Thales UK’s UK Modern Slavery & Human Trafficking Policy, as described below.
Thales Group or the Group
Thales S.A and all legal entities being subsidiaries thereof (whether direct or indirect).
Any and all individuals (permanent staff, contractors and temporary staff) working in any capacity for Thales.
All Thales Group wholly owned legal entities registered in the United Kingdom.
Thales UK Limited board of statutory directors.
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 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 (formerly known as Thales Transport & Security Ltd)
Thales GTS UK Limited (formerly Thales Ground Transportation Systems UK Ltd)
Thales DIS UK Limited (formerly known as Gemalto UK Ltd)
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, Aquila Air Traffic Management Services and UAV Tactical Systems (U-TacS).
Thales Organisation and Structure
Thales is a global technology leader in the Aerospace, Transportation and Defence, Security and Space markets. In 2020, the company generated revenues of €19 billion with 80,000 employees in 68 countries. With its 30,000 engineers and researchers, Thales has a unique capability to design, develop and deploy equipment, systems and services that meet the most complex security requirements. Thales has an exceptional international footprint, working with customers, suppliers and local partners around the world.
Thales in the UK is a team of over 7,000 experts, including 4,500 highly skilled engineers, located across nine key sites.
Each year, Thales spends over £575 million into 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.
Dow Jones Sustainability Index: In 2020, for the fourth consecutive year, Thales was ranked among the companies that have developed the most advanced corporate responsibility policy worldwide within the Aerospace and Defence sector.
Thales Group has been a member of the United Nations Global Compact since 2003. For the ninth 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.
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 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.
Thales UK holds the world class Procurement Excellence Programme Certification to Platinum level, from the Chartered Institute of Procurement & Supply(CIPS). Thales in the UK is now one of only 16 organisations globally to have this level of corporate certification. This covers a number of topics including ethics, corporate social responsibility, diverse supply chains and risk management.
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. 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 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.
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 Chief Operating Officer, 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.
How is Thales UK implementing the MSA?
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 Chief Executive Officer and CPO; and
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.
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.
Code of Conduct: Prevention of Corruption and Influence Peddling
Thales Group has a zero tolerance policy concerning corruption and influencing peddling. This code of conduct defines the risks relating to corruption and influence peddling, and the types of conduct that are prohibited by Thales.
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 process setting out the actions to be taken in the event that any unethical issues, including a breach of the MSA is reported. We have an alert line where such breaches can be reported. 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 Group uses a third party provider 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.
In addition, all new suppliers are required to sign the Thales Integrity and Corporate Responsibility Charter covering a number of topics including human rights, employment practices, anti-corruption, ethics and health, safety & environment.
As part of the on-boarding process, Thales 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.
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 process including supplier’s completion of 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 44 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 IS &/IT Services
C12: IT & Telecomm Services
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
SF General Expenses
C15: Transport & Logistics
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, 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 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
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 process;
% of completed supplier performance tool; and
% of policy preferred category suppliers assessed in the Third Party CSR 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:
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 MSA risk.
As part of the Thales UK Sustainable Future Programme, guidance on how to identify potential slavery or trafficking issues has 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.
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.
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 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 continued to develop and embed a wide range of measures to implement an effective MSA programme in relation to its supply chains, but recognises that sustained work with its supply chain, particularly at lower tier levels and in all the countries where it purchases will be required. It will continue to report on an annual basis.
Signed for and on behalf of the Board of Thales UK