The following statement sets out the actions taken by Kerry Group plc (“Kerry Group”, “Kerry” or the ”Group”) to address modern slavery and human trafficking risks across our business and supply chain for the financial year ending 31st December 2020.
As a Group, we are firmly committed to upholding the rights of workers. Modern slavery and human trafficking are unacceptable practices that exploit some of the most vulnerable people and Kerry supports all efforts to eradicate these and other human rights abuses from international business and global supply chains.
In this statement, Kerry Group reports on its actions to assess and address modern slavery risks associated with its operations, including its employment practices and the protections provided for workers. Furthermore, this statement also outlines how Kerry is assessing and addressing modern slavery risks within its supply chain, including the efforts with supply partners to mitigate this risk.
Kerry Group plc is a public limited company incorporated and headquartered in the Republic of Ireland. The Group is a global leader in the food and
beverage industry, operating across 149 manufacturing locations in 31 countries and with sales in over 150 countries. Kerry Ingredients (UK) Limited (Taste & Nutrition), Kerry Foods Limited (Consumer Foods) and Kerry Ingredients Australia Pty Ltd are wholly owned subsidiaries of Kerry Group and are our main operating entities in the UK and Australia respectively.
The Group’s activities include the purchase of raw materials for production of products for the food, beverage and pharmaceutical markets. The Group employs over 26,000 people and our operations encompass significant research, development and application expertise, customer and consumer insight and is enabled by a number of supporting functions including human resource, sales and marketing teams. The Group is structured across two business segments as follows:
Taste & Nutrition
Kerry provides market leading innovation through its Taste & Nutrition technologies and systems for the food, beverage and pharmaceutical markets.
Kerry Foods is a leading manufacturer and marketer of added value branded and customer branded chilled foods to the UK & Irish and selected international consumer foods markets.
As a global organisation, Kerry Group sources raw materials from thousands of suppliers around the world and we have a direct contractual relationship with more than three thousand dairy farmers in South West Ireland. With a raw material spend of almost €4 billion, we make a significant socio-economic contribution to the locations which we source from.
To ensure that this procurement spend contributes to improving livelihoods, we continue to map and better understand the geographic location and nature of products and services sourced. The range of products, sourcing locations, markets and regulations associated with these purchases can present potential risks and we apply a systematic approach to risk assessment that helps to identify and mitigate against a range of issues, including the risk of modern slavery and human trafficking.
Our supply chain includes suppliers who are involved in primary production (predominantly agriculture), processing and distribution of raw materials and these entities recruit and employ workers associated with undertaking these activities. We also rely on a number of other indirect goods and services in our day to day operations, for example cleaning and security services.
At Kerry, we adopt a zero-tolerance approach towards the use of forced, bonded, indentured or involuntary labour in our own operations or in any activities connected with the Group. The Kerry Group Mission and Purpose guide our business activities and set out our commitment to creating a world of sustainable nutrition. To ensure clarity on the issue of labour standards, there are a number of key policies that set out the requirements of those within the organisation and those whom we seek to do business with. These include the following:
While our Human Resource and Procurement functions take a lead role on upholding human rights, accountability is cross-functional and all our teams and business units work together to achieve our goals. We continue to build the capacity of our people on modern slavery and human rights more generally and this includes working collaboratively with others and seeking expert input for guidance on our approach.
Our management of modern slavery risk across our operations and supply chain falls within our broader approach to human rights.
As a Group, we have comprehensive structures in place to appropriately manage labour issues. In addition to our day-to-day people practices, we use a combination of internal assessments and independent ethical audits across our facilities to identify areas of potential risk. Our policies are communicated and available to all employees, ensuring that all colleagues are informed and understand our requirements. We also make employees aware of the means by which they can report concerns, including through the Group’s confidential reporting system. This independent platform is available in multiple languages and allows for anonymous reporting at any time.
While we are confident that these efforts are sufficient to mitigate the potential risk of forced labour within our operations, we remain vigilant and continue to look at ways to strengthen our approach.
We understand that the potential risk of forced labour is much greater within our agricultural supply chain. The agricultural sector is considered high risk forforms of labour exploitation, including modern slavery. As part of our efforts on responsible sourcing, we continuously assess the key risks associated with the goods and services we buy, including risks relating to
human rights. Through supply chain mapping and a risk identification process, we are aware of specific raw materials and sourcing regions where there is a heightened risk of human trafficking and/or modern slavery. We identify human rights risks by combining internal knowledge with a range of external data, independent tools and benchmarks. Through this risk mapping process, we have a better understanding of the risks associated with both the production sites of our raw materials and the agricultural origin of commodities, where these are different. However, where there are a number of tiers between the supply site and the agricultural source of the raw material, it is more difficult to achieve visibility of labour practices at each stage of the chain.
Kerry is explicit about our stance on forced labour with all those who seek to do business with the Group. Our Supplier Code of Conduct is communicated to all our direct suppliers and puts a clear onus on these partners to ensure they apply the same standards to those they work with.
Given the number of supply partners to Kerry, we adopt a targeted approach to monitoring compliance with our code based on the risk assessment outlined above. In this way, we focus our efforts on those suppliers where the potential for human rights infringements, including slavery and human trafficking, is greatest.
Our contract terms and conditions require Kerry’s suppliers to comply with all applicable laws, which include laws prohibiting slavery and human trafficking. We have an approval process in place for new suppliers and all are subject to Kerry’s Supplier Requirements Manual, which includes the Kerry Supplier Code of Conduct. Our supply quality team has an audit presence in 50 countries across 6 continents and while physical audit activity was restricted in 2020 due to COVID-19, more than 800 physical audits were conducted. These audits integrate high level human rights considerations as part of the broader supplier assessment and act as one element of our monitoring process.
As a member of SEDEX (Supplier Ethical Data Exchange), we use this platform and associated independent tools to help us assess our supplier performance. For our global contracts, over 92% of vendors are SEDEX registered. In addition, we continue to seek registration of all high-risk suppliers with the SEDEX platform. To enhance and expand our due diligence process, we revised our assessment criteria, bringing additional suppliers within scope for assessment in 2020. This work is ongoing and we expect to complete it in 2021. In 2020, 68% of high-risk
suppliers were registered with SEDEX and of these, 36% had independent SMETA (SEDEX Members Ethical Trade Audit) audits in place.
Where we become aware of ethical issues within our supply chain, we seek to engage with our suppliers directly. We favour working with suppliers to address any issues and where concerns are confirmed, we look for a clear roadmap for positive resolution including implementation of a corrective action plan within a defined period and verification of completion. Where suppliers fail to adequately engage or take the necessary steps to remedy the issues identified, we will take action, up to and including termination of the business relationship.
We are aware that even with due diligence processes in place, incidents of modern slavery can occur and so we extend our facility for anonymous reporting of concerns to those within our supply chain.
We are committed to creating effective grievance mechanisms and addressing and remedying adverse human rights impacts.
The Express a Concern Ethics Hotline can be accessed in more than 100 languages and is available 24 hours a day, 7 days a week. Users can report a concern anonymously, and their report will be logged with a unique ID, which they can use to check on the status of the concern raised without providing personal contact information.
All concerns raised in this manner will be assessed, fully investigated and appropriate action taken. All whistleblowing incidents are reviewed by the Head of Internal Audit and formally investigated by the relevant functional heads depending on the nature of the concern raised.
In 2020, there were no reports of trafficking or modern slavery received through this service.
In 2020, we continued to engage with our suppliers directly and through the SEDEX platform to ensure the effectiveness of our approach and build awareness of Kerry’s requirements. In addition, our all our manufacturing sites are registered with the platform and many are covered by independent SMETA audits, with learnings from this process shared to improve
overall Group performance.
We also understand that raising awareness is key in addressing the risk of modern slavery and human trafficking. We recognise the need to continue building capacity among our employees to identify risks of modern slavery and the actions required to respond effectively.
Internally, Kerry continues to make its policies available to employees via a number of channels, communicating on any relevant changes or updates. In addition, mandatory training for colleagues on the Group’s Code of Conduct is delivered through the Kerry Learning Academy. This training covers the key elements of our Group Code of Conduct, which incorporates our commitment to upholding human rights and in 2020, additional content was incorporated specifically on modern slavery and forced labour. The training includes an assessment element to help monitor progress and aid with understanding. In 2020, we also conducted dedicated training for procurement colleagues around human rights risks associated with various supply chains and rolled out customised tools to support them in identifying these risks.
We continue our membership of a number of multi-stakeholder initiatives that are engaged in the protection and promotion of human rights and the elimination of forced labour. These include, the
Roundtable on Sustainable Palm Oil (RSPO), the Food Network for Ethical Trade (FNET) and the Consumer Goods Forum (CGF). Our membership of these and other organisations allow us to assess our progress against industry best practice and helps us to identify areas for further improvement.