Ford Motor Company Global Modern Slavery and Human Trafficking Transparency Statement for the Financial Year Ending on December 31, 2021

This statement is made pursuant to reporting requirements of applicable modern slavery and transparency acts1 which require qualifying businesses to provide disclosures related to steps being taken to ensure that slavery and human trafficking are not taking place in our supply chains or any other part of our business.

This statement provides information required for these disclosures and provides guidance to other stakeholders of the Ford Motor Company, subsidiaries, and affiliates. Unless otherwise specified, reference to "Ford", "we", "us", "Company" or "our" refer to Ford Motor Company, subsidiaries, and affiliates.2,3

As of December 31, 2021, we employ approximately 183,000 employees worldwide. The Company designs, manufactures, markets, and services a full line of Ford cars, trucks, sport utility vehicles ("SUVs"), electrified vehicles, and Lincoln luxury vehicles, provides financial services through Ford Motor Credit Company LLC ("Ford Credit"), and is pursuing leadership positions in electrification, mobility solutions, including self-driving services, and connected vehicle services.

For further details on Ford Motor Company's business operations, see Ford'sIntegratedSustainability and Financial Report.

Ford Motor Company Overview

The supply chain in our industry is complex, with many tiers between material suppliers and manufacturers such as Ford. Our supply chain includes component suppliers as well as indirect suppliers of facilities, equipment, materials, and services.

Our products rely on the skills of thousands of employees and the support of our suppliers. Everything we make - or that others make for us - needs to be produced in a manner that is consistent with local laws and our own commitment to protecting

and respecting human rights and the environment, as

Operations

Production Suppliers

Indirect Suppliers

$90 billion global production spend

1200+ Tier 1 supplier companies

48 Ford-owned assembly and powertrain manufacturing sites*

50+ countries

13,500 supplier companies 700+ commodities

4,500+ supplier sites

100,000+ parts manufactured

500+ commodities sourced

* Does not include unconsolidated joint ventures

  • 1 Includes the Australia Modern Slavery Act, California Transparency in Supply Chains Act, and United Kingdom Modern Slavery Act.

  • 2 Includes the Ford Motor Company of Australia Pty Ltd, Ford Technologies Limited, Ford Motor Company Limited, Ford Retail Limited, and Ford Credit Europe.

3 Ford Motor Company of Australia Pty Ltd does not own or control any other entities.

embodied in ourWe Are Committed to Protecting Human Rights and the Environment policy.

The breadth, depth and interconnectedness of Ford Motor Company's supply chain can make it challenging to effectively manage business and sustainability issues. Ford's newSupplier Code ofConduct reinforces supplier requirements and expectations that we have had since 2004. It requires that suppliers adopt and enforce policies in accordance with the law and in line with Ford's policies. It also requires that they cascade these requirements to their own supply chain. We are working with our suppliers in a variety of ways to achieve these requirements.

As a company, our Purpose is to build a better world where everyone is free to move and pursue their dreams. Respecting human rights, supporting equality, providing fair and equal wages, and creating a safe place to work - and ensuring our suppliers and their suppliers do the same - are some of the ways in which we can achieve our Purpose. Ford+, our global strategy for growth, combines foundational strengths and evolving new capabilities to create superior experiences for customers - and profitable growth for Ford - in electric vehicles, commercial vehicles and services, connected services and autonomy and mobility. As Ford takes leadership of the electric revolution, our goal is to do so in a way that creates net positive impacts on people and the environment. In this pursuit, Ford supports transparency from businesses regarding efforts to deter forced labor, slavery and human trafficking in our operations and supply chain. For a summary of our positive impact see "How We Create Sustainable Value" in ourIntegrated Sustainability and Financial Report.

Public Commitments to Human Rights

Ford is the first major U.S. automaker to sign theAction Pledge for the United Nations' InternationalYear for the Elimination of Child Labour.The pledge describes actions companies can take to eliminate child labor around the world in 2021. In signing the pledge, Ford commits to respect human rights by extending policies and due diligence processes outlined in the company's human rights policy that prohibit child labor to its suppliers and business partners. Ford also engages with the Responsible Business Alliance and other multi-stakeholder groups to encourage others across industries to adopt best practices to end child labor and address the root causes.

We are also signatories to the:

  • UN Women's Empowerment Principles

  • UN Global Compact

  • UN Sustainable Development Goals (SDGs)

  • CEO Action for Diversity & Inclusion Pledge

Modern Slavery & Human Trafficking Policies

Our commitment to protecting and respecting human rights is embodied in ourWe AreCommitted to Protecting Human Rights and the Environment policy (formerly Policy Letter 24), which addresses key workplace issues commonly associated with modern slavery, including but not limited to child labor, forced labor, human trafficking, and freedom of association and collective bargaining rights. This policy applies to all of Ford's global operations.

Our policy states that Ford prohibits forced or compulsory labor and must comply with ethical recruitment principles. These include prohibiting the use of misleading or fraudulent practices while offering employment, the use of recruitment fees, and the confiscating, destroying, concealing, and/or denying access to employee identity documents.

Protecting rights to freedom of association and collective bargaining is also vital in preventing modern slavery and human trafficking in our workforce. In alignment with ourWe Are Committedto Protecting Human Rights and the Environment policy and the OECD Guidelines for Multinational Enterprises, Ford works with approximately 44 different unions globally, representing approximately 72% of our global workforce. Substantially all the hourly employees in our global Automotive operations are represented by unions and covered by collective bargaining agreements.

In addition, Ford has aGlobal Framework Agreement (GFA) with IndustriALL Global Union that reiterates our commitments to our global labor community. The principles outlined in the GFA are based on highly respected labor standards supported by groups, institutions, and documents, such as the UN Universal Declaration of Human Rights and the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises.

We ensure ongoing compliance with the GFA principles through open dialogue with our union partners. Where compliance issues are identified, we collaborate on solutions to critical issues as they arise. Ford hosts an annual Global Information Sharing Forum (GISF), attended by union leaders, senior leaders at Ford, and union representatives. Topics at the 2021 meeting included an overview of our Sustainability aspirations, Sustainable Financing Framework, our newSupplier Codeof Conduct,responsible material sourcing, and carbon neutrality.

Supplier Contracts & Policies

In addition to supporting human rights within our own operations, we are committed to working with suppliers who do the same. Ford launched our newSupplier Code of Conduct this year. This Supplier Code of Conduct ("Code") outlines both our requirements and our expectations for supplier relationships in areas related to human rights, the environment, responsible material sourcing, responsible and lawful business practices, and the associated implementation of these principles.

This Code applies to Ford's supplier community. Our requirements and expectations reflect applicable laws, widely accepted international human rights frameworks and charters, and Ford's own internal policies and procedures. We require suppliers to follow all applicable Ford policies and comply with or exceed all applicable laws and regulations. Incorporated into our production Global Terms and Conditions (GT&Cs), the Code requires that suppliers must enforce a similar code of practice and require their subcontractors do the same. We have begun measuring supplier compliance to the Code using the Sustainability Self-Assessment Questionnaire (SAQ) process outlined in the following section.

Ford's GT&Cs are further supplemented by our Social Responsibility and Anti-Corruption Supplier Guide. The Supplier Guide aligns with theSupplier Code of Conduct and expands on our expectations and suppliers' obligations on specific topics, including the prohibition of child labor, forced labor (including human trafficking and physical disciplinary abuse), and any infraction of the law. The Supplier Guide also outlines Ford's requirements regarding ethical recruitment, including the prohibition of recruitment fees, misleading or fraudulent practices while offering employment, and confiscating, destroying, concealing, and/or denying access to employee identity documents.

Assessment of Risks, Due Diligence and Verification

In 2022, we performed our third human rights saliency assessment to identify Ford Motor Company's salient issues. Conducted in line with the UN Guiding Principles Reporting Framework (UNGPRF), the saliency assessment identified and updated the human rights issues at risk of the most severe negative impacts through our activities and business relationships. In conducting the assessment, we consulted with global external subject matter experts in human rights, environment, and labor relations. The assessment identified 10 salient human rights issues, including child labor, forced labor and ethical recruitment, human trafficking, and equal and fair wages (see graphic). These apply throughout our business and extend to our partners and supply chain.

Ford's cross-functional Salient Human Rights Governance team manages and tracks our action plans to prevent, manage and remediate salient human rights issues. This process helps us track the effectiveness of our due diligence systems and performance and indicates opportunities to focus our efforts to address human rights issues, including those that affect how we source materials responsibly. We communicate our progress on our action plans to address our salient issues through ourIntegrated Sustainability and Financial Report and attached reports.

We have conducted more than 70 human rights assessments in Ford's global facilities since 2004, evaluating how they align with ourWe Are Committed to Protecting Human Rights andthe Environment policy. In 2021, Ford continued using an established online third-party assessment tool from theResponsible Business Alliance (RBA) to assess human rights risks across our global manufacturing facilities in a consistent way. The RBA's online assessment tool has been developed by human rights experts and provides a company the opportunity to identify areas within their facility that may be at more risk for human rights issues. Ford plans to continue utilization of RBA's tool to best foster our processes to uphold human rights and to ensure all of Ford's global facilities are regularly assessed for human rights risk. For more information, see ourIntegratedSustainability and Financial Report and attached reports.

We conduct Sustainability Self-Assessment Questionnaires (SAQs) with our global suppliers.

TheSAQ is based on the Automotive IndustryGuiding Principles andPractical Guidance for sustainability which have been developed through a collaboration of global original equipment manufacturers (OEMs). A growing element in our due diligence efforts, the SAQ allows us to assess supplier sustainability and alignment with ourSupplier Code of Conduct.The SAQ also supports our efforts to identify social and environmental risks throughout our supply base.

There are four phases of the SAQ process: data collection, third-party data validation, data analysis and performance improvement. We continue to expand usage of the SAQ to all our tier 1 production suppliers, enabling us to assess policy alignment and measure progress over time. We are also working towards incorporating SAQ results into our sourcing processes. The SAQ is managed through our partnership with Drive Sustainability.

We conduct an annual risk assessment of our Tier 1 supply base related to human trafficking and forced labor. The assessment is based upon multiple factors, including geographic risk profile, commodity manufactured, supplier quality performance, SAQ results, and the nature of the business transaction. Ford performs this risk assessment with input from external resources and stakeholders, including IHS Markit and the US Department of State 2021 Trafficking In Persons Report. Our 2021 supplier risk assessment included data from suppliers representing approximately 89% of our global production spend. The risk assessment supports our audit selection processes and provides key insights to improve our human rights program. We identified 22 countries in the Americas, Asia, Europe, Middle East, and Africa with high risk.

We use standard costing in our cost estimation systems to support supplier sourcing decisions. Based on our suppliers' pricing, if their quotation falls below our internal estimation of their costs, we may investigate to understand the cause and ensure the supplier pricing and cost structure, including labor, are sustainable. Historically, we have chosen not to source suppliers based on unrealistically low pricing/costing.

Supplier Audits & Effectiveness

We regularly conduct social responsibility audits of at-risk Tier 1 supplier factories. These audits evaluate supplier compliance with both local law and Ford's human rights expectations as communicated in ourSupplier Code of Conduct.These audits are performed through the independentRBA Validated Assessment Program (VAP v7.0). As in previous years, 100% of Ford's 2021 audits were externally validated and certified by the RBA. Ford's auditee list includes suppliers representing a broad range of commodity groupings from all regions of the world that were identified using our risk assessment process. Audits include worker interviews and can be either announced or unannounced.

Per the RBA VAP, our audits of suppliers evaluate for 43 Conformance Requirements, including the following:

  • All work must be voluntary

  • Workers must not be under the age of 15, or under the supplier policy minimum age, or under the legal minimum age for employment, whichever of these is greatest

  • Working hours do not exceed the maximum set by local law, and a workweek should not be more than 60 hours per week, including overtime, except in emergency or unusual situations

  • Workers must be provided with understandable wage statements that include sufficient information to verify accurate compensation for work performed

  • No harsh and inhumane treatment of workers

  • No harassment of or discrimination against workers

  • All workers have the right to form and join trade unions, to bargain collectively, and to engage in peaceful assembly

  • All required permits, licenses and test reports for occupational safety are in place

  • Potential for worker exposure to health and safety hazards is controlled

  • Process to cascade VAP code conformance requirements to company's own suppliers and to monitor their compliance to the code

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Ford Motor Company published this content on 03 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 May 2022 03:12:05 UTC.