Heraeus Supply Chain Due
Diligence Policy
VERSION 4/2023

Heraeus Holding GmbH
Heraeusstraße 12–1463450 Hanau

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I. Introduction
As a family-owned company with over 165 years of tradition,
Heraeus is committed to the principle of sustainability in its
supply chains. Heraeus is aware that the selection andmonitoring of its suppliers, especially in precious metal
trading and in the sourcing of critical raw materials is of key
importance for business activities which are focused onsustainability.

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II. PREAMBLE AND SCOPE
The various business segments of Heraeus pursue the goal ofaligning their value chains with due regard to the protectionof human rights. In doing so, Heraeus follows in particular:
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the OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affectedand High-Risk Areas;
the requirements of the German Supply Chain Due
Diligence Act (“Act”);
the EU Conflict Minerals Regulation 2017/821;
the Responsible Guidance of the London Bullion
Market Association (“LBMA”) and of the London
Platinum and Palladium Market (“LPPM”) and theResponsible Minerals Assurance Process (“RMAP”)
of the Responsible Business Alliance;
the Responsible Jewellery Counsel (“RJC”)
standards (for those Heraeus Companies who followthat standard).

Heraeus aims at sourcing Risk Products (as defined below)
only from legitimate sources that are not associated withcrime, armed conflict or human rights violations.
The objective of the Heraeus human rights due diligenceprocess is:▪ to identify and assess the risk of violation of humanrights;▪ to prevent and mitigate the negative impact of thedetected risks if these risks are directly or indirectly
linked to the activities of Heraeus.
This Policy applies to all Heraeus Companies (as definedbelow) but is particularly important for Heraeus PM.

III. SOURCING PRINCIPLES
Heraeus will not tolerate, profit from, contribute to, assist
with or be associated with:
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torture, cruel, inhuman and degrading treatment;
the worst forms of child labor or any form of forcedlabor. The age of employees shall not be less than
15 years or, where permitted by applicable local
law, not less than 14 years;
other gross human rights violations and abusessuch as sexual violence;
corruption or any other illegal activities such asbribery or money-laundering;

Heraeus Supply Chain Due Diligence Policy▪
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violations of the freedom of association or the rightto organize, including the right to participate incollective bargaining and strikes;
violations of international humanitarian law;war crimes, genocide, or any other crimes against
humanity;
the direct or indirect support of non-state armedgroups;
the involvement of public or private security forces,
if, due to a lack of control, their use leads to a
cruel or inhumane treatment of workers or to theinjury of workers or the restriction of the freedom ofassociation;
the unauthorized sourcing from world heritage sites
and protected areas;
the unlawful eviction or the unlawful taking of land;
the fraudulent misrepresentation of the origin ofminerals;
the non-payment of taxes, fees, and royalties togovernments;
the withholding of minimum wages provided forunder applicable law;excessive working hours with the risk of mental or
physical fatigue;
harmful soil contamination, water or air pollution,
harmful emissions, or excessive water consumption
harmful to the health of humans or constituting asignificant impairment of the basis for thepreservation or production of food;insufficient safety standards or a working
environment with an unacceptably high risk ofoccupational accidents;
any breach of statutory requirements with a highrisk of considerable bodily injury or harm to theenvironment.

Heraeus will not pursue any business opportunity or engage
in any transaction with business partners and will
immediately withdraw from existing business relationships if
any of the risks listed above are identified by Heraeus,
unless Heraeus can manage the identified risk by taking
appropriate measures to eliminate or mitigate the risk.
Business relationships with partners acting against thoseprinciples are not tolerated throughout the organization.
Heraeus reasonably ensures that the precious metals in its
supply chain originate from legal and ethical sources, thatthe precious metals are not associated with crime, armed
conflict or human rights abuses and that they will not be
used for money laundering, the financing of terrorism, tax
evasion, fraud or any other crime.

IV. SUPPLIER DUE DILIGENCE PROCESS AND MANAGEMENTSYSTEMa. Supplier risk assessment
Heraeus sets up a process for risk analysis and theassessment of suppliers, which includes a requirement for arisk-appropriate review by the relevant Heraeus Companies of
their suppliers for the risks listed above. The risk analysis isbased on the evaluation of country and industry risks. For
the risk analysis, the relevant Heraeus Companies may also

2/4use information which they have requested from thesupplier, researched themselves or obtained from externalsources (commercial data and ESG data providers). The risk
assessment process for the PM Business is described in
more detail in Section IV. below.

Due diligence of supply chain counterparts comprises allmeasures required by the latest LBMA Responsible Gold &Silver Guidance and the corresponding LPPM Guidance andis performed before entering into a new business relationshipwith any of our precious metal business partners.

b. Measures derived from the risk assessment
Based on the risk analysis, the relevant Heraeus Companies
are required to take appropriate measures if deemednecessary. Depending on the risk identified, such measures
can range from obtaining confirmations of compliance with
the Heraeus Supplier Code of Conduct, to transmitting andevaluating questionnaires, collecting external data,
committing the supplier to certain measures, and to on-site
supplier audits. Or the relevant Heraeus Companies may
even decide not to enter into a business relationship or toterminate an existing business relationship with certainsuppliers. The terms of the sample purchase contracts andthe terms of the Supplier Code of Conduct provide that thesuppliers of the relevant Heraeus Companies are to committheir sub-suppliers in a risk-appropriate manner to also
comply with the human rights and environmental standards
laid down in the Heraeus Supplier Code of Conduct.

Heraeus PM has a robust incoming inspection process foreach lot and specific documents must be received andtransactional details entered before Heraeus PM processes
any precious metal-containing material.

c. Management system
Human rights training courses are part of the compliancetraining seminars. Employees of the procurement
department and of the PM Business are invited to specifichuman rights training courses on human rights risk in thesupply chain. The relevant Heraeus Companies are required
to report the results of the risk assessment and theimplementation of preventive and remedial measures to their
top management or their supervisory board. The processes
for the implementation of the supplier risk assessment andthe measures derived from the risk assessment will bereviewed at least annually by a supply chain expert group.
Heraeus has a Compliance Hotline (“grievance mechanism”)
which is available to employees and to third parties.

Heraeus PM distinguishes between the following categories
of precious metal business partners:i.

Mining business partners
Heraeus PM requires a third-party due diligence audit
report which complies with OECD guidelines. In theabsence of such report, Heraeus PM will conduct on-site
audits itself. Such audits are based on LBMA’s or
LPPM’s questionnaire on mined material and include anassessment of the environmental impact of the miningsite.

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Refining material suppliers – secondary precious metals
All refining material suppliers must undergo a due
diligence process before Heraeus PM accepts anymaterial. For refining material from high-risk countries,
Heraeus PM applies very strict due diligence processes
and material checks to prevent any commingling of
secondary precious metals with precious metals of
unknown or conflict-affected origin.
b.

Identifying and assessing risks in the PM BusinessFor every business partner, Heraeus PM has establisheda business partner database and allocated a risk profile
according to internal compliance criteria. This process
is a formal requirement before entering into any
business relationships with our precious metal business
partners.

d. Responsibilities
The responsibility for the operational implementation of thisPolicy, in particular for the risk assessment and any
adequate measures taken based on such risk assessment,
lies with the managing director of the relevant Heraeus
Company, who may delegate the responsibility for the risk
assessment to the procurement department which is
supported in the implementation of this Policy by theProcurement Center of Competence and the Responsibility
Office (Heraeus Business Solutions GmbH).

If Heraeus PM is offered any minerals originating fromor transiting through conflict-affected and high-risk
Areas, Heraeus PM conducts an extensive due diligence
check. Only if Heraeus PM can exclude all of the risks
mentioned above for these products, a business
relationship can be established.
In addition, Heraeus PM reviews and monitors alltransactions undertaken in the course of the relationshipwith its business partners using sophisticated ITsystems.

V. ADDITIONAL PRINCIPLES AND PROCESSES FOR THE PM
BUSINESSa. General
Heraeus PM is a gold and silver producer accredited
according to the LBMA standards and a platinum andpalladium producer accredited according to the LPPM
standards and it is our commitment to abide by LBMA’s
Responsible Gold and Silver Guidance as well as by LPPM’s
Platinum and Palladium Guidance.

Heraeus Supply Chain Due Diligence Policy

Risk assessment (additional elements to CMS describedin Section III.)c.

Management System (additional elements to CMS
described in Section III.)
Heraeus PM has established an effective andcomprehensive compliance management system basedon strong local and international KYC due diligencepractices to target anti-money laundering, bribery incommercial transactions and to comply with theregulations set forth in the OECD Due Diligence

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Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas.
This management system defines the processes andresponsibilities of Heraeus PM for conducting risk-based
due diligence assessments and for the screening andmonitoring of all transactions and applies to all Heraeus
PM entities.
For the PM Business, the Compliance Officer has theauthority to deny any new suppliers classified as highrisk suppliers. The senior management retains theultimate control and responsibility for the supply chain.
Heraeus PM expects its suppliers of precious metals
and precious metal-containing material to takeappropriate steps to ensure that they adopt a policysimilar to this Policy, and that the provisions of thatpolicy are communicated to their employees and down
their own supply chain.
Heraeus PM conducts audits or commissions a reliablethird party to conduct audits if such audits arenecessary based on Heraeus’ internal risk assessment or
if they are legally required.
Heraeus PM does not support any business models ofsuppliers aiming at tax evasion and at the non-paymentof fees and royalties related to mineral extraction andtrade and export from conflict-affected and high-riskareas. Any such taxes, fees and royalties must be paid
to the relevant public authorities according to thesupplier’s position in the supply chain. Heraeus PM
commits to disclose its payments in accordance withthe principles set forth under the Extractive Industry
Transparency Initiative (EITI).
For the PM Business, an independent third-party supply
chain due diligence audit is performed annually basedon the requirements of the LBMA, the LPPM and theResponsible Minerals Initiative (“RMI”) and theregulations set forth in the OECD Due Diligence
Guidance for Responsible Supply Chains of Minerals
from Conflict-Affected and High-Risk Areas.
d.

Further information
Further information on how our systems, procedures,processes and controls have been implemented toconform to the specific requirements set forth in theLBMA, LPPM and RMI Guidance are detailed in theannual compliance report and can be found in thedownload section here:
http://www.herae.us/conflictminerals

VI. GRIEVANCE MECHANISM
Heraeus encourages its own employees or any external
stakeholders to use the Heraeus grievance mechanism,
allowing to anonymously voice concerns about our supply

Heraeus Supply Chain Due Diligence Policy

chain or any newly identified risks. Any reports made in goodfaith will be treated discreetly and are strictly confidential.
Any attempt to identify a whistle-blower who has reported aconcern in good faith and who has chosen to raise hisconcerns anonymously is strictly forbidden.
Internal compliance hotline:+49 (0) 6181 / 35 - 5500
or write to heraeuscomplianceofficer@heraeus.com
External ombudsman:+49 (0) 6105 / 921355
or write to
dr-buchert@dr-buchert.de
For the PM Business, concerns can also be reported to thegrievance mechanism of the Responsible Minerals Initiative
at:http://www.responsiblemineralsinitiative.org/minerals-duediligence/risk-management/grievance-mechanism/
Likewise, any other parties involved in gold or silver supply
chains are encouraged to contact the LBMA about allconcerns they may have in relation to this Policy.

VII. DEFINITIONS
Risk Products: Products or services are considered “RiskProducts” if their exploitation and purchase involve aparticularly high risk of violation of human rights, violation ofinternational trade rules or of criminal offenses. According toAnnex II of the OECD Due Diligence Guidance for
Responsible Supply Chains of Minerals from ConflictAffected and High-Risk Areas, tin, tungsten and tantalum(“3Ts”) as well as gold and their respective minerals arealways considered as Risk Products.
Outside the PM Business and the 3Ts, products and services
are considered as Risk Products if the risk analysis shows
risks in the areas described in Section 3 above and inSection 2 of the Act.
Heraeus PM/PM Business: Heraeus Precious Metals GmbH &Co. KG (business segment Heraeus Precious Metals) and its
worldwide PM trading and recycling sites.
Heraeus/(relevant) Heraeus Companies: for the purpose ofthis Policy all Heraeus legal entities falling within the scopeof the Act.
Precious Metals: Gold, silver, platinum, palladium, rhodium,iridium, ruthenium and osmium.

VIII. CONTACTS
If you have further questions regarding the PM Business,please contact Patrick Henritzi atpatrick.henritzi@heraeus.com
For questions regarding other Risk Products, please contact
conflictminerals@heraeus.com

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