Fair Trade

Compliance Program

The Fair Trade Act aims to promote balanced development of the national economy by stimulating free and fair competition among companies, improving creative business activities and protecting consumers.

Major Contents

The Compliance Program varies in operation depending on the features of the company and the industry. However, the following 7 key requisites shall be satisfied to ensure effective operation of the Compliance Program.

  • 1. Declaration of management's will on the voluntary compliance
  • 2. Appointment of Compliance Managers
  • 3. Preparation and distribution of compliance guidebook
  • 4. Execution of education program
  • 5. Implementation of monitoring system
  • 6. Disciplinary action against the employees violating the regulations related to Fair Trade
  • 7. Implementation of document management system

Benefits from the Compliance Program

For companies under the Compliance Program, if they accidentally violate the Fair Trade Act, legal restraints such as penalties, publication of notices in newspapers and criminal prosecutions will be alleviated by classifying the introduction and operation status of the Compliance Program into the following two categories.

Benefits from the Compliance Program
CP grading (grade A or better) Relief Standard
Grade A or A above 10% within
Grade AA or AA above 15% within
Grade AAA or AAA above 20% within
Voluntary Applying the general clauses to the relief by the voluntary readjustment (20% before the outset report, 10% after the report)

Excuation overview

Background

The Fair Trade Law encourages fair and liberal competition of companies and also promotes creative sales activities, protects customers, and induces the balanced development of public economies. POSCO published and distributed its Fair Trade Guidelines in order to ensure strict behavioral standards are followed by its employees in their observation of Fair Trade laws. POSCO has also put forth efforts to eliminate existing customs that violate Fair Trade laws. POSCO has been executing the Compliance Program since 2002 in order to comply with the policies of local authorities and to prevent any disadvantages to the company caused by violations by strengthening the preventive actions against viola.

History

  • '03. 06 : POSCO Code of Conduct declared (1,000 members signed to abide by Fair Trade)
  • '04. 03 : Insider Trading Committee established under Board of Directors
  • '06. 03 : Evaluated Most Excellent by the Korea Fair Competition Federation
  • '06. 12 : External evaluation on CP operation (Acquired ¡°AA¡± CP level evaluation from the Fair Trade Commission)
  • '07. 04 : 'Fair Trade Academy' hosted to uplift consultation abilities of subsidiary personnel in charge of Fair Trade
  • '08. 12 : External evaluation on CP operation (Acquired ¡°AA¡± CP level evaluation from the Fair Trade Commission)
  • '09. 03 : Fair trade agreement execution evaluation on subcontracting by the Fair Trade Commission (A+ Most Excellent)

Performance

POSCO has been carrying out tasks for the Compliance Program since its introduction in 2002.

Performance
Recommendations The promotion accomplishment of our compliance program
1. CEO's declaration of the commitment to compliance
  • CEO's declaration of the commitment to compliance and its notification to all employees when ethical standards were proclaimed (June, 2003)
  • Reconfirmation of the commitment to the fair and transparent trade (Oct, 2007)

    * Contributing as the profit-maker for the customer through the fair competition

  • Sending out the 5th anniversary message in commemoration of the proclamation of ethical standards for pan-POSCO's executives and employees (June, 2008)

    * The fair and transparent business to all interested people, respectful communication, and the practical actions are in need

2. Appointment and management of the compliance manager
  • Alteration of the compliance manager in the fair trade according to the decision of the board of directors (April, 2008)
3. Framing and distribution of the compliance handbook
  • First preparation of the handbook for the commitment to compliance (1996) and its revision (2004, 2005, and 2007)
  • Publishing the 2006 casebook for each section (purchase, enterprise conjunction, sales)
  • Publishing the 2007 guideline for the commitment action to compliance in marketing
  • Publishing the 2008 guideline for the commitment action to compliance in purchase
4. Operating educational programs
  • Improving the e-running fair trade education program (Oct, 2002) and creating the reformed (Nov, 2005) & added programs (Aug, 2001)
  • Administering the education for staffs in charge by the specialists outside the company
5. Establishing the internal monitoring system
  • Operating the self monitoring system of each department by the compliance checklist
  • Operating consultation/counseling and monitoring for the vulnerable parts at the same time
  • Appointment and management of the executive leader for each area (Sept, 2004)
6. Establishing the sanction system about the lawbreaker
  • Operating the punishment rules about the gravity of the offence
  • Administering the prompt sanction against the lawbreaker
7. Managing the fair trade-related documents
  • Systematic management of the compliance program-related documents (using KMS)
8. Organizing the compliance council
  • Operating 'the compliance council' with 14 fair trade-related department managers
9. The evaluation of the operation
  • Acquiring the grade AA (valid for two years) by the Fair Trade Commission¡¯s CP evaluation in 2008
  • Surveying the employees to evaluate the internal recognition

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