Disclosure 103-1: Explanation of the material topic and its Boundary
As a signatory of the UN Global Compact, Sika supports and respects the protection of internationally proclaimed human rights and ensures that it is not complicit in human rights abuses. With operations in more than 100 countries, Sika is active in many regions ranking high on Human Rights Risks Indices and sees it therefore as its responsibility to assess its own operations with regard to potential human rights violations.
The Human Rights Assessment encompasses three levels: Statement in favor of human rights, confirmation of processing a human rights assessment and a compliance check in order to specify the requirements pursuant to Sika compliance system. Human rights and with that prohibition of child labor, freedom of association. Prohibition of forced labor and equal opportunities for all employees are part of the Code of Conduct. This document gives a clear statement in favor of integrity and ethical conduct. General Managers of Sika subsidiaries give a “Compliance Confirmation” that the Code of Conduct is put in place. And thirdly, a compliance check is processed annually via a “compliance checklist”, see disclosure 103-2.
Disclosure 103-2: The management approach and its components
Sika’s Code of Conduct requires all employees to comply with applicable laws and regulations. At any location where Sika has operations this clearly excludes child labor and forced labor. For the reporting year, Sika has had no indication or reports about human rights violations within its own entities. This has been confirmed by the General Managers in a reporting system, the “Compliance Confirmation”. This confirmation has to be handed in by all General Managers each year. The 100% response rate and completeness of the details provided suggest no human rights violations to be reported. The Compliance Checklist distributed to General Managers specifies the requirements pursuant to the Sika compliance system, including training and information to staff about human rights (freedom of association, if permitted by local laws, no discrimination, no child or forced labor). In line with Sika’s holistic approach to compliance, this checklist is relevant to the operations of all functional units in the Sika companies in all Regions.
With a broad supplier base in many high-risk countries with regard to human rights violations as well as the sourcing from industries where in particular labor rights are potentially at risk, Sika considers the protection of human rights across its supplier base as an important issue that needs to be monitored and managed. Sika’s Supplier Code of Conduct focuses in particular on human rights and labor laws. Sika regards protection of human rights as foundations of the business wherever it operates.
Through mechanisms like audits and inspections, Sika assures and monitors that Group companies protect human rights. A cross-functional team, lead by Corporate Compliance and supported by Internal Audit and external experts has develop in the reporting year a proposal (scope, focus, timing and resources) for a Compliance Audit to submit and discuss with the Audit Committee, on the introduction of Compliance Audits.
General Managers and the local management team have the obligation to ensure, supervise, and monitor the protection of human rights for their area of responsibility in their companies. In the signed Compliance Confirmation, General Managers are asked to report yearly on human rights and confirm the following:
- to have implemented and communicated that child labor is strictly prohibited and confirm that child labor does not take place in their company,
- to have implemented and communicated the right of freedom of association in their company.
- to have implemented and communicated the non-discrimination principle as per Sika’s Code of Conduct in their company, and no apparent cases are unresolved.
- no apparent cases of forced labor exist in their company.
- an equal opportunity culture for all employees.
As clearly stated in the Compliance Confirmation, which is signed and acknowledged by each General Manager each year:
- Sika promotes equal opportunities and fair treatment in employment and occupation. Discrimination is the act and result of treating people unequally by imposing unequal burdens or denying benefits rather than treating each person fairly on the basis of individual merit.
- Sika ensures the right of workers and employers to establish and join organizations of their own choosing without the need for prior authorization.
- Sika prohibits “Forced or compulsory labor”, which refers to works and services which are exacted from any person under the menace of any penalty and for which the said person has not offered herself or himself voluntarily. The most extreme examples are slave labor and bonded labor, but debts can also be used to maintain workers in a state of forced labor (for example: withholding identity papers or requiring compulsory deposits).
- Child labor is strictly prohibited at Sika. The term “child” refers to any person under the age of 15 years or under the age of completion of compulsory schooling (whichever is higher).
Sika is an equal opportunities employer and is committed to treating staff without discrimination on the basis of their race, color, gender, age, national origin, religion, sexual orientation, gender identity or expression, marital status, citizenship, disability, or any other legally protected factor.
Sika is committed to aligning its operations and strategies with the universally accepted principles in the area of human rights and labor established by the United Nations Global Compact Initiative.
Sika has integrated human rights reviews into its Quality and Risk Management process.
The regional and local line management is responsible for compliance with human rights principles and local regulations.
Assessment of Sika’s own operations:
Sika has assessed compliance with human rights through its internal Group auditing activities, and will continue to improve the audit agenda to achieve a broader coverage. General Managers have given account of the local human rights situation and their observations in this regard through the Compliance Confirmation 2018. (See also chapter compliance).
Sika’s management approach to Supplier Human Rights Assessments is intended to avoid negative impacts caused by Sika’s suppliers with regard to human rights.
As clearly stated in Sika’s Supplier Code of Conduct, Sika is committed to high ethical standards and to sustainability in its relationships with employees, shareholders, customers, suppliers, competitors, governments, communities, and to the environment. Sika follows the principles of the United Nations Global Compact. Therefore, Sika expects suppliers to observe equal standards of professional conduct and integrity in particular in their relationship with Sika, their employees, and their sub-contractors. Suppliers recognize that their compliance with this code of conduct is an essential element of Sika’s vendor qualification. Suppliers’ conduct is governed by high ethical, safety & environment, and sustainability standards. The supplier has taken note of Sika’s Code of Conduct and will in its dealing with Sika not support any conduct which constitutes a violation of that Code.
In particular, on social and working conditions, suppliers commit to respect the provisions of the UN Universal Declaration of Human Rights and the Conventions of the International Labor Organization in regards to:
- Prohibition and elimination of child labor and forced labor
- Freedom of association and collective bargaining
- Promotion of equal opportunity and fair treatment in employment and occupation
- Safe and healthy working conditions
- Payment of living wages and regular employment entitlements
- Non-excessive working hours
Suppliers commit to have systems in place to ensure the proper instruction, training, and auditing of their personnel and subcontractors to ensure compliance with these principles. To the extent Sika is directly concerned, suppliers will immediately inform Sika of any violations of Sika’s Supplier’s Code of Conduct detected.
Screening of new suppliers: Based on the requirements set out in the Supplier Code of Conduct, Sika requires its new suppliers to perform a self-assessment.
- Procurement identifies suppliers with a hazard based on the results of the self-assessments.
- Suppliers that show a high risk of human rights violations are screened using desktop research and supplier audits through Sika personnel.
- Compliance with the set of human rights included in the Supplier Code of Conduct will be part of the contracts requirements.
- In case human rights violations are found, termination of the relationship with supplier is the only option.
- In addition to covering new suppliers, Sika also intends to monitor local suppliers specifically in “risk geographies”, where human rights violations are known or suspected and will include this in the scope of audit and evaluation of suppliers.
Disclosure 103-3: Evaluation of the management approach
The management approach has been reviewed and proven to be effective.