Wesfarmers Health works collaboratively with suppliers to mitigate adverse human rights impacts within its supply chain and uses to social audits to identify and rectify these impacts, with a particular focus on addressing non-conformances related to excessive recruitment fees.  Excessive recruitment fees often indicate forced labour and therefore human rights issues may be present in the supply chain.

Towards the end of the 2023 financial year, Wesfarmers Health became aware of a social audit conducted at one of its Tier 2 manufacturing facilities¹ in Malaysia. The audit raised a non-conformance concerning migrant workers allegedly being charged excessive recruitment fees by agents in their home country.

Wesfarmers Health promptly informed its Australian supplier about the non-conformance and detailed guidance, based on industry best practice, was provided. The supplier was requested to arrange an onsite audit at the facility in Malaysia and Wesfarmers Health temporarily halted new product development from the facility. The Category Team was also notified of the potential commercial ramifications should such non-conformances remain unresolved.

During the supplier's audit, the third-party auditor noted significant efforts by the factory management to comply with Wesfarmers Health's remediation requests.

The supplier provided photographic evidence of corrective actions, including:

• Terminating the services of the relevant recruitment agency.
• Temporarily pausing the recruitment of migrant workers from the concerned country.
• Implementing a "Zero Cost Policy" prohibiting the charging of recruitment fees by any parties during the recruitment process, approved by the Managing Director.
• Establishing a "Foreign Worker Recruitment Process" Standard Operating Procedure, outlining responsible persons, hiring procedures, induction and the process in place if fee charging is identified during worker induction.
• Conducting interviews with migrant workers in their own language.

The interviews focused on the recruitment process in the migrant workers’ home country, informed workers of the Zero Cost Policy, and obtained their consent to take legal action against recruitment agencies charging excessive fees.

The supplier made interview videos available for further review, devised a corrective action timetable and appointed a responsible person to track progress.

As of the reporting period's end, the third party auditor had closed the non-conformance related to excessive recruitment fees, along with all other identified non-conformances. Wesfarmers Health deems the remedial actions taken by the supplier and the factory as sufficient.

This example illustrates Wesfarmers Health's comprehensive approach to factory monitoring, non-conformance remediation and proactive supplier engagement. The company remains dedicated to reviewing social audits and actively collaborating with suppliers to address adverse human rights impacts it may have caused or contributed to.