Antimonopoly Act Compliance Program

Established October 31, 2006
Last Revised April 1, 2019

Classification *1 Specific Initiatives
Creating "an atmosphere that does not tolerate collusion"
(control environment)
  1. 1 Stipulate in the Articles of Incorporation that "each employee and board member shall observe laws and regulations, and maintain high ethical standards in their business activity."
  2. 2 At every opportunity, top management shall issue statements and declarations* on Antimonopoly Act compliance (creating a system that will be inherited by the next-generation management team)
    • ・Legal and regulatory compliance will be prioritized in all business activities, and the Corporation will not seek any orders received whatsoever through fraudulent activities
    • ・There is no reason that can serve as self-justification for legal and regulatory violations
    • ・Even the instructions of a superior do not excuse legal and regulatory violations, etc.
    • ・Exchange of information such as appetite from other companies in the same industry that may become competitors is prohibited
    • ・Foster a corporate culture that eliminates barriers between departments and points out each other
  3. 3 Implement strict internal disciplinary actions including compensations to damages to individuals in the event of violation
  4. 4 Disclose in a timely manner the required information such as the declaration of a determination by top management and information related to internal disciplinary actions
  5. 5 An "Obayashi Code of Conduct" for performing our business activities shall be established and added to the "Obayashi Basic Principles" and posted on the home page of the Corporation's intranet
  6. 6 Create an open corporate culture where impropriety can be pointed out
    • ・We will add "proactively provides opinions to superiors" to the evaluation items in personnel evaluations and will work to create awareness through regular training so that there will be a common awareness within the Corporation that an atmosphere allowing people to express their opinions proactively and point out mistakes, even to their superiors, helps to prevent crises and boost corporate value
  7. 7 The recommendation committee will consider the level of legal awareness including antitrust laws and other laws of the personnel when selecting the candidates of Directors
Risk assessment and response
  1. 1 Produce a manual about managing Antimonopoly Act violation risks
    1. (1) After gauging the level and details of the risks of Antimonopoly Act violations, identify violation risks in the Corporation's business activities
    2. (2) Make sure that a specific action plan is established for each division
  2. 2 Establish a consultation office to advise on the Antimonopoly Act (Legal Department)
    The Legal Department will build a system to actively accept legal consultations from business divisions
Creating the "framework to prevent collusion"
(control activities)
  1. 1 Create an action plan and improve the system for thorough Antimonopoly Act compliance
    1. (1) Formulate and revise the "Obayashi Basic Principles"
    2. (2) Establish and operate a Corporate Ethics Committee (Chairman: President, Secretariat: General Administration Department of Head Office)
      1. Hold around four Corporate Ethics Committee meetings each year, and where necessary, report on the committee's activities to the Board of Directors
      2. Establish a branch corporate ethics committee at each branch, and conduct independent corporate ethics promotion activities
      3. Once a year, examine the operational status of measures and consider necessary improvement measures
    3. (3) Establish a corporate ethics promotion system
      1. Corporate Ethics Leaders: assigned Executive Officers and general managers of branches
      2. Corporate Ethics Promoters: Department Heads
      3. Division in Charge of Corporate Ethics Promotion: General Administration Department in Head Office
    4. (4) Promote the entrenchment of corporate ethics initiatives at Group companies
      1. Horizontal development of the Corporation's initiatives at Group companies
  2. 2 Assure the circulation of Antimonopoly Act compliance manuals* and monitor their implementation
    These manuals provide focused explanations of sales activity-related matters that are easily misunderstood and difficult to judge correctly
  3. 3 Create thorough awareness of the action program for actions to take when confronted with acts of collusion, etc.
  4. 4 Conduct regular and continuous education and training for officers and employees
    1. (1) Corporate Ethics Leaders (assigned Executive Officers and general managers of branches) will implement regular training for Corporate Ethics Promoters (Department Heads)
    2. (2) Corporate Ethics Promoters (Department Heads) will implement on-the-job ethics training sessions
      1. In addition to lecture-style training sessions based on training materials, we will hold on-the-job, discussion-style sessions based on case studies posing the question "Could it happen at my own place of work?"
      2. The Corporate Ethics Promoters will collect signatures from the training session participants at their workplace stating they have completed the training and submit them to the General Administration Department in Head Office
    3. (3) After the completion of the on-the-job ethics training sessions given by the Corporate Ethics Promoters, e-learning will be implemented for all employees and officers to measure the effectiveness of the training
    4. (4) Conduct antitrust law compliance training for directors and executive officers
    5. (5) Antimonopoly Act compliance training will be implemented by employee class and for persons in charge of sales and persons in charge of technical divisions
      1. The divisions in charge of the training will collect signatures from the participants stating they have completed the training
    6. (6) The Compliance Officer will visit each branch to provide guidance
      1. The Compliance Officer will hold hearings and provide guidance through individual interviews with the management of each branch
  5. 5 Implement individual specific controls and management
    1. (1) A written pledge that they will "comply with the Antimonopoly Act and in no way engage in acts that violate the Antimonopoly Act" will be collected from the General Manager class of every division, and from the employees of the sales divisions and sales support divisions
      (In addition to the violators themselves, where a subordinate commits a violation, his or her superior will also be strictly disciplined)
    2. (2) All meetings, etc. (including telephone calls and e-mail) with industry peers must be reported to and approved by a superior
    3. (3) Excluding official events held by industry associations, technical associations, and clients, in principle, participation in receptions also attended by industry peers is prohibited
    4. (4) Create an "Antimonopoly Act Compliance Pledge Field" in the internal approval documents used for project bidding
      (The person responsible for the bid will constantly check that there are no acts of collusion in the entire project bidding process, from the calculation of the estimated bid amount to the decision on the bid amount, and affix their seal in the appropriate field)
    5. (5) When a consortium is formed to participate in bidding, written pledges of legal compliance will be exchanged among the constituent members
    6. (6) Clarify the reason for composition and obtain prior approval from the civil engineering and construction headquarters when composing a joint venture with other contractors which are as large as the Company
    7. (7) The Civil Engineering Construction Division will document the flow of bidding decisions and other processes, record the results and the reasons of judgments, and share them among related departments
    8. (8) When joining external groups, their regulations will be checked by the division in charge to ensure that there are no issues in terms of the Antimonopoly Act
    9. (9) When dining with individuals covered by the National Public Service Ethics Act (national public officers, local public officers, and de-facto public officers), a written report will be provided
Timely and accurate transmission of information
(information and communication)
  1. 1 Create and spread awareness of a system for the timely and accurate transmission of information
    1. (1) Create a Corporate Ethics Reporting System as internal notification system (establish an internal point of contact at the Audit & Supervisory Board and Secretariat of the Corporate Ethics Committee, and an external point of contact at an external legal office)
    2. (2) Promote the use of the Corporate Ethics Reporting System and improve the reliability by notifying all employees and officers of the system twice a year, and by providing the following explanations
      1. The whistleblowers will never be treated as disadvantageous after the whistleblowing, and investigations will be held protecting them against any unfair treatments
      2. Using the internal reporting system to prevent violations from occurring helps not only the Corporation, but also, ultimately, those engaged in attempted misconduct
      3. When an individual is aware that wrongdoing has occurred or deems that there is the risk of it occurring, regardless of the individual's involvement, it is mandatory for the person to report it through the office organization or via the internal reporting system
      4. Regarding conduct in violation of the Antimonopoly Act involving unfair bidding or conduct entailing such risks, even when an individual is temporarily involved, leniency in internal disciplinary action for the individual who made the internal report is stipulated
    3. (3) Report to the Outside Directors when the officers of the Company are involved in fraud
Oversight and improvement (monitoring)
  1. 1 Practice regular, continuous monitoring from the standpoint of Antimonopoly Act compliance
    1. (1) Monitoring by Audit & Supervisory Board members, Audit & Supervisory Board, and Audit Department based on the "Bid-Rigging Monitoring Program"
    2. (2) Monitoring from a third-party perspective by the Corporate Ethics Committee members including external experts and the head of the employees'union
    3. (3) The content of e-mails whose recipients or senders are industry peers will be checked by the Internal Audit Department
    4. (4) Audit & Supervisory Board Members confirm the status of compliance with the Antimonopoly Act through regular interviews with directors
    5. (5) Audit & Supervisory Board Members and the Business Administration Department conduct audits not only from "unexpected involvement in the bid-rigging," but also from the viewpoint of whether "executives and employees themselves are involved in bid-rigging"
  2. 2 Self-inspections will be implemented by the Corporate Ethics Leaders and Corporate Ethics Promoters
    1. (1) The Corporate Ethics Promoters will implement regular self-inspections of their own divisions
    2. (2) Corporate Ethics Leaders will gauge the state of implementation of on-the-job ethics training sessions and self-inspections conducted by the Corporate Ethics Promoters
    3. (3) The division in charge of corporate ethics promotion (General Administration Department in Head Office) will implement an annual self-check of each item in this program, and in addition to reporting to the Corporate Ethics Committee, will perform revisions as necessary
  3. 3 Self-checks and monitoring using the J-SOX method
    1. (1) The sales and other divisions will implement self-checks in accordance with the RCM (risk control matrix) corresponding to control methods for the latent risk of acts of collusion in the various operational processes and for their prevention in advance
    2. (2) The Business Administration Department will monitor the state of operations control at the sales divisions, etc., separately from the self-checks implemented by the sales divisions, etc.
    3. (3) The Business Administration Department will implement walk-through audits of bidding projects including non-ordered projects by each branch (public works projects and private projects) as a sampling survey (surveys are held not only to marketing division but also to employees involved in cost-estimation)

*1 Obayashi uses the COSO model to categorize initiatives taken so far to make the Antimonopoly Act Compliance Program function effectively. The COSO model is the de facto world-standard tool for evaluating the effectiveness of internal control systems.
Under the model, the objectives of an enterprise's internal control fall into three categories: 1) effectiveness and efficiency of operations, 2) reliability of financial reporting, and 3) compliance with applicable laws and regulations. To achieve these, five elements are incorporated into day-to-day work processes for each objective: 1) control environment, 2) risk assessment and response, 3) control activities, 4) information and communication, and 5) monitoring. These five elements have to function effectively.

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