Anti-Corruption Initiatives in Business Expansion in Emerging Countries

Anti-Corruption Initiatives in Business Expansion in Emerging Countries

While global companies are expanding their business in rapidly growing emerging countries, briberies of foreign public officials have drawing attention. On July 3rd, 2014, we invited Attorney Daisuke Morimoto, who is familiar with handling the anti-bribery related laws and regulations, and asked for anti-corruption initiatives with respect to how Daiichi Sankyo should operate business, what we should consider, and what risk management we should implement.

Shuji Handa Executive Officer, President of ASCA Company Daiichi Sankyo Co., Ltd.
                              Daisuke Morimoto Attorney-at-Law, Admitted in Japan & New York Partner of Nishimura & Asahi Law Firm

Yogosawa
I am Yogosawa from Daiichi Sankyo Co., Ltd, the moderator of today’s interview. I am engaged in promoting compliance management in the Daiichi Sankyo Group as Global Head of CSR.
Mr. Handa will explain Daiichi Sankyo Group’s business expansion in the ASCA regions and initiatives for compliance. Mr. Morimoto, who is specialized in handling anti-bribery laws and regulations, will explain the trend of the anti-bribery laws and regulations.
Katsuyuki Yogosawa Global Head of CSR Vice President of CSR Department Daiichi Sankyo Co., Ltd

Acceleration of Business and Risk for Corruption in Emerging Countries

Handa
ASCA Company has local subsidiaries in 8 countries and regions (see the map below) and sell pharmaceutical products in the regions. China and Brazil have production lines of pharmaceutical products. They also conduct licensing business for the surrounding countries. With an improved standard of living and increased health awareness, the overall market is estimated to show 10% growth a year on average in the next 5 years, and the ASCA regions are essential for the growth strategy of the Daiichi Sankyo Group.
Morimoto
The ASCA regions include regions with a high risk of corruption due to rampant briberies. In addition to measures to anti-bribery laws and regulations in each country that should be considered in communications with foreign public officials in the course of business activities in each country, measures for the extraterritorial application of laws in the United States such as the US FCPA (the Foreign Corrupt Practices Act) should be also considered. The interpretation of the US FCPA significantly varies, and there is a possibility to face several unexpected risks depending on how you approach it.

ASCA Region

Daiichi Sankyo Co., Ltd ASCA Region

Daiichi Sankyo’s Initiatives for Overall Compliance

Handa
We have stipulated in the Daiichi Sankyo Group Corporate Conduct Charter to act with the highest ethical standards and good social conscience appropriate for a company engaged in a business that affects human lives. All employees working in the ASCA regions comply with its spirit in conducting daily activities. In addition, each group company has developed its code of conduct for compliance to respond to country-specific trends of laws and regulations in line with the Charter and improve its promotion of compliance management.
The pharmaceutical business requires government approval and license and is strictly managed in all countries. There is an increased risk of bribery of public officials and other issues due to a high frequency of communication with public officials, and each employee engaged in business needs to operate activities with an awareness of compliance.
Morimoto
I agree with you. It is very important to establish a compliance system and train all employees engaged in business activities. What I want to emphasize with respect to bribery is briberies made by agents and distributors. You may become involved in briberies without realizing. Recent bribery cases have shown that just paying attention to yourself is not sufficient.

Recognition of Corruption Risk as Pharmaceutical Company

Handa
In addition to the approval and licensing activities of pharmaceutical products, pharmaceutical companies consider that contact/communication with physicians, pharmacists, and other healthcare workers for the adoption and prescription of pharmaceutical products are at high risk in relationships with public officials. We need to understand where risks specific to pharmaceutical companies exist and consider countermeasures at each stage.
Morimoto
It is an important initiative for risk mitigation to consider which aspects of business activities are at a higher risk of bribery. Cases related to the US FCPA and bribery cases in emerging countries have recently occurred, and it is essential for pharmaceutical companies to understand and address risks.
Yogosawa
Yes, Daiichi Sankyo is committed to compliance with the laws and regulations that prohibit bribery. Our company Charter requires that all Group companies comply with laws, regulations and rules regarding global corporate activities, and act with the highest ethical standards.

(as of July 3, 2014)