1. Definitions

In this document the following abbreviations and definitions shall have the meanings set out below:
 
Thales Group or the Group means Thales S.A and all legal entities being subsidiaries thereof (whether direct or indirect).
Thales Personnel means any and all individuals (permanent staff, contractors and temporary staff) working in any capacity for Thales.
Thales UK means all Thales Group wholly owned legal entities registered in the United Kingdom.
UK Board means the Thales UK Limited board of statutory directors

2. Introduction and Scope

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 all Thales Group wholly owned companies in the UK which meet the MSA turnover thresholds, 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 (UK) Limited
  • Thales Transport & Security Limited

3. Thales Organisation and Structure

Thales Group operates in 56 countries worldwide in the fields of aerospace, space, ground transportation, defence and security.   It has 61,000 employees and is domiciled in Paris, France.  Its turnover in 2015 was Euros 18.9 billion.

Thales Group has been a member of the United Nations Global Compact since 2003.

Thales UK Limited is a wholly owned subsidiary of Thales SA (the ultimate parent company within Thales Group). It is the principal Thales Group operating company in the UK and maintains twelve key locations as well as a presence on multiple customer sites.  All the other Thales UK companies are subsidiaries of Thales UK Limited.

Thales UK has approximately 6,100 employees based in the United Kingdom, with a turnover of £1.8 billion.

The business of Thales includes research, development, manufacture and supply of technology and services within the Aerospace, Defence, Security, Transportation and Space sectors. Its effective and innovative strategies play a leading part in shaping the steady convergence of military and civil technologies for both domestic and export markets. Thales works with its customers to create a safer world by providing tools needed to perform critical tasks through enhanced information gathering, decision making and communication. Some examples showing Thales breadth of activities include the following:
  • More than 130,000 passengers every day, use Thales in-flight entertainment systems, equivalent to almost 50 million viewers per year;
  • Thales secures the information systems of 19 of the world’s 20 largest banks;
  • Thales provides the UK Royal Navy with the key situational awareness sensors and systems to allow the fleet to operate effectively at sea;
  • Almost every train in the UK is fitted with Thales’ Train Protection & Warning System.
Most of Thales's 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 in Section 6.

Thales is a firm supporter of Investors in People (IiP) accreditation. Over 95% of Thales UK sites have received IiP accreditation awards ranging from Standard to Gold.  In 2017 Thales is looking to gain a single UK wide accreditation.

4. Thales UK Supply Chains

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. Currently, 80% of our external spend is inside the UK. 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.

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 Modern Slavery.

5. Who is responsible in Thales UK for ensuring compliance with MSA?

Thales UK Chief Procurement Officer (CPO) 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 UK VP Supply Chain, who, in turn, reports to the UK Chief Operations Officer (COO).

6. How is Thales UK implementing the MSA?

Modern Slavery & Human Trafficking Policy

In early 2016, Thales UK issued its 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, COO and VP Supply Chain; and
  • A list of actions that Thales UK has already implemented and intends to undertake to meet the principles of the MSA, which are described in this Section 6.

Code of Ethics

Since 2001, Thales Group has published a Code of Ethics (the 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.
 

Vendor Screening

Thales UK is developing the deployment of its compliance risk screening tools and processes in 2017 to assess breach of the MSA within its sub-tiers. It is also undertaking MSA risk mapping of its suppliers by nature of supply and countries to identify and prioritise higher risk third parties.
 

Vendor Assessments and Reassessments

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

The Thales UK vendor assessment tool includes a section on modern slavery and human trafficking to establish whether suppliers comply with the MSA and have implemented appropriate controls of their own 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.
In addition, all new suppliers are required to sign the Thales Purchasing and Corporate Responsibility Charter which includes sixteen questions from the UN Global Compact relating to the supplier’s compliance with its principles in respect of human rights, labour, environment and prevention of corruption. All new suppliers are also required to read and accept the terms of the Code of Ethics.
 

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) in some countries. IPOs are 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 right scale, size, standards and competence to meet Thales requirements. The India IPO also performs supplier assessment and audits in accordance with Thales process including supplier’s completion of the Thales Purchasing and Corporate Responsibility Charter and Health, Safety & Environment questionnaire. These suppliers also received the Sustainable Procurement – Supplier’s Guide.
 

Procurement Risk Management

Category Segmentation: Thales UK divides its procurement into 5 segments across which there are 40 family categories. Thales UK has performed a Sustainability Risk RAG 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:
 
Segment Example Family Category with MSA potential risk 
S1 General Expenses F15: Freight and Logistics
S2 IT Solutions F21: IT HW Solutions
S3 Systems and Equipment F80: Installation on Customer Sites
S4 Industrial Purchases F50 Electronic Components
S5 Systems & SW Engineering F61 Software Development
 
Thales UK is now working on a new Sustainable Procurement Heat map – assessing each of the Family Categories for risk against a number of criteria including Ethics and Labour Standards (which includes MSA).

Procurement Family 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 Family Policy Review (FPR) process enables the Category Lead Buyers to assess products, markets and supply chains to identify policy preferred suppliers. Within this three part assessment, 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 formal “Purchase Vet” process is followed and an assessment of compliance with MSA will be included.

Sustainable Procurement Internal Audits: conducted as part of the programme of activities preparing for ISO 20400 Sustainable Procurement. Audit findings are recorded and tracked to completion. MSA requirements have been included in these audits.
 

Key Performance Indicators

Thales UK does not have specific KPIs relating to the MSA, since this subject is one of many regulatory and ethical subjects that are managed under the processes described in the paragraphs above. The KPIs below are used to assess compliance with these processes:
  • % of its suppliers who have signed the Corporate and Social Responsibility Charter and the Environmental/Health & Safety questionnaire;
  • % of spend with suppliers selected under the FPR process;
  • % of Family Categories with a Sustainability Risk RAG Assessment completed;
  • % of its Strategic Suppliers under the Strategic Business Review (SBR) process; and
  • % of its Strategic Suppliers with a risk assessment completed.

Awareness Communications and Training of Thales Personnel

Thales UK will maintain regular awareness communications relating to its policy on Modern Slavery and Human Trafficking and its position on this subject as part of the UK Ethics Programme to ensure that all Thales Personnel understand that this is an important matter for Thales UK. This will include:
  • Buyer awareness roadshows and all employee sitcoms
  • Procurement newsletters
  • Quarterly Procurement communications events
  • Procurement on a Page guidance via the internal intranet
  • Induction training for new Procurement recruits
  • Intranet articles (Procurement and Ethics pages)
  • Sustainable Procurement – Acquisition Guide
  • Passport to Purchasing training
Specific training has already been provided to the Procurement function in 2016 to make them aware of the issue and to consider which parts of the supply chain, from which they purchase, are most susceptible to this risk. In 2017 this training will be extended to the Quality function and other areas deemed appropriate.

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

Terms & Conditions Of Purchase

Thales UK has updated its standard terms and conditions of purchase to include requirements that suppliers perform the appropriate 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 “Sustainable Procurement – Supplier’s Guide” to its suppliers which includes the subject of Modern Slavery, our policy and our expectations of suppliers.
 

Thales Involvement in Industry Sector Groups

SC21: Thales sponsors approximately 50 suppliers in the SC21 programme, which is a change programme managed by ADS ( the trade organisation representing the aerospace, defence, and security industries in the United Kingdom), 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 the 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.

PCF: The ADPG has been developing a Procurement Competency Framework. This is standard maturity assessment framework which can be used at all tiers of the sector’s supply chain. It should be deployed from 2017 onwards and will include assessments of supplier competencies around sustainability/regulatory risk including MSA.

MOD SPWG: Ministry of Defence Sustainable Procurement Working Group 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. 
 

7. Conclusion

Thales UK is fully committed to the combat of modern slavery and human trafficking both within its supply chains and in treating its own employees with equality, dignity and respect in accordance with the Code of Ethics.

It has already commenced a wide range of measures to implement an effective MSA programme in relation to its supply chains, but recognises that further development and refinement will be required to address all its supply chain risks, particularly at lower tier levels and in all the countries where it purchases. It will report developments and improvements to its MSA programme on an annual basis.

Signed for and on behalf of the Board of Thales UK  
 
Victor Chavez   Denis Plantier Kathy Jenkins
Thales UK Chief Executive Officer Thales UK Chief Operating Officer Thales UK VP Supply Chain

Dated:  6th January 2017
 
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