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Code of conduct for suppliers
12.01.2022

Preamble
ZAMA is committed to sustainable and responsible business practices – in the interests of thecompany, its employees and the general public alike. The ZAMA Group recognizes its responsibilityas amember of society in all regions in which it operates. As a family-owned company, ZAMA assumes a
special responsibility for people and nature. We respect and uphold the internationally declared humanrights, the protection of natural resources as well as the cultural, social, political and legal diversity ofsocieties and nations.
This Code of Conduct for Suppliers is based on legal regulations such as the German Supply ChainDue
Diligence Act, the principles of the United Nations Global Compact, the standards of the International
Labor Organization (ILO), especially the Fundamental Principles and Rights at Work, and the ZAMA
Principles of Social Responsibility, which are outlined in the ZAMA corporate culture.
The duties under this Code of Conduct are two-fold: It deﬁnes mandatory requirements (“must”) thatbusiness partners must not violate. And it describes ZAMA's expectations towards business partners(“prefer”) which are the basis for evaluating sustainability performance and thus deﬁne therequirements for preferred suppliers. We expect our business partners to act in accordance with thisCode of Conduct and to constantly improve their sustainability performance. We ask their top
management to demonstrate commitment to act accordingly. ZAMA will consistently pursue violationsof this Code of Conduct and take appropriate measures. ZAMA reserves the right to terminate thebusiness relationship as a ﬁnal consequence. Furthermore, we expect our business partners to work
towards ensuring that their business partners also comply with these principles.
Together, we strive to promote responsible procurement and the continuous improvement of socialandenvironmental standards in ZAMA's supplier network.

ZAMA Precision Industrial (Huizhou) Co., Ltd
ZAMA Precision Industry Manufacturing Philippines, Inc
ZAMA Corporate Co., Ltd
Zama Japan Kabushiki Kaisha
USA Zama INC.

ZAMA Code of Conduct for suppliers
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Code of Conduct for Suppliers
12.01.2022

CONTENTS
1

Respect of human rights and fair working conditions .................................................................. 3
1.1

Prohibition of child labor ...................................................................................................................3

1.2

Prohibition of forced labor ............................................................................................................... 3

1.3

Fair working conditions, remuneration and working hours ............................................................. 4

1.4 Equality and the prohibition of discrimination................................................................................. 5
1.5 Freedom of association .................................................................................................................... 5
1.6 Occupational health and safety........................................................................................................ 6
1.7
2

No expropriation .............................................................................................................................. 6
Environmental protection .......................................................................................................... 7

2.1

Avoid damage to the natural basis ................................................................................................... 7

2.2 Environmentally sound use of resources ..........................................................................................7
2.3 Reduction of greenhouse gas emissions .......................................................................................... 7
3

Corporate governance and business relations ............................................................................. 8
3.1 Combating corruption and anti-competitive behavior .....................................................................8
3.2 Handling conﬁdential information ....................................................................................................84

Responsible procurement .......................................................................................................... 8

5

Amendments ............................................................................................................................. 96

Implementation ......................................................................................................................... 9

7

Liability and Signature ................................................................................................................ 9

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1

Respect of human rights and fair working
conditions

For ZAMA, the company's social responsibility towards its own employees is of central importance.
We expect our suppliers not to commit nor to participate in human rights violationsand to organize
working conditions in a fair and appropriate manner in compliance with legal requirements. To
integrate socially acceptable practices in the workplace, including training, veriﬁcation (i.e. audits)and grievance mechanisms, we encourage the supplier to implement a social management system inorientation of the international standard SA8000.

1.1

Prohibition of child labor

ZAMA strictly rejects any form of child labor. The supplier must commit to zero tolerance of childlabor in its own business area or at its suppliers. The supplier must comply with the following
requirements regarding access to employment:The worst forms of child labor are strictly prohibited (ILO 182).
The minimum age for employment is the age at which compulsory education ends under theapplicable national law and is at least 15 years (ILO 138).
Persons under the age of 18 are considered minors and are therefore in need of protection (ILO
182). They must not perform work which, by its nature or the circumstances in which it isperformed, may endanger their health, safety or morals, e.g., overtime or night shifts (ILO 138).

We prefer suppliers that work towards the abolition of child labor within their own sphere ofinﬂuence, forexample by cooperating with suppliers and NGOs or by supporting schools.

1.2

Prohibition of forced labor

ZAMA strictly rejects any form of forced labor. The supplier must not tolerate forced andcompulsory labor or any form of modern slavery, bonded labour, human traﬃcking, domination
or oppression in the workplace environment, such as extreme economic exploitation, in its own
business and at suppliers:This includes any work or service which is required of a person under the threat of punishmentand
for which they have not voluntarily made themselves available (ILO 29).
In the recruitment, hiring and employment of employees, the supplier agrees not to use force,
deception, intimidation, demand excessive fees nor to use forced labor as a punishment i.e. foradvocating or expressing political views (ILO 105).
If third parties are engaged to recruit or hire employees or to protect the company, thesupplier is obligated to ensure that those third parties also comply with this prohibition.

We prefer suppliers who work towards the elimination of forced labor within their own sphere of
inﬂuence (for example by cooperating with suppliers and NGOs). The supplier should pay particularattention to the following indicators of forced labor in its business relationships: non-payment of wages,
restriction of employees' freedom of movement, withholding of passports or other documents,
intimidation of employees or their close associates, unacceptable working and living conditions andexcessive overwork.

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1.3

Fair working conditions, remuneration and working hours

The supplier must ensure that working conditions, remuneration and working hours comply withnational laws and industry standards, out of which the strictest regulations apply. Working conditions,
remuneration and working hours must be deﬁned by written agreement, and are considered as acontract between the supplier and employee at the time of hire. Additionally, ZAMA expects the
supplier to provide appropriate conditions for the employees as described inthe following.
With regard to remuneration, beneﬁts and working hours, the supplier must comply with thefollowing
speciﬁcations: The supplier shall organize working hours (overtime and maximum working hours, rest periods,work
schedules, maternity leave, sick leave, leave for family reasons, paid overtime) in such a way as toprevent occupational accidents due to physical and mental fatigue and to preserve the health of
employees (ILO 1, ILO 14). This also includes temporary employment, the secondment of workers
or the outsourcing of work.
 All overtime shall not be compelled and must not exceed the limit set by law. If there is no
statutory minimum wage or overtime premium, wages must be at least equal to the averageminimum wage for the industry and overtime must be compensated at a rate that exceeds the regularhourly rate.
 The weekly working time, including overtime, must not exceed 60 hours and overtime must notbe
used on a permanent basis. Exceptions are emergencies and exceptional circumstances.
 Employees shall be provided with at least 24 consecutive hours of rest at least every sevendays.
 Wages shall be paid at speciﬁed times in a traceable manner in accordance with ILO 95,
unauthorized deductions from pay and deductions from pay as a disciplinary measure areprohibited.
 The necessary contribution to the statutory social insurance is made.
 Social beneﬁts can be claimed by employees in accordance with applicable law (e.g. sick leave).
 The supplier prohibits harassment, abuse and punishment with any form of violence.
We prefer suppliers who promote fair working conditions in accordance with ILO standards regarding,among other things, working hours, maternity protection, wages and income, employment security,
work and family, elderly workers, social security and migrant workers withinits sphere of inﬂuence. In
addition, we ask the supplier to progressively improve the living standards of employees throughimproved wage systems and social beneﬁts that exceed legal requirements. Every worker has the rightto a living wage for a regular work week.

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1.4

Equality and the prohibition of discrimination

Equal treatment of all employees is a core value of ZAMA. We expect our suppliers to base theirselectionof employees on their qualiﬁcations and skills and maintain equal opportunities in all aspects of theemployment relationship.
The supplier must comply with the following with respect to hiring and employment of employees:

Any distinction, exclusion, or preference based on ethnic and national origin, citizenship, social
origin, color, health status, disability, sexual orientation, age, sex, political opinion, religion, or
belief (ILO 111), or any other characteristic protected by law, such as membershipof a national
minority, pregnancy, or veteran status, is prohibited, unless this is justified by the requirementsof employment
This includes the principle of equal pay for work of equal value (ILO 100).
This also includes equality of opportunity and treatment without discrimination of migrant,
temporary or seasonal workers.

We prefer suppliers who work to promote diversity in their own sphere of inﬂuence (e.g. through acareful selection of suppliers), identify vulnerable groups among the employees and implement
programs to strengthen equal treatment and prevent discrimination in recruitment and employment.

1.5

Freedom of association

ZAMA is committed to respecting freedom of association and collective bargaining. The supplier must
respect the fundamental right of every employee to establish organizations of their choice, tojoin such
employee organizations and trade unions and to conduct collective bargaining (ILO 87 and ILO 98). The
supplier must prohibit the disregard of freedom of association and the use of security forces tointerfere with freedom of association.
In situations where the rights to freedom of association and collective bargaining are limited by law,other opportunities must be granted for the independent and free union of employees for collective
bargaining. Workers’ representatives are to be protected against discrimination and needto be granted
free access to the workplaces of their colleagues to have the ability to exercise their rights in a legal
and peaceful manner.
Furthermore, we prefer suppliers who promote constructive and transparent dialogue between
employees, their representatives and management to resolve internal labor disputes and employee
grievances and ﬁnd agreements concerning working terms and conditions.

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1.6

Occupational health and safety

Occupational health and safety has top priority at ZAMA. The supplier must provide safe andhygienic working environments that comply at least with the national laws and standards of therespective country.
In order to avoid work-related health hazards, the supplier must commit to the following
protective measures:

Substances that are hazardous to health or toxic are labeled, stored safely, and handledaccording to their hazard potential.



Workplace, work equipment, tools, machines and devices are in a safe condition.
Necessary personal protective equipment and protective devices on machines are provided bythe
supplier and are ready for use.
Appropriate measures are in place to protect buildings from collapse, ﬁre, anticipatedenvironmental conditions or unauthorized access.
Escape and rescue routes and emergency equipment, including ﬁrst aid and emergency
treatment, are available and accessible.







A hygienic working environment is ensured by a minimum level of order and cleanliness.
Employees are adequately trained and instructed.
We expect our supplier to emphasize a hygienic working environment Safe drinking watersupply and access to sanitary facilities shall be guaranteed for all employees.
 If sleeping accommodation for employees are provided the supplier undertakes to ensure thatthey
are clean, safe and that the ﬁre safety standard for the respective building is satisﬁed.
The supplier should strive for the continuous reduction of work-related health hazards and theimprovement of occupational health. To this end, we prefer suppliers who establish an
occupational health and safety management system based on ISO 45001, including risk
assessment, preventive measures, performance measurement and eﬀective targets.

1.7

No expropriation

Our supplier must not engage in unlawful appropriation, destruction or clearing of land, forests, andwaters that support the livelihoods of individuals. The supplier is committed to obtaining Free Prior andInformed Consent (FPIC) from all aﬀected parties and adequate compensation for land use.
We prefer suppliers who analyze their business activities with regard to potential negative impacts onhuman livelihoods, implement measures to mitigate identiﬁed risks and respect the ILOConvention 169
on the Rights of Indigenous Peoples.

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2

Environmental protection

ZAMA takes responsibility for the environment. We are aware of the resource scarcity and our
responsibility towards future generations. We therefore expect our suppliers to constantly minimizetheirenvironmental impact and hazards and to continuously improve environmental protection in their daily
business operations. The supplier must comply with all applicable environmental laws, standards andother regulations. We prefer suppliers who continuously improve their environmental performance andtherefor implement an environmental management system based on ISO 14001.

2.1

Avoid damage to the natural basis

The supplier must not to cause any harmful alteration, consumption, waste, contamination, pollution
or noise that signiﬁcantly aﬀects the natural basis for the preservation and production of food, denies a
person access to clean drinking water, impedes or destroys access to sanitary facilities or damages
the health of a person.
To protect the natural basis the supplier must, at a minimum, take the following actions:Compliance with all applicable international conventions especially Minamata Convention (useof
mercury), Stockholm Convention (persistent organic pollutants), Basel Convention (transboundary
movements of hazardous wastes and their disposal).
Labeling of environmentally hazardous or toxic substances and storing, using and disposingthem
in a manner so that spills are prevented.
Compliance with SWN 39003 (REACH & RoHS) regulations on banned and restricted
substances.

We prefer suppliers who take measures within their own sphere of inﬂuence to prevent damage tonatural ecosystems such as forests and to promote their protection and conservation. We also
encourage the supplier to take measures to substitute or at least reduce the use of environmentally
harmful chemicals.

2.2

Environmentally sound use of resources

The supplier must handle resources responsibly (i.e. energy, water, raw materials, primary materials)
and avoid wastage. We prefer suppliers who actively promote recycling within their sphere of inﬂuence.
This includes the use of recycled materials and their integration into productdevelopment.

2.3

Reduction of greenhouse gas emissions

The reduction of climate-damaging emissions is a key concern for ZAMA. The supplier must takemeasures to generate transparency about the emissions of its own business activities, including
supply chain. We prefer suppliers who have a carbon management system and take measures tocontinuously reduce their greenhouse gas emissions.

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3

Corporate governance and business relations

At ZAMA, all our actions are based on the fundamental values of sincerity, lawfulness and fairness.
Conducting business operations in compliance with the law is essential for ZAMA. The supplier mustcomply with all legal regulations, in particular with regard to anti-corruption and anti-fraud, antimoney laundering, competition and antitrust law, tax law, data protection and privacy, and export
control. We expect our suppliers to ensure compliance with all mandatory requirements in atraceable
manner. We therefore prefer suppliers who have implemented a compliance and risk management
system to an appropriate extent, including corresponding training.

3.1

Combating corruption and anti-competitive behavior

Corruption in any form, including extortion and bribery, will not be tolerated by ZAMA. Our suppliermust commit to the prohibition of corruption and therefore implement regulations on theavoidance ofcorruption, including guidelines on the acceptance and giving of (tangible and non- tangible) gifts inthe company. In addition, we expect that fair competition is just as important to our suppliers as it is
to us and that they do not enter into any anti-competitive agreements with third parties or abuse adominant market position.

3.2 Handling conﬁdential information
Our supplier must maintain conﬁdentiality to protect sensitive information that requires protection.For
this purpose, the supplier agrees to enter into a non-disclosure agreement with ZAMA.

4

Responsible procurement

For ZAMA, sustainable procurement means paying attention to their impact on the environment andsociety when selecting products, services and suppliers. We expect our suppliers to align their own
procurement activities with these principles. The supplier must ensure that they comply with allapplicable laws and regulations in their procurement activities including procurement or production of
raw materials. A supplier using so-called conﬂict minerals (tin, tantalum, tungsten andtheir ores andgold) must comply with the applicable legal requirements regarding due diligence and veriﬁcation
systems along the supply chain (EU Conﬂict Minerals Regulation, Dodd-Frank Act Section 1502).
The supplier must have appropriate measures to pass on the requirements of this Code of Conduct
to his business partners. We prefer supplies who promote responsible sourcing within their sphere of
inﬂuence by identifying and assessing potential human rights and environmental risks in the supply
chain and, if necessary, taking measures to avoid or mitigate them. In particular,the extraction,
production, transportation, trade, processing and export of raw materials such as minerals (e.g.,cobalt, copper, lithium, aluminum and steel) may contain such risks. They should therefore be given
special consideration by implementing measures to create transparency and control.

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Amendments

The requirements deﬁned in this Code of Conduct may be adjusted from time to time depending onthe
results of risk analyses continuously conducted by ZAMA. The supplier will be informed by ZAMA one (1)month prior to any adjustment coming into force.

6

Implementation

The following measures are taken to promote the implementation of this Code of Conduct:
Complaint mechanism: To learn about (possible) violations of requirements given in this Code of
Conduct, ZAMA maintains a complaint mechanism (https://Stihl.integrityline.com/).
Escalation process: ZAMA supplier management includes a deﬁned escalation process. The
sustainability requirements are integrated into this process. An escalation is started when certain
threshold values are reached, e.g. in the regular supplier evaluation, or event-related.
Veriﬁcation of implementation: To verify compliance with the requirements deﬁned in this Code of
Conduct, ZAMA reserves the right to request a self-assessment from its suppliers, to conduct auditsor tocommission third parties with auditing. These measures serve to promote joint improvement inthe same
way as the Code of Conduct. We expect our suppliers to support us accordingly in conducting suchmeasures.

7

Liability and SignatureWith its signature, the supplier undertakes to recognize and comply with all principles and regulationsof the ZAMA Code of Conduct for Suppliers. This obligation applies to all locations of the supplier aswell as to all locations of the supplier's aﬃliated companies.
Aﬃliated companies of the supplier are companies which are directly or indirectly controlled by the
supplier. Control in the sense of this regulation means that the supplier directly or indirectly owns morethan 50% of the company shares or voting rights in the aﬃliated companies. By signing this agreement,
the supplier conﬁrms that it has all the necessary powers of attorney to be able to eﬀectively make thiscommitment on behalf of the aﬃliated companies as they are deﬁned in this agreement.

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PLAce, date

Supplier nameFirst name, Last name, Position

signature

ZAMA Code of Conduct for suppliers
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