Modern Slavery Act Statement by Breville Group Limited & Subsidiaries
We fully support the goals of modern slavery laws, such as the Australia Modern Slavery Act 2018 (Commonwealth), U.K. Modern Slavery Act 2015, and California Transparency in Supply Chain Act 2010. We seek always to exemplify fair human rights and labour practices around the globe. Our Code of Conduct for our employees and Ethical Sourcing Policy for our suppliers underpin our culture.
This statement describes the steps we are taking in an effort to combat the risks of slavery and human trafficking in our supply chain.
Breville Group Limited is headquartered in Sydney, Australia and operates through direct and indirect subsidiaries in Australia, New Zealand, the Americas, Europe, the Middle East and Asia. We actively manage a number of consumer electrical appliance brands, with a core focus in the small kitchen appliances segment. We own or have rights to the Breville, Sage, Kambrook, ChefSteps, Baratza, and Lelit brands, as well as other brands, and have a license agreement with Nestle Nespresso SA for the distribution of Breville co-branded Nespresso portioned (capsule system based) espresso machines in a number of global markets.
Our Supply Chains and Distribution Channels
Our supply chain and distribution channels include:
- Manufacturing of products sold under our tradenames and trademarks by third-party manufacturers located in multiple geographies, currently predominantly China.
- Procurement of products, parts, supplies and services from suppliers located in multiple geographies, currently predominantly China.
- Warehousing and distribution from strategically located third party facilities around the globe.
- A direct sales force, and third party distributors and channels, retained to distribute and sell products.
Our Approach to Preventing Slavery and Human Trafficking
We are committed to maintaining business operations, including our supply chain, that do not use or rely on modern slavery or human trafficking and to acting ethically and with integrity, and to implementing and enforcing effective systems and controls in an effort to prevent slavery and human trafficking in our supply chain.
Employee Accountability Standards: We hold our employees accountable under our Code of Conduct, our human resources policies and applicable laws. Our Code of Conduct contains a section entitled "Respect for Human Rights and Prohibition of Modern Slavery and Human Trafficking," where we state that we "embrace the fundamental principles espoused in the United Nations' Guiding Principles on Business and Human Rights as a framework for implementing respect for human rights and comply with all applicable modern slavery and human trafficking laws." Subject to the requirements of local law, any employee found to have engaged in slave labour or human trafficking acts will be subject to disciplinary proceedings. We encourage our employees to communicate grievances and to feel safe reporting any violations to their supervisor or Human Resources department.
Supply Chain Accountability Standards:
- Ethical Sourcing Policy: Our strategic suppliers are required to adhere to our Ethical Sourcing Policy ("Policy"), to conform to its standards and provisions and to apply the Policy to their own suppliers engaged in the production of goods for us. As stated in our Policy, we require that, as a condition of doing business with us:
- Suppliers agree not to engage in any form of human trafficking or slavery. We provide suppliers with guidance of acceptable management practices for evaluating and addressing risks of human trafficking and slavery in their own supply chain including not using forced or involuntary labour of any type or illegal child labour. All employment must be voluntary and legal.
- Suppliers comply with all applicable wage and hour laws and regulations including those relating to minimum wages, overtime hours, piece rates and other elements of compensation and provide legally mandated benefits.
- Suppliers treat all employees with respect and not use corporal punishment, threats of violence or other forms of physical coercion or harassment.
- Suppliers seek to provide their personnel with safe and healthy working environments.
- Suppliers provide their employees with a safe process whereby they can report any grievances or violations.
- Risk-based assessments and audits: We verify a supplier's compliance with the Policy through audits or on-site inspections in order to evaluate a supplier's compliance with our Policy and other supplier standards. Such audits or inspections can be carried out by us or by a third party at our request. From time to time our staff have conducted audits of our key suppliers' operations and facilities for a broad range of standards including, but not limited to, quality, environmental, human resources and security standards and operations. We periodically conduct a risk assessment, based on a geographical location, to determine status and risk in our supplier base and include a review of compliance with modern slavery and human traffic laws. These audits are arranged in advance with the cooperation of the supplier and typically consist of interviews with supplier management and facility inspections.
- Responsibility of Suppliers: We require our suppliers to comply with our Ethical Sourcing Policy through our contracts and/or policy requirements. In addition, we require our contract manufacturers to ensure that their supply chains adhere to the same standards. Our suppliers are responsible for ensuring that the manufacture, supply and distribution of our products comply with laws, including laws regarding slavery and human trafficking, of the countries in which the suppliers are doing business. A supplier's use of slave labour or engagement in human trafficking will be considered a material violation of our Policy which would result in termination. A supplier's failure to comply with other elements of our Policy will result in appropriate disciplinary action which may include, without limitation, a discontinuity of our relationship.
- Conflict Minerals: We are committed to working with manufacturers and suppliers who responsibly source minerals from conflict-free sources and share our value of human rights. We support the goals of ending the violence surrounding conflict minerals in areas such as Democratic Republic of Congo and neighboring countries, and will take swift action if we discover there is a risk that they are sourcing conflict minerals for any materials or parts used to manufacture our products.
- Our Current Risk Analysis: We assess our risk to be low to moderate. The risk is partially mitigated by the type of manufacturing applicable to our products: requiring high end, well trained and skilled assembly, rather than low skilled transitory labour. Additionally, we maintain long-term relationships with our manufacturing partners, which are collaborative in terms of bringing innovation projects to market, which in turn fosters a close understanding of each other's businesses. In most cases, we represent a significant part of our manufacturing partners' business, affording us influence over expected standards. We regularly visit our partners' plants and obtain observable evidence of how the facilities are operated. Our engineering teams make frequent visits to the manufacturing locations during the commercialisation phase of innovation projects. Our Chief Operating Officer and teams normally make visits 3-4 times per annum to review operational plans and, critically, our quality assurance teams conduct visits on a weekly basis to quality assess and release production batches. During the Covid lockdowns in China it has been more difficult for our COO and engineering teams to visit manufacturing facilities, but our weekly QA visits have continued uninterrupted. To support our regular internal observations, Breville commissions SMETA Audits (Sedex Member Ethical Trade Audits) conducted by AACs (Affiliate Audit Companies (AAC)) which comprehensively cover four pillars: labour standards, health and safety, the environment and business ethics. In 2018, we set a target to increase the number of audits performed annually from 5 to 10. In FY21, we audited 12 suppliers; in FY22 we increased this to 20 audits covering over 67% of our annual purchases. Sedex membership also gives us access to any audit performed by the organisation, whether commissioned by us or by another Sedex member. A number of our suppliers, representing over 85 percent of our supplier spend, are connected to the Sedex platform and comply with SMETA standards.
Detailed audit reports and findings are received and reviewed by our General Manager Quality and COO. The severity of any non-compliance, and hence rating of the vendor, is completed, and any that do not meet our internal 'baseline' standard are sanctioned appropriately.
Company Employee and Management Training: Employees receive training on our Code of Conduct, which requires employee compliance with applicable laws and our policies. Management and relevant employees in our supply chain and procurement functions receive training and information on slavery and human trafficking laws and best practices in risk identification, mitigation and prevention.
We are committed to the highest standards of conduct throughout our global supply chain. On a regular basis, we review and update our policies and procedures to ensure that our high standards are upheld and to guard against the mistreatment of anyone in our supply chain.
Objectives: We seek to comply, in general, with the standards manifested by the Australia Modern Slavery Act 2018 (Commonwealth), U.K. Modern Slavery Act 2015, and California Transparency in Supply Chain Act 2010, irrespective of when and whether such Acts may apply by law to our operations. The general objectives of such Acts are aligned with the way that we manage our business and supply chain, and with the principles espoused by our Board of Directors of fairness and humane treatment of all individuals around the world involved in the production and distribution of our products.
Additional Statement in Response to Covid-19: We remain committed to the highest standards of conduct and have continued to take steps to reduce the risks of modern slavery occasioned by the Covid-19 pandemic. We have not compromised our standards on account of the pandemic.
We have increased the frequency of communication with our suppliers during this time and continue to foster the relationships we maintain with them. Our COO periodically conducts video teleconferences with our suppliers, including weekly or bi-weekly meetings with our top five suppliers, which supply over 78% of our products. In the past, these meetings had been conducted approximately quarterly.
We have continued to ensure that our suppliers are taking heightened precautions to protect their workers by providing reasonable screening methods such as checking workers' temperature, ensuring workers wear masks, and educating workers on hygiene to lower the risk of virus transmission. We continue to inquire about the health of their workers and, as of the time of this statement, have had no reports of workers who have contracted Covid-19 from our top five suppliers. We have also ensured that workers continue to have access to grievance mechanisms designed to give a voice to workers whose safety may be at risk.
Additionally, we continue to act responsibly with our suppliers by ensuring that our terms and pricing have remained consistent with the market and that we continue to pay on the same cadence. We continue to act as a responsible partner and collaborate with our suppliers to support their evolving needs during this time. For example, in one instance, we increased orders to a supplier that was suffering temporary volume reductions, to ensure that they could run at a steady pace without disruption.
While we continue to conduct quality audits for every shipment, we've had to defer our normal pattern for social audits and personal visits because of travel bans during the pandemic. However, as soon as travel bans are lifted, we plan to resume social audits in these locations.
As a member of SEDEX, we conduct 4 Pillar Audits in accordance with the SMETA audit standards. By participating in SEDEX, we are reinforcing our commitment to reduce the risks of modern slavery. Our membership in SEDEX provides us with access to audit reports for numerous factories as well as self-assessment questionnaires that address inherent risks. We continue to encourage our manufacturing partners to become members of SEDEX and we continue to conduct social audits on a broad basis in areas where travel bans do not exist.
Assessing Effectiveness of our Actions
We are continuing to monitor and assess the efficacy of the processes and procedures we have established to prevent slavery and human trafficking. Our assessments include reviews of our employee accountability standards, under which employees receive training on our Code of Conduct, as well as reviews of our supply chain accountability standards, whereby we perform risk based assessments/audits and require our suppliers to comply with our Ethical Sourcing Policy. We assess the efficacy by monitoring the results of our processes and procedures, engaging in regular communication with our suppliers and external partners, and completing internal company meetings and governance procedures. As we continue to uphold our processes and procedures, in future reporting periods we will continue to assess the results and update and expand our measures to ensure the prevention of modern slavery and human trafficking in the production and distribution of our products.
Consultation of Entities
In the relevant reporting period, we consulted with the entities we own or control in preparation of this modern slavery statement.
Approval: Breville makes this statement in accordance with section 13 of the Modern Slavery Act 2018. This statement was approved by the Board of Directors of Breville Group Limited, on behalf of itself and all related bodies corporate on 14 October 2022, and signed off by the Chairman of the Board, Tim Antonie. Breville reserves the right to amend or correct this statement from time to time to comply with applicable laws or to reflect business changes.
14 October 2022