✓ audited

Compliance

Our Group-wide Compliance Program aims to ensure adherence to legal regulations and the company’s internal guidelines. With the statement “We strictly adhere to our compliance standards,” we have integrated compliance into our “We create chemistry” strategy. The employee codes of conduct we have established around the world firmly embed these mandatory standards into day-to-day business activities.

Based on worldwide standards, our Group companies have created codes of conduct for the regions, taking into account local laws and rules. These codes are binding for all employees in the respective countries. In 2012, we updated our codes of conduct and united these under one global Code of Conduct. This will replace the regional codes in 2013 and be implemented for all company employees worldwide, enabling us to ensure adherence to our high standards in an even more consistent manner.

Our efforts are principally aimed at preventing violations from the outset. To this end, all employees are required within a prescribed time frame to take part in basic compliance training, refresher courses and special tutorials dealing with, for example, antitrust law or trade control regulations. In 2012, more than 49,000 employees worldwide took part in a total of around 71,000 hours of compliance training. We particularly encourage our employees to proactively and promptly seek guidance in cases of doubt. For this, they can consult not only their supervisors but also numerous specialist departments and company compliance officers. We have also set up 46 hotlines worldwide which our employees can turn to anonymously.

BASF’s Chief Compliance Officer (CCO) manages the implementation of the program, supported by more than 100 compliance officers worldwide. The CCO regularly reports to the Board of Executive Directors on progress in the program’s implementation as well as on any significant findings; furthermore, the CCO reports to the Supervisory Board’s Audit Committee in at least one of its meetings each year on the status of the Compliance Program as well as any major developments. In the event of significant incidents, the Audit Committee is immediately informed by the Board of Executive Directors.

BASF’s Corporate Audit department monitors adherence to compliance principles. In 2012, 92 Group-wide audits of this kind were performed (2011: 75). If violations occur despite preventive measures, we investigate and rectify these as quickly as possible. In 2012, 308 calls and emails were received by our external hotlines. These related to topics ranging from questions about personnel management to the handling of company property and information on the behavior of business partners. We launch an investigation into all cases of suspected misconduct that we become aware of. Confirmed violations are penalized and can lead to dismissal. In doing so, we make sure to take necessary action in accordance with consistent company criteria. This includes the possible involvement of the public authorities.

In 2012, we included compliance for the first time as a topic in our Global Employee Survey. The results confirm that our employees are upholding compliance standards in their day-to-day business. The positive employee feedback spurs us to constantly enhance our compliance culture.

In 2012, we continued the investigation of our suppliers in terms of compliance with corporate governance standards and performed the first comprehensive environmental, social and corporate governance audits. In addition, our Supplier Code of Conduct was fundamentally revised in order to make our expectations even more transparent worldwide.

We support the respect of human rights and the fight against corruption outside of our company, as well. We are a founding member of the U.N. Global Compact as well as a member of Transparency International Deutschland and the Partnering Against Corruption Initiative (PACI) of the World Economic Forum, and assist in the implementation of these organizations’ objectives. As a member of the U.N. Global Compact LEAD, we also report in accordance with the Blueprint for Corporate Sustainability Leadership. This action plan comprises concrete sets of measures to support the U.N.’s sustainability goals, addressing topics such as transparency and stakeholder engagement.

Information relevant to the principles of the Global Compact