Whistleblowing

American Health Information Management Association Code of Ethics

 

Preamble

The ethical obligations of the health information management (HIM) professional include the protection of patient privacy and confidential information; disclosure of information; development, use, and maintenance of health information systems and health records; and the quality of information. Both handwritten and computerized medical records contain many sacred stories—stories that must be protected on behalf of the individual and the aggregate community of persons served in the healthcare system. Healthcare consumers are increasingly concerned about the loss of privacy and the inability to control the dissemination of their protected information. Core health information issues include what information should be collected; how the information should be handled, who should have access to the information, and under what conditions the information should be disclosed.

 

Ethical obligations are central to the professional's responsibility, regardless of the employment site or the method of collection, storage, and security of health information. Sensitive information (genetic, adoption, drug, alcohol, sexual, and behavioral information) requires special attention to prevent misuse. Entrepreneurial roles require expertise in the protection of the information in the world of business and interactions with consumers.

Professional Values

The mission of the HIM profession is based on core professional values developed since the inception of the Association in 1928. These values and the inherent ethical responsibilities for AHIMA members and credentialed HIM professionals include providing service, protecting medical, social, and financial information, promoting confidentiality; and preserving and securing health information. Values to the healthcare team include promoting the quality and advancement of healthcare, demonstrating HIM expertise and skills, and promoting interdisciplinary cooperation and collaboration. Professional values in relationship to the employer include protecting committee deliberations and complying with laws, regulations, and policies. Professional values related to the public include advocating change, refusing to participate or conceal unethical practices, and reporting violations of practice standards to the proper authorities. Professional values to individual and professional associations include obligations to be honest, bringing honor to self, peers and profession, committing to continuing education and lifelong learning, performing Association duties honorably, strengthening professional membership, representing the profession to the public, and promoting and participating in research.

 

These professional values will require a complex process of balancing the many conflicts that can result from competing interests and obligations of those who seek access to health information and require an understanding of ethical decision-making.

Purpose of the American Health Information Management Association Code of Ethics

The HIM professional has an obligation to demonstrate actions that reflect values, ethical principles, and ethical guidelines. The American Health Information Management Association (AHIMA) Code of Ethics sets forth these values and principles to guide conduct. The code is relevant to all AHIMA members and credentialed HIM professionals and students, regardless of their professional functions, the settings in which they work, or the populations they serve.

 

The AHIMA Code of Ethics serves six purposes:

• Identifies core values on which the HIM mission is based.
• Summarizes broad ethical principles that reflect the profession's core values and establishes a set of ethical principles to be used to guide decision-making and actions.
• Helps HIM professionals identify relevant considerations when professional obligations conflict or ethical uncertainties arise.
• Provides ethical principles by which the general public can hold the HIM professional accountable.
• Socializes practitioners new to the field to HIM's mission, values, and ethical principles.
• Articulates a set of guidelines that the HIM professional can use to assess whether they have engaged in unethical conduct.

The code includes principles and guidelines that are both enforceable and aspirational. The extent to which each principle is enforceable is a matter of professional judgment to be exercised by those responsible for reviewing alleged violations of ethical principles.

The Use of the Code

Violation of principles in this code does not automatically imply legal liability or violation of the law. Such determination can only be made in the context of legal and judicial proceedings. Alleged violations of the code would be subject to a peer review process. Such processes are generally separate from legal or administrative procedures and insulated from legal review or proceedings to allow the profession to counsel and discipline its own members although in some situations, violations of the code would constitute unlawful conduct subject to legal process.

 

Guidelines for ethical and unethical behavior are provided in this code. The terms "shall and shall not" are used as a basis for setting high standards for behavior. This does not imply that everyone "shall or shall not" do everything that is listed. For example, not everyone participates in the recruitment or mentoring of students. A HIM professional is not being unethical if this is not part of his or her professional activities; however, if students are part of one's professional responsibilities, there is an ethical obligation to follow the guidelines stated in the code. This concept is true for the entire code. If someone does the stated activities, ethical behavior is the standard. The guidelines are not a comprehensive list. For example, the statement "protect all confidential information to include personal, health, financial, genetic and outcome information" can also be interpreted as "shall not fail to protect all confidential information to include personal, health, financial, genetic, and outcome information."

 

A code of ethics cannot guarantee ethical behavior. Moreover, a code of ethics cannot resolve all ethical issues or disputes or capture the richness and complexity involved in striving to make responsible choices within a moral community. Rather, a code of ethics sets forth values and ethical principles, and offers ethical guidelines to which professionals aspire and by which their actions can be judged. Ethical behaviors result from a personal commitment to engage in ethical practice.

 

Professional responsibilities often require an individual to move beyond personal values. For example, an individual might demonstrate behaviors that are based on the values of honesty, providing service to others, or demonstrating loyalty. In addition to these, professional values might require promoting confidentiality, facilitating interdisciplinary collaboration, and refusing to participate or conceal unethical practices. Professional values could require a more comprehensive set of values than what an individual needs to be an ethical agent in their personal lives.

The AHIMA Code of Ethics is to be used by AHIMA and individuals, agencies, organizations, and bodies (such as licensing and regulatory boards, insurance providers, courts of law, agency boards of directors, government agencies, and other professional groups) that choose to adopt it or use it as a frame of reference. The AHIMA Code of Ethics reflects the commitment of all to uphold the profession's values and to act ethically. Individuals of good character who discern moral questions and, in good faith, seek to make reliable ethical judgments, must apply ethical principles.

 

The code does not provide a set of rules that prescribe how to act in all situations. Specific applications of the code must take into account the context in which it is being considered and the possibility of conflicts among the code's values, principles, and guidelines. Ethical responsibilities flow from all human relationships, from the personal and familial to the social and professional. Further, the AHIMA Code of Ethics does not specify which values, principles, and guidelines are the most important and ought to outweigh others in instances when they conflict.

 

Code of Ethics 2004

Ethical Principles: The following ethical principles are based on the core values of the American Health Information Management Association and apply to all health information management professionals.

 

Health information management professionals:

1. Advocate, uphold and defend the individual's right to privacy and the doctrine of confidentiality in the use and disclosure of information.
2. Put service and the health and welfare of persons before self-interest and conduct themselves in the practice of the profession so as to bring honor to themselves, their peers, and to the health information management profession.
3. Preserve, protect, and secure personal health information in any form or medium and hold in the highest regard the contents of the records and other information of a confidential nature, taking into account the applicable statutes and regulations.
4. Refuse to participate in or conceal unethical practices or procedures.
5. Advance health information management knowledge and practice through continuing education, research, publications, and presentations.
6. Recruit and mentor students, peers and colleagues to develop and strengthen professional workforce.
7. Represent the profession accurately to the public.
8. Perform honorably health information management association responsibilities, either appointed or elected, and preserve the confidentiality of any privileged information made known in any official capacity.
9. State truthfully and accurately their credentials, professional education, and experiences.
10. Facilitate interdisciplinary collaboration in situations supporting health information practice.
11. Respect the inherent dignity and worth of every person.

How to Interpret the Code of Ethics

The following ethical principles are based on the core values of the American Health Information Management Association and apply to all health information management professionals. Guidelines included for each ethical principle are a non-inclusive list of behaviors and situations that can help to clarify the principle. They are not to be meant as a comprehensive list of all situations that can occur.

 

1. Advocate, uphold, and defend the individual's right to privacy and the doctrine of confidentiality in the use and disclosure of information.

 

Health information management professionals shall:

 

1.1. Protect all confidential information to include personal, health, financial, genetic, and outcome information.

 

1.2. Engage in social and political action that supports the protection of privacy and confidentiality, and be aware of the impact of the political arena on the health information system. Advocate for changes in policy and legislation to ensure protection of privacy and confidentiality, coding compliance, and other issues that surface as advocacy issues as well as facilitating informed participation by the public on these issues.

 

1.3. Protect the confidentiality of all information obtained in the course of professional service. Disclose only information that is directly relevant or necessary to achieve the purpose of disclosure. Release information only with valid consent from a patient or a person legally authorized to consent on behalf of a patient or as authorized by federal or state regulations. The need-to-know criterion is essential when releasing health information for initial disclosure and all redisclosure activities.

 

1.4. Promote the obligation to respect privacy by respecting confidential information shared among colleagues, while responding to requests from the legal profession, the media, or other non-healthcare related individuals, during presentations or teaching and in situations that could cause harm to persons.

 

2. Put service and the health and welfare of persons before self-interest and conduct themselves in the practice of the profession so as to bring honor to themselves, their peers, and to the health information management profession.

 

Health information management professionals shall:

 

2.1. Act with integrity, behave in a trustworthy manner, elevate service to others above self-interest, and promote high standards of practice in every setting.

 

2.2. Be aware of the profession's mission, values, and ethical principles, and practice in a manner consistent with them by acting honestly and responsibly.

 

2.3. Anticipate, clarify, and avoid any conflict of interest, to all parties concerned, when dealing with consumers, consulting with competitors, or in providing services requiring potentially conflicting roles (for example, finding out information about one facility that would help a competitor). The conflicting roles or responsibilities must be clarified and appropriate action must be taken to minimize any conflict of interest.

 

2.4. Ensure that the working environment is consistent and encourages compliance with the AHIMA Code of Ethics, taking reasonable steps to eliminate any conditions in their organizations that violate, interfere with, or discourage compliance with the code.

 

2.5. Take responsibility and credit, including authorship credit, only for work they actually perform or to which they contribute. Honestly acknowledge the work of and the contributions made by others verbally or written, such as in publication.

Health information management professionals shall not:

 

2.6. Permit their private conduct to interfere with their ability to fulfill their professional responsibilities.

 

2.7. Take unfair advantage of any professional relationship or exploit others to further their personal, religious, political, or business interests.

 

3. Preserve, protect, and secure personal health information in any form or medium and hold in the highest regards the contents of the records and other information of a confidential nature obtained in the official capacity, taking into account the applicable statutes and regulations.

 

Health information management professionals shall:

 

3.1. Protect the confidentiality of patients' written and electronic records and other sensitive information. Take reasonable steps to ensure that patients' records are stored in a secure location and that patients' records are not available to others who are not authorized to have access.

 

3.2. Take precautions to ensure and maintain the confidentiality of information transmitted, transferred, or disposed of in the event of a termination, incapacitation, or death of a healthcare provider to other parties through the use of any media. Disclosure of identifying information should be avoided whenever possible.

 

3.3. Inform recipients of the limitations and risks associated with providing services via electronic media (such as computer, telephone, fax, radio, and television).

 

4. Refuse to participate in or conceal unethical practices or procedures.

 

Health information management professionals shall:

 

4.1. Act in a professional and ethical manner at all times.

 

4.2. Take adequate measures to discourage, prevent, expose, and correct the unethical conduct of colleagues.

 

4.3. Be knowledgeable about established policies and procedures for handling concerns about colleagues' unethical behavior. These include policies and procedures created by AHIMA, licensing and regulatory bodies, employers, supervisors, agencies, and other professional organizations.

 

4.4. Seek resolution if there is a belief that a colleague has acted unethically or if there is a belief of incompetence or impairment by discussing their concerns with the colleague when feasible and when such discussion is likely to be productive. Take action through appropriate formal channels, such as contacting an accreditation or regulatory body and/ or the AHIMA Professional Ethics Committee.

 

4.5. Consult with a colleague when feasible and assist the colleague in taking remedial action when there is direct knowledge of a health information management colleague's incompetence or impairment.

Health information management professionals shall not:

 

4.6. Participate in, condone, or be associated with dishonesty, fraud and abuse, or deception. A non-inclusive list of examples includes:

 

• Allowing patterns of retrospective documentation to avoid suspension or increase reimbursement
• Assigning codes without physician documentation
• Coding when documentation does not justify the procedures that have been billed
• Coding an inappropriate level of service
• Miscoding to avoid conflict with others
• Engaging in negligent coding practices
• Hiding or ignoring review outcomes, such as performance data
• Failing to report licensure status for a physician through the appropriate channels
• Recording inaccurate data for accreditation purposes
• Hiding incomplete medical records
• Allowing inappropriate access to genetic, adoption, or behavioral health information
• Misusing sensitive information about a competitor
• Violating the privacy of individuals

 

5. Advance health information management knowledge and practice through continuing education, research, publications, and presentations.
Health information management professionals shall:

 

5.1. Develop and enhance continually their professional expertise, knowledge, and skills (including appropriate education, research, training, consultation, and supervision). Contribute to the knowledge base of health information management and share with colleagues their knowledge related to practice, research, and ethics.

 

5.2. Base practice decisions on recognized knowledge, including empirically based knowledge relevant to health information management and health information management ethics.

 

5.3. Contribute time and professional expertise to activities that promote respect for the value, integrity, and competence of the health information management profession. These activities may include teaching, research, consultation, service, legislative testimony, presentations in the community, and participation in their professional organizations.

 

5.4. Engage in evaluation or research that ensures the anonymity or confidentiality of participants and of the data obtained from them by following guidelines developed for the participants in consultation with appropriate institutional review boards. Report evaluation and research findings accurately and take steps to correct any errors later found in published data using standard publication methods.

 

5.5. Take reasonable steps to provide or arrange for continuing education and staff development, addressing current knowledge and emerging developments related to health information management practice and ethics.

Health information management professionals shall not:

 

5.6. Design or conduct evaluation or research that is in conflict with applicable federal or state laws.

 

5.7. Participate in, condone, or be associated with fraud or abuse.

 

6. Recruit and mentor students, peers and colleagues to develop and strengthen professional workforce.

Health information management professionals shall:

 

6.1. Evaluate students' performance in a manner that is fair and respectful when functioning as educators or clinical internship supervisors.

 

6.2. Be responsible for setting clear, appropriate, and culturally sensitive boundaries for students.

 

6.3. Be a mentor for students, peers and new health information management professionals to develop and strengthen skills.

 

6.4. Provide directed practice opportunities for students.

 

Health information management professionals shall not:

6.5. Engage in any relationship with students in which there is a risk of exploitation or potential harm to the student.

7. Accurately represent the profession to the public.

 

Health information management professionals shall:

 

7.1 Be an advocate for the profession in all settings and participate in activities that promote and explain the mission, values, and principles of the profession to the public.

 

8. Perform honorably health information management association responsibilities, either appointed or elected, and preserve the confidentiality of any privileged information made known in any official capacity.

 

Health information management professionals shall:

 

8.1. Perform responsibly all duties as assigned by the professional association.

 

8.2. Resign from an Association position if unable to perform the assigned responsibilities with competence.

 

8.3. Speak on behalf of professional health information management organizations, accurately representing the official and authorized positions of the organizations.

 

9. State truthfully and accurately their credentials, professional education, and experiences.

 

Health information management professionals shall:

 

9.1. Make clear distinctions between statements made and actions engaged in as a private individual and as a representative of the health information management profession, a professional health information organization, or the health information management professional's employer.

 

9.2. Claim and ensure that their representations to patients, agencies, and the public of professional qualifications, credentials, education, competence, affiliations, services provided, training, certification, consultation received, supervised experience, other relevant professional experience are accurate.

 

9.3. Claim only those relevant professional credentials actually possessed and correct any inaccuracies occurring regarding credentials.

 

10. Facilitate interdisciplinary collaboration in situations supporting health information practice.

 

Health information management professionals shall:

 

10.1. Participate in and contribute to decisions that affect the well-being of patients by drawing on the perspectives, values, and experiences of those involved in decisions related to patients. Professional and ethical obligations of the interdisciplinary team as a whole and of its individual members should be clearly established.

 

11. Respect the inherent dignity and worth of every person.

 

Health information management professionals shall:

11.1. Treat each person in a respectful fashion, being mindful of individual differences and cultural and ethnic diversity.

 

11.2. Promote the value of self-determination for each individual.

Approved by the National Council of the AGO on: October 22, 2007

Effective November 15, 2007; Updated April 19, 2009

 

I. Purpose

A. These Procedures for Dealing with Complaints about Termination are not legal proceedings. They are a means to determine if an Institution has wrongfully terminated a Member and, if so, whether there are circumstances under which the Guild shall prohibit its Members from accepting regular or permanent employment by that Institution.

 

II. General Guidelines

A. Neither party may participate in these Procedures through legal counsel. If either party insists upon involving legal counsel in the Procedures, these Procedures shall be terminated.

 

B. While an employment contract is recommended, its existence is not necessary to invoke these Procedures.

 

C. Exceptions to these Procedures may be made at the discretion of the Councillor for Professional Development, in consultation with the Committee on Career Development and Support.

 

D. Only Members who are grievants may implement the Procedures. A chapter may not implement the Procedures, nor may an Institution. (Disputes between and among Members are resolved through the AGO Discipline. Go to www.agohq.org "Official Guild Documents" Discipline.)

 

E. It is the duty of the Member to become thoroughly familiar with the Procedures before initiating the Procedures. Any settlement agreement or release must be disclosed to the grievance Committee. Use of these Procedures may conflict with settlement agreements and releases and with prior, concurrent or subsequent litigation and Alternative Dispute Resolution.

 

F. Prompt action by the Member is advisable. There is nothing to prevent an AGO Member from accepting the grievant's position if a grievance has not been filed. The Procedures should be initiated as soon as possible after termination, but must be submitted within 90 calendar days of the termination.

 

G. The importance of confidentiality which must be maintained throughout the case cannot be overemphasized. Information gathered must be held in strict confidence. Confidentiality, however, cannot be guaranteed.

 

H. Evidence of the direct participation of legal counsel in these Procedures by either party will immediately terminate the Procedures. Examples of such participation include letters from attorneys, bringing the attorney to meetings scheduled under the Procedures, and refusing to answer questions on the specified advice of the attorney.

 

I. Simultaneous litigation does not necessarily terminate the Procedures. J. In the early stages, the Chapter engages in fact-finding, only. It should never promote the interests of either side or give the appearance of doing so. This is a time for inquiry, not advocacy, regardless of the appearance of the case.

 

K. Timeliness is essential in implementing and conducting the Procedures. (A copy of the Procedures should be sent by the Committee Director to the parties as soon as possible. (The most recent version may be downloaded from the AGO Web site: www.agohq.org.) See sample letters at the end of this document for initial contact with the Institution. In the event that there is no activity involving the National Councillor for Professional Development on a grievance for a period of time exceeding 90 calendar days, the grievance may be dismissed at the National Councillor's discretion with subsequent notice to the Grievant and the appropriate Regional Councillor.

 

L. If the Committee listed in Step One, Two or Three determines that the case is without merit, the Member may appeal the closing of the Procedures. If that happens, the "case in progress" status applies until the appeal is decided.

 

M. Critical correspondence should be prepared on chapter letterhead and sent certified mail, return receipt requested with copies kept in the file. Always include the certified mail number on the document (and the file copy) being sent.

 

N. At Step Three, it is advisable to identify the actual dispute and separate it, if possible, from collateral issues. For example, if the termination is really due to conflicting musical tastes between employee and employer, it may be cause for termination if done under the contract and/or in accordance with local law. It should not be confused with other matters which might have aggravated the conflict, such as lack of communication, insubordination and personality clashes, which may or may not, in and of themselves, also be grounds for termination.

 

O. Examples of wrongful termination may include (but are not limited to):

 

• Dismissal inconsistent with the existing employment agreement, the
• Institution's personnel policy and/or past practice
• Failure to communicate
• Discrimination
• Intimidation and harassment
• A record of good performance reviews followed by sudden termination
• Conduct that offends the Committee's sense of fairness, e.g. "whistleblowing" wherein the employee has alerted the authorities to specific unlawful activity

 

P. An otherwise proper termination notice or resignation does not automatically preclude the use of the Procedures if the termination or resignation was precipitated by fraud or duress.

 

Q. A "paper trail" is essential. Copies of all correspondence, e-mails, faxes, summaries of phone calls, and documentary evidence should be archived indefinitely.

 

R. The Member is entitled to know, in general terms, the status of the grievance and the reasons for the Committee's decision, without the Committee violating the confidentiality clause contained in the Procedures.

S. Hearsay encompasses oral or written statements being used to support the truthfulness of a matter at issue when the person making the statement is not present for questioning. The Committee should be wary of hearsay, written or oral, when interviewing the Member, Observers and representatives of the Institution. Although the Procedures do not follow strict legal rules, hearsay is not generally reliable. Be fair to both sides and be consistent in the treatment of all evidence. The Committee should, at least, discuss the reliability of any hearsay before accepting it and should decide what weight, if any, to accord it.

 

T. The burden of proof is usually upon the party seeking relief, i.e. the Member. It is therefore necessary for the Member to cooperate fully and present all relevant materials in a timely fashion. Invoking the Procedures creates an investigative proceeding. The employee, by filing a grievance, impliedly consents to allow the employer to share its records with the Committee. Failure of the Member to affirm this in writing, upon request, may constitute a failure to cooperate fully and may result in the closing of the Procedures.

 

U. In a simple majority vote of the Committee weighing the evidence, the standard of proof is a "preponderance of the evidence," i.e. overall proof which is more likely than less likely.

 

V. All contact with the parties outside of the meetings should be in writing, with copies retained by the Committee.

 

W. It is anticipated that during the investigation, the parties' input may not be totally forthcoming or relevant. In that case, specific written questions from the Committee to the parties and/or Observers may be appropriate.

 

X. Appeals do not normally provide opportunities for a rehearing of the case or the presentation of additional evidence. An appeal should only determine whether the previous decisions under the Procedures were supported by the facts and controlling authorities, such as the parties' written contract, the Institution's past practice, personnel manual, etc.

 

Y. Conflict Resolution is available to the Institution when the Procedures have "addressed" a termination. Therefore, the matter need not have been completed or carried through fully in order for the Institution to resolve the dispute [See VII Post Grievance Conflict Resolution.]

Z. At some point, the Committee may be called upon to evaluate the reasonableness of the Member's demands for a particular remedy.

 

AA. A Member should be aware of the remoteness of being reinstated to any position from which the Member has been terminated.

 

BB. These Procedures may be invoked by Members who are paid or compensated and by Members who are volunteers. The applicability of these Procedures on behalf of Members in various areas of music will be determined on a case by case basis.

 

III. Step One- The Preliminary Evaluation

A. When a Member wishes to pursue the Procedures for Dealing with Complaints about Termination (Grievance Procedures) the Member shall request assistance, in writing, from the Dean of his/her chapter with a copy to the Regional Councillor. This written request shall outline his/her work history in the Institution and claim of wrongful termination, and should be accompanied by a copy of the Member's employment agreement with the Institution, if there is one, and all other relevant supporting documentation, e.g., letter of agreement, employee manual and all other documents signed in connection with the employment. The Member, by so doing, agrees to cooperate fully. If cooperation is withheld at any point, the Guild may close these Procedures. Independent Members shall be considered as members of the Chapter which is nearest to their primary residence. “Nearest” shall be defined as the residence of the closest Chapter Dean at the time an incident occurred which gave rise to the use of the Grievance Procedures. In certain cases, with the approval of the Regional Councillor, this written request may be made to a Chapter officer other than the Dean.

 

B. The Dean or other Chapter officer shall provide copies of the Member's letter and accompanying documentation to the following Individuals:

 

• Chapter Coordinator for Professional Development (or another chapter officer if there is no Chapter Coordinator for Professional Development)
• Regional Councillor
• Regional Coordinator for Professional Development
• National Councillor for Professional Development.

 

The Regional Councillor shall convene these Individuals who shall promptly decide if the Member's complaint shall be acted upon. To avoid a conflict of interest, none of these Individuals may be a member or employee of the Institution. (This may be done by telephone conference call or by e-mail.) The Member shall be notified of these Individuals' decision within seven days. (See Letter 1.) If the Member disagrees with the decision of these Individuals, the Member may request within 30 calendar days, through the National Councillor for Professional Development, that the National Committee for Career Development and Support review the decision. The Committee's determination shall be final.

 

IV. Step Two- Appointments of Investigative Committee and Meeting with Grievant

A. If the Member's complaint deserves further consideration, the Regional Councillor shall appoint a Committee Director, who, in consultation with the Regional Councillor, shall appoint a Committee. The Committee Director shall convene and chair the Committee, and sign all Committee correspondence.

 

B. The Committee, appointed to carry out Step Two of the Grievance Procedures, shall be made up of the following individuals:

 

• One or two members of the chapter, appointed by the Dean (the Dean may be one);
• Regional Councillor (or his/her representative)
• Regional Coordinator for Professional Development (or his/her representative)
• National Councillor for Professional Development (or his/her representative).

 

C. To avoid conflict of interest, no member of the Committee may be a member or employee of the Institution. (Note: It can be helpful if one of the chapter's representatives is ordained.)

 

D. The following notice shall be published in the local chapter media. The local chapter shall refuse to advertise a regular or permanent vacancy at the Institution while these Grievance Procedures are pending.

(Notice A) Notice Informing Membership of Case in Progress

 

On (date) an AGO Member filed a formal complaint against (Institution's Name) for wrongful termination of employment. The Guild is investigating the matter according to the AGO's Procedures for Dealing with Complaints about Termination. No determination has been made at this time.

 

Although Guild Members may provide substitute or interim services, no Member may seek or accept regular or permanent employment with (Institution's Name) while these Procedures are pending. See the AGO's Web Site for the current status of this case.

 

E. At least two members of the Committee shall meet with the Member in person. If, after frank discussion with the Member and a review of his/her employment agreement and/or other pertinent documents, the Committee does not consider the Member's claim to be valid, it may close the Grievance Procedures. If the Member disagrees with the decision of these Individuals, the Member may request within 30 days, through the National Councillor for Professional Development, that the National Committee for Career Development and Support review the decision. The Committee's determination shall be final.

 

In the event that the Procedures are closed with or without a finding supporting a grievance, the decision shall be announced in the local chapter media using the language in Notice B(1), B(2), B(3), or B(4),as appropriate. (See Notices on pages 9 and 10.)

 

V. Step Three- The Investigation

A. If the Committee believes the Member's complaint deserves further investigation, it shall immediately take the following actions:

 

(1.) Request through the National Councillor for Professional Development that no advertisement for the position be included in The American Organist, or on the Guild's Web site.

(2.) Notice A (above) will be published on the Guild's Web site and in local chapter media as appropriate. Any departure from this wording must be approved by the National Councillor for Professional Development before publication.

(3.) Notify the appropriate leadership of the Institution, by telephone and then in writing, that the AGO has been asked by a Member (named) to investigate a charge of wrongful termination. (See Letter 2.)

 

• Make it clear that the process has merely begun, that no determination has been made, and that the Institution will receive, within one week, a copy of these Grievance Procedures.
• Set a time limit within which the Committee intends to complete its deliberations.
• Set the time for a meeting between the Institution and the Committee. This meeting should take place within 30 days of the receipt of the notification.
• Advise the Institution that its failure to participate in this process may result in a finding in favor of the Member.

 

(4.) Request from the Member the names, addresses, and telephone numbers of three regular Observers of his/her work within the Institution. In religious institutions, these Observers should be lay leaders, preferably a volunteer choir member, a member of the elected lay leadership, and a member of the congregation at large.

 

• Send Observers a copy of the Grievance Procedures after they have been contacted by the Committee and have agreed to participate.
• The Committee shall request from the Observers, in writing, a frank evaluation of the Member's work, competence, and influence in the Institution, and solicit the Observers' responses to the Institution's action(s). (See Letter 3.)
• The Committee should solicit the Observers' opinions of both the reasons and the manner in which the Member was terminated. Observers should be assured that all information, written or spoken, is confidential and will be shared only among the Committee members (not with the Member or the Institution).

B. After receiving the Observers' written evaluations, the Committee shall speak with the Observers as needed. At least two members of the Committee shall then meet in person with representatives of the Institution and separately with the member, if necessary for the purpose of clarification.

 

Sample Questions

NOTE: The substance and the tone of all questions should be in the spirit of fact finding and not of confrontation.

 

1. Will you share the employee's complete personnel file with the employee (and/or with this Committee) with the employee's consent?
2. What reason(s) exist for the employee's termination?
3. Does the manner of termination follow any existing contract, letter of agreement, personnel manual and/or past practice?
4. Was the employee given annual reviews? If so, what were the results?
5. What progression was followed to identify problems and to notify the employee of their existence and to provide the employee with opportunities to take corrective action? Was this progression in keeping with formal or informal guidelines which you follow as an employer?
6. Were salary increases (and/or benefits) given over the course of employment? If so, do they support recent activity regarding the employee?
7. What system of communication was in place to identify issues? Was there a breakdown? If so, why? What was done to restore dialogue?
8. If there was no contract (a meaningful document with mutuality, covering all essential elements of employment), why?
9. Was the employee given a chance to defend him/herself?
10. Was assistance from the AGO sought at any point in the progression? If so, what was it? What was the result?
11. Do you understand the function of this Committee and that of the Procedures?
12. Would you be willing to hold the employee's termination in abeyance while the AGO mentors the employee? If so, for what time period?
13. Would you agree to third party mediation or arbitration?
14. Will you consider assisting the employee with transition to another job?

 

C. All Committee members shall receive copies of all correspondence generated and received in connection with the inquiry.

 

D. The Committee shall promptly evaluate the information received from the Member, Institution, and Observers. After consultation with the Regional Councillor and the National Councillor for Professional Development, the Committee shall complete a written report that includes:

 

• a summary of the proceedings
• an explanation of its conclusion(s)
• its recommendations for action.

 

Copies of this report shall be sent to the Dean (to be shared with the Executive Committee), the Regional Councillor, Regional Professional Development Coordinator, and the National Councillor for Professional Development.

 

E. If, in the opinion of the Committee, the Grievance Procedures revealed questionable behavior on the part of the Member or wrongful termination of the Member by the Institution, the Committee may make such recommendations as it feels are necessary to resolve the situation and to prevent a recurrence. If the Committee finds that the Institution wrongfully terminated the member, the Committee shall apprise the Institution of the need to resolve the situation within 60 days. (See VII. Post Grievance Conflict Resolution.)

 

F. The Committee shall prepare letters summarizing the Committee's conclusions, which will be submitted to the National Councillor for Professional Development for approval. (See Letters 4 through 9.) Following approval, the letters shall then be sent to the Member, Institution, and Observers. The Member and observers shall be cautioned not to discuss the final outcome until the 60 days allotted for resolution have passed.

 

G. The response of the Institution is to be directed to the Committee Director, who will then share it with members of the Committee, including:

 

• Regional Councillor (or his/her representative)
• Regional Coordinator for Professional Development (or his/her representative)
• National Councillor for Professional Development (or his/her representative)

 

H. If the case is settled to the satisfaction of both parties, the settlement shall be announced on the Guild's Web Site and through local chapter media as appropriate using the following language.

 

Notice B(1) Notice Informing Membership of Settlement of Case

 

The employer and the employee at (Institution's name) have resolved their differences and the case has been closed. Guild Members may now accept employment at this Institution.

 

I. If the case is closed without a finding of wrongful termination, the decision shall be announced on the Guild's Web Site and through local chapter media as appropriate using the following language.

 

Notice B(2) Notice Informing Membership of Outcome of Case the AGO has determined, upon investigation, that the employer and the employee at (Institution's name) both had arguments and positions of merit regarding the termination of the employee. Therefore, the case has been closed without a finding of wrongful termination.

 

Or, as appropriate:

 

Notice B(3) Notice Informing Membership of Outcome of Case

The AGO has determined, upon investigation, that the employer (Institution's name) was

not at fault regarding the termination of the employee. Therefore, the case has been closed without a finding of wrongful termination.

 

J. If the Member disagrees with the decision of the Committee, the Member may request, within 30 days, through the National Councillor for Professional Development, that the National Council shall, as soon as possible, review the decision. The Committee will notify the Institution that the Member has appealed the Committee's decision. Under such circumstances, the notices about the case will continue to appear on the Web site and in the chapter newsletter, and no advertising of the vacancy may be published therein. The National Council's determination shall be final.

 

VI. Conclusion

A. If the 60-day limit passes with no resolution, the National Councillor for Professional Development shall notify the Institution in writing that the period for resolution has passed. (See Letter 11.) The Councillor also shall request approval by National Council of these actions to be taken by the chapter Dean at the chapter level and by the National Councillor at the national level of the Guild:

 

(1.) Announcing the decision on the Guild's Web site and through local chapter media as appropriate using the following language:

 

Notice B(4) Notice Informing Membership of Outcome of Case

 

The National Council has determined that a position at (Institution's Name) was made vacant by wrongful termination of a Member of the American Guild of Organists on (date).

 

In keeping with the AGO Code of Ethics, Members shall not seek or accept employment or attempt to place a student or colleague in the position until the National Council has declared that differences between the Guild and (Institution's Name) have been resolved.

 

(2.) Directing the editor of The American Organist, the Guild's Web site, and appropriate chapter media to refrain from advertising any music positions at the Institution.

 

(3.) Notifying the leadership of the appropriate denominational music organization of the decision.

 

B. If no resolution has occurred, the Notice B(4) printed above shall appear in a box for three months on the AGO Web site, and in local chapter media. After three months, a listing, (see Notice C, on page 11) giving the name of the Institution and date of the termination incident will be printed in the following venues:

 

• in the local chapter media, and
• listed on the AGO Web site.

This notice shall be printed in perpetuity until a resolution has been reached.

 

(Notice C) Notice in Perpetuity

 

(Institution) wrongfully terminated a member of the American Guild of Organists on (date) for which no resolution has been reached. Note: When an Institution is found to have wrongfully terminated a Member of the AGO, no Guild Member, individually or collectively, may serve that Institution as an employee or independent contractor, in an interim, temporary, substitute, regular or permanent capacity beyond a 90-day period following the date of this finding.

 

VII. Post Grievance Conflict Resolution

A. When an Institution wishes to resolve a termination that has been addressed by these procedures (within the 60 days allotted in these Grievance Procedures or at a later date) a committee (hereafter a Committee) appointed by the Regional Councillor shall review the documents from the original complaint.

 

This Committee shall consist of the following members:

• A chapter representative,
• Regional Councillor (or his/her representative),
• National Councillor for Professional Development (or his/her representative).

 

If possible, its members shall be the members of the Committee that handled the original complaint.

The Regional Councillor shall appoint a Committee Director, who shall sign all correspondence. Guided by the documents from the original complaint, the Committee may request that the Institution take specific actions, which, among other things, shall include one or more of the following:

 

• Reinstatement of the wrongfully terminated member.
• A good-faith effort to resolve financial issues with the Member, including, but not limited to, reimbursement of lost income and attending benefits.
• Providing the Committee with a proposed contract or letter of agreement pertaining to the position, using the American Guild of Organists' sample contract as a model.

 

B. If the Committee is satisfied with the Institution's response, it shall recommend to the National Council, through the National Councillor for Professional Development, that the conflict between the Institution and the American Guild of Organists be declared resolved. The National Council shall take such actions as it deems necessary, including:

 

• Announcing the resolution on the Guild's Web site, and in local chapter newsletters as appropriate, stating that AGO members may accept employment with the Institution. This notification shall be printed for three months.
• Directing the editor of The American Organist, the Guild's Web site, and chapter placement services to accept advertising for music positions at the Institution.
• Notifying the leadership of the appropriate denominational music organization of the resolution.

 

The following is the statement to be printed in the venues listed above for a 90-day period.

(Notice D) Notice Informing Guild Membership of Resolution of Case

 

On (date) the American Guild of Organists declared resolved the case of wrongful termination brought against (Institution's Name). Guild Members may now accept employment at this Institution.

Sample letters accompanying AGO Grievance Procedures can be viewed here.

 

Code of Ethics and Professional Conduct

Preamble

Commitment to ethical professional conduct is expected of every member (voting members, associate members, and student members) of the Association for Computing Machinery (ACM).

This Code, consisting of 24 imperatives formulated as statements of personal responsibility, identifies the elements of such a commitment. It contains many, but not all, issues professionals are likely to face.Section 1 outlines fundamental ethical considerations, while Section 2 addresses additional, more specific considerations of professional conduct. Statements in Section 3 pertain more specifically to individuals who have a leadership role, whether in the workplace or in a volunteer capacity such as with organizations like ACM. Principles involving compliance with this Code are given in Section 4.

The Code shall be supplemented by a set of Guidelines, which provide explanation to assist members in dealing with the various issues contained in the Code. It is expected that the Guidelines will be changed more frequently than the Code.

The Code and its supplemented Guidelines are intended to serve as a basis for ethical decision making in the conduct of professional work. Secondarily, they may serve as a basis for judging the merit of a formal complaint pertaining to violation of professional ethical standards.

It should be noted that although computing is not mentioned in the imperatives of Section 1, the Code is concerned with how these fundamental imperatives apply to one's conduct as a computing professional. These imperatives are expressed in a general form to emphasize that ethical principles which apply to computer ethics are derived from more general ethical principles.

It is understood that some words and phrases in a code of ethics are subject to varying interpretations, and that any ethical principle may conflict with other ethical principles in specific situations. Questions related to ethical conflicts can best be answered by thoughtful consideration of fundamental principles, rather than reliance on detailed regulations.

1. General Moral Imperatives

As an ACM member I will ....

1.1 Contribute to society and human well-being.

This principle concerning the quality of life of all people affirms an obligation to protect fundamental human rights and to respect the diversity of all cultures. An essential aim of computing professionals is to minimize negative consequences of computing systems, including threats to health and safety. When designing or implementing systems, computing professionals must attempt to ensure that the products of their efforts will be used in socially responsible ways, will meet social needs, and will avoid harmful effects to health and welfare.

In addition to a safe social environment, human well-being includes a safe natural environment. Therefore, computing professionals who design and develop systems must be alert to, and make others aware of, any potential damage to the local or global environment.

1.2 Avoid harm to others.

"Harm" means injury or negative consequences, such as undesirable loss of information, loss of property, property damage, or unwanted environmental impacts. This principle prohibits use of computing technology in ways that result in harm to any of the following: users, the general public, employees, employers. Harmful actions include intentional destruction or modification of files and programs leading to serious loss of resources or unnecessary expenditure of human resources such as the time and effort required to purge systems of "computer viruses."

Well-intended actions, including those that accomplish assigned duties, may lead to harm unexpectedly. In such an event the responsible person or persons are obligated to undo or mitigate the negative consequences as much as possible. One way to avoid unintentional harm is to carefully consider potential impacts on all those affected by decisions made during design and implementation.

To minimize the possibility of indirectly harming others, computing professionals must minimize malfunctions by following generally accepted standards for system design and testing. Furthermore, it is often necessary to assess the social consequences of systems to project the likelihood of any serious harm to others. If system features are misrepresented to users, coworkers, or supervisors, the individual computing professional is responsible for any resulting injury.

In the work environment the computing professional has the additional obligation to report any signs of system dangers that might result in serious personal or social damage. If one's superiors do not act to curtail or mitigate such dangers, it may be necessary to "blow the whistle" to help correct the problem or reduce the risk. However, capricious or misguided reporting of violations can, itself, be harmful. Before reporting violations, all relevant aspects of the incident must be thoroughly assessed. In particular, the assessment of risk and responsibility must be credible. It is suggested that advice be sought from other computing professionals. See principle 2.5 regarding thorough evaluations.

1.3 Be honest and trustworthy.

Honesty is an essential component of trust. Without trust an organization cannot function effectively. The honest computing professional will not make deliberately false or deceptive claims about a system or system design, but will instead provide full disclosure of all pertinent system limitations and problems.

A computer professional has a duty to be honest about his or her own qualifications, and about any circumstances that might lead to conflicts of interest.

Membership in volunteer organizations such as ACM may at times place individuals in situations where their statements or actions could be interpreted as carrying the "weight" of a larger group of professionals. An ACM member will exercise care to not misrepresent ACM or positions and policies of ACM or any ACM units.

1.4 Be fair and take action not to discriminate.

The values of equality, tolerance, respect for others, and the principles of equal justice govern this imperative. Discrimination on the basis of race, sex, religion, age, disability, national origin, or other such factors is an explicit violation of ACM policy and will not be tolerated.

Inequities between different groups of people may result from the use or misuse of information and technology. In a fair society,all individuals would have equal opportunity to participate in, or benefit from, the use of computer resources regardless of race, sex, religion, age, disability, national origin or other such similar factors. However, these ideals do not justify unauthorized use of computer resources nor do they provide an adequate basis for violation of any other ethical imperatives of this code.

1.5 Honor property rights including copyrights and patent.

Violation of copyrights, patents, trade secrets and the terms of license agreements is prohibited by law in most circumstances. Even when software is not so protected, such violations are contrary to professional behavior. Copies of software should be made only with proper authorization. Unauthorized duplication of materials must not be condoned.

1.6 Give proper credit for intellectual property.

Computing professionals are obligated to protect the integrity of intellectual property. Specifically, one must not take credit for other's ideas or work, even in cases where the work has not been explicitly protected by copyright, patent, etc.

1.7 Respect the privacy of others.

Computing and communication technology enables the collection and exchange of personal information on a scale unprecedented in the history of civilization. Thus there is increased potential for violating the privacy of individuals and groups. It is the responsibility of professionals to maintain the privacy and integrity of data describing individuals. This includes taking precautions to ensure the accuracy of data, as well as protecting it from unauthorized access or accidental disclosure to inappropriate individuals. Furthermore, procedures must be established to allow individuals to review their records and correct inaccuracies.

This imperative implies that only the necessary amount of personal information be collected in a system, that retention and disposal periods for that information be clearly defined and enforced, and that personal information gathered for a specific purpose not be used for other purposes without consent of the individual(s). These principles apply to electronic communications, including electronic mail, and prohibit procedures that capture or monitor electronic user data, including messages,without the permission of users or bona fide authorization related to system operation and maintenance. User data observed during the normal duties of system operation and maintenance must be treated with strictest confidentiality, except in cases where it is evidence for the violation of law, organizational regulations, or this Code. In these cases, the nature or contents of that information must be disclosed only to proper authorities.

1.8 Honor confidentiality.

The principle of honesty extends to issues of confidentiality of information whenever one has made an explicit promise to honor confidentiality or, implicitly, when private information not directly related to the performance of one's duties becomes available. The ethical concern is to respect all obligations of confidentiality to employers, clients, and users unless discharged from such obligations by requirements of the law or other principles of this Code.

2. More Specific Professional Responsibilities

As an ACM computing professional I will ....

2.1 Strive to achieve the highest quality, effectiveness and dignity in both the process and products of professional work.

Excellence is perhaps the most important obligation of a professional. The computing professional must strive to achieve quality and to be cognizant of the serious negative consequences that may result from poor quality in a system.

2.2 Acquire and maintain professional competence.

Excellence depends on individuals who take responsibility for acquiring and maintaining professional competence. A professional must participate in setting standards for appropriate levels of competence, and strive to achieve those standards. Upgrading technical knowledge and competence can be achieved in several ways:doing independent study; attending seminars, conferences, or courses; and being involved in professional organizations.

2.3 Know and respect existing laws pertaining to professional work.

ACM members must obey existing local, state,province, national, and international laws unless there is a compelling ethical basis not to do so. Policies and procedures of the organizations in which one participates must also be obeyed. But compliance must be balanced with the recognition that sometimes existing laws and rules may be immoral or inappropriate and, therefore, must be challenged. Violation of a law or regulation may be ethical when that law or rule has inadequate moral basis or when it conflicts with another law judged to be more important. If one decides to violate a law or rule because it is viewed as unethical, or for any other reason, one must fully accept responsibility for one's actions and for the consequences.

2.4 Accept and provide appropriate professional review.

Quality professional work, especially in the computing profession, depends on professional reviewing and critiquing. Whenever appropriate, individual members should seek and utilize peer review as well as provide critical review of the work of others.

2.5 Give comprehensive and thorough evaluations of computer systems and their impacts, including analysis of possible risks.

Computer professionals must strive to be perceptive, thorough, and objective when evaluating, recommending, and presenting system descriptions and alternatives. Computer professionals are in a position of special trust, and therefore have a special responsibility to provide objective, credible evaluations to employers, clients, users, and the public. When providing evaluations the professional must also identify any relevant conflicts of interest, as stated in imperative 1.3.

As noted in the discussion of principle 1.2 on avoiding harm, any signs of danger from systems must be reported to those who have opportunity and/or responsibility to resolve them. See the guidelines for imperative 1.2 for more details concerning harm,including the reporting of professional violations.

2.6 Honor contracts, agreements, and assigned responsibilities.

Honoring one's commitments is a matter of integrity and honesty. For the computer professional this includes ensuring that system elements perform as intended. Also, when one contracts for work with another party, one has an obligation to keep that party properly informed about progress toward completing that work.

A computing professional has a responsibility to request a change in any assignment that he or she feels cannot be completed as defined. Only after serious consideration and with full disclosure of risks and concerns to the employer or client, should one accept the assignment. The major underlying principle here is the obligation to accept personal accountability for professional work. On some occasions other ethical principles may take greater priority.

A judgment that a specific assignment should not be performed may not be accepted. Having clearly identified one's concerns and reasons for that judgment, but failing to procure a change in that assignment, one may yet be obligated, by contract or by law, to proceed as directed. The computing professional's ethical judgment should be the final guide in deciding whether or not to proceed. Regardless of the decision, one must accept the responsibility for the consequences.

However, performing assignments "against one's own judgment" does not relieve the professional of responsibility for any negative consequences.

2.7 Improve public understanding of computing and its consequences.

Computing professionals have a responsibility to share technical knowledge with the public by encouraging understanding of computing, including the impacts of computer systems and their limitations. This imperative implies an obligation to counter any false views related to computing.

2.8 Access computing and communication resources only when authorized to do so.

Theft or destruction of tangible and electronic property is prohibited by imperative 1.2 - "Avoid harm to others." Trespassing and unauthorized use of a computer or communication system is addressed by this imperative. Trespassing includes accessing communication networks and computer systems, or accounts and/or files associated with those systems, without explicit authorization to do so. Individuals and organizations have the right to restrict access to their systems so long as they do not violate the discrimination principle (see 1.4). No one should enter or use another's computer system, software, or data files without permission. One must always have appropriate approval before using system resources, including communication ports, file space, other system peripherals, and computer time.

3. Organizational Leadership Imperatives

As an ACM member and an organizational leader, I will ....

BACKGROUND NOTE:This section draws extensively from the draft IFIP Code of Ethics,especially its sections on organizational ethics and international concerns. The ethical obligations of organizations tend to be neglected in most codes of professional conduct, perhaps because these codes are written from the perspective of the individual member. This dilemma is addressed by stating these imperatives from the perspective of the organizational leader. In this context"leader" is viewed as any organizational member who has leadership or educational responsibilities. These imperatives generally may apply to organizations as well as their leaders. In this context"organizations" are corporations, government agencies,and other "employers," as well as volunteer professional organizations.

3.1 Articulate social responsibilities of members of an organizational unit and encourage full acceptance of those responsibilities.

Because organizations of all kinds have impacts on the public, they must accept responsibilities to society. Organizational procedures and attitudes oriented toward quality and the welfare of society will reduce harm to members of the public, thereby serving public interest and fulfilling social responsibility. Therefore,organizational leaders must encourage full participation in meeting social responsibilities as well as quality performance.

3.2 Manage personnel and resources to design and build information systems that enhance the quality of working life.

Organizational leaders are responsible for ensuring that computer systems enhance, not degrade, the quality of working life. When implementing a computer system, organizations must consider the personal and professional development, physical safety, and human dignity of all workers. Appropriate human-computer ergonomic standards should be considered in system design and in the workplace.

3.3 Acknowledge and support proper and authorized uses of an organization's computing and communication resources.

Because computer systems can become tools to harm as well as to benefit an organization, the leadership has the responsibility to clearly define appropriate and inappropriate uses of organizational computing resources. While the number and scope of such rules should be minimal, they should be fully enforced when established.

3.4 Ensure that users and those who will be affected by a system have their needs clearly articulated during the assessment and design of requirements; later the system must be validated to meet requirements.

Current system users, potential users and other persons whose lives may be affected by a system must have their needs assessed and incorporated in the statement of requirements. System validation should ensure compliance with those requirements.

3.5 Articulate and support policies that protect the dignity of users and others affected by a computing system.

Designing or implementing systems that deliberately or inadvertently demean individuals or groups is ethically unacceptable. Computer professionals who are in decision making positions should verify that systems are designed and implemented to protect personal privacy and enhance personal dignity.

3.6 Create opportunities for members of the organization to learn the principles and limitations of computer systems.

This complements the imperative on public understanding (2.7). Educational opportunities are essential to facilitate optimal participation of all organizational members. Opportunities must be available to all members to help them improve their knowledge and skills in computing, including courses that familiarize them with the consequences and limitations of particular types of systems.In particular, professionals must be made aware of the dangers of building systems around oversimplified models, the improbability of anticipating and designing for every possible operating condition, and other issues related to the complexity of this profession.

4. Compliance with the Code

As an ACM member I will ....

4.1 Uphold and promote the principles of this Code.

The future of the computing profession depends on both technical and ethical excellence. Not only is it important for ACM computing professionals to adhere to the principles expressed in this Code, each member should encourage and support adherence by other members.

4.2 Treat violations of this code as inconsistent with membership in the ACM.

Adherence of professionals to a code of ethics is largely a voluntary matter. However, if a member does not follow this code by engaging in gross misconduct, membership in ACM may be terminated.

This Code and the supplemental Guidelines were developed by the Task Force for the Revision of the ACM Code of Ethics and Professional Conduct: Ronald E. Anderson, Chair, Gerald Engel, Donald Gotterbarn, Grace C. Hertlein, Alex Hoffman, Bruce Jawer, Deborah G. Johnson, Doris K. Lidtke, Joyce Currie Little, Dianne Martin, Donn B. Parker, Judith A. Perrolle, and Richard S. Rosenberg. The Task Force was organized by ACM/SIGCAS and funding was provided by the ACM SIG Discretionary Fund. This Code and the supplemental Guidelines were adopted by the ACM Council on October 16, 1992.

"ACM Code of Ethics and Professional Conduct" Copyright © 1992, Association of Computing Machinery. All rights reserved. Used with permission.

 

PERSONNEL BULLETIN NO. 735-1

SUBJECT: Employee Responsibilities and Conduct

Attached and incorporated into this bulletin are rules on "Employee Responsibilities and Conduct," which address subjects different from those included by the Office of Government Ethics (OGE) in its "Standards of Ethical Conduct for Employees of the Executive Branch" (5 CFR Part 2635). Employees must follow the OGE rules as well as this bulletin.

 

Evelyn M. White
Director of Human Resources Management

Subpart A -- General Provisions.

735-101 Definitions.

(a) "Agency" means a constituent Agency of the U. S. Department of Agriculture.

(b) "Agency Head" means the Administrator or Chief of an Agency.

(c) "Department" means the United States Department of Agriculture.

(d) "Mission Area" means those components of the Department that report to an individual Under Secretary of Agriculture or to an individual Assistant Secretary of Agriculture.

735-102 Redelegation.

Unless otherwise stated, any authority delegated in this Issuance may be redelegated to a level of management that has the experience and/or training to administer the delegation.

735-103 Informing employees.

(a) Within 90 days of publication of this Issuance or subsequent changes to it, Agencies will issue each employee a copy.

(b) Each new employee shall be furnished, at the time of hiring, a copy of this Issuance.

(c) With his/her copy of this issuance, each employee will receive notification where to direct any questions about the issuance.

735-104 Mission Area supplementation.

With prior approval of the office of the Designated Agency Ethics Official, Mission Areas may supplement this Issuance as to substance and procedure. Mission Area supplemental regulations may be more restrictive. Mission Areas shall furnish employees copies of regulations that supplement this Issuance on the same basis employees are furnished copies of this Issuance as required in Section 735-103 (a), (b), and (c).

Subpart B -- Conduct and Responsibilities of Employees

735-201 Prohibited conduct - general.

Employees are prohibited from:

1. Engaging in criminal, infamous, dishonest, immoral, or disgraceful conduct, or other conduct prejudicial to the Government;
2. Conducting, or participating in, any gambling activity including the operation of a gambling device, conducting a lottery or pool, a game for money or property, or selling or purchasing a numbers slip or ticket while on Government-owned or leased property or while on duty for the Government. This does not preclude activities:
   • Necessitated by an employee's law enforcement duties; or
   • Under section 7 of Executive Order 12353, permitting solicitations conducted by organizations composed of employees among their own members for organizational support or for the benefit of welfare funds for their members.
3. Engaging in teaching, lecturing, or writing, with or without compensation, for the purpose of the preparation of a person or class of persons for an examination of the Office of Personnel Management or Board of Examiners for the Foreign Service that depends on information obtained as a result of the employee's Government employment. This does not preclude such teaching, lecturing, or writing if:
   • Prior written authorization is obtained from a Mission Area ethics official;
   • Such teaching, lecturing, or writing is not performed at or for any educational institution or other organization that discriminates because of race, creed, color, sex, religion, age, national origin, or physical or mental disability, in the admission or subsequent treatment of students;
   • The information upon which the preparation is based has been made available to the general public or will be made available on request; and
   • Such preparation is authorized in writing by the Director of the Office of Personnel Management or his or her designees, or by the Director General of the Foreign Service or his or her designees, as applicable.
4. Using an intoxicating beverage on Government-owned or leased property (except when authorized by the Office of Operations for the Washington, D.C., complex; or by the Agency Head or designee in field locations owned by the Department; or by the Agency Head or designee in field locations leased by the Department or controlled by the General Services Administration [GSA], upon concurrence by the lessor or the appropriate GSA official); or transporting or using an intoxicating beverage in a Government-owned or leased vehicle;
5. Harassing employees by word or action, or knowingly making false accusations against employees;
6. Monitoring telephone conversations, recording telephone conversations by device, or authorizing or permitting others under their administrative control to monitor telephone conversations or record telephone conversations by device, except:
   • As authorized by the Inspector General or his/her designee, with the prior consent of one party to a telephone conversation and when necessary in a criminal investigation;
   • When all parties agree in advance; or
   • When supervisors monitor or record telephone-bank or similar operations for the purpose of evaluating performance of employees.
7. Utilizing any device to monitor or record nontelephone conversations, except:
   • As authorized by the Inspector General or his/her designee with the prior consent of one party to a nontelephone conversation and when necessary in a criminal investigation; or
   • When all parties agree in advance.
8. Canvassing for sales, or selling, any article (including but not limited to candy or other items for schools or charities; kitchenware or other home furnishings; paper products; cosmetic products; or any other items whatsoever) in person or by distributing or posting literature, advertising matter, or any other graphic matter, in or on Government-owned or leased property, or property occupied by the Department;
9. Engaging in coercive or repeated unsolicited and unwelcome verbal comments, gestures, or physical contacts of a sexual nature or by using implicit or explicit coercive sexual behavior in the process of conducting agency business, or to control, influence, or affect the career, salary, or job of an employee;
10. Failing to take appropriate action on complaints or proven acts of sexual harassment, if a supervisor or manager who knew or should have known of those acts;
11. Displaying discourtesy or disrespect to a coworker, another Federal employee, or a member of the public when acting in an official capacity;
    • Failing to wear or use specified safety equipment, or failing to report obvious unsafe conditions, while on official duty; or
12. Making threats against other employees or members of the public.

735-202 Foreign gifts.

Pursuant to the Foreign Gifts and Decorations Act, the acceptance by an employee of a gift, present, decoration, or other thing from a foreign government or agent thereof (including an international organization whose membership includes a unit of foreign government or any agent of a foreign government) is subject to the following conditions:

1. An employee may not request or otherwise encourage the tender of a decoration or gift (including travel and travel expenses);
2. An employee may accept and retain a gift that is tendered and received as a souvenir or a mark of courtesy if the gift has a retail value in the United States, at the time of acceptance, less than an amount established by the U.S. Department of State;
3. An employee may accept a gift of more than an amount established by the U.S. Department of State:
   • when such gift is in the nature of an educational scholarship or medical treatment; or
   • when it appears that to refuse the gift would likely cause offense or embarrassment, or would otherwise adversely affect the foreign relations of the United States; or
   • when in the form of travel or expenses for travel entirely outside the United States, provided the employee obtains prior approval for the acceptance of the travel or expenses for travel from the head of the employing Agency or his or her designee; or
   • when the employee pays the appraised value of the gift plus the cost of appraisal in accordance with the regulation at 41 CFR Part 101-49;
4. The acceptance of a tangible gift of more than the amount determined by the U.S. Department of State ($225) is deemed to have been accepted on behalf of the United States, becomes the property of the United States, and must be deposited by the employee within 60 calendar days with his or her employing Agency's property management officer with a statement showing:
   • Name and position of the employee accepting the gift
   • Brief description of the gift and the circumstances justifying acceptance;
   • Identity, if known, of the foreign government and name and position of the individual who presented the gift;
   • Date of acceptance of the gift;
   • Estimated value in the United States of the gift at time of acceptance; and
   • Disposition and current location of the gift.
5. If the employee accepted a gift for travel or travel expenses, the employee must file a statement with his or her employing Agency Head within 30 calendar days after acceptance stating:
   • Name and position of the employee accepting the gift;
   • Brief description of the gift and the circumstances justifying acceptance; and
   • Identity, if known, of the foreign government and name and position of the individual who presented the gift;
6. An employee may accept, retain, and wear a foreign decoration if tendered in recognition of active field service or unusually meritorious service and if supported by a statement from the donor, preferably in the form of a citation, which shows the basis for tender of the award. A request from the head of the employing Agency for approval of the acceptance of the decoration will be forwarded to the Administrator of the Foreign Agricultural Service (FAS) or his or her designee for concurrence or disapproval. The request from the employing Agency must contain a recommendation as to whether or not the acceptance, retention, and wearing of the foreign decoration by the employee would be in the best interest of the United States. The Administrator of the FAS shall notify the employing Agency of his or her concurrence or disapproval of the retention of the foreign decoration. Disapproval by the FAS shall constitute acceptance on behalf of the United States, and the decoration shall be deposited by the employee with the Agency's Property Management Officer within 60 calendar days of the acceptance. The Property Management Officer shall report the decoration, as required by the Agriculture Property Management Regulations;
7. Violation of the provisions of the Foreign Gifts and Decorations Act, including the failure by an employee to report such a gift, may result in a civil penalty against the employee for the retail value of the gift plus $5,000; and
8. The definition of "employee" for purposes of the Foreign Gifts and Decorations Act includes all employees of the Department, experts or consultants under contract with the United States, spouses of all such individuals, and blood and in-law relations who are residents of the employee's household.

735-203 Attendance and leave.

1. Employees must observe designated duty hours and be punctual in reporting for work and returning from lunch periods. Tardiness can result in employees being placed in a nonpay status for unauthorized absence (Absence Without Leave [AWOL]) and being subject to discipline or adverse action.
2. Employees normally must obtain advance authorization for absence from duty. Approval of leave is a discretionary matter reserved to the supervisor. The taking of leave is not a right afforded to an employee, but is conditioned on the needs of Department service. Where absence from duty results from illness or an emergency, employees are required to notify their supervisor or other appropriate person as soon as possible. When an employee fails to notify properly his or her supervisor, an absence may be charged as unauthorized absence (Absence Without Leave [AWOL]). An employee charged with AWOL may be subject to disciplinary or adverse action.
3. Sick leave is administered in accordance with 5 CFR Part 630, Subpart D (including the Federal Employees Family Friendly Leave Act, Public Law 103-388, dated October 22, 1994), and covers a situation in which an employee:
   • Receives medical, dental, or optical examination or treatment;
   • Is incapacitated for the performance of duties by physical or mental illness, injury, pregnancy, or childbirth;
   • Provides care for a family member as a result of physical or mental illness; injury; pregnancy; childbirth; or medical, dental, or optical examination or treatment;
   • Makes arrangements necessitated by the death of a family member or attends the funeral of a family member; or
   • Would, as determined by the health authorities having jurisdiction or by a health care provider, jeopardize the health of others by his or her presence on the job because of exposure to a communicable disease.
   • Family memberincludes the following relatives of the employee:
     • Spouse, and parents thereof;
     • Children, including adopted children and spouses thereof;
     • Parents;
     • Brothers and sisters, and spouses thereof; and
     • Any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

735-204 Sale of personal property.

1. Personal property offered for sale by the Department may be purchased by employees only when the sale of such property is based upon competitive bids.
2. Except as provided in paragraph (c) of this section, no purchase of personal property offered for sale by the Department may be made by an employee who:
   • was formerly accountable for the property;
   • formerly used the property; or
   • was in any way connected with its condemnation, declaration as excess, or sale.
3. The prohibitions in paragraph (b) of this section do not apply in the following situations:
   • Surplus perishable products may be sold to employees at the best price obtainable in quantities not exceeding the needs of their immediate households; and
   • Special clothing and other articles or personal equipment purchased for the exclusive use of and fitted to an individual employee may, when not otherwise usable by the Department and in all respects surplus to the needs of the Government, be sold to such employees at the best price obtainable in the event of his or her separation from the Department or permanent assignment to duties not requiring such clothing or equipment.

735-205 Use of government vehicles.

1. An employee shall not, unless he or she has been specifically authorized by the Agency: store Government owned or leased motor vehicles at or near his or her private residence or at other unauthorized locations, including, but not limited to, homes of relatives or friends.
2. Employees are required to wear seat belts whenever riding -- as operator or as passenger -- in a truck, automobile, or other passenger vehicle in the performance of official duties or while on official time.
3. Unless authorized to do so in the performance of official duties, employees are prohibited from using Government owned or leased vehicles to transport firearms or explosives.

735-206 Activities with regard to farm organizations.

1. Department employees shall refrain from participating actively in meetings and in other activities concerned with the establishment of general or specialized farm organizations, or with recruiting members for existing organizations such as the National Grange, the American Farm Bureau Federation, the National Farmers Organization, the Farmers Union, the National Association of Conservation Districts, the National Rural Electric Cooperative Association, the National Council of Farmer Cooperatives, and Breed and Commodity Organizations. Department policy is to deal fairly and on the same basis with all such organizations. As a continuation of that policy, Department employees shall not, with respect to any general or specialized farm organization:
   • Hold any functional office, including financial or business agent, in the organization;
   • Advocate that the organization is better adapted for carrying out the work of this Department than any individual citizen, group of citizens, or organizations;
   • Advocate that the responsibilities of any Agency of the Department or any other Federal agency should be carried out through the organization; or
   • Advocate or recommend that any State or local agency should carry out its responsibilities through the organization.
2. The restrictions set forth in paragraph (a) of this section do not:
   • Apply to members of County Committees of the Department;
   • Apply to organizations such as cow testing associations and similar groups; or
   • Prohibit employees from participating in the organization of groups that are needed in carrying out Federally authorized programs, for example, a National Rural Electric Cooperative Association or similar group determined by the appropriate agency head to be essential in effectuating Federally authorized programs.

735-207 Prohibitions on employees serving abroad.

An employee on foreign assignment may not:

1. Violate Department of State regulations governing the post to which he or she is assigned;
2. Receive a "profit" from the sale of his or her personal car or other property when such "profit" accrues from import privileges granted him or her by reason of his or her official status. "Profit" for the purposes of this paragraph is as defined in the Department of State regulations or directives governing the post of assignment;
3. Engage in political activities in the country of assignment;
4. Violate the laws of the country in which he or she is assigned;
5. Have an interest in any business enterprise or engage in any profession in any country to which assigned; or
6. Speculate in real estate, bonds, stocks or shares (or the equivalent), or currencies of a country to which the employee is assigned or a country for which the employee is responsible.

735-208 Miscellaneous provisions.

1. Any money, property, or other thing of value received by or coming into custody of an employee in connection with the discharge of his or her duties must be accounted for, deposited, or otherwise disposed of in accordance with established procedures.
2. Employees are required under Section 5.3 of Civil Service Rule V (5 CFR 5.3) to give the Office of Personnel Management (OPM) and its authorized representatives all information and testimony in regard to matters arising under laws, rules, and regulations administered by OPM;
3. Employees are obligated to give information they possess to authorized representatives of the Department or Mission Area or Agency when called upon, if the inquiry relates to official matters and the information is obtained in the course of employment or as a result of relationships incident to such employment. This shall include the furnishing of a signed, sworn/affirmed statement. Failure to respond to requests for information or to appear as a witness in an official proceeding may result in consideration of disciplinary action. (Nothing herein shall be deemed to infringe upon an employee's right to invoke the protection of the Fifth Amendment to the Constitution with respect to self-incrimination in a criminal investigation.)
4. Mission Area and Agency officials have the authority to transfer, detail, and reassign employees whenever necessary to meet operational needs. Employees have an obligation to accept transfers, details and changes in assignment. Failure to accept a transfer, detail, or reassignment may result in the separation of the employee.
5. Employees shall not purchase products or receive services directly or indirectly from persons, firms, or establishments for which employees conduct inspection, grading, or similar regulatory activities without express approval. Each Agency shall establish the approval level and shall advise each employee. Agencies shall utilize the following criteria in granting such approvals:
   • Proximity of the employee to other retail outlets;
   • The number of retail outlets in the commuting area;
   • Whether the outlet is a sole source;
   • Whether the firm is selling the item or service at the prevailing price to the general public as well as the employee; and
   • Whether the outlet is open to the general public.

735-209 Computers.

Unless employees have specific authorization, they are prohibited from accessing any Department or Federal Government electronic, laser, or magnetic system of storing information, or computer software, not expressly identified for public or general access. This prohibition includes, but is not limited to, computers of all types, floppy diskettes, compact or laser disks, and magnetic tapes. Employees are subject to discipline or adverse action regardless of whether they use, damage, or make alterations to, the stored information.

735-210 Retaliation and reprisal.

No employee may retaliate against another, by word or action: for filing complaints about safety problems; for filing grievances under either the negotiated or administrative grievance systems; for filing complaints of discrimination; for assisting the investigators of the Department, Mission Areas, or Agencies; or for engaging in any other protected activity.

735-211 Reporting misconduct.

Each employee of the Department is required to report actions by other employees that he or she knows, or has a reasonable basis to believe, are violations of law or regulation. A report must be made to any appropriate office or official. Violations include, but are not limited to:

• Fraud, waste, and abuse of Government resources;
• Criminal activity of any kind;
• Violations of Federal personnel rules;
• Sexual harassment; and
• Prohibited personnel practices.

735-212 Miscellaneous statutory provisions.

1. The attention of each employee is directed to the following statutory provisions:
   • The prohibition against any inspector, deputy inspector, chief inspector, or other officer or employee of the Department authorized to perform any of the duties prescribed by Title 21 United States Code, Chapter 12 ("Meat Inspection"), Subchapter I ("Inspection Requirements; Adulteration and Misbranding"), accepting any money, gift, or other thing of value from any person, firm, or corporation, or officers, agents, or employees thereof, given with intent to influence his official action, or receiving or accepting from any person, firm, or corporation engaged in commerce any gift, money, or other thing of value, given with any purpose or intent whatsoever (violations are felonies to be punished, upon conviction, by summary discharge from office, by fine of not less than $ 1, 000 nor more than $ 10, 000, and by imprisonment for not less than one year nor more than three years) (12 U.S.C. 622). In accordance with a memorandum of understanding between the Secretary of Agriculture and the Attorney General, the following circumstances either have no prosecutive merit and are not required to be reported to the Department of Justice or do not constitute acceptance of a thing of value:
     • An exchange of social gifts in an obvious family or personal relationship (such as those between the employee and parents, spouse, children or close personal friends of the employee) when the circumstances make it clear that it is those relationships rather than the business of the other party which are the motivating factors;
     • Acceptance of loans from banks or other financial institutions on customary terms to finance proper and usual activities of employees, such as automobile and home mortgage loans;
     • Acceptance of unsolicited advertising or promotional material of clearly trivial value, such as: pens, pencils, note pads, calendars, and other things of nominal value (acceptance of gifts, such as meat products, alcoholic beverages, fruit baskets, boxes of candy, wallets, jewelry, and cufflinks is, however, strictly prohibited);
     • Exchange of customary social courtesies which are wholly free of any embarrassing or improper implications, and which are of trivial value (e.g., a soft drink or cup of coffee); and
     • Acceptance of food and refreshments of nominal value on infrequent occasions when the interest of the Government is served by participation of Department employees in industry-sponsored activities at which a luncheon or dinner may be served, and where the discussion of matters of mutual interest to the Government and industry will take place.
   • The prohibition against a person licensed or authorized to perform any official function under the U.S. Grain Standards Act, or employed by the Department to carry out the provisions of the Grain Standards Act, being financially or otherwise interested in an entity owning or operating a grain elevator or warehouse or engaging in the merchandising of grain, or being employed by or accepting gratuities from any such entity (7 U.S.C. 87(a)).
   • The prohibition against the unauthorized release of information, as specified in the Packers and Stockyards Act (7 U.S.C. 222).
   • The prohibition against the release of information in an employee's possession concerning cotton standards, estimates, tests, and analysis unless authorized by the Secretary (7 U.S.C. 472).
   • The prohibitions against the release of information acquired from parties to any marketing agreement and from handlers subject to marketing agreement orders, except as authorized by the Secretary for the purposes of suit or administrative hearings (7 U.S.C. 608d(2)).
   • The prohibition against persons administering activities concerned with cotton option contracts and commodity benefits as provided by the Agricultural Adjustment Act, speculating in agricultural commodities or products to which such contracts or benefits apply, or in contracts relating thereto, or in the stock or membership interests of any association or corporation handling such commodities or products (7 U.S.C. 610(g)).
   • Limitations on the use or availability of information furnished in connection with marketing agreements and orders (7 U.S.C. 610(i)).
   • Restrictions on the availability of information furnished in connection with marketing agreements and orders, and applicable to marketing agreements for anti-hog-cholera serum and hog-cholera virus (7 U.S.C. 855).
   • Restrictions on the use and publication of information furnished in connection with the collection of peanut statistics (7 U.S.C. 955).
   • Restrictions on the disclosure of information furnished in connection with tile establishment and adjustment of farm marketing quotas except as authorized by the Secretary for the purpose of suit or administrative hearing (7 U.S.C. 1373(c)).
   • The prohibition against an officer or employee being the beneficiary of or receiving any fee, commission, or gift for or in connection with any transaction or business under the Consolidated Farm and Rural Development Act other than such salary, fee, or compensation as he or she may receive as an officer or employee. In addition, members of a County Committee are prohibited from making any certification with respect to a loan to purchase any land in which they or any person related to them have any financial interest (7 U.S.C. 1986).
   • The prohibition against unauthorized release of information relating to the production and marketing of cotton (7 U.S.C. 2105(c)).
   • The prohibition against unauthorized release of information relating to plant variety protection (7 U.S.C. 2426).
   • The prohibition against unauthorized release of information relating to the production and marketing of eggs (7 U.S.C. 2706(c)).
   • The prohibition against the unauthorized prediction as to cotton prices in a Governmental publication (12 U.S.C. 1141j(d)).
   • The prohibition against the making of false statements in connection with activities of the Commodity Credit Corporation or embezzlement or conversion of anything of value belonging or pledged to the Corporation, or conspiring to commit such acts (15 U.S.C. 714m).
   • The prohibition against the acceptance of any fee, gift, or other consideration for compromise, adjustment, or cancellation of farm indebtedness (18 U.S.C. 217).
   • The prohibition against embezzlement of the money or property of the Federal Crop Insurance Corporation, the Rural Development Administration, or the Farmers Home Administration, and of pledged or intrusted property (18 U.S.C. 657).
   • The prohibition against the conversion of property mortgaged or pledged to the Farmers Home Administration, the Rural Development Administration, or the Federal Crop Insurance Corporation with intent to defraud (18 U.S.C. 658).
   • The prohibition against making, with intent to defraud, false entries or in participating in any benefit through any transaction in connection with Departmental activities concerned with agricultural loans (18 U.S.C. 1006).
   • The prohibition against making false statements or reports, or of willfully overvaluing land, property, or security to influence action in connection with agricultural loans (18 U.S.C. 1014).
   • The prohibition against willful disclosure of official information which might influence or affect the market value of crops prior to authorized publication. An employee acquiring, by reason of his or her employment, information as to the market value of agricultural crops, which information is required to be withheld, is prohibited from speculating in such product (18 U.S.C. 1902).
   • The prohibition against speculating in agricultural commodities to which the Federal Crop Insurance Act applies or in contracts relating to those commodities, or in the stock or membership interests of corporations or associations handling those commodities, by any person administering the Act (18 U.S.C. 1903).
   • The prohibition against the compilation or issuance of false crop reports (18 U.S.C. 2072).
   • The prohibition against any person using information to his or her own advantage or improperly revealing information concerning trade secrets acquired under the Poultry Inspection Act (21 U.S.C. 458).
   • The prohibition against the use of information obtained in the course of employment to speculate or to aid another in speculating on any commodity exchange (50 U.S.C. App. 2160(f)).
   • The prohibition against the knowing possession or the causing to be present of firearms or other dangerous weapons in a Federal facility (a building or part thereof owned or leased by the Federal Government, where Federal employees are regularly present for the purpose of performing their official duties) and a Federal court facility (18 U.S.C. 930).
   • The prohibition against willfully using or authorizing the use of a passenger motor vehicle or aircraft owned or leased by the United States Government for other than an official purpose, with mandatory penalty of suspension for at least one month, and when circumstances warrant, for a longer period or summary removal from office (31 U.S.C. 1349(b)).
   • The prohibition against any employee who has authority to take, direct others to take, recommend, or approve any personnel action:
     • Discriminating on the basis of race, color, religion, sex, age, national origin, handicapping condition, marital status, or political affiliation;
     • Soliciting or considering employment recommendations based on factors other than personal knowledge or records of job-related abilities or characteristics;
     • Coercing the political activity of any person;
     • Deceiving or willfully obstructing any person from competing for employment;
     • Influencing any person to withdraw from job competition for the purpose of improving or injuring the prospects of any other person for employment;
     • Granting any preference or advantage not authorized by law, rule, or regulation to improve or injure the prospects of any particular person for employment;
     • Engaging in nepotism (hiring, promoting, or advancing relatives);
     • Taking reprisal for whistleblowing;
     • Taking reprisal for the exercise of an appeal right;
     • Discriminating based on personal conduct which is not adverse to the performance of the employee, applicant or others; or
     • Violating any law, rule or regulation implementing or directly concerning merit system principles (5 U.S.C. 2302(b)).
2. Other statutes applicable to employees are listed by the Office of Government Ethics in the "Standards of Ethical 

Conduct for Employees of the Executive Branch" at 5 CFR 2635.902.

MESSAGE FROM THE CEO

Our Vision is to become the very best electric and gas company in the United States. To realize our Vision, we must commit ourselves not only to safety, accountability, and continuous improvement, but to the highest ethical standards.

 

The business prospects of our Company are excellent, and the foundation that we build on is very strong. That foundation comes from the people of Exelon, and from the service that we have provided to our customers, communities and employees. We are regarded as honest and caring, but disciplined, business people who are involved in providing essential services to major urban populations. We can be successful only if we employ an engaged workforce that best serves our diverse communities. And to meet the high standards set by our Company, we must conduct our operations safely and be leaders in developing solutions to our industry's environmental challenges.

 

Because our business involves services that are central to citizens in their every day lives and necessary for businesses to operate productively in the nation's economy, our operations are closely reviewed by governmental officials at the local, county, state and national level. Likewise, individuals and institutions have invested billions of dollars in our business with the expectation that we will honestly and productively use this capital to profitably operate our company and increase shareholder value.

 

We will be successful if we operate our Company, employ our people and finance our business in accordance with the highest ethical standards and with the law. We will destroy shareholder value if we do not. Our Exelon Code of Conduct provides the outline of what is expected of all of us to meet our important obligations, and gives us resources to understand these requirements and live up to them.

 

Please read this Code carefully, and ask your supervisor or the Ethics and Compliance Office if you have any questions. Our Company's success depends on each of us living up to these standards. I commit to you that I will do so. I expect no less from each and every one of you.

John W. Rowe

 

INTRODUCTION

Using This Guide
Exelon Ethical Principles
Who Must Follow Exelon Ethical and Legal Standards
Other Codes of Conduct

CORPORATE CITIZENSHIP AND THE Exelon COMMUNITY

Fair Treatment and Diversity
Harassment
Drugs and Alcohol
Workplace Violence and Weapons
Environment
Safety and Health
Community Relations, Employee and Corporate Contributions

WORKING WITH CUSTOMERS AND SUPPLIERS

Customer Relations
Procurement Standards

CONFLICTS OF INTEREST

Conflict of Interest Generally
Gifts and Gratuities
Entertainment
Corporate Opportunities
Outside Activity

PROTECTING COMPANY ASSETS

Company Assets Generally
Confidential Information
Records Management
Computer and Electronic Information Security
Internal Controls

GOVERNMENT RELATIONS

Government Business
Political Contributions and Lobbying

Personal Contributions
Corporate Contributions and Lobbying

LEGAL AND REGULATORY COMPLIANCE

Senior Officers
Insider Trading and Stock Tipping
SEC Code of Professional Conduct
Affiliate Non-discrimination
Energy Trading Rules
Antitrust and Unfair Competition
Foreign Corrupt Practices
Sales and Marketing Competitive Practices

CODE OF CONDUCT PROCESSES AND RESOURCES

Waivers
Certification of Compliance
Reporting and Investigating Violations
The Ethics and Compliance Office
Ethics and Compliance Reporting Line/Compliance Reporting Website

Retaliation

Violations and Penalties

Conclusion

Ethical Decision Making
Accountability

INTRODUCTION

 

Using This Guide

The success of Exelon Corporation, including its subsidiaries (“Exelon” or the“ Company”), is dependent on all of us conducting our activities in accordance with the highest ethical standards and applicable law. This Exelon Code of Business Conduct (“Code”) reflects our core value of integrity and is the statement of our required behavioral standards. The Code may, in some instances, set performance levels or expectations that are more stringent than required by law. They are nonetheless required. Exelon recognizes that such enhanced performance fosters compliance with law and provides a platform for our Company to be successful in the eyes of our customers, employees and investors.

 

The Code does not cover all situations where questions of ethics may arise. That would be virtually impossible to do. It enables you to identify situations that may raise ethical and legal issues, and is designed to help you learn what to do whenever you have a question or concern about what conduct the Company expects from you. All employees are held accountable for following the Code and it is important that you take the time to read it from cover to cover.

 

To assist with your understanding, described below is the purpose of each section of the Code.

 

1. The message from the CEO explains the importance of Exelon's commitment to the Company's core value of integrity.
2. The Introduction explains the accountability that all employees have for complying with the Company's policies and for raising concerns about possible violations of law or policy.
3. The Exelon ethical and legal business standards follow the Introduction. For each standard there is an “Overview,” which generally describes the standard, and the “Main Obligations” which are the core requirements under each standard. In some cases, there are also examples of “Things to Watch Out For,” which are circumstances that should alert you to a potential ethical or legal issue.
4. For each standard, there are Exelon policies that provide additional detail. The complete and latest text of the related Exelon policies are found on the Exelon Intranet Website. You should read the policies and talk to your manager to understand how the ethics standards and supporting Company policies apply to your job.
5. The Exelon Ethics Principles, stated below, are the framework from which the behavioral standards described in the Code are developed. They are your guideposts for understanding what acting with integrity looks like, in other words, how the Company expects that each employee will, at all times, conduct the Company's business.

 

Exelon Ethics Principles

• Obey the applicable laws and regulations governing our business conduct.
• Be honest, fair and trustworthy in all your Exelon activities and relationships.
• Foster an atmosphere in which fair employment practices extend to every member of the diverse Exelon community.
• Strive to create a safe workplace and to protect the environment.
• Avoid all conflicts of interest between work and personal affairs.
• Through leadership at all levels, sustain a culture where ethical conduct is recognized, valued and exemplified by all employees.

 

Who Must Follow the Exelon Code of Business Conduct

Exelon directors, officers and employees
The Exelon Code applies to all directors, officers, and employees of the Company.

Subsidiaries
An Exelon subsidiary may supplement this Code, as necessary, with its own implementing policies.

Third parties
All Exelon businesses must ensure that, either through contractual provisions or certification, others representing Exelon - such as consultants, agents, sales representatives, distributors, vendors, suppliers and independent contractors (“Suppliers”) - agree to follow applicable Exelon ethical and legal standards.

Supervisors and employees must:

• Identify those persons and companies outside Exelon whose activities on behalf of Exelon may involve issues covered by the Exelon Code.
• Require those persons and companies to agree to comply with relevant aspects of the Exelon Code.
• Provide those persons and companies with appropriate education on the requirements imposed.
• Take necessary action, up to and including terminating a contract with anyone representing Exelon, if the person fails to honor his or her agreement to abide by the Exelon Code.

Other Codes of Conduct

Since we operate in a heavily regulated industry, there may be other codes of conduct that apply to specific aspects of our business, for example the Federal Energy Regulatory Commission Standards of Conduct. Please note that all references to the Code in this document, unless otherwise stated, mean this Code of Business Conduct, which applies across Exelon and its subsidiaries.

CORPORATE CITIZENSHIP AND THE EXELON COMMUNITY

Fair Treatment and Diversity

It is Exelon's policy to provide equal employment opportunity and fair treatment for everyone. Whenever and wherever individuals engage in activities on behalf of the Company, they have a right to be free from prohibited discrimination. We will also actively seek to build an inclusive workforce. Our diverse employees are a competitive advantage, enabling us to make more informed business decisions and to better serve our diverse customer base. We are also committed to diversity in regard to our suppliers. Embracing diversity is not simply the right thing to do; it makes good business sense.

Main Obligations

• Judge each individual based on qualifications, demonstrated skills and achievements, without regard to race, color, gender, national origin, age, religion, disability, sexual orientation, marital status, veteran status or other classifications protected by law
• Promote an environment of inclusion and diverse ideas where communication is open, direct, honest, and respectful
• Listen and speak with the goal of understanding the value that we each bring, and disagree respectfully, treating each other with dignity
• Encourage free and open discussion and honestly communicate plans, expectations and results

Things to Watch Out For

• The failure to consider qualified diverse candidates in hiring, promotion and other employment decisions
• Making and acting on presumptions about any individual that are based on classifications protected by law

Harassment

We all have the right to work in an environment that is free from unlawful harassment or intimidation. Verbal or physical conduct by any employee that relates to characteristics protected by law and disrupts another's work performance or creates an intimidating, offensive, abusive, or hostile work environment will not be tolerated. The Company will conduct a prompt investigation of any reported harassment. Appropriate corrective action will be taken where prohibited harassment has occurred.

Main Obligations

• Speak up when a co-worker's conduct makes you or others uncomfortable, and promptly report perceived harassment, when it occurs, to the supervisor, department lead, HR representative, or the Ethics and Compliance Office
• Avoid making or tolerating insults, jokes, slurs, and solicitations or the display of pictures, cartoons or posters that relate to any protected characteristic
• Provide a work environment free of unwelcome sexual advances, requests for sexual favors, and other unwelcome verbal or physical conduct of a sexual nature
• If you are a supervisor, take reasonable steps to prevent and detect harassment and respond promptly when an employee reports alleged harassment

Things to Watch Out For

• Comments or jokes with sexual, racial or ethnic innuendo
• An employee who, on repeated occasions, is the subject of allegations of harassment or hostility by employees having the same protected characteristic

Drugs and Alcohol

Exelon is committed to maintaining a work environment that ensures the safety, health and welfare of employees and the public. As explained in detail in our Drug and Alcohol Policy, Exelon requires a drug and alcohol free workplace. Use of controlled dangerous substances and alcohol abuse may adversely impact productivity, workplace and public safety, and may jeopardize the Company's assets.

If you have problems related to alcohol or drugs, you are encouraged to seek confidential assistance from the Employee Assistance Program or other qualified professionals. Employees may contact a program representative at 1-866-872-1666.

Main Obligations

• Do not use, possess or be under the influence of drugs or alcohol while on duty, whether or not on Company premises, or while in Company vehicles
• Whether or not on duty, comply with all laws and regulations governing use or possession of alcohol and illegal drugs
• Inform the Company's medical department or a supervisor if, for medical reasons, you are using prescription or non-prescription drugs that may impair alertness or judgment and jeopardize your safety or that of your co-workers

Things to Watch Out For

• Inexplicable abnormal behavior by an employee
• Signs of potentially being under the influence of alcohol, including, slurred speech, red eyes, uneven gait or stumbling, or the smell of alcohol on the person
• Signs of potentially being under the influence of drugs, including dilated pupils, smell of marijuana on the person, extreme mood and behavior swings, or possession of drug paraphernalia

Workplace Violence and Weapons

Exelon is committed to a safe working environment, free of threats, intimidation and physical harm.

Main Obligations

• Do not engage in any violent behavior including assaults, fighting, threatening comments, stalking or any other similar behavior which endangers, or threatens the safety of employees, or the public
• Do not possess any deadly or dangerous weapon, explosives or incapacitating devices while on duty or in Company vehicles, whether or not on Company premises, unless specifically authorized by the Chief Nuclear Officer or prior approval is obtained from the Chief Compliance Officer

Things to Watch Out For

• Unusual physical contact with others
• Overreaction to common workplace frustrations
• Comments about plans to hurt another person or persons

Environment

Exelon will conduct its operations in a way that preserves and protects the environment, and complies with applicable environmental laws and regulations and other relevant standards to which the Company may voluntarily subscribe. We also promote a corporate culture where competitive initiatives are consistent with environmental stewardship, demonstrating environmental leadership though full compliance, pollution prevention and continuous improvement.

Main Obligations

• Comply with all applicable environmental laws, regulations, and voluntary commitments, as a minimum
• Integrate environmental risk analysis into business planning and operations- first, prevent pollution where possible, then reduce environmental impacts and implement cost-effective mitigation measures for environmental impacts that cannot be avoided
• Utilize natural resources more efficiently to reduce environmental impacts and operating costs
• Lead the industry in shaping public policy on strategic environmental issues
• Partner with the communities where we operate to enhance the environment
• Engage stakeholders and consider their environmental expectations in decisionmaking
• Publicly communicate our environmental issues and performance

Safety and Health

Exelon will operate all aspects of its businesses in a manner that protects the safety and health of its employees, contractors, customers and the general public. We will foster a safety culture in which everyone believes that accidents and injuries are preventable and all employees understand their accountability for maintaining a safe and healthful workplace. Our work is never so urgent, nor the schedule so important, that it cannot be performed safely.

Main Obligations

• Create a safety culture to achieve an accident and illness-free environment;
• Comply with all applicable health and safety laws and regulations, industry and internal Company standards, as a minimum
• Integrate safety risk analysis into business planning, engineering design, and operating decisions, to develop and implement effective hazard control measures and safety performance improvement
• Promote the value of employee involvement in the prevention of injuries and illnesses -- including every employee's right and obligation to question, stop and correct any unsafe condition or behavior -- and maintain an open and honest dialogue with our employees on health and safety issues and performance
• Continually improve safety performance to become the safest electric and gas utility

Community Relations, Employee and Corporate Contributions

We are committed to being a good corporate citizen and we support and encourage employee involvement in community activities and professional organizations. We are also proud to provide financial support to thousands of charitable and civic organizations in the communities where our employees live and work. However, we must ensure that all contributions of money, property and services are properly authorized and comply with all Company policies and procedures and legal and regulatory requirements. We may not bring pressure on others to contribute to charitable organizations and may not use Company resources to solicit support for charitable causes without appropriate prior approval.

WORKING WITH CUSTOMERS AND SUPPLIERS

Customer Relations

Customers purchase from companies that understand -- and sometimes even anticipate -- their needs. We must satisfy fundamental customer needs like quality, reliability, and service, and in a way that is ethical and legal.

Main Obligations

• Act in a professional, respectful and empathetic manner when listening and responding to customer inquiries and requests
• Deal fairly with customers by being accurate, consistent and flexible when responding to customer inquiries and requests
• Keep commitments to customers by following up through completion when resolving a customer's inquiry or request and by working to prevent a recurrence
• Work in a safe and responsible manner when on the property of a customer or other third party
• Be mindful of the federal and state rules regarding relationships with affiliated companies as discussed in the section regarding Affiliate Rules
• Accurately and appropriately represent all services in offerings or advertising, marketing and sales efforts

Things to Watch Out For

• Failing to respond promptly and courteously to customer inquiries and requests
• Failing to reasonably restore a customer's or other third party's property when work is completed
• Discriminating against or providing preferential treatment to any customer

Procurement Standards

Third-party perception of ethical conduct is particularly critical in the case of employees involved in procurement activities, as well as other employees who are in a position to influence procurement decisions or relationships. Employees must comply with Exelon procurement policies and practices during any procurement activity including issuing requisitions, identifying potential suppliers, bidding, negotiating and contracting, awarding bids, sole source procurement, managing purchase orders and contracts and processing invoices.

Main Obligations

• Make procurement decisions with integrity and based on criteria that will deliver the best total value to Exelon, such as quality, price, service, reliability, availability, technical excellence and delivery
• Deal with all suppliers professionally, ethically and fairly and avoid the appearance of impropriety; specific restrictions on the exchange of gifts and entertainment are discussed in the section below entitled “Conflicts of Interest”.
• Conduct Exelon business in good faith and resolve disputes quickly and equitably, where possible

Things to Watch Out For

• Sole source procurements without sufficient justification
• Frequent business entertaining with a supplier

CONFLICTS OF INTEREST

Conflicts of Interest Generally

Exelon is committed to making all business decisions objectively and solely on the basis of the best quality, service and price, or other similar competitive factors. A conflict of interest exists whenever the personal interests, activity, investment or association of an Exelon employee are inconsistent with the responsibilities of his or her employment or position. A loss to the Company need not occur for a conflict to exist.

Main Obligations

• Avoid any activity, interest or association that could compromise the independent exercise of your judgment in the best interests of the Company
• Act with an understanding that even the appearance of a conflict between personal interests and those of the Company can undermine trust and therefore must also be avoided
• Seek guidance from your manager or the Ethics and Compliance Office whenever there is a question concerning a conflict between your personal interest and the interests of the Company
• Promptly disclose all conflicts to the Ethics and Compliance Office and in your compliance certification

Things to Watch Out For

• An employee or a member of the employee's family receives a personal discount or other similar benefit from an Exelon supplier and the employee is in a position to influence Exelon decisions that impact the supplier
• An employee approves the selection of a family member's or close friend's firm for work, even if the selection results in lower cost to Exelon
• An employee having a material financial interest in an existing or proposed transaction to which the Company is or is likely to become a party
• An employee having a material financial interest in property which the Company is acquiring or likely to acquire (Not applicable to property acquired under the Company's Relocation Policy)
• An employee having a material financial interest in a corporation, partnership or other entity that does business with Exelon or competes with the Company (except for insignificant stock interest in publicly held companies)

Gifts and Gratuities

To maintain unquestioned integrity in our business relationships, we must avoid being placed in an embarrassing position that might make it difficult to carry out our duties impartially.

Main Obligations

• Employees, including members of their immediate families, may neither offer or give to, nor request or accept from a customer or any entity with which the Company does business, or is likely to do business a thing of value such as cash, bonuses, fees, commissions, gifts, gratuities, favors, loans, private or personal discounts (“Gifts”)
• Understand that mementos, advertising novelties and souvenirs of a modest value customarily associated with legitimate business relationships, or other gratuities or things of similar value are not considered Gifts and are excluded from these restrictions
• Understand that modest value is not subject to precise definition for all circumstances. In general, if it would appear questionable if printed in a newspaper article, it should not be provided or accepted
• Understand that business entertaining is permitted as described under the heading “Business Entertainment”
• If you receive a Gift of more than modest value you should return it with an explanation regarding Exelon's policy and notify your manager or the Ethics and Compliance Office
• Where it is customary and lawful in some foreign countries for business executives doing business with each other to give or exchange Gifts, respect these customs when appropriate, but only in accordance with U.S. and local laws

If you are unsure whether you may give or accept a Gift, call the Ethics and Compliance Office at 1-866-222-5315 or the Ethics Help Line at 1-800-23-ETHIC.

Business Entertainment

Business entertainment (e.g., meals and attendance at sporting or theater events) or invitations to business events is a common practice meant to promote good will and establish trust in business relationships. Such exchanges are acceptable if they are infrequent and of modest value.

Main Obligations

• Do not accept any business courtesy that might be perceived as a bribe or payoff
• Decline any offers of lavish meals, entertainment or business events
• As a measure of whether a particular meal, entertainment or business event is lavish, employees may only accept offers or invitations if the associated expenses would be reimbursed by Exelon as a reasonable business expense, if not paid for by the third party
• Avoid the offer or acceptance of frequent meals and entertainment from a continuing business Supplier
• Employees may provide third parties with meals, entertainment, refreshments, transportation, lodging or incidental hospitality. Such expenditures, however, must have a valid business purpose, be modest, and be done within the framework of sound business judgment
• Some areas of the Company, such as the Supply organization, may choose to implement stricter standards than the ones stated here

Corporate Opportunities

Employees owe a duty of loyalty to the Company and must act in the best interests of the Company's legitimate interests.

Main Obligations

• Do not deprive the Company of a business advantage or an opportunity
• Do not take an opportunity discovered through the use of Confidential Information or your position for personal gain or advantage or for the gain or advantage of any third party
• Do not use a Company Asset, Confidential Information or your position for personal gain or advantage or for the gain of advantage of any third party
• Do not compete with the Company

Outside Activities

Exelon employees actively offer their time and talents to serve in public office and other positions in the community. Exelon supports the involvement of employees in the service to their communities since these activities are consistent with the Company's strongly held core value of corporate citizenship. Likewise, employees may in some instances take on a second job with another business organization. Employees must ensure, however, that these outside activities do not exploit or conflict with their employment with Exelon or create or result in any conflict or appearance of conflict with the Company's interests.

Main Obligations

• Employees should report to their manager any public office or position they hold, disclose the potential for any conflict or appearance of any conflict to interested parties (including the Company), and disqualify themselves from Company decisions affecting their public or political constituency as well as any decisions in their public or political role that affect the Company
• If an employee decides to accept work with another business organization, the employee must ensure that the outside work is strictly separated from and does not interfere with the employee's position at Exelon or his or her loyalty to the Company
• An employee may not accept outside work with a competitor, supplier or other entity likely to do business with the Company unless a waiver is requested and approved in accordance with Code requirements described under the heading “ Waivers.”

Things to Watch Out For

• Doing outside work on Company time or using Company Assets in outside work
• Taking outside work that involves the sale of products or services to Exelon
• Outside employment that interferes with your ability to dedicate the time and effort required to fulfill your responsibilities to Exelon

If you have any questions about whether a public activity or outside work is appropriate, seek guidance from your human resources representative or contact the Ethics and Compliance Office.

P

ROTECTING COMPANY ASSETS

Company Assets Generally

We are entrusted with valuable Company assets. They consist of all property that the Company owns or uses to achieve business objectives (“Company Assets”). They include: physical assets like land, facilities, vehicles, buildings, equipment and inventory; financial assets like cash, receivables, and investments; intellectual property such as confidential information, patents and trademarks; contract rights, licenses; and computers and information resources.

Main Obligations

• Safeguard Company Assets and use them efficiently
• Take reasonable care to prevent unauthorized use, damage, destruction, waste, loss or theft of Company Assets
• Use or authorize the use of any Company Asset only for Company business purposes, regardless of condition or value
• Do not sell, lend, borrow, give away or dispose of Company Assets, except with proper authorization

Things to Watch Out For

• Using more of a Company Asset than is required for the project at hand
• Using any Company Asset or any Exelon business relationship to secure credit or a loan

Confidential Information

One of Exelon's most valuable assets is information. Our confidential information assets consist of information or knowledge, regardless of form, that Exelon considers private, that is not common knowledge outside the business or required by law or contract to be maintained as confidential, which might be of use to competitors or harmful to Exelon, if disclosed (“Confidential Information”). It is information or knowledge that an Exelon business develops or pays to have developed and to which Exelon has an exclusive right. Confidential Information that has commercial value to competitors or other entities that want to do business with Exelon is sometimes referred to as “proprietary information” or a “trade secret.” Examples of Confidential Information include information about Exelon facilities; systems; operations; finances; customers; suppliers; employees; business concepts and strategies; investment plans; development or construction plans; and marketing plans.

Main Obligations

• Be vigilant to protect our Confidential Information
• Safeguard Confidential Information by marking information accordingly, keeping it secure, and limiting access to those who need to know it in order to do their job
• Do not divulge Confidential Information to persons outside of the Exelon business, except where such disclosure is appropriately authorized by an officer or legally mandated or where such disclosure is done pursuant to a confidentiality agreement
• Do not share Confidential Information gained as a result of employment with Exelon with any individual, firm, or other organization after your employment with Exelon has ended
• Apply these same protections to similar information supplied to us by vendors and customers

Things to Watch Out For

• Failing to be cautious in situations that might result in the inadvertent disclosure of Confidential Information, such as when discussing Confidential Information in public areas like elevators, restaurants, public restrooms, and airplanes or in public education forums like seminars or lectures
• Failing to completely and permanently destroy Confidential Information when discarding it

Further information may be found in Corporate Procedures, Protecting Exelon Information and Information Asset Protection.

Records Management

Exelon's Records Management Corporate Policy and Procedure (Records Management Policy) provides the guidance required for the identification, management and maintenance of records required to conduct the Company's business, as well as the guidance required to ensure the consistent and documented destruction of such records. Records for purposes of this provision include any documentary material or information created or received in the ordinary course of business, regardless of the specific nature, medium or form, including paper, photograph, microfilm, electronic, digital, audio or other media.

Main Obligations

• Maintain, retain and destroy business records in accordance with the Company's Records Management Policy and do not retain applicable records longer than necessary
• Act with an understanding that almost all business records may become subject to public disclosure in the course of litigation or governmental investigations
• Do not discard or destroy business records that might normally be destroyed under the Company's Records Management Policy if those records are (1) relevant to a pending, threatened or reasonably anticipated legal or administrative action against the Company or (2) a regulatory or governmental investigation involving the Company or (3) a Company internal investigation

Things to Watch Out For

• Altering, destroying, mutilating or concealing any record when an official proceeding or internal investigation is underway and the document relates to the subject matter of the proceeding
• Failing to prevent others from destroying records that reasonably relate to an official proceeding or internal investigation

If there is any question as to whether a particular record should be maintained, seek guidance from the Corporate Secretary's Office or the Legal Department as to its destruction.

Computer and Electronic Information Security

Exelon's computer, telecommunications and other electronic information resources are Company Assets. They consist of all of the Company's information technology infrastructure and applications such as computer hardware, software applications, networks, e-mail and voice mail systems. If employees remotely access Exelon systems or access third party systems through Exelon systems, the access also belongs to Exelon (collectively “Computer and Information Resources”).

Main Obligations

• Use Computer and Information Resources only for Company business purposes and for the exclusive use of employees and authorized suppliers and their employees
• Incidental personal use of these resources may be permitted so long as the use is reasonable and does not interfere with work responsibilities or expose Exelon to potential liability
• Safeguard the integrity and confidentiality of Computer and Information Resources by protecting passwords, IDs and access only by authorized persons
• Take precautions against intrusion by "viruses" from the Internet or unauthorized software. For more information, refer to the Information Asset Protection Corporate Procedure
• Use Computer and Information Resources responsibly and in accordance with law and the Acceptable Use Corporate Procedure
• Do not access, solicit, or transmit inappropriate messages or materials (e.g., sexually oriented, pornographic, violence or hate related, discriminatory, etc.) utilizing Computer and Information Resources. Such activity may, in certain situations, be illegal and may subject Exelon and the employee involved to civil and criminal sanctions
• Employees should have no expectation of privacy while using Computer and Information Resources. Exelon reserves the right to monitor and restrict access to non-business related Internet sites and to refuse delivery of prohibited electronic messages or materials, as described above

I

nternal Controls

Management is accountable for establishing and maintaining a system of internal controls within an organization. Internal controls are those structures, activities, processes, and systems that help management effectively mitigate the risks to an organization's achievement of objectives. Management is also accountable for the effectiveness of the Company's internal control over financial reporting. Under Section 404 of the Sarbanes Oxley Act, this accountability encompasses ensuring there is clear, complete, fair and accurate reporting of financial and non-financial information pertaining to business transactions.

Management is charged with this accountability on behalf of the organization's stakeholders and is held accountable for this accountability by the Exelon Board of Directors.

Main Obligations

• Prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and Exelon accounting procedures
• Maintain a sound system of internal controls that provides reasonable assurance that:
  • operations and activities are effective and efficient
  • financial and operational accounting and reporting are full, fair, accurate, timely and reliable, and reflect the underlying performance
  • authority and accountability to conduct business is delegated in a manner that balances efficient decision-making with protection of Exelon's assets and interests
  • adequate segregation of duties exists between authorization, creation, approval, custody, record keeping and reconciliation and
  • compliance with Exelon's policies and practices and applicable laws and regulations is promoted, communicated and maintained

Employees are accountable for:

• understanding and complying with the system of controls established and maintained by management in their respective organizations, to achieve the expectations contained in the Company's policy on internal controls
• recording all business transactions, events and conditions accurately and completely
• ensuring that all transactions are properly authorized and approved, recorded and reported in a timely manner and are adequately supported and
• reporting accounting or internal control deficiencies that have the potential to adversely affect the ability of the Company to record, process, or report financial or operations data

Employees are prohibited from:

• falsifying data, information or records with respect to the Company's finances or operations, including those related to, among other things: assets, liabilities, revenues, expenses and earnings; quality, safety and security; environmental performance; plant and equipment; claims; and timekeeping
• accelerating, postponing or otherwise manipulating the accurate and timely recording of assets, liabilities revenues, expenses or earnings
• creating off-book accounts or funds or making any other entry in any other record that intentionally misrepresents, conceals or disguises the true nature of any transaction, event or condition and
• taking any action, either alone or with another employee or a supplier, to improperly influence, coerce, manipulate or mislead any auditor or investigator engaged in the performance of an audit or other review of the Company's transactions, activities or operations, including its financial statements, financial transactions, or accounting or other internal controls.

GOVERNMENT RELATIONS

Government Business

Exelon is committed to conducting its business with governmental agencies and officials consistent with the highest ethical standards and in compliance with applicable laws, regulations and rules. Exelon is also committed to cooperating with governmental enforcement investigators and law enforcement officials. Employees are free to speak to law enforcement officials in any matter, but are urged to contact the Legal Department whenever they are contacted by such officials regarding matters pertaining to Exelon business.

Main Obligations

• Cooperate with governmental agencies and officials in a straightforward manner and exercise the utmost integrity at all times in conducting business with such agencies and officials
• Provide forthright, responsive and timely disclosure of information in connection with the conduct of regulatory proceedings or in connection with responding to regulatory reporting requirements
• Ensure that all responses to reasonable requests or inquiries from governmental agencies are accurate, complete and timely
• Act professionally and with honesty and integrity when appearing before or interacting with government agencies
• Do not interfere with or prevent any other employee or person from providing accurate information to any government official or agency
• Understand and comply with the ethics codes applicable to the passing of benefits to state and federal legislators, their staff and officers or the staff of the executive branch and do not place such representatives in any conflict of interest, either actual or perceived
• Report, in accordance with law, any benefits passed to federal and state officials

Things to Watch Out For

• Giving anything of value to any governmental official
• Passing, on behalf of the Company, any benefit, including entertainment, food and beverage, travel and lodging, honoraria, loans, gifts or other things of value, to a state or federal legislator or executive branch official without obtaining the prior approval of Government Affairs, External Affairs or the Legal Department
• Incorrect or unauthorized cost-charging on government contracts
• Failing to respond in a timely manner to information requests from governmental officials

P

olitical Contributions and Lobbying

Personal Contributions

Employees have the right to participate in the political process and to engage in political activities of their own choosing. While involved in personal civic and political affairs, employees must make clear that their views and actions are their own, and not those of Exelon. If you have questions regarding personal political contributions or other personal political activity, seek guidance from the Legal Department, Government Affairs, or the Ethics and Compliance Office.

Main Obligations

• Employees may not solicit contributions from other employees for personal political purposes on Company time and may not require other employees, including secretarial or other support staff, to perform tasks in support of an employee's personal political activities
• Employees may use an insignificant amount of Company resources, such as phones, fax machines or office supplies for their personal political purposes, where state law permits
• Employees may make personal political contributions, but will not be reimbursed for such contributions by the Company

Corporate Contributions and Lobbying

Federal law places limits on a corporation's ability to participate fully in the political process, especially by imposing prohibitions on corporations from making contributions of any kind to a candidate, political party, or political committee in connection with a federal election. Some states impose similar restrictions on making corporate contributions and conducting activities to support state or local candidates. Certain limited activities, including political action committees and lobbying, are allowed and should be coordinated by Governmental Affairs. If you have questions regarding corporate contributions or lobbying, seek guidance from the Legal Department, Government Affairs, or the Ethics and Compliance Office.

Main Obligations

• Employees who do not have policymaking, managerial, professional or supervisory responsibilities may not ever be solicited for federal political contributions
• Since some states where we operate allow corporations to participate more broadly in the political process than others, decisions with respect to making corporate contributions and conducting activities to support state or local candidates or campaigns should be reviewed in advance with Government Affairs, the Legal Department or the Ethics and Compliance Office
• Certain management level employees at Exelon and its subsidiaries can use Company-connected Political Action Committees (PACs) to participate in political matters, and can be approached at work to contribute to PACs; employee contributions to any Company-connected PAC are strictly voluntary
• Employees should not provide any gift to governmental officials, or contact a government official on behalf of the Company unless they are specifically authorized to do so by Government Affairs and have met any governmental registration or reporting requirements

LEGAL AND REGULATORY COMPLIANCE

Senior Officers

In addition to all other provisions of the Code, Exelon's Chief Executive Officer, Chief Financial Officer and other senior officers must adhere to and advocate certain principles in connection with discharging their responsibilities:

Main Obligations

• Act honestly and ethically, including the ethical handling of actual or apparent conflicts of interest between their personal (including those of family members) and professional relationships
• Establish an environment in the workplace that promotes honest and ethical behavior
• Make full, fair, accurate, timely and understandable disclosure in reports and documents that the Company or any subsidiary files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Company
• Ensure that the internal controls around financial reporting are properly designed and effective in compliance with the Sarbanes-Oxley Act of 2002 and other applicable laws and regulations
• Comply with applicable governmental laws, rules and regulations
• Promote accountability for adherence to the Code, including these provisions, and uniformly administer the Code so as to deter wrongdoing
• Make prompt internal reporting of violations of these requirements to Exelon's Ethics and Compliance Counsel or other legal counsel

In order for these executives to be effective in meeting these principles, all employees must act with the same high regard for fairness, honesty, accuracy and good faith.

Insider Trading or Dealing and Stock Tipping

Exelon is committed to fair and open markets for buying and selling its public securities. Federal law prohibits employees from buying or selling any Company equity or debt security based on material information obtained in the course of employment if the information is not available to the general public (“Inside Information”). Material information is information (whether favorable or unfavorable) that a reasonable investor would consider important in deciding whether to buy, sell or hold a security of the Company. Exelon's policy requires full compliance with applicable laws and avoiding even the appearance of insider trading, insider dealing or tipping.

Insider trading or dealing means buying or selling stock or any securities while in possession of inside information about the Company. Stock tipping means disclosing Inside Information about Exelon or any other company to another person to enable that person to buy or sell stock or other securities on the basis of such information.

Employees with questions should consult with the Corporate Secretary or the Ethics and Compliance Office.

Main Obligations

• Never buy, sell or trade the stock or securities of the Company while you have Inside Information about the Company
• Abstain from buying, selling or trading securities of all companies until the Inside Information has been publicly available for at least two full NYSE trading days
• Also abstain from making buy or sell recommendations to anyone else while in possession of Inside Information
• Only disclose Inside Information within the ordinary course of Exelon business and only to those who have a clear need to know
• Members of the Board of Directors, officers and certain designated employees are required to obtain approval from the Office of the Corporate Secretary prior to any purchase or sale of Exelon stock
• Refer to the Buying and Selling Exelon Securities Corporate Procedure

Things to watch out for

• Failing to avoid the appearance that any Exelon employee is trading on inside information by engaging in “short sales” or trade in market options such as puts or calls on Exelon securities
• Using or passing trading tips if there is any reason to believe that the information may have originated from someone with Inside Information

SEC Code of Professional Conduct

The SEC has established a code of professional conduct applicable to attorneys who advise the Company on matters that may relate to the Company's SEC filings. The rules require the Company's attorneys to report up-the-ladder within the Company evidence of wrongdoing by the Company or its Directors, employees or agents. Exelon has adopted a policy to assist its attorneys to understand and comply with the SEC's rules.

Affiliate Non-discrimination

The Federal Energy Regulatory Commission and the state utility commissions in New Jersey, Pennsylvania and Illinois have adopted regulations governing the business dealings between utility subsidiaries of Exelon Energy Delivery Company (collectively referred to as “EED”) and its affiliates to ensure that resources and assets of the regulated businesses of the Company are not used to subsidize or give an unfair advantage to other lines of the Company's business. Employees must comply with all of these regulations and similar Tariff provisions applicable to business conducted by the utilities. Some examples of these include: the FERC Standards of Conduct, the Pennsylvania Code of Conduct, the Illinois Affiliate Non-Discrimination Rules and the New Jersey Affiliate Standards Rules.

Main Obligations

• EED's transmission operation must function independently from the operations of any of its affiliates
• Employees may not give non-public information regarding EED's market or its transmission and distribution systems to any third parties, including affiliates, on a preferential basis
• Employees may not give preferential treatment regarding EED customer leads or transmission and distribution systems to any seller of electric energy natural gas or energy services, whether an affiliate or a competitor
• EED customer information may be provided to third parties, including affiliates, only with the written consent of the customer
• EED employees may not provide leads, preferences or similar benefits designed to provide a competitive advantage for any competitive business segment of EED or any affiliate
• Costs must be appropriately charged or allocated between the regulated and other business functions of EED and between EED and its affiliates

If you are uncertain about these regulations or have questions regarding their implementation or interpretation, contact the Legal Department for guidance.

Energy Trading Rules

Exelon is committed to lawful and ethical practices in connection with conducting all of the Company's businesses. The Company's electric power and gas supply and trading operations have a special set of rules that must be followed.

Main Obligations

• Engage only in transactions with a legitimate business purpose and economic substance and not in transactions intended to artificially boost revenues or volumes or manipulate market prices, market rules or market conditions
• Operate and schedule generating facilities, undertake maintenance, declare outages and commit or otherwise bid supply in a manner that complies with applicable power market rules
• Comply with the rules and reliability requirements of transmission system operators in the dispatch of generation units and scheduling of power transactions
• Disclose accurate and consistent information, in compliance with all applicable rules and requirements, to regulators and market monitors and to the media, including market publications and publishers of surveys and prices
• Prepare and maintain adequate and accurate documentation of all trading transactions

Things to watch out for

• Discussing with other market participants the price or supply of any commodity or other factors that may bear on competition
• Engaging in simultaneous offsetting buy and sell trades or other activities that may artificially affect reported revenues, trading volumes and prices
• Engaging in transactions or scheduling resources that have the appearance of creating market congestion
• Making trades that are not properly and promptly recorded, or are expected in a non-conventional manner (i.e., cell phone versus recorded line)

Antitrust and Unfair Competition

Antitrust laws promote, preserve and protect competition and are a critical part of the environment in which Exelon operates. Violations of competition laws may expose Exelon and individual employees to criminal and or civil liability and associated penalties, including monetary damages, fines and even imprisonment.

Antitrust laws are complex. They generally prohibit joint action that restrains competition, as well as improper unilateral action that either propels one competitor into a monopoly position in the market or seriously threatens to do so. Other aspects of the antitrust laws prohibit certain types of discrimination in pricing and unfair trade practices. Employees who interact with customers, competitors or suppliers and anyone who believes that he or she is dealing with a situation that might have antitrust implications, should consult with the Legal Department or the Ethics and Compliance Office.

Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act (“FCPA”) has two main provisions. The anti-bribery provision makes it a crime to promise or give anything of value to foreign governmental or political officials or their agents to obtain or retain business, obtain any improper advantage or otherwise influence their judgment in the performance of official duties.

The FCPA also requires that publicly held companies, like Exelon, maintain accurate books, records and accounts and devise a system of internal accounting controls sufficient to provide reasonable assurance that, among other things, the Company's books and records fairly and accurately reflect business activities and transactions. It is Exelon policy to present financial statements fairly and accurately and in accordance with generally accepted accounting principles.

Sales and Marketing Competitive Practices

While information about our competitors is a valuable asset, federal law and our Code require that we obtain this information legally.

Main Obligations

• Do not solicit or accept trade secrets or other competitive information about a competitor that you know to be confidential or proprietary or know to have been obtained through unlawful means
• Do not make misrepresentations in connection with collecting competitive intelligence
• Do not solicit a competitor's or supplier's past or present employees to induce disclosures of proprietary information from them

CODE OF CONDUCT PROCESSES AND RESOURCES

Waivers

A waiver of any provision of the Code will be made only in exceptional circumstances for substantial cause. Requests for waivers must be submitted to the Corporate General Counsel, or his or her designee, for review and resolution. Any request for a waiver by any Director or Executive Officer must be submitted to the Board of Directors or a Board Committee. All waivers will be reported to the Exelon Ethics and Compliance Council. In addition, any waiver of a provision in the Code for any Director or Executive Officer will be disclosed to stockholders.

Certification of Compliance

Directors and non-represented employees and, in certain instances, independent contractors must complete each year a certification of compliance questionnaire. A completed certification questionnaire is a condition of employment for all nonrepresented employees. Directors will certify compliance with the Code in connection with the completion of their annual questionnaire.

Independent contractors required to complete the questionnaire are those who have access to Confidential Information, as defined in the Code, or those engaged in contract administration activities for Exelon such as verification of services and review and approval of invoices. The certification questionnaire is an acknowledgement of understanding and a self-assessment of Code compliance.

The certification questionnaire is administered on a confidential basis by the Ethics and Compliance Office. Exceptions that identify suspected violations of the law or this Code will be managed in accordance with the provisions stated below in “Reporting and Investigating Violations.”

Reporting and Investigating Violations

Exelon's success in achieving legal and ethical compliance depends on each employee not only conducting his or her responsibilities in accordance with the law and the Code, but also by reporting matters that raise compliance or ethics issues.

Employees must report potential violations of the law or the Code by using one of the resources described in this section. Employees may be disciplined up to and including discharge for the failure to report a Code violation where they have a reasonable basis to know that a violation is occurring or has occurred. Employees who knowingly submit false reports will be subject to disciplinary action. If an employee self-reports wrongdoing, it will be a factor considered by management in connection with any discipline imposed for a violation of the law or the Code.

All reports alleging violations of the law or the Code will be treated confidentially to the extent possible under the circumstances. A prompt, thorough and independent investigation will be conducted of reported concerns. Employees are required to cooperate in any investigation of a compliance or ethics concern. Reported concerns regarding accounting, internal accounting controls or auditing matters will be reported to the Audit Committee of Exelon's Board of Directors.

If an investigation discloses the need for corrective action, Exelon will implement appropriate corrective action to prevent recurrence.

The Ethics and Compliance Office

Because compliance and high standards of ethical behavior are important to the Company, employees must have access to additional guidance from a knowledgeable person when circumstances require. Exelon is committed to providing employees with the resources necessary to help them understand the Code, resolve compliance and ethics questions and report any compliance or ethics concerns. In this regard, Exelon employees have several options.

Managers and supervisors are an initial source of guidance for employees and an appropriate channel for questions or reporting compliance or ethics concerns. Each employee is encouraged to contact his or her manager or supervisor to discuss issues of interpretation or to report concerns with respect to compliance with the law or the Code.

The Ethics and Compliance Office is another avenue for seeking guidance on Code interpretation or reporting concerns. The office reports to the Corporate Secretary and its staff includes an Associate General Counsel accountable for administering the ethics and compliance program. The Ethics and Compliance staff may be reached by phone, e-mail, regular mail, or in person. Contacts may be made anonymously. All contacts will be treated confidentially to the fullest extent possible. Reports to the Ethics and Compliance Office will be handled promptly, thoroughly, fairly, and discreetly.

Other avenues for guidance and reporting concerns in their respective areas are: Human Resources, Legal, Corporate Security, Internal Audit and Environment, Health and Safety.

Exelon employees may also contact the Exelon Help Line at 1-800-23-ETHIC, which is further described below.

Ethics and Compliance Help Line/Compliance Reporting Website

If employees are uncomfortable talking to someone at their location or at the Company regarding Code guidance or a concern, they may call the Exelon Help Line at 1-800- 23-ETHIC. The Help Line is dedicated solely to answering questions concerning the Code and for reporting compliance or ethics concerns related to suspected violations of the law or the Code. Caller ID is not used and no attempt is made to identify the caller. Anonymous callers who wish to follow up on their call will be assigned a confidential case number and will be advised if additional information is required before an effective investigation can occur.

All calls to the Help Line are answered by an independent third-party contractor that maintains the service. The service is multilingual and is available 24 hours a day, seven days a week, 365 days a year. Once the call is complete, a report of the call is forwarded to the Ethics and Compliance Office for review and appropriate follow-up action, as described under the heading “Reporting and Investigating Violations.”

The contractor managing the Help Line may monitor calls for quality assurance purposes. Any quality assurance recordings will not be made available to the Company. The Help Line will communicate with employees about their specific issue or concern, but will not provide confidential information about the investigation to any employee. The Help Line will coordinate all communications with and from employees with Exelon's Ethics and Compliance Office.

Employees may also access the Report an Ethics Concern web link to request a Code interpretation or report a concern. The Report an Ethics Concern link can be accessed through the Exelon intranet website by selecting the link “Report an Ethics Concern” or by entering: www.compliance-helpline.com.

The Help Line and the Report an Ethics Concern web link are valuable resources and are made available to employees to request advice or report compliance or ethics concerns related to the Code. Employees are encouraged to use them.

RETALIATION

Any individual may in good faith report a concern regarding the conduct of another person or cooperate in any investigation regarding a suspected violation of the law or the Code without fear of reprisal, harassment, discrimination or retaliation of any kind. Any form of reprisal against an individual because the individual raised a matter of conduct or cooperated in an investigation is contrary to our culture and values -- and it will not be tolerated. A person who engages in any act of retaliation will be disciplined, up to and including termination.

VIOLATIONS AND PENALTIES

Exelon considers this Code of Business Conduct to be of the utmost importance. Accordingly, it will be appropriately enforced at all levels. Violations of this Code will not be tolerated.

Discipline may be taken against any employee who:

• Authorizes or participates in actions which violate the law or this Code
• Fails to report a Code violation where there is a reasonable basis to know that a violation is occurring or has occurred
• Fails to cooperate with an investigation or intentionally conceals information or otherwise intentionally obstructs an investigation concerning a suspected violation of the law or the Code
• Retaliates or discriminates in any way against anyone who in good faith reports a suspected violation of the law or the Code by another person
• Retaliates or discriminates in any way against anyone who cooperates in any investigation of any such suspected violation or
• Fails to complete or falsely completes a certification of compliance questionnaire

Discipline may include, but is not limited to, a reprimand, performance improvement plans, temporary suspension, demotion, financial sanctions, reimbursement for Exelon's losses or damages, and termination. The Company may as appropriate refer matters involving wrongdoing under the Code to law enforcement for criminal prosecution.

CONCLUSION

Ethical Decision Making

One of the primary goals of the Code is to enable employees to make ethical business decisions. The Code establishes a set of common expectations for behavior in areas that are vital to the Company's reputation and that pose ethical or legal concerns.

Employees may find it helpful to ask the following questions before taking action in specific situations:

• Is your action honest in every respect?
• Will your action comply with the intent and purpose of the Code?
• Does it conform to Exelon's policy?
• Could you defend your action in front of supervisors, fellow employees, the general public and your family?
• Do you feel comfortable taking the action?

In judging the appropriateness of any action, employees should be able to answer yes to each of these questions. If you are still unsure or uncomfortable with your course of action, please seek assistance.

The Company relies on the personal judgment and thoughtful behavior of each employee in conducting Company business. Ultimately, employees are personally accountable for their decisions and should discuss ethical questions with a supervisor, manager, or any of the other resources identified in this Code, or call the Ethics and Compliance Office Help Line at 1-800-23-ETHIC. Employees who feel uncomfortable discussing ethical questions with a supervisor or manager are encouraged to contact the Ethics and Compliance Office or call the Help Line at 1-800-23-ETHIC.

Accountability

Each employee is accountable for understanding and complying with the Code and compliance is a condition of employment. Managers have the additional accountability to create an environment that encourages ethical conduct and a commitment to compliance with the law.

• Managers, in collaboration with the Ethics and Compliance Office, are accountable for the following
  • Knowing and communicating the laws and regulations that affect their respective areas of operation
  • Assessing the potential for unethical or illegal conduct in their respective areas of operation and taking action to mitigate it
  • Supporting a system for reporting concerns about ethics and unsafe conduct that protects employee confidentiality and anonymity to the fullest extent possible and ensures there is no retaliation against any employee for reporting a concern in good faith
  • Monitoring and documenting compliance with the Corporate Compliance Program and
  • Consistently administering disciplinary action regarding ethical misconduct and violations of the Code
• Each of us is accountable for following the law, complying with Exelon and business unit policies and procedures, and striving to live up to our own values as well as those of Exelon

Committing an illegal or unethical act as an Exelon employee, agent, or supplier is never justifiable.

Each employee must conduct his or her business for the Company in accordance with this Code of Conduct. All of our stakeholders, including employees, customers, regulators, investors and suppliers, expect it, and our success depends on it.

Introduction

Purpose

At Merck, our values and standards have always formed the basis of our success. They inspire trust and confidence on the part of the medical community, government officials, regulatory agencies, financial markets, our customers and patients all of whom are essential to our success. Even more important, these values inspire the trust and confidence of Merck employees- creating a sense of pride and a desire in each of us to achieve great things at Merck.Yes, we care a lot about the results we achieve. But we care just as much about how we achieve them.

The comment by George W. Merck in 1950 that "Medicine is for the people" embodies our values and our aspirations. But sometimes it's not clear what this means in our day-to-day activities and decision-making as members of the Merck community. This booklet illustrates how our values are applied through standards of conduct with each of our key stakeholders: customers, employees, shareholders, suppliers and communities.

Applicability

This Code of Conduct and all relevant corporate policies apply to everyone who conducts business on behalf of Merck-including employees, executive officers (e.g., chief executive officer, chief financial officer, controller, etc.), members of the Board of Directors, agents,consultants, contract labor, or others, when handling Merck matters. Should exceptional employee situations warrant a waiver of the Company's standards any such waiver must be handled by a manager with the appropriate authority. Executive officers or members of the Board of Directors may be granted waivers only by the Board of Directors or a Board Committee. Any such waiver must itself be legal and promptly disclosed to our shareholders.

Accountability

Each of us is responsible for adhering to the values and standards set forth in this Code and for raising questions if we are uncertain as to whether or not the standards are being met. Violations of the Code may result in a variety of corrective actions, and in some cases, may result in disciplinary action up to and including termination of employment.

Availability

We believe that all of our stakeholders are entitled to know about our business practices. The Our Values and Standards booklet is available to the public and cam be accessed via our Web site at: www.Merck.com.

Our Customers

Our business is preserving and improving human life and animal hearth. All of our clients must be measured by our success in achieving this goal. Above all, we value our ability to serve patients who can benefit from the appropriate use of our products and services. We are dedicated to providing the highest level of professional excellence and health delivery systems. We strive to identify the most critical needs of health care professional and consumers, and we devote our resources to meeting those needs.

Our Suppliers

We believe in developing mutually beneficial relationships with our supplies. We recognize that they are important partners in our success, and we treat them with honesty, fairness and respect. We also expect that they will conduct business activities for or on behalf of the Company in accordance with business standards and values that align with our own.

Our Community and Society

Being a good corporate citizen means that we comply with all applicable laws, rules and regulations. Also we serve our society, from the local communities in which we operate to the national and international levels, by supporting programs that advance knowledge and education and improve health care. In addition to these priorities, we support programs to protect the environment; promote art and cultural activities; and foster civic institutions.

Our Fellow Employees

Our ability to succeed depends on the integrity, knowledge, imagination, skill, diversity, flexibility and teamwork of Merck employees. To this end, we strive to create an environment of mutual respect, encouragement and teamwork- a working environment that rewards commitment and performance and seeks to be responsive to the needs of employees.

We seek to provide a workplace atmosphere that attracts highly talented people and helps them achieve their full potential. Each of us is responsible for creating a climate of trust and respect, and for promoting a productive work environment. These responsibilities are embodied in out leadership principles:

• Know and develop yourself
• Know and develop our business
• Know,support and develop our people
• Communicate

Our Shareholders

We recognize that our ability to meet our goals depends on maintaining financial reform that encourages investment in leading-edge research and development.This in turn enables us to deliver effective products and innovative services. We strive to provide honest, accurate and timely information to our shareholders about our performance and to make clear disclosures in all public reports and communications.

Resources

No guidelines, no matter how detailed, can possibly anticipate all of the challenges we may face on the job. That is why there are additional resources we can use when we have questions about business conduct.

This booklet serves as a guide to our standards, including frequently asked questions, and is not intended to be an exhaustive description of the Company's policies and standards. Throughout this booklet you will find responses to real questions that Merck employees have raised. Supplementary information on a number of issues maybe found by referring to the relevant corporate policies, which you will find referenced throughout these guidelines. These policies may be accessed via the Intranet or you may contact the Human Resources Department.

If your questions are not fully addressed by these resources, your next step should be to discuss your questions with your manager. Other resources are also available-including specialists in the Legal, Finance, Corporate Audit, Human Resources Departments, the Office of Ethics and the Advice Line. You can use any of these resources when you need clarification of policies,assistance in dealing with "gray areas," or when you are concerned about possible violations of our standards, laws or regulations.

Q:Many of the topics don't seems to apply to me. Why should I be concerned with this booklet?

A:As a Company-wide, document, some sections and topics may be more relevant to certain functions or departments than to others. However, it maybe helpful to be aware of how business is conducted in different areas of the Company.

Q:Why does Merck have one standards booklet? Why don't we have regional booklets that address issues that are more relevant to particular locations?

A: Our values and standards are universal. We strive to do business by embracing the same high ethical standards wherever we operate. At the same time we recognize that the actual application of these standards as well as laws and regulations may vary by location. The Company has provided resources to help address the specific issues within a particular region. In addition to Company-wide resources like the Office of Ethics and Advice Line, you can also turn to your manager, human resources representative, divisional lawyer, your regional finance director and other members of your divisional compliance committee.

Relationships with Our Customers

Product and Service Quality

We are committed to meeting or exceeding customer and regulatory requirements regarding the research, development, manufacturing and marketing of our products. Quality means consistently satisfying requirements and expectations by delivering products and services of the highest value in a timely manner. Our customers include patients, health care professionals, health care organizations, government agencies, wholesalers and distributors.

Quality improvement in all areas of our business, fro product research in our laboratories to patient use of our products and services, is imperative in providing innovative products and services that improve the quality of life. The achievement of our quality goals and objectives depends on our ability to listen to and respect customer needs in every business activity.

Q: We are behind schedule and under a great d al of pressure. May we modify a few manufacturing steps to speed up production?

A: Probably Not. While we strive to streamline manufacturing processes to make them as efficient as possible, we must always go through proper channels to receive approval to modify existing manufacturing procedures. Some steps may be required by government regulatory agencies. Others may be required to meet our own quality standards. I, is possible that while the steps seem unnecessary, they could serve a critical quality function. If you have further questions-or to make suggestions as to how a process might be improved-consult with your manager or the head of Quality Operations a your site before taking any action.

Honest Communication

Lives depend not only on the quality of our product, and services, but also on the quality of the information e provide to the medical community and general public. Information furnished to our customers about our products and services, including availability and delivery, must be useful, accurate, supported by scientific evidence where relevant, and presented honestly, fairly and by proper means. This means that promotional communication that include a description of uses or dosage recommendations must also include (unless otherwise required by law r regulation) a summary of side effects, precautions, warnings and contraindications, as well as effectiveness for the described indicated uses. Lives depend not only on the quality of our product, and services, but also on the quality of the information e provide to the medical community and general public. Information furnished to our customers about our products and services, including availability and delivery, must be useful, accurate, supported by scientific evidence where relevant, and presented honestly, fairly and by proper means. This means that promotional communication that include a description of uses or dosage recommendations must also include (unless otherwise required by law or regulation) a summary of side effects, precautions, warnings and contraindications, as well as effectiveness for the described indicated uses.

We do not communicate publicly with the intent of promoting products for use before the product is approved for such use. This does not, however, restrict a full and proper exchange of scientific information concerning a product, including dissemination of research findings in scientific and other communications media.

Q: I am a sales representative and I know that I'm not supposed to encourage or promote any use of our products that is inconsistent with product labeling. But if a physician starts asking questions about such use, may I refer him to studies and to other doctors who are also prescribing such use?

A: Generally, Merck sales representatives must not provide directly to physicians information that is inconsistent with that contained in the product label. You should advise the physician that Merck does not recommend use of the product for purposes other than those specified in the product label. However, if the physician desires additional information on this topic, you can refer his request to our Medical Services Department. This Department is authorized, under certain limited circumstances, to provide such information directly to physicians.

Q: How should we handle requests for samples that seem inappropriate, (e.g., ZOCOR ^® requested by an orthopedist)?

A: If you have a reason to believe that the physician's use of samples is inappropriate under Company policy, you are encouraged to clarify the reason for the physician's request. If you determine that the request is inappropriate (e.g., the samples will not be used by the physician with his or her patients to evaluate the product in actual practice) you may not provide the samples. Inappropriate use of pharmaceutical samples violates Company policy and may be illegal. You should clarify the Company's sample policy for the physician and communicate the physician's request to your manager for further investigation.

Clinical Trials

Clinical trials determine the safety and efficacy of our products in people who volunteer to participate in our studies. It is, therefore, crucial that we conduct these trials with the utmost regard for the health and safety of participants while furthering the interests of science and society. Detailed standards and guidelines are available concerning clinical trials and product protocols.

Q: I'm in sales and marketing, and a physician has asked us if he can use our samples to conduct a small clinical trial with a group of patients. Is this acceptable?

A: No. Samples are not used for clinical trials. Detailed standards and guidelines are available concerning clinical trials and protocols. While the Company typically does provide product to study sites in accordance with the clinical trial protocol in Company-sponsored trials, this product is generally supplied via the Merck group managing the study (e.g., MRL, CDP or CDSP) and not via the sale and marketing area. You may contact the Medical Department or your area compliance committee for additional information.

Post-Marketing Clinical Trials

Post-marketing clinical trials help us learn more about the safety and efficacy of our products. They provide important information to practicing physicians, third-party payers, and key decision-makers to foster appropriate use of Merck products.

Q: A physician has advised me that a competitor is providing him with a payment for each prescription he writes for their products. Is it acceptable for me to do so?

A: No, this is not an acceptable practice. However, what may be happening is that the doctor is participating in a bona fide post-marketing clinical study. In that case, it may be appropriate to compensate the physician for his additional workload while participating in the study, but this is unrelated to the prescriptions that the physician writes.

Q: I believe I might be able to convince a key physician customer to switch from a competitor's product to prescribing one of our products if I encourage him to conduct an "observational study" to gain experience with our product. Is this an acceptable practice?

A: No. Observational programs involving Merck products may not be used for the purpose of inducing physicians to switch patients to Merck products, or maintaining patients on prescriptions of Merck products. Similarly, observational programs may not be used if they would create the appearance of doing so. Observational programs may be used only to obtain data that will help Merck and physicians improve patient care through direct observation of product use in a clinical setting. There must be a contract with the physician and written protocols that identify the need for the data and that detail how program results will be used.

Gifts and Hospitality

We believe in competing on the merits of our products and services and wish to avoid even the appearance of improper conduct with our customers. The giving of gifts whether in cash or non-cash, including services, to customers is prohibited unless it complies with the specific exceptions described below. We recognize that in certain cultures there may be an occasion when gift-giving is customary and expected. Decisions about these situations must be carefully weighed, and prior written approval must be obtained from your manager before proceeding.

To Physician Customers: Because we wish to safeguard the public's confidence in physicians to make decisions solely on the basis of patient health, we do not provide gifts or other incentives to our physician customers. As part of informing physicians about our products, we may provide occasional educational and practice-related items, as long as they are of nominal value and medically relevant (e.g., medical textbooks and other items that serve a genuine educational function). Additionally, promotional items of nominal value are also permissible (e.g., pens, notepads, calendars, etc.), provided that they are related to a physician's practice. Remember that some localities have more restrictive policies based on local laws or industry codes regarding gifts to physicians. Please consult your local/regional lawyer for additional guidance.

Q: I have been invited to the wedding of an important customer. In my culture, it is expected that guests will bring cash gifts to the wedding. What should I do? Are non-cash gifts acceptable?

A: Cash and non-cash gifts are prohibited. You should consult with your manager if you believe an exception to our Company policy is warranted .

Q: The chief cardiologist at a major hospital has requested a donation of equipment for the hospital has new cardiac-care unit. Would such a donations be a violation of our business standards?

A: It may be appropriate and desirable for the Company to make a contribution to improve the quality of local health care facilities. However, this question must be considered with regard to the following:

• Would the donation conflict with local laws?
• Who will be the ultimate beneficiary of the donation? the physician? the hospital?
• Is the recipient a government institution or an individual employed by the government?
• Is the cardiologist or the recipient in a position to influence the Company's business? For example, is the hospital considering adding a Merck product to its formulary? Would the donation affect or be perceived to affect the decision-making process?

Consult your manager to explore whether and how such a donation may be made in your region.

To other Health Care Customers: In addition to physicians, we also interact with other important customers, including wholesalers and distributors. With respect to these customers, only business related items of nominal value are permissible. Gift giving to these customers must comply with local laws, Company policies, and relevant industry codes.

Q: One of my customers is a very close friend and we regularly exchange valuable gifts during the gift-giving season. Is it all right for me to continue this practice?

A: The Company does not discourage friendships with business partners but does require discretion and good judgment in such situations. In some situations, the gift may be appropriate if the gift is "personal," is not paid for by Merck, and the exchange of gifts would not be perceived as a conflict of interest. You must disclose the relationship to your manager. Your manager will assess the situation and determine how to manage any potential conflict of interest in a manner consistent with the conflict of interest policy. It may become necessary to assign the customer to another Company employee.

Receiving Gifts

(While the receipt of gifts may be more common in the context of supplier relationships, these guidelines are included here for ease of reference and convenience.) As a common business courtesy, we may receive occasional gifts, provided that:

• The gift is of nominal value (e.g., pens, notepads, calendars, etc.);
• Doing so is legal; and
• The gift is neither intended nor likely to be perceived by others to improperly influence our business decisions.

Occasionally, there may be times when refusing a gift would be impractical or embarrassing. In those rare instances where the gift is of substantial value, accept the gift on behalf of the Company, report it to your manager, and turn the gift over to your local/regional finance director, who will handle its disposition.

Q: In my region, it is both typical and expected for suppliers to provide their clients with fairly expensive gifts. Because of this custom, it is difficult to discourage our suppliers from providing us with these gifts.

A: If suppliers offer expensive gifts regularly, you should politely advise these suppliers that Company standards do not permit Merck employees to accept these gifts. Department managers should look for opportunities to notify suppliers of these standards before problems arise (e.g., prior to a holiday gift giving period). You may wish to contact all suppliers to explain the Company's standards and send a copy of the Our Values and Standards booklet. If you have questions or concerns, you should consult your manager or the Office of Ethics.

Q: I recently attended a business conference at Merck's expense, where my name was automatically entered into a raffle, along with all other attendees' names. I won a trip to the Caribbean. Can I keep the prize?

A: Employees may be able to keep prizes from raffles provided that:

• A Merck supplier or customer is not a sponsor of the raffle (i.e., it is sponsored by a professional or trade association); and,
• The employee is not placed under any obligation for having entered or won the raffle (e. g., an obligation to use a specific company's services, to provide the sponsoring company with the employee's business attention).

You should speak with your manager, who will help you decide what would be the best course of action in this instance.

 

Providing and Accepting Meals and Other Hospitality

We may provide or accept occasional meals or hospitality, provided that it is:

• In the course of a bona fide business relationship ;
• An accompaniment to an educational or business event/function;
• Legal;
• Consistent with Company policies and procedures;
• Not likely to be perceived as an attempt to improperly influence business decisions; and
• Not embarrassing to the Company if it were to receive public scrutiny;

Q: It is customary in my country to take a physician to a restaurant to discuss our products. Is this acceptable under the policy?

A: The preferred location for discussing Merck pr ducts is in the physician's office, or in a hospital or other clinical setting. In certain instances, it may be appropriate to have a product discussion outside of such settings. If you feel that such an exception is warranted, you must first obtain the prior approval of your manager and such approval should specify the special circumstances that exist so that appropriate control and oversight procedures can be employed.

Q: A potential supplier has invited me to attend a professional sporting event with him. May ! attend?

A: If the sporting event is appropriate and not excessive, and the supplier will be attending with you and thus, available to discuss business, then it may be acceptable to attend. It is important, however, that accepting an invitation is neither intended nor likely to be perceived as an attempt to improperly influence a business decision. As an example,

• Occasional unsolicited tickets to regular season sporting events would be acceptable;
• Playoffs, quarterfinals and semifinals require more scrutiny; and
• Tickets to finals or championship events (e.g., the World Cup, Olympics and Wimbledon) would be considered excessive.

Invitations to Conferences/Symposia

We are committed to conducting and participating in educational programs that share medical and scientific information. We recognize the importance of ensuring that these activities are undertaken in an appropriate an professional manner, with the ultimate goal of improving patient care. However, our standards do not necessarily take into account all local legal requirements. Where more restrictive local laws exist, those take precedence.

Our purpose in supporting scientific/educational meetings is to improve patient care. Accordingly, the meeting agenda must be appropriate for participants and support the meeting's scientific purpose. The location should be selected on the basis of participant travel convenience, cost arid appropriateness for the type of meeting and audience . Sponsorship decisions must comply with local laws, local/ regional Company policies and guidance documents, and industry codes; we must also consider whether or no any of the participants are government employees or officials.

We do not fund travel for spouses or companions of attendees.

Q: We are funding the travel expenses of an important opinion leader who is speaking at a Merck-sponsored conference. She would like to bring her spouse, at her own expense. Is this permitted?

A: A spouse or companion may travel to a conference provided that it is not at the Company's expense. This means that any travel, lodging, meals an costs associated with the spouse's presence are not borne by the Company. However, it is inconsistent with the purposes of these events to allow spouses or companions to attend sessions or meetings where official business is discussed.

Q: Can we honor a physician's request to issue two economy-class tickets in place of one business class ticket to attend a conference?

A: No, this may not be done. An invitation is extended to the physician, and the Company will only cover expenses directly associated with the invitee's attendance.

Q: Can we pay the travel expenses for a physician involved in the approval process for new drugs to attend a meeting?

A: The laws and regulations governing such activities are complex and will vary depending on a variety of factors, including:

• Is the physician a government employee?
• Is the physician a decision-maker in the regulatory approval process?
• Is a Merck product registration pending or anticipated?
• Is there a perception of inappropriate influence?

Generally, the answer would be no, but there may be situations that are permissible. If you believe there are circumstances that justify an exception consult your manager and the Legal Department.

Q: From time to time, physicians whom Merck invites to symposia do not show up or do not participate as fully in the events as they are expected to do.How should/ handle these situations?

A: Upon inviting a physician to a symposium, you should discuss Merck's expectations regarding participation in particular events. If a physician's attendance becomes a problem, you should first discuss the event's value with the physician to ensure that he or she realizes what they are missing by not fully attending the event. Remember, however, that we cannot control the participation of physicians at such events. If the physician's attendance continues to be a problem, you should discuss the matter with your manager to determine whether the physician should be invited to future events

Fair Compensation

We believe that customers and society as a whole benefit from fair, free and open markets. Therefore, we compete on the merits of our products and services and do not make agreements with competitors to "fix" prices or to otherwise restrain trade. Our principles of fair competition require that:

• We do not share or exchange price or bid information with competitors. This includes pricing policies, discounts, promotions, royalties, warranties and terms and conditions of sale. If a competitor volunteers such information, whether in a trade association meeting or in a physician's waiting room, we should terminate the conversation immediately and bring the situation to the attention of the Legal Department. While the exchange may be intended innocently, it could create the appearance of price-fixing or bid-rigging.
• We compete aggressively in every market for eve customer. We make no agreements-or general understandings-with competitors concerning customer distributors or territories.
• We do not mischaracterized or distort the product or services of a competitor.

Our standards of fair competition are also a matter in virtually every country in which we operate, and there are additional legal requirements with which we must comply. Every manager must ensure that employees involved in marketing, sales and purchasing are aware of the letter and spirit of our standards and the applicable competition laws.

Q: I am attending a trade association meeting a several members are discussing pricing strategy What should I do?

A: If issues such as pricing strategy are discussed among competitors, there is the possibility that price-fixing or collusion could occur or be perceived to have occurred. Many countries prohibit the discussing pricing among competitors for this reason. If you yourself in this situation, you must excuse your from the meeting immediately. Promptly advise Legal Department of what you have observed.

Gathering Competitive Information

We compete fairly and honestly. We do not gather information through misrepresentation, theft, invasion of privacy or coercion.

You can obtain information about competitors from such acceptable sources as customers, consultants and even competitors themselves under appropriate circumstances. For example, you can gather information on competitors (i) from the news and other public resources, such as financial statements filed with the relevant regulatory bodies, examining our competitors' products and publicly available marketing materials, (iii) from competitors' customers (unless they are prohibited from disclosing the competitors' information), or (iv) from competitors` displays at conferences and trade shows.

• You should not encourage Merck employees who previously worked for our customers or competitors to breach a contract or non-disclosure obligation respect to a competitor's nonpublic information. Since it is difficult to know exactly what non-disclosure obligations may have been agreed to, we strongly discourage practice of asking Merck employees who previously worked for a competitor to provide information about their former employer.
• You should not permit Merck employees, such as subordinates or marketing consultants, to misrepresent themselves or their work in gathering competitive information. The Merck relationship should be disclosed if it is reasonable to assume that the source would not be likely to share such information, had he or she known of the Merck relationship.
• You should not receive pricing or other sensitive information directly from a competitor.

Additional rules regarding information-gathering may apply to government bids. Please contact your manager or the Legal Department for more information.

Q: We have just hired an employee from a competitor. How much information is he allowed to volunteer about his former employer?

A: We must not allow the employee to volunteer, nor should we ask for, any proprietary or confidential information about his former employer. Ask yourself if you would be comfortable if a former Merck employee shared such information with a competitor. Additionally, there are legal implications relating to the disclosure of confidential information of other companies. For further clarification, consult your manager or the Legal Department.

Q: A long-time customer, who is also a friend, recently told me about the release date of a competitor's newest drug, which is not yet public information. Can I communicate this information to others in my district? What if I knew the information was obtained by the physician from a consultant's meeting?

A: If you know, or it is apparent from the circumstances, that the information being volunteered by the customer has been provided to them on a confidential basis, such as during a consultants' meeting, you should discontinue discussion of the subject with the customer. You may not communicate the information to others in your district, but should bring the conversation to the attention of your manager who will discuss it with the Legal Department, as necessary. If it is public information, there is no problem in discussing it openly in a manner consistent with all applicable policy regarding product discussions.

Relationships with Fellow Employees

Our Work Environment

We seek to provide a work environment that will at and retain highly talented people and help them ac their full potential. Each of us is responsible for create climate of trust and respect, and for promoting a productive work environment. These responsibilities described in our Leadership Principles, serve as the foundation for all our human resources practices and processes. The Leadership Principles sp specific behaviors that are expected of us.

We encourage open communication by being receptive to the ideas and concerns of others, and we offer and feedback constructively.

Employee Privacy

We respect the privacy and dignity of our fellow employees and safeguard the confidentiality of employee records The Company collects and retains personal information needed to support functions such as benefits, compensation and payroll, as well as for other purposes as required We will protect private employee information and u only for legitimate business purposes, in accordance with all relevant laws.

The privacy of employee communications, including and Intranet/internet usage, is subject to the Company's appropriate business and operating needs, as well a local laws. We have the responsibility to monitor Co owned technology used for e-mail, Internet, and other communications and to investigate inappropriate us accordance with local laws.

Q: Does the Company actively monitor Internet or our e-mail? If so, under what circumstances?

A: The Company accesses its communications systems for a variety of business reasons. For example Company operations and network staff may e-mail in the course of normal system maintenance network administration or problem resolution addition, management may authorize the monitoring of e-mail usage to investigate inappropriate theft of Merck intellectual property or for other business purposes in accordance with local laws. Depending upon the circumstances, this may the reading or disclosure of e-mail messages. Similarly, as part of standard computer system administration, the Company maintains logs Internet usage activity which authorized person may use to investigate performance concerns, security incidents (e.g., network/system intrusion, inappropriate use or virus attacks) or for other business purposes.

Q: We traditionally post employee birthdays on the office bulletin board. Is this okay?

A: By posting employee birthdays, you are divulging personal information that some employees may not want known. Before adding an employee's private information to the list you should obtain their permission.

Q: Can the Office of Ethics provide advice on how to handle difficult situations with colleagues?

A: The Office of Ethics can provide advice in a confidential environment and recommend language to handle difficult situations with colleagues. If you feel comfortable doing so, you may also discuss the situation with your manager or with the Human Resources Department.

Fair Treatment

To meet our long-term growth and efficiency requirements, we must build an organization that responds quickly to change, and one in which all employees can achieve their full potential. Differences in backgrounds, experiences, perspectives and talents are a fundamental strength of our global Company.

We treat each individual fairly, and recruit, select, train and pay based on merit, experience and other work-related criteria. For further information, contact your Human Resources representative or the Corporate Human Resources Diversity Department.

Q: Is it acceptable to stipulate gender and age for an open position?

A: There is no business justification for advertising positions based on gender or age. Treating people fairly by hiring based solely on job-related criteria is not only the right thing to do, it's smart business.

Health and Safety

We conduct our operations with the highest regard or the safety and health of employees and the protection of the general public. Each of us is responsible for complying with safety rules and regulations and for taking the necessary precautions to protect ourselves and our colleagues. We must report all accidents and take action to correct unsafe practices or conditions, with a goal of continuously improving our performance. Central Safety and the Environment can answer specific questions about Merck safety standards; or you can check the Safety and Environment Web site at mmd.merck.com/S&E/.

Q: Is it really necessary to report a minor accident? I don't want to jeopardize our plants safety record.

A: To maintain safety performance excellence and to strive for an accident-free environment, you must report all accidents, no matter how minor, an work to eliminate unsafe practices and conditions. Reporting even minor accidents is important as it helps us to identify hazards and take correcting the action before serious injuries can occur.

Q: Our plant has safety guidelines that require the removal of all jewelry. How will the Company respond if an employee declines to remove a piece of jewelry for religious reasons?

A: The Company wishes to make reasonable accommodations for employee religious beliefs. It is possible that an alternative may be found (e.g., if the item can be secured, this may be permissible). However, if there is no satisfactory alternative then safety concerns must take precedence. If you have additional questions about what is acceptable you should consult your manager or the additional resources referenced in this booklet.

Drug and Alcohol Abuse

Use of illegal drugs and alcohol abuse create serious health and safety risks in the workplace. The possession, sale or use of illegal drugs or being under the influence of such rugs, on Company time or property, or at Company-sponsored events, is prohibited. Similarly, impairment from alcohol when conducting Merck business or at Company-sponsored events is also prohibited.

It is important that cases of drug and alcohol abuse e brought to management's attention immediately. For information on resources at your location that deal with substance abuse, please see the Additional Assistance Page.

Workplace Harassment

We strive to maintain an environment free of harassment, where all employees are respected. Workplace harassment is defined as any action that inappropriately or unreasonably creates an intimidating, hostile or offensive work environment. Examples include, but are not limited to, disparaging comments based on race, gender, religion or nationality.

Q: Is it acceptable to display political posters in one's own personal work area? What about religious symbols and imagery?

A: Employees should not use the workplace to demonstrate their personal support for a particular political issue, party or candidate. Other employees may find this type of conduct intimidating or offensive. Regarding personal displays of religious symbols and imagery, we respect employees' desire to express religious beliefs. However, we should also bear in mind that excessive personal displays and religious-oriented displays at Company functions or on Company premises may be perceived as intimidating or hostile to colleagues who have different beliefs.

Sexual Harassment

Sexual harassment is a form of workplace harassment of a sexual nature that affects the dignity of men and women at work. Sexual harassment includes, but is not limited to, demanding sexual considerations in exchange for job benefits, threatening or taking adverse employment actions if sexual favors are not granted, or unwelcome physical contact.

If you feel you have been harassed, inform the offender that the action is unwelcome. If you are not comfortable with a direct approach or if it fails to correct the problem, discuss the matter with your supervisor or with Human Resources, or refer to the resources listed on the Additional Assistance Page.

Q: Is it permissible to date a subordinate if it is a consensual relationship?

A: There is an inherent conflict of interest in managing someone with whom you have a romantic relationship. Even if you are acting impartially, your relationship will likely be perceived to inappropriately influence your judgment. Such relationships may damage morale and disrupt workplace productivity. Therefore, it is unacceptable to begin or maintain a romantic relationship with one of your direct or indirect reports -someone in your reporting chain whose performance reviews, compensation, and promotions you may influence. You must immediately disclose the relationship to your manager or Human Resources. Dating a colleague where there is no direct or indirect reporting relationship is acceptable If you find yourself in a reporting relationship after a romantic relationship has begun or ended, you should disclose this relationship to your manager or to Human Resources.

Q: Occasionally physician-customers behave in a sexually provocative manner toward me during sales visits, behavior that I think borders on sexual harassment. My job depends on maintaining good relation with these physicians, but I'm uncomfortable with their behavior What should I do?

A: No employee should tolerate sexual harassment or any other form of workplace harassment. If you are comfortable talking to the customer about the behavior, calmly express your discomfort with their actions. If the behavior persists, or you are uncomfortable confronting the physician, you should discuss this concern with your manager, Human Resources, or any of the other resource listed on the Additional Assistance Page.

Hiring Relatives and Friends

We seek to hire employees who can contribute to the Company's success. We will hire relatives and friends of current employees and we encourage their referral. However, we will not show favoritism to candidates who are family members or friends of Merck employees. We will hire each candidate based on his or her qualifications for the open position. Senior managers should be especially aware that their referral of family members or friends may be perceived as exercising undue influence on the hiring process and should take appropriate steps to avoid the appearance of "sponsoring" a friend or relative as a candidate, and to avoid interfering with the hiring process.

To ensure objectivity and prevent conflicts of interest, family members may not have direct or indirect reporting relationships to other family members. In rare instances where unique circumstances may warrant an exception to this policy, prior approval must be obtained from your divisional vice president.

Q: Will Merck sometimes take a less-appealing candidate as part of a "package" to get a very desirable candidate?

A: The Company's policy is to hire applicants who are qualified for the job in question. In rare instances, such as when a husband and wife both apply for positions with the Company, we have considered both applications in concert. The Company does this because we recognize that hiring one spouse without the other could be particularly problematic, it for example, relocation is required. Yet, if either spouse fails to meet the criteria for his/her position, we would not extend a job offer to that individual.

Relationships With the Shareholders

Conflicts of Interest

We have a responsibility to our shareholders to make decisions strictly on the basis of Merck's best interests without regard to personal concerns. A potential conflict of interest arises when we become involved, directly indirectly, in outside activities that could impair, or be perceived to impair, our business judgment. Example actual or potential conflicts of interest include:

• Having a personal financial interest in a supplier, customer, competitor or distributor;
• Having a close family member (e.g., spouse, parent, sibling, child or in-law), or anyone you treat like a member (e.g., finance, domestic partner or domestic partner of a family member), work for a supplier, customer, competitor or distributor;
• Receiving any form of compensation from a supplier, customer, competitor or distributor;
• Having a personal interest or potential for gain in Company transactions;
• Serving on an Advisory Board and/or Board of Directors of an association or company which is in a similar market/industry as Merck;
• Having a close family member work at an agency that approves our drugs;
• Hiring an employee/consultant due to their family relationship with government decision-makers.

The key to addressing conflicts of interest is full disclosure. Often, just disclosing the potential conflict to the Company is the only action required. If you believe you may have a potential conflict of interest, you discuss the situation with your manager. Certain employees, including directors, officers, executives other designated employees, must file annual conflict of interest certifications describing any actual or potential conflicts of interest. Company loans to employees particularly sensitive and are subject to specific scrutiny. Company loans to executive officers or members of Board of Directors are prohibited unless they were already in existence on July 30, 2002.

Q: I own a few shares of stock in British Telecom. Since BT provides phone services to Merck, must I report this as a conflict of interest?

A: An investment representing less than 1 percent outstanding shares of a publicly owned comp such as British Telecom, would not be considered potential conflict of interest under our policy.

Q: Are there any guidelines to help us avoid potential conflicts of interest with physician customers who are also personal friends?

A: Since there is a potential conflict of interest -or the appearance of a conflict-to have a personal friendship with a customer with whom you conduct business, you must disclose these personal relationships to your manager. Your manager will review the situation and determine what steps, if any, should be taken to manage the potential conflict. You should also consider the following questions to determine whether your relationship with a customer could present a conflict of interest:

• Is this a personal friendship or a friendly professional relationship?
• Do you socialize with the physician customer? On weekends? On holidays?
• Would your personal loyalty override or appear to compromise your ability to make decisions that are in the Company's best interests?
• Do you discuss business in non-work settings?
• Are you disclosing information to the customer that the Company would consider confidential or proprietary?
• Does your relationship compromise - or appear to compromise -the objectivity of the customer's decision-making (in the case of a physician, the physician's prescribing habits)?

It is important to use good judgment in managing your personal relationships with customers. If you are unsure how to proceed, it is always prudent to discuss the situation with your manager.

Use of Corporate Assets

Our shareholders have a right to expect that the Company's assets are properly maintained and used in an economical and efficient manner. As a general rule, we should not use Company equipment or resources (excluding communications tools-see next page), for personal use. However, there may be times when personal use of corporate resources is acceptable. If you have questions about such situations, discuss them with your manager.

Q: With the support of the Company, I am working on an advanced chemistry degree. May I use Company laboratory equipment over the weekend to further my studies?

A: Due to health, safety and other risks, personal use of Company laboratory equipment is not permitted. If you believe extraordinary circumstances war exception, discuss the situation with your manager.

Personal Use of Communication Tools

The Company encourages us to make efficient and effective use of communication tools such as e-mail, the Intranet and Internet, voicemail, telephones, photocopiers and fax machines to accomplish business objectives. These tools also allow us to efficiently accomplish personal activities and such use is generally permitted provided there id no undue cost to the Company or adverse effect on productivity or the work environment. Usage also must conform to all other existing standards and policies regarding communication tools. General guidelines for the various communication tools include:

Telephones: Use common sense and good judgment when using Company telephones for personal business. A quick call home is acceptable- lengthy overseas calls are not acceptable.

Faxes and Photocopiers: Personal use is acceptable provided it is infrequent and insubstantial. Photocopying your tax return is acceptable-copying 200 announcements for your sports club is not acceptable.

Internet and E-mail: Our personal use should not interfere with work productivity and not exceed a nominal cost to the Company. Again, use common sense and good judgment. Internet shopping during your lunch hour is acceptable-spending the afternoon "surfing the web" is not acceptable.

PLease note that the following are some examples of inappropriate use of the Internet and E-mail Systems and are strictly forbidden at all times:

• Disclosing confidential or proprietary information.
• Downloading or transmitting pornographic, sexiest, racially or ethnically insensitive material.
• Posting your opinions or views with regard to the Company or the Company's business in Internet newsgroups, chat rooms, bulletin boards, etc., unless you are specifically authorized by the Company to do so.
• Conducting private commercial business on the Internet or E-mail Systems.

Your particular division or location may have adopted more restrictive guidelines concerning personal use of communication tools. In all cases, personal use of communication tools is subject to the discretion of your manager. For more information, contact your local Information Systems professional, the Information Services Department Help Desk, or Human Resources representative.

Q: May I load my own personal software onto my Merck computer or personal digital assistant(PDA)?

A: Generally, this is not an acceptable practice. To reduce the likelihood of introducing code capable of destroying data, only software provided by the Company may be used on Company Computers. Exceptions require prior approval from your manager and Information Services; however, it should be noted that Information Services cannot dedicate its resources to support your use of personal software.

Q: Occasionally, some of my colleagues visit Internet chat rooms while at work. Is this appropriate?

A: Unless specifically authorized as part of your job responsibilities, it is inappropriate to visit Internet chat rooms using Company computers. If you wish to chat on the Internet, you should do so using your own personal computer on your own time.

Q: Would it be acceptable for me to do Internet banking on a Company computer?

A: Yes, Employees can use the Internet for appropriate personal tasks after hours,as well as during business hours as long as the activity is infrequent and insubstantial and does not interfere with an employees' job performance. However, if this activity involves installing any additional software on your computer, you would need to obtain approval from your manager and Information Services before proceeding.

Q: If the Company has sanctioned and/or paid an employee's online study coursework, what guidelines apply for his/her internet use?

A: The Company recognizes that greater latitude with regard to Internet use may be appropriate and warranted under certain circumstances. You should discuss your specific situation with your manager.

Protection of Company Information

Information is an important Company asset that must be protected. The loss of confidential information can b extremely damaging to our competitive position. Examples of confidential information include, but are not limited to, pricing, formulations, research results, manufacturing methods, financial data and marketing and sales strategies and plans.

We do not disclose any confidential Company information without a valid business purpose and proper authorization by management. Each of us is responsible for protecting the confidentiality of Company information. General guidelines for protecting confidential Company information include:

• Not discussing sensitive Company business in public ;
• Using password protection on computer files (and not sharing your password with other employees);
• Securing sensitive information in locked files and cabinets;
• Securing sensitive information on laptop computers while traveling;
• Exercising caution when using speakerphones and cellular phones.

Even after we leave the employment of Merck, we are obligated to maintain the confidentiality of Merck information and return all documents and files (inducing electronically-stored information).

Q: I overheard Merck employees discussing Company business on an airplane. What if anything, should I do?

A: If you believe the information that is being discussed is sensitive or confidential, advise the parties that they can be overheard. Every Merck employee has a responsibility to ensure that confidential and proprietary information is not disclosed in public.

Q: I was using my home computer and came across a chat room where sensitive Merck information was being divulged. What should I do?

A: Such disclosure of confidential Company information is strictly forbidden, as it seriously harms the Company in trying to achieve its business objectives. Discuss your observation with your manager. You may also call the Advice Line or contact the Office of Ethics, advising them of your observations.

Q:As a Merck researcher, I see a conflict between the Company's desire to protect its confidential and proprietary information and the open exchange of knowledge in the scientific community. What are my responsibilities?

A:The Company respects and shares researchers' desire to share scientific knowledge. To this end, we actively encourage the publication of scientific findings. However, since funding for our research comes only from product sales, it is essential that we have the opportunity to protect our discoveries through the patent process before making them known to the public and to competing pharmaceutical firms. As a Merck researcher, before you consider releasing any scientific result or information that is based on work conducted at Merck, you are required to first seek the approval of your divisional vice president, or have the information reviewed by the office of Scientific and Technical Information Clearance (OSTIC) process for approval.

Accuracy of Book/Records

We make decisions based on information recorded at every level of the Company. Incomplete or inaccurate information may lead to poor decisions and negative consequences, for example:

• Improper recording of revenues and expenses leads to misrepresentation of the Company's financial position, and is illegal;
• Incomplete or inaccurate manufacturing documents could jeopardize the supply of a product and violate regulations.

We must record all information honestly and accurately. This includes, but is not limited to, expenses, revenues, research test results, production and quality data and any other corporate information. All financial transactions and payments must be authorized and recorded. Strict compliance with corporate accounting methods is required, as is cooperation with internal and external auditors. Contact your divisional controller or corporate audit group client director with any questions concerning the proper recording of financial transactions.

Accuracy of Public Disclosures

We have a responsibility to ensure that we provide the investing public with information that reflects the true value of our operations. Therefore, all of our public disclosures that are filed with government agencies or communicated to the public must be full, fair, accurate, timely and understandable. This obligation applies to all employees, including all financial executives, with any responsibility for preparing such reports, including drafting, reviewing, and signing or certifying the information they contain. We must communicate openly about our operations, without compromising proprietary and confidential information.

If you have concerns about any aspect of our financial disclosures, you should discuss them with your manager, the Finance organization, the Legal Department, the Office of Ethics or the Advice Line. Any employee who is contacted by another employee who is raising questions or concerns about questionable accounting or auditing matters must immediately report those concerns to the Office of Ethics.

Q: It is December and there is money left in our annual budget. Is it acceptable to pre-pay for next year's activities using this year's budget?

A: No. Activities and payments must be matched to the same period. If an event occurs this year then payment should be recorded as taking place this year. If an activity is set for next year then the payment must be charged to the next year's budget and accounts.

Q: I am concerned that Company employees may be inclined to release only study data that puts our research in the best light. What should I do?

A: You are right to be concerned. This may be a serious issue and should be reported to your manager or the Legal Department immediately. Selective release of data may adversely affect Merck's reputation for quality research and may violate government regulations.

Q: A sales order came in and will be confirmed two days after the books are closed. Is it acceptable to include unconfirmed sales in an earlier period?

A: No. The sale has not officially taken place until it is confirmed and the goods have been shipped. It is a misrepresentation to include unconfirmed sales in an earlier period.

Q: Can I delay processing sales orders until the next period to help us attain our income targets in that period?

A: No. Sales orders received must be processed in accordance with standard operating procedures for the transaction. It is inappropriate to manipulate sales orders for processing during the next financial period.

Insider Trading

Merck strives to preserve fair and open markets for the buying and selling of the Company's securities. We may not buy or sell Merck securities, on the basis of nonpublic, material information. Material ("inside") information is any information that a reasonable investor would consider important in making investment decisions. Examples may include knowledge about acquisitions, divestitures, new products or processes, and financial information such as corporate earnings. These same restrictions apply to nonpublic material information about other companies that we learn through our capacity as Merck employees.

We are also prohibited from disclosing non-public material information to others - both inside and outside Merck - without a legitimate business reason and proper management authorization.

If we have inside information, we must refrain from trading in the affected securities until the beginning of the second full trading day after public disclosure of the information. If you are in doubt as to whether the purchase or sale of securities would violate our insider trading standards, please consult with the Legal Department.

Relationship with Suppliers

Selection of Suppliers

We select goods and services that best contribute to the long term well being of Merck. We choose our suppliers based on price, quality, delivery, service, diversity and reputation. Other factors, including environmental and business practices, also may be taken into consideration. Merck condemns the use of forced labor and exploitative child labor and expects its suppliers to respect this principle as well.

Q: I suspect that one of our suppliers is using child labor. What should I do?

A: Discuss your observation with your manager. You may also contact the Advice Line or, if you prefer, you may contact the Office of Ethics, advising them of your observations.

Q: Due to a recent promotion, I am now assigned to purchase office equipment. How should I evaluate suppliers?

A: In addition to the factors mentioned above, there may be a global supply agreement in place that includes a "preferred supplier" in your region. For further information, you should seek assistance from your local procurement representative or finance director.

Treatment of Suppliers

We treat our suppliers and subcontractors with fairness and integrity. We respect the terms and conditions of agreements with suppliers and we honor our commitments. We strive to pay on time and are careful to protect the confidential and proprietary information of our suppliers.

To ensure that all suppliers are given an opportunity to compete for our business, we obtain competitive bids where it is feasible to do so.

Q: Is it acceptable to copy Company software to my home computer if it would only be used for Company business?

A: Generally, this is not acceptable. We must respect the intellectual property of others and the terms of software-licensing agreements, which may limit the number of machines on which the software may be installed. To determine whether it would be acceptable for your particular software, consult Information Services.

Q: Can I solicit our suppliers and consultants for donations to causes that Merck supports? What about causes I personally support?

A: It may be appropriate for the Company to solicit donations from suppliers and consultants. However, the decision to make such a solicitation would be one that senior management needs to make. It would not be appropriate for you to solicit the Company's suppliers and consultants for a cause that you, personally, support. Using the Company's vendor list for any other purpose than a business purpose would violate our standards and policies.

Relationship with Our Communities and Society

Corporate Responsibility

Merck believes that an essential component of its corporate responsibility is to provide support to charitable or philanthropic organizations that benefit society, from the local plant community to the international level. Merck makes cash contributions both directly and through The Merck Company Foundation, and donates products and other in-kind services to qualified organizations and programs that address the needs of society and support Merck's overall business mission to enhance health.

The philanthropic outreach of Merck is guided by two strategic priorities worldwide: to advance scientific knowledge and education, and to improve health care. Merck supports initiatives to address selected health care issues with funding, donates MECTIZAN^® to treat river blindness and has joined a public/private sector cooperation to accelerate access to HIV/AIDs care and treatment in countries such as Botswana. Other Merck medicines are also donated to address health care needs in developing countries. In addition to these priorities, funding is also provided to support programs to protect our environment, promote art and cultural activities, and foster civic institutions. When appropriate, Merck provides assistance in response to major disasters and medical emergencies.

For more information, contact the Corporate Office of Contributions at White house Station.

Human Rights

We believe in the fundamental dignity of every human being and in respecting individual rights. In all of our operations:

• We condemn the use of forced labor and exploitative child labor and expect our suppliers to respect this principle as well;
• We respect employees' lawful freedom of association;
• We compensate our employees to ensure that basic needs are met and provide our employees with the opportunity to improve their skills and capabilities;
• We do not discriminate at any level of the organization on the basis of race, gender, age, ethnicity, national origin, sexual orientation, marital status, disability or religious beliefs;
• We provide a safe and healthy work environment.

We have the opportunity to set an example (for our business partners and other organizations) by upholding our standards. These standards demand respect for all individuals and consideration of the interests of all of those affected by and involved in our business. We also create work environments where free discussion can take root that respects the opinions of all employees, as well as reward creativity and innovation. For more information about the Company's policy on human rights, please contact the Office of Ethics.

Public Communications

All communications with the news media are potentially important and reflect upon the Company's image and business. It is vital that communications from the Company are consistent and that all regulatory and legal obligations be fulfilled. All communications must be accurate, responsible and in keeping with Merck's medical and legal policies. Media or public requests for information should be referred to and coordinated with Public Affairs.

Q: I will make a presentation at a conference where press coverage is likely. How should I respond if I'm approached by the media following my presentation?

A: Journalists often approach scientists and executives who make presentations at professional forums. When press coverage is likely to result, Public Affairs should be advised in advance and questions and answers should be prepared. But you should feel free to clarify for the reporter anything that was formally presented at the meeting. Questions that go beyond what was formally presented should be referred to Public Affairs. Copies of slides should not be given out without prior clearance from the Merck Research Laboratories and Public Affairs because this could jeopardize the scientific publication process.

Environmental Stewardship

Our responsibility to protect the environment is among our highest priorities. We comply with the letter and spirit of all environmental laws and regulations and respect the environment in every country where we operate. We provide consumers with information to help them handle our products in an environmentally responsible way. Central Safety and the Environment can answer specific questions about Merck's environmental standards; or you can check the Safety and Environment Web site at mmd.merck.com/S&E/.

Q: The laws in my country do not prohibit dumping waste on-site. Can I dispose of Merck waste in this way?

A: No. The disposal method must be in accordance with Merck's own environmental standards, and specific practices vary, depending on the type of waste. Merck has developed "best practice" global environmental standards for all of its facilities.In some cases, these standards require actions that exceed what laws in individual countries would allow.

Q: I am a site services manager and have the responsibility for buying replacements for everything from light bulbs to equipment. Does Merck's goal of continuous improvement mean that I should always select the most environmentally-beneficial option?

A: Not necessarily. Sometimes the cost of the most environmentally-beneficial option is disproportionate to the benefit to be obtained. Generally, however, where the cost differential between options is not significant and a real environmental benefit will result, the more environmentally beneficial option should be selected. Consult your Procurement representative to help determine the most appropriate purchases.

Improper Payments

To promote good government and fair, impartial administration of laws, we may not promise, offer or make payment in money or anything of value to any government official or political party with the intent to obtain or maintain business, or any unfair competitive advantage, or to improperly affect government decisions.

Our standards do not necessarily take into account all local legal requirements. Where more restrictive local laws exist, those take precedence. Seek the advice of the Legal Department if there is any uncertainty about the propriety or legality of an action. For additional information, refer to the Gifts and Hospitality section on page 9.

Q: I was told I have to pay a "gratuity" to a minor official to clear our vaccine products through customs. These vaccines are perishable, and will spoil if they are not cleared within the next few days. What should I do?

A: The Company does not provide gratuities to officials to ensure execution of official duties. Seek the advice of your manager or the Legal Department to determine if there are legally acceptable alternatives to secure the release of the vaccines.

Use and Selection of Agents

We will engage only reputable, qualified individuals or firms as consultants, agents, representatives or distributors under compensation arrangements that are reasonable in relation to the services performed.

Integrity of performance is a Merck standard for employees and agents alike wherever we do business, and ignorance of that standard is never an acceptable excuse for improper behavior, nor is it acceptable for improper behavior to be rationalized as being in the Company's best interest. No act of impropriety advances the interests of the Company.

Q: How does the Company ensure that its agents comply with Merck's standards?

A: The employee recommending use of an agent must conduct sufficient due diligence research to ensure that the agent is reputable. At a minimum, this should include research on, and reference checking with other parties and multinational companies for whom the agent has worked in the past. This information should be reflected in the approval memorandum submitted to management. In addition, once an external agent has been selected, it is important to monitor that agent's activities and expenditures, to ensure they are reasonable and in compliance with Company policies as well as local and international law.

Compliance With Laws, Rules and Regulations

Being a good corporate citizen means that we comply with all applicable laws, rules and regulations. Managers are responsible for communicating relevant rules and regulations to their employees. For further assistance, contact the Legal Department.

Boycotts

As a U.S.-based Company, all Merck operations, including foreign subsidiaries, must comply with U.S. laws pertaining to foreign boycotts. These laws primarily refer to the Arab boycott of Israel. However, from time to time, other boycott issues may arise. A variety of activities are prohibited under anti-boycott laws, including:

• Furnishing information about Merck's or any person's past, present or prospective relationship with boycotted countries or blacklisted companies; and,
• Paying, honoring or confirming letters of credit containing boycott provisions.

The laws also requires that certain requests for boycott information be reported to the U.S. Government. Because anti-boycott legislation is complex, all such requests should be directed immediately to the Legal Department.

Economic Sanctions and Other Import/Export Regulations

We may not export or sell drugs without proper approvals by the Merck Research Laboratories and the Clinical and Regulatory Development Review Committee. In addition, the drugs must meet the legal requirements of the producing country and the countries to which the drugs would be exported, as well as U.S. legal requirements. Further, we may not import from or export to countries against which there is a U.S. embargo (e.g., Sudan or Cuba). We may not import from or export to certain individuals or organizations with which contact is prohibited by U.S. government agencies.

Q: How can we justify not sending medicine to people in need who live in places that are out of political favor with the United States?

A: In return for the right to operate in the United States, we are obligated to comply with all applicable United States laws that apply to our operations-whether or not we agree with such laws. Please note that some U.S. laws, such as those pertaining to export controls, do apply to Merck operations outside of the U.S. In some situations, approvals may be obtained from the relevant U.S. government agencies for supplying medicines to restricted countries and entities.

Q: In the country where I operate, it is illegal to comply with the U.S., trade embargo regulations with certain countries. How do I handle this situation?

A: Transnational compliance with embargo regulations is a complex issue that varies from country to country. All such concerns must be directed to the Legal Department.

Political Activities

Good corporate citizenship requires that we do not unfairly or illegally influence the political process in the communities in which we operate. Due to the complexity and diversity of laws and regulations governing corporate political activities, political contributions and other related activities may only be undertaken with the prior approval of the Chief Executive Officer.

As private citizens, we may participate in the political process, including contributing to candidates or parties of our choice. However, we may not use Company time, property or resources for our personal political activities.

Raising Concerns

We hire employees with sound character and judgment, who we trust will act responsibly. However, there may be times when we need to raise concerns about behavior which we believe violates Merck's values and standards. If you observe such behavior, you have an obligation to discuss it with the appropriate parties. Doing so will provide the Company with the opportunity to correct the problem. The reporting process is flexible, allowing you to raise concerns through a variety of channels. For the appropriate resources in your location, please refer to the Additional Assistance Page found on the inside cover of this booklet.

Q: What is the difference between the Ombudsman Program, the Office of Ethics and the Advice Line? How do I know which resource I should use?

A: Your primary source of guidance is your supervisor or your manager. However, in those instances when you may wish to speak with someone outside your division or location, the Company provides alternative resources such as the Office of Ethics, the Advice Line and the Ombudsman Program.

• The Office of Ethics provides services to Merck employees, worldwide, with ethical questions or concerns. The Office of Ethics is responsible for both the Ombudsman Program and the Advice Line.
• The Advice Line, available to employees around the world 24 hours a day, seven days a week, is staffed by an outside organization and employees can remain anonymous when they call. The operator will not directly provide advice to the employee, but rather, will relay the information to the Merck Office of Ethics, providing the employee with a case number and a call-back date. While questions and concerns raised to the Advice Line will be forwarded to the Office of Ethics for review, no identifying information will be forwarded without the caller's consent.
• The Ombudsman Program promotes the positive and fair treatment of employees by providing an alternative channel for use by employees to address work-related concerns, including conduct inconsistent with the Company's policies, practices, values and standards. The program is designed to provide a "safe haven" where these issues can be addressed in confidence and without fear of retaliation.

You may call either the Office of Ethics or the Ombudsman Office to discuss matters in a confidential environment. The Advice Line offers complete anonymity, as it is operated by an external vendor.

Q: I cannot make collect calls to the United States from my country. Does this mean that t am unable to contact the Advice tine?

A: The Office of Ethics has established a variety of ways for all employees to get assistance. If you cannot call the Advice Line collect, you can contact the Advice Line by dialing direct to the U.S. at (770) 5825253, or the Office of Ethics at (908) 423-4478. In addition, you can reach the toll-free telephone number - (877) 3I9-0273 - by contacting your local telephone operator and requesting the access code for USA Direct or AT&T. Alternatively, the access codes are also available on the AT&T Web site at www.att.com.

Q: Is the Company encouraging employees to report on one another?

A: The Company encourages employees to address and resolve work-related concerns themselves before they become real problems, and certainly before they rise to the level of violations of law or risk to health and safety. At times, it may be appropriate to approach the person directly with your concerns, providing them an opportunity to clarify their behavior. In the event that employees are uncomfortable handling the situation on their own, they are encouraged to consult their managers or supervisors, or any of the resources listed in this booklet. If employees are unable to resolve concerns by using these channels, then the Company also has an "Advice Line" which is completely anonymous and available 24 hours a day, seven days a week.

Investigation of Reported Misconduct

The Company takes all reports of misconduct seriously. We will confidentially investigate all alleged misconduct to determine if any law, regulation, policy or procedure has been violated.

Q: I don't know of anyone who has contacted the Office of Ethics or Advice Line. How many employees really contact the Office of Ethics? What kinds of issues are brought forward?

A: The Office of Ethics handles 1,000 to 1,200 cases per year regarding ethics questions, concerns or allegations of inappropriate actions. Most of the issues revolve around interactions between employees and their managers, potential conflicts of interest, and inconsistent application of Company policy.

The fact that you do not hear much about reports of alleged misconduct reflects how well confidentiality is maintained during the ethics reporting and investigation process.

Q: In each of Merck's operating countries, numerous country-specific ethics challenges can arise. How will Merck ensure it has local expertise to address these issues?

A: The Office of Ethics is working with divisional compliance committees to enhance regional and country-specific resources. Currently, if you have an ethics question, consult your manager, local lawyer, or the Office of Ethics.

Anonymity and Confidentiality

When you contact the Office of Ethics to raise an issue, you may remain anonymous, although you are encouraged to identify yourself, since doing so will facilitate communication. Should you choose to identify yourself, the Office of Ethics will make every reasonable effort to keep your identity confidential in a manner consistent with conducting a thorough and fair investigation as may be required under the law. To assist the Office of Ethics in maintaining confidentiality, however, it is imperative that you practice discretion and refrain from discussing your Office of Ethics consultation with colleagues or co-workers.

Employees can also report concerns anonymously by using the Advice Line, a line answered by a third-party vendor. Anonymous callers are provided with a case number and instructed to call back within a certain timeframe to receive an update or to provide additional information which may be necessary to properly investigate their concern. To learn more about the Advice Line, please access the Office of Ethics Web site at: http://ethics.merck.com

Q: If I raise a concern with the Office of Ethics or Ombudsman, is it automatically considered anonymous?

A: Some employees confuse confidentiality with anonymity. You may raise concerns without identifying yourself, thus ensuring anonymity. However if you identify yourself, we will make every effort to keep your identity confidential. Matters raised with the Office of Ethics will be kept confidential unless they raise issues of potential harm to an individual or to the Company, or unless some disclosure is necessary due to an investigation. Our fax is located in a secure area and procedures are in place to safeguard your confidentiality. In those circumstances where you have presented an issue that may involve potential harm to an individual or to the Company, the Office of Ethics will advise you that confidentiality cannot be guaranteed. Disclosure will be made on a need-to know basis and only to the extent necessary.

Retaliation

Employees who raise concerns help the Company to correct problems before they grow. We will not tolerate retaliation against any employee for raising a business practices issue in good faith. Raising a concern in "good faith" means that you have made a genuine attempt to provide honest and accurate information even if you are later proven to be mistaken. The fact that an employee has raised concerns in good faith, or has provided information in an investigation, cannot be a basis for denial of benefits, termination, demotion, suspension, threats, harassment or discrimination. Similarly employees who work with those who raise concerns should continue to treat them in a courteous and respectful manner and should not engage in behavior that might alienate or intimidate colleagues. This protection extends to anyone giving information in relation to an investigation. If you or others have been retaliated against, you should report this behavior to your supervisor or the Office of Ethics.

Please note that Merck reserves the right to discipline anyone who knowingly makes a false accusation, provides false information to the Company or has acted improperly.

Guidelines for Raising Concerns

It is never easy to raise concerns about possible misconduct. It requires courage and integrity. Listed below are some general ideas on how to discuss your concern with your management:

1. Schedule a specific time with your manager or another Company resource to discuss your issue.
2. Discuss your issues calmly and professionally.
3. Highlight the risks to the Company and the potential impact of the particular misconduct.
4. Acknowledge (when appropriate) that you may not have all of the information or facts relevant to the issue.
5. State any concerns that you may have about the confidentiality of your report. (If you are concerned about confidentiality, be careful when sharing information with other colleagues who might inadvertently disclose information.)
6. Thank the individual for their time and their attention to the issue.

Guidelines for Receiving Concerns

Your reaction when an employee brings forward a concern is extremely important. It will either encourage an open communications environment where employees feel safe to discuss important issues or it will have a chilling effect on future communications and workplace morale. Listed below are some general ideas on how to respond when an employee raises a concern:

1. Ensure you have enough time to adequately discuss their concern. If not, schedule an alternate time and communicate to the employee that your desire to do so is to ensure that they and their issue have your full attention.
2. Listen as much as possible. Try to avoid becoming defensive or attempting to cut off the discussion.
3. Remain calm and professional.
4. Ask for clarification and additional information, but do so in a way that the employee does not feel intimidated or defensive.
5. Do not feel that you must give an immediate response. Many times it is better to reflect on the employee's concerns and respond later with your thoughts on the issue.
6. Thank the individual for bringing the issue to your attention.

Bear in mind that many employees may be particularly sensitive to perceived slights or perceived retaliation following a report of misconduct. It is imperative that you continue to treat employees with dignity and respect including the following:

• Evaluate based on actual performance.
• Provide meaningful assignments.
• Share information needed to get work done.
• Involve in social functions.
• Treat with courtesy.

The Electronic Industry Code of Conduct outlines standards to ensure that working conditions in the electronics industry supply chain are safe, that workers are treated with respect and dignity, and that manufacturing processes are environmentally responsible.

 

Considered as part of the electronics industry for purposes of this Code are Original Equipment Manufacturers (OEMs), Electronic Manufacturing Services (EMS) firms and Original Design Manufacturers (ODMs) including contracted labor that may design,market, manufacture and/or provide goods and services that are used to produce electronic goods. The Code may be voluntarily adopted by any business in the electronics sector and subsequently applied by that business to its supply chain and subcontractors.

 

To adopt the Code and become a participant ("Participant"), a business shall declare it support for the Code and seek to conform to the Code and its standards in accordance with a management system as set forth in the Code.

For the Code to be successful, it is acknowledged that Participants should regard thecode as a total supply chain initiative. At a minimum, participants shall require its nexttier suppliers to acknowledge and implement the Code.

Fundamental to adopting the Code is the understanding that a business, in all of its activities, must operate in full compliance with the laws, rules and regulations of the¹countries in which it operates. The Code encourages Participants to go beyond legal compliance, drawing upon internationally recognized standards, in order to advanced social and environmental responsibility.

 

The Electronic Industry Code Participants are committed to obtaining regular input from stakeholders in the continued development and implementation of the Electronic Industry Code of Conduct (EICC).

 

The Code is made up of five sections. Sections A, B, and C outline standards for Labor,Health and Safety, and the Environment, respectively. Section D outlines the elements of an acceptable system to manage conformity to this Code. Section E adds standards relating to business ethics.

 

• LABOR

Participants are committed to uphold the human rights of workers, and to treat them with dignity and respect as understood by the international community.

Recognized standards such as the Universal Declaration of Human Rights (UDHR),Social Accountability International (SAI) and the Ethical Trading Initiative (ETI) were used as references in preparing the Code and may be a useful source of additional information.

 

The labor standards are:

 

• Freely Chosen Employment

Forced, bonded or indentured labor or involuntary prison labor is not to be used.All work will be voluntary, and workers should be free to leave upon reasonable notice. Workers shall not be required to hand over government-issued identification, passports or work permits as a condition of employment.

 

• Child Labor Avoidance

Child labor is not to be used in any stage of manufacturing. The term "child" refers to any person employed under the age of 15 (or 14 where the law of the country permits), or under the age for completing compulsory education, or under the minimum age for employment in the country, whichever is greatest. The use of legitimate workplace apprenticeship programs, which comply with all laws and regulations, is supported. Workers under the age of 18 should not perform hazardous work and may be restricted from night work with consideration given to educational needs.

 

• Working Hours

Studies of business practices clearly link worker strain to reduced productivity,increased turnover and increased injury and illness. Workweeks are not to exceed the maximum set by local law. Further, a workweek should not be more than 60 hours per week, including overtime, except in emergency or unusual situations.Workers shall be allowed at least one day off per seven-day week.

 

• Wages and Benefits

Compensation paid to workers shall comply with all applicable wage laws,including those relating to minimum wages, overtime hours and legally mandated benefits. In compliance with local laws, workers shall be compensated for overtime at pay rates greater than regular hourly rates. Deductions from wages asa disciplinary measure shall not be permitted. The basis on which workers are being paid is to be provided in a timely manner via pay stub or similar documentation.

 

• Humane Treatment

There is to be no harsh and inhumane treatment, including any sexual harassment,sexual abuse, corporal punishment, mental or physical coercion or verbal abuse of workers: nor is there to be the threat of any such treatment.

 

• Non-Discrimination

Participants should be committed to a workforce free of harassment and unlawful discrimination. Companies shall not engage in discrimination based on race, color,age, gender, sexual orientation, ethnicity, disability, pregnancy, religion, politicalaffiliation, union membership or marital status in hiring and employment practices such as promotions, rewards, and access to training. In addition, workers or potential workers should not be subjected to medical tests that could be used in a discriminatory way.

 

• Freedom of Association

Open communication and direct engagement between workers and management are the most effective ways to resolve workplace and compensation issues.Participants are to respect the rights of workers to associate freely, join or not joinlabor unions, seek representation, join workers? councils in accordance with local laws. Workers shall be able to communicate openly with management regarding working conditions without fear of reprisal, intimidation or harassment.

 

• HEALTH and SAFETY

Participants recognize that the quality of products and services, consistency of production, and workers? morale, are enhanced by a safe and healthy work environment.Participants also recognize that ongoing worker input and education is key to identifying and solving health and safety issues in the workplace.

 

Recognized management systems such as OHSAS 18001 and ILO Guidelines occupational Safety and Health were used as references in preparing the Code and may be a useful source of additional information.

 

The health and safety standards are:

 

• Occupational Safety

Worker exposure to potential safety hazards (e.g., electrical and other energy sources, fire, vehicle, and fall hazards) are to be controlled through proper design,engineering and administrative controls, preventative maintenance and safe work procedures (including lockout/tagout). Where hazards cannot be adequately controlled by these means, workers are to be provided with appropriate personal protective equipment. Workers shall not be disciplined for raising safety concerns.

 

• Emergency Preparedness

Emergency situations and events are to be identified and assessed, and their impact minimized by implementing emergency plans and response procedures,including: emergency reporting, employee notification and evacuation procedures,worker training and drills, appropriate fire detection and suppression equipment,adequate exit facilities and recovery plans.

 

• Occupational Injury and Illness

Procedures and systems are to be in place to manage, track and report occupational injury and illness, including provisions to: a) encourage workers reporting; b) classify and record injury and illness cases; c) provide necessary medical treatment; d) investigate cases and implement corrective actions to eliminate their causes; and d) facilitate return of workers to work.

 

• Industrial Hygiene

Worker exposure to chemical, biological and physical agents is to be identified,evaluated, and controlled. When hazards cannot be adequately controlled by engineering and administrative means, workers are to be provided with appropriate personal protective equipment.

 

• Physically Demanding Work

Worker exposure to physically demanding tasks, including manual material handling and heavy lifting, prolonged standing and highly repetitive or forceful assembly tasks is to be identified, evaluated and controlled.

 

• Machine Safeguarding

Physical guards, interlocks and barriers are to be provided and properly maintained for machinery used by workers.

 

• Dormitory and Canteen

,p>Workers are to be provided with clean toilet facilities, access to potable water and sanitary food preparation and storage facilities. Worker dormitories provided by the Participant or a labor agent are to be clean, safe, and provide emergency egress,adequate heat and ventilation and reasonable personal space.

 

• ENVIRONMENTAL

Participants recognize that environmental responsibility is integral to producing world class products. In manufacturing operations, adverse effects on the community,environment and natural resources are to be minimized while safeguarding the health and safety of the public.

 

Recognized management systems such as ISO 14001 and the Eco Management and Audit System (EMAS) were used as references in preparing the Code and may be a useful source of additional information.

The environmental standards are:

 

• Environmental Permits and Reporting

All required environmental permits (e.g. discharge monitoring) and registrations are to be obtained, maintained and kept current and their operational and reporting requirements are to be followed.

 

• Pollution Prevention and Resource Reduction

Waste of all types, including water and energy, are to be reduced or eliminated atdhe source or by practices such as modifying production, maintenance and facility processes, materials substitution, conservation, recycling and re-using materials.

 

• Hazardous Substances

Chemical and other materials posing a hazard if released to the environment are to be identified and managed to ensure their safe handling, movement, storage,recycling or reuse and disposal.

 

• Wastewater and Solid Waste

Wastewater and solid waste generated from operations, industrial processes and sanitation facilities are to be monitored, controlled and treated as required prior to discharge or disposal.

 

• Air Emissions

Air emissions of volatile organic chemicals, aerosols, corrosives, particulates,ozone depleting chemicals and combustion by-products generated from operations are to be characterized, monitored, controlled and treated as required prior to discharge.

 

• Product Content Restrictions

Participants are to adhere to all applicable laws and regulations regarding prohibition or restriction of specific substances including labeling laws and regulations for recycling and disposal. Participants are also to adhere to processesto comply with each agreed-upon customer-specific restricted and hazardous materials list.

 

• MANAGEMENT SYSTEM

Participants shall adopt or establish a management system whose scope is related to the content of this Code. The management system shall be designed to ensure (a)compliance with applicable laws, regulations and customer requirements related to theParticipant?s operations and products; (b) conformance with this Code; and (c)identification and mitigation of operational risks related to this Code. It should also facilitate continual improvement.

The management system should contain the following elements:

• Company Commitment

Corporate social and environmental responsibility statements affirming Participant?s commitment to compliance and continual improvement.

• Management Accountability and Responsibility

Clearly identified company representative[s] responsible for ensuring implementation and periodic review of the status of the management systems.

• Legal and Customer Requirements

Identification, monitoring and understanding of applicable laws, regulations and customer requirements.

• Risk Assessment and Risk Management

Process to identify the environmental, health and safety² and labor practice risks associated with Participant?s operations. Determination of the relative significance for each risk and implementation of appropriate procedural and physical controls to ensure regulatory compliance to control the identified risks.

• Performance Objectives with Implementation Plan and Measures

Written standards, performance objectives, targets and implementation plans including a periodic assessment of Participant?s performance against those objectives.

 

• Training

Programs for training managers and workers to implement Participant?s policies,procedures and improvement objectives.

 

• Communication

Process for communicating clear and accurate information about Participant's performance, practices and expectations to workers, suppliers and customers.

 

• Worker Feedback and Participation

Ongoing processes to assess employees? understanding of and obtain feedback on practices and conditions covered by this Code and to foster continuous improvement.

 

• Audits and Assessments

Periodic self-evaluations to ensure conformity to legal and regulatory requirements,the content of the Code and customer contractual requirements related to social and environmental responsibility.

 

• Corrective Action Process

Process for timely correction of deficiencies identified by internal or external assessments, inspections, investigations and reviews.

 

• Documentation and Records

Creation of documents and records to ensure regulatory compliance andconformity to company requirements along with appropriate confidentiality toprotect privacy.

 

• ETHICS

To meet social responsibilities and to achieve success in the marketplace, Participantsand their agents are to uphold the highest standards of ethics including:

• Business Integrity

The highest standards of integrity are to be expected in all business interactions.Any and all forms of corruption, extortion and embezzlement are strictlyprohibited resulting in immediate termination and legal actions.

• No Improper Advantage

Bribes or other means of obtaining undue or improper advantage are not to beoffered or accepted.

• Disclosure of Information

Information regarding business activities, structure, financial situation andperformance is to be disclosed in accordance with applicable regulations andprevailing industry practices.

• Intellectual Property

Intellectual property rights are to be respected; transfer of technology and knowhowis to be done in a manner that protects intellectual property rights.

• Fair Business, Advertising and Competition

Standards of fair business, advertising and competition are to be upheld. Meansto safeguard customer information should be available.

• Protection of Identity

Programs that ensure the protection of supplier and employee whistleblower confidentiality are to be maintained.

• Community Engagement

Community engagement is encouraged to help foster social and economicdevelopment.

References :

The following standards were used in preparing this Code and may be a useful source of additional information. The following standards may or may not beendorsed by each Participant.

• ILO Code of Practice in Safety and Health
  www.ilo.org/public/english/protection/safework/cops/english/download/e000013.pdf
• National Fire Protection Agency
  www.nfpa.org/catalog/home/AboutNFPA/index.asp
• ILO International Labor Standards
  www.ilo.org/public/english/standards/norm/whatare/fundam/index.htm
• OECD Guidelines for Multinational Enterprises
  www.oecd.org
• United Nations Convention Against Corruption
  www.unodc.org/unodc/en/crime_convention_corruption.html
• United Nations Global Compact
  www.unglobalcompact.org
• Universal Declaration of Human Rights
  www.un.org/Overview/rights.html
• ISO 14001
  www.iso.org
• SA 8000
  www.cepaa.org/
• SAI
  www.sa-intl.org
• Ethical Trading Initiative
  www.ethicaltrade.org/
• OHSAS 18001
  www.bsi-global.com/index.xalter
• Eco Management & Audit System
  www.quality.co.uk/emas.htm

DOCUMENT HISTORY

Version 1.0 ? Released October 2004.

Version 1.1 ? Released May 2005.
Converted document to EICC format, minor page layout revisions; no content changes

Version 2.0 ? Released October 2005 with revisions to multiple provisions.

The Electronic Industry Code of Conduct was initially developed by a number ofcompanies engaged in the manufacture of electronics products between June andOctober 2004. Participating companies included Celestica, Dell, Flextronics, HP, IBM,Jabil, Sanmina SCI, and Solectron.

Companies adopting/endorsing the code and/or joining the Implementation Groupinclude: Celestica, Cisco, Dell, Flextronics, Foxconn, HP, IBM, Intel, Jabil, Lucent,Microsoft, Sanmina SCI, Seagate, Solectron, and Sony. Other companies are invitedand encouraged to adopt this code. You may obtain additional information fromwww.eicc.info

---

1. The Code is not intended to create new and additional third party rights, including for employees
2. Areas to be included in a risk assessment for health and safety are warehouse and storagefacilities, plant/facilities support equipment, laboratories and test areas, sanitation facilities(bathrooms), kitchen/cafeteria and worker housing /dormitories.

CONTENTS

1. PREAMBLE
2. CODE OF ETHICS - PRINCIPLES
3. CODE OF ETHICS - TENETS
4. INTERPRETATION
   1. THE COMMUNITY
   2. AREAS OF COMPETENCE AND DESCRIPTION OF QUALIFICATIONS
   3. CLIENTS AND EMPLOYERS
   4. COLLEAGUES
5. ACTING AS AN EXPERT WITNESS
6. PUBLIC COMMENT OR STATEMENTS
7. WHISTLEBLOWING
8. PROCEDURES FOR HANDLING ALLEGED BREACHES OF THE CODE OF ETHICS

 

Preamble

This Code of Ethics establishes the standards, including the Standards of Conduct, to be adopted and adhered to by all member firms of the Association of Consulting Engineers Australia and their staff as part of their working habits and relationships with clients, colleagues and the community generally.

 

A member of the Association of Consulting Engineers Australia, in the context of this code of Ethics, refers to both the firms and their staff individually.

 

The members are bound by a common commitment to promote technology based intellectual consulting services for the built and/or natural environment and facilitate its practice for the common good, based upon shared values of:

• ethical behaviour;
• competent performance;
• innovative practice;
• excellence in service provision;
• equality of opportunity;
• social justice;
• unity of purpose;
• sustainable development;
• responsible decision making;
• accountability for conduct and behaviour;
• recognition and management of risk; and,
• honesty and integrity.

 

This Code of Ethics and its obligations and requirements on members was approved by members in accordance with Article 12.1 and By-Law 6.1(b) by a general meeting of the Association held on 28 November 2003.

 

Code of Ethics - Principles

The members are committed to the Principles of this Code of Ethics. These are:

• to act honestly and with integrity;
• to respect the inherent dignity and privacy of the individual;
• to act on the basis of competence and a well informed conscience;
• to hold paramount the welfare, health and safety of the community; and
• to uphold, at all times, the Tenets as expressed in this Code of Ethics.

 

Code of Ethics - Tenets

The Tenets of the Code of Ethics are the specific principles to which the Association ascribes:

1. Members shall at all times place their responsibility for the welfare, health and safety of the community before their responsibility to private interests, or to other members;
2. Members shall act with honour, integrity and dignity in order to merit the trust of the community;
3. Members shall act only in areas of their competence and shall practise in a careful and diligent manner;
4. Members shall act with honesty, good faith and without discrimination towards all in the community, including clients, employers and colleagues;
5. Members shall apply their skill and knowledge in the interest of their employer or client for whom they shall act with integrity, without compromising any other obligation to these Tenets;
6. Members shall take all reasonable steps to inform themselves, their clients and employers and the community of the social and environmental consequences of the actions and projects in which they are involved;
7. Members shall express opinions and recommendations, make public statements or give evidence in an objective and truthful manner and only on the basis of existing and adequate knowledge having regard to their obligations of confidentiality and their responsibility to the safety, health and welfare of the community;
8. Members shall continue to develop relevant knowledge, skill and expertise throughout their careers and shall actively assist and encourage those under their direction to do likewise; and
9. Members shall not assist, induce or be involved in a breach of these Tenets, shall support those who seek to uphold them, and having knowledge of any alleged violation of this Code of Ethics will raise it with the member and the Association as considered appropriate.

 

Interpretation

The comments which follow provide interpretation of the Tenets as they apply to practices and situations in which members may find a need for ethical guidance. A breach of the Code of Ethics occurs when a member acts contrary to one of the nine Tenets judged on the circumstances of the case and not on the emphasis of the interpretations.

 

4.1 The community

Members' obligations to the welfare, health and safety of the community involves the application of sound judgement based on experience and relevant analysis to arrive at the appropriate balance of considerations which must apply in a given situation. Protection of the environment is both a short term and long term concern of the community and needs to be considered by members at all times. Members' obligations extend to taking all reasonable steps to understand the consequences of their own actions and the actions of those with or for whom they are working.

 

Members:

1. shall work in conformity with accepted environmental standards in a manner which does not jeopardise the public welfare, health or safety;
2. shall endeavour at all times to maintain services essential to public health and safety;
3. shall use their best endeavours, at all times, to meet the requirements and obligations in relation to the health and safety of employees, colleagues and the workforce;
4. shall give due weight to the need to achieve sustainable development and to conserve and restore the productive capacity of the earth;
5. shall endeavour to ensure that information provided to the public is relevant and in a readily understood form;
6. shall avoid assignments taken on behalf of clients or employers that are likely to create a conflict of interest between the member or their clients or employers and the community;
7. shall not use association with other persons, corporations or partnerships to conceal unethical acts
8. shall not involve themselves with any practice which they know to be of a fraudulent, dishonest or criminal nature. Successful prosecution before a Court for any such action may be deemed to be a breach of the Code of Ethics ; and
9. shall work in accordance with generally accepted professional and engineering standards in a manner which does not jeopardise the safety, health or welfare of the public and the community.

 

4.2 Areas of competence and description of qualifications

Members should understand the distinction between working in an area of competence and working competently. Working in an area of competence requires members to operate within their qualifications and experience; working competently requires sound judgement. If an error of judgement occurs, the outcome may be construed as negligence, however, it does not necessarily imply that the member has acted unethically.

Members:

1. shall neither falsify nor misrepresent their own, or their associates', qualifications, experience and prior responsibility;
2. shall inform their employers or clients, and make appropriate recommendations on obtaining further advice, if an assignment requires qualifications and experience outside their fields of competence;
3. shall only undertake assignments and provide services within the member's area of competence and qualification, and;
4. shall not affix their signatures to any plans or documents dealing with subject matter in which the member lacks competence or qualifications.

 

4.3 Clients and employers

Members shall practice in an open and informed manner and act in the best interests of the client and/or the employer unless to do so would jeopardise the safety, health or welfare of the public, the community or the environment.

Members:

1. shall promote the principle of selection of services by clients upon the basis of merit, and shall not compete with other consulting engineers on the basis of fees alone. However, it shall not be a breach of the Code of Ethics for members to provide information as to the basis upon which they usually charge fees for particular types of work. Also, it shall not be a breach of the Code of Ethics for members to submit a proposal for the carrying out of work, which proposal includes, in addition to a technical proposal, an indication of the resources which members can provide and information as to the basis upon which fees will be charged or as to the amount of the fees for the work which is proposed to be done. In this respect it is immaterial whether or not members are aware that others may have been requested to submit proposals, including fee proposals, for the same work;
2. shall take reasonable steps to recognise, manage and mitigate the risks associated with each assignment or engagement of work, and, in particular, the risks to the client, the workforce, the community and the environment, and;
3. shall, on request prior to engagement, advise existing clients and prospective clients of the relevant insurance maintained by the member. If the member does not maintain professional indemnity insurance this must be disclosed to the existing client or prospective client.
4. may use advertising (which includes direct approaches to prospective clients by any reasonable means) which is not misleading, to announce their practice and availability. Information given must be truthful, factual and free from ostentatious or laudatory expressions or implications;
5. shall, when acting as administrator of a contract, be impartial as between the parties in the interpretation of the contract. This requirement of impartiality shall not diminish the duty of members to fairly apply their skill and knowledge in the interests of their employers or clients;
6. shall keep their employers or clients fully informed on all matters, including financial interests, which are likely to lead to a conflict of interest;
7. shall advise their clients or employers when they judge that a project will not be viable, whether on the basis of commercial, technical, environmental or any other such risk which the member might reasonably have been expected to consider;
8. shall inform their clients or employers of the possible consequences in the event that a member's judgements are overruled on matters relating to the welfare of the community. Where justified by the consequences which result from the matter continuing, members shall endeavour further to persuade the client or employer to discontinue with the matter. If unsuccessful, members may make the details of the adverse consequences known to the public without incurring a breach of the Code of Ethics.
9. shall neither disclose nor use confidential information gained in the course of their employment without express permission, unless permission unduly withheld would jeopardise the welfare, health or safety of the community;
10. shall not undertake, nor should they be expected to undertake, professional work where the terms of reference are so restrictive that they are not able to carry out their responsibilities in accordance with recognised professional standards;
11. shall not accept compensation, financial or otherwise, from more than one party for services on the same project, nor provide free services, unless the circumstances are fully disclosed to, and agreed to, by all interested parties;
12. shall neither solicit nor accept financial or other valuable considerations from material or equipment suppliers for specifying their products;
13. shall neither pay nor offer directly or indirectly inducements to secure work, and;
14. shall neither solicit nor accept gratuities, directly or indirectly, from contractors, their agents, or other parties dealing with their clients or employers in connection with work for which they are responsible.

 

4.4 Colleagues

Members have an obligation to act in good faith, honestly and with integrity when dealing with colleagues to whom this Code of Ethics applies.

Members:

1. shall exercise due restraint in explaining their own work, shall give proper credit to those to whom proper credit is due, and shall acknowledge the contributions of subordinates and others;
2. shall accept, as well as give, honest and fair professional criticism when commenting on another's work or making public comment;
3. shall compete on the basis of merit and not compete unfairly;
4. shall neither maliciously nor carelessly do anything to injure, directly or indirectly, the reputation, prospects or business of others:
5. shall, where acting as a representative on behalf of an employer, recognise that other members, who are employees, are colleagues to whom the Code of Ethics applies;
6. shall uphold the principle of adequate and appropriate remuneration;
7. shall neither attempt to supplant another individual or organisation who has been duly appointed by a client or employer nor accept engagement from a client or employer in replacement of another without first ascertaining that the appointment has been terminated by due notice;
8. shall examine the circumstances and determine the appropriateness of accepting an engagement from a client if they have evidence that they are to replace another, having first made all reasonable efforts to make the other aware of the situation;
9. shall, if asked by a client to review the work of another, proceed only after gaining consent from the client to discuss that review with the other party concerned. Members shall discuss the review with the other person or organisation prior to submitting the review if it is possible to do so; and
10. shall not unfairly criticise others for their past work where such work was conducted in accordance with the accepted standards and practices and community values of the time, and in accordance with the needs of the time.

 

Acting as an expert witness

An expert witness provides a special and unique service to legal or quasi-Iegal proceedings established for the purpose of making judgements. Once accepted by the judge or arbitrator, an expert becomes "an officer of the Court or Hearing".

In this capacity the expert witness is normally afforded two important privileges: the freedom to remain in the proceedings at all times and the freedom to express an opinion.

At all times the expert witness owes the proceedings total objectivity. The role of expert witness is to give the tribunal the benefit of his or her special training and experience in order to help the tribunal understand matters which it would not otherwise understand and thus help the tribunal to come to the right decision.

It follows that:

1. members' reports, statements or testimony before any tribunal shall be objective and accurate. They shall express an opinion only on the basis of adequate knowledge and technical competence in the area, but this shall not preclude a considered speculation based on experience and wide relevant knowledge;
2. members must reveal the existence of any interest, pecuniary or otherwise, including any conflict of interest, that could be taken to affect their judgement about which they are making a statement, giving evidence or providing an opinion. This shall include advising the parties and the court or tribunal of any actual or perceived conflict of interest and any circumstance where the member has previously received payment for any work or services provided to any of the parties involved in the proceedings before the court or tribunal;
3. members must ensure that all reports and opinions given to a client prior to a hearing include all relevant matters of which they are aware, whether they are favourable or unfavourable;
4. members giving evidence as experts should listen very carefully to the question put, and ensure that each answer is given objectively, truthfully and completely and covers all matters relevant to the question of which they have knowledge; and
5. when discharging these responsibilities, members should have regard to the normal practice at the time of the occurrence of the incident which gave rise to the call for advice.

Members should also refer to relevant Practice Notes issued by this Association (and in particular to section 4.0) and also to the document "Guideline for Expert Witnesses in proceedings in the Federal Court of Australia" issued by the Federal Court of Australia.

Members must act in accordance with the requirements for expert witnesses as prescribed by the relevant court or tribunal when providing reports, statements or testimony as an expert witness.

 

Public comment or statements

Public comments and statements by members should be made in a way that maintains and enhances the trust of the community and must be made in good faith in an honest and objective manner. Any public comments or statements made by members must not breach the obligation of confidentiality to the client, must not breach the privacy of an individual and must consider the safety, health and welfare of the public, the community and the environment.

It follows that:

1. Members may, if they consider that by so doing they can constructively advance the well-being of the community, contribute to public discussion on technical matters in their area of competence;
2. in areas outside of a member's area of competence, but those in which a member can demonstrate adequate knowledge, comment may be made on details of a project within that area of knowledge. Adequate knowledge generally applies to a narrow aspect of an area of competence. Adequate knowledge may be acquired from working in a related area of competence or through continued professional development. However, adequate knowledge in a narrow area is not generally a sufficient basis for public comment or advice on the overall solution to a task outside of a member's area of competence; and
3. in areas outside of a member's area of competence, and in which the member is not able to demonstrate adequate knowledge, public comment or statements should be limited to enquiries which seek to provide deeper understanding. In this respect, the member may draw on experience in training and analysis as a basis for asking objective questions which may assist the public to evaluate services without the member implying personal competence or knowledge in the area.

Whistleblowing

In the course of a member's employment, situations may arise concerning the employer, client or external organisation which may present the member with a significant moral and legal problem. This could include criminal behaviour, threats to public safety, threats to the welfare of the community, threats to the welfare of the environment, unethical policies and breaches of this Code of Ethics. Depending on the particular circumstances a member may have responsibility under existing legislation or the provisions of this Code of Ethics to ensure that any such practices are brought to the attention of those with authority to rectify the problem or to raise the matter with the appropriate regulatory authorities.

The following practical and commonsense guidance is set out for the benefit of members who have or are intending to make such disclosure:

1. Make any objections to unethical practices promptly so as to avoid any misinterpretation of the motives for doing so;
2. Focus on the issues and proceed in a tactful, low-key manner to avoid unnecessary personal antagonism which might distract attention from solving the problem;
3. Keep supervisors informed of actions as much as possible, both through informal discussion and formal memoranda;
4. Be accurate in observations and claims and keep formal records documenting relevant events;
5. Raise the problem initially through normal organisational channels;
6. Consult colleagues for advice and avoid isolation;
7. Consult with the Association through the Chief Executive on the ethical issues involved, or with other organisations as appropriate; and/or
8. Seek legal advice concerning potential legal liabilities.

 

Procedures for handling alleged breaches of the Code of Ethics

The members of the Association have approved Articles and By-Laws to govern the investigation and hearing of alleged breaches of the Memorandum & Articles of Association, the By-Laws and this Code of Ethics. The Articles at Part 3 and Part 4 and By-Laws at Part 3 provide for a process to investigate and hear alleged breaches and to reflect the importance which the Board places on all members upholding the ethical standards of the Association and its members. All alleged breaches and complaints will be considered and dealt with in accordance with the Articles of Association, the By-Laws and this Code of Ethics. If a breach of the Memorandum & Articles of Association, the By-Laws or this Code of Ethics is substantiated or held to be the case by the Board of ACEA then the following sanctions may be applied:

• admonition;
• reprimand;
• fine;
• suspension;
• expulsion;
• ongoing membership declined; or
• termination of membership.

 

A Time to Listen... A Time to Hear

 

The American Society for Public Administration endorses the growing public demand for improved accountability of government employees in order to achieve more efficient, effective, and ethical enforcement of the laws, and more competent conduct of the public business, recognizing that most whistle blowing results from different perceptions of accountability.

 

Therefore, in order to improve accountability at all levels of government - ASPA recommends that federal, state and local governments take the following actions:

 

1. Establish and enforce policies and procedures that clearly describe the ethical bases for public employment and the penalties for violating them.

 

Adherence to such codes would result in improved accountability by public employees, especially managers, for their decisions and actions. This should result in a concomitant decrease in the need for whistle blowing aimed at exposing criminal activity, abuse of process, waste, withholding or distortion of information, and other unethical or illegal behavior.

 

2. Establish and enforce policies and procedures for more adequately communicating to each public employee the expectations of the governmental employer with respect to job performance, ethics, accountability, rewards, penalties, and regulations.

 

Since well-informed and well-supervised employees reflect good management practices, individual employees who know what is expected of them may be more likely to meet accountability standards and less likely to refuse responsibility for their performance - or to choose whistle blowing as a vehicle for communicating. Workshops and other forms of training programs are useful in helping managers and their employees cope with dissent and change.

 

3. Establish and enforce policies and procedures for internally reporting, investigating, assessing, and acting on allegations of illegality mismanagement waste or unethical behavior.

 

Complaint handling offices such as inspectors general and other appropriate mechanisms should be created and adequately supported to receive, and promptly and objectively, investigate internal allegations of wrong doing in order to diminish the need for the public gesture of whistle blowing. To be effective as well as efficient, such offices must inspire the trust and confidence of both managers and employees to avoid the aura of police-state intimidation by tending first to accuse or impugn the motives of the person making the allegation.

 

4. Establish and enforce policies and procedures that permit and encourage legitimate dissent and constructive criticism and protect dissenters from retaliation.

 

Many public employees take an oath of office to uphold, obey, and enforce the law in accordance with their sworn responsibilities. Therefore, perceived violations of that oath which result in differences of opinion about wrongdoing should be viewed as manifestations of account ability, rather than as rejections of supervisory authority unless proven otherwise.

 

5. Create and support dissent channels to permit contrary or alternative views on policy issues to be reviewed at a higher level.

 

Where disaffection grows not from allegations of wrongdoing but from honest professional disagreement over policy decisions, what converts the grieved dissenter into an angry whistle blowing is often the lack of any channel for additional senior review of the policy dispute. Good public administration in any institution includes provision for such open review at higher levels. Equating productive dissent or constructive criticism with disloyalty violates democratic principles of free speech and tends to discourage accountability, creativity and standards of excellence.

 

6. Establish and enforce policies and procedures that require management to focus on the message rather than the messenger when an employee expresses either substantive dissent as a professional difference of opinion or makes a allegation of wrongdoing.

 

In most instances, whistle blowing nay be averted by giving serious consideration to the merits of the message and by taking appropriate and timely action. By focusing only on the assumed motivations of dissenters or whistle blowers, attention is diverted from the substance of their dissent or the merits of their allegations, to the detriment of the or-

7. Create and use program evaluation, monitoring and other oversight methods to increase and improve the availability of reliable information for decision making.

 

Top management needs accurate and timely information produced by competent staff who are encouraged to make recommendations and to energetically advocate them without fear of reprisal. Since an organizational pattern of absent, distorted, or unnecessarily suppressed information tends to produce demands for such information on the grounds of accountability, the systematic collection, analysis, dissemination, and use of verified facts should help to diminish or eliminate the motivation to blow the whistle.

 

Background

The American Society for Public Administration seeks to improve the quality of human life through more effective, efficient, compassionate, and trustworthy public service. Throughout its history, ASPA has supported improved management and program performance in all branches and among all levels of government. ASPA's commitment to excellence in government acknowledges the principles that any organization should be subject to an appeal to determine the fairness of its actions and that ultimate accountability rests with the citizenry. As such, ASPA supports the intergovernmental and institutionalized due process system which provides accountability through evaluation and oversight of the actions of public organizations and employees.

 

At times, however, these institutional oversight mechanisms may provide inadequate protection for the public, particularly in cases of certain types of hidden corruption, criminal activities, discrimination, or administrative excess.

Sometimes, public employees who become aware of organizational or employee activities which have potentially harmful consequences to the public face a moral dilemma. What should they do?  Should they ignore the situation? Should they bring the situation to the attention of an appropriate source within the organization? Or should they bring the situation to the attention of a third party? Employees who choose to disclose previously hidden aspects of organizational and public employee activities have been called whistle blowers. The American Society for Public Administration selected whistle blowing as a subject of study because the debate over this growing phenomenon more often than not has centered on whether or not one is either for or against whistle blowing and external processes rather than focusing on its causes and remedies.

 

To some, whistle blowing is considered to be an ultimate expression of accountability. To others, whistle blowing is the spiteful behavior of disgruntled employees and an act of organizational disloyalty. ASPA focused on factors which tend to produce whistle blowing and the need to establish standards of accountability for whistle blowers, organizations, and the third parties which assist the whistle blowers.

 

Responsibilities of Public Agencies to Maintain Accountability to the Public

Federal, state, aid local governments as well as all public institutions should recongize the need to be accountable to the public by creating responsive administrative environments. All public agencies should establish and enforce policies and procedures to encourage internal reporting by employees and to assure the investigation of responsible and reasonable criticisms from employees without recrimination.

 

In addition, organizations should protect from retaliation responsible and conscientious public employees who, after much forethought, disclose information about situations potentially harmful to the public interest. Agencies should focus on the message rather than the messenger.

 

Some Obligations of Public Employees

Public employees have a serious obligation to themselves to exercise their conscience in a responsible and judicious manner. Public employees must also remember their ultimate accountability to the public, Because of the serious consequences of their actions, public employees should avoid frivolous, irresponsible, or false criticism of government.

Implementation

Given the increasing public interest in the subject, the Task Force on Whistle blowing urges prompt adoption of the statement by the ASPA Policy Issues Committee and the National Council. The task force also recommends:

 

1. that ASPA's president and National Council hold a press conference when appropriate concerning this statement.
2. that copies of the statement be distributed to newspapers, magazines, radio and television stations and other mass communications media;
3. that the statement be published in its entirety in the Public Administration Times;
4. that copies of the statement be sent to the president, to members of Congress, and be made available to state and local governments;
5. that the statement be sent to other public interest professional associations urging them to endorse the position statement and its implementation;
6. that the president of ASPA institute appropriate procedures to evaluate the effectiveness and the Implementation of this policy and report back to the National Council in 1981.

Policy Issues Committee

Revised November 30, 1979

Adopted by the National Council on December 2, 1979