Supplier Code of Conduct

Introduction

Corporate integrity, responsible product sourcing, and the safety and wellbeing of workers across the global supply chain are of paramount importance to The Scotts Company LLC, The Hawthorne Gardening Company and their Affiliates (the “Company”). These principles apply to all aspects of the Company’s business, and encompass all manufacturers, distributors, vendors, and other suppliers (each a “Supplier” and collectively “Suppliers”). “Affiliate” means any entity controlling, controlled by or under common control with, the Company.

These principles are reflected in this Code of Conduct (“Code of Conduct”), which establishes the minimum standards that must be met by any Supplier that sells goods to or does business with the Company, regarding:

  • Supplier’s treatment of workers;
  • workplace safety;
  • the impact of Supplier’s activities on the environment; and
  • Supplier’s ethical business practices.

Applicability

This Code of Conduct applies to all Suppliers that provide goods and services to the Company. Supplier is responsible for compliance with the standards set out in this Code of Conduct (“Standards”) throughout its operations and throughout its entire supply chain. Supplier shall adopt or establish a management system designed to comply with the Standards and facilitate continual improvement through the establishment of objectives, targets, and implementation plans which are periodically assessed to determine progress. Supplier shall identify senior executives and other representatives responsible for the implementation and regular review of the management system.

Without limiting Supplier’s obligations hereunder, Supplier shall comply with the Standards in:

  • all of its Facilities; and
  • all of its operations, including with respect to manufacturing, distribution, packaging, sales, marketing, product safety and certification, intellectual property, labor, immigration, health, worker safety, and the environment.

Without limiting Supplier’s obligations hereunder, Supplier is responsible for compliance with the Standards by all of its suppliers, vendors, agents, and subcontractors and their respective Facilities that are involved in supporting Supplier in supplying the Company (“Partner(s)”). Supplier shall ensure regulatory compliance and compliance with the Standards through a formal risk assessment and management process to identify legal, environmental, ethics, and health and safety risks and to manage each risk according to its significance, instituting appropriate controls where risks are identified.

Slavery and Human Trafficking

All labor must be voluntary. Supplier shall not support or engage in slavery or human trafficking in any part of its supply chain.

Without limiting Supplier’s obligations hereunder, Supplier shall not, and shall ensure that its Partners do not, support or engage in, or require any:

  • compelled, involuntary, or forced labor;
  • labor to be performed by children (child is defined as the greatest age between the following: 15, age for completing compulsory education, or minimum age for employment in the country);
  • bonded labor;
  • indentured labor; and
  • prison labor (unless expressly approved in writing)

Compliance and Documentation

Supplier shall:

  • implement and maintain a reliable system to verify the eligibility of all workers, including age eligibility and legal status of foreign workers; and
  • implement and maintain a reliable recordkeeping system regarding the eligibility of all workers.

Hazardous Work

Without limiting Supplier’s obligations hereunder, Supplier shall not, and shall ensure that its Partners do not, support or engage in, or require any hazardous labor to be performed by any person under the age of 18, pregnant women, or nursing mothers. Hazardous labor involves any work, that by its nature or the circumstances in which the work is undertaken, involves the substantial risk of harm to the safety or health of the worker or coworkers if adequate protections are not taken. Supplier shall include protections for all workers for physically demanding work including manual material handling, heavy or repetitive lifting, prolonged standing, and highly repetitive or forceful assembly. Supplier shall safeguard machines with physical guards, interlocks and barriers where appropriate.

Identification Papers

Without limiting Supplier’s obligations hereunder, Supplier shall not require any worker to surrender control over original:

  • identification papers or documents giving a foreign worker the right to work in the country;
  • identification papers or documents, such as a passport, giving a foreign worker the right to enter or leave the country; or
  • documents, such as a birth certificate, evidencing the worker’s age.

Financial Obligations

Without limiting Supplier’s obligations hereunder, Supplier shall not, whether or not as a condition to the right to work, require any worker (or worker’s spouse or family member) to, directly or indirectly:

  • pay recruitment or other fees or other amounts (monetary or in-kind);
  • incur debt;
  • make financial guarantees; or
  • incur any other financial obligation.

Supplier shall repay workers should it be discovered any financial obligation was discovered to be paid by workers.

Freedom of Movement

Without limiting Supplier’s obligations hereunder, Supplier shall ensure that workers have the right to freedom of movement without:

  • delay or hindrance; or
  • the threat or imposition of any discipline, penalty, retaliation, or fine or other monetary obligation.

Worker freedom of movement rights include each worker’s right to leave the Facilities without retaliation:

  • at the end of each workday;
  • based on reasonable health and safety-related justifications; and
  • based on any reasonable circumstances, such as personal or family emergencies.

Freedom to Terminate Employment

Without limiting Supplier’s obligations hereunder, Supplier shall allow workers to terminate their employment or work arrangement:

  • without restriction; and
  • without the threat or imposition of any discipline, penalty, retaliation, or fine or other monetary obligation.

Compensation and Benefits

Supplier must compensate all workers with wages, including overtime premiums, and benefits that at a minimum meet the higher of:

  • the minimum wage and benefits established by applicable law;
  • collective agreements;
  • industry standards; and
  • an amount sufficient to cover basic living requirements.

Supplier shall make wage payments according to a regular schedule and provide benefits on a timely basis.

Supplier’s obligation to compensate and provide benefits applies to all workers at all times, including during periods of training, apprenticeship, and probation.

Documentation

Supplier shall:

  • provide proof of payment to workers in the workers’ native language showing hours worked, wage amounts and rates (regular, overtime, and bonus), and deductions;
  • ensure that proof of payment is accurate, is clearly calculated, and enables workers to quickly verify the amount of payment and method of calculation; and
  • maintain proper documentation of wage payments for their internal records.

Deductions

Supplier shall not make any deductions from wages, except income tax withholding and those that are legally allowed.

Work Hours

Supplier shall comply with all federal, state and local laws related to both the maximum number of regularly paid hours worked per week (including overtime hours) and to providing workers with holidays and days off, rest periods, bathroom breaks and meal breaks. Workers should not exceed 60 hours per week, including overtime, except in emergency or unusual situations.

Documentation

Supplier shall:

  • use an industry-accepted time-keeping system to track worker work hours; and
  • develop work-hour policies to ensure compliance with this Code of Conduct and applicable law.

No Discrimination, Abuse, or Harassment

Supplier shall not discriminate in hiring, compensation, training, advancement or promotion, termination, retirement, or any other employment practice based on race, color, national origin, gender, gender identity, sexual orientation, military status, religion, age, marital or pregnancy status, disability, or any other characteristic other than the worker’s ability to perform the job. Supplier shall not subject workers or potential workers to medical tests that could be used in a discriminatory way. Supplier shall provide workers reasonable accommodation for religious practices.

Supplier shall treat workers with respect and dignity.

Supplier shall not subject, or threaten to subject, workers to corporal punishment, or physical, verbal, sexual, or psychological abuse or harassment. Supplier must not condone or tolerate such behavior by its Partners.

Anti-Bribery, Anti-Corruption and Sanctions

Supplier, Supplier’s Partners, and third parties acting on behalf of Supplier, shall not, directly or indirectly, promise, offer, authorize, give or receive gifts, gratuities or other benefits that might improperly influence or affect a business decision or the decision of a government official for purposes of gaining a competitive advantage.  Supplier, and Supplier’s Partners, will conduct its business in compliance with all applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act (“UKBA”) and local anti-bribery and anti-corruption laws.

Supplier will conduct its business in compliance with all applicable laws, treaties, rules, regulations, orders, and decrees relating to economic or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes and anti-terrorism laws imposed, administers or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of State, or any other relevant governmental authority.   Supplier, and Supplier’s Partners, will not engage in any business with sanctioned persons, entities or countries and will not do anything that could cause the Company to be in violation of any applicable Laws or that could damage the reputation of the Company.

Supplier will immediately report to the Company any information concerning a suspected violation of any applicable Law, including the sanctions Laws, the export control Laws, the FCPA, the UKBA, and local anti-bribery and anti-corruption laws.

Confidential Information and Intellectual Property

Supplier shall, and shall cause its Partners to, protect the confidential information and intellectual property of the Company. Further, Supplier shall, and shall cause its Partners to, protect the confidential information and intellectual property of others, including without limitation not wrongfully obtaining, using, disclosing, or seeking to do any of the same. Supplier shall, and shall cause its Partners to, maintain the reasonable privacy expectations of personal information of everyone Supplier and Partners conduct business with including suppliers, customers, consumers and employees, in compliance with privacy and information security laws and regulatory requirements.

Notice Prior to Changes

Supplier shall disclose to the Company the names and contact information of its Partners at least 30 days before the Company’ first purchase order. Supplier shall notify the Company of the names and contact information of any new partners within 30 days of adding, changing, or eliminating any Partners. For avoidance of doubt, Supplier’s disclosure of its Partners shall in no way limit any of Supplier’s obligations under this Code of Conduct (or any other agreement) and shall in no way limit the Company’s remedies.

Health and Safety

Supplier shall provide a safe, healthy, and sanitary working environment. Supplier shall implement procedures and safeguards to prevent workplace hazards, and work-related accidents and injuries, including procedures and safeguards to prevent industry-specific workplace hazards, and work-related accidents and injuries, that are not specifically addressed in these Standards. Supplier shall track and report incidents to investigate and provide corrective actions to eliminate the incident’s causes.

General and industry-specific procedures and safeguards include those relating to:

  • health and safety inspections;
  • equipment maintenance;
  • maintenance of Facilities;
  • worker training covering the hazards typically encountered in their scope of work in languages the worker can understand before work begins and regularly thereafter;
  • fire prevention; and
  • documentation and recordkeeping.

Supplier shall provide workers adequate and appropriate personal protective equipment free of charge to protect workers against hazards typically encountered in the scope of work should elimination of the hazard, or design, engineering, and administrative controls not prove sufficient for ensuring worker safety.

Facilities

Supplier shall:

  • ensure that all Facilities meet all applicable building codes and industry design and construction standards;
  • obtain and maintain all construction approvals required by law;
  • obtain and maintain all zoning and use permits required by law, including environmental permits;
  • without limiting Supplier’s obligations hereunder, ensure that all Facilities have:
    • an adequate evacuation plan;
    • adequate, well-lit (including emergency lighting), clearly marked, and unobstructed emergency exit routes, including exits doors, aisles, and [fire-rated enclosed] stairwells;
    • a sufficient number of emergency exit doors, which are located on all sides of each building, are unlocked (from the inside), and are readily opened [with a push bar with minimal force and] from the occupied side and swing in the direction of emergency travel;
    • visible and accurate evacuation maps posted in the local language, and including a “you are here” mark;
    • emergency drills performed annually or more frequently as required by local law
    • adequate ventilation and air circulation;
    • adequate lighting;
    • adequate first aid kits and stations;
    • adequate fire safety, prevention, alarm, and suppression systems;
    • adequate access to potable water;
    • adequate access to private toilet facilities, and
    • adequate living quarters or dormitories.
  • post safety rules, inspection results, incident reports, and permits, in each case, as required by law.

If Supplier provides dining facilities for its workers, it shall provide safe, healthy, and sanitary facilities (including food preparation and storage areas) that comply with all the Standards set out in the Health and Safety section of this Code of Conduct. Without limiting Supplier’s obligations hereunder, Supplier shall obtain and maintain all food preparation permits and health certificates required by law.

Freedom of Association and Collective Bargaining

Supplier shall respect, and shall not improperly interfere with, the right of workers to decide whether to lawfully associate with groups of their choice, including the right to form or join trade unions and to engage in collective bargaining.

Without limiting Supplier’s obligations set out above, Supplier shall not:

  • take any action to prevent or suppress the workers’ exercise of freedom of association or collective bargaining rights;
  • discriminate or retaliate against, or discipline or punish, any worker who supports or exercises freedom of association or collective bargaining rights;
  • discriminate or retaliate against, or discipline or punish, any worker who raises collective bargaining compliance issues; or
  • discriminate or retaliate against, or discipline or punish, any worker based on union membership or the worker’s decision to join or not join a union.

Environmental Protection

Operation of Supplier’s Facilities

Supplier shall operate its Facilities in compliance with all environmental laws, including laws, regulations and international treaties relating to:

  • non-hazardous waste disposal;
  • air emissions;
  • water discharges; and
  • hazardous and toxic material handling and disposal.

Supplier shall conserve natural resources and reduce or eliminate emission and discharge of pollutants at its Facilities. Supplier shall monitor and manage air emissions of volatile organic chemicals, aerosols, corrosives, particulates, ozone depleting substances, and combustion byproducts generated from operations appropriately prior to discharge. Supplier shall monitor and manage wastewater appropriately prior to discharge or disposal.

Supplier shall establish a company-wide greenhouse gas reduction goal. Supplier must look for methods to improve energy efficiency and minimize energy consumption and greenhouse gas emissions. Supplier must track and publicly report on energy consumption and relevant Scopes 1 and 2 greenhouse gas emissions in comparison to the established greenhouse gas reduction goal.

Inputs and Components

Supplier must ensure that the goods that it manufactures (including the inputs and components that it incorporates into its goods) comply with all environmental laws, regulations, treaties, and customer requirements. Supplier must ensure that it will only use packaging materials that comply with all environmental laws, regulations, and treaties.  Supplier will endeavor not to use Conflict Minerals in the materials that it supplies to the Company and, if it does use them, must report this fact accurately to the Company in accordance with the Organisation for Economic Co-operation and Development (OECD) Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas or an equivalent and recognized due diligence framework. Conflict Minerals are tantalum, tin, tungsten and gold (or “3TG”), or their derivatives, sourced from the Democratic Republic of the Congo or its adjoining countries (collectively, the “DRC”).

Gifts and Entertainment

Supplier must maintain the highest ethical standards.  Except in situations preapproved by the Company’s Chief Ethics Officer, Supplier must not offer cash, favors, gifts, or entertainment to the Company’s team members that are valued at more than $100.  Supplier shall also comply with the Company’s Foreign Corrupt Practices Act (FCPA) policy.

Report Violations

Supplier shall self-report any violations of the Code of Conduct. Supplier can also submit questions and comments regarding the Code of Conduct, to the Company’s liaison set out below:

Responsible Sourcing Coordinator
14111 Scottslawn Road, Marysville, Ohio 43040
responsible-sourcing@scotts.com

Supplier must maintain accurate and transparent books and records of all business dealings including labor, health and safety, environmental practices, business activities, structure, financial situation, and performance in accordance with applicable regulations and industry standard practices.

Supplier shall not retaliate or take disciplinary action against any worker who has, in good faith, reported violations or questionable behavior, or who has sought advice regarding this Code of Conduct. Workers reporting violations or questionable behavior in good faith must have their confidentiality and anonymity maintained, unless prohibited by law.

Compliance with Laws

Supplier shall comply with all applicable national and local Laws, including laws and regulations relating to all the Standards, including without limitation all applicable securities Laws. Supplier will, and will cause its employees, contractors, agents, and representatives to comply with the United States securities laws with respect to information regarding or relating to the Company.

Where the Standards as set forth in this Code of Conduct requires Supplier to meet a higher standard than set out by law or regulation, Supplier shall meet such higher Standard. Supplier acknowledges that Scotts may use these Standards to audit the Supplier and help determine whether Supplier is meeting the requirements set out in this Code of Conduct. Supplier acknowledges that the Company may in its discretion conduct inspections of the Facilities, either on its own or through a third party auditor, to confirm Supplier’s compliance with this Code of Conduct. The Company has no obligation to conduct inspections. The failure of the Company to enforce any of these Standards does not constitute a waiver of that Standard. Should internal or external inspections, audits, or other forms of assessment uncover deficiencies, Supplier shall respond and correct the deficiencies as rapidly as possible in accordance with internal processes and in conformance with any corrective action plan agreed to by the Parties.  If Supplier does not correct deficiencies in accordance with the corrective action plan and/or is unwilling to establish a corrective action plan, the Company may take any action available to it pursuant to applicable laws, including Termination.

Poster Display Requirements

Corporate social and environmental policy statements from Supplier’s own executive management demonstrating commitment to compliance and continual improvement must be posted in a common area of its facilities where goods destined for the Company are manufactured, distributed, packaged or otherwise handled. Posting of policies shall serve as a supplement to, and not a replacement for, training of workers on all applicable policies, procedures, objectives and legal and regulatory requirements. Supplier must additionally ensure clear communication of policies, practices, and expectations to suppliers and customers.

Supplier shall bear the entire cost of preparing, translating, and displaying the posters.

Stricter Language Controls

In the event of any conflict between this Code of Conduct and stricter requirements on Supplier in any agreement between Supplier and the Company, the provisions of this such other agreement shall prevail. It is the intent of this Code of Conduct to establish minimum standards of acceptable conduct for Suppliers.

Termination

The Company may terminate its business relationship in accordance with the terms of such relationship (including any purchase order(s) and purchase contracts) with Supplier if Supplier or its Partners fail to meet the Standards.