Strengthening of Compliance
Companies around the world are being required to comply with increasingly strict regulations in all regions. The Group's Compliance Committee has been established to maintain and promote awareness of compliance, and it deliberates and makes resolutions regarding the Group's annual compliance plan, policies for compliance-related activities, and other important compliance-related matters.
The Group's Compliance Committee convenes twice yearly and reports its agenda items to the outside directors by way of the Board of Directors.The NYK Group has set September as the month for strengthening compliance, during which it conducts comprehensive compliance checkups and provides opportunities for staff members*1 to review their conduct and work processes. One activity designed to raise employee awareness of compliance issues is a compliance survey that is distrib-uted throughout the Company followed by several opportunities to provide feedback via the Company's internal web bulletin board.
In April 2020, the Company revised its internal rules related to compliance. In addition to clarifying the rules for reporting compliance incidents (including potential incidents), we held multiple in-house briefing sessions*2 regarding the revised rules and the importance of compliance.
- *1Staff members including employees, secondees from other companies, and temporary staff.
- *2In-house briefing sessions regarding revised rules held 10 times in remote format from May 2020 to June 2020 (total of 690 participants)
The NYK Group's Compliance System
- *Reports to a full-time audit and supervisory board member periodically and as required
List of Training for Enhanced Compliance
The Group strives to improve awareness regarding compliance, antitrust laws, and the prohibition of bribery, among others, through group training and e-learning.
|Status of Training in Fiscal 2019||Number of programs||Number of participants|
|Training on compliance*1||16||553|
|Training on antitrust law and the prohibition of bribery, etc.*2||199||3,135|
|e-learning for the above
- *1Since fiscal 2002, we have held 441 training sessions with 12,488 participants.
- *2Training was conducted at 111 domestic and overseas group companies in 29 countries, with eight training sessions in Japan and one session every 12 to 18 months in each region overseas. Since the program started in 2009, the program has had some 39,375 participants.
The NYK Group recognizes its social responsibility to comply with the laws of all countries and to fulfill its obligation to pay taxes, and constantly strives to improve taxation compliance.
In recent years, various problems have arisen with companies seeking to evade paying taxes by taking advantage of differences between corporate activities, national tax regulations and international taxation. NYK believes international taxation frameworks, such as the OECD's Base Erosion and Profit Shifting (BEPS) project, are essential for securing taxation transparency, and we seek to comply with such international standards.
The Company provides several consultation services for employees to discuss concerns about or report workplace misconduct, harassment, and non-compliance activity, including the Yusen Chat Room providing connections to other employees and outside lawyers and a telephone consultation line operated by outside contractors. The Yusen Chat Room is available to roughly 70 Group companies in Japan and provides connections to six personnel, including an outside lawyer, available specifically to listen to a wide range of compliance matters and provide consultation, reporting, and whistleblowing on the matters.
Every effort is made to ensure the person contacting the service incurs no adverse consequences and, if desired, the contact remains completely confidential with the objective that the information provided will help improve the work environment. Group companies overseas also contract with outside entities to provide internal reporting contact points at business sites in each region to support reporting and open discussion by directors and employees.
NYK's Whistleblowing System Certified by Japan's Consumer Affairs Agency
NYK's whistleblowing system was certified as a "Whistleblowing Compliance Management System"(*) by Japan's Consumer Affairs Agency.
By increasing the effectiveness of its whistleblowing system, NYK seeks to build a healthy corporate culture and ensure the highest standards of ethics and integrity to promote incorporating ESG (environmental, social, governance) criteria into business strategies.
- *Whistleblowing Compliance Management System (WCMS)
In case a company's whistleblowing program meets the criteria for certification based on the "Guidelines for Private Enterprises Regarding the Development and Operation of Internal Reporting Systems Based on the Whistleblower Protection Act" established by the Consumer Affairs Agency, the designated registration agency will issue a certificate to the company and grant it the right to use the official WCMS mark.
Complying with Antitrust Laws
In the global shipping industry, which is subject to the principle of the freedom of shipping (free navigation in international waters and innocent passage in territorial waters), anyone is free to enter or leave the market, which means that it is easy for competition to intensify. To reduce the potential negative impacts from that, such as interruptions to the stable shipping network and reduced shipping and industry competitiveness in emerging countries, the industry has historically been exempted from the scope of antitrust laws under certain conditions.
With these legal protections diminishing in recent times, it has become common for shipping companies to cooperate through vessel sharing agreements and slot exchanges in order to fulfill infrastructure responsibilities, maintain and improve diverse navigation networks, and manage the frequencies of port calls. As such, companies in the industry encounter many opportunities to make contact with competitors.
Since September 2012, the NYK Group has been subject to investigation by overseas authorities for allegedly violating antitrust laws regarding the shipping of automobiles and other cargo. The Company and some overseas group companies are also subject to class action damage compensation suits in multiple regions.
We offer all our stakeholders a sincere apology for the concerns that we caused.
We implemented various measures including the president declaring thorough compliance with antitrust law, building and operating a control network spanning the entire Group in Japan and overseas, and educating and raising employee awareness through training and manuals on antitrust law and rules concerning contact with other companies in the same industry. Nevertheless, we solemnly accept the fact that this situation occurred and are constructing and initiating a system to ensure absolute compliance with antitrust laws while continuing to raise the awareness of all group employees* and executive officers.
- *Includes company employees, personnel seconded from other companies, and temporary staff
Measures for preventing reoccurrence (continued from 2013)
- Annual meetings of the Executive Committee Overseeing Thorough Law Compliance (*1)
Meetings are chaired by the president and attended by directors, executive officers, audit and supervisory board members and general managers.
September 2019: Meeting held with 107 attendees
March 2020: Meeting postponed due to COVID-19
The Executive Committee Overseeing Thorough Law Compliance has met 14 times in total as of March 2020
- Formulate prevention guidelines and conduct risk assessments of all operating departments of group companies in Japan and overseas
- Reviewing new investment projects by in-house lawyers, etc.
- Obtaining written oaths regarding antitrust laws and competition law compliance
- Adopt an application system (*2) for each officer and employee at headquarters seeking to participate in industry gatherings
- *1The NYK Group previously maintained the Executive Committee Overseeing Thorough Antitrust and Anti-bribery Law Compliance dedicated to ensuring complete Group compliance with the Antimonopoly Act, laws related to bribery, and economic sanctions.
In March 2019, the committee was renamed the Executive Committee Overseeing Thorough Law Compliance, and its scope was broadened beyond compliance to specific laws to cover compliance of all laws, regulations, and licenses.
- *2The system is designed to limit opportunities to interact with companies in the same industry and to require pre-approval to attend necessary meetings and a report on the discussion content after a meeting.
Thorough Prohibition of Bribery
In January 2014, the Company updated its basic policy and guidelines related to prohibiting bribery to reflect the Japan Unfair Competition Prevention Act (prohibiting the bribing of foreign public officials), the U.S. Foreign Corrupt Practices Act, and the U.K. Bribery Act 2010. Since fiscal 2015, the Company has conducted anti-bribery training for employees in Japan and overseas.
In addition, the Company has been a member of the Maritime Anti-Corruption Network (MACN) since fiscal 2015. MACN is a global network engaged in activities to prevent and eliminate corruption in order to realize fair trade across the entire maritime shipping industry while investigating the root causes of corruption. To reduce the incidence of corruption, MACN has established cooperative relationships with major stakeholders, such as government officials, government authorities, and international organizations.
In April 2016, the Company established a system to prevent the bribery of overseas public officials. When considering new businesses in high risk countries, our legal department screens candidate partners and agents for bribery issues and provides advice and checks, including establishing anti-bribery clauses when creating agreements.
Exercising Due Diligence Regarding Bribery
In April 2016, we established a system under which legal departments confirm matters related to bribery when the launch of new business in a high-risk country is being considered. In addition to screening partner and agency candidates for bribery-related problems, suggestions regarding incorporation of clauses related to the prohibition of bribery when concluding contracts are provided and relevant matters are confirmed.
Legal consultation system
When considering new investment and the launch of new businesses, our legal department implements risk management via screening and due diligence in order to conduct checks regarding antitrust laws, bribery, and economic sanctions.
Certification from anti-bribery business organization
The Group has received below certification from TRACE International, a globally recognized anti-bribery business organization and leading provider of third-party risk management solutions.
"TRACE has completed a TRACE certification due diligence review of Nippon Yusen Kabushiki Kaisha. Certification by TRACE signifies that Nippon Yusen Kabushiki Kaisha has completed internationally accepted due diligence procedures and has been forthcoming and cooperative during the review process. TRACE certification underscores Nippon Yusen Kabushiki Kaisha's commitment to transparency in international commercial transactions.
TRACE certification ID: TC3182-6961 (Valid through: 2021/1/15~2022/1/14)
- More Information:
As part of its lobbying activities, NYK makes political contributions that comply with the political funds control law, are based on company performance, and are made in accordance with proper internal procedure.
Also, to remain socially responsible and expand business value, we carefully review our lobbying activities and make contributions at amounts considered acceptable.