California Supply Chains Act
Disclosure Under the California Transparency in Supply Chains Act
The California Transparency in Supply Chains Act (the “Act”) requires each retailer and manufacturer doing business in the State of California to make disclosures regarding efforts to eradicate slavery and human trafficking from its direct supply chain.
Fresenius Kabi is deeply committed to the protection and advancement of human rights, and otherwise conducting business in an ethical and appropriate manner. As such, the Company supports the goals of the Act. The Company’s commitment to ethical business practices is reflected in our Code of Conduct, which is distributed to each new employee, available and publicized within the Company, and on which training and certification are required of each employee annually. Violations of the Code of Conduct subject employees to disciplinary action, up to and including termination.
In relation specifically to our supply chain, our Suppliers Code of Conduct is provided and applicable to those persons and companies that provide us with goods or services. While we expect our suppliers have and live up to their own codes, our Supplier Code of Conduct sets forth standards required of our vendors regarding the protection of labor conditions and human rights, as well as other ethical business practices. Use of child and forced labor are specifically and explicitly prohibited.
In addition, our contracts with suppliers require their adherence to all applicable laws and regulations, including of course those which prohibit slavery and human trafficking. We do not currently require regular certifications of compliance with these provisions. Any violation of these obligations, however, would constitute a breach by the supplier of the agreement for which we could terminate our relationship.
We regularly conduct audits of our major raw materials and component vendors. Normally these are scheduled in advance with the suppliers due to the necessity to review certain specific materials relating to current good manufacturing practices. During these visits, our auditors, whether employees or third parties we may use to conduct the audit, observe for suitable employment conditions and ensure appropriate qualification of the workers employed by the vendor. We will not qualify vendors not meeting stringent standards.
Those Company employees who have primary responsibility for finding, contracting with and otherwise relating to our suppliers are alert to the issues underlying the Act, and have received specific instruction to remain vigilant for any indication of the use of forced labor or human trafficking by those in our supply chain. Additionally, questions are included in a supplier questionnaire under development that will require prospective and current vendors to verify their compliance with local labor requirements.
As our policies and procedures are periodically reviewed and updated, the Company will continue to consider whether additional provisions should be included to further enhance our programs, including as to issues involving forced labor.
One of the Company’s fundamental values is Integrity, which we expound for this purpose as “the ability to earn and inspire trust by acting ethically, demonstrating consistency in words and actions, and applying high standards of professionalism, honesty and respect in everything we do.” This unarguably includes the respect for human life and dignity, and reflects our corporate purpose: “Caring for Life".