Chapter 3. Fair Transactions

LG employees are acting uprightly and making value judgments in accordance to the code of ethics.

All business transactions are based on the principles of fair competition, with equal opportunity guaranteed to all entities. We build trust and cooperative relationships through fair and transparent transactions. Such relationships are built based on long-term mutual growth.

1.Equal Opportunity

LG Code of Ethics

  • (1) We offer equal opportunities to all qualified companies seeking to become our business partners.
  • (2) We register and select all applicants in a systematic manner, following a fair and objective evaluation process.
Guidelines for Practice
  • (1) Establish and use general regulations and systems for the Business Partner Selection Process to select and register business partners based on fair evaluation criteria.
  • (2) The Business Partner Selection Process shall include detailed evaluation items and methods; the selection shall take into consideration characteristics of the business.
  • (3) Exclude any form of pressure or favors when selecting business partners.

2.Fair Transaction Process

LG Code of Ethics

  • (1) We conduct all business transactions under equal circumstances. The terms and procedures of the transaction are thoroughly discussed between the parties involved.
  • (2) We never engage in any form of unfair transaction taking advantage of any superior position.
  • (3) We exchange transaction information through appropriate procedures in a timely manner. Transaction results are evaluated on a regular basis and mutual cooperation measures are taken.
Guidelines for Practice
  • (1) Exchange transaction-related information in a timely manner and take security measures to prevent damage from information disclosure to third parties.
  • (2) Mutually-agreed transaction terms and conditions shall not be modified without just reasons.
  • (3) Apply sound opinions that are proposed for improving and innovating business transactions.
  • (4) Acquire prior approval of business partners when using their technologies or other assets.
  • (5) Compensate business partners fairly for damages caused by error on our part.
  • (6) Do not engage in any of the following unfair transactions prohibited by laws and regulations related to fair transactions:
    • ① Inappropriately forcing the purchase of other products or services, while providing the company’s products and services
    • ② Selling products or services by force to business partners who have no intention of purchasing them
    • ③ Unjustly colluding transactions between business partners and competitors or limiting transaction regions or business partners
    • ④ Unjust colluding, such as an unilateral increase in sales price or an increase in the purchasing unit price without consulting business partners
    • ⑤ Rejecting goods that are returned with just cause, or rejecting or delaying the receipt of ordered goods
    • ⑥ Not fulfilling legal obligations for the payment conditions of bills
    • ⑦ Discontinuing transactions with business partners or notably decreasing transactions without just cause
    • ⑧ Setting unfair transaction conditions by discriminating against specific business partners
    • ⑨ Interfering with business partner’s management activities, such as HR management, production, and transactions without just cause
    • ⑩ Any other unfair acts prohibited by laws and regulations

3.Pursuing Mutual Growth

LG Code of Ethics

  • (1) We support the long-term growth of our dealers and vendors by enhancing their competitiveness through technological and managerial assistance. We share the profits derived from business innovations.
  • (2) We pursue mutual efforts and cooperate with our business partners in promoting a healthy business environment and maintaining fair business processes.
Guidelines for Practice
  • (1) Establish and implement standards for supporting and helping the development of business partners.
  • (2) Standards for helping the development of business partners must state the requirements of business partners and include detailed operational standards, such as technical support and managerial guidance.
  • (3) Any profit generated from technical support or managerial guidance shall be fairly shared.
  • (4) To ensure that business partners adopt Jeong-Do Management, Jeong-Do Management Pledge of Practice must be submitted and administered accordingly.