Responsible Sourcing Standards

Ethical trading requirements for suppliers to WHSmith
Revised: March 2022

Introduction

Welcome to our Responsible Sourcing Standards which set out our expectations for business conduct in our supply chain. WHSmith is committed to respecting human rights and the environment throughout our operations and supply chain and ensuring that we source goods and services responsibly is a key component in delivering this commitment. We want to partner with suppliers who:

Are committed to working with integrity, and always operate within the law;
Provide safe, fair and decent working conditions, respecting employees’ individual and collective freedoms and rights;
Treat all workers with dignity, respect and without discrimination; and
Minimise the impact of their operations on the environment and on the communities in which they are located.

WHSmith is committed to responsible sourcing practices, to ensure that our procurement activities do not have a detrimental impact on worker welfare, the environment or local communities. We expect our partners, suppliers and manufacturers to commit to working towards compliance with these Responsible Sourcing Standards, both within their own operations and those of their suppliers.

This document builds upon and replaces our previous Ethical Trading Code of Conduct and sets out the standards we expect. It is based upon a number of international human rights principles and standards, including:

The Ethical Trading Initiative’s (ETI) Base Code ;
The United Nations Guiding Principles on Business and Human Rights ;
The International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work and associated fundamental ILO conventions on freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation; and
Business Principles for Countering Bribery produced by Transparency International .

The requirements in this document constitute minimum and not maximum standards, and they should not be used to prevent companies from exceeding these standards. All of our suppliers are expected to comply with national and other applicable law and, where the provisions of law and this document address the same subject, suppliers should adhere to the provision which provides the worker with the greater protection.

We monitor compliance through a due diligence process of supplier self-declaration, in-house assessment, independent audit and on-going supplier engagement to verify that all suppliers of WHSmith-branded products meet acceptable standards and are working towards continuous improvement and full compliance with our requirements. We are committed to working with suppliers, their employees, elected representatives and NGO’s where appropriate through the due diligence process. Suppliers are responsible for enforcing these standards in their own operations, and in those of their supply chain, and should be sensitive to the rights of their workers in implementing these standards.

In line with the Modern Slavery Act 2018 (Cth), we are committed to addressing any incidences of modern slavery within our supply chain. Section 2 of this document covers measures to reduce the risk of modern slavery, but many of the other sections are also relevant. We pay particular attention to the protection of foreign contract workers who may be potentially vulnerable to exploitation. WHSmith aims to ensure that all foreign workers retain passports and other identity documents to facilitate their unhindered freedom of movement, and do not have to pay recruitment fees that would leave them indebted to their employer. We expect all of our suppliers and partners to follow this policy within their own operations and supply chains, and to ensure that these standards are upheld throughout the value chain.

The standards which follow cover these areas:

Acting lawfully and with integrity
Employment is freely chosen
Freedom of association and a right to collective bargaining are respected
Working conditions are safe and hygienic
Child labour shall not be used
Living wages are paid
Working hours are not excessive
No discrimination is practised
Regular employment is provided
No harsh or inhumane treatment is allowed
Disciplinary and grievance procedures are in place
Similar standards for agency and indirect staff
Protecting the rights of migrant workers
Environmental impacts are minimised, and community land rights protected

WHSmith commits to supporting and working with suppliers who have genuine difficulties in meeting these standards, or who identify other risks not considered in this document which need addressing.

Carl Cowling

Group Chief Executive

Approved by the WH Smith PLC Board: March 2022

1. Acting lawfully and with integrity

1.1 Any supplier to WHSmith must comply with all laws and regulations in the country in which it operates, and with other applicable international laws and regulations. These include those relating to international trade, such as sanctions, export controls and reporting obligations; data protection; and anti-trust and competition law. The supplier must not take any action or permit actions by its supplier or other third parties, which may render WHSmith liable for a violation of any law.

1.2 WHSmith does not tolerate corruption, bribery or extortion in any form, either within our own business or in those we do business with. Bribery and corruption are criminal offences under Section 70.2 of the Schedule to the Criminal Code Act 1995 (Cth) which applies to any bribes paid in connection with WHSmith’s business anywhere in the world. We require our suppliers, and all those in their supply chain, to comply with the Criminal Code Act, in addition to any local anti-bribery and anti-corruption laws.

1.3 Bribery is the act of offering, giving, requesting, accepting or receiving something of value in exchange for some kind of influence or action in return. Bribes can be offered in many forms:

facilitation payments, offers of gifts or hospitality, and donations to political parties can all constitute forms of bribery. The supplier must have an anti-bribery policy and adequate processes in place to ensure bribery does not take place in any of its commercial undertakings, including improper offers or payments to or from employees, customers, suppliers, organisations or individuals. On request, the supplier must provide evidence that their own suppliers, sub-contractors, agents or representatives have similar anti-bribery and anticorruption procedures in place and there are signed compliance statements to confirm this.

1.4 Any actual or potential conflict of interest in any commercial dealings with WHSmith must be declared by the supplier. Any ownership or beneficial interest in a supplier by a government official, a representative of a political party or a WHSmith employee must be declared in advance of any contractual relationship with WHSmith.

1.5 All financial and commercial dealings should be accurately recorded in the suppliers’ reporting systems. There should be no actual or attempted fraud or money laundering and no use of confidential information to engage in insider trading. Any money or other consideration paid to the supplier by WHSmith should not be used for any unlawful purpose. We expect transparency from our suppliers, and double books, fake or deliberately inconsistent records will not be tolerated.

2. Employment is freely chosen

2.1 Suppliers must ensure that all workers on their site, both permanent and casual, are provided with employment documents that are freely agreed and which respect their legal and contractual rights. These documents must include understandable information about their employment conditions, including wages, hours, holidays and reasonable notice periods and must be provided before workers enter employment.

2.2 There must be no forced, bonded, compulsory or involuntary prison labour. Any form of mental or physical coercion, slavery or human trafficking is strictly forbidden. All employment should be voluntary.

2.3 There must be no requirement for workers to lodge deposits, provide financial guarantees or lodge identify papers with their employee. Employers must not withhold payments or place debt

upon employees. Employees must be free to leave their employment if they so wish after reasonable notice.

2.4 Suppliers must respect the rights of workers to take meal and rest breaks as scheduled and leave their workplace at the end of their shift. Any use of worker accommodation must be voluntary and must not restrict workers’ freedom of movement, or other principles laid out in this document.

2.5 All suppliers must ensure they are familiar with local and international laws on Modern Slavery, including those enacted by the UK and Australian Governments. Suppliers must be willing to support WHSmith in our compliance with our legal requirements, ensuring their own due diligence procedures are in place to prevent modern slavery.

3. Freedom of association and a right to collective bargaining are respected

3.1 Workers, without distinction, have the right to join or form trade unions or similar representative bodies of their own choosing and to bargain collectively to the extent permitted by applicable law. Conversely, no worker shall be forced to join trade unions or similar bodies against their wishes.

3.2 The employer adopts an open attitude towards the activities of trade unions or similar representative bodies, and their organisational activities.

3.3 Workers representatives are not discriminated against and have access to carry out their representative functions in the workplace.

3.4 Where the right to freedom of association and collective bargaining is restricted under law, the employer facilitates, and does not hinder, the development of parallel means for independent free association and bargaining.

4. Working conditions are safe and hygienic

4.1 Suppliers must provide a healthy, safe and hygienic working environment for employees, contractors, partners and others affected by their activities. Adequate steps must be taken to prevent accidents and injury to health arising from, or associated with, or occurring in the course of work, by minimising, so far as reasonably practicable, any hazards present in the working environment.

4.2 The supplier must assign responsibility for health and safety to a member of senior management. The supplier should ensure it meets acceptable standards of health and safety risk prevention, including identifying, minimising and preventing hazards, using trained and competent workers, and providing and maintaining safe equipment, tools and personal protective equipment where required.

4.3 The supplier shall have procedures in place to ensure that all of its employees are competent to carry out their work safely. Workers shall receive regular and recorded health and safety training, and such training shall be repeated for new or reassigned workers.

4.4 Access must be provided to potable water, clean toilet facilities and, if appropriate, suitable facilities for safe food preparation and storage. Accommodation, where provided, shall be clean, safe, and meet the basic needs of the workers.

4.5 The supplier must have adequate safeguards against fire, and must ensure the strength, stability and safety of all buildings and equipment. Fire safety requirements include:

prominent display of evacuation posters, with layout, exit routes, assembly points and evacuation procedures:
fire exits and escape routes which are clearly signed, free from obstruction and easily opened;
fire extinguishers with adequate instructions on their use;
fire alarms on all floors to warn of the need for evacuation;
fire doors which meet local legislation and industry standards;
regular inspection of fire prevention measures for signs of damage or obstruction, and to check that they are working;
regular testing of emergency evacuation procedures in both the workplace and accommodation where present.

4.6 The supplier shall have a system and training to prepare for and respond to accidents and other foreseeable emergency situations. There should be mechanisms in place to record, investigate and implement corrective action from any accident and emergency situation.

5. Child labour shall not be used

5.1 There shall be no recruitment or employment of child labour. No one below the minimum legal age for employment should be employed.

5.2 The minimum age for employment shall be the legal age for completing education in the relevant country, or 15 years (or 14 years in countries where educational facilities are sufficiently developed), whichever is the higher.

5.3 If a child is found working directly or indirectly for a supplier, the interests of the child should be the primary consideration. The employer must implement a remediation plan, developing, contributing to, or supporting policies and programmes to assist the child enabling her or him to attend and remain in quality education until no longer a child.

5.4 Children and young people under 18 shall not be employed at night, in hazardous conditions or in a way which will interfere with their education or be harmful to their health, safety or physical, mental, spiritual, moral and social development.

5.5 The policies and procedures relating to the employment of children shall conform to the provisions of the relevant ILO standards.

5.6 Suppliers must have procedures and processes in place to ensure that they do not recruit child labour and that young workers under 18 are protected. All work for young people under 18

must be subject to an appropriate risk assessment and regular monitoring of health, working conditions and hours of work.

5.7 Verification of age must be undertaken, and suppliers must have systems in place to guard against the use of falsified documents as proof of age or use of an older person’s identification papers.

6. Living wages are paid

6.1 Wages and benefits paid for a standard working week should meet or exceed national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income.

6.2 All workers shall be provided with written and understandable information about their wages and employment conditions before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid.

6.3 Deductions from wages as a disciplinary measure are not permitted nor any deductions not provided for by national law without the expressed permission of the worker concerned. Any wage deductions or disciplinary measures must be recorded.

6.4 Employees must be paid at regular intervals and on time.

7. Working hours are not excessive

7.1 Working hours must comply with national laws, collective agreements, and the provisions detailed below, whichever affords the greater protection for workers.

7.2 Working hours, excluding overtime, shall be defined by contract, and shall not exceed 48 hours per week.

7.3 All overtime must be voluntary and not be used to replace additional regular employment. Overtime shall be used responsibly, taking into account the extent, frequency and hours worked by individual workers and the workforce as a whole. Overtime must always be compensated at a premium rate and must meet local law requirements. If no local law exists, the premium rate is recommended to be not less than 125% of the regular rate of pay.

7.4 The total hours worked in any seven-day period shall not exceed 60 hours, except in the exceptional circumstances where the following are met:

this is allowed by national law;
this is allowed by a collective agreement freely negotiated with a workers’ organisation representing a significant portion of the workforce;
appropriate safeguards are taken to protect the workers’ health and safety; and
the employer can demonstrate that exceptional circumstances apply such as unexpected production peaks, accidents or emergencies (production peaks which can be reasonably anticipated do not count as exceptional circumstances).

7.5 Workers shall be provided with at least one day off in every seven-day period or, where allowed by national law, two days off in every 14-day period. The supplier shall grant its employees the right to paid annual vacation.

8. No discrimination is practised

8.1 Suppliers must base their employment practices on the principles of equal opportunity and fair treatment for all. They must not engage in, support or tolerate discrimination in any area of employment.

8.2 There must be no discrimination in hiring, employment terms, remuneration, compensation, access to training, promotion, termination or retirement based on race, social class, national or ethnic origin, religion, age, disability, gender, marital status, sexual orientation, union membership or political affiliation.

8.3 Suppliers must not require medical tests or a pregnancy test as a condition of starting or continuing employment, except where required by applicable laws or regulations or where it is necessary for safety reasons. The worker should provide written consent prior to any medical test taking place.

8.4 Suppliers should make reasonable adjustments for workers with a disability or chronic illness, including re-arranging working duties, providing opportunities for rest breaks and allowing time off for medical appointments.

9. Regular employment is provided

9.1 To every extent possible work performed must be on the basis of a recognised employment relationship established through national law and practice.

9.2 Obligations to employees under labour or social security laws and regulations arising from the regular employment relationship shall not be avoided through the use of labour-only contracting, sub-contracting, temporary labour, excessive use of fixed-term contracts, homeworking arrangements, or through apprenticeship schemes where there is no real intent to impart skills or provide regular employment.

10. No harsh or inhumane treatment is allowed

10.1 Suppliers must treat all employees with respect and dignity. Physical abuse or discipline, the threat of physical abuse, sexual or other harassment and verbal abuse or other forms of mental or physical coercion and intimidation are prohibited.

11. Disciplinary and grievance procedures are in place

11.1 Suppliers must establish written disciplinary procedures and explain them in clear and understandable terms to workers. All disciplinary and other performance management actions must be recorded and explained to workers.

11.2 Workers have the right to trade union or other appropriate representation at disciplinary hearings which may result in significant penalties or dismissal.

11.3 Suppliers must provide a grievance mechanism for workers to raise concerns, without fear of reprisal and with an option of anonymity. Grievances must be thoroughly investigated, and feedback and appropriate remedy given in a timely manner. The root causes of any grievances which are substantiated should be understood and learnings integrated into business processes.

11.4 The existence and scope of this grievance mechanism must be clearly communicated to all workers, and all workers must have equal access.

12. Similar standards for agency and indirect staff

12.1 Suppliers are responsible for all workers on their site, whether they are directly employed, or employed or engaged through a labour provider, agent or contractor. Suppliers must have a process to ensure that they have a record of all workers working at their site, and procedures for recording working hours, wage payments and ensuring that employment of these workers meets any local laws.

12.2 Suppliers to WHSmith must have written agreements with any third-party labour provider to ensure the rights of those workers are protected. These agreements should include pay and benefits, accommodation where provided, health and safety and all other protections described elsewhere in this document. The supplier should monitor adherence on a regular basis to ensure compliance.

13. Protecting the rights of migrant workers

13.1 A migrant worker is defined in the International Labour Organization (ILO) instruments as a person who migrates from one country to another with a view to being employed other than on their own account. Migrant workers may be particularly vulnerable to exploitation, trafficking and indicators of modern slavery. The protections for workers laid out in these standards are as equally applicable to migrant workers as they are to local workers.

13.2 Suppliers must recruit workers through reputable, and in countries where they exist, government-registered recruitment agencies. All workers must be legally permitted to work in the host country. Suppliers must adhere to the laws of the host country and of the country of origin of the worker.

13.3 Migrant workers should not have to pay any fee or other deposit to an agency in order to find work. Suppliers are expected to pay the cost of employment, including recruitment fees, visa fees, fees for work permits and initial travel costs from the country of origin to the host country. These costs must not be charged back to the worker.

13.4 Prior to leaving their home country, workers should be provided with their employment contract in their own language, detailing all pay, working conditions and living arrangements. The contract should be between supplier and worker directly, and not the recruitment agency and worker.

13.5 In line with paragraph 2.3, migrant workers must not be expected to lodge identify documents with their employer. If workers ask for their documents to be held for safe-keeping, then written permission must be obtained from the employee, and documents should be returned to the worker whenever requested.

13.6 Migrant workers must be able to return home at any time without fear of reprisal or incurring unexpected debt. Suppliers must not withhold workers’ pay for insurance, bonds, guarantees or similar purposes.

13.7 At contract completion, the supplier must pay travel costs for the worker to return home. Any wages, benefits or other remuneration must be paid before the worker leaves the host country.

14. Environmental and community impacts are minimised

14.1 The supplier shall comply with all relevant legislation and international standards, and in countries where environmental legislation is not evident or enforced, ensure reasonable practices are in place for managing environmental impacts.

14.2 Suppliers should identify and where appropriate, seek to reduce the environmental impacts of their business activities. An environmental management system should be in place to allocate responsibilities, identify legislation and key environmental impacts, set objectives and targets, ensure policies and processes are in place to manage environmental risks and provide a framework for audit, employee training and corrective actions for continual improvement.

14.3 In addition to complying with local laws, steps should be taken to optimise the use of energy and natural resources and reduce the generation of waste and air pollutants. Principles of resource efficiency and circular economy should be adopted to minimise energy, water and raw materials as far as possible. Suppliers should set targets and action plans to decarbonise their activities, in line with the requirement to reduce emissions to minimise global warming to 1.5^OC

14.4 Waste must be disposed of legally, responsibly and in a way which is not detrimental to the local community or environment. Any wastewater effluents should be subject to appropriate treatment prior to discharge and should meet any local regulatory standards.

14.5 Suppliers must obtain, maintain and keep current all necessary environmental permits, approvals and legislation.

14.6 Individual and local community rights and title to property must be respected. We expect all suppliers to adhere to the principles of free, prior and informed consent during negotiations with regard to use of and / or transfer of land.

14.7 Suppliers must also comply with our Sustainable Forests Policy and Animal Welfare Policy. All products containing paper, board or wood materials must be made from certified materials – FSC (Forest Stewardship Council), PEFC (Programme for the Endorsement of Forest Certification) or other approved certification schemes; or from recycled materials.

Compliance
One of the primary aims of our approach to responsible sourcing is to facilitate continual improvement in working conditions and environmental performance and we are committed to supporting suppliers who are willing to work with us to achieve this goal. WHSmith is a member of the Ethical Trading Initiative and suppliers are expected to join collaborative efforts to understand the root causes of noncompliances and work towards their elimination. The ETI Base Code, or a similar set of principles must be displayed to workers at each supplier site.

We reserve the right to visit any factory used for the production of WHSmith-branded products, either announced or unannounced. If access is denied, then no further orders will be placed with the supplier until the situation is resolved satisfactorily.

We expect transparency from all of our suppliers, and all WHSmith employees and / or third party auditors should be given unrestricted access to premises, workers and relevant documentation. It is the supplier’s responsibility to report all production sites and any use of sub-contractors before work begins. If it comes to light, either through inspection arrangements or other reliable sources, that there is more than one factory and it has not been reported to us already, the undeclared site(s) would be audited and a charge made to the supplier.

Our approach is one of continual improvement, however, there are certain breaches of our standards which will not be tolerated. These include:

Employment of child labour;
Use of forced, bonded or involuntary labour;
Coercion or harassment of workers;
Unsafe working or living arrangements; and
Illegal working practices.

If serious non-conformances are discovered, then an improvement plan will be agreed and no further orders will be placed until the issue is resolved to our satisfaction. We reserve the right to cancel orders and / or terminate supplier contracts with immediate effect in extreme cases, or if the supplier refuses to put in place an improvement plan.

We require our suppliers to report any violations of the law or major breaches with these standards. In the first instance this should be with the WHSmith procurement team who placed the order.