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Compliance

Basic concept
All employees exhibit correct judgment and conduct in line with corporate ethics

JTEKT positions compliance as the premise and foundation of corporate value, therefore essential to realizing our corporate philosophy. Believing that compliance is not merely about observing laws, but also fulfilling our social responsibility in accordance with corporate ethics, JTEKT has established the Ethics Code for Directors and Officers, Compliance Rules, etc.

Training and awareness-raising activities

JTEKT conducts ongoing training and awareness-raising activities targeting its directors, employees and all group companies regarding how compliance is deeply intertwined with our operations. We conduct annual workshops targeting our key corporate compliance officers (directors, auditors, managing officers, etc.). The themes for our FY2017 workshop were protection of personal information and protection of small-to-medium businesses (SMBs), which are topics attracting particularly high interest from society in recent years, and provided participants with the opportunity to refresh their awareness on these issues through a lecture by an external lawyer, etc. Moreover, we have established every July as "Compliance Strengthening Month" (currently "Risk Management Strengthening Month", during which our president sends out a message to all JTEKT employees, including group companies both in Japan and overseas, and compliance training materials are distributed for e-learning and workplace perusal, etc. in an effort to support compliance activities in each workplace. Even regarding internal training planned by our HR department, etc., compliance is addressed so that each employee can take the necessary cautions suitable to their rank and job type.

Compliance inspections

At JTEKT, we carry out regular inspections targeting all internal departments and domestic/overseas JTEKT Group companies to assess the management status regarding compliance affecting our operations.

Internal reporting consultation desks (i)

To enable fine-tuned response to each matter of consultation, JTEKT has established the Corporate Ethics Consultation Desk and several other consultation desks aimed at the prevention, early detection and recurrence prevention of scandals.Consultation desks have been individually established across the JTEKT Group, including overseas group companies.

No. of internal reports made in past 5 years

FY 2013 2014 2015 2016 2017
No. of reports 50 51 51 45 50

Role of the internal reporting consultation desks

Anti-Monopoly Act/Anticorruption

With consideration to a global trend of placing importance on fairness in the features and transactions of our group’s businesses and products, as well as the current tightening of laws and exposure, JTEKT places particular importance on compliance with the Anti-Monopoly Act of Japan, the competition laws of various countries and laws relating to acts of corruption and bribery.
In concrete terms, JTEKT’s President pledges that JTEKT and all JTEKT Group companies will respect fair trade practices and do not recognize cartels and bribery (ii) as justifiable means to engage in business, and that, in addition to establishing concepts to prevent non-compliance, we also establish a code of conduct and rules stipulating internal procedures, conduct training for officers and employees (iii) on an annual basis. In regards to the status of these initiatives, independent items are established in the annual compliance inspections and audited by the internal auditing department and auditors, in addition to periodical reporting to the management meeting for guidance from directors and other officers.
Moreover, while naturally non-compliance conduct is a matter for the internal reporting consultation desks, in order to prevent non-compliance due to a lack of understanding, JTEKT’s Legal Supervising Department takes a primary role in maintaining a system allowing employees to consult on areas where precaution is required in their regular day-to-day tasks. Moreover, JTEKT’s Basic Purchasing Transaction Agreements contain a clause in which each signing party pledges that it will not engage in conduct that violates the Anti-Monopoly Act and competition laws of various countries, nor engage in corruption or bribery and, in order to avoid misuse towards money laundering, etc., will not itself be an antisocial force, nor be affiliated with an antisocial force. In the same way, any company acquisitions executed by JTEKT and the JTEKT Group entail due diligence as an independent item in order to confirm these abovementioned legal non-compliance issues will not arise.

Initiatives for appropriate tax payment

JTEKT and the JTEKT Group understands that making the appropriate tax payments for each country and region in which business is conducted is important in order to support corporate value and realize our Corporate Philosophy. In accordance with this understanding, we respect the laws relating to taxes of each region and country we do business, as well as a spirit of cooperating with such laws.
JTEKT and the JTEKT Group conducts businesses in approximately 30 countries and regions throughout the world and engages in trade between group companies across countries and regions. In regards to the transfer pricing during such transactions, we have established a group policy conforming to the OECD Transfer Pricing Guidelines and endeavor to appropriately declare any income gained through our businesses in each relevant country and region. Moreover, neither JTEKT nor the JTEKT Group engages in tax planning leading to tax base erosion or income transfer that abuses tax havens or tax treaties, etc. in countries or regions outside of where our business sites are located.
Furthermore, if doubts arise or are predicted to arise regarding appropriate tax payments, JTEKT and the JTEKT Group will fully cooperate with the tax authorities in each country and/or region as required. JTEKT and the JTEKT Group accurately conveys information on its businesses and exchanges information with sincerity as it promotes initiatives aimed at appropriate tax payment.
JTEKT maintains a system whereby the General Chief of Corporate Headquarters reports important matters regarding tax payment to the Board of directors as appropriate, then follows instructions given by the Board. Moreover, the Auditing Guidelines stipulate that the duty of our Auditors is to perform audits examining the legality of our directors’ duty execution and decision-making by the Board of Directors, etc. The Board of Auditors also performs audits of important matters regarding tax payment as appropriate.

  1. The internal reporting consultation desks of JTEKT and the JTEKT Group, in accordance with the relevant laws and internal company regulations, protects the informant and details of reported matters as confidential information and ensures a system whereby the informant will not in any way be treated disadvantageously by the company due to having reported a matter of concern.
  2. In order to avoid offering bribes to public officials, etc., and offering or receiving excessive gifts and entertainment to/from private companies, JTEKT and the JTEKT Group has defined these acts as bribery. Moreover, JTEKT prohibits facilitation payments (payments to facilitate regular administrative services) as conduct that could be suspected as non-compliant, excluding cases in which a specific country’s laws clearly stipulate otherwise. Over the past ten years, neither JTEKT nor any JTEKT Group company has been exposed by the regulatory authorities of any country for non-compliance relating to corruption or bribery.
  3. These legal areas, while based on a common global philosophy, are regulated by the unique laws of individual nations, and no single regulation can be applied across-the-board to suit the circumstances of individual regions. JTEKT shares the basic concept with each company of the JTEKT Group at the same time as promoting localization in line with the laws and actual state of affairs in each individual region.