Modern Slavery Statement 2019

This statement has been published in accordance with the Modern Slavery Act 2015. It sets out the steps taken by KFC and other relevant group companies  (“KFC”) from January to December 2019 to prevent modern slavery and human trafficking in its business and supply chains.

Our previous Modern Slavery Statement can be found here: 2017/2018 Statement

Our Organisation and Our Business

KFC was introduced to Britain in 1965, when our first restaurant opened in Preston. There are now around 950 KFCs in the UK and Ireland and over 27,500 team members in our business.  There are over 21,000 KFC outlets in more than 130 countries and territories around the world. KFC is operated on a part equity, part franchised model and as of December 2018 98% of KFC restaurants are franchise operated.

KFC is part of Yum! Brands, Inc. (“Yum! Brands”) whose other brands include Pizza Hut and Taco Bell. Yum! Brands based in Louisville, Kentucky has over 43,500 restaurants in more than 135 countries and territories. In 2017, Yum! Brands was named to the Dow Jones Sustainability North America Index. In 2018, Yum! Brands was recognized as part of the inaugural Bloomberg Gender-Equality Index and ranked among the top 100 Best Corporate Citizens by Corporate Responsibility Magazine.

We understand that modern slavery - whether slavery, servitude, trafficking or forced labour, is a continual and growing global issue that can be found especially in the agri-food sector in which we operate. At KFC, we’re determined to work towards a zero tolerance policy on modern slavery and human trafficking of any kind within our business or our supply chain. We have a responsibility to minimise any risk of this kind in any part of our business operations and in the event of an incident, we will address this promptly with all relevant parties concerned.

[1] This statement sets out the steps taken by Kentucky Fried Chicken (Great Britain) Limited and its subsidiary company KFC Advertising Limited both of which fall within the scope of section 54(2) of the Modern Slavery Act 2015 and the Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015.

Our Supply Chain

We are committed to conducting our business with the highest degree of integrity. We assure the quality of our products and the wellbeing of the people working in our restaurants and supply chain by maintaining a close stable relationship with our franchisees and our direct suppliers; managing performance and continuous improvement of quality, service, cost, innovation and risk management.

Direct suppliers means suppliers providing food, drink, non-consumables such as packaging, uniforms, equipment and machinery and construction services.

While we are confident that our internal centralised human resources processes for recruitment minimises the risk of modern slavery or human trafficking taking place within KFC itself, our supply chain relies on our suppliers’ good ethical business practices. Open communication with our suppliers is critical for identifying and resolving any supply chain issues so that together we can respond rapidly and fully to ethical issues. Our supply chain teams have a duty to report any suspicions of poor supplier ethical behaviours immediately.

We have processes for the sourcing and management of our suppliers in order to minimise risk to our brand, the environment and the communities that our restaurants and supply chains impact.

We carefully select our direct suppliers, developing long term relationships with them that gives us the confidence that a global brand like KFC demands in its supply chain. We are aware that parts of our supply chain are predominately resourced with a seasonal, low paid, unskilled workforce and that these industries can be at risk from the exploitation of workers and modern slavery. Whilst we are confident that our sourcing practices minimise this risk, particularly in relation to our direct suppliers, we know that risk can only be reduced if we are continually vigilant and demanding on our supply chain. In any instances where we feel there is unacceptable risk, we will contact our suppliers in writing, reminding them of our values and ethical standards, and reiterating the expectations we have when working with them. We contractually reserve the right to audit our Direct suppliers if the need arises.

All of our direct suppliers are contractually obliged to be able to trace food, drink and other non-consumables e.g. packaging, uniforms, furniture, print materials and paper products all the way back through the supply chain to the raw material origins. This can often be a complex matrix of multiple tiers of suppliers and facilities but we are confident that our suppliers can trace their products all the way back through every facility employing a work force. We expect them to have full details of each facility within their supply chain and provide us with the details should we wish to engage a third party to perform an ethical audit.

Labour Standards

We work with our suppliers to ensure that they provide employment that is freely chosen and that they have in place policies, systems, risk assessment, training and measurement to ensure no forced labour or slavery exists. We also require that our suppliers allow employees the freedom to associate, organise and join a trade union (or collective bargaining group acting for them) in a lawful and peaceful manner without penalty or interference.  We also factor this into our pricing strategy to ensure that our suppliers and franchisees are not incentivised to use cheaper, slave or bonded labour.

Ultimately, by working with our suppliers, our goal is to find ways to make a positive difference across our supply chain, from the grower or farmer right up to the team members in our restaurants. This is an ambitious and complex goal but we believe that through our robust policies and procedures and strong supplier relationships we can together drive and deliver a high standard of labour practices.

Our Policies

At KFC we have a range of policies that together constitute our Modern Slavery Policy. These policies include our Supplier Code of Conduct and our Anti-Bribery Policy. All direct suppliers are contractually obliged to comply with these policies.
We offer a number of education programmes, such as apprenticeships, so we also have a Safeguarding Policy and Safeguarding Officer whose role is to safeguard our minors and vulnerable adults against any inappropriate behaviour.

Since our last statement we have issued the Sourcing Code of Practice (The “Sourcing Code”) to all of our Direct suppliers. This Code requires a high standard of compliance with internationally agreed standards of labour, applicable national laws and a commitment to work to continually improve workplace and employment standards. It is aligned with the International Labour Organisation (ILO) Convention and the UN Guiding Principles on Business and Human Rights.

It sets out defined social, ethical and environmental standards we require suppliers to follow as part of their agreement to supply KFC. The Sourcing Code extends to all employees of those suppliers including contractors, temporary workers and other non-permanent staff, including any agency workers. All direct suppliers must comply with the Sourcing Code wherever they are based.

As part of their contract with us, suppliers are expected to establish management systems for delivering compliance with the Sourcing Code and to maintain records demonstrating this. We expect suppliers to be able to verify that all sub-contractors and companies in their own supply chain, which are in any way involved with KFC products, are provided with the Sourcing Code and confirm, in turn, their compliance with it.

Due Diligence, Risk Assessment and Management

We recognise the importance of being fully aware of the ethical and social practices and any associated risks in our supply chain. To ensure this, we undertake independent and third party audits of suppliers’ sites and thorough self-assessment questionnaires. All of our direct suppliers are required to register with SEDEX and complete Self-Assessment Questionnaires (“SAQs”). SEDEX is an ethical data exchange which ensures that ethical standards are monitored and measured, and best practice is shared across the industry.

We then use SEDEX to review the SAQs to enable us to make a risk assessment of suppliers. This risk assessment tool provides a modern slavery risk rating for each supplier facility and over the coming year, we intend  to use this to  determine whether we need to carry out any third party audits. Third party audits will be able to provide us with a neutral, unbiased and factual report that we then use in conjunction with the SAQs to provide a big picture review of the supplier.

The SAQs collect data across four key pillars:

- Labour Standards: includes questions on wages, working hours, children and young employees, freedom of association, non-discrimination, forced labour and human rights. This forms the basis of the data used for the modern slavery risk assessment rating.
- Health & Safety: includes questions on management, training, emergency and fire safety, and worker health.
- Environment: includes questions on environmental management, waste, raw materials, water, energy and pollution.
Business Ethics: includes questions on bribery and corruption.

The risk assessment tool helps us to prioritise those suppliers who need to make further improvements so we can help them to provide better working rights and conditions as appropriate.

Our Restaurants

We recognise that team members working for both KFC equity and franchise owned restaurants must be treated fairly and with respect. They should be empowered to develop their skills and fulfil their potential. As a business we ensure that we comply with all applicable wages, benefits and hour laws and regulations, including those relating to minimum national legal standards or industry benchmark standards, overtime and maximum hours. We pay fair wages in line with the norms for the industry and market and do not require anyone to work excessive hours, particularly where this might impact personal health or safety; overtime shall be voluntary.

Our Policies

We have a number of general policies and procedures that support our statement and position onf modern slavery and human trafficking throughout the different areas of our business, including the following

- Recruitment Policy;
- Equal Opportunities and Dignity at Work Policy;
- Whistleblowing Policy;
- Anti-bribery and Corruption Policy;
- Business Conduct Policy; and
- Employee Handbook

We intend to implement a modern slavery reporting mechanism, whereby our employees, suppliers, business partners, customers and other interested parties can raise any genuine concerns or suspicions that they may have about our procurement, recruitment or working practices, in complete confidence. The implementation of this reporting mechanism should be completed in the coming financial year.

Training and Capacity Building

We know that our employees are crucial to helping ensure that modern slavery is removed from our operations and supply chain. Each and every one of our employees has a duty to report any practice they’re worried about so that we can take steps to stop it happening. We know that this can be personally challenging so we’ve provided and publicise a completely confidential helpline called “Speak Up” to encourage our employees to whistle-blow in safety. Our employees are expected to report any suspicions or wrong doing in this way and management are expected to act upon such concerns.

Employees are also subject to a Business Conduct & Ethics Policy, including the Business Code of Conduct which includes conduct in relation to

- Bribery
- Fair treatment of customers and suppliers
- Gifts and conflict of interest
- Honesty
- Harassment
- Bullying
- Corruption

KFC has an annual compliance training programme in relation to anti-bribery and the Business Code of Conduct. We are proud of our training standards, and we are currently assessing our compliance training programme to see where we can make further improvements and extend Modern Slavery awareness training.

Our Previous Commitments and Achievements

In 2017 through 2018, we committed to:

Issue and implement the Sourcing Code of Practice

- We have issued and implemented the Sourcing Code of Practice to all of our Direct Suppliers.

Commence the mapping of our Direct Suppliers

- We have completed mapping for all of our Direct Suppliers and commenced mapping for our Non-Direct Suppliers.

Complete the SEDEX risk assessments on all Direct Suppliers

- We have completed SEDEX risk assessments on all of our Direct Suppliers.

Ensure that we have no high risk suppliers within our Direct Suppliers

- Through our compliance tools and processes, we can confirm that all of our Direct Suppliers are low risk.

Have a clear roadmap to 100% low risk Direct Suppliers

- We have achieved 100% low risk Direct Suppliers and a clear roadmap to maintain this.

Complete risk assessments on Non-Direct categories in our supply chain that we consider to be high risk

- We have completed risk assesments on our Non-Direct categories in our supply chain that we consider to be high risk.This needs to be completely reviewed in the context of who is managing the SEDEX risk assessment and follow up including audits, results and any non-compliances.

What Comes Next?

In 2020, we will:

- Review our risk mapping of all direct suppliers and follow up with those rated as high risk to further assess their due diligence on modern slavery prevention requirements

- Establish a process to address any non-compliances found in both supply chain and restaurant operations and build this into Responsible Business governance structure.

- Incorporate modern slavery awareness training in our compliance training programme.

- Review our current levels of effectiveness to increase stakeholder engagement and awareness of modern slavery.

- Assess our salary benchmarking practices in restaurant roles to ensure that we are paying fair according to the location of the role.

This statement has been approved by the board of directors of Kentucky Fried Chicken (Great Britain) Limited.

Signed
Paula MacKenzie
General Manager, Kentucky Fried Chicken (Great Britain) Limited
December 2019