Our commitment to human rights continues to be a key priority for Monster Beverage Corporation and our international business ("Monster" or "we"). We take slavery and human trafficking seriously, and are opposed to slavery and human trafficking in all its forms. We recognize that modern slavery is a critical global issue and we continue to engage with our stakeholders and suppliers to provide support and maintain the safety and well-being of our employees and partners.
In this statement, which is made pursuant to the United Kingdom Modern Slavery Act 2015 and the California Transparency in Supply Chains Act of 2010, Monster Beverage Corporation is disclosing, on behalf of itself and its applicable subsidiaries (including but not limited to Monster Energy Europe Limited) our efforts taken during the last financial year ending 31 December 2020 to ensure that slavery and human trafficking do not occur in our supply chain or in any part of our business.
Monster Beverage Corporation is a holding company and conducts no operating business except through its consolidated subsidiaries, which market and distribute energy drinks throughout the United States, United Kingdom, and a growing number of international markets. We choose to work with a limited number of suppliers who adhere to high ethical standards.
Slavery and Trafficking Risk Template
In 2020 we surveyed all new suppliers and suppliers who had not completed the survey in prior years to identify risks of slavery and human trafficking throughout our supply chain and evaluate the risk profiles of individual suppliers.
Our specialized third-party service provider sends each of our suppliers a ‘Slavery and Trafficking Risk Template’ (the "STRT") which they are requested to complete and return. Housed by the Social Responsibility Alliance, the STRT is a proven data exchange template that measures suppliers’ vulnerability to modern slavery and human trafficking occurring in their own operations and/or in their supply chain. In the STRT, suppliers are asked numerous questions about their operating contexts, their processes, policies and practices, as well as any measures they have in place to identify, prevent and manage risks related to human trafficking and slavery. This slavery and human trafficking risk survey is provided in multiple languages, and suppliers must certify to the accuracy of their responses and provide supporting evidence.
These verification and certification efforts are not limited to our direct (tier 1) suppliers. Where possible, we review the suppliers of our suppliers (tier 2), going further down the supply chain. In the STRT, our direct suppliers are asked to certify whether their suppliers are required to accept and comply with the direct suppliers’ policies regarding forced labor and human trafficking, and whether that downstream supplier conducts its own verification activities to identify, assess, and manage risks specific to slavery and human trafficking in its own operations and supply chain. This information gives us the ability to survey second tier suppliers.
Last year, over three quarters of the suppliers contacted engaged in the STRT process. We are evaluating these responses and continue to work with those suppliers who are still going through the process.
Audits are also a key part of our due diligence process. We conduct announced audits of certain suppliers. Audits consist of a review of documents, interviews with workers, and visits to production facilities. Auditors are instructed to include issues of slavery and human trafficking in these audits.
Corrective Action Plans
We continue to engage a specialized third-party service provider to work with certain suppliers to mitigate human trafficking and slavery risks in their operations and supply chains. After completing the supplier training described below, the specialized third-party service provider assigns that supplier a ‘Corrective Action Plan’ that targets any gaps identified through the supplier’s STRT response. Such corrective actions may include the adoption and implementation of new policies, the training of employees, and the establishment of due diligence processes to help the supplier identify and address slavery and human trafficking risks in their own business and supply chains.
In addition to STRT responses, we track and follow up with each supplier on their Corrective Action Plan progress. Approximately three quarters of suppliers engaged in their specifically tailored Corrective Action Plans and almost half of suppliers have completed it.
We have a number of policies that we expect our employees, suppliers and partners to adhere to. These policies are reviewed and updated periodically to reflect any change in risk profiles, international guidance or local law requirements.
The Monster Beverage Corporation Human Rights Policy applies to all of Monster and its employees, regardless of location. It addresses forced labor and human trafficking, diversity and inclusion, child labor, workplace health and safety, workplace security, work hours, wages and benefits, freedom of association and collective bargaining, and employee reporting. The Monster Beverage Corporation Human Rights Policy is available here: https://www.monsterbevcorp.com/hr-policy.php .
Our Code of Business Conduct and Ethics requires our employees, officers and directors to lawfully conduct our business with integrity. It specifically addresses respect for human rights, and requires employees to uphold the Monster Beverage Corporation Human Rights Policy. In addition, the standards of conduct under the Code of Business Conduct and Ethics include equal employment opportunity, providing a safe and healthy work environment, equitable treatment of employees and compliance with laws, rules and regulations applicable to Monster. We interpret these standards broadly, and require ethical behavior and compliance with the Code of Business Conduct and Ethics to ensure that slavery and human trafficking do not exist in our supply chain. Employees are required to promptly report any perceived violations of the law or the Code of Business Conduct and Ethics. We distribute the Code of Business Conduct and Ethics to each of our employees, officers and directors, and make it available on our corporate website at the following link: https://investors.monsterbevcorp.com/static-files/2cb26535-baa4-4101-9a1e-d1b24af8ec27 .
We expect our suppliers to comply with all legal requirements of the country or countries in which they are doing business, including laws regarding slavery and human trafficking. Just as our Code of Business Conduct and Ethics sets high standards for our employees, officers, and directors, suppliers are expected to abide by the Monster Beverage Company Supplier Code of Conduct, which covers areas including forced labor, child labor, abuse of labor, wages, hours, freedom of association and collective bargaining, and discrimination, among others. The Monster Beverage Company Supplier Code of Conduct is found here: https://www.monsterbevcorp.com/sc-conduct.php .
Our training program from a specialized third-party provider on slavery and human trafficking, offering the following categories of training:
Employees whose work relates to supply chain management (including those in procurement and the legal department) are provided with mandatory training on slavery and human trafficking risks and our policies. This training is made available on the company intranet.
Auditors are given specialized training, designed to help them recognize the risks and signs of slavery and human trafficking in their audits.
Monster offers training for certain suppliers on slavery and human trafficking. We are pleased to see that notwithstanding the pandemic, the vast majority of contacted suppliers engaged in online anti-slavery training.
We encourage individuals to, without fear of reprisal, report any violations or perceived violations of the law, the Code of Business Conduct and Ethics, the Supplier Code of Conduct, and the Human Rights Policy, and raise any other questions or grievances they have. We make a number of mechanisms available for any individuals or groups to report, including:
Monster Beverage Corporation
ATTN: Senior Vice President and Deputy General Counsel
1 Monster Way
Corona, CA 92879
Any employee who is found to have violated the Code of Business Conduct and Ethics is subject to disciplinary action, including termination of employment. Similarly, if we uncover that a supplier is not adhering to laws regarding slavery and human trafficking, we will take corrective action, including terminating our business dealings with such offending supplier.
This statement is made pursuant to Section 54(1) of the United Kingdom Modern Slavery Act 2015 and Section 3 of the California Transparency in Supply Chains Act of 2010, and constitutes Monster Beverage Corporation’s slavery and human trafficking statement for the year ended December 31, 2019. This statement was approved by the full board of directors.
Hilton H. Schlosberg
Vice Chairman of the Board of Directors,
President, Chief Operating Officer,
Chief Financial Officer and Secretary