2017 Anti-Human Trafficking and Slavery Statement

Northrop Grumman is a leading global security company. We conduct most of our business with the U.S. Government, principally the U.S. Department of Defense (DoD) and intelligence community. We also conduct business with national and other governments outside of the U.S., as well as commercial customers. Our principal executive offices are located in Falls Church, Virginia, U.S.A. and we have a global presence outside of the U.S., including in Europe, the Middle East and the Asia Pacific region.

Northrop Grumman Policy on Human Trafficking and Modern Slavery

As a responsible corporate citizen, Northrop Grumman fully supports the elimination of human trafficking and slavery, including from the supply chain. Our policies, practices and procedures reflect our strong commitment to human rights as set forth in the Universal Declaration of Human Rights and sound employment practices.

Northrop Grumman does not tolerate trafficking in persons, including the procurement of commercial sex acts, and the use of forced or child labor. We believe the transparent disclosure of our anti-human trafficking efforts is critical and we report consistent with the requirements of the United Kingdom’s Modern Slavery Act of 2015 and the California Transparency in Supply Chains Act of 2010 (USA). We have implemented comprehensive policies and procedures, including our Supplier Standards of Business Conduct (SSOBC), which require our employees and suppliers to comply with applicable law and behave in an ethical manner. We believe our SSOBC helps to mitigate the risk of human trafficking in our supply chain. In addition, our standard procurement terms and conditions contain provisions requiring our suppliers to comply fully with all applicable laws and regulations, including explicit obligations regarding anti-human trafficking. We also have established a robust enterprise wide compliance program to help ensure that we do business only with parties that share our corporate values for integrity and adhere to transparent and ethical business practices.

Northrop Grumman and Our Global Supply Chain

Suppliers are critically important to our success at Northrop Grumman. For the year ended September 30, 2017, we subcontracted more than $6.8 billion to a broad base of suppliers. We regard our suppliers as essential team members and seek to treat our suppliers with respect. We expect our suppliers to understand the critical need for top performance, while maintaining the highest standards of ethics and integrity.

Verification of Supply Chain, Evaluation of Risk and Compliance

We require prospective suppliers to complete a due diligence process during which we: (1) collect information from the supplier; (2) review the supplier’s reputation and background; and (3) conduct a risk-based assessment of certain suppliers operating in international locations. Suppliers that pose potentially higher risks of human trafficking and/or slavery may be subject to more detailed risk assessments and additional oversight, if necessary, to help ensure compliance with our policies and procedures and applicable law.

In addition, we expect our suppliers (and those who work for them, including employees and subcontractors) at all tiers to comply with our Supplier Standards of Business Conduct, which set forth certain fundamental requirements. Our standard terms and conditions also expressly prohibit trafficking in persons and the use of forced labor, among other items.

Our suppliers are required to act ethically and ensure the integrity of their operations in support of our programs. Acting with integrity includes being accountable for the highest standards of behavior. We expect our suppliers to treat people with respect and dignity, encourage diversity, remain receptive to diverse opinions, promote equal opportunity, and foster an inclusive and ethical culture. Suppliers must refrain from violating the rights of others and address any adverse human rights impacts of their operations. Suppliers are required to ensure that child labor is not used in the performance of our work. For additional information, please refer to our Supplier Standards of Business Conduct and Human Rights Policy.

If a supplier violates our Supplier Standards of Business Conduct, contract provisions or applicable legal requirements, we pursue appropriate corrective action to remedy the situation. In the case of an actual or possible violation of law or regulation, we may be required to make a report to proper authorities. We also reserve the right to terminate our relationship for misconduct or to take any other appropriate action with any supplier under the terms of our contract.

U.S. Government Contracts

As a U.S. Government contractor, we are also governed by and comply with Federal Acquisition Regulation (FAR) 52.222-50 on Combating Trafficking in Persons. We flow down the FAR 52.222-50 requirement to all covered suppliers, subcontractors, and agents. We also require our suppliers to provide certifications of compliance with respect to their plans regarding anti-human trafficking where required by the FAR.

Maintenance of Ethics and Compliance Program and Accountability

We maintain a broad-based corporate ethics and compliance program that addresses values, leadership, training, audits, certifications and accountability and is intended to ensure compliance with applicable laws and a culture committed to ethics and integrity in all we do. In keeping with this commitment, we maintain robust, global supply chain programs, practices and procedures to support the goal of ensuring that our suppliers meet our strong ethical standards outlined in our Supplier Standards of Business Conduct and comply with applicable laws and regulations, including those prohibiting human trafficking and forced labor.

Our employees are responsible for complying with our Company policies and procedures, including those that seeks to combat human trafficking and forced labor. Northrop Grumman employees found to be in violation of this procedure are subject to discipline, up to and including termination.

Training of Relevant Employees and Suppliers

We provide targeted training and awareness on human trafficking and forced labor through various methods, including online training modules, corporate communication campaigns, ethics articles, posters at applicable work sites and postings on internal Northrop Grumman websites. Employees who have direct contact with our suppliers are required to complete additional awareness training. We also provide awareness training to our suppliers through materials that are published on the Northrop Grumman Supplier portal (OASIS).

Reporting Violations and/or Concerns

We expect and ask our employees to raise any concerns regarding violations of law, regulations or our Standards of Business Conduct. We provide various reporting channels, including our corporate OpenLine which permits anonymous reporting. We also provide reporting channels, including our OpenLine, to our suppliers who we also expect to raise concerns. We have established human trafficking as a specific category for reports. Good faith reports can be made without fear of retaliation, which we do not tolerate.

Review of Anti-Human Trafficking Efforts

We review our anti-human trafficking mitigation efforts in light of our ongoing compliance obligations and to ensure consistency with our Values, which are:

We take responsibility for QUALITY;
We deliver CUSTOMER SATISFACTION;
We provide LEADERSHIP as a company and as individuals;
We act with INTEGRITY in all we do;
We value PEOPLE;
We focus on SAFETY; and
We regard our SUPPLIERS as essential team members.

As we expand further into global markets, we will review and, where appropriate, continue to enhance our efforts to prevent human trafficking and other misconduct within our global supply chain.

To review our current Anti-Human Trafficking and Slavery Statement, please follow the link below: