Our due diligence
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.
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 view the respecting of human rights as a Group-wide issue that involves many different areas, including social labor standards/law for employees and sustainable supplier management.
Society’s expectations of companies regarding human rights are rising, As shown by legal regulation (e.g. the UK Modern Slavery Act) and political initiatives such as Germany’s National Action Plan (NAP) for Business and Human Rights. 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 best we can. We pursue the goal of preventing human rights violations from occurring in our own business activities (zero-tolerance principle).
Our contribution to the SDGs
As a signatory to the UN Global Compact, we support this important international initiative that aims to uphold human rights. Human rights principles also feature in the UN’s global development goals. We want to further these SDGs as a company by respecting and promoting human rights and preventing adverse effects. We support SDG 5 on “Gender equality” and SDG 8 on “Decent work and economic growth”, and see our role in achieving these SDGs primarily in enacting a responsible employment policy for our workforce.
Codes of Conduct for Employees and Suppliers
MTU sees it as its duty to respect the individuality and dignity of all, 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), which prohibits discrimination against employees and job applicants. 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
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. → More about MTU’s Code of Conduct for Suppliers
Established reporting procedures are intended to ensure that we rigorously follow up on all complaints or reports of human rights infringements. Reports may be made by employees or external stakeholders to the Compliance Officer as a confidential contact point in the Group, or anonymously via the new, web-based iTrust reporting system, available in multiple languages. This applies to all human rights concerns.
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, a trained person on site is identified as the contact point for complaints regarding discrimination. For cases of sexual harassment, female employees can go to a female contact person. In accordance with Canadian law, MTU Maintenance Canada has established an Employment Equity Committee to review complaints and reports and has also named an Employment Equity Officer to serve as a confidential point of contact. 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 committed by MTU depending on the severity of their impact. In cases of substantiated complaints, we take appropriate correcitve action. → More information about the collaboration between management and the works council in the chapter on MTU as an employer
Across the entire Group, no site received a substantiated complaint in 2019 according 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.
We have identified no 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.
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 and MRO segments separately, since each handles procurement through its own organizational units. Throughout this process, we have 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 vendors used by the German sites. In the future, we will expand the evaluation to cover additional sustainability aspects as well.
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 directly 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 2019, no infractions came to the knowledge of MTU that infringe on the principles of the Dodd-Frank Act.
We plan to further refine our risk analysis concept for suppliers in 2020, putting the emphasis on a more differentiated evaluation of product risk.
Monitoring for NAP in Germany is scheduled to finish in 2020, and a new EU regulation on conflict minerals is due to take effect in 2021. We keep an eye on these developments in human rights law so as to properly comply with relevant requirements in a timely fashion. → More information about our supplier management