MSD Animal Health Modern Slavery Statement 2023
Introduction
This statement is made pursuant to the reporting requirements of the UK Modern Slavery
Act 2015. It provides information for the January 1, 2023, to December 31, 2023, reporting
period.
Reporting Entities
MSD (a trading name of Merck & Co., Inc., Rahway, NJ, USA.) provides this single joint statement
for itself and on behalf of its entities that are directly covered by a reporting obligation of the UK
Modern Slavery Act 2015. These reporting entities are listed in Appendix I.
Structure, Operations and Supply Chains
About MSD
We are called MSD everywhere outside of the U.S. and Canada. In the U.S. and Canada, we are
known as Merck & Co., Inc., Rahway, NJ, USA. The company is listed on the New York Stock
Exchange under the symbol “MRK”. MSD is a global health care company that delivers innovative
health solutions through its prescription medicines, vaccines, biologic therapies, and animal health
products. The company is headquartered in Rahway, NJ, USA. With over 69,000 employees, MSD
operates in many regions and countries. The company has operations in more than 150 markets
around the globe. A list of our worldwide locations is available at MSD Worldwide Locations.
For more information, visit MSD UK.
About MSD Animal Health
MSD Animal Health, a division of Merck & Co., Inc., Rahway, NJ, USA., is the global animal health business unit of MSD. MSD Animal Health offers veterinarians, farmers, pet owners and governments a wide range of veterinary pharmaceuticals, vaccines and health management solutions and services.
MSD Animal Health is dedicated to preserving and improving the health, well-being and performance of animals and the people who care for them. Our MSD Animal Health headquarters is located at: 2 Giralda Farms Madison, NJ 07940 USA. MSD Animal Health is present in more than 50 countries, while its products are available in some 150 markets.
For more information, visit MSD Animal Health United Kingdom.
Our Supply Chain
We manufacture, package, and distribute products to many markets around the world. We have established business relationships with thousands of suppliers, including direct suppliers (including external manufacturing providers), capital expenditure suppliers, indirect suppliers, and research providers. Our direct suppliers provide us with goods and services such as packaging, components, and ingredients. Capital expenditure suppliers provide goods and services such as engineering and construction. Our indirect suppliers include those that provide services such as logistics, travel and meetings, facility management and marketing. Our research providers include laboratory supplies and services.
Policies
In accordance with UN Guiding Principles, we have integrated respect for human rights into our business practices, including our Code of Conduct (Our Values and Standards), our Business Partner Code of Conduct, as well as relevant corporate level policies. Our public commitment to upholding human rights and eradicating modern slavery in all its forms are described in our Public Policy Statement on Human Rights.
Risk of Modern Slavery Practices
Our Operations
The pharmaceutical industry is highly regulated and is not generally recognized as an industry that
poses a significant risk of modern slavery, compared to other industries such as agriculture and
farming, textiles, construction, mining, domestic work, hospitality, and tourism.
As outlined in the section below, we take measures to reduce the risk of modern slavery. We believe
there is minimal risk of causing, contributing to or being linked to instances of modern slavery
within our own operations. No instances of modern slavery were identified in 2023.
Our Supply Chain
The risk of modern slavery within our supply chain is predominantly associated with our use of
suppliers that operate in counties that are known to present a significant risk of modern slavery,
such as those countries listed Walk Free Foundation’s Global Slavery Index and The Children’s
Rights in the Workplace Index.
We recognize that supply chains of companies that extend into high-risk countries, potentially face
greater risk of modern slavery. We understand that the risk of modern slavery in the
pharmaceutical supply chain exists, albeit that it may be relatively lower compared to some other
industries.
We are working to address these risks and promote responsible supply chains. As outlined in the
section below, we are implementing measures such as supplier codes of conduct, supplier due
diligence and social audits.
Collaboration with industry initiatives and organizations like the Pharmaceutical Supply Chain
Initiative (PSCI) also helps in driving responsible practices across the pharmaceutical sector. No
instances of modern slavery were identified in our supply chain in 2023.
Addressing the Risk of Modern Slavery
Our Operations
During 2023, we worked to detect and address the risks of modern slavery within our own operations through:
Code of Conduct: Respecting and abiding by our company’s core values and standards, as stated in our company Code of Conduct. We consider these to be the foundation of our company’s success. They apply globally, wherever we are doing business.
Standards: Upholding and maintaining company standards on modern slavery and human trafficking. These are embedded in our Global Policy on Labour & Human Rights and reflected in our Public Policy Statement on Human Rights.
Speaking Up: Fostering an environment where employees feel safe to speak up and report concerns, including any that may relate to modern slavery. We encourage employees to speak up about potential violations of our Code, policies, procedures, the law, or other misconduct.
Communication Channels: Maintaining multiple communication channels to make it easy for employees and others to ask questions or report concerns. Employees can report concerns to their Managers, Human Resources, Compliance, Legal or the Office of Ethics.
Speak Up Tool: Providing a speaking up tool. The Speak Up tool at msdethics.com is operated by an independent third-party, available 24 hours a day, 7 days a week. It allows employees to raise concerns or ask questions confidentially in their preferred language via ‘phone or the internet.
Investigations. All allegations of misconduct are investigated in accordance with our company’s Compliance Issues Visibility Response (“CIVR”) process, which promotes confidentiality, dignity
and respect, objectivity, promptness, and non-retaliation.
Corrective Action. We take violations seriously. Corrective and disciplinary actions are taken against individual employees who are determined to have engaged in misconduct based on the findings of an investigation.
Training: Providing training to all employees on our company’s Code of Conduct (Our Values & Standards) annually. Training completions are closely monitored and reported to senior management.
Accountability: Maintaining accountability. All employees are responsible for 1) adhering to our company’s Code of Conduct; 2) complying with all relevant polices; and 3) raising concerns. Substantiated violations may result in disciplinary action up to and including termination.
Our Supply Chain
During 2023, we worked to detect and address the risks of modern slavery in our supply chain through:
Supplier Selection: Striving to select suppliers that are socially responsible and who share our company’s commitments to ethics and legally compliant business practices. Our goal is to obtain services, goods, active ingredients, components, finished goods or other products in a way that is lawful and fair.
Expectations: Communicating our expectations of suppliers, including those related to child labour, forced labour, modern slavery and human trafficking. We use our Business Partner Code of Conduct (BPCC) to communicate our expectations. It has been translated for all countries in which we operate and is posted on our company website.
Supply Chain Mapping: Conducting supply chain mapping to identify which of our suppliers may present a higher risk of modern slavery. As part of this activity, we categorize suppliers based on industry type, country location, and service / commodity. We use this information to decide upon the level of due diligence that may be necessary.
Due Diligence: Performing supplier due diligence, using a risk-based approach. We use a supplier Environmental Social & Governance (ESG) questionnaire to gather relevant information from suppliers on how they address the risks of modern slavery. The results and outcomes of supplier due diligence are used to inform our supplier selection and risk management processes.
Contracts: Seeking assurance from suppliers to respect the requirements set forth in our Business Partner Code of Conduct (BPCC), including those related to modern slavery, through our contracts. Our standard contracts contain relevant clauses on compliance, ethical business practice, right to audit, sub-contracting, as well as termination rights.
Auditing: Performing Labour & Human Rights (LHR) audits at select supplier facilities to seek assurance and verification of their conformance with our company’s expectations, and by working with them to address identified non-conformities revealed by audits. We use independent social audit firms to perform announced LHR audits on our behalf.
Grievance Mechanisms: Maintaining grievance mechanisms accessible to external stakeholders (including suppliers and other business partners) to allow the reporting of concerns, including any related to modern slavery. We expect our suppliers and other business partners to establish their own grievance mechanism to enable the reporting of concerns.
Response and Remediation: If we discover any evidence of modern slavery in our supply chain, we take immediate action to investigate. Where an occurrence of modern slavery is proven to have taken place, we will work collaboratively with the supplier to take necessary corrective actions and provide remedy where required.
Oversight & Monitoring: Assigning relationship managers from within our Global Supplier Management Group function to oversee, manage and monitor the performance of key suppliers. We continue to hold suppliers accountable for meeting their contractual obligations.
Governance: Using our Third-Party Risk Committee to help govern and oversee the management of modern slavery, as well as other human rights related risks associated with our supply chain. This committee is chaired by our company’s Senior Vice President for Global Supplier Management.
Engagement: Engaging and seeking input from relevant internal stakeholders, including Global Supplier Management Group, Ethics & Compliance Organization, Legal, Global Safety & Environment and our Office of Corporate Responsibility.
Training: Providing training to procurement staff that have responsibility for supplier management to help raise awareness of modern slavery. Online training is provided on 1) Business Partner Code of Conduct; 2) Mitigating Modern Slavery Risks in Supply Chains; and 3) Third Party Risk Management.
Assessing Effectiveness
During 2023, we reviewed the following key performance indicators to help us assess the effectiveness of our efforts in addressing the risk of modern slavery in our own operation and supply chain. We use these measures to monitor our performance and identify opportunities to help improve our programmes.
- Number of reported concerns/complaints related to modern slavery.
- Number of supplier assessments conducted, as part of supplier due diligence.
- Number of supplier labour and human rights audits performed.
- Number of supplier labour and human rights audit findings.
- Number of supplier labour and human rights audit findings remediated.
- Number of procurement staff trained on modern slavery and human trafficking.
Collaboration
During 2023, we collaborated with Pharmaceutical Supply Chain Initiative (PSCI) Human Rights and Labour sub-group. PSCI is an industry collaboration that supports principles for responsible supply chain management for ethics, human rights, health and safety, environment, and related governance and management systems.
We are a member of BSR’s Human Rights Working Group a global, cross industry network of businesses focused on human rights challenges. This working group helps companies around the world to implement the UN Guiding Principles on Business and Human Rights (UNGPs), by sharing knowledge and practical guidance.
Next Steps
We will continue working on our efforts to identify, assess, and address modern slavery risks within our operations and supply chains. These efforts will include:
- Investigating all reported concerns promptly
- Conducting supplier labour and human rights due diligence to identify and address risks
- Auditing select suppliers to verify conformance with our standards for human rights
- Holding suppliers accountable for addressing non-conformities revealed by LHR audits
- Participating in the activities/initiatives of PSCI’s Labour & Human Rights Sub-Committee.
Consultation
The preparation of this statement was performed in consultation with relevant internal stakeholders directly involved with the management of risks related to modern day slavery and human trafficking, including senior management representatives from Global Supplier Management, Legal, Ethics & Compliance and Office of Corporate Responsibility.
Approvals
Company directors representing the boards of reporting entities (listed in Appendix I) reviewed
and approved this statement prior to publication.
Other Relevant Information
As a signatory of the United Nations (UN) Global Compact, we are committed to advancing the 10 principles on human rights, labour, environment and anti-corruption and the UN Sustainable Development Goals (SDG).
We share our progress against the UN SDG targets for Good Health and Wellbeing, Gender Equality, Decent Work and Economic Growth and others in our company’s Impact Report 2022/2023.
Appendix I
In accordance with the UK Modern Slavery Act 2015, the following MSD UK entities are included in this statement:
MSD ANIMAL HEALTH UK LIMITED – Company Number 00946942
MSD R&D INNOVATION CENTRE LTD – Company Number 00955192
INTERVET UK PRODUCTION LIMITED – Company Number 03200055
MERCK SHARP & DOHME (UK) LIMITED – Company Number 00233687