Modern Slavery Statement 2020 - Fonterra
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Modern Slavery Statement
2020
1
Contents
Introduction 2
Fonterra structure, operations and supply chain 3
Reporting Entities
Our Supply Chain
Understanding our modern slavery risks 5
Key areas of risk
Impact of Covid-19 on modern slavery risks
Actions to treat and address risk 8
Policy Framework
Governance and Risk Management
Risk mitigation activities
Assessing the effectiveness of our actions 11
Consultation and looking ahead 12
Appendix 13
1
FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
At Fonterra, people matter - in our workforce, in
our supply chain, and in the communities in which
we operate. We believe that everyone has value
and the right to be treated with respect and dignity,
regardless of background or circumstances.
O ur approach to addressing Modern Slavery is
part of our commitment to human rights.
environments, good working conditions, ensuring
the right to freedom of association and collective
bargaining, prohibiting forced labour and child
provided for workers. Furthermore, this statement
also outlines how Fonterra is assessing and
addressing modern slavery risks within its supply
We recognise our responsibility to respect human
rights and our ability to contribute to positive labour (including modern slavery), and prohibiting chains, including the efforts with supply partners
human rights outcomes. To achieve this, we are bribery and corruption. to mitigate this risk.
always working to foster a culture which supports We also consider the potential impact of our This statement was approved by the Fonterra
internationally recognised human rights and seeks operations on local communities, and we require Board of Directors on 16 March 2021.
to avoid complicity in human rights abuse. our supply chain to uphold human rights in their
In line with the UN Guiding Principles on Business operations through our Supplier Sustainability
and Human Rights, Fonterra’s commitments are Code of Practice.
based on the International Bill of Human Rights The following statement sets out the actions
and the principles concerning fundamental rights taken by Fonterra to address modern slavery and Peter McBride, Chair
set out in the International Labour Organization risks in our business and supply chain for the
Declaration on Fundamental Principles and financial year ending 31 July 2020.
Rights at Work. In this statement, Fonterra reports on its
Our commitments (embodied in our internal actions to assess and address modern slavery
policies and standards) include seeking to provide risks associated with its operations, including Miles Hurrell, Chief Executive Officer
safe, secure and non-discriminatory working its employment practices and the protections
2
FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Fonterra Structure,
Operations and
Supply Chain
F onterra is a global dairy nutrition Co-operative
owned by approximately 10,000 farmers.
We’re a world-leading dairy exporter – shaping
branded dairy products sold direct to consumers,
such as milk, milk powders, yoghurt, butter and
cheese. Our three global consumer brands are
the industry in quality and innovation. We share Anchor™, Anlene™ and Anmum™.
the goodness of dairy nutrition with the world The milk we collect from our farmers is
through our brands, farming and processing made into the many Fonterra dairy foods that
operations across four continents. We are one generations of Australians have grown up with and
of the top six dairy companies in the world by love, including Perfect Italiano, Mainland, Western Reporting Entities:
turnover, the leading exporter of dairy products Star, Australian Dairies and Bega. This 2020 Modern Slavery Statement
and are responsible for more than a third of These exist alongside our Farm Source brand covers Fonterra Co-operative Group
international dairy trade. which works to make farming easier by lowering Limited and its subsidiaries, including the
We make high-quality dairy ingredients, on-farm costs through the power of collective following Australian reporting entities:
foodservice and consumer dairy products, which purchasing and by providing on-farm support
• Fonterra Brands (Australia) Pty Limited
are sold in more than 130 countries. Our range of and advice.
We have more than 20,000 employees across • Fonterra Australia Pty Limited
dairy ingredients are sold under our NZMP™ brand
and can be found in prominent food and nutrition 28 markets, including manufacturing operations in • New Zealand Milk (Australasia)
brands around the world. New Zealand, Australia, Indonesia, Malaysia, Chile Pty Limited
Under our Anchor™ Food Professionals brand and Brazil. Our operations encompass significant
research, development and application expertise, Further details of Fonterra’s subsidiaries are
we create high quality, fit-for-purpose products
customer and consumer insight and is enabled outlined in the 2020 Annual Report which
and solutions for foodservice professionals in over
by several supporting functions including human is available at Fonterra.com.
50 countries.
We also manufacture, market and distribute our resource, sales and marketing teams.
own consumer products. These products include
3
FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Rest of AMENA* China Rest of Asia Pacific United States
REVENUE ($ MILLION) REVENUE ($ MILLION) REVENUE ($ MILLION) REVENUE ($ MILLION)
3,322 FY19: 3,215 5,198 FY19: 4,352 5,881 FY19: 5,590 949 FY19: 931
EMPLOYEES (FTE): EMPLOYEES (FTE): EMPLOYEES (FTE): EMPLOYEES (FTE):
522 FY19: 520 1,625 FY19: 1,727 2,066 FY19: 2,170 86 FY19: 87
MANUFACTURING SITES MANUFACTURING SITES MANUFACTURING SITES MANUFACTURING SITES
3 0 4 0
RAW MILK COLLECTED RAW MILK COLLECTED RAW MILK COLLECTED RAW MILK COLLECTED
(MILLION LITRES) (MILLION LITRES) (MILLION LITRES) (MILLION LITRES)
0 298 FY19: 279 11 FY19: 13 0
Our Supply Chain * AMENA - Represents ingredients,
foodservice and consumer
businesses in Africa, Middle East,
As a global organisation our supply chain sources Europe, North Asia and Americas
(including Latin America)
raw milk from over 10,000 farms primarily in
New Zealand, with some raw milk collection in
five other countries (Australia, Sri Lanka, Chile,
Total
Brazil and China). We also source packaging and REVENUE ($ MILLION)
ingredients from suppliers globally. Our global 20,2821 FY19: 19,255
supply chain stretches from farms to our Fonterra EMPLOYEES (FTE):
manufacturing facilities, as well as third-party
manufacturing sites across the globe enabling the
20,278 FY19: 20,685
delivery of products to customers and consumers MANUFACTURING SITES
in more than 130 countries. 47 FY19: 48
We make a significant socio-economic RAW MILK COLLECTED
contribution to the regions where we operate and (MILLION LITRES)
from where we source. Our supply chain includes
suppliers who are involved in primary production
19,130 FY19: 19,547
(predominantly agriculture), processing and
distribution of raw materials, and these suppliers
recruit and employ workers associated with
undertaking these activities. We also rely on a Australia New Zealand Latin America
number of other indirect goods and services in our REVENUE ($ MILLION) REVENUE ($ MILLION) REVENUE ($ MILLION)
day to day operations, for example cleaning and
security services.
1,670 FY19: 1,776 1,658 FY19: 1,676 1,604 FY19: 1,715
We want to ensure that our procurement EMPLOYEES (FTE): EMPLOYEES (FTE): EMPLOYEES (FTE):
and other spending contributes to improving 1,276 FY19: 1,381 11,757 FY19: 11,732 2,946 FY19: 3,068
livelihoods. The range of products, sourcing MANUFACTURING SITES MANUFACTURING SITES MANUFACTURING SITES
locations, markets and regulations associated with
these purchases can present risks and we apply a
6 FY19: 7 29 5
systematic approach to risk assessment that helps RAW MILK COLLECTED RAW MILK COLLECTED RAW MILK COLLECTED
(MILLION LITRES) (MILLION LITRES) (MILLION LITRES)
to identify and mitigate these risks, including the
risk of modern slavery. 1,383 FY19: 1,583 16,901 FY19: 17,162 537 FY19: 510
4
FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Understanding our
modern slavery risks
Possible forms of modern
slavery identified:
• Forced/Bonded labour
• Exploitation of migrant workers
F onterra has been undertaking a Human Rights
Due Diligence process for several years and
in 2020 expanded this assessment to better
• Deceptive recruitment
• Excessive working hours
understand our more salient modern slavery risks.
• Underpayment of wages
We have mapped our key sources of risk against
Fonterra’s operational and sourcing footprint
as follows:
Operational Footprint: These sources of risk in our operational footprint
• Staff locations have been identified primarily from the
following indicators:
• Property locations
• World Bank World Governance Indicators
• Milk collection locations
• Global Slavery Index (Walk Free Foundation)
• Manufacturing and own farm sites
• US Department of Labour List of Goods
• Third Party Manufacturing Produced by Forced Labour or Child Labour
• Merchandising • Various academic and NGO reports
Sourcing Footprint: (including Amnesty International, Oxfam,
• Locations of all ingredients’ vendors University of Auckland, International Labour
Organisation (ILO))
• Locations of top 400 vendors globally by In addition, we have anonymously surveyed
spend (75% of procurement spend) significant portions of our employee population to
• Locations of top 200 Farm Source store goods garner their feedback on the likelihood of human
vendors by spend rights risks in our value chain.
5FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Key areas of potential risk
Based on our initial assessment we have identified consequences are specified in the Terms of Supply failed to meet the minimum standards established
key areas of key areas of potential risk within and include increased on-farm audit frequency, by the Trafficking Victims Protection Act (TVPA)
Assessment of potential modern slavery risks our operational and sourcing footprint that we undertaking corrective actions, financial penalties, and showed some efforts to correct this behaviour.
across Fonterra’s operational and sourcing activities will continue to understand and report on in placement under performance management and However, trafficking in Malaysia is significantly
future statements. suspension of milk collection. increasing without proportional actions being
Farmers who are being investigated, or subject taken to rectify the situation.
Modern Slavery Risk or On-farm workers to an enforcement action by any regulator are Approximately 30% of PKE imports into
Fonterra footprint Indictors of Modern Slavery Activities required to immediately report this situation New Zealand are procured and distributed by
All workers have rights as employees, and it is a
Operational • Forced/Bonded labour • Outsourced / contingent workforces crime for employers to exploit these. In Australia to Fonterra. Agrifeeds, a joint venture between Fonterra
• Exploitation of migrant workers (cleaning and merchandising) and New Zealand where the majority of our milk Our Co-operative Difference programme and Wilmar International. Our 50% share in
• On Farm labour, particularly collection occurs these rights include holidays, encourages farm business owners to take the Dairy the Agrifeeds joint venture was sold to Wilmar
• Bullying and Harassment
migrant workers leave, work breaks, wages, freely chosen work and NZ Workplace 360 assessment. This assessment International in November 2020. We have been a
• Underpayment of wages helps to identify strengths and weaknesses in member of the Roundtable for Sustainable Palm
• Third Party Manufacturing, and milk supply written employment agreements.
• Excessive working hours Within the area of modern slavery, some a work environment, shows opportunities for Oil (RSPO) since 2010, and since 2015, all of our
to Third Party Manufacturing
risks for on-farm workers include bullying improvement and helps monitor progress. palm oil purchases have been certified by the
Sourcing • Forced/Bonded labour • Sourcing of garments or harassment, insufficient pay (less than RSPO. In 2016, we launched our Palm Product
• Deceptive recruitment • Magnesium and phosphate sourcing minimum wage), withholding of any form of
Worker exploitation in the Palm Oil Standard that requires all palm product vendors
• Exploitation of migrant workers • Sourcing of ingredients / packaging / leave or information about these entitlements, industry (and PKE sourcing) within our supply chain to publicly commit to No
finished goods from higher risk countries and overworking. Deforestation, No Peat, No Exploitation (NDPE)
• Excessive working hours Palm products are one of the highest-profile raw
(including sugar and cocoa) All farmers supplying milk to Fonterra are and have processes to meet these commitments.
• Underpayment of wages materials in our supply chain. The production of This standard is currently under review and we
• Palm oil and Palm Kernel Expeller required to comply with the Fonterra Farmers' palm products is often linked to unsustainable
Terms of Supply (Terms of Supply), including expect to publish the new version in 2021. All
(PKE) sourcing practices, including deforestation, habitat
compliance with the law. This requirement Wilmar-owned palm oil mills have achieved 100%
• Outsourced / contingent workforces destruction and poor human rights practices. More traceability to plantation level, and approximately
establishes sufficient control of the conditions specifically, the palm oil industry has been linked
(cleaning and merchandising) 15% of their third-party supplying mills are
under which the raw milk is supplied to Fonterra. to major human rights violations including the use
Failure to comply with the Terms of Supply has a traceable to plantation level.
of forced labour. The 2020 Trafficking in Persons
As at 31 July 2020 we have not identified any specific range of proportional consequences depending report ranked Indonesia and Malaysia as Tier 2
instances of modern slavery across our value chain to date. on the severity of the non-compliance. These and Tier 2 watch list countries, indicating that they
6FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Impact of COVID-19 on
modern slavery risks
COVID-19 has significantly disrupted global or undergoing self-isolation. Workers who have
supply chains and hence increased the risks of lost their jobs as a result of the pandemic may
exploitation of vulnerable workers. As a result, become increasingly desperate for work, putting
Fonterra has been committed to supporting our themselves at heightened risk of exploitation.
co-operative and value chain partners to address Supply chain shortages and reduced international
new and changing modern slavery risks linked to freight capacity have led to rapid increases in
the pandemic. demand for several product categories.
COVID-19 has exacerbated the vulnerability COVID-19’s impact on our human rights plan:
of a large proportion of the global population. • Delayed deadline for Modern Slavery
Employment is no longer certain, stringent Statement for 2020 financial year to
measures are required to ensure the safety of March 2021
staff at work and governmental regulations are
• Many activities planned for February to
constantly changing. This new environment may
July 2020 (the second half of our financial
increase the risks of worker exploitation; therefore,
year) to further identify and assess modern
we must assess these risks and prepare to mitigate
slavery risks (such as in person audit of our
them at a global level.
international supply chain, further consultation
According to the UN, the most vulnerable
with regional businesses, development of
groups are being hit hardest by the pandemic
specific risk responses) had to be deferred.
– these include older persons, persons with
disabilities, children, women, migrants and • We focused on the wellbeing and safety of our
refugees. The restrictions on global travel have employees, milk suppliers, and maintaining
affected the feasibility of site audit checks income for our vendors and supply for our
for companies. There is an increased risk that customers (including providing ingredients
employees may be working overtime to cover for medical nutrition products that support
capacity gaps due to colleagues taking sick leave COVID-19 recovery).
7FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Actions to treat
and mitigate risks
O ur approach to modern slavery is Co-
operative-wide. We have a robust
governance structure that oversees the
Key supporting policies are available on Fonterra.com and include:
Policy/Code Purpose
management of modern slavery risks across our
Fonterra Global ‘The Way We Work’ Code of Sets out expected behaviours for our employees
own operations and our supply chain. Outlined
Business Conduct towards each other, our customers and the
below are the global policies, programmes and
wider community.
frameworks already in place to mitigate human
rights and modern slavery risks for our people, Fonterra Global Ethical Behaviour Policy Sets the ethical expectations of our employees,
and those who interact with the Co-operative. embedding a culture of integrity, honesty
and transparency.
Fonterra Global Health, Safety and Wellbeing Policy Articulates our ambition to achieve zero harm for
Policy Framework our people, including contractors and visitors to
Respect for human rights is embedded in our our sites.”
“Our People” Group Policy, and expectations
Fonterra Supplier Sustainability Code of Practice Sets out our expectations for suppliers to align
are articulated throughout our people standards,
with our values and codes of conduct, including
and our code of conduct, “The Way We Work”.
upholding human rights, fair working conditions and
The Managing Director Co-operative Affairs is
specifically excluding forced labour and child labour
responsible for the governance of human rights
within our business and our sphere of influence.
To ensure clarity on the issue of labour standards
and to protect universally recognised human rights,
there are several key policies that set out the
requirements of those within the organisation and
those whom we seek to do business with.
8FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
International Union of Food explains our expectations of our suppliers , and • Freedom of association - Suppliers shall
every supplier who signs our standard terms respect the right of employees to be
(IUF) Obligations of purchase must endeavour to align their represented by trade unions and other FONTERRA BOARD
3RD LINE OF DEFENCE
In 2002, Fonterra, the IUF and the NZ Dairy behaviour and business practices (and those bona fide representatives of employees and
Workers’ Union (NZDWU) signed an agreement of their subcontractors) with the principles engage in constructive negotiations with
to ensure minimum labour standards for all contained in the Code . The Code sets out a range such representatives with a view to reaching Audit & Finance Safety & Risk
INTERNAL ASSURANCE
employees of Fonterra and its subsidiaries, in NZ of expectations across social, economic and agreements on employment conditions. Committee Committee
and around the world. environmental areas. Our suppliers must commit
Fonterra
Minimum Labour Standards (ILO Conventions): to complying with Code requirements, which are
• Freedom of Association and Protection of the drawn from the International Labour Organisation Governance and Management Team
Right to Organise Convention, 1948 (No. 87) (ILO) and Ethical Trading Initiative (ETI). These are Risk Management
minimum standards based on the principles of the
• Right to Organise and Collective Bargaining
United Nations Universal Declaration of Human
Convention, 1949 (No. 98)
Rights. Fonterra expects suppliers/contractors to
Fonterra's sustainability governance
• Workers’ Representatives Convention, 1971 express their preparedness and intent to comply The Fonterra Board has ultimate overall
2ND LINE OF DEFENCE
IT
(No. 135) with the Code and to ask their subsidiaries and responsibility for Fonterra’s sustainability Finance Legal
suppliers to comply as well. performance, including our supplier strategy and
• Forced Labour Convention, 1930 (No. 29) issues relating to the risk of modern slavery in our Supply Chain Health & Safety
The Sustainability Code of Practice is included GROUP RISK
• Abolition of Forced Labour Convention, 1957 in all new contracts and in the standard template operations and supply chain. Responsibility for the
Environment Milk Supply
(No. 105) when contracts are up for renewal, ensuring that strategy and its integration into our day-to-day
every supplier regardless of size is required to activities is shared across the organisation. People & Culture Food Safety
• Minimum Age Convention, 1973 (No. 138)
adhere to the Code.
• Worst Forms of Child Labour Convention, The Code explicitly expects suppliers to support Fonterra’s approach to
1999 (No. 182) the following ethical standards set out in the Code Risk Management
• Equal Remuneration Convention, 1951 of Practice related to modern slavery: Fonterra’s Global Risk Management Policy outlines
(No. 100) • Freely chosen employment - Suppliers shall our risk principles and accountabilities, setting out
1ST LINE OF DEFENCE
• Discrimination (Employment and Occupation) not make use of forced or bonded labour. the requirements for managing and reporting risk Greater
APAC AMENA
Convention, 1958 (No. 111) Labour should be freely given, and employees across our global business aligned to the ISO31000 China
should be free to leave in accordance with Risk Management – Principles & Guidelines 2018.
Supplier Code of Practice established rules. It is designed to embed a co-operative-wide risk
Co-operative
• Child labour - Suppliers shall not employ management capability, establishing a consistent COO oCFO
We recognise that identifying and addressing Affairs
children in violation of conventions 138 and approach to identifying, assessing, controlling,
modern slavery risks in our supply chain requires
182 of the International Labour Organization. monitoring and reporting on our key risks. These
collaboration with our suppliers. Our supplier
include risks that may affect our Co-operative’s
Sustainability Code of Practice (the “Code”)
9FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
ability to achieve its objectives and protect our Risk mitigation activities We expanded our assessment approach in FY20 to and our customers independent assessments of 5. Social procurement
people, shareholders, customers and reputation. consider products and geographies most at risk of our performance. Independent audits against In May 2019, Fonterra signed up to be one of 12
Our risk management framework is based on the modern slavery, though COVID-19 has impacted the Sedex Member Ethical Trade Audit (SMETA)
1. Human Rights Due Diligence founding “buyer members” in New Zealand’s first
three lines of defence model. Fonterra’s first line some of the more detailed regional analysis we for labour practices, environment, health and Social Procurement Programme. In conjunction
of defence is our people. Managers and individual Human Rights ‘due diligence’ is a process to were planning. In our non-milk supply chain, we safety and business practices are undertaken for
identify and prioritise actual and potential human with regional and local government, Ākina created
business units hold clear risk management have focused in a deeper assessment of human the majority of our New Zealand based sites. We the ‘Fwd:platform’ -a marketplace website that
responsibilities for business risk management, rights issues in an organisation’s direct and indirect rights performance with our top 26 suppliers by have also achieved a gold rating in our annual
sphere of influence. Fonterra has been undertaking connects buyer members with Ākina certified social
including requirements to ensure compliance value. Within our Australian Farm Source business, EcoVadis assessment. enterprises that are trading to deliver positive social
with external requirements as well as Fonterra’s a Human Rights Due Diligence process (following we conducted an assessment to understand
the guidance of the UN Guiding Principles on 3. Staff training and development and environmental impact. This year, we hosted a
Global Policy standards. Our risk management the likelihood of farm work exploitation risks meeting with other like-minded organisations to
and assurance processes support this via our Business and Human Rights) for several years. in Fonterra farm suppliers. The key risks were Buyers within our procurement teams play a critical
In 2017, our workforce evaluation across New support increased understanding and identification
group functions, ensuring a consistent best- identified and response plans are being developed. role in assessing and managing the sustainability
Zealand, Australia, Brazil and Chile, covering of opportunities across categories.
practice approach to risk management across the performance of our vendors. In FY19 we ran
approximately three-quarters of our employees, 2. Independent evaluation and company-specific training on sustainability,
business, aligned with our risk appetite settings.
identified some concerns about bullying and certification of sites
Reporting and monitoring of
These processes are overseen by the Fonterra including social and environmental issues faced
Management Team alongside a dedicated internal harassment, long working hours and the potential Our manufacturing sites are subject to regular in our supply chain with 77% of our Group grievance mechanisms
audit function, taking a risk-based approach to for human rights risks in our non-milk supply internal and third-party audits. Internal audits Procurement team in attendance. This specifically We are committed to providing our teams access to
oversight of key business activities and reporting to chain. This year we have been responding to are conducted by staff independent of the site included training on human rights risks to assist effective remedies aligned with our commitment to
the Board via the relevant Board committees. these concerns within our workforce, and in our and are used to identify areas for improvement. with our preparation to report on Modern Slavery. the United Nations Guiding Principles on Business
supply chain. Third-party audits give regulatory authorities and Human Rights.
4. Vendor assessments Fonterra has a ‘The Way We Work Hotline’,
Assessing and managing the risk of environmental which is an independently administered,
and social issues within our supply chain is a core confidential service and has been designed
part of responsible procurement. We have assessed specifically for reporting issues like theft, fraud,
our top 400 non-milk suppliers globally (accounting corruption, harassment, misconduct or other
for 75% of spend) and we extended the coverage unethical behaviour. The Hotline is available to
of this assessment to also cover our Farm Source anyone working for or on behalf of Fonterra, and
Retail business. For Farm Source retail, over 200 can be accessed 24/7 via telephone, website
vendors were assessed for human rights and or e-mail, and different language versions
environmental risk, specifically investigating are available.
country of origin of goods and including the top
45 vendors by spend.
10FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Assessing the effectiveness of
our actions
F onterra does not currently have any key
risk indicators specific to modern slavery
as we have only just started assessing the full
risk of modern slavery. We regularly review and
assess the effectiveness of policies, codes and
frameworks as part of our risk management
framework. We will continue to develop and
modify our approach as we formally identify
our risks and implement mitigation measures.
This will include developing metrics that enable
us to track the progress and effectiveness of
our actions over time, as we look to continually In 2020 we continued to be active members
improve. The impacts of COVID-19 have delayed of several multi-stakeholder initiatives that are
the development of metrics; however, we are engaged in the protection and promotion of human
looking to develop these over 2021 and 2022. rights and the elimination of forced labour. These
Quantifiable metrics might include measuring include, the Roundtable on Sustainable Palm Oil
access to collective bargaining across our supply (RSPO) and the International Union of Food (IUF).
chain, and grievance mechanisms in place and Our membership to these and other organisations
being used. allow us to assess our progress against industry
We understand that raising awareness is best practice, work in collaboration across
key in addressing the risk of modern slavery. industries, and helps to identify areas for
We recognise the need to continue building further improvement.
capacity among our employees to identify risks
of modern slavery and the actions required to
respond effectively.
11FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Consultation and
looking ahead
A ll Fonterra entities operate under a common
set of governance policies and programmes.
This includes the programmes through which
Fonterra is in the early stages of our Modern
Slavery journey, and we are committed to further
developing and refining our programme as we learn
modern slavery risks in both our operations and more about our risks and are looking to continually
supply chains are assessed and addressed by improve over time.
Fonterra. A process of consultation across Fonterra Our focus for the next few years will include:
and some of our reporting entities was undertaken • Deeper consultation across the business on
during the Human Rights due diligence process material risks
which contributed to the identification on salient
modern slavery risks, and to help with the drafting • Development of action plans to address
of this statement. This included engagement salient and material risks
with procurement, food safety and quality, third- • Implementation of an external grievance
party manufacturing and our Farm Source teams. mechanism process
We will look to expand this as we continue our
• Development of metrics to measure and
Modern Slavery journey.
monitor the effectiveness of actions
12FONTERRA MODERN SLAVERY STATEMENT 2020 — Introduction | Fonterra structure, operations and supply chain | Understanding our modern slavery risks | Actions to treat and address risk | Assessing the effectiveness of our actions | Consultation and looking ahead | Appendix
Appendix one
T his statement was prepared to meet
our Australian regulatory disclosure
requirements. It complements our existing
sustainability disclosure on the Fonterra
website and in our sustainability and,
annual and interim reports. The table to
the right references where the mandatory Mandatory criteria Location of information
criteria are disclosed for the Australian Identify the reporting entity Reporting entities (page 3)
Modern Slavery Act 2018 and where more Fonterra 2020 Annual Report (page 136)
information is located in our Annual and
Sustainability Reports. Describe the reporting entity’s structure, Fonterra structure, operations and supply chain
operations and supply chains (pages 3 – 4)
Describe the risks of modern slavery practices in Understanding our modern slavery risks (pages 5 – 6)
the operations and supply chains of the reporting Impact of COVID-19 on modern slavery risks (page 7)
entity and any entities it owns or controls
Describe the actions taken by the reporting Actions to treat and address risks (pages 8 – 11)
entity and any entities it owns or controls to assess Fonterra 2020 Annual Report (pages 171 – 174)
and address these risks, including due diligence Fonterra 2020 Sustainability Report (pages 54 and
and remediation 68 – 69)
Describe how the reporting entity assesses the Assessing the effectiveness of our actions (page 11)
effectiveness of these actions
Describe the process of consultation with any Consultation and looking ahead (page 12)
entities the reporting entity owns or controls
13fonterra.com
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