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SLAVERY AND HUMAN TRAFFICKING STATEMENT

This statement is made pursuant to section 54 of the Modern Slavery Act 2015. It sets out the steps taken and progress made by Hovis Holdings Limited and its subsidiary companies, Hovis Limited and Rank Hovis Milling Limited, (“Hovis”) during the financial year ending 31 December 2019 to prevent modern slavery and human trafficking in its business and supply chains.

Introduction

Hovis is an iconic household brand with over 134 years’ experience in the baking and milling industry. Our core values apply to everything we do and are centred on three key principles: quality, accountability and trust. We are proud of our heritage and reputation, and are committed to putting Hovis goodness at the heart of every day. We recognise that, to achieve this, we must adhere to the highest possible standards in everything we do. This commitment includes ensuring that people within our business and our supply chain are treated with dignity and respect, and taking proactive steps to tackle and prevent slavery, servitude and human trafficking.

Our business and supply chain

Hovis Holdings Limited is jointly owned by The Gores Group (51%) and Premier Foods Group Limited(49%). Rank Hovis Milling Limited, a wholly owned subsidiary of Hovis Limited, is a dormant company as of the end of 2019, following the disposal of the milling business in 2018 and the subsequent closure of its Southampton mill in June 2019 after it ceased production in February 2019. As a result, Hovis Limited, a wholly owned subsidiary of Hovis Holdings Limited, is now a fully integrated baking business, with a large proportion of the flour used to produce our products being supplied by Hovis’ mill at Wellingborough.

Headquartered in High Wycombe, we employ around 2,700 employees in the United Kingdom. We also use agency labour in our business which is sourced both directly and/or through carefully selected, reputable recruitment agencies. We recognise and respect our employees’ rights to join trade unions and to bargain collectively and we adopt a collaborative approach to working with trade unions within our business.

We have eight bakeries in England, Scotland and Northern Ireland producing high quality bread and other bakery products. We also have one flour mill based in Wellingborough and two regional distribution centres, enabling us to deliver over one million loaves every day of the week throughout the United Kingdom and Ireland. Our core brands include Hovis®, Mothers Pride® and Ormo®.

We work with over 1160 suppliers across our supply chain. Our suppliers are an integral part of our business and we work closely with them to build sustainable and trusted business relationships. Our direct suppliers provide ingredients and packaging for our products. The majority of our raw ingredients and packaging materials are sourced from suppliers based in the United Kingdom and Europe, however, we do source some minor and seasonal ingredients from further afield such as Turkey and China. Our indirect suppliers provide us with goods or services to support the day-to-day business operations, such as utilities, maintenance, security and office supplies.

Our policies on slavery and human trafficking

Hovis does not tolerate any form of modern slavery in its business or supply chain and is committed to eradicating such practices and protecting the workforce. We employ a number of policies, systems and controls to ensure that we are conducting our business in an ethical, responsible and transparent manner. All of the following policies are readily available to employees and workers on Hovis’ intranet, with the new Human Rights Policy also being available on Hovis’ website:

  1. Anti-slavery Policy: This policy applies to all employees and agency workers of Hovis. It sets out roles and responsibilities, what behaviours constitute slavery, how to identify any instances of slavery or servitude and the procedures to follow if concerns are identified.
  2. Recruitment Procedure: We operate a robust recruitment procedure, including conducting eligibility to work in the UK checks for all employees and agency workers, to safeguard against human trafficking or individuals being forced to work against their will.
  3. Whistleblowing Policy: This policy applies to all employees and agency workers of Hovis. It sets out how to raise concerns about how colleagues are being treated, or practices within our business or supply chain, without fear of reprisals.
  4. Safecall line: Hovis supports a culture of openness and transparency. In conjunction with the Whistleblowing Policy, Hovis operates a Safecall line that can be contacted (by telephone) 24 hours a day, 365 days a year to allow employees and workers to report (anonymously if they wish) concerns of unethical conduct or behaviour. This therefore gives individuals a method of reporting suspected incidents of slavery or servitude in a confidential manner. Any complaints or reports will be investigated.
  5. Code of Conduct: This code aligns with our core values and explains the manner in which Hovis operates as an organisation and how we expect our employees and workers to behave. In particular it requires all employees and agency workers to ensure that they comply with applicable laws, rules and regulations; to act with honesty and integrity; and to treat people fairly with dignity and respect. Non-compliance with the code may result in disciplinary action being taken.
  6. Human Rights Policy: In 2019, Hovis implemented a Human Rights Policy, which is publically available on the Hovis website (www.hovis.co.uk). It sets out our commitment and the steps we take to meet our responsibility to respect internationally recognised human rights standards. It is guided by the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. It applies to Hovis employees, workers, contractors, suppliers and any other third parties working with us.

Due diligence processes for slavery and human trafficking

Forced labour, in any form, has no place in Hovis’ operations and supply chains. Hovis has an Ethical Trading Statement in place, which is based around internationally recognised code of labour practices, setting out the minimum standards we expect all of our suppliers and business partners to adhere to. In 2019, this was reviewed and revised to make the expectations clear, before being reissued to all incumbent suppliers. We will continue to reissue it to all incumbent suppliers on an annual basis to reinforce the expectations placed on our suppliers to respect workers’ rights and improve working practices.

Hovis continues to be a member of SEDEX (the Supplier Ethical Trading Data Exchange), a not for profit membership organisation dedicated to driving improvements in ethical and responsible business practices in global supply chains. We require all ingredients and packaging suppliers to be members of this organisation to give us visibility of their ethical performance and aid the assessment of risk in our supply chain.

In addition, in 2019 Hovis devised and implemented a Supplier Due Diligence Questionnaire to be completed by all procurement centrally sourced suppliers (which covers approximately 63% of our total annual spend) to enable the business to review and better understand the steps prospective suppliers are taking to prevent modern slavery and human trafficking in their supply chains and to identify and work with prospective suppliers to mitigate any risk. This new measure will give Hovis greater visibility and understanding, from the outset, of the steps being taken by the suppliers we work with to prevent any form of forced labour, human trafficking or slavery taking place in our supply chain. It will also ensure that Hovis does not appoint or work with any centrally sourced suppliers unless and until it is satisfied that they demonstrate and implement standards that are aligned with our policies, expectations and values.

To ensure that Hovis’ suppliers comply with the Modern Slavery Act 2015, we continue to include contractual ‘anti-slavery’ provisions in our agreements that require our suppliers to confirm to us that they have and continue to take steps to prevent modern slavery within their business and supply chain and to report any incidents or suspected incidents to us. In 2019, we have amended our standard terms of purchase to include express terms requiring suppliers to adhere with our Human Rights Policy and Ethical Trading Policy. Where appropriate, we also include a contractual right to conduct audits of suppliers to ensure compliance with all applicable laws, regulations and contractual terms, including the prohibition against forced labour, slavery and human trafficking.

Assessment of risk

We work in conjunction with our suppliers to assess the risk of slavery and human trafficking in our supply chain. Hovis purchases a wide range of goods and services, predominantly from suppliers based in the UK and Europe, which are seen as lower risk, however, we do procure products from the agriculture sector and a limited range of goods from suppliers outside of Europe, which are considered to pose a greater risk from a modern slavery perspective.

Accordingly, during the latter part of 2019 we implemented a compulsory ethical component into our food safety and compliance audits to ensure that both physical (higher risk) and desktop (lower risk) supplier audits include questions which are specifically designed to identify potential signs of modern slavery in the workplace. No non-compliances in this area have been identified in 2019.

In addition, we have worked closely with and provided training to our key internal stakeholders, including those from our procurement and technical functions, who will often visit suppliers’ premises throughout the year. The training these stakeholders have received will enable them to actively look for evidence of forced labour and/or slavery during any such visits and they are encouraged to proactively report any concerns using the processes and/or mechanisms identified above.

As identified in our KPIs for 2019, we also engaged an expert external auditor to conduct SEDEX Member Ethical Trade Audits (SMETA) of our top six ingredient and packaging suppliers, who were identified by our procurement function as being medium to high risk from a modern slavery perspective, based on the source of the raw materials and the level of spend. These audits involve an in-depth analysis of the suppliers’ compliance with labour standards. As a result of the audits conducted, several minor non-conformances relating to working hours, wages and policy improvements were identified and raised with the suppliers. We are working with these suppliers to ensure that appropriate corrective action plans are in place so that these points are rectified within reasonable timeframes. Importantly, the external auditor also noted some extremely positive practices including recreational facilities available to aid employee wellbeing, free fruit to encourage healthy living and wage rates being above the statutory requirements.

We have considered the risk of slavery and human trafficking in our operations, including via the use of agency labour and we consider the risk to be low due to the robust recruitment and on boarding processes that we, and our recruitment agencies, abide by. In addition, members of our Human Resources team, who have now received modern slavery awareness training, conduct regular audits of the recruitment agencies we use, including selecting a random sample of workers to speak with to identify any concerns or breaches of the applicable legislation and policies. In 2019, no material non-conformances were identified as a result of these audits.

Training

We regard training and awareness as key to developing our staff’s understanding of the harm and suffering which modern slavery and labour exploitation cause to individuals and the wider society, as well as giving them the tools to identify suspected cases and take appropriate action.

In 2019, we have built on our staff’s previous understanding and awareness of modern slavery by exceeding our target of having 50 key stakeholders trained on modern slavery, reaching over 90 key stakeholders across the business, including the Executive Team. The training, delivered by external specialist provider, StrongerTogether, focused on tackling modern slavery in UK business. The training explained:

  • what modern slavery and forced labour exploitation is;
  • the risk and impact of such taking place within the business;
  • how to recognise the signs that someone might be being exploited; and
  • how to respond to any such signs and report concerns.

The feedback received from staff who undertook the training has been extremely positive, with the session being a real eye-opener for many as to the appalling exploitation which victims of modern day slavery are subjected to. A key take away for those taking part was understanding the common signs/red flags of modern slavery taking place in a workplace and how to report any such concerns. The training thereby further cemented their understanding of the issue and commitment to do their utmost to help eradicate any form of slavery or forced labour from our business and wider society.

Stronger Together also provided focussed specialist training to our Procurement team, namely tackling modern slavery through purchasing practices, to enable them to better understand and assess modern slavery risks in our supply chain and how they play a pivotal role in helping the business to prevent such at an operational level. This, coupled with the introduction of the Supplier Due Diligence Questionnaire discussed above, will enable our Procurement team to be at the forefront of our business’ controls to prevent modern slavery taking place in our supply chain.

Effectiveness in combating slavery and human trafficking & report on progress in 2019

As set out in our 2018 statement, for 2019 we set ourselves a number of key performance indicators (KPIs) against which we would measure our progress in taking steps to identify, assess and combat modern slavery, labour exploitation and human trafficking in our business and supply chain. We are pleased to report that, as detailed in the foregoing sections, we have achieved all of our KPIs for 2019, including tightening our controls and processes so that we have better oversight of our supply chain; almost doubling the target for the number of key stakeholders trained so that our workforce are able to help us identify and tackle modern slavery concerns in our business; and undertaking audits of key suppliers, resulting in a number of minor non-compliances being identified and rectified as a result.

In order to assess our progress in tackling and preventing slavery and human trafficking taking place in any part of our business or supply chain, and to ensure continuous improvement, in 2020 we will take the following actions:

  1. to enhance our governance in this area, we will establish an Ethical Standards Committee with key representatives from HR, Legal, Procurement, Technical, Logistics and Manufacturing functions, who will report to the Executive Team, meet quarterly and be responsible for:
    1. investigating any complaints or concerns raised regarding modern slavery in our business or supply chain;
    2. ensuring that Hovis is continuously improving and enhancing its compliance programme to combat human trafficking and modern slavery;
    3. overseeing Hovis’ compliance with its responsibilities pursuant to the Modern Slavery Act 2015; and
    4. monitoring progress against Hovis’ KPIs in our Modern Slavery Statement;
  2. we will ensure that a further 25 key stakeholders within the business undertake compulsory modern slavery training with Stronger Together, including any senior management team new starters;
  3. we will include a modern slavery section within our compulsory legal compliance training that all new senior management team members will attend as part of their induction on joining the business;
  4. we will hold an internal Modern Slavery Awareness Day in order to:
    1. increase awareness across the entire workforce of the steps the business is taking in the fight against human trafficking and modern slavery in our business and supply chain; and
    2. highlight the circumstances that may indicate a person is being exploited and signposting them to both internal and external sources to raise their concerns and/or seek help and support.
    We will obtain feedback to assess the effectiveness of this awareness day;
  5. we will review the aforementioned policies to ensure that they are robust, fit for purpose and in line with best practice so that they are an effective tool in preventing any form of modern slavery or labour exploitation in our business;
  6. we will undertake a supply chain mapping exercise of our key tier 1 suppliers to enable us to have a greater understanding of our supply chain and more easily identify higher risk suppliers based on sector, country of origin of raw material, SEDEX risk rating and a geographical risk index pertaining to human rights. This will, in turn, help us to take a more structured, targeted approach to our audit activities and enable us to develop a longer term strategy thereby enhancing our compliance; and
  7. we will conduct audits using an external provider to ensure that we have audited, within the space of 2 years (2019 & 2020), a total of 40% of our supplier spend, to ensure that we continue to increase our oversight of our supply chain and can identify and mitigate against any risk.

This statement has been approved by the Board of Directors of Hovis Holding Limited, Hovis Limited and Rank Hovis Milling Limited on 11 May 2020.

 

Nish Kankiwala

Director and CEO of Hovis Holdings Limited

Date: 20/05/2020

Nish Kankiwala Signature

 

George Idicula

Director of Hovis Limited

Date: 20/05/2020

George Idicula Signature

 

Peter Hill

Director of Rank Hovis Milling Limited

Date: 20/05/2020

Peter Hill Signature

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