Prevent corrupt practices

All employees agree that the AEON MALL Group will not pursue profit through bribery or other fraudulent means under any circumstances.
Although group employees abide by internal rules and regulations established by AEON MALL and each group company, each individual in our group promises to consider, judge, and take action in line with social justice when asked to comply with a demand by public officials or others. Group employees must not damage our corporate culture by furnishing benefits, paying expenses, making donations, or providing aid for improper purposes. Executives and employees must also refrain from improper behavior that could impede the healthy advancement of any particular country or region. Finally, executives and employees recognize that any such behavior will have an adverse effect the group’s approach to compliance. In addition, group employees affirm their strong commitment and dedication to high ideals, approaching anticorruption in a serious and sincere manner.
Toward the implementation of these principles, AEON MALL Group has established the Basic Rules for the Prevention of Bribery. Employees of the group comply with and follow these rules as a code of conduct. To instill and enshrine corporate ethics in our company, we provide training to directors and employees at every level of our organization. We also incorporate corporate ethics into the behavior evaluation sections of our goal management system.
The AEON Code of Conduct provides for anti-bribery policy, which includes not accepting gifts or hospitality from business partners. The AEON Mall Co., Ltd. employment regulations also clearly provide that employees must not accept gifts or hospitality in connection with work without the company’s permission and employees must not lend company money or goods to other individuals or use such for personal gain. AEON MALL Group companies also abide by these rules and regulations.

Basic rules for the prevention of bribery

AEON Mall Co., Ltd. Basic Rules for the Prevention of Bribery

The Company has identified bribery as a key materiality, and we have defined the following as KPIs through 2030.
(1) Conduct anti-bribery education and raise awareness to ensure compliance with the Basic Rules for the Prevention of Bribery
(2) Comply with anti-bribery provisions in employment regulations
(3) Revise the Basic Rules for the Prevention of Bribery on an ongoing basis, reporting to the president and CEO at least once a year on the status of compliance, and engaging in the consistent implementation of corrective measures

Oversight of executive corrupt practices prevention

AEON MALL has established a Risk Management Committee, chaired by the HQ general manager of administration, to deliberate on issues and measures pertaining to the promotion of risk management at the group level and to report proceedings to the Management Council. In addition, important issues are also reported to the board of directors and presented in our annual report.
The department in charge of internal auditing creates an annual audit plan according to the Internal Audit Rules and conducts internal audits to enhance the effectiveness of risk management. The department also reports the plan of the annual audit to the board of directors.
The Risk Management Committee and the Compliance Committee have been established as subordinate organizations of the Management Council. The Compliance Committee holds discussions five times a year to maintain and strengthen the compliance system. The committee conducts case studies on past incidents, particularly cases of misconduct or fraud, that may lead directly to compliance risks. The committee also discusses underlying causes and measures to prevent recurrence. The committee conducts risk surveys on a regular basis. These surveys include matters regarding corrupt practices in general. Significant cases and reports (e.g., the nature and number of misconduct cases) identified are addressed by the board of directors. Education for management and employees consists of annual training in the basics of our corporate philosophy reflecting the AEON Code of Conduct, as well as awareness-building education based on a pre-defined topic for the particular year in question. Combined, these trainings and educational activities form the foundation of our compliance structure.

Under the direction of Compliance Committee, we have established as system in which our human resources, legal, accounting, internal audit, and other departments conduct day-to-day operations to implement polices based on the Basic Rules for the Prevention of Bribery.
Each of our subsidiaries organizes its own compliance committee to establish a system to prevent bribery, appoint a committee chairman, conduct approval procedures based on the internal rules of the subsidiary, and report regularly to the AEON MALL Compliance Committee regarding implementation status.
To avoid the increasing risk of bribery accompanying the expansion of business in China and ASEAN countries, the Japan Headquarters established the Basic Rules for the Prevention of Bribery on September 1, 2018. The headquarters also formulated related procedural rules, which came into effect on December 21 of the same year following a notice period. To avoid the risk of bribery in accordance with these rules, we have imposed stricter procedures for certain expenditures and have otherwise strengthened bribery prevention efforts further. Subsidiaries in Japan and overseas have enacted similar rules and mechanisms to prevent bribery, especially in areas where the risk of bribery is higher due to rampant corruption.
Regarding the governance system in China, We have established a dual audit system for internal audits which consists of the AEON MALL Japan Headquarters Management Audit Department and the AEON MALL (China) Investment Co., Ltd. Management Audit Department Both departments will conduct regular internal audits and monthly accounting audits. AEON MALL (China) Investment Co., Ltd. was established in July 2013 for the purpose of consolidating all China business operations. The company functions as the headquarters for all China businesses that AEON MALL develops, and is structured to manage all China business operations.

Anti-corruption measures and processes

When an employee becomes aware of a violation of the Basic Rules for the Prevention of Bribery, he or she shall immediately report to the Helpline/AEON MALL Hotline established by the AEON MALL Group company to which the employee belongs. Upon receiving the report, the general manager of the Human Resources Management Department will make a report and take necessary measures in accordance with the Risk Management Rules.
In addition, if an employee violates any laws related to bribery, the Basic Rules for the Prevention of Bribery, or internal regulations established by said rules, he or she will be punished in accordance with Employment Regulations, etc. The Basic Rules for the Prevention of Bribery provide that no retaliation in any form whatsoever is permitted against the employee who made the report.

Employees resolve any questions or doubts regarding the provision of benefits to public employees through consultations and discussions with the Legal Affairs and Compliance Department or the Compliance Committee. The Legal Affairs and Compliance Department or the Compliance Committee consults with outside experts such as attorneys to obtain opinions and advice for any questions or doubts that arise, or if any matters remain unclear.

Corruption risk assessment process

The Company conducts regular risk surveys covering all aspects of corruption, including bribery and abuse of superior position, to assess corruption risks in our businesses. We submit matters of particularly high risk to the board of directors for oversight and evaluation, as well as for corrective and preventive measures.
We also established anti-bribery regulations to deal with bribery at the legal and cultural levels in each country.

Employees are required to follow the procedures below when providing entertainment, gifts and other benefits to public employees.
Employees must follow the pre-approval procedures, which include submitting designated application forms and supplementary information (Flowcharts and supporting materials for entertainment, gifts and other benefits) to the Compliance Committee, as well as written approval from the chairperson. If a separate approval request based on internal regulations is required, the draft of that approval request and attachments must be attached to the application form.

Procedures to address the risk of corruption in high-risk businesses

Each department receives recommendations regarding risks.

Due diligence for new customers regarding corruption

When doing business with new business partners, we conduct checks to ensure the supplier in question is not an antisocial force and that the supplier is a company that engages in compliance.

Before appointing any representative or consultant, employees must perform due diligence of the party through an eligibility review. The review addresses honesty, integrity, and ability to conduct business. Additionally, even when the representative or consultant has been appointed in an ongoing capacity, due diligence identical to that described in the previous section, and based on business performance and the actual situation up to that point, must be carried out by conducting an eligibility review.

Departments conducting risk assessments related to corruption

The Risk Management Committee designates the department in charge of handling the assessment.

Protection mechanisms for all employees to ensure confidentiality and anonymity

We have established the Helpline/AEON MALL Hotline as an internal reporting contact point. A Union 110 Hotline has also been separately established at our labor union. The Helpline/AEON MALL Hotline and Union 110 Hotline are available to all employees working at AEON MALL. The whistleblowing system also covers reports related to anti-corruption and bribery. Whistleblowers can choose to remain anonymous or confidential. We have installed similar helpline systems at our subsidiaries in the future. We ensure that users of this helpline are not subject to reprisal. In the event a report is filed via this hotline, we carefully investigate the details reported. Where unacceptable behavior is proven, we take disciplinary action according to internal rules. AEON MALL (or the department in question) also drafts measures to prevent recurrence, shared for company-wide implementation. The Compliance Committee receives a report of the measures.
We have established Public Interest Whistleblower Protection Regulations to provide mechanisms for employees to consult about or report violations of laws or regulations by organizations or individuals. In addition to setting up the Helpline/AEON MALL Hotline and Union 110 Hotline contact points within the company, AEON MALL takes appropriate measures to cooperate with the department in charge of reporting to AEON Code of Conduct 110, a contact point for the entire Group. The status and content of reports will be reported to the Compliance Committee and the Board of Directors on a regular basis.

Anti-corruption training for employees

The Human Resources and Education Departments have established and implemented a system to provide employees with regular compliance education and training to prevent bribery of bribery of public employees. The Compliance Committee formulates education and training policies and supervises the implementation of education and training programs.
To instill and enshrine corporate ethics in our company, we provide training to directors and employees at every level of our organization. We also incorporate corporate ethics into the behavior evaluation sections of our goal management system. All employees, including those at overseas subsidiaries, are informed about the AEON Code of Conduct established by AEON. We conduct related in-house training annually. The AEON Code of Conduct requires employees to engage in fair transactions with suppliers and stipulates that employees shall not commit bribery. We hold seminars in China and ASEAN countries to prevent misconduct by executives and employees of local corporations.

Employee training, including anti-corruption policies

• 2020 AEON Code of Conduct / Human rights training
• Progress related to matters identified by the previous committee meeting and response service level improvement questionnaire along with the eradication of workplace harassment
• Utilization and understanding of the Joint Declaration
• Compliance training for DV business officers

To ensure that the Basic Rules for the Prevention of Bribery, enacted on September 1, 2018, has been communicated and understood, we conducted an e-learning program for all employees related to bribery prevention. Our in-house attorneys conducted compliance training for all employees related to managing compliance risk in China for the purpose of preventing commercial bribery.

Political contribution Funds

Contributions are within the scope of the Political Funds Control Act.

Number of employees disciplined or dismissed due to compliance violations

We confirmed relevant facts and disciplined the individual in question in response to a report of ambiguous working hours and power harassment.

We recorded 12 cases involving disciplinary actions, one more than in the prior fiscal year. Of the cases reported, zero individuals were dismissed.

Fines, Penalties, and Settlements Related to Corruption

We noted no serious violations of laws or regulations due to non-compliance with anti-bribery regulations during fiscal 2020. We also noted no fines or other payments related to corruption.