieve sustainable growth, each employee is expected to conduct business with high ethical standards and transparency. I am committed to contributing to the reinforcement of the Nabtesco Group’s compliance system through various initiatives of the Compliance Committee.

Corporate Communications Department, Compliance Promotion Department, 1, 2
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Response thumb 137 423e

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