Phase 3 fosters and promotes fair and ethical business practices while acting in the best interest of the company. This includes adhering to a strict code of ethics. Phase 3 Suppliers must adhere to the provisions of this Supplier Code of Conduct, and all applicable laws and regulations in the places in which they do business. Phase 3 will do business only with those Suppliers who share in its commitment to ethical conduct.

Phase 3 values and commits to:

• offering safe, quality, and compliant products,

• conducting business in an ethical manner,

• protecting the environment and natural resources,

• respecting all people within our supply chain.

These principles are at the core of our business operations and our supplier outreach and onboarding process. We expect all Phase 3 Suppliers to be transparent in their efforts to uphold these commitments.

This Supplier Code of Conduct sets forth the business principles and ethical and legal guidelines with which Phase 3 requires its Suppliers (as described below) to comply. The Code includes, among other principles, expectations that Suppliers operate with ethics and integrity, safeguard Phase 3’s reputation and assets, and respect and protect employees. A “Supplier” means any third party, whether an entity or an individual, that provides a service or product to Phase 3. For clarity, Suppliers include, without limitation, Suppliers, consultants, agents, contractors, temporary workers, other third parties working on behalf of Phase 3 (including any affiliates thereof), as well as owners, officers, directors, employees, consultants, affiliates, contractors, and subcontractors of the foregoing third parties.

Suppliers may use subcontractors to manage or perform services for Phase 3; however, Suppliers must ensure that any subcontractors have agreed to comply with this Code and be responsible for any breach by its subcontractors.

All Suppliers are required to provide transparency into their operations, policies, processes, and relevant records. This includes granting Phase 3 access to relevant records and documentation for review. For specified orders, factories must be willing to work with Phase 3 to disclose the identity, physical location, and ownership of all pertinent manufacturing locations, including sub-contractors. Phase 3 shall have the right notwithstanding any remediation plan, to terminate its relationship with any Supplier determined by Phase 3 to be in violation of this Code.

Phase 3 expects Suppliers to demonstrate a commitment to continuous improvement in the areas of social and environmental accountability, product quality and safety, security of goods, data security and privacy, and compliance with applicable regulatory laws.

 

Supplier Requirements

Fair Competition

Phase 3 requires Suppliers to comply with applicable antitrust laws and fair-dealing laws created to ensure a free and open marketplace. A Supplier must not propose, or enter into, any agreements with a competitor in order to influence clients, territories or markets, or to boycott a competitor or client.

 

Anti-Bribery and Anti-Corruption

Suppliers are required to strictly comply with the anti-bribery laws of the United States and of the foreign countries where Phase 3 does business including compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act, and all other global and local anti-bribery and anti-corruption laws, our bribery policy prohibits giving, promising, or offering anything of value in any form or any amount.

Suppliers will never, directly or indirectly, offer, authorize, give, or promise any form of bribe or kickback to any person in connection with Phase 3’s business. A “bribe” is any money, favor, or anything of value used to influence or ensure a particular result or action. A bribe does not have to be cash; it could also be paying an inflated price to purchase products or services, or it could be providing lavish entertainment. Any hospitality must be lawful and reasonable in value and frequency and must always have a valid business purpose. A “kickback” is the return of money already paid or due to be paid as part of a contract as a reward for making business arrangements.

Suppliers should never make a payment to a government official to facilitate or speed up any action, such as processing paperwork or issuing visas. Payments like these are called “facilitation payments” and are prohibited under Phase 3’s policies. Suppliers, and those acting on a Supplier’s behalf, should refrain from receiving gifts in circumstances that may give rise to an actual or apparent conflict of interest. All Suppliers with whom Phase 3 conducts business are required to maintain accurate records of all transactions conducted on our behalf.

 

International Business and Trade

Phase 3 is a global company and follows all international trade laws and regulations. Phase 3 expects Suppliers involved in the movement of services or technology across international borders to be aware of and comply with all applicable trade laws, regulations, and restrictions – following the most stringent provision whenever there is a conflict.

 

Conflicts of Interest

Conflicts of interest affect objectivity and impair proper decision-making. The existence of potential and actual conflicts may also undermine credibility and good judgment. Our company policy forbids employees from engaging in any other business which competes with Phase 3. Company policy also forbids an employee from holding a financial or ownership interest in an entity that does business with or is a competitor of Phase 3 (except where such ownership consists of securities of a corporation regularly traded on the public stock market).

Suppliers must avoid any situation or relationship that creates – or appears to create – a potential conflict between Supplier’s own interests and the interests of Phase 3. Such conflicts could arise from outside employment, personal relationships, financial interests and investments, board memberships, business ventures, or inappropriate offers of gifts or entertainment. In order to identify and manage such conflicts, Suppliers must disclose all actual or potential conflicts of interest with Phase 3 due to either:

• Personal or business relationships with Phase 3 clients, Suppliers, business associates, and employees with whom they work and/or support.

• Outside activities related to Supplier’s services provided to/for Phase 3.

If Supplier becomes aware of a potential conflict of interest, Supplier must disclose such conflict to Phase 3 immediately.

 

Labor and Human Rights

Worker Treatment Rights

Suppliers must comply with all applicable labor laws and must only employ workers who meet legal requirements related to age and have the legal right to work in such location and industry. Phase 3 has a Zero Tolerance Policy for the use of child or forced labor or human trafficking practices. Further, Suppliers must comply with all applicable wage and hour labor laws and regulations covering employee compensation, reimbursements, taxes, and working hours. Our standards are the cornerstones of our compliance program.

We will achieve these standards in all areas of our business, and we require that all suppliers, agents and factories seeking to become approved by Phase 3 demonstrate in writing and practice a shared, relentless commitment to these standards.

 

Child Labor

Suppliers must observe all legal requirements and local laws regarding the work of authorized minors, including, but not limited to, those pertaining to hours of work, wages, age, minimum education and working conditions.

 

No Forced Labor

Suppliers may not, under any circumstances, utilize slave labor, exploited bonded labor, indentured labor or involuntary convict labor.

 

Health and Safety Conditions

Suppliers must comply with all applicable safety and health laws and regulations in the jurisdictions where Supplier operates. Supplier should employ its own safety and health systems and practices to reduce injuries, including the use of safe equipment and the implementation of job-relevant safety training. If potential emergency situations arise, be sure to identify, assess, and address them through emergency plans and response procedures as needed. Proper sanitation, lighting, ventilation, and fire safety protection will be provided.

 

Discipline and Termination

Suppliers must treat all workers with respect and dignity. No worker shall be subject to corporal punishment, physical, sexual, psychological, or verbal harassment or abuse. In addition, Suppliers will not use monetary fines as a disciplinary practice. Applicable laws regarding employee termination will be followed.

 

Employment Policy

Applicable employment laws will be followed, available, communicated and posted in a formal fashion to employees. In the absence of law in a particular location relating to safety, labor, employment, and environment or working conditions, the spirit and intent of these policies shall be met.

 

Grievance Procedures

Fair and reasonable grievance procedures will be established and followed without consequence to involved workers. Procedures will be documented and properly explained to employees upon being hired.

 

Workers Hours and Compensation

Regular and Overtime Wages

Regular and overtime wages will meet local minimum wage requirements and be paid on a regular and scheduled basis. Exceptions to overtime and similar wage laws permitted by local authorities shall be clearly documented and communicated to employees. No disciplinary deductions shall be permitted.

Hours and Wages

Suppliers with whom we do business must comply with all applicable labor laws, rules and regulations including those covering the withholding of payment, excessive working hours, and underpayment of wages.

 

Benefits

At a minimum, benefits will be provided per local law without disproportionate payroll deductions.

 

Payroll Practices

Payroll practices will include worker access to their complete personal earnings records, kept according to generally accepted accounting principles. The practice of “double books” is not acceptable.

 

Working Hours

Workers must not work more hours in one week than allowable under applicable laws.

 

Worker Health Safety

Suppliers must provide a safe and healthy work environment consistent with international standards and local law. OSHA or local law is followed in environmental policy, procedures, and protocols.

 

Manufacturing Processess

All applicable environmental laws and regulations will be followed. The environmental footprint, (i.e., energy, water, and waste systems) related to manufacturing activities will be considered and managed to minimize the adverse impact on the environment.

 

Materials Handling

A documented protocol and process for the handling and control of hazardous substances is in place. First aid procedures and handling instructions will be visibly placed near storage or use of hazardous substances.

 

Reporting Mechanisms and Concerns

If a Supplier becomes aware of a potential or actual violation of this Code or any law or policy that may apply to Supplier’s work with or for Phase 3, the Supplier must report potential or actual misconduct.

A Supplier may report via email anonymously to supplier.relations@phase3mc.com, provided that the Supplier provides an adequate amount of specific information to enable a complete investigation of the reported concern. When a Supplier makes a report, it is forwarded to Phase 3 Executives for investigation.

Phase 3 reserves the right to amend the Code from time to time, and Supplier shall at all times comply with the Code, as amended, upon mutual agreement. It is the responsibility of each Supplier to (a) know the requirements of the Code and all applicable laws and regulations in the jurisdictions in which Supplier operates and (b) operate at all times in accordance with the Code and all applicable laws and regulations. If compliance with any provision of the Code would cause a violation of law or regulation, Supplier must abide by the law. If there is ever a discrepancy between Supplier agreements and this Code, always follow the stricter standard. If the Supplier has any questions about the Code, please email supplier.relations@phase3mc.com.