Business
Region : 2024 Modern Slavery Statement
Region : 2024 Modern Slavery
About this update from Region Group
2024 Modern Slavery Statement Supporting better communities through life's essentials. 2024 Modern Slavery Statement Contents Reporting Entity 2 Letter from the CEO 3 Region's Structure, Operations and Supply Chain 4 Letter from the CEO At Region, our purpose is supporting better communities through life's essentials. This drives us to make positive change in our communities and influences our approach to modern slavery. Region's structure 4 Region's operations 4 Region's supply chain 4 Risks of modern slavery in Region's operations and supply chain 6 Operational risks 6 Supply chain risks 8 Measures taken to assess and address risks of modern slavery in Region's business 10 Preventing modern slavery in Region's operations 10 Preventing modern slavery in Region's supply chain 10 Assessing effectiveness 12 Consultation 13 Action plan for future reporting periods 14 Appendix 15 Reporting Entity The Reporting entity of this Modern Slavery Statement is Region Group (" Region ") which comprises Region Management Trust, Region Retail Trust (together, " Trusts "), Region RE Limited ("Region RE") and any entities owned and/or managed, either beneficially or legally, by the Trusts or Region RE for the financial year ending 30 June 2024. It also includes reference to some actions which have occurred after 30 June 2024. Where such actions We recognise that our operations have an impact on people's lives, and we are committed to making this impact a positive one. We aim to provide spaces that improves the well-being of our stakeholders. At the same time, we understand our responsibility to identify and address the risk of our operations unintentionally causing harm. One of the ways do this is by understanding and managing potential modern slavery risks-an essential part of our commitment to upholding human rights. Modern slavery is a multifaceted issue that affects supply chains, industries, and locations where vulnerable populations are at risk. Region is strongly committed to ensuring that all work is conducted freely, without any form of slavery, servitude, forced labour, or association with human trafficking. We see the partnerships with our suppliers as an opportunity to promote ethical practices that align with our own standards. During the reporting period, Region: reviewed its risk map of active suppliers to various risk categories in order to determine the inherent modern slavery risk in Region's Tier 11 supply chain; monitored adherence to its Supplier Code of Conduct designed specifically to assist with the management of modern slavery risks; has maintained its supplier engagement contract templates to address modern slavery risks within contractual arrangements with suppliers and service providers; provided all employees with modern slavery awareness training; shared its expectations of supply chain and contractor behaviour to not engage in any activity that constitutes or involves modern slavery in the performance of obligations. This year's Modern Slavery Statement outlines our endeavour to strengthen our capabilities and build a framework for future initiatives. Continuing on from our previous statements, it highlights our understanding of potential modern slavery risks within our operations and supply chain, as well as the measures we have in place to address them. 1 Tier 1 suppliers are those suppliers contracted directly to provide goods and/or services to Region, and with whom Region has a direct payment relationship. have been included, the timing has been noted. Anthony Mellowes Chief Executive Officer 2 3 2024 Modern Slavery Statement Region's Structure, Operations and Supply Chain REGION'S STRUCTURE Region comprises two registered managed investment schemes: Region Management Trust (ARSN 160 612 626) and Region Retail Trust (ARSN 160 612 788). The securities in each Trust are stapled to form the stapled listed vehicle, Region Group. Region is listed on the Australian Securities Exchange (ASX) under the code "RGN". Region is internally managed, which allows alignment of management interests with the interests of security holders. Region RE is the responsible entity of Region Management Trust and Region Retail Trust. Region RE is a wholly owned subsidiary of Region Management Trust. Region RE as Responsible Entity of Region Retail Trust owns 20% of SCA Metro Convenience Shopping Centre Fund (Metro Fund 1), a joint venture with a global institutional investor. REGION'S OPERATIONS Region's core strategy is to invest in a geographically diverse portfolio of convenience-based retail properties. The portfolio is focused on the non- discretionary retail sector and is anchored by long term leases to quality tenants. Region's operations include the management, leasing, acquisition, tenancy delivery, development and disposal of retail shopping centres undertaken by an in-house team of property professionals. Since listing on the ASX in 2012, Region has completed a number of acquisitions and divestments and at 30 June 2024, owned 92 convenience-based shopping centres in Australia with a total value of $4,368m. At 30 June 2024, Region had 127 anchor tenants with the majority comprising of Woolworths Group, Coles Group and Wesfarmers Group stores. Anchor tenants accounted for 47% of Region's gross rent for the year ended 30 June 2024, with specialty tenants accounting for 53%. Region also manages Metro Fund 1 which comprises 7 properties with a total value of $295m. REGION'S SUPPLY CHAIN Region relies on a large number of suppliers to execute its business activities of which the vast majority operate in Australia. Region's supply chain comprises products and services generally grouped into the following categories: Property Operations - external service providers providing a range of operational services including external property management and facilities management services, sustainability, cleaning, security and office equipment. Corporate - external service providers providing a range of professional services including unit registry services, banking and financial services, information technology, payroll, property valuation, travel, recruitment, audit, compliance, sustainability, custodial services and specialist advice such as legal and tax. Property Development - external service providers providing a range of services including development management, design and construction. TOTAL SPEND BY CATEGORY Information Technology 0.7% Insurance 4.2% Office and Supplies 0.9% Professional Services 10.7% Employee related expenses 10.3% Travel 0.4% Property Management 11.3% Statutory Charges 9.4% Subcontracted Services 52.1% 4 5 2024 Modern Slavery Statement Risks of modern slavery in Region's operations and supply chain OPERATIONAL RISKS Region has assessed the risk that it causes, contributes to or is directly linked to modern slavery. As in the prior reporting period, it has assessed the risk in its direct operations as low, with no instances of modern slavery having been identified. Region has a small workforce of 94 people operating exclusively in Australia and all staff are employed in accordance with Australian workplace law. We have offices in New South Wales, Victoria, Queensland and Western Australia. Each of these jurisdictions have strong employment workplace health and safety and anti- discrimination laws which Region must comply with. The majority of its workforce is in the corporate office in New South Wales. Region's workforce is predominantly made up of trained professionals with 93% permanently employed and 7% on contracts. Region acknowledges the following risks in relation to the management of its employees: deficient employee grievance mechanisms could reduce Region's ability to identify and remediate modern slavery risks; and inadequate modern slavery training could reduce the effectiveness of Region's policies and grievance mechanisms to manage the risk of exploitation. See page 10 for measures taken to assess and address these risks. 94 Total number of employees directly employed 7 Employees on fixed term contracts 7 QLD 6 WA 1 SA 73 NSW 7 VIC 6 7 2024 Modern Slavery Statement SUPPLY CHAIN RISKS Region considers that there will be people in its supply chain who are at higher risk of modern slavery than its direct workforce. Knight Frank Australia provides property management services to Region. With their assistance, Region have completed a risk assessment of our critical and key Tier 1 suppliers such as cleaning and security contractors. Other participants in Region's supply chain were also invited to complete its Modern Slavery Questionnaire or alternatively send their own Modern Slavery Statements. Region's direct supply chain consist of suppliers who provide a range of services and products directly to Region, such as construction, property management, energy retailers, legal services, banking, insurance, professional consultancy etc. All Region suppliers are located within Australia. For those property level suppliers assessed by Knight Frank Australia, an ethical sourcing screening questionnaire was required to be completed. Further detail in respect of Knight Frank Australia's assessment process can be found in the Knight Frank Australia Modern Slavery Statement with respect to indirect suppliers. Additionally, Region reviewed its risk map of all active Tier 1 suppliers to various risk categories to determine the inherent modern slavery risk in its supply chain. Drawing on guidance published by the AS ISO 20400 Sustainable Procurement Standard, suppliers were then assessed against four drivers of risk: Location of product or service which included the consideration of the right of freedom of association, health and safety procedures, occurrence of discrimination and average living conditions. Industry sector which included the consideration of recruitment practices and the termination of employment, employment profile (reliance on low-skilled and/or migrant workers), living wage and existence of grievance mechanisms. Supplier relationship which included the consideration of the duration of the relationship, the level of oversight and the value of the contract. Existing information which included the consideration of suppliers having an ethics/ whistleblower policy, existence of a code of conduct, non-compliances with policies and other factors that are indicators of modern slavery, and media or non-governmental organisation reports indicating possible problems with labour standards. As part of that risk assessment, Region grouped the selected suppliers into industry sectors, and then allocated a modern slavery risk (either very low or significant) by reference to the industries listed in the Social Responsibility Alliance's Global Slavery and Trafficking Risk Template which are known to have significant risk of human trafficking. Risk ratings range from 1-5, with 5 representing the highest risk level Score Risk Rating Type of Supplier 5 Significant Low level of skill and migrant workers 4 High Lower level of skill 3 Moderate Uncertainty over level of knowledge/skill 2 Low Licensed Professionals 1 Very Low Highly Professional and Skilled For suppliers who did not respond, a high-level risk assessment was carried out to evaluate the reasons for their lack of response. Further follow-up was carried out where appropriate. For suppliers identified as a concern by Knight Frank Australia, following their initial review of the ethical sourcing screening questionnaire, further due diligence was undertaken to determine the specific risk mitigation measures the supplier had implemented to combat modern slavery risks within their operations and supply chain. Across both Region and Knight Frank Australia's assessments, the suppliers identified as having a potentially significant modern slavery risk were primarily in the cleaning, security and facilities management industry sectors. 8 9 2024 Modern Slavery Statement Measures taken to assess and address risks of modern slavery in Region's business • The risk of modern slavery has been identified in asset operational procurement, therefore once a contract with a third-party supplier is entered into, the employee with responsibility for the supplier relationship is accountable for: ° monitoring the supplier against the terms of the contract and service level agreements; ° refrain from using forced labour, whether in the form of prison labour, indentured labour, bonded labour or otherwise; ° refrain from engaging in any act of modern slavery; ° take commercially reasonable steps to prevent its own subcontractors and suppliers from PREVENTING MODERN SLAVERY IN REGION'S OPERATIONS Region is committed to respecting the rights of its employees through its internal employment policies and practices. The rights of all employees are addressed in Region's Code of Conduct, Human Resources Handbook, Workplace Health and Safety Policy and Diversity and Inclusion Policy. Employees are made aware of their rights through a variety of channels including employment contracts, induction and ongoing training. Under the relevant employment laws that apply to it, Region is obliged to ensure that employees meet specified age requirements and this is supported by the pre-employment screening checks that Region undertakes on each employee. Region does not hire individuals under the age of 18 years, ensuring there is no risk that it will be associated with child labour in its operations. On occasion, Region provides work experience learning opportunities for high school students, at their request. These students are not employees but are managed in a manner to prevent exploitation. Region's culture supports open communication and the reporting of concerns at all levels. Due to the small size of Region's workforce, all employees have direct access to the senior management team, including the Chief Executive Officer, Chief Financial Officer and Chief Legal and Investment Officer, and any issues or concerns can be discussed with the members of the senior management team directly. All employees, as well as third parties, have access to an authorised 24-hour hotline where they can raise any concerns in relation to improper conduct, including unethical business practices, in confidence and without fear of recrimination. Modern slavery training is provided to all employees. Training is also provided to employees in relation to, amongst other things, Region's Code of Conduct, Whistleblower Policy and Procedure, Workplace Health and Safety Policy, and Diversity and Inclusion Policy. Completion of training is reported and monitored by Region. While the risk of modern slavery in Region's operations is low, Region is aware of the need to have an effective grievance mechanism in place. The remediation of harm (if required) would be addressed through the relevant internal employment policy. This would include formal investigations in accordance with Region's Whistleblower Policy and Procedure where required. The Whistleblower Policy is available on the Region website and is therefore accessible to all employees to utilise. PREVENTING MODERN SLAVERY IN REGION'S SUPPLY CHAIN Region's Outsourcing Policy and Procedure, and Procurement Policy and Procedure require that a procurement review be undertaken at the initiation of a project or identification of the need to engage a key third-party supplier. Region's supplier selection process is not limited to cost competitiveness but incorporates and requires consideration of issues relating to environmental sustainability, social responsibility, workplace health and safety standards, required certifications and licenses, and modern slavery. Prior to entering into a new third-party supplier relationship pursuant to the Outsourcing Policy and Procedure or Procurement Policy and Procedure, the employee designated as the Responsible Person (as defined in the Outsourcing Policy) must initiate due diligence on the potential key supplier, which includes a review of the supplier's compliance with applicable laws and regulations, including those that impose ethical standards on suppliers. A subsequent risk management assessment of the supplier is required to determine the appropriate level of ongoing monitoring. and ° documenting and reporting legal and other issues or incidents. • The level of oversight imposed on the supplier varies with the supplier's risk assessment. • Region's Procurement Policy and Procedure sets out the process pursuant to which suppliers are engaged. This includes the requirement for suppliers to be engaged using Region's standard supplier engagement template contracts. These contracts require compliance with the Modern Slavery Act of 2018 ("The Act"), and also require adherence with Region's Supplier Code of Conduct. The minimum requirements set out in these contracts include a prohibition on modern slavery, a right for Region to request information, an obligation to be notified of any breach of contract by the supplier and a right to terminate for non-compliance. A number of the more major works and services template contracts go further and also require suppliers determined by Region as being of potentially higher modern slavery risk to develop and implement appropriate policies and processes to detect and deal with modern slavery and provide reasonable programs and training for the supplier's personnel relating to modern slavery. • Region's Supplier Code of Conduct sets out Region's expectations for suppliers on a range of issues and includes the need to promote and respect human rights by working to prevent child or forced labour and human trafficking in their operations and supply chains. The Supplier Code of Conduct includes a specific reference to The Act and requires suppliers to meet the following minimum requirements: ° adopt sound labour practices and treat its workers fairly in accordance with laws and regulations; engaging in any acts of modern slavery; and ° notify Region if any such supplier identifies any instance of modern slavery on its part or on the part of any of its sub-contractors. • Region's Supplier Code of Conduct can be found at regiongroup.au • If a supplier is found to be in breach of its contract with Region, including in breach of the terms of the Supplier Code of Conduct, Region may look to exercise its contractual rights against that supplier and/or engage with the supplier to remediate the breach. • For the reporting period, Region sent a due diligence questionnaire to 40 of its critical and key Tier 1 suppliers to assess whether they were required to submit modern slavery statements under the Act and to ascertain the suppliers' approaches to modern slavery across their businesses. For the 7 suppliers that have not responded, we continued to evaluate through public information and noted that some of them are no longer part of our supply chain. Of those suppliers for which Region has statements for FY23, it believes they are low risk and are likely in the process of preparing their own FY24 statements. In future reporting periods, Region will continue to engage appropriately with its suppliers to ensure that Region mitigates the risk of modern slavery, by encouraging suppliers to adopt their own measures to minimise the risk of slavery and trafficking occurring within their own organisations and supply chains. 10 11 2024 Modern Slavery Statement Assessing effectiveness Consultation Region is responsible for the continuous improvement of its processes and procedures implemented to address modern slavery risks within its operations and supply chain, acknowledging that this is an ongoing process. Region measures its effectiveness by: conducting annual reviews of its modern slavery approach and the effectiveness of its supplier identification process under AS ISO 20400; monitoring suppliers in accordance with the terms of its service level agreement, including any corrective actions; and tracking ongoing engagement with suppliers, beyond the initial risk assessment, to identify potential process improvements. Region RE and the two stapled Trusts consult on Modern Slavery. All actions taken in this reporting period were taken by and on behalf of Region RE and the Trusts as a group. This will continue as Region seeks to achieve its FY25 objectives. SPECIFIC OUTCOMES INCLUDE STATUS Training employees on modern slavery Completed in FY24 Inclusion of modern slavery clauses in all supplier Included in all renewals and new supplier engagement contracts engagements in FY24 Review of all Tier 1 suppliers to identify and prioritise Completed in FY24 potential modern slavery risk Encouragement of prompt reporting of incidents Ongoing - no incidents observed or reported in FY24 and modern slavery concerns in Region's operations and supply chain Region's Whistleblower Policy and Procedure offers Ongoing - no incidents observed or reported in FY24 protections to individuals to raise modern slavery concerns directly with Region Joined the Informed 365's Property Council of Ongoing - continue to assess the appropriateness Australia's shared Modern Slavery application of the application Review procurement strategy for inclusion of supply Ongoing - procurement project continues in the chain accountability frameworks and consider project preparation stage roadmap for implementing 12 13 2024 Modern Slavery Statement Action plan for future reporting periods Appendix Region recognises that modern slavery issues are multifaceted and continually evolving. We are committed to upholding and promoting human rights through robust practices and policies that reflect this commitment. Region understands that this effort requires ongoing reassessment and adaptation in response to shifting global conditions and policy landscapes. We are dedicated to engaging with a diverse range of stakeholders to address these critical issues actively and responsibly. Region's FY25 objectives include: continual refinement of procurement strategy to improve supply chain accountability frameworks; ongoing review and improvement of the supplier risk map; continued identification and assessment of supply chain risk; continued engagement with suppliers to raise awareness of the risk of modern slavery; providing ongoing staff training on the risk of modern slavery and what it means in practice; and audit a sample of new suppliers selected through the procurement process. The purpose of this Statement is to provide general information only as required by the Act and is correct as at the date of publication. This Statement was approved by the Board of Region RE Limited, the responsible entity of Region Management Trust and Region Retail Trust on 10 December 2024. The below table identifies where each mandatory reporting criterion set out under the Act is disclosed within this Statement. Identify the reporting entity Page 2 Reporting Entity Describe the reporting entity's structure, Page 4 operations and supply chains Region's Structure, Operations and Supply Chain Describe the risks of modern slavery practices in Pages 6-8 the operations and supply chains of the reporting Risks of modern slavery in Region's operations and entity and any entities it owns or controls supply chain Describe the actions taken by the reporting entity Pages 9-11 and any entity it owns or controls to assess and Measures taken to assess and address risks of address those risks, including due diligence and modern slavery in Region's business remediation processes Describe how the reporting entity assesses the Page 12 effectiveness of these actions Assessing effectiveness Describe the process of consultation with any Page 13 entities that the reporting entity owns or controls Consultation (a joint statement must also describe consultation with the entity giving the statement) Provide any other relevant information Page 3 Letter from CEO 14 15 2024 Modern Slavery Statement