2020 Modern Slavery Statement - Coles Group

Coles Group Limited 2020 Modern Slavery StatementColes Group Limited 2020 Modern Slavery StatementOur operations rely on, and are supported by, a large, dynamic and complex supply chain. We have over 10,000 suppliersof goods for resale and many more indirect suppliers.Our modernslavery risksOur commitmentDespite our global network of suppliers, we have an Australian-first sourcing policy. In FY20, 96% of fresh produce, byvolume, was sourced from our supply partners from all over Australia, excluding floral, nuts, dried fruit, sauces, dressingsand packaged salads. 100% of fresh lamb, pork, chicken, beef, milk and eggs and 100% of Own Brand frozen vegetableswere Australian grown.During the financial year ended 28 June 2020, we paid over 29.9bn to our suppliers for goods and services.Our supply chain can be broadly grouped into the following categories:3Goods not forresale suppliers(GNFR)Indirectsuppliersour grievance mechanisms and union engagement toundertake our own risk assessment and analysis of oursupply chain. Our monitoring program also informs ourinternal risk assessment.During the Reporting Period, Coles completed a riskassessment to understand the modern slavery risks withinour operations and our supply chain. We also identifiedother broader human rights risks which could be indicativeof increased modern slavery risk. Table 1 describes theresults of this assessment for the countries / sectors mostprevalent in our operations and supply chain.Sedex is one of the world’s leading ethical trade serviceproviders, working to improve working conditions in globalsupply chains.Goods not for resale suppliers are suppliers of goods or services to Coleswhich are not intended for sale to customers. They include goods suchas transport vehicles, equipment used in our stores, packaging materials,office stationery, marketing and services such as cleaning, security, trolleycollection, labour and professional services.Indirect suppliers supply both goods and services to proprietary suppliers,Own Brand suppliers and goods not for resale suppliers. Indirect suppliersdo not have a direct trading relationship with Coles.Fair Farms is a program providing support and training offarm employers and a pathway to independent third-partyaudit and certification of fair employment practices.100%Suppliers of goods for resaleFresh produce sourced in AustraliaSAP Ariba is a market-leading supplier risk solution thatallows us to tailor risk views and alerts to our business.96%We do not rely solely on any one of these programs toidentify risk in our supply chain. We also use intelligencegathered from public sources (including NGO reportsand regulatory investigations) and insights obtained via10,000 Excluding floral, nuts, dried fruit, sauces, dressings and packaged salads6Children’s Rights in the Workplace Index; and ITUC Global Rights Index.We have assessed that there is a risk of modern slaverybeing present in our extended supply chain due to thegeographical locations from which products and rawmaterials are sourced. In the next reporting period, Colesintends to conduct further review and assessment into callcentre operations that service our business as part of ourextended supply chain.Consultation 29.9bn RemediationDow Jones delivers actionable information andapplications specifically for compliance requirements andworkflows related to anti-money laundering and counterterrorism financing, sanctions, anti-bribery and corruptionand international trade compliance.Fresh lamb, pork, chicken, beef,milk and eggs sourced in AustraliaForced Labour Index;For our internal operations, where inherent risk of modernslavery could be evident, we have a robust suite ofresources, policies and procedures (refer to page 11) as wellas a number of grievance and whistleblowing channelsto ensure we can identify and mitigate any potentialrisk of modern slavery before it occurs. Because of theseprocesses and the continued engagement with our Colesteam members, we have assessed the risk of modernslavery in our own operations as very low. Notwithstandingthis assessment, Coles will continue to monitor, reviewand assess risk across our internal operations, includingassessment of our manufacturing and supply chainoperations.StaffSure is a certification scheme which makes it simplefor business, government and workers to find and partnerwith reputable Workforce Service Providers such as labourhire companies, professional contracting firms and privateemployment agencies.Paid to our suppliers for goods and services Our effectivenessColes publishes a summary of the countries from which Own Brand products are sourced on colesgroup.com.au. We alsopublish a full list of the sites which manufacture our Mix-branded apparel range.This assessment of modern slavery risk comprised anassessment of country risk and sector / commodity risk.For example, Sedex provides this assessment of risk usingseveral indicators, including but not limited to:Our actions4Own BrandsuppliersOwn Brand suppliers manufacture goods badged witha Coles-owned trademark.We recognise that modern slavery risks can occur in bothour Australian and overseas supply chains. With a highlycomplex and diversified supply chain portfolio, we useseveral different tools and databases to help us identifywhich countries, sectors, products and services pose thegreatest modern slavery risks. Tools and data sources usedinclude: Modern slavery risks2Proprietary suppliers provide goods for resale which are labelled witha trademark not owned by Coles. O ur business1Suppliers ofgoods for resale(proprietarysuppliers)IntroductionOur supply chain7

Coles Group Limited 2020 Modern Slavery StatementColes Group Limited 2020 Modern Slavery StatementMODERN SLAVERY RISK ORINDICATORS OF MODERN SLAVERYSECTORS AND INDUSTRIES AT HIGHER RISKAustralia Bonded labourSupply chain Exploitation of migrant workers Deceptive recruitment Underpayment of wagesHorticulture (fruits and vegetables); viticulture,meat processing; construction; cleaning; trolleycollection; security services; labour hire.Our operationsChinaIndiaThailandVietnamExploitation of migrant workers Child labour Underpayment of wages Excessive working hours Forced / bonded labour Deceptive recruitment Exploitation of migrant workers Underpayment of wages Forced / bonded labour Deceptive recruitment Excessive working hours Underpayment of wages Forced / bonded labour Excessive working hours Underpayment of wages Bonded labour Exploitation of migrant workers Deceptive recruitment Underpayment of wages Forced labour Human trafficking Deceptive recruitment Exploitation of migrant workers Excessive working hours Underpayment of wages Forced labour Exploitation of migrant workers Deceptive recruitment Forced labour Deceptive recruitment Exploitation of migrant workers Excessive working hours Underpayment of wages8Dairy (cheese); horticulture (fruit); processedmeat (bacon).Grains (rice); tea and coffee; manufacturing(apparel, homewares).Horticulture (fruit, vegetables).Horticulture (fruits, vegetables); meatprocessing (seafood, poultry); viticulture (wine).Aquaculture (fresh, frozen and cannedseafood); grains (rice); horticulture (fresh andcanned fruit).Several factors contribute to this risk including exploitationof visa requirements, employment contracts nottranslated into the workers’ native language and lack ofunderstanding of legal rights in the country where work isbeing undertaken.Within our own operations, migrant workers are representedin our directly employed team member population as wellas labour we source through third party providers. Whilemany of our migrant workforce are permanent residents,we also have migrant workers on other visa types includingworking holiday and student visas. Coles recognises theincreased vulnerability of migrant workers. However,based on our management processes, including workingrights checks (both initial and ongoing) and onboardingprocedures, we do not consider there is a risk of modernslavery to migrant workers in our own operations.Manufacturing (apparel); horticulture (fruit);aquaculture (fresh and frozen seafood).Migrant or undocumented workers may also not havebeen able to safely return to their home countriesbecause of the impact on travel and therefore couldhave been more vulnerable to human rights offences.Across our supply chain broadly:In our supply chain, utilisation of migrant workers isprevalent especially in the horticulture, cleaning, trolleycollection, security and manufacturing sectors both locallyand offshore. Some of these sectors also carry higher risk forthe utilisation of undocumented workers who are at evenhigher risk of exploitation.Impact of COVID-19 on modern slavery risksAquaculture (fresh seafood, canned fish);horticulture (fresh and dried fruit). Risk of exploitation increases when there is a reliance ona migrant workforce or undocumented workers. This isparticularly so for those hired through third party labour-hirecompanies where it is more challenging for both the hiringcompany and the end customer to identify deceptiverecruitment practices. We have been restricted in our ability to assess andaddress risks in our supply chain, the main cause of thisbeing the restriction of movement as set by the relevantgovernments in the areas our suppliers operate in. Thishas resulted in auditors not being able to dischargeauditing related work and Coles team members beingable to visit sites less often. Lack of auditor availability during the pandemicchallenged suppliers’ ability to obtain auditorverification to be able to close out non-conformances. In some instances, suppliers required longer lead timesto complete their required actions given disruptions totheir business operations.In addition, our in-house social compliance auditor hasbeen unable to conduct on-site audits since late February2020.We recognise that COVID-19 has impacted modern slaveryrisks.Our operations: During COVID-19, Coles undertook additional fasttracked recruitment. During this process, Coles’recruitment governance processes continued tooperate and as a result, risks to workers onboardedduring this period were mitigated.Consultation Our discussions and engagement with unions areinvaluable and have alerted us to some of theunique challenges faced by undocumented workersin Australia and the increased vulnerability of theseworkers during the COVID-19 pandemic. These included:the reluctance of these workers to access health-careor medical assistance for fear of being identified asan illegal or undocumented worker; the inability tosocially distance or isolate given working and housingconditions; and other general safety-related issues suchas lack of personal protective equipment.RemediationUnited StatesDeceptive recruitment Our effectivenessNew Zealand Horticulture (vegetables); aquaculture(seafood); manufacturing (homewares,electrical goods, apparel, beauty products);store fixtures and fittings.Our actionsMexicoForced / bonded labourOur Australian supply chain: Modern slavery risksEurope and theUnited Kingdom Exploitation of migrant andundocumented workers O ur businessMeat processing; food manufacturing;warehousing; cleaning; trolley collection(particularly where non-permanent residentmigrant workforce is higher); security services.Our commitmentCOUNTRYOur farmers are among the hardest workers inAustralia and so are the workers on their farms. It istherefore important that we are working with farmers,labour hire organisations and industry bodies like theNational Farmers Federation, the unions, governmentand the broader industry to ensure the people whohave grown, picked, packed, delivered and stackedthis food are treated ethically and fairly.IntroductionTable 1 – Modern slavery risks9

Coles Group Limited 2020 Modern Slavery Statementand conditions. We expect suppliers to impose similarexpectations on their own supply base. Collectively, thesedocuments outline our expectations of suppliers and ourrequirements in relation to:Administration and compliance include: assessingsupplier risk, engaging businesses based on risk, assessingperformance through self-assessment questionnaires andthird-party ethical audits to identify potential human rightsrisks, investigating allegations of human rights abuses andworking to ensure that action and remediation of risks/issues are in line with global best practice standards.Functional TeamsThe Coles Board is responsible for the approval of Coles’Human Rights Strategy and Ethical Sourcing Policy. Itreceives and reviews regular reports on the status of thestrategy including our program to address human rightsin our supply chains. Coles senior management who holdresponsibility for the day-to-day execution of our EthicalSourcing Program are regularly invited to present to theBoard on the content of the report and to answer questions.Since December 2019, ethical sourcing has been a standingitem on each Board meeting agenda.Oversees the General Manager, Risk and Compliance, theHead of Compliance, and the Ethical Sourcing Team whoare collectively responsible for the overall administration ofthe Ethical Sourcing Program.Chief Operating OfficerOversees the Coles Procurement function and is responsiblefor most procurement activity to source goods and servicesnot for resale.Chief Executive – Commercial & ExpressAudit and Risk CommitteeOversees the procurement of goods for resale in ColesSupermarkets and Coles Express including sourcing ofColes Own Brand products.Chief Executive – LiquorOversees the procurement of goods for resale in Liquorincluding sourcing of Liquor Own Brand products.Executive managementWorking hours6Freedom of association and collective bargaining7Subcontracting and indirect suppliers8Safe working conditions9Discrimination10Regular employmentPeople and Culture Team11Illegal labour12Environment13Business integrity14Reporting and documentation15Grievance mechanisms and remediationThe People and Culture team is responsible for ensuringsystems and controls exist to prevent modern slavery in ourown operations.Our policiesOurEthical Sourcing Policy, together with our EthicalSourcing Supplier Requirements set out our expectationsof suppliers to comply with labour rights, human rights,environmental and health and safety obligations, andbusiness integrity (governance).Our Ethical Sourcing Policy is reviewed annually andrequires approval by the Coles Board.Our policy and requirements are based on internationallyrecognised codes of practice, including:Our policy and requirements are available on our websiteat colesgroup.com.au and also published on our supplierportals. International Labour Organisation (ILO) Declaration onFundamental Principles and Rights at Work UN Guiding Principles on Business and Human Rights UN Universal Declaration of Human Rights Global LGBTI Standards for BusinessAnti-bribery and Corruption PolicyHead of Compliance Children’s Rights and Business PrinciplesWhistleblower PolicyHas oversight of the Ethical Sourcing Team and reports tothe General Manager, Risk and Compliance. OECD Guidelines for Multinational Enterprises UN Human Right to Water and SanitationOperations Convention on Migrant Workers UN Global Compact’s Ten PrinciplesChild Labour Remediation Requirements UN Women’s Empowerment PrinciplesForced / Bonded Labour Remediation RequirementsCode of ConductEthical Sourcing Program GuidanceEthical Sourcing Remediation FrameworkCompliance with our policies and procedures (whichinclude our Ethical Sourcing Policy and SupplierRequirements) is built into our standard trading termsDiversity and Inclusion Policy11ConsultationThe Ethical Sourcing Team is responsible for administrationof the Ethical Sourcing Program and works in partnershipwith functional business units to execute actions.Policies / documents which support our modern slaveryprogram:RemediationEthical Sourcing Team105Ethical Trade Initiative (ETI) Base CodeHas oversight of the Head of Compliance and the EthicalSourcing Team and reports to the Chief Legal & SafetyOfficer.The role of the Committee extends to reviewing theapplication of relevant legislative and regulatoryrequirements concerning human rights, such as thereporting requirement under the Modern Slavery Act.Wages and benefitsFunctional teams are regularly updated on the status of theEthical Sourcing Program and human rights commitments.Performance information is also included in training aimedat ensuring team members understand their ethicalsourcing and human rights responsibilities and the impactof their actions.General Manager, Risk and ComplianceOur Human Rights Steering Committee is a cross-functionalmanagement committee chaired by the Chief LegalOfficer. The Committee guides our approach andmanagement of human rights issues. The Committee metfive times during the Reporting Period.4 ManagementHuman Rights Steering CommitteeHarsh or inhumane treatmentOur effectivenessThe Audit and Risk Committee is a committee of the Board.As ethical sourcing had been identified as a material risk toColes, it is responsible for evaluating Coles’ ethical sourcingperformance and the effectiveness of our ethical sourcingrisk management systems and processes.3Our actionsChief Legal & Safety OfficerChild labour Modern slavery risksBoardWhile everyone at Coles shares the responsibility of ensuringthat our goods and services are procured ethically,our category teams, procurement teams and producttechnologists have the direct relationship with our suppliersand are responsible for the day-to-day execution of theEthical Sourcing Program.2 O ur businessOur approach to modern slavery is company-wide. We have a robust governancestructure that oversees the management of modern slavery risks across ourown operations and our supply chain. Our Ethical Sourcing Program, includingthe assessment and mitigation of modern slavery risks, has been a focus of ourbusiness for several years. The key roles and responsibilities of our governancestructure for human rights and ethical sourcing are outlined below.Forced / bonded labourOur commitmentThe team includes an in-house certified auditor (as certifiedby the Association of Professional Social ComplianceAuditors) to manage the ethical audit program.1IntroductionActions to assessand address riskColes Group Limited 2020 Modern Slavery Statement

Coles Group Limited 2020 Modern Slavery StatementColes Group Limited 2020 Modern Slavery StatementManaging our risksIn March 2020 the Coles Board endorsed our Human RightsStrategy. This was developed with support from externalhuman rights experts and followed team member interviewsand workshops.Our own operationslabour rights; right to health and safety; right to equality and freedom from discrimination; Indigenous rights; cultural rights; and right to dignity and justice.processes to ensure all Coles team members holdworking rights in Australia and to ensure compliancewith visa conditions where applicable; training for team members covering fundamentalgovernance principles, including our code of conduct,grievance mechanisms, workplace behaviours; significant resources dedicated to human resourcemanagement; high union membership and engagement; and resources, systems and processes to administer teammember payments.Our supply chainTable 2 below describes the current scope of our EthicalSourcing Program. Suppliers and sites captured by thisprogram scope are referred to as ‘suppliers’ and areidentified as ‘in-scope’.We have a complex supply chain with thousands ofsuppliers that have a direct trading relationship with us, andthousands more within our extended supply chain. Modern slavery risksWe recognise that modern slavery risks are more likely toexist where human rights principles are not respected.Our strategy focuses on systems and processes to prevent,mitigate and remedy actual or potential adverse humanrights impacts under the areas of compliance, work culture,people and technology, governance, remediation andstakeholder engagement. The scope of our Ethical Sourcing Program has evolvedand expanded since the program’s establishment in 2005.During the Reporting Period, we commenced expandingthe scope of our Ethical Sourcing Program coverage toinclude Liquor and GNFR suppliers. For Liquor, an exerciseto map the supply chain was completed with onboardingin-scope suppliers onto the program planned for early FY21.For GNFR, we built a bespoke third-party risk managementassessment framework (supported by the SAP Aribatechnology platform) to standardise the risk assessment ofsuppliers upon contract renewal or introduction to Coles.Suppliers with ethical sourcing risk indicators – such asthe provision of high-risk goods or services or operationsbased in high risk countries – will be onboarded onto theEthical Sourcing Program at contract renewal. The averagecontract term for goods not for resale and services suppliersis three years. O ur business Coles’ operations are predominantly based in Australia,with only a very small operation based outside of Australiain Shanghai, China. While Coles’ risk assessment identifiedthat modern slavery and human rights risks may exist in ouroperations (as outlined in Table 1 – Modern Slavery Risks),we have assessed that risk to be very low. This assessmentis based on the supporting structures, policies, programsand processes we have in place. These include, but are notlimited to:Our commitmentColes puts people’s welfareat the centre of everything wedo. We believe that respectfor human rights is essentialto ach

Coles Group Limited 2020 Modern Slavery Statement Coles Group Limited 2020 Modern Slavery Statement 6 7 Our supply chain Our operations rely on, and are supported by, a large, dynamic and complex supply chain. We have over 10,000 suppliers of goods for