This Disclosure which is made pursuant to California Transparency in Supply Chains Act (the “Act”) made by Festo Corporation (“Festo”) which is part of the Festo Group and whose ultimate parent company is Festo SE & Co.KG.
Festo remains committed to upholding human rights and preventing acts of forced labor and human trafficking. This Disclosure provides an update on the steps that we have taken to combat the risks of forced labor and trafficking in our organisation or supply chains.
About Festo
Founded in 1925, the Festo Group is a worldwide supplier of automation technology and delivers industrial training and education programmes. The Festo Group has approximately 20,800 employees, operates in 60 countries worldwide, and has over 250 branch offices delivering worldwide service in 176 countries.
The Festo Group has a global annual turnover of 3.5 billion euros.
We work with a global supply chain that includes contractors, sub-contractors, suppliers, manufacturers and professional advisers. We impose the same high standards aimed at driving out forced labor and human trafficking in our supply chains as we do in our own operations.
To date no forced labor has been detected by us in either our business or our supply chains. In light of this, together with keeping our approach to eliminating forced labor and human trafficking within Festo and its supply chain under review driving, we perceive our exposure to be low.
As required by the Act, we provide information on the following
Verification. The following is how Festo engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery.
In January 2021, Festo’s Code of Conduct for Business Partners (the Supplier’s Code) was updated. The Supplier’s Code is available on the Festo website at: https://www.festo.com/group/en/cms/10310.htm.
Suppliers are obliged to comply with the human rights principles of the International Labor Organization of the United Nations. The Supplier’s Code includes an expectation that all suppliers eliminate all forms of forced or compulsory labor within their organizations, including child labor.
In addition, suppliers are required to comply with their own due diligence obligations and any applicable regulations regarding relevant raw materials, in particular 3 TG or ores (conflict minerals).
The Supplier’s Code is provided to all of Festo’s suppliers. Upon their receipt of the Supplier’s Code, each recipient must confirm that they have read, understood and will comply with it. Festo will only contract with those suppliers which provide that written confirmation and/or supply their own Disclosure concerning prohibition against forced labor (provided such Disclosures are deemed acceptable by Festo). The Supplier’s Code is annually reissued to Suppliers – on each re-issue, Suppliers must sign to confirm receipt and continued compliance.
The Chief Compliance Officer (“CCO”) remains responsible for overseeing suppliers’ observance of the Supplier’s Code, and any breaches are reported to either the Chairman of the Management Board, the Management Board in its entirety or the Supervisory Board. This enables Festo to consider the termination of supply contracts with those who breach the Supplier’s Code. The Festo Group’s Risk Management and Internal Audit departments work with the CCO to further develop compliance checking systems and keep under review the Supplier’s Code in line with industry best practice.
1. Audits. Festo conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The verification was not an independent, unannounced audit.
Supplier Self-assessment and Auditing
The Supplier’s Code requires suppliers annually to self-assess their compliance with all applicable rules and regulations covering matters such as health and safety, safe working, forced labor and ISO standards. In support of the self-assessment, a self-assessment form is provided annually to our critical suppliers, and on-site audits are undertaken by the supply chain team as and when required. A critical supplier is any supplier which provides a service to us or one of our customers which would be difficult to source elsewhere.
We also ensure that a six-monthly review is undertaken by an appropriate department manager. During this review, the critical supplier is rated on Product Quality, Responsiveness, Post-Sales Support, Flexibility, and On-Time Delivery. Depending on the outcome of the review, we may impose corrective measures or end our relationship with that supplier.
With respect to risks related to slavery and human trafficking, the self-assessment form asks the supplier to confirm whether it has been subjected to any prosecutions, improvement or prohibition notices in the last 36 months and, if so, steps taken to prevent reoccurrence.
Internal Auditing
All departments within Festo are audited every four years by ICS, which reports directly to the Supervisory Board. The most recent audit was conducted in August 2022.
If any risks are identified within the Festo Group, ICS will conduct ad-hoc audits in addition to its four-yearly audits to ensure that those risks are properly managed, mitigated and eliminated.
External Auditing and Certification
The Bureau Veritas Certification Germany GmbH audits the Festo Group. This ensures Festo’s continuing regulatory compliance in the following areas:
Festo continues to strengthen its management of the risk of forced labor within its operations and supply chain. A number of steps designed to strengthen that management have been identified for further feasibility review and include:
2. Certifications. Festo requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the United States and other applicable countries.
We understand that raw materials and supplies (and in particular in relation to conflict minerals) give rise to the highest forced labor risks within our operations and our supply chain – see below.
As part of our initiative to identify and mitigate risk, we complete a Compliance Management System (CMS) and a Compliance Questionnaire. The CMS focuses on compliance and due diligence within Festo and its supply chain and provides guidance on where to find information relevant to specific compliance topics.
In December 2021 the CMS 10 Golden Rules (“the Golden Rules”) was introduced. The Golden Rules are signed off by all members of the Management Board and reinforce managers’ responsibility for acting in accordance with all applicable laws, rules, guidelines and the Code. The Golden Rules include commitments to:
The Compliance Questionnaire is sent by Festo to its regional branches and is completed annually by the local compliance officers with assistance from all necessary managers.
The Compliance Questionnaire indicates:
In relation to forced labor risks, the Compliance Questionnaire assess the risks related to areas such as compliance with the Code and whistleblower protections. The Compliance Questionnaire is completed annually and informs the internal audits completed by Festo’s Internal Control Systems (ICS). Please see below for further information about our internal audit procedure.
Structure Engineered Compliance
Festo takes seriously its responsibility for compliance issues and operates a structure which includes regional as well as local compliance officers who have specific responsibility for compliance.
Festo’s local compliance officer in United States is responsible for ensuring all staff have access to training and information about their responsibilities under the Fighting Against Forced Labor and Child Labor in Supply Chains Act. This information and training is provided via a mixture of platforms, including:
Dow Jones Corporate Compliance
Our sales handled by third-party Sales Partners and distribution networks are subject to Dow Jones compliance checks to minimise risks in the following areas:
The Dow Jones compliance checks require our employees to:
As part of the Dow Jones compliance process, an internal risk assessment questionnaire must be completed by an employee, and an external due diligence questionnaire is completed by each Sales Partner. The external questionnaire will include mandatory questions and require mandatory documentation as proof of Disclosures made by Sale Partners in compliance with applicable codes. If any information is missing, we will conduct a risk mitigation and define any necessary mitigation measures.
A risk score is then assigned which also determines the frequency for repeating this process.
Conflict Minerals
Festo discloses the smelters from which its products’ raw materials are sourced within the framework of the Responsible Business Alliance, which helps to support the sustainable use of conflict minerals.
Festo also completes the Conflict Minerals Reporting Template in furtherance of transparency and increasing the proportion of certified smelters worldwide. Festo requires its business partners to comply with all applicable regulations concerning conflict minerals – this is included in the Supplier’s Code.
3. Accountability. Festo maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
Our continued commitment to ensuring that there are no forced labor or human rights violations within either our supply chains or in any part of our business is supported by both established policies and Festo’s overarching ethos.
The policies reflect Festo’s pledge to treat people with respect and dignity; and our corporate compliance initiatives are designed to address the risk of non-compliance within our operations and our supply chain.
As part of this commitment, and as reported in our previous Disclosure, Festo has in place a number of policies (including, but not limited to, those set out below) and corporate compliance initiatives that underpin our ethos of driving out forced labor.
A number of these policies have been updated in the last 12 months to ensure they are current. Alongside this Disclosure and Festo’s corporate compliance initiatives and procedures, the policies are reflective of our commitment to:
Code of Conduct
Issuing new employees with a contract of employment on or before their first day of employment which contains a contractual obligation to comply with the Code of Conduct (“the Code”) remains a key element of the on-boarding process. The Code (available in 16 languages on account of our global presence via the Festo Group website https://www.festo.com/group/en/cms/10310.htm) covers matters including forced labor and is regularly updated so it too is current.
Further, in support of our commitment to further eradicate forced labor from its business operations, all Festo employees are issued with the current Code each year. On annual issue, all employees must electronically sign to confirm they have received, read and understood the Code.
Whistleblowing Policy
The Festo Group has a corporate Whistleblowing Policy which is published on Festo’s intranet and includes a hyperlink so employees can send confidential and anonymous emails detailing concerns they have about unethical or unlawful practices.
The Festo Group also operates a “Whistleblowing Hotline” which provides another confidential channel for all employees, suppliers, customers, or members of the public to raise concerns which they may have about suspected unethical or unlawful behaviour. The hotline is operated externally by Deloitte and is certified ISO/IEC 27001 compliant.
Alternatively, staff can notify suspected breaches either via their Line Manager or the CCO via a dedicated email address.
4. Training. Festo provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
Employee Training
Employees receive annual trainings on Festo’s Code of Conduct as well as other mandatory training under US law.
Our compliance team maintain a register of those who have completed relevant training courses to ensure that the relevant training is completed by all employees.
Supplier Staff Training
It is implicit by virtue of the Suppliers’ Code that our business partners provide training to their staff and suppliers and providers.
Updated: June 2024