Supplier Code of Conduct

INTRODUCTION

Welcome to the Oatly supplier code of conduct document (the “Supplier Code of Conduct”). All Oatly “Suppliers”, defined as third parties with whom Oatly has active commercial relationships for the supply of goods or services, are expected to apply this Supplier Code of Conduct. If the Supplier is a distributor, broker, or agent, they are expected to assure that their suppliers, providing goods intended for Oatly also apply these standards, and are able to provide their assurance to Oatly upon request. Suppliers to Oatly are expected to provide their subcontractors with assistance in complying with these expectations as needed to ensure compliance throughout the supply chain.

We’re glad you’re here. This document is very important – its purpose is to ensure a common understanding about what we’re trying to achieve within the Company and with our partners and Suppliers, all while pursuing a safe environment where we can successfully keep doing this work that matters.

Oatly exists to make it easy for people to eat better and live healthier lives without recklessly taxing the planet’s resources in the process. Our vision is for a food system that is better for people and the planet. Our vision can only be achieved with collaboration and shared understanding with our partners and Suppliers.

The Company mission and vision are intended to highlight the shift we set out to create in the world — in the way people eat, the way food is produced and the way the planet is treated. The daily work being done by our partners and Suppliers is playing a critical role in that shift.

Our Supplier Code of Conduct is grounded in our mission and our core values: sustainability, nutritional health and trust. It is based on international rights and principles, including:

The International Bill of Human Rights (consisting of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights);
The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and other ILO conventions (hereinafter “ILO”);
United Nation (“UN”), Guiding Principles on Business and Human Rights;
The UN’s Sustainable Development Goals; and
UN Declaration on the Rights of Indigenous Peoples.

This Supplier Code of Conduct expresses our ethics as a company, and it is critical that all Suppliers and partners respect worker rights, the rights of people across their value chain and act in accordance. In the event of non-compliance or the likelihood of a risk of noncompliance with this Supplier Code of Conduct we expect all signatories to notify Oatly or any Oatly group company immediately.

WORKPLACE

We believe that a workplace where employees feel safe, human dignity and human rights are respected, and each individual feels valued, is a workplace that propels the company forward. We require all our partners to respect and prioritize the health and safety of their employees, too. In fact, everyone in our supply chain must have decent working conditions, by which we mean a workplace that meets basic welfare requirements such as lighting, thermal comfort, access to drinking water, sanitation and first aid ensuring productive work for all people in conditions of equity, security and human dignity and fair terms of employment. We hope to inspire this level of ethics within and beyond our value chain.

NO FORCED (COERCED) LABOR

The trafficking of human beings and all forms of coerced, slave or involuntary labor are prohibited. Original personal identification and travel documents are not retained, and freedom of movement is not restricted. All work should be free from coercion, and employees shall have the right to leave the workplace premises after the end of their working hours. The employee must be free to terminate their employment with reasonable notice and receive all owed salary. Workers should not pay any The employer shall not demand an employee to pay a deposit or recruitment fee, directly or indirectly, as a condition of employment or retain or deny access to identity documents, unless specifically required by law.

FREEDOM OF ASSOCIATION

Employees should have the right to join or not join any association without fear of intimidation or harassment. Employers must not interfere with employees who wish to organize themselves or take part in collective bargaining in a lawful manner. Where workers are represented by a legally recognized union or employee representative, the Supplier will establish a constructive dialogue with the representative function’s freely chosen representatives and bargain in good faith with these representatives. These representatives must not be discriminated against or otherwise prevented from performing their union work. In countries where the right to freedom of association is restricted or prohibited by law, the employer shall facilitate, and not hinder, alternative forms of independent and free worker rep-resentation.

NO CHILD LABOR

All forms of unlawful employment or exploitation of children are prohibited. Child labor should not be used. The term “child” refers to any person under the age of 15 (or 14 for countries in transition as declared upon ratification of ILO Convention 138) or under the minimum age for employment in the country, whichever is higher. Particular attention shall be paid to employees under the age of 18 in terms of working hours and overtime, and they should not work at night or in hazardous conditions. Work shall not interfere with normal educational activities. In addition, documentation that supports the date of birth of each employee shall be required. Policies and action plans to prevent child labor shall be established, documented, and communicated to relevant staff and other stakeholders. Measures taken to prevent child labor should always take the child’s best interests into account. In any instance that child labor is detected it must be reported to Oatly immediately.

NO DISCRIMINATION

There should be no discrimination in recruitment, pay, training, promotion, termination or re-tirement based on race, religion, age, disability, gender, national origin, marital status, preg-nancy status, sexual orientation, union membership or political affiliation. Measures shall be taken to protect employees from being sexually harassed, insulted or exploit-ed, and from discrimination, or termination of employment on unjustifiable grounds, such as marriage, pregnancy, parenthood, sexuality or HIV status. No form of physical or psychological harassment, repression, degrading or humiliating treat-ment shall be accepted. A safe, gender-inclusive workplace must be provided for employees. We encourage physical spaces to be set aside for pregnant or breastfeeding individuals in workplaces, and in accordance with applicable laws, to provide compensated parental leave (see more: Section 9, Working Hours). We prohibit Suppliers from requiring employees to take pregnancy tests during the recruitment process. We encourage employers to provide reasonable accommodations for employees with disabilities to perform their job functions effectively. This includes making spaces accessible, such as physical facilities, technology, and communication methods.

WORK ENVIRONMENT AND SAFETY

Working conditions shall be safe and hygienic, and systems are in place to detect and manage potential risks to workers. All workers are encouraged to report any safety concerns or incidents without the fear of consequences. A clear set of regulations and procedures must be established and followed regarding occupational health and safety, fire protection and emergency preparedness. A management representative responsible for the health and safety of all employees shall be appointed. Systems to detect, avoid or respond to potential threats to health and safety of all employees shall be established. The potential of danger and harm caused to employees must be minimized to the greatest extent possible through means such as, but not limited to, appropriate safety training and equipment, emergency and crisis plans, regular risk assessments and mitigation, emergency exits and signage, and first aid kits. Preventive measures should be taken to prevent and minimize work-related accidents. Hazardous materials and chemicals are properly stored, and workers are provided with appropriate personal protective equipment.

Employees shall receive regular and appropriate training and information in the relevant language to ensure that employees can execute response procedures in the event of an emergency. Safety information shall also be made available to employees as written documents in the workplace, in languages commonly used by the Supplier’s workforce.

Sanitary facilities should be clean and clean water should be available to the employees. If appropriate, sanitary facilities for food storage shall be provided. Any employer-provided food must be sanitary and safe to consume.

If the employer provides accommodation, it must be clean, safe and sufficiently ventilated. Such accommodation must have access to clean sanitary facilities and clean drinking water. Fire protection and emergency preparedness must be the same as in the workplace premises.

Employer provided transportation must be safe.

COMPENSATION AND BENEFITS

All legally mandated wages and benefits will be provided.

The terms and payment of the salary must be agreed upon in writing before employment begins and be presented to the employee in an understandable manner. Salaries shall be paid in full directly to the employee on the agreed date and transparent pay information shall be provided in a timely manner. Deductions from the salary (e.g. a loan to a worker, OSH equipment) are only permitted, so long as they are in accordance with national law and safeguards provided in the International Labor Standards.

Suppliers who have operations in low-wage countries, or countries where the minimum wage does not cover the basic needs, should be able to demonstrate how they ensure that their workers can live on their salaries, for example by collective bargaining, wage audits or other monitoring.

WORKING HOURS

Working hours shall be in accordance with national law, applicable collective bargaining agreements and industry benchmarks standards and not exceed working hours specified in international conventions. Working hours shall not on a regular basis exceed 48 hours per week.

Regular and overtime working hours shall be in compliance with national law, applicable collective bargaining agreements and industry benchmarks standards, and take into account worker safety. Overtime is voluntary and compensated, exceptions to this if governed by a collective bargaining agreement or national legislation.

At least 24 consecutive hours of rest are provided in every 7-day work period, or more if required to comply with national law, applicable collective bargaining agreements and industry benchmarks standards. If allowed by national law, applicable collective bargaining agreements and industry benchmarks standards, 48 consecutive hours of rest in every 14-day work period are permitted.

Employees shall be entitled to paid statutory annual leave and sick leave without any negative reprisal. National laws relating to paid leave and parental leave will be respected.

JOB SECURITY

Workers have the right to an employment contract in a language they understand. The employer shall favor long-term employment with negotiated contracts and not circumvent obligations to employees through the use of short-term employment in the form of temporary or single day work. The employer should give at least the same notice of termination to the employee as the employee is obliged to give to the employer. In case of ‘at-will’ employees (which may only be used in jurisdictions where this is allowed under national law), the employer should at minimum provide a written outline of the basic terms and conditions of the offer of employment. In jurisdictions where no cause or notice of termination is required, we still encourage our partners to apply principles of fairness and equity when making decisions regarding employment.

DATA PROTECTION, CYBER SECURITY AND DIGITAL INTEGRITY

We believe in the importance of protecting personal information and an individual’s right to privacy and integrity. The right to privacy is a human right and as such we require that our Suppliers ensure good governance in how they deploy technology, secure their systems and use our data as we enjoy the risks and opportunities of living in a digital age. Additionally, we require that transparency and accountability are at the core of how our Suppliers make decisions on how data is processed and managed. This includes ensuring compliance with all applicable laws and incorporating these principles in the design of how we use data and digital tools. Suppliers should ensure adherence to good privacy practices in line with these principles and applicable laws, as well as ensure that they comply with any data processing agreements in place between Oatly and our Suppliers prior to processing any data belonging to or on behalf of Oatly. Suppliers should ensure they also have their own policies and procedures in place governing data privacy, cyber security and digital integrity and that these tools are not used to violate the rights of their employees or compromise Oatly’s systems or networks.

CORRUPTION

All forms of bribery (public as well as corporate) and fraud, such as the use of alternative routes to facilitate undue benefits, corrupt payments, or otherwise circumvent the law, are strictly prohibited. The Supplier is responsible for ensuring it is in compliance with any applicable bribery laws, including UK Bribery Act 2010 and the Foreign Corrupt Practices Act (FCPA) of the USA. Suppliers should immediately report to Oatly any violation or attempted violation of this provision. A violation of this provision constitutes a material breach and may result in immediate termination.

FINANCIAL TRANSPARENCY AND REPORTING

We believe accurate, transparent and reliable records are crucial to our business. We ask the same from our partners. Suppliers must maintain sounds financial health which may include; financial risk management, a positive credit rating, stable cash flow, and a strong financial foundation.

WHISTLEBLOWER AND EMPLOYEE PROTECTION GRIEVANCE MECHANISM

Workers will be aware of, and have access to, a Supplier-provided grievance mechanism to allow employees to voice complaints. Oatly maintains four criteria for a successful grievance mechanism:

It must be easily accessible by employees, including being offered in the workers’ preferred language.
It must guarantee the anonymity of grievance raisers and protect them from reprisal, including taking measures to protect users’ identity, such as by assigning them case numbers and transcribing/encrypting voice calls.
It must have an option to address issues to an independent third party in order to prevent conflicts of interest.
It must have a clear timeline for action and redress, and a way to guarantee accountability, such as a case tracking and management system.

Suppliers will make available Oatly’s grievance mechanism to their employees as applicable, allowing employees to directly raise complaints with Oatly. Complaints may be raised directly to Oatly at whistleblower.oatly.com.

Retaliation against employees reporting violations or cooperating in investigations is prohibited.

MARGINALIZED POPULATION & FREE, PRIOR AND INFORMED CONSENT

Oatly believes in the land rights of individuals and community, thereby standing strongly against illegal land acquisitions. We stand against all forms of encroachment on land, strictly following the regulations outlined by the United Nations’ Food and Agricultural Organization.

We require that Suppliers respect the land and resource rights of communities such as women, indigenous people, and communities affected by Suppliers’ activities, as we believe that control over resources is a key component of self-determination that should be afforded to all persons. The production and use of natural resources must not contribute to destroying the resource and income base for marginalized populations, e.g. by laying claim to large land areas or other natural resources upon which such population groups depend.

The rights and titles to property and land of individuals, indigenous peoples and local communities shall be respected and all negotiations concerning land and property must adhere to the principles of free, prior and informed consent (FPIC) as outlined by the United Nations.

We recognize that this requirement is an evolution that will require our ongoing attention and further refinements.

Retaliation against employees reporting violations or cooperating in investigations is prohibited.

ENVIRONMENT

Suppliers shall be in compliance with all international, national, and local regulations for the environmental impact of your activities, like, but not limited to, waste management (handling and disposal of chemicals and other hazardous substances), water management (spring water protection and recovering, consumption reduction and wastewater treatment), biodiversity protection and regeneration, air pollution and greenhouse gas management. Suppliers will take actions as requested by Oatly to assist in delivering on the sustainability goals outlined in our Oatly Sustainability Plan, and Suppliers will provide (i) regular reporting related to performance against these goals and (ii) any additional information and reporting required by Oatly to comply with applicable rules regarding sustainability reporting. Requested assistance may include but is not limited to: implementing sustainable farming practices as outlined in our Future Agriculture Renovation Movement (FARM) protocol, utilizing recycled or renewable packaging that is fully recyclable (to the extent possible), reducing greenhouse gas emissions, minimizing energy and water use, using 100% renewable energy, reducing waste and employing the best available recycling or disposal options, and utilizing more sustainable transportation.

Suppliers of certain materials and services, including strategic direct materials, may face additional sustainability and related reporting requirements. Please see separately provided, the “Sustainability Requirements” document for further details.

SUPPLY CHAIN TRACEABILITY

Supply chain traceability and transparency are important pre-conditions for meeting our sustainability goals, as well as fulfilling our mission. We are committed to creating and maintaining a supply chain that is bi-directional, and most importantly, accessible to our consumers.

Upon Oatly’s request, Suppliers will describe and document their process for managing traceability and transparency within their own value chain and disclose how they manage related sustainability risks, and provide any information required by Oatly to comply with applicable rules regarding sustainability reporting. Upon Oatly’s request, Suppliers will provide documentation to demonstrate the source of origin of ingredients or products delivered to Oatly.

SANCTIONS & OTHER LAWS GENERALLY

All activities in support of a Supplier’s relationship with Oatly should be in accordance with local and international law. This includes compliance with sanctions and any other applicable rule, regulation or legislation. How Suppliers conduct business when acting on Oatly’s behalf or for Oatly’s benefit is important to us, and at all times should be in compliance with the law. Suppliers will ensure they are aware and remain informed of the applicable sanctions law in the supply of any goods or services. Suppliers should immediately report to Oatly any violation or attempted violation of this provision. A violation of this provision constitutes a material breach and may result in immediate termination.

COMPLIANCE AND SUPPLY CHAIN GRIEVANCE MECHANISM

All Suppliers will act in accordance with our Supplier Code of Conduct. Suppliers are responsible for ensuring that all employees understand, respect and act in accordance with the Supplier Code of Conduct.

Suppliers and partners are responsible for ensuring that their contractors, subcontractors or consultants comply with the Supplier Code of Conduct. Oatly reserves the right to verify the Supplier’s compliance with this Supplier Code of Conduct through various internal and external auditing mechanisms, including — but not limited to — self-assessment questionnaires, including through on-line tools or platforms, on-site audits performed by Oatly or an independent third-party, worker well-being surveys, and confidential worker interviews. Auditors, with reasonable notice, may inspect Suppliers’ facilities, operations, books, records, including financial records, and Supplier-provided housing.

If any investigation reveals non-compliance, Supplier will be asked to issue a corrective action plan within two weeks for Oatly to approve. Suppliers will implement the corrective action plan in an effective and timely manner. The plan shall have clear key performance indicators to measure the success of the outcome, including a well-defined implementation time frame. Upon completion of the plan, Oatly will reevaluate compliance.

If Supplier is found to have breached the Supplier Code of Conduct or any provisions of a corrective action plan, Oatly reserves the right to suspend the purchase and delivery of goods and services, as well as the right to terminate business relations with the Supplier, entirely at Oatly’s sole discretion.

In addition to these fundamental principles, all national laws and regulations and other applicable standards shall be respected.