Human rights
Elopak respects and supports internationally recognized human rights and labor standards, including those outlined in the International Bill of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work (Core Labor Standards). In 2022, Elopak had operating legal entities in more than 30 countries, production in 10 locations and sales to customers in 70 markets, hence we strive to positively impact our business partners and the communities where we operate. Elopak has its own operations as well as supply chains in countries associated with high political corruption and human rights risks.
Elopak actively works to ensure compliance with progressive human rights legislation, including the Norwegian Transparency Act (2022) and the UK Modern Slavery Act (2015). More countries have adopted similar laws for mandatory human rights and environmental due diligence in Europe, and the EU is following suit by adopting the proposal for the Directive on Corporate Sustainability Due Diligence in 2022. Elopak welcomes such initiatives, which are in line with our responsible way of doing business.
Freedom House is an independent organization dedicated to the expansion of freedom and democracy around the world. Freedom in the World is an annual global report on political rights and civil liberties. The end score for a country or territory is dependent on the aggregated political rights score and its aggregated civil liberties score, where the total of these two scores is equally weighted. The 2022 edition covers developments in 195 countries and 15 territories. Freedom House includes one of the indexes we use to evaluate risks of human rights violations on country level.
Approach
Our approach to supporting human rights in our work is based on the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidelines for Responsible Business Conduct. Human rights are included in Elopak’s risk management processes and embedded in our compliance program. Governance of human rights in Elopak is further described here.
1. Embed responsible business conduct into policies and management systems
In 2022, Elopak adopted a new Human Rights Policy. The Policy is founded on Elopak’s existing commitment to respecting human rights, as outlined in our Code of Conduct, and aligned with international principles and requirements. The Policy is a starting point for our framework for managing human rights risks. As with other ethics and compliance topics, human rights are upheld in Elopak through governing documents. For human rights these include: Business Partner Procedure (Integrity Due Diligence process, including country risk assessment); Anti-Corruption Policy; safety procedures, HR procedures (including a Privacy Statement); Sourcing Policy including supplier qualification/due diligence requirements, Responsible Supply Chain Procedure; Global Supplier Code of Conduct; and General Terms and Conditions of Purchase (GTCs).
2. Due diligence
a. Define scope
Human rights issues cover all our employees and business partners, including suppliers, contractors, customers, joint ventures, mergers and acquisitions, as well as our impact on local communities.
b. Identify and assess risks (risk assessment)
Our human rights risk assessment is part of the assessment of ethics and compliance in Elopak, which follows the company’s risk management process. With our risk-based approach to human rights, we prioritize our due diligence by focusing on size of the business and the context of operations for our own operations and joint ventures, i.e., using global human rights sources and indexes which evaluate risks of human rights violations on country level, and severity levels. We have established a process to identify and assess human rights risks by facilitating workshops in the organization with stakeholders representing our business areas and regions, including specific entities and support functions.
In 2022, we identified that our most significant risks for potentially violating human rights were related to safe working conditions for our production workers, as well as the risk to decent working conditions throughout our operations and supply chain, and the potential for forced labor in our supply chain.
Supply chain human rights risk assessment
Elopak has a risk-based approach to supply chain human rights due diligence. In 2021, we conducted a high-level review and risk assessment of our supply chain in order to identify key human rights risk topics and our human rights due diligence priorities. This is to allow us to better prioritize and channel our resources and efforts. Our main focus areas in terms of supply chain risk management are the prevention of forced and child labor; safeguarding the right to decent working conditions; and the right to health and safety.
To address issues more efficiently with our suppliers, we also focus on prioritized areas and categories. These have been identified considering Elopak’s influence, (e.g., spend and strategic importance) and activity/risk to people, (e.g., level of manual work, use of unskilled labor, hazardous work, etc.), as well as geography/country risk.
Using this approach, we prioritize the following categories for further due diligence activities:
– Raw material categories (paperboard, aluminum, inks and solvents, polymers)
– Logistics and transport
– Filling machines
– Catering and cleaning services
– Maintenance
During 2022 we initiated more thorough human rights risk assessments. This started with raw material categories and suppliers; instituting mitigating actions and follow-up plans where there is a higher risk for adverse human rights impacts. Should we detect or be informed of human rights risks or adverse impacts in the non-prioritized areas of our supply chain, we will take appropriate action to mitigate risks there as well.
c. Prevent and mitigate human rights violations
Stakeholders engaged in the human rights risk assessment align on appropriate mitigating actions. A risk owner from the organization is identified for each significant risk that requires follow-up on agreed measures.
Integrity due diligence is conducted for new and existing customers, suppliers, and other business partners, such as joint venture partners or third-party representatives. Prior to major projects or expansion opportunities being initiated, we aim to conduct assessments to evaluate the risk of any potential negative impact on people. Third-party ethical audits are conducted where deemed necessary.
We work proactively with our suppliers to prevent and mitigate potential human rights violations. Mitigating measures include clarifying expectations and requirements through Supplier Code of Conduct engagement; inclusion of adequate contractual clauses on Responsible Business Conduct in supplier contracts; follow up meetings; internal and external supplier assessments and on-site audits. Read more about our approach here.
At Elopak, training, communication and awareness-raising programs are continuously ongoing as a further element in our preventive measures to mitigate human rights violations. The Code of Conduct mandatory training is our main initiative to build awareness about business integrity and prevent unethical behavior, including human rights breaches. Specific e-learning (nano-learning) courses on our responsibilities within business and human rights is offered to Elopak employees. In addition, further in-depth training is provided to relevant functions such as the Global Procurement Network.
3. Track and monitor
Group Legal & Compliance coordinates the internal follow-up of preventive and risk reducing measures with the designated risk owners to ensure progress and allow for evaluation of the effectiveness of the proposed measures. Third party ethical audits are conducted where deemed necessary.
4. Report and communicate
Grievance mechanisms
Grievance mechanisms are important to better understand the impact of our operations on the rights of individuals and groups. In Elopak, concerns or grievances can be reported in several ways. Our whistleblower helpline allows anyone involved in or affected by our activities to raise a concern, via phone, email, or an online form. The whistleblower helpline also includes concerns related to that of respecting human rights. The helpline is hosted by an independent external service provider and is confidential, anonymous, and available in multiple languages.
Internal and external reporting
Human rights, together with other ethics and compliance topics, are regularly discussed with the executive management team. Twice a year, the Chief Legal & Compliance Officer formally reports to the Board Audit and Sustainability Committee on compliance and business integrity matters, including human rights.
Pursuant to the UK Modern Slavery Act 2015, Elopak reports annually on steps that have been taken to ensure that there is no slavery or human trafficking in its supply chain. According to the Norwegian Transparency Act, Elopak reports annually (by 30 June) on the due diligence assessment conducted. The report is signed by the Board of Directors and CEO.
Performance
Targets
Strive for decent working conditions and no gross violations of human rights throughout our supply chain
KPIs | KPI reference | Status 2022 |
a) % completed human rights training b) Significant actual and potential negative social impact identified in the supply chain | GRI 412-2 GRI 414-2c | a) 32% b) See text |
In 2022, we carried out regular internal communication campaigns to build awareness within Elopak on the Code of Conduct and human rights. These communications included the publication of articles on our intranet to raise awareness on requirements within the Norwegian Transparency Act and Elopak’s main human rights risks. Elopak also conducted workshops with senior management on human rights issues in the company, and a celebration of the United Nations Human Rights Day.
During 2022, Elopak identified the following risks to human rights. An initial screening was done on India, which is continued in 2023, and as such not included in the below:
In 2022, Elopak acquired a production facility at Casablanca in Morocco. The majority of employees at the plant are local temporary workers.
Main risks include potential violation of the:
– Right to health and safety
– Decent working conditions
Mitigating and managing the risks:
During 2022, there has been increased focus on health and safety at all our production sites, with a particular focus on identifying hazards and the risk they pose. In 2022, the Moroccan site was included in the Group Safety Network. Going forward, we will continue our safety training program (“Safe by Choice”) with specific program objectives for each site, including the plant in Morocco. A safety audit will be carried out on site in 2023 to assess any further needs.
Elopak’s approach to total remuneration is to benchmark against mid-market conditions. With the integration of Elopak Morocco, Elopak conducted a review of all wages against the local mid-market and updated wages to align with Group principles. All Elopak Morocco employees received updated contracts in line with local regulations and reflecting changes (e.g., to insurance policies) to ensure alignment with mid-market evaluations. Read more here.
In 2022, Elopak acquired a production facility in Dammam in Saudi Arabia, as part of the same acquisition of the Morocco site. Approximately half of the total workforce of 40 employees are temporary workers and migrant workers.
Main risks include potential violation of the:
– Right to health and safety
– Decent working conditions
– Rights of vulnerable individuals and groups
Mitigating and managing the risks:
During 2022, Group Health & Safety representatives visited the production plant in Morocco and raised awareness on health and safety issues. The Dammam plant was included in the Group Safety Network. Elopak will continue the safety training program and outline key objectives and safety measures for the plant. A safety audit will be carried out on site in 2023 to assess any further needs.
Elopak is working closely with the contracting company in Saudi Arabia to ensure workers are entitled to their rights. Through contractual clauses, the supplier shall ensure adequate accommodation, living conditions, and a decent wage, among other provisions. In 2022, as part of a dialogue with temporary workers, Elopak detected issues with wages that were not received on time and some instances of irregular wage deductions. These issues were immediately rectified. Similar meetings will be held going forward to ensure the issues have been addressed appropriately.
In 2022, Elopak improved the accommodation for our permanent employees which are non-Saudi residents (Read more below).
With the integration of the entity in Dammam, Elopak reviewed salaries against the local mid-market and updated employees’ wages and contracts to align with our Group principles.
Elopak has an office in Kiev and a production facility in Fastiv, with a total of 151 employees in Ukraine. On 24 February 2022, the plant in Fastiv was temporarily closed in order to focus on the safety of employees and their families. In light of the extraordinary situation in Ukraine, a dedicated risk response team is working on managing and mitigating risks, continuously assessing the impact on Elopak’s people, business and assets, in line with the Elopak’s risk management principles. The plant was reopened in April 2022 to resume small-scale production to supply customers in Ukraine, in support of efforts to maintain supplies of essential goods in the country.
Main risks include potential violation of the:
– Right to health and safety
– Decent working conditions
Mitigating and managing the risks:
Elopak conducted a comprehensive risk assessment that prioritized the personal safety and security of our employees in Ukraine before reopening the plant in April 2022. The company ensured compliance with security and safety requirements for employees, including providing a clear evacuation plan and suitable shelter in the event of an emergency. Elopak continues to evaluate the risks of operation on an ongoing basis. Read the case on Ukraine here.
Elopak works with more than 5000 suppliers worldwide and sources parts and materials from various countries across the globe, including from high-risk countries.
Main risks include potential violation of the:
– Use of forced labor and child labor
– Decent working conditions
– Right to health and safety
Mitigating and managing the risks:
We mainly focus on prioritized categories where more in-depth human rights risk assessments and supplier integrity due diligence processes are conducted to manage and mitigate potential violations of Human Rights. Read more about this here.
In 2022, no significant instances or indications of possible human rights violations were identified.
Safety is our number one priority in Elopak, and we are committed to getting everyone home safe every day.
Main risks include potential violation of the:
– Right to health and safety
Mitigating and managing the risks
Risk assessments for machines and processes were conducted for our main activities. Based on inputs from risk assessments, the annual Safety Week was arranged across all Elopak sites with the theme “Mind the Risk”.
In 2022, Elopak entered into a joint venture agreement with GLS in India, forming a new company, GLS Elopak, with a 50/50 ownership structure. Going forward, Elopak will continue its safety training program with specific program objectives for the production plant, and a safety audit will be carried out physically in 2023 to assess further needs.
Safety best practices are shared across production sites. To meet specific challenges with heating in the converting plants, especially in the summer, breaks are planned at a frequency reflecting the temperature level and drinking water is made easily available. A trial for the use of cooling clothes has been started at one site. These mitigating measures reduce risks significantly. In 2022, we launched the “Golden Safety Rules” for our operational sites as part of Elopak’s safety culture and training program (“Safe by Choice”). Read more here.
Case
Improving housing conditions for workers in Saudi Arabia
In 2022, Elopak improved the accommodation for our permanent employees at the production plant in Dammam. This is a result of the integration of the entity in Saudi Arabia and the post-merger acquisition activities which includes a strong focus on human rights. Based on this work, we conducted, among different measures, a site visit to the housing facilities of our permanent employees which are non-Saudi nationals. Founded on the observations and conclusions from the site visit, local management relocated the employees to improved housing facilities.
This example illustrates that we can make a positive impact on people where we operate.
Moving forward
In 2023, we aim to further improve our approach to human rights. We will roll out our Human Rights Policy for the organization and familiarize our employees with the human rights supporting framework.
Our key focus and priority for 2023 is to integrate new operating units located in high-risk countries (Morocco, Saudi Arabia, and India) into existing frameworks and processes. We are also increasing our efforts to map and assess potential human right violations in these operations (in particular in India which was not completed during 2022), their supply chains, and business relationships to mitigate and manage potential issues more effectively. Moreover, we are in the process of further improving our supplier qualification /due diligence framework by better integrating human rights considerations into the existing audit framework.