In today’s globalized economy, we are involved with a multitude of suppliers, including some in parts of the world where basic values concerning human rights or the environment may be sacrificed to economic growth. As OSRAM will not tolerate a violation of those basic values, we are rolling out a combination of the OSRAM Code of Conduct and the auditing of suppliers to ensure these values are upheld.

Revised Code of Conduct
It is a source of pride that the OSRAM code of conduct for suppliers was a significant contribution to the global Code of Conduct that SIEMENS adopted in May 2007. Praised for its conciseness, the OSRAM Code of Conduct was amended on the subject of a formal Health & Safety Management System. To ensure consistent handling within the Siemens Group, we have restarted the process of getting our suppliers to sign this updated document. In total, over 1000 suppliers have accepted our code of conduct. This rate of return constitutes 80% of our key suppliers.

Roll-Out of Auditing
To keep the Code of Conduct from being a paper tiger, auditing is necessary. Following the success of our pilot in our operation in Penang, Malaysia, we have now implemented corporate responsibility aspects in our regular supplier auditing process in line with Siemens Guidelines. This is taking place in several dimensions:

• We held workshops for quality auditors in Europe and Asia, training over 60 participants and raising awareness of these issues.
• We conducted 20 audits following our pilot EHS Audit Guidelines, reaching our goal for 2007. For 2008, 100 audits including CR aspects are planned.
• Corporate Responsibility is now a mandatory element of the initial audit for new key suppliers, and the implementation of these measures is part of the balanced scorecard of our commodity business managers.
• The integration of these tools in the Purchasing Management System ensures the seamless integration in the procurement process.

Results and measures taken
In the audits conducted so far, a few discrepancies have been noted. These were discussed together with the respective suppliers and recommendations for improvements were worked out. Re-auditing the suppliers concerned is scheduled. So far, no violations of our Code of Conduct were found that made a termination of business relationships necessary. The general feedback from our suppliers was positive – being an OSRAM supplier in good standing is obviously a source of pride for many of them.