The California Transparency in Supply Chains Act of 2010 became effective in California on January 1, 2012, and the UK Modern Slavery Act became effective in the UK on March 26, 2015.
These laws were each designed to increase the amount of information manufacturers and retailers make available to customers and consumers regarding their efforts to address the issue of slavery and human trafficking.
As is stated in the Cummins Code of Business Conduct:
"Customers, employees, shareholders and communities have depended on Cummins to do the right thing for almost 100 years. Our Company’s strong ethical reputation and business success have been built on doing what is right and doing what we say we will do. That is why integrity is one of our Company’s core values. . . . Our Code of Business Conduct forms the backbone of our commitment to ethical behavior."
For more information, please see the Code of Business Conduct.
Cummins has a comprehensive Code of Business Conduct which includes provisions prohibiting forced or child labor. We require all employees to comply with, and have training on, the Cummins Code of Business Conduct. Included in our Code of Business Conduct is the following language:
"...We support human rights around the world, and will comply with all applicable laws regarding the treatment of our employees and other stakeholders. We will not tolerate child or forced labor anywhere and we will not do business with any company that does. . . . Our commitment to fair treatment also extends to our joint ventures, suppliers and other partners..."
Through our Supplier Code of Conduct, we make sure our suppliers and partners understand our values and treat their stakeholders in a way that is consistent with those values. The Supplier Code of Conduct provides, in pertinent part, as follows:
NO FORCED LABOR, NO CHILD LABOR
Suppliers must not use slavery or involuntary labor of any kind, including prison labor, debt bondage, or forced labor by governments and suppliers must not be involved in human trafficking. Suppliers must not use corporal punishment, physical or psychological abuse, threats or violence, or other forms of physical or mental coercion. There must not be unreasonable restrictions on the ability of employees to enter or exit the workplace.”
SPECIFIC CALIFORNIA DISCLOSURES:
Verification of Product Supply Chain. Cummins suppliers are required to sign a response form (“SCOC Response Form”) agreeing to comply with the Supplier Code of Conduct (“SCOC”), which includes a prohibition against forced or child labor, or affirmatively set forth the reasons why they are unable to comply. Cummins reviews the SCOC Response Form to ensure that it meets the intent of the SCOC. If Cummins concludes that the supplier is not in compliance based on the SCOC Response Form, Cummins will work with the supplier to (a) develop a plan to attain compliance, or (b) work on an exit strategy. If the Supplier agrees to take the appropriate steps to comply, Cummins will monitor the supplier’s actions until all those required have been taken.
Supplier Audits. To verify that suppliers remain in compliance with SCOC, Cummins conducts an audit during supplier visits in China, India, Brazil, Mexico, South Africa and Eastern European countries (including Russia). The informal audit is conducted by Cummins personnel and the supplier is not notified before or during the audit. Cummins management will contact the supplier’s management to inform them of all negative audit scores and Cummins will develop a corrective action plan with the supplier. If any inappropriate behaviors or conditions viewed as systemic or critical are observed during the audit, the situation is reviewed with the Cummins legal department for appropriate action.
Supplier Agreements. Cummins requires suppliers that make up the top 80% of purchases to sign an SCOC Response Form or a contract that contains SCOC language, which requires suppliers to comply with applicable laws and regulations and includes the prohibition against the use of forced or child labor of any kind.
Accountability Standards and Procedures. As our Code of Business Conduct states, “. . . [w]e will not tolerate child or forced labor anywhere and we will not do business with any company that does. . . .” Employees and contractors have multiple avenues to raise concerns should a fellow employee or contractor be suspected to be in violation of this core ethical principal. These avenues include contacting their supervisor, human resources or calling the ethics helpline or report through a specially designed ethics website. Cummins does not tolerate retaliation and no action will be taken against an employee or contractor because he or she reported a concern.
Similarly, Cummins SCOC sets forth our expectations for suppliers. An employee or contractor who identifies a potential violation of the SCOC (outside of the Supplier Audit context described above) should report the information to his or her management, the purchasing department or the legal function so that Cummins can investigate the matter and take appropriate action.
Supply Chain Training. Cummins trains employees responsible for supply chain management on Corporate Responsibility. We require all Cummins employees to comply with, and have training on, the Cummins Code of Business Conduct, which includes provisions prohibiting forced or child labor.
Due diligence processes for slavery and human trafficking
As part of our initiative to identify and mitigate risk we have in place systems to:
• Identify and assess potential risk areas when considering taking on new suppliers and regularly review our existing supply chains.
• Mitigate the risk of slavery and human trafficking occurring in our supply chains.
• Monitor potential risk areas in our supply chains.
• Protect whistle blowers.
We have zero tolerance to slavery and human trafficking. To maintain awareness and ensure a high level of understanding of the risks of modern slavery and human trafficking in our businesses our Code of Business Conduct is available on the Intranet.
SPECIFIC UNITED KINGDOM DISCLOSURES:
Structure and Supply Chains
Cummins’ UK presence is comprised of four manufacturing sites and an additional 14 associated sites which include parts reconditioning, distribution, and administration. Globally Cummins employs a total of 59,900 employees, and UK represents 7.6%. In 2021, Cummins imported approximately £1.7B of parts and materials into the UK, of which approximately 50% was imported from the European Union. Of all Cummins’ global imports into the UK, approximately 46% were imported directly from Cummins Inc. or a Cummins affiliate.
Policies on Modern Slavery
In March 2018, Cummins launched its Human Rights policy which applies to Cummins entities worldwide. The policy prohibits the use of all forms of child labour and forced labour, including threat of force or penalty, prison labour, indentured labour, bonded labour, military labour, slave labour and any form of human trafficking.
Since September 2017, Cummins Inc. has belonged to the United Nations Global Compact. Cummins supports the ten principles of the Global Compact to set higher standards in Cummins’ Human Rights policy and our Code of Business Conduct reflect and further detail our company’s commitment to human rights. In our Code of Business Conduct, Cummins states: “We will embrace diverse perspectives and backgrounds and treat all people with dignity and respect.” Our Code further states:
“We support human rights around the world and will comply with all applicable laws regarding the treatment of our employees and other stakeholders. We will not tolerate child or forced labour anywhere and we will not do business with any company that does (. . .) Our commitment to fair treatment and human rights also extends to our joint ventures, suppliers, and other partners. We will insist our suppliers and partners treat their stakeholders in a way that is consistent with our values through Cummins Supplier Code of Conduct (“SCoC”).”
Additionally, through our SCoC, Cummins expects our suppliers and partners to support our values and to treat their employees and business partners in a way that is consistent with those values. The SCoC states:
“Suppliers that do business with Cummins are prohibited from using slave or involuntary labor, of any kind including prison labor, debt bondage, or forced labor by governments. Suppliers must not engage in human trafficking and must not use corporal punishment, physical or psychological abuse, threats of violence, or other forms of physical or mental coercion.”
Due Diligence Processes and Risk Assessment
Cummins has initiated processes that identify and combat risks within our supply chain. Since 2019, Cummins has taken steps to assess and mitigate human-rights risks within our supply chain with a focus on suppliers we engage in our UK business. These steps include:
Identification of UK-based suppliers that may pose human-rights related risks. These include suppliers that provide labour-related services to Cummins’ entities located in the UK. Examples include but are not limited to: catering, cleaning, security, and logistics services.
Cummins expects its suppliers, especially those that may pose human-rights related risk, to comply with its SCoC.
Human-rights related risk suppliers are included as part of a supplier annual review to ensure compliance with the SCoC.
Cummins measures its effectiveness by confirming that targeted suppliers certify compliance with the Cummins SCoC.
Cummins conducts informal audits to suppliers globally including suppliers in mainland European countries and the UK to verify that suppliers remain in compliance with the SCoC.
Cummins will continuously improve by evaluating processes to identify suppliers which present human rights violation risks.
Training for Staff
In addition to an online training course “Cummins Code of Business Conduct” available to all Cummins employees globally, since 2019, Cummins has offered an online training course “Human Rights Training” that is available for all employees. However, it is mandatory training for the following functions: Legal, Internal Audit, Ethics and Compliance, and Supply Chain, Planning, Purchasing, Manufacturing, Logistics, Health & Safety, & Quality.
This statement is (i) made pursuant to section 54(1) of the Modern Slavery Act 2015 and constitutes our company’s slavery and human trafficking statement for the fiscal year ending 31st December 2021 and (ii) approved by the directors of Cummins Ltd on 21 June 2022.