Thales Communication Department

Thales Head Office

www.thalesgroup.com

2003-04-25

Thales International

Thales International * leads, coordinates and supports the Thales Group's sales and marketing function on a worldwide basis, providing operating units and regional agencies with specialised expertise in international trade financing (project finance and hedging risks), offset arrangements and legal affairs. Furthermore, the Group's corporate treasury department covers exchange risk and optimises foreign exchange flows. These are essential functions, given the Group's exchange risks exposure, particularly on long-term export contracts.

Thales International is also responsible for ensuring strict compliance with legislation, ethical business practices and end-user control procedures for exports of sensitive equipment and systems (see section on ethics in international trade on page 41).

The Thales International network enables Thales to maintain close ongoing contacts with its customers, and understand their concerns, not only in terms of operational requirements but also in terms of industrial development, financing and direct or indirect offsets.

Sustainable development

Ethical conduct is a key issue for Thales, conscious not only of the requirements of various international organisations charged with setting standards of acceptable conduct, but also of the concerns of its own employees, suppliers and customers, shareholders and, more generally, the community at large.

For this reason, the group took steps in 2001 to establish a group-wide code of ethics and behaviour, known and shared by all its employees, with a dual objective :

improve the long-term competitiveness of the group, by favouring sustainable development and respect for its environment, and thereby strengthening its corporate image and legitimacy vis-n-vis its customers;
ensure strict respect of the new regulations whether local or international applying to safety and security matters, by defining specific procedures and behaviours.

The group has thus developed an ethics organisation encompassing :

the Code of Ethics which is its cornerstone and guides Thales employees’ professional conduct;
the Corporate Ethics Committee, which oversees compliance with the Code. It is chaired by the Corporate Secretary, and includes representatives from business units, functional departments and the major Thales overseas holding companies;
a network with seventeen Ethic Managers, which provides local points of contact for the Committee all over the Group.

The Code of Ethics

The Code of Ethics establishes rules of conduct applicable within the Group without seeking to replace the national and international legal regulations applicable in the countries where it operates. These rules of good conduct address the main following matters :

relationships with external partners, customers and suppliers. Thales "establishes lasting relationships, based on mutual trust and respect";
human resource management, around the key principle that " people are the most important of the group’s resources";
protection of the group’s tangible and intangible assets, "which are key to its long-term development";
responsibility towards shareholders and financial markets, which implies application of the principles of good corporate governance;
responsibility towards the community at large, and its environment, based on an approach of good citizenship and a desire to contribute towards sustainable development.

The Code of Ethics offers a framework for behaviour applicable to all of the group’s employees. It is the result of extensive internal consultation and represents a summary of the best practices existing within the group. It reflects a strong conviction on the part of the group’s senior management, committed to share it and to see it implemented throughout the group in order to respond to the new international standards, whether related to trade, social issues or the environment .

Implementation in the group

The Code of Ethics has been issued to each employee in the Group; it may also be released outside of the Group, for example to customers, suppliers and shareholders.

It is Thales’ senior management’s responsibility to disseminate the Code of Ethics and ensure that it is applied. In particular, the Corporate Secretary, who is responsible for Group security and the protection of Group assets, defines how the Code is put into practice and how its application is monitored.

The Corporate Ethics Committee, chaired by the Corporate Secretary and with thirteen members, is responsible for dissemination of the Code, as well as ensuring that it is both understood and applied throughout the group. It carries out the enquiries necessary to put forward recommendations and is the driving force behind the network of Ethics Managers. A matter may be referred to the Committee by an Ethics Manager, or directly by any group employee. Each year, the Committee submits a report to the group’s Board of Directors describing the main issues encountered and the action taken. Ethics Managers are responsible for disseminating good practices, providing advice to employees and management, proposing amendments to the Code and informing the Committee about any non compliant conduct. Each manager has a dual obligation of strict confidentiality concerning personal matters on which he may be consulted; and total transparency in dealing with the Corporate Secretary and the Ethics Committee on matters relating to the application of the Code.

In 2002, the major action taken has been to heighten the 65 000 group employees’ awareness of ethics concerns. Group-wide dissemination of the Code, in four main languages French, English, Dutch and German, and, locally, in several other languages, was supported by convening more than 500 presentation meetings, attended by over 25 000 members of staff. The Code is now issued by most business groups to each new employee when recruited. In addition, there is a specific section on Thales’ intranet website, dedicated to Ethics where employees can raise questions and share experiences. Finally, training sessions on ethical behaviour and the Code of Ethics are included in all management training programmes at Thales University, in particular covering ethics in international trading (see later).

* Headed by Chairman Jean-Paul Perrier, also Executive Vice-President, Marketing and Sales of Thales.

** from a press statement by the National Director of Public Prosecutions given on Saturday 2003-08-23

"The Decision

31. The investigation team recommended that we institute a criminal prosecution against Deputy President Zuma.

32. ....there is a prima facie case of corruption against the Deputy President.....

32(a) .....we have decided not to prosecute the Deputy President.

32(g) We will be referring the evidence we have against Alain Thetard, Perrier and international companies like Thomson to the French authorities for them to take appropriate action.

Conclusion

More importantly, I want to extend my greatest appreciation to Dr Penuell Maduna, the Minister of Justice, for his unstinting support.

Minister, you've once more demonstrated political leadership."

Sure he did.

But, as importantly, what did the French do?