DCSIMG
DSM Code of Business Conduct - Annual Report 2015 - DSM

DSM Code of Business Conduct

Business principles

The DSM Code of Business Conduct ('the Code'), as introduced and rolled out from 2010, contains the company’s business principles across the three dimensions of People (11 principles), Planet (5 principles), and Profit (15 principles). These principles translate DSM’s mission and core value − sustainability − into daily practice across its business operations. All DSM employees are expected to act in accordance with the Code, and the Managing Board holds DSM’s unit management accountable for compliance with the Code. The Code is now available to employees in 19 languages and the full text of the Code can be found on the company's website.

Umbrella function

The Code serves as an umbrella for several other DSM regulations and together form the basis for the company's ethical business behavior. These regulations are often supported by e-learning programs to train relevant people within the company. Integration and compliance plans, comprising amongst others risk management and training on values, are being rolled-out for DSM's new acquisitions in Latin America and China. Depending on the subject, this concerns all employees or selected employees with a specific role in the organization. DSM regulations cover the three dimensions of People, Planet and Profit, of which the most important are listed below:

People: To support DSM’s ambition to create an incident-free and injury-free workplace, the Life Saving Rules specify the 12 most important rules that must be followed by all employees to prevent serious or fatal incidents. In 2015, the Human Rights project further elaborated the business principles on diversity and non-discrimination, forced labor and child labor, fair remuneration and standards of business partners. An overarching Human Rights position paper bringing together existing human rights-related policies and procedures has been published on the company's website. For more information, see 'Human Rights' on Human rights.

The Unlawful Harassment Prevention e-learning emphasizes the importance of the cultural, diversity and non-discrimination aspects of the Code and focuses on effective employee relations, communications, and non-discriminatory practices in the workplace.

The DSM Privacy Code for Employee Data and the DSM Privacy Code for Customer, Supplier and Business Partner Data came into force during 2014. These codes prescribe a mandatory training for Privacy Officers, human resources employees, legal counsels and employees who work with personal data on a regular basis. DSM began to roll out the related Privacy e-learning in 2015.

Planet: The Basic Course Responsible Care® addresses the elements of the Responsible Care® Program: Safety, Health and Environment, Product Stewardship, Security and Sustainability. Because of the importance of the Responsible Care® principles for all functions and roles within the company, this course is mandatory for all DSM employees, as well as for selected contractor employees.

Profit: DSM uses the e-learning trainings Global Competition Law Principles and Practices and Global Trade Controls. Compliance with these subjects is structurally embedded in DSM’s systems and processes. As part of the global trade controls compliance process, DSM master data is screened to check customers and suppliers against embargoes and lists of sanctioned parties.

The DSM Anti-Bribery and Corruption (ABC) Policy and Compliance Manual has been communicated to targeted employees in commercial and business roles since 2014. Supporting classroom training and an ABC e-learning was further rolled out in 2015. Special attention has been given to DSM’s employees and businesses in China, including the provision of a Chinese translation of the DSM ABC Policy and Compliance Manual, an easy-to-use ABC checklist for business people, and ABC classroom trainings in addition to the Competition Law classroom program.

The Security e-learning covers all key security topics relevant to DSM’s business, including DSM’s seven Key Security Behaviors. To complete the e-learning, participants are required to read and sign-off on the DSM Code of Conduct for Information Security. A classroom version of the training is available for locations without access to e-learning facilities.

DSM also has rules in place on the holding of and execution of transactions in DSM financial instruments and certain other financial instruments related to trading in DSM shares, and if applicable, shares and related financial instruments in other companies, which apply to all relevant DSM employees, including the members of the Managing Board and the Supervisory Board.

Value chain

The business principles most relevant for the supply chain are brought together in the Supplier Code of Conduct and also structured along the three sustainability dimensions of People, Planet, and Profit. The Supplier Code of Conduct (available on the Company’s website in eight languages) is signed-off by suppliers in framework contracts, whereby they confirm their commitment to sustainability amongst other things. For distributors' and agents' contracts, the ABC Policy is being translated into terms and conditions to ensure ethical business conduct when these third parties are acting on behalf of DSM or dealing with DSM’s products further down the value chain.

Training and awareness

DSM employees must refresh their training on the Code every two years. The implementation of this training program continues to progress well. The Code training was rolled-out within a number of acquisitions (e.g. Latin America) for the first time in 2015, meaning that all regions are now covered. At year-end well over 90% of all DSM employees had completed (or refreshed) their training, excluding employees of some businesses acquired recently. The training program is also offered by the business units to selected contractor employees as well as to employees in DSM's joint ventures. A Code Review Team, chaired by the Vice President Risk Management, monitors implementation of the values training program as well as internal and external developments concerning corporate ethics to promote and safeguard the Company’s values and reputation. In 2015, the Code Review Team initiated a project to apply global monitoring and reporting − already in place for the Code training since 2014 − to all of the values trainings in DSM’s learning management system.

People: At the end of 2015, well over 90% of all DSM employees had completed the Life Saving Rules training, underlining the importance of safety within DSM.

Planet: The Basic Course Responsible Care® has now been successfully followed by over 90% of the employee population.

Profit : Further implementation of the ABC program also progressed well in 2015. Employees within the ABC target group have been identified and invited to complete the ABC e-learning; over 90% had already done so by year-end. The training for Global Trade Controls and Security has been in place for longer and implementation levels remain good at 90% and 93% respectively. Additional training on Trade Controls Compliance has been given to zoom-in on various business specific aspects of this topic.

Those employees for whom competition laws are most relevant must complete an annual statement to confirm their compliance with the rules set forth in the DSM Competition Law Compliance Manual. In this statement they confirm that they are not aware of any violation of competition laws by DSM. Sign-off levels are excellent. Alleged breaches are reported to and discussed with Group Legal Affairs. In 2015, no breaches were reported and DSM was not subject to any investigation by competition authorities related to potential anti-competitive behavior.

Dilemmas

Living the Code can sometimes result in dilemmas that do not have a quick or clear answer. Dilemma workshops are held to prepare for these cases using the UN Global Compact Dilemma Game as a tool. The workshops build on DSM’s company culture, which is based on openness, fairness and trust. The aim is to create an open-minded atmosphere in which dilemmas can be discussed. These discussions are used to calibrate 'what is right' and 'what is wrong' in order to continuously improve business integrity in daily operations.

Letter of Representation

At the end of each year, the management of all 33 operational units directly reporting to the Managing Board (business groups, regions, others) sign-off on a Letter of Representation. With this they confirm the compliance of the unit and its employees with applicable laws and regulations, the Code and related values training as well as corporate policies and requirements.

Consequence management

DSM applies zero-tolerance consequence management to violations of the Code. Most Code incidents are reported to, and dealt with by, local line management. If reporting to line management is not considered possible, the whistleblower procedure (DSM Alert) is used. Complaints received by DSM Alert are dealt with via the DSM Alert Officer. In all cases, consequence management practices are in place (e.g. official warning, temporary suspension, dismissal) to support compliance with the Code. The DSM Alert Officer reports to the Managing Board and is invited to report independently to the Supervisory Board at least once a year. As of 2014, people who are not DSM employees but wish to raise a concern regarding a violation of the Code can also contact the DSM Alert Officer via the company's website. In 2015, one external report of a potential violation was received.

The table on the next page gives an overview of all reported Code violations, with a breakdown per Triple P dimension and per region. Proven serious violations of the Code can result in dismissal or other forms of consequence management. In line with this policy, 38 employees were dismissed in 2015 as a result of breaches of the Code or other legal or local company regulations. In addition, 51 cases were reported that have led to other kinds of consequence management (official warning or suspension). Overall this is a decrease compared to 2014, to which portfolio changes have also contributed.

People: Most of the cases in the People dimension are related to violations of the Life Saving Rules or inappropriate behavior. Safety and health in the workplace has a priority for the company and incident-reporting channels are well-known.

Planet: There were no violations of the Code reported in the Planet dimension. Investigations of serious environmental incidents have shown that none of these occurred due to seriously negligent or irresponsible behavior by employees. More details on serious environmental incidents are provided in the chapter 'What still went wrong in 2015' on What still went wrong in 2015.

Profit: There were fewer violations of the Code reported in the Profit dimension in 2015 compared to 2014. The cases that were reported related to matters including a number of fraud and falsification of time records cases.

Table 1

Code of Business Conduct
2015
2014
Training and awareness e-learning:
% of targeted employees trained
   
General
   
- Code of Business Conduct
96%
91%
People
   
- Life Saving Rules
96%
- 1
Planet
   
- Basic Course Responsible Care®
93%
- 1
Profit
   
- Global Trade Controls
90%
- 1
- Anti-Bribery and Corruption (introduced 2014)
94%
71%
- Security
93%
- 1
DSM Competition Law:
   
% of targeted employees signed-off
   
- DSM Competition Law compliance annual statement
100%
100%
Violations of the Code:
   
Number of dismissals/other consequence management
   
Triple P breakdown
   
- People
26/45
32/64
- Planet
0/0
3/2
- Profit
12/6
27/10
Regional breakdown
   
- Europe & Africa
5/19
10/38
- Americas
27/30
30/26
- Asia-Pacific
6/2
22/12
Total
38/51
62/76
Alert cases (whistleblower procedure):
   
Number substantiated/not substantiated/under investigation
   
Triple P breakdown
   
- People
3/9/1
6/12/0
- Planet
0/0/0
0/0/0
- Profit
2/0/1
0/5/0
Regional breakdown
   
- Europe & Africa
2/1/0
2/6/0
- Americas
3/5/2
2/7/0
- Asia-Pacific
0/3/0
2/4/0
Total
5/9/2
6/17/0
1 No overall global data available for this period