Dialight’s statement pursuant to the California Transparency in Supply Chains Act 2010:
California Transparency in Supply Chains Act – Declaration
The California Transparency in Supply Chains Act 2010 came into effect on 1 January 2012 in the State of California (the “Act”). The Act seeks the elimination of slavery and human trafficking from product supply chains and requires that qualifying companies disclose their efforts to achieve this.
Dialight plc and its affiliates (collectively, “Dialight”) has a zero tolerance policy in respect to modern slavery practices and is committed to implementing internal procedures to ensure our business does all it can to safeguard against such activity. Sustainability is not a preference or “luxury” for Dialight but one of the founding principles of our business. It permeates our global operations and is the key driver to our long-term corporate strategy. Dialight understands that sustainability is not simply an environmental or technical concern but a value that applies equally to the human resources impacted by our supply chain. As such, we are proud to have introduced new measures to make our work force and business partners more aware of modern slavery issues and human trafficking activities. We understand our work does not end here however, and have a comprehensive compliance road map to ensure “zero tolerance” becomes a practical reality for all Dialight operations, not just a distant ambition.
IDENTIFYING RISK – DIALIGHT SUPPLY CHAIN:
Our supply chain is our single greatest risk area for exposure to modern slavery practices and human trafficking, particularly our operations in Mexico given the country’s ranking in the global slavery index. Dialight has a global network of suppliers but our key partners are primarily based in the USA, Mexico, Asia and Europe. Dialight currently operates the following in-house manufacturing sites:
- Ensenada, Mexico (serves global business);
- Malaysia (only for signals and components); and
- Denmark and Brazil (top level assembly plants).
From mid-2016 Dialight has primarily outsourced its manufacturing to Sanmina Corporation, who by the end of June 2017 will produce the overwhelming majority of our products for our customers from their site in Guadalajara, Mexico. Sanmina is a globally recognised specialist manufacturer for electrical goods/products and have comprehensive business ethics policies in place. Sanmina has adopted the EICC Code of Conduct which prohibits practices of slavery and human trafficking, establishing common business ethics standards for companies operating in the electronics industry supply chain. Furthermore, Sanmina must comply with the California Transparency in Supply Chains Act 2012 and the UK Modern Slavery Act 2015.
CURRENT ANTI-SLAVERY PROTOCOL:
In keeping with Dialight’s commitment to act ethically, sustainably and with integrity in relation to all its business dealings, many of our existing policies are relevant and mutually supportive in ensuring that no modern slavery practices or human trafficking activities are tolerated in any part of our business.
Electronic Industry Citizenship Coalition (“EICC”) & Business Code of Business Conduct
Dialight supports the standards set out by the EICC, which have been broadly incorporated into our Code of Business Conduct – our business ethic framework that is supported by more specific policies. Dialight’s Code of Business Conduct sets out, in practical common-sense terms, what acting in a “professional”, “moral” and “ethical” manner means on a day-to-day basis. We aim, where possible, to apply the code to all our business partners around the world, including suppliers, agents, representatives, distributors and consultants. It sets out the type of working environment Dialight seeks to create, one in which there is respect for fundamental human rights and where forced labour is not tolerated.
Anti-Bribery & Corruption policy
This policy outlines Dialight’s position on preventing and prohibiting bribery, in accordance with the UK Bribery Act 2010. Dialight does not tolerate any form of bribery or corruption within or outside the organisation. Given that many examples of modern slavery practices and human trafficking activities go hand in hand with corrupt business practices, we would hope this policy would also identify and prevent scenarios whereby modern slavery may be a factor.
Dialight believes a discreet and effective whistle blowing procedure is essential for encouraging an environment of openness and integrity. Dialight’s anonymous whistleblowing hotline, available to all employees, offers employees a confidential mechanism by which complaints can be raised within the organisation – this will also cover our new anti-slavery policy going forward.
Consequences of non‐compliance
If we believe any supplier does not comply with our Code of Business Conduct or supporting policies we will provide such supplier with the opportunity to remedy any potential non‐compliance and will assist them in achieving the high standards we require. Should the supplier continue to fail to meet our standards, we reserve the right to terminate the business relationship and remove such supplier from our supply chain. Where our employees do not comply with our Code of Business Conduct or supporting policies they are subjected to disciplinary action where necessary.
Due diligence on new suppliers
Before Dialight contracts with new suppliers, its supply chain group will work with our quality assurance department to ensure the candidate supplier has a proper quality assurance system in place, sufficient capacity to supply Dialight requirements, and comply with all regulations applying to the commodity or services we procure. On site supplier audits are performed by Dialight supply chain specialists as and when necessary. Before all new master supply agreements are signed, the Finance and Legal departments will undertake certain due diligence on the relevant supplier group, which includes a new search for reported illegality, regulatory breaches and non-compliance with sanctions etc.
Outbound supply chain
Dialight serves customers directly and via wholesale distributors. With both types of arrangements the underlying commercial contract is reviewed and negotiated by the Dialight Legal department, with local law advice sought when necessary from external law firms or regulatory experts. It is Dialight’s starting position to ask customers to sign up to its standard form terms & conditions of sale and/or distribution agreement. Both documents require the customer to comply with Dialight’s Code of Conduct and Anti-Bribery policies, which we intend to extend to include our new anti-slavery policy (see below).
Dialight employment procedures
All Dialight employees, both permanent and temporary, are employed on local contracts of employment in line with local market standards. Right to work checks are undertaken by our HR team for all new employee hires and we only use reputable recruitment agencies of proven quality.
RECENT ENHANCEMENTS TO MODERN SLAVERY PROTOCOL:
- Internal Responsibility. The Dialight Legal team have been appointed as the appropriate internal working group within the organisation to take responsibility for drafting and publishing appropriate anti-slavery notifications in each financial year, supervise the implementation and operation of our anti-slavery policy and provide further training to Dialight staff as required;
- New Anti-Slavery policy. We have successfully introduced a new group wide anti-slavery policy, which has been approved by the Dialight board and circulated to all employees. The policy sets out what modern slavery and human trafficking practices are, the warning signs/how to identify these and how to respond. This policy will be reviewed and updated each year (as required); and
- Updated Template Contracts. Our Standard Terms & Conditions for Sale and Purchase have been updated to include representations that our suppliers and end customers will comply with the requirements of the Act, applicable UK Modern Slavery legislation and our own Dialight anti-slavery policy.
NEXT STEPS: NEW MEASURES FOR 2016-2017:
In addition to the above steps above, Dialight plans to bring in the following measures to make our anti-slavery program even more robust:
- New mandatory business ethics training. Modern slavery and human trafficking related training to be rolled out for all employees via an external compliance service provider;
- New Induction Training for new joiners. All new Dialight employees to be trained in respect to the Dialight business ethics policies described above, which include the new Anti-Slavery policy; and
- All new suppliers to be provided with anti-slavery questionnaires. Forms will make enquiries as to supplier’s anti-slavery procedures and due diligence requirements for their supply chain – this will need to be completed to Dialight’s satisfaction before a company can be classed as an “approved supplier”.
- Governance framework. The Board is committed to the maintenance of high standards throughout the Group and is accountable to the Company’s shareholders for good corporate governance. It currently operates within defined parameters and in accordance with those Matters Reserved for Board approval (“Matters Reserved”) and Terms of Reference (“ToR”) of the Board Committees. Both the ToR and the Matters Reserved have been approved and adopted by the Board and copies of these documents are available from the Company Secretary at the Registered office.
 As of 1 April 2017 - Mexico ranked number 36 out of 167 in the Global Slavery Index http://www.globalslaveryindex.org/index
 Electronic Industry Citizens Coalition’s Code of Conduct http://www.eiccoalition.org/standards/code-of-conduct/