MODERN SLAVERY STATEMENT 2021

Kentucky Fried Chicken (Great Britain) Limited Modern Slavery Statement 2021. 
 

Introduction from Meghan Farren – KFC UK&I Managing Director

This is KFC’s Modern Slavery Statement for 2021 issued in accordance with the Modern Slavery Act 2015.

KFC was first established by Colonel Harland Sanders in the 1930s. Today KFC is a global business but despite this, the values that the Colonel built the business on remain as important today as when our first restaurant opened. These values are centred on authenticity and integrity coupled with generosity and going that extra mile for our people.

Whilst we are a global restaurant business, we are also a people business.  The scale and nature of our business mean we have a responsibility to play our role in reducing, and ultimately eliminating the exploitation of people. Within today’s modern society the exploitation of any human cannot be accepted, and KFC will take a zero-tolerance approach to any form of slavery, forced labour and human trafficking.

We care about the impact that our ingredients have before they reach us, that’s why we work closely with our supply chain partners, franchisees and NGOs to put plans and programmes into action to protect the rights of people across our supply chains. Throughout 2021 we have focused on increasing the transparency of our supply chain and improving our risk mapping in this area. This information has improved the actions we have taken, including the development of our supplier risk scorecard.  We have worked closely alongside STOP THE TRAFFIK to ensure we continue to make progress.

Looking ahead, we will be continuing to improve the awareness of risk across our own business, within our partner supply chains and across the wider industry. We will continue to develop the transparency and risk rating of our own business and supply chain and take a targeted approach that continues to drive improvement.

The statement below sets out the steps we have taken throughout 2021 (and continue to take) as a business to prevent slavery and human trafficking in our operations and supply chains.

Introduction

This statement sets out the steps taken by Kentucky Fried Chicken (Great Britain) Limited and other relevant group companies (“KFC” or “we”) for the financial year ended 26 December 2021 to prevent modern slavery and human trafficking in its business and supply chains.

Our previous Modern Slavery Statements can be found here: 2020 Statement; 2019 Statement; 2018/17 Statement; 2016/17 Statement.

Our Organisation and Our Business 

KFC was introduced to Britain in 1965 when our first restaurant opened in Preston. There are now around 1,000 KFCs in the UK and Ireland and around 27,000 team members in our business.  There are over 26,000 KFC outlets in more than 145 countries and territories around the world. KFC is operated on a part equity, part franchised model and as of December 2021, 99% of KFC restaurants across the world 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 53,000 restaurants in more than 150 countries and territories. In 2019 and 2021, Yum! Brands was named to the Dow Jones Sustainability North America Index and in 2020, the company ranked among the top 100 Best Corporate Citizens by 3BL Media. 

 We understand that modern slavery - whether slavery, servitude, forced or compulsory labour or human trafficking - is a continual and growing global issue that can be found especially in the agri-food sector in which we operate. At KFC, we have a zero-tolerance policy on modern slavery and human trafficking of any kind within our business and 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. Our Supply Chain

We are committed to conducting our business with the highest degree of integrity. We seek to 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 the continuous improvement of quality, service, cost, innovation and risk management.  

Direct suppliers mean suppliers of goods that are core to our business, namely food, drink and packaging. 

While we are confident that our internal centralised human resources processes for recruitment minimise 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. 

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. Further details of what these processes include can be found in the due diligence section of this document.  

We carefully select our direct suppliers, developing long-term relationships with them that give 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.

Our Policies  

One of the ways we address modern slavery risks in our supply chains is through our Sourcing Code of Practice (the “Sourcing Code”), which incorporates the Yum! Supplier Code of Conduct and is governed by the KFC Western Europe Ethical Sourcing Policy, the Sustainable Sourcing Policy, the Farm Animal Welfare Policy, and the Product Integrity Policy. The Sourcing Code sets out defined ethical standards we require suppliers to follow as part of their agreement to supply KFC. It requires all suppliers to uphold internationally agreed standards of labour, comply with national laws, and work to continually improve workplace and employment standards. All our direct suppliers are required to comply with the Sourcing Code. 

Labour Standards 

Our labour standards are set out in our Western Europe Ethical Sourcing Policy, which is reviewed and updated where needed by the KFC Western Europe Head of Responsible Sourcing & Regulatory Compliance. If a supplier is found to be in breach of these policies an investigation and appropriate corrective action will be taken.

We require our suppliers to provide employment that is freely chosen, ensure that there is no forced or bonded labour and have in place policies, systems, risk assessment, training, and measurements 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. Suppliers are required to treat all workers with dignity and respect, and never allow or condone any actions such as abuse or harassment. Suppliers are also required to comply with all applicable wage and hour laws and regulations.

Further, we support the Ethical Trading Initiative (ETI) Base Code of Conduct, which sets out the labour standards we expect our suppliers to meet. 

Due Diligence, Risk Assessment and Management 

We recognise the importance of being fully aware of the ethical practices and any associated risks in our supply chain.  

In 2021, KFC completed an inherent supply chain risk mapping with our partner, STOP THE TRAFFIK. Inherent risk mapping involves an overview of supply chain risk by evaluating suppliers’ sectors and countries of operation. This process helped us target and prioritise our risk mitigation efforts.

The risk mapping process ranks each supplier on a scale of 1 to 5 based on factors related to their economic sector and country of operations. A supplier’s ranking is measured by assessing their potential impact across several human rights issues, including but not limited to, employment rights and civil liberties, corruption and the rule of law, human development and employment, financial inclusion, peace and stability, and refugees and migration. For the assessment, STOP THE TRAFFIK gathered data from 14 different data sources, which was then further enriched with evidence from their Centre for Intelligence-Led Prevention. These data sources contain nearly 1 million incidents of modern slavery.

As part of their contract with KFC, suppliers are expected to establish management systems for delivering compliance to KFC policies and to maintain records demonstrating this. Suppliers must take appropriate steps to ensure that:

• The Sourcing Code is communicated to all relevant employees.
• There is regular engagement with relevant management teams about the need for compliance.
• Appropriate training on the Sourcing Code is provided to key employees.
• Processes and systems are in place to provide means for workers to report or discuss non-compliance confidentially.

KFC expects any non-compliance to the Sourcing Code to be reported by our supplier so that we can work together to create a time-measured plan to correct the situation as quickly as possible.

In addition, our direct suppliers are required to register with SEDEX, an ethical data exchange that ensures that ethical standards are monitored and measured. All direct suppliers are required to complete a risk assessment, including a Self-Assessment Questionnaire and undertake independent third-party audits when required.  This provides KFC with an overview of the level of risk posed by each supplier and allows us to focus on the areas of greatest risk.  

In any instances where we feel there is an 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.

2. Our Operations

We recognise that team members working for both KFC UK headquarters, KFC-owned restaurants and franchisee-owned restaurants must be treated fairly and with respect. We ensure that we comply with all applicable wages, benefits and hour laws and regulations, and our franchisees are contractually obliged to do the same. We pay fair wages in line with the norms for the industry and market, do not require anyone to work excessive hours and overtime is voluntary. 

Our Internal Policies  

We know that our employees are crucial to helping ensure that modern slavery is removed from our operations and supply chain. We have the following policies that support our statement and position on modern slavery and human trafficking:

• Business Conduct Ethics Policy
• Employee Code of Conduct
• Grievance Policy
• Equal Opportunities Policy
• Whistleblowing Policy (which is included in our Equal Opportunities Policy) - our employees have a duty to report any ethical concerns so that we can take steps to stop it from happening. We know that this can be personally challenging, so we have provided and publicised a completely confidential helpline called “Speak Up” to encourage our employees to whistle blow in safety.

Training  

KFC has an annual compliance training programme in relation to our policies. We are proud of our training standards, and we continue to assess our compliance training programme to see where we can make further improvements. An assessment of our training programme in 2021 showed the need to expand the training modules to include modern slavery and sexual exploitation training. This will be rolled out as a mandatory training session for all employees in 2022.

Achievements in 2021

To measure our effectiveness and progress on the issues of modern slavery and human trafficking, we have created Key Performance Indicators (KPIs), and have reported on our progress on each of our KPIs as set out below:

Next steps

In the next 12 months, we will continue to strengthen our approach to managing the risk of modern slavery within our business and supply chain. Our targets for 2022 are set out below:

1. Supply chain risk assessment – we will continue our work to ensure that 100% of KFC’s existing and new suppliers have an up-to-date risk score, and we will continue our work with STOP THE TRAFFIK to develop an understanding of the current supply chain's modern slavery risk.
2. Supply chain due diligence – we will continue our work to ensure that 100% of KFC’s direct suppliers are required to be registered with SEDEX, and we will develop our use of the platform to increase the transparency of information we have on suppliers.
3. Training - we will launch a mandatory training programme for all restaurant and regional staff on modern slavery and specifically, child sexual exploitation.
4. Employees – we will launch the KFC Reward Council, which oversees the visibility and parity of rewards across our business, both within franchisees and direct employees.

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

Meghan Farren

Director, Kentucky Fried Chicken (Great Britain) Limited

20 December 2022