Introduction
This Statement details the steps we have taken up to the end of August 2020 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 fifth 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. We have also highlighted the sourcing of cobalt in the batteries used for electric vehicles of our manufacturers as a growing risk. Further details of how we continue to address these are provided below.
Our organisation
The Zenith Group includes Zenith Vehicle Contracts Limited, Leasedrive Limited, Contract Vehicles Limited, ZenAuto Limited, Zenith Remarketing 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 and does not extend to any high-risk industries for modern slavery offences. For example, low-skilled manual labour.
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
In 2020 we began to categorise our supply chain based upon the following criteria:
We accept that our current categorisation only applies to tier one of our supply chain. We work alongside our suppliers to understand the additional tiers of the supply chain and as the business matures we continue to refine and develop this.
Our policies
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;
- An Environmental, Social and Governance (ESG) policy outlining our commitment to combatting slavery and human trafficking;
- 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;
- Supplier Governance and Risk Forum with a clear and defined terms of reference;
- A third-party governance, risk and compliance (GRC) software system.
Our approach to assessing and managing risk
Individual Suppliers
We categorise individual suppliers into one of four categories as defined in the ‘Our Supply Chain’ section above. We assess an individual supplier’s risk by considering the following factors:
- Compliance controls
- Data Protection
- Information Security
- Employee screening
- Anti-corruption
- Human rights and labour conditions
- Environmental
- Business continuity planning
- The supplier’s control, governance and management of their own suppliers
- The nature/type of the goods or services provided
- The location of the supplier
- Zenith transactional spend with the supplier.
Assessing Modern Slavery risk within the supply chain
We take the following steps to identify modern slavery risk areas within our supply chain as a whole:
- Completing consultations with relevant internal stakeholders when assessing a supplier’s risk
- Regularly reviewing 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, legal, 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.
New suppliers
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 subject matter experts in the Supplier Governance and Risk Forum. 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.
Existing suppliers
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.
Where areas of risk have been highlighted within our supply chain, we complete enhanced due diligence. We have reported on our enhanced due diligence processes in previous statements. Examples include an analysis of hand car washes, waste management suppliers and vehicle manufacturers following the mica scandal.
Our training
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 Modern Slavery legislation, Zenith’s obligations to combat such offences in our business and supply chain, whilst increasing awareness by discussing developments regarding criminal 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
These two sectors remain the key areas of risk for Zenith. Whilst there have been no high-profile reports of offences or convictions since our previous transparency statement, the Government department for Labour Market Enforcement has called for an independent national regulator of hand car washes . Zenith is supportive of this initiative. Having said that, Zenith does not utilise independent hand car washes, Zenith vehicles are valeted on-site at our accident management, maintenance and remarketing suppliers. We complete ongoing monitoring of these suppliers to ensure that they continue to complete vehicle valeting on-site as confirmed during the pre-contractual and ongoing due diligence.
Since our previous statement, we have created and launched a Supplier Governance and Risk Forum. Membership is comprised of stakeholders from Group Compliance, Information Security, Legal and Procurement. The forum’s membership, responsibilities and powers have been agreed in a terms of reference. The forum is responsible for reviewing and prioritising the management of supply chain risks and incidents. The forum also reviews any new or upcoming changes to legislation or regulation that may impact Zenith’s business or supply chain, coordinating any necessary process changes. The above responsibilities for the forum include Modern Slavery.
In 2020, Zenith undertook a financial crime programme to improve our controls. Zenith partnered with an independent third-party whistleblowing hotline in 2017. This ensures that all allegations of misconduct, including potential modern slavery offences, can be raised anonymously and can be investigated impartially. The financial crime programme included an awareness campaign regarding our whistleblowing practices and procedures such as the whistleblowing hotline. Newsletters, office posters and wallet cards have all been circulated to employees to increase awareness of our whistleblowing procedures.
Through the completion of our annual modern slavery training and risk assessment, we highlighted cobalt mining as a potential risk. Cobalt is used in the manufacturing of the battery used in electric vehicles. Cobalt mining is linked to forced labour and child labour. The Democratic Republic of Congo (DRC) produces over 60% of the world’s cobalt. The Financial Times reported that 30% of the cobalt sourced from the DRC is from informal mines. The use of informal mines implies weak employee rights and protections. This risk will grow as the electric vehicle market continues to increase. Work is underway between our group compliance, procurement and manufacturer relationship teams to assess and understand this risk further. An update on the steps we have taken to mitigate this risk will be explained in greater detail in our next statement.
No incidents or allegations of modern slavery offences within Zenith or our supply chain have been identified or reported.
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.
Mark Phillips
Chief Financial Officer
Zenith Group
25.01.21