Basic Approach to Compliance

For many years, the NAGASE Group's Management Philosophy has upheld the ideal of maintaining the highest integrity as a member of society, and we hold dear the observation of laws, regulations, and rules.

Due to the globalization of the Group's business activities, diversification of the types of its transactions, and the growing demand for corporate social responsibility actions within society, we formulated the NAGASE Group Basic Compliance Policy in October 2002. In December 2003, based on this policy, we also enacted the NAGASE Group Code of Conduct and the Compliance Help Desk Rules (subsequently partially revised in 2012). In October 2008, we enacted the Product Safety Principles, which have been adopted across all of NAGASE Group's domestic and overseas entities.

NAGASE Group compliance regulations

NAGASE Group compliance regulations

In recent years, with the ever-accelerating changes in the external environment, restrictions from laws and regulations have become more borderless, complex, and stringent. There have been particularly stringent demands for compliance with the prohibition of bribery and the rules on fair competition. The demands and expectations that society places on corporations also continue to evolve, and there is an ever-increasing demand on corporations to act in a socially-responsible manner. In light of these changes and trends, we reevaluated and revised the Basic Compliance Policy, NAGASE Group Code of Conduct, and Compliance Help Desk Rules in 2017, and will continue to constantly and rigorously ensure compliance in keeping with the changing times.

Respecting compliance in every action that we take as a company, and being an organization that can detect issues early and take corrective action, implementing measures for improvement and rectifying these issues swiftly and decisively will allow us to gain credibility and trust with our business partners and stakeholders. Credibility and trust are treasured assets for the Group, and we intend to continue to grow these assets in our day-to-day business activities.

Basic Compliance Policy

Based on our management policy that “We recognize our responsibility to society and offer beneficial products and services while maintaining the highest standards of integrity. Through our growth, we will contribute to society and enrich the lives of our employees.”, We hereby establish and execute the Basic Compliance Policy as follows.

This policy defines the behavior standards that NAGASE Group and its officers and employees will observe as they carry out their work.

We require our officers and employees to comply with these standards and team them to others by example—particularly to co-workers. Any danger of non-compliance must be addressed without delay, and officers or employees should identify the root cause of the issue, taking steps to prevent any recurrence.

1. Comply with applicable laws and regulations; conform to internal rules

  • Conduct business fairly and in good faith, in keeping with laws, company rules and social norms.
  • Conduct work in keeping with internationally accepted norms to ensure our growth as a global enterprise.
  • Comply strictly with domestic and foreign laws including laws regarding bribery and competition laws.

2. Eliminate anti-social elements

We firmly reject any anti-social elements that threaten the public order and safety.

3. Provide useful products and services

Contribute to society through useful goods and services.

4. Respect employee personality and individuality

  • We foster a corporate culture in which employees can contribute with their independence and creativity.
  • We will protect employee health, respect their basic rights, and treat them fairly and without discrimination. We will provide a safe and enriching work environment for our employees.

5. Disclose information

We will ensure management transparency by fairly disclosing corporate information to our stakeholders, including our customers, suppliers, employees, and shareholders.

6. Protect the global environment

We recognize and perform on our responsibility to improve the environment.

7. Responsibilities to top management

The top management of all NAGASE Group members including NAGASE & CO., LTD.., Ltd. shall take the lead to ensure that the business is administered “with the highest standard of dignity as a member of society”.

Management based on NAGASE Group Code of Conduct

In the NAGASE group, the Risk Compliance Committee establishes and improves the risk management system and the compliance system that address corporate ethics as well as legal compliance.

The Risk Compliance Committee develops the Basic Compliance Policy to develop a system to ensure that all the directors and employees, including the group companies, fully enforce corporate activities in accordance with NAGASE Group Code of Conduct. The members of the Committee consist of the Board of Directors and employees, and these members make all decisions on the risk management and compliance, and also appoint external experts where necessary to prevent violations of laws and bylaws.

In August 2021, we conducted the Nagase & Co., Ltd. Compliance Questionnaire (776 out of 969 respondents responded. Response rate 80.1%).

In the case of becoming aware of an issue such as a violation of a law in the NAGASE group, an employee promptly reports to, notifies and consults with his/her superior or the relevant section, and then reports to the Committee, which reports to the Board of Directors and the (Board of) Auditors. The Risk Compliance Committee also reviews the efficacy of the Basic Compliance Policy on a regular basis to improve the risk management and compliance systems.

コンプライアンス体制

Internal Reporting System

The NAGASE Group has introduced an internal reporting system and set up a contact point for officers and employees, including those in Group companies. These persons may use this contact for internal reporting consultation with confidentiality and anonymity. The internal reporting system is also operated as a point of contact for reporting problems of human rights and harassment.

内部通報制度

Reporting the status of compliance

The NAGASE Group appropriately operates an internal reporting system and internal audits to check for violations of laws and regulations and internal rules stipulated in the Compliance Code of Conduct. If an investigation is deemed necessary, the Risk Management and Compliance Committee will establish an investigation team to conduct the investigation while respecting the credibility, honor and privacy of those involved. If any violation of laws and regulations or internal regulations is found as a result of the investigation, corrective measures and preventive measures will be taken immediately, and appropriate measures such as internal measures will be taken if necessary. In addition, we will report to the relevant administrative agencies, etc. if necessary, and if the Risk Management and Compliance Committee deems it necessary, we will disclose the information outside the Company.

The NAGASE Group regularly reviews the effectiveness of its Code of Conduct and Code of Ethics.

Compliance

For the Compliance Code of Conduct, please click here.
Please check the table below for an overview of the Compliance Code of Conduct.

Primary Item Secondary Item Tertiary Item
1. Comply with Applicable Laws and Regulations; Conform to Internal Rules (1) Compliance with Laws and Regulations 1) Compliance with Laws and Regulations related to Products and Services
2) Compliance with Trade Laws
3) Compliance with Fair Competition Laws and Regulations
4) Compliance with Insider Trading Laws
(2) Healthy and Sound Relationship with Business Counterparties and Public Administration 1) Relationship with Business Partners
2) Relation with Public Officials
3) Fairness in Political Activities
(3) Compliance with Company Regulations and Rules 1) Trade Secret and Intellectual Property
2) Protection of Personal Information
3) Avoiding Conflicts of Interests
4) Use of Corporate Assets
5) Proper Accounting
6) Appropriate Use of Information Systems
7) Retirement from the Company
2. Eliminate Anti Social Elements - -
3. Provide Useful Products and Services (1) Develop and Offer Useful Products and Services with Adequate Safety Precautions
(2) Prevent Further Damages
(3) Prevent Recurrences
(4) Communicate with Suppliers
(5) Respecting the history, culture and traditions of each country and region
4. Respect Employee Personality and Individuality (1) Respect for Human Rights, Eliminate Discrimination
(2) Respect for Privacy
(3) Establishing an Environment to Draw out the Strengths of Employees
5. Disclose Information (1) Fair and Prompt Disclosure of Corporate Information
(2) Media Relations
6. Protect the Global Environment
7.Responsibilities of top management

Fair Business Practice Initiatives

Under its Compliance Code of Conduct, the NAGASE Group rigorously ensures strict compliance with laws, regulations, and rules, as well as internal regulations and rules.

Under the Antimonopoly Act, cartel regulations and their high-impact penalties present major risks to businesses. Accordingly, the NAGASE Group actively conducts education activities, with our core manufacturing companies and others, to ensure there is no involvement in unfair trade. We intend to strengthen our approach to the prevention of bribery of foreign public officials with respect to Japan’s Unfair Competition Prevention Act. To ensure strict compliance with anticorruption measures, we are also educating employees worldwide regarding bribery prevention regulations, reflecting considerations of extraterritorial application of the U.S. Foreign Corrupt Practices Act and the UK Bribery Act.

Tax Policy

The NAGASE Group Code of Conduct clearly defines and provides an enforcement mechanism for compliance with laws, regulations, and internal rules.

All NAGASE Group officers and employees shall maintain autonomy and rigor regarding their own actions, observe both laws, international rules, and the spirit of these, respect the culture and customs of local communities, and act with dignity and the common sense of society.

  • In tax practice, we strive to maintain and improve compliance, as well as to adhere to the following principles.
  • We comply with tax-related laws and regulations, as well as other accounting-related laws and regulations in their respective countries and regions, always conducting tax treatment appropriately. We have built a constructive and mutual trust relationship with tax authorities and address tax issues through prior inquiry with these.

Basic Approach to Preventing Corruption

The NAGASE Group strives to prevent corruption and maintain sound and appropriate relationships with business partners and governments. The Group has enacted and enforces the Basic Regulations for Prevention of Bribery specifically to address bribery issues. Further, the NAGASE Group Code of Conduct clearly defines and provides an enforcement mechanism for compliance with laws, regulations, and internal rules. We take the following actions to ensure sound and appropriate relationships with business partners and governments.

  • Prohibition of providing or obtaining unfair benefit in commercial transactions
  • Officers and employees must comply with laws, regulations, and internal rules, such as the Basic Regulations for Prevention of Bribery, and take correct actions within reasonable bounds to prevent misunderstandings and disgrace from the public.

(Excerpts from the Code of Conduct follow)

1) Relationship with Business Partners

  • Do not offer payments, gifts, entertainment or any other economic benefit beyond the socially acceptable level to officers or employees of business partners. Similarly, do not accept any economic benefits beyond the socially acceptable level from officers or employees of business partners. The ways these situations are viewed varies between each country and region. In addition, adequate verification is required as the provision of economic benefits between private enterprises is also regulated under the laws and regulations depending on the country or region.
  • Any sales incentive or award must be offered according to company rules.
  • Suppliers must be selected according to rational criteria such as price, quality, delivery time, attitude toward global environment issues, etc.
  • Do not grant a favor to business partners or competitors for your personal gain.
  • The purchase or acceptance of securities (including stock, stock options, etc.) from non-publicly traded business partners could violate laws concerning unjust enrichment. Always report your intent to purchase or receive such securities to the company, as the matter may be subject to company judgment.

2) Relation with Public Officials

  • No benefits such as gifts or payments may be given to public officials (including foreign national governments or local municipalities) or the equivalent for the purpose (or apparent purpose) of seeking favorable arrangements or actions related to their duties. Similarly, no promise or offer of such benefits may be made to such officials. If the use of payments to distributors and consultants, to illegally influence the staff of government agencies or their related staff to these is suspected, such payments shall be terminated.
  • In many countries, the law prohibits offering gifts or payments to public officials or the equivalent. Besides the laws and regulations in the countries and regions that each company of the NAGASE Group is located, take due notice that the laws and regulations of the countries and regions where you go to on business and also third countries such as the FCPA (The Foreign Corrupt Practices) in the US and the Bribery Act in England are also applicable in certain cas es as well.

3) Fairness in Political Activities

  • NAGASE Group is committed to ensuring impartiality and fairness regarding political activities, in accordance with laws and regulations of the respective countries and regions in which we do business. The political donations, purchases of party tickets for fund-raising, and so forth are prohibited in principle. (except in private)

Internal and external communication and training on anti-corruption

In its Basic Compliance Policy and Compliance Code of Conduct, the NAGASE Group declares strict compliance with domestic and foreign laws and regulations, including bribery and competition laws, and stipulates rules for compliance with laws and regulations and maintaining sound and normal relationships with business partners and the government. This Basic Policy and the Code of Conduct are posted on the NAGASE Group's internal intranet and external website to ensure that all Group employees are fully aware of the policy, and compliance questionnaires are conducted on a regular basis.

Compliance training also covers a comprehensive range of anti-corruption issues, including bribery, accounting fraud, illegal receipt of payments, and bid-rigging.

Specific initiatives for compliance

Product Safety and Quality Control

The NAGASE Group considers product safety and quality control a major social responsibility in order to provide customers with safe products and build a safe and secure society. According to the NAGASE Group Product Safety Principles, we strive to ensure the safety of products through Group-wide rules and education. In addition, the Risk Management Division provides management of vendors and manufacturing contractors, support to Group manufacturing companies, and internal education.

Please click here for the NAGASE Group Voluntary Action Guidelines on Product Safety.

Security Trade Controls

Trade is the foundation of the NAGASE Group’s activities. To conduct appropriate trade in line with laws and regulations as a member of international society, the Security Trade Control Committee works to understand the export control situation, follow the latest revisions to the Foreign Exchange and Foreign Trade Control Law, and ascertain a detailed picture of export controls across the entire Group, while formulating related Group policies. The Item Compliance Management Council is in charge of directing and educating each business division and Group company in matters and statute updates determined by the Security Trade Control Committee. It is the responsibility of the Item Compliance Management Council to protect the Company and affiliates against the risk of illegal acts.

・Specific Import-Export Management Framework

Information about our export products, technologies, and overseas customers is stored in and managed via our proprietary Product Management System. We confirm whether certain products or Technologies are subject to restriction under the rules of the Foreign Exchange and Foreign Trade Control Law and the U.S. Export Administration Regulations. Only those products approved by the Item Compliance Management Section are put into the system as products allowed for export. Going one step beyond mere adherence to the law, we define policies for the entire NAGASE Group associated with security trade controls that, as a rule, prohibit trade of products that are military-related items or that have military applications.

・Efforts to Promote Personnel Development

The practical business of security trade controls changes every year. To keep pace with developments, the NAGASE Group encourages its employees—primarily those involved in export operations—to become Security Trade Control Associates by taking the exam offered by the Center for Information on Security Trade Controls (CISTEC).

Qualified Security Trade Associates (Cumulative)
Fiscal year ended March 31, 2017 856
Fiscal year ended March 31, 2018 890
Fiscal year ended March 31, 2019 947
Fiscal year ended March 31, 2020 982
Fiscal year ended March 31, 2021 1,033

Regulatory Compliance in Products

Safe handling of chemicals is also an important foundation for the NAGASE Group's business. Please click here for the management system for product-related laws and regulations, including chemical management.

On Animal Experimentations

NAGASE & CO., LTD. (hereinafter, “we”) will not conduct or outsource experimentation on animals unless required by relevant domestic or foreign laws and regulations or guidelines issued by relevant authorities, or unless it is the only way to explain or provide assurance to the public regarding the safety of our products or ingredients used in the products, when such explanation or assurance is required based upon our legal obligations in the event of any post-marketing accident or instruction by relevant authorities of each country.

When providing animals for use in testing, study, and research or the manufacture of biological preparations, or for any other scientific use, we will give consideration to the appropriate use of such animals by such means as using alternative methods to that of the use of animals as much as possible and reducing the number of animals provided for such use as much as possible, within the extent that the purpose of the scientific use can be attained.

In addition, in case where an animal is provided for a scientific use, we will use a method that minimizes the pain and distress to the animal as much as possible, within the limit necessary for such use.

Management and Auditing of Public Research Funds and Initiatives against Misconduct in Research Activities

Based on the "Guidelines Concerning Management and Audit of Public Research Funds" and "Guidelines Concerning Responses to Misconduct in Research Activities" of the respective ministries and agencies, we have established the following basic policies, etc.

1. Basic Policy on Fraud Prevention Measures

In accordance with the guidelines of the respective ministries and agencies, we will develop and operate internal rules and regulations to ensure the proper management and auditing of public research funds and the prevention of misconduct in research activities.

2. Taking responsibility

chief administrator President and Representative Director
general manager General Manager, Risk Management Division
Compliance Promotion Manager Division heads of each business unit

3. Contact point in the event of fraud

Please contact us through the "Contact Us" page of our website (https://www.nagase.co.jp/english/contact/) or in writing at the following address

〒103-8355
5-1, Nihonbashi Kobunacho, Chuo-ku, Tokyo
Nagase & Co., Ltd.

Data on Compliance