Compliance

Our Group-wide Compliance Program aims to ensure adherence to legal regulations and the company’s internal guidelines. We have integrated compliance into our “We create chemistry” strategy. Our employee Code of Conduct firmly embeds these mandatory standards into day-to-day business. Members of the Board of Executive Directors are also expressly obligated to follow these principles.

Based on international standards, BASF’s Compliance Program combines important laws and company policies regulating the behavior of all BASF employees in working with business partners, officials, colleagues and society. The uniform Code of Conduct, updated in 2013, merges previous behavioral guidelines and now also covers human rights, labor and social standards, and conflicts of interest. These issues had previously been regulated by voluntary commitments as well as internal guidelines. We have also increased our focus on protecting data privacy by adding the issue to our global Code of Conduct.

BASF’s Code of Conduct

Our actions are based on behavior compliant with the Code, which comprises important laws as well as company-internal regulations.

BASF’s Code of Conduct (graphic)

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 2013, more than 47,000 employees worldwide took part in a total of around 62,000 hours of compliance training.

We particularly encourage our employees to actively and promptly seek guidance if in doubt. For this, they can consult not only their managers but also numerous specialist departments and company compliance officers. We have also set up 50 external hotlines worldwide which our employees can turn to anonymously. All reported incidents are investigated by our experts. We make sure that all concerns are processed within a determined time frame.

BASF’s Chief Compliance Officer (CCO) manages the implementation of our compliance management system, 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, covering all areas in which compliance violations could occur. They investigate whether employees adhere to regulations and make sure that the established processes, procedures and monitoring tools are appropriate and sufficient to minimize potential risk or preclude violations in the first place. In 2013, 111 Group-wide audits of this kind were performed (2012: 92), predominantly in the areas of antitrust law, imports and exports, and gifts and entertainment. If violations occur despite preventive measures, we investigate and rectify these immediately.

In 2013, 304 calls and emails were received by our external hotlines (2012: 308). Concerns involved topics ranging from questions on personnel management and handling of company property to 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. If necessary, a notification is sent to the appropriate authority.

It is becoming increasingly important to investigate our business partners in terms of adherence to corporate governance and compliance standards. This is especially the case in evaluating our suppliers; we have intensified our activities in this area.

Even outside of our company, we support the respect of human rights and the fight against corruption: We are a founding member of the United Nations Global Compact, and are committed to our responsibility in accordance with the U.N. Guiding Principles on Business and Human Rights. As a member of Transparency International Deutschland and the Partnering Against Corruption Initiative (PACI) of the World Economic Forum, we assist in the implementation of these organizations’ objectives. As a member of the U.N. Global Compact LEAD, we report in accordance with the Blueprint for Corporate Sustainability Leadership. This action plan comprises concrete measures to support the U.N. Millennium Development Goals, addressing topics such as transparency and stakeholder engagement.

Abiding by compliance standards is part of responsible leadership. This has been expressly embedded in our values, where we state: “We strictly adhere to our compliance standards.” We are convinced that compliance with these standards will not only avoid the disadvantages associated with violations, such as fines. We see compliance as the right way ahead to secure our company’s long-term success.

Information relevant to the principles of the Global Compact