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VOLVO GROUP

SUPPLIER
CODE OF
CONDUCT
ISSUE 1 | 2019
Introduction
The Volvo Group’s mission is to drive prosperity through transport solutions
and our approach to sustainability is an important part of the success of our
company. We believe in developing, producing and distributing products and
services in a responsible and sustainable manner as it builds trust with our
customers, with society at large as well as with our business partners. The
Volvo Group wants to conduct business responsibly and in compliance with
applicable laws and regulations.

Our Suppliers, as we define in section “Scope”, play an integral part in our


sustainability journey and we can never succeed without our partners and
suppliers in the value chain. In our vision to become the most desired and
successful transport solution provider in the world, we therefore need all
Supplier’s full commitment to support us on this sustainability journey through
the care they invest in the parts, components and services they deliver.

2 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 3
Purpose Scope
The purpose of the Volvo Group Supplier Code of The Supplier Code of Conduct is an integral part
Conduct (hereinafter referred to as the “Supplier of the agreement between Supplier and the
Code of Conduct”) is to define minimum Volvo Group.
sustainability requirements and aspirations for all
Volvo Group Suppliers, in the areas of: The term “Employee” used throughout this
Supplier Code of Conduct covers everyone
1. Human Rights and Working Conditions, page 8 working for or on behalf of a Supplier, including
2. Health and Safety, page 13 but not limited to full and part-time employees,
consultants, contractors, trainees, temporary
3. Responsible Sourcing of Raw Materials, page 14
workers, migrant workers, senior management
4. Environmental Performance, page 16 and board of directors.
5. Business Ethics, page 19
The Supplier Code of Conduct applies to all
The Supplier Code of Conduct is also referred Suppliers that deliver goods and/or services
to as the Volvo Group Key Element Procedure 6 to any entity of the Volvo Group, including
(KEP 6). their parent, subsidiary or affiliate entities as
well as their respective employees and agents
The Supplier Code of Conduct is based on (hereinafter individually and collectively referred
the Volvo Group Code of Conduct and our to as “Supplier”).
Volvo Group Environmental Policy, as well as
international conventions and standards such For each area of the Supplier Code of Conduct,
as the United Nations Global Compact, the the Volvo Group has defined two categories for
OECD Guidelines for Multinational Enterprises, our Suppliers’ sustainability performance and
the International Bill of Human Rights and actions – Requirements and Aspirations:
the International Labour Organisation’s (ILO)
Fundamental Principles and Rights at Work. Our General Requirements
 S
 upplier shall comply with all the  S
 upplier shall have a senior executive in

THE VOLVO GROUP

Requirements of the Supplier Code of place who is responsible for compliance with
ENVIRONMENTAL POLICY
Conduct and make required efforts to comply the areas covered by this Supplier Code of
REQUIREMENT with the Aspirations. Conduct.
The Volvo Group’s goal is to be ranked as a leader in terms of Environmental Care among the world’s top

A requirement refers to basic  S


 upplier shall ensure that all Requirements of  S
 upplier shall have a Code of Conduct in place
requirements which all Suppliers this Supplier Code of Conduct are cascaded to clarifying the Supplier’s rules of behaviour and
producers of transport-related products, equipment and systems. The Volvo Group’s Environmental Care

programmes shall be characterized by a holistic view, continual improvement, technical development and

resource efficiency. These means shall give the Volvo Group a competitive advantage

and contribute to sustainable development.

HOLISTIC VIEW
In our efforts to reduce the environmental impact of our
products, operations and services, we shall:
• take the complete lifecycle into account
TECHNICAL DEVELOPMENT
We shall strive to exceed our customers’ and society’s
demands and expectations by:
• active, pioneering research and development
must comply with. A breach of a and complied with within its own operations proper conduct for the Supplier´s Employees.
requirement is considered a breach of and by its direct suppliers. We also encourage
• take a leading position regarding environmental care, • developing transport solutions with a low
everywhere we operate around the world environmental impact
• comply with legal and other applicable requirements • promoting the development of harmonized

S
 upplier shall be proactive in appropriately
as a minimum standard legal requirements


• make pollution prevention a prerequisite for • continually reducing our products’ fuel consumption,

the Supplier agreement. each Supplier to uphold the same standard


all operations emissions, noise and impact on climate change
• engage suppliers, dealers and other business partners • reducing the use of environmentally harmful materials.
within our sphere of influence to adopt the principles
RESOURCE EFFICIENCY

addressing any risk of violation of the


in this policy.
By taking the complete lifecycle of our products and
CONTINUAL IMPROVEMENT industrial operations into account, we shall:

regarding our Aspirations and to work


Environmental Care shall be integrated in all our • minimize our consumption of natural resources
operations and be improved continually by:
• minimize and responsibly manage our waste and
• formulating, communicating and monitoring clearly residual products.

Requirements, whether in their facilities or in


defined goals
The Volvo Group’s environmental programmes and their
• engaging our employees. results shall be communicated in a transparent manner.

proactively in their supply chain beyond their


Each business entity is responsible for implementing
action programmes based on this policy.

their supply chains.


Martin Lundstedt
President and CEO of the Volvo Group

Adopted May 3, 2016

direct suppliers to implement similar standards


as outlined in this Supplier Code of Conduct  S
 upplier shall implement and make
ional Enterprises
both regarding Requirements and Aspirations. available appropriate grievance channels
ASPIRATION and remediation mechanisms available to
al Enterprises
OECD Guidelines  S
 upplier shall operate honestly and be
all Employees and third parties in order for
Recommendations for Responsible
for Multinational Enterprises
An aspiration refers to Supplier’s transparent with facts and data in relation to
on
2011 EDITION ILO DECLAR ATION activities where the Volvo Group both Requirements and Aspirations. The Volvo them to raise concerns or complaints, but also
encourages each Supplier to go recommendations and improvement ideas
OECD Guidelines for Multinational Enterprises

ON FUNDAMENTAL Group wants to maintain an open dialogue


beyond our basic requirements to concerning the Supplier’s operations, without
elines for Multinational Enterprises
D Guidelines for Multinational
PRINCIPLES AND
concerning achievements, trends and
RIGHTS AT WORK
further advance Supplier’s sustainable possibilities for improvements in the areas fear of retaliation.
AND ITS FOLLOW-UP
performance and impact in the areas outlined by this Supplier Code of Conduct.
covered by this Supplier Code of Environmental data related to production,
2011 EDITION

OECD Publishing.

ll OECD books, periodicals and

Conduct. product and transport shall be available upon


ot hesitate to contact us for more
adopted by
the International Labour
Conference

request to enable the Volvo Group to conduct


at its Eighty-sixth Session,
Geneva, 18 June 1998
-64-11528-6 (Annex revised 15 June 2010)
2011 10 1 P -:HSTCQE=VVZW][:
environmental life cycle assessments.

4 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 5
Management System Legal Compliance Continuous Improvement Implementation and Compliance
Supplier shall establish and maintain adequate Fundamental to all areas of this Supplier Code The Volvo Group believes in continuous Sustainability performance as outlined by this
management systems to oversee all elements of Conduct and the baseline of all business with improvement and recognises that implementing Supplier Code of Conduct is a key indicator in the
of this Supplier Code of Conduct, in proportion the Volvo Group, we require our Suppliers to the standards of this Supplier Code of Conduct Volvo Group supplier qualification and assessment
to the size, complexity and risk environment of be knowledgeable about and to comply with into the Suppliers’ operations and supply chains process, and accepting it is a prerequisite
the Supplier’s business. It shall contain a policy all applicable laws and regulations as well as is a dynamic rather than a static process. It for doing business with us. The Volvo Group
commitment from the Suppliers’ management the contractual terms and conditions agreed is important to us that our Suppliers show verifies compliance with the Requirements and
as well as provide for effective due-diligence and upon with the Volvo Group. All legally required dedication towards embedding not only the Aspirations of this Supplier Code of Conduct by
risk assessment, assign responsibility to relevant permits, approvals, licenses, registrations, Requirements but also the Aspirations into their means of a self-assessment questionnaire and
personnel, and include monitoring and reporting inspections and related reports shall be in place, operations and across their supply chains and to reserves the right to conduct an on-site audit at
mechanisms related to all areas of this Supplier up to date and available for inspection upon seek continuous improvement over time in order any time, either through employees of the Volvo
Code of Conduct. Such management system request. to be able to show progress in all areas covered Group or through an independent third party
shall be continuously reviewed, monitored by this Supplier Code of Conduct. appointed by the Volvo Group.
and improved, preferably under 3 RD party In case local laws and regulations are less
certification. restrictive, the principles of this Supplier Code Lack of cooperation, failure to address violations
of Conduct shall apply. In case a requirement is of the Requirements of this Supplier Code of
covered by this Supplier Code of Conduct as well Conduct and/or non-timely implementation of
as by applicable laws and/or the agreement with necessary corrective action plans may result in a
the Volvo Group, the stricter regulation offering reduction in business and, ultimately, an end to
the greatest protection shall apply. In cases where the business relationship with the Volvo Group.
there is a direct contradiction between mandatory
local law and the principles contained in this Any questions regarding the interpretation of this
Supplier Code of Conduct, the local law shall Supplier Code of Conduct or the Volvo Group´s
prevail, however the Suppliers shall strive to honor approach to sustainability in our supply chains in
the intentions of the Supplier Code of Conduct. general can be raised to
supplier.sustainability@volvo.com.

6 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 7
1. Child Labour

HUMAN RIGHTS AND


WORKING CONDITIONS REQUIREMENT
The Volvo Group does not
ASPIRATION
Supplier is encouraged to have adequate
tolerate child labour, and Supplier policies, risk awareness, risk assessment
shall prevent all forms of child and due-diligence processes in place to
labour. The minimum working prevent child labour throughout its supply
age is the age of completion of chain.
compulsory school, but never Supplier is further encouraged to engage
The Volvo Group strongly believes that employees are a company’s most important less than 15 years. constructively with relevant stakeholders
resource and the respect for human rights forms the basis of any successful Young Employees within the such as children’s rights experts, non-
business. age of 15 – 18 years shall not be governmental organisations and industry
exposed to work that is likely to associations in order to build awareness
Suppliers of the Volvo Group shall respect all internationally recognized human harm their physical or mental and proactively work towards preventing
rights and treat all people with dignity. Suppliers should especially be aware of health, safety or morals. child labour and respect children’s rights.
and respect the rights of indigenous people, vulnerable groups, including, but not
limited to migrant workers, women, children and disabled people, as well as local
communities in connection with the Supplier’s activities and operations.

We expect our Suppliers to exercise human rights due diligence in order to identify,
Working Hours and Leave
prevent, mitigate and account for negative human rights impacts of their own
operations and supply chain with a focus on where they have the highest risks of
doing harm to people, and appropriate to company size and circumstances.
REQUIREMENT ASPIRATION
Supplier shall always respect and Supplier is encouraged to maintain
comply with applicable laws and reasonable working hour schedules for its
collective bargaining agreements, Employees in order to prevent quality and
if applicable, on working and safety incidents and to minimize strains on
Modern Slavery and Forced Labour resting hours, including overtime Employees’ physical and mental health.
working hours, as well as annual, Supplier is encouraged to comply with
sick and parental leave and any ILO standards on working hours and
other applicable leave regulations. leave.

REQUIREMENT ASPIRATION
The Volvo Group does not tolerate Supplier is encouraged to have
any forms of modern slavery adequate policies, risk awareness,
or forced labour, including but risk assessment and due-diligence
not limited to forced, bonded or processes in place to prevent modern
compulsory labour and human slavery and forced labour throughout
trafficking. Consequently, Supplier, its supply chain.
including their recruitment agencies, Supplier is further encouraged
shall not engage in or tolerate to engage constructively with
restrictions of movement, excessive relevant stakeholders such as
recruitment fees, confiscation recruitment agencies, non-
of identity documents and/or governmental organisations and
passports, withholding of wages, industry associations in order to build
abusive working conditions, debt awareness and proactively work
bondage, violence or any other kind towards preventing modern slavery
of exploitation or abuse. and forced labour.

8 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 9
Wages and Benefits

REQUIREMENT ASPIRATION
Supplier shall always pay and provide its Employees’ Supplier is
wages and benefits that, as a minimum, comply with encouraged
applicable laws and collective bargaining agreements. to adopt a pay
Supplier shall provide its Employees with information structure that
about their employment terms and conditions, including adequately reflects
benefits, in a format and language they can easily Employee skills and
understand, such as a written employment contract experience enabling
and a timely wage statement. Deduction from wages them to meet the
is permitted only if and to the extent prescribed by basic needs of
applicable law, regulations or collective bargaining themselves and
agreements. their dependents.

Non-discrimination and Fair Treatment

REQUIREMENT ASPIRATION
Supplier shall treat everyone with dignity Supplier is encouraged to
and respect and provide equal employment actively promote diversity
opportunities and conditions based on the and inclusion and provide
individual’s ability to do the job, regardless equitable benefits and
of Employee or job applicant characteristics working conditions
including, but not limited to: accommodating all
categories of human
gender,
  gender identity or expression diversity.
age
  Supplier is encouraged
nationality,
  race, ethnicity, skin colour or cultural to engage constructively
background with relevant
 religion or belief
 stakeholders such as
 disability, genetics, or health information
 non-governmental
including pregnancy organisations and
 sexual orientation
 industry associations in
 union affiliation
 order to build awareness
and proactively work
Supplier shall not tolerate humiliating or physical towards identifying root
punishment or allow any Employee to be subject causes of discrimination
to verbal, psychological, physical or sexual if it is a widespread
harassment or abuse. societal issue.

10 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 11
2.
Freedom of Association and Collective Bargaining HEALTH AND SAFETY
REQUIREMENT ASPIRATION
All Employees shall have the right to Supplier is encouraged to
lawfully form, join or not join labour unions, engage in active social dialogue
bargain collectively, seek representation with its Employees on the basis
and join worker’s councils in accordance of motivation, recognition and Suppliers shall provide Employees a safe and healthy working environment that
with local law and international reward in order to stimulate minimizes the incidence of work-related injuries and enhances the quality of
conventions. Employees shall be able to workplace engagement. products and services, the consistency of production and worker retention and
openly communicate and share ideas and Supplier is encouraged morale. This applies to Supplier’s production facilities but also to any company
concerns with management regarding to engage constructively provided accommodation such as dormitories as well any type of transportation
working conditions and management with relevant stakeholders provided by a Supplier to its Employees.
practices without fear of discrimination, such as non-governmental
intimidation or retaliation. organisations, industry
Where local law sets restrictions on associations and worker
the right to freedom of association and representatives for sustained
collective bargaining, Supplier shall allow relations between employers
alternative forms of worker representation, and workers within the industry
association and bargaining. sectors or areas of operation.
REQUIREMENT ASPIRATION

Supplier shall ensure that preparedness procedures in Supplier is


its Employees’ potential place in order to identify and encouraged
exposure to safety assess potential emergency to work pro-
hazards, such as machines, situations. Emergency actively with
equipment or substances, plans, fire safety and a long-term
or other chemical, biological response procedures shall health and
or physical agents, are be implemented, including safety strategy,
identified, assessed and Employee notification and which includes
controlled through proper evacuation procedures, aspects on
design and/or preventative Employee training and age, disability,
maintenance and safe work evacuation drills. Fire safety gender and
procedures. Where hazards procedures shall, where religion.
cannot be adequately available, be periodically
controlled by these means, reviewed and approved by
Employees shall be provided local authorities.
with appropriate personal Employees shall have
protective equipment ready access to clean
including access to first-aid drinking water, hygienic
supplies. Safety information toilet facilities, hygienic
shall be made available food preparation, storage
to everyone in order to and eating facilities,
educate, train, and protect adequate ventilation, light
the Employees from safety and temperature levels,
hazards. and acceptable levels of
Supplier shall have noise and dust pollution (as
adequate emergency applicable).

12 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 13
3.
RESPONSIBLE SOURCING
OF RAW MATERIALS

The Volvo Group believes that mining and trading of minerals and raw
materials can generate income, growth and prosperity and sustain
livelihoods and foster local development. However, we also recognize the
risk of contribution to adverse impacts such as human rights violations and
conflict. Supplier shall respect all internationally recognized human rights
and conduct responsible supply chain management of any materials critical
to the industries in which the Volvo Group operates, and in particular of
those from conflict affected and high-risk areas.

REQUIREMENT ASPIRATION
Supplier shall exercise adequate due diligence following Supplier is
the OECD Due Diligence Guidelines with respect to encouraged to
sourcing, extraction and handling of tantalum, tin, exercise adequate
tungsten, gold, hereinafter referred to as “3TG”, and due diligence
cobalt and to make a reliable determination of the origin similar to 3TG
and source of such minerals. Supplier shall have a policy and cobalt for
and process in place to ensure that any of these minerals any materials and
contained in the products manufactured by the Supplier minerals contained
do not directly or indirectly finance or benefit armed in the products
groups that are perpetrators of human rights abuses delivered by the
or in any other way directly or indirectly contribute to Supplier to the
human rights violations. We require our Supplier to Volvo Group that
ensure that all smelters and refiners in its 3TG and directly or indirectly
cobalt supply chain take part and actively engage in third contribute to
party audit programs and to provide any information on human rights and/
such smelters and refiners upon request to the Volvo or environmental
Group. violations.

14 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 15
4. Emissions and Waste Management
ENVIRONMENTAL
PERFORMANCE REQUIREMENT ASPIRATION
Supplier shall monitor, track and Supplier is encouraged to routinely
document its emissions to air, control, minimize and to the extent
water and soil from its facilities and possible eliminate greenhouse gas
transports as well as the wastewater emissions and discharges or pollutants
and solid waste generated by its at the source or by other adequate
operations in order to be able to measures. Supplier is also encouraged
The Volvo Group expects its Suppliers to reduce their negative environmental identify aspects that Supplier can to control and treat wastewater
impacts by protecting the environment, conserving natural resources and control and influence fostering and solid waste generated from the
continuously striving towards reducing the environmental footprint of their opportunities for improvement and operations, industrial process and
production, products and services throughout their entire life-cycle. The minimized emission. All output sanitation facilities of the Supplier prior
life cycle stages include acquisition of raw materials, design, production, shall be monitored, tracked and to discharge or disposal. Moreover,
transportation/delivery, use, end-of-life treatment and final disposal. Suppliers documented on both the site and Supplier is encouraged to implement
are expected to handle environmental violations and complaints methodically corporate level and be provided to the a waste management strategy
and communicate them to affected Employees and to external stakeholders Volvo Group upon request. that targets, in order of priority: (1)
including the Volvo Group, if relevant. Supplier shall monitor, track and prevention, (2) reduction, (3) reuse,
document the composition of their (4) recycling, (5) energy recovery, (6)
packaging material which becomes incineration without energy recovery,
waste at the Volvo Group in order and (7) landfill/disposal of waste in a
to facilitate steps towards circular safe and environmentally responsible
economy, e.g. utilizing non-complex manner.
Resource Efficiency and Energy Consumption materials and/or materials for which Supplier is encouraged to design
there are locally established recycling all packaging material in a way that
markets available. facilitates a circular economy approach.

REQUIREMENT ASPIRATION
Supplier shall monitor, Supplier is encouraged to use and consume
track and document its natural resources and sources of energy in an
consumption of natural optimised and efficient way, with particular focus
resources such as water on implementing conservation and recycling
and raw materials, practices in Supplier’s production and maintenance
as well as sources of processes. At all times, we encourage Supplier
energy in order to be to adhere to the precautionary principle by, when
able to identify aspects suitable alternatives are available, substituting
that Supplier can control materials and methods posing potential
and can influence environmental and health related risks.
fostering opportunities A Supplier located in an area affected by water
for improvement and scarcity and/or water stress is encouraged to
minimized consumption. economize and to secure existing and future access
Consumption shall be to water sources, and to seek opportunities for
monitored, tracked and responsible treatment of water and wastewater
documented on both discharges.
the site and corporate Supplier is encouraged to implement a
level and provided to comprehensive energy reduction strategy and
the Volvo Group upon management program while increasing the use of
request. renewable energy.

16 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 17
5.
BUSINESS ETHICS

The Volvo Group requires its Suppliers to uphold the highest standards of integrity
and always operate honestly and equitably throughout their operations and
business relationships. The Volvo Group believes that earning business fairly and
in compliance with applicable legal requirements is essential to build trust with
customers and other business partners. We require our Suppliers to conduct their
business in the same way, especially in the following areas.

Hazardous Substances

REQUIREMENT ASPIRATION
Supplier shall identify potentially hazardous substances in Supplier is
chemical products and articles used in its production and encouraged
ensure that they are handled, transported, stored, recycled to substitute Fair Competition
and disposed of safely. Safety information shall be available hazardous
to educate, train, and protect Employees from hazardous substances
materials and Employees shall have access to adequate with those less
personal protective equipment. hazardous.
REQUIREMENT ASPIRATION
Substances included in products or services delivered to
the Volvo Group must fulfill the requirements stated in the Supplier shall respect and comply with all applicable Supplier is encouraged
Volvo standards 100-0002, 100-0003 and 100-0005 also fair trade, competition and anti-trust laws and to implement a
known as the Volvo Black, Grey and Red list, including any regulations and shall not have any anti-competitive corporate or group
updates thereof. discussions or enter into any anti-competitive wide compliance
We require 100% declaration of all substances used in agreements, including illegal price-fixing, market program on fair
the products delivered to the Volvo Group, reported through sharing, customer allocation or other illegal competition applicable
the International Material Data System (IMDS) or any other restrictive practices, at any level of the production or to all Supplier’s affiliate
corresponding tool as advised by the Volvo Group. distribution chain. organisations.

18 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 19
Business Integrity

REQUIREMENT
Supplier shall at all times uphold the Anti-Corruption. Supplier shall not
highest level of integrity in all business engage in, endorse nor tolerate any form of
interactions and disclose details of its bribery or corruption, directly or indirectly.
corporate structure when requested by the Supplier shall not offer nor accept any
Volvo Group. form of improper benefit to or from a third
party, private or public, with the purpose of
Conflicts of Interest. Supplier shall
obtaining or retaining business or any form
do business in an open and transparent
of preferential treatment. Such benefits
way in order to demonstrate that they
may comprise not only cash but also job
are an honest and reliable partner.
opportunities, favours, travel, facilitation
Further, Supplier shall conduct business
payments, promises to pay debts or
in a manner that avoids situations where
unlawful gifts and entertainment.
private, financial or other external interests
conflict with the job responsibilities of Confidentiality and Intellectual
the Employee. Any situation where a Property Rights. Supplier shall respect
Volvo Group employee or professional Volvo Group confidential information and
under contract with the Volvo Group intellectual property rights by safeguarding
may have a personal interest of any against misuse, mishandling, counterfeit,
kind in the Supplier´s business or any theft, fraud or improper disclosure in
kind of economic ties with the Supplier, accordance with applicable law and the
must immediately be reported to the contractual terms with the Volvo Group.
Volvo Group through ordinary reporting
channels.

ASPIRATION
Supplier is encouraged to implement an
information management strategy, including
a policy which ensures proper levels and
thresholds as well as records for proper Data Privacy
business integrity. Moreover Supplier should
implement a whistle-blower process where
its Employees can anonymously raise any
concerns of misconduct.
REQUIREMENT ASPIRATION
Supplier is encouraged to implement
an effective anti-corruption compliance Whenever a Supplier is entrusted with personal Supplier is encouraged
program, covering a process for conducting information about individuals, Supplier shall to implement a risk
due diligence prior to entering relationships safeguard it and take appropriate steps to protect it evaluation process in
with business partners in order to from misuse. All applicable data privacy laws as well order to identify threats
investigate and evaluate the integrity, as the contractual terms with the Volvo Group shall be to privacy, and to act
quality, suitability and credibility of all observed when collecting, storing, using, processing upon any threats or
potential business partners. or sharing personal information about individuals. risks identified.

20 | Volvo Group Supplier Code of Conduct Volvo Group Supplier Code of Conduct | 21
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22 | Volvo Group Supplier Code of Conduct

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