This Global Anti-Corruption Guideline (this “Guideline”) intends to establish a transparent and sound corporate culture by specifying the Code of Conduct for officers and employees of Lotte and informing officers and employees of Lotte Corporation, Lotte Group affiliates and its overseas subsidiaries (hereinafter individually referred to as the “Holding Company”, “Domestic Affiliates” and “Overseas Subsidiaries” and collectively referred to as the “Company” or the “Companies”) of international standards so that they comply with anti-corruption laws and regulations of each country such as the Criminal Act and the Act on Prohibition of Improper Solicitation and Provision/Receipt of Money and Valuables of Korea, the Foreign Corrupt Practices Act (“FCPA”) of the United States, Bribery Act of the United Kingdom, and OECD Anti-Bribery Convention (hereinafter domestic and international anti-corruption laws and regulations are collectively referred to as the “Applicable Laws”).
2. Scope of Application
(1) This Guideline applies to the Holding Company, Domestic Affiliates and Overseas Subsidiaries.
(2) The Company shall make efforts for anti-corruption and perform and handle necessary works therefor by referring to the Applicable Laws and this Guideline.
3. Compliance with Applicable Laws Related to Anti-Corruption
(1) Officers and employees of the Company shall comply with the Applicable Laws in performing their duties, and shall not ask or request their subordinates or co-workers to complete tasks in violation of the Applicable Laws.
(2) Officers and employees shall not be indemnified for any act in violation of the Applicable Laws even if such act is generally accepted by the society or in accordance with business practices.
(1) Bribes are offered to stakeholders with respect to their duties or offered by stakeholders to officers or employees in connection with their duties. In no event shall giving or taking bribes be allowed. Officers and employees who receive or are asked to offer bribes shall reject such offer and immediately report to the dedicated team for compliance.
(2) Bribery includes, but is not limited to:
1. Any and all economic profits such as money, securities, real property, goods, lodging ticket, membership, entry ticket, discount ticket, invitation ticket, admission ticket and right of using a real estate;
2. Provision of entertainment such as food and beverages, alcoholic beverages or golf or accommodations such as transportation or lodging;
3. Other tangible or intangible economic benefits such as cancelling debts, offering jobs or granting rights and interests (including letting children of a stakeholder participate in an internship program without following ordinary procedures and commissioning work to a company owned by the family of a stakeholder); and
4. Usage of service, facility and asset of the Company free of charge.
(3) A stakeholder to whom anti-bribery applies refers to any person, organization or group who has direct or indirect interests in connection with business activities of the Company and falls under any of the following. If it is unclear whether a person constitutes a stakeholder or not, such person should be regarded as a stakeholder and be confirmed by a dedicated team for compliance within the Company:
1. Public official
A. A person recognized as a public official pursuant to the applicable laws of the relevant country where the Companies are located (hereinafter the “Relevant Country”);
B. A person engaged in legislation, administration or jurisdiction of the Relevant Country;
C. Officers and employees of a company in which the government of the Relevant Country has contributed to more than half of the paid-in-capital or exercises substantive control over the operation;
D. A person who works for public organizations or agencies established under laws and regulations to conduct public affairs such as education and healthcare pursuant to relevant laws and regulations of the Relevant Country;
E. Candidates running for office in the Relevant Country (candidates who run for a governor, mayor, etc.), political parties or officers or employees thereof; and
F. Any other person acting for a public international organization.
Any third party engaged in transactions with the Company in connection with the Company’s business regardless of its name such as customer, trader or vendor.
(4) If bribes are offered due to coercion, the relevant officer or employee shall notify the dedicated team for compliance thereof immediately after escaping from the situation.
5. Facilitation Payment
(1) Facilitation payment refers to the payment of money and valuables or other interests in order to facilitate ordinary and repetitive work carried out by government officials such as public officials and is not allowed in principle. In particular, payment of money and valuables or other interests to make government officials such as public officials exercise inappropriate discretion in areas where they have discretion shall not be provided because they can be recognized as bribery.
(2) However, facilitation payment may be allowed to the extent permitted by the Applicable Laws of the Relevant Country.
(3) Any officer or employee who intends to provide facilitation payment shall consult with the dedicated compliance team in advance and then proceed with the payment based on the opinion of the dedicated compliance team.
6. Meal, Gift, Travel and Entertainment
(1) Gift, meal and other entertainment may be allowed if they are permitted by the laws and regulations of the Relevant Country or do not go beyond common courtesy for purposes such as facilitation of work and social relationship.
(2) However, meal and other entertainment intended to inappropriately affect stakeholders such as government officials including public officials, customers, vendors and third parties or vice versa in connection with the Company’s business shall not be allowed.
(3) Whether meal, gift, travel and other entertainment is allowed or not shall be determined based on the following standards:
1. Whether it is lawful and customary;
2. Whether the amount thereof is appropriate; and
3. Whether consideration (such as reward and benefit) is paid therefor.
(4) The Company may establish and implement separate guidelines (on the amount of meal, value of gift, etc.) or detailed standards (hereinafter the “Guideline for Implementation”) on meal and entertainment for each company or place of business to the extent that they do not violate the Code of Conduct for officers and employees of Lotte and this Guideline.
(1) The Company may make a donation to charitable institutions, etc. for purposes of charity, public interest and paying back to the society to the extent permitted by the Applicable Laws of the Relevant Country.
(2) However, donations are prohibited if they are likely to be regarded as bribery for purposes such as receiving unjust benefits in a relationship with a stakeholder. Any officer or employee who has questions in connection therewith shall consult with the dedicated team for compliance first before discussing or executing a donation.
8. Report on Breach or Suspected Case
(1) Any officer or employee who finds or suspects breach of this Guideline and other Applicable Laws shall report to the dedicated team for compliance or the reporting channel.
(2) The Company shall indicate on the reporting channel and inform that any violation or suspicious situation may be reported through the reporting channel of the parent company or the Holding Company.
(3) Any person who becomes aware of the details of the report or the reporter shall keep reports and secrets of reporters in strict confidence.
9. Measures against Breach
(1) With respect to officers and employees who act in violation of the Applicable Laws of the Relevant Country, Code of Conduct for officers and employees of Lotte and this Guideline, the Company shall take disciplinary action appropriate for such violation in accordance with the Company’s HR policy and laws and regulations related to labor of the Relevant Country.
(2) After analyzing the cause of breach set forth in Paragraph (1), the Company shall take necessary measures such as education and improvement of related work procedures in order to prevent reoccurrence.
10. Measures Taken During Transactions with a Third Party
(1) The Company shall fully inform third parties engaged in transactions with the Company of anti-corruption obligations including compliance with the Applicable Laws of the Relevant Country and this Guideline, and state related matters in the agreement.
(2) The Company shall include in the agreement that if a third party engaged in transactions with the Company breaches anti-corruption obligations, the Company shall be entitled to take measures such as investigation, claim for damages and termination of agreement.
(3) However, if it is not allowed to specify anti-corruption obligations in the agreement under laws and regulations of the Relevant Country or there is any reasonable cause in light of circumstances such as nature of transaction and progress of negotiation, it may not be reflected in the agreement.
11. Submission of Letter of Commitment
Officers and employees of the Company shall submit a letter of commitment once a year, in which they promise to comply with the Code of Conduct for officers and employees of Lotte and this Guideline.
Unless there are other special circumstances, the Company shall incorporate the key details of this Guideline into a corporate policy and ensure that officers and employees of the Company comply with the policy; provided, however, that such policy may be appropriately amended or modified according to the laws, etc. of the Relevant Country.