A Shared Commitment. GSC-012 The Tyco Guide to Supplier Social Responsibility

Transcription

1 The Tyco Guide to Supplier Social Responsibility A Shared Commitment 1 P a g e

2 May 2016 George Oliver, CEO Andrea Greco, SVP Supply Management & Real Estate A Message from Tyco Dear Supplier Partner, As Tyco moves towards building a world-class supply chain organization, we believe our success lies in the development and diversification of our supplier relationships. We recognize that the quality of our supplier relationships has a direct bearing on our customer relationships, and by extension Tyco s success in the marketplace. Our supplier relationships must, however, be built on a foundation of integrity. Our shareholders, employees and the communities where we work expect honest and ethical conduct from us every day. We believe it is vital that Tyco and its business partners conduct activities in a manner that is ethical and in accordance with the law. Tyco s Guide to Supplier Social Responsibility reaffirms our commitment to the development of relationships based on integrity by outlining what we expect from our supplier partners, and what our supplier partners can expect from us. It identifies Tyco s core values and the socially responsible principles that govern how we conduct business and serves as a complement to the Tyco Guide to Ethical Conduct. Tyco has embraced four core values as part of its business activities: Integrity, Excellence, Teamwork and Accountability. Our board of directors, senior management, and all Tyco managers and employees are committed to the highest standards of integrity and full compliance with the regulations and policies that affect the conduct of our business. We expect all of our supplier partners to conduct their business with the same high standards. We have a zero tolerance policy for ethical violations. We tolerate nothing less. Please join us in making Tyco a strong and successful company. 2 P a g e

3 A SHARED COMMITMENT Tyco s Core Values Our commitment to the highest standards of integrity begins with ensuring that everyone across the Tyco organization understands our core values values that define how we conduct ourselves both as Tyco employees and decision-makers. We also believe it is important that our supplier partners understand and share our core values. These four values are the foundation of the Tyco Guide to Ethical Conduct: + Integrity We must demand of ourselves and of each other the highest standards of individual and corporate integrity. We safeguard company assets. We comply with all company policies and laws. + Excellence We continually challenge each other to improve our products, our processes and ourselves. We strive always to understand our customers businesses and help them achieve their goals. We are dedicated to diversity, fair treatment, mutual respect and trust. + Teamwork We foster an environment that encourages innovation, creativity and results through teamwork. We practice leadership that teaches, inspires, and promotes full participation and career development. We encourage open and effective communication and interaction. + Accountability We honor the commitments we make, and take personal responsibility for all actions and results. We create an operating discipline of continuous improvement that is an integral part of our culture. 3 P a g e

4 Tyco Supplier Social Responsibility Principles The Tyco Guide to Ethical Conduct, together with our business-specific policies, provides our employees and supplier partners with a framework for understanding what is expected of them in terms of conduct and decision-making. It outlines key principles and supportive behaviors that flow from our core values. Our Supplier Social Responsibility Principles, based largely on the Tyco Guide to Ethical Conduct, seek to highlight the principles and behaviors that define our relationship with our supplier partners. We expect our supplier partners to share these principles and behaviors, and promote the application of these standards among those with whom they do business. Our goals at Tyco are to: Consistently achieve compliance around the world, both with all applicable laws and with all policies and expectations of Tyco International Provide for a safe workplace Be a good corporate citizen by being a good neighbor in the communities in which our sites operate, and to be guardians of the public health and the environment Reduce and recycle our waste and emissions to the most practicable extent Be forward-looking as we develop new products and make changes to our existing products or processes, and to assess the EHS impacts of those changes Always look for ways to improve our performance through continuous improvement Environment, Health and Safety Tyco expects its supplier partners to share in its commitment to protect the health and safety of our employees and the environment. We believe we have a duty to provide a safe working environment for all our employees, independent contractors, Suppliers and customers, and will operate our facilities in a manner that prevents harm to public health and the environment. We are also committed to conducting our worldwide operations in a manner that conserves and protects natural resources and the environment, including our impact on global warming. Environment Suppliers should ensure that every manufacturing facility complies with environmental laws, including all laws related to waste disposal, air emissions, discharges, toxic substances and hazardous waste disposal for their country and international laws. Suppliers must validate that all input materials and components were obtained consistent with international treaties and protocols in addition to local laws and regulations. Health and Safety Suppliers must provide workers with a safe and healthy work environment. Suppliers must take proactive measures to prevent workplace hazards. Suppliers must be able to provide Tyco with records of any health and safety violations on a quarterly basis. Substance Free Work Environment Substance abuse, whether alcohol or drug abuse, poses a serious threat to the safety, health, and productivity of our organization, employees, and customers. Tyco has a substance-free workplace policy that extends to locations worldwide and applies to our employees, suppliers, customers, and visitors. 4 P a g e

5 Human Rights Tyco expects its employees and supplier partners to treat one another with respect and dignity. Equal opportunity and fair treatment should be extended to all. Tyco specifically will not tolerate discrimination on the basis of age, color, disability, ethnicity, marital or family status, national origin, race, religion, sex, sexual orientation, veteran status, or any other characteristic protected by law. Our values show our commitment to being a good global citizen and acting in a socially responsible way in the communities where we live and work, all across the globe. We require Tyco businesses and business partners/suppliers to provide clean and safe working environments and conditions, forbid child labor trafficking or slavery, promote freely chosen employment, and require that employees receive all compensation and benefits (including minimum wage and hours) mandated by applicable laws. Regardless of the location, Tyco has a zero tolerance for supplier partners that engage in activities that do not maintain individual dignity and respect, even if permissible under applicable law. 1) All Labor Must Be Voluntary Suppliers must have procedures to manage the materials, including all labor-related processes, incorporated into their products to ensure they comply with laws on slavery and human trafficking. Workers must be allowed to maintain control over their identity documents such as: government issued identification, passports or work permits. 2) No Child Labor Child labor is an issue that we take very seriously. No person shall be employed at an age younger than the law of jurisdiction of manufacture allows. Tyco will not use suppliers that use labor from persons of less than the legal minimum working age or 15 years of age, whichever is greater, or the age designated by national law for completion of compulsory education. For jobs that require greater maturity or pose a safety risk, these workers are to be a minimum of 18 years of age. The supplier must maintain official verifiable documentation of each worker s date of birth. If a supplier is lacking verifiable documentation they must have some legitimate means of confirming each worker s age. 3) No discrimination Tyco requests that their suppliers do not engage in any form of discrimination. Some of the more common forms of discrimination include: sex, age, race and nationality discrimination. Employees should be hired based upon their knowledge, skills and abilities to conduct the job task. While employed, employees should work in an environment free of discrimination. 4) Working Hours Work weeks are not to exceed the maximum allowable hours set by local law. Further, a work week should not be more than 60 hours per week, including overtime, except in emergency or unusual situations. Workers shall be allowed at least one day off per seven-day week. 5) Wages and Benefits Compensation paid to workers shall comply with all appropriate wage laws, including those relating to minimum wages, and legally mandated benefits. Workers shall be compensated for overtime at pay rates required by applicable local law.. Workers are to be paid in a timely fashion and in a manner consistent with applicable local law. 5) Freedom of Association Suppliers must respect the rights of workers to associate freely, to join or not join labor unions, to seek representation, and to join workers councils in accordance with local laws. Workers shall be able to communicate openly with management regarding working conditions without fear of reprisal, intimidation or harassment. 5 P a g e

6 Conflict Minerals Tyco will only work with suppliers whose business activities comply with all applicable national and local legal requirements, customs and published industry standards in the country of manufacture. Supplier partnership and cooperation is critical in conducting an annual assessment of Tyco s product portfolio, to determine if we have manufactured, or contracted to manufacture, certain products for which tin, tantalum, tungsten or gold ( 3TG or conflict minerals (as defined in Section 1502(e)(4) of the Dodd- Frank Wall Street Reform and Consumer Protection Act) derivatives) are necessary to the functionality or production of such products. As such, we expect that our supplier partners: Develop policies and processes aimed toward preventing the use of conflict minerals or derivative metals necessary to the functionality or production of their products that finance or benefit armed groups in the DRC or adjoining countries; and Not knowingly procure conflict minerals that originate from facilities in the DRC or adjoining countries that are not certified as conflict free To support this partnership, we will endeavor to continuously improve upon our supply chain due diligence efforts by: Clearly communicating expectations with regard to supplier performance, transparency and sourcing Continuing to compare supplier outreach results to information collected via independent conflict free smelter validation programs such as the EICC/GeSI Conflict Free Smelter program Contacting smelters identified as a result of the supplier outreach process and request their participation in obtaining a conflict free designation from an industry program such as the EICC/GeSI Conflict Free Smelter program Implementing a risk management plan, monitor and track risk mitigation, report to senior management and evaluate supplier relationships; and Undertaking additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances Customs Trade Partnership against Terrorism The Customs Trade Partnership Against Terrorism (C-TPAT) is a threat awareness program devised by U.S. Customs to identify weaknesses in security procedures and introduce any needed corrective action to overcome potential threats posed by terrorists and contraband smugglers at each point in the foreignbased logistical supply chain. C-TPAT compliance carries valuable benefits, and due to the global nature of business activities, it is being perceived as mandatory by many U.S. buyers. TYCO has incorporated C-TPAT guidelines and security practices into our daily functions. As an importer, TYCO is required to have written and verifiable processes for the selection of business partners including manufacturers, product suppliers and Suppliers. The C-TPAT section of our Supplier Handbook provides suppliers with the necessary guidance to reach C-TPAT compliance standards and improve safety and security throughout the foreign based logistical supply chain. 6 P a g e

7 Supplier Diversity At Tyco, we recognize that supplier diversity has become a key business strategy for progressive corporations. As a customer-centric organization, we are focused on fully understanding and exceeding our customers needs, wants and preferences, and providing greater value to our customers. To achieve this, we must build our organization and supply base to reflect the demographics and virtues of our stakeholders and customers. Tyco s Supplier Diversity program is aimed at expanding our commitment to integrating small business concerns, minority- and women-owned businesses into the strategic sourcing process, providing a solid foundation for building capacity to capture significant growth opportunities, and encouraging business diversity growth and equity. In doing so, we believe that we will achieve significant cost savings, improve quality in targeted commodities and improve our industry market position, thereby developing goodwill relationship within our communities. Our goal is to increase the number and variety of diverse supplier partners with whom we do business, thus creating a positive impact in our communities by stimulating job creation and business development. We are dedicated to building a strong community and driving diverse suppliers to sustain themselves well into the 21st century. Tyco s Supplier Diversity initiative includes businesses that are at least 51 percent owned, operated and controlled by one or more individuals who are U.S. citizens in any of the following categories: Minority-Owned Business Enterprise "Minority" refers to Black or African Americans, Hispanic Americans, Native Americans and Asian Americans. 'Black or African American' includes people not of Hispanic origin who have origins in any of the Black racial groups of Africa 'Native American' includes American Indians, American Eskimos, American Aleuts and Native Hawaiians 'Asian-American' includes United States citizens whose origins are from Japan, China, the Philippines, Viet Nam, Korea, Samoa, Guam, the U.S. Trust Territories of the Pacific, Northern Marianas, Laos, Cambodia and Taiwan, India, Pakistan and Bangladesh Women-Owned Business Enterprise This includes women of any race or ethnic background Veteran or Service Disabled Veteran Business Enterprise Veterans are individuals who have served on active duty with the U.S. Army, Air Force, Navy, Marines or Coast Guard for any length of time and at any place, and who were discharged or released under conditions other than dishonorable. Reservists or members of the National Guard called to Federal active duty or disabled from a disease or injury incurred or aggravated in the line of duty while in training status also qualify as a veteran. 'Service disabled' means a veteran who possesses a disability rating letter issued by the Department of Veterans Affairs establishing a service connected disability rating between percent. HUBZone Small Business 'HUBZone' refers to a business whose principal office is located and operated within a Historically Underutilized Business Zone (HUBZone) as designated and certified by the Federal government. The business must also have at least 35 percent of its employee base residing within the HUBZone. Employers of Workers with Disabilities This refers to a public or private organization or workshop which agrees that at least 75 percent of the direct labor required by contract will be performed by individuals who have a physical, mental or emotional impairment, ailment, disease or disability of a permanent nature. 7 P a g e

8 Conflicts of Interest, Gifts and Entertainment Tyco expects its employees and supplier partners to identify and prevent situations where there is an actual conflict of interest, or even the appearance of a conflict of interest. Our supplier partners should familiarize themselves with Tyco s policies and procedures on conflicts of interest, gifts and business entertainment. These policies, which are outlined in our Guide to Ethical Conduct, govern acceptance of gifts and entertainment, giving of gifts and entertainment, reporting of gifts and loans, and other favors. Suppliers must not enter into transactions with Tyco associates that create a conflict of interest. Financial Responsibility Tyco believes that accurate, timely financial records and controls are essential to fulfilling obligations to our shareholders, governments and the general public at large. As a financially responsible organization, we are committed to ensuring that all internal and external financial records and information follow U.S. generally accepted accounting principles, and are maintained by using effective internal controls, including procedures to protect the company s assets. It is our expectation that our supplier partners will exercise a similar commitment to financial responsibility. Tyco endeavors to comply with all applicable laws and regulations governing importation and/or exportation of products and technology. This includes, but is not limited to, production materials, finished goods, capital equipment, molds and tooling, samples and prototypes, repaired or returned products, and technical information. As a supplier partner, you are required to exercise due diligence to ensure that proper import/export-related policies, procedures and controls are adopted within your organization. Failure to do so could expose Tyco, along with our customers and suppliers, to significant financial exposure, increased scrutiny from government agencies and negative publicity. Our ability to conduct business on a global basis is a privilege that cannot be jeopardized. Suppliers must keep accurate records of all matters related to their business with Tyco in accordance with standard accounting practices such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Prohibition on Gifts to Government Officials To comply with U.S. laws prohibiting the bribery of foreign officials, as well as the laws of all nations where it does business, Tyco strictly prohibits payment of cash and severely limits the provision of gifts to government officials. No payment in cash or in-kind may be made to government officials on Tyco s behalf without approval by the Tyco Law department. Tyco expects its suppliers to be in strict compliance with the U.S. Foreign Corrupt Practices Act, as well as all local laws governing payments to government officials. Suppliers must not offer gifts or entertainment to Tyco associates or those working on behalf of Tyco. 8 P a g e

9 Continuous Improvement Tyco is committed to improving capabilities and our investments and require that our suppliers do the same. Within the suppliers Continuous Improvement Management system the following elements should be contained: Identification, monitoring and understanding of applicable laws, regulations and customer requirements. Identify the environmental, health and safety and labor practice risks associated with company operations. Determination of the relative significance for each risk and implementation of appropriate procedural and physical controls to ensure regulatory compliance to control the identified risks. Areas to be included in a risk assessment for health and safety are warehouse and storage facilities, plant/facilities support equipment, laboratories and test areas, sanitation facilities/ bathrooms, kitchen/cafeteria and worker housing /dormitories. Written standards, performance objectives, targets and implementation plans including a periodic assessment of company performance against those standards, objectives, and plans. Programs for training managers and workers to implement policies, procedures and improvement objectives. Periodic self-evaluations to ensure conformity to legal and regulatory requirements, the principles and guidelines outlined in this Guide, and contractual requirements related to social and environmental responsibility. Process for timely correction of deficiencies identified by internal or external assessments, inspections, investigations and reviews. Creation of documents and records to ensure regulatory compliance and conformity to company requirements along with appropriate confidentiality to protect privacy. 9 P a g e

10 Supplier Partner Responsibility As a supplier partner, your role begins but does not end with understanding Tyco s values and principles. If any ethical or legal compliance issues arise that raise questions in your mind, you have a responsibility to bring them forward. To raise a concern you can log on to Tyco s confidential Internet-reporting service at The site is available in nine languages. You can also call Tyco s confidential, toll-free ConcernLINE at ConcernLINE is available seven days a week, 24 hours a day and is staffed by trained professionals. For calls outside of the U.S., a complete list of toll-free numbers can be found on Tyco s Web site in the Governance section; operators are available to answer in local languages. In addition to the Web site, we have established an ombudsman, a Tyco employee, who is an independent, impartial, and a totally confidential resource for our employees, suppliers, investors and customers to raise and address compliance concerns. The primary function of this office is to ensure that all compliance issues, raised through any of the channels offered to you in this Guide, are resolved quickly, fairly, and at the proper level in the organization. The direct line to the Office of the Ombudsman is or WE ARE DEDICATED TO BUILDING A STRONG COMMUNITY AND DRIVING DIVERSE SUPPLIERS TO SUSTAIN THEMSELVES WELL INTO THE 21ST CENTURY. OUR ABILITY TO CONDUCT BUSINESS ON A GLOBAL BASIS IS A PRIVILEGE THAT CANNOT BE JEOPARDIZED. AS A SUPPLIER PARTNER, YOUR ROLE BEGINS BUT DOES NOT END WITH UNDERSTANDING TYCO S VALUES AND PRINCIPLES. 10 P a g e

11 It is the responsibility of the Suppliers and Factories to ensure that it understands and complies with this Supplier Social Responsibility and to inform Tyco (or a member of its management) if and when any situation develops that causes a Supplier or Factory to operate in violation of this Supplier Social Responsibility. Suppliers and Factories are expected to self-monitor their compliance with this Supplier Social Responsibility, therefore, Tyco strongly encourages Suppliers and Factories to define and implement a policy for social accountability and to adopt or establish a management system to ensure that the requirements of Tyco s Supplier Social Responsibility can be met in a consistent manner. In addition to any other rights Tyco may have under any agreement it may have entered into with a Supplier or Factory, if Tyco determines that any Supplier or Factory fails to comply with or breaches any terms of this Supplier Social Responsibility or has otherwise behaved in a manner that is inconsistent with the intent of this Supplier Social Responsibility, Tyco reserves the right, in its sole and absolute discretion, to: (1) Terminate the business relationship with the Supplier or Factory, including the cancellation of any outstanding purchase orders, or (2) Require corrective actions within an acceptable time period and/or work with the Supplier or Factory for an acceptable remedial program in order for the business relationship to continue or resume. 11 P a g e