Sustainability Guidelines for Vendor RelationsSustainability Guidelines for Vendor Relations

P&G Sustainability

Guidelines for

Vendor Relations

ADear Business Partners —

At Procter & Gamble, thefoundation of our vendor selection guidelines is based on our Purpose, Core Values and Principles.

These key elements are of utmost importance for proper business conductand respect for all individuals in the quest for common prosperity.

This publication reaffirms the following commitments, what we expect from ourvendors and what our vendors can expectfrom us.

P&G is committed to providing productsand services of superior quality and valueto the world’s consumers. While P&Gcompetes hard to achieve leadership andbusiness success, it is vital for vendors to understand that the Company is concerned not only with results, but withhow those results are achieved. We willnever condone nor tolerate efforts oractivities to achieve results through illegalor unethical dealings anywhere in the world.

We operate within the spirit and letter of the law and maintain high ethicalstandards wherever we conduct business.We expect all our vendors to conducttheir business with the same high standards. We will actively seek businessrelationships with vendors who share our

values and promote the application ofthese high standards among those withwhom they do business.

Likewise, P&G always seeks to treat vendors honestly, ethically and fairly. We believe that any relationship worksbest when a foundation of trust existsbetween the parties. By treating vendorshonestly, ethically and fairly, we do ourpart in building that foundation. We do this not only because it is the rightthing to do, but also because it can helpstrengthen our results by making us, our business and our Company moreattractive to our vendors.

A.G. LafleyPresident andChief Executive

John E. PepperChairman of the Board

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CEO and ChairmanLetter

S u s t a i n a b i l i t y G u i d e l i n e s f o r V e n d o r R e l a t i o n s

P P&G Statement of Purpose

We will provide products and services of superior quality and value thatimprove the lives of the

world’s consumers.

As a result, consumers willreward us with leadership

sales, profit and value creation, allowing our people,

our shareholders, and thecommunities in which we live

and work to prosper.

P&G’s guidelines for business conduct

f low from our Purpose, Core Values

and Principles. Our Purpose is focused

on improving the lives of our consumers.

P&G has been built through the character of

its people. That character is ref lected in the

Company’s Core Values, which have been

fundamental to our success for more than

160 years. Our continued success depends

on each one of us doing our part to uphold

these values in our day-to-day work and in

all the decisions we make, as ref lected in our

operating principles. These principles f low

from our Purpose and Core Values.

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Introduction

S u s t a i n a b i l i t y G u i d e l i n e s f o r V e n d o r R e l a t i o n s

P & G P e o p l eWe attract and recruit the finest people in

the world. We build our organization from

within, promoting and rewarding people

without regard to any difference unrelated to

performance. We act on the conviction that

the men and women of Procter & Gamble will

always be our most important asset.

L e a d e r s h i pWe are all leaders in our area of responsibility,

with a deep commitment to deliver leadership

results. We have a clear vision of where we

are going. We focus our resources to achieve

leadership objectives and strategies. We

develop the capability to deliver our strategies

and eliminate organizational barriers.

O w n e r s h i pWe accept personal accountability to meet the

business needs, improve our systems and help

others improve their effectiveness. We all act

like owners, treating the Company’s assets as

our own and behaving with the Company’s

long-term success in mind.

I n t e g r i t yWe always try to do the right thing. We are

honest and straightforward with each other. We

operate within the letter and spirit of the law.

We uphold the values and principles of P&G in

every action and decision. We are data-based

and intellectually honest in advocating

proposals, including recognizing risks.

P a s s i o n f o r W i n n i n gWe are determined to be the best at doing

what matters most. We have a healthy

dissatisfaction with the status quo. We have

a compelling desire to improve and to win in

the marketplace.

T r u s tWe respect our P&G colleagues, customers,

consumers and treat them as we want to be

treated. We have confidence in each other’s

capabilities and intentions. We believe that

people work best when there is a foundation

of trust.

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PeopleLeadership

Integrity Passion forWinning

Trust

Ownership

P&G Core ValuesP&G is its people and the Core Values by which they live.

P&G PrinciplesThese are the Principles and

supporting behavior which flowfrom our Purpose and Core Values.

W e S h o w R e s p e c t f o r A l lI n d i v i d u a l sWe believe that all individuals can and want

to contribute to their fullest potential.

We value differences.

We inspire and enable people to achieve

high expectations, standards and

challenging goals.

We are honest with people about

their performance.

T h e I n t e r e s t s o f t h eC o m p a n y a n d t h eI n d i v i d u a l a r e I n s e p a r a b l eWe believe that doing what is right for the

business with integrity will lead to mutual

success for both the Company and the

individual. Our quest for mutual success

ties us together.

We encourage stock ownership and

ownership behavior.

W e a r e S t r a t e g i c a l l yF o c u s e d i n O u r W o r kWe operate against clearly articulated and

aligned objectives and strategies.

We only do work and only ask for work that

adds value to the business.

We simplify, standardize and streamline our

current work whenever possible.

I n n o v a t i o n i s t h eC o r n e r s t o n e o f O u rS u c c e s sWe place great value on big, new consumer

innovations.

We challenge convention and reinvent the

way we do business to better win in

the marketplace.

W e a r e E x t e r n a l l y F o c u s e dWe develop superior understanding of

consumers and their needs.

We create and deliver products, packaging

and concepts that build winning

brand equities.

We develop close, mutually productive

relationships with our customers and

our suppliers.

We are good corporate citizens.

W e V a l u e P e r s o n a lM a s t e r yWe believe it is the responsibility of all

individuals to continually develop

themselves and others.

We encourage and expect outstanding

technical mastery and executional

excellence.

W e S e e k t o b e t h e B e s tWe strive to be the best in all areas of

strategic importance to the Company.

We benchmark our performance rigorously

versus the very best internally

and externally.

We learn from both our successes and

our failures.

M u t u a l I n t e r d e p e n d e n c yi s a W a y o f L i f eWe work together with confidence and trust

across functions, sectors, categories

and geographies.

We take pride in results from reapplying

others’ ideas.

We build superior relationships with all the

parties who contribute to fulfilling our

Corporate Purpose, including our

customers, suppliers, universities

and governments.

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LegalComplianceP&G is committed to legal

compliance wherever it conducts

business. We expect our vendors to

comply with all applicable laws of

their country, including laws relating

to employment, discrimination,

environment, and health and

safety. Vendors who knowingly

violate laws or have repeated

problems conforming to them

will not receive our business.

Human RightsP&G supports universal human rights,

particularly those of our employees;

the communities within which we

operate; and the parties with whom

we do business. In our business award

decisions, we will continue to place

substantial value upon incumbent and

potential vendors who consistently

respect basic human rights.

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Guidelines forVendor Selection

S u s t a i n a b i l i t y G u i d e l i n e s f o r V e n d o r R e l a t i o n s

Employment PracticesP&G utilizes fair employment practices, as

well as strives to provide a safe, healthful and

productive work environment for its employees.

The Company expects vendors to also maintain

fair employment practices, specifically...

C h i l d L a b o r a n d F o r c e d L a b o rP&G does not use child* or forced labor in any

of our global operations or facilities, and we

expect suppliers or contractors with whom we do

business to uphold the same standards. More

specifically, we will not conduct business with

vendors employing child, prison, indentured or

bonded labor, or using corporal punishment or

other forms of mental and physical coercion as

a form of discipline.

W o r k i n g C o n d i t i o n sP&G expects vendors to

conduct their business without

unacceptable worker treatment

such as harassment,

discrimination, physical or

mental punishment, or other

forms of abuse.

W a g e a n d H o u r P r a c t i c e sP&G pays employees a competitive wage, as

benchmarked with other leading companies.

Consistent with our principle of valuing

personal mastery, we reward employees for

improving their skills and capabilities. At a

minimum, we expect our vendors to comply

with all applicable wage and hour laws, and

rules and regulations, including minimum

wage, overtime and maximum hours.

H e a l t h a n d S a f e t yP&G commits to providing a clean, safe and

incident-free work environment. We expect

vendors to provide a safe work environment,

to prevent accidents and injury, and to

minimize exposure to health risks.

E n v i r o n m e n tP&G improves the environmental quality of

our operations and our products. We strive

to do business with vendors who share our

concerns for and commitment to preserving

the environment. At a minimum, vendors

must meet all current, applicable

environmental rules, regulations and laws

in their countries.

D a t a P r i v a c yP&G believes in protecting the privacy of

personal information. We strive to treat

information provided by an individual as that

individual’s, which has been entrusted to

P&G. We inform people about the use and

handling of data they provide us. We follow

all pertinent data privacy laws and

regulations. When other companies are

handling personally identifiable data as our

agents, we require them to abide by our

privacy practices as they relate to the data.

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* In the absence of any national or local law, we will define “child” as less than 15 years of age. If local minimum age law is set below 15 years of age, but is in accordance with developing country exceptions under International Labor Organization (ILO) Convention 138, the lower age will apply.

Should a pattern of violation of these

principles become known to the Company

and not be corrected, we will discontinue the

business relationship.

Ethical Treatment of VendorsOur vendors are valued partners in the

success of our business. Our relationships with

them must be

characterized by

honesty and

fairness. Suppliers

are selected on a

competitive basis

based on total

value, which includes quality, service,

technology and price. Terms and conditions

defining our relationship with suppliers are

communicated early in the vendor selection

process and agreements to such terms and

conditions, or any acceptable modifications,

are reached before work begins. Included in

these standard terms and conditions are

P&G’s policies regarding payment terms,

confidentiality, the use of intellectual property,

and labor practice expectations.

We are guided by the following:

� We tell the truth. We do not intentionally

mislead others.

� We do not take advantage of honest

vendor errors.

� We treat proprietary vendor information in

a confidential manner.

� We do not reveal a vendor’s pricing,

technology, or other information without

prior written permission.

� We resolve issues, claims and disputes on a

factual and fair basis.

Gifts, Entertainmentand GratuitiesWe conduct our business on the basis of the

superior value of goods and services we buy

and sell. Our policy on gifts, entertainment

and gratuities is designed to preserve and

maintain P&G’s reputation as a global

enterprise that acts with integrity and

bases decisions only on legitimate business

considerations. Receiving gifts, entertainment

or other gratuities from people with whom we

do business is generally not acceptable,

because doing so could imply an obligation

on the part of the Company and potentially

pose a conflict of interest.

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Guidelines forVendor Treatment

S u s t a i n a b i l i t y G u i d e l i n e s f o r V e n d o r R e l a t i o n s

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Notes

S u s t a i n a b i l i t y G u i d e l i n e s f o r V e n d o r R e l a t i o n s

Thank you for your efforts in support of P&G’s values and guidelines.

For further information, please contact:Corporate PurchasesThe Procter & Gamble Company1 Procter & Gamble PlazaCincinnati, Ohio 45202

www.pg.com

www.pg.com

The Procter & Gamble Company1 Procter & Gamble PlazaCincinnati, Ohio 452020009-6001

12/00Printed in the U.S.A.

This publication was printed on 10 percentpost-consumer recycled paper.