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.
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
Risk and Compliance Committee
The Risk and Compliance Committee, chaired by a director and executive officer of the NAGASE Group, is responsible for establishing and strengthening a risk management and compliance system that not only complies with laws and regulations but also extends to corporate ethics. The Risk and Compliance Committee has established the “Basic Compliance Policy” and ensures that all officers and employees, including those of NAGASE Group companies, follow the “NAGASE Group Compliance Code of Conduct.
The Committee makes all decisions related to risk management and compliance, and also engages in activities to prevent violations of laws, regulations, and the Articles of Incorporation by drawing on outside pro-competent professionals as necessary. The effectiveness of the “Basic Compliance Policy” is periodically reviewed and revised when deemed necessary.
In the event that the NAGASE Group recognizes a problem such as a violation of laws and regulations, it will promptly report it to the Committee after reporting, communicating, and consulting with its superiors and the relevant departments. The Committee also reports to the Board of Directors and the Board of Corporate Auditors, and the Board of Directors oversees the risk management system and compliance system.
Risk and Compliance Penetration Activities
The NAGASE Group Compliance Manual is translated into multiple languages (Japanese, English, Chinese, German, and Korean) and distributed to all employees of the Group to disseminate the basic compliance policy and the compliance consultation and reporting desk. In addition, the Compliance Consultation and Reporting Office is open to all employees of the Group. We also distribute a card with the contact information of the Compliance Consultation and Reporting Office to all employees. The Risk and Compliance Committee holds an e-learning series “Brush Up! Compliance” once a month to raise the compliance awareness of all employees of Nagase and provides them with the latest information.We distribute the “Compliance News” on a monthly basis.
In addition, compliance education incorporating timely topics and compliance trends within the Group is conducted every year at NAGASE Group companies in Japan and overseas.
Internal Reporting System
The NAGASE Group has introduced an internal reporting system as a “Compliance Consultation and Reporting Window,” where directors and employees, including those of group companies, can consult and report anonymously under strict confidentiality. The “Compliance Consultation and Reporting Window” is also operated as a human rights reporting air vent and a harassment reporting air vent.
Reporting the status of compliance
The NAGASE Group appropriately operates an internal reporting system and periodic internal audits to check for violations of laws and regulations and internal rules stipulated in the Compliance Code of Conduct. In particular, we conduct annual internal audits of our Company and its domestic affiliates for security trade control and product law control. If the results of an internal audit indicate that a more detailed investigation is 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.
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
With regard to anti-monopoly laws and global competition laws and regulations, we are actively conducting educational activities for the NAGASE Group’s major manufacturing companies and other companies, focusing on cartel regulations that have a large impact in terms of monetary penalties. We will continue to promote awareness of fair trade related laws and regulations within the group, focusing on those that are highly necessary. In addition, in view of the strengthening of the use of anti-bribery prevention measures for foreign public officials in the Unfair Competition Prevention Law and the overseas application of anti-bribery prevention regulations such as the FCPA in the U.S. and UKBA in the U.K., we will continue to conduct educational activities on anti-bribery prevention regulations targeting groups in Japan and overseas.
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 policies, and compliance questionnaires are conducted on a regular basis.
Compliance training for all Group employees (including temporary employees and commissioned employees) covers a comprehensive range of anti-corruption issues, including harassment, bribery, accounting fraud, improper payments, cartels (bid-rigging), and data security.
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.
Since July 2023, Nagase has been using the “Supplier Management Guidelines” and “Supplier Quality Control Manual”.
Vendor Quality Control Manual: Standardizes the level of control by outlining our management structure, quality control steps, and requirements for our suppliers regarding quality and supply risk.
Supplier Management Guideline”: To organize and share the overall picture of risks ((1) quality and supply risk, (2) credit risk, (3) intellectual property risk, (4) legal risk, (5) product and legal risk) and points to be checked when doing business with suppliers.
We are building a management system and clarifying operational rules with the supplier quality control manual and 17 procedure manuals.
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|
|Fiscal year ended March 31, 2022||1,089|
|Fiscal year ended March 31, 2023||1,125|
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
2-6-4 Otemachi Chiyoda-ku, Tokyo
Nagase & Co., Ltd.