Doing our due diligence
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. As a participant in the UN Global Compact, 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. In particular, we pursue the goal of preventing human rights violations that could affect employees (zero-tolerance principle). Read more at Employees However, our respect for human rights by no means stops at our plant gates. MTU expects its suppliers to uphold human rights and create fair working conditions.
Code of Conduct for Suppliers
The Code of Conduct for Suppliers applies to upstream value creation activities. Our suppliers are obligated to uphold this Code of Conduct, which is informed by the ten principles of the UN Global Compact and the core labor standards of the International Labour Organisation (ILO). The Code requires suppliers to observe and uphold human rights and to ensure that they are not complicit in any human rights violations. In addition, it calls for 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. And finally, we require our suppliers to apply the Code to their subcontractors and reserve the right to terminate any contract with a supplier using child labor to manufacture products supplied to MTU, without prior notice. → MTU’s Code of Conduct for Suppliers
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 carried out regularly
We regularly conduct a risk analysis of suppliers to the sites in Germany, Poland and Canada as well as the MTU Aero Engines North America subsidiary. The risk analysis takes into account MTU-specific product groups and the countries they are sourced from. It incorporates the findings of the Global Slavery Index der Walk Free Foundation, which evaluates countries regarding forced and child labor and legal frameworks, among others. This risk analysis is integrated into the existing risk process for suppliers. In the next step, we plan to audit key suppliers to check their compliance with sustainability criteria. To this end, MTU has investigated an IT solution available on the market and decided to implement it in 2022.
Throughout this process, we again in 2021 identified no supplier that poses a significant risk as regards child, forced or compulsory labor, or at which the freedom of association or right to collective bargaining could be compromised. MRO also conducts a supplier evaluation twice a year for suppliers of the German sites.
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. According to the provisions of the Dodd-Frank Act applicable to companies listed on stock exchanges in the United States, our American partners and customers require that we disclose the origin of minerals used in our components and limit our sources to certified mining companies and primary-alloy producers (Conformant smelters and refiners list). 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. 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.
When MTU requested information from suppliers in 2021, it discovered nothing to indicate that MTU components contain conflict minerals.