CODE OF CONDUCT

Code of Conduct for vendors to Kluntz A/S

Introduction

This Code of Conduct is intended to create and encourage commitment to responsible production and business principles around the world. The purpose is to ensure that vendors and their subcontractors produce components and supply services to Kluntz in a manner that respects the rights of their employees and the environment. In this way Kluntz also wishes to promote and support the principles in the Universal Declaration of Human Rights.

Acceptance of and compliance with this Code of Conduct, form an integral part of every Business Agreement with Kluntz. The Code of Conduct establishes a minimum requirement and Kluntz urges its vendors to strive for continued improvement within all areas covered by this Code of Conduct, in furtherance of human rights, labour standards and to the protection of the environment and refrainment from corruption. 

UN GLOBAL COMPACT
 
Kluntz has joined the UN initiative, GLOBAL COMPACT in the spring of 2007. The Global Compact was announced in 1999 as an UN initiative for the business community to help promote sustainable development in the world. Kluntz’s participation in this initiative is relevant to the content of this Code of Conduct. Kluntz urges all vendors to support Global Compact.

The Global Compact lay down 10 principles in four important areas: Human rights, labour rights, environment and anticorruption.

Human rights

• Support and respect the protection of international proclaimed human rights within their sphere of influence.
• Make sure their own corporations are not complicit in human rights abuses.

Labour rights

• Freedom of association and the effective recognition of the right to collective bargaining. 
• The elimination of all forms of forced and compulsory labour. 
• The effective abolition of child labour. 
• The elimination of discrimination in respect of employment and occupation.

Environment

• Support a precautionary approach to environmental challenges. 
• Undertake initiatives to promote greater environmental responsibility. 
• Encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

• Work against corruption in all its forms, including extortion and bribery.

It is essential to Kluntz that the men and women, who take part in the production of our products and components, whether in factories owned by vendors or their subcontractors, are treated decently and with dignity.

Application

Kluntz adheres to the principles of this Code of Conduct and requires that our vendors do the same.
Vendors shall be responsible for ensuring that their subcontractors comply with KLUNTZ Code of Conduct. In the following, the term “Vendor” also includes any subcontractor of any vendor.

Publication

All Kluntz vendors must take appropriate action to ensure that the provisions of our Code of Conduct are communicated to managers and supervisors in their own language.

Employment Practices
Child Labour and Young Workers

Child labour must not be engaged in or benefited from.

Child labour is defined as the employment of a person in a full-time position who is younger than the local legal minimum age for full time employment. The minimum age for employment shall not be less than the age of completion of compulsory schooling and, in any case, shall not be less than 15 years (or 14 years where established by national laws in accordance with the ILO developing-country exception). If child labour is detected, then, in addition to other actions pursuant to this Code of Conduct, Kluntz reserves the right to involve local or international organisations with a view to securing the child’s future.

Vendors must comply with all local laws and regulations regarding the employment of young workers, i.e., with respect to permitted types of work, work schedules and labour intensity. For work at night or in hazardous conditions, workers must be older than 18 years of age.

Kluntz generally encourages the creation of apprenticeship programs.

Kluntz’s position on child labour is elaborated in the appendix.
Forced Labour and Freedom of Movement

Forced or compulsory labour must not be used or benefited from. Employees must have the freedom of movement during the course of their employment. Guards must only be posted for normal security reasons to protect employees and the property of the company.
Personal papers or compensation to employees must not be withheld, thereby preventing the employees from ending their employment.

Coercion and Disciplinary Practices

Physical punishment, threats of violence or other forms of mental or physical coercion or abuse must not be used.

Grievance procedures that provide employees with effective means to challenge disciplinary sanctions imposed upon the employees must be established. Decisions resulting from the use of such procedures must be accepted and abided by.

If fining is used as a disciplinary sanction, such fines must be imposed based on objective criteria known to the employees. In no case, however, may fines imposed reduce the net compensation payable to the employee for any relevant payment period below the minimum wage level determined under local laws and regulations.

Discrimination

Discrimination, directly or indirectly, in hiring and employment practices on grounds of race, colour, sex, language, religion, political or other opinion, age, national, social or ethnic origin, property, sexual orientation, birth or other status must not be engaged in or supported.

It must not be required that female employees are subjected to mandatory pregnancy tests.

It must not be required that employees are subjected to mandatory HIV/AIDS tests.

Compensation, Rest, Leisure and Holidays

Wages and Benefits 
Employees shall be paid a decent living wage and at least the minimum wage required under local laws and regulations. Additionally all benefits required by local laws and regulations must be provided. Wages must be paid in legal tender, and not less frequently than on a monthly basis. Employees are entitled to sick and maternity leave as provided by local laws and regulations.

Working Hours
Employees must not be forced to work more than 48 hours per week and 12 hours overtime, or the limits on regular and overtime hours allowed by local laws and regulations. Working hours exceeding 60 hours per week must be on a voluntary basis, and must be planned in a way that ensures safe and humane working conditions. Employees must be compensated for overtime, consistent with local laws and regulations. Consecutive working days must be in accordance with local laws and regulations and, as a minimum, employees must be entitled to at least one day off per week. Employees must be entitled to periodic holidays with pay.

Employment Terms

Employees must be provided with written confirmation of employment terms, if and as required by local laws and regulations.

Freedom of Association and the Right to Collective Bargaining

The rights of the employees to choose to be a member of a trade union and to bargain collectively as permitted by local laws and regulations must not be interfered with or restricted.

Freedom of Expression

Retaliation practices must not be used to prevent workers from expressing dissatisfaction with their working conditions openly and in a loyal manner.

Health and Safety

A safe and healthy working environment must be provided, in compliance with all local laws and regulations.

As a minimum it must be ensured that:

• Facilities meet all local laws and regulations governing health, safety, environmental, and working conditions.
• One or more management representatives are responsible for health, safety, welfare and general facilities, and that written policies and procedures regarding these topics are established and adhered to.

Emergency procedures and plans

• Facilities have an adequate written emergency preparedness plan that is well-known to managers and employees. 
• Emergency procedures are rehearsed with managers and employees, at least on an annual basis. 
• Fire protection equipment, including fire alarms and fire extinguishers, is installed, maintained and inspected in accordance with all local laws and regulations. 
• All aisles are clear and that emergency exits are operative and accessible at all times.

Safety

• Waste is stored in non-combustible containers and removed on a regular basis. 
• All hazardous materials, including flammable liquids, are labelled, stored, used and disposed of, in accordance with all local laws and regulations, and handled only by employees who are properly trained and properly protected. 
• All necessary registrations and permits have been obtained from local authorities regarding hazardous materials, waste disposal, air discharges, sewage, and the like. 
• Electrical equipment and wiring is properly installed and maintained so as to prevent injuries to employees. 
• All accidents and near misses are reported and investigated, and that corrective actions are implemented to prevent similar accidents.
• All machinery is properly maintained and serviced, and equipped with proper protection measures.

Housing

• Dormitories, where applicable, are safe and clean, and separated from the working facilities. 
• Adequate toilet and shower facilities, segregated between men and woman, are provided in close proximity to the dormitories. 
• Appropriate dormitory rules for residents and guests are established, and that appropriate actions are taken in cases of violations of these rules. 
• Employees are permitted to exit and re-enter the dormitory freely at all times.

Food

• Canteens, where applicable, are clean, hygienic and well lit. 
• Food handling is safe and hygienic, that food handlers are properly trained in food preparation hygiene, and that meals provided meet generally recognized nutritional requirements.

Environment

Local laws and regulations regarding the protection of the environment must be complied with.
Vendors must strive to: 

• Reduce waste and emissions to air, ground and water 
• Handle chemicals in an environmentally safe way  
• Handle, store and dispose of hazardous waste in an environmentally safe manner 
• Contribute to the recycling and reuse of materials and products
• Implement environmentally friendly technologies.

Corruption and Bribery

Bribes must not be offered, promised, given, accepted, condoned, knowingly benefited from, or demanded.

Security

Vendors must be in compliance with the best practices of:

• Access
• Personal 
• Procedural security
• Physical security

E.g. following the Supply Chain Security / Container Security Initiative and C-TPAT Guidelines and recommendations of the U. S. Customs Service.

Monitoring and Evaluation

Kluntz reserves the right to monitor and audit vendors at any time to verify compliance with this Code of Conduct. Vendors shall maintain, on site, any documentation that may be necessary to demonstrate compliance with this Code of Conduct.

All vendors are required to provide:

• Full access for on-site inspection, including unannounced visits, by Kluntz and/or its designated representatives.
• Access to all records that might enable determination of compliance with this Code of Conduct, including records such as General Admission Records, Wage and Hour Records, Health and Safety Records, and Maintenance Records.
• Access to randomly selected employees for confidential interviews during monitoring visits.

Failure to permit full access will be viewed as non-compliance with this Code of Conduct, and business relations with the vendors denying access will be terminated. The result of all monitoring visits will be documented in a monitoring report. If an on-site inspection reveals non-compliance with this Code of Conduct (other than by failure to permit access as set forth above), Kluntz will enter into a constructive dialogue with the vendor in question in order to improve conditions. Kluntz will request adequate action plans to correct issues of non-compliance and will undertake follow-up inspections to verify that improvements are made. If improvements do not progress in a manner acceptable to Kluntz, business relations with the vendor will be terminated.

APPENDIX

A Family Friendly Work Environment – Kluntz Position on Child Labour

Kluntz does not condone or support child labour. We believe that children must have time to learn through education and time to play in order to thrive as children. Kluntz believes that the rights and interests of children are consistent with children undertaking safe part time work as long as the national and international laws and standards for legal employment as a minimum are respected and met. In doing so, we recognize that the problem of child labour does exist in many countries, and Kluntz contributes to its socially responsible prevention and solution.
 
This appendix to Kluntz’s Code of Conduct elaborates Kluntz’s position on child labour and working children and offers guidance to our vendor, how to handle child labour in a socially responsible way that caters for the rights and interests of the child.

1. General Principle

Kluntz does not in any form or fashion accept children undertaking harmful work but supports the principle of children working part-time under safe conditions that allow them to complete school and time to play.

Kluntz supports the United Nations Convention on the Rights of the Child (UNCHR) (1989) stipulated in:

Article 3:
“All actions concerning the child shall take full account of his or her best interests.”
 
Article 32.1:
“…the right of the child to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral or social development.”

In addition to the U.N. Convention on the Rights of the Child, Kluntz bases its approach to working children on the following definitions and principles:

Child work:
Children’s participation in economic activity – that does not negatively affect their health and development or interfere with education, can be positive. Work that does not interfere with education (light work) is permitted from the age of 12 years under the International Labour Organization (ILO) Convention 138.

Child labour:
Refers to children working in contravention of the above standards and involves children below 12 years of age working in any economic activities, and those aged 12-14 years engaged in non-hazardous full-time work, those under 18 engaged in hazardous work as determined by national legislation and all children engaged in other worst forms of child labour.

Other worst forms of child labour:
These involve children being enslaved, forcibly recruited, prostituted, trafficked, and forced into illegal activities. The Worst forms of child labour are contained in the ILO convention 182.

In effect and in accordance with Kluntz Code of Conduct this means:
The minimum age for admission to employment or work is determined by national legislation and can be set at 15 or 16 years in developed countries and at 14 years in developing countries. Light work that is compatible with a child’s schooling may be allowed from age 13 and in developing countries from age 12.

• Kluntz does not accept the new employment of a person in a fulltime position who is younger than the minimum age for admission to work and the employment of a person for part time work who is younger than the local minimum age for admission to light work. Children under the minimum age already employed at the time of detection, must be offered alternative safe light work in combination with education.
• Further, Kluntz does not accept young workers less than 18 years of age to be involved in hazardous work or to work at night regardless of the number of hours worked. For this kind of work, workers must be older than 18 years of age. Vendor must comply with all local laws and regulations regarding the employment of young workers, i.e. with respect to permitted types of work, wages, work schedules and labour intensity. (Additional guidance is provided by the Global Compact’s Principle 5 on the effective abolition of child labour.)
• In all types of work and regardless of the child’s age, vendor must seek to establish working hours and overtime with special consideration to the worker’s young age.

2. Ensuring a Family Friendly Work Environment

Kluntz, as part of its prevention of child labour, aims to promote a family friendly work environment, and encourages all of its vendors and their subcontractors to treat all workers with decency and respect. Kluntz recognizes that the wage and employment conditions have an important impact on children. If parents and adult workers are treated well and paid a living wage, there is less need for children to supplement family incomes by working.

Kluntz also recognizes that establishing fair and ethically correct policies for production and sourcing reflects positively on worker’s conditions, including the conditions of working children. Therefore, Kluntz and its vendors must work towards continually improved production planning and procurement policies and practices that do not put unnecessary pressure on suppliers and sub-suppliers to reduce lead time and require overtime work.

3. Positive Steps to Address Child Labour

Vendors are obliged to take the appropriate measures to ensure that no child labour occurs at suppliers’ and their sub-contractors’ places of production. (Places of production refer to all places of extraction, manufacturing, transport and service activities related to producing for Kluntz.)

If child labour is found in any place of production, Kluntz will require the vendor to implement a socially responsible corrective action plan with the assistance of Kluntz. If the corrective action is not implemented within the agreed timeframe, or if repeated violations occur, Kluntz will terminate all business with the vendor concerned.

The action plan may differ in content dependent on the situation of the company and the child. However the corrective action plan has to ensure that all actions to handle working children must take the child’s best interests into account and include the child and its family in decisions with regards to the child’s future.
As part of the action plan, a child must be offered education in combination with safe light work on a part-time basis, apprenticeship, and vocational training. If the child is below the local minimum age for employment, a redundancy payment is provided by the vendor to the child or its family. Alternatively to employing the child in safe light work on a part time basis, the child’s parents may be offered a job or compensation for lost income.

4. Co-operation with National and International Organizations

Kluntz may from time to time co-operate with national and international organizations protecting the interests of children and young workers. If Kluntz’s vendor are found to be in non-compliance with this Code of Conduct including the appendix on child labour, such vendor shall co-operate with Kluntz and/or its national or international partner organization to the fullest extent possible, to avoid that such non-compliance may cause harm to children or young people and to ensure more viable and sustainable alternatives for the children.

Concerning links:
www.unglobalcompact.org
www.ilo.org
www.unicef.org