Modern Slavery Statement
Paladone Modern Slavery & Human Trafficking Statement Financial Year 1st July 2017 – 30th June 2018
This statement sets out Paladone's actions to understand the potential Modern Slavery and Human Trafficking risks related to its business and to put in place steps that are aimed at ensuring that there is no slavery or human trafficking in its own business and its supply chains. This statement relates to actions and activities during the financial year 1st July 2017 to 30 June 2018. As part of the wholesale gifts sector, Paladone recognises that it has a responsibility to take a robust approach to slavery and human trafficking.
Paladone at the outset of this financial year has a staff head count of 107 people across 3 International offices. The headquarters based in Shoreham by Sea in the UK are accountable for 90 of those people with a further 12 people in HK and China and the remaining 5 in California. U.S.A. Paladone continues to see unprecedented growth in the global wholesale gifting sector and anticipates that it will witness sales in excess of £36million this financial year. Whilst every effort is made to drive ethical practice in its supply chains, Paladone looks to go beyond audit and encourage its supply chain to do the same and raise its awareness to issues like Modern Slavery that touches every corner of the globe.
Paladone creates unique gift products for its customers which are sold wholesale to 80 countries around the world. In addition to our UK and USA offices we have an office in Hong Kong with dedicated ethical and quality compliance staff. We work with a number of factories across a large spectrum of product which are all based in China. Our New Product Development team in the UK create and develop products with our China suppliers, which are then presented to our customers by the Sales team. Orders are then placed and the Purchasing team will track the products through to delivery to one of our UK and USA distribution centres or directly to the customer. Paladone also has an online shop which dispatches product from our UK distribution centre.
Our Policy and Due Diligence
The term Modern Slavery is used to encapsulate slavery, servitude, child labour (as defined by the International Labour Organisation) and forced or compulsory labour, as well as human trafficking. Paladone prohibits the use of forced, debt bonded, indentured labour, involuntary prison labour, slavery or human trafficking in its business or supply chain which is enforced through our Supplier Code of Conduct (COC).
We work with our suppliers to meet or exceed the Ethical Trade Initiative (ETI) Base Code, which forms the foundation of our Supplier COC. This is a mandatory requirement for all our suppliers and is subject to an audit both by our Asia-based Compliance team and via third parties. We are members of Sedex and therefore expect a transparent and cooperative attitude from our suppliers to work together towards improving conditions for the people that make our products. For detailed information on our code, please see this link - https://paladone.com/supplier-code-of-conduct.
We track the factories we work with through a database of detailed information from third party and Paladone audits. We have developed a grading system which enables us to rate factories based on their audit standard and work closely with them to rectify any issues found and drive continuous improvement. Our preferred audit standard is the Sedex Members Ethical Trade Audit (SMETA) as the audit framework is built around the ETI Base Code and is widely recognised by the industry as the most thorough standard. It is the only audit format to include Modern Slavery and Human Trafficking dedicated sections in its latest audit format SMETA 6.0 which includes:
• Human Rights based on the UN Guiding Principles
• Transparency in recruitment practices
• The movement of migrant labour across the globe
• Details on the Modern Slavery Act 2015
• An Expanded Business Ethics Module
SMETA audits can be announced or semi-announced and we build relationships to encourage factories to work towards semi-announced audits as it demonstrates a higher level of compliance.
Paladone Internal Policy
Paladone encourages all its workers, customers and other business partners to report any concerns related to the direct activities, or the supply chains of the business through our Whistleblowing policy which is included in our Employee Handbook. The whistleblowing procedure is designed to make it easy for workers to make confidential disclosures, without fear of retaliation, using our disclosure form. Any actions that may need to take place are detailed in the handbook and will be managed by the HR Director.
China Factories Policy
Paladone recognises that we have much less control over the factories we work with and therefore believe that the starting point for reducing the risk of modern slavery and human trafficking will be through taking a non-judgemental approach and building trust. We realise that audits alone do not always go far enough and can sometimes encourage factories to hide non-compliances. Therefore, this area will be one of our focuses for our actions in the coming year, which are detailed below.
High Risk Areas Identified
Paladone’s Compliance and HR teams have conducted a risk assessment to identify high risk areas of the business and have identified the factories we work with in China and temporary warehouse workers in the UK and USA as the highest risk to modern slavery.
As we do not own the factories we work with in China we have less control, and limited visibility due to a relatively small team on the ground in the Far East. As our current process revolves around auditing, we understand that instances of modern slavery and human trafficking may be sometimes missed. We have identified that recruitment of temporary and migrant workers at peak times (June-September) are exposed to the highest risk of exploitation following a workshop the Paladone Compliance and HR departments took part in with Anti-Slavery International.
As a starting point we have mapped the locations of the factories we work with against the number and nature of non-compliances found on audits to identify the factories and areas to focus on as a priority have found that Zhejiang Province comes up as one of the highest risk in terms of potential Modern Slavery indicators. Through training we are aware that non-compliances such as the below can all be potential red flags of risks of modern slavery:
• lack of worker representation
• improper recruitment practices
• unfair fees or deductions from wages
• poor dormitory conditions
• retaining of ID documents
• unfair contracts
• excessive working hours
Map Header: Average Non-Compliances at a Factory (by Province)
Temporary Warehouse Workers
In our main UK warehouse Paladone employs agency workers at busy periods which we are aware of as another high-risk area as we have less control over how agencies have recruited the staff, whether they have taken illegal deductions or deposits and whether they have carried out checks to ensure workers are not victims of human trafficking or forced labour. To minimise this risk Paladone’s HR department conducts interviews with any new agency and uses only specified, reputable employment companies to source labour, always verifying their practices before accepting workers.
Actions for this year
• Further training with Anti-Slavery International to give our staff the skills and knowledge to spot the signs of slavery and human trafficking and raise awareness
• A Modern Slavery and Human Trafficking Workshop with ETI for Paladone Hong Kong Compliance staff and one of our top suppliers in China, plus an ETI Webinar on Modern Slavery and Human Trafficking for our top 20 suppliers.
• After ETI training, suppliers will be asked to fill out a feedback form to show what they have learned and give examples of how they will improve their practices with completion dates. This document will be signed by the supplier to confirm their commitment.
• Incorporating modern slavery and human trafficking sections into our factory audit procedure
• Creating a Supplier Handbook to include our Code of Conduct which suppliers must sign to show their commitment to uphold best practice
• Expanding the team with two new members of staff based in China focusing on ethical compliance; building relationships with factories and ensuring ETI Base Code standards are upheld. This will enable to Hong Kong team to visit factories more regularly to build trust and work towards an honest and non-judgemental relationship where issues are resolved together
• Investigating the best way to implement a Whistleblowing policy into China factories.
Paladone’s aim from this action plan is to drive continual improvement for our workers both in the UK, USA and China. Improvement will be measured in the following ways:
• Tracking the increase in number of visits factories have each year as our Asia-based staff increases, and ensuring all factories sign our Supplier Handbook.
• Tracking the increase in factories willing to undertake SMETA semi-announced audits which shows their commitment to improving compliance.
• Tracking non-compliances from audits to identify and prioritise high risk factories.