Modern Slavery Statement 2021 Blooms The Chemist Management Services Limited
This statement is made pursuant to the Modern Slavery Act 2018 (Cth) and is made for the financial year ending financial year June 2021.
Message from the Chief Executive Officer Blooms The Chemist believes that building a better future is the collective responsibility of individuals, governments, and businesses.
Our Modern Slavery Statement outlines the steps we have taken to create greater visibility of practices in our supply chain and our commitment to taking meaningful action.
This includes addressing key issues such as climate change, healthcare equity and access, and modern slavery. Modern slavery refers to a range of serious forms of exploitation, including forced labour, debt bondage, human trafficking, and slavery.1
I wish to acknowledge the transparency and receptivity of our supplier and agency partners with whom we have collaborated on this important assessment. I also wish to thank Marque Lawyers and Bambuddha Group for their assistance and counsel.
Over 40 million people are living in modern slavery; and 75% of those people live in the Asia-Pacific region — including in Australia and Australian supply chains.2 The COVID-19 pandemic has increased vulnerability to modern slavery globally, due to the impact on supply chains and heightened insecurity in relation to food, housing, and healthcare access. The pandemic has also exacerbated existing inequalities experienced by vulnerable groups including children, migrants, and women.1 It is our responsibility to address and eradicate the practice of slavery in all its forms. Since 2020, Blooms The Chemist has been working in consultation with our top tier supplier partners and key service providers to identify and mitigate the risk of modern slavery within our operations. Blooms The Chemist was not required to carry out this activity under the provision of the Modern Slavery Act 2018, but we believe it is the right thing to do.
Whilst we are proud of the actions we have taken and continue to take to combat modern slavery, we know that this is a continuous journey that requires ongoing monitoring, assessment, and collaboration with others. We must continue to work together to build lasting, sustainable change, a fairer society, and a world in which everyone, everywhere has access to good health and wellbeing. Emmanuel Vavoulas
1 The Department of Home Affairs, n.d, Modern slavery act information sheet: coronavirus, homeaffairs.gov.au, https://www.homeaffairs.gov.au/criminal-justice/ files/modern-slavery-covid-19.pdf 2 UN Global Compact Network Australia, n.d, Modern Slavery, unglobalcompact.org. au, https://unglobalcompact.org.au/business-human-rights/modern-slavery 3 Hesketh, O, Johnstone, O, November 2021, Impact of the Covid-19 pandemic on modern slavery, Modern Slavery and Human Rights Policy and Evidence Centre, https://modernslaverypec.org/assets/downloads/Modern-Slavery-PEC-Policy-BriefImpact-of-Covid-19-on-MS.pdf
Contents Introduction
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1.
Our structure and operations
5
2.
Consultation
6
3.
Our supply chains
6
4.
Supply chain risk assessment
6
5.
Our policies on slavery
7
6.
Due diligence processes for slavery
7
7.
Supplier adherence to our values and ethics
8
8.
Training
9
9.
Our effectiveness in combating slavery
9
10. Further steps and remediation
9
11. Board approval
9
Schedule – List of Suppliers
10
Introduction At Blooms The Chemist, we strive to deliver ethical business practices that help maintain the highest levels of health, safety, and human dignity globally. We discourage all forms of human rights abuses and the exploitation of children. At Blooms The Chemist, we are tremendously proud of the actions we have taken and continue to take to combat modern slavery.
40.3
15.4
24.9
people live in slavery globally
victims of forced marriage
people in forced labour
16
4
4.8
million
million
people exploited in global supply chains in the private economy
million
million
people in forced labour imposed by state authorities
million
million
people in forced sexual exploitation
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1. Our structure and operations 1.1 This modern slavery statement covers Blooms The Chemist Management Services Limited (ABN 64 003 584 718) of Level 1, 15 Bourke Road, Mascot NSW 2020 (“Blooms, we or our”). Blooms operates a support office function for the provision of services to pharmacies operating under the Blooms’ banner as well as acting as buying agent for those pharmacies. In addition, Blooms’ provides acquisition finance to pharmacists buying pharmacies intended to operate under eth Blooms banner. 1.2 We have a national annual revenue of $50 million. 1.3 We have 60 employees residing across Australia and only operate in Australia. 1.4 Our office is organized into eight business units. Each business unit reports either to the Chief Operations Officer, the Chief Financial Oficer or to the Chief Executive Officer, who then reports to the Board of Directors. Details of our key staff positions and business units are set out below. (a) Chief Executive Officer, Emmanuel Vavoulas ensures that there is continual development and growth of our business and that our business strategy is executed. (b) Our General Counsel advises the company on all relevant legal and compliance matters, reviews all contractual and commercial arrangements, and oversees acquisitions of pharmacies new to the group. (c) The Finance unit provides us and over 100 Blooms The Chemist Network Pharmacies with bookkeeping, financial reporting, payroll, analytics, treasury, superannuation, insurance and compliance services. (d) The Information and Technology unit interacts with all areas of the business. From setting up Point Of Sale equipment in stores to project
management and the various technology partners who work with the Company. The business unit is also responsible for the strategic requirements of the Company from an IT perspective and balancing longer term goals with the day to day challenges that arise in a modern information technology environment. The IT business unit also monitor risk management for the business, including cyber security and the protection of data and systems. (e) The People and Culture unit assists with the people and organisational needs of the business. The unit facilitates strategy development and review sessions with the Board, executive team, and departments. (f) The Operations unit mediates all business requirements and liaises with all business units within the company on behalf of the stores. Operations ensures that stores execute the brand strategy and provides support and guidance for the store network. (g) Our Pharmacy unit provides industry, professional and compliance support and knowledge across our entire network and is responsible for ethical buying. Supplier relationships are nurtured with key dispensary suppliers on behalf of all stores within the network. Trading terms are negotiated for dispensary items. In addition, the team educates the entire network on pharmacy matters to ensure state and national pharmacy regulatory compliance. (h) The Merchandise unit is responsible for maximising gross margin return on inventory through data driven category management, negotiating commercial trading terms, and managing retail procurement and inventory planning. Supplier relationships and engagement for the retail business is critical. (i) The Marketing unit is responsible for conducting regular market research to understand customer needs and viewpoints. Additionally, the team liaises with suppliers to execute marketing activity which complies with our ‘everyday low price’ strategy and communicate the message across a number of platforms which resonates with our customers.
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2. Consultation We have acted in consultation with the fifty top tier suppliers to the Blooms’ branded pharmacies and nine of our service providers, in our capacity as appointed buying agent for those pharmacies. We have also consulted with Marque Lawyers and Bambuddha Group in preparing this statement.
3. Our supply chains 3.1 The pharmacies’ supply chains are extensive and global, and incorporate a wide range of products, and services spanning a variety of industry sectors, broadly grouped as follows:
3.3 These Blooms Network Pharmacies are the pinnacle of our business and the vast majority of suppliers we engage with are engaged on behalf of Blooms Network Pharmacies as part of the procurement service offering. Accordingly, our engagement with Blooms The Chemist Pharmacies constitute the major component of our supply chain. 3.4 Blooms Network Pharmacies work with their customers to deliver health outcomes including prescription medication, OTC items or the provision of certain health services (e.g. iron screening). Medication, cotton and plastics
(a) Medication made from synthetics, plant and/or animal products;
The medication, cotton and plastics sectors make up the majority of our tier one supply chain for Blooms Own Brand Products. These sectors also make up a substantive portion of our tier 2 suppliers, as these are tier 1 suppliers to Blooms Network Pharmacies.
(b) Cotton and plastics; and
IT, Financial and Legal Services
(c) IT, Financial and Legal Services.
IT, Financial and Legal Services make up a substantial portion of our tier 1 suppliers for our support office, particularly with regards to our operational and administrative service offering to the Blooms Network Pharmacies.
Blooms The Chemist Pharmacies 3.2 We package and arrange the supply of our own brand of products (Blooms Own Brand Products) to a network of pharmacies (Blooms Network Pharmacies) and provide services as an assisted optimised channel for pharmacy businesses including Blooms Network Pharmacies. As part of our arrangements with Blooms Network Pharmacies, we: (a) operate as a buying agent of goods and services and negotiate terms of trade, rebates and incentives with suppliers and wholesalers on behalf of Blooms Network Pharmacies; (b) design, source and market Blooms Own Brand Products that are distributed through various distributors or supplied in store at Blooms Network Pharmacies; (c) provide operational and administrative services to Blooms Network Pharmacies on a wholesale at cost basis; and (d) licence each Blooms Network Pharmacy to use certain trade marks and trade names.
General 3.5 We work with more than 130 suppliers headquartered in Australia. 3.6 Given the size of the Blooms pharmacy network and the broad range of products offered by the Blooms Network Pharmacies, ensuring we avoid any involvement in modern slavery, beyond first- tier suppliers, is a challenge.
4. Supply chain risk assessment 4.1 Within our domestic office and business we have not identified modern slavery risks and consider our domestic operations to be at low risk of modern slavery. 4.2 As we had anticipated. the major risks of modern slavery in our business appear in the supply chain for the Blooms’ Network Pharmacies.
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4.3 Components for Blooms Own Brand Products and the medications and products we procure on behalf of Blooms Network Pharmacies are sourced from around the world, with manufacturing and processing also occurring throughout the globe. Of the tier 1 suppliers we have a direct contractual relationship with, certain suppliers provided little useful information in response to our questionnaire or asserted certain information was confidential and could not be shared with us. Given the lack of transparency we have experienced regarding certain suppliers, we aren’t able to determine low risk and accordingly acknowledge that there is a risk of modern slavery in these supply chains. 4.4 We anticipate the operations of Blooms Network Pharmacies, along with the products ranged by stores that are not Blooms Own Brand Products or are not procured by us are susceptible to risks of modern slavery, given there is limited visibility over these product lines and less procurement oversight from us. 4.5 Two of the suppliers have indicated a high risk of modern slavery in their supply chains. These suppliers are working to mitigate these risks and we intend to continue to closely monitor their progress.
5. Our policies on slavery 5.1 We are committed to continuing to explore our supply chains and minimising the risks of modern slavery in our supply chains or in any part of our business. 5.2 We are developing our Blooms Anti-Slavery Policy for the coming financial year 2023. This policy will reflect our commitment to acting ethically and with integrity within all our business relations. We will implement and will continue to enforce effective measures and controls to ensure that modern slavey is not occurring throughout our supply chain. 5.3 Our Code of Ethics and Conduct acts as a guide for the Blooms The Chemist. The purpose of this Code of Ethics is to act as a guide for the Blooms’ team to operate in a professional, ethical manner. It recognises our responsibilities to act intelligently, ethically, and sustainably within
the organisation and provides a framework for how we connect with our clients, partners, suppliers, and other stakeholders, as well as the world at large. 5.4 Our Whistle Blower Policy reflects on ensuring a safe and supportive environment where our people feel confident to raise breaches of internal rules or Disclosable Conduct relating to the organisation, its branches, officers, employees or members. 5.5 This policy applies to everyone who performs work for and on behalf of Blooms The Chemist, inclusive of all directors, team members (whether permanent, part time, fixed term or temporary), contractors, consultants, volunteers, work experience participants, and students on placements, collectively “Team Members”. This Policy also applies to certain people who may not be Team Members (for example, certain Whistle Blowers) as detailed in the Whistle Blower Policy guidelines. 5.6 Violations of the Whistle Blower Policy have severe consequences, and may result in actions being taken employees, contractors including, but not limited to removal from a contract, demotion, termination of employment or contract. 5.7 Should the Code Of Ethics and Conduct be breached, team members should raise their concerns with their line manager, in the first instance. If the breach involves the line manager raise, it will need to be raised with the next level manager. If the concern is serious enough that it should not go through preferred channels, relevant team members should refer to the Whistle Bblower Policy
6. Due diligence processes for slavery 6.1 We have in place systems to ensure we take all preventative measures to alleviate any source or service that may suggest that Modern Slavery is present. 6.2 To begin this journey, we engaged with Bambuddha Group and Marque Lawyers to ensure we understood the applicable legislative framework and how to map and analyse our supply chains.
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6.3 We investigated our supply chains and for our initial statement decided to focus on the fifty top tier suppliers and nine main service providers (as determined by spend) – being mostly suppliers and service providers to the Blooms Network Pharmacies but also including suppliers and service providers to Blooms itself. Our supply chain assessment will continue to deepen each year. 6.4 We asked each supplier and service provider to complete a survey containing questions regarding its operations, supply chain, goods and services and requesting details of any applicable polices or training that relate to modern slavery. We also requested that a copy of any modern slavery statement and/or any supporting documentation that details how the business combats modern slavery be provided. 6.5 Our personnel reviewed all information we received. We then undertook a risk assessment for each supplier/service provided based on the following. (a) Country or region risk: We used the 2019 ITUC Global Rights Index to identify regions as high risk. In our supply chain India and China is a higher risk. (b) Sector/industry risk: We used the 2019 ACSI and the 2018 Global Slavery Index country specific findings report as a bases to identify sectors as high risk. In our supply chain Health Care is a higher risk. (c) Commodity/product risk: We used the 2018 Global Slavery Index to identify commodities and products as high risk. In our supply chain plant and animal based products, in particular cotton is a higher risk. 6.6 From the top fifty suppliers, two suppliers have identified within their own businesses that there is evidence to suggest modern slavery is occurring within their supply chain. These businesses have confirmed they will put measures in place to put a stop to modern slavery. 6.7 Should a supplier or service provider not act or work towards eliminating modern slavery, we will review the terms of the agreement in place. 6.8 Each potential case will be reviewed on a case by case scenario and may result in terminating existing agreements.
7. Supplier adherence to our values and ethics 7.1 We have a zero tolerance of slavery and work to ensure all those in our supply chain and contractors comply with our values and ethics. Should we suspect that there is modern slavery in the supply chain we are to notify our General Counsel and report this in accordance with our Whistle Blower Policy. 7.2 Our dedicated compliance team, consists of the following: (a) Our General Counsel, Dianne Hamilton, ensures that Blooms is in compliance with all applicable laws. Direction is provided on how we continue to combat modern slavery and guidance is given should we need to terminate any agreements with a supplier and/or service provider who is not able to meet the requirements of our Modern Slavery Policy (when in effect). Our General Counsel ensures that we and any of our affiliated parties comply with our Code of Ethics and Conduct. (b) Our Audit, Risk and Governance Committee is a sub-committee of our Board. This Committee ensures that the business meets applicable audit requirements and reviews compliance systems put in place by Blooms. (c) Our People and Culture business unit, facilitates and assists with development of business strategies. This business unit is driven by Kelly Hyland. Kelly’s team ensures that all policies are in place and are reviewed. Should any policy be breached or where misconduct has occurred, the team will facilitate the appropriate course of action as described in the Whistle Blower Policy. (d) Our merchandising business function supports our stores and manages supplier expectations. The Merchandise team liaise with suppliers directly and are the first point of contact. Merchandising also review and conduct risk assessments of all suppliers and ensure that suppliers are endeavouring to combat modern slavery.
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8. Training
10. Further steps and remediation
8.1 To ensure a high level of understanding of the risks of modern slavery in our supply chains and our business, we provide annual training specific to modern slavery to all of our staff in the following business divisions:
10.1 Following a review of the effectiveness of the steps we have taken to date we intend to take the following further remedial steps to combat slavery in our operations and supply chain:
(a) Legal; (b) People and Culture; and (c) Merchandise. 8.2 We are committed to provide training to all relevant team members. Any new team member that enters into the business will be trained as a part of the individuals onboarding. 8.3 For our business partners to comply, it is also required that their staff and suppliers are trained and educated.
9. Our effectiveness in combating slavery We intend use the following key performance indicators to measure how effective we have been to ensure that slavery is not taking place in any part of our business or supply chains. As we continue to explore our supply chain, we may revise these KPIs:
(a) further investigations of our supply chain and issuing questionnaires to additional suppliers; (b) an annual review and revision of our modern slavery statement;. (c)
adopting a Blooms Anti-Slavery Policy; and
(d) imposing obligations in our terms with suppliers and service provider. These will vary depending on the relationship of the parties and the risk associated with that supplier/service provider but may include a right to audit, terms obliging them to comply with modern slavery laws and our Blooms Anti-Slavery Policy, undertake certain investigations of their supply chains and provide us with information requested.
11. Board approval This modern slavery statement is made by Blooms The Chemist for the financial year ending June 2021. This statement was approved by the Company’s Board of Directors on 30 March 2022.
(a) Information gathering. The number of suppliers and service providers that have been issued with and have responded to a questionnaire regarding modern slavery; (b) Tier of supplier. Which tier of supplier we have mapped and vetted in a particular year; (c)
Whistleblowing. The number of reported breaches in the past year;
(d) Training. The number or percentage of staff trained; and (e)
Remedial action. The instances of remedial action being needed.
Chairman John Thorne 23 May 2022
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Schedule – List of Suppliers 3P PTY LTD
ASPEN PHARMACARE PTY LTD
FINE FRAGRANCE COMPANY
Tier 1 Suppliers to Blooms The Chemist Management Services Ltd
KEY PHARMACEUTICALS
NORGINE
RECKITT BENCKISER
Meridian Lawyers
AFT PHARMACEUTICALS
BAYER PHARMACEUTICAL COMPANY
FIT BIOCEUTICALS P/L
Simpson Freed Lawyers
KIMBERLEY CLARK
NUTRICIA AUST PTY LTD
Sandoz
Mont Lawyers
ALCON LABORATORES (AUST) P/L
BLACKMORES
GALDERMA PTY LTD
Aretex
Medescan
PERRIGO AUSTRALIA- EPIL
SANOFI
Access Accounting
ALITA
CARUSO’S NATURAL HEALTH
GLAXO SMITH KLINE
MEDTRONIC
Pfizer
Sanofi
ALLERGAN
CHURCH AND DWIGHT
PAUL HARTMANN PTY LTD
METAGENICS
APSS - PHILLIPS
SMITH & NEPHEW
APOTEX ADVANCING GENERICS
CRANKY HEALTH
Havenhall
MOOGOO
APSS - RESMED ASIA/PAC LTD
SWISSE NAT HEALTH CARE
Arrotex
EGO PHARMACEUTICALS
INOVA PHARMACEUTICALS
NATIO PTY LTD
PHYTOLOGIC PTY LTD
TLC DIAGNOSTICS
ASALEO PERSONAL CARE PTY LTD
ENSIGN LABORATORIES (Arborvitae)
J.A.DAVEY
NESTLE
PROCTER & GAMBLE AUS
VIATRIS
Tier 1 Suppliers to Blooms Network Pharmacies
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