Compliance

Goals and Achievements of Major Initiatives

Objectives of initiatives Goals for fiscal year 2017 Achievements in fiscal year 2017 Evaluation Goals for fiscal year 2018
Enhance awareness of compliance. Achieve target for percentage of employees participating in the e-learning program (90%). • Participation in e-learning aimed at eliminating bribery and corruption reached 91%.
• Steps were taken to respond promptly to reports received via the whistle-blowing hotline. No reports of significant violations were received.
★★ Achieve target for percentage of employees participating in the e-earning program (95%).
Implement compliance- and governancerelated legal training in Japan, the Asia– Pacific region and Greater China.
Encourage use of the whistle-blowing system to promptly identify and correct compliance violations.
Conduct business fairly. Continue working to eliminate violations of antitrust and anticorruption laws. Succeeded in eliminating violations of antitrust and anticorruption laws. ★★ Eliminate violations of antitrust and anticorruption laws
  • Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Basic Approach to Compliance

Compliance in the DIC Group encompasses not only obeying laws but also acting in a manner that is in keeping with social norms and the expectations of customers, communities and other stakeholders. With the aim of ensuring sustainable growth for businesses that are both fair and transparent, DIC formulated the DIC Group Code of Business Conduct, a unified set of guidelines the adherence to which it considers to be the foundation of compliance. DIC compels all DIC Group employees to conduct themselves in accordance with the code.

The DIC Group Code of Business Conduct

The DIC Group completed the DIC Group Code of Business Conduct in July 2014. The code not only mandates compliance with national laws and international rules but also presents 10 principles essential to the professional conduct of DIC Group employees. The DIC Group Code of Business Conduct has since been translated into 25 different languages to ensure that DIC Group employees worldwide share the Group’s values and commit themselves to doing what is right, as well as to acting with common sense and an understanding of individual responsibilities, in all aspects of their work.

10 Principles Essential to Professional Conduct

  1. Your Rights as an Employee: Respect, Dignity, Privacy
  2. Environment, Safety and Health
  3. Your Responsibility to Avoid Potential Conflicts of Interest and to Protect Group Property
  4. Anti-Corruption and Anti-Bribery Policy
  5. Your Relationship with Governments and Government Officials
  6. Your Relationship with Customers, Suppliers, and External Third Parties
  7. Money Laundering and Anti-Terrorism
  8. Forced Labor, Child Labor, Conflict Minerals
  9. Insider Trading
  10. Proper Accounting and Internal Controls Relating to Financial Reporting 

Initiatives to Promote Compliance

In addition to the DIC Group Code of Business Conduct, the Group promotes compliance through the following initiatives:

1.Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before overseas transfers. In addition, with the aim of promoting awareness of the DIC Group Code of Business Conduct, in fiscal year 2017 e-learning on the prevention of bribery and corruption was provided in Japan, the Asia–Pacific region and Greater China. Participation in all three regions averaged 91%-plus of eligible employees.

2.Compliance officers are appointed at all regional headquarters—DIC Corporation (Japan), Sun Chemical Corporation (the Americas and Europe), DIC (China) Co., Ltd. (the PRC), and DIC Asia Pacific Pte Ltd (Asia and Oceania)—to spearhead global compliance efforts.

The DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation would appear to profit the Group. As a corporate citizen, the Group also pledges to respect social norms and act in a sound and socially acceptable manner. In fiscal year 2017, there were no serious violations of compliance laws.

Establishing and Operating a Whistle-Blowing System

Establishing and Operating a Whistle-Blowing System

The DIC Group has established a whistle-blowing system through which one can directly report an issue or question regarding compliance to the division responsible for compliance. Since fiscal year 2014, the Group has maintained whistle-blowing hotlines that can handle reports in the languages of more than 160 countries. The Group has also devised strict rules under this system to protect whistle-blowers from retaliation, and is working to ensure the system functions in a proper manner.
When a report is received, the Group responds swiftly and appropriately, giving due consideration for pertinent laws while also incorporating internal and external opinions, to promptly identify and correct misconduct and other compliance violations as quickly as possible.

Antitrust and Anti-Corruption Legislation

The DIC Group has formulated a basic policy to comply with antitrust legislation and made Groupwide efforts to ensure fair business practices. The DIC Group Code of Business Conduct includes rules for complying with antitrust legislation and prohibits involvement in corruption. Since fiscal year 2014, the Group has held more than160 presentations regarding antitrust and anti-corruption legislation for relevant employees to ensure strict compliance with the laws of the countries in which it operates. In fiscal year 2017, compliance study sessions were held for directors and for the CEOs of DIC Group companies in Japan.

Promoting Compliance with Legislation Regarding the Timely Payment of Subcontra

With the aim of enhancing understanding of the importance of appropriate and fair transactions with subcontractors, the Legal Division held presentations on legislation regarding the timely payment of subcontractors for the purchasing departments of domestic DIC Group companies that incorporated case studies. In January 2016, DIC prepared the Manual for Internal Auditing of the DIC Group’s Compliance with Japan’s Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and standardized audit procedures, thereby creating a framework for conducting audits in a more efficient manner. The Group also encouraged employees in related positions to participate in programs sponsored by external organizations, including a workshop on promoting adherence to the Act sponsored by the Japan Fair Trade Commission and the Small and Medium Enterprise Agency.

Taxation Compliance

Amount of Accrued Tax in Fiscal Year 2017

In November 2017, the DIC Group formulated an official approach to tax. As an organization with global operations, the Group engages in fair and appropriate tax planning that reflects the nature of its businesses. The Group is also aware of risks associated with transfer price taxation and the use of tax havens and of its obligation to pay appropriate taxes in the proper jurisdictions as appropriate for its operations. The chart to the right shows a geographic breakdown of taxes paid by the Group in fiscal year 2017.

VOICE

We provide legal services that are essential to the DIC Group’s global operations.

I am currently on assignment at DIC (China) as an overseas trainee, overseeing legal matters in collaboration with the staff of DIC (China)’s legal department. To ensure legal compliance when operating in a country or territory with different laws and regulations it is essential to consult local legal experts. This can be difficult if you don’t have a basic knowledge of the country or territory’s laws. As a trainee, I have come to realize that legal department staff members are expected to communicate with legal experts as well as serve as intermediaries between experts and business units. Looking ahead, I will continue working to gain a firmer grasp of needs associated with global operations with the goal of providing effective legal services.

Legal Department Toshiharu Tashiro

Legal Department
Toshiharu Tashiro

VOICE

Our goal is to enhance global legal services.

I serve as General Counsel and Secretary of Sun Chemical. In this role I am responsible on a global basis for Sun Chemical’s legal, intellectual property, real estate, regulatory compliance, and environmental, health and safety functions. I am proud of the work performed by each of these areas and of the collaborative working relationship that we have with DIC. As an example of the exceptional work performed Sun Chemical employees, our Legal Group was recently named the “Legal Department of the Year” by the New Jersey Law Journal. This award is in recognition of the group’s outstanding work in providing legal services to the Sun Chemical organization and in managing relationships with outside counsel located around the world.

Vice President, General Counsel and Secretary, Sun Chemical Corporation Jim Van Horn

Vice President,
General Counsel and Secretary,
Sun Chemical Corporation
Jim Van Horn

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