Cadbury Schweppes Ethical Sourcing Standards Working With Suppliers We've always believed good ethics and good business go together naturally. Social responsibility sits at the heart of Cadbury Schweppes. It always has. We're clear about our obligations and how they shape the way we operate, and proud of the loyalty and trust which this approach has earned for our company and our brands. Consumers and other stakeholders have rising expectations. As our business grows and becomes ever more complex, we all need to ensure we can live up to those expectations, both within our own operations and in our wider supplier networks. And you, our suppliers, are an essential part of this. We want to share our commitment to the highest ethical standards. This document explains what our standards are and will help you understand what that means for you and your own supplier networks. from milk to maintenance: from cocoa to copiers We are an international group of companies with a broad and complex supply chain spanning many countries and many types of goods and services. This chain provides our businesses with everything from the quality ingredients in our products to the machinery to make them. Packaging, stationery, promotional items, technical support, catering, laundry, transport, security and marketing - all are vital to the creation of our brands, supplying everything from the pallets in the warehouses to the pencils in our offices. over 30,000 suppliers, large and small Around 30,000 firms supply us directly. Some are global corporations, others are small companies. Many are only one part of a much longer supply chain which delivers raw ingredients from the field to our factory doors. Working together to create brands people love We've worked with suppliers to share knowledge and technical advice, and to improve quality, productivity and environmental standards. Together we've created delicious and trusted brands that bring moments of pleasure to millions of consumers all around the world. Dialogue to share ethical standards will help ensure we continue to grow and sustain that success in different and changing markets, and in a variety of cultures. It's part of delivering our Core Purpose of "working together to create brands people love". Sourcing Standards Respect for human rights, and ethical trading is fundamental to the way we work. Within our own business, Our Business Principles provide the framework of values and behaviours expected of every employee, everywhere. They and our Human Rights and Ethical Trading Policy form the basis of these Sourcing Standards. We want our suppliers to act in a responsible and ethical manner. We look for business partners who: • • • • have high standards of corporate governance carry out their business honestly and ethically respect the rights and interests of others abide by laws and regulations Our Human Rights and Ethical Trading policy is based on international standards such as the Universal Declaration of Human Rights and the conventions of the International Labor Organisation. It is outlined below together with an explanation of what each principle means in practice. However, no set of standards can deal with all situations. Some may need to be applied according to local legal definitions or frameworks, or be adapted to respect cultural sensitivities. In so doing, we expect suppliers to exercise good business judgment upholding the spirit of the standards. Naturally, in all cases we look for minimum legal standards to be adhered to and best industry practice. 1. Core labour rights and dignity at work • • • • Preclude the use of forced labour: Workers should enter voluntarily into employment contracts. Employers should not hold or control the identity papers of their workers or a money deposit. Prisoners should not be hired. No slavery or indentured labour. Respect the rights of employees to join legally recognised labour unions: No discrimination against union representatives or members. No obstruction of collective bargaining. Ensure that children are employed only under circumstances that protect them from physical risks and do not disrupt their education: No harmful child labour, which means no employment of anyone under the minimum school leaving age; the work of anyone under 18 must not interfere with their education; they should not be exposed to physical or other risks which can harm physical, mental, emotional or spiritual development. Do not tolerate any form of harassment in the workplace: All employees should be treated with respect and dignity and not be subject to persecution or bullying in the workplace. 2. health and safety in the workplace • Create a healthy and safe work environment for each employee: Keep all the relevant health and safety laws and provide a safe and healthy workplace. Supply the necessary safety equipment and training. Ensure there are appropriate rest periods and suitable facilities. 3. fair remuneration • Ensure that working hours and remuneration are reasonable and comparable to those offered by similar companies: Meet local legal minimum standards and comply with local laws. Wages and working hours should be comparable with those of similar companies and in line with normal industry standards. All workers should have a written understanding of their employment contract. Overtime should generally be worked on a voluntary basis. All obligations in respect of local social security payments and provision must be met. 4. diversity and respect for difference • • Manage diversity to promote and capitalise on cultural and individual differences to create competitive advantage through new perspectives and local market sensitivity. Provide employees with equal opportunities. 5. opportunity for development • Recognise the value that employees create and reward them with opportunities for personal and career development. Living out the standards (a) Implementation These standards will be part of our general supplier selection helping us to choose suppliers based upon an assessment of economic, quality, environmental and ethical factors. They will also be a factor in monitoring and reviewing performance. (b) dialogue and communication Securing our sourcing standards is a two-way process which requires dialogue and mutual understanding. We began with a series of "pilot studies" talking to a cross-section of suppliers to see how things work in practice and identify potential issues. The pilots took place in a range of countries across a variety of commodities, and included consultation with other stakeholders such as government representatives and interest groups. They have helped to inform these standards and the methodology for taking the process further into our supply chain. (c) Support from us You may want our advice in interpreting the requirements, or help in demonstrating your compliance with them. We are happy to discuss any questions and provide support in addressing issues. (d) Steps to take You are asked to review the standards and: • • • Consider how they fit with your own business practices as well as those of your own suppliers Take any action necessary to comply (for example, maintaining appropriate records and documentation, and ensuring that any statements of business principles and policies fully address these issues) Contact us if you need further clarification of our expectations. I have read and understood the above document and am authorized to accept the implications that this may have on the ongoing relationship with Cadbury Schweppes.