Social ESG

Social

All the below policies apply to Tower Semiconductor Ltd. and its subsidiaries, with respect to all businesses, countries, and regions (collectively the “Company” or “TS Group”).

Social Responsibility Policies

Code of Ethics

Tower Semiconductor Ltd. (the “Company” or “Tower”) is dedicated to conducting its business with the highest standards of business conduct and ethics. Tower Semiconductor Ltd. has an obligation to all stakeholders including employees, shareholders, customers, suppliers, community representatives and other business contacts, to be honest and fair in all of its business activities.

Vendors of Tower Semiconductor Ltd. are made aware of the Company’s code of ethics (the “Policy”) and are expected to meet the standards in this Policy.

1.    Purpose and Scope

This Policy applies to Tower and its subsidiaries, with respect to their activity all businesses, countries and regions.

1.1     The Company’s managers are expected to lead the Company according to the Company’s standards of ethical conduct, in both words and actions. Managers and employees are responsible for promoting open and honest two-way communication throughout the Company.  Managers must work for the benefit of the Company and its employees, be positive role models, and show respect and consideration towards each person with whom the Company comes in contact.

1.2     The Company has designated a Compliance Officer to administer this Policy. Any questions or concerns about the understanding and implementation of this Policy, as well as reports or complaints regarding illegal or unethical acts, should be addressed to the Compliance Officer.

1.3     The Compliance Officer shall be responsible to ensure that all Company employees are made aware of the Policy and the Complaints Management Procedure. The training shall emphasize to all employees the possibility of maintaining anonymity at the choice of the person(s) submitting any reports or complaints and the means by which anonymity is accomplished and ensured.

1.4     Any violation of the provisions of this Policy may result in disciplinary action, including immediate termination of employment.

1.5     All references in this document to the masculine gender shall apply also to the female gender.

2.  Code of Ethics

2.1  Compliance with Applicable Laws

All employees, officers and directors of the Company (“Employees”) should comply with all of the laws, rules and regulations of the U.S., Israel, Japan and other countries, as applicable.

2.2  Conflict of Interests

All Employees should strive to avoid any actual or apparent conflicts of interest with regard to the Company’s interests.

The Company acknowledges and values the Employees’ right and will to engage in activities other than the Company’s business and activities, so long as such activities do not create a conflict of interest and do not interfere with the Employees’ responsibility to the Company or the Employees’ efficiency in performing his/her job.  An Employee who wishes to engage in such activities shall fill out the form attached hereto as Annex B and obtain his/her direct manager’s signature and the signature of the VP of his/her department. 

A “conflict of interest” may exist whenever an individual’s private personal interests conflict in any way, or even appear to conflict, with the interests of the Company. A situation in which such a conflict may arise is when an Employee takes actions or has interests that may make it difficult to perform his or her Company work objectively.  Conflicts of interest may also arise when an Employee, or a member of his or her family, receives improper personal benefits as a result of his or her position in the Company, whether received from the Company or a third party. 

The following are examples of situations which should be avoided:

  • An Employee engaging in another job or activity which interferes with his or her ability to perform his or her tasks in the Company efficiently.
  • The provision of services of any kind by an Employee to one or more of the Company’s customers, competitors, suppliers or service providers, beyond those that are within the scope of her/his position at Tower.

In situations in which an Employee is uncertain as to whether a conflict of interest exists, the Employee shall consult with the Compliance Officer or Legal Department. 

An Employee who becomes aware of a situation with a conflict of interest or a potential conflict of interest shall bring the same to the attention of the Compliance Officer who shall take the necessary actions and provide guidelines for future behavior.

2.3  Gifts and Business Amenities

The following are the Company’s general guidelines on giving and receiving gifts and business amenities. Under these guidelines, Employees may give or accept customary business amenities, such as meals, entertainment and gifts, provided the expense involved is reasonable and is not prohibited by law or established business practices.

Neither Employees nor any member of their families may solicit or accept from a supplier or customer money or a gift that could influence, or could appear to influence, the Company’s business relationship with that supplier or customer. Notwithstanding the above, Employees may accept gifts of nominal value, such as small promotional items bearing another company’s name, when it is customary in similar business relationships conducted by others with the same customer or supplier. If an Employee has any doubt about a particular situation, he/she shall consult with the Compliance Officer. Senior management may approve the giving or receipt of gifts and business amenities of a higher value, provided that such are not prohibited by law or acceptable business practice.

Employees may not give money or gifts to an officer, manager or employee of any Company supplier, customer or any other organization, if doing so would influence or could appear to influence the Company’s relationship with said person or entity. Notwithstanding the above, Employees may give gifts of nominal value, such as small promotional items bearing the Company’s name, if it is not prohibited by law or the other party’s acceptable business practices.

2.4  Personal Financial Interests

Employees should not have a financial interest in any entity that conducts business relations with or competes with the Company, if such interest would give rise to, or would appear to give rise to, a conflict of interest with the Company. Such entities include Company suppliers, competitors, customers, representatives and partners. Notwithstanding the above, an Employee may invest in funds in which the decisions regarding their investment process are not made by a person who is related to the Employee, such as an account manager or broker.

A financial interest of an Employee is improper if his/her job, the amount of the investment, or the particular company in which the investment was made could influence, or could appear to influence, the actions of such Employee.

2.5  Use of inside information

It is forbidden to make use of inside information in the trading of the Company’s shares. 

The Company has an internal Insider Trading Policy.

2.6  Corporate Opportunity

Employees are prohibited from (a) taking for themselves personally opportunities that belong to the Company or that the Employee is aware of through the use of corporate property, information or position; (b) using corporate property, information or position for personal gain; and (c) competing with the Company. Despite the above, the Board of Directors of the Company or a Board committee, comprised of independent directors, may decide that in certain situations the Employee is permitted to engage in the above-mentioned activities.

2.7  Confidentiality and Privacy

All Employees must maintain the confidentiality of Confidential Information (defined below) entrusted to them by the Company, its suppliers or customers, except when disclosure of such information is authorized by the Company or required by applicable laws, regulations or legal proceedings. 

“Confidential Information” includes, but is not limited to, non-public information that is the property of the Company or has been entrusted to the Company by others. It should be emphasized that Confidential Information may be used by competitors of the Company to its detriment, and/or use thereof may harm the Company or its customers if disclosed. Whenever feasible, Employees shall consult with the Company’s Compliance Officer or the Legal Department if they believe they have a legal obligation to disclose Confidential Information. Disclosure of any Company information shall be in accordance with Section 2.15 below.

Personal information should be collected, stored and use only for approved purposes keeping the individual’s privacy in accordance with the applicable regulations.

2.8  Fair Dealing and Mutual Respect

Each Employee is required to respect and deal fairly in business relations with the Company’s customers, suppliers, partners, competitors, shareholders, and Employees. Employees are prohibited from taking unfair advantage of anyone through manipulation, concealment, abuse of Confidential Information, misrepresentation of material facts or any other unfair dealing practice. It is prohibited to illegally obtain proprietary information, misuse trade secrets that were obtained without the owner’s consent or cause the disclosure of such secrets by former employees.

2.9  Protection and Proper Use of Company Assets

All Employees must protect all Company Assets (defined below) and ensure their proper use. Theft, carelessness, and waste of Company Assets have a direct impact on the Company’s profitability. All Company Assets shall be used solely for legitimate business purposes and other purposes approved by management. Company Assets may never be used for illegal purposes.

“Company Assets” include, among other things, tangible assets and proprietary information, such as intellectual property and Confidential Information.

2.10      Public Company Reports

As a public company, it is of critical importance that the Company’s reports filed with the securities authorities and stock exchanges in Israel and the U.S. and the Company’s communications to the public are full, fair, accurate and timely. Employees are requested to provide information necessary to assure that the Company’s public reports are complete, fair and clear.

2.11      Anti-Bribery, Anti-Corruption policy

It is prohibited to give, offer or promise something of value (such as money, benefits, excessive gifts) to anyone, including a government representative, with the intention of obtaining a business or other advantage (“Bribery”).

Bribery can be direct or indirect through a third party, both of which are prohibited. 

The Company has an internal Anti-Corruption, Anti-Bribery Policy.  

2.12      Compliance with export control laws and trade sanctions

The Company is committed to comply with all applicable laws and regulations governing import and export of goods, technology and information and relevant sanctions (both on entities and individuals).

2.13      Business Records Accuracy

The Company’s policy is to comply with all financial reporting and accounting regulations applicable to the Company. Each Employee is responsible for ensuring that all business records that he/she deals with are accurate, complete and reliable, so that the Company may accurately and completely reflect all required information in accordance with applicable accounting procedures.

2.14      Prevention of Money Laundering

It is prohibited to use the Company’s resources for the purpose of money laundering, defined as the transformation of illegally obtained gain into seemingly legitimate funds.  As part of the Company’s compliance with the Sarbanes-Oxley Act, including COSO 2013 standard, the Company has implemented procedures and segregation of duties to prevent such illegal activity.

2.15      Requests for Information and Contact with Outsiders

For purposes of this Policy, an “Outsider” is defined as a person or entity not bound by an employer/ employee relationship with the Company and not a member of the Board of Directors, including analysts, reporters, shareholders, institutional investors, the investment community, lawyers, governmental authorities, the general public and the media.

The Corporate Secretary is responsible for managing the Company’s relationships with certain Outsiders, shall refer specific instances to the CEO, CFO or Senior VP of Investor Relations and Public Communications, as appropriate, and shall authorize other Company Employees, on a case-by-case basis, to act on the Company’s behalf.

The CEO, CFO and Senior VP of Investor Relations and Public Communications shall represent the Company in all communications, meetings, and other interactions with Outsiders. The CEO, CFO and Senior VP of Investor Relations and Public Communications are entitled, at their sole discretion, to authorize other Company Employees to interact with Outsiders, on a case-by-case basis.

Employees shall not initiate contact with Outsiders or respond to their inquiries unless authorized to do so as specified above and only within the scope of their authority.

If Employees receive a request to receive information on the Company from an Outsider, such as an attorney, investigator, law enforcement official, public official or other government entity, they shall refer the request to the Corporate Secretary.

2.16      Labor and Human Rights

Tower is committed to ensuring the human rights of our workers and treating them with dignity and respect.

2.17      Proper behavior and prevention of sexual harassment

Company policy prohibits sexual harassment in any form.

Labor and Human Rights Policy

TS Group  is  committed to ensuring the human rights of our employees and all persons we engage with, treating them with dignity and respect as understood by the international community.

We are committed to supporting and respecting the protection of international human rights within the sphere of TS Group influence, and ensuring that we are prohibitive of human rights abuses.

The Company’s managers are expected to lead the Company in accordance with this policy, in both words and actions. Managers are responsible for promoting open and honest two-way communication throughout the Company.  Managers must work for the benefit of the Company and its employees, be positive activists and role models and show respect and consideration towards each person with whom the Company comes in contact.

The Company has designated its Senior VP HR as a Compliance Officer to administer this policy. Any questions or concerns about the understanding and implementation of this policy, as well as reports or complaints regarding illegal or unethical acts, should be addressed to the Compliance Officer.

The Compliance Officer shall be responsible for informing all of the Company employees annually of the existence of this policy.

Any violation of the provisions of this policy may result in disciplinary action, including immediate termination of employment.

All references in this document to the masculine gender shall apply also to the female gender.

1. Freely Chosen Employment

TS Group does not use any forced, bonded or indentured labor, involuntary prison labor, slavery or trafficking of persons. This includes transporting, recruiting, transferring, holding employing or engaging persons by means of threat, force, coercion, abduction or fraud for the purpose of exploitation. All work is voluntary, and employees are free to leave with reasonable notice as required by corporate policy, contract or applicable law. Employees are not required to present government-issued identification, passports or work permits as a condition of employment.

2. Child Labor Avoidance

Child labor is strictly prohibited. As used here, the term “child” refers to any person under the age of 18, or under the minimum age for employment in the country where hired, whichever is greatest. The use of legitimate workplace apprenticeship programs, which comply with all laws and regulations, is permitted.

3. Working Hours

Workweeks and workdays do not exceed the maximum set by local law.

4. Wages and Benefits

Compensation paid to employees complies with all applicable wage laws, including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with local laws, employees are compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages as a disciplinary measure are not permitted. The basis on which employees are being paid is provided in a timely manner via pay stub or similar documentation.

5. Humane Treatment

TS Group is committed to a workplace free of harsh or inhumane treatment. Employees shall not threaten another employee or other person who he/she engages with or subject them to any harsh or inhumane treatment, including any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion or verbal abuse.

6. Non-Discrimination

TS Group is committed to a workplace free of harassment and unlawful discrimination. Employees are not allowed to engage in discrimination based on race, color, age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, political affiliation, union membership, marital status or any other group protected by law in hiring and employment practices such as promotions, rewards and access to training.

TS Group respects the religious beliefs and practices of all employees and persons it engages with and will make, on request, a reasonable accommodation for such observances when possible that does not create an undue hardship on the Company’s business.

7. Freedom of Association

TS Group respects the rights of employees to associate freely, join or not join labor unions, seek representation and join workers’ councils in accordance with local laws. Employees are allowed to communicate openly with management regarding working conditions without fear of reprisal, intimidation, harassment or retaliation.

8. Conflict Minerals.

TS Group has adopted a conflict minerals policy in order to ensure that it does not incorporate Conflict minerals (as defined below) into items manufactured at TS Group’s facilities. “Conflict minerals,” as defined in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, are Columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives. Metals derived from these minerals are tin, tantalum, tungsten, and gold (3TG). For more information, please refer to the conflict minerals policy in this website.

Policy Against Forced Labor and Trafficking in Persons 

Purpose

Tower Semiconductor Ltd. and it affiliates (“TS Group”) prohibit forced labor, slavery and trafficking in persons in connection with its operations.  The purpose of this policy (“Policy”) is to assure compliance with the US Federal Acquisitions Regulation (Executive Order 13627), the California Transparency in Supply Chains Act, the UK Modern Slavery Act, the recent Countering America’s Adversaries Through Sanctions Act (CAATSA) and the US Tariff Act.  

TS Group Policy

TS Group employees, contractors, subcontractors, suppliers, partners and others through whom TS Group conducts business must comply with the relevant regulations and must not engage in any practice that constitutes forced labor, slavery or trafficking in persons, including:

  • Engaging in forced, indentured, child, or debt-bonded labor, illegal movement of persons, or sexual exploitation;
  • Destroying, confiscating, concealing, or otherwise denying access to an individual’s identity or immigration documents;
  • Using fraudulent or misleading practices during the recruitment of candidates or offering of employment/contract positions for the purpose of slavery or trafficking in persons;
  • Making material misrepresentation during the recruitment of employees regarding the key terms and conditions of employment; [this is general and doesn’t specifically relate to slavery, etc]
  • Using recruiters that do not comply with local labor laws of the country in which the recruiting takes place;
  • Charging applicants/candidates recruitment fees;
  • Failing to provide return transportation or failing to pay for the cost of return transportation upon the end of employment, if legally or contractually required;
  • Failing to provide or arrange housing that meets the host country’s housing and safety standards, if legally or contractually required; and
  • Failing to provide an employment contract, recruitment agreement, or other required work document in writing, in a language the employee understands, if legally or contractually required.

TS Group employees, contractors, subcontractors, suppliers, partners and others through whom TS Group conducts business must cooperate fully with governmental audits or investigations relating to any potential violations of the above prohibitions. Any violation of this Policy could result in disciplinary action, including termination of a business relationship or employment.

Reporting

Any credible information that any employee, contractor, subcontractor, supplier, partner or other person or entity has violated this Policy, must be reported immediately. Such reports may be made through TS Group’s anonymous reporting to management link in TS Group intranet, to the tower Legal Department or to the Corporate Compliance Officer.  

Non-Retaliation

TS Group does not tolerate retaliation or threats of retaliation against anyone who raises concerns, informs of potential violations under this Policy or assists in an internal or governmental audit or investigation.

This Policy, along with TS Group’s disclosure regarding our efforts to ensure our supply chain is free from slavery and trafficking, can be found on our corporate website at https://www.towersemi.com. For further information or to voice any concerns relevant to Tower regarding trafficking in persons, please contact us at Compliance.Officer@Tower.com

Health and Safety Policy

TS Group recognizes a safe and healthy work environment enhances the quality of products and services, consistency of production and worker retention and morale. A safe and healthy work environment also minimizes the incidence of work-related injury and illness. As a result, we are committed to creating safe working conditions and a healthy work environment for all of our employees.

  • Occupational Safety. Employee exposure to potential safety hazards (e.g., electrical and other energy sources, fire, vehicles, and fall hazards) is controlled through proper design, engineering and administrative controls, preventative maintenance and safe work procedures (including lockout/tagout), and ongoing safety training. Where hazards cannot be adequately controlled by these means, employees are provided with appropriate, well-maintained, personal protective equipment. The company is committed to keep employees who report on safety and other issues safe and harmless
  • Emergency Preparedness. Emergency situations and events are identified and assessed. The impact of potential emergency events is minimized by implementing emergency plans and response procedures, including: emergency reporting, employee notification and evacuation procedures, employee training and drills, appropriate fire detection and suppression equipment, adequate exit facilities and recovery plans.
  • Occupational Injury and Illness. Procedures and systems are in place to prevent, manage, report and track occupational injury and illness, including provisions to: a) encourage employee reporting; b) classify and record injury and illness cases; c) provide necessary medical treatment; d) investigate cases and implement corrective actions to eliminate their causes; and e) facilitate safe return of employees to work.
  • Industrial Hygiene. Employee exposure to chemical, biological and physical agents are identified, evaluated, and controlled. Engineering and administrative controls are used to control overexposures. When hazards cannot be adequately controlled by such means, employee health is protected by appropriate personal protective equipment programs.
  • Physically Demanding Work. Employee exposure to the hazards of physically demanding tasks, including manual material handling and heavy or repetitive lifting, prolonged standing and highly repetitive or forceful assembly tasks are identified, evaluated and controlled.
  • Machine Safeguarding. Production and other machinery are evaluated for safety hazards. Physical guards, interlocks and barriers are provided and properly maintained where machinery presents an injury hazard to employees.
  • Sanitation, Food, and Housing. Employees are provided with ready access to clean toilet facilities, drinking water and sanitary food preparation, storage, and eating facilities. Employee dormitories provided by the Company are maintained clean and safe, and provided with appropriate emergency egress, hot water for bathing and showering, and adequate heat and ventilation and reasonable personal space.

Employing Persons with Disabilities Policy

Tower Semiconductor Ltd. and its subsidiaries, with respect to all businesses, countries and regions (collectively the “Company” or “TS Group”),   believes that a diverse work environment, which includes people from different backgrounds and cultures, encourages creativity and strengthens employees’ commitment to the organization. The Company promotes hiring populations with relatively low representation in the labor market in general and in particular in high-tech, such as persons with disabilities.

To help raise awareness and implement the actual hiring of these populations, the Company partners with local nonprofit organizations that focus on placement of such persons through participation in dedicated job fairs.

TS Group aims to integrate persons with disabilities through several measures:

  • Physical accessibility projects of the Company’s offices for persons with disabilities
  • Support for employees with disabilities and escort by direct managers and human resource professionals
  • Collaboration of human resource personnel with associations that promote the employment of disabled persons and are engaged in their placement.
  • Encouraging employees to offer candidates with disabilities as part of the “friend brings a friend” program or employment opportunities through employment referral programs.

These activities help the Company identify and explore opportunities to recruit and integrate persons with disabilities into the workforce, thereby increasing social impact and diversity.

In addition, TS Group encourages its existing employees to voluntarily report as to their disabilities in order to allow the Company to offer them any required adjustments in the workspace.

Community Contribution – Lead with a Social Purpose

Realizing corporate social responsibility as an integral building block of our success, Tower Semiconductor aims to enrich and improve not only individuals’ lives, but enhance society as a whole. We believe that social responsibility is essential for a healthy and balanced corporate culture. The Company’s goal is to inspire youth to pursue careers in science and technology by creating a synergy between current educators and corporate resources. 

Read more…

Responsible Supply Chain

Tower Semiconductor Partnership with the RBA

Tower is dedicated to corporate social responsibility and reporting our internal social responsibility standards to our customers allowing them to evaluate and assess their global supply chains, including responsible sourcing of minerals in our supply chains.

Tower is a partner of the Responsible Business Alliance (“RBA”) since 2014 and has a corporate social responsibility (“CSR”) program to ensure implementation and enforcement throughout our organization. The RBA is formerly the Electronic Industry Citizenship Coalition (“EICC”). Our partnership with the RBA allows for transparency and customer accessibility to CSR data and performance.  The RBA provides assessment tools, including a self-assessment questionnaire which is designed to help members identify social, environmental and ethical risks in their supply chains and take action to put in place systems to further improve their social contribution.  Tower participates in the RBA self-assessment questionnaire (“SAQ”) for all of its wholly owned facilities every year and works to adopt improvements based on input collected through the SAQ. Certain Tower customers monitor Tower’s SAQ and recognize that Tower has achieved a noteworthy rating since completing the first SAQ. The risk level assigned to Tower as a result of each assessment is low.

Similarly, Tower Japanese affiliate, TPSCo has completed the RBA SAQ for two of its three fabs, resulting in a low risk rating.

Global Tower Ethical Requirements for Suppliers – RBA Supplier Code of Conduct

Ethics

To meet social responsibilities, suppliers are expected to conduct their Business in an ethical manner and to act with integrity, all in accordance with Tower’s code of ethics and Tower Policy on Labor and Human Rights available on www.Towersemi.com; Our requirements include among others  the following aspects:

Business Integrity

  • Suppliers are expected not to practice or tolerate any form of corruption, extortion or embezzlement.
  • Suppliers will not offer or accept bribes or other unlawful incentives to/from their business partners.
  • Suppliers are expected not to offer to Tower employee’s gifts or any other kind of personal benefit resulting from the relationships with the suppliers.

Fair Competition

Suppliers will conduct their business in line with fair competition and in accordance with all applicable anti-trust laws.

Privacy & Intellectual Property

Suppliers will safeguard and make only appropriate use of confidential information and ensure that all employees’ and business partners’ privacy and valid intellectual property rights are protected.

Identification of Concerns

Suppliers will provide means for their employees to report concerns or potentially unlawful activities in the workplace. Any report should be treated in a confidential manner. Suppliers will investigate such reports and take corrective action if needed.

Conflict Minerals

Suppliers are expected to ensure that products supplied to Tower do not contain metals derived from minerals or their derivatives originated from conflict regions that directly or indirectly finance or benefit armed groups.

Labor

Suppliers are expected to protect the human rights of their employees and to treat them with dignity and respect. This includes the following aspects:

Child Labor Avoidance

We do not tolerate child labor in our supply chain. Suppliers should avoid any sort of child labor in their business operations consistent with the ILO’s2 (International Labour Organization) core labor standards and the United Nations Global Compact principles.

Freely Chosen Employment

Forced, bonded or indentured labor or involuntary prison labor will not be utilized by the suppliers.

Diversity and Inclusion

Equal treatment of all employees will be a fundamental principle of the supplier’s corporate policy. Typical discriminatory treatment takes into consideration – consciously or unconsciously – irrelevant characteristics of an employee such as race, national origin, gender, age, physical characteristics, social origin, disability, union membership, religion, family status, pregnancy, sexual orientation, gender identity, gender expression or any unlawful criterion under applicable law. Suppliers will ensure that their employees are not harassed in any way. Tower encourages suppliers to provide an inclusive and supportive working environment and to exercise diversity when it comes to their employees as well as in their decisions to select subcontractors.

Fair Treatment

Suppliers will provide their employees with a workplace free of harsh and inhumane treatment, without any sexual harassment, sexual abuse, corporal punishment or torture, mental or physical coercion or verbal abuse of employees, or the threat of any such treatment. Furthermore, suppliers are expected not to unfairly terminate any employment contract or without clear evidence specify that the termination of an employment contract, in relation to the working performance of an employee, is permitted by law.

Working Hours, Wages and Benefits

Working hours for suppliers’ employees will not exceed the maximum set by the applicable national law. Compensation paid to employees will comply with applicable national wage laws and ensure an adequate standard of living. Unless otherwise provided by local laws, deductions from basic wages as a disciplinary measure will not be permitted (this does not exclude the entitlement of damages on a contractual or legal basis). Suppliers are expected to provide their employees with fair and competitive compensation and benefits. Compensation and benefits should aim at providing an adequate standard of living for employees and their families. Suppliers’ employees will be paid in a timely manner. It is recommended that suppliers offer their employees ample training and educational opportunities.

Freedom of Association

Suppliers will be committed to an open and constructive dialogue with their employees and workers’ representatives. In accordance with local laws, suppliers will respect the rights of their employees to associate freely, join labor unions, seek representation, join works councils and engage in collective bargaining. Suppliers will not disadvantage employees who act as workers ‘representatives.

Health, Safety, Environment and Quality

Suppliers are expected to provide a safe and healthy working environment and, if applicable, safe and healthy company living quarters, and to operate in an environmentally responsible and efficient manner. Suppliers will integrate quality into their business processes. This comprises the following aspects:

Quality Requirements

Suppliers will meet generally recognized or contractually agreed quality requirements in order to provide goods and services that consistently meet Tower’s needs, perform as warranted and are Safe for their intended use.

Health, Safety, Environmental and Quality Regulations

Suppliers will comply with all applicable quality, health, safety and environmental regulations. All required permits, licenses and registrations will be obtained, maintained and kept up-to-date. Suppliers will fulfill their operational and reporting requirements.

Product Safety

Material safety data sheets containing all necessary safety-relevant information will be made available by suppliers for all hazardous substances and will be provided to Tower and other parties in case of legitimate need.

Occupational Health and Safety

Suppliers will protect their employees from any chemical, biological and physical hazards and physically demanding tasks in the workplace as well as from risks associated with any infrastructures used by their employees. Suppliers will provide appropriate controls, safe work procedures, preventative maintenance and necessary technical protective measures to mitigate health and safety risks in the workplace. When hazards cannot be adequately controlled by these means, suppliers will provide employees with appropriate personal protective equipment. Safety information relating to hazardous materials3 – including compounds in intermediate materials – shall be available to educate, train and protect workers from hazards. A safe and healthy working environment also includes as a minimum potable drinking water, adequate lighting, temperature, ventilation and sanitation and, if applicable, safe and healthy company living quarters.

Process Safety

Suppliers will have safety programs in place for managing and maintaining all their production processes in accordance with the applicable safety standards. Suppliers will address product-related issues and their potential impact during all stages of the production process. For hazardous installations the supplier will conduct specific risk analyses and implement measures that prevent the occurrence of incidents such as chemical releases and/or explosions.

Emergency Preparedness, Risk Information and Training

Suppliers will make available safety information on identified workplace risks and suppliers’ employees will be correspondingly trained to ensure they are adequately protected. Suppliers will identify and assess likely and potential emergency situations in the workplace and minimize their impact by implementing emergency plans and response procedures.

Waste and Emissions

Suppliers will have systems in place to ensure the safe handling, movement, storage, recycling, reuse and management of waste, air emissions and wastewater discharges. Any of these activities that have the potential to adversely impact human or environmental health will be appropriately managed, measured, controlled and handled prior to release of any substance into the environment. Suppliers will have systems in place to prevent or mitigate accidental spills and releases into the environment.

Resource Conservation and Climate Protection

Suppliers are expected to use natural resources (e.g. water, sources of energy, raw materials) in an economical way. Negative impacts on the environment and climate will be minimized or eliminated at their source or by practices such as the modification of production, maintenance and facility processes, material substitution, conservation, recycling and material reutilization. Suppliers will engage in the development and use of climate-friendly products and processes to reduce power consumption and greenhouse gas emissions.

Security

Suppliers will have good security practices across their supply chains. Suppliers will maintain processes and standards that are designed to assure the integrity of each shipment to Tower from its origin through to its destination and all points in between. Suppliers are expected to implement the necessary and appropriate measures in their area of responsibility to ensure that Tower products, their workable components or raw materials as well as the corresponding know-how do not end up in the hands of counterfeiters or third parties and do not leave the legal supply chain.

Management Systems

Suppliers are expected to implement management systems to facilitate compliance with all applicable laws and to promote continuous improvement with respect to the expectations set forth in this Supplier Code of Conduct This includes the following aspects:

Legal and Other Requirements

Suppliers will comply with all applicable laws, regulations, contractual agreements and generally recognized standards.

Communication of Sustainability Criteria in Supply Chain

Suppliers will communicate the principles set forth in this Supplier Code of Conduct to their supply chain. Supplier will ensure personnel awareness of the importance of ethical behviour.

Commitment and Accountability

Suppliers are encouraged to fulfill the expectations set forth in this Supplier Code of Conduct by allocating appropriate resources.

Risk Management

Suppliers are expected to implement mechanisms to identify, determine and manage risks in all areas addressed by this Supplier Code of Conduct and with respect to all applicable legal requirements.

Documentation

Suppliers are expected to develop adequate documentation to demonstrate that they share the principles and values expressed in this Supplier Code of Conduct. This documentation may be reviewed by Tower upon mutual agreement.

Training and Competency

Suppliers will establish appropriate training measures to allow their managers and employees to gain an appropriate level of knowledge and understanding of the contents of this Supplier Code of Conduct, the applicable laws and regulations and generally recognized standards.

Continuous Improvement

Suppliers are expected to continuously improve their sustainability performance by implementing appropriate measures.

Conflict Minerals Policy

TS Group has adopted a conflict minerals policy in order to ensure that it does not incorporate Conflict minerals (as defined below) into items manufactured at TS Group’s facilities. “Conflict minerals,” as defined in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, are Columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives. Metals derived from these minerals are tin, tantalum, tungsten, and gold (3TG). These metals are derived from minerals that are mined throughout the world, including the Democratic Republic of Congo (DRC) and adjoining countries (collectively the “Covered Countries”). Armed groups operating in the Covered Countries have controlled many of the region’s mines and/or transit routes and have engaged in armed conflict, as well as committed some of the world’s worst human rights violations. Products which do not contain necessary Conflict minerals that directly or indirectly finance or benefit armed groups in the Covered Countries are considered “Conflict free”.

TS Group is committed to responsible sourcing of Conflict minerals throughout its supply chain and to continued compliance with the applicable SEC rules and regulations related to Conflict minerals. TS Group supports the position of the Global e-Sustainability Initiative (GeSI) and Responsible Business Alliance (RBA) to avoid the use of Conflict minerals that directly or indirectly finance or benefit armed groups in the Covered Countries.

TS Group has established programs aligned with the internationally recognized OECD due diligence framework to regularly evaluate its supply chain and require its suppliers to do the same as it does not purchase any tungsten or tantalum directly from smelters, refiners, or mines, but rather is many steps removed in the supply chain from the mining of these necessary Conflict minerals. Suppliers are prohibited from supplying TS Group with materials known to be derived from the Covered Countries that have not been confirmed as “Conflict free” via a recognized and credible third party process such as the Conflict Free Sourcing Initiative’s Responsible Minerals Assurance Process (RMAP).  Suppliers shall have in place policies and due diligence measures that will assure that products and components supplied to them containing Conflict minerals are Conflict free. In addition, TS Group requires its direct suppliers of items that include 3TG to submit completed Conflict minerals declarations using the RMI (www.responsiblemineralsinitiative.org) Conflict Minerals Reporting Template (CMRT). TS Group reserves the right to take appropriate actions to enforce its conflict minerals policy, including discontinuing purchases from suppliers that fail to comply with this policy.

On an annual basis, Tower discloses on Form SD (Specialized Disclosure Report) its compliance with Rule 13p-1 under the Securities Exchange Act of 1934, including its reporting and disclosure requirements related to Conflict minerals.

In addition to the SEC rule regarding the conflict minerals reporting, Tower voluntarily performs due diligence on the sourcing of Cobalt and reports its findings through the Cobalt CRT on its web site.