CODE OF CONDUCT FOR EMPLOYEES AND SUPPLIERS

1. foreword

SCHAFFRATH is committed to environmentally and socially responsible corporate governance. We expect the same behavior from all our suppliers. We also assume that our employees adhere to the principles of ecological, social, and ethical conduct and integrate them into our corporate culture. Furthermore, we strive to continuously optimize our business practices and products in terms of sustainability and encourage our suppliers to contribute to this holistic approach.

The Code of Conduct is based on national laws and regulations such as The Act on Corporate Due Diligence Obligations in Supply Chains (LkSG), as well as international agreements such as the Universal Declaration of Human Rights, the Guidelines on Children's Rights and Business, the United Nations Guiding Principles on Business and Human Rights, the International Labor Organization's International Labor Standards, and the United Nations Global Compact. We expect our suppliers to comply with all relevant laws and regulations, as well as the requirements stated in this Code of Conduct.

2. LABOR AND HUMAN RIGHTS

2.1 WORKING CONDITIONS, HOURS, AND WAGES

We expect our suppliers to stand up for fair working conditions and to comply with the respective applicable regulations regarding working hours and vacation regulations. Overtime should be performed within legal limits. Employees should have at least one day off every seven days. The supplier must respect local laws and regulations regarding maximum working hours and vacation time. The supplier ensures adequate compensation based on contractual agreements, complying with legally guaranteed minimum wage and aligning with the respective national labor market.

2.2 HARASSMENT AND DISCRIMINATION

The supplier must prevent any form of harassment, such as sexual harassment, sexual abuse, physical punishment, psychological or physical coercion, or verbal abuse, by all means. Regardless of personal characteristics, including gender, skin color, ethnic or social origin, genetic features, language, religion or belief, political or other opinions, membership in a national minority, socioeconomic status, birth, disability, age, or sexual orientation, every individual or group must be treated equally.

2.3 FREEDOM OF ASSEMBLY

We expect our suppliers to provide their employees with the opportunity to peacefully assemble and associate, particularly in political, trade union, and civil society activities. This includes the right, where legally permitted, to establish trade unions and engage in collective bargaining to protect their interests.

2.4 FORCED LABOR AND HUMAN TRAFFICKING

The supplier must eradicate all forms of modern slavery. Examples of such practices include forced overtime, withholding identification documents, and human trafficking.

2.5 CHILD LABOR AND YOUNG WORKERS

The supplier commits to not employing children below the legal minimum age (in accordance with ILO Convention 138). Furthermore, suppliers are expected to ensure that young workers under 18 years of age do not engage in night work or overtime and are protected from working conditions that are harmful to their health, safety, and development. The supplier should ensure that the responsibilities of young workers do not interfere with their schooling.

2.6 HEALTH PROTECTION AND WORKPLACE SAFETY

The supplier must have occupational health and safety measures in place that comply with local legal requirements. The supplier must ensure that workplaces, machinery, equipment, and processes under their control are safe and free from health risks. It is the responsibility of the company management to provide adequate resources for health and safety and to conduct regular risk assessments and reportings to ensure continuous improvement of the system. The use of a certified occupational health and safety management system such as ISO 45001 or equivalent is recommended.

3. ethics of the business

3.1 OMISSION OF CRIMINAL ACTS

Each supplier is expected to refrain from criminal acts.

3.2 CORRUPTION PREVENTION

SCHAFFRATH does not tolerate corrupt practices and takes action against them. Suppliers must not engage in or tolerate corruption, bribery, extortion, or embezzlement in any form. Any form of direct or indirect bribery or favoritism, whether through acceptance or provision of payments, gifts, or benefits of any kind beyond legal limits and customary norms, is prohibited.

Furthermore, we expect our suppliers to actively commit to corruption and fraud prevention.

3.3 PREVENTION OF MONEY LAUNDERING AND TERRORIST FINANCING

The supplier commits to fulfilling its legal obligations in preventing money laundering and terrorist financing in accordance with the applicable legal provisions and not to promote them either directly or indirectly.

3.4 DATA PROTECTION AND DATA SECURITY

The processing of personal data of employees, customers, and business partners, including the collection, storage, retrieval, use, and provision, is carried out in accordance with applicable legal requirements.

The supplier is obliged to handle and protect any information appropriately. Data and information are used solely based on their classification. The supplier ensures that data requiring protection is collected, processed, secured, and deleted in an appropriate manner. Furthermore, the supplier ensures that the technical information systems are adequately protected against cyber threats by adhering to standard practices such as antivirus protection, encryption, segmentation, role and permission management, and so on.

3.5 FAIR COMPETITION AND ANTITRUST LAW

The supplier respects fair and free competition. SCHAFFRATH expects its suppliers to comply with applicable competition and antitrust laws. This includes practices that unlawfully restrict competition, improper exchange of competitive information, price fixing, bid manipulation, or abusive market allocation.

3.6 CONFLICTS OF INTEREST

Suppliers must avoid and disclose any relevant conflicts of interest to SCHAFFRATH that could potentially affect the business relationship. Decisions are made solely based on objective basis.

3.7 INTELLECTUAL AND MATERIAL PROPERTY

The supplier commits to respecting the protection of intellectual property and ensuring its compliance throughout the entire supply chain. This applies equally to the material property of SCHAFFRATH, which must be protected against loss, theft, or misuse.

3.8 EXPORT CONTROLS AND ECONOMIC SANCTIONS

The supplier strictly adheres to compliance with all applicable regulations and laws regarding the import and export of goods, services, information, and payment transactions. Existing sanctions and embargoes are observed in accordance with laws and regulations during business opperations.

3.9 WHISTLEBLOWING AND PROTECTION AGAINST RETALIATION

SCHAFFRATH expects that the employees of the supplier can freely express themselves without fear of retaliation when there is a violation of the contents defined in this Code of Conduct.

4. ENVIRONMENT

4.1 IN GENERAL

SCHAFFRATH expects its suppliers to minimize negative impacts on the environment and climate resulting from their business activities and to handle natural resources carefully.

4.2 COMPLIANCE WITH ENVIRONMENTAL LAWS

SCHAFFRATH expects its suppliers to comply with national and international environmental standards and laws.

4.3 ENVIRONMENTAL MANAGEMENT SYSTEMS

The supplier is encouraged to continuously monitor and improve its environmental footprint. Suppliers with production sites should have suitable environmental management systems in place.

4.4 USE OF NATURAL RESOURCES AND AIR POLLUTION

The supplier should reduce or avoid the use and consumption of natural resources, including raw materials, water, and energy. Economically viable solutions should be sought to improve energy efficiency and minimize energy consumption. General emissions from operational processes (air and noise emissions) should be avoided whenever possible.

4.5 CLIMATE PROTECTION AND CO2 REDUCTION

The supplier is encouraged to find cost-effective solutions to minimize greenhouse gas emissions.

4.6 WASTE, WASTEWATER, AND HAZARDOUS SUBSTANCES

The supplier should have measures in place to reduce both waste and wastewater and treat them in accordance with all legal requirements. Waste should be recycled to the greatest extent possible. When handling chemicals and hazardous substances, the supplier ensures responsible practices regarding environmental and health protection.

5. PROMOTING A RESPONSIBLE SUPPLY CHAIN

For conflict minerals such as tin, tungsten, tantalum, and gold, as well as other resources like cobalt, SCHAFFRATH establishes processes in accordance with the guidelines of the Organization for Economic Cooperation and Development (OECD) to fulfill due diligence requirements and promote responsible supply chains for minerals sourced from conflict-affected and high-risk areas. SCHAFFRATH also expects its suppliers to comply with these guidelines. Smelters and refineries lacking appropriate audited due diligence processes are to be avoided.

6. ASKING QUESTIONS AND REPORTING MISCONDUCT OPPORTUNITIES

SCHAFFRATH pursues reported indications of potential misconduct. In order for us to become aware of possible violations in the first place, we rely on employees, business partners, and third parties to report potential misconduct. This requires the support and assistance of all parties involved to bring relevant potential violations to our attention. Suppliers are welcome to direct any questions regarding the Code of Conduct to the management. (mail@schaffrath1923.com)

7. COMPLIANCE WITH SCHAFFRATH'S REQUIREMENTS

We expect our suppliers, with regard to supply chains, to identify risks within them and take appropriate measures. In case of suspected violations or to secure supply chains with heightened risks, the supplier will promptly and, if necessary, regularly inform the company about the identified violations and risks, as well as the measures taken.

The company verifies compliance with the standards and regulations listed in this document through the use of a self-assessment questionnaire and risk-based audits at supplier production sites. The supplier agrees that the purchaser may carry out such audits once a year or for a specific reason to check compliance with the Code at the supplier's production sites during normal business hours after reasonable advance notice by persons appointed by the supplier. The supplier may object to individual audit measures if these would violate mandatory data protection regulations.

If a violation of the provisions of this Code of Conduct is identified, the company will promptly notify the supplier in writing and provide them with a reasonable deadline to bring their behavior into compliance with these provisions. If a remedy is not feasible within a foreseeable timeframe, the supplier must immediately report this and work together with the company to develop a plan with a timeline for rectifying or minimizing the violation. If the deadline expires without a satisfactory resolution or if the implementation of the measures outlined in the plan does not remedy the situation and no milder measures are available, the company may terminate the business relationship and terminate all contracts. The company reserves the right to terminate the relationship without prior notice, particularly in cases of severe violations, as well as the right to seek damages as provided by law.