Competing Globally : Arch Chemicals

Competing Globally

Arch conducts business in numerous countries and deals with many different cultures. Regardless of where we do business, we must adhere to Company policy, our Code of Conduct and the laws and regulations of the U.S. and of the countries where we do business.

Working with Our Suppliers
We manage our supplier relationships in a fair, equitable and ethical manner consistent with our Code of Conduct, our policies and all applicable laws and regulations. We also partner with our suppliers to meet the objectives of Responsible Care® and work together to provide products and services to our customers, taking into consideration safety, health and the environment.

Wherever practical we provide a competitive opportunity for suppliers to earn a share of our purchases, including small businesses and businesses owned by the disadvantaged, minorities and women. We also enlist the active support of our suppliers in ensuring that we meet customer expectations regarding quality, cost and delivery.

When we make the decision to hire a subcontractor or source materials from a particular vendor or supplier, it is made on the basis of objective criteria such as quality, reliability, technical excellence, price, delivery, service and maintenance of adequate sources of supply. We do not make purchasing decisions on the basis of personal relationships and friendships or the opportunity for personal financial gain.

All Arch employees must respect the terms of supplier contracts and licensing agreements and maintain open, honest dialogue consistent with good business practices. Employees must also safeguard all information received from a subcontractor or supplier, including pricing, technology or proprietary design information, and not disclose it to anyone outside of Arch without the supplier or vendor's written permission.

Product Quality
The reputation of our Company and the ultimate success of our business are dependent in large part on the integrity and quality of our products and services. Employees must ensure that Arch products and services conform to all applicable laws, regulations, specifications, test procedures or any other contractual requirements.

Arch employees must never:

Falsify, alter or distort any inspection or test documentation or software
Improperly or erroneously record inspection or test results
Falsely certify or state that required inspections or tests were performed or that test documentation is available
Mislead any customer's representative
Use incomplete or improper inspection or testing protocols or procedures

Antitrust and Fair Competition
The U.S. and many other nations have antitrust and other trade laws and regulations designed to promote free and fair competition. You must comply with these laws as well as laws related to competition in countries where we do business. A violation of these laws and regulations may result in serious criminal and civil sanctions for both corporations and individuals.

You should avoid discussions with competitors and potential competitors unless the discussions have a valid business purpose and, then, keep any discussions to a minimum. It is particularly important that you not propose or enter into any agreements or understandings with competitors, customers, distributors and suppliers, whether formal or informal, written or unwritten, that would set prices or limit the availability of products or services.

To avoid even the appearance of an agreement, you should never discuss any of the following with a competitor:

Prices, discounts or credit terms
Costs
Profits or profit margins
Allocations of markets, orders or customers
Limits on production or sales volume
Distribution methods or allocations
Production capacity
Sales territories
Agreements to refuse to do business with suppliers and competitors
Group boycotts of suppliers and competitors

Competition law issues can be very complex. You must review with the Legal Department any issues, activities or agreements that might raise antitrust issues. Consult with the Legal Department before proposing or entering into any agreements or understandings that:

Obligate a supplier or customer to conduct business with Arch before Arch will purchase from or sell to it
Restrict a customer's choices in using or reselling an Arch product or service
Require a customer to purchase one Arch product or service as a condition to purchasing another Arch product or service
Restrict any party's freedom to conduct business with or produce or provide any product or service with any other party
Restrict the freedom of a licensee or licensor of any patent, copyright or licensing arrangement

Competitive Information
Competitive information is a valuable business tool that allows us to understand our marketplace and
better meet the needs of our customers. However, it must be gathered fairly, ethically and in compliance with all applicable laws and regulations.

You should seek competitive information only when there is a reasonable belief that both the receipt and the use of the information are lawful. Competitive information includes anything related to the competitive environment or to a competitor's products, services, markets, pricing or business plans.

Competitive information that is drawn from published sources or that is otherwise widely available is known as "public information" and may be acquired and used lawfully. You may lawfully gain access to or use proprietary information belonging to competitors under the following circumstances:

By deriving information from public sources
By observing items in public use and deriving information from such use
By obtaining a license to use the information
By purchasing the outright ownership of the information legally owned by another
By lawfully obtaining product samples and deriving information through reverse engineering of the product

You must never try to obtain or be willing to accept improperly obtained non-public information about competitors. Arch employees should never:

Obtain proprietary information by means of theft, bribery or misrepresentation
Hire a competitor's employee for purposes of improperly obtaining competitive information
Induce or coerce a person to provide competitive information in exchange for gifts, job offers or the withholding of the same
Copy, duplicate, draw, photograph or otherwise convey someone else's proprietary information
Knowingly be in a restricted area of a party's premises without authorization
Obtain product samples without authorization from the owner
Gather information from a competitor through invasive means (e.g., wiretapping, electronic eavesdropping or "hacking into" a computer system)
Obtain proprietary information accidentally misplaced or left in an unsecured place or medium
Employ an intelligence-gathering firm to collect proprietary competitive data while misrepresenting themselves or the purpose of the data collection

Trade Controls and Export Restrictions
The U.S. has established a system of licensing requirements and controls to regulate the export and import of products, technology and software. These requirements and similar requirements of other countries are designed to protect national security, control the transfer of equipment and ideas and promote foreign policy.

The export and import laws regulate exports from the U.S. as well as re-exports of domestic products and technology from one country to another. Therefore, Arch's products are regulated whether they are shipped from the U.S. or shipped from a country outside the U.S. The U.S. also regulates the sale of defense-related goods.

If you are involved with the marketing, sale or transfer of products or technology in the international and domestic arena, you must fully comply with all of the laws, regulations and public policy of the U.S. as well as other countries where we do business. Failure to comply with these regulations may constitute a crime with serious sanctions including fines and imprisonment for Arch and any individuals involved. Companies that do not comply with these laws may also be denied the right to participate in export trade.

International transactions that are not authorized by an applicable regulation, export or re-export license or approval are prohibited. Also prohibited are unauthorized transactions with:

Embargoed countries and individuals or entities listed on the U.S. Department of State's Debarred Parties List, the Department of Commerce's Denied Persons and Unverified Parties Lists and the General Services Administration's Debarred Bidders and Excluded Parties lists
Arms proliferation-related end users or parties named on the Department of Commerce's Prohibited Entities List
Individuals and entities listed on the Department of Treasury's Office of Foreign Assets Control Specially Designated Individuals and Entities List or to countries under embargo administered by the Office of Foreign Asset Control
Any party known or believed to be acting in violation of U.S. laws and regulations or the laws and regulations of other countries where we do business
Parties who refuse to do business with or discriminate against another country or entity in support of a boycott not sanctioned by the U.S. government

Anti-Bribery and The U.S. Foreign Corrupt Practices Act (FCPA)
Strict rules apply when we do business with government agencies and officials, whether in the U.S. or other countries. For instance, we must comply with the U.S. Foreign Corrupt Practices Act (FCPA) as well as similar laws and regulations in other countries where we do business. These regulations make it a crime for Arch, or any of its subsidiaries, agents, or employees to directly or indirectly offer, promise or pay a bribe to a public official.

The term "public official" refers to any official of, or any person acting in an official capacity on behalf of, a government, agency, department or instrumentality, a government-owned corporation or a political party. The term also applies to any party officials or candidates for political office and any public international organizations such as The World Bank or the Red Cross.

Payments to a public official are considered illegal if they are made for the purpose of influencing an official to help the Company obtain or retain business or favorable legislation or action. Payments are considered illegal for these purposes whether they are made through consultants, advisors, suppliers, customers or other third parties and also whether they are made with corporate or with personal funds.

No matter how lucrative a deal, if you cannot obtain a contract without paying a bribe, you must walk away from the deal and report it immediately to your supervisor and the Legal Department. Arch's reputation for integrity is more important than the profit from any contract.

You should be alert to a possible FCPA violation if any of the following occur:

Unexplained large expenses on a Travel & Entertainment expense report
Any agent demanding payment before the award decision is announced
Agents or sales representatives demanding a higher than normal commission for a transaction
Agents or salespeople who say they are working with a government official to give Arch the contract
A request that a commission be made in cash, in another name or in a third country

Agents, Consultants and Other Third Parties
The acts of third parties such as Arch's agents, consultants, independent contractors and representatives, are considered the acts of Arch. In other words, we cannot use agents or representatives to do indirectly what we could not do directly. All Arch employees, agents and representatives must abide by all laws in spite of customs, cultural norms or competitive pressures that suggest otherwise.

If you are responsible for the selection or approval of an agent or other third party, you must conduct adequate background checks to ensure that the parties are qualified and reputable. This includes such steps as determining if the party has ties to the government and checking the reputation of the party with the U.S. Embassy or Consulate and with local bankers, clients and other business associates.

When you negotiate a relationship with a third party, you should seek the assistance of the Legal Department in making background checks and verifying business credentials. Here are some "red flags" to look out for:

Third parties with family or other relationships that could influence the buying decision
Independent contractors or consultants with a reputation for bribes
A history of corruption in the country where the third party is being hired
Unusually high commission requests
A sales representative or agent who approaches you near the award of a contract and indicates a "special arrangement" with an official
A customer who suggests that an Arch bid be made through a specific agent or representative

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