Royal Mail Group - Ethical Standards Statement

Ethical Standards Statement and Associated Code of Conduct

Ethical trading statement

Royal Mail Group is committed to doing business in a way that ensures that everyone in our supply chains benefits from trading with us. We believe that high workplace standards, good health and safety, fair pay and employment conditions are all elements of a successful, professionally run business and contribute to its efficiency and productivity. Our approach is to engage with vendors and workers and recognise and respect the cultural diversity within our supply chains.

Royal Mail Group wants great products and services at great prices, but not at the expense of the people who make or provide them. We are committed to sourcing products and services responsibly and fairly.

Royal Mail Group’s principles seek to ensure that we…

• Work with vendors who share our aims and values • Have visibility along the supply chain of the products we buy • Set and assess workplace standards for our vendors’ factories, including minimum standards, which need be met as a condition of supply, and higher standards which vendors are required to meet within agreed timescales • Work with our vendors, governments and non-governmental organisations to address challenging issues within our supply chains • Provide guidance to those factories making our products to help them achieve the required standards

Purpose of the code

The purpose of the code is to provide more detailed guidance on how to apply Royal Mail Group’s ethical standards and ethical policies.

Code of conduct for vendors • Royal Mail Group requires that vendors, agents and anybody involved in the manufacture of goods or the provision of services to its businesses meet all the legislation applicable to those activities. RMG vendors must comply with the labour, health and safety and other pertinent laws in the countries where these products are manufactured, stored and distributed.

• As part of this duty, vendors are expected to keep up to date with changes in legislation, identifying and implementing operational and management changes to maintain continuing compliance. Where legal provision and the standards of this Code address the same subject matter, vendors should apply whichever provision provides the greater protection or highest standards for workers.

• Vendors must comply with the RMG ‘Responsible Procurement Policy’ – which includes assurances relating to the elimination of bribery and corruption.

• Vendors are expected to communicate the requirements of this Code to all employees, their own vendors and any out-workers or sub-contractors engaged in their supply chain. They should also take steps to ensure that their vendors and sub-contractors comply with the requirements of this code.

Exploitation of labour • The exploitation of workers is unacceptable. RMG expects its vendors to ensure that the conditions under which workers are employed do not deny or demean their basic human rights, freedoms and dignity as defined by local and international laws.

• RMG vendors shall not engage in or support the use of forced or bonded labour, nor shall workers be required to surrender identity papers or lodge deposits prior to commencing employment other than in circumstances where this is required by law. Workers should be free to terminate their employment after a reasonable agreed period of notice.

Freedom of association and collective bargaining • RMG expects its vendors to respect their employees’ rights of freedom of association and collective bargaining, and their rights to join or form trades unions of their own choosing.

• Where such activities are restricted by law, RMG will encourage its vendors to facilitate such equivalent mechanisms of free association and negotiation as are permitted by the legal framework.

• RMG expects its vendors to ensure that elected worker representatives are not subject to discrimination and have reasonable access to those workers who they represent within the workplace.

A safe and hygienic working and living environment • Vendors are expected to assign responsibility for health and safety to a senior management representative and provide training for its employees appropriate to the work that they undertake.

• Vendors are expected to provide a safe and hygienic working environment, relative to industry standards. This must consider appropriate measures to prevent accidents and injury by removing or minimising workplace hazards. In addition, workers should have access to clean toilet/washing facilities and potable water.

• The use of hazardous substances/activities must be kept to a minimum.

The risk of harm from hazardous substances/activities should be minimised through the provision of safety equipment, signage, training and a safe factory infrastructure.

• Where appropriate, there should also be hygienic food storage, and any accommodation must be safe and clean and meet the basic needs of the workers.

• Workers will not be employed in potentially hazardous conditions without receiving adequate safety training and supervision. Records of safety training must be available for inspection and individual workers must be able to demonstrate their understanding of the job and the ability to perform it to at least the minimum standard required by their employer.

• Vendors are expected to provide essential items of relevant personal protective equipment and any safety equipment free of charge to their workers.

• Vendors are expected to ensure that there is an adequate number of safe, unblocked fire exits, escape routes and fire fighting equipment accessible to workers from each floor of the factory or production site and accommodation (if provided). There should be well lit signage on display showing exit routes and plans.

• Vendors are expected to ensure that first aid training is provided to a reasonable number of appropriate, selected individuals. An adequate number of first aid kits should be available within the factory.

• Where provided, accommodation shall be safe, clean and meet the basic needs of workers. Secure storage facilities should be provided. Vendors should provide a range of mixed gender, segregated and family accommodation as appropriate to the number of workers housed.

• Accommodation shall be segregated from the factory environment.

Child labour • RMG vendors shall not engage in or support the use of child labour. Children are defined as being under the age of 15, unless the local minimum age for work or mandatory schooling specifies a higher age, or if International Labour Organisation (ILO) for developing country exemptions apply.

• Specific consideration must be given to young persons between the ages of 15 and 18, particularly in respect of their hours of work and safety. Such young persons must not work at night or in hazardous conditions.

Compensation & benefits • RMG expects its vendors to provide wages for a standard working week which are consistent with at least the legal or industry minimum standard, whichever is the higher. Wages should be sufficient to meet basic worker needs and provide some discretionary income.

• Other benefits (eg Social Insurance, Maternity Benefits etc) are expected to be in line with local legislation.

• Deductions from wages should not be made for disciplinary purposes. Wages should be paid in cash or by cheque in a manner which is acceptable to employees. Any deductions which are not required by National Law should not be made without prior agreement of the employee concerned.

• RMG expects its vendors to provide its workers with written and understandable information about their employment conditions prior to their employment. This applies, particularly in respect of wages prior to their employment, and about particulars of their wages for the periods concerned when they are paid.

• All disciplinary measures should be recorded.

Working hours • RMG expects its vendors to meet legislation and industry standards pertaining to working hours, whichever afford the better protection.

Employees shall not, on a regular basis, be expected to work for more than 48 hours per week and shall be provided with at least one day off in any seven day period.

• Each employee shall receive paid annual leave in accordance with local legislation.

• Overtime, (i.e. periods worked in excess of 48 hours per week), shall not exceed 12 hours, shall be voluntary (normally to meet exceptional business circumstances) and should be remunerated at a premium rate.

Harsh or inhumane treatment • RMG vendors shall not engage in or threaten physical, sexual or verbal abuse, and shall not employ harassment or intimidation of any kind.

Discrimination • RMG discourages its vendors from exercising discrimination in respect of hiring, compensation, access to training, promotion, termination of employment or retirement based upon race, caste, national origin, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.

• The principle of equal opportunities must be applied to all of the above.

Regularised employment • Work should be on the basis of a recognised employment relationship, identified by law and/or Practice. Workers should be provided with simple, written contracts which detail the terms and conditions of their employment. Contracts should be in the appropriate language for each worker.

• Vendors are expected to meet their obligations under labour or social security laws, and not use devices such as labour only contracting, subcontracting, or home-working arrangements, or apprenticeship schemes where there is no intention of imparting skills or providing regular employment. Vendors should also not excessively use repeated, fixed-term contracts of employment.

• Vendors should encourage workers to participate in all state benefit schemes, especially sickness, injury and retirement pensions.

Environmental standards Vendors are expected to comply with all statutory and other legal requirements relating to the environmental impacts of their business as a minimum. They should also seek continuous improvements in their environmental performance. For example: • Waste Management Waste should be minimised and items recycled whenever this is practicable.

Effective controls of waste in respect of ground, air, and water pollution should be adopted. In the case of hazardous materials, emergency response plans should be in place.

• Contamination Contamination of the local environment shall be minimised in line with local legislation with respect to air, noise and odour.

• Packaging and paper Undue and unnecessary use of materials should be avoided and recycled materials used whenever appropriate.

• Conservation Processes and activities should be monitored and modified as necessary to ensure conservation of scarce resources, including water, energy and raw materials.

• Energy use All production and delivery processes, including the use of heating, ventilation, lighting, IT systems and transportation, should be based on the need to maximise efficient energy use and to minimise harmful emissions.

Records and compliance For each element of this Code, Royal Mail Group expects its vendors to maintain records in sufficient detail to demonstrate how the vendor is complying with the Code. An individual in a senior management position should be appointed to ensure compliance with the Code. Relevant records should be available for inspection by RMG or its agents on request.

Monitoring and auditing

Royal Mail Group, or its agents, will routinely review the practices and achievements related to the principles of this Code. This may be by site audit (potentially linked to audits reviewing quality parameters), or by other means as advised to the vendor. Any review of the vendor’s application of the Code will be reported to the factory and/or the agent involved, together with, as appropriate, recommendations for improvements. These improvements may call for corrective or remedial action within defined and agreed time periods.

Where any review highlights serious instances of failure to comply with the Code, immediate corrective action to address the issue will be required. A failure to instigate appropriate and timely action may result in termination of RMG contracts and supply of the services or products involved.

RMG will generally advise vendors of its intention to audit any site, although RMG reserves the right to undertake unannounced audits if deemed necessary.

Continuous improvement • RMG will always try to achieve continual improvement in these workplace and employment standards by working with its vendors rather than operate sanctions.

• These defined standards are intended as the minimum acceptable vendors should aim to exceed them.

If you want to discuss our Ethical Standards Statement and Associated Code of Conduct, please contact us at: CSR, Royal Mail, Unit 6 Ancells Court, Rye Close, Fleet, GU51 2UY Telephone: 01252 806610 Email: steve.boorman@royalmail.com Web: www.royalmailgroup.com

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