MODERN SLAVERY AND HUMAN TRAFFICKING STATEMENT.
Shop Direct, the UK’s second largest online-only retailer, is made up of department store brands Very.co.uk, Littlewoods.com, VeryExclusive.co.uk and LittlewoodsIreland.ie. Our websites receive an average of 1.3 million website visits every day, with 69% of online sales completed on mobile devices.
As is befitting of our world class ambitions, we at Shop Direct are fully committed to taking action to combat modern slavery and human trafficking within our business and supply chains.
This is our second annual statement, which outlines the steps we’ve taken during the 12 months, up to and including 30 June 2017. It covers both Shop Direct Home Shopping Limited and Shop Direct Finance Company Limited – respectively the retail and financial services businesses within the Shop Direct Limited group of companies.
Our 2015/16 modern slavery statement for the 12-month period ending 30 June 2016 can be accessed here.
At Shop Direct, we’re committed to behaving in a responsible way. We place a strong focus on maintaining strong ethical and environmental standards and being the best possible citizen we can in the communities in which we operate.
We continue to support the United Nations Global Compact (UNGC) and to abide by the ten principles in all of our business operations, and have further developed our relationships with the Ethical Trading Initiative (ETI), Bangladesh Accord on Fire and Building Safety and Sedex during the year. We have also become a member of a new, UK-focused collaborative initiative called Fast Forward.
These relationships, along with our CSR board of senior stakeholders who are tasked with driving and embedding our CSR agenda, help guide and support our CSR activities at Shop Direct. Our latest annual CSR report, which outlines our progress and plans, can be found here.
PROGRESS ACROSS OUR BUSINESSES
Our 2015/16 modern slavery report outlined the steps we’ve taken to reduce risk across our operations. Building on these actions, we have made the following progress during our 2016/17 financial year to further enhance our approach to combating modern slavery and human trafficking.
At Shop Direct, we have a broad and varied supply chain, sourcing own brand clothing and footwear and home and living products from over 900 factories in 30 countries worldwide, including China, India, Bangladesh, Malaysia, Poland and Turkey. We are aware that our supply chain remains complex and is constantly evolving, and we use the Sedex system and work collaboratively with our suppliers to ensure visibility of those sites manufacturing our products.
To increase transparency, we have taken the decision to publish a full list of our manufacturing sites, which we will update every six months. We hope that sharing this data will help support us in our efforts to better understand and make improvements to our supply chain. Click here to view our latest list.
Our dedicated responsible sourcing team, which is based in the UK with a presence on the ground in key sourcing countries, continues to work hard to understand risks specific to our supply chain, and the countries we source from. To achieve that, we utilise both internal expertise and databases as well as third party information including audits, ETI updates, trade union risk maps and non-governmental organisation (NGO) country reports.
From this work, we know that there is an increased risk of modern slavery where there is:
- A prevalence of migrant labour
- Contract and agency workers
- High presence of refugees
- Young workers and risk of child labour
- Vulnerable workers
- Unauthorised subcontracting
Certain countries within our operations may have one or more of these risks and this leads us to more closely monitor these areas through regular visits by our in-country teams, which offer additional support and guidance to our suppliers to ensure that they are managing these situations responsibly.
All suppliers of own brand goods to Shop Direct have to sign our code of conduct prior to commencement of business. The code of conduct is based on the ILO Labour Standards and the provisions laid out in the ETI Base Code. The code of conduct is reviewed and updated regularly in line with changes in best practice and lessons learnt from our and others’ experiences.
As well as the code of conduct, we have worked hard this year to update and develop further policies to support our efforts in finding and combatting modern slavery. These include an updated young worker policy as well as a migrant and contract labour policy, both of which are currently being socialised with our suppliers.
Over the last year, we have improved ongoing verification of suppliers’ conformance to our code of conduct by signing global agreements with three third party audit companies. This will allow us to request that specific areas be looked at in more depth if we have particular concerns at a supplier site. These audits are a crucial due diligence tool, allowing us to better assess each supplier’s and factory’s level of knowledge and ability to comply with legal and ethical requirements.
This year, our own brand factory monitoring programme found non-conformities related to our code of conduct point on ‘employment is freely chosen’. These covered various areas within this clause, including not having suitable policies on forced and bonded labour in place, toilet breaks being restricted, and workers having to provide deposits for uniforms. Our in-house team worked closely with the factories involved to implement improved HR practices that better respect the human rights of the workers involved. The solutions implemented were built in collaboration with peer group retailers and other ETI members and had been proven to work at other sites.
As well as this, we found a consistent issue in Malaysia where passports for migrants were being retained without the full consent of workers. We worked with the factories on a suitable solution for this and ensured that each worker had their own locker in which to safely store the passports. Our team then arranged visits to our key suppliers and factories in Malaysia to verify these changes had been made. From document reviews and worker interviews during these visits, we gathered information to suggest that migrant workers might be paying fees for services relating to securing their jobs. We understand the need to verify this information further and are planning another trip early in 2018. We have also reached out to the ETI, other retailers, NGOs and consultancies to see if there is existing knowledge of this issue or if there are learnings from similar experiences in other countries that could be used to work on this issue going forward.
We continue to work with others to better understand some of the more complex and systemic problems found within global supply chains so that collective solutions can be found. Our memberships with the UNGC and the ETI allow us to build and maintain strong relationships with a varied group of businesses as well as trade unions and NGOs, and to share information and resources to better benefit workers in our supply chains. This year, we also joined the Fast Forward initiative, which focuses on prevention of worker exploitation and mistreatment in UK supply chains. Fast Forward assesses modern slavery risk as part of its audit processes, providing us with insight into employment practices used not only by our suppliers but also their recruitment agencies. The programme also allows us to work with other retailers as well as our suppliers to deal with any issues identified.
Alongside our audit programme, our strategy is focused on better supporting our factories through offering our time and resources to assist them in making sustainable improvements. Our in-country specialists work collaboratively with our internal teams and suppliers to resolve issues that are identified and deliver training to prevent issues occurring. We are partnering with Impactt, a specialist ethical trade consultancy, on a factory improvement programme in China. This aims to give factories the tools to better assess and monitor their own risks, with the training including modules on responsible recruitment and social dialogue. These modules in particular will support factories in reducing the risks of modern slavery within their own operations.
Due to changes in other areas of legislation, we’ve had to delay sending updated terms of purchase agreement to our suppliers of branded goods to ensure that they have visibility of our codes of conduct. This will be addressed over the next 12 months and any branded suppliers who have not signed up to our agreement will be asked to provide copies of their own codes of conduct, which we will review to ensure that they are aligned with our own.
Modern slavery and human trafficking risks have been considered and reviewed in individual audits where appropriate and through HR audits from relevant partners such as cleaning and catering suppliers. In July 2016, we changed catering provider for outlets across our sites. Baxter Storey now provides our catering services and people policies formed a key area of decision-making during the tender process. We have also reviewed our key non-merchandise strategic suppliers to confirm that their modern slavery statements adhere to our objectives.
During the year, we carried out a training needs analysis on modern slavery across our business. The results of this analysis led to delivery of responsible sourcing training to colleagues in our overseas offices, including a section on modern slavery. We also facilitated several of our Chinese suppliers in attending a modern slavery webinar created by the ETI. We have continued to raise awareness of modern slavery across all business areas, through local communications and signposting colleagues to the modern slavery helpline should they suspect inappropriate activity internally or with our suppliers. We have also taken steps to include modern slavery as a topic in our broader regulatory training programme. This will ensure we continually review, research, consult and conduct training needs analysis, to ensure we provide the right training to the right people, when needed.
We also recently enlisted the support of a sustainability consultant who reviewed our approach to legal compliance and best practice procedures within our modern slavery and overall corporate social responsibility strategies. The aim of this review was to determine whether any gaps exist in current policies and procedures, provide recommendations on how we can develop policies and procedures to underpin our approach to modern slavery, and develop robust due diligence procedures to meet the requirements of the Modern Slavery Act and other legislation.
OUR COMMITMENT – HOW WE’LL BUILD ON WHAT WE ARE DOING YEAR ON YEAR
We’re committed to continuous improvement to further enhance our approach to combatting modern slavery and human trafficking during our 2017/18 financial year. Following our review by a sustainability consultant, we’ll also be analysing the recommendations and best practice to see how best to implement these across our business over the coming year.
We will continue to work collaboratively with other retailers, trade unions, NGOs and membership organisations to tackle the broader issues related to modern slavery. For relevant scheduled site audits, our team will work with the business owners to ensure appropriate policies and controls are in place and are operating effectively to mitigate modern slavery and human trafficking risks. Over the next year we will also undertake a wider review of non-merchandise strategic suppliers to confirm that the content of their modern slavery statements are aligned to our business and CSR objectives.
Now that we’ve added modern slavery as a topic in our broader regulatory training programme, we will continue to evaluate the need to produce relevant training and education modules on modern slavery and forced labour, supported by directing colleagues who work for our suppliers to the modern slavery helpline. We plan to roll out responsible sourcing training to 350 suppliers and factories over the next 12 months, including modules focusing on modern slavery. Alongside this, we will further develop our support mechanisms and training for suppliers and factories to aid their understanding and ability to tackle issues which could lead to modern slavery. We will ensure that any communication or training delivered aligns to our internal policies and legal obligations.
Our CSR board will continue to drive our agenda forward and maintain our commitment to combatting modern slavery and human trafficking in the year ahead.
This statement has been approved by the Shop Direct CSR board and our Group CEO, who will review and update it annually.
Alex Baldock, Group CEO.
On behalf of Shop Direct Home Shopping Limited and Shop Direct Finance Company Limited.
21st December 2017.