Suppliers comply with applicable laws and do not exceed them.

This means:

Suppliers of our hotel brands undertake to comply with all requirements of national and local legislation, especially with regard to human rights, working conditions, health and safety, and the environment. For suppliers operating in countries where the legal requirements differ from the requirements of this document, the respective higher requirements must be complied with.
In the event of a clear violation, allegation of a clear violation, or investigation of a possible violation that is related to services or products that suppliers provide to our hotel brands or that may restrict suppliers from providing services or products of the usual quality to our hotel brands, suppliers agree to notify their contact at our hotel brands as soon as possible.