Ethical Management

As a global company, LOTTE Chemical will strive to fulfill its ethical responsibilities that meet the demands of various stakeholders
and the society, andto practice transparent management.

Code of Ethics

The Code of Ethics is a standard for correct thinking, judgment, and action to embody the corporate philosophy of “creating a prosperous future” based on the management guidelines of "creation of customer-oriented values, harmonization of nature with humankind, sustainable growth of the company, and development of joyful corporate culture."
Lotte Chemical has enacted the Code of Ethics that the Company and its employees must observe to fulfill its social responsibility as a corporate citizen, pursue the common interests of its stakeholders, the nation, and humankind, and grow into and remain as the leading global company.

Chapter 1 Ethics for Customers

1-1. Customers are the source of Lotte Chemical’s existence.
Lotte Chemical ponders and determines all management matters from the customer’s point of view, and serves the customers by creating value.

1-2. Lotte Chemical is honest with customers, respects the opinions of customers, and keeps its promises with customers.

1-3. Lotte Chemical never uses customer information for any purposes other than its intended purpose without the prior consent of the customer.

Chapter 2 Ethics for stockholders

2-1. The employees of Lotte Chemical do their best to increase the market value of company shares with faithful management through innovation and creativity.

2-2. Lotte Chemical complies with the laws and principles of corporate management and maintains transparency.

2-3. Lotte Chemical listens to the candid opinions of the stockholders.

Chapter 3 Ethics for Employees

3-1. Employees of Lotte Chemical act rightfully in accordance with social norms and high ethical values as well as positive laws to maintain the honor and personal dignity of the company and to earn respect and trust from their colleagues and customers.

3-2. Employees of Lotte Chemical actively and creatively contribute to the company through bold endeavors, innovation, cooperation, and harmony with a sense of duty in their work.

3-3. Employees of Lotte Chemical are fairly treated according to their ability and performance regardless of regional or academic connections, gender, etc.

3-4. Employees of Lotte Chemical do not use company property for personal use and do not disclose company information obtained through company activities. Employees of Lotte Chemical create a pleasant workplace atmosphere by not offering gifts, making loans, or providing solidarity guarantees with each other and by avoiding offensive conversations or sexual harassment.

3-5. Executives of Lotte Chemical cope with opportunities and crises by bearing in mind their social responsibility in actively dealing with opportunities and crises, and set an example for acting in accordance with international standards of corporate management.

3-6. Lotte Chemical passionately recognizes the dignity and value of each individual employee as a human being and strives to enhance the quality of work life.

Chapter 4 Ethics for Suppliers

4-1. Lotte Chemical provides equal opportunities to its suppliers and trades acceptable products at fair prices to ensure mutual benefit.

4-2. Lotte Chemical does not make unreasonable demands or receive illicit money or entertainment by taking advantage of its superior position. Lotte Chemical explains the purpose and spirit of this code to its suppliers and encourages them to follow it.

Chapter 5 Ethics for the Nation and Society

5-1. Lotte Chemical respects the values of the nation and society, complies with the relevant laws, and develops the company through sound business activities to contribute to national development by creating social wealth and improving quality of life for the people.

5-2. Lotte Chemical does not involve itself in politics.

5-3. Lotte Chemical strives to protect the environment and resources by developing and selling eco-friendly products, recycling waste materials, conserving materials, and by conducting education and training.

5-4. Lotte Chemical always strives for the safety of its communities, customers, and employees and works to prevent accidents through education and training.

Rule of Conduct

Purpose of enactment

LOTTE Chemical aims to contribute to the Company's sustainable growth and the common prosperity of the nation and humankind with "Creating prosperous future" as its management philosophy.
Accomplishing the goal begins with the establishment of a fair and transparent corporate culture, and LOTTE Chemical has enacted the Action Guidelines for the Code of Ethics that our employees should observe and practice.

Applicable subjects

Employees of LOTTE Chemical should adhere to these rules faithfully and act in accordance with the following guidelines concerning all stakeholders of the Company including the stockholders, customers, business partners, vendors, social organizations, and government agencies.

Responsibilities and Duties

Chapter 1 Customers/Clients

1-1 Lotte Chemical examines the point of view of its customers and clients and strives to satisfy them.
1) Lotte Chemical holds customer/client satisfaction as the top priority and aims to provide the best products and services at reasonable prices. Lotte Chemical handles the reasonable demands of customers promptly and accurately.
2) Lotte Chemical always treats its customers and clients politely and courteously.

1-2 Lotte Chemical keeps its promises with customers and clients.
1) Promises to customers and clients must be strictly observed for product supply, technical support, and customer complaints. If Lotte Chemical fails to keep a promise in a timely manner, the company shall promptly notify the customer of the reason and follow-up plan and seek their understanding.
2) Lotte Chemical shall not deceive the customer or provide false information under any circumstances.

1-3 Lotte Chemical protects the information and rights of customers.
1) Lotte Chemical manages and protects the customer/client’s property, intellectual property rights, trade secrets, and other valuables with the same duty of care as the company's assets, and does not disclose them, provide them as security, or transfer them to any third party without the prior consent of the customer or client.
2) Lotte Chemical shall not disclose customer or client’s information to any third party without the prior consent of the customer or client.

Chapter 2 stockholders

2-1. Lotte Chemical maximizes corporate value through faithful management.
1) Employees of Lotte Chemical establish management strategies from a long-term perspective and give their best efforts to produce high business performance and enhance corporate value.
2) Employees of Lotte Chemical strive to help the company cope with the changing market proactively and to prepare for future uncertainty through creative thinking and constant innovation.

2-2. Lotte Chemical complies with the law and maintains transparency related to corporate management.
1) Lotte Chemical’s management shall comply with the relevant laws and regulations and shall follow democratic and rational principles and procedures.
2) The decision-making, execution, and financial status of Lotte Chemical shall be processed, generated, and maintained according to the relevant laws and generally accepted accounting standards.

2-3. Lotte Chemical respects the fair opinions of stockholders.
1) Lotte Chemical respects the fair opinions of stockholders and strives to reflect them in management.

Chapter 3 Employees

3-1. Employees of Lotte Chemical seek the mutual growth of the company and individuals by establishing ethical values.
1) Each employee of Lotte Chemical shall always have an honest and sincere attitude with pride and confidence for being a part of Lotte Chemical.
2) No employee of Lotte Chemical shall seek personal interest using their position or title.
3) An employee of Lotte Chemical shall not neglect their duties for any personal purpose during work hours, and shall not engage in illicit acts such as drinking, gambling, or private conduct within the workplace.
4) An employee of Lotte Chemical shall not copy or use software owned by a third party without legitimate authorization.

3-2. Employees of Lotte Chemical shall contribute to company development with a progressive attitude and creative thinking.
1) Each employee of Lotte Chemical shall share the values and goals that the company pursues, and shall complete the tasks assigned according to the company management policy.
2) Each employee of Lotte Chemical shall maximize the performance and efficiency of the business with active cooperation and communication between colleagues and the relevant departments.
3) Each employee of Lotte Chemical shall always strive for self-development to become a leader in the era of globalization.

3-3. Lotte Chemical treats its employees fairly according to their ability and performance.
1) Lotte Chemical shall not discriminate against its employees according to their gender, academic background, age, religion, place of origin, etc., and shall treat employees according to the appropriate standards.
2) Employees of Lotte Chemical shall not breach the unity and harmony of the company by creating factions based on ancestry, region, or school relations.
3) Lotte Chemical, executives, and managers shall motivate their employees to improve their performance by treating and compensating them justly according to their ability and performance.

3-4-1 Employees of Lotte Chemical do their best to protect the company’s assets.
1) An employee of Lotte Chemical shall not use the company's property, equipment, materials, etc. for personal use.
2) An employee of Lotte Chemical shall not disclose any information regarding the company, customers, or suppliers acquired during their business duties to a third party or use it for personal purposes without prior consent of the supervisor and the information subject.
3) Each employee shall make every effort to prevent leakage of company information by strictly managing the ID and passwords needed to use computers and devices.

3-4-2. Employees of Lotte Chemical do not engage in monetary transactions with each other.
1) Employees of Lotte Chemical shall not accept gifts from each other except in the following cases:
① Gifts from a senior employee to a junior employee
② Gifts provided between department members on anniversaries such as birthdays
③ Gifts as an expression of gratitude and recognized to have no expected repayment
2) Employees of Lotte Chemical shall not engage in loans, joint guarantees, or any other monetary transaction with each other except for gift money for congratulatory occasions or condolences that are recognized as the social norm.

3-4-3. Employees of Lotte Chemical shall not harm the company atmosphere with offensive speech, behavior, or sexual harassment.
1) All employees of Lotte Chemical shall not harm the dignity of the company with vulgar language or attire, and shall not breach the unity of the organization by defaming or slandering any other colleagues or employees.
2) Lotte Chemical conducts training for prevention of sexual harassment at least once a year, and each employee strives to create a pleasant workplace through mutual respect and consideration.

3-5. Executives of Lotte Chemical recognize that they are in a position of social responsibility, and develop their management capabilities to enable the company to grow as an internationally competitive company.
1) Each executive of Lotte Chemical strives to contribute to the well-being of humankind through transparent management and the creation of new value with the goal of mutual growth of the company, the nation, and society.
2) Each executive of Lotte Chemical acquires internationally leading innovative knowledge and experience on corporate management in advance and applies it to the management of the company.
3) The places where business activities are conducted respect the social value of the area, whether at home or abroad, and give the most possible effort to avoid conflicts with local citizens.

3-6. Lotte Chemical recognizes the human dignity of individuals and strives to improve the quality of life.
1) Lotte Chemical seeks to provide a safe and comfortable working environment for its employees and to create a pleasant workplace.
2) Lotte Chemical does its best to improve the health, education, culture, environment, and welfare areas needed for the happiness of its employees and their families.
3) Lotte Chemical respects the autonomy and creativity of each employee and strives to build a mature labor-management relationship based on trust, balancing performance and compensation.

Chapter 4 Suppliers

4-1. Lotte Chemical strives to establish transparent and fair trade practice for shared growth with suppliers.
1) Lotte Chemical grants fair opportunity when a new qualified company intends to begin business with Lotte Chemical.
2) The registration and contract of the supplier are determined in an objective and fair manner according to the standards and procedures established in advance by Lotte Chemical.
3) All employees of Lotte Chemical do their best to transfer their expertise in management, technology, and production to the greatest possible extent so that suppliers can grow with Lotte Chemical.

4-2. Employees of Lotte Chemical do not make unreasonable demands such as for money or entertainment by using their superior position.
1) The person responsible shall explicitly explain the reason in writing when terminating business with a registered supplier.
2) The department responsible shall institute periodic collection of suppliers’ opinions, promptly process claims of protest, objections, and demands from a supplier, and inform them of the result immediately.
3) An employee of Lotte Chemical shall not receive any money, entertainment, or convenience from a supplier or stakeholder in relation to the business of Lotte Chemical. Although there may be an exception if the level is acceptable by social norms, any case that exceeds the socially acceptable level or has any implicit expectation should be notified to the Ethics Office through the supervisor immediately.
4) An employee of Lotte Chemical shall follow the procedure for reporting the receipt of money or other gifts according to the “Bylaws of Enforcement of the Code of Ethics” if he or she could not avoid receiving the money or other gifts.
5) An employee of Lotte Chemical shall not engage in actions that impose a burden on customers, suppliers, or stakeholders by reason of congratulatory or consolatory events.
6) An employee of Lotte Chemical shall not engage in any monetary transaction (loan, guarantee, collateral, etc.) with customers, suppliers, or stakeholders for personal purposes.
7) An employee of Lotte Chemical shall not use (through partnership, investment, brokerage, etc.) any customer, supplier, or stakeholder for personal gain.

Chapter 5 Nation and Society

5-1. Employees of Lotte Chemical comply with national laws and create social wealth through sound business activities.
1) Employees of Lotte Chemical shall respect social values and obey the relevant laws and regulations of the region where Lotte Chemical conducts its business activities, whether at home or abroad.
2) Lotte Chemical contributes to national development by creating jobs and diligently paying taxes, and each employee actively volunteers to help their socially underprivileged or neglected neighbors.
3) Lotte Chemical makes sure to prevent any harm to the area where the company’s business is located, and strives to strengthen ties with residents.

5-2. Lotte Chemical does not involve itself in politics.
1) Lotte Chemical shall not support or sponsor specific political parties or politicians.
2) An employee of Lotte Chemical shall not coerce other employees to support a specific political party or politician, and shall not use the company’s credit or assets for such purposes.

5-3. Lotte Chemical actively leads efforts to protect the environment.
1) Lotte Chemical prevents the environment from being destroyed, polluted, or damaged by the company's business activities and complies with the laws and regulations related to environmental protection.
2) Each employee of Lotte Chemical actively strives to protect the area of the business site and our natural environment to hand down to our descendants.
3) Lotte Chemical strives to use eco-friendly products for raw materials and items needed for business activities, and each employee makes a habit of saving resources.

5-4. Lotte Chemical strives to secure safety and prevent accidents.
1) Lotte Chemical thoroughly complies with the relevant standards and regulations for the safety of company facilities and employees, and institutes the analysis and prevention of factors that can impair safety.
2) Lotte Chemical creates a comfortable and safe working environment by maintaining cleanness and orderliness in the workplace.
3) All employees of Lotte Chemical actively follow the guidelines and instructions provided by the company in the event of a disaster or emergency and work together to overcome it.
4) Lotte Chemical strives to prevent accidents by providing safety training for all employees and for customers/clients and suppliers, as well as for visitors who enter the business site.

Chapter 6 Ethics Office

All executives and managers of Lotte Chemical shall guide and supervise their staff to comply with these guidelines, and after a motion by the Ethics Office the HR Committee can determine rewards or discipline in a case where an individual shows exemplary practices or violation of these guidelines.
Lotte Chemical may reduce or exempt the reporter of violation from disciplinary action if the reporter is involved in the violation.
Lotte Chemical establishes the Ethics Office to manage the Code of Ethics and Ethics Code of Conduct, and the details of the operation of the Ethics Office including the whistleblowing will follow the "Ethics Office Regulations".

■ Definitions of Terms

This section includes the definitions of the following terms used in these guidelines.
① Supplier: Refers to any person or company who provides or wishes to provide goods or services to Lotte Chemical.
② Stakeholders: Refers to all individuals, corporations, and organizations inside and outside of the company whose rigor and obligations are affected by the acts or decision of employees in the course of their duties.
② Degree generally acceptable by social norms: Refers to the voluntary and good-willed giving of articles or entertainment with implied expectations and to a level that is socially acceptable to impose no mutual burden. The total monetary value of the gift should be less than 50,000 won at one time or 500,000 won total for the year.
④ Money: Refers to cash, securities, commodities, and other items of economic value.
⑤ Entertainment: Refers to the providing of meal, drink, sports, leisure, or other entertainment activities.
⑥ Convenience: Refers to the provision of benefits where the provider incurs an economic loss such as for accommodations, transportation, tours, or other events other than money or entertainment.

Action Guidelines

    • Prohibition of receipt of money and entertainment
    • Employees of LOTTE Chemical should not receive monetary favor (including entertainment, hospitality, and convenience) from or make money transaction (including debt, guarantees, and provision of collateral) with any stakeholder (including customer, business partner, and vendor).
    • Employee action concerning gifts and entertainment
    • Refuse any offer politely and explain LOTTE Chemical’s Code of Ethics and the prohibition on receiving money or entertainment.
      If the situation forces you to accept it, report it to the Ethics Office.
    • Operation of Gift Return Center
    • LOTTE Chemical operates the Gift Return Center to return the received gift as part of the departments in charge of ethical management at its head office, plants, and Research Institute.
    • Receipt of money and other unauthorized favors
    • Report to the head of division, team manager, or executive in charge
                                                    → Fill out the report on receipt of money, entertainment, etc. and submit it to the Ethics Office.
                                                    → Return of received item(LOTTE Chemical donates the item to poor neighbors and social welfare facilities if it is not feasible to return it.)
                                                    →  Report of records to the Management Committee every six months
    • Confidentiality
    • LOTTE Chemical should maintain the confidentiality of the person reporting the violation and actively protect the reporter of violation from any disadvantage.
      In the event of a violation, the Director of the Ethics Office should investigate the situation and report it to the CEO promptly and can recommend disciplinary measures against the offender.
    • Protection of reporter
    • LOTTE Chemical should accept it as much as possible when the report of violation requests a transfer to another department or change of position to avoid the inconvenience or disadvantage caused by the report.
      The Director of Ethics Office may demand LOTTE Chemical, related executive, and team manager to restore the situation if the reporter of violation receives disadvantage as the result of the report.
    • Exemption of liability
    • LOTTE Chemical may reduce or exempt the reporter of violation from disciplinary action if the reporter is involved in the violation.