- The Global Compact and the MSM principles of social responsibility
The Global Compact is an initiative of UN General Secretary Kofi Annan that mobilizes private industry support of such fundamental principles as respect for human rights and protection of jobs and the environment. Through agreements between the United Nations and private industry, the Global Compact creates a global framework for responsible action in support of these principles.
The principles declare the company’s commitment to preserve internationally recognized human rights and to uphold the principle of equal opportunity in employment and refrain from unlawful discrimination. They encompass MSM’s adherence, within the context of applicable laws, to the principle of “equal pay for work of equal value” as well as its rejection of exploitative working conditions. The principles also express MSM’s concern for the protection of the safety and health of its employees in workplaces in Mongolia.
MSM is convinced that social responsibility is a crucial factor in the long-term success of the company. It is both a result of and a precondition for the value-oriented and sustainably profitable running of a business.
The principles of social responsibility apply throughout the world. Various different cultures and the diversity of value systems in different societies were taken into consideration in their creation, because equal opportunities are the basis for successful international cooperation. This means that all employees can be appointed, supported and allowed to develop according to their competencies, abilities and performance, without unlawful discrimination.
An important part of the success of the Global Compact and the principles of social responsibility is the entrenching of their aims in the minds of all employees. In the following rules of conduct, standards of behavior for management personnel and employees are formulated as binding. Dealings with suppliers and other business partners as well as contacts with parties and authorities are also regulated. In addition, guidelines for the protection of the environment are set.
- General rules of conduct
2.1 Rules of conduct affecting employees of the company all employees contribute to a corporate culture that is characterized by cooperative working relationships. Tolerance and respect towards each other are some of the fundamental convictions of the management and the employees. Moreover, each employee is committed to responsible and ethical behavior. The dignity of each individual is to be respected. Mutual esteem is based on inner conviction and a willingness to take action. Only in this way can an open, tolerant and cooperative environment develop.
2.1.1 Rules of conduct for employees MSM expects all its employees, both management and non-management, to contribute to a positive atmosphere through their behavior towards each other. The possibility to get to know other cultures and ways of thinking through cooperation is enriching for all employees. It also helps to motivate employees, and is the basis for sustainable business success and value creation.
2.1.2 Rules of conduct for management Management personnel support productive behavior by practicing performance-based, value-oriented management. The conduct of management personnel should set an example of respect for the dignity of all employees. Through their open-minded dealings with employees, they create a working atmosphere that is conducive to positive employee morale and the open exchange of ideas. Through courtesy, tolerance and mutual consideration, they cultivate harmonious and productive dealings with other people.
2.2 Rules of conduct when dealing with third parties all employees, especially management personnel, must be aware that they represent the company with their behavior. Their conduct affects both the external reputation of the company and its internal culture. All employees are expected to treat others as they themselves would expect to be treated, including customers and other external persons having business relations with the company. Of course, this also applies to employees of other firms working within the company.
- Employee responsibility
Each employee has a responsibility to be familiar with and comply with the letter and spirit of the MSM Integrity Code and the company’s policies and guidelines. Also, where applicable, compliance is required with employment contracts, work’s rulebook and standards of conduct. Protecting MSM’s reputation means abiding by the Integrity Code around the clock. Even off the job, employees are perceived by others as a representative of MSM. It is also important that employees encourage each other to uphold the MSM Integrity Code and cooperate with the company in enforcing its provisions. The reputation and viability of MSM may be at stake.
Scope of application the nature of some of the company’s objectives may require standards of conduct more specific than those set forth in this Integrity Code. In those cases, supplemental standards for certain business units, regions or individual operations may be developed in cooperation with Human Resources.
Obey the law The basic policy underlying the MSM Integrity Code is the company’s commitment to conduct its business in full compliance with applicable law. Employees are responsible for understanding and conforming their conduct to the legal requirements relevant to their jobs and communicating this standard to those they supervise.
Dealing with Government Officials
III Dealing with Government Officials
- Political contributions Payments, gifts, loans or services provided by MSM to any political party or committee or a candidate for, or a holder of a political office are permitted only if in compliance with applicable law, local policy, and approved in advance by the MSM Board of Management.
- Payments or loans Payments or loans of corporate, subsidiary or personal funds or transfers of anything else of value to a government official or employee for the purpose of obtaining, retaining or directing business to MSM or any of its subsidiaries or affiliates or other persons are prohibited.
Conflict of interest issues
IV Conflict of interest issues
- Relationships with suppliers, dealers, customers and other business partners
Employees must avoid personal interests or financial activities that conflict, or appear to conflict, with MSM’s interests or that influence, or appear to influence, their judgment or actions in performing their duties as employees. In particular, employees must comply with the following guidelines dealing with gifts, meals, entertainment, and other benefits from business partners.
1.1 MSM employees should never request or solicit offers for entertainment, meals, gifts or other gratuities, or personal services or favors from business partners.
1.2 Business meals as the guest of a business partner may be accepted if they are offered voluntarily, have a legitimate business purpose and are an integral part of the work agenda (e.g., lunch during a seminar or meeting, cocktail reception following meetings or dinner incorporated into a continuing work period). Employees have a responsibility to inform their supervisors on an ongoing basis about the frequency and nature of meals and entertainment paid for by business partners.
1.3 Travel and overnight accommodations paid for by business partners are not allowed. Exceptions are permitted for business travel in a business partner’s plane with the prior approval of an immediate supervisor and at least a Senior Vice President (level C or higher). If a business partner pays for accommodations or provides “in-house” accommodations, employees should determine the fair market value, make appropriate payment to the business partner, and arrange for reimbursement via their expense report.
1.4 Attendance at sports events and activities, shows or other appropriate entertainment or social activities as the guest of the same business partner is not allowed more than twice a year. A representative of the hosting company must be present.
1.5 If employees use MSM suppliers, dealers or customers to provide goods or perform services of a personal nature, fair market value must be paid for the goods or services, and the payment must be documented.
1.6 Solicitation or acceptance of personal financial assistance of any kind from a supplier, dealer or a customer is prohibited.
1.7 Sponsorship by a supplier, dealer or other customer of MSM events, of birthday, retirement or other company parties is not allowed. Similarly, neither an employee nor an employee on behalf of the company should solicit or accept supplier participation in employee or company-sponsored charitable or quasi-charitable endeavors. Such participation could introduce variables other than cost, quality and delivery into the supplier-selection process.
1.8 Employees may take advantage of discounts and other promotions offered by MSM suppliers, dealers or customers, provided such discounts are available to all MSM employees. Discounts that have been solicited or bargained for in connection with obtaining or providing goods or services on behalf of MSM or that are only offered to a limited group of employees are prohibited. 1.9 Employees and their families should never solicit gifts or accept other personal benefits from MSM suppliers, dealers or other customers. Promotional material and other items of value up to € 30/ U.S.$ 30 or less may be accepted if made voluntarily and there is no reasonable likelihood the gifts will influence an employee’s judgment or actions in performing their duties. Gifts above this value should not be accepted and the giver should be advised of the MSM policy. If employees have questions (e.g., in an international setting where rejection of the gift would be considered culturally discourteous) they should review the matter with their supervisor or any of the other contacts referred to in chapter XII.
Employees may not serve on boards of directors of companies operated for profit without MSM’s approval. Employees may not engage in recurring private business activities that interfere with their MSM duties and may not, without prior approval, work or otherwise perform services for hire for business partners or competitors. In their personal capacities, employees may participate in community, government, educational and civic organizations and may serve on the boards of directors of private clubs, educational institutions, charities and hospitals, provided that such participation or service does not interfere with their duties as MSM employees.
MSM employees and their immediate family members may not hold directly or indirectly, any undisclosed share ownership interest in business partners or other concerns having current or proposed business relationships with MSM. Excepted are ownership interests that do not influence the performance of duties of MSM employees.
Employees who participate in or serve on the boards of community, government, educational, civic or other non-profit organizations as representatives of the company must obtain the prior approval from the authority level established by the business unit.
Members of MSM management are periodically asked by outside concerns to participate in interviews, give speeches or write articles expressing the views of the company or discussing its activities. Employees should ensure that both the occasion and content of any interview, speech or article have been approved by their management, are consistent with the company’s interests and programs, and have received the concurrence of the Communications Office. Any honorariums, fees, expense reimbursements or other remuneration associated with these activities are to be paid or made payable to MSM. Any exceptions require prior approval by director level or above.
V Internal Control
- Protection of assets and information
Employees have a responsibility to protect MSM property against loss, theft, abuse and unauthorized use, access or disposal. Employees may use company assets only for purposes related to their MSM job responsibilities.
Confidential information (nonpublic information about the company or its products) is to be held in strict confidence during, as well as after, an employee's term of employment.
Employees must follow the company’s use, access and security guidelines for software and information technology, email, inter-/intra-/ extranet and voice mail systems. Moreover, personal data protection rights, where applicable, must be strictly observed.
- Internal control systems/reports/ records
MSM’s policy is to maintain effective internal control systems to ensure compliance with laws and corporate policies, protect and prevent misuse of company assets, and assure appropriate authorization for company transactions and other corporate activities. The company prepares external reports that fulfill all relevant international business and legal requirements, including financial statements that fairly present the company’s financial position. To achieve this standard, employees are expected to maintain accurate and complete internal records of all company business activities and arrange for appropriate authorization and documentation of transactions and commitments with business partners. In particular, employees are required to report business expenses in an accurate and timely manner. Company records are the sole property of MSM and should be created and maintained in a manner consistent with applicable policies.
- Investor relations and insider trading
The Company’s policy is to disclose important information about its business in accordance with German, U.S. and other applicable securities laws and stock exchange guidelines, with the objective of promoting an orderly market for its publicly traded securities. This policy depends on maintaining the confidentiality of undisclosed information about the company that might be considered material, inside information -information that could reasonably be expected to affect the price of such securities -before its public dissemination. It is a violation of applicable securities laws, and of the company’s policy, to buy or sell the company’s publicly traded securities or those of its business partners while in possession of material, inside information or to disclose such information to others.
MSM’s commitment to quality and quality improvement processes is essential to its growth and prosperity. Employees should strive to exceed customer expectations, both internal and external, and continuously improve the quality of MSM products and services.
Social responsibility principles of MSM
VII. Social responsibility principles of MSM
MSM acknowledges its social responsibility and the nine principles that form the basis of the Global Compact. In order to achieve these shared goals, MSM has agreed upon the following principles with the international employee representatives.
MSM supports the United Nations’ initiative and want to work with other companies and institutions to prevent the irreversible process of globalization from causing fear and alarm among the people all over the globe; MSM wants to show the human face of globalization, among other things by creating and preserving jobs. MSM is convinced that social responsibility is an important factor for the long-term success of the company. This also applies to the shareholders, business partners, customers and employees. Only then can MSM contribute towards world peace and prosperity in the future.
Heeding this responsibility, however, requires that MSM is competitive and remains so in the long term. Taking social responsibility is indispensable for a value-based company. The following principles, which are guided by the conventions of the International Labor Organization, have been implemented by MSM worldwide, and in establishing them, diversity in culture and social values have been duly acknowledged and heeded.
MSM respects and supports compliance with the internationally accepted human rights.
MSM condemns all forms of forced and compulsory labor.
MSM supports the elimination of exploitative child labor. Children must not be inhibited in their development. Their health and safety must not be adversely affected. Their dignity must be respected.
MSM undertakes to uphold equal opportunities with respect to employment and to refrain from discrimination against employees based on gender, race, disability, national origin, religion, age or sexual orientation unless national law expressly provides for selection according to specific criteria.
Equal pay for equal work within the scope of applicable law, MSM respects the principle of “equal pay for work of equal value”, e.g. for men and women.
Relations with employees and employee representatives
MSM acknowledges the human right to form trade unions. During organization campaigns the company and the executives will remain neutral; the trade unions and the company will comply with basic democratic principles and thus, they will ensure the employees can make a free decision. MSM respects the right to collective bargaining.
Elaboration of this human right is subject to national statutory regulations and existing agreements. Freedom of association will be granted even in those countries in which freedom of association is not protected by law.
Cooperation with employees, employees’ representatives and trade unions will be constructive. The aim of such cooperation will be to seek a fair balance between the commercial interests of the company and the interests of the employees. Even where there is disagreement, the aim will always be to work out a solution that permits constructive cooperation in the long term.
It is the aim of the company to involve and inform the individual employees as directly as possible. Conduct towards and communication with employees shall be characterized by respect.
MSM is opposed to all exploitative working conditions. Protection of health
MSM ensures health and safety at the workplace to a level no less than required by national legislation and supports the continuous improvement of working conditions.
MSM honors the right to reasonable compensation of a level no less than the legally established minimum-wage and the local job market.
Working hours MSM guarantees compliance with national provisions and agreements regarding working hours and regular, paid holidays.
MSM supports training of employees with the aim of good performance and high quality work.
MSM supports and encourages its suppliers to introduce and implement equivalent principles in their own companies. MSM expects its suppliers to incorporate these principles as a basis for relations with MSM. MSM regards the above as a favorable basis for enduring business relations.
Protection of the environment
VIII. Protection of the environment
MSM is dedicated to protecting the environment for current and future generations and to complying with all applicable environmental laws and regulations. The company expects and encourages the active support and participation of its employees in pursuing new products and manufacturing technologies that promote resource conservation, facilitate recycling, eliminate pollution, and preserve the natural environment.
- Commitment to high ethical standards
MSM is committed to achieving high ethical standards in business transactions. MSM does not tolerate unethical or corrupt practices by its employees or on the part of our business partners. MSM strictly forbids engaging in or tolerating bribery or any other form of corruption. MSM will devote appropriate resources within its business units on an ongoing basis to identifying and correcting potential weakness in its internal controls.
Relationships with competitors and business
X. Relationships with competitors and business partners
MSM is committed to complying fully with all applicable antitrust and trade laws and related laws pertaining to fair pricing, fair competition and consumer protection.
These laws regulate MSM’s relations with its competitors, suppliers and dealers, distributors and retail customers. They generally prohibit agreements and other activities that fix or coordinate prices or price formulas, divide sales territories or customers, or unreasonably restrict free and open competition. They also restrict the company’s ability to share proprietary or competitively sensitive information and to deal exclusively with suppliers or other business partners. These laws also establish requirements for consumer disclosures and the resolution of customer issues.
Antitrust and trade laws are complex and affect all aspects of MSM’s domestic and international business activities. The penalties for noncompliance can be severe. If employees have questions about how these laws relate to their job responsibilities, they should contact the Office of the General Counsel.
In collecting information about its business partners and competitors, MSM utilizes all legitimate sources, but avoids any actions that are illegal or could cause liability to the company.
Dealing with governments and customers
XI. Dealing with governments and customers – international trade laws
MSM is committed to complying fully with antibribery, export control, customs and antiboycott laws. These international trade laws affect all aspects of MSM's global enterprise and its employees.
Antibribery laws prohibit providing, directly or indirectly, anything of value not only to domestic, but also to foreign governmental, political or military officials or representatives of international organizations (such as the United Nations and the World Bank) to obtain or retain business or to gain an unfair advantage. These laws also impose record keeping and internal accounting and control requirements that, like MSM’s own accounting and internal control policies, are designed to ensure integrity and accuracy in the recording and reporting of all business transactions.
Export control and customs laws regulate where and how MSM may sell goods, technology or exchange information. In some cases, these laws may prohibit doing business with certain countries, or impose requirements for licenses before goods or technology may be exported or exchanged. Customs laws require accurate documentation and proper reporting and valuation of goods.
Antiboycott laws may prohibit participation in foreign boycotts and limit disclosure of information about business activities and personnel, and may require the reporting of certain types of requests for information or participation in boycotts.
International trade laws are complex. The penalties for noncompliance can be severe and could include personal liability and imprisonment. In addition, compliance with various MSM internal regulations and procedures on international trade, such as the MSM Control Directives, is also essential to maintaining MSM’s nationwide reputation.
If employees have questions about how these laws and directives relate to their job responsibilities, they should contact the Office of the General Counsel.
XII. Obey the Integrity Code
1. Questions about the Integrity Code Questions about the MSM Integrity Code or other business ethics situations may arise from time to time. If employees are unsure about the right thing to do, they can discuss it with their supervisor. Their question may also be answered by referring to the MSM Integrity Code intranet site or by contacting their local Human Resources representative. Alternatively, they may contact the following organizations (on a confidential basis if they prefer):
MSM Group LLC
David I. Reiner
Chief Executive Officer
Chief Operating Officer
|MSM Building, Chinggis avenue – 62|
|Industry Zone 17070, 3rd Khoroo, Khan-Uul District |
CPO Box 154, Ulaanbaatar, Mongolia
|Fax:||+976 11 342175|
|Phone:||+976 7014 8138|
Violations of the MSM Integrity Code or any other MSM policy, guideline or procedure may result in disciplinary action, up to and including discharge, and legal proceedings.
All MSM supervisors and management personnel are responsible for ensuring that all employees are familiar with the contents of the MSM Integrity Code and that they obey the rules. Failure to fulfill these responsibilities may also subject a supervisor or manager to disciplinary action and legal consequences.
The corporate audit department will examine compliance with these principles in its inspections and will include them in its audit criteria, in cooperation with the departments concerned.
MSM reserves the right to amend and interpret the terms of the MSM Integrity Code.