Human rights Governance

The Pirelli Group pursues and supports the respect of human rights affirmed in international venues.These values have always been firmly anchored in corporate management.

Human Rights Governance is fully integrated in the Sustainable Management System adopted by Pirelli, which is based on the United Nations Global Compact of the, of which the Company has been an active member since 2004 – as well as a member of the Steering Committee of Global Compact Lead – the ISO26000 guidelines and the provisions of SA8000® Standard.

The commitment of Pirelli to Human Rights is specifically addressed in “The Pirelli Group Values and Ethical Code”, approved by the Board of Directors, and in detail, in the Social Responsibility Policy for Occupational Health, Safety, Rights, and Environment”, signed by the Chairman and which provides that “The sustainable development strategies of the Group presume, inter alia, a commitment to continuous improvement of the environmental, occupational health and safety aspects related to its own activities, in firm compliance and support of the contents of the “Universal Declaration of the Rights of Man”, the “International Labour Organisation Declaration on Fundamental Principles and Rights at Work”, the “Rio Declaration on Environment and Development” and the “United Nations Convention against Corruption”, before listing all the commitments made by Pirelli in this regard, including reference to each of the ILO Core Labour Standards and its extension to the supply chain.

The “Equal Opportunities Statement”, also signed by the Chairman, is dedicated to the Group commitment to equal opportunities and non-discrimination.

Any human rights violation may be reported to the Company by using the Whistleblowing Procedure.

A section is dedicated to the Procedure elsewhere in this chapter, to which reference is made for more detailed information on the received reports. However, none of the Reports received in 2013 concerned alleged violations of human rights or ILO Core Labour Standards, with specific reference to forced labour, child labour, freedom of association and bargaining, and non-discrimination, as also stated in the Independent Assurance Statement published at the end of this report, and to which rteference is made.

All of the aforementioned documents have been distributed to employees in their local language. They are also an integral part of the sustainability clauses of contract applied to Group suppliers, as well as being published on the Pirelli website in the languages spoken by Pirelli employees and its principal suppliers.

In regard to human rights governance, Pirelli acts on the basis of the recommendations set out in the “Guiding Principles for Business and Human Rights: implementing the United Nations Protect, Respect and Remedy Framework” of 2011, which translate into actual company practise the three pillars “Protect, Respect and Remedy” identified in 2008 in the “Framework for business and Human Rights” by Professor John Ruggie, Special Representative for companies and human rights at the United Nations.

Moreover, human rights are included in the mapping of materiality of sustainability factors for Group strategies. The mapping, which consolidates the opinion of all categories of Company stakeholders, including employees, suppliers, institutions and dozens of NGOs present in the countries where the Company operates, is published in this chapter.

The human rights management processes are handled by the Pirelli Sustainability & Risk Governance Department, which acts in concert with the affected and responsible functions, and in reference to the internal and external community.

Before investing in a specific market, ad hoc assessments are conducted of any political, financial, environmental and social risks, including those related to the respect of human and labour rights. The context inside and outside the company is monitored in those countries where Pirelli does operate, in view of preventing negative impacts on human rights in the ambit of the sphere of corporate influence, and if so, remedying them.

In terms of materiality in the corporate value chain, the respect of human rights assumes particular importance in the human resources and the supply chain areas..

The management of human rights in the supply chain is reported in the section dedicated to Pirelli suppliers, Chapter 2 of this report, to which reference is made for more details.

The management of human and labour rights in the Pirelli internal community is reported in the section dedicated to “Compliance with statutory and contractual obligations governing overtime, time off, freedom of association, equal opportunities and nondiscrimination”, in Chapter 4 of this Report and to which reference is made for more details.

Both management areas – Employees and Suppliers – are managed by using training and monitoring tools that have been consolidated over the years.

The Pirelli Training Model also draws newly hired employees’ attention to the Group’s sustainability policies and the commitments they involve, as detailed in the Ethical Code, the Code of Conduct, the Equal Opportunities Policy, and the Social Responsibility Policy for Occupational Health, Safety, Rights, and Environment, thus including Pirelli upholding the contents of the “Universal Declaration of Human Rights”, the International Labour Organisation’s “Declaration on Fundamental Principles and Rights at Work”, the “Rio Declaration on Environment and Development” and the United Nations “Convention against Corruption”, as well as the indications of Standard SA8000®., beginning with the ban on forced labour and child labour, and then free bargaining, equal opportunities and nondiscrimination.

All of these issues are also the subject of training courses for all Sustainability and Purchasing Group managers.

Specifically in regard to Suppliers training, following the training project targeting strategic suppliers provided by e-learning format in 2012, Pirelli extended the same sessions to all Group security service providers worldwide during 2013. This training course addressed aspects of labour rights, human rights, respect for the environment and business ethics..

Together with constant co-ordination and monitoring at the corporate level, compliance with Pirelli human rights and labour rights requirements and environmental sustainability and business ethics rules is assessed in periodic audits commissioned by Pirelli to specialised independent firms, as well as through Audits performed by the Pirelli Internal Audit Department. The audit activities carried out in 2013, both at Pirelli sites and supplier sites, are extensively discussed in the Risk Governance section of this chapter, as well as in the section “Industrial Relations” of the third chapter, to which reference is made for more details. It should be noted that none of the audits revealed any breach of the ILO Core Labour Standards, with specific reference to forced labour or child labour, free association and bargaining, and non-discrimination, as also stated in the Independent Assurance Statement published at the end of this report, and to which rteference is made.

In regard to the context outside the Company, beginning with the local communities where the Company operates, Pirelli pursues dialogue, especially with representatives of local and national institutions and non-governmental organisations. This allows the Company to define its own activities in support of local development. The Company dedicates special attention to initiatives in support of children, training, sport and health. The initiatives in favour of the external community are described in Chapter 4 of this report, to which reference is made for more details.

The Human Rights Management System was audited once again this year by independent party, in the terms and with the results described in the Assurance Statement at the end of this report.