Kroger 2012 Annual Report Download - page 50

48
WHEREAS, neither our company’s Supplier Code of Conduct or its 2012 Sustainability Report addresses
human rights, a major corporate responsibility issue, and
WHEREAS, according to the Polaris Project, one of the leading organizations in the global fight against
human฀trafficking฀and฀modern-day฀slavery,฀victims฀of฀labor฀trafficking฀have฀been฀found฀among฀the฀nation’s฀
migrant฀and฀seasonal฀farmworkers,฀including฀men,฀women,฀families,฀or฀children฀as฀young฀as฀5฀or฀6฀years฀old฀
who฀harvest฀crops฀and฀raise฀animals฀in฀fields,฀packing฀plants,฀orchards,฀and฀nurseries,฀and
WHEREAS, Kroger’s current Code of Conduct for suppliers is based heavily on
compliance฀ with฀ the฀ law฀ (Kroger฀ 2012฀ Sustainability฀ Report,฀ page฀ 42฀ “Vendor฀ Standards”)฀
http://sustainability.kroger.com/2012KrogerSustainabilityReport.pdf฀ and฀ U.S.฀ agricultural฀ workers฀ are฀
excluded฀from฀many฀labor฀laws฀that฀apply฀to฀other฀U.S.฀workers฀(for฀example,฀National฀Labor฀Relations฀Act฀of฀
1935,฀29฀U.S.C.฀§฀151฀at฀seq.;฀portions฀of฀the฀Fair฀Labor฀Standards฀Act฀of฀1938,฀29฀U.S.C.฀§฀201,฀213),฀and
WHEREAS, although the company website stipulates that Kroger and its affiliates are subject to the provisions
of the California Transparency in Supply Chains Act of 2010, compliance with this law is not verified by
frequent third-party, unannounced audits,
THEREFORE BE IT RESOLVED that the shareholders urge the Board of Directors to publish a report
assessing฀the฀human฀rights฀risks,฀including฀human฀trafficking฀and฀forced฀labor฀(modern฀day฀slavery),฀
throughout its supply chain. The report should evaluate all policies and procedures in place to manage
identified฀risks฀relating฀to฀the฀labor฀practices฀of฀suppliers,฀including฀labor฀brokers.฀In฀addition,฀the฀report฀
should฀include฀the฀findings฀from฀any฀audits฀undertaken฀and฀the฀steps฀taken฀to฀resolve฀any฀identified฀
issues.
TH E B O A R D O F D I R E C T O R S R E C O M M E N D S A VO T E A G A I N S T T H I S P R O P O S A L F O R T H E
FO L L O W I N G R E A S O N S :
Kroger฀recognizes฀the฀importance฀of฀ensuring฀basic฀human฀rights฀are฀recognized฀by฀those฀seeking฀to฀
do business with us. As such, Kroger has in place a comprehensive code of conduct that is applicable to those
that furnish goods or services to us, as well as their contractors. That code of conduct has been published
and is available on our website at ir.kroger.com.฀Our฀existing฀code฀of฀conduct฀requires฀compliance฀with฀all฀
applicable labor laws, regulations, and orders, including the Fair Labor Standards Act. In addition, the code
of฀conduct:
•฀ Prohibits฀child,฀indentured,฀involuntary,฀or฀prison฀labor;
•฀ Prohibits฀exposing฀workers฀to฀unreasonably฀hazardous,฀unsafe,฀or฀unhealthy฀conditions;
•฀ Prohibits฀unlawful฀discrimination;
•฀ Requires฀the฀workplace฀to฀be฀free฀from฀harassment;
•฀ Requires฀workers฀to฀be฀treated฀fairly,฀with฀dignity฀and฀respect;
•฀ Requires฀that฀wages฀meet฀or฀exceed฀legal฀and฀industry฀standards;
•฀ Requires฀that฀U.S.฀workers฀be฀eligible฀for฀employment฀in฀the฀U.S.;
•฀ Prohibits฀bribes฀and฀conduct฀that฀appears฀improper฀or฀may฀result฀in฀a฀conflict฀of฀interest;
•฀ Requires฀compliance฀with฀the฀U.S.฀Foreign฀Corrupt฀Practices฀Act;฀and
•฀ Requires฀maintenance฀of฀records฀(that฀must฀be฀furnished฀to฀us฀upon฀request)฀evidencing฀compliance฀
with the code.
Kroger’s฀code฀of฀conduct฀does฀more฀than฀simply฀reporting฀on฀human฀rights฀risks฀in฀its฀supply฀chain;฀it฀
prohibits those that do business with us from engaging in the type of conduct of concern to the proponents.
Those that violate our code will not be permitted to do business with us until they comply with our code.
As฀such,฀we฀do฀not฀believe฀that฀human฀rights฀violations฀in฀our฀supply฀chain฀pose฀a฀substantial฀risk,฀that฀the฀
requested report would serve little benefit to shareholders, and preparation of a report would divert resources
that otherwise could be more appropriately used in the best interests of shareholders.