Procurement
Human rights in the supply chain
We respect human rights and are committed to seeing that they are also upheld in upstream value creation activities. Our aim is to prevent the violation of human rights in the supply chain.
We are conscious of our responsibility as a company with global operations, and aim to carry out our due diligence with regard to human rights. MTU fully respects the internationally proclaimed human rights set out in the United Nations’ Universal Declaration of Human Rights and applies that to the supply chain as well. Our goal is to enforce compliance with human rights and fair working conditions. In the Policy Statement on the Protection of Human Rights it adopted in 2023, MTU commits to its human rights due diligence in the supply chain.
Supplier Code of Conduct
The Supplier Code of Conduct applies to upstream value creation activities. Our suppliers must commit to compliance with the Code of Conduct, which is based on the ten principles of the UN Global Compact, which in turn are derived from international initiatives and conventions for the protection of human rights. MTU itself is a member of the UN Global Compact. The Code of Conduct requires suppliers to observe and uphold human rights and to ensure that they are not complicit in any human rights violations. That includes compliance with labor standards regarding the freedom of association, the right to collective bargaining, the prohibition of forced and child labor, the equality of remuneration regardless of gender, and equal treatment of employees. MTU’s revised Supplier Code of Conduct has been in force starting in 2023. On the topic of human rights, this also formulates requirements for appropriate payment, occupational health and safety, and environment-related topics such as the handling of hazardous substances and waste, as well as expectations regarding environmental protection and climate action. And finally, we require our suppliers to apply the Code to their subcontractors and reserve the right to terminate, without prior notice, any contract with a supplier who takes no appropriate countermeasures in the event of violations. Our Code of Conduct is included in the General Terms and Conditions and in contract templates for suppliers. → The MTU Supplier Code of Conduct
Established reporting procedures are in place to ensure that we can systematically follow up on all complaints or reports of human rights infringements. Employees and external stakeholders can make reports to the Compliance Officer as a confidential contact point in the Group, or anonymously via the web-based iTrust reporting system, available in multiple languages. This applies to all human rights concerns. → See Compliance for information about handling reports
In the reporting period, no reports of suppliers violating the Code of Conduct regarding human rights were submitted. Furthermore, no supplier relationships were terminated due to sustainability shortcomings with regard to human rights.
Risk analysis and monitoring of sustainability performance
MTU carries out an annual risk analysis for direct suppliers of the fully consolidated Group companies using a standardized tool, taking into account the probability of occurrence and extent of damage. The analysis is based on defined environmental, social, and governance (ESG) criteria such as product groups and the countries they are sourced from. We have integrated our risk analysis into our existing risk process for suppliers, and we also include key suppliers in an assessment of compliance with sustainability aspects. This is done by means of a scorecard within the ESG assessment tool. Our risk management approach includes preventive and, if necessary, corrective measures. MTU Maintenance also conducts a structured supplier evaluation twice a year for suppliers of the German sites.
For the findings of the risk assessment of suppliers with regard to child, forced, or compulsory labor or with regard to the freedom of association or the right to collective bargaining, please see MTU’s 2023 report to the German Federal Office for Economic Affairs and Export Control (German version only).
In the reporting year, an interdisciplinary project team completed the implementation of the requirements imposed by Germany’s Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) on the management of supply chains with regard to the protection of human rights. MTU has appointed human rights coordinators for the supply chains in its OEM and MRO businesses. The coordinators are responsible for risk analysis and report to the Group’s Human Rights Officer.
Conflict minerals: Transparency about raw materials used
We take various steps to safeguard the respect of human rights in the supply chain. This applies especially to the procurement of certain raw materials known as conflict minerals: for example, tantalum, tin, tungsten and gold, which can be found in some of our engine components. These minerals can cause problems in procurement because they are sometimes mined in Central African countries, where the profits are used to finance armed conflicts that commit human rights violations. MTU strives for a sustainable and transparent value chain that excludes the use of conflict minerals. The company never deliberately purchases conflict minerals, but they can find their way into production or pre-production at the various levels of the global supply chain. The General Terms and Conditions and contract provisions require suppliers to provide information about the source of minerals in accordance with the EICC/GeSi Conflict Minerals Reporting Template. Every year, MTU requires its suppliers who deliver components containing minerals declared in the Dodd-Frank Act to declare the origin of the minerals or to source materials solely from certified mines and primary-alloy producers (Conformant smelter and refiner lists) in order to achieve a value chain with conflict-free raw materials. In turn, MTU demands that its relevant suppliers should specify the origin of such minerals, in order to ensure that the value chain contains only conflict-free raw materials.
When MTU requested information from suppliers in 2023, it discovered nothing to indicate that MTU components contain conflict minerals.
