BASF Report 2021 Management’s Report – Supplier Management 111 We received sustainability evaluations for 701 suppliers. We also groups in 2021. It also facilitated direct dialog between Sibanye- We review our suppliers’ progress according to a defined timeframe take into account other certification systems and external audits, Stillwater and nongovernmental organizations active in this area. based on the sustainability risk identified, or after five years at the such as from the Roundtable on Sustainable Palm Oil, when latest. In the case of ongoing, serious violations of the standards assessing our suppliers. Depending on business requirements, we We discuss sustainability matters with our supplier Nornickel and defined in our Supplier Code of Conduct or international principles, additionally conduct our own Responsible Care audits at selected other aspects relevant to our cooperation on a monthly basis. These we reserve the right to impose commercial sanctions. These can go suppliers (see page 117). include current events and the findings from the mining-specific TfS as far as termination of the business relationship. In 2021, this hap- audits. In 2021, TfS audits were carried out at Nornickel’s site in pened in three cases. Polar, Russia. Nornickel seeks to join various industry initiatives that Audit results provide third-party verification of mining and responsible procure- ment standards, such as the International Council on Mining and We carefully analyze the results of our assessments and document Metals (ICMM) or the Initiative for Responsible Mining Assurance them in a central database. The on-site supplier audits conducted (IRMA). In addition, topics relevant to stakeholders were discussed in over the past few years have identified some need for adjustment meetings with interest groups. The dialogs continue in various forms. with respect to environmental, social and corporate governance standards, for example in waste management or deviations in occu- pational health and safety measures and standards under labor law. Supplier development Follow-up audits in 2021 identified improvements, for example, a reduction in health and safety risks following the implementation of We use TfS evaluations to pursue a risk-based approach with clearly appropriate measures and compliance with labor law requirements. defined, BASF-specific follow-up processes. If we identify deviations In 2021, none of our audits identified any instances of child labor or from standards, we ask suppliers to develop and implement dangerous work and overtime performed by persons under 18. corrective measures within a reasonable time frame. We support them in their efforts, for example by training employees from 31 sup- We maintained close dialog with our South African platinum supplier pliers in China on ESG topics in 2021 as part of a partnership with 1 in 2021 on the results of the audit from 2020, the Sibanye-Stillwater the East China University of Science and Technology. In South implementation of the resulting action plan, and other relevant America, around 190 suppliers took part in a diversity talk on gender topics. This includes working with all stakeholders, including local equality in the supply chain, and around 340 suppliers attended a authorities, to take a unified approach to community development. webinar on ethical principles, legislation and human rights in the Almost all the needs for adjustment identified by the audit had been supply chain. implemented by the end of 2021. BASF and Sibanye-Stillwater continue to discuss the progress made four times a year and also As part of TfS, training was also developed for suppliers undergoing use this as a platform for dialog on other sustainability topics. a sustainability evaluation for the first time and for suppliers that Sibanye-Stillwater is a member and supporter of the International already have a sustainability rating but have potential for improve- Platinum Group Metals Association (IPA) sustainability initiative that ment in ESG performance. In 2021, more than 1,800 participants was co-founded by BASF. The initiative’s measures include con- attended online TfS training on this topic in different languages. TfS ducting comprehensive sustainability audits and sharing factors for is also developing a global learning platform for buyers and sup- success. BASF continued its regular dialog with local stakeholder pliers, which will provide various (online) training opportunities on specific sustainability topics. It is scheduled for launch in 2022. 1 In 2012, an extended strike at a platinum mine in Marikana, South Africa, culminated in a violent confrontation between mine workers and armed South African police. Employees of the former mine operator, Lonmin, were among the fatalities. Ownership of the Marikana mine was transferred to Sibanye-Stillwater in 2019. For more information on the supplier relationship with the Sibanye-Stillwater mine, see basf.com/en/marikana