UK MODERN SLAVERY ACT TRANSPARENCY STATEMENT

We welcome the requirements of section 54 of the Modern Slavery Act and see the transparency it encourages as coherent with our support for the UN Guiding Principles on Business and Human Rights and their requirement to ‘know and show’ that we are working to respect human rights.

About Us

Our Organisation, Structure and Supply Chain

Kollestee UK Global is a Global and Innovative Company providing Hi-Tech Innovative Solutions by applying Science and Technology with all Global Resources to improve Quality Standards at Every Stage of Life.

Global Innovations have being developed and executed by Kollestee UK Global with Globally gained Deep Experience.

Kollestee UK Global especially focuses to provide Break-Through, Groundbreaking and Game Changer Innovations that have High-Potential in Sustainability, Reliability and Repeatability.

At the same time, Kollestee UK Global is a Multinational Consumer Goods Company that produces Food, Drink, Personal Care, Beauty, Wellbeing and Home Care products. The Specific and Premium Kollestee UK Global brands are used by consumers worldwide. Our brands are available in around 60 countries.

In May 2023, in the United Kingdom, as Kollestee UK Global, we launched a new organisational structure aimed at helping our Global Businesses navigate to Sustainable Growth, Faster Innovation and a Profitable Future.

We have moved to an Operating Model comprising nine Business Groups:

Kollestee UK Medical

Kollestee UK Nutrition

Kollestee UK Agri-Tech

Kollestee UK Researches

Kollestee UK Technology

Kollestee UK Innovations

Kollestee UK Finance

Kollestee UK Ventures

Kollestee UK Studios

We call these our Pioneer Organisations. The model is designed to deliver our Pioneer Strategies and navigate our Purpose-Led, Future-Fit Companies to be the Global Leaders in Sustainable, Reliable and Repeatable Businesses.

The Kollestee UK Global Supply Chain

We have a large and diverse supply chain. Details of our supply chain and strategy (including our suppliers per spend category), the geographic distribution of our suppliers. Further details of our company and supply chain will be able to be found in our Annual Report and Accounts 2023.

Our Approach to Human Rights

“ ………”.

Olcay Yılmaz DAMAR | Chairman of the Board | Kollestee UK Global

 

Governance

Our approach to respecting and advancing human rights can be found here.

Our human rights governance is led from the top, overseen by our CEO, and supported by our Kollestee UK Global Leadership Executive (KUGLE), the most senior leaders of our business. As well as providing strategic direction, the KUGLE is consulted on human rights issues when the severity of an actual or potential impact is high, where a business-critical decision needs to be taken, or where substantial financial investment may be needed to address an impact. Additional board-level oversight is provided by the Corporate Responsibility Committee. The business is also advised by the Kollestee UK Global Sustainability Advisory Council.

Our approach to human rights is to embed it in all parts of our business, with areas of global expertise to provide guidance and support, including within the Sustainability Function; Business Operations; and Responsible Business (Business Integrity). The Global Head of Sustainability (Human Rights) reports to the Chief Sustainability Officer who reports to the Chief Executive Officer.

Our teams work together to embed respect for human rights in our business and in the markets where we operate, working closely with other functions, including Human Resources and Legal.

Our Responsible Business team is responsible for the compliance and governance of the Responsible Partner Policy.

Our Sustainability function and Business Operations Sustainability teams work together to address human rights risks.

Once a risk to people is identified, we work to address it. In our extended supply chain, this is either bilaterally with our partners or collaboratively with other stakeholders, depending on our influence and the scale of the risk. If the risk materialises and an impact is found to have occurred, then we work with our partners to remediate it, verify remediation and put appropriate processes in place to seek to prevent the issue from happening again. We believe that transparency is vital to enable positive change, and we report on our progress.

The Business Operations Team (BOS) leads the development of a framework and action plan to address forced labour, aiming to improve the identification, prevention and remediation of forced labour issues. BOS works in collaboration with the Global Sustainability Function, Responsible Business, Human Resources and Procurement.

Embedding Our Policies

This year we have updated and released two key policy statements – our overarching Human Rights Policy Statement and our Responsible Partner Policy (RPP).

Human Rights Policy Statement

We first published our Human Rights Policy Statement (a key element of implementing the UN Guiding Principles on Business and Human Rights) in 2023. We are publishing it in Quarter-2 2023.

Responsible Partner Policy (RPP)

In May 2023, we launched our updated Responsible Partner Policy (RPP), which brings together our supplier-facing Responsible Sourcing Policy (RSP) and our distributor and customer-facing Responsible Business Partner Policy (RBPP) to create a single comprehensive policy that outlines our expectations and requirements for our business partners. Our RPP outlines our commitment to responsible business and details the mandatory requirements we expect our partners to meet – largely based on international conventions and standards and aligned with peer companies.

Our requirements are set out as 17 fundamental principles and these are organised within the RPP as three interconnected pillars: Business Integrity & Ethics, Human Rights and Planet.

The RPP includes Mandatory Management Systems which provide the appropriate policies, processes and procedures that our partners must have in place and implement in order to achieve and maintain the Mandatory Requirements of the policy. The greater focus on Management Systems is aimed at addressing the root causes of potential issues of non-compliance. Future Mandatory Requirements are requirements that are not yet mandatory in order to do business with us but will be mandatory in the future, for example payment of a living wage.

The scope of the RPP has also been extended to cover more suppliers, going beyond those who directly invoice us for goods and services to include those:

in any tier that do the work that Kollestee UK Global contracts from a Tier 1 (direct) supplier; and

any supplier beyond Tier 1 who has a contract with Kollestee UK Global, or whom Kollestee UK Global has expressly appointed to provide goods or services to the Tier 1 supplier, even where they do not directly invoice Kollestee UK Global.

We recognise that forced labour and modern slavery are more likely to occur further up the supply chain.

We have strengthened the requirement for our partners to cascade requirements up their own supply chains. Undertaking upstream due diligence and regularly engaging with relevant business partners (using a risk-based approach) help to prevent conditions of slavery from entering the supply chain.

The RPP is designed to build a more resilient business, by moving beyond a compliance model to a more continuous improvement process.

The RPP builds on the previous Responsible Sourcing Policy by making it explicit that employers must repay fees if workers have paid these in connection with obtaining employment.

The Policy also prohibits the use of prison labour except in circumstances where the terms and conditions of employment uphold the Mandatory Requirements of the policy and can be verified.

Our partners must adhere to the Mandatory Requirements and Mandatory Management Systems of our RPP in order to do business with Kollestee UK Global.

Fundamental Principles 4 and 7 work to prevent forced labour.

Fundamental Principle 4 – Freely Agreed Terms of Employment – ensures that work is conducted on the basis of freely agreed and documented terms of employment.

Fundamental Principle 7 – Work is Voluntary – ensures that employment is accepted and work is conducted on a voluntary basis.

Leading Practices

The RPP includes a section on Leading Practices. Relating to the requirement that work is voluntary, the two highlighted leading practices related to participation in sector-wide initiatives to promote ethical recruitment and support for initiatives to support survivors of human trafficking.

The RPP also contains a requirement that non-management workers work a maximum of 60 hours per week including overtime. Excessive working hours can be an indicator of forced labour.

Alongside our RPP, later in 2023 we will publish Implementation Guidance, which provides our business partners with examples of effective steps and additional information to help them achieve and sustain the Mandatory Requirements of our RPP.

Human Rights Due Diligence

We are driving the Implementation of Respect for Human Rights through our Due Diligence Processes.

We have a strong policy framework and management system, which includes the identification and assessment of risk and impact, addressing this as appropriate. We engage with rights-holders, help to build awareness and capability and provide remedy where needed. We report regularly on our progress. We have a continuous improvement model, whereby we review our policies and processes against the best practices from peers and guidance from expert organisations. We collaborate with others, using our leverage as appropriate.

Salient Human Rights Issues

We have created a structured framework to address our salient human rights issues. Details of this can be found in our Modern Slavery Statement from last year.

Our 2023 focus has been on implementing our forced labour action plan in priority countries whilst planning to scale up our work in other countries.

In order to focus our efforts, we segmented our supplier base from both a risk and business perspective, carrying out a baseline assessment to gain knowledge of key areas of needed improvement in both awareness and risk. Through this process, we have gained insight into the kind of intervention that is required to strengthen responsible recruitment and employment practices, developing and rolling out tools and guidance for both colleagues in our procurement teams and our suppliers. We have focused on ways to improve the detection of forced labour; that includes working to improve the audit process and testing alternative methods to complement existing audits. At an industry level, we will be playing a key role in encouraging businesses to follow a consistent approach to fee remediation, address common issues related to forced labour collaboratively and pilot new digital solutions. This Statement provides an overview of our approach.

Forced Labour Risk Identification

We take a multidimensional approach to identifying forced labour risk.

When conducting our risk assessment, we consider a number of elements, including:

• External risk indicators, calculated by Verisk Maplecroft, who undertake country-level analysis of forced labour risk
• The views of our Business Integrity committees, internal subject-matter experts and our teams in local markets
• Historic training programmes and completion rates
• Supplier self-assessments through our responsible sourcing programme
• Historic Code breaches and audit results
• Grievances raised and results from other ways of worker engagement
• The views and work of our industry experts, civil society and our peers.

How do we prioritise forced labour issues?

In order to effectively tackle forced labour, we use a geographic risk-based approach, both in our own operations and in our value chain.

In 2023, we will be identifying our priority and high-risk countries by conducting a review of the countries our suppliers operate in and the goods or services they provide; we will then compare these with externally available indices that indicate modern slavery risks. In addition to this, we will be carrying out supplier segmentation to understand which of our suppliers employ migrant workers and where workers come from. We know that migrant workers are at higher risk of forced labour as their movement and recruitment are often poorly regulated and informal, meaning they are vulnerable to risks such as deception, debt bondage (through the payment of recruitment fees) and limited freedom of movement.

Through this process, we have identified the following as high-risk and priority countries:

Priority countries: Malaysia, Oman, Qatar, Saudi Arabia, Thailand, UAE.

High-risk countries: Brazil, Chile, China, Colombia, Ecuador, India, Indonesia, Mexico, South Africa, Vietnam.

Forced Labour Salient Issue Action Plan – 2023 Implementation

Areas of Interventions and Enablers

Our forced labour plan covers five key areas of intervention and we have identified clear outputs, activities and KPIs for each area. Our capability-building plan targets each of these areas.

All workers across our supply chain work voluntarily:

• Suppliers
• Procurement
• Workers
• Recruitment agencies
• Industry and Government Engagement

Implementing our Action Plan in 2023

In 2023 we have begun implementing a three-pillar action plan to address issues related to forced labour, in particular the payment of recruitment fees by workers. This action plan is looking at three key areas: detection, prevention and remediation. Our work continued and evolved throughout 2023.

Detection – Issues are Identified

Detection in our Own Operations

“Consumer Goods Forum (CGF) Human Rights Coalition (HRC) – Employing Human Rights Due Diligence in our Own Operations”

In addition to our ongoing Code Policy process, as members of the CGF Human Rights Coalition (HRC), we are working to cover 100% of our own operations with forced labour-focused human rights due diligence (HRDD) systems by 2025. We recognise that forced labour remains difficult to detect and measure – HRDD will support us in monitoring, remediating and preventing human rights issues that workers may face.

In 2023, we have begun by identifying key countries to pilot this focused HRDD process, namely Pakistan, UAE and Saudi Arabia, so that we can refine the process before rolling it out to all our operations by 2025 as the CGF commitment states.

Detection in our Value Chain

We continue to work to improve the identification of issues related to forced labour, including the payment of recruitment fees, through, for example, improving the quality of audits. We are building on our work in 2023 when we develop guidance for auditors on how to detect non-compliances related to the ‘employer pays’ principle. In 2023 we continue to engage with auditors, especially where we feel that detection is not at the level that it should be.

Alternatives to Audits

Part of our work during 2023 will be to identify and implement alternative approaches to detect forced labour cases, and we will be currently testing alternative methods to complement existing audits.

Human Rights Impact Assessments (HRIA)

As part of our implementation of the UN Guiding Principles on Business and Human Rights and to complement our social compliance process, we carry out Human Rights Impact Assessments (HRIAs).

The findings and risks of all HRIAs are discussed both within Kollestee UK Global and with relevant partners, and action plans to respond to the findings are created.

Prevention – Reducing the Risk of Forced Labour

In 2023, we continue to support our suppliers in their implementation of management systems to improve responsible recruitment systems. Using a variety of approaches, we have carried out a number of capability-building initiatives in order to reduce the risks of forced labour in our value chain and beyond. During 2023 training will have been conducted with a focus on priority countries and suppliers as highlighted through risk assessment.

Internal Capability Building

Procurement plays a key role in engaging with suppliers to support the remediation of Key Incidents related to forced labour or to discuss initiatives aimed at reducing the risk of forced labour in priority and high-risk countries. Tools and knowledge to support suppliers in preventing and remediating these issues are shared with our procurement team.

External Capability Building

The tables, we will share in the following years, will provide an overview of our key awareness-raising and capability-building initiatives and examples of the stakeholders we engaged with since 2023.

We continue to work to address potential issues beyond our direct suppliers. This will include working with both our direct suppliers and their recruitment agencies and the workers of those agencies, implementing the pilot projects to leverage new technology solutions to support this approach.

Remediation – Forced Labour Related Issues are Addressed

In 2023 we will have discovered a number of incidents of non-compliances with our requirements relating to voluntary work, including the payment of recruitment fees and passport retention. When these incidents are found, our Procurement teams work with these suppliers to support them in implementing a Corrective Action Plan (CAP). We help the suppliers understand the issues, stop the practices relating to the non-compliances and put preventative measures in place to stop similar issues from happening again. Suppliers are required to create a CAP in line with our supplier remediation guidance (relating to the payment of recruitment fees) within four weeks. Once the CAP is completed, we review it with the supplier, provide any recommendations for improvement if they are needed and approve it if it meets our remediation requirements.

Consumer Goods Forum (CGF) Guidance In 2023, we will be working in partnership with a number of peer companies, under the umbrella of AIM-Progress, and the CGF HRC, we will release new Guidance on the Repayment of Worker-paid Recruitment Fees and Related Costs. This guidance acts as a tool to support corporate action against forced labour, specifically debt bondage. It sets out a clear framework to help businesses ensure their recruitment and employment practices respect the CGF’s Priority Industry Principles.

“ ………”.

Olcay Yılmaz DAMAR | Chairman of the Board | Kollestee UK Global

What fee payment remediation looks like:

Step 1: Raise a Key Incident (KI) with Kollestee UK Global

Step 2: Investigate the recruitment fees and costs paid by workers

Step 3: Understand who is eligible for repayment

Step 4: Calculate the repayment amount

Step 5: Create the timeline for repayment

Step 6: Engage and communicate with migrant workers

Step 7: Verify repayment

Assessing Impact and Effectiveness

“During 2023, we will have finalised our first KPIs in order to better measure and describe our progress. We will begin to comprehensively measure against these indicators in 2024.”

This is an area which we know we must strengthen, finding better ways to understand, measure and report on the impact on those affected, rather than input/output indicators. We also recognise that more accurate data relating to pre- and post-departure fee payment will help more effectively repay the money that workers have paid.

We believe that industry-level KPIs are also an important step in driving progress and will continue to work with organisations such as AIM-Progress and the Consumer Goods Forum on this.

Part of Kollestee UK Global’s 2023 SPI (Sustainability Progress Index) is linked to our Compass ambition to raise living standards and specifically the value of contracts (including the requirement that workers are paid a living wage). As stated by organisations such as Walk Free, “Ensuring a living wage for workers at every stage of the supply chain lessens the likelihood of them becoming victims of forced labour or child labour”.

Looking Ahead

Detection

Recognising that the numbers of identified cases of forced labour are likely far smaller than the reality and working both bilaterally with our suppliers and peer companies, we will continue to explore more effective ways of identifying potential cases of forced labour.

Whilst smart-phone penetration is high in many countries, particularly in South East Asia, it is more challenging in other parts of the world. We are considering how we best address this going forward. The use of digital technology is best used to complement other means of engagement (both directly with workers and with their representatives) and not to replace it.

Prevention

In 2023 we will continue to work across our industry, including efforts with the Consumer Goods Forum and AIM-Progress to prevent cases of forced labour through ongoing capability building for our direct suppliers and beyond, taking a risk-based approach.

We are discussing with peer companies under the umbrella of AIM-Progress (APAC hub) the further engagement of suppliers in South East and North Asia aiming to support a deeper understanding of effective human rights due diligence processes to enable responsible sourcing.

The B4IG Human Rights Working Group’s Fair Recruitment project will continue to advance in 2023.

Business for Inclusive Growth (B4IG) is a partnership between the OECD and a global, CEO-led coalition of companies fighting against inequalities of income and opportunities.

Remediation

We will continue to work with our suppliers both bilaterally and with other companies as appropriate to remediate identified issues of forced labour, increasing our understanding of – and reporting on – the impact on workers of these issues and their remediation. Although much of our work is focused on the remediation of recruitment fees, we will continue to work to detect, prevent and remediate all issues of potential or actual forced labour.