Supplier Code of Conduct

SHL Medical* requires its suppliers to meet the following requirements regarding social and environmental responsibility and ethical conduct.

Human rights and labor

Freely chosen employment
Suppliers shall not use forced, bonded, or indentured labor, involuntary prison labor, or slavery. All work must be voluntary, and employees shall be free to terminate their employment. Suppliers shall not hold or otherwise destroy, conceal, confiscate, or deny access by employees to employee’s identity or immigration documents, such as government-issued identification, passports, or work permits unless the holding of work permits is required by applicable law or regulations.

Child labor and young workers
Suppliers shall not use child labor. Suppliers may employ young workers who are older than the applicable legal minimum age but are younger than the age of 18 years to the extent that young workers do not perform work that is likely to jeopardize their health or safety, including night shifts and overtime.

Working time, wages, and benefits
Suppliers shall comply with all applicable laws and regulations with respect to working hours and days of rest. All overtime must be voluntary. Compensation shall be paid to employees in compliance with all applicable laws and regulations, including those relating to minimum wages, overtime hours, and legally mandated benefits. Overtime shall be infrequent and voluntary. Deductions from wages as a disciplinary measure shall not be permitted.

Suppliers shall ensure that employees have reasonable breaks during their workday. Employees shall be allowed at least 24 consecutive hours of rest in every consecutive 7-day period in addition to the regular period of rest allowed at the close of each working day and shall be entitled to take paid annual leave in accordance with applicable laws. Employees shall be entitled to leave for sickness, family reasons, maternity, public holidays, and occupational diseases or injuries in accordance with applicable laws. The leave shall be paid in accordance with applicable laws. Public holidays shall not be counted as part of the annual leave.

Non-discrimination and fair treatment
Suppliers shall provide a workplace that is free of harassment and abuse. Any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion, or verbal abuse of employees is prohibited; nor is there to be threat of any such treatment.

Suppliers shall not engage in discrimination based on race, color, age, gender, sexual orientation, gender identity and expression, ethnicity or national origin, disability, pregnancy, religion, political affiliation, union membership, covered veteran status, protected genetic information, or marital status in hiring and employment practices such as wages, promotions, rewards, and access to training.

SHL Medical encourages suppliers to provide an inclusive and supportive working environment by exercising diversity when it comes to their employees.

Freedom of association
Suppliers shall respect the right of all employees, as set forth in the applicable laws and regulations, to form and join trade unions of their own choosing, and to bargain collectively, and also respect the right of employees to refrain from such activities. Workers shall be able to communicate openly with management regarding working conditions without threat of reprisal, intimidation, or harassment.

Use of security forces
Whenever third parties (private or public) are employed to protect supplier’s operations and activities, suppliers must ensure that employees are protected through appropriate instructions or control of such third parties. Security personnel must respect the human rights of the individuals they encounter while on duty. Use of torture, cruel, excessive force, inhuman, or degrading treatment, or injury to life or limb, as well as impairment of the right to organize and the freedom of association, are not acceptable.

Local communities and vulnerable groups
Suppliers shall respect the rights of local communities, including all vulnerable and disadvantaged groups. Suppliers shall obtain any such local communities’ free, prior and informed consent on whether and how to carry out business activities. Unlawful eviction and deprivation of land is not acceptable. Suppliers shall listen to the concerns of local residents and strive to create positive impacts through local engagement. The support of local job creation, local sourcing, education provisioning, and infrastructure development is encouraged.

Conflict of minerals
Suppliers shall carry out due diligence on the source of the conflict minerals used in the product supplied to SHL Medical to promote legal and sustainable sourcing. Suppliers shall document and disclose to SHL Medical any use of conflict minerals from a country that has directly or indirectly financed or benefited armed groups if relevant to the product suppliers supply to SHL Medical. Conflict minerals include columbite-tantalite, cassiterite, wolframite (or their derivatives tantalum, tin, and tungsten) or gold, and any other minerals subject to legal requirements to avoid sourcing from conflict-affected areas.

Health and safety

Worker protection
Suppliers shall identify, evaluate, and control employees’ exposure to chemical, biological, and physical hazards. Suppliers shall have programs in place to prevent or mitigate occupational injury and illness. Suppliers shall identify, evaluate, and control employees’ exposure to the hazards of physically demanding tasks, including but not limited to manual material handling and heavy or repetitive lifting, prolonged standing, and highly repetitive or forceful assembly tasks. Suppliers shall evaluate production and other infrastructures for safety hazards and shall provide and properly maintain physical guards, interlocks, or barriers where machinery presents an injury hazard to employees. Supplier shall provide employees with appropriate, well-maintained, personal protective equipment and educational materials about risks associated with hazards. Suppliers shall provide and maintain a safe and healthy working environment.

Emergency preparedness
Suppliers shall identify and assess potential emergency situations and events and shall minimize the impact by implementing emergency plans and response procedures.

Process safety
Suppliers shall have management processes in place to identify the risks from chemical and biological processes and to prevent or respond to catastrophic release of chemical or biological agents.

Hazards information
Suppliers must comply with product safety regulations, label products properly, and communicate to employees and the relevant parties the product-handling requirements. Suppliers shall provide the relevant parties with the applicable documentation containing all necessary safety-related information about all hazardous substances in case of a legitimate need.

Environment

Environmental authorizations
Suppliers shall obtain, maintain, and keep current all required environmental permits, approvals, and registrations and shall comply with their operational and reporting requirements.

Solid waste and wastewater
Suppliers shall implement a systematic approach to identify, manage, reduce, and responsibly dispose of or recycle solid waste and wastewater generated from operations.

Hazardous substances and spills
Suppliers shall comply with all country and local environmental regulations with regard to hazardous substances and spills for the regions in which they operate. These regulations include but are not limited to: Waste Electrical and Electronic Equipment (WEEE), registration, evaluation, authorization, and Restriction of Chemicals (REACH), and Restriction of Hazardous Substances (RoHS).

Suppliers shall have an adequate system in place designed to identify and disclose to SHL Medical all chemicals and other materials in its products and product sub-components that are regulated by the governments and/or authorities in the regions where they are being used and are deemed hazardous, toxic, or carcinogenic. Supplier shall also manage to ensure its safe handling, movement, storage, use, recycling or reuse, and disposal of the above chemicals and materials. Suppliers shall have systems in place to ensure the safe handling, movement, storage, and disposal of materials containing hazardous substance(s). Suppliers shall ensure effective protection on the ground to prevent and mitigate accidental spills or releases of hazardous substance(s) to the environment.

Air emissions
Suppliers shall identify, manage, reduce, and control air emissions that have or potentially have adverse impacts on human or environmental health prior to discharge. Supplier shall conduct routine monitoring of the performance of its air emission control systems.

Transportation logistics
Suppliers will optimize transportation strategies in order to minimize the environmental footprint of all products shipped. This includes consideration of transportation modes and distances as well as the types and quantities of packaging material.

Conservation and use of natural resources
Suppliers shall preserve and protect natural resources, such as sources of energy, water, forests, soil, raw materials, etc. Suppliers shall strive to reduce energy, water, and natural resource consumption and minimize hazardous substances consumption.
Suppliers shall have clear environmental targets, strategies, and policies in place and demonstrate continuous environmental improvements. Suppliers shall encourage and apply circular economy practices.

Climate protection
Suppliers shall set a strategy to reduce the greenhouse gas (GHG) emissions caused by their operations directly (scope 1) or indirectly (scope 2) and those caused in their value chains (scope 3). Suppliers is expected to set ambitious targets and demonstrate emissions reduction by 2030 and beyond. Suppliers shall undertake reasonable effort to set targets in line with the Science-Based Targets initiative (www.sciencebasedtargets.org). Upon request, Suppliers shall be able to provide the carbon footprint of its organization or products.

Renewable electricity and energy use
Suppliers shall undertake reasonable efforts to endeavor to use 100% of its purchased electricity from renewable sources by 2030. Suppliers shall use reasonable efforts to increase the overall use of renewable energy on a yearly basis. Suppliers shall undertake reasonable efforts to have management systems in place to continuously improve energy efficiency in their operations.

Ethics

Business integrity
All forms of bribery, corruption, extortion, and embezzlement are prohibited. Suppliers shall not pay or accept bribes or participate in other illegal inducements in business or government relationships. Suppliers shall conduct its business consistent with fair and vigorous competition and in compliance with all applicable anti-trust laws. Suppliers shall employ fair business practices including accurate and truthful advertising.

All business dealings shall be transparently performed and accurately reflected on Supplier’s business books and records. SHL Medical buys solely upon quality, performance, suitability of the product or service, and cost.

Conflict of interest
Suppliers represent and warrants that (1) it does not have any interest which directly or indirectly conflicts with the proper and ethical relationship with SHL Medical; and (2) it shall maintain arm’s length relations with all third parties with which it deals with or on behalf of SHL Medical.

Trade compliance
Suppliers shall comply fully with all applicable international trade laws affecting the transfer of goods, services, software, and technology across national borders (including but not limited to economic sanctions, export controls and anti-boycott regulations), all applicable healthcare laws and all applicable anti-corruption laws.

Disclosure of information
Suppliers shall accurately record information regarding their labor, health and safety, environmental practices, business activities, structure, financial situation, and performance and shall disclose or make available such information in accordance with applicable regulations and prevailing industry practices. Falsification of records or misrepresentation of conditions or practices are unacceptable.

Confidentiality and intellectual property
Suppliers shall safeguard SHL’s confidential and proprietary information. Suppliers shall protect the reasonable privacy expectations of personal information of everyone it does business with, including suppliers, customers, consumers, and employees. Supplier’s information systems that contain SHL’s confidential information or data shall be appropriately managed and protected against unauthorized access, use, disclosure, modification, or destruction. Suppliers shall respect intellectual property rights and safeguard customer information. Transfer of technology and know-how shall be done in a manner that protects intellectual property rights.

Data privacy and data protection
Suppliers shall comply with the applicable privacy and information security laws and regulatory requirements when personal information is collected, stored, processed, transmitted, and shared. Suppliers shall: (1) collect personal information only for legitimate business purposes, (2) use it in a legal, transparent, and secure manner, (3) share it only with those who are allowed access, (4) protect it in accordance with security policies, retain it only for as long as necessary, and (5) obligate any third party who has access to such personal information to protect it.

Accuracy of business records
Suppliers must maintain all financial books and records in conformance with generally accepted accounting principles. Business records must be accurate in all material respects. Business and financial records must be legible and transparent and reflect actual transactions and payments.

Management system

Management accountability and responsibility
Suppliers shall allocate appropriate resources to ensure the implementation of the management systems and associated programs described in this Code of Conduct.

Legal and customer requirements
Suppliers shall identify and comply with applicable laws, regulations, and customer requirements, including the requirements described in this Code of Conduct.

Risk management
Supplier shall make safety information on identified workplace risks available to employees and contractors. Suppliers shall ensure that their employees be correspondingly and continuously trained to ensure their employees are adequately protected at all times. Suppliers shall develop and maintain a process to assess and manage risks in all areas addressed by this Code of Conduct; determine the relative significance for each risk; and implement appropriate procedures and controls to control the identified risks and ensure regulatory compliance.

Continuous improvement
Suppliers shall demonstrate their commitment to continuous improvement with written performance objectives, targets, and implementation plans to improve Supplier’s social and environmental performance. Suppliers shall have a mechanism for timely correction of deficiencies identified by internal or external assessments, inspections, investigations, or reviews.

Training and competency
Suppliers shall have training programs to facilitate the implementation of its policies, procedures, and improvement objectives and to meet applicable legal and regulatory requirements.

Supplier responsibility
Suppliers shall have a process to communicate the requirements set forth herein to its employees, suppliers, and contractors, and to monitor their compliance to this Code of Conduct

Supplier inclusion and diversity
Suppliers shall commit to advancing inclusion and diversity by actively promoting relationships with diverse and underrepresented businesses.

Evaluation by SHL Medical
Suppliers acknowledge that SHL Medical will evaluate Supplier’s conformance with the principles outlined in this code of conduct upon reasonable prior notice. The evaluations will be executed directly by SHL Medical or by a qualified third party during an assessment, audit, etc.

Systems, documentation and evaluation
Suppliers shall develop, implement, use, and maintain management systems and controls related to the content of this code of conduct. Suppliers shall maintain documentation necessary to demonstrate conformance with the principles outlined herein. Suppliers shall document and report to SHL Medical the social and environmental impact it makes in line with the principles set forth herein.

Remedial action
Suppliers shall, without undue delay, (1) report to SHL Medical in writing any identified risks of violations of the principles outlined in this Code of Conduct; and (2) take appropriate remedial actions to prevent, end, or minimize the violation. SHL Medical reserves the right to (1) suggest an approach ending or minimizing such violation; and (2) request Suppliers to cooperate in this respect. If Suppliers fail to comply with the requirements of this Code of Conduct and fail to cure any such violations within 3 months after discovery (if the breach curing period set forth in any other agreement Suppliers enters into with SHL Medical (the “Agreement”) is shorter than 3 months, the period set forth in the Agreement will prevail), SHL reserves the right to either (1) suspend the Agreement until such violations have been remedied, or (2) terminate the Agreement at any time beyond the 3-month period.

Identification of concerns
Suppliers shall encourage and provide means for their employees to report concerns, complaints, or potentially unlawful activities that have in their workplace area or of another supplier without threat of reprisal, intimidation, or harassment. Any report must be treated in a confidential manner and be able to be made anonymously, where permitted by law. Suppliers shall investigate such reports and take corrective action if needed. Suppliers shall notify SHL Medical of legal actions, administrative investigations, or prosecutions that may affect its business with SHL Medical or that could potentially adversely affect its and SHL’s reputation.

Supply disruptions and business continuity
Suppliers shall inform SHL Medical of financial, economic, supply changes, or other material conditions that affect or might affect its ability to supply SHL Medical or SHL’s ongoing operations or operating decisions. Suppliers shall implement appropriate business continuity plans for operations supporting SHL´s business.

Human rights policies and processes
Suppliers shall: (1) have and maintain a policy to meet its responsibilities to respect human rights; (2) conduct human rights due diligence to identify, prevent, mitigate, and account for how it addresses its adverse human rights impacts; and (3) establish processes to enable the remediation of any severe adverse human rights impacts it caused or to which it contributes. These processes may vary in complexity, in proportion to the circumstances such as size, sector, operational context, ownership, and structure, as well as the severity of Supplier’s adverse human rights impacts.

Supply chain security
SHL Medical maintains membership in supply chain security programs administered by the customs authorities in the United States (Customs-Trade Partnership Against Terrorism) and the European Union (Authorized Economic Operator). These programs require SHL Medical and SHL’s supply chain partners to meet or exceed the acceptable warehouse, transportation, and cargo security standards. Supply chain partners may be subject to audit for the purpose of validating SHL’s supply chain security profile.

Fraud prevention and reporting
Suppliers shall implement robust fraud prevention and reporting programs. Suppliers shall report to SHL Medical all occurrences of fraud (actual or under investigation) involving their business with SHL Medical, regardless of materiality.

Quality

Quality requirements
Supplier shall meet generally recognized quality standards and contractually agreed quality requirements and standards in order to provide goods and services that consistently meet SHL’s and its customers’ needs, and perform the Agreement as warranted and ensure the products and/or services it provides are safe and effective for their intended use. Suppliers shall immediately address all major issue(s) that have the potential to negatively affect the quality of products and services. Suppliers must inform SHL Medical about changes of the materials, manufacturing site, manufacturing- or supply process that have the potential to impact the specification of goods and services provided with an 18-month prior notice.

Security and anti-counterfeiting measures
Supplier shall maintain good product security practices and apply the relevant contractually agreed standards across its supply chains. If applicable, Suppliers shall assure the integrity of each shipment of products to SHL Medical from its origin through to its destination where there is an applicable Incoterms agreed. 

Suppliers shall implement the necessary and contractually agreed standards to ensure that its and SHL’s products, the associated components, or raw materials, as well as the corresponding know-how that is under Supplier’s control or responsibility, are not transferred to any unauthorized third party and do not leave the legitimate supply chain. Suppliers shall promptly analyze their relationship with an authorized third party if it obtains or is provided with evidence that it is inadvertently involved in the manufacturing or selling of counterfeit, falsified, or otherwise illegal products (including products destined for export that are considered counterfeit, falsified, or otherwise illegal products in the destination country) via the actions of such third party. SHL Medical expects Suppliers to support the investigation and prosecution of any activities connected with counterfeit, falsified, or otherwise illegal products.

By signing below, Suppliers hereby certifies that it has read, fully understood, and agreed with this Code of Conduct. Any questions concerning this Code of Conduct have been raised and discussed. A photocopy of this Code of Conduct is as valid as the original.

*SHL Medical AG, Scandinavian Health Limited, SHL Technologies Ltd. and its Taiwan branch, SHL Pharma LLC, SHL Medical LLC, SHL Medical AB, and their affiliates