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    Values and management
    UK Modern Slavery Act
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    UK Modern Slavery Act

      UK Modern Slavery Act

      UK Modern Slavery Act 2015, declaration of the principles and guidelines of the company for the business year 2019

      This Declaration of Principles is made in accordance with § 54 part 6 of the UK Modern Slavery Act 2015 and describes the measures implemented by Krones to ensure that our business operations support neither slavery nor human trafficking.

      Business model and markets

      As a supplier of complete systems, Krones provides breweries, beverage bottlers and food producers all over the world with both individual machines and with entire production plants. We cover every individual process step in production – starting from product and container production, filling and packaging all the way up to material flow management and container recycling. The company has a close-knit network of subsidiaries and offices all around the world. Our supply chain, via which we procure raw materials, assembly services, hardware and software for information technology, capital investments and consumables, spans the entire globe.

      In the UK, the Krones Group is represented by its subsidiary Krones UK Ltd. Krones UK Ltd. has also committed to the following principles and measures for ensuring compliance with due diligence requirements in connection with human rights. The company undertakes to fulfil the obligations that are incumbent upon it within the framework of the UK Modern Slavery Act 2015 and to therefore prevent all forms of modern slavery throughout the supply chain.

      Rules and guidelines

      The Krones Code of Conduct applies to all employees, plants and subsidiaries worldwide. It is based on our corporate mission statement and ensures group-wide compliance with laws, standards and guidelines in order to create a working environment that guarantees integrity, respect and fair and responsible behaviour and dealings. All employees in the Krones Group have committed to complying with this Code of Conduct. Consequently, every employee supports the same basic principles in relation to human rights, fair working conditions, environmental protection and the fight against corruption.

      Without exception, Krones also expects all of its business partners to comply with these principles. These are defined in the Krones Group Supplier Code. As set out in the Supplier Code, Krones expects all its suppliers to comply with applicable international standards, including for example:

      • the principles of the United Nations Global Compact (UN),
      • the core labour standards of the International Labour Organization (ILO),
      • the OECD Guidelines for Multinational Enterprises (Organisation for Economic Co-operation and Development),
      • the basic principles of the ETI Base Code (Ethical Trading Initiative),

      and the UK Modern Slavery Act 2015. Furthermore, the Supplier Code of the Krones Group also defines the standards that must be complied with by suppliers in relation to child labour, forced labour and abuses, which also correspond to the UK Modern Slavery Act 2015. Business partners are expected to agree to following the Code of Conduct for Suppliers. For this reason, at regular intervals they are expected to monitor compliance with the standards defined in the code, engage in dialogue with their relevant business partners and permit Krones to carry out company audits on this matter. In the event of non-compliance, Krones reserves the right to respond accordingly.

      Krones will not knowingly engage in business activities with business partners or support them if they are involved in slavery or human trafficking. Any breach of the principles and requirements set out in the Supplier Code will be considered a material impairment of the contractual relationship on the part of the business partner. Krones will further have the right to terminate some or all contractual relations with business partners without notice if the business partners demonstrably fail to fulfil the Supplier Code or do not instigate and implement improvement measures having been set a reasonable period of time by Krones in which to do so.

      Risks and due diligence

      Human rights risk analyses enable Krones to better appraise susceptibility to potential human rights violations and to already take preventive measures in advance. Risks from the company’s own business activities are analysed on the basis of the results of several external social audits. Country-specific and product-specific human rights risks are assessed with the aid of publicly accessible databases, and this is taken as the basis for a qualitative risk assessment of suppliers.

      These risk assessments are supplemented with findings from the compliance due diligence checks, which can also yield information about potential human rights violations in the value creation chain. As part of the procedures integrated in the regular due diligence process, customers, agents, brokers, suppliers, third-party payers, new managing directors/CEOs and new members at top management level are vetted using publicly accessible data to check for red flags.

      The findings from the risk analyses and the due diligence checks feed into the regular group-wide risk management reporting process and are integrated in existing personnel, purchasing and audit processes.

      Training and audits

      As part of our compliance management, all employees in the Krones Group are required to successfully complete compliance training. Krones expects its employees to follow the Code of Conduct. This obligation is enshrined in our employment contracts. The directors of the relevant companies must ensure that their employees are informed about the Code of Conduct and that they lead by good example themselves within their own leadership structure. All employees of the Krones Group are kept informed about changes to the Code of Conduct.

      Product and system audits are carried out by Global Quality Management at our suppliers and cover the areas of Environmental Management, Occupational Health & Safety, Quality Management, Compliance and Human Rights. As well as looking at weaknesses, risks and potential areas for improvement in the corresponding management systems, this also reviews compliance with the Krones Code of Conduct and the Krones Supplier Code. Corresponding follow-up measures from audits are then defined by the organisation being audited and agreed with the relevant person who is responsible for the actions. In 2019 a total of 69 system audits and 76 product audits were performed at suppliers of Krones AG.

      Reporting

      Reports of suspected non-compliance in connection with activities of the organisation and its business partners, including activities that harbour a risk of slavery, bondage, forced or compulsory labour or human trafficking, can be forwarded to the relevant line manager, to the Compliance Helpdesk or to members of the Compliance and Governance Committee of Krones AG; this can be done in person, electronically, in writing or by phone. In addition, all stakeholder groups also have the possibility of reporting violations of applicable laws or internal company rules via the Internet portal Krones Integrity, which can be publicly accessed via the Corporate Website. This can be done either anonymously, or the person(s) reporting the violation can also state their own name. Since the start of 2019, information about human rights violations can be clearly marked as such on the portal, allowing targeted processing of the information. Incoming information is reviewed by the responsible areas. If it is found that a violation has indeed occurred, appropriate steps are taken to remedy the identified failings.

      As part of the annual non-financial reporting, the Krones Group publishes information about progress made in relation to compliance with due diligence in connection with human rights. All process and project-related measures are communicated transparently in the non-financial report for the relevant business year.

      https://www.krones.com/media/downloads/KRONES_NFB2019_e.pdf

      Neutraubling, 24. April 2020
      Bolton, 24th April 2020
      Christoph Klenk
      Chief Executive Officer
      Krones AG
      Andrew Wilson
      Managing Director
      Krones UK Ltd.
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      kronesEN
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