HERMES PARCELNET LIMITED

Modern Slavery Statement 2018/19

1. Introduction / Background

This statement is made by Hermes Parcelnet Limited. It is a statement made in accordance with Section 54 of the Modern Slavery Act 2015 and covers the financial year from 1 March 2018 to end 28 February 2019 The Statement also refers to activity we will be taking during our 2019/20 financial year.

We are the UK’s leading consumer delivery specialist handling more than 330 million parcels each year. We provide a range of delivery options to home, work, neighbour, safe place or our ParcelShop locations.

Within the UK, Hermes has over 3,000 employees and operates a network of over 13,000 couriers, 27 depots, 550 sub-depots and over 4,500 ParcelShops.

Hermes works with a wide range of leading high street, catalogue and online retailers in the UK.

We engage a range of third party suppliers to provide goods and services to us (our “Suppliers”). These Suppliers include suppliers of fleet vehicles, sortation equipment, mobile scanning hardware and software and cloud based technology.

We also engage self-employed individuals to provide courier services on our behalf such as our final mile couriers, those who operate ParcelShops and/or provide sub-depot operational services (collectively, our “Services Providers”).

We are committed to the sustainable development of our business in a way that reconciles economic success with the social wellbeing of individuals that are employed by us or are involved in the provision of services to us.

We know that slavery, human trafficking, servitude and forced labour (“Modern Slavery”) is a global and increasing challenge for governments and business.

2. Our Policies and Contractual Terms on Slavery and Human Trafficking

As a business we recognise our responsibility to be aware of the risks of Modern Slavery within our own organisation and supply chain. We have taken the following steps:

• In September 2016 we introduced our new Code of Conduct (“the Code”). A copy of the Code can be found by clicking on the relevant link found below this statement.
  
  This was a new and important step for us and acts as the cornerstone of our Social Compliance Model. The Code is based on ethical, moral and legal principles which provide a framework for all that we do. Our Suppliers and Services Providers can expect us to comply with the law, observe ethical standards and act as a fair business partner. In turn, we expect our Suppliers and Service Providers to apply the same standards. We make an unambiguous commitment in the Code to treat our service provider and suppliers with dignity and respect.
  
  Part 1 of the Code sets out the principles that we expect our employees to comply with in the course of their relationship and interactions with our Suppliers and Service Providers. Part 2 of the Code sets out the principles which we expect our Suppliers and Service Providers to comply with while they are engaged by us. We expect the standards set out in the Code to be passed on to the employees, workers and the suppliers of our Suppliers and Services Providers.
  
  Both parts of the Code include specific provisions in relation to Modern Slavery. Specifically, we define what Modern Slavery means and make clear that it is prohibited in our operations and supply chain. Hermes and our employees will not engage in, facilitate or fail to report any activity that might lead to, or suggest, a breach of our Code in this respect. Likewise, our Suppliers and Service Providers must not engage in, facilitate or fail to report any activity that might lead to, or suggest, a breach of those principles.
  
  The Code includes a complaints procedure under which alleged breaches of the Code can be raised and will then be investigated. When it comes to modern slavery and other human rights-related complaints, the matter will be referred to the independent external Business and Human Rights Ombudsman appointed by Hermes (see further below).

• In tandem with our Code of Conduct, we have appointed an independent external Business and Human Rights Ombudsman. The role of the Ombudsman is to consider and investigate alleged serious breaches or potential breaches of human rights by following the process set out in our Ombudsman Investigation and Recommendations Procedure. The role of the Ombudsman includes investigating such matters, making findings and providing recommendations to ensure that we achieve and sustain the standards set out in our Code of Conduct. Although this would include matters related to modern slavery, we are aware that modern slavery is not commonly reported by the workers themselves as they can fear retaliation.

• In August 2017, we introduced a new Anti-Slavery and Human Trafficking Policy to cover all employees of Hermes Parcelnet Limited. A copy of our policy can be found by clicking on the relevant link found below this statement. Our policy outlines our zero tolerance approach to Modern Slavery of any kind within our operations and supply chain and it makes it clear that employees have a responsibility to prevent, detect and report any part of the business that they are responsible for or otherwise come across.

• We have also reviewed and amended our standard contractual terms for engaging new third party Suppliers to include specific detailed provisions on Modern Slavery.

3. Risk Assessment Processes

Our due diligence activities to combat Modern Slavery, as set out in our statement for 2017/18, are risk based and correspond with the level of risk identified.

As part of this risk assessment a third-party auditor, SGS, completed two of three phases of external audit to assess compliance with all aspects of our Code of Conduct across our Depot network and network of Service Providers. The reports of each depot and sub depot audit were disseminated within the business. The audits identified certain areas of non-compliance including failure to display the Code of Conduct poor communication between Hermes and couriers regarding later deliveries to sub depots. Follow up audits showed an increase in compliance for displaying the Code and this year we will work with Field Teams to ensure late deliveries are communicated to couriers to allow them to manage their time more efficiently and not have to wait at sub-depots.

Following the completion of the second phase of audits, we took the decision to bring the process in-house to make it part of our day to day business operations. In the coming financial year, we plan to develop our own process to ensure compliance with the Code of Conduct is a priority in our depot and sub-depot network with an aim to increase the frequency of audits.

4. Due Diligence Processes

In order to seek to prevent slavery and trafficking in our business and supply chains we send a copy of our Code of Conduct to any company applying to work with Hermes through a formal tender process. Part 2 of the Code sets out the principles which we expect our Suppliers and Service Providers to comply with while they are engaged by us. We expect the standards set out in the Code to be passed on to the employees, workers and the suppliers of our Suppliers and Services Providers.

The Code of Conduct forms a part of the contract we have with Suppliers and, in signing a contract to work with Hermes, companies agree to comply with the Code.

We would eliminate from a tender process any company who does not share our values and who chooses not to sign up to the Code as part of a contract.

New third-party relationships are subject to specific questioning regarding compliance with the Modern Slavery Act and our Code of Conduct and we have modified our procurement procedures to address the risk of slavery and trafficking.

In the last year we have reduced the number of agencies we use to supply additional staff, with 80% of temporary labour now coming from one agency. This supplier is managed centrally to ensure that there is transparency in sourcing labour and compliance with the Code of Conduct. It also minimises the number of links in the supply chain of labour, providing more control and oversight of the processes used by the agency and the labour being supplied.

5. Training

To ensure that our staff are aware of the challenge posed by Modern Slavery, how to spot the signs of Modern Slavery, and what steps they should be taking to mitigate the risk of Modern Slavery within our organisation and supply chain, we have rolled out an online training package to all our employees. This is a compulsory training. In our last statement we said all staff should complete the training by September 2018. This target was not fully achieved and this year we will be re-issuing the training on a more accessible platform to achieve a 100% completion rate.

Through the depot audits we also identified the opportunity to provide additional, more tailored training on modern slavery to field teams who work directly with service providers and agency staff. In the coming year, as we bring the audit process in house we will see how this could be implemented.

6. Measuring Effectiveness – Performance Indicators

To monitor the effectiveness of the steps we have taken to seek to prevent Modern Slavery taking place in our business and supply chains in the coming financial year up to the end of February 2020 we will:

• Use the learnings from the external audit process and experience of other companies to bring the Code of Conduct audit process in-house, to fully embed the culture of audit and assessment into our business. Developing an approach which extends beyond compliance and which seeks to assess behaviours and working culture at the grass roots of the business.

• Make use of more ad-hoc opportunities to review the effectiveness and impact of the Code within the business, in addition to a formal schedule of depot and sub-depot audits once the process is brought in house.

• Develop a new online platform for training which will allow us to more easily assess staff completion of the modern slavery training on an annual basis.

• Work with the independent Ombudsperson to ensure the Code of Conduct is fully embedded in the business, including by holding an event at which the Hermes Ombudsperson and the Director of Legal & Public Affairs of Hermes (who has responsibility for the Code of Conduct in the business) will speak to the senior management layers of the business in small groups about what the Code of Conduct means to them and the risk of Modern Slavery to the business, and engage in a constructive conversation about these matters.

• Draft a summary of the Code of Conduct in an easy to read accessible format to clearly capture what Hermes expects of those who engage with it, and what they can expect from Hermes as a company.

This Slavery and Human Trafficking Statement is hereby approved by the Board of Directors of Hermes Parcelnet Limited.

Martijn De Lange
CEO
29 August 2019