Third Party Code of Practice
We have a Third Party Code of Practice which outlines the minimum standards we expect our third party suppliers to uphold, including requirements related to modern slavery.
As of April 2020, the code included the following requirements:
- Third parties will prohibit the use of forced or involuntary labour, through slavery, servitude, forced or compulsory labour, human trafficking or other means. Employment is voluntary and employees retain the right and are able to leave employment when they want.
- Third parties will not use child labour. Employment of young workers shall adhere to local regulations.
- Third parties will ensure that working hours are in accordance with local regulation and industry practices, that employees are allowed at least one day off in each working week and all overtime is carried out on a voluntary basis.
- Third parties will comply with all applicable wage legislation and regulation relevant to the country in which they operate, including those relating to minimum wages, overtime hours and any other elements of compensation. Unauthorised deductions will not be taken from wages.
- Third parties will respect the legal rights of employees to join, or to refrain from joining, worker organisations and associations including trade unions.
- Third parties will not discriminate on grounds of race, religion or belief, age, sexual orientation, sex, gender reassignment, marital or civil partnership status, pregnancy and maternity or disability in its employment practices.
- Third parties will treat all employees with respect and shall not use any form of psychological or physical coercion or harassment.
- Third parties will provide clear disciplinary and grievance procedures that enable employees to raise concerns including bullying and harassment, mental, physical or verbal abuse.
During the 2019/20 financial year, we began updating our Third Party Code of Practice to include additional standards such as upholding the Employer Pays Principle, meaning no worker should pay for a job. The updated Code will be reviewed by our partner, Unseen.
The code is owned by our Supply Chain Responsible Business Team and is approved by our Director of Shared Services. It can be found within the policy section of our Supplier Portal: https://www.nationwide.co.uk/suppliers/suppliers-home
We formed the Supply Chain Responsible Business Team in 2019 to drive progress on environmental, social and ethical topics in relation our supply chain, including modern slavery. We recruited a Responsible Business Consultant with experience in corporate modern slavery reporting who joined the team in 2020 and has since supported the direction and delivery of our programme to eradicate modern slavery throughout our supply chain.
In February 2020, we established a cross-functional Supply Chain Anti-Slavery Working Party to further build on our efforts to eradicate modern slavery throughout our supply chain. The party meets approximately once a month and is chaired by our Senior Supply Chain Responsible Business Manager.
The Working Party established a partnership with Unseen to build on our approach to supplier due diligence. We’re collaborating with Unseen to refresh our third party supplier risk assessment and enhance our screening, monitoring and engagement activities. Unseen will also provide tailored training to colleagues with supply chain responsibilities.
We screen our third party suppliers through our Third Party Registration Form and Pre-Qualification Questionnaire (PQQ), which each request that suppliers confirm they can comply with our Third Party Code of Practice. In addition, we subscribe to the Financial Supplier Qualification System (FSQS), a tool by Hellios used to assess potential third party suppliers across a number of areas including compliance with the Act.
Our standard form supplier agreements include provisions relating to ethical trading and tackling modern slavery. The contractual terms that we seek to agree with our third party suppliers require that they comply with our Third Party Code of Practice, take steps to monitor their own operations and supplier networks for modern slavery, and to report as necessary. For large third party suppliers, this means meeting their own obligations under the Act. Our terms provide that Nationwide will work in support of a supplier in tackling instances of modern slavery that they may uncover, rather than simply ceasing to work with that supplier. We believe that this approach, where suppliers are encouraged to actively seek out and resolve any instance of modern slavery in their business or supply chain without the fear of losing Nationwide’s business, is consistent with the approach that the Act promotes.
Assessing and managing risk
We have refreshed our third party supplier risk assessment. We partnered with Unseen to systematically assess approximately 900 of our third party suppliers based on location, category, materiality and spend band. Unseen created a risk assessment matrix to apply to our third party suppliers, using country-level research by the Global Slavery Index, Verisk, Maplecroft, UN Human Rights Council and Trafficking in Persons Report 2019, as well as sector analysis by the UK Government, Organization for Security and Co-operation in Europe, KPMG and United Nations Office on Drugs and Crime. Additional risk factors, such as political instability and social or civil unrest, were also taken into consideration.
4% of the third party suppliers assessed have primary operations identified as high risk, which included China.
13.2% of the third party suppliers assessed are in categories were identified as high risk. These included construction, facilities, IT hardware and resourcing.
During 2020/21, we’ll be investigating the findings of the risk assessment further and engaging with those suppliers identified as potentially higher risk to promote best practice in mitigating and managing modern slavery risk.
Last year, we set a target to provide further modern slavery training to Procurement and Supply Chain Management colleagues. To achieve this, we co-hosted Business in the Community’s (BITC) first ever procurement event with workshops on tackling modern slavery through sourcing and supply chain management, and attended StrongerTogether’s Tackling Modern Slavery through Purchasing Practices workshop.
During the financial year we also began planning training for a wider group of colleagues with supply chain responsibilities, partnering with Unseen to develop tailored content. Whilst initial dates for these training workshops have been postponed with the disruption resulting from the COVID-19 pandemic, we still intend to deliver some training within the 2020/21 financial year.
We request all of our third party suppliers comply with our Third Party Code of Practice via our Third Party Registration Form, and where contracts are agreed via our PQQ. In January 2020, a centralised function was created to enhance management and control of the screening process for supplier due diligence at supplier onboarding and required intervals, such as contract renewals. By the end of March 2020, 99%, or 70 of 71, of our third party suppliers onboarded or renewed agreed to comply with our Third Party Code of Practice via our PQQ through this enhanced process. We’re reviewing the policies of the remaining third party supplier to ensure they meet our standards.
Approximately 34% of our third party suppliers participate in the FSQS, by Hellios, completing a questionnaire including questions related to modern slavery. Of these, 79.5% state they publish a statement on their website concerning their approach to modern slavery and 18.6% are not obligated to publish a statement under the Act. Nationwide is engaging with the remaining 1.9% of (or 7) third party suppliers to understand their obligations under the Act. One supplier has since shared its statement and the link from its website, another has shared its parent company’s statement and two have confirmed they are not obligated under the Act. Conversations are ongoing with the remaining three third party suppliers.
|Sourcing to meet the global goals
||Business in the Community BITC)
||4 colleagues including the Director of Shared Services, our Supply Chain Responsible Business Team and Supplier Relationship Manager
||We co-hosted BITC’s first ever procurement event which included workshops on addressing modern slavery facilitated by representatives from StrongerTogether and the Ethical Trading Initiative. Our Director of Shared Services opened the event by sharing our journey with representatives from 60 companies attending.
|Tackling Modern Slavery through Purchasing Practices
||Supply Chain Responsible Business Consultant
||Our Supply Chain Responsible Business Consultant attended this one-day workshop by MSI StrongerTogether which presented best practice in addressing modern slavery in procurement and supply. Learnings have been built into our anti-slavery programme.
Our priorities for the 2020/21 financial year are to engage with high risk suppliers on their approach to addressing modern slavery, and to provide training to further colleagues with supply chain-related roles and responsibilities in partnership with Unseen.
This has been approved by the Board of Nationwide on behalf of Nationwide and each of its subsidiaries, and is signed by:
- Joe Garner, Chief Executive Officer
- David Roberts, Chairman