At Utech Products Inc. (Utech), labor and human rights are a top priority. We are committed to treating everyone who works at or with Utech with dignity and respect. We explicitly prohibit human trafficking and the use of involuntary labor within our supply base, and this extends to forced, bonded, or indentured labor, involuntary or exploitative prison labor, and other forms of modern slavery. We are committed to working with industry partners and our supply chain to drive high standards in the industry. By collaborating with other thought leaders across the industry, we can increase our positive impact.
This statement is designed to meet Utech’s reporting obligations under the Australian Modern Slavery Act 2018 (Cth), the UK Modern Slavery Act of 2015, and the California Transparency in Supply Chains Act of 2010. Utech provides this statement for itself and on behalf of certain foreign subsidiaries that are directly covered by a disclosure obligation in their respective jurisdictions. Currently this includes Utech Products Inc, Endosoft Pty Ltd. Australia, Utech Products BV The Netherlands, Endosoft BV The Netherlands, Utech Products GmbH, Germany, Endosoft Limited UK and Utech Products Limited UK, pursuant to the UK Modern Slavery Act of 2015; and EndoSoft Pty Limited which is the only reporting entity for the purpose of the Australian Modern Slavery Act 2018 (Cth). Utech and its subsidiaries share the same core business operations and supply chains, policies prohibiting modern slavery, and supporting processes further described in this statement. The below statement covers Utech’s Fiscal Year 2022 (FY2022) ended Dec. 31, 2022.
This statement communicates Utech’s policies and practices to respect human rights, how we identify and address potential impacts, and how we mitigate risks. Utech upholds and respects human rights as contained in the United Nations (UN) Universal Declaration of Human Rights (UDHR); the International Covenant on Civil and Political Rights (ICCPR); the International Covenant on Economic, Social and Cultural Rights (ICESCR); and the eight Core Labour Conventions developed by the International Labour Organization (ILO), including Conventions No.29 and No.105 on the elimination of all forms of forced or compulsory labour. Utech’s approach is informed by the documents identified above, anchored to the
framework set forth in the UN Guiding Principles on Business and Human Rights (UNGPs), and includes ongoing engagement of potentially impacted stakeholders or their legitimate representatives.
About Utech’s Structure and Business Operations
Utech is a multinational company incorporated in New York and headquartered in Schenectady New York, United States of America. We conduct business operations globally and manage our business by geography. Our business is organized into the following three geographic segments: Americas; Europe, Middle East, and Africa; and Asia Pacific, Japan, and China. Utech conducts operations in 13 offices worldwide.
Utech designs, manufactures, and sells Laboratory/Medical Equipment and supplies and develops clinical software applications related to the healthcare and information technology industry. Utech provides services associated with these products and their use. We had approximately 150 full-time employees as of Dec. 31, 2022. We conduct significant sales and customer support operations in countries around the world. We sell our products and services both directly and through a variety of channels with support from our salesforce.
About Our Supply Chain Network
We source from a global network of suppliers and partners. Hundreds of suppliers provide parts that go into our products, and then manufacturing partners assemble and test finished products; provide logistical services; and collect, refurbish, and/or recycle products at the end of their useful life. The major elements of our materials supply chain are briefly described below. Our Supplier List provides more insight on the global suppliers with which we partner.
- Contract Manufacturing partners: a select group of suppliers that produce finished Utech products
- Component suppliers: a wide group of suppliers, often contracted directly by Utech to provide parts to our manufacturing partners according to our specifications; and
- Logistics service providers that transport components and finished products.
Utech’s Policies
Utech’s policies and approach to preventing involuntary labor and human trafficking have been developed based on international labor and human rights standards, as well as best practices across the global business community. These policies apply to the whole Utech group and all local subsidiaries, including EndoSoft Pty. Ltd. Australia, are expected to adhere to them. These policies establish our baseline expectations as well as communicate our values and help promote trust and collaboration as a key underpinning of our many business and stakeholder relationships. Utech’s specific policies include:
- Global Human Rights Policy: Our commitment to upholding and respecting human rights is stated in our Global Human Rights Policy. Our approach is governed by international human rights frameworks, including the UDHR, ICCPR, ICESCR, the ILO core labor standards, and is aligned to the UNGPs. A dedicated Business and Human Rights (BHR) team is responsible for the implementation of this policy, which we review on a regular basis.
- Code of Business Conduct (COBC): Our COBC is a crucial part of our company culture that provides employees with a clear understanding of our core values and the high standards for ethical conduct by which we conduct our business, including respect for human rights.
- Supplier Code of Conduct with Freely Chosen Employment Requirement: Utech has adopted the Responsible Business Alliance (RBA) Code of Conduct as its own (the “Code”). The Code prohibits workers from paying fees for their employment at any time, as outlined in the Definition of Fees. The Code defines Utech’s requirement for suppliers to implement management systems to protect workers’ rights, including the right to freely choose their employment. The Code also prohibits the use of forced, bonded (including debt bondage) and indentured labor, involuntary or exploitative prison labor, slavery, or trafficking of persons, and prohibits unreasonable restrictions on workers’ freedom of movement. Utech suppliers are required to acknowledge the Code as part of doing business with Utech. Furthermore, it is a foundational element of our Supplier Ethics Policy.
- Supplier Ethics Policy: Our Supplier Ethics Policy requires Utech suppliers and their employees to conduct themselves with the highest standards of honesty, fairness, and personal integrity. Suppliers must ensure that their employees, subcontractors, agents, and third parties assigned to provide services or products to Utech act consistently with this policy. This policy also is incorporated within standard terms and conditions for Utech’s global affiliates that supply Utech’s products and Utech’s indirect procurement suppliers. Furthermore, suppliers acknowledge and commit to the Code when they agree to the Supplier Ethics Policy.
- Juvenile Labor Policy and Expectations: Our Juvenile Labor Policy and Expectations require suppliers to uphold the human rights of children, juvenile or young workers, students, interns, and apprentices.
- Responsible Minerals Policy: Utech’s Responsible Mineral Policy aligns with our long-standing commitment to uphold and respect human rights for all people, including those who work in our supply chain. Our goal is to work collaboratively through the supply chain to source minerals consistent with our values around human rights.
- Ethics Policy: Utech believes our employees, customers, partners, suppliers, shareholders, and stakeholders have a responsibility to speak up promptly about any conduct or circumstances they believe, in good faith, may constitute a violation of the Code of Business Conduct, the Code, or any other Utech policy.
- Risks of Modern Slavery and Human Trafficking: Due to the extensive nature of our materials supply chain network, business is conducted with suppliers in a variety of global contexts, including in countries where local law may not exist to protect populations vulnerable to forced labor or human trafficking risks. Due to constraints in local labor markets, suppliers can deploy workforce strategies to recruit foreign or domestic migrant workers using labor recruitment agencies. As a result, workers could potentially be subject to conditions that may contribute to forced labor such as debt bondage, by paying excessive recruitment fees; passport withholding; a lack of transparency of terms and conditions in their contracts if those contracts are not in their own language or are not fully explained before they commence employment; and lack of legal protections in the countries where they work or migrated from.
Our supply chain network also includes a complex mineral supply chain. Like many companies in this industry, our products contain various minerals necessary for functionality. Utech does not directly procure minerals from mines, or from the smelters or refiners that process them. However, some mine operations can pose serious human rights risks, including forced labor, child labor and other risks for the workers and communities at the beginning of the electronics supply chain.
In addition to outlining Utech’s expectations for suppliers to uphold human rights through policy, Utech undertakes a variety of actions to address and mitigate these risks.
Utech’s Actions
Utech takes multiple approaches to protect workers from forced labor, slavery and human trafficking in our own business and materials supply chain. We take the following activities with our direct material suppliers:
- Verification: We evaluate and address risks of human trafficking and slavery through conformance to the Code and using a risk-based approach. When new suppliers are onboarded, Utech assesses modern slavery risks, which includes an assessment of whether the supplier employs vulnerable workers (for example, foreign migrant workers and young workers). If risks are identified, we follow up to determine if impacts need to be addressed prior to scaling business with the supplier.
For existing suppliers and supplier entities that are integrated through mergers and acquisitions, Utech follows its standard programs and due diligence processes, as follows: Utech conducts an annual risk assessment by evaluating the supply base on social and environmental risk factors. This evaluation includes indicators for forced labor and human trafficking risks in addition to the potential presence of vulnerable worker groups. The outputs of the risk assessment identify which suppliers we will ask to demonstrate their conformance to the Code, using RBA’s assessment tools, such as the Supplier Self-Assessment Questionnaire (SAQ), Validated Audit Process (VAP), or equivalent. Utech assesses the effectiveness of the risk assessment process and continuously works to improve. The assessment is refreshed annually to maintain relevance to our operations with updated indicators, newly available data, and accounts for lessons learned over the past year. We also convene or attend teleconferences, webinars, and other meetings so that we may better understand and monitor risks associated with labor recruitment practices. We conduct these activities regularly and extensively.
- Audits: We conduct third-party supplier audits using the VAP, or equivalent, or review audit reports through the RBA’s audit sharing system and conduct unannounced audits as necessary. The audit process includes on-site inspections, document reviews, and worker and management interviews.
- Certification: Suppliers must agree to comply with the Code as well as international standards and applicable laws and regulations when they enter into master purchasing agreements or equivalent terms and conditions with Utech. This creates legally enforceable obligations, including in cases where the law is silent or allows practices that violate Utech policies. We require suppliers to acknowledge the Code at the onset of the relationship.
- Accountability: Non-conformance with the Code is taken very seriously. Utech works with suppliers to develop corrective action plans, identify the root cause of the non-conformance, and strives to ensure that corrective actions are implemented in the shortest possible timeline. Corrective actions may include the immediate return of passports or facilitating reimbursement of paid recruitment fees within 90 days of discovery. Corrective actions are followed by preventative actions to ensure that non-conformances do not reoccur and to reduce future risk. Such actions may include ensuring the facility has a policy in place and workers are aware of the policy, and that contracts are clear and in a language workers can understand. Multiple teams collaborate to hold suppliers accountable and to ensure actions are completed by specified deadlines. Utech’s approach is to drive continuous improvement with suppliers and engage them with short and long-term improvement plans, as needed. To help make lasting improvements, Utech will monitor and coach suppliers across multiple years, as needed.
Utech also uses supplier scorecards to drive conformance to the Code and accountability throughout the engagement process. It also informs supply chain sourcing and procurement decisions. Suppliers are scored on factors such as audit performance and closing findings on time, including findings for Freely Chosen Employment. Having sustainability metrics alongside cost, quality, and service delivery allows managers to make informed decisions when awarding business to suppliers. When Utech’s standards are not met, we may disqualify the supplier from consideration for future business or terminate the supplier’s relationship with Utech.
Our Supply Chain Human Rights Governance Committee helps assure progress against our priorities, including freely chosen employment. This committee establishes management oversight of human rights risks and opportunities within the supply chain. The committee oversees the integration of human rights policies and priorities into business operations and regularly reviews due diligence results including audit findings, forced labor allegations, and minerals supply chain risks. The committee convenes our Senior Vice President of Supply Chain Operations and other management representing Global Manufacturing and Logistics, Global Supplier Management, Technology & Quality, Supply Chain Transformation, and Legal.
As well as conducting its own standard due diligence, Utech investigates and addresses allegations brought to our attention from other channels, internal and external. Issues detected outside of the Verification and Audit processes outlined above are tracked through our incident management system and assessed against our policies and priorities. We assess human rights risks and impacts and determine the severity of the violation. When impacts are identified, we follow the same corrective action, preventative action, accountability and reporting mechanisms, and closure timelines as those we follow in our regular due diligence processes to help mitigate or remedy the issue.
Furthermore, for our own employees, we require compliance with our COBC, and employees certify compliance annually. Our COBC describes how to raise concerns, which are tracked at both regional and corporate levels.
- Training: Our strategy focuses on capability building for our suppliers and employees. We regularly engage suppliers across the globe to train on Code fundamentals. This helps us build awareness, propagate best practices, and focus on improvement. For suppliers, the contributions we make to RBA workshops and training content are mutually beneficial, ensuring understanding of policies and standards.
RBA’s Learning Academy provides online training on a range of topics, including methods to combat trafficking and forced labor in the supply chain. As part of our audit process, suppliers are directed to training resources related to an audit finding and are expected to complete the training. When appropriate, Utech also collaborates with RBA members to conduct focused training with specific sets of high-risk suppliers and share best practices. For our own employees, our COBC training helps guide our employees to make ethical, professional, and respectful choices. Further, beginning in FY2021, Utech launched an internal training about human rights in the supply chain to raise awareness and educate employees on how they can play a role in helping Utech to follow through on our human rights commitments. Employees learn how to detect warning signs of serious risks such as forced labor and child labor, how to report if they suspect violations of Utech’s standards, and how they can support work to help hold suppliers accountable. These training courses are part of Utech’s internal Education Management System and are required to be taken by employees around the world who are most likely to encounter human rights issues in day-to-day supply chain operations.
Utech provides additional details and annual updates about our supplier engagement process and actions regarding freely chosen employment, in our ESG Reporting Hub.
Actions taken during Fiscal Year 2022
During FY2022, we continued to see supplier audits uncover nonconformities to the Code expectation for Freely Chosen Employment. These nonconformities indicated risks for forced labor or bonded labor. These supplier nonconformances arose if any workers paid fees related to recruitment, such as small one-time fees for health examinations or larger recruitment fees. We continue to see the majority of Freely Chosen Employment cases reflect instances where workers paid one-time health examination fees of less than 5 percent of their monthly salary and were reimbursed after commencement of employment. Our teams have worked with suppliers to develop models in which employers pay healthcare providers for health examinations, eliminating the need for workers to be reimbursed.
In countries where it is legal for recruiters to charge fees to foreign migrant workers prior to departing from their home country and upon arrival, we have continued to identify risks of bonded labor, a type of forced labor. In these instances, foreign migrant workers paid excessive recruitment fees equivalent to a month of their gross wages or more. Workers become bonded by debt when they are forced to work in order to repay loans or excessive fees to labor brokers. As part of our normal processes, we take the following corrective actions to address bonded labor risks: drive suppliers to absorb recruitment fees previously passed onto workers and remediate and facilitate reimbursement of affected workers. Given that recruitment fees are legal in some countries, it can take time to drive resolution with suppliers, and our efforts are ongoing.
Upon discovery of the practice of charging prohibited fees, we work with the supplier to investigate further: identify fees workers may have paid to labor agents’ pre-departure and upon arrival, account for recurring fees deducted from their paychecks, and drive suppliers to hold dialogue with workers regarding fees that may have been paid to other intermediaries or for travel. A thorough investigation is important in helping the supplier determine the actual cost of recruitment moving forward and the amounts to be reimbursed to workers. As part of corrective actions, suppliers must adopt comprehensive “no fees” policies and procedures to prevent future workers from paying fees during the recruitment process. When these policies are adjusted, workers are trained and informed about the “no fee” policies in a language they can understand. This training is also integrated into the recruitment process for future workers. In addition to RBA audits, we conduct targeted surveys of suppliers who employ vulnerable populations, such as migrants or young workers. We select sites for this targeted engagement based on risk. For example, if the supplier is located in a country that legally permits recruitment fees such as Taiwan or Malaysia, and the suppliers’ self-assessment questionnaire indicates foreign migrant workers on-site, and we do not have a current or planned RBA audit for that site, then these sites receive an additional survey asking them about their recruitment practices and forced labor due diligence. Even if the practice of charging recruitment fees is permitted under local law, we make it clear to suppliers that we expect them to have processes to implement “no fees” policies, conduct due diligence on their labor agents, and ensure Freedom of Movement for workers.
Within the past fiscal year, our participation in the RBA Responsible Labor Initiative (RLI) supported our ability to address forced labor risks with suppliers. Utech sponsored a few suppliers to attend RLI Forced Labor training seminars. Our team leveraged these trainings to guide suppliers to conduct thorough fee investigations, equipping them with tools and resources such as fee checklists and guidance questionnaires. The Labor Migration Corridor Database assisted in helping suppliers identify fees workers could have paid during their journey.
Sourcing Minerals Responsibly
To help address the human rights risks in our complex mineral supply chain, Utech has implemented a comprehensive due diligence process. The Utech Responsible Minerals Program
aligns to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Details about this program including due diligence
strategy, efforts to hold suppliers accountable, and results of our work can be found in our calendar year 2022 Conflict Minerals Report.
Commitment to Leadership Through Collaboration and Transparency
We are actively involved in advancing industry-wide responsible practices through our engagement in the RBA, a nonprofit alliance of leading companies dedicated to respecting the rights and promoting well-being of workers and communities engaged in the global supply chain. Utech also participates in RBA’s Responsible Labor Initiative, a multi-stakeholder initiative
focused on ensuring the rights of workers vulnerable to forced labor in global supply chains are consistently respected and promoted. Utech also participates in the Responsible Minerals
Initiative (RMI) and leverages its tools and programs to advance responsible sourcing. We are committed to transparently communicating our actions. For further information on Utech’s work to maintain a socially responsible supply chain, please contact us.
Assessing Utech’s effectiveness
Utech has measures to assess the effectiveness of its actions including tracking the number of internal trainings on human rights in supply chains we have rolled out, the proportion or number of complaints resolved by our Ethics department, and the number of corrective action plans and preventative actions we have developed and implemented with our suppliers.
Approval and Signing
The Nomination and Governance Committee of the Board of Directors of Utech Products, Inc., which is our principal governing body, has approved this Statement and has delegated authority to the Director of operations to sign the Statement on behalf of the Board of Directors.
Name: Jeff Kreines
Title: Director of Operations
Date: January 20, 2023