Compliance

Sumitomo Warehouse will not only conduct business in compliance with laws and regulations, but also realize fair and appropriate management in accordance with social norms and corporate ethics, increase transparency and fulfill its social responsibility in the future.

Sumitomo Warehouse Group Business Conduct Guidelines

As the basic policy of Sumitomo Warehouse with regard to compliance, we have established the Sumitomo Warehouse Group Business Conduct Guidelines.

Sumitomo Warehouse Corporate Standards of Conduct

Based on Sumitomo Warehouse Group Business Conduct Guidelines, we have established the Sumitomo Warehouse Corporate Standards of Conduct which form the basis of actions when employees perform their duties.

Compliance Management System

At Sumitomo Warehouse, the Internal Control Subcommittee, a subcommittee of the Sustainability Committee chaired by the President, formulates measures for the Group’s compliance, checks the progress of these measures, and shares information based on instructions from the Sustainability Committee. The Internal Control Subcommittee’s activity plan is implemented after approval by the Sustainability Committee, and the details are reported to the Board of Directors. The progress of internal control-related issues and targets is confirmed every quarter, and a report is made to the Sustainability Committee and the Board of Directors at least once a year, with management of compliance being carried out by receiving necessary instructions from the Board of Directors through the Sustainability Committee.

The Internal Control Subcommittee prepares and distributes compliance manuals, plans and implements education and training related to compliance in coordination with the relevant departments, and also tracks and analyzes compliance risks throughout the Group and implements measure to prevent them.

AEO (Authorized Economic Operator)

AEO is a system in which an operator that has established cargo security management and legal compliance systems is authorized and certified by customs authorities and granted preferential treatment such as alleviation or simplification of customs procedures. Following the terrorist attacks on the United States in 2001, it has been necessary to balance security and smooth operation in international logistics, and the system has been introduced in over 70 countries and regions worldwide.

The Sumitomo Warehouse Group has received authorization and certification under the AEO system as follows, and is strengthening legal compliance efforts in international logistics such as bonded warehouse operations and customs clearing operations.

Acquisition of AEO Authorization and Certification in Japan

Responses to AEO Systems Overseas

• Sumitomo Warehouse (U.S.A.), Inc. (C-TPAT)
• Sumitomo Warehouse (Europe) GmbH (AEO)
• Sumitomo Warehouse (Singapore) Pte Ltd (STP)
• Union Services (S'pore) Pte Ltd (STP-Plus)
• Rojana Distribution Center Co., Ltd. (AEO)
• Shanghai Sumiso International Logistics Co., Ltd. (GCE)

※The certification names in each country are indicated in parentheses.

Initiatives Aimed at Raising Awareness of Compliance

Preparation and Distribution of the Sumitomo Warehouse Group Compliance Manual

A compliance manual summarizing matters related to the Company’s compliance system including the Sumitomo Warehouse Group Business Conduct Guidelines and the Sumitomo Warehouse Corporate Standards of Conduct, in addition to systems for reporting and consultation related to compliance has been established and the booklet is distributed to employees within the Group. The manual is also prepared in languages such as English, Dutch, Malay, Chinese and Thai, and distributed to employees of overseas subsidiaries to promote understanding.

Implementation of Internal Control Liaison Meetings

Sumitomo Warehouse has established Internal Control Liaison Meetings attended by directors, etc. of the Company and its subsidiaries. Meetings are held for domestic subsidiaries and overseas subsidiaries to provide information and guidance and to exchange opinions on matters related to compliance. Instructors from outside the Company are invited to each of these meetings to conduct legal seminars on legal and compliance themes.

Implementation of Education and Training on Compliance

Instructors from outside the Company are invited to periodically conduct top management seminars for senior executive officers and legal training for management personnel. In addition, legal seminars on different themes are also held as needed for specific departments.

Compliance training (including e-learning) is conducted once per year for all employees including temporary employees. It covers themes that are current at the time such as cyber security, management and collection of receivables, revision of the Civil Code (law of obligations), harassment, fraudulent accounting, prevention of corruption, and foreign economic sanctions and export controls.

In the tiered training for management personnel, we include lectures on harassment prevention and response specifically.

In addition, workshops on the Subcontractors Act and the Antimonopoly Act that need to be understood when dealing with many partner companies and suppliers, and education on relevant legal knowledge and procedures required for conducting business in bonded warehouse and operations related to importing and exporting are also periodically carried out in each workplace.

Legal and compliance training is also provided as needed for officers and employees of subsidiaries.

The company newsletter published quarterly also contains articles on compliance in every issue in an effort to provide knowledge and to disseminate and raise awareness of compliance.

Implementation of Education and Training on Prevention of Bribery

We conduct continuous education and training to ensure that employees are thoroughly informed about the prevention of bribery and improper receipt of benefits (hereinafter referred to as 'bribery, etc.'). Additionally, we create and distribute a compliance manual to prevent such activities.

Furthermore, we conduct compliance training for all employees and legal and compliance training for the officers and employees of subsidiaries to raise awareness about the prevention of bribery, etc.

Prevention of Legal Violations and Improprieties, and Responses in the Event of Their occurrence

The Audit Department performs internal audits including domestic and overseas subsidiaries to prevent the occurrence of compliance violations, etc.

Furthermore, company rules have been established for prompt reporting and consultation according to the office organization if a problem related to compliance occurs in everyday operations, or if it is found that there is a risk of such occurrence.

When a problem arises, it must be promptly reported to the branch or department overseeing the business location where the problem occurred. Reports and inquiries from partner companies are received by the departments that handle them. In the event of a report or inquiry, the relevant departments such as the General Affairs Department coordinate to determine the facts, identify the causes and take steps to prevent a recurrence. Key issues are reported in Sustainability Committee and the details are shared over the intranet to prevent similar problems arising.

Company rules stipulate that a person who makes a report or an inquiry will not be treated disadvantageously due to making the report or inquiry.

Initiatives for Complying with Competition Laws

We are working to prevent competitive restrictive practices (bid-rigging, cartels) as follows.

-We will not engage in any acts that constitute unfair trade practices such as cartels or bid-rigging, unreasonable restrictions on trade, private monopolization or the like.
-We will not exchange or discuss information on the adjustment of prices and quantities, the distribution of customers and sales territories, etc. (“competitive information”) with competitors. In addition, we do not exchange or discuss competitive information with competitors in the course of bidding or other activities.
-We will clearly refuse if a competitor asks to exchange or discuss competitive information.
-In addition, we do not exchange or discuss competitive information in meetings, etc. attended by competitors.

Anti-Bribery Initiatives

In order to prevent bribery, etc., we have established the “Anti-Bribery Regulations” and are engaged in the following initiatives. Furthermore, we also conduct internal audits of our internal systems for preventing bribery, etc.

-In Japan, we do not engage in any actions that conflict with the Criminal Code, the National Public Service Ethics Act, the National Public Service Ethics Code, or other similar regulations established by government agencies.
-We will not offer, promise, or provide, directly or indirectly, any money or other benefits to foreign public officials or those equivalent to them (hereinafter referred to as “foreign public officials, etc.”) in relation to their duties, in order to obtain wrongful gain related to our business.
-We will not directly or indirectly accept money or any other benefits from a third party, or make any requests or promises to do so, in order to obtain wrongful gain related to our business, whether in Japan or overseas.
-In the event that an employee of the Company is requested by foreign public officials, etc. to provide money or any other benefit, the employee shall not engage in bribery except in cases where it is truly unavoidable to comply with the request such as where failure to comply with the request would endanger the life, physical safety or freedom of the employee, other employees or their family members, etc. due to assault, threat, arrest, or confinement by police officers or soldiers in the armed forces, etc.
-When engaging in the provision of entertainment or gifts to foreign public officials, etc., the invitation of foreign public officials, etc., overseas donations, or the hiring of agents or consultants in relation to the Company’s business, we will comply with the prescribed procedures.
-With regard to affiliated companies overseas, we will provide guidance to ensure that systems are in place to prevent bribery, etc. at affiliated companies, taking into account the degree of risk of bribery, etc., in each company’s business region and business content, etc.
-Entertainment and gifts should be provided within the bounds of what is considered socially appropriate, and we will not provide entertainment, money or goods that exceed these bounds.

Anti-Corruption Initiatives

In our compliance manual, the Group has set out specific standards of conduct, including “prohibition of excessive entertainment and exchanges of gifts,” “prohibition of conflicts of interest (breach of trust, embezzlement, etc.),” “prohibition of unfair business practices, etc.,” “prohibition of insider trading” and “confronting antisocial forces,” and we are engaged in the prevention of corruption in all its forms, including extortion and bribery. Matters related to corruption, including bribery, etc., are handled by the Internal Control Subcommittee, a subordinate body of the Sustainability Committee, which formulates policies and checks on progress, etc., and promotes measures to prevent corrupt practices under the supervision of the Sustainability Committee and the Board of Directors.

-Prohibition of unfair business practices, etc.
The Company will comply with the Antimonopoly Act and the Subcontracting Act, and will not engage in any acts that constitute unfair trade practices, unreasonable restrictions, private monopolization or the like. We regularly check the status of compliance with laws and regulations regarding transactions with partner companies, and provide training on relevant laws and regulations.
-Prohibition of insider trading
The Company has established “Information Disclosure and Insider Trading Prevention Regulations” to define the management and disclosure systems, etc. for company information (material information) as stipulated by laws and regulations and the rules of financial instruments exchanges, and has made these regulations known to all employees.
-Establishment of a whistleblower contact point
We have set up a helpline (whistleblower contact point) that also covers corruption, including bribery, etc. Reports can be made anonymously, and the employees are informed of the reporting destination.
-Handling high-risk areas
When employing agents, consultants, etc. in foreign countries for activities that are generally considered to be high-risk, such as bribery, we conduct corruption risk assessments by evaluating risks using a third-party hiring checklist and establishing prescribed procedures. We require that contracts include anti-bribery clauses, and we also conduct regular checks.

Initiatives for Respecting Intellectual Property

We will appropriately protect the intellectual property owned by the Company and the Group, and we will respect the rights for intellectual property held by other companies. In addition, when using intellectual property held by a third party, we will use it through legitimate procedures and methods.

Initiatives to Prevent Tax Avoidance

We will comply with tax laws in each country where we conduct business activities and international rules, and pay appropriate taxes. We will not engage in transactions for the sole purpose of tax avoidance.

Helpline (Whistleblower Contact Point)

If a problem arises from the perspective of laws, regulations, internal rules, or social norms, and it is not possible to report or consult on the matter through the office organization, it can be reported to the helpline. Reports can be made to an internal contact point or an external contact point (a law firm), and reports to the external contact point can be made anonymously. When a report is made to the helpline, it is reported to the Sustainability Committee, and the General Affairs Department promptly conducts an investigation and, if necessary, takes corrective measures and measures to prevent recurrence. In addition, the content of the report is kept strictly confidential, and the company rules stipulate that the person who made the report or consultation will not be treated disadvantageously on the grounds of having made the report or consultation. In addition to making employees aware of this system through portable cards, in-house newsletters, the intranet, and training, similar contact points have also been set up at domestic and overseas subsidiaries.