Compliance

Compliance goes beyond merely following the letter of the law. In its true sense, compliance means corporations, as members of society, also living up to the expectations and earning the trust of all stakeholders and fulfilling their social responsibilities.

Priority Activities in Fiscal 2010

- Formulate the fiscal 2010 Compliance Committee activities plan
- Review the fiscal 2009 action plans for divisions, branches and offices and formulate the fiscal 2010 action plans.
- Publish the 7th edition of the "Compliance Manual" and collect written pledges.
- Implement a new system of compliance administration for industryspecific laws.
- Respond to the comments made by the Audit Department in fiscal 2009.
- Conduct compliance surveys.

Fiscal 2010 in Review

We approved the Compliance Committee activities plan for fiscal 2010 according to the PDCA (Plan-Do-Check-Act) process, reviewed annual action plans for divisions, branches and offices and formulated plans for the new fiscal year. We implemented a new system of compliance administration for industry-specific laws and conducted compliance surveys.

Compliance System

The Marubeni Group regards compliance to be a top management priority. In 2002, we strengthened our compliance system by establishing the "Compliance Committee," which is directly overseen by the President, and creating the "Compliance Manual.2 We continuously strive to improve the system.
The activities of the "Compliance Committee" in fiscal 2010 included: (1) approval of the fiscal 2010 Compliance Committee activities plan, (2) review of the fiscal 2009 action plan and report of the fiscal 2010 action plan, (3) report on the progress of enhancing the administration system for industry-specific laws and regulations, (4) response to the comments made by the Audit Department in fiscal 2009, and (5) adoption of compliance surveys conducted by external survey firms.

Organization of the Marubeni Group Compliance System

Excerpt from the Compliance Manual: Introduction

"When you are faced with a choice between integrity and profit, choose integrity without hesitation."

If we do not follow this direction and choose an easy option that results in our corporate brand being damaged, it will take a long time and a lot of energy to restore our brand. We shall not take shortcuts in the pursuit of a quick profit; rather we shall choose the right pathway even if it involves a detour, taking one step at a time. Each and every one of you should re-assess your position to confirm that your pathway:
- does not violate any law;
- is one that you can tell your family about with confidence;
- is one that you would be happy for your children to adopt;
- is one that you can be proud of if it be reported in the newspapers or on TV;
- does not enable others to take advantage of our weakness;
- is not a shortcut that allows you to enjoy an easy life at the expense of others.

If you are ever in any doubt as to any of the above, please revisit this "Compliance Manual."

Compliance Manual Pledge

The Marubeni Group distributes the "Compliance Manual" to all executives and employees of Marubeni Corporation, as well as all executives and employees of each of the Group companies. An electronic copy is published on our intranet and extranet, and is made publicly available via our website.
In fiscal 2010, following the publication of the 7th edition of the "Compliance Manual," all Marubeni executives and employees were asked to pledge to adhere to its precepts as a measure to renew their awareness of compliance. The "Compliance Manual" is reviewed and revised each year to reflect new laws and regulations and changes in the business environment. When the 8th edition was edited for fiscal 2011, the titled "Prohibition on Bribes and Matters relating to the Exchange of Presents and Client Entertainment" was revised to reflect the new British anti-bribery law.

Compliance Survey

Every 2 years the Marubeni Group contracts an impartial external provider to conduct a compliance survey on our behalf. The most recent survey was conducted in February 2011 with new questions on communication between employees and their supervisors (e.g., "Do you think your boss actively listens to the opinions/suggestions of those he/she manages?"). The survey firm will analyze and review the responses received from a total of 10,785 executives and employees of 63 major Group companies, including Marubeni itself.

Compliance Systems of Domestic Group Companies

Each of the companies within the Marubeni Group has also been developing its own compliance system suited to its business. Every year, the Chairman of the "Compliance Committee" visits the main Group companies to be briefed on their activities and to directly communicate the importance of compliance. During fiscal 2010, the Chairman of the "Compliance Committee" visited 19 domestic Group companies.

Compliance Systems of Overseas Offices and Subsidiaries

Overseas offices and subsidiaries have also been creating compliance systems suited to the laws and business practices of their respective countries. Major overseas offices and subsidiaries reviewed their fiscal 2009 compliance action plans and formulated their fiscal 2010 compliance action plans.

Compliance Education and Training

The Marubeni Group has developed the Compliance e-Learning Training Program to provide staff with the knowledge required to put compliance into effect. As of March 31, 2011, a total of 14,000 people from 83 Group companies have participated in the program.
E-learning training programs and group training programs are also provided to keep our staff updated on revisions to applicable laws and regulations, as well economic developments and social movements. These theme-based training sessions are timely provided and include such topics as intellectual property rights, subcontractor regulations (specifically, the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors), document administration, insider trading regulations, and laws and regulations about waste treatment and sanitation. Compliance is also a subject taught on other occasions, such as at group training sessions conducted by each division, orientation for new employees, and job grade-specific training courses.
To ensure compliance at overseas offices, the Chairman of the "Compliance Committee" has taught training courses at Marubeni America Corporation, while the Secretariat has provided Group training courses in the ASEAN region (Marubeni Philippines Corporation, Marubeni ASEAN Pte. Ltd, P.T. Marubeni Indonesia, Marubeni Thailand Co., Ltd., and Marubeni Corporation Kuala Lumpur Branch), and at Marubeni (Beijing) Trading, Co., Ltd., Marubeni (Shanghai) Co., Ltd., Marubeni (Guangzhou) Trading Co., Ltd., and Marubeni Hong Kong & South China Ltd. Altogether, a total of 611 Japanese and local employees and other employees from Group companies attended the compliance training sessions. Compliance e-Learning training for local staff at Marubeni's overseas subsidiaries was also extended to local staff at other overseas Group companies.

Enhancement of the Administration System for Industry-Specific Laws

We undertook a full review of the administration system for industry-specific laws at all departments and divisions including domestic Group companies to ensure complete observance of these laws. After creating flowcharts for specific business transactions, we generated lists of the laws involved in each. Every year, we review these lists to ensure compliance. In order to strengthen the compliance and administration system for each law, we extended the use of the quick notification and law search systems from Marubeni Corporation to other Group companies in January 2011.

"Door of Courage"

If misconduct does occur within a company, it is important that it be curtailed at the initial stage. For this reason, a system is required whereby, if a problem arises, it is communicated immediately to top-level management via reporting lines. While the Marubeni Group aspires to create an open and free environment where any person can seek advice on any topic, for some matters, reporting through ordinary means may be difficult.
To address this situation, the Group established the "Door of Courage" reporting and consultation hotline, by which all members of the Marubeni Group can consult directly with the "Compliance Committee" or with 1 of the 2 external legal counselors (1 male and 1 female). This ensures that reports and consultations are held in the strictest confidence and will not become the basis for any unfair treatment. In fiscal 2010, the team received 1 or 2 reports each month.
With the aim of making the "Door of Courage" known as widely as possible, the system is introduced at every opportunity, such as during training programs. Also, the "Door of Courage Q&A" has been posted on the Marubeni intranet and extranet to create a more user-friendly environment.

Product Safety Management

Marubeni has established a product safety management system, based on internal company regulations, that stipulates the structure, system and other items related to product safety management. Each division generates its own "Product Safety Management Manual" to ensure the safety of the products traded by the Marubeni Group.