Corporate governance

Doing our due diligence

Human rights

We respect human rights and are committed to seeing that they are upheld within the Group and upstream along the value chain. Respect for human rights is firmly embedded in our corporate culture by means of several instruments. Beyond this commitment, we aim to prevent the violation of human rights at MTU and in the supply chain.


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Respecting the individuality and dignity of each and every person, maintaining equality of opportunity and preventing discrimination—we are committed to respecting our employees’ human rights.

MTU respects the internationally proclaimed human rights set out in the United Nations’ Universal Declaration of Human Rights and enforces and protects these rights within its sphere of influence. We also respect and support the fundamental principles of the International Labour Organization (Core labor standards of the International Labor Organization [ILO]) and are a signatory to the UN Global Compact, Principle 6 of which aims to uphold human rights.

We view the respecting of human rights principles as a Group-wide issue that involves many different areas, Including social labor standards/law for employees, sustainable supplier management and trade compliance standards for responsible international trade.

Society’s expectations of companies regarding human rights have risen. Increasing levels of statutory regulations reflect this, such as Germany’s planned Due Diligence Act and proposed new EU due diligence legislation. 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. In particular, we pursue the goal of preventing human rights violations that could affect employees (zero-tolerance principle). 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.

Our contribution to SDGs 5 and 8

Human rights principles also feature in the UN’s global sustainable development goals (SDGs). We support SDG 5 on “Gender equality” and SDG 8 on “Decent work and economic growth,” and want to play a role in achieving these SDGs. We succeeded at this again in 2020: there were no incidents of discrimination at MTU nor any reports of suppliers violating our standards with regard to human rights.

Gender equality
Decent work and economic growth

→ Learn more about our contribution to the SDGs of the UN’s 2030 Agenda

 

Code of Conduct for Employees

MTU sees it as its duty to respect the individuality and dignity of each and every person, maintain equality of opportunity in the workplace and prevent discrimination. The protection of human rights, the right to appropriate remuneration, as well as recognition of regulations governing employee and union representation under labor and works constitution law, are implemented Group-wide through the Code of Conduct. As an employer, we want to create fair working conditions based on legally binding employment contracts with appropriate remuneration. This includes the right to unionize and to adopt collective agreements.

Compliance with the Code of Conduct and ethical principles is enshrined in the MTU Principles. In addition, MTU is bound by legal obligations that may differ from location to location; in Germany, for example, MTU must honor the General Act on Equal Treatment (AGG). Also in Germany, we have worked with employee representatives to enact internal guidelines on fair and cooperative conduct that are designed to prevent bullying, sexual harassment and discrimination. They stipulate a systematic process for handling complaints.

When they join the company, new employees are informed about the regulations laid down in the Code of Conduct and—in Germany—in the General Act on Equal Treatment (AGG), and they undertake to comply with these requirements. In addition, we provide regular training on the Code of Conduct at all the company’s sites and across all hierarchical levels. More about MTU’s Code of Conduct and associated training can be found under Compliance Revisions to the Code of Conduct made in the reporting year include a stronger emphasis on human rights; respect of human rights is highlighted as an essential part of MTU’s corporate social responsibility. Our zero-tolerance approach to violations is also underpinned by our Code of Conduct.

  

Human rights in the supply chain

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 Organization (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

 

Channels for reporting complaints in place

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

Additional points of contact for employees have been set up at each location, about which we provide information on-site. For example, in compliance with legal regulations such as the AGG in Germany, trained personnel at each site are identified as the contact points for complaints regarding discrimination. For cases of sexual harassment, female employees can go to a female contact person. At MTU Maintenance Canada, employees can file a formal complaint with human resources management in cases of discrimination. They also have the right to go beyond the company and make a formal complaint to the BC Human Rights Tribunal. At MTU Aero Engines Polska, this function is carried out by a person elected by the employees. Employees can also report grievances to managers, the works council or the head of human resources. The Executive Board is informed about infringements depending on the severity of their impact. In cases of substantiated complaints, we take appropriate action to find a solution. → More information about the collaboration between management and the works council in the chapter Collaboration and leadership.

No violations or incidents

0
discrimination at MTU
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Zero discrimination—we also lived up to this aspiration in 2020: We are pleased to report that we again had no incidents or substantiated complaints regarding discrimination against employees. We see this as a sign of good collaboration at MTU.

No site had a case of discrimination or received a substantiated complaint in 2020 as defined by the respective anti-discrimination legislation in effect there. Furthermore, there were no substantial violations within the MTU Group of the principles underpinning the Code of Conduct.

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.

  

Keeping a close eye on potential risks

We have identified no MTU business location that we must consider at significant risk of child, forced or compulsory labor, or at which the freedom of association and right to collective bargaining could be compromised. MTU considers the risk of human rights violations among its employees to be low at all its locations, as it is bound by the relevant national legislation that protects human rights and can play a direct role in upholding them. We review all national and international decisions about capital expenditure to ensure that they comply with MTU’s human rights standards. More information about managing sustainability-related risks

Regarding the supply chain, we apply a concept for an annual risk analysis of all key suppliers to the sites in Germany, Poland and Canada as well as the MTU Aero Engines North America subsidiary. The concept takes into account MTU-specific product groups and the countries they are sourced from. This process incorporates the assessment of the annual Global Slavery Index compiled by the Walk Free Foundation, which evaluates countries regarding forced and child labor and legal frameworks, among others. MTU applies the concept to the OEM (new and replacement parts business) and MRO (commercial maintenance) divisions separately, since each handles procurement through its own organizational units. In the reporting year, we refined the existing concept to enable us to carry out a more differentiated assessment of product risk. The next steps are being planned (see the outlook at the end of this chapter).

Throughout this process, we again in 2020 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 in the supply chain

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. We never deliberately purchase conflict minerals, but they can find their way into our production or pre-production at the various levels of our 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. In 2020, no infractions of the Dodd-Frank Act came to the knowledge of MTU when it requested information from suppliers relating to the extraction and trade of conflict minerals in the Democratic Republic of Congo and its neighboring states (Angola, Burundi, Republic of Congo, Rwanda, Zambia, Sudan, Tanzania, Uganda, Central African Republic).

Outlook

In 2021, we plan to introduce training courses on the revised Code of Conduct for all employees. To this end, we are working on a new e-learning format.

We intend to integrate the enhanced version of our supplier risk analysis into our existing process for analyzing supplier risk and, in the next step, we plan to audit key suppliers to check their compliance with sustainability criteria. This development is currently in the concept phase.

Further information in this report:

→ Sustainable supplier management

→ Responsible international trade


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