Kurita Water Industries Ltd. established the E&S Committee in April 2017 in order to promote not only compliance activities and better environmental activities but also activities related to CSR throughout the Group by integrating them. In addition to being responsible for checking the state of compliance and better environment activities, the committee identifies material issues from among social priorities including environmental issues for the Kurita Group from a long-term and strategic perspective and establishes policies on and a management stance toward CSR activities that the Group should undertake.
Basic Approach toward Compliance
All Kurita Group officers and employees share fairness, transparency, integrity, safety, and compatibility as five core values, and how all Kurita Group officers and employees should conduct themselves and what conduct is prohibited was compiled into the Kurita Group Code of Conduct in October 2016, which was subsequently implemented. The Kurita Group’s basic approach toward compliance is to implement this code of conduct.
Furthermore, the Group does not consider compliance as simply adhering to laws and ordinances but as fulfilling the social responsibilities expected of it, and Group employees comply with laws and ordinances and conduct themselves in a socially ethical way in daily business activities.
Framework for Promotion
The Company has established the E&S Committee, which is chaired by the director, and the Group E&S Committee, which is also chaired by the abovementioned director and whose members are representative directors of Group companies. In these committees, the Group sets out policies and important measures for compliance activities, and conveys them to all employees through subcommittees at each headquarters division, business division, and Group company.
Efforts Based on "Compliance Activity Plan"
In fiscal 2017, the Kurita Group formulated a "legal violation risk map" for each organization and company according to operations they are responsible for and worked to identify major risks of violation of laws and regularly checked the state of implementing these measures. After identified risks were evaluated on three axes (probability the risk will materialize, impact, and response level), risk items that each organization and company should give priority to were reflected in the Compliance Activity Plan, which was then implemented.
In fiscal 2017, there were no major legal violations within the Kurita Group.
Questionnaires on Compliance
Questionnaires on compliance are conducted once a year for all Group employees. The Company monitors the results of compliance activities through the questionnaire results, and issues that become apparent through analysis are reflected in compliance activity plans for the following year.
Reinforcing the Kurita Group’s Anti-Bribery Initiatives
The Kurita Group reinforced its Anti-Bribery Policy on March 1, 2017, in order to promote fair business activities within the Group. This policy defines basic items related to the Group’s bribery prevention systems. Under this policy, the Company and each Group company defines items to be complied with as rules and works on the reduction of the risk of the occurrence of bribery.
Initiatives to Prevent Bid-Rigging and Cartels
The Kurita Group actively works to avoid the re-occurrence of bid-rigging. In 2006, the Kurita Group withdrew, in principle, from all construction projects ordered by the national government and local public entities. However, exceptions to this principle are limited to cases where no existence of compliance risks are confirmed to projects involving facilities delivered by the Company that are subject to ongoing maintenance and management work by a Group company, which are executed by obtaining the approval of the Board of Directors on a case-by-case basis.
We also forbid participation and membership of trade associations in order to exclude all dealings with associates that can easily connect to bid-rigging and cartels.
Response to Anti-Social Forces
The Company takes a firm stance against anti-social forces that threaten the order and safety of society, and we are vigilant that we never accept illegal requests from such forces. Upon reaching a basic agreement for business with our customers, we obtain a written statement from each supplier stating that they have no relationships with such anti-social forces.
Overview of the Kurita Group’s Whistle-Blowing System
The Company and its domestic Group companies maintain consultation desks within each company as well as at outside organizations in an effort to protect persons who consult or make reports and to achieve early detection of dishonest practices. Starting in April 2016, we commenced operation of the Kurita Global Helpline, which allows the employees of overseas Group companies to make reports to a consultation desk.
Internal Control System
The Kurita Group endeavors to enhance its internal control with the "Basic Policies for Constructing an Internal Control System," established by the Board of Directors in May 2006 in response to the enforcement of Japan’s Companies Act. These policies are updated as necessary according to the decisions of the Board of Directors.
The internal control system of the Kurita Group is roughly divided into two: A system that ensures the accuracy of business operations, and a system that ensures the effective auditing of the Audit & Supervisory Board. These systems are established and appropriately operated. The former system is: (1) to ensure that the execution of the duties of directors and employees conforms with laws, regulations, and the articles of incorporation, (2) to store and manage information about the execution of the duties of directors, (3) to ensure regulations and other systems for managing the risk of loss, (4) to ensure the efficient execution of duties by the directors, and (5) to ensure the accuracy of operations in a corporate group consisting of the Company and its subsidiaries. The latter system clarifies: (1) matters related to staff that assist the duties of the auditor, and (2) a system for the directors and employees of the Company and Group companies to report to the Audit & Supervisory Board.
In order to conduct financial reports in an adequate manner, the Kurita Group has established and now operates the internal control reporting system in accordance with the Financial Instruments and Exchange Act. Monitoring, recommendations for improvement, and support for improvement for the operation of the system is implemented by the Internal Auditing Department. In addition, the Accounting Department in the Corporate Planning Division shares responsibility for monitoring, recommendations for improvement, and support for improvement related to the "operations process control within the Company" and the "financial reporting process control of consolidated subsidiaries from a Company-wide perspective."
Establishment of the E&S Committee