Basic Approach

The ENEOS Group is committed to thorough compliance and has designated high ethical standards as a core element of the Group Philosophy and the Group Code of Conduct. No significant legal violations occurred within the Group in fiscal 2022.

ENEOS Group Code of Conduct (excerpt)
  1. 1.Compliance
    1. (1)We ensure compliance with laws, contracts, and corporate regulations and follow social norms and customs in an appropriate manner.
    2. (2)We shall neither ignore nor participate in any compliance violations.


The Internal Control and Compliance Committee has been established under the Executive Council to ensure the implementation of effective and efficient internal control and compliance. The committee, comprising relevant officers and department general managers, regularly confirms the performance of and issues related to the Group’s internal control and compliance activities and deliberates policies for future activities (see Comprehensive Internal Control Structure).

Material Issues, Plans and Results

Fiscal 2022 Targets, Results and Progress

Evaluation:Achieved/Steady progressNot achieved

Material ESG Issue Initiative Target (KPI) Results/Progress
Compliance Legal compliance inspections Conduct legal compliance inspections

(no major issues)
Implement training on important laws and regulations Strengthen management of personal information and provide legal training according to business needs

Operation of whistleblower systems Revise and appropriately apply rules based on the amended Whistleblower Protection Act


Major Initiatives

Internal Control and Compliance Inspections

We conduct internal control and legal compliance inspections annually as a voluntary initiative at each work site.
We inspect each business operation to ascertain compliance with Group-wide rules (internal control standards) and whether the corporate culture values integrity and ethics. In addition, given the rapidly changing management environment, we use a risk control matrix to ascertain whether risks have been appropriately identified and assessed, and whether effective controls for these risks have been developed and implemented. We also utilize interviews of all staff by managers to identify compliance issues, including questions and concerns, in order to prevent legal violations and to identify and correct any issues at an early stage.
The Group identified approximately 800 compliance issues, questions, and concerns in fiscal 2022. None of the issues significantly impacted management. The Company resolved 80% of the issues within the fiscal year and is taking steps to promptly address the remaining 20% of unresolved issues.

Compliance Violations (Fiscal 2023)

Deficiencies under the High Pressure Gas Safety Act at ENEOS

On June 9, 2023, the Ministry of Economy, Trade and Industry cited deficiencies under the High Pressure Gas Safety Act and revoked certification of ENEOS Corporation as an Accredited Completion Inspection Executor for the Ukishima North Area and Ukishima South Area of the Kawasaki Refinery (including certification of the Ukishima North Area as a Specified Accredited Completion Inspection Executor under the Regulation on Safety of Industrial Complexes). As a certified business operator under the High Pressure Gas Safety Act, we are required to rigorously carry out voluntary safety management, and we sincerely apologize for this incident.
To prevent recurrence of a similar situation, the company is implementing prevention measures, including steps to ensure a high level of safety awareness and strengthen the safety management system. All Group companies are also broadening and strengthening compliance initiatives and working to quickly restore trust in the company.

Compliance Training

Strong awareness among all officers and employees is an important element in achieving thorough compliance. To this end, we issue ENEOS Group Philosophy cards and ENEOS Group Code of Conduct handbooks to all personnel and regularly provide compliance training for officers and employees.
In fiscal 2022, we conducted company-wide training on compliance, competition laws, anti-bribery, the Act on the Protection of Personal Information, and insider trading regulations, as well as anti-monopoly law training for sales departments to raise employee awareness and prevent violations of laws and regulations in each business. We will continue to provide training based on select topics as part of our ongoing efforts to ensure thorough compliance.

Establishment and Operation of Whistleblower Systems

Whistleblowing Workflow

To enable prompt detection and corrective action in the event of legal violations, the Company and some of its subsidiaries maintain compliance hotlines for their employees and those of contractor companies.
The hotlines are part of whistleblower systems aligned with the Whistleblower Protection Act. In addition to establishing whistleblower hotlines with external specialists as reporting contacts to respond to both real-name and anonymous reports, we have established a system that enables appropriate responses to whistleblowing, through means such as adopting Group whistleblower systems that enable whistleblowing to the reporting contacts established by ENEOS Group companies. We have also introduced whistleblower systems, including some with multilingual capabilities, for overseas subsidiaries where we have ownership of more than 50%.
Based on internal regulations, when whistleblowing is received, the content is reported to the relevant officers, including the chairman and president, and an investigation is launched under the responsibility of the general manager of the Legal & Corporate Affairs Department. The investigation results and any necessary corrective and recurrence prevention measures are reported to the officers. Individuals who identify themselves when conducting whistleblowing are also informed of the investigation results.
To ensure that employees do not hesitate to use the system, they are informed through the intranet, posters, and training that the identity of those conducting whistleblowing is strictly confidential and that whistleblowing can be conducted even if the employee is not sure if the matter constitutes a legal violation.
In fiscal 2022, the Group recorded 227 reports via its whistleblower systems.

Compliance with Competition Laws

The Group maintains a policy that the entire Group must thoroughly comply with competition laws in Japan and other countries. We have put into place necessary company rules, and all officers and employees work under a clear commitment by management to ensure compliance with competition laws.
Specifically, we have established the ENEOS Group Competition Law Compliance Policy, which strictly prohibits officers and employees from engaging in any activity, including cartels, that violates competition laws of any country. The policy clearly states that no activity that would violate competition laws shall be justified by any reason of business custom, the authority or position of the violator, maintaining or expanding business or making profits.
Our legal division checks each department every year for planned interactions with business competitors, assessing those interactions for competition law risks, and requesting the submission of meeting records detailing the interactions. Through these and other efforts, we work to prevent competition law violations before they occur.
We also conduct competition law compliance training for officers and employees on a regular and ongoing basis.

Operation of the Competition Law Compliance Policy

The Group has established and published the ENEOS Group Competition Law Compliance Policy pursuant to the basic principle of compliance with competition laws set out in “7. Equitable and fair transactions” in the ENEOS Group Code of Conduct. This policy clearly states the Group’s commitment to comply with competition laws.
We will communicate this policy to and require compliance of all those within the scope of application of the ENEOS Group Code of Conduct. In addition to implementing this policy within the Group, we will also request that the companies and others that make up our value chain also cooperate with this policy.

Prevention of Bribery and Corruption

The Group participates in the United Nations Global Compact, and puts the 10 principles, including anti-corruption, into practice. We have established and published the ENEOS Group Anti-Corruption Policy, which clearly states that the ENEOS Group will not engage in corrupt practices. With regard to anti-corruption, the Group does not tolerate bribery in any form. We have internal regulations in place to prevent bribery at our Group companies, and all officers and employees actively work under a clear commitment by management of all Group companies to prevent bribery. Specifically, a mechanism has been put in place to check for bribery involving travel expenses, business entertainment, gift giving, and donations, taking into consideration the laws and regulations of each country. We also implement third-party due diligence procedures to prevent our involvement in bribery through a third party such as an agent, agency, or distributor.
Employees can access relevant internal regulations at any time via the company’s in-house intranet or other means. They also undergo various forms of compliance training on the prevention of bribery. In this manner, we are working to raise employee awareness of this important issue.
Internal controls, compliance inspections, and internal audits are used to continuously monitor whether these mechanisms are functioning properly. The results of monitoring are reported to the Company’s Board of Directors. Every year, we conduct regular screenings for all divisions and business sites in Japan based on our anti-bribery procedures. We also conduct risk surveys at the commencement of business relationships with new business partners, and if risks are indicated, we take necessary risk mitigation measures and determine whether or not to commence the business relationships. Overseas subsidiaries where we have ownership of more than 50% are also required to establish and comply with anti-bribery guidelines. We also have a system in place to promptly detect and rectify problems through our whistleblower systems.
In fiscal 2022, there were no serious violations and no fines, administrative monetary penalties or settlements imposed regarding corruption or bribery. In addition, no internal disciplinary action was taken in connection with corruption or bribery.

Operation of the Anti-Corruption Policy

Based on the basic rules on the prevention of bribery and corruption established within “7. Equitable and fair transactions” and “8. Appropriate relationships with governments and public administrations” of the ENEOS Group Code of Conduct, the Group formulated and published the ENEOS Group Anti-Corruption Policy, which clearly stipulates that the Group will not engage in corrupt practices.
Going forward, we will continue to raise awareness of and require compliance with this policy within the scope of application of the ENEOS Group Code of Conduct. In addition to applying this policy within the Group, we will request the cooperation of companies in our value chain as well.

Political Contributions

The Group thoroughly complies with Japan’s Political Funds Control Act. The Group prohibits contributions to individual politicians as prohibited by law and monetary donations to specified political groups or political parties exceeding the legally permitted threshold.
In fiscal 2022, the Group did not make any political contributions (donations).

Honoring Tax Liabilities

Companies have a corporate social responsibility to appropriately honor their tax liabilities in the countries and areas in which they conduct their business activities. Therefore, we have formulated the ENEOS Group Tax Matters Policy to ensure that tax liabilities are appropriately honored throughout the entire Group.

Timely and Proper Disclosure of Company Information

Disclosure Framework and Workflow

  1. 1Whether timely disclosure is required is determined through consultation among the director responsible, the general managers of the General Administration, Legal & Corporate Affairs, and Controller departments, the information disclosure officer (general manager of the Investor Relations Department), and the general managers of any other relevant departments or offices.
  2. 2 Disclosure of information regarding events that require urgent disclosure may be made on the authority of a representative director without being reported to the Board of Directors.

The Company is fully aware that the timely and proper disclosure of corporate information is a key element of healthy capital markets. Accordingly, the Company makes efforts to ensure prompt, appropriate, and fair disclosure of information to shareholders and other investors with the aim of promoting transparency in management.
Systems are in place to obtain, manage, and disclose information on the Company, as well as information on ENEOS Group companies, quickly and accurately. Information that is subject to the Timely Disclosure Rules is made public through the timely disclosure system (TDnet) provided by the Tokyo Stock Exchange and others, and the same information is made available on the Company’s website. Information that is not subject to the Timely Disclosure Rules is disclosed proactively based on basic policies and disclosure standards.
The Company has prepared Rules for the Prevention of Insider Trading, and systems have been created to communicate regulations regarding insider trading throughout the ENEOS Group.