Compliance

We carry out our business not only in full compliance with legal requirements but also in ways that ensure sociallyresponsible conduct. Spreading understanding of this among all Hitachi employees is a fundamental management issue.
As economic activity becomes increasingly borderless, there is a growing need for steps to eradicate bribery, corruption,and other illegal behavior in accordance with conditions in the countries and regions where we have operations. As a
global company, we are implementing a consistent compliance structure across the entire Hitachi Group.

Enhancing Our Compliance Framework

Compliance Reporting System

To comprehensively implement our compliance framework, weHitachi has instituted a Group-wide whistleblowing system tohave appointed a senior executive as the head of risk manage-

prevent illegal and unethical behavior, to promptly address infrac-ment for the entire Hitachi Group. Every in-house company andtions, and to enhance our ability to self-regulate. In this system,

key Group company also has an executive handling risk manage-reports go directly to the Compliance Department at Hitachi orment, assisted by a compliance manager (CM). We are also sup-to an outside attorney. This system can be used not only byporting regional Group companies and have appointed

employees within the Hitachi Group, who are able to reportcompliance heads in 11 regions globally.

issues through in-house channels, but also by former employees,

Under this system, policies and measures are shared throughthe Compliance Management Conference, composed of risk

temporary staff, and suppliers.
In addition, we have implemented the Channel to the Board ofmanagement executives from in-house companies and key

Directors system to allow employees to directly report problems

Group companies. In addition, all CMs meet regularly at theanonymously to Hitachi directors. The facts related to all reports

Hitachi Group Compliance Conference to provide information on

are subject to thorough investigation and checking, and people

compliance and to confirm implementation of required actions.

who have identified themselves in the reports are informed ofThe Advisory Committee, consisting of outside experts, con-the investigation results. We make every effort to appropriately

venes regularly to exchange views on the state of compliance ini-deal with situations, including taking remedial action wheretiatives. The insights provided by committee members are utilized

necessary.

to improve policies and actions.
The internal audit section regularly conducts Group-wide

Thorough Export Controls

reviews to verify that each area of compliance is being appropri-

For basic export control policies, we adopt the Hitachi Standards

ately operated. In cases where the reviews identify necessaryof Corporate Conduct, which state: “We shall help maintainimprovements, corrective measures are swiftly implemented.

international peace and security through compliance with traderelated laws and regulations.” We established the CorporateRegulations concerning Security Export Control based on thispolicy in 1987. We carry out strict export control practices in linewith relevant laws and regulations, screening all goods and technologies intended for export against such factors as destination
countries and regions as well as intended end use and end users.
We provide guidance and educational support to Hitachi Group
companies to ensure that all Group companies follow the same
export control policies. In fiscal 2015, we held workshops forGroup companies in the United States, South Korea, and India
providing practical training on export control. During this periodan e-learning program in Japanese, English, and Chinese—ExportControls of the Hitachi Group (Introductory Course)—was introduced and taken by around 113,000 employees at Group companies worldwide.

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Hitachi, Ltd. | Integrated Report 2016

Measures to Prevent Bribery andCorrupt Practices

awareness of compliance issues, including publicizing messages

To deal with global bribery and corruption risks, in fiscal 2013 wefrom top executives, developing company regulations, conduct-referred to the US Foreign Corrupt Practices Act Resource Guide*

ing regular audits, and providing education and training toand other documents to develop various corruption risk scenarios.

employees based on a compliance manual. In fiscal 2015, we

These were used as the basis for a survey conducted at Hitachi

held group education sessions on the Antimonopoly Law forGroup companies outside Japan. By analyzing the survey results,1,263 participants, including all Hitachi sales managers. We also

we identified several companies at risk from corruption. We arereleased an e-learning program on the fundamentals for compli-monitoring and working with those companies with the goal ofance with competition laws and implemented it at Hitachi Group

reducing corruption worldwide.

companies globally.

In 2015 we also created a set of revised rules regarding
prevention of bribery and corrupt practices, which were globally
adopted by Hitachi Group companies.
That same year we released a global version of an e-learning

We are working to prevent further violations and to broaden

Through these initiatives we will continue working to improveand enhance our compliance framework.

Implementing Thorough Tax Complianceprogram regarding the fundamentals of preventing bribery andIn January 2016, we established a set of tax-related regulations

corrupt practices to be utilized among Group companies

with which the entire Group must comply. In connection withworldwide.

the globalization of our business, we are implementing risk

* T he US Foreign Corrupt Practices Act consists of antibribery provisions regarding foreign
government officials and transparent accounting provisions within the Securities
Exchange Act. Enforced by the Department of Justice, it prohibits bribes to foreign
government officials. Transparent accounting, enforced by the Securities and Exchange
Commission, requires companies to show transactions fairly and accurately in theiraccounting records and to maintain effective internal control over accounting.

Preventing Violations of Fair Competition Laws
Hitachi engages in business based on the principles of conformance with the law and business ethics and fair and disciplinedcompetition.
However, Hitachi, Ltd. was found to have impaired the fairnessof a public bid in fiscal 2002 and was penalized in September 2006,
October 2008, and March 2009 for violating the Japanese
Antimonopoly Law. In November 2012, a subsidiary dealing in
automotive components was penalized by the Japan Fair TradeCommission for violating the Antimonopoly Law. In September
2013, the same company was prosecuted by the US Departmentof Justice for violating American antitrust laws, resulting in a plea
bargain, and in January 2016 the company reached a settlement with
the European Commission for a violation of EU competition laws.

­management for taxation that focuses in particular on the points
listed below.
(1) G roup companies strictly comply with all relevant laws andimplement tax management when pursuing their businessactivities, bearing in mind such international tax-compliancestandards as the Transfer Pricing Guidelines for Multinational
Enterprises and Tax Administrations of the Organisation for
Economic Co-operation and Development (OECD), as well asthat body’s Action Plan on Base Erosion and Profit Shifting(BEPS).
(2) Group companies effectively, continually, and proactively
manage tax-related issues as socially responsible organizations, while maintaining Hitachi brand value and seeking tomaximize shareholder value.
(3) G roup companies build sincere and positive relations of trustwith the tax authorities in the regions where the companies
do business, and strive to maintain and develop thoserelations.

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