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 Chief Executive Officer, COO and CPO; 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.
Code of Ethics
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.
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.
Actions Undertaken in the Event of Suspected Breach of MSA
Thales maintains a written procedure setting out the actions to be taken in the event that any unethical issue (including breach of the MSA) is reported. The procedure requires that an Investigating Officer is appointed by the UK Ethics Director 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 supplier concerned and the appropriate authorities to establish the actual situation and implement any necessary corrective actions, to address both the supplier non-compliance and assistance to any MSA victims.
Since early 2018, Thales UK has been using third party tools to improve 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 this tool to ask additional screening information of its most strategic suppliers. These suppliers submit a detailed Modern Slavery Self-Assessment questionnaire within the tool and receive a detailed report summarising any potential gaps or risk. The supplier also submits other relevant questionnaires on subjects including anti-corruption, labour standards and conflict minerals.
Vendor Assessments and Re-Assessments
Thales UK 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 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 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.
In addition, all new suppliers are required to sign the Thales Purchasing and Corporate Responsibility Charter. This includes sixteen questions from the UN Global Compact which relate 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 the 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 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 UK divides its procurement into five segments across which there are 40 categories. 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:
||Example Family Category with MSA potential risk
|SA General Expenses & IT Solutions
||C15: Transport and logistics
|SB Systems & Equipment
||C80: Installation on customer sites
||If manufactured in a high risk country
||C50 Electronic components
|SE Systems & SW Engineering
||C61 Software Development
Thales UK operates a 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).
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 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 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: These are 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
Risks associated with the procurement process are managed to reduce the potential failures using monthly KPI analysis e.g. cost, quality and delivery risks. This is monitored using procurement dashboards and process effectiveness reviews. Process compliance through use of the Thales Group e-acquisition tool is also reviewed.
Procurement failure is also 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.
The KPIs below are used to assess compliance with these processes:
- % of its suppliers who have signed the Purchasing and Corporate Responsibility Charter and questionnaire and the Health, Safety and Environmental questionnaire;
- % 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 process;
- % of completed supplier performance tool; and
- % of policy preferred category suppliers assessed in T-VERS.
Awareness Communications and Training of Thales Personnel
Thales UK maintains regular awareness communications relating to its MSA Policy and its position on this subject as part of the UK Ethics 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 library
- 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)
- Sustainability Guide
- Passport to Purchasing training
Specific training is regularly 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 MSA risk.
As part of the Thales UK Sustainable Procurement Programme, guidance on how to identify potential slavery or trafficking issues has been created and issued to the Procurement community.
Since 2018, all members of the Procurement function completed a technical competency self-assessment within the Thales UK HR information system. This contains multiple questions from the full set of professional competencies required across the Procurement job family. Included in the system are questions to ensure that Thales Personnel are aware of the MSA and its consequences on Thales UK and its supply chain.
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.
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.
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 business.
SC21: Thales sponsors approximately 50 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: 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.