Compliance

Compliance program and code of conduct

• Commitment to laws, labor standards, and business ethics
• Regular compliance training for employees

BASF’s Compliance Program is based on our corporate values and voluntary commitments, as well as international standards. It describes our commitment to responsible conduct and our expectations of how all BASF employees will interact with business partners, officials, co-workers, and the community. At the core of our Compliance Program is the global, standardized Code of Conduct. All employees and managers are obligated to adhere to its guidelines, which cover topics ranging from corruption and antitrust laws to human rights, labor and social standards, conflicts of interest and trade control, and data privacy protection.

Abiding by compliance standards is the foundation of responsible leadership. This has also been embedded in our values. We are convinced that adhering to these standards will be critical in ensuring our company’s long-term success. Our efforts are principally aimed at preventing violations from the outset.

One key element in the prevention of compliance violations is compulsory training and workshops held offline like in classrooms or online courses. All employees in Greater China are required, within a prescribed time frame, to take part in basic compliance training, refresher courses and special tutorials dealing with, for example, antitrust legislation, taxes or trade control regulations. In 2022, more than 2,300 participants in Greater China received approximately 20 sessions of compliance training.

Compliance culture at BASF Greater China

We firmly believe that for corporate responsibility to be successful, there must be an active culture within the company that lives by these guidelines. We expect all employees to act in line with the principles as embedded in our Global Code of Conduct. Managers play an important role here – they serve as examples of and communicate our values and culture both internally and externally.

Monitoring adherence to our compliance principles

At the global level, BASF’s Chief Compliance Officer (CCO) reports directly to the Chairman of the Board of Executive Directors and oversees the further development of our global compliance organization and our Compliance Management System. The CCO is supported in this task by the Corporate Compliance unit and more than 100 compliance of ficers worldwide in the divisions, regions, and countries, including Greater China.

We encourage our employees to actively seek guidance if in doubt by consulting their managers, specialist departments, such as the legal depar tment, and company compliance officers. In addition, we have set up more than 50 external hotlines worldwide that our employees can use - including anonymously – to report potential violations of laws or company guidelines. All hotlines and the website can be accessed by the public. Each concern is documented according to specific criteria, properly investigated in line with standard internal procedures and answered as quickly as possible. The outcome of the investigation, as well as any measures taken, is ocumented accordingly, and included in internal reports.

In 2022, our compliance team in Asia Pacific has completed a number of tasks, including: (i) providing practical guidance to business units and senior management with respect to the latest developments in anti-trust laws, (ii) monitoring the development of the United States sanctions / China countersanctions measures, and (iii) complying with the new data protection and cybersecurity laws.

In 2022, our external hotlines and other channels in Greater China received calls and emails. The information received related to all categories of our Code of Conduct. We carefully investigated all cases of suspected misconduct that came to our attention and, when necessary, took countermeasures on a case-by-case basis. These included, for example, improved control mechanisms, additional information and training measures, clarification, and expansion of the relevant internal regulations, as well as disciplinary measures as appropriate.

In 2022, our compliance team in China proactively adjusted our risk management system to respond to the continuous developments and complexities of the China’s Corporate Social Credit System (CSCS). To best safeguard BASF’s compliance performance and rating level under CSCS, the company has established an internal risk assessment mechanism and a monthly monitoring process, and offered timely regulatory updates, numerous compliance trainings, and one-on-one systematic dialogues with the relevant key stakeholders.