Compliance

Basic Approach

Compliance at the Daifuku Group means acting in good faith and complying with not only the internal and external rules, applicable laws, and regulations, but observing social norms and ethics in all aspects of the Group’s business. The Group has established a Group Code of Conduct that sets out the behavior that all officers and employees should practice, and we are working to ensure group-wide awareness of compliance through the distribution of booklets and training programs.

Group Code of Conduct (extract)

Basic Stance

  • We will act in accordance with applicable laws, rules, regulations, social norms and ethics.
  • We will place safety as a major premise in all aspects of our business activities.
  • We will remain committed to the creed of “Hini Arata” as we take on new challenges and make changes for the better.

1. Compliance

We will act in good faith and comply with all applicable laws, rules, regulations and social norms of each country in all aspects of our business activities.

Group Code of Conduct

Promotion System

The Compliance Committee, chaired by the CEO, was established to ensure that all the Group officers and employees are aware of our mission and role as a leading company in our industry to comply with all applicable laws and regulations, our Articles of Incorporation, the Group Code of Conduct, and other rules and regulations, and ensure sound and high-growth global operations. The Committee, an advisory body to the Board of Directors, comprises all directors, officers, and subsidiary managers, and serves as a headquarters for investigating and responding to serious compliance violations regarding various rules and regulations. The Group Code of Conduct is reviewed in accordance with changes in the times, and is approved by the Board of Directors after careful examination of its contents.
Further, in addition to legal affairs-related work, the Legal and Compliance Division prepares and administers compliance-related regulations, including anti-bribery and competition law violations, to ensure that every employee not only complies with laws and regulations, but also conducts themselves with good faith and consistent with social norms.
The Audit Division evaluates the effectiveness of the Legal and Compliance Division's efforts to prevent illicit activities, including corruption, and confirms the existence of illicit activities through internal audits. Important matters are reported to the Board of Directors as appropriate.

Major Initiatives

Whistleblowing system

We have established a whistleblowing system for the early detection of illicit activities and misconduct that may lead to violations of the law or our internal regulations, and to take appropriate action. In addition to the internal reporting desk, we have set up an external reporting desk (outsourced by a neutral company) that provides multi-lingual support.
This reporting desk allows anonymous reporting and is available not only to executives and employees of Daifuku and its Group companies, but also to business partners with ongoing dealings. To make effective use of this system, operating rules are stipulated in the Whistleblowing System Rules and its operating standards, and these encompass its function as a whistleblowing system under the Whistleblower Protection Act.
The rules primarily set forth that the Internal Reporting Secretariat is responsible for the administration of the system, verifies the facts of report, determines the course of action to take, and handles investigations among other duties. Investigations differ depending on the severity of the reported case, the degree of urgency, and whether or not there is involvement of upper management. Should a compliance problem be identified through the investigation, corrective action and measures to prevent a recurrence are taken. Critical problems are reported to the Compliance Committee and the Audit & Supervisory Board. In addition, we impose an obligation to confidentiality on those involved in whistleblowing operations and protect whistleblowers so that they will not receive any disadvantageous treatment for filing a report.
To enhance the effectiveness of this system, top management communicates messages through the internal company networks and conduct compliance training for employees on an ongoing basis. In particular, we are working to raise the level of trust in this system by making it clear that whistleblowers are not only legally protected under the Whistleblower Protection Act, but also that whistleblowers use this system without fear of retaliation for reporting.
In fiscal 2021, there were six instances that the whistleblowing system was used, and these reports were related to labor (5 incidents) and illicit conduct (1 incident).

Anti-corruption

In addition to declaring our respect for human rights in our management philosophy, the Group Code of Conduct also shows respect for human rights and stipulates that we act properly in accordance with applicable laws, regulations, social norms and ethics. Moreover, the entire Group works to prevent corruption and bribery. We have also signed the United Nations Global Compact in 2014 and have clarified our stance on anti-corruption in the 10 principles.
The issue of bribery is a serious risk that may directly lead to the tarnishing of our corporate value. Involvement in bribery in emerging and developing countries where the rule of law has not yet been established may distort the proper enforcement of regulations by the host government of the other country and may encourage corruption in the society of that country as a whole. For this reason, we have established the Group rules on the provision of entertainment and gifts and the Group rules on the receipt of entertainment and gift-giving to set forth guidelines for the conduct of transparent business dealings by officers and employees of the Group. Moreover, we have established detailed rules on prevention of bribery regarding the provision of entertainment and gifts for high-risk countries, defining prohibited acts for entertainment and gifts, travel expenses, contracts with agents and consultants, facilitation payments, etc., as well as clarifying the specific procedures to be followed. In addition, we have prepared guidelines in the form of FAQs that can be used by all employees in their daily work to make the intent of the system easier to understand and to disseminate it more widely. Therefore, based on our internal rules, we verify the presence or absence of any illicit provision or receipt of advantages. Further, an internal audit is carried out regularly to verify that this system is running accordingly.
Internal audits confirm the status of compliance within the Group, including the operation of anti-bribery controls and security trade controls, through regular audits and ongoing monitoring, and instruct the Group to take corrective measures when problems are discovered.

Compliance education and training

The CEO sends out messages to all employees via the company intranet to communicate the Group’s policy on compliance, including on the prevention of corruption. We are also providing regular education and awareness on compliance to all employees through various training programs, so as to thoroughly familiarize everyone with corporate ethics.
As business transactions with various countries and regions continue to increase with the globalization of business, in addition to complying with the various laws of each country, including anti-corruption laws and security export control laws, we are making efforts to establish and spread an awareness of compliance by holding lectures on respecting human rights and outlining professional ethics.
In fiscal 2021, we conducted 18 different kinds of training and education on compliance that included anti-corruption. We created materials in both the Japanese and English languages regarding anti-corruption, and carried out e-learning courses based on these, while placing particular emphasis on training and follow-up for employees in Japan and overseas with the authority to receive and place orders. In April 2021, the Daifuku Group Compliance Guidebook, which includes explanations of each item in the Group Code of Conduct, specific examples and FAQs, was created in multiple languages, and e-learning courses were successively carried out on this Compliance Guidebook and the mentality of compliance.

Training examples

  • Training on bribery and the competition law
  • Rank-based training
  • Global staff training
  • Training by business division
  • New employee training

Compliance Enhancement Month

We have set every October as Compliance Enhancement Month, during which we carry out initiatives to raise compliance awareness among our employees. The program for 2021 was a lecture by a legal specialist and a panel discussion seminar on governance held online (Teams) for executives, including outside directors. The recording was later distributed globally via the company intranet in Japanese and English. It was also published in the company newsletter. These initiatives familiarize our employees with compliance.

Preventing anti-competitive behavior

In the Group Code of Conduct, the Group clearly states our commitment to compliance with competition laws and other rules and to promoting fair trade. In addition, a message regarding compliance with competition laws is sent out from the CEO through the Group’s internal network explicitly stating the company's position of not accepting any act of profiting from noncompliance.

Response to anti-social forces

The Group Code of Conduct stipulates the Group’s policy of taking a firm stance against forces and organizations that pose a threat to the order and safety of civil society and of never having any relationship with these forces and organizations, and all officers and employees of the Group are fully aware of the Group’s policy.

Political and administrative relationships

Regarding political activities, we do not provide donations, favors, or other forms of assistance to any specific political party or politician. For political contributions, donations or other support to any organizations, etc., we comply with the relevant laws and regulations and follow the proper procedures and methods. In fiscal 2021, we made no political contributions.

UK tax strategy

Through material handling, the Group aims for further growth by balancing business activities and social soundness. In addition to contributing to the development of the country and the region by implementing a fair tax payment, we disclose our tax strategy in the UK.

UK Tax Strategy(PDF: 54KB)