Strengthening of Compliance

A Message from the Chief Compliance Officer
Thorough Diffusion of the Revised Code of Conduct and Strengthening of Cooperation with Overseas Legal Affairs Sites

Yoshiyuki Yoshida
Director, Managing Corporate Officer, and Chief Compliance Officer
Yoshiyuki Yoshida

Q  NYK's Code of Conduct was significantly revised for the first time in 17 years.
    What were the main changes, and what was the aim of the revision?

In recent years, as the globalization and increased sophistication of business continue, companies now must conduct business while adhering to the laws, regulations, and societal norms of diverse countries and regions. The Company established a Code of Conduct based on management philosophy in 1999, but in light of such changes in societal circumstances and the trends of the era, we made significant revisions to the Code of Conduct for the first time in 17 years.
The revisions of the Code of Conduct include creating separate clauses on compliance with antitrust laws and antimonopoly laws as well as clauses related to the prohibition of bribery, enhancing the contents of the section on respect for human rights, and clearly indicating what officers and staff members* should aim for and what they should not do when conducting corporate activities. We also distributed a guidebook to all officers and staff members, providing supplementary information on the background and intent of the Code of Conduct, and conducted 66 briefings on the matter, aimed at thoroughly spreading the information.
In addition, we decided to get a written pledge from all officers and staff members to comply with the Code of Conduct, and will do so on a yearly basis beginning in fiscal 2017. The act of pledging will encourage each officer and staff member to reaffirm the proper aims of the Company and what should be adhered to in corporate activities, get back to the basics, and review their daily actions and workplace environment. We believe that this will result in establishment of an environment in which individuals can protect themselves, protect the Company, and work with assurance.

* Staff members include secondees from other companies and temporary staff, in addition to employees.

Q  This is the third year since legal offices were established in three overseas regions.
    What are your expectations for them going forward?

In order to establish a structure for comprehensively grasping the laws of each country, we are deepening cooperation between the Legal & Fair Trade Promotion Group at NYK headquarters and the legal offices opened in three overseas regions in 2015. At the semiannual Global Legal Meeting, attendees share information on the management policies and legal trends, etc. of each region, and confirm future orientation.
Further, in light of the importance not only of antitrust laws but the prohibition of bribery as well, we have established a structure for consultation with legal departments when launching new business, and are using it to help with risk management.
Under policies designated by the NYK headquarters, individual legal offices conduct compliance training at group companies in the relevant region, with content suited to the characteristics of that region.
We will continue to strengthen cooperation between legal departments in Japan and overseas, and thoroughly implement risk management, in order to promote the Group's business activities smoothly.

Response to Antitrust Law

Since September 2012, the NYK Group has been investigated by authorities in Europe and other authorities overseas on suspicion of violation of antitrust law in relation to the transport of automobiles and other cargoes. Further, in the U.S. and other countries, actions for damages (class action lawsuits) have been filed against the Company and certain overseas subsidiaries.
We sincerely apologize to all stakeholders for causing concern.
We view as a grave matter the fact that an incident occurred even though we had taken a range of measures to prevent such incidents. Prior to this incident, the president had issued an announcement regarding rigorous compliance with antitrust law; we had established and managed control networks in each division at the NYK headquarters as well as group companies in Japan and overseas; we had prepared manuals and conducted a variety of in-house training on antitrust law; and we had established regulations pertaining to contact with competitors. Further, in response to the incident, we are building systems and advancing measures to heighten the awareness of each officer and employee of the Group and to reinforce rigorous compliance with antitrust law.

The NYK Group's Antitrust Law Compliance System

Preventive Measures

Management level
In April 2013, the Company established the Executive Committee Overseeing Thorough Antitrust Law Compliance. At biannual meetings of the committee, all officers, from the president down, and general managers of groups share information on initiatives in their respective departments. A meeting of the Committee was convened in September 2016 (120 attendees) and March 2017 (109 attendees).
Frontline operations level
All business units, including group companies in Japan and overseas, take the initiative in conducting risk assessments and establishing guidelines. After risk assessments are completed, business units and legal departments review guidelines.
Business project level
In-house lawyers use specialist knowledge to evaluate new investments.
Individual level
We obtain antimonopoly law (including antitrust law) compliance pledges from each staff member.
In fiscal 2014, we began extending this initiative to include group companies in Japan and overseas.

Antitrust Law Compliance Training Sessions in Fiscal 2016

Classification Number of sessions Number of attendees
Training sessions* 260 6,459
e-learning(Japanese, English, Chinese) 1 9,827

* Since fiscal 2009, a total of 25,904 people have participated.

Training activities

To ensure that each NYK Group staff member is fully aware of antitrust law compliance, we have conducted antitrust law compliance training at 131 group companies in 39 countries, including Japan. We began this training in 2009, and 25,904 group staff members have participated up to this point. We have also implemented e-learning (Japanese, English, Chinese) for all business units, including group companies in Japan and overseas. By continuing this training, we will endeavor to ensure rigorous compliance.

Thorough Prohibition of Bribery

In January 2014, we further developed our basic policy and guidelines on the prohibition of bribery and rigorously informed the Group employees about them, in response to the Unfair Competition Prevention Act (crime of bribing foreign public officials) in Japan, the Foreign Corrupt Practices Act in the U.S., and the Bribery Act 2010 in the U.K. In fiscal 2013, we began training for staff members in Japan and overseas to spread the information throughout the Group. We strive to thoroughly familiarize everyone about the prohibition of bribery through a program in conjunction with antitrust law training, conducted at each level, eight times each year for the Group companies in Japan, and once each year for each overseas region.

Exercising Due Diligence Regarding Bribery

In April 2016, we established a system under which legal departments confirm matters related to bribery when the launch of new business in a high-risk country is being considered. In addition to screening partner and agency candidates for bribery-related problems, suggestions regarding incorporation of clauses related to the prohibition of bribery when concluding contracts are provided and relevant matters are confirmed.

Certification from anti-bribery business organization

The Group has received below certification from TRACE International, a globally recognized anti-bribery business organization and leading provider of third party risk management solutions.

"TRACE has completed a TRACEcertification due diligence review of Nippon Yusen Kabushiki Kaisha. Certification by TRACE signifies that Nippon Yusen Kabushiki Kaisha has completed internationally accepted due diligence procedures and has been forthcoming and cooperative during the review process. TRACE certification underscores Nippon Yusen Kabushiki Kaisha's commitment to transparency in international commercial transactions.

TRACE certification ID: TC3182-6961 (Valid through: 2018/1/15~2019/1/14)

Compliance Initiatives

To strengthen compliance activities, the Company has established the Compliance Committee, which convenes twice yearly. The president chairs the committee, whose members consider compliance measures.
Also, we have set September as the NYK Group's compliance-strengthening month and conduct comprehensive compliance check-up activities during this period as an opportunity for staff members to review their own behavior and work processes. The findings are posted on the in-house intranet.
We have established help lines in Japan and overseas according to the circumstances in each region. The Yusen Chat Room* system, one of the help lines in Japan, is composed of six personnel, including an outside lawyer, who receive whistle-blower reports and provide consultation on a wide range of compliance-related matters. We are developing an open corporate culture that promptly collects information helpful for the prevention of corruption and rectifies it immediately through these measures.

* Yusen Chat Room
This system covers NYK and 60 domestic group companies.

Compliance Training Sessions in Fiscal 2016

  Number of sessions Number of attendees
Training sessions* 10 277

* Since fiscal 2002, we have implemented 367 training sessions, which were attended by a total of 10,007 people.

The NYK Group's Compliance System

図

*1 For significant matters
*2 Reports to a full-time audit and supervisory board member periodically and as required

Main Measures Aimed at Strengthening Compliance

1997
  • Established NYK Business Credo
1999
  • Established NYK Code of Conduct
2002
  • Established position of Chief Compliance Officer
2005
  • Established NYK Group Mission Statement
2006
  • Established Internal Control Committee
2008
  • Established Antitrust Law Task Force
2013
  • Established Executive Committee Overseeing Thorough Antitrust Law Compliance
2016
  • Introduced measures to prevent bribery of overseas public officials when establishing new business
  • Revised the NYK Code of Conduct
2017
  • Implemented a written pledge of adherence to the NYK Code of Conduct

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