Principle and Outline
The Daigas Group's view on compliance is that it entails sensible corporate activities based on sound ethics with a particular focus on observing laws and regulations. Ensuring compliance requires that all executives and employees follow laws/regulations and their consciences, in line with the foundations for compliance set forth in the “Daigas Group Code of Conduct”, and act in accordance with in-house regulations and rules. To those ends, we conduct training and educational activities aimed at raising awareness of the importance of compliance, instilling knowledge, and improving the ability to think ethically.
The Daigas Group believes that observing compliance is the most important element in earning the trust of customers and the general public, and that compliance is the foundation on which rests the Group's status as a going business concern. Accordingly, the Group has set up a “Compliance Desk” as one mechanism for promptly ascertaining legal and regulatory violations, fraudulent acts, and other such matters and dealing with these quickly and appropriately.
“Predictive Data Monitoring”
In FY2012 the Daigas Group started a new “Predictive Data Monitoring” initiative to detect signs of potential compliance-related problems. This initiative aims to prevent any compliance-related problems from occurring by detecting unusual changes in the data through regular and continuous data monitoring and by taking proactive measures as soon as possible.
In FY2020, monitoring was conducted on 147 items.
Improving Compliance Awareness
In-house training efforts, etc.
We are continually working to improve compliance awareness through such efforts as training sessions and awareness surveys. For example, we conduct case method training to sharpen the ability to think ethically, and offer “Compliance Coordinator and Staff Seminars” for compliance coordinators and staff who serve as key personnel in the compliance efforts of specific organizations and affiliate companies (including all subsidiaries), training sessions for organizational heads and higher-ranked managerial personnel featuring outside instructors, and tier-specific education for managers and new employees. In addition, we have achieved our goal of 100% for the training participation rate among Daigas Group employees used as a CSR indicator by extending the compliance training directed by individual organizations and affiliate companies.
In addition to providing employees with a variety of information on compliance via the intranet and other means, we undertake educational activities such as soliciting “Compliance Slogans” from employees each year (10,323 submissions were received group-wide in FY2020).
Compliance Coordinator and Staff Seminar
Promotion of Global Compliance
Promotion of global compliance in step with overseas business development
In view of expanding business operations abroad, an English version of the leaflet summarizing the Corporate Principles of the Daigas Group, the “Daigas Group CSR Charter,” the “Daigas Group Code of Conduct” and in-house whistle-blowing contacts used for the internal reporting system was posted on the intranet for dissemination to employees. In FY2020, to address overseas risks, we checked the actual conditions and issues of companies affiliated with the Energy Resources & International Business Unit. In FY2020, we grasped how risks have been addressed at 16 major overseas subsidiaries while modifying risk items listed under G-RIMS, a risk management system developed by Osaka Gas, for use by such overseas subsidiaries. We checked whether preventive measures and early-detecting steps for about 40 risk items had been implemented at the subsidiaries as intended. Then, we took response actions against the risks.
We also conducted on-site surveys at our overseas subsidiaries to determine the status of their environmental compliance and CSR efforts.
Compliance Desks (Hotline)
Compliance Desks set up at Osaka Gas, major affiliated companies and law firms to receive reports from and give advice to parties both inside and outside the Group
The Daigas Group has established “Compliance Desks” at the Head Office, core affiliates, and law offices outside the company to provide a channel for persons who need a place to seek advice on, and report matters of compliance with laws and internal rules. Not only management and employees of the Group, and workers dispatched from manpower agencies to work for the Group, but also management and employees of client companies providing goods and labor to Group companies on a long-term basis can seek advice or make reports by phone, e-mail, or in writing anonymously.
In FY 2020, the “Compliance Desks” received a total of 191 consultations and reports. Upon receipt of a report, an initial examination was made, following which a fair investigation of the facts was conducted and any necessary corrective measures were implemented.
Acting on a report concerning compliance, the Group will take remedial measures if the case is found to constitute a violation of law. Even if no violation is detected, the Group will carry out improvement measures as a way of creating a better working environment and maintaining it, if doing so is deemed necessary for the workplace.
■Number of Consultations
■Breakdown of Report Content
Protection of whistleblowers
Osaka Gas has a rule that deals with compliance-related reports by employees to the Compliance Desk and the subsequent investigation of the matter. Based on this rule, we keep the names of the whistleblower and persons implicated confidential, and prevent retaliatory action against the whistleblower.
The contents of the reports received, results of the investigation into the matters, and corrective measures taken are reported to and shared with the Compliance and Risk Management Subcommittee and the ESG Committee to prevent similar matters.
■Organization of “Compliance Desks”
Dissemination of information on Compliance Desks
A portable card contains a variety of information, including Compliance Desk contact details and frequently asked questions (FAQs). This card is distributed to all employees of the Daigas Group and workers loaned to the Group for temporary periods. Information on Compliance Desks is also posted on the Company's Intranet while a poster aimed at disseminating such information has been updated. Through these measures, believed to be effective, the Company will work on promoting employees' awareness and understanding of Compliance Desks.
The Daigas Group's in-house portal site contains FAQs regarding how to better use a Compliance Desk.
Efforts to operate consultation and reporting systems adequately
Employees seeking advice on violations of compliance, including harassment, often turn to the section in charge of general affairs of their organization as well as Compliance Desks. Osaka Gas sponsors training sessions for those who have newly taken charge of compliance affairs at each organization to have them better respond to complaints and learn how to address compliance-related problems.
About the cease and desist order and the order for payment of surcharge from the Japan Fair Trade Commission
In February 21, 2017, the Japan Fair Trade Commission conducted an on-site inspection of Osaka Gas Chemical Co., Ltd. (“OG Chemical”), a subsidiary of Osaka Gas, on suspicion of violating the Antimonopoly Act in a process of bidding for activated carbon to be used at water purification facilities. Since then, OG Chemical has fully cooperated with the investigation by the Commission. On November 22, 2019, it received a cease and desist order and an order for payment of surcharge under the Antimonopoly Act.
1．Overview of the cease and desist order
OG Chemical was ordered to do the following in a bid for activated carbon to be used at the local government’s water purification facilities and refuse incineration plants:
- ・make sure that any act that violates the provisions of Article 3 of the Antimonopoly Act (prohibition of unreasonable restraint of trade) has been given up;
- ・ensure that a prospective supplier will not be decided on anymore and that each company independently conducts sales activities; and
- ・notify the other business operators involved, local governments that order activated carbon, and business partners of the details of the corrective measures OG Chemical is taking for recurrence prevention and also make these measures thoroughly known to its employees.
2．Overview of the order for payment of surcharge
Amount of surcharge to be paid: 46.1 million yen
3．Corrective actions takenIn response to the orders from the Japan Fair Trade Commission, OG Chemical has paid the surcharge, adopted a resolution at the Board of Directors based on the cease and desist order, notified local governments and business partners of the details of corrective measures, and made the details thoroughly known to its employees. Furthermore, taking the administrative punishment seriously, OG Chemical’s (two) former presidents and (one) Director and Managing Executive Officer voluntarily gave up 10% of their monthly remunerations for one month.
Immediately after the on-site inspection in February 2017, OG Chemical ceased illegal activities. Since then, it has taken measures for recurrence prevention in an attempt to ensure thorough legal compliance, including the development of internal rules to prevent cartels, the implementation of internal audits, and continuous implementation of antitrust education.
We sincerely apologize for the great concern and inconvenience caused to our customers, shareholders, and other people concerned. The Daigas Group will continue to further strengthen and enhance its compliance system and make efforts to restore trust.