IHG Ethical Sourcing Supplier Code of Conduct

IHG Ethical Sourcing Supplier Code of Conduct

Independent Hardware Group (IHG) is committed to upholding human rights, fair working conditions and environmental protection. In accordance with the expectations of our customers, the community and the requirements of International Law, we endeavour to always operate responsibly within the community, and we expect the same from our suppliers. We are committed to conducting due diligence, combating modern slavery, eliminating human rights risks, protecting vulnerable people, and making responsible sourcing decisions in our supply chains and operations.

Upholding the highest legal, moral, and ethical standards in our interactions with customers and other key stakeholders is essential to our continued success. This Supplier Code of Conduct has been developed to complement our core values of integrity, trust and acting responsibly.

The IHG Ethical Sourcing Supplier Code of Conduct sets out the standards that we expect all our suppliers to comply with when producing and supplying products/services for IHG no matter where they operate in the world. These standards are based on internationally recognised frameworks and institutions such as United Nations’ Universal Declaration of Human Rights and the International Labour Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work. Our suppliers must commit to complying with the requirements outlined within this document.

Employment Conditions

1. Forced, Bonded, and Involuntary Labour
   
   • The use of any form of involuntary labour is considered a zero-tolerance breach of this Code.  Suppliers must prohibit the use of forced labour in all forms; prison, indentured, bonded, and slave labour as well as labour obtained through human trafficking.
   • Forced Labour includes any work or service which is obtained from any person under the menace of any penalty and for which the said person has not offered voluntarily.
   • Workers should:
     • Not bear the costs of recruitment, all recruitment costs should be covered by the employer.  
     • Not be required to lodge deposits with their employer.
     • Not be required to perform work that, by its nature or the circumstances, is likely to harm their health or safety.
     • Not have any portion of their wages confiscated to repay debt or recruitment fees
     • Have free and complete access to their own identity documents. Identity documents should not be retained by the employer.
     • Be provided with contracts in their native language if migrant/international workers. 
     • Be able to move freely and not be confined to the supplier premises.
     • Be free to leave their employer after reasonable notice.

2. Child Labour

    

   • The use of child labour is considered a zero-tolerance breach of this Code.

      

   • Suppliers must have an age check in their hiring process and require workers to be older than the highest out of:

      

     • 14 years of age

        

     • the minimum age of employment permitted by the law of the country of employment

        

     • the age of completing compulsory education in the country of employment

   • Workers under the age of 18 should have additional health and safety considerations such as no hazardous or night work.

3. Illegal Labour

    

   • Suppliers should only employ workers with the legal right to work. 

      

   • All workers, including employment agency staff, should be validated by the supplier for their legal right to work. The supplier should implement processes to enable adequate control over agencies with regards to the above points and related legislation. When utilising labour hire agents for any form of contracted, temporary, or foreign migrant workers, suppliers should conduct thorough due diligence to ensure all employment practices align with this Code.

4. Freedom of Association and Collective Bargaining

    

   • Workers have the right to join or form trade unions of their choice and to engage in collective bargaining.

      

   • Suppliers should recognise and uphold the unrestricted right of workers to organise, advance, and safeguard their interests through collective bargaining. Suppliers should ensure protection for workers from any form of discrimination or interference, associated with their exercise of the right to organise, engage in trade union activities, and collectively bargain.

      

   • If local laws prohibit unions, workers should be safe to express concerns without risk of penalty.

5. Discrimination

    

   • All workers should be treated equally. 

      

   • Suppliers should avoid discrimination in compensation, training, hiring, promotion, termination or retirement based on race, national origin, colour, religion, age, disability, gender, marital status, sexual orientation, political affiliation or union membership.

6. Harassment, Harsh or Inhumane Treatment 

    

   • The use or threat of physical abuse, verbal abuse, sexual violence, harassment, and all forms of intimidation shall be prohibited and is considered a zero-tolerance breach of this Code. 

      

   • Suppliers should treat all workers with dignity and respect. Suppliers should work with their supply chain to ensure there is no harsh or inhumane treatment, coercion or corporal punishment.

7. Regular Employment

    

   • Recognised employment relationships should be established through national law and practice for all work performed.

      

   • Regular employment affords workers several obligations from their employer under labour or social security laws and regulations. Such obligations shall not be avoided through the use of labour-only contracting, sub-contracting, home-working arrangements, fixed-term contracts. Apprenticeship schemes where there is no real intent to impart skills or provide regular employment are also not to be used to avoid employer obligations related to regular employment.

8. Wages, Benefits and Living Wages 

    

   • All workers must receive wages, overtime pay, legally mandated benefits, and paid leave that meets any applicable local laws or industry practices, whichever is higher.

      

   • Wages should always be enough to cover basic needs and to provide some discretionary income.

      

   • Suppliers should:

      

     • Pay wages to workers regularly, directly and on time.

        

     • Keep accurate and transparent records of wages, benefits, and any deductions made for each worker

        

     • Provide workers with understandable written information about their employment conditions regarding wages before they start work and include details about their wages for each pay period with every payment.

        

     • Correctly compensate workers for any type of paid leave such as sick leave, annual leave, and parental leave.

        

     • Not deduct from a worker’s wage without written permission of the worker affected, unless in accordance with applicable laws, regulations, or collective agreements. Worker permission is to be obtained without coercion.

     • Not deduct from a worker’s wage as mean of discipline, this is prohibited under this Code. All disciplinary measures must be recorded.

        

     • Allow workers complete control of money earned. The bank account that payment is deposited into should be under the worker’s name and not be under the name of the employer, male relative, or spouse.

        

     • Pay any outstanding payment in full and no later than the next payroll date upon termination of employment. Suppliers must not require workers to continue to work in order to receive outstanding payments.

9. Working Hours and Overtimes

    

   • Working hours and overtime should comply with any local laws and benchmark industry standards, whichever affords greater protection. All overtime shall be voluntary and compensated as per legal requirement or collective negotiation agreement. 

      

   • Disciplinary measures must not include forced overtime or threats of termination or penalties for those who refuse to exceed their contracted hours.

      

   • Workers shall not on a regular basis be required to work in excess of 72 hours per week and shall be provided with at least one day off for every seven-day period on average. Overtime shall be voluntary, not be excessive, not be demanded on a regular basis and always be compensated as per legal requirement or collective negotiation agreement.

10. Work Safety and Occupational Health

     

    • Suppliers must provide a safe and hygienic work environment for their workers, considering the specific industry and associated hazards.  

       

    • Suppliers should:

       

      • Implement appropriate measures to prevent accidents and injuries to workers that may arise from or occur during their work, by minimizing, as much as reasonably possible, the hazards present in the working environment.

         

      • Adhere to all local laws, regulations, and statutory requirements pertaining to Health & Safety

         

      • Provide necessary personal protective equipment to workers, and train workers in proper use.

         

      • Provide regular and recorded Health and Safety training to workers

         

      • Provide workers access to clean toilet facilities and potable water

         

      • Assign responsibility for Health & Safety to a senior management representative

         

      • Respect the worker's right to refuse tasks that are reasonably deemed unsafe, without facing discrimination or loss of pay.

         

      • Maintain proper injury records, investigate all significant accidents and near misses, and take action to minimise any re-occurrence.

         

      • Comply with occupational exposure limits (OELs) established by local authorities in cases where workers may be exposed to chemical, physical, or biological substances and agents in the workplace. In the absence of local regulations, aim to adopt the best available industry standards.

    • If the supplier provides accommodation facilities for its workers, the facilities should also meet hygiene, health and fire safety standards outlined in this Code.

11. Fire Safety

     

    • Suppliers should have an effective fire safety management plan in place that complies with local law and fire safety standards. 

       

    • Manufacturing facilities should have adequate:

       

      • Emergency exits which are unlocked, clearly marked and easily accessible including during overtime shifts.   

         

      • Fire extinguishers which are in good condition, appropriate to the types of potential fires in the various areas of the facility, and labelled according to the types of fire they are to be used for.

         

      • Emergency alarm systems which are able to be heard throughout the entire facility.

         

      • Fire suppression systems (eg. sprinkler system) which meet or exceed local legal requirements.

         

      • Storage of flammable materials away from sources of ignition

         

      • Communication of fire safety and emergency evacuation plans including evacuation drills conducted annually, or more often where required by law.

12. Machinery and Equipment

     

    • Suppliers should have an effective machinery and equipment safety plan in place that complies with local law and safety standards.

       

    • Specialised equipment and machinery (eg. forklift, cargo lift, boiler, compressor etc.) should have appropriate permits and safeguards which meet or exceed local law, including emergency stop switches where applicable. All operators of specialised equipment and machinery should be licenced, where legally required, and be trained in safe operating procedures.

       

    • All machinery and equipment should be regularly inspected and maintained. Electrical equipment, outlets and wiring should be properly maintained with no exposed wires and in a safe working condition. Electrical control panels should be easily accessible, fully enclosed, adequately maintained and clearly marked.

       

    • All chemicals and hazardous substances should be stored in a separate covered area that is equipped with appropriate fire extinguishers, safety signs, ventilation, anti-explosive lights, instructions on handling and disposal of chemicals, and personal protective equipment for workers.

13. Sub-contractors

     

    • Where a facility has been audited, reviewed and approved by IHG the use of unauthorised sub-contracting away from the approved facility is considered a zero-tolerance breach of this Code. Facilities may be reviewed in the cases of private label, supplier investigation or standard due diligence practices.

       

    • All subcontractors must comply with this Code and local law. Suppliers with a sub-contracting agreement should have adequate processes in place for properly managing sub-contracting and home working to ensure sub-contractors do not abuse, exploit or provide unsafe working conditions for their workers.

14. Business Integrity

     

    • Suppliers should not engage in acts of bribery and corruption, whether in cash or in kind. Suppliers must provide transparent documentation and record and uphold professional business ethics. 

       

    • Should an audit be conducted the following behaviours are considered zero-tolerance breaches of the Code: denial of access to the site/employees/records, attempted bribery of auditors, punishment of workers for answering interview questions, and being unable to provide legally required business licenses.

15. Environmental Compliance 

     

    • Suppliers must, at minimum, comply with all applicable local and national environmental laws/regulations. Suppliers should also strive to minimise impacts and risks to the environment associated with their operations. 

       

    • We expect suppliers to identify the key environmental impacts and risks associated with their business operations and implement controls to minimise impacts and risks to the environment. Suppliers should apply the precautionary principle in business operations and should make all efforts to conserve natural resources.

       

    • Suppliers should manage their environmental impact by maintaining policies and practices regarding:

       

      • Disposal of waste in accordance with local environmental laws and regulations, including proper hazardous waste storage, transport and disposal to minimise harm. Proper disposal methods (a licenced facility designed for treating such waste) should be utilised to prevent harm to the environment, public health, and safety. Improper disposal of hazardous waste which has the potential to cause severe environmental pollution is a zero-tolerance breach of this Code.

         

      • Minimising the release of pollutants into local water sources, and alert systems to notify local environmental authorities in the event of accidental discharge of pollutants or other environmental emergencies. Processes that result in the discharge of untreated wastewater or exhaust gas containing toxic or priority pollutants is a zero-tolerance breach of this Code.

         

      • Efficient use and monitoring of energy, water and natural resource consumption.  

         

      • Reducing the risk of pollution, loss of biodiversity, deforestation, damage to ecosystems and greenhouse gas emissions.

         

      • Sourcing timber products from legal and well-managed forest operations including plantations or sustainably managed forests that have regular compliance checks and do not contribute to deforestation by conversion or clearing.

16. Supply Chain Traceability 

     

    • Suppliers are encouraged to track and trace the movement of products and their components throughout the entire supply chain, from raw materials to finished goods. 

       

    • The aim of this tracking is to enhance transparency, accountability, and trust throughout the supply chain, promoting responsible business practices and safeguarding consumer interests. IHG may require suppliers to provide supply chain information that would assist us in identifying and mitigating potential human rights and environmental risks, counterfeit products, contamination, unethical practices, and supply chain disruptions.

17. Access to Grievance Mechanism 

     

    • Suppliers should have an effective, confidential grievance process. 

       

    • This process should ensure that any worker, acting individually or with other workers, can submit a grievance without suffering any prejudice or retaliation of any kind. Grievance mechanisms should be available in a language that workers understand and should include the ability to report incidents or grievances anonymously.

18. Remediation

     

    • Suppliers should have a plan in place to enable effective remediation of modern slavery findings and work to prevent recurrence. 

Supplier Code of Conduct Implementation

IHG is dedicated to fostering long-term partnerships and collaborating with suppliers on solutions to help achieve compliance with the Code. Suppliers are encouraged to self-assess their compliance with the Code and take timely action to correct any non-conformances reported or identified by an audit, assessment, inspection, investigation or review.

We are willing to work in partnership with our suppliers who do not yet meet the outlined minimum standards but are genuinely willing to improve and rectify issues within agreed timeframes.

Should a supplier demonstrate unwillingness to collaborate with IHG in meeting the minimum standards outlined in this Code or fail to demonstrate improvement within agreed timeframes, we retain the right to reassess the suitability of IHG's ongoing relationship with the supplier.