Magna International Inc.
Report on Fighting Against Forced Labour
and Child Labour in Supply ChainsMay 2024

About this Report
This joint report (the “Report”) is made pursuant to subsection 11(2) of the Fighting Against Forced
Labour and Child Labour Supply Chains Act, S.C. 2023 c.9 (the “Act”) and has been prepared by
Magna International Inc. for itself and the subsidiaries listed in Appendix “A” (collectively, “Magna”).
This Report summarizes the steps that Magna has taken in the financial year ended December 31,
2023 to prevent and reduce the risk of forced labour or child labour within our operations and supply
chain. The terms “we,” “our,” “us,” “Company,” and “Magna” used in this Report refer collectively to
Magna International Inc. and the applicable controlled entities, unless otherwise noted.
Contact Us:
If you have any inquiries concerning this Report, please contact sustainability@magna.com

1. About Magna International Inc.
a. Our Structure & Activities
Magna International Inc. is a company incorporated under the laws of the Province of Ontario,
Canada. Our registered and head office is located at 337 Magna Drive, Aurora, Ontario, Canada
L4G 7K1. Our Common Shares trade on the Toronto Stock Exchange under the trading symbol“MG”, and the New York Stock Exchange under the trading symbol “MGA”.
We are a mobility technology company and one of the world’s largest suppliers in theautomotive space. As of the date of this Report, our global network includes 343 manufacturing
and assembly operations and 105 product development, engineering, and sales (“PDE&S”)
centres in 28 countries. 1 We have a global, entrepreneurial-minded team of over 179,000
employees. 2
We have complete vehicle engineering and contract manufacturing expertise, as well as productcapabilities which include body, chassis, exterior, seating, powertrain, active driver assistance,electronics, mechatronics, mirrors, lighting, and roof systems. Magna also has electronic andsoftware capabilities across many of these areas.
Our business is managed under four operating segments which have been determined on thebasis of technological opportunities, product similarities, as well as market and operating
factors, as follows:•

Body Exteriors & Structures•

Seating Systems•

Power & Vision•

Complete Vehicles

A more detailed description of our company, products and activities can be found in our Annual
Information Form, which is available on Magna’s website www.magna.com.

1 Manufacturing operations and PDES centres include certain operations accounted for under the equity method.

2 Number of employees includes over 168,000 employees at our wholly owned or controlled entities and over 11,000
employees at certain operations accounted for under the equity method.

2

b. Our Supply Chain
Magna designs, engineers and manufacture components, assemblies, systems, subsystems,
and modules for original equipment manufacturers (“OEMs” or “automobile manufacturers”) of
vehicles and light trucks. As a Tier 1 supplier, we source subcomponents from Tier 2 and othersub-suppliers, which are integrated into the products sold by us directly to OEMs. Due to thenumber and complexity of the products we manufacture, Magna’s supply chains consists of a
substantial number of suppliers globally, the composition of which changes within each calendar
year and from year to year.
In 2023, we had approximately 10,000 direct materials/goods suppliers (representing
approximately 7,000 supplier parent entities), with approximately 1,300 such suppliers providing
goods/commodities directly to Canada. Our top categories of materials/goods purchased in
Canada for the fiscal year ended 2023 were: steel (approximately 22%); stampings(approximately 22%); electronics (approximately 10%); resins/plastics (approximately 11%); andaluminum (approximately 5%).

2. Our Policies and Processes to Combat
Forced/Child Labour
a. Magna’s Values and Commitment to Respecting Human Rights
Respect for human rights is a part of our core company values and we recognize our
responsibility with respect to preventing forced/child labour and promoting socially responsible
business practices. We are committed to conducting business in a legal and ethical mannerglobally and we seek to fully comply with all applicable labor and other laws in all jurisdictions inwhich we operate.
We hold our own employees to high ethical standards and expect the same commitment of our
suppliers, vendors, consultants, independent contractors, agents, or any third party engaged on
our behalf (collectively, “suppliers”). We expect that Magna personnel and suppliers will always
act with integrity by obeying the letter and spirit of laws, regulations, standards and Magnapolicies that apply to them, wherever they do business. A failure by any of our suppliers tocomply with its terms can result in the termination by Magna of the supply relationship.
b. GovernanceSeveral of Magna’s Corporate functions centrally manage policies and, in some cases,
implementation of activities aimed at social risks generally, and forced/child labour risk inparticular. These include:•

Magna's global Human Resources function (including Magna’s Health, Safety andEnvironmental department), is responsible for ensuring respect for working conditions andemployment standards compliance, human rights, safety and employee wellness, as well as
environmental standards, within our own business, as well as managing various due
diligence and audit processes;

3•

Magna’s global Purchasing function (including its Supplier Management function), is
responsible for directing due diligence processes within the supplier base. The SupplierManagement team leads a cross-functional working group that includes representation fromlegal, ethics and compliance, human resources, sustainability and other functions that
determines Magna’s standards for its suppliers and oversees global implementation of key
due diligence and other supply chain activities;•

our Ethics and Compliance function oversees our ethics and compliance program, updates
to key policies such as our Code of Conduct, and Supplier Code, and Ethics andCompliance training, as well as related investigations and remedial action;•other specialist functions provide regular and ad-hoc reports to their function leadership; and•overall support for ESG policy, practices and initiatives is also provided by our global
Sustainability team.

Magna’s Compliance Council (“Compliance Council”), a body that includes key corporate
officers representing our finance, legal, human resources, operations, internal audit, sales andmarketing, technology, information, research and development, and compliance functions,supervises our ethics and compliance program. The Compliance Council also ensures that therequired elements of our Program are being carried out globally by our cross-functional
Operating Group Compliance Committees.
Day-to-day responsibility for effective implementation and execution of compliance activities
relating to human rights are managed by each of Magna's Operating Groups and theirrespective business divisions and partners within our overall policy framework and with thesupport of the Magna Corporate functions referred to above.
Board-level oversight is provided by the Governance, Nominating and Sustainability Committeeof Magna’s Board of Directors (with respect to supply chain risks) and the Talent Oversight andCompensation Committee (with respect to health and safety risks and social risks related to ourown workforce). Our Audit Committee oversees our global compliance program.
c. Key Policies Supporting Our Commitment
Magna maintains a policy framework that clearly and unequivocally prohibits forced/child labour,
promotes socially responsible business practices, and is designed to protect and recognize thefundamental rights of workers as key stakeholders in our business. While we operate in a
number of jurisdictions with a range of different laws, Magna’s policy framework applies equallyto all our operations across the globe to establish a common and consistent baseline for the fairtreatment of our own employees, as well as those in our supply chain. The key policies
supporting our commitment to human rights are Magna’s:

4Employee’s Our Employee’s Charter sets out our philosophy of fairness andCharter: concern for people including through the following principles: Job
Security; a Safe & Healthful Workplace; and Fair Treatment with equal
opportunities based on an individual’s qualifications and performance,
free from discrimination or favouritism.
Code of Conduct Our Code of Conduct, which applies equally to all our directors,
and Ethics executive officers and employees, articulates our compliance-oriented
values and expectations. The Code addresses standards of conduct in(“Code of Conduct”): a number of specific areas, including: conducting business withintegrity; fairness and respect; complying with all laws and regulations;diversity and inclusion; and respect for human rights, including fairworking conditions and prohibitions against slavery and forced/childlabour. It also addresses how to report suspected violations of theCode, and prohibits retaliation against persons who report such
violations in good faith.
Supplier Code of Our Supplier Code is a foundational document in our businessConduct relationships with suppliers. It outlines the human rights, labour andother standards we require every entity that supplies goods or services(“Supplier Code”): to Magna to adhere to, even in jurisdictions where meeting suchstandards may not be considered part of the usual business culture.
Such standards include similar requirements as our internally applied
Code of Conduct, including the prohibition against using forced/childlabour. A failure to comply with our Supplier Code can result in thetermination by Magna of the supply relationship.
Global Labour All Magna employees and suppliers are required to abide by our Global
Standards: Labour Standards, which articulate our commitment to various
internationally recognized frameworks that govern workers' rights,
including the UN Universal Declaration of Human Rights, ILO
Fundamental Conventions (which include conventions prohibiting
forced and child labour-related practices), and ILO Declaration on
Fundamental Principles and Rights at Work. The Global Labour
Standards have been incorporated into our Supplier Code.
Global Company
Statement Regarding
Human Rights &Environmental
Standards(“Human Rights
Statement”):

Our Human Rights Statement is a comprehensive summary of Magna’svalues and commitment regarding human rights and environmental
standards, and internal and supply chain requirements. The Statement
also outlines our risk assessment and risk management process withrespect to human rights and environmental risks.

Global Policy
regarding use of
Temporary Staffing &Employment
Agencies, Recruiting
Firms and Labour
Brokers (“Staffing
Agency Policy”):

The Staffing Agency Policy sets out requirements and best practices
when doing business with third party vendors supplying labour-related
services to Magna, including: due diligence requirements; prohibition on
the use of all forms of debt bondage arrangements; transparency inemployment terms; and verification processes related to contract
workers’ employment conditions.

5We also maintain a number of other comprehensive human rights related policies that prohibit
discrimination and harassment and country specific Employee Policy Manuals & Contract Terms
that are aimed at compliance with applicable laws. Local employee policy manuals consistently
reflect local hiring policies and practices that prohibit both forced and child labour, and contain
operational procedures that include robust worker identification requirements, minimum working
age policies, policies on the legal and ethical employment of young workers in educational
programs, and provide oversight for hours of work and overtime practices to ensure that
employment is free and voluntary in nature. Such manuals also have substantive human rights
policies addressing the prohibition of harassment, discrimination and/or workplace
violence/bullying, together with proactive complaint and investigation procedures, reinforced
with guarantees of no retaliation against whistleblowers.
Our key policies can be found at: https://www.magna.com/company/companyinformation/leadership-and-governance/corporate-governance-documents
d. Risk of Forced/Child Labour Being Used and Steps Taken to Prevent and Reducesuch Risk
We believe that the risk of forced/child labour is generally lower in our own operations due toour: robust policy framework and practices; well-established Human Resources program,including HR due diligence/audit programs; and compliance-oriented values, including our longstanding philosophy of fairness and concern for our people and respect for the inherent rights ofworkers.
We have identified certain areas of our supply chain that carry the potential risk of forced/childlabour, based on a range of sources, including:••••regulatory guidance or legislation (e.g. The Uyghur Forced Labor Prevention Act (UFLPA) in
the United States);
publicly available non-governmental external data sources;
information learned through our participation in industry associations; andthird-party supplier risk assessment tools.

While we monitor all our suppliers using a third-party live-monitoring platform, our SupplierManagement function has identified certain categories of goods requiring enhanced due
diligence, including aluminum, electronics, polysilicon, and steel. We cross-check categories wehave identified against the U.S. Department of Labor List of Goods Produced by Child Labor or
Forced Labor and its List of Products Produced by Forced or Indentured Child Labor, as well as
the high-priority sectors identified by the U.S. Department of Homeland Security’s Forced Labor
Enforcement Task Force.
Knowledge gained from these risk assessment measures and through other sources such as
our global whistleblower Hotline (described below) are continuously incorporated into our risk
identification process to improve our due diligence processes.
e. Due Diligence Processes and Steps Taken to Prevent Forced/Child Labour Risk
In 2023 and to date in 2024, Magna has taken the following steps to prevent and reduce the riskthat forced labour or child labour is used at any step of the production of goods in Canada or
elsewhere by Magna or of goods imported into Canada by Magna:

6

Policy •Enhancements:

We reviewed key policies addressing human rights including our
Supplier Code and implemented new policies including the Human
Rights Statement and Staffing Agency Policy

Employee •Training:•

We conduct mandatory annual Code of Conduct training for our
employees (described below)
We have developed the mandatory human rights training modules(discussed below)

HR-Related •Audits/Due
Diligence:

We have implemented a number of HR audit and/or due diligenceprograms aimed at the protection of the rights of workers andcompliance with applicable laws, including:• Employee Opinion Surveys - designed to assess overall
employee engagement and satisfaction, identify
workplace complaints and issues, and assess employee
opinions on a variety of workplace issues ranging fromfair treatment, working conditions, diversity and inclusion,and health & well-being• Wage & Benefits survey process - designed tobenchmark industry competitive wage and benefit levels
for all job classifications, help ensure that objective andnon-discriminatory compensation structures are in place,and to implement remedial compensation adjustments
where necessary to ensure both competitive and legallycompliant compensation levels are maintained• Health, Safety & Environmental Audits and Inspections designed to help ensure the maintenance of legallycompliant health, safety and environmental programs,
using a coordinated systems of world class audits,
inspections and remedial action plan processes;• Payroll & Compensation Audits - conducted throughMagna’s Internal Audit (IA) teams that review location
specific payroll processes to verify that employeecompensation meets applicable employment standards,
while aligning to hours of work, overtime and payroll
record keeping requirements• Labour & Employment Audits - designed to assess HR
compliance-related issues, policies, and practices at the
local Divisional level and adherence to both Magnapolicy and local laws, in a variety of areas, including fairworking conditions and prevention of forced and childlabour• Magna Hotline – which allows employee’s and otherstakeholders to report concerns or suspected violationsof Magna’s policies or practices

7Third Party •Labour/Staffing
Management:•••

We maintain oversight and due diligence practices with respect tothird party labour/staffing agencies including service agreement
templates for use with third party labour suppliers to ensure that
contingent workers are subject to the same ethical standards
applicable to Magna’s regular full-time employees. The service
agreement templates include, among other things, requirements toadhere to ethical labour standards, express prohibition on forced or
child labour related practices, and robust audit and investigation
provisions
We implemented a system for reporting non-compliant third-party
labour suppliers which is designed to help ensure that we do not
conduct business with prohibited suppliers. As a result, we
terminated business relationships with a number of temporary
staffing/labour agencies that did not meet the requirements of our
Staffing Agency Policy
Globally, we conducted over 2600 ‘manpower’ audits of labour
related suppliers
We took the remediatory actions discussed under Remediation
Measures below

Supplier •Engagement:

We routinely communicate and reinforce our expectations andrequirements to suppliers through a variety of means, including:dedicated supplier ESG roundtables; direct buyer interactions; live
“all supplier” communications; and information on our Corporatewebsite and supplier information portal

Supply Chain •Management:

Our Supplier Management function uses a third-party supply chain
risk monitoring and mapping tool, which monitors and provides realtime alerts regarding a number of ESG-related categories, including
forced/child labour and poor working conditions
We monitor updates to the UFLPA entity list of entities suspected ofusing Uyghur forced labor and integrate such updates into our thirdparty monitoring tool.
We require selected suppliers to complete ESG self-assessment
questionnaires (SAQs) that cover, among other things: working
conditions, human rights and health and safety. In certain
circumstances we require suppliers to undergo morecomprehensive on-site audits. The SAQs and audits generatecorrective action plans for suppliers to complete
We use a scorecard process to provide ongoing monitoring andassessment of suppliers and have developed an ESG component tothis process which includes forced/child labour as a critical flag. No
production suppliers needed to be terminated in 2023 as a result ofa violation of working conditions or human rights
The Supplier Management function maintains an investigation andcase management system to gather information and execute control
and oversight of any necessary mitigating activities

•

•

•

•

8

f.

Reporting •Mechanism:•

We enhanced our Hotline to create a dedicated reporting tier for
suppliers
Continuously monitored reports received by our Hotline for mattersrelating to social/human rights risks. None of the reports submitted
to our Hotline have involved forced or child labour related
allegations

Transparency & •Reporting:We publicly report on our efforts to combat forced/child labour in ourannual Sustainability Report and a number of regulatory reports,
including this Report which increases transparency and further
amplifies the importance of our activities to stakeholders

Mechanisms for Reporting Concerns

We have established a robust and comprehensive complaints management process as anintegral part of our due diligence procedures. Our own employees can take advantage ofseveral reporting/resolution mechanisms, including our Open-Door Process whereby employees
are empowered to bring issues and concerns forward to leadership at all levels of theorganization, without fear of retaliation. Our Open Door Process includes Fairness Committees
and an Employee Advocates program in certain of our operations. In addition to these internalmechanisms, if any stakeholder experiences prohibited treatment or becomes aware ofviolations of Magna requirements or expectations outlined in our policy framework, they are able
to use our whistleblower line, the Magna Hotline; which provides an additional avenue for
employees and third parties (including our suppliers) to report suspected violations of Magna's
Employee’s Charter, the Code of Conduct and Ethics, and the Supplier Code. In a number ofour operations globally, our facilities have third party employee representative bodies such as
unions and/or works councils, together with formal concern resolution and grievance procedures
designed to address workplace related issues. Where third party representation exists, we work
constructively with employee representatives and are jointly committed to the protection andenhancement of workplace rights.
Magna strictly prohibits any form of retaliation against individuals who report legal and ethicalconcerns in a truthful and good-faith manner, as outlined in our Policy on Anti-Retaliation. All
communications made through the complaints management process are treated confidentially,in accordance with relevant local data protection laws. Anonymity is possible when reporting
through the Magna Hotline (if local law permits). Should an individual voluntarily choose toreveal their identity, Magna will make diligent attempts to preserve confidentiality throughout theinvestigative procedures. We conduct comprehensive investigations into all reports andreasonable suspicions that are brought to our attention.
g. Employee Awareness and Training
In order to help our employees understand the values, standards and principles underlying ourCode, we have implemented a global compliance program overseen by the Audit Committee,
which includes training of employees through different modalities (e-learning live in-person, andvirtual instructor-led) on various topics relating to compliance and ethics. Office-based
employees complete annual Code of Conduct training, as well as specific training covering
subtopics addressed by the Code.

9In addition, we have developed and will be rolling out during the first half of 2024, mandatory
enhanced compliance training for employees on responsible sourcing and global supply chain
laws, covering such issues such as child labour, human trafficking, forced labour, and the
responsible use of third party labour brokers. The training will be mandatory for employees
across various functional areas with responsibility for hiring and supplier/vendor selection andoversight, such as Human Resources, Purchasing, Legal, and Quality, as well as otherfunctional leadership. These modules are expected to be rolled out in the first half of 2024.

3. Assessing the Effectiveness of Our Actions
We are committed to continuously improving our approach to human rights and continue toassess ways to refine our program and enhance the operationalization of our commitment. We
regularly evaluate our activities to confirm that they remain current and aligned with regulations,industry standards and best practices.
We assess the effectiveness of our activities with respect to forced/child labour in a number ofways, including:
•
•

•
•
•
•
•
•
•
•
•

Effectiveness assessments conducted at least annually by a cross-functional internal
working group;
Participation in a number of industry associations that allows us to benchmark best practices
regarding activities to prevent forced/labour and identify opportunities for continuous
improvement. For example, we are a founding member of the Responsible Supply Chain
Initiative (RSCI), an association of automotive OEMs, Tier 1 Suppliers and industry
associations, which has established an assessment program for due diligence in theautomotive supply chain relating to social compliance, occupational safety andenvironmental protection;
Engagement with key stakeholders, such as investors and customers, as well as suppliers
through mechanisms such as our Supplier Roundtables;
Feedback from our risk-based audits described in this Report, such as our Employee
Opinion Surveys and other HR audit programs;
Feedback received from our Board of Directors and its standing committees;
Interactive tests included in our employee training modules which give us indicative
feedback on the effectiveness of our training activities;
Monitoring and analysis of existing and emerging regulatory requirements globally;
Monitoring of non-governmental and other public reports related to forced/child labour;
Assessments of Magna and/or its Divisions from third-party ESG rankings and customerrequired self-assessments or audits;
Assessments of the extent to which our suppliers are improving in self-assessment
questionnaires or on-site audits or implementing corrective actions; andOngoing monitoring of reports received through the reporting mechanisms described in thisReport, including the Magna Hotline.

4. Remediation Measures
We identified one reportable matter in the reporting year. A description of the matter and our
remediation activities is as follows:10

During 2023, an Ontario Ministry of Labour (MOL) inspection at a division of one of our Ontario
subsidiaries alerted Magna to potential concerns related to abusive and/or illegal practices bytemporary staffing agencies operating in Simcoe County area. We determined that the Magna
Division had no relationship with either of the staffing agencies, and as a result the MOL
inspection triggered no findings of concern.
Nonetheless, we proactively launched our own internal investigation centered on a third-party
staffing agency that was occasionally contracted by the same Magna Division to help provide
temporary worker placements. Through the internal investigation Magna learned of thepossibility that workers ineligible to be in Canada, and potentially vulnerable to exploitation,
were illegally presented for temporary placements, in clear violation of the agency’s contractual
obligations to the Magna Division.
As a result, Magna took a number of remediatory steps, including:
•
•
•

•
•

•
•

proactively contacting Ontario Victims Services to offer our support for the temporary
workers involved;
self-reported immediately to the MOL to ensure the Ministry was fully aware of the facts
uncovered by Magna’s investigation;
self-reported and provided investigative material of assistance to both the York Regional
Police (YRP) and the Canada Border Services Agency (CBSA) to help support their criminal
investigation of those parties seeking to take advantage of vulnerable workers;
terminated our services agreement with third party agency in question;
took steps to confirm this was an isolated incident and that no other examples of such noncompliance existed in any of our operations elsewhere, particularly where staffing agencies
might have been used;
introduced additional compliance measures to strengthen our existing internal controls andoversight, particularly concerning protocols for contracted staffing agencies; andmade proactive contact with YRP and the CBSA to share the results of our internal
investigation with a view to ensuring that anyone acting wrongly might be held to account.
This information helped to alert the YRP and CBSA to possible bad actors apart from thosethey had already identified.

We also maintain the oversight and due diligence practices with respect to third-party
staffing/temporary labour agencies, discussed in this elsewhere in this Report.
At all times, the Magna division in question paid the temporary agency involved fees that met or
exceeded all requirements under the Ontario’s Employment Standards legislation for purposesof properly compensating the temporary workers placed at the Magna Division those wages
required to be compliance with local laws. Any shortfall in wages suffered by the affected
workers at the hands of the non-compliant agency was unknown to Magna or its division.
Nonetheless, Magna, on a good faith and compassionate basis, proceeded to fully compensate
those workers confirmed to have been temporarily placed at the division, who had been taken
advantage of as a result of unethical employment practices of their hiring agency.

11

5. Approval and Attestation
This Report was approved by Magna’s Board of Directors on May 2, 2024. In accordance withthe requirements of the Act, and in particular section 11 thereof, I attest that I have reviewed theinformation contained in the report for the entity or entities listed above. Based on myknowledge, and having exercised reasonable diligence, I attest that the information in the report
is true, accurate and complete in all material respects for the purposes of the Act, for thereporting year listed above.

Seetarama (Swamy) Kotagiri
Chief Executive Officer and Board Member
Magna International Inc.
On behalf of the Board of Directors of Magna International Inc.
May 2, 2024

12

Appendix A
Reporting Entities Covered By this Joint Report
Parent Company• Magna International Inc.
Controlled Subsidiaries• Magna Closures Inc.
• Magna Exteriors Inc.
• Magna Powertrain Inc.
• Magna Seating Inc.
• Magna Seating of America, Inc.

13