Compliance with Laws & Regulations

Johnson & Johnson is a large and diverse company, with thousands of daily transactions that must comply with hundreds of regulations around the world. We take compliance issues seriously, investigate each one, and revisit our operational controls. Our Policy on Business Conduct sets expectations that all employees will comply with all laws and regulations governing our company’s behavior. When this is not the case, information is reported up internally within the organization to senior management and, as appropriate, also shared with the Executive Committee, the Board of Directors and/or the external auditors. Many breaches are subject to confidentiality, legal, privacy or other similar restrictions and, therefore, are not publicly disclosed. However, this information is reported externally in our public filings if it meets the criteria for requiring public disclosure.

When public disclosure criteria are met, product liability claims and lawsuits that cover customer health and safety, labeling or marketing, as well as corrective actions and resulting fines and penalties, are outlined in our 10-Q and 10-K filings.

Antitrust and Competition Laws
We require employees to comply with the antitrust and competition laws of each country in which our companies do business. Employees may not engage in anti-competitive conduct nor are they permitted to take unfair advantage of any customer, supplier, competitor or other person through manipulation, concealment, misrepresentation of material facts or other unfair-dealing practice.

Environmental Laws and Regulations
Johnson & Johnson is committed to conducting our business in an environmentally sound manner. In addition to carrying out the corporate-wide programs the Company has initiated, all of our employees are required to be familiar with environmental laws and regulations relevant to their employment responsibilities and to comply with them.

Healthcare Compliance; Approval, Manufacture, Sales and Marketing of Drug, Medical Device, Diagnostics, and Consumer Products
No aspect of our business is more subject to governmental regulation than the development, manufacture, approval, sales and marketing of health care products. Due to the complexity of many of these regulations, we take particular care to ensure employees are aware of regulatory requirements and comply with them.

Legal requirements of Health Care Compliance and the Foreign Corrupt Practices Act are embodied in the Health Care Business Integrity Guide (HCBIG). The HCBIG is available to all employees on the Company’s intranet; training is required and documented for all employees in health care–related positions. Adherence is verified through ongoing independent audits and operations testing conducted by Internal Audit and Health Care Compliance & Privacy. Information on reviews is part of regular updates to the Regulatory, Compliance & Government Affairs Committee of the Board of Directors. Where process reviews identify questionable activities, these issues are escalated to the Triage Committee and for-cause investigations commence.

Johnson & Johnson has a system for annual certification by senior management on compliance with its anticorruption policies and procedures. The results of this certification process are also shared with the U.S. Department of Justice as part of Company’s commitments under its Deferred Prosecution Agreement.

Employment and Labor Laws and Policies
Our most important resource is our employees. It is our policy to comply with all applicable laws and regulations, including those concerning hours, compensation, opportunity, human rights and working conditions. Johnson & Johnson strictly prohibits discrimination or harassment against any employee because of the individual’s race, color, religion, gender, sexual orientation, national origin, age, disability, veteran’s status or any status protected by law.

In addition to local laws and regulations, the Company’s Policy on the Employment of Young Persons  prohibits the employment of people under the age of 18 in the manufacture of any product, or any component of a product, by or for any of our businesses. Forced or compulsory labor of any workers is also prohibited.

It is our policy that all employees work in a clean, orderly and safe environment. The Company requires full compliance with applicable workplace safety and industrial hygiene standards mandated by law.

Compliance with Securities Laws
Johnson & Johnson is often required by the Securities Laws of the United States to disclose to the public important information regarding the Company. All such disclosure, as well as all public communications, should be full, fair, accurate, timely and understandable.

An employee who knows important information about the Company that has not been disclosed to the public must keep that information confidential. Employees may not buy or sell securities of any other company using important non-public information obtained in the performance of their duties or provide that information to others.

Political Activities and Contributions
We encourage our employees to be involved personally in political activities. Nonetheless, employees may not use or contribute funds or assets of the Company to any political party, candidate or campaign unless this is the accepted practice, is lawful in the country involved and is approved by the appropriate Company Group Chairman.

Respect for Trade Secrets and Confidential Information
It is our policy to respect the trade secrets and proprietary information of others. Although information obtained from the public domain is a legitimate source of competitive information, a trade secret obtained through improper means is not.
Johnson & Johnson maintains a hotline for employees that is accessible by telephone or online at www.credohotline.com. This hotline can also be accessed by non-employees, customers and vendors of the enterprise. Global Compliance Services, Inc. operates the confidential hotline, and sends an annual summary report to Johnson & Johnson Corporate Internal Audit. Reports are forwarded to the appropriate company or corporate staff for investigation and resolution.

The information on this page represents only a summary of the policy views and of various laws and regulations. For more information, refer to the Policy on Business Conduct.

Anti-Corruption
It is the policy of Johnson & Johnson to comply with the laws of each country in which our companies do business. This includes compliance with the applicable anti-bribery laws and regulations such as, but not limited to, the U.S. Foreign Corrupt Practices Act, the Organization for Economic Cooperation and Development (“OECD”) Convention on Combating Bribery of Foreign Public Officials, the United Nations Convention Against Corruption (“UNCAC”), and national implementing statutes.

Accordingly, J&J prohibits, directly or indirectly, offering, promising, giving, or authorizing anyone to give anything of value to or for anyone acting in an official capacity for or on behalf of: a national, regional or local government; an agency, department or instrumentality of a national, regional or local government; a government-owned or government-controlled company; or a public international organization to influence any official act (or failure to act), or any decision in violation of his or its lawful duty; or induce the use of his or its influence to affect any governmental act or decision; or secure any improper advantage in connection with business. Furthermore J&J Companies will strictly comply with applicable commercial bribery rules.

Compliance and Monitoring
The Johnson & Johnson Compliance Committee consists of senior leaders from several corporate functions as well as three senior compliance leaders from the pharmaceutical, medical device and diagnostic, and consumer sectors. The Johnson & Johnson Chief Compliance Officer chairs the Committee. The Compliance Committee is responsible for overseeing and approving corporate and sector-specific compliance policies, procedures and programs, and periodically reporting to the Executive Committee and the Board of Directors, including reports on the state of compliance.

The corporate functions represented on the Committee play a key role in overseeing the effectiveness of compliance programs in their functional area. They carry out this role by setting standards and policies, providing enterprise-wide training on new standards and policies, and reviewing the results of audits, testing and monitoring, programs, resource allocations, training plans, and management action plan reviews.

In addition, Corporate Internal Audit conducts independent audits of the businesses that address several compliance areas, including Health Care Compliance, anti-corruption, and privacy. The corporate representatives also periodically report to the Compliance Committee on regional and global enterprise-wide compliance matters.

The Law Department and the Johnson & Johnson Office of Health Care Compliance & Privacy are responsible for setting enterprise-wide standards with respect to anti-corruption laws and interactions with Health Care Professionals.

As a general rule, the Finance organization is responsible for assuring appropriate accounting controls at all levels of the organization that ensure accuracy over financial reporting, including the investigation of potential frauds, thefts, defalcations and falsification of financial results. The organization is also responsible for evaluating, testing and monitoring accounting control systems on an ongoing basis to be reasonably assured that the controls in place continue to be appropriate and function properly. Part of this evaluation includes documenting all the steps taken to evaluate and monitor controls, as well as documenting existing accounting and internal control systems and procedures.

Training
Training on Our Credo and our Policy on Business Conduct is made available to employees worldwide in 16 languages, which we estimate covers the language needs of more than 90 percent of our worldwide employees. The training provides information on Johnson & Johnson policies regarding conflicts of interest and compliance with laws and regulations. Training on the U.S. Foreign Corrupt Practices Act (FCPA) is provided to employees outside the United States.

Our employees are asked to refresh their education in these areas every two years, and successful completion is recorded. Additionally, specific training on health care laws and regulations applicable to our businesses is undertaken through an extensive network of compliance officers throughout our worldwide business. Policies for selling, marketing and interacting with health care professionals.

Our policies require anticorruption training for employees who may present a compliance risk to the Company and place a significant emphasis on the training requirement to ensure compliance. In 2012, two courses were combined into one and given to meet the requirement: “Health Care Business Integrity for J&J Employees” and “Understanding the U.S. Foreign Corrupt Practices Act (FCPA).” This training emphasizes U.S. and international anticorruption and anti-bribery laws and describes how to identify health care professionals (HCPs), governmental organizations (GOs) and HCPs who are deemed GOs. The training covers all aspects of the Health Care Business Integrity Guide, including charitable contributions, donations, third-party intermediary (e.g. distributors) and cross-border interactions, all of which are deemed as high-risk activities.

In 2012, Johnson & Johnson operating companies met the training goal, as tracked by an online training application, with training completed for more than 79,000 employees.

In addition to our own employees, we also hold many of our critical third-party intermediaries, such as distributors, accountable to the Company’s policies. Due diligence and background checks are regularly conducted on sales intermediaries to help ensure compliance with our policies. In addition, the Company requires that its sales intermediaries be trained in the requirements of the HCBIG, and that contracts include specific contractual commitments to abide by all applicable anticorruption laws, comply with our HCBIG policies when interacting with customers on our behalf and allow for auditing of their activities. Training is also provided to third-party intermediaries to help ensure understanding of the Company’s policies. Regulatory compliance of suppliers and vendors is monitored and audited by our Regulatory Compliance and Procurement organizations. Internal Audit performs annual contract reviews of a number of key vendors to ensure compliance with agreed upon contract provisions and requirements. Any allegations of impropriety raised regarding business dealings with third parties are documented and investigated by Internal Audit, the Law Department or other appropriate organizations within the Company.