This Statement details the steps we have taken up to the end of August 2019 towards ensuring that slavery and human trafficking are not taking place either in our organisation or our supply chain. Zenith has a long-standing commitment to conducting business ethically and the prevention of slavery and human trafficking is an important part of that commitment.
This is Zenith’s fourth Modern Slavery Act Transparency Statement and shows the progress we have made in developing and maturing our strategy.
In previous statements, we have highlighted hand car washes and recycling / waste disposal as two sectors of potential concern within our direct supply chain. These two sectors remain the highest risk of Modern Slavery offences for Zenith. Further details of how we continue to address these are provided below.
The Zenith Group includes Zenith Vehicle Contracts Limited, Leasedrive Limited, Contract Vehicles Limited, Zenith Automotive Limited and Provecta Limited.
The Zenith Group employs over 700 employees in the UK. We are the UK’s leading independent leasing, vehicle outsourcing and fleet management provider. Our direct business is solely service-based, with departments including finance, accident management, customer services. Our supply chain includes suppliers of both goods and services.
We are based across two offices. Over 600 employees are based at our Head Office in Leeds, with the remainder being based at an office in Solihull or home-based.
Our supply chain
As mentioned in previous statements, we categorise our supply chain using the 4 below criteria:
- Core in-life
- Wider network
- Large corporate
- Non-direct / ad hoc
Work is ongoing to categorise our suppliers based upon the level of Compliance risk they present. The risk of Modern Slavery and human trafficking will be a factor in categorising our suppliers. We focus on a range of risk factors when categorising our supply chain as higher spend with a supplier does not necessarily correlate with a higher risk of Modern Slavery offences occurring. Further detail regarding this is provided within the ‘Our effectiveness in combating slavery and human trafficking’ section below.
As the business matures, we accept that our current categorisation only applies to tier one of our supply chain. We are continuing to work alongside our suppliers to understand the additional tiers of the supply chain and as the business matures we will refine this. A further update will be provided next year regarding the steps that we have taken to achieve this.
Our policy commitment to preventing slavery and human trafficking is underpinned and supported by the following:
- A collaborative approach with our supply chain, which encourages transparency. We will provide appropriate support, guidance and monitoring to tackle any reported issue. Serious or repeated violations may result in a termination of supply, reduced volume of business or non-inclusion in future tender opportunities
- Annual training for key stakeholders within Zenith
- A supplier lifecycle and procurement policy incorporating pre-contractual supplier due diligence, comprehensive contractual agreements and periodic review
- Supplier Code of Conduct
- Annual risk assessment of the supply chain
- Whistleblowing procedures within Zenith and the introduction of a contractual requirement for direct suppliers to our operational business to monitor compliance and report any matters of concern
- A third-party governance, risk and compliance (GRC) software system (detailed further below)
Our approach to assessing and managing risk
We assess risk in our supply chain through consultations with relevant internal stakeholders. Risk factors include: the location of the supplier, the nature / type of the goods or services provided, the depth of our relationship with our supplier and our perception of the supplier’s level of corporate governance – both in relation to its own activities and its supply chain. We also regularly review press reports, the Anti-Slavery Commissioner website, and publications from the Gangmasters and Labour Abuse Authority (GLAA) and Human Rights charities.
Following this consultation process we have assessed our exposure to the risk of slavery and human trafficking as low for the following reasons:
- Our office locations are entirely UK-based.
- Almost all of our direct suppliers have strong levels of corporate governance and are based in countries where slavery and human trafficking are low risk.
We perceive our greatest exposure to risk (albeit still limited) is further down our supply chains – for example where the sourcing of raw materials used in the production of vehicles occurs in countries with weak labour standards. We continue to make steps as an organisation to understand the suppliers further down our supply chain. This process is being co-ordinated by members of the procurement, compliance and information security teams.
Our due diligence processes
Our supply-chain due diligence processes are proportionate to the level of assessed risk and the level of control or influence we have in each relationship.
Where we take on a new supplier to our business, we require them to respond to our pre-contractual due diligence questionnaire. The questionnaire specifically addresses slavery and human trafficking. The questionnaire must be completed prior to contract award and services being provided by the supplier to Zenith. The completed questionnaire is reviewed by our Procurement, Compliance, Legal and Information Security teams. Any identified risks are managed by the supplier owner with support and guidance offered by Compliance, Legal and Information Security teams where appropriate. All new suppliers are required to agree to our Code of Conduct.
Our review processes differ by supplier groups and are based on the products and services that they provide, any risks that they present, the size of the supplier group, the depth of the relationship and the maturity of the relevant department’s processes.
For example – accident management bodyshops are reviewed annually, with periodic site visits. The reviews ensure that the bodyshops have maintained appropriate manufacturer approvals, insurance certificates and BS10125 certifications. We also review how the bodyshops have handled any complaints.
An ongoing programme is underway between Legal, Procurement, Compliance and Information Security to develop our supply chain review process for existing suppliers. Further detail is provided below.
Where areas of risk have been highlighted within our supply chain, we complete enhanced due diligence. An example of enhanced due diligence is discussed further below in relation to our waste management suppliers. We have reported on our enhanced due diligence processes in previous statements regarding hand car washes and vehicle manufacturer following the mica scandal.
We deliver annual Modern Slavery training sessions to key stakeholders across the business. Key stakeholders are defined as employees that have a significant supplier relationship, or employees working in departments with suppliers in higher risk industries.
The sessions provide an insight into the legislation, developments regarding investigations and prosecutions within the UK. Our existing risk assessment is refreshed in these sessions, with any new risks being raised as applicable and steps agreed to mitigate those risks. These sessions are delivered by our Group Compliance team.
Our effectiveness in combating slavery and human trafficking
In previous statements, we have highlighted that the two main sectors of potential concern within Zenith group’s supply chain are:
- Hand Car Washes within Zenith car and LCV supply chain
- Recycling / Waste Disposal within the full business supply chain
Press reports and convictions over the past year have shown that these two sectors remain the main areas of risk for Zenith. There was much publicity in 2019 for the largest-ever Modern Slavery gang uncovered in the UK. Eight individuals were jailed in July 2019 for exploiting at least 400 people. The gang exploited individuals by forcing them to seek work through a specific recruitment agency. A member of the gang was employed by the agency and would ensure the exploited individuals were employed within recycling centres across the country.
This conviction highlighted a Modern Slavery risk to the organisation as we are an office-based services organisation requiring waste management suppliers. As such, we completed enhanced due diligence on these suppliers. They provided information regarding the employment checks that they complete and assurances regarding the steps they take to ensure that slavery and human trafficking are not present within their business. They all confirmed that they had never used the services of the recruitment agency involved in the conviction mentioned above.
Following the purchase of the HGV (Heavy Goods Vehicle) fleet management company, Contract Vehicles Limited (CVL), into the Zenith Group in 2017, work continues to understand their supply chain and integrate a universal due diligence practice for these suppliers. In the last year, we have created a Service Level Agreement (SLA) that HGV suppliers must adhere to. The SLA includes clauses requiring suppliers to comply with all applicable labour standards legislation. Their adherence to the SLA will be audited by the Zenith business owner of the supplier relationship. Any reports of non-compliance will be reported to Legal & Group Compliance. We will work collaboratively with our suppliers to ensure that they comply. Serious or repeated violations may result in a termination of supply, reduced volume of business or non-inclusion in future tender opportunities.
In our 2018 statement, we stated that we had launched a third-party GRC system called Surecloud. This enables us to regularly monitor and review our suppliers, including their labour standards. Over the previous year we have worked alongside Surecloud to implement our due diligence questionnaire into the system. A supplier’s response to each section of the questionnaire has a resulting risk score. One section of the questionnaire relates to the supplier’s labour standards and Human Rights practices. Their risk score enables us to more accurately determine whether they require enhanced due diligence focussing on their risk of slavery and human trafficking.
Over the next year, we will be working alongside Surecloud to input our existing supplier register into the system. This will combine with the ongoing work by Legal, Group Compliance, Procurement and Information Security to categorise suppliers into defined groups based upon their business necessity and risk score. In the coming year, these two pieces of work will enable us to complete targeted audits of our existing suppliers. We will report upon our progress in this regard in our next Transparency Statement.
This Statement is made in accordance with section 54(1) of the Modern Slavery Act 2015 and has been approved by the Board of Directors.
Chief Financial Officer