Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Commitment, principles & goals
Our entrepreneurial approach as a conscientious, responsible company includes ethical conduct as well as a commitment to human rights and core international labor standards.
Our primary policy documents include:
- Code of Conduct: Our Code of Conduct is a compulsory set of rules for all Merck KGaA, Darmstadt, Germany, employees. It explains the principles for interacting with business associates, general partners, colleagues, and employees, as well as with the communities in which we operate. Thus, it supports all employees in acting ethically – not only in their interactions with one another, but also outside the company.
- Human Rights Charter: At the end of 2013, Merck KGaA, Darmstadt, Germany, adopted a Group-wide human rights charter that underscores our commitment to respecting and protecting human rights. It brings together and complements existing regulations and guidelines that pertain to human rights, such as our Code of Conduct, our Social Charter, our Environment, Health and Safety Policy, and our Charter on Access to Health in Developing Countries. The Human Rights Charter defines our company's expectations while increasing awareness of human rights within the company. It also allows us to more accurately assess Group-specific risks and to align our business operations with our Values.
Since the Human Rights Charter includes core labor standards of the International Labor Organization (ILO), the Human Rights Charter is replacing our Social Charter. - Procurement Policy: Through our Group Procurement Policy, updated in 2013, we are ensuring that our procurement processes adhere to CR standards, which includes the selection, assessment and management of suppliers. This policy reflects numerous internal and external guidelines, such as our Code of Conduct, our Social Charter, our EHS policy, and ISO standard 14001. Standard operating procedures for Group Procurement have been revised to reflect this policy.
- Our Responsible Sourcing Principles: To complement our procurement policy, we drafted our Responsible Sourcing Principles and integrated them Group-wide into our general terms and conditions in 2013. These principles define what we require of our suppliers with regard to responsible conduct, highlighting the responsibility of our suppliers to apply our corporate responsibility standards to their upstream value chain.
As a member company of the German Federal Association for Materials Management, Purchasing and Logistics (Bundesverband der Materialwirtschaft Einkauf und Logistik e.V. – BME), Merck KGaA, Darmstadt, Germany, supports the BME compliance initiative against corruption, cartels and child labor. - Access to Health Charter: As described in our Charter on Access to Health in Developing Countries, Access to Health (A2H) is a strategic priority for Merck KGaA, Darmstadt, Germany. Our A2H strategy is designed to contribute to overcoming barriers to access for underserved populations and communities in developing countries. Recognizing that access is a complex and multifaceted challenge with no one-size-fits-all solution, our programs and initiatives are tailored to global, regional and local needs. We take a holistic needs-based approach, working in partnerships to achieve results. Our A2H work cuts across our businesses and is a component of our Corporate Responsibility strategy.
Merck KGaA, Darmstadt, Germany, is committed to the Millennium Development Goals (MDGs) and to working with partners to achieve them, as well as to ensuring that health remains an integral component of the post-2015 development framework. Through our efforts to expand access to health solutions, we are working to make Merck KGaA, Darmstadt, Germany, a health partner of choice in low and middle income countries as they continue to develop.
Our robust patient needs-based approach to addressing the complex challenge of providing access is designed around four pillars, known as the 4A´s for Access to High Quality Health Solutions: Availability, Affordability, Awareness, and Accessibility.
Implementation
- Compliance management: We support compliance with statutory and company-internal rules and regulations through our compliance organization. The central Group function Compliance, with the Group Compliance Officer (GCO) and other specialists, is responsible for maintaining and further developing the compliance program.
In the subsidiaries abroad, local compliance officers are responsible for implementing the compliance measures. They are advised by Group Compliance and provided with training documentation, among other forms of support. The local compliance officers report to the GCO at regular intervals. The GCO in turn reports at least once a year to the Executive Board, with a focus on the status of compliance activities, compliance risks, and serious compliance violations. The Executive Board informs the supervisory bodies at least once a year about the key compliance issues. Compliance management is continuously adapted to current requirements. - Compliance training: Our employees receive regular training on compliance topics via classroom and online courses. Employees at all levels of the hierarchy are familiarized with our requirements with regard to the Code of Conduct.
In 2013, around 108,000 compliance-related courses were conducted for 34,733 employees. Furthermore, 24,168 employees (thereof 12,390 employees ranked Global Grade 10+) were trained in anti-corruption (35,003 courses).
The training plan is regularly updated and adjusted in response to new developments. In addition, classroom sessions are adapted to local needs. - Human Rights Risk Assessment: In 2012, Merck KGaA, Darmstadt, Germany, conducted a Group-wide human rights risk assessment based on the Organizational Capacity Assessment Instrument (OCAI). It aimed to systematically examine and evaluate the effects of our business operations on human rights and the potential risks, as well as to determine the next steps to be taken.
- Supplier management: Supplier Management is a core task within Procurement and comprises the entire process of supplier assessment, evaluation, development, and phasing-out. It aims at optimizing the performance of the entire supply base in order to realize added value for Merck KGaA, Darmstadt, Germany, by using a transparent, holistic and globally uniform approach. Merck KGaA, Darmstadt, Germany, expects its suppliers to comply with fundamental rules, such as rules against corruption and child labor, and sets minimum requirements regarding work standards.
To complement our Procurement Policy, we developed our Responsible Sourcing Principles, which were incorporated Group-wide into our general terms and conditions in 2013.
In order to document our suppliers´ commitment to environmental and social standards, we use supplier self-assessment questionnaires. In 2013, around 600 questionnaires were completed by new and select suppliers (on the basis of a risk analysis).
The Group standard "Sustainability Audits in Supply Chain" regulates audits aimed at evaluating working conditions at key suppliers of Merck KGaA, Darmstadt, Germany, as well as the suppliers' impact on the environment and community. - Promoting access to health care in developing countries: Through our programs and our charter on Access to Health in Developing Countries, we strive to lead and collaborate with others to improve global access to medicine. The charter covers the topics of product pricing, intellectual property, research & development for neglected tropical diseases (NTDs), anti-counterfeiting as well as pharmaceutical product donations and philanthropy.
An important component of our Access to Medicine activities is our Praziquantel Donation Program. Through this initiative, we have been supporting the World Health Organization since 2007 in the fight against schistosomiasis in Africa, a widespread tropical worm disease. Since the program was launched, around 150 million tablets containing the active ingredient praziquantel have been donated, resulting in the treatment of more than 38 million children. In 2007, Merck KGaA, Darmstadt, Germany, made a commitment to donate to WHO 200 million tablets of Cesol® 600, which contain the active ingredient praziquantel. By 2017, this was intended to have treated around 27 million children for schistosomiasis in the most severely affected countries in Africa. In 2012, we announced that we will continue our efforts to fight schistosomiasis until the disease has been eliminated in Africa. To this end, Merck KGaA, Darmstadt, Germany, is increasing the number of praziquantel tablets donated in the medium term, raising the total to up to 250 million tablets annually.
In 2012, our commitment to access to medicines was ranked eighth in the Access to Medicine Index , which ranks pharma companies' access to medicine activities. The next ranking will be published in 2014.
Gauging the results
- Compliance audits: Compliance audits are conducted as part of general assessments by Internal Auditing. The audits focus on the existence and quality of compliance guidelines, processes and structures. In addition, our sites are reviewed for violations of our Code of Conduct and Social Charter. The topic of corruption and the requirements of the Social Charter are an integral part of our standard audit program and are audited within the scope of general audits at our sites. Altogether 30 audits were conducted to check for corruption in 2013. In addition, a total of 27 sites in 27 countries were audited on Social Charter topics in 2013. No violations of the Social Charter rules were found.
- Central SpeakUp Line for compliance violations: All employees are called upon to report compliance violations to their supervisor, Legal, HR or other relevant departments. Via the SpeakUp Line, a central reporting system, employees can report violations by telephone or via a web-based application in their respective national language, free of charge and anonymously.
The reports received are reviewed by the Group Compliance Office (GCO) and submitted to the Compliance committee to coordinate the necessary investigation of the facts. The Compliance committee consists of senior representatives of the Internal Auditing, Compliance, Group Security, Data privacy and Human Resources departments. It monitors the processing of reported incidents and initiates, if necessary, corresponding corrective measures. Disciplinary actions are also taken, where needed, against the employee who has violated a compliance rule. These actions may range from a simple warning up to dismissal of the employee, depending on the severity of the violation. In 2012, 20 compliance-related reports were received via the SpeakUp Line. In five cases in 2012, the alleged violation of our rules of conduct was confirmed. These cases were investigated and reported, action plans were implemented and monitored by Group Compliance. Merck KGaA, Darmstadt, Germany, takes such misconduct very seriously and takes appropriate action, including dismissals in line with the applicable laws.
2013 data will be published in June 2014 in our Corporate Responsibility Report – Update 2013. - Supplier audits: To assess our suppliers' adherence to social, environmental, and workplace safety standards, a total of 22 supplier audits were conducted in 2013. The suppliers audited were selected on the basis of a risk analysis. We found four suppliers with critical flaws, and 20 suppliers with major defects. We demanded that these suppliers provide us with a corrective action and preventive action plan (CAPA), which describes the course of action needed to address the issues. Auditors will be reviewing their progress. Particularly when it comes to critical flaws, we consider the option of terminating business relations if the problems are not sufficiently corrected.
- Evaluation of our Praziquantel Donation Program: Since the start of our Praziquantel Donation Program, over 150 million tablets have been donated. To date, more than 38 million patients in total have thus been treated, consisting primarily of school children. In 2013, around 50 million tablets were provided to the African countries of Angola, Ethiopia, the Democratic Republic of Congo, Cameroon, the Republic of the Congo, Madagascar, Mali, Nigeria, Senegal, Zimbabwe, Sudan, and Tanzania.
As part of a Bertelsmann Foundation project on corporate social engagement, we collaborated on the development of the "IOOI" method (Input, Output, Outcome, Impact), a way of gauging and assessing social engagement. We have applied this method to our donation program to combat schistosomiasis, which allows us to evaluate the progress of the project.
