Sustainability requirements for suppliers

of Motorenfabrik Hatz GmbH & Co. KG and Hatz Components GmbH (hereinafter referred to as “Hatz”)

To ensure that the text is easy to read and understand, gender-neutral language has not been used.

Scope of use

The following sustainability requirements apply to all business relationships between Hatz and its suppliers. They must comply with the sustainability requirements in their economic, ecological and social activities and – as far as this is relevant to their respective business activities – reflect the requirements in their own guidelines and processes. In addition, our suppliers are requested in an appropriate manner to promote compliance with these requirements among their suppliers and along the supply chain. Compliance with the sustainability requirements is the basis for long-term cooperation and recurring orders.

Economic conduct

Avoidance of conflicts of interest

Hatz makes all business-related decisions based on objective criteria and not on private interests or relationships. They expect the same from its suppliers.

Anti-corruption

Hatz is committed to fighting all forms of corruption and does not tolerate any violations. Accordingly, Hatz also expects their suppliers not to tolerate any form of corruption or bribery or to engage in such practices in any way, including illegal payment offers or similar benefits to influence decision-making. No personal advantage in return for preferential treatment in business transactions may be accepted, offered, requested, promised, granted or approved if it is intended to influence a business relationship in an improper manner or if there is a risk of compromising the professional independence of the business partner.

Antitrust and competition law

Hatz expects their suppliers to comply with the applicable national antitrust and competition laws. In particular, they shall not enter into any anti-competitive agreements with competitors, subcontractors or customers and shall not abuse any market dominance they may have. Unfair practices are prohibited.

Financial responsibility

The supplier undertakes to record all business transactions in its accounts in accordance with established procedures and auditing principles and generally accepted accounting principles. These records shall contain the necessary information about the respective transactions.

Export controls and economic sanctions

Our suppliers must ensure compliance with the relevant country-specific laws and regulations. Furthermore, the supplier is required to comply with the applicable import restrictions, export controls and economic sanctions on goods, services and information.

Data protection, data security and confidentiality

The supplier undertakes to meet the reasonable expectations of its client, suppliers, customers, consumers and employees with regard to the protection of business and private information. The supplier must observe the laws on data protection and information security and the official regulations when collecting, storing, processing, transmitting and passing on personal information.

Ecological action

Environmental protection and energy efficiency

Environmental protection is an integral part of Hatz’s sustainable corporate culture. For this reason, all suppliers are expected to minimise environmental hazards, use natural resources sparingly and comply with the applicable national environmental laws and regulations. Suppliers are also expected to work on continuously improving their energy- and environment-related processes and products, ideally by demonstrating suitable management systems for environmental protection and energy management. The use of renewable energy should be steadily expanded.

Sustainable resource management

Our suppliers are obliged to use natural resources responsibly and to contribute to the careful consumption of energy, water and fuels.

Preservation of natural resources

The supplier must refrain from harmful soil changes, water and air pollution, noise emissions and excessive water consumption if this damages the health of people, significantly impairs the natural basis for food production or prevents people from accessing clean drinking water or sanitary facilities.

Land, forest and water rights, forced eviction

Hatz expects their suppliers to advocate for responsible regulation of property, ownership and usage rights to land, fishing grounds and forests in order to promote sustainable social and economic development that contributes to the elimination of poverty and food insecurity and to responsible investment.

We expect our suppliers to comply with all applicable legal requirements regarding land, forest and water rights and forced evictions in line with the “Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests” unanimously adopted by the United Nations Committee on World Food Security in May 2012.

Water consumption, water quality and water management

We expect our suppliers to reduce water quality impacts to the minimum necessary, promote good water quality to the maximum extent possible, keep water consumption to a minimum and not pollute water bodies and groundwater. Wastewater must be classified, monitored, checked and, if necessary, treated before discharge or disposal. In addition, measures should be introduced to reduce the generation of wastewater.

Handling of conflict materials

For the conflict minerals tin, tungsten, tantalum and gold, as well as for other raw materials such as cobalt, the supplier must establish processes in accordance with the guidelines of the Organisation for Economic Co-operation and Development (OECD) for the fulfilment of due diligence to promote responsible supply chains for minerals from conflict-affected and high-risk areas.

When selecting products and purchasing components, appropriate due diligence must be exercised to ensure that only raw materials from verified smelters or refineries are used for Hatz.

Handling of waste and hazardous substances

The generation of waste must be kept to a minimum throughout the supplier’s value chain. Chemicals or other materials that pose a hazard when released into the environment must be identified. Safety must be ensured at all times during the handling, collection, storage and transport of these wastes, as well as during their recycling, reuse and disposal.

Mercury must be used in accordance with the prohibitions of the Minamata Convention of 10 October 2013 and persistent organic pollutants in accordance with the Stockholm Convention of 23 May 2001, as amended.

Social action

Diversity, equality and inclusion

Equality, diversity and inclusion are firmly anchored in our corporate mission statement, business processes and management culture. We are committed to ensuring that the diversity that exists in our society is also reflected in the workplace, valued and seen as an asset. We also expect this from our suppliers.

Discrimination, harassment, women’s rights

Our suppliers must ensure that there is no discrimination, exclusion or preferential treatment based on ethnic origin, skin colour, gender, sexual orientation, religion, political opinion, national origin, membership of minorities or social background. The working environment must be free from harassment. A social environment must be promoted that ensures respect for each individual and offers equal opportunities to all employees.

We condemn any distinction, exclusion or restriction based on gender that has the consequence or purpose of impairing or nullifying the recognition, enjoyment or exercise by women of human rights and fundamental freedoms on the basis of equality of men and women.

Human rights, occupational safety and health protection

Our suppliers undertake to comply with human rights in accordance with the United Nations Universal Declaration of Human Rights and to respect and support the principles of the United Nations Global Compact. These require from companies to recognise, support and implement a catalogue of fundamental values within their sphere of influence.

Hatz expects compliance with the applicable national labour rights and recognition of the core labour standards of the International Labour Organisation (ILO) and the rights established by the Organisation for Economic Co-operation and Development (OECD). In addition, the supplier must respect the labour rights of employees with regard to freedom of association and nationally applicable standards and guidelines regarding remuneration and working hours.

Our suppliers must comply with the nationally applicable rules on occupational safety and health protection. In doing so, they must take measures – for example in the form of training – to improve occupational safety, prevent occupational diseases and minimise health and accident risks as far as possible. Our suppliers guarantee their employees access to drinking water in sufficient quantities at all times and provide access to clean sanitary facilities.

Freedom of association

Hatz recognises the right of employees to form employee representatives and to conduct collective bargaining to regulate working conditions. The supplier must uphold its employees’ right to join trade unions. The establishment of, affiliation to and membership of a trade union must not be used as grounds for unjustified discrimination or retaliatory measures. Trade unions must be allowed to operate freely and in accordance with the law of the place of employment. This includes the right to strike and the right to collective bargaining.

Child labour

Hatz does not employ children and also requires its suppliers to refrain from any form of child labour. Suppliers must observe and comply with all applicable national guidelines in all cases. In particular, the Convention on the Minimum Age for Admission to Employment (Convention 138 of the International Labour Organisation) and the Convention on the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour (Convention 182 of the International Labour Organisation) shall serve as a benchmark and be observed.

Forced labour

The supplier further undertakes not to permit any form of forced or compulsory labour.

Rights of minorities and indigenous peoples

Our suppliers respect the rights of minorities and indigenous peoples and pay attention to the impact their business activities and those of their business partners have on the human rights of these groups.

Ethical recruitment

The supplier’s application and recruitment process is ethical, sustainable, transparent and respectful in accordance with legal and regulatory requirements. A detailed procedure must be clearly set out in the supplier’s relevant documented information.

Remuneration, working hours

Remuneration for regular working hours and overtime must be in line with the national minimum wage or industry minimum standards, whichever is higher. The supplier must ensure that employees receive clear, detailed and regular written information about the composition of their remuneration. The legal requirements regarding working hours and breaks must be strictly observed.

Private or public security forces

The supplier shall refrain from using security personnel if, due to a lack of guidance or control, there is a risk of torture and cruel, inhuman or degrading treatment, injury to life or limb, or interference with freedom of association and assembly.

Compliance with sustainability requirements

It is Hatz’s goal to work with their suppliers to ensure that our requirements are implemented sustainably throughout the entire supply chain. We therefore expect our suppliers and business partners to make every effort to ensure that the principles and requirements of these sustainability requirements are also observed by their subcontractors.

In the event of suspected violations of the requirements, e.g. negative media reports, information from employees, etc., Hatz reserves the right to request further information on the relevant facts and to carry out audits in order to rule out such suspicions or, if necessary, to take further measures.

If the supplier fails to comply with our sustainability requirements, we will consider this to be a significant impairment of the contractual relationship and the basis of the contract. In such cases, we therefore reserve the right to terminate the contract agreed with the supplier without notice.