McDonald’s Restaurants Ltd (“McDonald’s”) Modern Slavery Statement for the 2016 Financial Year

McDonald’s UK Standards of Business Conduct

At McDonald’s, we conduct our activities in a manner that respects human rights as set out in The United Nations Universal Declaration of Human Rights. We do not use any form of slave, forced, bonded, indentured or involuntary prison labour. We do not engage in human trafficking or exploitation, or import goods tainted by slavery or human trafficking. We support fundamental human rights for all people. We will not employ underage children or forced labourers. We prohibit physical punishment or abuse. We respect the right of employees to associate or not to associate with any group, as permitted by and in accordance with applicable laws and regulations.

ORGANISATION, BUSINESS AND SUPPLY CHAIN

McDonald’s UK

McDonald’s has proudly run its business in the UK since 1974, with over 1,250 restaurants, including company owned and franchised restaurants, serving more than 3.7 million customers every day. McDonald’s is one of the UK’s largest private sector employers, with 115,000 company and franchisee employees. Additionally, the McDonald's system supports over 130,000 jobs indirectly through the UK supply chain.

Serving safe, high quality, sustainably sourced food that our customers can trust is our number one priority. We are very proud of the reputation we have earned as a key supporter of UK agriculture.

McDonald's Global Supply Chain

As a global business, McDonald's works with suppliers from many countries of diverse cultural, social and economic circumstances. We expect our suppliers, independent businesses in their own right, to support our expectation of fundamental rights for all people, as defined in our policies: to treat their employees with fairness, respect and dignity, and to follow practices that protect health and safety for the people working in their facilities. And just as we are committed to fair employment practices and a safe, healthful and productive work environment for our employees, we expect our suppliers to hold their own suppliers to these same standards.

SLAVERY AND HUMAN TRAFFICKING POLICIES

McDonald’s commitment to respect human rights is defined in our Standards of Business Conduct, which apply to all employees of McDonald’s, and in our Supplier Code of Conduct, which applies to McDonald's suppliers globally.

McDonald's Standards of Business Conduct

As set forth above, McDonald's Standards of Business Conduct addresses expectations with respect to human rights, including the prohibition of human trafficking. McDonald’s UK employees, restaurant managers and above, are trained annually on the Standards of Business Conduct and are required to certify their understanding of and commitment to upholding the Standards.

McDonald's Global Supplier Code of Conduct

McDonald’s Supplier Code of Conduct is the cornerstone of our Supplier Workplace Accountability program and was developed through a comprehensive process that included input from suppliers, benchmarking with other corporations, and consultation with external experts and stakeholders. The Supplier Code of Conduct applies to all suppliers in our global supply chain and every supplier is required to acknowledge the Code annually.

The Supplier Code of Conduct sets standards that help our suppliers understand McDonald’s expectations, including the requirement to respect the rights set out in the UN Universal Declaration of Human Rights, and to require that their suppliers, in turn, do the same.

Slavery and human trafficking are specifically addressed in McDonald's Supplier Code of Conduct, which states:

Suppliers shall not use any form of slave, forced, bonded, indentured, or involuntary prison labor. They shall not engage in human trafficking or exploitation, or import goods tainted by slavery or human trafficking. They shall not retain employees’ government-issued identification, passports or work permits as a condition of employment.

HUMAN RIGHTS RISK MANAGEMENT AND DUE DILIGENCE PROCESS

McDonald’s has a robust risk management process in place to assess risk within our supply chain, including modern slavery. McDonald's Supplier Workplace Accountability program provides guidance to suppliers on complying with our standards, including McDonald's expectation that suppliers hold their supply chains to the same high standards.

Suppliers undergo online training to understand the expectations of the Supplier Workplace Accountability program and are required to complete a rigorous self-assessment questionnaire that appraises the supplier’s current practices and management systems. After completing the self-assessment questionnaire, suppliers receive a report indicating areas of opportunity.

Human Rights due diligence is incorporated into McDonald’s Supplier Workplace Accountability program. McDonald's utilises third-party monitoring firms to conduct on-site announced and unannounced audits of suppliers. Examples of due diligence are a physical inspection of the facility, including the housing and cafeterias for the workers. In addition, the monitoring firms also conduct private worker interviews and review facility records and business practices to assess compliance with McDonald’s Supplier Code of Conduct.

Modern Slavery risks are addressed specifically as part of the audit, including verifying that workers are not charged illegal fees by the supplier or a third-party employment agency. Moreover, the third-party monitoring firm reviews hiring practices to ensure workers are employed under voluntary conditions, including confirming that worker contracts are in the local language and signed by the worker, and workers have freedom of movement, including confirming that workers have the option of retaining all personal identification documentation.

Instances of non-compliance are shared with the supplier during an audit closing meeting and in an audit report. Suppliers are required to complete a corrective and preventative action plan to address non-compliance. The plan must provide specific time frames within which corrective action will be taken, root causes analysed, and policies and procedures updated. In addition, the plan must be designed to avoid recurrence of the non-compliance and establish specific accountability. In instances of significant non-compliance, suppliers are subject to a follow-up audit, the timing of which is based on the audit findings.

McDonald’s Supplier Workplace Accountability program is designed to support suppliers in meeting our standards. However, there are circumstances under which McDonald's will remove a supplier from the supply chain to address instances of significant non-compliance with McDonald's Supplier Code of Conduct.

TRAINING AND CAPACITY BUILDING

McDonald’s is committed to raising awareness about human rights, including modern slavery, in our supply chain. Accordingly, we offer year-round, online training for suppliers as part of the Supplier Workplace Accountability program.

In an effort to ensure the Supplier Workplace Accountability program continues to address emerging human rights issues and risks such as modern slavery, McDonald’s will continue to participate in human rights working groups and engage in consultation with stakeholders.

Our Supplier Workplace Accountability program is built on the model of continuous improvement. In 2017, McDonald’s will further strengthen our human rights strategy by leveraging the key strengths of the McDonald’s system and our long-standing relationships with our suppliers.

STATEMENT APPROVAL

This statement was approved by Paul Pomroy on 30 June 2017

Paul Pomroy’s Signature

Paul Pomroy
Chief Executive Officer