Compliance and Respect for Human Rights
Giving Consideration to Human Rights on a Global Scale, Strengthening Compliance Management
Our Approach to ComplianceCompliance Depends on the Good Intentions of Each Employee
The Sekisui Chemical Group carries out compliance management based on fundamental principles, including contributing to society, being a trusted company, and adherence to both the letter and spirit of the law, and principles that are spelled out in its Compliance Declaration announced in 2003. Based on the spirit of the Company Philosophy and our Corporate Code of Ethics, our compliance initiatives are in tune with the ethics and social norms valued by society as we strictly adhere to laws, regulations and internal rules.
Our business and compliance activities support the corporate value of the Sekisui Chemical Group, and compliance is the basis of all management activities. We aim to remain a company in which each individual employee can be proud of our good intentions. To this end, we strive to improve awareness of compliance throughout the Sekisui Chemical Group in order to remain in the trust of society.
Prevent Compliance IssuesPrevent Major Compliance Issues
In the CSR Medium-term Plan, which we started to implement in fiscal 2017, we carried over "zero incidents of major compliance issues" as a KPI target from the previous medium-term plan. From fiscal 2015 onward, Sekisui Chemical has continually achieved zero incidents of corruption and fraud. In fiscal 2017 as well, no major compliance issues arose.
We will continue strengthening our management of compliance and work to prevent compliance issues before they occur.
Growing Awareness Toward ComplianceCompliance Manuals and Compliance Cards Distributed
The Sekisui Chemical Group has created and distributed the Compliance Manual, in which are described the matters with which each Group employee should comply, and also created a pocket version called the Compliance Card in order to instill awareness of compliance in each and every employee. The Compliance Manual includes information on topics such as the prohibitions on corruption and bribery, respect for human rights and the prohibition of discrimination, data management and protection, compliance with antitrust legislation, prohibitions on insider trading, conservation of the global environment and compliance with labor-related laws and regulations, and the internal whistleblowing system; it publicizes, and promotes thorough adherence with, these requirements among all employees. In addition to the existing Compliance Manual, we have created a Global Compliance Manual covering regulations around the world. To allow all overseas Group employees to understand this manual, we have created Chinese and Thai editions, as well as an English edition, and are proceeding with translating the manual into more local languages.
- The Company's Compliance Manual
- The conveniently sized Compliance Card
Putting Compliance Management Efforts into PracticeBuilding an Effective Compliance Promotion System
We are building a realistic and effective compliance promotion system to ensure that compliance management is fully put into practice. In addition to having established a Compliance Subcommittee—which reports to the CSR Committee and is chaired by the executive officer who heads the Legal Department—as an organization to oversee Group compliance and to put forward policies and implementation measures, we are also establishing compliance promotion subcommittees at headquarters and at each divisional company, appointing persons responsible for putting compliance promotion into practice and implementing and deploying each measure. In the unlikely event that an important compliance issue arises, we will hold a Compliance Advisory Board meeting to address any problems that have actually occurred and examine measures to prevent a recurrence.
Compliance Management Promotion System
Compliance TrainingOngoing Provision of Opportunities to Learn About Compliance
As part of our efforts associated with putting compliance management into practice, we also focus on employee compliance education. We continuously provide opportunities for all Group employees to learn about the importance of compliance, such as by conducting e-learning sessions specific to compliance quarterly. These e-learning programs include information about compliance as training for new employees and as rank-specific training.
Upgrade of the Whistle-blowing ProgramWe Are Promoting Knowledge of S.C.A.N.'s Existence and Its Effective Operation
In 2002, the Sekisui Chemical Group developed the Sekisui Compliance Assist Network (S.C.A.N.) intra-company whistle-blowing system, which is the mechanism that has been made available for use by all Sekisui Chemical Group employees and its business partners.
Operated under the supervision of the executive officer in charge of the legal department, S.C.A.N. enables direct reporting not only to the executive officer in charge of the Legal Department but also to an outside law firm. In addition to serving as a reporting system, S.C.A.N. also plays a role as a point of contact for consultations, such as whether a specific act would be classed as a compliance violation.
In order to create an organizational culture that maintains full awareness of compliance, the system also prescribes the protection of the whistleblower and stipulates that information on the person who provided the information be kept secret from everyone other than at the point of contact and the prohibition of any prejudicial treatment toward that person.
Responses to External Notifications
In accordance with the establishment of the Corporate Governance Code, we reconfigured the internal reporting system in fiscal year 2015 as part of the strengthening of governance functions at each Sekisui Chemical Group company and newly put in place points of contact for consultations from, and whistleblowing by, suppliers.
This consultation / notification point of contact is intended for use by the executive officers and employees of business partners in Japan who are continuously conducting business transactions with Sekisui Chemical Group companies. We occasionally accept requests for consultations and receive reports via a form made available on Group company websites and, while conducting consultations with business partners, proceed to confirm the facts and take corrective action concerning any alleged “law-violating conduct.” The content of consultations and reports is shared only among the minimum number of people necessary to resolve the “law-violating conduct" concerned, and all parties that need to be involved are obliged to keep that content confidential.
Prevention of Bribery and CorruptionGuidelines in Place, Educational Programs Conducted for High-risk Divisions
A signatory to and an approver of the UN Global Compact, which stipulates anti-corruption efforts under its voluntary action principles, the Sekisui Chemical Group is promoting efforts to prevent acts of bribery and corruption in that spirit.
As part of our internal regulations, we have put in place rules to prevent bribery and corruption and are promoting their introduction at all Sekisui Chemical Group companies. We have also formulated anti-bribery guidelines, which summarize matters concerning bribery and corruption, that employees should observe when doing business in Japan, the United States and China. We have worked to make these regulations and guidelines known via the intranet, so that Group employees can check them at any time.
Main Measures Relating to Bribery and Corruption
In our efforts to prevent the breaking of any laws, we identify high risk cases regarding corruption and bribery, and put countermeasures in place. For example, when a government official is to be entertained or presented with a gift, a form must be submitted in advance to obtain approval from management. In the event that we appoint an agent or consultant in connection with business transactions, including those involving public officials from other countries, we stipulate that this can only be undertaken once we have confirmed that payments of remuneration to that agent or consultant could not be classed as bribes, that there are no reasonable grounds to suspect that payments could constitute bribes and only after a predetermined settlement procedure has been followed.
Identification of High-risk Divisions and Employee Training
Having identified sales departments and the Purchasing Department as the business divisions at particularly high risk of bribery and corruption, we encourage them to learn about regulations and guidelines, such as by conducting training specific to countering graft and corruption, and to make full use of the relevant forms, among other measures. Following on from training conducted for certain departments within Japan, in fiscal year 2015, 13 training sessions targeting employees at overseas business sites were held in fiscal year 2017, with 135 employees participating.
Cases of Violations in Fiscal 2017
No cases of major violations of the laws governing bribery and corruption occurred in fiscal 2017.
Protection of Intellectual PropertyProtecting Our Intellectual Property and Respecting the Intellectual Property Rights of Others
The Company regards intellectual property (IP) that has resulted from its R&D activities to be an important management resource underpinning the Sekisui Chemical Group's growth and profitability as well as efforts toward the maximization of corporate value.
For that reason, the Sekisui Chemical Group endeavors to properly use IP and protect its own rights. Among various measures, we quickly file patent applications for inventions made in manufacturing and development. We also take appropriate measures to prevent and avoid infringing the IP rights of others. We conduct educational programs to fit the level and needs of participants, from the acquisition of basic knowledge to programs covering the building of IP strategies.
Under the basic policy of securing business competitive strength by obtaining strong patents, headquarters and IP divisions of each divisional company are central to the IP strategy, which is based on a consistent system that ranges from the development of basic policies common to headquarters and each divisional company to the acquisition and management of patents and the utilization of rights.
Reasonable Evaluations with Regard to R&DAssigning a Fair Value to Valuable Inventions
Headquarters and each business division have R&D sections that work to increase the speed of technological development and create outstanding technologies. The Invention Grand Prize has been established as one part of efforts to ensure researchers and engineers receive the evaluations and recognition they deserve. The Invention Grand Prize establishes monetary rewards for inventors recognized as having made major contributions to profits.
Respect for Human RightsDeepening Understanding of Human Rights, Implementing Business Activities That Respect Human Rights
Along with its suppliers, the Sekisui Chemical Group engages in business activities that respect human rights as part of its obligation to all stakeholders. All Group employees are provided with a copy of the Company’s Compliance Manual. We have set strict standards for respecting human rights, prohibiting discrimination, preventing harassment, and protecting personal information. We conduct training and e-learning sessions for employees about the prevention of all forms of harassment. We work diligently to raise the understanding and awareness of such issues among all of our employees.
Assessing the Human Rights Situation at Our SuppliersCaring About Human Rights Issues Across the Entire Supply Chain
Through CSR procurement with our suppliers, we make sure our business partners respect human rights. In order for our suppliers to understand the Group’s procurement policy, including respect for human rights, we have produced English and Chinese translated versions as well as the Japanese version and are promoting the process of making procurement policies available in a variety of languages, such as by posting them in Japanese and English on our websites.
With regard to suppliers that do not meet the prescribed standards, a request is made to ensure that the necessary steps are taken to resolve any issues. The Sekisui Chemical Group works together with suppliers in the implementation of appropriate measures. We are making progress with the development of mechanisms, designed specifically for our overseas business partners and suppliers, to encourage improvements via our regional management companies.
Compliance Reinforcement MonthLearning About the Importance of Compliance from Actual Violation Case Studies
In fiscal 2014, we decided that October of each year would be Compliance Reinforcement Month, to give all employees the opportunity to reflect on their compliance awareness and actions.
In fiscal 2017, under the banner of “actual compliance violation case studies,” a range of initiatives were carried out in Japan based on actual past cases of compliance violations that had occurred inside and outside the Company. We also expanded the area in which Compliance Reinforcement Month is implemented overseas, which resulted in Group companies in North America and China launching Compliance Reinforcement Month initiatives.
Initiatives Taken During Compliance Reinforcement Month (FY2017)
1.Disseminated the President’s Top Message
2.Covered actual compliance violation case studies in Group newsletters. Also reported the start of Compliance Reinforcement Month in the United States and China
3.Implemented all types of compliance training / Held an open-style legal seminar in which employees participated of their own accord (7 locations, 10 times in total)
4.Conducted e-learning / Implemented e-learning on the Company intranet (questions centered on actual compliance violation case studies)
5.Initiated the Compliance Implementation Report by frontier leaders
6.Conducted compliance awareness surveys
Other compliance training
1.Implemented education programs conducted by visiting staff at business sites where there had been several violations of compliance laws
2.Provided educational opportunities at business sites in Japan where the opportunities were deemed insufficient
Upgrade of Legal Affairs StructureReinforcement of Global Legal Affairs Structure
The Sekisui Chemical Group has been reinforcing its legal affairs structure by developing and deploying legal personnel, strengthening collaboration among legal departments and enhancing legal functions.
In fiscal 2017, employees responsible for legal affairs at Sekisui Europe B.V. and Sekisui Southeast Asia Co., Ltd., our regional management companies in Europe and Thailand, respectively, took up new posts and commenced, for example, contract screening and the expansion of the internal reporting system.
Marketing CommunicationsLegal Compliance with Regard to Advertising and Labeling
When conducting business activities, the Sekisui Chemical Group strictly adheres to laws and regulations while engaging in good-faith marketing activities. In fiscal 2017, there were no serious violations of laws, regulations or internal rules to report within the context of marketing communications related to advertising and product labeling.
Responses to Past Legal Violations
From 2004 to 2006, Sekisui Chemical determined the sale price of its PVC pipes and joints in cooperation with other companies, and in February 2009, was ordered by the Fair Trade Commission to take measures to abolish this and to pay surcharges.
Certification of the facts in this order differ from Sekisui Chemical's interpretation, so from April 2009 onwards, we asked for it to be expunged through referees and litigation rescinding the decision, but in January 2018 we withdrew our appeal, and accepted the verdict through a certification of the facts at the Fair Trade Commission.
We take this result seriously, and will not only thoroughly prevent recurrence, but also become involved in strictly observing compliance.
Initiatives Geared Toward SuppliersConducting CSR Procurement Surveys
Guided by its procurement policy, the Sekisui Chemical Group has been conducting surveys as a part of the process to select new suppliers in Japan since 2007. Through these surveys, the Company works to ascertain the stance of each supplier toward human rights and environmental protection as well as the status of each supplier’s CSR activities. In fiscal 2017, we formulated and put into effect CSR Status Survey Guidelines for Suppliers, which are geared toward the raw materials procurement departments at each divisional company.
As a result of the CSR procurement survey conducted in fiscal 2017, we assessed conditions at the major suppliers of all the divisional companies in Japan and the major suppliers of the Group companies in China (211 companies in Japan, 17 companies in China). We confirmed that no major human rights infringements, including child labor and forced labor, occurred at our major suppliers.
Initiatives Geared Toward EmployeesImplementing Human Rights Training and Education
The Sekisui Chemical Group conducts training and educational programs focusing on the theme of human rights for its employees. In this manner, the Group is endeavoring to engage in management that takes into consideration concerns regarding human rights.
We incorporate content that raises awareness about human rights issues, such as forced labor, child labor, harassment, etc., in particular in training carried out at career milestones, such as when joining the Company or upon promotion.
In addition, training programs that aim to prevent all forms of harassment are held every year. In fiscal 2017, 201 employees participated in these programs.
Addressing the Issue of Conflict Minerals“Conflict Minerals Survey Guidelines" Put into Effect
Sekisui Chemical is concerned about the conflict mineral problem, namely the mineral resources controlled by armed forces in the Democratic Republic of Congo and neighboring countries that commit human rights violations and destroy the environment. We conduct surveys on the use of conflict minerals at companies throughout our supply chain from a CSR management perspective.
We put our “Conflict Minerals Survey Guidelines” into effect in April 2017. These guidelines were newly formulated for each Group division*1 responsible for receiving survey requests for conflict minerals from suppliers and for conducting the surveys.
In fiscal year 2017, we conducted 308 conflict mineral surveys at Sekisui Chemical's Urban Infrastructure & Environmental Products Company, High Performance Plastics Company and the group companies of each. We confirmed that, out of those companies surveyed, 238 do not use 3TG*2 and 51 source from countries other than the DRC and neighboring countries*3. While there were 19 cases where minerals were sourced from DRC, each case is confirmed that it is from CFS-certified facilities*4. Meanwhile, there were no cases in which the smelter was unknown.
- 1 For the quality control department of each divisional company factory and the quality control departments of affiliated companies or affiliated company factories
- 2 3TG: Columbite-Tantalite stone (tantalum), tin stone (tin), iron manganese stone (tungsten) and gold or their derivatives
- 3 Republic of Congo and neighboring countries: Refers to Democratic Republic of Congo (DRC) and the nine countries (Angola, Burundi, Central African Republic, Republic of Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia) bordering the DRC
- 4 CFS stands for “conflict-free smelter.”
Certification is granted through a program based on conflict-mineral surveys created by the Conflict-Free Sourcing Initiative (CFSI), an organization that deals with issues relating to conflict minerals.
The Initiative’s investigations not only audit smelters and refineries but also check whether conflict minerals being used to fund armed groups are included in transactions further down the supply chain.
We confirm that manufacturing sites have been certified through this program using conflict-mineral surveys.
Addressing the Procurement of Timber MaterialsEstablished “Timber Procurement Survey Guidelines,” Implementation Started in the 2018 Fiscal Year
Timber Procurement Survey Guidelines for the procurement departments of each company were established in 2017. Implementation of the guidelines began in April 2018.
In order to contribute to the eradication of deforestation as well as the sustainable use of timber resources, every effort is made to ensure that the timber used in products is logged in accordance with statutory and regulatory requirements (FSC etc.).
Employees Using the e-learning System Over Time
Employees Using the e-learning System Over Time
List of Results Relating to Compliance Training
Fiscal Year 2017 List of Results Relating to Compliance Training
Number of Whistleblowing Cases and Consultations
Fiscal Year 2017 Number of Whistleblowing Cases and Consultations