siemens.com/answers© Siemens AG 2013 Alle Rechte vorbehalten. The Ruggie Framework – Questions on Implementation –

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 2CHR GP LL LS What is needed to integrate human rights within a multinational company  Assume responsibility for overseeing human rights matters with the support of dedicated resources (both from other governance owning departments and the operating business units)  Own mandate for putting in place measures that enable it to anticipate, to be aware of, understand the impact of, and be prepared to respond to human rights challenges effectively  Keep a watching brief over progress on implementing human rights issues within the targeted (business) processes  The human rights coordinating unit should be technically qualified and trained on human rights  Establish a systematic early human rights risks and impacts screening and assessment process  Assign clear responsibilities and accountabilities for the identification, mitigation, monitoring and reporting phases  Assign clear responsibility for external communication on human rights topics (incl. content compilation  Develop feedback loop from the business activities to the company head office to ensure lessons learned are being shared and identified areas for improvement are being tackled  Develop incentives to report on (potential) human right issues Human rights issues are diverse and cross-cuttin Competence profile of a Human Rights „coordination“ function Expedient measures for integrating human rights within a company

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 3CHR GP LL LS Current Situation  The „Ruggie framework on corporate responsibility to respect human rights“ has defined recommendation for the ground rules companies should adhere to  Companies are asked at an increasingly higher frequency to comment on internal human rights practices  Regulation around human rights might occur over the next 5-10 years  As a member of the United Nations Global Compact, Siemens regards its 10 principles as binding 1  Siemens is „committed to supporting and enacting, within its sphere of influence, the set of core values in the areas of human rights, labor standards, and environment“ (Source: BCG)  IFA (International Framework Agreement) was signed in The UN Global Compact’s Ten Principles: 2 related to human rights, 4 to labor, 3 to environment, 1 to anti-corruption (Source:

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 4CHR GP LL LS Organisational issues  Siemens has a governance owner for relevant human rights topics.  Responsibility for protecting human rights also resides with the country CEO. They are supported by the governance owners from the headquarter.  Protection of topics such as illicit payments, conflict affected regions, indigenous people and forced community relocation has to be ensured by the country CEO or the BU CEO.  Infrastructure projects possess a certain immanent risk that human rights – especially those related to local communities – may be affected.

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 5CHR GP LL LS Additional implementation of concrete actions 1. Release a positioning paper and actively communicate to employees, business partners (and potentially affected stakeholders). Include info on how company assesses and manages its potential & actual human rights impacts. Description of actions 2. Create awareness push by providing specific training modules. 3. Provide enablement of a preventive human rights approach by integrating methods for assessing human rights impacts. Assess human rights risks periodically through the lifecycle of a project or a business relationship and report regularly on it. 4. Formalize crisis response process and re-define roles & responsibilities

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 6CHR GP LL LS Implementation of coordination team (governance owner / cross-functional team) External communication towards Investors External communication towards NGO’s 1 Assessment of human rights violation allegations External communication (e.g. speakers on panels External communication towards SAM, DJSI Assessment of human rights risks 2 Requires internal coordination 1 The respond to human rights questionnaires sent by NGO’s, to comment on alleged human rights violations

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 7CHR GP LL LS BACK-UP

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 8CHR GP LL LS What companies should ideally do to fulfill the expectations as stated in the „Ruggie framework“? Policy  Human rights statement policy available in all major languages  Policy developed in cooperation with major external stakeholders (e.g. NGOs)  Stated commitment to work with other actors (e.g. governments and communities)  Policy includes information on how company intends to work with business partners and communities to understand and manage its human rights impacts Source: UN: Guiding Principles on Business and Human Rights (2011), Key corporate principles based on “Ruggie” Comment on what this should ideally entail to reach highest fulfillment grade Impact Assessment  Company has a defined process of identifying and managing potential and actual human rights impacts across its operations and relationships  Potentially affected stakeholders are involved in reviewing the results  Methods for assessing human rights impacts are integrated into all regular assessment activities of the company  Methodologies and procedures for assessing human rights impacts are communicated to stakeholders potentially affected by business activity  Specific actions to avoid/mitigate impacts are incorporated into project plans  Findings are used for root causes analyses purposes Part I of III

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 9CHR GP LL LS What companies should ideally do to fulfill the expectations as stated in the „Ruggie framework“? Communications  Human rights elements are systematically integrated into internal and external communication activities  Communication includes how company grappled with systemic human rights issues and their role and cooperation activities in addressing these  Human rights KPI’s included in balanced business scorecards and other performance management systems  Collated results form assessment program are used to inform public dialogue on sustainable development (shared incident reviews with NGOs)  Groups potentially affected by corporate impacts are invited to contribute to communication activities of the company Source: UN: Guiding Principles on Business and Human Rights (2011), Key corporate principles based on “Ruggie” Comment on what this should ideally entail to reach highest fulfillment grade Dilemma Management  Grievance mechanisms are used strategically to collect data, analyze patterns in complaints, identify gaps in the management systems and adapt corporate practices accordingly  Company has projects in place to train and empower potentially affected stakeholders to use grievance mechanisms and become better negotiators / advocates of their own rights Part II of III

November 2013 Intern © Siemens AG 2013 Alle Rechte vorbehalten. Seite 10CHR GP LL LS What companies should ideally do to fulfill the expectations as stated in the „Ruggie framework“? International set-up  Strategic responsibility for human rights rests with one or more board members or senior managers who report directly to the CEO  Human rights issues are being discussed at board level on a regular basis and raised with host and home government where appropriate  Responsibility for identifying and managing human rights impact is clearly identified throughout the business and performance targets set for staff of all relevant functions  Corporate procurement practices are designed in a way to encourage good human rights performance at suppliers and discourage violating behavior  Training on human rights due diligence is provided to all employees globally  Training also reaches out to stakeholders external to the company like potentially affected stakeholders, business partners and government representatives  Human rights performance is incorporated in hiring, promotion, compensation and incentive systems.  There is budget in place to support the integration of human rights due dilligence throughout the business and to work in collaboration with other actors to resolve persistent human rights problems.  Company establishes on-going dialogue with home and host governments  Products and services are routinely assessed for human rights impacts Source: UN: Guiding Principles on Business and Human Rights (2011), Key corporate principles based on “Ruggie” Comment on what this should ideally entail to reach highest fulfillment grade Part III of II