The Dow Chemical Company ("Dow") is a signatory to the United Nations Global Compact and is committed to promoting socially responsible conduct that aligns to the 10 universally accepted principles, including those related to human rights and labor: (4) the elimination of all forms of forced and compulsory labor and (5) the effective abolition of child labor. These principles are woven throughout The Diamond Standard — (the "Code"). All employees of Dow and its subsidiaries, including those with direct responsibility for supply chain management, are expected to know and abide by this Code. Rigorous training on the content and application of the Code is mandatory for each and every employee, and each employee must periodically acknowledge that they have read and agree to comply with the Code. Dow takes seriously and fully investigates all potential legal or Code violations, in a respectful, confidential and fair manner. When an allegation of an employee Code violation is substantiated, an appropriate management team is convened to review the investigation findings and determine a final outcome. Consistent with the severity of the violation, discipline can include verbal or written warning, suspension with or without pay, loss or reduction of bonus or stock options, demotion or, for the most serious offenses or repeated misconduct, employment termination. Dow's Code states:
Dow's commitment, however, does not end here. To this end, in March 2011 Dow unveiled its Code of Business Conduct for Suppliers (the "Supplier Code"), which clearly articulates the basic principles for supplier conduct when working with Dow. The Supplier Code was sent to over 35,000 Dow suppliers worldwide in March 2011 and posted on Dow.com. Among other things, the Supplier Code sets forth Dow's expectations with respect to Human Rights and Labor:
The Supplier Code also details Dow's expectations concerning Suppliers' systems and procedures to ensure compliance for itself and for its suppliers, and the potential consequences of non-compliance:
The majority of Dow's standard purchase orders and contract templates have been updated to include new provisions to require suppliers' compliance with the Supplier Code, with the intent that all new Dow suppliers must abide by the Supplier Code. As existing contracts come up for renewal, Dow intends to add similar provisions. In addition, as part of the next phases of Dow's roll out of the Supplier Code and as Suppliers become more familiar, Dow is currently evaluating whether to require compliance certifications, self assessments and/or compliance audits. Currently Dow does utilize a stringent internal supplier qualification process for new suppliers. No decisions have yet been made as to whether future assessments will be verified, or supplier audits conducted by independent third parties, or if audits will be unannounced.