MODERN SLAVERY STATEMENT.

In accordance with the Modern Slavery Act 2015 (MSA), this Statement provides the measures that we take to prevent slavery and human trafficking occurring in our business and supply chains.

Arnold Clark Automobiles Limited is fully committed to preventing acts of modern slavery and human trafficking from occurring, whether in our business or our supply chains, and we require the same standards of our suppliers.

This statement will be made available on our website to all who engage with us, whether in employment or in business, so that those parties may familiarise themselves with the contents.

WHO WE ARE

We operate retail sites and service centres across the UK. Our principal activities concern the sale, hire and servicing of new and used automobiles. We represent 27 new car manufacturers. We have over 200 dealerships, 160 service centres, 25 accident repair centres and 12 parts centres. We also have 40 car and van rental locations, 3 training facilities and 6 vehicle leasing business centres. The Group directly employs over 13,000 people.

Our business functions are broad. Our vehicle aftercare includes MOT testing, accident repairs, servicing and maintenance of vehicles for both businesses and the general public. We arrange finance to enable our customers to buy vehicles. We sell parts and accessories from our parts centres and hire vehicles to the public and to businesses throughout the UK. We provide a suite of fleet management services to businesses in the public, private and third sectors. We provide and organise insurance. Our training centres deliver various qualifications, apprenticeships, business courses and automotive courses.

AREAS OF RISK

Our assessment for 2020 drew similar conclusions to our assessment from 2019 and concluded that, while risks exist in our recruitment practices and operational site management, the most significant risks remain in our material and subcontract procurement.

We source and sell products and parts from a wide range of national – and international – suppliers. Supply chains in the automotive industry are complex, which can make it difficult to conduct full audits of each tier. Furthermore, raw materials commonly used in the automotive industry such as cobalt (which is used in electronics), mica (used in some paint finishes) and rubber (used for tyres and seals) can be supplied by higher risk countries. Finally, some of our staff members are required to wear company uniforms. The garment industry is considered to present a high risk of modern slavery in both its national and international supply chains.

Construction has been highlighted by The Chartered Institute of Building as high risk for modern slavery. This is due to a combination of factors such as a high turnover of staff, a reliance on migrant workers and low profit margins across the industry. Our construction and maintenance work is currently outsourced.

Cleaning and valet services also face a higher risk of modern slavery due to similar factors as those in the construction industry, including high staff turnover and a reliance on migrant workers. We employ a number of full and part time cleaning and valet staff across our branches, as well as using external suppliers.

THE STEPS WE TAKE TO PREVENT SLAVERY AND HUMAN TRAFFICKING

We prohibit all areas of our business and supply chain from using child labour, slavery, or human trafficking of any kind. We are committed to taking action to prevent any cases within our business and to mitigate against the risks of any exploitation throughout our supply chains.

From a supply chain perspective, we make sure that our suppliers commit to our company values by obtaining written confirmation from all of our suppliers that their business practices and supply chains are in accordance with the MSA. In procurement, this is evaluated as part of the tender process, and on a regular basis. We monitor supplier compliance with suitable levels of due diligence according to their level of risk, which we assess for the potential of human trafficking and/or modern slavery. However, due to the complexity of the global supply chains in the automotive industry, we are unable to check every business relationship and avenue between each tier.

Any instances of non-compliance, alleged modern slavery or human trafficking that we are made aware of will be assessed on a case-by-case basis. We will quickly and thoroughly investigate any claim or indication that any area of our business or supply chain is engaging in human trafficking or slave labour. Any such claim would be reported to senior management as appropriate. The Board of Directors will be informed of the issue including the findings and outcome of the investigation.

If such instances are proven, remedial action will be taken and tailored to suit the circumstances. We will only trade with those who are taking steps towards full compliance. If we are not satisfied with the steps being taken towards full compliance, we will temporarily suspend our business with that supplier (to the extent allowed in contract or law). The ultimate sanction for the continual failure to comply will be for us to cease to trade with that supplier.

Our whistleblowing and employee conduct policies were revised and reissued during the year to ensure that they remained relevant and are available to all of our members of staff on our employee portal.

Our estates department only contract with those contractors who are “Alcumus SafeContractor” approved, in order to guarantee that construction companies are health and safety accredited. Alcumus SafeContractor are committed to stamping out modern slavery within the construction industry. For workers on our own sites and locations, we require our contractors to check that all on site workers carry Construction Skills Certification Scheme (CSCS) cards which are only granted to licensed labourers and engineers.

Finally, one of our main protections against modern slavery is our employment policies process which make sure that our organisation complies with minimum wage legislation and that all of our employees have the right to work in the UK. We also require our contractors to comply with these standards. While we acknowledge that this does not completely eradicate the risk of modern slavery, it is one of the most effective ways of combating this risk.

Arnold Clark adopts a zero-tolerance approach to modern slavery and human trafficking, therefore we do not record key performance indicators, as any reported instance would be a breach of our policy.

ACTION WE ARE TAKING TO COMBAT MODERN SLAVERY IN 2020

While we have made numerous steps towards reducing the risk of modern slavery and human trafficking within our business, we understand that there is still more that all businesses, including our own, can do. Some of the steps we are taking in 2020 will help us to do this:

• Our Compliance department is engaging with a number of third-party organisations to discuss ways of implementing a more in-depth social and ethical audit programme to provide further assurance that our significant and higher risk suppliers are taking the steps necessary to mitigate against any risks from their own supply chains.
• Our Estates team continue to consider ways to improve our due diligence in this area, and is committed to a collaborative approach with external contractors.
• Arnold Clark Automobiles Limited and all its employees are committed to eliminating modern slavery and human trafficking within our business activities and supply chains. Employees are encouraged to familiarise themselves with this statement and our whistleblowing policy to help incorporate our ethical business values within their day-to-day work.

This statement has been approved by the Arnold Clark Automobiles Limited Board of Directors and the original statement was signed by our Chief Executive Officer & Group Managing Director Eddie Hawthorne on 28 July 2020. This statement will be reviewed and updated annually.