oerlikon.com

Ethics & Integrity

Ethics & Integrity
GRI 102-16, 17; GRI 205-1,2

We have established Group-wide procedures to ensure Oerlikon’s compliance with legal and regulatory
statutes as well as internal standards, including the company’s Code of Conduct. This oversight encompasses training, communication and consulting activities designed to provide all Divisions, Business Units, groups and individuals with the information and resources necessary to fulfill their responsibilities and understand their role in ensuring ethical compliance and behavior.

Oerlikon’s robust compliance and integrity platform evolved from 2009 to 2012, when we invested significant resources in updating key elements of our compliance program and introduced the current
written Code of Conduct, compliance risk assessment analysis and anticorruption training program.
We have continued to build on those initiatives and to refine our approach to promoting ethical behavior
and integrity both within our organization and in the entities with which we conduct business. These
developments include the upgrading of our business partner integrity screening process and the establishment of an antitrust compliance program.

The framework of the Compliance Program has three pillars:

  1. Prevention: policies, directives, training, the Code of Conduct, risk assessment, maturity assessment, compliance councils, internal controls and metrics, examples and Q&A in all employee meetings.
  2. Early detection: the “whistle-blowing” hotline; continuous compliance reviews, controls and internal audits; allegation management process.
  3. Response: disciplinary action on compliance breaches, process adaptation, resolution plans,
    remediation of internal control systems, fine-tuning of policies.

Through tips left on our whistle-blowing hotline by concerned colleagues, we have been able to act
swiftly to prevent wrongdoing or to deal with it promptly. Cases pertaining to the misdirection of funds or to physical bullying have led to dismissals with cause of those individuals who failed to live Oerlikon’s values. Thus, Oerlikon’s Code of Conduct ensures that every member of staff has a resource to help guide responsible decision-making in line with our standards of ethics, our culture and values, and our commitment to compliance in all our business practices. Furthermore, Oerlikon has broadened the scope of its governance framework by integrating ethics within its leadership development initiatives, with a focus on:

  1. Providing substantive support to highperforming teams,
  2. Reinforcing awareness of our commitment to sustainable practices, and
  3. Measuring successes against the triple bottom line parameters

Above all, the Code of Conduct prioritizes Oerlikon’s most significant distinction: its extraordinary reservoir of talented people. By promoting company-wide understanding and appreciation of the core
values encapsulated in the Code of Conduct, our leadership team ensures that our employees not only comply with these standards, but that they also take pride in them. This creates our strongest foundation for pursuing continued evolution of a comprehensive sustainable ethics and compliance governance framework.

Since 2017, Oerlikon has provided online/virtual training in the Code of Conduct to employees on a
rolling basis. New colleagues receive mandatory compliance training when they join Oerlikon. Colleagues who lack Internet access receive in-person training. To date, more than 15 000 employees have been trained across our global operations. In 2020, around 4 000 registered users completed the training, representing 91% of registered users.

In addition, employees whose work involves interaction with certain external parties receive antibribery
and antitrust compliance training. Approximately 6 000 employees have completed this program since its introduction in 2017.

In 2021, Oerlikon will launch an updated Code of Conduct and organize training programs throughout
the organization. The updated Code of Conduct will replace the current version on Oerlikon’s website in the second half of 2021. Furthermore, to ensure best practices as both an ethical and sustainable
organization, Oerlikon will introduce new Group policies in 2021: Anti-Harassment and Anti- Discrimination Policy; Policy Against the Use of Child Labor: and Policy Against Human Trafficking in Person and Slavery. The policies were approved by executive leadership and the Oerlikon Board of Directors, and oversight and responsibility for the implementation of this policy rests with a cross-functional team that includes members from HR, Compliance, Legal, and Procurement.

 
 
 

Child labor GRI 408-1

Oerlikon does not participate in and does not accept child labor. Oerlikon supports all international conventions pertaining to the nonuse of child labor. Oerlikon’s Supplier Code of Conduct condemns child labor.

The full policy document includes Oerlikon’s directives on reporting suspected incidences of child labor, investigating those allegations promptly and taking all appropriate actions against the practice of child labor — including, as warranted, sanctions against or termination of relationships with partners or suppliers engaged in those practices.

Human rights assessment GRI 412-1,2,3

Oerlikon is committed to a safe work environment that is free from and provides for protection against human trafficking and slavery, including forced labor and unlawful child labor. Oerlikon does not tolerate or condone human trafficking or slavery in any part of its global organization. Oerlikon prohibits human trafficking and slavery. Employees, contractors, subcontractors, vendors, suppliers, partners and others through whom Oerlikon conducts business must not engage, be involved or participate in any practice that constitutes human trafficking or slavery.

The full policy document includes Oerlikon’s directives on reporting suspected incidences of human trafficking or slavery, investigating those allegations promptly and taking all appropriate actions against the practices of human trafficking or slavery — including, as warranted, sanctions against or termination of relationships with partners or suppliers engaged in those practices.

Although Oerlikon does not undertake specific human rights reviews or impact assessments, we do carry out frequent employee and labor relations/rights risk assessments of our own operations in various countries across the world as well as thorough compliance audits of our policies, including human resources, with applicable legislation and corporate policies and instructions.

Over the longer term, we will continue to monitor our business and the industries and markets we serve to identify additional areas of compliance focus through 2030 and beyond.

Compliance Enforcement

Compliance Enforcement

Oerlikon’s Compliance office and Internal Audit oversees the company’s internal investigation protocol.
Thanks to this office’s efforts, we have reduced compliance breaches by more than 50% from 2014 to 2020 — a figure that reflects a 33% reduction in the number of significant cases that required investigation.

In 2020, we received seven complaints via the whistle-blowing hotline, which is intended primarily to alert management to antibribery and corruption issues, but which yielded information on additional topics as well. There were six substantiated cases: two related to incidents of harassment and four within the antibribery category. The company has terminated the employment of staff members when evidence has proven that they engaged in improper behavior.

Most recently, the company identified a gap in its core suite of compliance- and risk-related policies and took immediate action to remedy this oversight. In 2021, the company will introduce new human rights policies against human trafficking, child labor and harassment (please see previous 2 sections).

Customer Privacy

There has not been any registered personal data breaches impacting customer privacy.

During 2020, the company experienced one personal data breach that had an impact on employment
candidates and other professional contacts of the targeted employee. The breach occurred when the employee’s LinkedIn account was hacked and phishing emails were sent to all of the employee’s contacts, but no clients were included in those contacts.

Unrelated to this incident, we honored the requests of two prospective clients who asked us to delete their contact details from our CRM.

Oerlikon has a policy dedicated to the management of personal data breaches. As a further security measure, the Manmade Fibers Division, the Business Units Balzers, Metco and AM all have now their own privacy policy for the management of customers data and have received data privacy guidance on how to use customer data in the CRM and direct marketing. The marketing and Digital Hub teams received training on direct marketing during 2020.

Tax governance and strategy

Oerlikon’s tax strategy is executed in compliance with our Code of Conduct as well as all applicable laws and regulatory requirements, including those that pertain to timely completion and filing of tax returns and those related to disclosure of tax positions. We seek to have a transparent relationship with the tax authorities in the countries in which we operate and conduct tax audits as required to provide requested information in a timely manner.

The company does not engage in aggressive tax planning and does not use complex structures or
offshore havens to minimize its tax liabilities. In addition, we adhere to arm’s length principles and comply with local laws and regulations for pricing of intercompany transactions.

Oerlikon’s Chief Financial Officer, a member of the Executive Committee, is responsible for all financial
matters relating to operational management and is supported by a team of qualified tax professionals in support of the Group companies.

Trade Control

The traffic of goods is essentially free but may be subject to restrictions or prohibitions that states impose to safeguard their national security interests and the peaceful coexistence of people, or to prevent the proliferation of weapons. These regulations may relate to purchases, sales, services, technology transfers or payments. Additional restrictions may target behavioral changes of individuals, entities or states, and the scope of such sanctions may encompass (but need not be limited to) asset freezes or travel bans, or may even take the form of total embargoes.

Embargoes usually arise in response to United Nations Security Council resolutions, decisions of the Organization for Security and Co-operation in Europe (OSCE) or common positions of the EU Council or the US Government. Several countries, including Iran, Cuba, North Korea, Syria and Sudan, are currently subject to sanctions regulations.

Management Approach

Oerlikon’s top management attaches importance to the topic and directs all employees to practice
unconditional compliance. Additionally, we support nonproliferation efforts and may refrain from a transaction in cases of continued concerns regarding the end-use application. This self-restraint prevails over commercial interest.

To ensure sustainable trade compliance, Oerlikon has implemented a robust Internal Control Program that is regularly monitored, continuously developed and safeguarded by state-of-the-art IT measures.

Given the complexity and fluid nature of this subject, we provide employees with training as well as updates on international trade control provisions and the company’s policies and procedures, which are designed to ensure that they:

  • Have information related to traded items, such as their nature, origin, components, value and technical characteristics.
  • Have confirmed the end use and the end user as well as third parties or agents involved.

Violation by any Oerlikon employee may lead to disciplinary action, including termination of employment.

Contact

Thomas Schmidt

Thomas Schmidt

Head of Group Communications
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