Siemens Code of Conduct
for Suppliers and Third-Party
Intermediaries brochure
Sustainability in the Supply Chain

Sustainability requires
close cooperation with
our suppliers
and third-party
intermediaries

Foreword
Ladies and Gentlemen,
Siemens is active in around 190 countries worldwide – that bears a great responsibility for our people, for our shareholders and for the societies in which we operate. Sustainable business practices are firmly anchored in our corporate
culture, based on our company values and our ethical principles embedded in the Siemens Business Conduct Guidelines.
This applies as well to our Supply Chain Management. Sustainability has long been a fundamental aspect of our corporate policy, and we have elevated it to an essential element of our business strategy. Only in close cooperation with all
stakeholders – specifically our suppliers and third-party intermediaries worldwide - we can seize the opportunities andminimize risks associated with the challenge of sustainable development. Siemens conducts business responsibly and incompliance with the legal requirements and governmental regulations of the countries in which we operate. Therefore,
we expect our people, suppliers, and third-party intermediaries to comply with all applicable laws and regulations basedon – amongst others – the International Bill of Human Rights, Core Labor Norms of the International Labor Organization, the UN Convention against Corruption and OECD Convention against Bribery of Foreign Public Officials.
Over the last years, the world changed, and it requires our willingness and ability to adapt and to develop but – in othercases - to resist firmly. Avoiding environmental pollution, especially reducing Greenhouse Gases immediately, respecting
human rights and much more have to be integral part of our principles of working with our suppliers and their supply
chains. We need to fight against environmental damage but also to resist renunciation of social and humanitarian freedom and tolerance which is in danger in too many countries.
On the following pages you will find information about our approach to a sustainable Supply Chain, a set of commonly
accepted rules and regulations, as well as practical help in implementing sustainable business practices. This is our commitment to clean business.
We are asking you to join us on our path to sustainability for the benefit of the generations to come. This brochure is addressed to suppliers and third-party intermediaries. For simplification purposes the term “partner” is used for both. If thebrochure means to address “suppliers” or “third-party intermediaries” exclusively, the respective term will be used.

Judith Wiese

Dr. Klaus Staubitzer

Annette Kraus

Member of the Managing Board of Siemens AG

Chief Procurement Officer for Siemens AG

Chief Compliance Officer for Siemens AG

Chief Sustainability Officer of Siemens AG

3

Siemens
Code of Conduct
This Code of Conduct defines
the basic requirements placedon the suppliers and third-party
intermediaries of Siemens
concerning their responsibilities
towards their stakeholders andthe environment. The supplier
and/or third-party intermediarydeclares herewith to:

Prohibition of Forced Labor• Neither use nor contribute to slavery, servitude,
forced or compulsory labor, suppression,
exploitation, and human trafficking.
Prohibition of Child Labor• Install no workers under the age of 15 or, in
those countries subject to the developing country
exception of the ILO Convention 138, install noworkers under the age of 14.
• Install no workers under the age of 18 for work
which is likely to harm the health, safety, andmorals.
Non-Discrimination and Respect for Employees• Ensure equal treatment of employees,
irrespective of skin color, race, nationality,
ethnicity, social background, disabilities, gender,
sexual identity and orientation, marital status,
political or religious conviction, or age andpromote equal opportunities amongst them.
• Refuse to tolerate any unacceptable treatment of
individuals such as mental cruelty, sexual
harassment or discrimination including gestures,
language, and physical contact, that is sexual,
coercive, threatening, abusive or exploitative.

4

Legal Compliance
Comply with the laws and regulations of theapplicable legal systems.

Freedom of Association• Recognize the legal rights of workers to form or
join existing trade unions and to engage incollective bargaining; neither disadvantage nor
prefer members of employee organizations or
trade unions.

Human Rights and Labor Practices
To ensure respect of all internationally proclaimed
human rights by avoiding causation of and complicity
in any human rights violations. Heightened attention
shall be paid to ensuring respect of human rights ofrights holders or groups of rights holders which are
specifically vulnerable, such as women, children,
migrant workers or of (indigenous) communities.

Working Hours, Wages & Benefits for Employees• Adhere to all applicable working-hours
regulations.
• Pay fair wages for labor and adhere to allapplicable wage and compensation laws.
• In the event of cross-border personnel
deployment adhere to all applicable legal
requirements, especially with regard to minimum
wages.

Occupational Health & Safety, Security Forces• Act in accordance with the applicable statutory andinternational standards regarding occupational health andsafety and provide safe working conditions.
• Provide training to ensure all employees installed are
educated in health & safety issues.
• Establish a reasonable occupational health & safety
management system¹.
• In the event of use of private or public security forces ensurethat human rights of employees and other rights holders arerespected (no use of unlawful physical or mental violence)
Grievance Mechanism• Provide access to a protected mechanism for their employees
to report possible violations of the principles of this Code of
Conduct and ensure protection of whistleblowers orcomplainants against retaliation.

Environmental and Climate Protection, Protection of
Natural Resources• Act in accordance with the applicable statutory andinternational standards regarding the environment.
• Minimize environmental pollution and make continuous
improvements in environmental protection.
• Establish a reasonable environmental management system .
• Reduce the emission of air pollutants and Greenhouse Gas(GHG), reduce harmful soil change, water pollution andharmful noise emission to the fullest extent as possible.
• Increase energy efficiency, use renewable energy, andreduce water consumption to the fullest extent as possible.
• Cause no unlawful taking of land, forests, and waters.
• Reduce waste and ensure their proper treatment anddisposal.

Fair Operating Practices
Anti-Corruption and Bribery• Tolerate no form of and do not engage directly or indirectlyin any form of corruption or bribery and do not grant, offer
or promise anything of value to a government official or to a
counterparty in the private sector to influence official action
or obtain an improper advantage.
This includes to renounce from giving or accepting improper
facilitation payments.
Fair Competition, Antitrust Laws
and Intellectual Property Rights• Act in accordance with national and international
competition laws and do not participate in price fixing,
market or customer allocation, market sharing or bid rigging
with competitors.
• Respect the intellectual property rights of others.

Conflicts of Interest• Avoid and/or disclose internally and to Siemens
all conflicts of interest that may influencebusiness relationships, and to avoid already theappearance thereof..
Anti-Money Laundering,
Terrorism Financing• Not directly or indirectly facilitate money
laundering or terrorism financing.
Data Privacy• Process personal data confidentially andresponsibly, respect everyone’s privacy andensure that personal data is effectively protected
and used only for legitimate purposes.
Foreign Trade Regulations• Comply with the applicable export, import,
customs, and foreign trade regulations.

Responsible Minerals Sourcing• Take reasonable efforts to avoid in its products
the use of raw materials which originate from
Conflict-Affected and High-Risk Areas andcontribute to human rights abuses, corruption,
the financing of armed groups or similar negative
effects.

Supply Chain• Use reasonable efforts to make its suppliers
comply with the principles of this Code of
Conduct and check their compliance on a riskbased approach.
• Comply with the principles of non-discrimination
with regard to supplier selection and treatment.

1Further information underwww.siemens.com/code-of-conduct

5

6

Content
Foreword		

3

Code of Conduct

4

Content		

7

Introduction
Sustainability in the Supply Chain

8

Trustworthy Third-Party Relationships

10

Explanation of the Code of Conduct
Legal Compliance11

Human Rights and Labor Practices

12		

Prohibition of Forced Labor

13

		

Prohibition of Child Labor

14

		

Non-Discrimination and Respect for Employees

16		Working Hours, Wages & Beneﬁts for Employees and Freedom of Association17

		

Health & Safety of Employees and Security Forces18		

Grievance Mechanism of Partner

20

Environmental and Climate Protection, Protection of Natural Resources

22

Fair Operating Practices

24		Prohibition of Corruption and Bribery

26

		

Respect Fair Competition, Antitrust Laws and Intellectual Property Rights

28

		Awareness of Conflicts of Interest30

		Prohibition of Money Laundering and Terrorism Financing

32

		Respect Data Privacy

33

		Observe Export, Import, Control and Customs Regulations
		and Foreign Trade Regulations

34

Responsible Minerals Sourcing

36

Supply Chain of the Partner

38

Specific Information for Siemens Suppliers
Sustainability in Supplier Management

40

Assessments – Desk-top to on-Site

42

Consequences of Deviations

44

Training and Capacity Building

46

Specific Information for Third-Party Intermediaries
Siemens’ Books and Records Requirements

48

Purpose and Approach of On-site Audits

50

How to report allegations of Siemens’ wrongdoing

51

7

Introduction

Sustainability in the
Supply Chain
Seize opportunities, minimize risks, live our values. For us,
sustainability means acting responsibly on behalf of future
generations in order to achieve economic, environmental
and social progress. Only a value-based, sustainabilitydriven company committed to living its principles canminimize risks and master these challenges to optimallyleverage emerging opportunities for its stakeholders.

Sustainability is not new for Siemens.
Acting as a responsible and accountablecompany has always been part of ourphilosophy. This is why we take a stand
today on our commitments.
Here are some examples:• We actively contribute to forward looking
development at our locations.
• All of our products have to be engineered
and manufactured in such a way that theypose no threat to property, life, or limb.
• Our responsibility extends not only to
Siemens, but to our value chain and tosociety.

8• With our environmental portfolio andenvironmental work, we make effective
contributions to climate protection.
• We act with integrity in business,and our behavior complies with ourmoral principles and values.

www.siemens.com/sustainability
Our Sustainable Procurement process has
several perspectives on how we secure our
supply chain. Particularly important are twopillars:• Sustainability Assurance: assuring oursustainability requirements given bylegislation and required by ourcustomers, investors and otherstakeholders. Our suppliers’committment to the Siemens Code of
Conduct is the first step of the
Sustainability Assurance process andends with Supplier Sustainability
Assessments (described later in thisbrochure)• Sustainabilitxy Performance: measuring
our suppliers’ sustainability performancecan be done by e.g. our suppliers’
engagement in CO2e-reduction efforts

Purchased products and services accountfor almost half the value of our total revenue.
As our suppliers play a critical role in oursustainability-oriented value chain, Siemens
expects them also to demonstrate theircommitment towards these standards andprinciples which are summarized in the
Code of Conduct.

This Code of Conduct is based to a great
extent on the ten principles of the UN Global
Compact relating to human rights, labor
standards, environmental protection andanti-corruption initiatives. These principles
are derived from the Universal Declarationof Human Rights, the Declaration on
Fundamental Principles and Rights at Workof the International Labor Organization (ILO)
and the principles of the Rio Declaration on
Environment and Development.

9

Introduction

Trustworthy Third
Party Relationships
Siemens’ global activities entail collaboration with many different partners
all over the world. Third-party intermediaries play an important role inhelping us to conduct business. Being representatives of our business, we
expect them to follow similar values and principles to those which form thefoundation for all Siemens’ business activities. Mutual trust is essential tothese relationships. As summarized in the OECD-Report on the “Liability ofLegal Persons for Foreign Bribery”, Siemens may be held accountable for theactions of its third-party intermediaries from a legal and also a reputational
point of view. Therefore, Siemens has implemented a special “Compliance
Due Diligence Process” for third-party intermediaries.

Legal Requirements
The US Foreign Corrupt Practices Act(FCPA) specifically refers to payments
made to “any person, while knowingthat all or a portion of such moneyor thing of value will be offered,given, or promised, directly or
indirectly” to a foreign official.
To avoid the related “head-in-thesand” problem, the FCPA alreadyholds companies liable for a“conscious disregard,” “willful
blindness” or “deliberate ignorance”
of a bribery scheme committed bythird-party agents.
Also, the UK Bribery Act holds acompany responsible for offencesof a so called “associated person”,
which is defined as someone who
performs services for or on behalfof a company.
This can be an agent but also anyone
else connected to a company who
might be capable of committing
bribery on its behalf. This broad
scope means that also cooperation
partners, contractors and resellers
could be “associated” persons.

Transparency through Due Diligence
To ensure mutual trust, Siemens performs acompliance due diligence prior to thecooperation with such a third-party intermediary.
Our process is structured and straightforwardand ensures that the relevant business
relationship is responsibly evaluated andmonitored throughout its existence. Based on arisk assessment of the proposed business
relationship, the initial due diligencequestionnaires include internal information
obtained from the third-party intermediary as
well as publicly available external informationfrom independent sources. The required
information varies depending on the type andcontent of the planned business relationship.
Contractual Safeguards
The contract between Siemens and the thirdparty intermediary will include specificcompliance clauses. Your adherence to thesecontractual obligations will be monitored –which may include preventive or incident driven
audits.1
In case these requirements are not fulfilled, thiscan have consequences up to a termination of
the contractual relationship.

1

see p. 48-51, Information for

Third-Party Intermediaries

10Explanation of the Code of Conduct

Legal Compliance
Siemens conducts business responsibly and in compliance with the legal
requirements and governmental regulations of the countries in which we
operate. Therefore, the company will under no circumstances tolerate illegal
or non-compliant behavior. We have set ourselves globally-binding BusinessConduct Guidelines that requires our people to behave in an ethical,
law-abiding manner. Equally, Siemens expects its partners to comply with allapplicable laws and regulations.

11Explanation of the Code of Conduct

Human Rights andLabor Practices
The Code of Conduct requires all Siemens partners to ensure
respect of all internationally proclaimed human rights by
avoiding causation of and complicity in any human rights
violations.
The core internationally recognized human rights arecontained in the International Bill of Human Rights(consisting of the Universal Declaration of Human Rights, theInternational Covenant on Civil and Political Rights and theInternational Covenant on Economic, Social and Cultural
Rights, coupled with the principles concerning fundamental
rights in the eight ILO core conventions as set out in the
Declaration on Fundamental Principles and Rights at Work).
Depending on circumstances, business enterprises may needto consider additional standards.
Partners should pay heightened attention to ensuring respectof human rights of specifically vulnerable rights holders orgroups of rights holders such as women, children or migrant
workers, or of (indigenous) communities. Required focus ofincreased attention will depend on the specific situation andcircumstances the partners operate within.
Specifically, Siemens expects its partners to respect thefundamental employment rights set out in international
conventions of the United Nations (UN) and the International
Labor Organization (ILO).

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Prohibition ofForced Labor

We demand the elimination of all forms offorced labor to which our partners must
contribute to by implementing appropriate
measures and control mechanisms – not only
within their own organization but also in their
supply chain, e.g., when using Labor Brokers,
Temporary Employment Agencies, etc. Underno circumstances can we except that e.g.,
employees’ IDs are confiscated, salaries not paid
periodically or in too long periods, physical or
psychological pressure put on employeesor their families.

We expect you as our partner to:• Neither use nor contribute toslavery, servitude, forced orcompulsory labor, suppression,
exploitation, and human trafﬁcking.
• Implement respective control
mechanisms in your own company
as well as in your supply chain.

13

Explanation of the Code of Conduct

Prohibition ofChild Labor

Siemens expects its partners to only employ workers witha minimum age of 15. This minimum employment age is laid
down in several conventions of the International Labor
Organization (ILO). These conventions regulate internationallyvalid lower limits. If a higher minimum employment age isvalid in the country in which a partner maintains its businesspremises, then the partner must adhere to it.
In exceptional cases only, we will accept a minimum age of 14
provided that a statutory minimum age of 14 applies under
ILO Convention 138 in the country where the affected partner
maintains its business establishment.
For hazardous work according to ILO Convention 182,
an age limit of 18 years is essential.

We expect you as our partner to:• Employ no workers under the age of 15 or,in those countries subject to the developing
country exception of the ILO Convention
138, employ no workers
under the age of 14.
• Ensure equal treatment of employees,
irrespective of skin color, race,
nationality, ethnicity, social background,disabilities, gender, sexual identity andorientation, marital status, political or
religious conviction, or age and promoteequal opportunities amongst them.

14• When appointing new employees, youverify their dates of birth and document
them in the personnel files.
Taking account of stricter country-specificlegislation, you do not employ any
workers under the age of 15 or –for hazardous work – the age of 18.

15

Explanation of the Code of Conduct

Non-Discrimination and
Respect for Employees
Our partners shall ensure equal treatmentof employees, irrespective of skin color,
race, nationality, ethnicity, social
background, disabilities, gender, sexual
identity and orientation, marital status,
political or religious conviction, or age andpromote equal opportunities amongst
them.
They refuse to tolerate any unacceptable
treatment of individuals such as mental
cruelty, sexual harassment or discrimination including gestures, language andphysical contact, that is sexual, coercive,threatening, abusive or exploitative.

We expect you as our partner to:• Have internal regulations governing
respect for applicable employment rights.
• Abide by the principles of equal
opportunities and equal treatment, andimplement internal regulations created
for this purpose when hiring employees,
and in other personnel-related activities
such as training and continuing
professional development andadvancement. For example,
discrimination, including on the basis ofrace or skin color, is prohibited withinyour company.
• Establish internal rules for the fairtreatment of others and monitor theirobservance. Your employees are free tolodge complaints with their superiors
without fear of reprisal.

16

Working Hours, Wages& Benefits for Employees
and Freedom of Association
Everyone has the right for fair
remuneration ensuring forthemselves and their family an
existence worthy of humandignity. Our partners,
therefore, must pay
appropriate wages and ensure
reasonable limitation ofworking hours and periodic
holidays with pay. They
recognize the legal rights ofworkers to form or join existing
trade unions and to engage incollective bargaining;

We expect you as our partner to:• Recognize the legal rights of workers
to form or join existing trade unions andto engage in collective bargaining;neither disadvantage nor prefer membersof employee organizations or trade unions.

they neither disadvantage nor prefermembers of employee organizations or
trade unions. In the event of cross-borderpersonnel deployment all applicable legal
requirements, especially with regard tominimum wages, must be adhered to.

• Adhere to all applicable working-hours regulations globally.
• Pay fair wages for labor and adhere to all applicable wage
and compensation laws globally.
• In the event of cross-border personnel deployment, allapplicable legal requirements, especially with regard tominimum wages must be adhered to.

17

Explanation of the Code of Conduct

Health & Safety for Employees
and responsibilities by bringing
Security Forces into service
Siemens expects its partners to take responsibility for the health andsafety of their employees and to ensure in the event of use of private or
public security forces that human rights of employees and other rights
holders are respected.

Physical inviolability is the highest good forevery individual. Therefore, it is one of themost important duties for every partner torespect this right and ensure with mosteffort that its employees are protectedagainst accidents resulting in injuries ordeath.
We expect you as our partner to:• Contribute actively implementing thefollowing minimum requirements. We
know, however, that not all businessactivities are greatly endangered and not
all safety measures are meaningful or
could be expected from all our suppliers:
working in heights needs more specificprecautionary measures than developinga software on a computer. This is why wedeveloped a set of safety & healthexpectations graduated into three
categories. (see also chapter “Health andsafety management system –categorization according to the supplier’s
size or type of activities”).
• There must be a clear commitment bymanagement to occupational healthand safety.
• Take measures to prevent accidents onbuilding sites, in plants and in projects.

18• Eliminate unsafe and dangerous conditions immediately.
• Control hazards and take the best possible precautionary measuresagainst accidents and occupational diseases, which means:assessing hazards and effects of activities, products and services
and implementing appropriate measures to eliminate or minimize
the risks and their effects as far as possible.
• Regularly develop minimum requirements further internally andkeep your suppliers informed about them.
• Have a person who is responsible for occupational health andsafety matters and who trains and educates your employees.
• Support your suppliers actively in implementing these standards
also. If a supplier repeatedly or seriously breaches these standards,
you exclude this supplier from further business transactions.
• Have an occupational health and safety management system inplace in accordance with ISO 45001 or equivalent. Implementing
an occupational health and safety management system includes:
risk assessment, risk minimization,systematic and complete
description of process workflows, identification of requirements
and efficient implementation, regular monitoring and assessment.
In addition, our partners must adhere actively to the principles ofoccupational health and safety, both when selecting suppliers andin the conduct of their business relationships. We act with integrityin business, and our behavior complies with our moral principles
and values.
• In the event of use of private or public security forces ensure thathuman rights of employees and other rights holders are respected(no use of unlawful physical or mental violence)Health and safety management system – categorizationaccording to the supplier’s size or type of activities
The supplier’s relevance and responsibility interms of occupational health and safety
depends essentially on the type of activities
that its employees perform. A distinction istherefore made between suppliers that
perform solely administrative/management oradvisory functions, e.g., sales- and marketingrelated activities (category 1), and those that
also manufacture products or in any other way
process or rework products (category 2 or 3).
Category 1 suppliers are expected to provide
evidence of compliance with following
occupational health and safety requirements:

In addition to requirements in Category 1,
we expect Category 2 suppliers to provide:• Written statement of commitment tooccupational health and safety by thecompany‘s management.
• Written assessment of and plan forcompliance with legal requirements.
• Written emergency plan.
Additionally, Category 3 suppliers have toshow evidence of implementation of an
occupational health and safety management
system.

• Availability of safety specialists.
• Instruction and training for employees.
• Conduct of risk assessments and risk control
measures.

19

Explanation of the Code of Conduct

Grievance Mechanismof Partner
Employees as well as companies’ stakeholders need the possibility ofreporting misconduct – if necessary, anonymously.
Whistleblowers or complainants against retaliation must be protectedagainst all kinds of disadvantages or negative consequences.

We expect you as our partner to:• Implement a grievance mechanism whichcan, depending on the size of thecompany, vary from a complaint box to asophisticated electronic tool and/or
access to an external Ombudsperson.
• Ensure anonymous reporting andguarantee no negative consequences for
all who report a possible misconduct or areasonable suspicion.

20

Practical actions for implementing a
Grievance Mechanism may involve:• Nominating a company responsible who
is setting up a complaint process.
• A roadmap for remediation and resolving
complaints.
• Timelines for resolving grievances.
• Processes to respond to complaints if
agreement is not reached or if its impacts
are particularly severe.

21

Explanation of the Code of Conduct

Environmental and Climate
Protection, Protection of
Natural Resources
Siemens expects its partners to act in accordance with the applicablestatutory and international standards regarding environmental protectionin order to minimize adverse environmental impacts and make continual
improvements in environmental protection.

Siemens‘ environmental protection policy isbased on global standards and legislationfor environmental management. Where our
products are concerned, we take a holistic
approach to environmental protection,
ensuring that all products areenvironmentally compatible during thewhole product life cycle, from development
through manufacturing and use, to reuse,recycling ,or disposal.
We also expect our partners, to make every
effort to protect the environment, and tokeep the impact your activities have on it as
low as possible. Among other things, we
expect your environmental management
policy to include the efficient use of energy
and other resources.
We expect you as our partner to:• Contribute and actively implement thefollowing minimum requirements. We
know, however, that not all businessactivities might endanger theenvironment in the same way and not allenvironmental protection measures aremeaningful or could be expected from all
our suppliers: smelting steel needs more
specific precautionary measures than toperform a service.

22

This is why we developed a set of environmental protection
expectations graduated into three categories. (See also chapter“Environmental management system – categorization according to
the supplier’s environmental relevance”):• Implement a process, or an organization of your own, that ensurescompliance with statutory regulations and customer requirements
governing operational and product related environmental
protection.
• Document, implement and regularly check all approvals and/or
licenses required for the operation of your sites.
• Have a suitable management system (e.g., an ISO
14001-compliant or equivalent system) of environmental
protection implemented.
• Have rules, guidelines, internal standards, or similar governing
product related environmental protection, for example with regard
to product design, restrictions on materials, labeling, information
obligations, reuse, recycling, environmentally compatible productuse, maintenance and disposal, and, where applicable, measuresfor protection against hazardous substances, and you train youremployees accordingly.
• Reduce the emission of air pollutants (in particular GreenhouseGas) and develop a net-zero emissions strategy for your company.
• Reduce harmful soil change, water pollution or harmful noise
emission to the fullest extent as possible, especially but not
exclusively in compliance with the Stockholm Convention
regulations.
• Increase energy efficiency, use renewable energy, and reducewater consumption to the fullest extent as possible.
• Cause no unlawful taking of land, forests, and waters.
• Reduce waste and ensure their proper treatment and disposal
especially but not exclusively in compliance with the Basel
Convention regulations.

Environmental management system –categorization according to the supplier’s environmental relevanceThe supplier’s relevance andresponsibility in terms of environmental
protection depends essentially on thetype of activities (e.g., production,
services, project work) and the resources
being used. A distinction is therefore
made between suppliers that perform
solely administrative/ management oradvisory functions, e.g., sales-, IT- andmarketing related activities(category1), and those that have ahigher environmental impact (category
2 or 3): suppliers with low
environmental relevance are assigned
to category 1 irrespective of theindustry in which they operate.

For category 2 suppliers, a formalized
environmental management system isrequired which shall include ISO 14001elements, for example:• An environmental policy.
• Definition of roles & responsibilities
for environmental protection.
• Ensuring that employees andmanagers with responsibilities
concerning environmental protection
or whose activities can have anenvironmental impact are qualified
and act accordingly.

• Records of environmental training.
• Emergency preparedness andresponse.
• Regular monitoring of operations
with significant environmental
impacts.
Category 3 suppliers have a highenvironmental relevance and, therefore,
have to implement an environmental
management system like suppliers of
category 2. They additionally have toachieve an ISO 14001 certification or
an EMAS validation.

23

Explanation of the Code of Conduct

Fair Operating
Practices
Siemens conducts business responsibly and in compliancewith the legal requirements and governmental regulations of
the countries in which we operate and expects its partners tocomply with all applicable laws and regulations.
We expect you as our partner to:• Set up, implement and maintaina company-wide appropriate
compliance program or process
which reflects the company’s size
and risks.
• Define binding rules for all
employees, including rules
governing the offering andacceptance of gifts.

24• Provide your employees with regulartraining in respect of importantcompliance issues.
• Appropriately respond to complianceviolations.
• Impose a contractual obligation on yoursuppliers to comply with the law, inparticular the provisions governing
corruption, and monitor adherence to it.
• Emphasize the responsibility of theexecutive management for compliancematters.

25

Explanation of the Code of Conduct

Prohibition of Corruption
and Bribery

Siemens does not tolerate any form of corruption in its business dealings
anywhere in the world. This includes Siemens business dealings throughour external partners.

Bribery
The most common form of corruption isbribery. Bribery is a criminal offense
worldwide.
Siemens strictly prohibits its partners fromengaging in any form of bribery, i.e. directly
or indirectly offering, promising, granting or
authorizing money or anything else of value
to a public official or to a counterparty in theprivate sector to influence an official act or
to obtain an improper advantage for
Siemens.
Any offer, promise, grant or gift made by apartner in connection with Siemens
business must comply with applicable laws
and regulations and must not create an
appearance of bad faith or impropriety.
Specifically, outgoing payments must be
used lawfully.
We expect you as our partner to:• Use accounts or funds only for legitimate
purposes.
• Make payments only if they are lawful
and have legitimate purposes.
• Make payments only with proper
documentation.

26

Facilitation Payments
Bribery also includes facilitation payments.
A facilitation payment is a relatively small
amount of money, or the granting of any
other benefit, usually to low-ranking public
officials, for their personal benefit or to
expedite the performance or a routine
governmental action. Facilitation payments
are prohibited and can be prosecuted.

Gifts, Hospitality and other Benefits
In many cultures, gifts and invitations
to entertainment events are importantfor developing and deepening business
relationships. However, some gifts andinvitations may unreasonably influence
the recipient’s decision-making or
create the appearance of improper
influence.
Gifts, hospitality and other benefits must
always be in accordance with applicablelaws and regulations. They further must:• Be transparent and correctly
recorded in the company’s books
and records.
• Be appropriate in terms of type,value, and frequency to the occasion
and the position of the recipient.
• Not be offered, provided, demandedor accepted with the expectation of
any type of advantage.
• Never give the appearance ofdishonesty or inappropriateness.
Counterparts, especially public
officials, often have their own
internal rules that restrict theirability to accept gifts and hospitality.
These rules can be very strict andmust be followed.

Travel Expenses
Companies may be required to pay
third-party travel expenses for certain
business transactions. However,excessive reimbursement may
inappropriately influence the recipient
or at least create the appearance of
influence.
Therefore, travel expenses must be
reasonable and allowable.
Sponsorship, Donations,Contributions and Memberships
Sponsorships, donations, charitable
contributions, and memberships can beimportant to social commitment andthe pursuit of corporate goals. They:• Must be carefully examined todetermine whether they promote
the company’s legitimate objectives.
• May not be promised, offered, ormade to obtain improper businessadvantages or for other unethicalpurposes.
• Must be religiously and politicallyneutral in connection with Siemens
business.

Involvement of Third Parties
There are many legitimate reasons for
involving third parties in business
relationships. However, the use of third
parties to unlawfully or improperly
influence public officials or private
individuals is prohibited. Therefore, we
expect our partners to check relevant
third parties at the beginning of theiractivities and to monitor them duringbusiness relationships.
To prevent, detect and deter violationsof any applicable law, particularly such
relating to anti-corruption, Siemens
deems it necessary that our partners
maintain books, records and accounts
where appropriate and relevant underlocal legislation, which accuratelyreflect any and all payments made,expenses incurred, and assets disposedof. An appropriate internal control
system should be maintained to ensure
the proper authorization, recording andreporting of all transactions.

27

Explanation of the Code of Conduct

Respect Fair Competition,
Antitrust Laws andIntellectual Property Rights
Siemens conducts business responsibly and in compliance with the legal
requirements and governmental regulations of the countries in which we
operate. Therefore, Siemens expects its partners to comply with allapplicable laws and regulations, in particular in the field of faircompetition and antitrust and to respect intellectual property rights ofothers.

Antitrust law protects free, undistorted,and effective competition for the benefitof customers, companies, and society as
a whole. Antitrust laws, amongst others,
prohibit agreements and concerted
practices between companies that restrict
competition. Anticompetitive agreements
include bid rigging, price agreements,
market, customer, or territory allocations,and project agreements with competitors.
Abusing a dominant position is also
prohibited.
Siemens has a strict policy to act incompliance with antitrust laws and expects
its contractual partners to do the same.

28

Inter alia, we expect you to handle confidential information from
Siemens and third parties, such as competitors, customers, and sales
partners, with care.
Furthermore, Siemens expects its partners to respect intellectual
property rights of others, e.g., copyrights, patents and, trademarks
and trade secrets and to act within the limits of licenses granted (e.g.,with respect to software).
We expect you as our partner to:• Act in accordance with national and international antitrust laws
and e.g., not to participate in price fixing, market or customer
allocation, market sharing or bid rigging with competitors.
• Respect trade secrets and the intellectual property rights of others.

29

Explanation of the Code of Conduct

Awareness of Conflictsof Interest

Employees should always act in the best interest of theircompany. Therefore, a conflict of interest exists if the interestsof an individual or of his/her close personal relations diverge
from those of the company to which the individual belongs.

Conflicts of interest can hinder the successof a company, lead to economic damages
and also tarnish the company’s reputation
if it becomes public, for instance, if theconflict of interest leads to uneconomical
decisions, if customers get lost because theylose confidence in the integrity of thecompany or if restricted information isdisclosed as a result. In some cases, conflictsof interest might also bear corruption or
antitrust risks. Accordingly, employees
should have no relationship, financial orotherwise, with anyone that conflicts, orappears to conflict, with the employees’
obligation to act in the best interest of theircompany. Therefore, it should be ourcommon goal to avoid situations of conflictsof interests and to create awareness for suchsituations.

30

We expect you as our partner to:• Make business decisions in the bestinterest of the company and not on thebasis of personal interests.
• Anticipate and avoid situations in which
the appearance of a conflict of interest
may arise.
• Avoid engaging companies with which
personal interest exists if it could
personally benefit the partner.
• Inform Siemens of any personal interest
that might exist in connection with thebusiness relationship.
• Establish measures which prevent
conflict of interests.
• Avoid that their employees use theirposition to offer gifts, invitations or otheradvantages to Siemens employees orother third parties. This does not apply tooccasional gifts of purely symbolic value
or meals or entertainment of appropriate
value.

The following questions can help an
employee to assess whether there is a
conflict or an appearance of a conflict:• Is the decision we make for our company
influenced by personal interests?
• What impression would the situation
leave on third parties, such as customers,
business partners, and investors?
• How would the public react to thebusiness decision?

31Explanation of the Code of Conduct

Prohibition of Money
Laundering andTerrorism Financing

Money Laundering is the disguising of the origin of moneyor other assets from criminal activities and moving theminto the legitimate economy. In addition to monetary
support, terrorism financing may include other assets suchas goods or merchandise.
Siemens strives to maintain business relationships only with
reputable customers, partners, and companies whosebusiness activities comply with legal requirements andwhose financial resources are of legitimate origin.

We expect you as our partner to:• Support us in identifying relevant
shareholder(s), ultimate beneficial
owner(s) and legal representative(s),when necessary.
• Take appropriate, risk-based measures toverify the identity and economy
background of your customers, business
partners, and other third parties, and theorigin of payments to ensure they comefrom legitimate sources.
• Follow-up on suspicious business
relationships, activities, and transactions
immediately and report those to law
enforcement authorities, when necessary.
Siemens’ partners undertake:• Not to facilitate money laundering or
terrorism financing, directly or indirectly.

32

Respect Data
Privacy

Personal data is information about specific or identifiable natural persons,such as name and address, photos, personnel number, bank data, digital
identifiers, or health data.
The protection of personal data plays an important role in our digitized world.
The loss or improper use of personal data can have serious consequences for theindividuals concerned. It is therefore very important for Siemens to ensure that thisdata is effectively protected and used only for legitimate purposes.
All of us who handle the personal data of employees, customers, or third parties
bear a high level of responsibility.
We expect you as our partner to:• Collect and process personal data
confidentially, only for legitimate,predetermined purposes, and in atransparent manner.

• Only process personal data if it isprotected against loss, modification,and unauthorized use or disclosure
by appropriate technical andorganizational measures.

• Immediately inform our company’s
local Data Protection Organization of
possible data protection violations inconnection with Siemens business.

33

Explanation of the Code of Conduct

Observe Export, Import,
Control and Customs
Regulations and Foreign
Trade Regulations

As a globally operating company, Siemens must comply
with a wide variety of national and international customs,
import/export control, embargoes respectively foreign trade
regulations that govern and restrict the free movement ofgoods. Legal and related internal measures thereof areanchored in our Internal Control Program Export Control(ICP EX) as well as our Internal Control Program Customs(ICP CU). Compliance with these regulations is essential toprotect Siemens and our global operations.
In the same way Siemens expects from its partners that theapplicable foreign trade regulations are carefully compliedwith when goods are traded or transported, services areprovided, or other technical know-how or software istransferred, including regulations on EU and US sanctions
lists are checked.

We expect you as our partner to:• Provide us the applicable product-related
export control classification numbers,
harmonized system numbers, country oforigin and, if asked, for free tradepreferential origin.

34• Avoid purchasing products fromsanctioned persons, companies ororganizations, and in order to be able
to continue to jointly employ efficientand secure import and export processes,
your support concerning customs related
supply chain security programs and its
requirements.

35

Explanation of the Code of Conduct

Responsible
Minerals Sourcing

Until the present day, trade with minerals in Conflict-Affected
and High-Risk Areas (CAHRAs) is affected by violent conflicts
and violation of human rights, especially in the Democratic
Republic of the Congo and its adjoining countries (the DRC
region). The local population is facing systematic exploitationin the fight between armed groups for control of the mines andtrading routes. Siemens is committed to ensuring that minerals
contained in its products are sourced with due respect forhuman rights, that sourcing those minerals does not contributeto any risk defined in Annex 2 of the OECD Due Diligence
Guidance, and that Siemens’ supply chain practices support thedevelopment in the CAHRAs.

Responsible Minerals Sourcing is the
Siemens commitment to working toward
avoiding the use of minerals from ConflictAffected and High-Risk Areas which areaffected by the risks defined in Annex 2 of
the OECD Due Diligence Guidance within
our supply chain. The relevant minerals
include but are not limited to tantalum, tin,tungsten, the ores from which they
originate, and gold. CAHRAs include but are
not limited to the Democratic Republic of
the Congo, Angola, Burundi, the Central
African Republic, Rwanda, South Sudan,
Tanzania, Uganda, and Zambia.

36

The mining of minerals represents one of
the main sources of income for the local
civilians in CAHRAs and is thus indispensable
to them. As such, imposing an embargo andstigmatizing the whole of the CAHRAs
would most likely be an inappropriate
response to this issue. However, transparency
and the disclosure of information aboutminerals will allow purchasing decisions to
be made consciously, thus supporting
responsible sourcing.
Siemens takes systematic steps to determine
the use, source and origin of the relevant
minerals in its supply chain and works
closely with its direct suppliers in carryingout these steps. This information will also
help Siemens’ customers to fulfill the U.S.
Securities and Exchange Commission (SEC)
reporting requirements.and content of theplanned business relationship.

To ensure transparency within the
supply chain, Siemens expects suppliers
to provide supply chain data so that
Siemens can identify smelters in its
common supply chain.
Siemens suggests that its suppliers use
the standard Conflict Minerals Reporting
Template of the “Responsible Minerals
Initiative”.
This template is developed by the crossindustry initiatives “Responsible
Business Alliance” (RBA) and“Global e-Sustainability Initiative” (GeSI).

Siemens will compare smelters andrefiners used by relevant suppliers
against an independently verified list of
smelters that use responsibly sourced
minerals, identified through industry
programs. Minerals originating from asmelter/refiner on this list can bedeemed not to contribute to any
conflict in CAHRAs.
Siemens expects its suppliers to takeevery effort to avoid minerals that are
not found to be sourced responsibly.

We expect you as our partner to:• Take reasonable efforts to avoid
in its products the use of raw materials
which directly or indirectly financearmed groups who violate human rights.
You can also find the Siemens
Responsible Minerals Sourcing Policy,
which the company expects its
suppliers to follow, at:www.siemens.com/
responsibleminerals

37Explanation of the Code of Conduct

Supply Chainof the Partner
For our partners too, a large proportion of the value added isgenerated in the supply chain. It is therefore important to us
that our partners take active steps to promote and implement
compliance with our Code of Conduct or their own equivalent
code of conduct in their supply chain and check theircompliance on a risk-based approach.
For this reason, we expect our partners not
only to comply with the Code of Conduct intheir own organization but also to ensure inturn that their suppliers adhere to theinternational standards summarized in the
Code of Conduct which has to be checkedby e.g., using a risk-based approach.
Therefore, our partners are expected to
implement own detection modules, e.g., an
on-side audit process. Our values as well as
increasing legislation expect companies –in particular, multinational enterprises –to conform with international standards.
The ‘OECD Guidelines for Multinational
Enterprises’ and the respective ‘OECD Due
Diligence Guidance for Responsible BusinessConduct’ explain the international
expectations and possibilities to implement
necessary processes.

We expect you as our partner to:• Have established your own ethical, socialand ecological minimum requirements inyour supply chain, and your suppliers arelegally bound to comply with them.
• Have at least one officer who is
responsible for issues of sustainability
in the supply chain.
• Have implemented a process to ensure
the adherence of sustainability
requirements in your own supply chain
by using detection modules such as an
onside-audit process.

In addition, our partners shall also actively
adhere to the principles of non-discriminationin the selection of their suppliers and in the
conduct of their business relationships.
Non-discrimination in the area of business
relationships means, in particular, thatrequests for quotations should be madeaccessible to as wide a circle of potential
suppliers as possible. Equality of opportunity
should not be restricted from the outset
through the exclusion of suppliers(e.g., due to their background, race, beliefs)
without reasonable grounds.
• You actively support your suppliers in
implementing these standards. If a
supplier commits repeated or serious
breaches, for example with regard to childlabor, you take active steps to exclude this
supplier from further business transactions.
• You undertake continuous further
development of your own minimum
requirements for suppliers.

38

39

Specific Information for Siemens Suppliers

Sustainability in
Supplier Management
Siemens operates in areas of business that are of major
importance for today‘s society. These areas are all closelyaligned with the guiding objectives of business sustainability:
greater security, more efficient use of resources, and long-term
environmental and social compatibility.
This chapter only applies to suppliers which are involved in the
Siemens supplier qualification process.

Siemens sources goods and services worth
approximately half of its yearly revenue inabout 150 countries – a huge source ofbusiness for suppliers all over the world.
Sourcing goods and services on this scale –in a variety of markets and for a large numberof locations – poses major challenges to our
Supply Chain Management and exerts asignificant influence to the environment,
societies and local economies in which we
operate.
An integrated Supplier Management createsthe conditions for the common optimizationof this value chain. It ensures our global
competitiveness and our adherence with our
broad sustainability requirements.
Therefore, our sustainability requirements
are embedded company-wide in unified,mandatory procurement processes,
in particular those processes involved in
Supplier Management. A key part of this is
ensuring that our suppliers agree contractually
to abide by the Code of Conduct.
We evaluate and review the Code’s
sustainability principles as part of our overall
Supplier Management Process in all its threelevels:• Supplier Qualification• Supplier Evaluation• Supplier Development40

Supplier Qualification:
Siemens suppliers are subject to the company-wide standardized
Supplier Registration and Qualification Process. It is a core element
within our supplier selection process to make sure that our crossfunctional requirements are continuously met by the supplier. As aprerequisite towards ensuring sustainability in their own organizationand their supply chain, our suppliers are expected to commit to therequirements of the Code of Conduct and – if applicable – to conduct
the Corporate Responsibility Self-Assessment (see chapter “Detection
Modules”).
Supplier Evaluation:
Further, more detailed efforts are made to ensure the sustainability
requirements in our supply chain during the Supplier Evaluation
Process. Therefore, our Supplier Evaluation focus beside typicalperformance indicators like price, quality, technology, and availability
also on control of sustainability aspects. The Corporate Responsibility
Self-Assessments, the External Sustainability Audits and the Incident
Driven Inspections form a control system which is based on a riskbased approach (see chapter “Detection Modules”).
Supplier Development:
Supplier Development activities aim at a sustainable cooperation
between Siemens and our suppliers as well as the continuous
identification and realization of optimization opportunities. The
established Supplier Development Process ensures sustainable
implementation of relevant corrective actions which result from thedescribed Detection Modules and supports continuous enhancements ofsuppliers’ compliance with our requirements.

Contractual Obligation
We developed a system of contractual obligations to ensure that all of our supplierscommit to the requirements of the Code of Conduct:
Supplier Qualification
Qualifying suppliers: within our Supplier Qualification process, all suppliers have topass several requirements – one of them is the commitment to our Code of Conduct.
Corporate Responsibility Contract Clause
Negotiating contracts: all new and extended procurement contracts have to include
the Corporate Responsibility contract clause which commits the supplier to our Codeof Conduct and, additionally, defines self-assessment and audit rights.
Conditions of Purchase
Purchase orders: to complete the system and to include possible small procurement
volumes which might not be covered by explicit procurement contracts, all purchaseorders include the Code of Conduct commitment in the Conditions of Purchase.

41Specific Information for Siemens Suppliers

Assessments – Desk-top to
on-SiteSupplier Sustainability Assessments, ranging from Self-Assessments toon-site visits at the supplier’s premises, monitor adherence with therequirements and principles of the Siemens Code of Conduct and ensure ourlegal obligations in securing our supply chain. We use various assessments
within the supplier onboarding and management processes depending on
the identified potential risk of each supplier.
This chapter only applies to our suppliers. Third-party intermediaries
underlie the process described in chapter Supply Chain of the Partner.

Risk Analysis
In order to assess the sustainability risks of all our Siemens suppliers at least once per year, we utilize the professional
services of an external provider. This provider uses internationally available information segmented into several risk
indicators and combined with country-, industry- and commodity risk categories. Within that, the risk indicators areweighted. Finally, each supplier is allocated into the risk categories “Low / Medium / High / Extreme”.
Corporate Responsibility
Self-Assessments
The Corporate Responsibility Self-Assessment(CRSA) is an integral part of the Siemens
Supplier Qualification Process. Siemens
expects, on the basis of a questionnaire, thatthe supplier provides its own assessment of
the requirements of the Code of Conduct.
Suppliers based on defined criteria (e.g.,based in a higher-risk-country, Procurement
Volume, etc.) need to perform a CRSA
before the suppliers receives the “Ready-forBusiness (R4B)” status. In case the supplier’s
answer is insufficient or deviates from theSiemens requirement, the supplier has toundertake measures to improve and meet
the Siemens requirements. The CRSA must
be renewed every three years based on theabove described criteria.

External Sustainability Audits
Inspections at the supplier’s premises are only carried out following
prior notification by Siemens, within normal operating hours and inaccordance with the applicable laws. In addition, it will be ensured
that the business activities of the supplier are not disrupted and that
confidentiality agreements with third parties are not breached.
Protection of personal data is important to Siemens. Therefore all
personal information is handled in line with the applicable legal
guidelines on the protection of personal information, data security,
and antitrust regulations.
This means that personnel information or price calculations, forexample, are not included in an audit.
Siemens has appointed an internationally recognized auditing
company which conducts on-site audits based on the principles of theCode of Conduct by using an international standard. The outcome isan in-depth assessment and report that enables Siemens and its
suppliers to identify and manage potential sustainability risks.
External Sustainability Audits also play an important role in thescheme of supplier development by improving the supplier’s
sustainability performance.
Responsible Minerals Sourcing
Siemens is working hard to prevent the use of minerals from areas ofconflict, and high-risk areas in the supply chain that are covered by
the risk definition set out in Annex 2 of the OECD’s Due Diligence
Guidance for Responsible Supply Chains of Minerals from ConflictAffected and High-Risk Areas. To determine the use, sources, andorigins of these minerals in our supply chains, we investigate thesmelting plants involved. Siemens is a member of the Responsible

42Minerals Initiative (RMI), an organization of
more than 400 industrial companies thatprovide auditing programs for smelting. We
use the Conflict Minerals Reporting
Template (CMRT) published by the RMI tosurvey our relevant suppliers and elicit the
information we need about smelters in our
supply chain that are associated with the
production of tin, tantalum, tungsten, andgold (3TG). We share our findings on
identified smelters with our RMI partners.
The initiative then reviews the smelters’certification. In this process, Siemens
supports the smelters as they move toward
the final audit and certification stage.
Carbon Web Assessment(“supplier+s” by ctrl+s)
In our Carbon Reduction@Suppliers
program, we collaborate with an external
partner to analyze the economic data andmodel the carbon footprint of each of our
suppliers. To facilitate this process, we

utilize a Carbon Web Assessment called
supplier+s that highlights the main sourcesof suppliers’ CO2e emissions and provides
guidance on how to reduce them.
It is based on the following methodology:• The basis is the model calculation of ourexternal partner ctrl+s, which divides our
suppliers into product and service
categories and country of origin andassigns an industry average for CO2e.
• We ask our suppliers to provide
information via the “supplier+s”
assessment about their implemented
CO2e reduction measures and theirgeneral CO2e management. Based on
their answers, we calculate the resulting
emission reduction and the supplier’s
remaining carbon footprint.

43

Specific Information for Siemens Suppliers

Consequences ofDeviations
In the case of deviations from the Code of Conduct, Siemens
and the supplier will agree to implement sustainable measures
for improvement within a suitable time frame.
Deviations from this Code of Conduct by Third-party
intermediaries who are not Suppliers are regulated by therespective contractual clauses.
The time frame for rectification can,depending on the type and extent of thedeviation, cover an agreed period of days,
weeks or months during which time therequired remedial measures are defined andput in place by the supplier immediately
following discovery of the deviation. All
measures put in place after inspections areincorporated into the company-widestandard Supplier Management method at
Siemens and are systematically selected andpursued. Implementation of the measureshas, therefore, an influence on the supplier’s
performance rating and on the assessmentof the supplier’s future potential, as well ason the approval of the supplier within theregular supplier qualification process.

44

How do you, as a supplier, actively ensure
us that the requirements of the Code of
Conduct are implemented and sustained?
We expect you as our partner to:• Answer enquiries regarding compliancewith the Code of Conduct within therequested time.
• Actively support the need for clarificationand demonstrate active co-operation andwillingness to improve, should a potential
risk arise from the information in the
Corporate Responsibility Self-Assessment,
for example failure to check the age ofyoung employees or non-implementationof corrective measures in the case of awell-known environmental incident.
• Permit the auditors access to the required
documents and areas so that they cangain a full awareness of your compliancewith the Code of Conduct.
• Make competent employees available
for confidential interviews at External
Sustainability Audits/ Incident Driven
Inspections.

What are the consequences of a breachof the Code of Conduct?
• Should minor breaches be discovered orreported, for example no documented
record of the person in your company
responsible for legal compliance,a suitable and binding period for
improvement will usually be put in place.
In the context of the company-wide
mandatory Supplier Management method,measures to correct the problem will be
implemented and incorporated into the
Supplier Development program.

• In the case of a significant breach, forexample significant risks/dangers for
employees are present which are notanalyzed and eliminated, even whensevere accidents take place, and if nomeasures are taken against the problem,
or if measures are not sufficiently
implemented within the agreed
improvement period, the business
relationship will be terminated.

45

Specific Information for Siemens Suppliers

Training andCapacity Building

It is especially important to us that we build up our suppliers’
long-term skills, so we can rise to the future challenge ofsustainable development together.
It is not sufficient to solely implement the principles of sustainability within Siemens, but we need to make sure that our
supply chains follow the same rules.
Therefore, the principles of sustainability must be known,
accepted, obeyed and confirmed by all our suppliers.
For third-party intermediaries, Siemens provides specifictrainings.

We conduct specific Supplier Sustainability
Workshops in various countries following
our excellent experience in recent years
when we integrated sustainability
presentations and break-out sessions into
the general Supplier Days. All environmental
and labor requirements stated in our Codeof Conduct are addressed during theworkshop in presentations given by e.g., thelocal Chief Procurement Officer, Complianceexperts, and EHS (Environment, Health &Safety) experts. Break-out sessions are thenheld to address mostly country/regionspecific topics in more detail.
Additionally, our buyers regularly speak with
our suppliers about the implementation
status of the supplier’s efforts in this regard.

However, such a sublime requirement
cannot be explained in personal talks alone.
We, therefore, decided to also offer a
training method that distributes theinformation about and the spirit ofsustainability to the many participants ofour supply chains in an uniform manner.
The Web-based Training (WBT), as a
guideline for suppliers, illustrates oursustainability requirements. In addition, weoffer an internet-based information which isavailable free of charge to all suppliers.
We provide training and information on
specific topics like Greenhouse Gas emission
reduction via our “carbon reduction@
suppliers” program or our responsible
mineral sourcing program.

Together with other international
manufacturing companies, we havebeen supporting an industry-wide
initiative of efficient substancedeclaration via a web database called
BOMcheck and also developed a webinformation for our suppliers.

46

You can find further information on our web-based trainings
and information under:
SCM Sustainability Website:
https://www.siemens.com/sustainablesupplychain
SCM Web-based Training:https://www.siemens.com/code-of-conduct/training
Compliance Website:
https://new.siemens.com/global/en/company/sustainability/compliance.html
You can find further information on our trainings for third-party intermediaries under:
https://bpcdd.compliance.siemens.com/bpext/nui/train (International)

47

Specific Information for Third-Party Intermediaries

Siemens’ Books andRecords Requirements
Third-party intermediaries are required to maintain books,
records, and accounts.

• An accounting system, appropriate to thenature and size of the business, should
be used i.e. an IT-based system or manualbook keeping.
• The books, records and accounts should
include a balance sheet and profit andloss statement and where appropriate
and relevant under local legislation, a
trial balance, general ledger and subledgers.
• The third-party intermediaries owners
should segregate private and businessrelated incomes and expenses (i.e.
private income and expenses should not
be recorded in the books, records andaccounts).

CompletenessThe books, records and accounts should
separately record:• All ﬁnancial income and expenses• All bank accounts (local and foreign/offshore), petty cash balances and cashboxes
All bank account balances should bereconciled to the related bank statements.
Reasonable Detail
The books and records should record:• The exact amount of all income andexpense transactions (e.g., no round-up
or offsetting in accounting entries).
• Recipient of all payments.
• Details of the source of all income.
Accuracy• No accounting entries, records or
supporting evidence should be falsified or
fabricated.
• The books, records, and accounts should
agree to the related tax returns (sales tax/
value added tax and income tax).
• Compliance with all local andinternational legal requirements.

48

Third-party intermediaries are required to maintain details of recipient andthe nature of every payment or expenditure.
Supporting evidences• The supporting documents should be adequate to properly explain
the nature of services and the business rationale.
• Retain detailed support for payments, expenditures, expense
reimbursements, loans to shareholders / affiliated companies /individuals, commissions, fees, i.e. detailed description and proofof services provided, date, value, customer, and businessrationale.
• Maintain detailed support for gifts, sponsorships, donations, travel
and entertainment transactions e.g., detailed proof anddescription of expenditure, date, value, recipient.

49

Specific Information for Third-Party Intermediaries

Purpose and Approachof On-site Audits

For the purposes of executing audit rights to review books andrecords of the third-party intermediary, which may be includedin the specific compliance clauses of an agreement with athird-party intermediary, Siemens requires an appropriate levelof documentation which substantiates, in a transparent andclear manner, the activities of the third party. The documentation needs to support the appropriate use of their funds andtheir compliance with the contract and with the applicable laws
and regulations, especially with the anti-corruption related
regulatory environment.
What is Siemens’s approach?

Requested document including but not limited to:• In order to validate that the third-party
intermediary is an established company
with all required qualifications, an audit
will review company and ownership
structure.

• Shareholder/Ownership information• Organization and management structure• Overview of third-party intermediary’s employee setup• In order to ensure that the third-party
intermediary is complying with the books
and records requirements, an audit will
review detailed financial information withregard to the formal accounting andreporting requirements und local
legislation.

• In order to ensure transparency with theuse of funds and compliance with
Siemens anti-corruption rules and otherapplicable regulations, an audit will
review the compliance program (ifavailable) and detailed supporting
documentation for selected transactions.

• In order to ensure transparency in the useof sub-contractors for Siemens projects
and the compliance with the contractual
agreement, an audit will review thebusiness relationship between the subcontracted party and the third-party
intermediary.

50• Financial Statements e. g. Profit and Loss Statement, Balance
Sheet, Tax Returns• All bank accounts and their bank statements including bankreconciliations for all bank accounts• Sub-ledger details for selected company accounts (e.g., Gift &Hospitality, sponsorships, travel expenses, marketing andconsulting etc.)• Overview of cash and cash equivalent activities (e.g., petty cash,
wired transfer activity, check register, etc.)• Supporting documents e.g., contracts, invoices, proof of services
for the selected transactions• Compliance related guidelines• Overview of used sub-contractors e.g., consultants, sub-agents,
sub-distributors for Siemens projects• Proof that Siemens was informed about the use of the subcontractors according to the contractual agreement• Supporting documents e.g., contracts, invoices, proof of services
for the selected transactions

How to report allegations ofwrongdoing at Siemens or in
the Siemens supply chain
Siemens‘ Reporting Channels
Reporting of Possible Misconduct
To justify the trust placed in Siemens by customers, suppliers,
shareholders, employees and other stakeholders of the company, weplace the highest priority on the integrity and transparency of ourbusiness processes. Therefore, it is essential that Siemens obtains
knowledge of any violations of the law, in particular violations of theSiemens Business Conduct Guidelines. Reliable reporting channels forinternal and external stakeholders are indispensable for effective
compliance, because they help ensure that possible misconduct isreported, thoroughly investigated and brought to light.
Like other external stakeholders and Siemens employees, Siemens
partners may choose between two protected channels to reportpossible misconduct.
Whistleblower Hotline “Tell Us”
The Whistleblower hotline “Tell Us” is a secure way of reporting
potential violations of the law. Reports can be submitted at any timeof the day or night, anywhere in the world, in a safe, confidential andif desired, anonymous manner, either online or by telephone, innumerous languages. The call center and website are operated
by an external provider specializing in the secure and confidential
handling of sensitive content. Incoming reports are not traced andreporting parties are not automatically registered. The content ofincoming reports is forwarded by the service provider to the Siemens
Corporate Compliance Office for clarification. The decision on further
actions to be taken is made there. All reports are treated confidentially.

Ombudsperson
In addition to the Whistleblower hotline “TellUs”, possible violations of law can also bereported to the Siemens Ombudsperson.
Siemens has appointed an attorney to serveas an external Ombudsperson for thecompany, in order to give employees aprotected reporting channel for possible
violations of the law. All our stakeholders
can contact this impartial individual on aconfidential and anonymous basis if they
have observed any improper businesspractices.

The Ombudsperson can be reached via our
global Siemens internet page:https://www.siemens.com/global/en/
company/about/compliance/reportingchannels.html“Tell Us” can be reached via a secure
external Internet server:
https://www.bkms-system.net/
bkwebanon/report/clientinfo?cin=19siem14&language=eng

51

Published by :Siemens AG
Supply Chain Management
Otto-Hahn-Ring 681739 München
Germany
Telephone: +49 (89) 636-00
https://www.siemens.com/
sustainability-in-the-supply-chain
Issue 6, July 2024

© 2024 by Siemens AG, Berlin and Munich

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