Lockheed Martin fighter jet preparing for takeoff.

Responsible Sales


Objective

Ensure sales are conducted ethically and fairly, with careful consideration for export controls and trade policies, intended use of products and services and impact on civilian needs.

Management

Lockheed Martin is committed to compliance with the trade laws and regulations of the United States and all countries where we do business, and maintains an integrated team of hundreds of professionals engaged in trade compliance throughout the enterprise.

Due to the nature of our business, we sell our products and services around the globe and sometimes through intermediaries. We are committed to follow all applicable domestic and international regulations regarding the sales of our products and services. At times, international sales of Lockheed Martin defense products and services occur on a government-to-government basis via Foreign Military Sales (FMS) programs, and at other times through Direct Commercial Sales from Lockheed Martin to our customers. Export transactions are authorized by the Arms Export Control Act (AECA), the Export Control Reform Act of 2018 (ECRA) and the Atomic Energy Act (AEA). The FMS program is funded by administrative charges to the customer and is operated at no cost to taxpayers. The Defense Security Cooperation Agency (DSCA) manages FMS sales for the DoD. The U.S. Executive Branch—and Congress, under certain conditions—reviews and approves the proposed exports to ensure they support U.S. national security and foreign policy objectives.

The U.S. Executive Branch establishes the U.S. Conventional Arms Transfer Policy and reviews international sales from this policy framework to consider the risk that an arms transfer might contribute to abuses of human rights. We also have the discretion not to bid on a contract for any reason, if we so choose. Refer to the Foreign Assistance Act, the International Traffic in Arms Regulations (ITAR) and the U.S. Conventional Arms Transfer Policy[1] for more information on regulatory and policy guidelines and requirements.

With international sales, it is common to have an industrial participation agreement, sometimes referred to as offset agreements—meaning contracts with purchasing countries require Lockheed Martin to buy or invest in resources from that country. Lockheed Martin has a dedicated organization that monitors and oversees the company’s industrial participation programs. Some countries allow and may require commitments in the form of direct foreign investment, technology transfer, or other business relationships with non-defense economic sectors. We view these obligations as an opportunity to contribute to sustainable development initiatives globally. Commensurate U.S. business activities are subject to multiple policies, procedures and contractual obligations, including but not limited to those itemized in Lockheed Martin’s human rights policy and related codes of conduct.

[1] https://www.state.gov/conventional-arms-transfer-cat-policy/ 

2020 SMP Goals

Maintain transparency of hardware exports made without regulatory authorizations as a percentage of all exports.

Achievement

Success: We do not disclose performance data deemed competitive and proprietary. A reporting process is in place for unauthorized hardware exports to minimize associated risk.

Responsible Sales
F-35 Program and International Trade Compliance

The F-35 program is supported by over 1,900 suppliers worldwide. Lockheed Martin’s international trade compliance teams manage over 500 regulatory authorizations, and certify hundreds of applicable exemptions and exceptions that together facilitate tens of thousands of F-35 related export/import transactions yearly.

Responsible Sales
Lockheed Martin’s Human Rights Policy

Our Human Rights Policy and Principles:

As outlined in our Good Corporate Citizenship and Respect for Human Rights Policy, at Lockheed Martin, we believe that respect for human rights is an essential element of being a good corporate citizen. Our commitment to respect human rights underlies Setting the Standard, the Lockheed Martin Code of Ethics and Business Conduct and our stated values—Do What’s Right, Respect Others and Perform with Excellence. This commitment applies to all employees, the Board and others who represent or act for us. Our Human Rights Policy includes the following principles:

  • Support human rights by treating employees with respect, promoting fair employment practices, providing fair and competitive wages, prohibiting harassment, bullying, discrimination, use of child or forced labor, or trafficking in persons for any purpose.
  • Uphold the laws applying to our business, wherever we operate.
  • Seek to minimize the negative consequences of our business activities and decisions on our stakeholders, including by minimizing harm to the environment and conserving natural resources, promoting workplace safety, ensuring accuracy and transparency in our communications and delivering high-quality products and services.
  • Contribute to economic and social well-being by investing our resources in innovative products and services, supporting charitable, philanthropic and social causes, participating appropriately in political affairs and public debate to advance and advocate our values (including engaging our customers to balance appropriately the sale and use of our technology against national and international interests) and promoting efforts to stop corrupt practices that interfere with markets, inhibit economic development and limit sustainable futures.

 Board Oversight of Human Rights:

The Board, through the Nominating and Corporate Governance Committee, reviews and monitors the Corporation’s policies and procedures regarding corporate responsibility and human rights and our compliance with related laws and regulations. Business Integrity is one of the core issues in our Sustainability Management Plan and the Nominating and Corporate Governance Committee receives regular reports from our Senior Vice President, Ethics and Enterprise Assurance on how we are implementing our Sustainability Management Plan, which includes goals with respect to human rights.

Our Human Rights Due Diligence Approach:

Our human rights due diligence processes are embedded within our operating and decision-making practices and procedures and do not exist as a stand-alone procedure.

  • We have robust procedures to ensure that new contracts meet our standards and values. Prospective commitments are reviewed to ensure that they fit our strategic direction, will uphold our reputation and are structured for successful technical and financial performance. Each Business Area has implemented proposal review and approval procedures that evaluate risks, and which can result in a decision not to bid at all. Proposals that involve the pursuit of an opportunity related to certain types of products or programs that carry increased reputational risks require review of a multi-disciplinary corporate review committee that is chaired by our CFO and COO and includes our Senior Vice President, Ethics and Enterprise Assurance, who reports to the Nominating and Corporate Governance Committee as described below. In 2020 we also formed a Weapons Review Council at our Missiles and Fire Control Business Area. This Council thoroughly reviews products and activities that may potentially raise human rights issues.
  • We also conduct risk-based anti-corruption due diligence, which may be subject to audits, before entering into relationships with third parties, including consultants. We require international consultants to undergo training on our Code of Conduct and associated business conduct and anti-corruption policies. We will walk away from business rather than risk violating these anti-corruption laws and our corporate values.
  • Our robust trade compliance program is designed to ensure that sales of our products are conducted in accordance with all international trade laws and regulations of the U.S. and each foreign country in which we operate.
  • We provide oversight of our standards and controls by providing mandatory training to our employees and trusted grievance mechanisms, providing resources and support to our suppliers and aligning the interests of employees and suppliers within established frameworks. Formal and informal stakeholder engagement is an integral part of our business. We continue to encourage our employees, suppliers and the general public to report potential human rights violations through our anonymous ethics helpline.

Business Integrity

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