Supplier Code of Conduct
I. Preface
We at JOYSONQUIN Automotive Systems Germany GmbH and all our affiliates (in the sense of sec. 15 et seq. German Stock Corporation Act (AktG)) („JOYSONQUIN“, “we” or “us”) are highly committed to legal compliance, business ethics as well as our social and corporate responsibility. In particular human rights and environmental protection, product safety, the protection of rights of employees and their representatives, fair competition and anti-trust are corporate values for us. Therefore, we only work with suppliers who are committed to the same principles.
II. Scope of application
This Supplier Code of Conduct applies to all suppliers of JOYSONQUIN and is part of the contractual relationship between us and all our suppliers.
The supplier agrees that the following provisions shall apply to all current and future business relationships with JOYSONQUIN as an essential obligation and minimum requirement. The supplier in particular agrees that the provisions contained in this Supplier Code of Conduct apply to all future deliveries by the supplier to us and that they apply in addition to the other contractual provisions (e. g. the provisions of a supply agreement) that are applicable in connection with the respective delivery; any conflicting, additional or deviating terms and conditions of the supplier with regard to the subject matter of this Supplier Code of Conduct shall not become part of the contract unless we expressly agree to their validity in writing. This Supplier Code of Conduct shall apply exclusively even if the supplier carries out a delivery or service to us without reservation in the knowledge of its conflicting or deviating terms and conditions.
The supplier is obliged to comply with the provisions of this Supplier Code of Conduct. The provisions of this Supplier Code of Conduct shall not be considered to be exhaustive and shall neither apply instead of the applicable legal regulations nor affect their applicability. In particular, the legal obligations of the supplier and our legal rights due to a breach by the supplier of his obligations arising from this Supplier Code of Conduct and/or the legal regulations shall not be affected by the provisions of this Supplier Code of Conduct.
III. Basic Principles
The supplier commits to adhere to the basic principles (“Basic Principles”) as set out in this section III.
1. Fundamental Principles
> Compliance with laws: Next to compliance with all contractual conditions agreed with JOYSONQUIN including this Supplier Code of Conduct, the supplier undertakes to fully comply with all applicable laws and regulations. This Supplier Code of Conduct takes precedence over applicable laws and regulations or national or international standards or self-given standards by supplier, unless they contain regulations which are more stringent than supplier’s obligations set out in this Supplier Code of Conduct. If a local custom conflicts with a provision of this Supplier Code of Conduct, this Supplier Code of Conduct must be followed.
> Financial responsibility (Accurate Records) /reporting: We expect our suppliers to observe the principles of proper accounting and (if applicable) financial reporting at all times.
2. Cooperation / Anti-corruption and Anti-money Laundering
We expect our suppliers to abide by laws and regulations prohibiting unfair competition. Supplier insofar in particular adheres to the following further basic principles within its operating practices, and makes sure by appropriate measures that his employees do so:
> Integrity and conflict of interest: The highest standards of integrity must be applied to all business activities. Decisions are made exclusively on the basis of factual criteria and are not influenced by personal interests and relationships. Supplier is expected to disclose any actual or potential conflicts of interest that could impact its objectivity in dealings with JOYSONQUIN.
> Anti-Corruption and Bribery: No form of corruption or bribery shall be tolerated or engaged in, neither directly nor indirectly, even if this means that a business or transaction will not be concluded. It will not be granted, offered or promised anything of value to a governmental official or any counterpart in the private sector with the aim of influencing or obtaining a preferential treatment or other improper advantage. This also includes to refrain from giving or accepting facilitation payments.
> Fair competition: Supplier and its employees will act in compliance with national and international competition and antitrust laws.
> Anti-Money Laundering: Money Laundering or terrorism financing shall not be facilitated, neither directly, nor indirectly.
> Customs, Export controls and economic sanctions: All applicable national and international export control, customs, sanctions, and embargo regulations shall be complied with in all deliveries, services, and payments.
> Data Protection, Data Security and intellectual property: All personal data shall be collected in accordance with applicable data protection regulations, only be processed and used in a lawful, transparent and secure manner and its effective protection and use only for legitimate purposes ensured. Intellectual Property of JOYSONQUIN as well as third parties will be respected; in particular, no counterfeit parts shall be produced and/or delivered.
> Responsible Mineral Sourcing: No products shall be knowingly supplied, that contain raw materials that contribute to human rights abuses, bribery, corruption, the financing of armed groups or ethical violations, or that negatively impact the environment or comparable negative effects.
> Non-disclosure of information to third parties: Information provided by JOYSONQUIN, be it information about JOYSONQUIN and/or JOYSONQUIN’s business partners, will be kept strictly confidential and protected against access by third parties, misuse, loss, destruction and manipulation. This has to be ensured also by our suppliers for their supply chain.
> Disclosure of information: Financial and non-financial information will be disclosed to us in accordance with applicable regulation and prevailing industry practices. Moreover, upon request supplier will disclose information regarding supplier’s labor/labor force, health and safety practices, environmental practices, business activities, financial situation, and performance.
3. Treatment of employees
Supplier will further adhere to respectively valid labor laws and regulations and create a good working environment, observing in particular the following principles:
> Expected Behaviour: All employees are expected to act with integrity, respect, and professionalism at all times. We treat others fairly, communicate honestly, and uphold the company’s values in every decision and action. Discrimination, harassment, or any form of disrespectful conduct will not be tolerated.
> Working times: Respectively applicable local laws regarding working hours shall be complied with.
> Ethical Recruiting: The supplier shall ensure transparency of the application and recruitment process and the equal treatment of all applicants and employees and insofar provide a fair framework.
> Use of private and public security forces: It shall be refrained from the commissioning or use of security forces, if, in the course of their use, persons are treated or injured in an inhuman or degrading manner, or injured, or if the freedom of association is impaired hereby.
> Health, Safety and Environmental Protection: The supplier shall be committed to maintaining a safe, healthy, and environmentally responsible workplace. All employees must use the required personal protective equipment and follow all machine safety procedures to prevent injury. Everyone should be familiar with emergency preparedness measures and act quickly and responsibly in case of an emergency. Incidents and accidents must be reported immediately to ensure proper management and to prevent recurrence. The supplier promotes workplace ergonomics by encouraging safe and healthy work practices that reduce strain and fatigue. When handling chemical or biological substances, employees must strictly follow safety instructions and use appropriate protective measures. Proper fire protection practices must always be observed, including keeping exits clear, maintaining firefighting equipment, and reporting potential hazards without delay.
4. Sustainability and Environment
A sustainable purchasing strategy is becoming increasingly important, not only because our customers make their procurement decisions based on aspects of environmental protection and social responsibility. We at JOYSONQUIN have made it our mission to meet the needs of the present without compromising the ability of future generations to meet their own needs and we expect our suppliers to do the same by obeying the following basic principles regarding sustainability and environment:
> Biodiversity: Supplier shall evaluate its operations’ impact on biodiversity and land use, to avoid sourcing that contributes to deforestation or habitat loss.
> Land, forest and water rights and forced eviction: Supplier shall not, in breach of legitimate rights, deprive any person of land, forests or waters, the use of which secures the livelihoods of persons. Supplier shall respect the rights of indigenous peoples and ensure that its operations do not infringe on traditional land rights.
> Sustainable resource management: Our suppliers have a duty to contribute to the careful use of energy, water and fuels, in particular by using natural resources responsibly. This includes protecting air quality and water quality, and ensuring responsible water consumption and management.
> Greenhouse gas emissions: Before their release, greenhouse gas emission from the operating processes shall be typified, monitored and – if necessary – respectively treated. Supplier is required to find economic solutions to reduce any greenhouse gas emissions. Supplier is encouraged to define greenhouse gas reduction targets aligned with the Paris Agreement, and seek third-party validation where possible.
> Energy efficiency and renewable energies: Also, energy consumption shall be monitored, documented and economic solutions to be found in order to improve energy efficiency and minimize energy consumption. In this context, the use of renewable energy shall be promoted and expanded.
> Decarbonisation: In order to reduce CO2 emissions, we expect our suppliers to minimize the use of fossil fuels in their operating procedures including transport and buildings, but to rather use low-carbon energy. Furthermore, the supplier is obliged to calculate and provide the Global Warming Potential (“GWP”) as CO2 equivalent per unit of product (e.g., per kg or per piece) for all parts or projects supplied to JOYSONQUIN. Upon JOYSONQUIN’s request, the supplier must provide the GWP data along with comprehensive documentation detailing the methodology, input data, and calculations used to determine the CO2 equivalent values.
> Responsible chemicals management (Handling of chemical and/or biological substances): chemicals or other materials that pose a hazard when released into the environment shall be identified and handled, transported, stored, used, recycled, or reused and disposed in a way that safety is ensured.
> Waste reduction and prevention, reuse, and recycling: The supplier maintains an appropriate system in order to identify, reduce and responsibly recycle, dispose of or reuse waste. Suppliers should implement circular economy principles, such as reusing materials and minimizing primary resource consumption.
> Animal welfare and protection: Supplier shall comply with all applicable laws and regulations regarding animal welfare and protection.
The corresponding qualified certifications are expected for the purpose of verification.
IV. Expectations with regard to human rights and environmental concerns
We make the consideration of the expectations listed below (“Expectations”) a prerequisite for entering into and continuation of all our business relationships. These Expectations are as follows:
> Child Labour and young workers: Individuals below the minimum age permitted by local law must not be employed. In case that such local laws and the core ILO standards regarding child labour including ILO Convention 138 are in conflict, it shall be operated in accordance with ILO Convention 138. According to ILO Convention 138 the minimum employment age for employment should not be less than the compulsory schooling age of the country in which the individual is employed but in any case, not less than 15 years. However, in those countries subject to the developing country exception of the ILO Convention 138, no workers under the age of 14 shall be employed.
> Forced labor: Use of any forms of slavery, including modern slavery, human trafficking, servitude, forced or compulsory labor shall be strictly prohibited.
> Occupational Health and safety: The occupational safety and health obligations applicable under the law of the place of employment shall be complied with, thus preventing the risk of accidents at work and/or work-related health hazards.
> Freedom of association: The right of free association of employees and collective bargaining shall be recognized as far as legally possible. Formation, joining, and membership in a union shall not be used as grounds for unjustified discrimination or retaliation.
> Diversity, Equity and Inclusion, non-discrimination and harassment: Respect for women’s rights is a fundamental principle in all business activities. Equal opportunities in employment, fair treatment, and protection from discrimination or harassment must be ensured regardless of gender. A safe, inclusive, and supportive work environment for women is essential. Practices should align with internationally recognized human rights standards and promote gender equality throughout the supply chain. All people shall be treated equally, concerning human rights and working conditions and respect rights of minorities and indigenous peoples. Unless this is justified by the requirements of the employment, equal opportunities and treatment of employees shall be promoted in particular irrespective of skin color, race, social background, nationality, disabilities, political opinion, religion or belief, sex or age.
> Minimum wage: Fair remuneration shall be provided, in particular the respectively applicable national statutory minimum wage shall be guaranteed. Employees salary and benefits must be in accordance with the statutory provisions.
> Environmental protection: Any kind of environmental damage should be avoided. This includes counteracting greenhouse gases (GHG), harmful soil quality changes, water and air pollution, harmful noise emissions and excessive water consumption. The supplier shall only supply organic materials (e.g. wood, leather) that are not associated with negative impacts on biodiversity.
We expressly reserve the right to adjust these Expectations at any time. The supplier undertakes to comply with the Expectations listed above as well as such further Expectations as they may be defined by us based on a risk analysis and hereafter respectively notified to the supplier immediately in writing.
V. Whistleblowing and protection against retaliation
We encourage the supplier to offer an effective means of complaint that is suitable for individual persons or groups of persons to report via this channel violations of the law and/or violations of Expectations outlined above as well as suspected cases of such violations. In any event, the supplier must at least, insofar as he is legally obliged to establish such complaints possibilities or channels, comply with the applicable legal regulations in this regard.
VI. Implementation, Control-mechanisms and sanctions
The supplier undertakes to comply with the Expectations listed above and take appropriate measures (in particular preventive measures) to enforce them. Moreover, the supplier must appropriately address the Expectations vis-à-vis his suppliers along the supply chain. The same applies to such further Expectations as they may be defined by us based on a risk analysis and hereafter respectively notified to the supplier immediately in writing.
1. Management and control systems
Supplier shall implement appropriate measures to identify, prevent, and mitigate risks related to the above mentioned Expectations within the supply chain. This encompasses, but is not limited to, a supply chain mapping.
Additionally, we expect the supplier to maintain an appropriate management system in order to ensure compliance with applicable laws and this Supplier Code of Conduct. To this end, we in particular expect our suppliers to conduct appropriate trainings of their employees in order to familiarize these with the Expectations and Basic Principles set out in this Supplier Code of Conduct.
2. Provision of documentation
Insofar as we are obliged to comply with regulatory requirements, in particular those of the German Act on Corporate Due-Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz – LkSG), because we have concluded a contract with a company which is obliged to comply with such requirements, the supplier has to provide us with all information, data and documents that are necessary in order to be able to fulfil such requirements. This encompasses, in particular, provision of evidence that goods and their components were not – wholly or in part – manufactured with forced labor in the People’s Republic of China, especially from the Xinjiang Uyghur Autonomous Region, or Xinjiang. Such documentation may encompass, in particular:
- trade invoices
- production documents
- salary information (Timecards or salary deductions from factories abroad)
- videos and/or photographic evidence of the goods manufactured in the factory in China (or elsewhere abroad)
- parts lists
- purchase contracts and orders
- delivery documents
This obligation applies without prejudice to appropriate measures for the protection of business and trade secrets and for the compliance with mandatory legal data protection provisions. In any event, in order to fulfil this duty of disclosure, the supplier only has to disclose his business and trade secrets and these may also only be used insofar as it is necessary for us to comply with the aforementioned regulatory requirements.
3. Questionnaire / Audit
We may verify supplier’s compliance with the Expectations as well as its further commitments and obligations set out in this Supplier Code of Conduct through appropriate control-measures, which may include a self-assessment questionnaire.
The supplier shall, at our request, enable us to verify at the supplier’s premises compliance with this Supplier Code of Conduct, in particular as to whether the Expectations and Basic Principles outlined above are being addressed appropriately (“Audit”). We shall also have the right to commission a third party, which is bound to confidentiality by profession and acceptable to supplier, to do so. To this end, the supplier shall grant us or such third party access to its premises as well as all documentation and information necessary for this purpose during normal business hours with reasonable advance notice, to the extent permitted by law.
Audits may only be carried out for justified reasons, in particular in the event of process-related changes, the awarding of contracts or if there are concrete indications of violations of the Expectations and/or Basic Principles outlined above. Moreover, we shall take care that the supplier’s business is disturbed as little as possible by such (own or third party) activity at supplier’s premises. All other rights remain reserved.
The above obligations in connection with the examinations described therein apply without prejudice to appropriate measures for the protection of business and trade secrets and for the compliance with mandatory legal data protection provisions. In any event, in order to fulfil his above-mentioned obligations in connection with the aforementioned examinations, the supplier only has to disclose his business and trade secrets and these may also only be used insofar as it is necessary for the purpose of these examinations.
4. Remedial action and reporting misconduct
If during the business relationship the supplier discovers a violation of the Expectations set out above that the supplier has causally caused and that has already occurred or is imminent in the business of the supplier (“Violation”), or there is a suspicion of such a Violation due to actual indications, the supplier has to report this misconduct and the information available to him in this respect to us without undue delay. Furthermore, if we or the supplier discover such a Violation, the supplier shall, without undue delay, take appropriate remedial action to prevent, end or minimize the extent of this Violation. This also applies if such Violation is identified at a supplier’s contractual partner.
If the Violation is such that the supplier cannot end it in the foreseeable future, supplier has to cooperate with us with regard to drawing up and implement a concept for ending or minimizing the Violation without undue delay. The concept must contain a concrete timetable, within which supplier is obliged to implement the developed concept (“Remedial Concept”). When fulfilling the aforementioned obligations, due consideration must be given to the protection of business and trade secrets by means of appropriate measures and mandatory legal data protection provisions must be complied with.
In the event that the Violation is of a serious nature, we reserve the right to suspend the business relationship until the Violation has ended. For the duration of such temporary suspension of the business relationship, the corresponding contractual obligations of us and the supplier shall also be suspended. We will inform the supplier in writing about the start and end of the suspension. For the avoidance of doubts; even if we suspend the business relationship in accordance with this section VI. 4, the supplier remains liable for the consequences of the Violation, including possible damages and expenses resulting from suspension due to the Violation.
If we or the supplier identify a very serious Violation causally caused by the supplier, we are entitled to unilaterally terminate the business relationship (all agreements and contracts concluded with the supplier, in particular master supply agreement, project agreement(s) and individual purchase order(s)) without notice if the supplier fails to remedy the situation within the timetable set in the Remedial Concept and no other remedy can be found despite joint efforts. This includes the right of each JOYSONQUIN company to unilaterally terminate all agreements and contracts the respective company concluded with the supplier without notice. All services provided by the supplier up to the time of termination shall be remunerated by the respective JOYSONQUIN company as agreed. Any further contractual or statutory rights of the respective JOYSONQUIN company to extraordinary termination remain unaffected, as do any statutory or contractual rights to compensation.
VII. Breaches of this Supplier Code of Conduct
In the event that the supplier breaches his obligations under this Supplier Code of Conduct, we reserve our rights arising from this breach. In particular, a breach by the supplier of his obligations arising from this Supplier Code of Conduct may constitute a reason for or cause each JOYSONQUIN company to temporarily suspend the fulfilment of its individual or all agreements with the supplier (e. g. supply agreements), which have not yet been completely fulfilled, until the breach has been remedied or even to terminate them as the last appropriate solution.
All services provided by the supplier up to the time of termination shall be remunerated by the respective JOYSONQUIN company as agreed.
Without prejudice to our further legal or contractual rights and notwithstanding the regulations in the foregoing section VI. of this Supplier Code of Conduct, the following shall therefore apply: If the supplier breaches his obligations under this Supplier Code of Conduct, each JOYSONQUIN company has the right to suspend the fulfilment of its contract concluded with the supplier until the breach has been remedied. Furthermore, in the aforementioned case, each JOYSONQUIN company is entitled, at its discretion, to terminate a contract concluded with the supplier extraordinarily without notice or to declare our rescission of such a contract, which in both cases requires that the supplier was set a reasonable period of time to remedy the breach and this period has expired without result. However, specifying a period of time may be dispensed with in the event of a serious, repeated or permanent breach.
VIII. Applicable Law and Jurisdiction
This Supplier Code of Conduct shall be governed by the laws of the Federal Republic of Germany, without regard to the United Nations Convention on Contracts for the International Sale of Goods (CISG). As far as not otherwise agreed in the Master Supply Agreement, the exclusive place of jurisdiction for all disputes arising from this Supplier Code of Conduct shall be the registered office of JOYSONQUIN. However, JOYSONQUIN shall also be entitled to commence legal proceedings at the registered office of the supplier and at any other admissible place of jurisdiction.
IX. Declaration of Supplier
By accepting this Supplier Code of Conduct, supplier agrees to be bound by this Supplier Code of Conduct and declares, in addition to any other contractual agreements with JOYSONQUIN, to comply with and accept the Expectations, Basic Principles, control-mechanisms and sanctions and other obligations as set out herein.