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  5. Competition Laws/Anti-corruption Laws

Competition Laws/Anti-corruption Laws

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Approach

Commitment to Competition Law Compliance and Anti-corruption

The IHI Group has established the Basic Code of Conduct for the IHI Group to be followed by all the officers and the employees of all the Group companies. The management, including the President, takes the lead in promoting compliance with all laws, including competition and anti-corruption laws.
By acting in accordance with this Code of Conduct, the IHI Group thoroughly prohibits bribery of all persons, including government officials.

Policies

IHI Group Competition Law Compliance Policy

In order to comply with competition laws, the IHI Group has established the IHI Group Competition Law Compliance Policy, that embodies the IHI Group Code of Action, and is continuously working to prevent anti-competitive behavior. The policy requires each Group company to establish operational standards and appoint a management supervisor who is in charge of compliance in competition laws. It also stipulates that violations of the policy will be subject to strict disciplinary action. In addition, the IHI Legal Division supports the creation of highly effective operational standards that take into account the actual business situations of each Group company.

IHI Group Basic Policy Against Bribery of Public Officials

In order to comply with anti-corruption laws, the IHI Group has established the IHI Group Basic Policy Against Bribery of Public Officials, which further specifies the IHI Group Code of Action, and is continuously engaged in the fight against corruption. The policy prohibits bribery of all persons, including government officials, and unjust or unreasonable expenses or donations, including facilitation payments. It also stipulates that violations of the policy will be subject to strict disciplinary action. In addition, each Group company has established operating guidelines and has defined specific procedures and chief administrators regarding expenses for government officials, thereby working to improve the effectiveness of the regulations.

Governance

As a part of its internal control, the IHI Group regularly conducts audits and provides education, training, and other related activities for each of its internal divisions and IHI Group companies to ensure that they are in compliance with the IHI Group Competition Law Compliance Policy and the IHI Group Basic Policy Against Bribery of Public Officials.
Furthermore, the IHI Group has established a system to identify and address any compliance issues at the earliest possible stage through the Compliance Hotline.
If any serious compliance issues are discovered, the IHI Group will set up an emergency headquarters headed by the Chief Executive Officer (CEO) to quickly and flexibly handle the issue, utilizing the expertise of internal and external experts. The emergency headquarters will follow up the matter until the implementation of measures to prevent recurrence are completed.

Risk Management

Competition Law and Bribery Risk Assessment

The IHI Group conducts regular assessment on risks to competition laws and anti-corruption laws for each division of IHI and each Group company. Assessments are conducted with consideration to the region in which each business operates, the characteristics of products and services, the market environment, and past violation cases (including those of other companies), and appropriate measures are taken according to the level of risk.

Training on Competition Law Compliance and Anti-corruption

In order to prevent anti-competitive behavior to occur, the IHI Group conducts awareness-raising and educational activities on competition law compliance for all the officers and the employees of IHI Group, which cover competition laws in various countries, such as the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade in Japan, the Sherman Antitrust Act in United States, and competition laws in the European Union.
Moreover, in order to prevent corruption, the IHI Group conducts awareness-raising activities and education regarding compliance with anti-corruption laws such as the Japanese Penal Code and the Unfair Competition Prevention Act as well as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act.
Starting in fiscal 2023, the IHI Group rolled out basic e-learning on competition law compliance and anti-corruption to all officers and employees as a principle.
Based on the results of risk assessments, additional training programs are provided to IHI divisions and Group companies according to the level of risk. In addition, the training materials are shared on the company’s internal website so that officers and employees are able to refer to them at any time. Also, the IHI Legal Division considers feedback from the participants and recent consultation cases and reviews the training content, then uses the PDCA cycle to make the training more effective.

Raising Awareness Among Officers and Employees

The IHI Group posts information on competition law and anti-corruption topics on its internal website, which is available to officers and employees. The Group updates such information as necessary while also making an effort to increase knowledge of these topics. Relevant internal rules and guidelines are also posted on its internal website, which officers and employees can read at any time.

Metrics and Targets

Training on Competition Laws and Anti-corruption Laws

Item Scope Unit FY2022 FY2023 FY2024 FY2025
Participants (total) IHI and consolidated subsidiaries People 2,007 51,222 47,246 50,352
(Breakdown by topic) Competition law IHI and consolidated subsidiaries People 622 26,148 24,016 23,371
Anti-corruption law IHI and consolidated subsidiaries People 1,385 25,074 23,230 26,981
(Breakdown by region) Japan IHI and subsidiary companies in Japan People 1,784 50,618 44,288 46,307
Overseas Subsidiary companies overseas People 223 604 2,958 4,045

Number of Violations and Amounts of Surcharges, Fines, etc.

Item Scope Unit FY2022 FY2023 FY2024 FY2025
Competition law Number of violations IHI and consolidated subsidiaries Incidents 0 0 1 0
Amount paid for surcharges, etc. IHI and consolidated subsidiaries Yen 0 0 0 0
Anti-corruption law Number of convictions IHI and consolidated subsidiaries Incidents 0 0 0 0
Amount paid for fines, etc. IHI and consolidated subsidiaries Yen 0 0 0 0

Expenditure to Lobbying, Political Organizations, Economic Organizations, Industry Organizations, etc.

Item Scope Unit FY2022 FY2023 FY2024 FY2025
Expenditure Lobbying, interest groups IHI Millions of yen 0 0 0 0
Political organizations*1 IHI Millions of yen 10 10 10 10
Economic and industry organizations*2 IHI Millions of yen 177 178 208 241
Other (such as expenditure related to ballot measures or referendums) IHI Millions of yen 0 0 0 0
  1. The recipient of the expenditure is the People’s Political Association.
  2. The main recipients of expenditure to economic and industry organizations are the Japan Business Federation (Keidanren), the Japan Society of Industrial Machinery Manufacturers, and the Japan Bridge Association.

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