Basic Concept of Compliance
Sumitomo Electric believes that complying with laws and regulations and maintaining corporate ethics comprise the backbone of its management; these matters are its social duties as a corporation, and form the absolute basis for the Company's continued existence and development. In recognition of this understanding, Sumitomo Electric has developed the compliance system. Despite our efforts in this regard, in February 2003 Sumitomo Electric received notice from the Japan Fair Trade Commission (JFTC) advising us to end a practice that violated the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade. This has led us to redouble our ceaseless efforts to further strengthen our compliance.
Nevertheless, in May 2010, we received Cease and Desist Orders and other orders from JFTC in connection to the sale of optical fiber cables and related products. In addition, concerning the supply of automotive wiring harnesses and related products, we received a surcharge payment order from JFTC in January 2012, and were also under scrutiny of overseas competition authorities. Among the authorities, the European Commission notified us of its decision finding infringements of EU competition law in July 2013. (The Commission granted immunity from fines to the Sumitomo Electric Group as a result of the Group's cooperation in the investigation. Sumitomo Electric has also been cooperating with authorities conducting investigations in the United States, Canada and Australia, and therefore, does not expect to be criminally or administratively fined or otherwise sanctioned by these authorities concerning the supply.)
In response to the on-site investigation by JFTC in June 2009 concerning optical fiber cables and related products, we have taken corrective action out of recognition of the seriousness of the matter, including the exhaustive compliance with the Antimonopoly Act and prompt recruitment of outside experts to conduct studies into other infringement behavior, if any, in order to identify and eliminate conduct that violates the Act. Additionally, we have conducted intensive training, enforced Competition Law Compliance Regulations, and established a system to ensure the administration and management of the Regulations by specialized organizations, etc., in order to reinforce competition law compliance by the entire Group. While both the surcharge payment order of January 2012 by JFTC and the decision of July this year by the European Commission concerning the supply of automotive wiring harnesses and related products apply to violations that predate these preventive measures, we fully recognize the gravity of the situation and are striving to implement fair business activities that merit the trust of society, identifying competition law compliance as a top priority issue in our business management.
The Sumitomo Electric Group has established the Compliance Committee, chaired by the President, as an organization that promotes measures necessary to develop and further strengthen the compliance system. The Committee engages in various activities, including preparing and distributing the Sumitomo Electric Group Compliance Manual and organizing compliance training seminars. In addition, the Committee identifies and analyzes Group-wide compliance risks, disseminates preventive measures Group-wide, and monitors the compliance activities implemented by each division and subsidiary.
Efforts to Raise Awareness of Compliance
The manual explains specific and useful instructions so that employees can act in a socially acceptable way from legal and ethical perspectives. We distributed the revised version to employees in Sumitomo Electric and the Group companies.
To check compliance risks, ensure implementation of preventive measures and develop and enhance awareness of compliance, the Compliance Committee organizes regular training seminars for all officers and administrative members every year. New employees and newly promoted personnel are also provided with training seminars.
The Sumitomo Spirit, which forms the basis of the Sumitomo Electric Group's compliance system, as well as our philosophies and code of conduct mentioned in the Sumitomo Electric Group Corporate Principles and the Sumitomo Electric Group Charter of Corporate Behavior are also disseminated by, for example, holding a variety of training programs and citing comments made and actions taken by top management.
We have established the Speak-Up System, which enables employees to directly report and consult on potential compliance-related issues, so as to identify and resolve such issues by ourselves at an early stage. In addition to the Company's compliance staff, a law firm has been appointed as an external contact in the Speak-Up System. To address issues reported through this System, the Compliance Committee swiftly conducts investigation and takes necessary action. Sumitomo Electric instructed Group companies in Japan to establish their own in-house consultation contacts. At the same time, Sumitomo Electric positions outside contacts in its Speak-Up System as those for the entire Sumitomo Electric Group. We are working to disseminate the Speak-Up System to employees through monthly in-house magazines.
Competition Law Compliance System
To ensure compliance with domestic and overseas competition laws as well as to eliminate cartel and collusion including suspicious acts in the Group, we continuously provide compliance training on competition laws. In addition, the Competition Law Compliance Office, which has been established in the Corporate Staff Group under the supervision of the Compliance Committee, forms a system to monitor the operation of and compliance with the Competition Law Compliance Regulations, including rules to restrict contact with competitors, in cooperation with the dedicated organization or competition law compliance manager of each of the units. Thus, all employees and officers are firmly engaged in competition law compliance.
Awareness of Compliance among Overseas Group Companies
We are also committed to the development of the compliance system among group companies overseas in line with the globalization of our businesses. Sumitomo Electric has introduced the Business Code of Conduct (BCC) to overseas consolidated subsidiaries based on the local legal systems and also provides compliance training seminars for local managers.
In addition, as part of SEI University activities, we organize the Global Leadership Program to develop awareness of compliance and create a sense of unity among the Sumitomo Electric Group with lectures on Sumitomo’s history and the Sumitomo Spirit , our group’s business visions and compliance, and through group discussions on practical subjects.