Efforts to Eradicate Human Trafficking
Lockheed Martin Policy on Supply Chain Transparency Concerning Modern Slavery and Human Trafficking
The California Transparency in Supply Chains Act of 2010 requires retailers and manufacturers doing business in California to disclose efforts to eradicate slavery and human trafficking from its direct supply chain. Section 54 of the United Kingdom Modern Slavery Act 2015 requires commercial organizations to disclose their policies and other information in relation to slavery and human trafficking, and the steps the organizations have taken during the preceding financial year to ensure that slavery and human trafficking are not taking place within the business and its supply chains.
Lockheed Martin is committed to ensuring that its employees and suppliers take appropriate steps to mitigate the risk of human trafficking and slavery from occurring in any aspect of its business and supply chain. The following information is provided in compliance with the foregoing statutes.
 For the purposes of this Modern Slavery Act 2015 except where referring to future intent this statement reflects the steps taken during Lockheed Martin’s and its subsidiaries’ 2017 financial year.
Verification of Supply Chain
Lockheed Martin verifies product supply chains through several methods, including site evaluations, inspections, verification of government debarments and denied parties lists, among others. Lockheed Martin requires as a condition of contract that all suppliers agree to comply with all applicable laws and regulations. Suppliers outside the United States are required to comply with their local laws, as well as applicable laws of the United States.
Evaluation of Supplier Compliance/Audits
Lockheed Martin does not conduct audits of suppliers to evaluate supplier compliance with specific standards for trafficking and slavery in supply chains. However, Lockheed Martin maintains an ethics helpline at (US) 1-800-LM-ETHIC (When calling from outside the U.S., first dial the origin country's exit code).
Anyone who observes conduct contrary to the principles set forth in Lockheed Martin’s Code of Conduct may call the Ethics helpline number that is included in all supply contracts. Lockheed Martin promptly investigates all reported matters and takes action as needed, including disclosure to governmental authorities as appropriate.
Lockheed Martin requires as a condition of contract that all suppliers commit to comply with applicable laws and regulations, but does not require suppliers to certify expressly that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
Lockheed Martin has also established a Supplier Code of Conduct that communicates the core principles to which we expect our suppliers to adhere. It includes the following provisions:
We expect our suppliers to treat people with respect and dignity, encourage diversity and diverse opinions, promote equal opportunity for all, and help create an inclusive and ethical culture.
We expect our suppliers not to engage in the use of forced, bonded (including debt bondage) or indentured labor, involuntary prison labor, slavery, or trafficking of persons. This includes transporting, harboring, recruiting, transferring, or receiving vulnerable persons by means of threat, force, coercion, abduction, or fraud for the purpose of exploitation.
We expect our suppliers to ensure that child labor is not used in the performance of work. The term “child” refers to any person under the minimum legal age for employment where the work is performed.
Lockheed Martin Corporation and Its Supply Chain
Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs approximately 100,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
As a global security and aerospace company, the majority of Lockheed Martin's business is with the U.S. Department of Defense and U.S. federal government agencies. In addition, Sikorsky (a Lockheed Martin Company) provides military and rotary-wing aircraft to all five branches of the U.S. armed forces along with military services and commercial operators in 40 nations. The remaining portion of Lockheed Martin's business is comprised of international government and commercial sales of products, services and platforms.
Lockheed Martin has a number of subsidiaries that are wholly owned or controlled by Lockheed Martin. Our subsidiaries are required to substantially adopt Lockheed Martin compliance requirements, including those related to human trafficking as described below, or demonstrate when required that they have equivalent standards. Throughout this statement “Lockheed Martin” refers to the whole organization, including wholly-owned or controlled subsidiaries.
Lockheed Martin has a large, complex supply chain consisting of more than 16,000 first-tier suppliers, and numerous lower-tier suppliers. The majority of Lockheed Martin’s suppliers are in the United States, but significant numbers of suppliers are located in Europe, Canada, and other parts of the world.
U.S. Government Contracts Only
Most Lockheed Martin prime contracts with the U.S. Government contain Federal Acquisition Regulation (FAR) clause 52.222-50 Combating Trafficking in Persons (48 C.F.R. § 52.222-50). Lockheed Martin has established a compliance plan to address the requirements of the clause, including the following:
(i) Establishment of an awareness program to inform contractor employees about the U.S. Government's policy prohibiting trafficking-related activities, the activities prohibited, and the actions that may be taken against the employee for violations;
(ii) A process for employees to report, without fear of retaliation, activity inconsistent with the policy prohibiting trafficking in persons, including making available to all employees the hotline phone number of the Global Human Trafficking Hotline at (US) 1-844-888-FREE (When calling from outside the U.S., first dial the origin country’s exit code) and its email address at firstname.lastname@example.org;
(iii) A recruitment and wage plan that only permits the use of recruitment companies with trained employees, prohibits charging recruitment fees to the employee, and ensures that wages meet applicable host-country legal requirements or explains any variance;
(iv) A housing plan, if the contractor or subcontractor intends to provide or arrange housing, that ensures that the housing meets host-country housing and safety standards; and
(v) Procedures to prevent agents and subcontractors at any tier and at any dollar value from engaging in trafficking in persons and to monitor, detect, and terminate any agents, subcontracts, or subcontractor employees that have engaged in such activities. This includes flowing down the requirements of FAR 52.222-50 by the supplier to its lower tier suppliers as required by the clause.
Internal Accountability Standards
Lockheed Martin maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking. Lockheed Martin has implemented several internal policies addressing this requirement; an example is Corporate Policy Statement, Good Corporate Citizenship and Respect for Human Rights, which states that Lockheed Martin seeks to improve the global society in which we operate, advance technological and economic development, communicate honestly and forthrightly, and hold ourselves accountable to deliver consistently what we promise to our stakeholders (customers, stockholders, employees, partners, suppliers, and communities); and minimize any negative consequences of our business activities.
Additionally, Lockheed Martin’s Corporate Policy Statement on trafficking in persons sets forth requirements for compliance with the United States Government’s zero tolerance policy on trafficking in persons.
Employees and covered subcontractors must comply with FAR 52.222-50 as required by our contracts. Violations may result in disciplinary action, up to and including termination of employment.
Lockheed Martin has procedures in place for employees to report, without fear of retaliation, activity inconsistent with the policy prohibiting trafficking in persons. When violations involving employees are substantiated, Lockheed Martin will take appropriate disciplinary action. If the violation involves Lockheed Martin suppliers, appropriate action, up to and including termination of contracts will be undertaken. Lockheed Martin will make all required disclosures under FAR 52.203-13 or FAR 52.222-50, including disclosure of remedial actions taken in response to violations that are reported.
Lockheed Martin has developed initial training for recruiters to ensure compliance with company standards regarding slavery and trafficking. Lockheed Martin will continue to develop and maintain training modules that support our commitment to human rights, including child or forced labor, trafficking of persons, adherence to labor laws, adherence to truthful and trustworthy practices during the recruitment of employees or offering of employment, proper disclosure of information, and proper representations during the recruitment process to include key terms and conditions of employment, wages, fringe benefits, work location, housing, and nature of work.
Suppliers needing assistance with developing compliance plans will be provided copies of Lockheed Martin’s Combating Trafficking in Persons Compliance Plan, its Code of Conduct, and Supplier Code of Conduct as needed.
Further Development and Reassessment of Lockheed Martin Anti-Trafficking Plan
Lockheed Martin will continue to review, reassess, and further develop its anti-trafficking plans, not only to ensure compliance with the law but also to ensure that we fulfill our core values - Do the Right Thing, Respect Others, and Perform with Excellence. As suppliers provide evidence of their anti-trafficking plans and as other companies make their Modern Slavery Act declarations, Lockheed Martin will actively review and consider any best practice that it can adopt to enhance its own developing policies and procedures.