Governance: responsible management
Supply chains: new requirements
The Supply Chain Due Diligence Act (LkSG) came into force on January 1, 2023. It aims to improve the international human rights situation by defining requirements for the responsible management of supply chains. In order to implement the new law in the best possible way, we have developed suitable measures and introduced them in the company. We are broadly committed to internationally recognized standards, guidelines, and principles. These include, in particular, the Sustainable Development Goals, the Universal Declaration of Human Rights and the conventions of the United Nations, the core labor standards of the International Labour Organization, and the OECD Guidelines for Multinational Enterprises. We conduct our business activities primarily in Germany, where the protection of human rights is established by law. When tendering international services, national and international laws and conventions apply. We document this carefully when concluding contracts.
LkSG requirements: a multi-stage approach
When implementing the requirements of the LkSG, we pursue a multi-stage approach to ensure both legal compliance and the efficiency of purchasing processes. In all new tender and contract documents, we oblige bidders and contractual partners to comply with all requirements of the LkSG by including the Code of Conduct clause as standard. In addition, we work closely with the relevant department to establish additional criteria for the performance requirements in calls for tenders with an increased potential for risk with regard to human rights or environmental due diligence obligations in order to minimize such risks. If risk or suspicion cases arise during the performance phase, we investigate each case individually. The Purchasing, Sustainability, and Compliance departments coordinate measures to minimize these potential risks along the supply chains and present them to the LkSG Risk Board, which meets quarterly.
An external risk analysis did not reveal any high potential for risk. The analysis of country-specific risks relating to direct suppliers revealed a very low potential risk, as 96 % of third-party suppliers come from Germany and 99 % from the EU. We purchase product groups that involve a potentially increased industry risk in countries with a low risk potential. As a result of the external risk analysis, we have consolidated the country- and sector-specific risk potentials in a matrix and divided them into risk classes. Measures to minimize risk were derived according to the risk class and the size of the purchasing volume.
It is expected that the due diligence obligations stemming from the LkSG will increase. The LkSG Risk Board has decided to use a software-based application so that it can continue to document them in a legally compliant, complete, and efficient manner. This will reflect both the internal and external risk analysis as well as the reporting obligations of the Federal Office of Economics and Export Control in a legally compliant manner. In addition, media monitoring will fulfill early warning functions. The conclusion of the contract and the implementation of the online application are planned for early 2024.
Principles: updating the Code of Conduct
In our Policy Statement on Respect for Human Rights, we commit to the highest standards of sustainability, which include environmental and social responsibility as well as good corporate governance. Furthermore, we are also guided by our Code of Conduct. It summarizes the key principles and rules of conduct as well as the standards we have set for ourselves in our dealings with business partners and stakeholders. Since May 2022, the Code of Conduct has provided the overriding framework of orientation for the Executive Board, as well as all managers and employees. It lays out the fundamental principles and rules for responsible and ethical conduct toward persons inside and outside the Group. In it, we undertake to comply with national and international laws, government regulations and official requirements as well as in-house rules.
Due to the LkSG and the new Whistleblower Protection Act, which came into force in July 2023, we have also adjusted our Code of Conduct. Specifically, the amendment to the LkSG included Munich Airport’s expectation of its suppliers not to violate any human rights, internationally recognized labor standards, or environmental obligations throughout the supply chain.
Our current Code of Conduct clause was adopted in 2023 through the implementation of the LkSG in the purchasing process. In 2024, we will also consider the Code of Conduct and risk management measures when drafting our purchasing guidelines.
Human rights: fairness in international relations
The laws and statutes of the Federal Republic of Germany and the EU shall apply directly and without exception also in international relations. This includes the prohibition of anti-competitive behavior, the formation of cartels and monopolies, undeclared work, child labor, forced labor, and violence. Compliance with human rights and human rights procedures is ensured particularly in accordance with the principles of the United Nations (UN) Universal Declaration of Human Rights. Furthermore, Munich Airport published rules of procedure for a complaints process on January 1, 2023. The new Whistleblower Protection Act has compelled us to update the rules of procedure with regard to the channels for complaints. At the beginning of July 2023, FMG also established an internal reporting office to record violations of the LkSG.
Group Management Report: Compliance management system (page 63)