Modern Slavery Act Statement

In this document the following abbreviations and definitions shall have the meanings set out below:
 

Thales UK considers that modern slavery and human trafficking is an abhorrent crime that inflicts unacceptable harm on vulnerable adults and children.  It fully supports the principles of the UK Modern Slavery Act of 2015 (MSA) and is firmly committed to its implementation.  Thales UK has initiated a UK wide programme, supported by the UK Board, to prevent its engagement in commercial arrangements with any organisation or persons that commit offences under the MSA.  

For the purpose of clarification, this MSA Statement includes the parent company Thales UK Limited and all Thales UK wholly owned operational companies in the UK which meet the MSA threshold, as listed below. All such companies operate as a single integrated organisation within the UK and are subject to the same internal rules and instructions:

Thales UK Limited
Thales Ground Transportation Systems Ltd 
Thales GTS UK Limited
Thales DIS UK Limited 
Thales DIS CPL UK Limited

Thales Alenia Space UK Ltd is also included in this MSA Statement as it is a majority owned joint venture subsidiary of Thales Group and registered in the UK.

Separate MSA statements are also published by our joint ventures partners, where Thales UK has a shareholding of 50% or less. These companies include AirTanker and Aquila Air Traffic Management Services.

Thales is a global technology leader in the Aerospace, Defence & Security, Digital Identity & Security and Transport.   In 2021 Thales announced the disposal of its transport business.  The company generated revenues of €16.2 billion in 2021 with 81,000 employees in 65 countries. With 30,000 employees who work in the Group’s technical activities, from research to engineering, Thales has a unique capability to design, develop and deploy equipment, systems and services that meet the most complex security requirements. Thales dedicates considerable human and financial resources to research and development.   Every supplier’s sovereignty is an overriding concern at every link in the supply chain and is partly mitigated by establishing partnerships with academic institutes and developing innovative projects with the Group’s ecosystem of suppliers.   Thales has 17,000 suppliers worldwide, including 73% in Europe.

Thales in the UK is a team of over 7,000 experts, including 4,500 highly skilled engineers, located across 9 key sites. 

Each year, Thales spends over £575 million in its UK supply chain, working with over 2,000 companies. They are dedicated to research and technology, working with partners to invest over £130 million+ in R&D in the UK annually.

Most of Thales' business activities are technology intensive, making innovation a strategic priority and the driving force behind the long-term development of the company. This means that a highly skilled and motivated workforce is essential.  Its resourcing process uses reputable recruiting companies that are required to comply with the MSA conditions set out in Thales UK terms and conditions of purchase as referenced below.  

Trust is essential for societies to flourish. Trust in our institutions.   Trust in our systems. Trust in technology.   Trust in each other.    At a time when progress offers huge opportunities – and faces serious challenges – it is essential that the people we all rely on are trusted.

We strive to turn leading–edge technologies into solutions that are both imaginative and resilient, human centred and sustainable.  So those we serve, our customers, can navigate uncertainty with confidence.

Vigeo Eiris, Moody’s ESG Solutions has ranked Thales Group third in its sector with an Environment, Social and Governance (ESG) overall score characterised as “robust”.

Thales Group has been a member of the United Nations Global Compact since 2003. For the tenth successive year, our Group corporate responsibility policies have achieved Global Compact “Advanced” level, the highest level of achievement in this initiative. Through this status Thales confirms its strong involvement in key areas such as respect for human rights, the development of labour standards, the protection of the environment and the fight against corruption.   In October 2020, during the celebration of the fiftieth anniversary of the United Nations, our Chairman and Chief Executive Officer personally signed the “Statement from Business Leaders for Renewed Global Cooperation” initiated by the United Nations Global Compact.  

Thales Group remains committed to being a responsible and ethical organisation. Transparency International in its Defence Companies Anti-Corruption Index in 2015, which was the last comprehensive assessment of Defence and Aerospace companies’ ethics and anti-corruption programmes that took into account publicly available policies, procedures and commitments as well as those privately held, Thales Group ranked in Band “B”. Band “B” was the second highest rating.  Companies were placed in one of six Bands from “A” (the highest) to “F” (the lowest). Since then, Transparency International have released a 2020 index which just assesses publicly available anti-corruption policies and procedures. Thales was ranked in Band “D”. Therefore, we believe, the 2015 assessment remains the more comprehensive assessment and fuller picture of our commitment to being responsible and ethical.

In 2020, Thales Group embarked on an ISO 37001 “Anti-Bribery Management System” certification process, which was successfully completed in March 2021.   Thales Group is the first French company in its sector to be certified to the ISO standard and one of the first companies in its segment worldwide on the main stock market index in France (the CAC 40) to have obtained this certification.

The Thales UK supply chain is complex, global and multi-tiered. Thales UK procures goods and services from a wide variety of suppliers in the UK and overseas. The diversity of those goods and services acquired is a product of the multiple businesses within Thales UK and the global markets in which they operate. Thales UK also acquires significant volumes of goods and services from other parts of Thales Group, predominantly in Europe.

We set a high bar for ourselves and our suppliers.  The Procurement organisation deploys common policies and practices across all Thales UK businesses under a single operating model, enabling standard approaches to be taken across core subjects including the measures to be taken in respect of human rights and modern slavery.

Thales Group uses a third party Corporate Responsibility Supply Chain Assessment tool to provide a deep dive assessment of our supply chain and any risks, including breaches of the MSA, within its sub-tiers. More details are described in the section “Vendor Screening” below.

Thales UK Procurement Director is responsible for ensuring compliance of the Procurement function and its supply base to the MSA Policy and obligations under the MSA.  The CPO reports directly to the UK Chief Operating Officer (COO), who, in turn, reports to the Thales UK Chief Executive Officer (CEO).

Within the Procurement function is the UK Category Management team.  Part of its responsibilities is to define, implement and measure compliance to Thales UK’s approach to all issues within the sustainability and regulatory perimeter, including the requirements of the MSA.  The UK Social Value and Sustainability Head of Procurement has annual objectives related to Thales UK’s Sustainable Future programme.

Modern Slavery & Human Trafficking Policy

Thales UK has a Modern Slavery & Human Trafficking Policy (MSA Policy). Adherence to this policy and other related documents are regularly audited by the Quality function of Thales UK. The MSA Policy sets out the steps that it is taking in order to implement the MSA. 

The MSA Policy includes the following:

• A description of the meanings of slavery and servitude; forced or compulsory labour and human trafficking so that Thales Personnel are more easily able to understand and recognise these situations;
• A description of the requirement for the MSA Statement, including the commitment that the MSA Statement must be approved by the UK Board and signed by the Thales UK CEO and CPO; 
• A commitment to continuous improvement. An example of which is a Proposed Improvement Plan from a gap analysis undertaken after completing the recent UK Government Modern Slavery Assessment Tool;
• A description of the escalation and grievance mechanism.

Policy Provisions

The following provisions are a requirement for all of the Thales supply chain and are included in the Thales Integrity & Corporate Responsibility Charter and are part of the Thales Vendor Assessment Tool.

1. Adherence to local and national laws
2. Freedom of workers to terminate employment
3. Freedom of movement
4. Freedom of association
5. Prohibits any threat of violence, harassment and intimidation
6. Prohibits the use of worker-paid recruitment fees
7. Prohibits compulsory overtime
8. Prohibits child labour
9. Prohibits discrimination
10. Prohibits confiscation of workers original identification documents
11. Provides access to remedy, compensation and justice for victims of modern slavery

Code of Ethics

We are committed to conducting our business in a lawful and ethical manner. Since 2001, Thales Group has published a Code of Ethics defining the guidelines of behaviour required within the Group, including those expected towards suppliers and employees. The Code of Ethics addresses Thales Group’s responsibility to its staff including its obligation of equality of treatment, avoiding any discrimination and ensuring respect. It also addresses the requirement of all suppliers to comply with its principles in relation to human rights and labour standards and is fully implemented and applied within Thales UK.

Code of Conduct: Prevention of Corruption and Influence Peddling

Thales Group has a zero tolerance policy concerning corruption and influencing peddling. The Code of Conduct defines the risks relating to corruption and influence peddling, and the types of conduct that are prohibited by Thales.

All Thales employees in the UK are now required to refresh and confirm their knowledge of the Code of Conduct on an annual basis.

Whistleblowing Policy

Thales UK is committed to conducting its business with honesty and integrity and expects all its employees to maintain such high standards. A culture of openness and accountability is maintained and clear communication channels are defined within the “speak up” programme so that any issues can be reported in confidence, with the assurance that they will be investigated and appropriate action taken. This reporting is encouraged to be made using the Thales Alert Line.

Thales Alert Line

The Thales Alert Line platform is intended to receive reports concerning any of the conduct or situations listed below, raised by an individual acting in good faith. The Alert Line can be used by all employees, including occasional employees of the Group (temporary or contractor) and all third parties, such as a customer or supplier of the Group or members of the general public. 

1. Human Rights abuse
2. Harassment/Discrimination/Workplace Violence
3. Data protection issues
4. Bribery or influence peddling
5. Fraud
6. Money laundering, financial and accounting crimes
7. Conflicts of interest
8. Anti-competitive practices
9. Trade compliance 
10. Product Safety
11. Health and Safety
12. Information Security and Privacy
13. Environmental Issues
     

Actions Undertaken in the Event of Suspected Breach of MSA

Thales Group maintains a written process setting out the actions to be taken in the event that any unethical issues, including a breach of the MSA is reported. The Alert Line can be used to report such breaches. The procedure requires that an Investigating Officer is appointed for any incident notified, who will involve any other relevant personnel where additional subject matter expertise is required. 

In the event that a suspected MSA breach is identified in the supply chain, the Investigating Officer will work with the UK Social Value and Sustainability Head of Procurement, the supplier concerned and the appropriate authorities to establish the actual situation and implement any necessary corrective actions, to address both the supplier non-compliance, remedy and assistance to any modern slavery victims.

Thales places Corporate Responsibility at the heart of its operations and expects full compliance from its suppliers and sub-contractors.

Vendor Screening and Third Party Due Diligence

As part of Thales UK’s screening of Associated Persons in accordance with the UK Bribery Act and its own internal compliance programme, an assessment will be made of supplier third parties in relation to the principles of the MSA.

Thales Group uses a third party provider, Intertek, to undertake its compliance risk screening processes and ability to assess breaches of the MSA within its sub-tiers. In addition to the entry level checking explained in the paragraph “Vendor Assessments and Re-Assessments” below, Thales UK uses these tools to ask additional screening information of its most strategic and high risk suppliers (by country and commodity). These suppliers submit a detailed Self-Assessment Questionnaire within the tool with focussed questions on modern slavery, human rights, health & safety and environmental protection and receive a detailed report and where necessary corrective action plan with recommendations. 

Vendor Assessments and Re-Assessments

Thales Group performs thorough checks on potential suppliers before they are selected for use as described below. It repeats such assessments at periodic intervals throughout the life of that supply or sub-contract.

The Thales Group vendor assessment tool includes a section on modern slavery and human trafficking to establish whether suppliers comply with the UK MSA and have implemented appropriate controls of their own in their supply chain in this area.

The vendor assessment tool includes requests for information in relation to the following items to which all its suppliers are to respond:

• its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
• the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place and the steps it has taken to assess and manage that risk;
• its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains.

As part of the on-boarding process, Thales Group assesses if there is risk of vulnerable worker groups such as children, migrant, women and refugees, as well as the type of work involved such as temporary, hazardous and low or unskilled.

Integrity & Corporate Responsibility Charter

The Thales Responsible Purchasing policy is based on six strong commitments outlined in 2020. Through this policy, Thales asks its suppliers and subcontractors to adhere to its Corporate Integrity and Responsibility Charter, which reflects the main principles of the United Nations Global Compact
and its Code of Ethics. In 2021, 97% of the Group’s new suppliers committed to these principles, with the target of reaching 100% by 2023.

Thales UK requires all new and legacy suppliers to sign its Integrity & Corporate Responsibility (ICR) Charter.  The ICR Charter specifically addresses human rights, employment practices, anti-corruption, other legal practices (including competition & anti-trust, insider trading, and fraud & deception), conflicts of interest, maintenance of accurate records and audit rights, protection of information, environment, health & safety, global trade compliance and the requirement to operate an ethics and compliance programme.

The relationship between Thales Partners and Suppliers is an important component for building sustainable business success. Thales Group expects from its Partners and Suppliers full compliance with all applicable laws and regulations of the countries where they are registered, as well as where operations are managed or services provided. 

Conflict Materials

Concerning minerals originating from conflict areas (Conflict Minerals), Thales Group carries out its due diligence and updated its position in early 2022 to integrate into its processes the obligations required by European regulations in force as of 1 January 2021.

Vendor Country Risk Management

In order to reduce the multiple risks associated with international sourcing, Thales UK works through Thales Group’s International Procurement Offices (IPOs) present in China, Singapore and India. The IPOs operate in accordance with Thales policies, procedures and operating models. They assess, select and manage suppliers in those countries and the locality using Thales Group standard processes. 

The Thales IPO comprises experienced sourcing professionals, focused on the identification and development of suppliers having the right scale, size, standards and competence to meet Thales requirements. The India IPO also performs supplier assessment and audits in accordance with Thales processes, including asking suppliers to complete the Thales Integrity and Corporate Responsibility Charter and third party Corporate Responsibility Supply Chain Assessment questionnaire. These suppliers also receive the Thales UK Sustainability Guide.

Contractors and Other Temporary Workers

Where Thales UK requires temporary workers, it uses resourcing agencies which are contractually required to ensure that any such personnel are provided in compliance with the MSA. Such resourcing agencies are also subject to all the Thales UK vendor screening and assessment processes to ensure that this is the case.

Procurement Risk Management

Risks associated with the procurement process are managed to reduce the potential failures using monthly Key Performance Indicator (KPI) analysis e.g. cost, quality and delivery risks. This is monitored using the UK and local Country Business Unit procurement dashboards and process effectiveness reviews. Process compliance is also reviewed through use of the Thales Group e-acquisition tool.

In addition, any procurement failure is monitored as part of the Thales Group Enterprise Risk Management Programme which assesses risks on an annual basis Group wide, including over dependency on a supplier and supply chain transformation issues through a series of checkpoint questions.

Category Segmentation: Thales Group divides its procurement into six segments across which there are 42 Category Codes and/or 207 Procurement Category Codes (PCCs). Thales UK has performed a sustainability risk RAG (Red, Amber or Green) assessment on these categories to identify areas of concern including: emissions, waste, water, ethics, labour standards and material criticality. The table below shows this structure and an example in each segment where our initial assessment has identified the greatest risk with respect to possible modern slavery in its supply chain:

Thales UK operates a sustainable procurement heat map which assesses each of the categories for risk against a number of criteria including ethics and labour standards, which includes the MSA.

Procurement Category Process: Thales UK undertakes a standard process to select and manage suppliers of common goods and services to the businesses of Thales UK. This category policy review process enables category lead buyers to assess products, markets and supply chains to identify policy preferred suppliers. Within this, sustainable procurement and compliance requirements, including the MSA and the Bribery Act, are considered in their applicability and risk to this commodity group.

Acquisition Approval Process: For all high risk/value procurements a formally governed “purchase vet” process is followed and an assessment of compliance with the MSA will be included.
 

Key Performance Indicators

The KPIs below are used to assess compliance with these processes:

• % of suppliers who have signed the Integrity and Corporate Responsibility Charter; 
• % of suppliers assessed in the Third Party CSR tool; 
• % of spend with suppliers selected under the category policy review process; 
• % of categories with a sustainability risk RAG assessment completed; 
• % of its strategic suppliers under the Strategic Business Review (SBR) process; and
• % of completed supplier performance tool.

Awareness Communications and Training of Thales Personnel

Thales UK communicates its MSA Policy and its position on this subject as part of the UK Ethics, Integrity and Corporate Responsibility Programme to ensure that all Thales Personnel understand that this is an important matter for Thales UK. This includes:

• Procurement awareness training;
• Procurement newsletters;
• Induction training for new Procurement recruits;
• Awareness Videos i.e. Gangmasters & Labour Abuse Authority (GLAA) video;
• Intranet articles (Procurement and Ethics & Integrity pages);
• Sustainability Guide 
• CSR 2021 – 2022 Integrated Report 

Specific targeted training is provided to the Procurement function to make them aware of the MSA and to consider which parts of the supply chain from which they purchase are most susceptible to potential slavery risk. 

In 2021, a Modern Slavery e-Learning was mandated to all staff in Procurement, Human Resource, Real Estate and Health, Safety and Environment (HSE) functions.

As part of the Thales UK Sustainable Future Programme, guidance on how to identify potential slavery or trafficking issues has also been created and issued to the Procurement community.

Terms & Conditions of Purchase

As part of its annual review, Thales UK includes any necessary updates to its standard terms and conditions of purchase which relate to suppliers’ due diligence on their supply chains to ensure that they are free from modern slavery. 

Supplier Communications

Thales UK takes the opportunity at all appropriate supplier meetings to communicate Thales UK’s policy on modern slavery and human trafficking and the importance for suppliers to perform due diligence on their own supply chain to ensure that they are not in breach of the MSA.

All Thales UK Buyers are instructed to ensure that their current or potential suppliers are made aware of the requirements of the MSA and Thales UK’s policy in respect thereof. Thales issues the Sustainability Guide to its suppliers which includes the subject of modern slavery, the MSA Policy and our expectations of suppliers.

The Thales UK internet has a dedicated Supplier page containing our Code of Ethics, Supplier Sustainability Guide and our Modern Slavery Act Statement. 

Thales Involvement in Industry Sector Groups

ADS Human Rights Working Group: Thales UK is a member of ADS, the leading aerospace, defence, security and space trade organisation for companies in the UK. Activities are focused around the following key areas: influencing the policy debates of most importance to our industries; supporting UK manufacturing and industries’ supply chains; encouraging investments in technology and innovation and supporting business development opportunities. 

The need to consider the human rights impact of an organisation’s business activities is a subject of increasing significance for members of ADS.  Since the launch of the UN Guiding Principles on Business and Human Rights (UNGPs) in 2011, ADS members are keen to work together to articulate what the salient issues for members are and what they are doing or need to do, to respond to these issues. It is not just regulation driven but part of our collective approach to responsible businesses delivering against the UN Sustainable Development goals, in this case Sustainable Development Goal Number 8 “Decent work and Economic Growth”. 

SC21: Thales sponsors approximately 30 suppliers in the SC21 programme (a change programme managed by ADS), which is designed to accelerate the competitiveness of the UK aerospace & defence industry by raising the performance of its supply chains. This community meets frequently and Thales has communicated to this community on many issues related to sustainability, including the MSA.  

ADPG: The CPO of Thales UK represents Thales UK on the Aerospace and Defence Procurement Group (ADPG), a sector wide body sponsored by the Chartered Institute of Procurement and Supply (CIPS), with CPO’s from the main Primes in the Aerospace and Defence Sector. The mission of the ADPG is to promote co-operation and common solutions to the key challenges facing the sector and in this respect the sector response to MSA has been reviewed, together with proposals to deploy appropriate screening solutions.  CIPS itself is committed to ensuring that all Procurement teams, in all businesses, put in place tools and policies to address MSA. 

MOD SPWG: The Ministry of Defence Sustainable Procurement Working Group (MOD SPWG) is a collaborative Industry and Government panel of which Thales UK is a member.  The working group shares and discusses threats and opportunities within the defence industry relating to environment, economic and social issues, including modern slavery and human trafficking.  

Thales is proud of the progress we have made to further advance human rights throughout our business.  We will publish our commitments annually and report progress.  

Thales UK has identified four fundamental commitments for 2022. 

• Review our human rights policies and processes
• Engage with organisations that are supporting activities to eliminate modern slavery
• Expand our internal training delivery
• Review our supply chain policies, due diligence and assessment processes.
• Thales Group embarked on a certification process to achieve the ISO 37001 “Anti-Bribery Management System which was successfully completed in March 2021. Thales UK is aiming to have this certification extended to cover the UK in 2022.

Thales UK considers that modern slavery and human trafficking is an abhorrent crime that inflicts unacceptable harm on vulnerable adults and children. We fully support the principles of the UK Modern Slavery Act of 2015 and is firmly committed to its implementation. For a company that's serious about acting responsibly, good intentions are simply not enough. Thales has recognised this for some time, progressively embedding corporate responsibility in all its business processes.

In 2021 we worked across our business to improve policies and processes in order to improve our approach to tackling the risks of Modern Slavery.  We have further implemented Modern Slavery awareness training for those working with supply chains and recruitment of resource.

In 2022, we have challenged ourselves to do more as detailed in Our 2022 Commitments and will continue to report on an annual basis.

Signed for and on behalf of the Board of Thales UK

Dated:  29 June 2022