Lion 2022

RESPONSIBLE SOURCING

CONTENTS
1 Introduction to the code2

2 Purpose of the code

3

3 Scope3

4 Requirements

4

5 Implementation of code8

6 Grievance mechanism

9

7 Glossary

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INTRODUCTION
TO THE CODE
Championing sociability and living well. It’s the core purpose that drives
us to ensure that everything we do creates positive change and builds
a pathway to tackle some of the biggest social and environmental
challenges ahead.
‘Living well’ is more than just ‘the good life’. It’s about building a plan that looks after the wellbeing and future of ourcommunities, protects our environment for generations to come, and strengthens and safeguards how we operate
so that our brands can continue to bring joy to every adult social occasion.
So, what does Lion want to stand for? We want to be known as a force for good for society and the environment.
We want to be known as a business that does the right thing for the long term, thinks beyond, promotes fairness for all,and gives back to the community.
For us, being a force for good means:• Demonstrating brave and enduring Environmental leadership• Creating long-term positive Social impact• Strengthening and safeguarding our GovernanceIn our recent materiality assessment, sustainable procurement and human rights was selected as one of the key
material topics likely to affect our business now and in the future. Lion is committed to sustainable, ethical, andtransparent business practices across its operations and supply chain.
We rely on thousands of suppliers to support our manufacturing and business operations. We recognise thatthe actions of our suppliers, and our interactions with them, support Lion in its efforts to drive positive social,environmental, and economic outcomes in the communities we live and work.
Our Procurement Policy and Responsible Sourcing Code (“the Code”) guide our purchasing decisions. These
documents capture Lion’s commitment to responsible sourcing through three core principles:
1. Promoting human rights and ethical sourcing
2. Promoting sustainable sourcing
3. Building strong commercial outcomes and productive partnerships
Our Procurement Policy and Supplier Responsible Sourcing Code embrace the Ethical Trade Initiative (ETI)
Base Code, the International Bill of Human Rights¹, the International Labour Organisation’s (ILO) Declaration on
Fundamental Principles and Rights at Work² and the UN Guiding Principles on Business and Human Rights3.
As a signatory to the UN Global Compact, we are committed to upholding its 10 principles related to human rights,
labour standards, the environment and anti-corruption.

1.	The International Bill of Human Rights consists of the Universal Declaration of Human Rights, the International Covenant on Civil and Political
Rights and the International Covenants on Economic, Social and Cultural Rights. It is widely regarded as the fundamental human rights
framework in the international community.
2	The Declaration on Fundamental Principles and Rights at Work refers to freedom of association and the effective recognition of the right tocollective bargaining, the elimination of all forms of forced or compulsory labour, the effective abolition of child labour and the elimination of
discrimination in respect of employment and occupation.
3.	The United Nations Guiding Principles on Business and Human Rights, endorsed by the United Nations Human Rights Council in 2011,
are the authoritative global standard for States and business to prevent and address the risk of adverse impact on human rights linked tobusiness activity.

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PURPOSE OF THE
CODE
Lion seeks to conduct business with organisations which share ourcore values and help support our commitments to operate in an ethical,
social, and environmentally responsible manner.
The Code’s purpose is to:• support suppliers to identify, mitigate and manage their sustainability (including environmental, social humanrights, modern slavery, and governance) risks; and• set expectations of our suppliers and their subsequent suppliers in providing goods and services to Lion.
The size and complex nature of our supply chain makes it impractical for us to directly monitor compliance of every
supplier in our extended supply chain. Consequently, we require our direct suppliers to ensure that the standards
outlined in this Code are upheld within their supply chains to ensure human rights and ESG (Environment, Social& Governance) risks are mitigated.
Our aim is to continually increase the transparency of our upstream value chain and give our customers confidence
that their trusted brands are being sourced responsibly and from sustainable sources.

3

SCOPE
The Requirements set out in section 4 of this Code apply to all first-tiersuppliers who supply to Lion Group (including brokers, agents andco-manufacturers) and their suppliers in all geographic locations unlessotherwise specified.
First tier suppliers are those with a direct supply relationship, contract, or purchase orders with a member of theLion Group.
Additional material specific requirements may apply to the suppliers of materials detailed in Section 4.5. This list is
not exhaustive and may be updated from time to time.

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REQUIREMENTS
As part of Lion’s standard purchasing terms, suppliers are required
to comply to the standards set by this Code.
Without limiting the contractual rights available to Lion, should suppliers consistently fail to live up to thesestandards and be unwilling to institute appropriate and reasonable improvements, Lion will take actions available
to it, which may involve terminating contracts and ceasing to trade.
Reporting related to the supplier implementation or performance against the Code may be requested onreasonable notice.

4.1 Legal & Contract Compliance & Risk Management
Suppliers must comply with all applicable local laws as their first obligation. Where local laws and regulations
conflict with or set a different standard of protection to the international standards, such as applicable ILO or
United Nations Conventions, our business partners shall abide by the principles that provide the highest protection
to the workers and environment.
Suppliers must identify, mitigate and manage their risks, vulnerabilities and compliance obligations, including risks
that the supplier’s actions may pose to people and the environment.

4.2 Business Integrity
Suppliers must establish their own internal processes and policies setting out appropriate standards of businessintegrity including but not limited to policies in relation to anti-bribery and corruption, conflicts of interest, respect
and conduct and privacy.

4.3 Human Rights & Labour Relations
4.3.1 	Suppliers must respect all internationally recognised human rights through their operations and business
relationships, including their supply chain, and address any adverse human rights impacts.

Suppliers must ensure they have policies and/or processes in place to identify, mitigate and address any form ofmodern slavery within their operations and supply chain, including human trafficking, slavery, servitude, forced
labour, bonded labour, deceptive recruitment, forced marriage and the worst forms of child labour.
Lion considers the ETI Base Code as the reference standard for labour standards to keep workers safe and freefrom exploitation. Our expectation is that our suppliers adopt the same. The provisions of the Base Code constituteminimum, not maximum standards. Where the law and the Base Code address the same subject, companies are
expected to apply the provisions that affords the greater protection to workers.
4.3.2

Additional requirements for overseas workers in Australia and New ZealandIn addition to the human rights and labour standards under sections 4.3.1, the following standards apply toSuppliers operating within Australia and/or New Zealand.
All people working in Australia or New Zealand are entitled to basic rights and protections in the workplace. This
includes overseas workers, which refers to workers who are not Australian or New Zealand citizens or permanent
residents, and may include ‘backpackers’, seasonal workers, or international students.
In order to work in Australia or New Zealand, they must have a current visa with the right to work in that country.
It is a criminal offence to hire or refer illegal workers. Fines apply to employers, labour hire companies, employment
agencies and anyone who allows illegal workers to work or refers them for work. Suppliers are responsible for
ensuring the workers engaged to provide goods and services to Lion are legally allowed to work in the country they
are employed regardless of whether the workers are employed directly by the Supplier or through a labour
hire intermediary.

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4.3.2

REQUIREMENTS
continued
Additional requirements for overseas workers in Australia and New Zealand continued
Suppliers must validate the legal right to work in the country of employment for workers on their facilities orproviding a service to Lion at Lion’s sites. In Australia, Suppliers can verify legal right to work using the free service
Visa Entitlement Verification Online (VEVO). In New Zealand, Suppliers can use the VisaView check.
Employment conditions of all workers (including overseas workers) must meet or exceed the minimum
employments rights set out by the relevant authorities:• Fair Work Australia• Employment New Zealand

All overseas workers must receive an induction before starting work, in a language they understand or with aninterpreter present. The induction as a minimum must include an explanation of workers’ basic rights, safety
at work.
All overseas workers engaged to work in Australia must be provided a copy of the Fair Work Information Statementand ‘My employment checklist’ available from www.fairwork.gov.au in a language they understand.
All overseas workers engaged to work in New Zealand must be provided a copy of Employment New Zealand’s the
Minimum Employment Rights and Responsibilities in a language they understand.
Suppliers who engage overseas workers either employed directly or through a third party labour hirecompany must:• have documented management systems and processes in place for monitoring compliance with workplace lawswith respect to overseas workers, including, without limitation, the minimum rights and conditions at work
outlined above; and• implement processes to enable adequate oversight of any labour hire companies, contractors or sub-contractors
they use with regards to compliance with workplace laws, correct rates of pay, hours of work and the minimum
rights and conditions at work.

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REQUIREMENTS
continued

4.4 Protection of the Environment
4.4.1

Environmental
Permits

The Supplier shall obtain and ensure currency of all relevant environmental permits for its
operations and facilities as required by national and local laws.
The Supplier shall comply with the requirements of all its environmental permits andnational and local environmental laws and regulations.

4.4.2

Environmental
Management System

The Supplier shall develop, document and implement an effective environmental
management system based on ISO 14001:2015 or a similar internationally recognised
standard for its facilities that supply Lion.
The environmental management system must identify and document key environmental
impacts and implement controls to eliminate or minimise impact on the environment, as aminimum, with respect to:• waste reduction, reuse, recycling and disposal;• hazardous chemicals storage and management;• air and water emissions;• energy use and carbon emissions; and• water use and wastewater discharge.

4.5 Material Specific Requirements for Responsible Sourcing
4.5.1

Agricultural
Commodities

As a minimum, all suppliers of agricultural commodities must demonstrate that they haveprocesses to monitor, identify, remedy and report any use of forced labour and child labour.
Lion reserves the right to request independent audits of suppliers’ processes.

4.5.2

Animal Welfare

Lion places significant importance on the welfare of the animals. Lion will only source animal
products from farms that have implemented animal welfare standards and comply with
relevant federal and state animal welfare legislation.

4.5.3

Sugar

All cane sugar supplied to Lion must be Bonsucro certified or Smartcane Best Practiceaccredited, inclusive of all modules of the Smartcane Best Management Practice program.
Lion may accept alternative certification schemes, if deemed equivalent, at its discretion.

4.5.4

CoffeeAll coffee product suppliers including brokers must provide evidence of sustainable coffee
production including complete transparency of the upstream value chain from farm to
Lion. If a supplier does not have its own supply chain traceability program, Lion may accept
Fairtrade or Rainforest Alliance (including UTZ) certification.
Lion may accept alternative certification schemes, if deemed equivalent, at its discretion.

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REQUIREMENTS
continued

4.5 Material Specific Requirements for Responsible Sourcing continued
4.5.5

Packaging

Lion is adopting the principles of a circular economy, reducing waste and reliance on natural
resources, improving packaging design and reducing costs. This means designing products
and processes so that resources can be used in a ‘closed loop’ system to reduce demand on
natural resources.
Any primary packaging with recycled content must meet food safety requirements and notadversely impact packaging functionality and shelf-life.
All packaging must be recyclable as defined by the PREP tool https://prep.org.au/main/content/home
All packaging must either have at least 50% post-consumer recycled content (defined by
ISO 14021) or provide a time bound plan to achieve at least 50% postconsumer recycledcontent within the term of the supply contract.
Virgin content in paper and board must be certified under the Forest Stewardship Council(FSC) certification or Programme for Endorsement of Forest Certification (PEFC).

4.5.6

Carbon Intensive
Supplied Materials
or Services

Lion has set a target of achieving a net zero carbon emission value chain by 2050.
Verified Lifecycle Analysis or Product Carbon Footprints may be requested for materials orservices that contribute materially to Lion’s value chain footprint.

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5IMPLEMENTATION
OF CODE
Our Responsible Sourcing program embeds important risk
management principles to ensure our supplier relationships and theirsubsequent supplier relationships mitigate environmental, social andgovernance (ESG) risks in our supply chain, including salient issues suchas climate change, human rights, and modern slavery.

5.1 Risk Assessment
Lion takes a risk-based approach to manage our suppliers within our Responsible Sourcing program. The risk
assessment considers several factors including geographical risk, category or commodity risk, the nature of Lion’scommercial relationship and potential brand exposure. The resulting segmentation informs how we manage andmonitor compliance with the program. It allows us to focus our resources where there is a greater risk of labour orhuman rights violations.

5.2 Ongoing monitoring and verification
Suppliers with a higher risk profile will be required to complete a Sedex self-assessment questionnaire (SAQ) for
all their sites that supply product or service to Lion. Brokers and agents must ensure their suppliers complete theSedex SAQ for all facilities that Lion is supplied from.
Lion may also choose to use independent audits to verify suppliers’ compliance with this Code. The audits we
accept are based on the conventions of the International Labour Organisation and the Ethical Trading Initiative
Base Code. Independent audits must be conducted by an APSCA or BSCI-amfori enrolled or certified auditor.
Suppliers must use all reasonable endeavours to assist Lion in conducting such an audit, including, without
limitation, allowing site access to Lion’s representatives and supplying all relevant requested evidence ofcertifications and compliance.
For materials where Lion requires specific certification(s), suppliers are required to provide evidence of therelevant certification(s).

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GRIEVANCEMECHANISM
Further Information & Reporting Breaches
If you have any questions regarding this code including compliance issues, please contact
Procurement@lionco.com or speak to your nominated Lion representative.
If you are unsatisfied with the response or would like to anonymously report breaches please consider using
drawtheline, Lion’s whistleblower hotline. drawtheline is a confidential service, offered by Deloitte, for Lionteam members and related parties including suppliers to raise concerns of suspected or actual misconduct in theworkplace. Examples include fraud, theft, harassment, modern slavery issues or any other unethical behaviour.
For further information including contact details for making a disclosure, and the protections available to eligible
whistleblowers, please refer to Lion’s whistleblower policy.

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GLOSSARY
Glossary of terms and definitions
TERM

DEFINITION

Lion or Lion Group

Lion Pty Ltd and its related bodies corporate (as defined in the Corporations Act 2001
(Cth)).

UN Global Compact

The UN Global Compact (UNGC) is a voluntary initiative based on CEO commitments
universal sustainability principles and align strategies and operations with universal
principles of human rights, labour, environment and anti-corruption.

UN Guiding principles
on Business andHuman Rights

The UN Guiding principles on Business and Human Rights are a set of guidelines forStates and companies to prevent, address and remedy human rights abuses committed inbusiness operations. The guidelines were endorsed by the UN Human Rights Council in
June 2011.

First tier supplierFirst tier suppliers are those with a direct contractual relationship with a member of theLion GroupSedex

The Supplier Ethical Data Exchange (Sedex) is an online data sharing platform enablingbuyers, suppliers and auditors to store, share and report on social, ethical andenvironmental policies, practices and performance.

SAQ

Self-assessment questionnaire. Sedex has a set of questions tailored to industry sectorsthat suppliers complete and share with their customers to enable customers to assess
suppliers based on their self-assessment.

APSCA accredited

Auditing companies accredited by the Association of Professional Social Compliance
Auditors

BSCI authorised

Audit companies authorized by the Business Social Compliance Initiative (BSCI) to conduct
BSCI audits.

Forced labour

Forced labour refers to any form of indentured servitude such as the use of physicalpunishment, confinement, threats of violence as a method of discipline or control such asretaining employees’ identification, passports, work permits or deposits as a conditionof employment. Where the Supplier is using migrant or prison labourers under a legal
framework, Lion Pty Ltd must be made aware to review appropriate documentation
maintained by the Supplier.

ILO

The International Labour Organisation (ILO) is a United Nations agency dealing withlabour issues, setting international labour standards, developing policies programs topromote decent work opportunities for all. The ILO has 187 member states (including
Australia and New Zealand).

Child labour

Child labour refers to work that:• is mentally, physically, or morally harmful to children;• can negatively affect their mental, physical, or social development, and• interferes with their schooling:– by depriving them of the opportunity to attend school;– by obliging them to leave school prematurely; or– by requiring them to attempt to combine school attendance with excessively longand heavy work.

Environmental
Management System

An Environmental Management System (EMS) is a set of processes and practices thatenable an organisation to reduce its environmental impacts and increase its operating
efficiency. An effective EMS should be based on ‘Plan-Do-Act-Check’ cycle and should
include the organisational structure, planning and resources for developing, implementing
and monitoring objectives for the protection of the environment.
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GLOSSARY
continued
TERM

DEFINITION

ISO 14001

ISO 14001 is the international standard that specifies requirements for aneffective environmental management system (EMS).

Bonsucro

Bonsucro is an international not for-profit, multi-stakeholder organization established in2008 to promote sustainable sugar cane. Its aim is to reduce ‘the environmental and social
impacts of sugarcane production while recognising the need for economic viability. It
does this through setting sustainability standards and certifying sugar cane products
including ethanol, sugar and molasses.

Smartcane BestManagement Practice(BMP)

The Smartcane BMP is an industry-led, voluntary program available to all sugarcane
growers across the state of Queensland. Smartcane BMP assists growers to document,
benchmark and continuously improve their on-farm practices for productivity, profitability
and stewardship. Smartcane BMP has been benchmarked against the Bonsucro
Production Standard, demonstrating full alignment with the Standard’s indicators.

Fairtrade

Fairtrade is a non-profit organisation aiming to help primary producers in developing
countries achieve better trading terms and to promote sustainable farming. Fairtradefocuses on certification of commodities, or products which are typically produced indeveloping countries and exported to developed countries such as coffee, cocoa, sugar,
chocolate, fresh fruit, flowers and so on.

Rainforest Alliance
Certification Program

The Rainforest Alliance is an international non-profit organisation working toconserve biodiversity and ensure sustainable livelihoods by transforming land-use
practices. A Rainforest Alliance Certified farm is one that complies with 10 standards set inplace by the Sustainable Agriculture Network (SAN). These standards include ecosystemconservation, wildlife protection, and fair treatment and good working conditions
for workers.

UTZ certified

With the launch of the 2020 Rainforest Alliance Certification Program, UTZ certification is
being phased out.

Circular economy

A circular economy is an alternative to a traditional linear economy (make, use, dispose) inwhich we keep resources in use for as long as possible, extract the maximum value fromthem whilst in use, then recover and regenerate products and materials at the end of eachservice life.

Recyclable

Consumer packaging material that can be recycled through kerbside recycling services
available to most households in Australia and New Zealand.

Recycled content

ISO 14021 defines recycled content as the proportion, by mass, of recycled material
in a product or packaging. Only pre-consumer and post-consumer materials shall beconsidered as recycled content. Pre-consumer materials are those diverted from the waste
stream during a manufacturing process. Post-consumer materials are those generated
by households or by commercial, industrial and institutional facilities in their role as endusers of the product.

FSC certified

Forest Stewardship Council (FSC) is a global non-profit organisation setting standards forsustainable forest management. FSC certification and its label gives consumers confidence
that the paper/board products they buy has come from a forest and supply chain that is
responsibly managed.

PEFC certified

Programme for the Endorsement of Forest Certification (PEFC) is a global non-profit
organisation promoting sustainable forest management through independent third
party certification.

ETI Base CodeThe ETI Base Code is founded on the conventions of the International Labour Organisation(ILO) and is an internationally recognised code of labour practice.

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