International Labor and Social Standards

• Alignment with U.N. Guiding Principles on Business and Human Rights

We act responsibly toward our employees. Part of this is our voluntary commitment to respecting international labor and social standards, which we have embedded in our global Code of Conduct. This encompasses internationally recognized labor norms as stipulated in the United Nations’ Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy of the International Labour Organization (ILO). BASF is committed to complying with these standards worldwide. We mainly approach our adherence to international labor and social standards using three elements: the Compliance Program (including external compliance hotlines), close dialog with our stakeholders (such as with employee representatives or international organizations) and the BASF guideline on compliance with international labor norms, which was established in 2015 and applies Group-wide.

This guideline concretizes what the human rights issues and international labor standards in our global Code of Conduct mean as these relate to our employees. It forms the basis for our global management process: We monitor and evaluate whether the national law of all the countries in which BASF operates complies with international labor and social standards. If the national law contains no or lower requirements, actions plans are drawn up to successively close these gaps in a reasonable time frame. If conflicts with national law or practices arise, we strive to act in accordance with our values and internationally recognized principles without violating the law of the country concerned. As part of the management process, we regularly follow up on and document the results of the comparison between national law and our guideline, as well as measures to implement the guideline. This is our central due diligence system. Based on our guideline, our management process has been able to improve maternity leave at BASF companies with no statutory requirements or lower requirements than in the BASF guideline, for example.

We already use internal control processes such as Responsible Care audits to review the degree of adherence with the individual elements of the guideline in BASF Group companies.¹ Beyond this, we started to integrate our voluntary commitment into the existing corporate audit process in 2018.