This is the modern slavery and human trafficking statement of McCormick & Company Incorporated (“McCormick” or the “Company”) prepared for fiscal year 2016-17, as well as McCormick’s response to the reporting requirements of the UK Modern Slavery Act 2015 (the “UK Act”). The UK Act requires certain organizations carrying on business in the UK to publish a statement each financial year describing steps taken to ensure slavery and human trafficking are not taking place in their businesses and supply chains. This statement has been approved by the board of directors of McCormick.
ORGANIZATIONAL STRUCTURE AND SUPPLY CHAIN
Founded in 1889, McCormick is a global flavor company that manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to three primary segments of the food industry – retail outlets, food manufacturers, and foodservice businesses. McCormick has over 10,000 employees worldwide located in 25 countries, with major manufacturing operations in North America, Europe, the Middle East and Africa, and Asia Pacific. The Company’s business is divided into consumer and industrial segments.
A key part of McCormick’s value chain is the agricultural producers that provide the raw materials for our products. The most significant raw materials used in our business are pepper, dairy products, rice, capsicums (red peppers and paprika), onions, garlic, and wheat flour. A variety of mechanisms are used to source agricultural raw materials, including joint venture partners and strategic alliances.
OUR POLICIES AND SUPPLIER CODE OF CONDUCT
It has always been important that materials used by McCormick in its products are obtained through ethical and fair labor conditions. In general, McCormick’s agricultural products are acquired from suppliers who ultimately source raw materials from small individual farms managed by family farmers. In all countries where McCormick processes products, products are processed in facilities that comply with existing local laws. In McCormick’s processing facilities (foreign and domestic), employees are provided with fair wages, regular working hours, and a clean working environment.
McCormick’s Supplier Code of Conduct makes clear the Company’s commitment to fair labor standards and helps ensure that the Company aligns itself with suppliers that share this commitment and expect the same of their own suppliers. This Code of Conduct states that all vendors, suppliers and contractors who wish to conduct business with McCormick are required to conform to certain principles and practices, such as the following:
- Fair employment practices, including those prohibiting child labor, prison or forced labor, or any form of indentured servitude with stipulations of fair working hours and compensation as well for a safe working environment.
- Compliance with applicable laws, including those pertinent to equal employment opportunities, wages and benefits, and worker and product safety.
- Ethical business conduct based on compliance with the law, avoidance of conflicts of interest, and respect for the environment.
McCormick seeks to ensure that quality, safety and employment standards are maintained throughout the Company’s supply chain and the Company reviews its supplier base to determine if corrective actions are needed. Moreover, McCormick maintains an anonymous hotline staffed by an independent organization for employees to report actual or potential violations of McCormick’s policies and codes of conduct without fear of retaliation. McCormick efforts so far in aligning with the UK Act requirements include the following:
VERIFICATION AND AUDIT OF PRODUCT SUPPLY CHAINS
While McCormick’s Supplier Code of Conduct has been in place for several years, the Company is now designing a risk-based verification process to identify high-risk suppliers and is developing an appropriate responsible sourcing audit approach to help ensure the Company’s product suppliers are in compliance with our Code of Conduct.
McCormick’s Supplier Code of Conduct is designed to be embedded into the Company’s procurement practices (and thereby help assure such procurement is free from slavery and human trafficking) by:
- including references to the Code of Conduct in major request for quotations;
- incorporating language in all supply agreements and contracts requiring suppliers to warrant compliance with the Code of Conduct and acknowledge that any known violation may result in immediate termination of any and all business;
- providing a link to the Code of Conduct in purchase order terms and conditions stating that acceptance of the purchase order constitutes an agreement to adhere to the latest version of the Code of Conduct;
- requiring acknowledgement of the Code of Conduct as part of all new suppliers onboarding process;
- issuing the latest Code of Conduct to McCormick’s current supplier community and allowing access to a website that uploads any revisions in the future; and
- collaborating with suppliers to share best practices.
INTERNAL ACCOUNTABILITY AND STAFF TRAINING
It is the Company's policy to be a good "corporate citizen," as set forth in our Business Ethics Policy (see ir.mccormick.com under "Corporate Governance," then "Business Ethics Policy). Wherever McCormick does business, the Company’s employees are required to comply with all applicable laws. A training program is being developed that will provide appropriate employees with training on how to mitigate the risk of human trafficking and slavery. As part of this training program, our staff in the UK is informed about the UK government’s 24-hour modern slavery public telephone helpline (0800 0121 700).
In many cases, McCormick is not the only food company working with a given supplier. One of the reasons McCormick is transparent about the Company’s suppliers is to reach out to other food brands and organizations to see how companies can work together. By getting the rest of the industry involved, companies are able to send a stronger message to suppliers about the importance of operating a responsible workplace.
To aid in McCormick’s collaboration efforts, the Company is an active member of Business for Social Responsibility (“BSR”), which is an organization that, among other pursuits, brings together a broad range of agriculture, food, and beverage companies – including farms, processors, manufacturers, retailers, and restaurants – to help integrate corporate responsibility into core business strategies. For more information about BSR, please visit its website at www.bsr.org.
OUR EFFECTIVENESS IN ELIMINATING SLAVERY AND HUMAN TRAFFICKING
McCormick will adopt key performance indicators to measure the Company’s effectiveness in ensuring that slavery and human trafficking is not taking place in the Company’s business or supply chains. McCormick reviews the effectiveness of the measures it takes in seeking to ensure that there is no slavery or human trafficking in the Company’s supply chains, and uses this to inform the development of the Company’s policies and procedures. McCormick will remain transparent and report on the Company’s evolving efforts to combat slavery and human trafficking in the Company’s business and supply chains.
McCormick is committed to uncompromising integrity in all that it does.
Lawrence E. Kurzius
Chairman, President and Chief Executive Officer McCormick and Company, Incorporated
Date: January 10, 2017