- Basic Policy
- Compliance Promotion
- Compliance Training
- Compliance Hotline
- Compliance Auditing
- Preventing Corruption
- Promotion of Fair Competition and Appropriate Transactions with Subcontractors
- Political Contributions Policy
- Restriction of Insider Trading
- Rejection of Inﬂuence from Anti-Social Forces
- Prevention of Traffic Accidents and Violations
The Sumitomo Forestry Group established the new Sumitomo Forestry Group Code of Conduct as a foundation for its policies and regulations based on its Corporate Philosophy and Our Values. The Sumitomo Forestry Group uses the Code of Conduct for compliance not only at its Group companies but also at its suppliers to prevent corruption such as bribery, engage in fair business practices, maintain informational confidentiality, build healthy relationships with politicians, and respect human rights.
Sumitomo Forestry established the Compliance Subcommittee as a subordinate organization under the Risk Management Committee, chaired by the general manager of the General Administration Department and comprised of the persons responsible for risk management, including those from the responsible departments at each group company. As a cross-cutting organization across the group, the subcommittee promotes responses to compliance risk. It has established the group standard risk management system and tools to ensure compliance with the Construction Business Act of Japan and other laws throughout the group, for efficient response to compliance risk.
A meeting was held by the committee twice in fiscal 2021 to continuously improve the compliance system through the following inspections and awareness activities. Through these efforts, compliance officers of the entire group are able to coordinate their viewpoints from the bottom up and share a sense of crisis.
- Combined inspection of compliance with the Construction Business Act, Act on Architects and Building Engineers, and the Real Estate Brokerage Act
- Combined inspection of safe operation management system
- Combined inspection of compliance with the Subcontracting Act
- Combined inspection of responses to administrative procedures and legal requirements specific to Tsukuba Research Institute and Group companies
- Explanation and sharing of information on the Unfair Competition Prevention Act and the Antimonopoly Act
- Explanation and sharing of information on the laws to be revised
(such as the Whistleblower Protection Act, the Act on the Protection of Personal Information, and the Road Traffic Act)
These activities are outlined and reported to the Board of Directors once every quarter to build a system to reﬂect this information into the execution of our businesses. In addition to making monthly activity reports to auditors and internal audit divisions, any particularly important initiatives or risk information that is common to the group is shared with the auditors in each group company via the meetings of statutory auditors of Sumitomo Forestry and its subsidiary companies. Thus, the group has developed a system for promoting compliance in its lines of business execution using internal and external approaches.
Based on the Sumitomo Group Procurement Policy, Sumitomo Forestry Group responds to compliance risks in supply chains by working with suppliers to ensure that wood procurement is performed legally and in a sustainable manner with consideration of legal compliance, human rights, labor practices, biodiversity conservation, and local communities. The Wood Procurement Committee convened four times in fiscal 2021 led by the director and managing executive officer in charge of sustainability promotion as chairperson and procurement managers from the Timber and Building Materials Division, Housing and Construction Division, and each department procuring timber and wood products as members. This committee receives reports on results from local interviews and the Sustainability Procurement Survey, including the level of supplier compliance awareness, and requires corrective actions to rectify any supplier issues found.
In order to heighten awareness among each and every employee about compliance, Sumitomo Forestry Group conducts compliance training for new employees to promote their understanding about general compliance issues, such as traffic safety, and information security. In fiscal 2021, training was administered to a total of 258 new graduate recruits, and to 82 mid-career recruits (Sumitomo Forestry). Compliance training was also provided to groups of employees at specific levels, including "Training for New General Managers."
In addition, we have designated e-learning courses such as "Risk Management and Compliance," "Information Security," and "Work and Human Rights," which include topics related to harassment, as mandatory courses. All employees of the Group, including temporary employees and part-time employees, are required to take these courses every year through our intranet. Employees must pass a test to measure the effectiveness of the course.
The Sumitomo Forestry Group is committed to creating a workplace environment equipped with a self-corrective function for catching any misconduct concealed in day-to-day operations at an early stage. To this end, the Group established the Compliance Hotline (advice desks) in 2002 in order to prevent corruption such as anti-bribery, defined in the Sumitomo Forestry Group Code of Conduct.
The Group has two Compliance Hotlines, one within the Group (general manager of the General Administration Department is responsible) and one external to it (lawyer), ready to provide advice and receive reports via telephone or a dedicated email address. Sumitomo Forestry clarified the protection of rights for persons seeking advice or making reports in relevant regulations and in the user manual while publicizing this information on its intranet. We also are striving to create an environment where everyone can easily use this hotline through measures such as the distribution of cards including the contact information—internal and external—for the compliance hotline to anyone providing ongoing labor to Sumitomo Forestry from every employee at Group companies to employees at partner building contractors.
We received 11 consultations, including cases of suspected misconduct and harassment in fiscal 2021.When a report is received, an investigation will be carefully conducted. If a compliance violation, etc. is confirmed, necessary corrective measures will be taken.In addition, content of corrective actions (including cases of disciplinary actions) and content of reports are be used as model cases and used in training, etc. as necessary to prevent recurrence.
In October 2019, we put in place a whistleblowing mechanism shared with some overseas Group companies under the General Administration Department to strengthen compliance overseas as our Group expands businesses around the world. Furthermore, an external multilingual operator is used for this reporting system to receive reports in English, Chinese, Indonesian, Vietnamese, and Thai.
Compliance Hotline Framework
The Sumitomo Forestry Group audits matters related to compliance at each business site through internal audits as well as guides and provides follow-up support for corrective actions and improvements for any problems that are found.
Based on the Sumitomo Forestry's Regulations for Prevention of Bribery of Officials including Public Servants, we aim preventing corruption both in Japan and overseas. Basic principle of these regulations is to pay attention to facilitation payments (small payments to facilitate ordinary administrative services) and to provide conditions and prior approval for donations such as political contributions. The regulations also stipulate that no offer, promise, implementation, or approval will be made for the provision of money, goods, or other benefits to public officials, etc.We also introduce overseas consolidated subsidiaries common tools such as a Sales Commission Checklist to help prevent bribery.On-site visits to overseas Group companies became difficult due to impact of the coronavirus disease (COVID-19) pandemic from March 2020. However, we continued to grasping corruption risk in China as well as providing remote training to Group employees.
In addition to the above, when appointing a new contractor or agency or renewing a contract, the Company appropriately confirms that there is no risk that contractor will commit acts of bribery. At the same time, when engaging in joint ventures with other companies, the Company appropriately conducts due diligence, including status of corruption.
In fiscal 2021, no violation of corruption and relevant laws was identified.
Promotion of Fair Competition and Appropriate Transactions with Subcontractors
For the purpose of promoting fair competition, Sumitomo Forestry published the Antimonopoly Act Guide Book, and via articles on its intranet website, e-learning and other methods, it works to enhance understanding and awareness regarding the intent and outline of the Antimonopoly Act and about the risk of cartels stemming from contact with competitors. There were no breaches or issues related to the Antimonopoly Act in fiscal 2021.
Given that the Group's business activities are supported by many business partners, every year, Sumitomo Forestry also makes a comprehensive examination of its compliance with the Subcontract Act and the Construction Business Act of Japan for the purpose of promoting appropriate transactions with subcontractors.
Political Contributions Policy
The Sumitomo Forestry Group states in its Code of Conduct: "We shall maintain a healthy and transparent relationship with the government that is in conformance with all laws." This statement has been included to ensure a healthy relationship with the government. The Sumitomo Forestry Group Code of Conduct Handbook distributed to every employee working at Group companies in and outside Japan clarifies "As a general rule and in accordance with relevant laws and company regulations, only the division in charge is permitted to make political contributions” and "If circumstances require another division to make a political contribution, make sure that there is adequate prior consultation with the division in charge or top management."
Restriction of Insider Trading
The Sumitomo Forestry Group adheres to the Financial Instruments and Exchange Act as well as other relevant laws to prevent insider trading. Regulations to prevent insider trading maintains and improves the trust society has for the company in the stock market by clarifying procedures to prevent insider training by executives and employees as well as the management of information and disclosure methods. In addition, executives and employees who have the potential to come into contact with insider information on a daily basis are required as policy to gain the prior approval of the General Manager of the General Administration Department if they plan to buy or sell company stock to ensure the appropriateness. The Group also has published an Insider Trading Prevention Manual and raises awareness through its internal websites in addition to reminding the executives and employees twice a year about the prevention of insider trading as a general rule.
There were no breaches or issues related to insider trading in fiscal 2021.
Rejection of Inﬂuence from Anti-Social Forces
The Sumitomo Forestry Group's Code of Conduct state that the “inﬂuence from anti-social forces will be met with a resolute attitude and no compromises will be tolerated” as its basic policy. The General Administration Department is designated as the division to coordinate overall response and systematically cooperates with external expert bodies such as the police and lawyers in order to gather information about anti-social forces, and when required, gives guidance in issuing warning notices. In addition, in accordance with the enforcement of laws of each prefecture for the exclusion of organized crime, Sumitomo Forestry takes appropriate action including standardization such that all contracts that Group companies enter into with third parties include a clause to exclude anti-social forces.
Furthermore, we have requested that all business partners, including existing contracted partners, provide declarations guaranteeing that neither they nor their parent, subsidiary or subcontracting companies are anti-social forces.
Prevention of Traffic Accidents and Violations
Given that the Sumitomo Forestry Group has a ﬂeet of about 5,000 vehicles used for work in Japan, it promotes use of a standard Group system for managing safe driving to manage the risks associated with traffic accidents and violations.
Specifically, as well as establishing related rules, standardizing accident report forms, and acquiring Certified Driving Records*, Sumitomo Forestry has rolled out a Safe Driving Management System to each Group company which centrally manages basic driver and vehicle information (licenses, traffic violation histories, vehicle inspections, insurance, etc.), and has established systems for ensuring that the fulfillment of statutory obligations and driver instruction are carried out in a timely and appropriate manner.
Sumitomo Forestry also shares the results of analyses on monthly traffic accidents with the safe driving administrators at the head office and each business division, which helps in formulating measures to prevent accidents and in educational activities.
Furthermore, we conduct driving aptitude assessments to help new junior employees who are at a greater risk of accident due to insufficient driving skills and experience understand their personality and driving behavior and provide training to raise awareness about safe driving, such as hands-on vehicle training from daily inspections to basic driving and slalom driving.
* A certificate issued by the Japan Safe Driving Center showing a driver's violations and administrative disciplinary actions, etc