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Supplier Code of Conduct


Effective Date: September 25, 2023

Purpose

Corporate integrity, responsible product sourcing, and the safety and well-being of workers across the global supply chain are of paramount importance to BRC, Inc. and its subsidiaries (collectively, 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”) that supply the products that are incorporated into the Company’s products.

These principles are reflected in this Supplier Code of Conduct (“Code”), 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;
  • Impact of Supplier's activities on the environment; and
  • Supplier's ethical business practices.

Suppliers may also be required to comply with additional, separate policies developed to address specific product or commodity risk as applicable.

Poster Display Requirements

It is important that Supplier’s workers understand Supplier’s obligations under this Code. Therefore, Supplier agrees to use reasonable efforts to either (i) display a poster (“Poster”) containing substantially similar terms and conditions of this Code in a conspicuous and accessible communal area of each of its facilities where goods destined for Company are manufactured, distributed, packaged, or otherwise handled (“Facility(ies)”), or (ii) provide regular training on the Code to its employees. Supplier shall bear the entire cost of preparing, translating, and displaying any Posters or training provided to its employees.

Scope

Supplier is responsible for compliance with the standards set forth in this Code (“Standards”) throughout its operations and throughout its entire supply chain. This Code is applicable to all workers and employees of Supplier, including permanent, temporary, contractor, and migrant. This includes all workers providing work at the Facilities, such as under an employment agency or service provider. The Code also applies to subcontractors and third-party labor agencies. We expect Suppliers to support our commitment to full compliance with this Code through a similar policy and continual audit over their own supply chains.

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

  • all its Facilities; and
  • all 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 its suppliers, vendors, agents, and subcontractors and their respective Facilities (“Partner(s)”).

Suppliers must maintain the necessary documentation to demonstrate their compliance with this Code. The Company and/or its designated agents maintain the right to take certain actions, such as inspection of production facilities or review of the applicable documentation, to ensure the Supplier’s compliance with this Code.

Supplier shall promptly report to [email protected] any actual or potential legal or policy violations and acknowledges that a breach of compliance obligations constitutes a material breach of this Code with Company. 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.

Business Ethics

Compliance with Law. Suppliers must comply with all laws, ordinances, rules, regulations, and orders of public authorities pertaining to the maintenance and operation of the business that supplies products or services to the Company. Suppliers must also comply with all other applicable international laws and regulations, including those relating to international trade, sanctions, export controls, antitrust/competition, and data protection. Where there is disparity between law and the Standards set in this Code, Supplier is expected to comply with that which provides greater protection. The Company recognizes that local and cultural constraints might apply to the implementation of this Code.

Bribery/Corruption. All forms of bribery, kickbacks, corruption, extortion, embezzlement, and unethical practices are prohibited. Supplier must have a zero-tolerance policy and prohibit any such behavior. Supplier must not take any action that would violate or cause the Company to violate any applicable anti-bribery law or regulation, including, but not limited to, the U.S. Foreign Corrupt Practices Act. Supplier shall comply with all Anti-Bribery and Corruption policies issued by the Company from time to time and shall provide commercially reasonable training to its personnel on such topics.

Gifts/Hospitality. Any business entertainment or hospitality with the Company staff, employees, auditors, or other third parties must be reasonable and customary under the circumstances of the relationship and not intended to influence in any way the Company’s business decisions. Supplier must maintain the highest ethical standards. Supplier must not offer cash, favors, gifts, or entertainment to Company’s team members. Supplier shall also comply with Company's Foreign Corrupt Practices Act (FCPA) policy.

Anti-Money Laundering and Anti-Terrorism. The Company is committed to complying fully with all applicable anti-money laundering and anti-terrorism laws. The Company and affiliates will conduct business only with reputable suppliers involved in legitimate business activities, with funds derived from legitimate sources. Supplier must comply with all applicable anti-money laundering and anti-terrorism laws and regulations, regardless of local practices or customs. Supplier shall implement and maintain effective internal controls to minimize the risk of breaching such laws. Supplier is strictly prohibited, whether knowingly or unknowingly, from engaging or attempting to engage in any transaction involving proceeds derived from an unlawful activity or financing of terrorist acts and terrorist organizations.

Sanctions & Export. Supplier will comply with all applicable sanction laws, export controls regulations and requirements. Supplier warrants that Supplier is not directly or indirectly owned by, controlled by, owning, controlling, or named as a restricted party according to applicable laws. Supplier will not use any funds received from the Company for the benefit of any restricted party or individuals or entities from sanctioned countries.

Conflicts of Interest. Supplier, and anyone acting on behalf of the Company, shall avoid any relationship or activity that might impair, or appear to impair, the ability to render objective and appropriate business decisions in the performance of work for the Company. All conflicts of interest in business dealings with the Company, which Supplier is aware of or should be aware of, must be disclosed to the Company. Such conflicts of interests include, but are not limited to, any ownership or beneficial interest in the Supplier by a Company employee or someone who has a close personal relationship with a Company employee.

Subcontracting. The Company does not allow subcontracting or assigning any agreement with the Company without the Company’s prior written consent.

Intellectual Property. Supplier will not disclose, publish, or divulge any Company information that is not in the public domain. The Company’s intellectual property and confidential information must be safeguarded and not disclosed to any third-party unless prior written consent by the Company and in a way that protects the Company’s intellectual property rights. Supplier will not use any Company trademarks, trade dress, trade names, or design marks without prior written consent.

Traceability, Materials and Factual Disclosures. Supplier shall be able to disclose the country of origin for the primary materials for all deliveries made. The Company reserves the right to ask Supplier for a full supply chain map to facilitate risk assessment and gauge compliance in the upstream supply chain, including disclosure of all known locations used to produce products or services for the Company. At the Company’s request, Supplier is expected to provide the Company reports on the occurrence of substances in any materials supplied to the Company that may be restricted by, or require disclosure to, governmental bodies, customers, and/or recyclers.

No Insider Dealing. Supplier, Supplier’s employees, and employee’s families shall not buy or sell the securities of the Company based on material nonpublic information whether obtained through the business relationship or otherwise. Supplier shall not disclose, publish, or divulge any material nonpublic information of the Company.

Labor and Human Rights

Freely Chosen Employment. All work must be voluntary, and workers shall be free to resign “at will.” All forms of involuntary labor are prohibited including, but not limited to, forced, coerced, bonded (including debt bondage), involuntary, or exploitative prison, slavery, trafficked, or indentured service. Supplier shall ensure there is no involuntary labor in any part of the supply chain.

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.

Child Labor. Child labor is strictly prohibited. The term “child” means any person under the age of fifteen (15), or under the minimum age for employment in the applicable country. Workers under the age of eighteen (18) may only work during times that do not interfere with their mandatory schooling or jeopardize their physical or mental well-being. They must not work at night in adherence with International Labour Organization conventions on Night Work (C090 and C079).

Freedom of Association and Collective Bargaining. Supplier shall respect, and shall not interfere with, the right of workers to decide whether to lawfully associate with groups of their choice, including the right to join or form trade unions or other comparable organizations of their choosing, to collectively bargain with their employer, and any other means of independent and free association and bargaining, and must provide any workers’ representatives with access to carry out their representative functions, as applicable laws require in their jurisdiction.

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.

Wages and Benefits. Supplier shall ensure that workers receive wages and benefits that meet, at a minimum, national legal standards. Wages shall be paid directly in full, on a regular schedule and employees must receive an understandable pay slip that shows how wages are calculated. No deductions beyond ordinary and required taxation will be made unless explicitly agreed to by the worker in writing and in compliance with applicable laws. Supplier's obligation to compensate and provide benefits always applies to eligible workers, including during periods of training, apprenticeship, and probation. Supplier shall maintain proper documentation of wage payments for its internal records.

Working Hours:

  • Regular Work Hours. Supplier shall not require or allow workers to work more than the lesser of forty (40) regularly paid hours per week or the maximum legally permitted number of regularly paid hours worked per week.
  • Overtime Work Hours. Additional overtime hours must not exceed the maximum legally permitted number of overtime hours worked per week.
  • Rest and Lunch Breaks. Supplier shall allow workers to take reasonable rest breaks, including bathroom breaks, and daily lunch breaks in accordance with applicable laws.
  • Documentation. Supplier shall use an industry-accepted time-keeping system to track worker hours and develop work-hour policies to ensure compliance with this Code and applicable law.

Humane Treatment. Supplier shall ensure that all workers are treated with respect and dignity. Supplier shall not tolerate harassment including, but not limited to, sexual harassment, sexual abuse, punishment, mental or physical coercion, or verbal abuse. Supplier shall not threaten any such treatment. Supplier shall not 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.

No Discrimination. Supplier shall maintain a workforce and work environment free from discrimination based on race, color, nationality, religion, age, disability, gender, marital status, sexual orientation, gender identity, social origin, social status, Indigenous status, military status, political affiliation, pregnancy, disability, or other status of an individual unrelated to their ability to perform the job. All employment practices including, but not limited to, hiring, termination, compensation, promotion, training, retirement, and discipline must be based exclusively on ability and willingness to do the job.

Slavery and Human Trafficking. Supplier shall abide by all applicable national and international laws prohibiting slavery and human trafficking, including, but not limited to, arranging, or facilitating the travel of another person with a view to that person being exploited.

Freedom of Movement. Without limiting Supplier's obligations hereunder, Supplier shall ensure that workers have the right to freedom of movement without delay, hindrance, or any threat of, 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.

Health and Safety

Working Conditions. Supplier shall provide a safe, sanitary, and healthy working environment, including clean restrooms, appropriate fire exits, essential safety equipment, access to emergency medical care, and well-lit workstations as appropriate for the industry, geography, and workforce. Supplier shall respect workers’ right to refuse unsafe work and report unhealthy working conditions. Supplier shall provide personal protective equipment to workers, as appropriate or required. Supplier shall conduct health and safety risk training programs. 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. 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, fire prevention, and documentation and recordkeeping.

Basic Services. Supplier shall ensure that workers have access to potable drinking water and clean restrooms, sanitary food preparation, food storage, and food consumption areas always at the Facilities or any Supplier or third-party provided housing.

Accommodation. Where provided, accommodations provided by either the Supplier or a third-party must be clean and safe. Accommodations must also comply with all applicable laws and regulations.

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 eighteen (18). 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.

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, and obtain and maintain all zoning and use permits required by law. Without limiting Supplier's obligations hereunder, Supplier shall 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 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 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;
  • 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
  • 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.

Environmental Practices

Resource Consumption, Pollution Prevention, and Waste Minimization. Supplier shall ensure that business is conducted in a manner which proactively embraces sustainability. Supplier shall optimize its consumption of natural resources, including energy and water.

Environmental Impact Management. Supplier shall conduct business in a manner that reduces environmental impact. Supplier shall take reasonable efforts to manage the environmental impact of their facilities and operations, including air and greenhouse gas emissions, water (whether in a production process, for irrigation, or for other uses) and contamination.

Hazardous Materials and Product Safety. Supplier shall identify and reduce the use of hazardous materials, chemicals, and substances. Supplier shall ensure their safe handling, storage, and disposal. All applicable employees shall be aware of and trained in related safety procedures.

Operation of Supplier’s Facilities. Supplier shall operate its Facilities in compliance with all environmental laws, including laws and international treaties relating to:

  • waste disposal;
  • emissions;
  • discharges; and
  • hazardous and toxic material handling.

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 and treaties. Supplier must ensure that it will only use packaging materials that comply with all environmental laws and treaties.

Policies, Processes, and Procedures

Grievance Mechanism for Employees. Supplier shall have systems to enable fair, confidential, and anonymous grievance reporting and follow-up without fear of reprisal. Such systems must include whistle-blower protection. Supplier shall ensure that workers know how to use the grievance system and explain the process for managing any issues that are raised. Issues raised should be addressed within a reasonable time.

Audits and Corrective Action Process. The Company reserves the right to audit, assess, and/or monitor Supplier’s compliance with the Code at any time. In the event of any violation, the Company may request corrective action to be taken by the Supplier. Such corrective action may include additional training on top of rectifying the violation. If the Supplier does not comply, the Company reserves the right to terminate any agreement with the Supplier. In the event the Company does not act on any violation, that in no way renders such inaction acceptable in the future nor the violated section inoperable.

Quality and Safety. Supplier shall ensure compliance with good manufacturing practices, laws, and regulations. Supplier shall immediately report and address any product or safety issues that affect the Company.

Compliance and Documentation. Supplier shall implement and maintain a reliable system to verify the eligibility of all workers, including age and legal status of foreign workers. Supplier shall implement and maintain a reliable recordkeeping system regarding the eligibility of all workers.

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, showing evidence of the worker's age.

Financial Obligations. Without limiting Supplier’s obligations hereunder, Supplier shall not, whether 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.

Compliance. Supplier acknowledges that these Standards set out audit standards that Company may use to determine whether Supplier is meeting the requirements set out in this Code. Supplier acknowledges that Company may in its discretion conduct inspections of the Facilities to confirm Supplier’s compliance with this Code. Company has no obligation to conduct inspections. In the event that Supplier has not corrected any violations of this Code after thirty (30) days written notice from Company, Company may immediately terminate its business relationship (including any purchase order(s) and purchase contracts) with Supplier if Supplier or its Partners fail to meet the Standards.

The terms of this policy are in addition to and not in lieu of all requirements set forth in any contract between Company and Supplier.

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