Compliance

JSW Group has established its Basic Sustainability Policy and engages in business activities in compliance with ethics, laws and regulations, and international rules in both letter and spirit. In particular, the Group will continue to conduct business activities based on the understanding that compliance is not only legal compliance, but also includes adherence to internal rules and contracts, and is an important element for building a relationship of trust with society as well as a fundamental driver for increasing employee engagement.
In addition, the Board of Directors has decided on the Basic Policy on Internal Control and is developing internal control systems. Recognizing the importance of the proper operation of these systems, the Internal Control Committee regularly reports on matters relating to internal control and its progress to the Board of Directors. The Group will also review its Basic Policy on Internal Control to ensure quality compliance and prevent the recurrence of inappropriate conduct.

Regarding compliance with codes such as laws and regulations, and internal rules, on a regular or as-needed basis, the Internal Auditors Office audits the overall operations of JSW, and reports the results to the Board of Directors and Audit & Supervisory Board, as well as the representative director & president and, the Executive Board or the Management Council, or other relevant parties, as necessary. In fiscal 2023, there were no violations of relevant laws and regulations* that resulted in fines or penalties.

• Relevant laws and regulations: Laws and regulations regarding the environment, Industrial Safety and Health Act, Financial Instruments and Exchange Act, laws and regulations regarding export control administration, laws and regulations regarding competition, laws and regulations regarding bribery, and Whistleblower Protection Act

Promotion of Compliance Training

The Company is implementing the following measures to further enhance compliance awareness.

• E-learning for JSW employees and Group company officers and employees is conducted annually to enhance compliance awareness and ensure thorough risk management. (In fiscal 2023, the participation rate was 94%)
• Regular harassment prevention training is conducted by our corporate divisions for subsidiaries (4 companies in fiscal 2023: Nikko Techno, JSW AFTY, Nikko YPK Shoji, and Fine Crystal).
• Information and articles are posted and continually updated on the in-house portal site, intranet noticeboard, posters, and newsletters to help raise awareness of compliance.
• E-learning for employees of the Company and Group companies is conducted annually to ensure compliance with laws, regulations and internal rules on export control administration. (In fiscal 2023, the participation rate was 99%)
• Internal mock examinations, preparatory courses for examinations and e-learning are conducted annually to increase the number of current employees who pass the export control administration practical skills certification examination.
• Information security training is conducted annually for all employees. (In fiscal 2023, the participation rate was 100%)
• As part of Quality Compliance Month each May, the Company streams a video message from the president and conducts e-learning and quality compliance training via educational videos. (In fiscal 2024, the participation rate was 100%)
• For National Product Quality Month each November, the Company streams a video message from the director in charge of quality management and conducts e-learning and quality compliance training via educational videos. (In fiscal 2023, the participation rate was 98%)
• E-learning is conducted on patents for employees involved in technology development at the Company and Group companies who have worked for a certain number of years.

Examples of Compliance Initiatives

Response to Antisocial Forces

The Japan Steel Works Group's Basic Policy in "The Japan Steel Works Group Standards of Corporate Behavior" is to confront antisocial forces and groups that affect the order and safety of civil society as a corporate organization, and to never accept any illegal or unjust demands.

Health and Safety

The Japan Steel Works Group has established basic safety and health management practices necessary to ensure the safety and health of all personnel involved in its operations. In addition, we have established a safety and health management system and take necessary measures to prevent occupational accidents, prevent health problems caused by working conditions and the work environment, and ensure the health of our employees, as well as educate and train our employees.

Security Export Control

We have established the "The Japan Steel Works Security Export Control Regulations" for the purpose of maintaining international peace and security, and are working to implement appropriate security export control and to raise the level of our employees through educational and awareness activities.

Prohibition of insider trading

In order to prevent insider trading, the Company has established "Regulations for Prevention of Insider Trading," which stipulate the basic rules necessary for the management of important information obtained by officers and employees of the Company and its subsidiaries, etc., and for the conduct of their duties, and ensures that they comply with the regulations.

Management of Public Research Funds and Prevention of Research Misconduct

We have established the "Basic Policy for Management of Public Research Funds and Prevention of Research Misconduct" and are working to prevent misconduct involving public research funds.

Whistleblowing System

JSW Group has formulated and operates whistleblowing rules for the purpose of strengthening and promoting compliance management, and has established a system for the proper handling of reports and consultations from employees and others regarding potential organizational or individual violations of laws and regulations that may have been committed by employees or others associated with JSW or Group companies.
This enables JSW Group to promptly detect potential violations of laws and regulations and take corrective action, thereby minimizing risk and damage to the Group that would otherwise arise from such a violation. This system brought about events such as the discovery of inappropriate conduct in quality inspections by Japan Steel Works M&E, Inc. and the system is functioning effectively in line with these goals.

Anonymous reports and consultations are accepted and disadvantageous treatment of persons who make reports or seek consultation is prohibited. In the event of disadvantageous treatment received, the Company will respond with appropriate measures, including disciplinary action.
In October 2021, the whistleblowing rules were amended so that the contact point for whistleblowing was changed to external specialists in order to ensure greater protection for the confidentiality of whistleblowers and individuals with whom they consult, while also reducing the psychological burden of whistleblowing. Furthermore, in order to facilitate further awareness of the whistleblowing system to reach even Group subsidiaries as well, we display the manual on internal workplace bulletin boards and have distributed a pocket version of the manual that employees and others can refer to at any time.
As of February 2024, a system of reduction or exemption of internal disciplinary action for self-reporting of misconduct (known as a leniency system) was introduced to fortify the response to organizational misconduct and harmful practices.

The Whistleblowing Committee, chaired by the director in charge of risk management, investigates reported cases, and if a problem is identified, the committee will take appropriate action and implement corrective measures. During this process, the office of the Whistleblowing Committee and Audit & Supervisory Board members share information as appropriate, while the Audit & Supervisory Board members monitor the progress made in individual cases and the status of operation of this system.
In principle, the Board of Directors confirms proper operations of the whistleblowing system twice a year, as based on reports from the Committee.
The number of reports made was 42 in fiscal 2022 and 42 in fiscal 2023, most of which were consultations about workplace environment, including instances of harassment. As a result of changing the contact point for whistleblowing to external specialists, and efforts to raise awareness of the system, the number of reports—which includes those from Group subsidiaries—is increasing. Reports were investigated by the Committee and appropriately addressed.

Contact for Reporting Company name: NEC VALWAY, Ltd.
Department in charge: Whistleblower Service Center
Address: NCO Sapporo 10F, 1-2-6, Kita 7 Nishi 1-chome, Kita-ku, Sapporo 060-0807
E-mail: naibu24_sc@dm-necvw.jp.nec.com