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MODERN SLAVERY STATEMENT FY2023

1. ABOUT HARTALEGA

Hartalega is the world’s leading nitrile glove manufacturer. With over 35 years of experience, we house two manufacturing facilities in Malaysia, producing high-quality gloves to protect healthcare practitioners and glove users globally. As Hartalega continues to grow by leaps and bounds, we are committed to touching lives and creating positive impacts through innovative healthcare products.

Guided by our SHIELD core values, we uphold the belief of doing the right thing at all times. Our strong business ethics and values are reflected in how we conduct ourselves daily in all aspects of our business, ensuring that the rights and welfare of all employees are supported and protected at all times.

We strictly abide by both local and global standards for human rights and social compliance. This includes Malaysian labour laws, the UN Guiding Principles on Business and Human Rights, and the ILO’s 11 Indicators of Forced Labour. This is reflected through our social compliance policies which are aligned with local and international benchmarks against child labour and young workers, workplace discrimination, modern slavery, human trafficking and forced labour.

In all that we do, we go above and beyond to ensure that regardless of nationality, race, religion, gender or age, all our employees are treated with fairness and respect.

2. ABOUT THIS STATEMENT
In accordance with the United Kingdom's Modern Slavery Act 2015, this statement which marks Hartalega’s second Modern Slavery Statement, highlights the measures and practices that we undertook to safeguard human rights and to alleviate the potential risks of any modern slavery or human trafficking activities happening across our business operations and supply chain for financial year ended 2023.
3. SUSTAINABILITY STRATEGY

As a responsible and ethical corporate citizen, Hartalega firmly believes in accountability in how we operate. In our pursuit for purpose-driven growth, we intend to create a positive and enduring impact for the community, environment, marketplace, and workplace.

We advocate integrating sustainability practices across all aspects of our operations in keeping with economic, environmental, social and governance considerations, focusing on four key pillars:

Pillar 1: Upholding the highest standards in our business practices and product quality
Pillar 2: Caring for the Environment
Pillar 3: Caring for Our Employees
Pillar 4: Contributing to the Wellbeing of Local Communities

Aligned with our Sustainability Policy and Framework, our sustainability approach is premised on identifying economic, environmental, social and governance topics that matter most to both Hartalega and our stakeholders. In FY2023, we carried out a high-level review to ensure that our material matters remained relevant and significant to our stakeholders and the Group. Following the review, the material matters of Human Rights which were encapsulated in third pillar - Caring for our Employees of our Sustainability Framework, remains as one of the key considerations in our business.

Our commitment to making a meaningful difference in our impact sees us actively supporting the United Nations 2030 Agenda for Sustainable Development by aligning our efforts with global initiatives to address prevailing challenges for people and the planet and forge a path towards a brighter future for generations to come. Through supporting and upholding social compliance, we align ourselves with UN SDG 8: Decent Work and Economic Growth and UN SDG 10: Reduced Inequalities.

4. OUR BUSINESS STRUCTURE & SUPPLY CHAIN

Operating from our state-of-the-art manufacturing plants in Bestari Jaya and Sepang, Selangor, Hartalega has the capacity to produce billions of gloves every year. Across our operations, we employ a total workforce of over 7,000 local and migrant workers to meet our business needs. Driven by the demand for our innovative and quality products, we export to over 70 countries in different regions across the globe such as North America, Europe, Asia and the rest of the world. Apart from our OEM business, we continued to reinforce our market presence via MUN Global, the global distribution arm for Hartalega to focus on emerging and developing countries.

To ensure the resiliency and the sustainability of our supply chain, we procure materials from both local and international suppliers. We understand that responsible supply chain management is instrumental in promoting transparency, ethical practices and protecting workers’ rights. Hence, our relationships with suppliers are premised on ethical conduct and deeply ingrained in our corporate ethos. We continue to maintain this by enhancing our focus on suppliers’ compliance with economic, environmental, social and governance practices in keeping up with Hartalega’s efforts.

5. HUMAN RIGHTS GOVERNANCE
The Board provides oversight on the Group’s sustainability agenda, including economic, environment, social and governance topics. The Board is assisted by the Management who oversee implementation of the Group’s sustainability measures. The Board recognises its responsibility to set the “tone from the top” and ensure good governance within the Group. In this regard, the Board continues to play an active role in providing oversight on all economic, environmental, social and governance topics, including human rights.
5.1 Risk Management and Sustainability Committee
Sustainability governance, including economic, environment, social and governance topics is spearheaded at the Board level by the Risk Management and Sustainability Committee (RMSC). Ensuring that sustainability is deeply rooted throughout the Group and embedded in decision-making processes, the key responsibilities of the RMSC include formulating relevant strategies, identifying priorities and setting targets in relation to ESG goals and sustainability risks and opportunities of material importance to the Group.
5.2 Sustainability Working Committee
The RMSC is supported by the Sustainability Working Committee (SWC). Chaired by the Chief Executive Officer (CEO), members of the C-Suite and Senior Management from relevant departments sit on the committee, namely the Health & Safety, Social Compliance and Strategy, Sustainability & Corporate Management Department. The primary responsibilities of the SWC include driving proper business conduct and putting in place the necessary management processes which integrate relevant ESG practices.
5.3 Social Compliance Department and Social Compliance Task Force

Our governing policies towards human rights are spearheaded by our Social Compliance Department and Social Compliance Task Force. Working closely with other departments, the Social Compliance Department is responsible for the implementation of effective social compliance practices, in addition to the management of internal and external social compliance audits. This enables us to maintain our rigorous standards, continuously enhance our strategies, and undertake corrective action when necessary.

Alongside this, our Social Compliance Task Force which is helmed by our CEO is charged with assessing potential risks to social compliance and identifying opportunities to enhance our practices across the Group. The Task Force also undertakes engagements with key stakeholders pertaining to labour practices.

6. ASSESSING HUMAN RIGHTS RISKS & DUE DILIGENCE

Our commitment to advancing our social compliance journey is part of our robust risk management framework and best corporate governance practices. In addition to enforcing strict codes of conduct for both employees and suppliers, we actively evaluate our operations and supply chain and undertake the necessary due diligence to identify potential risks, close gaps, and implement continuous improvements to strengthen our human rights performance.

This is supported by regular risk-based assessments and audits that prescribe to international standards of Sedex Members Ethical Trade Audit (SMETA), amfori Business Social Compliance Initiative (amfori BSCI) and Worldwide Responsible Accredited Production (WRAP) certification, as well as corresponding with the requirements of our clientele. We also put in place due diligence efforts towards responsible recruitment and other areas in our operations.

7. POLICIES IN RELATION TO SLAVERY AND HUMAN TRAFFICKING
As a staunch advocate of human rights, our commitment is articulated in the strict policies that we have implemented to promote and protect human rights:
  • Social Compliance & ESG Policy
  • Prohibition of Forced Labour Policy
  • Child Labour Protection Policy
  • Prohibition of Discrimination Policy
  • Zero Cost Recruitment Policy
  • Supplier Code of Conduct
  • Whistleblowing Policy and Procedure
These policies require our people to act in accordance with all applicable human rights standards and laws, creating the foundation to inculcate responsible and sustainable practices across our operations and supply chain.
8. STRINGENT SOCIAL COMPLIANCE PRACTICES
To safeguard the rights of workers across our operations as well as our supply chain, we continue to adhere to stringent social compliance practices and manage possible risks.
8.1 Prohibiting Forced Labour
Hartalega firmly stands against forced labour, adopting a zero-tolerance approach. We provide transparent employment terms and ensure the non-retention of personal documents for migrant workers to freely hold their passports and identity documents. As we strive to maintain a supply chain that is free of forced labour, it is mandatory for all our suppliers and sub-contractors to acknowledge and comply with our Supplier Code of Conduct which explicitly prohibits forced labour. In financial year ended 2023, there were zero incidents of forced labour reported.
8.2 Prohibiting Child Labour
With strict adherence to Child Labour Protection Policy, we do not allow the employment of child labour and young workers under the ages of 15 and 18 respectively. All suppliers and sub-contractors are to comply with this in accordance with our Supplier Code of Conduct. As a result of our stringent measures, we recorded zero reported cases of child labour in financial year ended 2023.
8.3 Workers Representation
Cultivating a culture of open dialogue helps us create a supportive working environment for all Hartanians. To ensure migrant workers have an equal voice, worker representatives from each dormitory are elected by their fellow workers’, with diverse nationalities represented. As of financial year ended 2023, there are 210 workers’ representatives appointed to attend monthly meetings, where workers representatives can directly interface with the Senior Management Team to express their needs, concerns, and feedback.
8.4 Grievance Mechanism

We have implemented a robust grievance mechanism that facilitates safe reporting of non-compliance orunethical behaviour for employees. This mechanism provides multiple channels for employees to voice theirgrievances in a confidential manner, such as via QR code, email, telephone, worker representatives,department managers, the HR Department, and/or security supervisors.

Once a grievance is reported, this will trigger an investigation by our Social Compliance and/or HumanResource Department. This is carried out in a timely manner, engaging with whistleblowers within two weeksof a report being lodged. The results of the investigation are submitted directly to the Director of the HRDepartment and CEO to take necessary action. In financial year ended 2023, a total of 12 grievances werereported and successfully resolved.

8.5 Whistleblowing Policy and Procedure

A Whistleblowing Policy and Procedure has been implemented to enable all stakeholders, including employees, suppliers, customers, shareholders, or any parties with a business relationship with the Group with an avenue to report suspected wrongdoings that may adversely impact the Group. The Group treats all reports in a confidential manner and at the same time provides protection for anyone who reports such concerns in good faith. Whistleblowing reports are lodged to an independent third-party outsourced service provider via email and/or website ("Hartalega Speak Up"), which are available in multiple languages, namely English, Bahasa Malaysia, Burmese, Bengali and Nepali.

This is aligned with the Whistleblowing Policy and Procedure that is in place to provide an avenue to employees, suppliers, customers and other applicable stakeholders to report on genuine concerns with regard to unethical behaviour, malpractice, regulatory or legal violations or similar.

8.6 Regulation of Working Hours
In compliance with the Malaysia Employment Act, we maintain decent working hours and overtime limits that are below the statutory limits. Our standard working days are eight hours per day and one rest day per week for each worker. All overtime is closely tracked, regulated and approved, and is on a voluntary basis with fair compensation provided. Digital tools and third-party audits help us accurately monitor, manage and uphold ethical working hours.
8.7 Advocating Equal Opportunities
All employees are provided with equal opportunities and we do not condone discrimination in any form, adopting a fair and equitable approach to treat all employees with dignity and respect. This is supported by key policies and practices, including:
  • Established Prohibition of Discrimination Policy that cultivates an organisation that is free from discrimination.
  • An Accelerated Development Programme that provides a pathway for high-performing employees’ career advancement with an equal opportunity requirement set.
  • Established a promotion with rigorous assessment process, which is reviewed by both immediate superior and peers from other departments to ensure a fair and transparent evaluation of performance and capabilities.
  • Maintaining our equal-job-equal-pay principle, whereby entry-level pay for local and migrant workers is equal.
  • Equal access to worker facilities for all, including our canteen and sickbay
8.8 Prevention of Sexual Harassment
To foster a safe and conducive working environment free from any form of harassment, a Sexual Harassment Procedure is established during financial year ended 2023. This procedure aims to provide an effective mechanism to eradicate any forms of sexual harassment and instill a zero-tolerance mindset against sexual harassment at the workplace. This entails setting a clear definition of sexual harassment, the roles and responsibilities of employees, Heads of Departments and superiors, and the HR Department, as well as a Sexual Harassment complaint process.
8.9 Decent Workplace for Quality of Life

To ensure good quality of life for our migrant workers, we provide first-rate accommodation which adheres to the ILO’s regulations and surpasses the Workers’ Minimum Standards of Housing and Amenities (Amendment) Act 2019 (Act 446) stipulated by Malaysian laws. With more than RM98 million invested to- date, our multi-purpose accommodation is fully equipped with facilities and amenities on-site to cater for the comfort and convenience of employees.

Further prioritising employee well-being, we have a Health Management Programme in place to support employees in the management of non-communicable diseases. Spearheaded by our sickbay team, services offered include screening for early detection and treatment of health conditions and non-occupational disease where costs for medical screening tests are borne by the Group.

8.10 Freedom of Movement
We recognise the right of our migrant workers to unrestricted movement outside of working hours, free from any curfew limitations. To facilitate their travel, we offer complimentary shuttle services from our hostels to amenities in the vicinity and visits to local tourist attractions. Moreover, no constraints on movements are imposed to migrant workers who opt to return to their respective home countries prior to or after completion of their contracts.
8.11 Freedom of Association and Collective Bargaining
In accordance with the Industrial Relations Act 1967 and the Trade Unions Act 1959, all employees have the freedom to create, join or associate with trade unions through legal means, and to bargain collectively. We uphold this in our supply chain via our Supplier Code of Conduct, requiring our suppliers, sub-contractors and service providers to enable the right to freedom of association and collective bargaining for their workers.
8.12 Zero Cost Recruitment Policy
As part of our efforts towards combating forced labour, we continue to practise strong and ethical recruitment of migrant workers in Hartalega by:
  • Implemented Zero Cost Recruitment Policy with four checkpoints to ensure no migrant workers have paid recruitment fees;
  • Established a robust due diligence process to ensure the integrity of our hiring process for migrant workers via licensed recruitment agents in source countries;
  • Having a third-party auditor to assess the selection of recruitment agents to ensure they are socially compliant;
  • Travelling to source countries by our Human Resource (HR) personnel to brief and recruit new workers;
  • Appointing an NGO to provide oversight in the recruitment process in source countries to ensure no risk of modern slavery;
  • Appointing lawyers in source countries to go through employment contracts with our recruits; and
  • Established a dedicated Suara Kami (Our Voice) hotline which is available for candidates should they have any queries or concerns. Suspension or termination of contractors or agents will be undertaken, following an in-depth investigation in the event where contractors or agents are in violation to our Zero Cost Recruitment Policy
8.13 Internal Social Compliance Audit
Our Social Compliance Department regularly carries out internal audit programmes to proactively identify and mitigate social compliance risks, allowing us to address internal risks and implement targeted improvements in a timely manner prior to external, regulatory or compliance audits. In financial year ended 2023, we conducted 7 internal social compliance audits at our NGC and Bestari Jaya facilities.
8.14 External Social Compliance Audit
In addition, we regularly assess our adherence to social compliance standards and relevant human rights regulations through external audit programmes, both customer-appointed and self-initiated. This includes the SMETA and amfori BSCI audit programmes, as well as external audits in line with our customers’ Codes of Conduct covering 100% of our facilities including NGC and Bestari Jaya. In financial year ended 2023, 19 external audits were carried out at both our NGC and Bestari Jaya facilities, maintaining our positive track record with an A rating for our amfori BSCI audit for NGC. We also completed an audit for the ILO’s 11 Indicators of Forced Labour, which detected no major or critical finding.
8.15 Supply Chain Management
Extending our commitment to safeguarding human rights to our supply chain, we implemented Supplier Code of Conduct and conduct pre-assessment audits for all new and existing on-site suppliers and sub- contractors, allowing us to ensure suppliers adhere to our social compliance standards and to identify potential human rights risks. Existing on-site service providers are also evaluated to assess their compliance with social compliance guidelines. Following these audits, the management engages with suppliers on Corrective And Preventive Actions (CAPA) measures, driving continuous improvement and accountability throughout the supply chain. In financial year ended 2023, we conducted 6 pre-assessment audits for new on-site suppliers and contractors to ensure compliance to our social compliance standards.
9. OUR ACHIEVEMENTS
At Hartalega, we understand the importance of continuously upholding our good labour practices. Our dedicated efforts and commitment to continuous improvement have enabled us to receive recognitions and achieve the following:
  • Received Gold Award for Human Rights and Labour Standards (Large Companies Tier) in ESG Positive Impact Awards 2022;
  • Received an overall rating of A in the amfori Business Social Compliance Initiative (BSCI) audit for NGC facilities;
  • Received Gold rating by WRAP certification for both NGC and Bestari Jaya manufacturing facilities;
  • Continue to be a member of the Supplier Ethical Data Exchange (SEDEX) since 2019; and
  • Founding member of Responsible Glove Alliance (RGA) and member of Responsible Business Alliance (RBA).
Sustainability recognitions:
  • Received Gold Award (Healthcare Category) in The Edge Malaysia ESG Awards 2022;
  • Included as constituent of FTSE4GOOD Bursa Malaysia index since 2014;
  • Scored A rating in MSCI index;
  • Scored in the low-risk category in Sustainalytics;
  • Awarded Bronze medal in Ecovadis Sustainability Assessment; and
  • Awarded Prime status (in Health Care Equipment & Supplies sector) in Institutional Shareholder Services (ISS).
10. TRAINING & AWARENESS
10.1 Human Rights and Social Compliance Training

We take matters relating to people very seriously in Hartalega. To foster a good understanding of human rights and social compliance amongst our workforce, we provide training to our employees to ensure that all our employees understand our policy of eliminating forced labour, child labour and human trafficking.

Employees are required to complete e-learning modules on an annual basis. Our elected worker representatives also disseminate information on our human rights and social compliance practices to employees who do not have access to the e-learning platform. Employees at the management level and key personnel across departments receive additional training to be better equipped in handling human rights matters. In financial year ended 2023, we recorded a total of 3,190 participation hours by employees on human rights and social compliance training via our e-learning modules.

10.2 Supplier Capacity Building
To strengthen social compliance within our supply chain, we provide capacity building opportunities for strategic suppliers, as determined by our Procurement Department. In financial year ended 2023, training and workshops encompassing key topics of updates to Malaysian laws, amfori BSCI, WRAP, SMETA and the ILO’s 11 Indicators of Forced Labour, amongst other areas were conducted for our key suppliers. Our supplier capacity building covers 100% of our key suppliers.
10.3 Proactive Stakeholder Engagement and Industry Collaboration

Regular engagements and industry collaborations enable us to transparently communicate on our social compliance performance with stakeholders, while providing the opportunity to contribute to driving positive change in the industry. In financial year ended 2023, we continued to engage with government authorities from key markets, customers, suppliers, NGOs, industry participants and academia. Alongside this, we participated in various industry-driven initiatives and forums aimed at strengthening human rights and labour practices within the glove sector.

As a founding member of the Responsible Glove Alliance (RGA) and member of the Responsible Business Alliance (RBA), we continued to strive for the implementation of best practices within the glove sector and the global supply chain, in collaboration with global industry participants and stakeholders.

11. LOOKING AHEAD
We will continue to engage proactively with key stakeholders and participate in global industry forums to gather valuable insights and constructive feedback. Our focus moving forward is to enhance human rights and social compliance practices in the supply chain through engagement with our suppliers as part of our supplier capacity building initiatives. We will continue to strongly uphold social compliance and adherence to our policies to ensure there is no modern slavery, forced labour or human trafficking in Hartalega.
More information can be found in our latest Integrated Annual Report.
This statement is approved by the Hartalega’s Board of Directors.