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Governance

Compliance

Policy

MC defines "compliance" as not only observance of laws, rules, regulations, international standards and internal regulations, but also respect for generally accepted standards for the conduct of business. In addition to 1) observance of laws and regulations, all officers and employees at the MC Group must also 2) observe internal rules and regulations and 3) respect generally accepted standards for the conduct of business. Officers and employees must consider at all times what these standards entail in the present-day context and in the applicable regions, as there are no clearly stated rules in this regard. Officers and employees are aware of the high expectations of society and aim to ensure that the MC Group remains trusted by society.

Under the Three Corporate Principles, which constitute MC’s corporate philosophy, MC’s Corporate Standards of Conduct serve to regulate MC, and the MC Code of Conduct serves to regulate all officers and employees. The basic policy of the MC Code of Conduct states that “All officers and employees of MC must comply with all applicable laws, rules and regulations, international standards and rules, and all internal corporate rules and policies in the operation of their business. In addition, all officers and employees of MC must act in a socially responsible manner by complying with the highest ethical standards in the conduct of their business.” Compliance at MC goes beyond simply complying with laws. Acts that go against generally accepted social norms for the conduct of business must not be carried out regardless of their legality. With the goal of gaining the understanding of the MC Code of Conduct, business card-sized MC Employee Pocket Handbooks are prepared and distributed to all officers and employees. In addition to the basic principles, the handbook contains the contact details for compliance mail boxes and helplines (whistleblowing system). Officers and employees carry this handbook at all times in order to confirm the details whenever necessary. Moreover, each year officers and employees are required to take e-learning courses, which include case studies on the Code of Conduct and to acknowledge that they understand and will adhere to the Codes at all times.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Structure

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コンプライアンス関連の主要な社内規程

Investigations of Compliance Violations and Response Systems
Compliance Framework

At MC, the Compliance Committee and the Compliance Officer systems play important roles in implementing compliance programs. As an advisory body to the Chief Compliance Officer, important compliance incidents that occur in the MC Group and compliance programs to solve compliance issues are reported, consulted and discussed in the Compliance Committee. The Compliance Committee is led by the Chief Compliance Officer, who is appointed by the President, and held twice a year, in principle. The matters reported to and discussed at the Compliance Committee are reported to the Executive Committee and the Board of Directors once a year. The Chief Compliance Officer is in charge of all compliance matters of the entire MC Group, and is responsible for planning and implementing compliance programs. The Chief Compliance Officer also has the authority to conduct necessary investigations in the event of a breach or potential breach of compliance and can also order the suspension or change of the business activities to prevent or remedy the breach or potential breach. In addition, MC has appointed Compliance Officers in the corporate section and in each Business Group at the Head Office. Each Compliance Officer has an authority to, implement compliance programs in a manner tailored to the characteristics of each section and Group.

Response Systems for Individual Cases

Officers and employees of MC are required to report to or consult with their superiors/managers or other personnel relevant to the matter, including, compliance personnel, if they become aware of a breach or potential breach of compliance. The managers of organizational bodies must in turn report to or consult with the Compliance Officer of their section or Group , who is then required to report to the Chief Compliance Officer. Furthermore, cases of violations and the status of resolutions reported to the Chief Compliance Officer, including those of Group Companies, are also reported to the Audit & Supervisory Board Members. The relevant Compliance Officer must conduct necessary investigations of the reported matter with the due care of not infringing the human rights and dignity of concerned parties, and implement necessary preventive measures and remedies. The result of the investigations and preventive measures/remedies implemented by the Compliance Officer are reported to the Chief Compliance Officer and used to plan and implement compliance programs for the entire MC Group as lessons learned from the matters.

In addition, MC has a dedicated organization within the Legal Department called "Administration Office for the Compliance Committee" to support the Chief Compliance Officer. it supports the Chief Compliance Officer in handling compliance cases, and planning and implementing MC Group compliance programs in cooperation with each Compliance Officer and the relevant departments.

Internal Rules and Regulations

In order to have an effective compliance program in place and to ensure accessibility to MC's compliance philosophy and rules, MC has established various compliance-related internal regulations under the Three Corporate Principles, the Corporate Standards of Conduct and the Conduct of Conduct. These internal regulations are reviewed every year to reflect amendments to the laws and regulations and changes in the business environment and other conditions surrounding the MC Group.

Major internal rules and regulations relating to compliance are listed below:

  • Basic Rules for the Organization and Implementation of Compliance
  • Code of Security Trade Control
  • Code of Trade Procedures Control
  • Standard for the Prevention of Cartels
  • Transaction Standards based on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors
  • Standards for the Prevention of Unfair Trading of Shares, etc.
  • Code of Prohibition against Improper Payments or Other Types of Benefits
  • Code of Entertainment and Being Entertained
  • Code for the Control of Transactions of Secondhand Articles
  • Licensing and Notification Management Standards
  • Control Standards relating to Chemical Substances
  • Standards on Import, Sale, etc. of Consumer Products
MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Initiatives for Preventing Corruption

MC has established the “Code of Prohibition against Improper Payments or Other Types of Benefits” in order to prevent provision of improper benefits to domestic and foreign public officials, etc. (including persons who are deemed to be public officials under applicable laws, etc.), and prevent conducts from being seen as suspicious or untrustworthy by third parties. MC also complies with the anti-bribery laws and regulations of various countries, including Japanese criminal law and the Unfair Competition Prevention Act, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. Furthermore, MC has established a strict anti-corruption system and pre-approval process by setting detailed guidelines regarding the provision of entertainment or gifts to public officials, etc., and regarding the appointment of agents/intermediaries, etc. In addition, MC has established internal anti-corruption regulations requiring detailed due diligence when accepting workplace experience training for relatives of public officials, etc., as well as providing donations to government and public officials. We have also introduced guidelines to conduct anti-corruption due diligence on our business and other partners. MC continuously and periodically reviews and improves its internal rules and regulations taking into account the trends of the enforcement and proceedings brought by anti-corruption regulators,and anti-corruption programs/measures taken by other companies. In 2016, aiming to build a more effective anti-corruption system, MC conducted a thorough assessment by external experts regarding its entire anti-corruption systems. Utilizing the experts’ evaluations and recommendations, MC is committed to continuously improving its anti-corruption systems and ensure that they operate effectively. In the fiscal year ended March 2020, MC adopted a risk-based anti-corruption system that devotes appropriate attention and resources depending on the types and scales of transactions and the level of corruption risks in applicable countries, and revised relevant guidelines accordingly to build a system to prevent bribery/corruption on a consolidated basis.

Moreover, in 2016, MC created the Anti-Corruption Handbook to provide accurate information about anti-corruption, including information about laws and regulations, and enforcement cases relating to the bribery and corruption in major countries. The handbook also explains MC’s programs, systems and other initiatives to prevent bribery and corruption. The handbook has been distributed throughout the MC Group.

In the fiscal year ended March 2020, there were no bribery or corruption cases which had a significant impact on MC Group.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Initiatives in Selecting and Managing Agencies, Intermediaries, etc.

In addition to preventing corruption by officers and employees, MC established internal regulations to prevent corruption by any agents, consultants, intermediaries, etc. retained by MC (hereafter collectively referred to as “Agents”). The internal regulations require officers and employees to obtain prior approval from the relevant Compliance Officer to retain suitable Agents. From the fiscal year ended in March 2020, MC introduced new internal approval procedures for retaining Agents on the basis of the risk based approach depending on the nature of the relevant services to be provided by the Agents, the size and purpose of projects, and the level of risks, including the level of the corruption risk of the relevant countries.

  • Agents are categorized into four categories based on the nature of the services to determine the level of due diligence on the Agents on the points below.
  • Agents shall have no relationship with any public officials who would be able to influence on the business transactions and dealings which MC seeks, shall have good track record on the compliance matters in the past, have necessary qualifications and have capabilities to provide the services.
  • The adequacy of the amount of remunerations for the services to be paid to Agents shall be thoroughly assessed.
  • In the event that an Agent subcontracts its services to a third party, additional appointment procedures will be required to the appointment of such third party as well.
  • Contracts with Agents shall include clauses that prohibits the provisions of improper benefits to public officials, etc., by the Agents, and the Agents shall be made aware of MC’s Anti-Corruption Guidelines.
MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Mitsubishi Corporation Group’s Anti-Corruption Guideline

In 2015, MC established and published “Mitsubishi Corporation’s Anti-Corruption Guideline” in order to inform business partners of MC’s basic principles related to the prevention of corruption. In the Guideline, MC explains its anti-corruption policies and initiatives as "MC's commitment" and expects business partners to adhere to MC’s anti-corruption initiatives. In April 2019, in order to further strengthen its anti-corruption initiatives, MC expanded the scope of the Guideline to cover the entire MC Group and announced the new “Mitsubishi Corporation Group’s Anti-Corruption Guideline.” The new Guideline not only includes commitments of the MC Group, but also requests that all business partners and clients (including suppliers) of MC Group prohibit bribery, inform anti-corruption policies, and cooperate with investigations when there are concerns about violations.

Reference:Mitsubishi Corporation Group’s Anti-Corruption Guideline

Cases of Corruption

In the fiscal year ended March 2020, there were no corruption cases detected in MC. As a result, no fines or financial penalties relating to the corruption were incurred.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Supervision by the Board of Directors

Every year, the Board of Directors receives reports regarding compliance matters, including anti-corruption initiatives, and the results and status of compliance violation cases, together with reports regarding the compliance programs and measures to be implemented in the current fiscal year. In addition, both Outside Directors and Outside Audit & Supervisory Board Members receive reports twice a year regarding compliance activities, so that they can provide more effective supervision from their external perspectives.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Monitoring System

Monitoring of Individual Cases

All reports regarding the facts, causes and preventive measures and remedies of each compliance incident are shared with the Administration Office for the Compliance Committee, and are used for conducting case analyses and risk assessment, and planning compliance programs and measures.

Employee Awareness Survey

Starting in the fiscal year ended March 2020, MC has conducted the “Employee Awareness Survey”, which integrates the content of the Compliance Awareness Survey with its previous survey of employee awareness , with the aim of establishing and improving the foundations of MC’s organizational culture, including the level of compliance awareness. This survey is viewed as a key initiative for assessing and evaluating the current status of MC as well as for making improvements to the organizational climate in terms of human resources and organization, because it is able to confirm the degree of compliance awareness and the ethics environment in the workplace at the individual officer and employee level. In the fiscal year ended March 2020, approximately 6,000 MC employees, including those working at domestic and overseas offices, and 110 Group companies participated in the survey. MC implements measures to resolve issues identified by the previous survey, and conducts a follow-up survey to confirm the effectiveness of those measures.
In addition, as a result of the periodic review of these measures each fiscal year, from the fiscal year ended March 2021, MC began offering the Compliance Monitoring Survey to Group companies. This serves as a tool to supplement the Employee Awareness Survey, which is conducted once every three years in line with MC’s management cycle, by extracting compliance-related questions from that survey. In doing so, MC aims to identify compliance-related concerns in a timely manner even in fiscal years when the Employee Awareness Survey is not conducted.

Responses to Risk Factors by Each Business

MC conducts periodic self-assessments of the compliance risks to which special attention should be given for each of its Business Groups and subsidiaries, such as risks relating to anti-trust violations, bribery and corruption, and occupational health and safety, taking into consideration of industry characteristics, product characteristics, regions, etc. Each Compliance Officer of Business Groups conducts risk management initiatives related to the compliance risks to which special attention should be given related to its Business Group. Each subsidiary also appoints a person responsible for compliance matters (i.e.compliance officer of subsidiaries) and implements measures to manage compliance risks relevant to the subsidiary.

PDCA Cycle

Utilizing PDCA cycle, MC implements necessary and tailored compliance programs and measures, including conducting compliance seminars and adopting or amending internal regulations to address the compliance risks identified as the results of the various surveys, reports and monitoring, taking into consideration of the opinions and ideas of the Compliance Officer of each Business Group. The results are further monitored, and the analysis of the results is reflected in the further identification and evaluation of risks. The aim is to improve the awareness and knowledge about compliance of all officers and employees by repeatedly and rigorously educating and training them.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X), 人事部 人事組織チーム(PJ-P)

Internal Whistleblowing System

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通報受付件数

MC has established internal whistleblowing systems, known as the “Meyasubako(Compliance Mail Box and Helpline).” Reports to the systems are directly sent to the Administration Office for the Compliance Committee. The systems are reporting or consultation hotlines for any compliance-related questions or problems, including workplace misconducts and harassments, violations of laws and regulations, as well as bribery and corruption. MC has also established whistleblowing reporting routes to the Internal Audit Dept. and the Audit & Supervisory Board Members. In addition, MC has established a whistleblowing reporting route connecting to outside legal counsel (called the "Bengoshi Meyasubako(Outside Legal Counsel Compliance Mail Box and Helpline") for officers and employees who wish to remain anonymous. While the outside legal counsel will confirm whether the informant is an office or employee of MC , they will not reveal the name or the sections to which the informant belongs to the Administration Office for the Compliance Committee without the informant’s consent. There is another whistleblowing reporting route called the “MC Group Legal Counsel Compliance Mail Box and Helpline” for officers and employees of MC Group companies. Furthermore, in 2016, MC established a new whistleblowing system for anti-trust and corruption issues (called “Let Us Know System(LUKS)”), which is available to the officers and employees of MC and its domestic and overseas subsidiaries. Our internal regulations clearly stipulate that we protect anonymity and confidentiality of the informant and the content of the report, protect informant’s human rights and prohibit retaliation and disadvantageous treatment of the informant. Moreover, when investigating the reported matters, we ensure that any conflicts of interest are eliminated. After receiving details of a whistleblowing report, the Administration Office for the Compliance Committee will share the information only with limited number of personnel who need to know the report to conduct the investigations and actions. Every year, we invite outside instructors to provide training to those in charge of investigating and responding to whistle blowing report on how to handle and investigate the report and points to keep in mind. Thus, while we have set up multiple whistleblowing reporting routes, we continue to review and improve them going forward. In the fiscal year ended March 2021, we engaged external expertsto assess the effectiveness of our whistleblowing systems and its operation. With regard to management-level harassment training, MC conducts internal trainings aimed at general managers, team leaders and other levels. MC is working to prevent harassment by introducing case studies. (1) The prohibition of harassment is stipulated in the Code of Conduct; (2) basic policies; and pamphlets and other resources have been produced to prevent harassment; and (3) the Whistleblowing Systems set for above as well as the Human Rights Consultation Desk in the Human Resources Department have been established, which are all well-publicized internally.

In the fiscal year ended March 2020, there were no whistleblowing reports which had a significant impact on the management of the MC Group.

Compliance Framework

Number of Whistleblowing Reports

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Performance

Results of Compliance Training

MC conducts in-house training programs on a Company-wide basis according to level in the organization. Compliance-related training is offered on individual topics such as antitrust laws, the Subcontract Act, prevention of bribery and corruption including anti-bribery laws, and labor management. In FY2019, MC held a total of more than 200 in-house legal and compliance seminars worldwide, with a cumulative total of approximately 8,000 participants. Furthermore, tailored seminars are held for each Business Group and region. Moreover, MC has created an e-learning program related to the MC Code of Conduct based on the latest case studies. Every year, all MC officers and employees, advisors, part-time employees, secondees and temporary staff are required to complete this program.

Compliance Discussions

In 2013, MC began holding compliance discussions in which small groups of employees in each workplace discuss compliance issues that could occur in the workplace as well as other day-to-day concerns. These discussions serve as a means of supplementing conventional training, which tends to be a one-way form of communication, and of improving the compliance awareness of every officer and employee. By facilitating these types of discussions about familiar topics in each workplace, every employees will recognize that compliance is something that is connected to them personally, which will in turn gradually increase their compliance awareness. MC has been conducting compliance discussions at least once a year, with the participation of essentially all employees at all levels of every internal organization, including overseas offices since 2013, and MC has also expanded this initiative to over 100 domestic and overseas subsidiaries.

Distribution of Handbook for Officers and Employees

In addition to providing training opportunities and the e-learning program, MC has created a Compliance Handbook that presents a collection of the latest case studies in a Q&A format. The aim of this booklet is to resolve any doubts about the compliance duties of officers and employees that they may have on a daily basis, and MC distributes the booklet to all officers and employees. The content of the handbook for officers and employees is updated on a regular basis, and each update is made available through MC intranet.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Number of Compliance Violations

The total number of violations at the Head Office, domestic and overseas branches and offices, and domestic and overseas subsidiaries and affiliated companies that were reported in the fiscal year ended March 2020 was 198. There were no compliance violations that had a significant impact on the management of the MC Group .

Provisions Concerning Legal Violations and Litigation

If MC presently owes debt (legal or constructive) as a result of past incidents, is likely to be required to pay such debt, and a reliable estimate of the amount of such debt (penalties, settlement amount etc.) can be made, MC must record provisions for such debt. As of the end of March 2020, there were no significant provisions requiring separate disclosure in its financial statements.

MC SIM事務局, 法務部 コンプライアンス総括室(PL), 法務部 法務企画室(PL-X)

Tax Transparency

MC conducts tax affairs in accordance with the following basic principles.

  1. (1)Compliance with laws and regulations
    MC is committed to comply with the Tax Laws, and not to pursue tax avoidance which deviates from the intention of the Tax Laws in the relevant jurisdictions.
  2. (2)Transparency
    MC is committed to report and disclose the tax related information properly, in accordance with the Tax Laws, the accounting principles and the other applicable international rules (e.g. OECD Guidelines).
  3. (3)Relationships with tax authorities
    MC seeks to maintain mutual understanding with the local tax authorities whenever necessary, so that MC and its subsidiaries should be subject to proper tax administration in the relevant jurisdictions where they operate.
主計部 予・決算管理チーム(PC-B), 主計部 リスク管理チーム(PC-U), 税務チーム