Responsible sourcing As a leading global dairy company, we source goods and services around the world. Since 2000, Arla’s procurement has been centralised to ensure common standards and practices, enabling us to take environmental, social and human rights responsibilities into consideration when selecting a supplier. All suppliers sourced by our procurement department are required, as part of their con- tractual agreement with us, to comply with our Code of Conduct for Suppliers. This requires our suppliers to e.g.: • Provide a safe and healthy working environment; • Respect the rights of children and not engage in or tolerate the use of child labour; • Not use forced labour and at a minimum comply with applicable laws and industry stand- ards relating to working hours and minimum wages; • Respect international agreements on human rights Due diligence and audit of our supply chain Arla has a global approach to supplier assurance and our preferred suppliers of key categories (ingredients, packaging, contract manufacturing, and selected services such as facility manage- ment) are required to complete a detailed supplier questionnaire covering quality, food safety and human rights standards, among other areas of importance. We have processes in place for audit and assessment of our preferred suppliers of logistics services (hauliers and ware- houses). We take a risk-based approach to auditing of suppliers using location, sourcing category, and historical performance as some of the selection criteria. Progress since the previous statement Due to the need for changed prioritisation and focus caused by the COVID-19 pandemic, some of our planned actions have been slightly changed or delayed. We have, however, continued the work with human rights in general, and identified the ‘Right not to be subjected to slavery, servi- tude or forced labour (incl. child labour )’ as one of Arla’s salient human rights issue s. • New Arlagaarden Programme was implemented for all farmer owners (compulsory) commenc- ing April 1 st 2020. The programme is developed to engage and ensure 24/7 adherance to the programme, using quarterly self-assessment and Independent 3 rd party audits. Checkpoints include working environment, health & safety and accommodation and rest facilities. • In the UK, we have appointed a single temporary labour provider and, following a transitional period, this provider will be the only source through which we engage temporary labour. We have verified the practices of the agency and have robust processes in place for audit and as- sessment. • In the UK, we work to continuously rationalise our supplier base and engage with specified, reputable hauliers and warehouses for transportation and storage of our products. Compliance with policies and processes is high on the agenda in Arla, and we continue to train our col- leagues in correct purchasing behaviour. All new hires in our 6 core countries (UK, DK, SE, NL, DE, FI) are invited to a session where we explain how to buy and order the Arla way and how to be compliant, and we monitor purchasing compliance through robust and regular reporting procedures and reach out to those colleagues who are most non-compliant and support them in changing habits and behaviour. • Our confidential whistleblower service has been updated, and external parties are now able to access this. Arla Foods Modern Slavery Statement – updated June 2021
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