California Transparency in Supply Chain

California Transparency in Supply Chains Act of 2010 Disclosure

Michelin is committed to respecting human rights in its business operations, which includes all its own employees and those employed through its supply chain in all countries where Michelin and its affiliates do business.

This commitment is embodied in the Michelin Performance and Responsibility Charter (PRM Charter) that clearly defines the core values that each employee is expected to reflect on a daily basis on behalf of the company:

➥ Respect for the Customer
➥ Respect for People
➥ Respect for Shareholders
➥ Respect for the Environment
➥ Respect for the Facts

Specifically, the language in the Michelin Code of Ethics, which is rooted in the PRM Charter, states without equivocation: “We are fundamentally opposed to child and forced labor, in full compliance with the principles of the International Labor Organization. We are aware of the responsibilities arising from our commercial and industrial presence in numerous countries. Wherever we are located, we are determined to act as a responsible and honest Company, respectful of mankind and the law.”

Moreover, as mandated in the Michelin Code of Ethics, employees are incumbent to abide by the following: “By adhering in 2010 to the Global Compact, Michelin undertook to fully respect the Human Rights in all its activities and in all countries where the Group operates, and to ensure the promotion of the said Global Compact.

Furthermore, Michelin undertakes to respect the following international regulations: the Universal Declaration of Human Rights; fundamental rules of International Labor Organization (ILO); and Organization for Economic Co-operation and Development (OECD) guidelines concerning human rights, environment protection and the fight against corruption.

Michelin undertakes to ensure labor conditions and relationships respecting human dignity, and to ensure that these labor conditions are safe and in compliance with ILO norms and local laws and regulations.
Michelin suppliers and subcontractors enter into an agreement to comply with these Michelin Purchasing Principles as outlined clearly in the company’s standard contract documents and purchase order terms. These terms specially dictate that a supplier and/or contractor shall not "engage in or condone the unlawful employment or exploitation of children in the workplace, as defined below, and does not engage in or condone the use of forced labor, defined as any work or service extracted from any person under the menace of any penalty and for which said person has not offered himself voluntarily."

The bottom line is that Michelin always seeks to select suppliers who support our values, and the company expects them to comply with all applicable laws and regulations. As an example of Michelin’s commitment to this, in 2012, Michelin engaged a third party to evaluate the corporate social responsibility of its raw material and other key suppliers. The broad-ranging topics covered in this evaluation include critical supplier policies on labor and human rights issues such as child and forced labor. This program is ongoing. Currently, unannounced audits are not part of this process.

Michelin does not currently verify its product supply chain to specifically evaluate risks of human trafficking and slavery or require our direct suppliers to formally certify that materials incorporated into products comply with such laws.

While Michelin’s Purchasing Principles and Code of Ethics are clear on this issue, the company does not maintain internal accountability standards and procedures for employees and contractors failing to meet Michelin standards regarding slavery and human trafficking. As clearly outlined previously, Michelin expects its suppliers to comply with the Michelin Purchasing Principles and will terminate relationships for non-compliance. Similarly, employees who fail to comply with the Code of Ethics could be subject to disciplinary action. And while employees are required to acknowledge their commitment to comply with the Michelin Ethics Policy, their training does not include specific training on the company’s policy regarding forced and child labor.

This disclosure applies to all consolidated Michelin affiliates that are California taxpayers subject to the California Transparency in Supply Chains Act.