INTRODUCTION FROM THE BOARD
This statement is made pursuant to Section 54 of the Modern Slavery Act 2015 (the “Act”) on behalf of LKQ Group (UK) Limited, LKQ Digraph and LKQ (Distribution Ireland) Limited (together “LKQ UK & Republic of Ireland”).
The above companies are affiliates of LKQ Corporation and part of the overall governance and compliance framework of the wider LKQ Group.
OUR SUPPLY CHAINS
LKQ UK and Ireland is the largest distributor in the UK in the automotive and components sector and also operates across Ireland.
Our supply chain extends to parts manufacturers in Europe, the Middle East, Asia and Africa. In addition to dealing with manufacturers we deal with other suppliers to support the operational and commercial aspects of our business.
Due to the complexity of our supply chain, there are often many different levels of suppliers between a distributor and the source of raw materials obtained by the manufacturers that we engage with. We therefore require that our suppliers and manufacturers adhere to the same ethical trading principals that we adhere to.
OUR POLICIES ON SLAVERY AND HUMAN TRAFFICKING
Our objective is to ensure as far as reasonably practicable that there is no modern slavery or human trafficking in our supply chains or in our own business. We have a Code of Ethics, and global supplier code of conduct, and we request our suppliers and require our employees to follow such policies. In particular, we ask our suppliers to either sign up to our Supplier Code of Conduct or confirm they have policies and procedures setting out an equivalent framework which they comply with.
DUE DILIGENCE PROCESSES FOR SLAVERY AND HUMAN TRAFFICKING
As part of our initiative to identify and mitigate risk we seek to:
- Identify and assess potential risk areas in our supply chains.
- Mitigate the risk of slavery and human trafficking occurring in our supply chains.
- Monitor potential risk areas in our supply chains.
- Protect people who speak up about these issues.
SUPPLIER ADHERENCE TO OUR VALUES
We have a zero tolerance to slavery and human trafficking. To encourage all those in our supply chain to comply with our policies, we have involved our Legal, Procurement, HR and Audit departments to assist the business in ensuring, as far as reasonably possible, that our supply chain adheres to the Modern Slavery Act.
We regularly review and update our standard terms and conditions, and provide training on our terms and conditions to our employees who work with our suppliers. We have sent revised terms and our Supplier Code of Conduct to our suppliers to make them aware of the standards that we expect from them.
We continue to audit suppliers in China, which we have identified to be a high-risk region. This forms an integral part of our supplier introduction process and is followed up by targeted audits.
In addition, monitoring and assessment of our suppliers is being carried out by the European Procurement Team of our parent company, LKQ Europe GmbH. to improve efficiency and to reduce risks not only in ethical, social and environmental terms, but also with regards to compliance, finance, quality, privacy and security. This applies to all suppliers of European-based trading companies within the LKQ Group (including LKQ UK and Ireland).
The process consists of two phases: the first is aimed at defining a prioritisation and identifying major risks based on ESG, compliance and financial-health risk scoring, and the second consists of a full supplier assessment.
We defined a 3-year plan, with the goal of completing the first level risk analysis on 100% of the supplier base by 2025: all suppliers will progressively be assessed using a third party platform, where risk level is related to the industry sector, the size of the company and the country where the company operates, and to the relevance of the supplier for LKQ Europe. Compliance and financial-health checks are then performed on a subset of our suppliers, selected according to our Risk Framework.
Based on the results of this first risk-level analysis, strategic or risk-relevant suppliers are requested to complete a risk and sustainability assessment registering on the third party platform (an external system for monitoring the sustainability performance of suppliers). The third party platform’s methodology covers 21 criteria across the four main topics: Environment, Labour & Human Rights (including Modern Slavery), Ethics and Sustainable Procurement Practices, and allows companies to monitor sustainability performance of their suppliers, manage supply chain risks and propose improvement plans to the suppliers themselves.
The assessment process is then completed asking suppliers additional information through a second questionnaire, to cover remaining risk areas included within our risk framework.
TRAINING
We are continually refreshing our compliance training activity with internal staff and carry out an annual attestation of adherence to our Code of Ethics.
Kevan Wooden (CEO)
LKQ Group (UK) Limited