I am curious if other organizations are seeing Suppliers reject their Supplier Code of Conduct, with the explanation that the Supplier has their own organization's Code of Conduct that they are required to comply with.  If so, how do you manage these exceptions? Who reviews and approves the exceptions?

Even-though we are a large Enterprise, the most common reason for rejection, is that the even larger companies point towards their own COC and dont want to deviate against their standards globally. Even more, they typically point to their websites where these are stored. For approvals, we have a joint authority between our Procurement subject matter experts, our compliance and finally our ethics folk. In most instances, the suppliers COC matches the requirements of our own. 

Code of conduct in non negotiable and Supplier  has to comply with same .