Modern Slavery Statement

 UK Modern Slavery Act: Anti-Slavery and Human Trafficking Statement

Anti-Slavery and Human Trafficking Statement for LX Hausys

LX Hausys makes this anti-slavery and human trafficking statement as required by section 54(1) of the Modern Slavery Act 2015, setting out the steps that LX Hausys took during the financial year (running from 1 January – 31 December 2021) to ensure that slavery and human trafficking are not taking place in any part of our business or in any of our supply chains.

 

LX Hausys Overview

LX Hausys is a company specialising in the production and sales of building and decorative materials, industrial film, and automotive materials and components. Our main products include building and decorative materials such as windows, flooring, solid surface, engineered stone, industrial film such as home appliance and furniture finishing materials, and automotive skin/components. We operate our head office and manufacturing plants in Korea, in addition to six overseas sales offices, three overseas manufacturing sites, and two overseas branch offices, primarily in the United States, China, and India.

 

Business Overview

Our main building decoration products include windows and doors, flooring materials, wallpaper, insulation, solid surface/Easton, kitchens and baths. We are taking the lead in improving living environments for our customers by developing environmentally-friendly flooring materials and wallpapers of various designs, kitchen tops, solid surface/E-stone (which are interior and exterior finish decorative materials), kitchen and bath products differentiated by our own materials and technology (including high-performance windows and doors for residential and commercial spaces), and PF insulation with excellent insulation and fire-resistance properties.

Global Human Rights & Labour Policy

Under the corporate management principle, “People-Oriented Management”, LX Hausys fulfills its basic responsibility to uphold human rights including the rights for freedom and happiness. LX Hausys supports international standards including the Universal Declaration of Human Rights, the Human Rights and Labour Principles of the UN Global Compact (UNGC), the UN Guiding Principles on Business and Human Rights (UNGP) and the International Labour Organisation (ILO), and is in compliance with the laws of the countries within which we operate. LX Hausys applies this policy at all overseas business sites, and constantly monitors and reduces any risks regarding human rights. Furthermore, LX Hausys shares this policy with our stakeholders including employees, customers and suppliers, and contributes to improving and expanding their awareness of this policy.

• Respect for Human Dignity: LX Hausys respects all employees and strives to create a secure working environment by prohibiting workplace violence, including abusive language, psychological and physical coercion, etc.
• Avoidance of Forced Labour: LX Hausys prohibits all forms of involuntary labour, including forced labour and restriction of psychological and physical freedom of employees. Original copies of identification, passports, and work permits are not requested upon hiring.
• Prohibition of Child Labour: LX Hausys complies with the local labour laws on minimum age of employment and prohibits child labour below the age of 16. Employees under the age of 18 are not permitted to carry out tasks that jeopardise their health or safety, including night shifts and overtime.
• Non-Discrimination Policy: LX Hausys provides equal opportunities for hiring, promotions, remuneration and training. We strictly prohibit all forms of discrimination including gender, age, race, religion, disability, marital status, pregnancy, labour union activities and social status.
• Working Hours: LX Hausys complies with local laws on working hours (regular/overtime hours, holidays) and does not force employees to work overtime. Employees are paid in accordance with labour laws when working overtime.
• Wages and Benefits: All employees are paid above minimum wage as prescribed by local laws.
• Freedom of Association: LX Hausys respects the employee’s freedom of association and collective bargaining in accordance with local labour laws. Employees can communicate with management regarding their working conditions without any fear of discrimination or retaliation. Employees will not be disadvantaged for joining, participating in, or organising labour unions.

Occupational Safety and Health Committee

In relation to employee health and safety, we have signed an official agreement with the labour union and we hold quarterly occupational safety and health committees with the participation of an equal number of members from employees and from management. We are trying to solve safety and health issues, for example through incident prevention activities focused on production sites and hazardous facilities, and by inspecting work environments with the participation of executives and staff members once per quarter.

 

Risk Management

LX Hausys conducts thorough and effective risk management activities in order to identify and solve any issues that arise early on. Nine areas are subject to review: Governance, Ethics management, Shared growth, Fair trade, Customer value, Social contribution, Labour conditions and Human rights, Safety and health, and Environmental management. Immediate action was taken to resolve any risks predicted and/or discerned through such inspections/diagnoses, and these areas are subject to regular monitoring to ensure that the issue(s) have been effectively resolved. Where any of our suppliers are found to be in breach of our contracts including compliance with our CSR Code of Conduct, LX Hausys reserves the right to terminate its arrangements with that supplier.

Social Contribution

LX Hausys has carried out various CSR (Corporate Social Responsibility) activities. We are acutely aware of the impact of our business activities on individuals and society, and we utilise our CSR activities to nurture our relationship with local communities.

Stakeholder Communication

LX Hausys communicates with its major stakeholders - customers, shareholders and investors, business partners, employees, and local communities - through tailored channels. We ensure transparency by sharing our reports on the activities and outcomes of our business and other activities (e.g. Sustainability reports, Business reports, Environmental information reports). This type of transparent information disclosure enables us to gain the trust and respect of our valued stakeholders, and to promote our CSR activities and various training programs.

 

CSR Code of Conduct for Suppliers

LX Hausys established its CSR Code of Conduct in 2016, and continues to implement it for all of our suppliers. The Code of Conduct defines the social responsibilities of suppliers in terms of issues related to labour and work conditions, ethics management, health and safety, and environmental management. We require Tier 1 and Tier 2 suppliers to abide by this set of regulations. Overseas suppliers who enter into contracts with our manufacturing companies in Tianjin and Wuxi, China, and Atlanta, United States (i.e. the manufacturing companies which serve as our major overseas production bases), are required to comply with the CSR Code of Conduct from the time of contract signing.

• Supplier CSR Checklist Items
  • Safety and Health: safety and health management system, industrial safety, response to industrial accidents
  • Environmental Management: environmental management system, hazardous chemical management, environmental pollutant management
  • Human and Labour Rights: written labour contract, discrimination prevention, wages and working conditions, grievance handling
  •  Other: customer satisfaction management, ethics management, fair trade, data protection, contribution to local communities

 

Supplier CSR Management Principles and Due Diligence Processes

LX Hausys evaluated 400 suppliers from whom we purchased items worth more than KRW 100 million in the previous year by using a checklist based on the CSR Code of Conduct for Suppliers. In particular, new candidate companies must be subjected to CSR evaluation, which is reflected in the evaluation score when selecting a supplier, and the CSR evaluation results are also reflected in the evaluation score during the regular evaluation of existing suppliers. Going forward, we further plan to divide suppliers according to their priority risk level (high/medium/low), conduct evaluations, and carry out improvement activities.

In overseas countries, we are managing the CSR of suppliers primarily in Atlanta and in Tianjin and Wuxi, which serve as our major overseas production bases. Our Atlanta branch conducts evaluations on suppliers with whom purchases valued at over USD 10,000 are conducted, and this branch has been signing the CSR Code of Conduct with suppliers since 2018. Our branches in Tianjin and Wuxi also include the Code of Conduct for Suppliers in their standard contracts and perform CSR evaluations.

In principle, if the CSR evaluation score of a potential supplier is less than 70 out of 100, that company is excluded from selection. CSR evaluation is based on on-site visits, but if it is difficult to conduct such visits due to the nature of the company (non-manufacturing companies, overseas companies, agents, sales agencies, etc.), one-off transactions or temporarily registered companies with transactions of less than KRW 100 million per year are evaluated via a written survey.

 

LX Code of Ethics

LX has established and implemented the Code of Ethics as the standard for correct behaviour and value judgment that all executives and employees must comply with. The Code of Ethics mainly consists of responsibilities and obligations towards customers, fair competition and trade, ethics and responsibilities of employees, and responsibilities to the nation and society. In addition, since the Code is posted on the website of LX, it can be accessed at any time.

 

Report & Whistleblowing System

All of our employees sign the Jeong-Do Management Pledge (i.e. Code of Conduct) by way of commitment to practising Jeong-Do Management. Here at LX Hausys, we prohibit all employees from accepting any bribes or rewards from stakeholders under any circumstances. In the event that bribes or gifts are offered, they should be politely declined and returned in accordance with the Code of Ethics. If for any reason this is not possible, they should be reported and handed in to the Ethics Bureau. Any violation of Jeong-Do Management principles is reported via the Shin mungo System (i.e. training on modern slavery and trafficking). These include unfair practices carried out by our employees such as misuse of authority, acceptance of bribes, and any other practices that go against the Code of Ethics. In the event that online reporting is unavailable, reports can be made by phone, fax, postal mail, or in person.

 

Training in relation to Jeong-Do Management Culture

LX Hausys makes concerted efforts to spread the culture of Jeong-do Management through implementation of Jeong-do Management training, and through distribution of promotional materials to all of our employees, partners and overseas corporations every year. We provide training tailored to each role within our company. This training is provided to all of our employees, including new recruits/experienced employees and expatriates, and we also provide training led by each business division/department. In 2021, education for employees was conducted online in accordance with rules aimed at preventing the spread of COVID-19. In addition, we appointed a director and other specific personnel to work in the Office of Ethics, whose remit was to spread and establish a culture of “Jeong-Do Management” throughout the company, in addition to practicing Jeong-do Management every day by taking the lead on all related education, public relations, and preventive activities. The principles of Jeong-Do Management are reflected in the KPIs of our directors and personnel of our 33 departments both domestically and overseas at a rate of 5 to 10%.

Encouraging Jeong-Do Management among Suppliers

LX Hausys continuously strives to achieve mutual trust and cooperative relationships with our suppliers through a culture of fair trade. We communicate with our suppliers through mobile web toons and messages such that suppliers can approach the topic of Jeong-do Management in a comfortable manner.

 

Further Steps

Following a review of the effectiveness of the steps we have taken during the financial year ending 31 December 2021 to ensure that there is no slavery or human trafficking in our supply chains, we intend to take the following further steps to combat slavery and human trafficking: [Outline further steps or measures to be taken to combat slavery and human trafficking].

 

This disclosure confirms our efforts to eradicate slavery and human trafficking practices within our supply chain and it shall be reviewed annually and updated accordingly. This statement was approved by the board of LX Hausys on 10 August 2022 and was subsequently signed and uploaded.

 

Approved by the board of LX Hausys Europe GmbH on: 10 August 2022