Code of Conduct and Code of Ethics for Business Partners

I. Introduction and purpose

1. In line with a corporate ethics embodying the concept of sustainable “Corporate Social Responsibility”, i.e., the socially responsible management of its company, the following requirements specify schwartz GmbH’s expectations on attitudes and policies pursued by its business partners in their operations.
Consequently, the following requirements form a basic part of the business relations between schwartz GmbH and its business partners, serving each partner’s corporate success in a sustainable manner.
Given their shared recognition of legal and ethical minimum standards, the business partners, by conforming to these requirements, will contribute significantly to the implementation of fair and sustainable practices in areas including, without limitation, working and social conditions as well as ecological commitment.
2. Thus, the business partners expressly undertake to comply with and abide by applicable laws in the country in which they maintain business relations or other service relations with schwartz GmbH.
This compliance obligation shall specifically apply with regard to the law prohibiting child labor, stipulating minimum wages, working hours and environmental protection standards, and combating bribery, corruption, exploitation or other criminal offences.
Aside from the foregoing, the business partners undertake to comply at all times with the laws governing labor, non-discriminatory practices, occupational health and safety, data protection, social security, taxation, and fair competition.

II. Policies and addressees of these requirements

1. The policies and associated requirements laid down herein are based on national and international codes, conventions, and values defined by the company itself. They relate, inter alia, to principles of the Global Compact, the International Chamber of Commerce’s “Charter for Sustainable Development”, and the relevant conventions of the International Labor Organization. Moreover, schwartz GmbH derives ecological objectives and environmental requirements, a quality policy, and the assurance of social rights from these rules.

With its successful and sustainable business performance, schwartz GmbH has gained credibility in the international marketplace, advancing to the vanguard of its industry through the quality and value of its products and services. But schwartz GmbH’s success is also a function of the conduct of its business partners. Effective and excellent business relations can only arise and prevail in a sustainable manner through honest dealings on the part of the business partners, both between themselves and in relation to their environment including personnel and resources. This is essential if a business relationship is to gain strength through mutual trust, enabling both partners to attain maximum success. These principles, on which schwartz GmbH is founded, also drive the collaboration with its business partners. Authenticity, integrity, fair play and transparent dealings form the central pillars of this concept.

The name “schwartz” stands for honest, authentic and lawful business conduct, which should also be reflected in the practices of our business partners. In this context, the respect for human dignity and human rights in any form, as well as for the legal matters stated at I.2. above, are of particularly high importance. schwartz GmbH therefore expects all business partners and their employees, as well as all participants in the delivery chain, to act in a law-abiding and responsible manner. Consequently, the requirements laid down herein are binding for the business relationship. This implies that schwartz GmbH expects its business partners to impose these requirements on their suppliers as well, whereas no claims arising from these requirements may be asserted by third parties.

2. The principles laid down herein apply to the relevant business partner’s company in its entirety, i.e., including its associated undertakings. In addition, the respective business partner must ensure that these Code of Conduct principles are applied along its delivery chains, too. The obligation to fulfill these requirements and the responsibility for compliance with the principles enshrined in this Code of Conduct and Code of Ethics, as well as for the implementation of all necessary measures for a continuous review of the boundary conditions and resulting workflow and performance improvements, rests solely with the business partner committing himself thereto.

III. Field of application and auditing

1. These policies and their requirements apply globally, across all sites and business units, to all schwartz GmbH relations with its business partners, who must in turn impose an equivalent commitment on their suppliers and shall communicate it, especially vis-à-vis groups of people requiring protection (children, adolescents).
2. schwartz GmbH reserves the right to see to it that the fulfillment of the requirements set forth above and below will be audited at the business partner’s site following due prior notice, such audit to be conducted in the presence of the business partner’s representatives and during normal business hours. Throughout this process, schwartz GmbH shall at all times proceed within the confines of applicable law, specifically by safeguarding data protection requirements and by taking into account the confidential nature of trade and business secrets.

IV. Requirements in detail

The requirements stated below are mentioned by way of example only and do not constitute an ultimate list. They represent schwartz GmbH’s minimum requirements.

1. Rights of employees

For schwartz GmbH, the respect of internationally recognized human rights constitutes the basis of all business relations. The following provisions, as well as the labor law of the country in which the business partners operate, shall be particularly taken into account:

No discrimination
Equal opportunities and equal treatment, irrespective of ethnic origin, skin color, sex, religion, nationality, sexual orientation, social background or political attitude – to the extent to which the latter is based on democratic principles and tolerance towards those holding opposing views – shall be ensured. Employees shall be selected, hired and promoted, on principle, by virtue of their qualification and skills.

No forced labor
schwartz GmbH rejects any conscious use of forced or compulsory labor, including bonded labor and non-voluntary work by prisoners.

No child labor
Child labor is prohibited and shall not be used. The minimum age for admission to employment, as stipulated in government regulations in each case, shall be observed.

No harassment
Employees shall not be subjected to any physical punishment whatsoever, nor to any other physical, sexual, psychological or verbal harassment or abuse.

Compensation and benefits
The compensation and benefits paid or provided per normal working week shall correspond at least to the legally applicable and guaranteed minimum. In the absence of statutory regulations or collective bargaining agreements, compensation and benefits shall be based on industry-specific collective agreements consistent with local custom and practices that ensure an appropriate standard of living for the employees and their families.

Working hours
Working hours shall correspond at least to the respective national legal requirements or to the minimum standards of the respective national economic sectors.

Occupational health and safety
The business partner shall at least fulfill the respective national standards for a safe and hygienic working environment and shall take appropriate measures in this context in order to guarantee health and safety at the workplace so that beneficial working conditions are ensured.

2. Transparent business relationships

Avoidance of conflicts of interest
schwartz GmbH’s business partners shall make decisions solely on the basis of objective criteria that are not influenced by personal interests or relationships.

Combating corruption
schwartz GmbH supports the national and international efforts undertaken to protect competition from the influence or distorting effects of corruption, and rejects all corrupt practices and other conduct that could harm the company. schwartz GmbH expects its business partners to reject and preclude all forms of corruption, including so-called facilitation payments (payments effected to speed up routine official procedures). The business partners shall ensure that their personnel, subcontractors and agents will not grant, offer or accept any bribes, facilitation payments, inadmissible donations or other inadmissible payments or undue benefits, whether to or from customers, officials or other third parties.

3. Fair market behavior

Free competition
schwartz GmbH expects its business partners to abide by all valid and applicable competition and antitrust laws. In particular, they shall not enter into any anti-competitive agreements with competitors, suppliers, customers or other third parties and shall not abuse a dominant market position should they hold one.

Import and export controls
In importing and exporting goods and services, the business partners shall comply with all valid and applicable laws.

Money laundering
The business partners shall only maintain business relationships with partners whose integrity they are convinced of. They shall ensure that the relevant provisions of anti-money-laundering law are observed and are not violated in any case.

4. Due diligence to promote responsible supply chains for minerals from conflict-affected and high-risk areas

schwartz GmbH expects its suppliers to avoid any use of minerals sourced from conflict-affected smelters. Minerals are classified as conflict-affected if non-government armed groups are supported directly or indirectly through their extraction, transport, trade, handling/processing, or export.

Information on smelters or refineries used by suppliers or sub-suppliers for minerals such as tin, tantalum, tungsten and gold shall be disclosed to schwartz GmbH upon request.#

To this end, schwartz GmbH recommends the use of the standardized Conflict Minerals Reporting Template developed by the Conflict-Free Sourcing Initiative (CFSI). Using the CFSI data, schwartz GmbH will advise suppliers doing business with conflict-affected smelters or refiners on existing options for sourcing from conflict-free smelters or refiners.

schwartz GmbH’s suppliers and customers are requested to exercise due diligence along their supply chain. This includes the implementation of measures which assure that the minerals they are using – particularly tantalum, tin, tungsten and gold – will not help to sponsor or support any armed conflicts, either directly or indirectly.

These due diligence requirements constitute an extension to the abovementioned sustainability criteria regarding environmental protection, employee rights, transparent business relations and fair market conduct, which form an integral part of the due diligence process to be applied to mineral supply chains.

5. Environmental Guideline for Suppliers

The aim of schwartz GmbH is to save our common environment through a responsible use of the resources needed in performing our services. We can only achieve this goal by taking into account environmental aspects at an early stage, i.e., when selecting scopes of supply in external sourcing of raw materials and consumables, machinery and equipment, as well as services. Our suppliers must ensure, when subcontracting third parties, that their vendors are familiar with this Guideline.

Basic requirements:

The provisions of environmental protection law and the rules of the Employers’ Liability Insurance Associations [Berufsgenossenschaften] must be fulfilled.
Substance bans imposed by law shall be duly observed.
The “appointed persons” stipulated by law must be designated and supported.
Personnel must be appropriately trained and instructed as regards the environmentally relevant aspects of their work.

Systemic requirements:

Effects on the environment (environmental aspects) should be monitored taking into account lifecycles.
Processes of high environmental relevance are to be documented.
In order to avoid waste and unnecessary packaging, reusable packaging is to be given preference (target proportion of reusable packaging).
Where the protection of products calls for the use of disposable packaging, eco-friendly recyclable materials shall be used (target recycling rate).
Unavoidable waste shall be recycled to the maximum possible extent. Where this not feasible, such waste shall be disposed of in a technically correct manner and in compliance with applicable law.
Chemicals or other materials which constitute a hazard when released into the environment shall be identified and handled so as to ensure safety during handling, transport, storage, use, recycling or re-use, and disposal of these substances.
Wastewater from operations, production processes and sanitary facilities shall be classified, monitored, tested and, if necessary, treated prior to discharge or disposal. In addition, steps should be taken to reduce the amounts of wastewater produced.
General emissions from operating processes (air and noise emissions) as well as greenhouse gas emissions shall be classified, routinely monitored, tested and, if necessary, treated prior to their release. In addition, the supplier is required to monitor its exhaust gas cleaning systems and is called upon to find cost-efficient solutions to minimize emissions of any kind.

Operational requirements:

Unequivocal and effective regulations must be in place for the handling of hazardous materials.
Production facilities and environmentally relevant infrastructures should be in an environmentally compatible condition.
Resources and materials must be handled in a responsible manner.
A systematic approach shall be used for identifying, handling, reducing and carrying out the responsible disposal or recycling of solid waste.

Prospective requirements:

The introduction and certification of an environmental and energy management system shall be aimed for wherever such a system is not yet in place.

V. Legal consequences of any violation of requirements

schwartz GmbH considers the observation of the requirements set forth herein essential to the respective contractual relationship. In case a business partner does not comply with these requirements, schwartz GmbH reserves the right to terminate its relationship with that business partner for cause. However, schwartz GmbH shall be free to forgo, at its own discretion, any such consequence and to take alternative steps instead, always provided the business partner can demonstrate to schwartz GmbH’s satisfaction that it has instituted countermeasures without delay so as to prevent a re-occurrence of similar violation in the future.