General Dynamics recognizes the fundamental human dignity of all people
General Dynamics Corporation Policy Statement on Human Rights
General Dynamics Corporation recognizes the fundamental human dignity of all people. As a company with operations and suppliers around the world, we appreciate the importance of ensuring that basic human rights are respected in our business activities. This core value is embedded at all levels of our business.
We believe that corporate values are best measured by the conduct of the corporation and its employees, not words on the page. That is why our corporate Ethos is the single most important element of our culture. It undergirds all of our actions. Through our Ethos, we commit ourselves to transparency, trust, honesty and alignment in all things, at all times: between fellow employees; with our customers; and toward anyone with whom we interact. It is our fundamental moral character.
These fundamental values demand responsible and ethical practices, and an unshakable commitment to human rights. We respect the dignity of the work done on our behalf. We do not discriminate, and we value the diversity of our workforce and business partners. We respect the rule of law. We recognize the special responsibilities that come with products and services with lethal capabilities, and we rigorously comply with applicable laws and requirements regarding product safety and end use.
In carrying out our core commitment to human rights, our North Star is the law and policy of the U.S. government. In our complex and international business, some circumstances may be subject to potentially competing imperatives over how and to whom we provide our products and services. Given our role as a core supplier to the United States government and military, we are legally, ethically and morally bound to support the foreign and defense policy of the United States.
General Dynamics Corporation holds itself accountable to these fundamental commitments. Our Board of Directors and senior management retain direct oversight of our material risks, including those related to human rights. If there is a problem, we want to know about it so that it may be properly addressed.
It is a privilege to support the U.S. government and our customers around the world. If we do not do what is right, we will lose the right to do it at all.
Human Rights Areas of Focus
For our company, carrying out our commitment to human rights includes:
We respect the dignity of the people who perform work on our behalf. Work must be fairly compensated and free from coercion and unnecessary danger. We pay fair wages. We ensure a safe working environment. We never tolerate human trafficking, slavery, child labor or abusive employment practices either in our company or at any point in our supply chain.
We do not discriminate. All people must be treated fairly regardless of race, ethnicity, gender, sexual orientation or religious belief. We do not tolerate racism, sexism or invidious discrimination in any form.
We value diversity. The diverse backgrounds, experiences and viewpoints of our employees and business partners is a source of strength for our company. We strive to promote a diverse and inclusive organization.
We acknowledge the special responsibility associated with products and services capable of taking human life. Many of our products and services include, or otherwise support, lethal capabilities. This imposes a terrific responsibility on us. To meet this call, we rigorously comply with applicable laws and regulations relating to the export and end use of our products and services. We also maintain demanding quality processes to reduce the risk of accidents and product safety injuries.
We respect the rule of law. The restraints of law secure human freedom. Strict adherence to applicable law is expected wherever we operate.
We are transparent and accountable about our human rights commitments. We make public disclosures regarding our human rights commitments, consistent with the Sustainability Accounting Standards Board framework, and in our Sustainability Report. Our Board, directly and through its Sustainability Committee oversees sustainability risks and opportunities, including those related to human rights. Management maintains day-to-day responsibility for these areas through internal management procedures and internal controls.
We further embed these principles in our Code of Conduct and in many of the comprehensive corporate directives and practices adopted by our Corporation and individual operating units.
We expect all persons associated with General Dynamics Corporations to live up to these commitments. We encourage employees who believe that there has been a violation of our policy statement or our core commitments to human rights to report it, including through our Ethics program or Hotline.
Due Diligence and Human Rights
Risk based due diligence is an important part of our approach to identifying, assessing, and mitigating risk. By taking prudent steps to understand the proposed parties and nature of proposed engagements or transactions, we strive to consider the implications of our business activities prior to entering into them.
Human rights risks, like other risks associated with any engagement or transaction are encompassed within this well-established approach to addressing risks. Risks related to human rights may arise in a variety of areas associated with a particular engagement or transaction, from supply chain conduct to environmental implications of operations. Our due diligence accordingly is focused on particular risks rather than human rights generally.
As context for our due diligence activities as they relate to human rights risks, the nature and location of our business opportunities mitigates or avoids certain risks. This changes the overall risk profile of the engagement or transaction on which we conduct due diligence and the nature of the particular risks on which we focus in that due diligence. For example, we have concentrated our supply chain in the United States. This factor has several advantages for our business, including abating concerns regarding modern slavery or child labor from most of our supply chain transactions.
Under our risk-based approach to due diligence, the focus and extent of due diligence depends on a variety of factors, including the parties involved and the nature and circumstances of the engagement or transaction under review. These review efforts scale in proportion with the degree of potential risk: for example, we do not conduct customer-based due diligence for our U.S. government sales.
Following this risk-based approach, our due diligence may focus on:
- Identity of the party or parties involved in the transaction, including the potential end user of product or services
- Beneficial ownership of party or parties
- Impacts of U.S. and other applicable export laws and sanctions on the proposed party or parties, engagement or transaction, including restrictions on end-use, end-users or retransfers
- Legal structure, location of business operations, and related entities of those involved in the transaction
- Qualifications and ability to perform relevant obligations by relevant party or parties
- Supplier quality and compliance, including related to conflict minerals and labor practices
- Counterparty labor standards and compliance with occupational and health requirements
- Environmental impacts and compliance with environmental laws regulations
- Anti-corruption or anti-money laundering risks associated with the party or parties, engagement or transaction, including relations with government officials or political candidates or reputational concerns
- Financial, cyber, or operational risks associated with the relevant engagement or transaction
- Other regulatory or reputational risks associated with the party or parties, engagement or transaction
We tailor our efforts to the particular due diligence focus area and related risks. We use a variety of tools, techniques, and analyses to identify and assess the risk of a proposed engagement or transaction. For example, depending on the engagement or transaction and focus of the due diligence, we may use:
- Screening of relevant parties against government-issued lists of individuals, entities and countries subject to concerns, prohibitions, sanctions, or regulatory enforcement
- End-use certifications
- Site visits and meetings
- Engagement of specialized external advisors
- Third party audit or investigative surveys, self-assessments, or interviews of parties involved in the transaction
- Reference checks
- Specialized database searches
- Open source and web searches for adverse media
- Review of financial records, banking information, legal and corporate records, and credit checks
- Anti-corruption or conflict of interest statements or certifications
- Financial analyses
- Legal assessments
Red flags regarding potential legal, policy, regulatory, reputational, or operational risk are escalated within our robust risk management structure. Where appropriate, we conduct further, enhanced due diligence. The results of due diligence and potential risks are assessed by management from relevant functions such as, depending on the nature of transaction and risks, operational management, human resources, legal, international trade compliance, finance, engineering, health and safety, manufacturing and supply chain. Engagements or transactions presenting significant risks are escalated to senior management in accordance with our risk management framework.
Board Oversight And Reporting
Our Board oversees our risk-based approach to due diligence as part of our overall risk management structure. Significant risks identified through our due diligence process are escalated to the Board if appropriate as part of its oversight of the relevant business operations in which that risk arises.
In addition to oversight of the risk management process, due diligence as it relates to sustainability topics, including human rights, are specifically discussed with and overseen by our Board’s Sustainability Committee.
International Sales and End-Use Monitoring
Our international transactions relating to U.S. defense articles or services are undertaken in compliance with U.S. trade laws and regulations. Our international sales of defense articles or services must be aligned with and support U.S. national security and foreign policy. We maintain a comprehensive international trade compliance program focusing on risks associated with export, sanctions, and anti-corruption compliance.
In addition to our due diligence, our sales of U.S. defense articles to non-U.S. governments are subject to additional U.S. government review and approval. While this government review is not a feature of our internal process, it is essential context to understand the human rights risks associated with the end user and the end use of our products and services.
U.S. defense articles may be sold internationally through either the Direct Commercial Sales or Foreign Military Sales process. Direct Commercial Sales are contracts entered into directly with a non-U.S. government. Foreign Military Sales are sales that are completed through the U.S. Department of Defense. Each channel requires authorization prior to export.
Proposed exports are subject to comprehensive U.S. government independent review of the end-user and transaction. This review is coordinated with between relevant U.S. Government agencies, including depending on the transaction the Department of State, Department of Commerce, and the Department of Defense. Significant transactions, including sales involving significant monetary value must also be certified to Congress.
This government review and approval includes independent end-user review. By law and policy, the U.S. Government expressly takes into account human rights considerations. For example, the President’s 2023 National Security Memorandum directed the executive branch to take into account when considering transaction for approval, among other factors, “risk that the recipient may use the arms transfer to contribute to a violation of human rights or international humanitarian law.”
End use monitoring provides additional context for understanding the human rights related risk associated with any transfer pursuant to the U.S. export regime. The U.S. Government, through both the State Department and the Department of Defense, maintains its own end-use monitoring program:
- The State Department Blue Lantern End-Use Monitoring Program provides end-use verification of defense articles and services sold via direct commercial sale.
- The Department of Defense’s Golden Sentry End-Use Monitoring Program verifies and monitors the end-use of defense articles or services transferred via Foreign Military Sales.
Through these programs, the U.S. government verifies the bona fides of the parties and end-users, and tracks whether the articles and services are being used for the purposes for which they were provided.
In addition to U.S. Government review, certain international transactions may be subject to review and approval by allied nation governments, which share a similar approach in their consideration of the end users and end-use risks in defense trade, including human rights considerations.