"The automotive industry signs a joint Code of Business Conduct to support the restart of production" CLEPA and ACEA

What is the objective of the code of business conduct in relation to COVID19?

The aim of the code is to successfully exit the coronavirus crisis and this will require the timely sharing of critical and appropriate information, ensuring that all actors in the value chain can plan and act as effectively as possible.

"While the safety and well-being of our communities remain the first priority, a timely and well-coordinated industry restart is of paramount importance to mitigate the impact of the COVID19 crisis on society. The joint automotive industry code of conduct will make a big difference in this process," notes Sigrid de Vries, Secretary General of CLEPA.

What areas does the business code of conduct attack against COVID19?

The Code of Conduct contains chapters on health and safety in the workplace, timely communication, contractual requirements and coordination of the resumption of activity.

1. Safety in the workplace. 

The health and safety of citizens and employees is a priority. Therefore, all actors in the value chain must commit to:

• provide a safe working environment, in accordance with applicable safety standards.

• ask public authorities for harmonised measures across the EU, as far as possible.

• discuss, together with the social partners, common criteria, standards and conditions under which employees can safely return to work to restart production. 

• ensure excellent communication with employees, install measures for preventive health care, and provide the necessary training.

• share best practices on health and safety with partners along the value chain.

2. Transparency:

Successfully exiting the crisis will require the timely sharing of critical and appropriate information, enabling value chain partners to plan and act as effectively as possible. Before and after the process therefore, value chain partners commit themselves to:

• provide each other with transparent and credible information on expected demand and inform each other in a timely manner about delays and subsequent deviations.

• share information on shutdown, downtime and capacity increases in order to avoid unnecessary loss of money.

• communicate clearly and transparently with their business partners about actual capacities at production sites, under consideration of safety measures.

• discuss in good faith with their business partners whether the exceptional situation requires reprioritisation of ongoing projects taking into account limited R&D and plant capacities. This may involve revision and/or postponement of project milestones and planning.

3. Contractual requirements:

All actors in the value chain have a shared responsibility for the continued prosperity of the sector. Therefore, the actors in the value chain believe that:

• this industry can only emerge well from this crisis if all actors respect contractual agreements, in particular with regard to payments, receipt and timely delivery of ordered products, investments, tooling, testing, development and engineering services and inventories, and so on,

• taking into account the extraordinary circumstances affecting the whole industry. These terms should be applied pragmatically with the objective of avoiding imposing unnecessary operation or additional cost on value chain partners.

4. Preparing for recovery:

An orderly restart of production throughout the automotive value chain is impossible without close coordination. Therefore, all actors in the value chain are committed to:

• a timely start-up of production capacities, coordinated between all upstream and downstream partners in a difficult and continuous economic and health environment. This refers to projects, production plants as well as logistical capacities and, if necessary, also the consideration of potential critical needs of the parties involved. 

• Consider the effects of production shutdowns in one region and the availability of its components for the continuation of production in other parts of the world. 

5. Fair competition 

Despite the recognised need for broad industry cooperation, all actors in the value chain are fully committed to compliance with applicable competition laws. In addition to regular legal review of all coordination and information exchange efforts, the following principles will apply:

• Commercially sensitive information, including demand, production capacity or downtime or capacity increases, will be limited to partners in the same value chain and are generally not shared with competing value chains. sí.

• Where information exchange or temporary cooperation between competitors is deemed necessary to avoid supply shortages caused by COVID-19, such exchange or cooperation must be structured in accordance with Article 101TFEU/53 of the EEA Agreement or other applicable competition laws and in accordance with the guidance of the competent competition authorities.

"Our commitment is to come out of the crisis even stronger and all those involved in the value chain have a shared responsibility in managing the revival of the industry in a sustainable way. The Code of Business Conduct provides manufacturers and suppliers with essential guidance on the approach needed to overcome the COVID19 crisis," stresses Eric Mark Huitema, Director General of ACEA.

As stipulated in the Code, COVID19 represents a global health, social and economic challenge with a potentially serious impact on individuals, companies and countries. Minimising the risks to employees and the wider community must always be a top priority. Working together against the COVID19 crisis, in a spirit of collaboration and in compliance with applicable competition laws, will lead to the best possible outcomes to protect people and minimise economic harm.