Our company is committed to sustainability. This includes respect for universally recognised principles on human rights including labour rights, the environment, and anti-corruption.

Therefore, we seek to ensure that our own company and our suppliers operate in accordance with the requirements of the enclosed supplier Code of Conduct.

Our company recognises that establishing the required processes outlined in the Code of Conduct requires both time and resources, especially in the initial phases, as we are also im-plementing similar processes in our operations. The Code of Conduct should therefore be un-derstood as a tool for cooperation and dialogue with our supply chain partners about improv-ing systems to manage adverse impacts on human rights including labour rights, the envi-ronment, and anti-corruption.

In case of non-compliance with requirements in our Code of Conduct, we will focus on suppli-ers’ ability and willingness to demonstrate continuous improvements. We feel confident that cooperation and dialogue will result in a more efficient partnership, which both parties will benefit from.

Please refer to the enclosed Code of Conduct for more information about the specific re-quirements.

If you have any questions regarding this letter, our Code of Conduct or our responsible supply chain management program in general, please do not hesitate to contact our offices.

Kind regards,
NORDAL A/S

I. Introduction

Purpose of the Code of Conduct

The purpose of this Code of Conduct (Code) is to ensure that our suppliers operate in accord-ance with internationally recognised minimum standards on human rights including labour rights, the environment, and anti-corruption. NORDAL therefore expects suppliers to establish systems to avoid and address adverse impacts on these minimum standards.

NORDAL adheres to the content of this Code and expects the same of its suppliers. Compli-ance with the requirements of this Code is therefore a condition of any agreement or contract between NORDAL and its suppliers.

The aim of this Code is not to cease the business relationship between NORDAL and suppliers if non-compliance were to be identified, but to help suppliers improve their management of adverse impacts continuously. NORDAL is therefore willing to work with suppliers to achieve compliance with the provisions of this Code. However, NORDAL will not conduct business with a supplier if compliance with the terms of this Code is deemed impossible and the supplier shows no willingness or ability to mitigate identified adverse impacts.

NORDAL is aware that our company’s actions and procurements practices can influence sup-pliers’ ability to comply with the requirements in this Code. Therefore NORDAL will routinely assess any adverse impacts it may cause or contribute to through its purchasing, compliance and other supply chain practices. This includes ensuring that the following purchasing prac-tices do not negatively impact suppliers’ ability to meet the requirements set forth in this Code: Lead time, order volume versus production capacity, product development process, pricing, order size fluctuation and consistency of orders. In addition NORDAL shall periodically review the adequacy and continuing effectiveness of this Code.

General Principles

This Code is not and should not be interpreted as a means to circumvent or undermine na-tional laws or national labour inspectorates. Similarly, this Code is not and should not be in-terpreted as a substitute for free trade unions, nor should it be used as a substitute for col-lective bargaining.

This Code outlines necessary processes and minimum standards. NORDAL will not accept any attempt to use the requirements as a means to lower existing standards. When implementing this Code, suppliers shall take all necessary measures to ensure that they do not uninten-tionally leave workers and other beneficiaries in a worse position than before this Code was introduced.

International Principles and Legal Compliance

The provisions as set forth in this Code establish minimum requirements to suppliers. These minimum requirements are based on the ten general principles contained in the UN Global Compact as made operational with the UN Guiding Principles on Business and Human Rights. The minimum requirements are made in consideration of the International Bill of Human Rights, the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the United Nations Convention against Corruption. Furthermore, the Code rests on the OECD Guidelines for Mul-tinational Enterprises, 2011 Edition.

In addition to meeting the minimum requirements of this Code and thereby act in considera-tion of relevant international agreements, principles, objectives, and standards, suppliers shall comply with all laws, regulations, administrative practices and other applicable stand-ards (e.g. collective bargaining agreements or other Codes of Conduct) in the countries in which they operate.

Where there are differences between the terms of this Code and national laws or other appli-cable standards, suppliers shall adhere to the higher requirements. Conflicts between the provisions of this Code and national laws or other applicable standards shall be evaluated by NORDAL in cooperation with its supplier and relevant stakeholders in order to establish the most appropriate course of action that will help to foster respect for the international princi-ples outlined above. If any conflicts are detected, suppliers must inform NORDAL immediately.

II. Process Requirements

This section outlines the required processes in order for suppliers to manage adverse im-pacts on human rights including labour rights, environmental, and anti-corruption principles.

NORDAL expects all suppliers to develop and implement the following:

1) policy statement, 2) due diligence and 3) remediation.

1. Policy Statement:

NORDAL expects suppliers to adopt a policy statement committed to the international princi-ples that this Code is based on. The policy statement shall:

• Be approved by the most senior level of the supplier.
• Take into account relevant internal or external expertise on human rights including labour rights, environmental, and anti-corruption principles.
• Stipulate expectations on human rights including labour rights, environmental, and anti-corruption principles towards personnel, business partners and other parties directly linked to the suppliers’ operations, products or services.
• Be publicly available and communicated both internally and externally.
• Be reflected in other operational policies and procedures necessary to embed the policy statement throughout the supplier operations.

2. Due Diligence:

NORDAL expects suppliers to establish a process of continuous due diligence in relation to SUPPLIER’s adverse impacts on human rights including labour rights, environmental, and anti-corruption principles. The due diligence process should cover potential and actual adverse impacts that suppliers may cause or contribute to through their own activities as well as ad-verse impacts, which may be directly linked to suppliers’ operations, products or services by their business relationships.

Conducting due diligence should, as a minimum, include the following elements for managing potential and actual adverse impacts:

• Identification: Firstly, an assessment of potential and actual adverse impacts on human rights including labour rights, environmental, and anti-corruption principles must be con-ducted on a regular basis.
• Prevention and mitigation: If potential or actual adverse impacts are identified, suppliers must effectively integrate their impact assessment findings across relevant internal func-tions and processes, and take appropriate action. This includes ensuring that such adverse impacts are prevented or appropriate action for their mitigation is taken.
• Accounting: The process of addressing adverse impacts must be closely tracked. Suppliers are expected to account for how they address their potential and actual adverse impacts by communicating their findings and actions to relevant stakeholders including NORDAL.

3. Remediation:

NORDAL recognises the possibility of actual adverse impacts, even when the best policies and processes are in place.

If a supplier discovers or is informed that it causes or contributes to an actual adverse impact on human rights including labour rights, environmental, and anti-corruption principles the supplier shall enable access to remedy for those affected or inform the proper authorities.

If the supplier did not cause or contribute to such adverse impact, but is directly linked to it as it occurs in the supplier’s value chain or in other relations, the supplier commits to use its leverage to make the causing or contributing entity prevent reoccurrence, mitigate the situa-tion, and enable access to effective remedy for those affected or ensure that the proper au-thorities are informed.
Suppliers have an explicit responsibility to provide remedy to victims of actual adverse hu-man rights impacts that they cause or contribute to. Therefore, if such actual adverse human rights impacts are identified, NORDAL expects suppliers to provide for or cooperate in their remediation through legitimate processes.
To make it possible for adverse impacts on human rights including labour rights, environmen-tal, and anti-corruption principles to be addressed early and remediated directly, suppliers must establish or participate in effective operational-level or sector-based grievance mecha-nisms accessible for other business enterprises, individuals and communities, who may be adversely impacted or otherwise have identified adverse impacts.

Grievance mechanisms should have the following characteristics:

• Legitimate: It should enable trust and be accountable for fair conduct;
• Accessible: It should be known to all intended users (such as employees and the local community) and provide adequate assistance for those who may face particular barriers to access;
• Predictable: It should provide a clear and known timeframe, clarity on the types of process and outcome available, as well as means of monitoring implementation;
• Equitable: It should provide reasonable access to sources of information, advice and ex-pertise necessary to engage in the process on fair, informed and respectful terms;
• Transparent: It should keep parties informed about progress, and provide sufficient infor-mation about its performance to build confidence in its effectiveness and meet public in-terest at stake;
• Rights-compatible: It should ensure that outcomes and remedies are in line with interna-tionally recognised human rights including labour rights, environmental, and anti-corruption principles;
• A source of continuous learning: It should draw on relevant measures to identify lessons for improving the mechanism and prevent future adverse impacts; and
• Based on engagement and dialogue: It should consult the persons for whose use it is in-tended on its design and performance, and focus on dialogue as the means to address and resolve adverse impacts.

III. Principles and Standards in the Code of Conduct

Suppliers’ policy statement, due diligence and remediation processes should cover interna-tionally agreed principles in relation 1) human rights including labour rights, 2) environmen-tal principles and 3) anti-corruption principles.

The principles and standards that NORDAL expects all suppliers to manage adverse impacts upon are described in the three sub-sections below.

1. Human rights including labour rights

Suppliers are expected to manage adverse impacts on internationally recognised human rights including labour rights as stated in the International Bill of Human Rights and the In-ternational Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. This also includes managing adverse impacts on consumers, as stated in the OECD Guidelines on Multinational Principles’ chapter on Consumer Interests.

A list of human rights including labour rights can be found in the table below.

2. Environmental principles

Suppliers are expected to establish adequate processes to manage all significant potential and actual impacts on the external environment and support the principles in the Rio Decla-ration on Environment and Development. These principles are further described in the UN ac-tion plan Agenda 21.

This corresponds to the environmental principles described in the OECD Guidelines for multi-national enterprises.

The environmental principles listed in the following table should as a minimum be managed.

3. Anti-corruption principles

SUPPLIER should establish adequate processes to counter corrupt practices. Such processes should support and be in line with the United Nations Convention against Corruption.

The anti-corruption principles listed below should as a minimum be managed.

IV. Implementation of the Code of Conduct

Records and Documentation

Suppliers shall maintain appropriate records to demonstrate compliance with the require-ments of this Code. Records shall be available to NORDAL upon request. Appropriate records include, but are not limited to:

• Policy Commitment(s);
• Documentation of due diligence processes, including impact assessments and records from the tracking process;
• Information on grievance mechanism(s);
• Records of any significant instances of non-compliance encountered in relation to this Code, including a summary of corrective actions taken.

Definition of Roles and Responsibilities

Suppliers must assign responsibility within their organisation for the implementation of this Code. As a minimum, the following representatives shall be designated:

• One or more management representatives with the responsibility and authority to en-sure compliance with the Code
• A qualified compliance officer responsible for planning, implementing and monitoring compliance with the Code

Scope of Application

The requirements of this Code extend to all NORDAL’s suppliers and all of their workers, re-gardless of their status or relationship with suppliers. This Code therefore also applies to workers who are engaged informally, on short-term contracts, or on a part-time basis.

Suppliers are responsible for ensuring that their business relationships including their sub-suppliers also have adequate processes to manage their adverse impacts on human rights including labour rights, environmental, and anti-corruption principles in place. This includes sub-suppliers classified as home-based workers or small farmers. As part of this obligation, a supplier shall:

• Require sub-suppliers to inform the supplier about other business entities in the sup-ply chain taking part in the production of each order
• Use its leverage to make sub-suppliers work towards meeting the requirements of this Code
• Undertake reasonable efforts to check that sub-suppliers operate in conformance with this Code.

Continuous collaboration

NORDAL may monitor the operations of suppliers with the purpose of gaining insight into how suppliers manage their impacts on human rights including labour rights, environmental, and anti-corruption principles.

NORDAL expects all suppliers at any time to be able to declare in writing its stage of imple-mentation in relation to the requirements contained in this Code. Suppliers are expected at any point to willingly cooperate in answering further questions, self-assessments and if deemed necessary cooperate with NORDAL in improving systems to manage adverse impacts on human rights including labour rights, environmental, and anti-corruption principles.

Suppliers shall accommodate visits from NORDAL. This includes providing physical access to any representative from NORDAL or assigned by our company. NORDAL reserves the right to let an independent third party of our choice make on-site inspections to verify compliance with the requirements of this Code.

Where instances of non-compliance are detected as a result of supplier visits, suppliers will be given a fixed period of time to self-correct the deficiency. In the event of failure to self-correct a problem, NORDAL is willing to engage in a constructive dialogue with suppliers to develop and implement action plans, with appropriate time scales for implementation and improvements to be achieved. Agreement to abide by action plans allows for continuation of a business relationship, as long as NORDAL finds that suppliers are implementing the plan in good faith. In the event of repeated and serious breaches of the requirements of this Code, NORDAL reserves the right to cease business relationships with its suppliers and possibly cancel any production or delivery in progress.