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SUSTAINABILITY LIBRARY 2023 People Risk assessment

Risk assessment

Anchoring of responsible business

Lerøy has undertaken to respect internationally recognized standards for human rights and decent working conditions and strives to comply with all applicable laws and regulations, including internationally recognized conventions on the protection of human rights and decent working conditions.

In particular, Lerøy undertakes to comply with the following international conventions and standards:

  • International Bill of Human Rights and other relevant human rights conventions
  • ILO's declaration on basic principles and rights in working life
  • The UN's guiding principles for business and human rights
  • OECD guidelines for multinational companies where applicable

In addition to complying with the above principles for the protection of human rights and decent working conditions, Lerøy, as further described in ethical guidelines and policy documents, has a special focus on the following areas within human rights and decent working conditions, and expects the same from its suppliers and business partners.

  • Forced labour
  • Child labour
  • Permanent employment
  • Decent pay and regulated working hours
  • Trade unions and collective bargaining
  • Discrimination and harassment

Board and management

In the Group, the work for basic human rights and decent working conditions is firmly rooted in management and the board. The board has approved guidelines and policy documents as detailed below. The day-to-day managers of the reporting subsidiaries, together with the Group management and the board, have been involved in the implementation of responsible business.

Guidelines and policy

The main principles for protecting human rights and decent working conditions are incorporated in the Group's ethical guidelines and policy documents which apply to all subsidiaries in the group.

  • Ethical guidelines
  • Ethical guidelines for suppliers
  • Policy for human and labor rights
  • Policy for Health, Environment and Safety (HSE)
  • Policy for diversity and inclusion
  • Notification policy
  • Policy for purchasing
  • Policy for fish feed
Responsibility and operationalization

The responsibility for implementation, operationalization and continuous improvement of the due diligence process is as follows:

  • The board of Lerøy Seafood Group ASA has overall responsibility
  • Group management and segment management look after the due diligence process as a whole for the group
  • General managers in reporting subsidiaries are responsible for implementation and follow-up in their own operations

The purpose of the above-mentioned guidelines and policy documents is to establish common principles and rules that shall apply to all employees in Lerøy, suppliers and business partners. The Group's ethical guidelines reflect the values the Group stands for and provide guidance on which principles employees and partners must follow when it comes to human rights and decent working conditions.

All employees must have an orderly relationship that involves their own written contract, correct pay, adequate training, follow-up throughout the employment relationship and freedom of organisation. The company focuses on equal rights for women and men. More information about the Group's work for equality, anti-discrimination and equal pay can be found in the Group's Equality, non-discrimination and gender pay report 2022.

Each individual employee is responsible for practicing the ethical guidelines. The Group communicates continuously with its employees and encourages openness and involvement.

The Group has arranged for anonymous, internal notification if the employees wish to notify about objectionable conditions. A notification committee has been set up that covers the entire group. The committee coordinates case processing and the implementation of necessary measures.

The companies in the Lerøy group report quarterly to the Group through a compliance certificate. The compliance reporting contains information on several relevant areas to ensure human rights and decent working conditions, for example HSE, ethical guidelines and warnings. All our farms are Global Gap or ASC certified, and audited by a 3.part every year also in subjects connected to human rights and decent working conditions.

The board must revise ethical guidelines and policy documents every year. An annual schedule has been drawn up to ensure the implementation of various activities throughout the year.

Interested parties can obtain information on our work with responsible business by contacting the Group via a contact form on the Group's website at www.leroyseafood.com

The group has arranged for notifications to external parties via the group's website, where notifications can be made anonymously if desired here.

Description of the due diligence assessment process

The Group has carried out a risk assessment of potential or actual negative impact on basic human rights or decent working conditions in connection with the Group's activities and operations.

As part of the due diligence process, the following overall goals have been set:

  • Ensure that the business or operation does not have a potential or actual negative impact on basic human rights or decent working conditions in connection with the Group's business and operation
  • Inform the public through a report on an annual basis
  • Provide information upon request.
Risk mapping

Risk mapping has been carried out on a wide scale to identify areas of the business, across countries and operations, including the supply chain, where the risk of negative impact on human rights and decent working conditions is most relevant.

In the risk mapping, we have taken as a starting point the OECD's guidelines with a focus on industrial risk, geographical risk, product/service risk and company risk.

The Group has carried out due diligence assessments throughout the Group, both in its own operations and against suppliers, with a particular focus on human rights and decent working conditions.

Lerøy has centralized functions, common management systems and standardization across companies within the same segment. Due diligence assessments have therefore been carried out at segment level, which include all the companies within the respective segment. General managers in reporting subsidiaries have carried out due diligence assessments in their own operations. If there are risk conditions or findings that are specifically linked to a company within a segment, this will be specified in the Group's report.

Based on risk mapping, a prioritization has been made. This is mainly based on severity and probability. A closer assessment of prioritized risk areas has then been carried out.

Lerøy has created a separate landing page for suppliers on the Group's websites. Here, suppliers will find the necessary information about the requirements we as a Group set for our suppliers.

A policy has been drawn up for purchasing and various procedures for how purchasing in the Group is to be carried out. This is a document that applies to all our companies across segments. The policy document has been approved by the board and management/board in all subsidiaries.

For larger suppliers such as suppliers of fish feed, physical audits are carried out annually with follow-up of e.g. human rights and decent working conditions. Audits are also carried out via a 3rd party company, recently of all suppliers linked to logistics.

Lerøy has a complex value chain with over 9,000 suppliers from more than 30 countries. This means that there will generally be risks linked to our supply chain. Due to the large scale of suppliers, a risk-based approach has been implemented.

Through a risk-based approach, the suppliers were assessed based on various risk criteria:

Supplier category, (*Recommended special focus according to the Norwegian Labor Inspection Authority)

o Service aquaculture

o Fish feed

o Construction services*

o Ship and shipyard industry*

o ICT

o Transport*

o Cleaning*

o Nutrients

o Rights to land and resources

o Staffing services*

o Equipment

o Others

Turnover

Country of origin

History

 

Furthermore, a survey was carried out against selected suppliers with the following focus:

Business management

o Ethical guidelines

o Policy document

o Compliance

o KS system

o Anti-corruption

o Anti-competitive behaviour

Value chain

o Requirements and guidelines for own supply chain

Human rights

o Decent salary

o Working time regulations

o Equality and discrimination

o Slavery and forced labour

o Child labour

o Professional organisation

o Notification routines

HSE

o Working environment

o Security

o Sick leave

o Risk assessments

Results from the risk-based approach and the surveys are further evaluated and any measures implemented.

This year supplier survey had a response rate at: 85% (63 respondents).

Below is a summary of the most important risks identified in the risk assessment and the implemented and planned risk reduction measures to stop, prevent or reduce such harmful effects.

When assessing potential measures, account is taken of Lerøy's specific involvement in the actual or potential harmful effects that have been identified in order to determine appropriate measures. This means assessing whether Lerøy (a) caused (or would cause) the negative impact; or (b) contributed (or will contribute) to the adverse impact; or if (c) the negative impact is (or would be) directly related to the operations, products or services through a business relationship.

Other risks that are identified will be followed up in the same way by assessing current controls and assessing recommended measures. The risks are allocated to a responsible person, and in the case of planned risk-reducing measures, a deadline is set for completion and residual risk.

In the risk assessment carried out for the Group, no actual negative consequences or significant risk of negative consequences have been discovered through the due diligence assessment.

However, based on the risk assessment that has been carried out, the following areas will be prioritized going forward:

  • Health, environment and safety (HSE) in own business
  • Discrimination and harassment in own business
  • Business management at the supplier level
Health, environment and safety (HMS) in own business

Lerøy has a strong HSE focus in all parts of the business and works continuously to reduce HSE risks in many ways.

We have a higher damage extent than desired and will therefore work to reduce our H1 value. If measures are not implemented, there will be an increased risk of new injuries occurring. (H1 value= Number of injuries with absence*1000000/number of hours worked)

People are Lerøy's most important resource, and we will facilitate the best possible working conditions for our employees. In Lerøy, we have a strong focus on both the prevention of accidents and unwanted incidents, as well as close follow-up if and when an accident occurs. We are a learning organization that learns from the mistakes that have been made, and wants to use these lessons to continually become a better Lerøy.

Measures and expected effect

In relation to HSE, several measures have been taken which we expect will yield results.          Measures that can be mentioned are:

  • Increased focus from Group management
  • Employment of a central HSE resource
  • Implementation of training tools
  • Various competence-enhancing measures
  • Digitization projects
  • Continuous improvements
  • Several KPIs are linked to HSE

The Group expects that these measures together with day-to-day management will reduce the number of injuries and the group's H1 value in the future.

Discrimination and harassment in own business

In Lerøy, there must be real equality, and all employees must be guaranteed equal opportunities regardless of gender. Lerøy consists of 5,972 employees in permanent and temporary positions, of which 853 employees are hired labour.

At the end of 2022, the percentage distribution was 39% women and 61% men in the entire group. The gender distribution in Lerøy has been stable for several years, and in recent years we have seen a positive development in the proportion of women.

In Lerøy, we work for a safe, inclusive and developing working environment that builds on the group's value base. Diversity and inclusion in Lerøy means that every employee is treated equally, regardless of gender, age, skin colour, origin, ethnicity, language, sexual orientation and religion.

Measures and expected effect

We work on continuous development in the area of basic human rights and decent working conditions in all parts of our business. Some of the ongoing measures are the training of managers through management development programmes, a manager's handbook, professional meetings, as well as increased professional support from HR to be able to identify and handle unwanted incidents.

For all our employees, some of the group's continuous improvement initiatives focus on communication and information about the Group's ethical guidelines and values, as well as regular training in routines and policies. The Group has e-learning courses for ethical guidelines, notification, equality and diversity.

The work with equality and diversity is anchored in Lerøy's overall strategy. An increase in the proportion of women in the companies and at management level is one of the KPIs that the Group management has in its strategic scorecard. Measures are underway to increase diversity at all job levels. For more information about Lerøy's work against discrimination and harassment, see Equality report 2022.

Norwegian fishing organizations have entered into an agreement to prevent and prevent all forms of harassment in the fishing industry. Segment Villfangst has a particular focus on the findings made in the industry about harassment and, as a result, has an increased focus on measures aimed at this in its own operations and in collaboration with the industry.

Lerøy annually conducts an employee survey for all employees in the Group under the auspices of Great Place To Work. In the employee survey, specific questions are asked that deal with discrimination, bullying and harassment, in order to be able to identify the employees' experience at the workplace. The survey gives Lerøy important insight into further work with the working environment and management.

The Group expects that measures taken will contribute to a safe, inclusive and developing working environment in line with the Group's core values.

Business management at the supplier level

We see that certain suppliers need to carry out risk-based investigations in their own value chain and to develop certain policy documents. We will also follow up that individual suppliers introduce routines for regularly updating ethical guidelines as well as notification channels for anonymous notification.

Measures and expected effect

We expect that a closer collaboration between supplier and purchasing manager will produce the desired effect over time. Internal competence raising as well as close dialogue with individual suppliers is expected to gradually lead to new routines being implemented both internally and externally.

General measures to stop, prevent or limit harmful effects

To reduce identified risks, Lerøy has implemented the following general measures:

  • Updating ethical guidelines to further strengthen our commitment to promoting human rights and decent working conditions
  • Update of policy for human and labor rights
  • Implementation of ethical guidelines for suppliers
  • Notification channel for employees
  • Notification channel for external users
  • Regular e-learning courses for employees

The Group's digital channel for reporting objectionable conditions gives employees the opportunity to report anonymously. Whistleblowing cases are registered, investigated and processed in accordance with the whistleblowing policy and internal procedures. It must be taken into account that notification cases are different. Depending on the nature, scope and severity of the case, investigations are carried out by local management, the COO for the relevant segment, the CEO, or in special cases by the board. Measures taken will depend on the nature and degree of severity of the deviation.

The Group's whistleblowing committee reports quarterly on the status of whistleblowing cases to Group management and the board.

The Group has also created a notification channel for external users on the Group's website. All cases are registered, investigated and processed in accordance with the Group's internal routines. Reported cases follow the same procedure as the handling of internal notifications in that, depending on the nature, extent and severity of the case, they are handled by local management, the COO for the relevant segment, the CEO or, in special cases, by the board. The cases are reported quarterly to Group management and the board. Of the 3 cases received in 2022, there are no cases related to decent working conditions or human rights.

In the past year, the Group has implemented several new routines for follow-up of the Group's suppliers. An expanded purchasing organization is one of the measures that have been implemented and which we expect will be important in the future to prevent and limit harmful effects in the supply chain.

Lerøy will follow up the due diligence assessment and the measures described above in accordance with procedures and guidelines, as well as through short-term and long-term initiatives. This includes communicating with stakeholders about how any negative consequences have been handled, as well as ensuring or collaborating on recovery and compensation where this is required.

Due diligence assessments must be carried out at least annually, as well as in the event of significant changes in the risk picture or significant changes in the Group's risk assessments. Lerøy have implemented guidelines for carrying out due diligence assessments for use in the segment and all Group companies to ensure a coordinated implementation of the due diligence process throughout the Group.

Review and analysis
Some feedback from the supplier survey:
Supplier survey image
96.83 %
I support and acknowledge Lerøy`s Supplier Code of Conduct
100 %
The organization has an overview of and is in compliance with all laws and regulations that apply to it
95.24 %
The organization reports incidents/non-conformances and completes incident/non-conformance investigation/handling including incidents related to HSE
77.78 %
The organization has a relevant third party certification
95.24 %
The organization has policies to respect human rights
74.6 %
The organization has established and implemented a process for supplier risk assessment and management
71.43 %
The organization has established and implemented a process for regular supply chain follow-up and audits
65.08 %
The organization has carried out risk-based supplier audits of selected suppliers
80.95 %
The organization has process for ensuring that its suppliers provide safe working conditions to employees and workers as well wages that are no lower than the minimum wage for the country in question or the industry standard
93.65 %
The organization has established procedures for promoting equality and prevent discrimination
90.48 %
The organization has established procedures that ban forced labor and modern slavery
100 %
The oranizations workers and employees have the right to freedom of association
88.71 %
The organization had an established channel for whistle-blowing
96.83 %
The organization has policies and ensures a work environment free threats, abuse and mistreatment
100 %
Are the companys`s employees free to choose union representatives without interference from the company management?