Shareholders and Investors, Customers, Suppliers and Other Trade Partners, Employees, Local Communities, Global Environment

Promoting Compliance


Message from the Chairperson of the Compliance Committee

Hideo Yamane
Chairperson of Compliance Committee
Director and Managing Executive Officer
The Sumitomo Riko Group has been adhering to the Sumitomo Spirit of "Banji-nissei", "Shinyo-kakujitsu" and "Fusu-furi". We have positioned "compliance" as the basis of our manufacturing spirit and business operations, aiming to fulfill the Group’s corporate social responsibility through activities based not only on legal compliance but also on a high corporate philosophy.
In order to promote compliance activities with the united efforts of the Group, we have established a Compliance Committee with the participation of business unit leaders as committee members. We are promoting measures such as global risk assessment, education, and monitoring to instill a spirit of legal compliance in each and every employee.
We believe that these activities will serve as the foundation for the Group's steady growth toward becoming a "Global Excellent Manufacturing Company" and will contribute to the "Creation of Social Value" for the Group by improving both "Corporate Value" and "Public Value" as stated in our long-term vision "2029 Sumitomo Riko Group Vision (2029V)".
We would like to ask all of our stakeholders for your understanding of our Group's compliance efforts and for your further support in the future.

Basic Approach to Compliance

The Sumitomo Riko Group is developing and operating a compliance structure based on the Sumitomo Spirit. We hope to fulfill the aim of practicing management that meets the expectations of all stakeholders by seeking "Creation of Social Value" with the enhancement of our "Corporate Value" and "Public Value." We are placing particular importance on responding to the risk of violating laws and regulations which accompany the globalization of business and development in new fields, and creating an open and transparent corporate culture that forms the foundation of compliance.

Compliance Structure

The Sumitomo Riko Group has developed its compliance structure in accordance with its basic policy for internal control. The Compliance Committee, chaired by the Director and Managing Executive Officer, has been established and regularly reports its activities to the Board of Directors. In addition, general managers, managers, and supervisors at each workplace are appointed as compliance leaders (CL) to inculcate compliance awareness at workplaces.
Group companies are also developing their own compliance structures suited to their risk situations, based on the Basic Regulations on Group Compliance.

Compliance Action Guidelines and Education

As a guideline for practicing compliance, we have established the Sumitomo Riko Group Global Compliance Conduct Guidelines (Code of Conduct )* and are working to disseminate it through periodic education for all Group employees. The Conduct Guidelines have been revised periodically, and the most recent revisions include the following items that are important for the Group to fulfill its social responsibilities. These items include "S.E.C.Q. (Safety, Environment, Compliance, and Quality)," "Bad News First & Thanks" and "Ensuring Reliability of Records and Reports," which are the basis of our business operations, as well as the Tokyo Principles for Strengthening Anti-Corruption Practices (2018), and we have added our efforts to prevent corruption in all its forms.
Our Group conducts systematic compliance education at the time of hiring and for all levels of employees, from general employees to directors. Concerning important laws and regulations such as competition law and anti-corruption law, we conduct annual training for managers of group companies around the world to respond to local conditions, and all managers at each site around the world have participated in the training.

* Content of the Sumitomo Group Global Compliance Conduct Guidelines
The Sumitomo Spirit, Sumitomo Riko Group Management Philosophy, Sumitomo Riko Group Corporate Action Charter, Corporate ethics, Bad News First & Thanks, Fair Trade (compliance with antitrust laws), Prohibition of Money Laundering, Elimination of Antisocial Forces, Prevention of Bribery, Respect of Human Rights and Diversity, Prohibition of Conflict of Interest, Quality and Safety, Information Security, Co-existence and Co-prosperity with Communities and Society, Information on Hotlines, etc.


If an important compliance problem arises, it must be promptly reported to the Compliance Committee and the departments concerned in accordance with the Compliance Regulations. We have a system in place to follow up on reported cases until corrective actions are completed. In addition, all departments of the Company and all Group companies worldwide (all of which are consolidated) report the status of compliance issues to the Committee on a quarterly basis. Under the slogan "Bad News First & Thanks,"* the committee works to reduce legal violations and create an open corporate culture throughout the Group by promptly sharing information on compliance issues between the workplace and management.
The Committee has established a contact point for whistleblowing from within the Company. There are contact points for domestic Group companies at a law firm and within the Company, and a global hotline as a contact point for whistleblowing from overseas Group companies. We have also set up a contact point on our website that can be used by external parties such as our business partners. Whistleblowers will not suffer any disadvantages as a result of reporting.
*Bad News First & Thanks
The Sumitomo Group's slogan means that managerial personnel and managers should feel free to report bad news first and not fear repercussions because management and executives should appreciate swift reporting of bad news. In light of lessons learned from the problem at the Matsusaka Plant after-mentioned, Sumitomo Riko is working to inculcate this practice throughout the Group.

Compliance Review Day Initiatives

On January 25, 2012, the Company and its employees were reported to the Public Prosecutor's Office on the grounds of violating the notification obligation under the Industrial Safety and Health Act at the Matsusaka Plant. The issues raised included prioritizing production over legal compliance, and delays in reporting and responding to violations of laws and regulations that were recognized in the worksite.
In order to keep the lessons learned from this experience alive, we have designated January 25 of every year since that incident as "Compliance Review Day," and have taken measures such as sending out a message from the President, lectures by outside experts, reporting the results of a compliance survey of all employees in Japan, and providing basic knowledge education.
In 2016, two subsidiaries of the Company were subject to suspension for three months by the Acquisition, Technology & Logistics Agency because of erroneous entries in the inspection record for hose products manufactured and processed by the two subsidiaries. This was identified by internal inspections triggered by an employee report. Sumitomo Riko reported to the Agency voluntarily.
In this issue, the lessons of "Bad News First & Thanks" were used to apply prompt reporting and response to the authorities. On the other hand, the problem of insufficient recognition by some employees of the need to ensure reliability of records and reports became apparent.
Therefore, since 2017, in addition to "S.E.C.Q. (Safety, Environment, Compliance, and Quality)" and "Bad News First & Thanks," which are the basics of our business operations, we have also made thoroughness in "reliability of records and reports" an objective of "Compliance Review Day" to strengthen efforts to learn from past incidents.

Anti-corruption Initiatives

Having endorsed the United Nations Global Compact (UNGC) in 2014 and the Tokyo Principles for Strengthening Anti-Corruption Practices of the Global Compact Network Japan in 2018, Sumitomo Riko is implementing anti-corruption measures as the practical expression of our management's commitment. The details of anti-corruption activities are reported to the Board of Directors as part of the Compliance Committee's periodic activity report.
The Anti-Corruption Policy is clearly stated in the Sumitomo Riko Group Global Compliance Conduct Guidelines, and specific measures are made into Group-wide rules through regulations, which are disseminated through annual training programs conducted worldwide. When starting transactions with third parties such as agents and consultants, we check the appropriateness of their contents (due diligence), and also check the daily payment management process from the viewpoint of anti-corruption.


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