In today’s globalized economy, we are involved with a multitude of suppliers, including some in parts of the world where basic values concerning human rights or the environment may be sacrificed to economic growth. As OSRAM will not tolerate a violation of those basic values, we are rolling out a combination of the OSRAM Code of Conduct and the auditing of suppliers to ensure these values are upheld.

Revised Code of Conduct
It is a source of pride that the OSRAM code of conduct for suppliers was in large parts the basis for the code of conduct that SIEMENS adopted in July 2007, replacing the separate Code of Conducts used by the different divisions. Praised for its conciseness, the OSRAM Code of Conduct was amended on the subject of a formal Environmental Management System. To ensure consistent handling within the Siemens Group, we have restarted the process of getting our suppliers to sign this Code of Conduct. In total, XX suppliers have accepted our code of conduct, including yy where only the previous code was so far returned. This rate of return constitutes ??% of our key suppliers.

Roll-Out of Auditing
To keep the Code of Conduct from being a paper tiger, auditing is necessary. Following the success of our pilot in our operation in Penang, Malaysia, we are rolling out a slightly modified Corporate Responsibility-Audit in line with Siemens Guidelines. This process is taking place in several dimensions:
• We held workshops for quality auditors in Europe and the People’s Republic of China, training over 60 participants and raising awareness of these issues.
• We conducted 20 audits following our pilot EHS Audit Guidelines, reaching our goal for 2007. For 2008, 100 CR-Audits are planned.
• A CR-Audit is now mandatory for new key suppliers and the implementation of these measures is part of the balanced scorecard of our commodity business managers.
• The integration of these tools in the Purchasing Management System ensures the seamless integration in the procurement process.

Results and measures taken
In the audits conducted so far, a few discrepancies have been noted. These were discussed together with the respective suppliers and recommendations for improvements were worked out. Re-auditing the suppliers concerned is planned. So far, no violations of our Code of Conduct were found that made a termination of business relationships necessary. The general feedback from our suppliers was positive – being an OSRAM supplier in good standing is obviously a source of pride for many of them.