Reporting entity
In accordance with the Modern Slavery Act 2018 (Cth) (the “Modern Slavery Act”), The Henry Schein Regional Trust (ABN: 83 132 312 515) with a registered office of Building 3, Level 6, 189 O’Riordan Street, Mascot NSW 2020 (the “Henry Schein Trust”) provides the following Modern Slavery Statement for the reporting period of 1 January 2023 to 31 December 2023.
Introduction
The Henry Schein Trust is an indirect subsidiary of Henry Schein, Inc. (“Henry Schein”). Henry Schein is a solutions company for health care professionals powered by a network of people and technology, a FORTUNE 500 Company, and a member of the S&P 500® index. Henry Schein is headquartered in Melville, N.Y., USA, and has operations or affiliates in 33 countries and territories.
Henry Schein, Inc. and its subsidiaries (the “Henry Schein Group”) are committed to “doing well, by doing good” and recognize the importance of being accountable to our stakeholders. From when Henry and Esther Schein established Henry Schein in 1932, they instilled the ethos that the social and environmental wellbeing of our community contributes to the success of Henry Schein. This recognition is a driving force behind how we adapt and evolve to the changing needs of our environment. As such, the Henry Schein Group is committed to upholding human rights standards in all areas of our business. We commit to identify and prevent adverse impacts on human rights , including assessing and addressing the risks of modern slavery across its operations and supply chains.
What is modern slavery?
The term “modern slavery” describes situations in which coercion, threats, or deception are used to exploit humans and limit their freedom. Modern slavery takes many forms including human trafficking, slavery, servitude, forced labour, debt bondage, deceptive recruiting for labour or services, child labour (including where children are exploited through slavery or exposed to hazardous work), and forced marriage.
Our Structure
In Australia, Henry Schein operates through four operating entities:
- The Henry Schein Trust is a fixed unit trust registered in New South Wales. The trustee of this trust is Henry Schein Regional Pty Limited. The Henry Schein Trust offers a comprehensive selection of dental supplies and equipment to dentists and dental laboratories in Australia. The Henry Schein Trust also sells products to its affiliates in Australia and New Zealand for resale. The Henry Schein Trust employs approximately 450 Team Schein Members (“TSMs”).
- The Adaam Unit Trust, a discretionary trading trust registered in Victoria, trades as "Adam Dental Supplies" (“Adam Dental”). The trustee of this trust is Adaam Pty Ltd. Adam Dental offers a comprehensive selection of dental supplies to dentists in Australia. Adam Dental employs approximately 10 TSMs.
- Pacific Dental Specialties Pty Ltd, a private company registered in New South Wales, trades as “Pacific Dental Specialties” (“Pacific Dental”). Pacific Dental is a distributor of dental implant surgical and restorative solutions and digital dental solutions to dentists and dental laboratories in Australia and New Zealand. Pacific Dental employs approximately 4 TSMs.
- Regional Health Care Group Pty Limited, a private company registered in New South Wales (“Regional Health Care”). Regional Health Care is a distributor of consumables and equipment to medical practices in Australia and New Zealand and employs approximately 35 TSMs.
Our Operations
The Henry Schein Trust operates Australia’s largest dental distributor, stocking a wide range of dental products and equipment. The operations of Pacific Dental and Adam Dental are the same as those of the Henry Schein Trust. Through its Regional Health Care subsidiary, the Henry Schein Trust operates a medical products distribution business serving public and private sector customers in Australia and New Zealand.
The Henry Schein Trust’s head office is in Mascot, New South Wales and we have sales offices located in:
- Mulgrave, Victoria
- Parkville, Victoria
- Milton, Queensland
- Belmont, Western Australia
- Malvern, South Australia
The Henry Schein Trust operates two distribution centres in Australia (Sydney and Perth) which maintain inventory of finished therapeutic and non-therapeutic products and arrange for delivery of these products to customers of each operating company. In addition, we operate a repair centre to provide repair and maintenance services for dental handpieces and other small equipment.
Each operating business maintains relationships with a range of suppliers and third-party manufacturers, as well as service providers. A representative list of the brands offered can be found on each operating company’s website:
Our supplier and third-party manufacturers are both domestic and international companies, and our relationships with them are generally longer term. However, the related distribution and supply agreements are generally shorter term, with initial terms of one to three years and automatic annual renewals unless notice to terminate is given. Our top 10 suppliers have an average relationship with us of 20 years. The Henry Schein Group may also have relationships with these suppliers and third-party manufacturers in other countries where it operates.
Additionally, to support our operations, we work with recruitment agencies who assist us by sourcing temporary, full and part-time staff for our warehousing and distribution centres. We also procure services from a variety of companies in areas such as building services, cleaning, travel, security and maintenance services.
Our Supply Chains
Henry Schein's supply chains include domestic and overseas factories where the products are made, the importation of the products into Australia and the subsequent sale and distribution of the products to customers in Australia and to our affiliates in New Zealand. Supply chains for an individual product manufactured by our suppliers or third-party manufacturers may extend across multiple countries and indirect suppliers.
The Henry Schein Trust purchases products and services for resale from over 250 suppliers and manufacturers. These products and services include both therapeutic and non-therapeutic products and services needed for the day-to-day operation of our customer’s businesses. A representative list of the types of products and services offered can be found on each operating company’s website:
Over the relevant reporting period, Henry Schein spent over AUD $200 million on products and services from our suppliers and third-party manufacturers, more than 70% of which was sourced from our top 20 suppliers. The main area of supplier spend was on consumable items for resale.
Our suppliers and third-party manufacturers are located in Europe, Asia, North America, Australia, and New Zealand. Of our top 20 suppliers, seven are headquartered in the United States, three in Japan and two in Australia, with the remainder in Western Europe (including Finland, Germany and Switzerland). As noted above, our supplier and third-party manufacturers are both domestic and international companies, and our relationships with them are generally longer term.
Risk of modern slavery practices in our operations and supply chains and in the operations and supply chains of the entities which we own or control.
Overview
We recognise that the complex nature of our business and its supply chains means that we need to be vigilant towards any suspected or known instances of modern slavery.
In identifying risks of modern slavery in our operations and supply chains, we continue to consult publicly available resources, including the Global Slavery Index, the Commonwealth Modern Slavery Act 2018 Guidance for Reporting Entities, as well as materials and information on risks of modern slavery produced by the International Labour Organisation and Review of Australia’s Modern Slavery Act 2018 Issues Paper.
We considered the relevant risks of modern slavery practices by reference to a range of factors such as business activities; labour force structure; sector, social, political and environmental conditions in the countries in which our suppliers and manufacturers operate.
Risks in our Operations
We partner with recruitment agencies who assist us by sourcing staff for our warehousing and distribution centres and we procure services such as building services, cleaning, travel, security, and maintenance services. The services sector was one of five sectors identified by the International Labour Organisation that accounted for the majority of total adult forced labour. Accordingly, the recruitment agencies that we work with are asked to expressly confirm compliance with all applicable workplace laws and pay not less than the minimum rate of pay to employees. We also review the modern slavery statements published by such agencies where they are available, and where not available, we review their modern slavery policy. In addition, we source services from reputable operators who are required to comply with all applicable Australian laws and perform our own compliance procedures, including review of any work visas and requesting and reviewing provided background checks.
Risks in Our Supply Chains
The Henry Schein Group includes businesses with supply chains focused on:
- sourcing finished goods and services for resale to health care practitioners;
- internally developed products, which may be manufactured in facilities that are part of the Henry Schein Group;
- sourcing product from various manufacturers for sale under a brand owned by the Henry Schein Group; or
- a combination of the foregoing.
This results in complex supply chains across the Henry Schein Group, working with finished goods suppliers, raw material suppliers, and internal and third-party manufacturers in many different jurisdictions. With respect to our business in Australia, our supply chain is primarily focused on sourcing finished goods and services.
Henry Schein engages with third party manufacturing plants in Asia which produce Henry Schein branded products including gloves, masks, tissues and various other consumable items, which are sold in Australia. We are aware that these manufacturing plants carry potential risks of forced labour, child labour and human trafficking due to the industry's high labour intensity and reliance on migrant workers, the relatively low skill levels of workers and low level of regulation in these geographical locations generally.
In short, our modern slavery risk profile is dynamic, however we are committed to monitoring and assessing our modern slavery risk profile at regular intervals and addressing any concerns with alacrity.
Actions taken by us and the entities that we own or control to assess and address risks of modern slavery, including due diligence and remediation processes
Overview
We have a variety of mechanisms in place that are designed to help us better detect and to guard against slavery and human trafficking in our supply chain including through our supplier contracts, verification, audits and monitoring, and programs to support supplier accountability for compliance with our policies, as well as role-based learning and communications for our own employees and programs to encourage open communication and a “speak-up” culture. These mechanisms have been established over a series of reporting periods and currently include:
Setting clear expectations with suppliers
It is our expectation that our suppliers conduct themselves in an ethical and lawful manner, and respect human rights in all their business dealings. As part of this, we have strengthened our Global Supplier Code of Conduct to clarify our expectations in the areas of business integrity, labour practices and human rights, employee health and safety, and environmental management. We also have continued to use our Distribution and Supply Agreement terms to require our suppliers to confirm that they will comply with all applicable laws in relation to the supply of products under the agreement.
Supplier due diligence and verification
When a new supplier is established in our system, a due diligence process is required to be undertaken. This process includes completion by the supplier of a questionnaire, review and approval by the Regulatory Affairs and Risk Management departments, and an assessment by the Office of Cyber Security. Along with the questionnaire, the supplier also receives a copy of our Global Supplier Code of Conduct and an agreement detailing the supplier’s obligations to comply with all applicable laws in relation to the supply of products to us, both of which need to be signed by an authorized officer of the supplier.
We have a Corporate steering committee for monitoring global requirements for supply chain transparency, which meets regularly to monitor Henry Schein’s compliance with global laws regarding the use of forced and child labour. This group is cross-functional and includes participation from multiple internal teams responsible for compliance, supplier approval, and product sourcing. In consultation with outside counsel and industry experts, we have designated high-risk countries for the use of forced and child labour and monitor suppliers from those countries more closely to ensure their compliance with worker protection requirements.
Ongoing supplier monitoring
We monitor key suppliers’ ethical and labour performance through various approaches such as desk audits, site visits, business reviews, supplier scorecards, or other means. We continue to expand our due diligence protocols with advanced standards, tools, and initiatives.
For our Asia-based Henry Schein brand supplier partners, the Henry Schein Group uses a social accountability checklist related to child labour, forced labour, health, safety, facilities, working hours, wages, recruitment, etc. as the basis for the social aspects of the Henry Schein Group’s audit program. Since 2015, Henry Schein has conducted audits throughout its supply chain with identified actions successfully addressed and closed.
We also work collaboratively in the industry to enhance our supplier monitoring activities. For example, our affiliate was a founding member of the Responsible Glove Alliance, a collaborative established in 2022 to prevent, identify, and remediate forced labour in the medical supplies industry in Malaysia through recruitment transformation, collective influence, and the application of due diligence with advanced standards, tools, and programs. Out of the 45 audits of suppliers in high-risk countries we performed in 2023, 11 were for existing glove suppliers against the SA8000:2014 standard. Additionally, we audited and rejected a prospective supplier for not meeting the standard requirements.
In addition, Henry Schein actively monitors actions taken by governmental authorities to enhance the information available to us. For example, Adam Dental sold a glove range which was manufactured by companies located in South East Asia. In August 2020 we became aware of a decision by the US Customs and Border Protection to impose a detention order on these companies "based on reasonable evidence of forced labour in the manufacturing process … including debt bondage, excessive overtime, retention of identification documents, and abusive working and living conditions." Once Henry Schein became aware of the decision of the US Customs and Border Protection, we immediately suspended our dealings with the manufacturer while we considered the matter, sought guidance and took inventory of our relevant saleable stock. Ultimately, we took the decision to cease the sale of the relevant products and cease trading with the manufacturer's associated companies.
From the high-risk countries identified by our Corporate supply chain transparency steering committee, 45 suppliers were audited in 2023 by internal TSMs covering products such as dental instruments, electronics, disinfecting products, and other medical supplies. An additional 25 audits were performed by LRQA, a global market leader in Environmental, Social and Governance (ESG), sustainability and supply chain services, on our behalf.
Education of our team
We offer education to all TSMs through a learning management system about significant business risks and our policies designed to mitigate these risks. This educational program reinforces that our TSMs are accountable for compliance every day. During 2023, TSMs were assigned curricula covering a range of topics tailored for different TSM groups based upon roles, organizational level, and geography. In addition to our standard learning program, we reinforce key policies during “Compliance Month” by providing communications throughout the month. Communications are sent weekly along with messaging from senior leadership describing the importance of compliance. Topics regularly include our Worldwide Business Standards, and our responsibilities to society at large with respect to human rights.
In early 2023, an updated human rights training course was launched along with an internal Henry Schein Group supply chain transparency working group focused on ongoing monitoring and implementation of human rights standards. We continue to focus on strengthening our processes and our relationship with our suppliers to ensure that we maintain our strong reputation for integrity and compliance.
Ongoing internal monitoring
Henry Schein’s corporate Ethics & Compliance Department requires each Henry Schein affiliate or subsidiary to complete a monthly questionnaire describing any new legal/regulatory requirements, operational changes, and potential non-compliance. This process is designed to provide the Henry Schein corporate Ethics & Compliance team with assurances that the local operations are conducting business in compliance with policies and other requirements. It is also a mechanism to escalate instances of potential noncompliance and identify opportunities for best practices and information sharing across the group.
An Ethics & Compliance Ambassadors program was also established to enhance the connectivity between the corporate Ethics & Compliance team and the local businesses in EMEA and Asia. Ambassadors were nominated by local management to serve in this role for a two-year period. The program’s goals were to train Ambassadors on key compliance principles, to leverage the Ambassadors to cascade compliance-related information locally through aligned partners, and to receive information about local operations that informs priorities for the Ethics & Compliance Program. Ultimately, the program seeks to ensure both that our global operations have local ethics and compliance contacts speaking their language and to create an effective network to further reinforce and enhance Henry Schein’s Ethics & Compliance Program within local operations.
The Henry Schein Speak-Up Helpline is available to employees and third parties via web portal and by phone 24 hours a day, 7 days a week in local languages where Henry Schein has operations. It is regularly communicated to TSMs though learning modules, managerial toolkits, communications, our intranet sites, and posters in each of our facilities. A Helpline report may be made anonymously. Reports may also be made through internal channels such as directly to senior leadership, a manager, HR, Legal, Internal Audit, Ethics & Compliance, or a member of the Compliance Committee. We are committed to evaluating our Speak Up helpline reporting process against the effectiveness criteria of the UN Guiding Principles for Business and Human Rights. We continue to evaluate our Speak Up helpline reporting processes and provide meaningful education to those handling the investigations.
Remediation processes
We are committed to investigating any report received through the Speak Up Helpline or internal channels of potential incidences of modern slavery occurring anywhere in our operations or supply chains.
In addition, we encourage regular engagement with our stakeholders through roundtables, business review meetings and other means to enable concerns to be addressed.
In line with our values and commitments, we confirm that we will take all appropriate steps to rectify any confirmed incidences of modern slavery in our operations or supply chains. Henry Schein will continue to work collaboratively with its suppliers and, if necessary, their suppliers, to achieve these goals. If, for any reason, progress in this regard is not possible, Henry Schein will take steps to sever its connections to the offending supplier or sub-supplier, as it did with the Southeast Asian supplier whose products were subject to a detention order in 2020.
During the reporting period, no instances of modern slavery were reported to us via our Speak-Up Helpline or reporting process or through our risk management processes, including internal audits.
Our values and commitments
Ethical behaviour is one of the Team Schein Values, and it is essential that we conduct ourselves with a high degree of ethics and integrity in all our actions. Our Worldwide Business Standards, Statement on Human Rights, and other Company policies are valuable ethical roadmaps for all TSMs.
Henry Schein respects human rights as recognised by the principles set out in the United Nations Universal Declaration of Human Rights, the International Covenant on Economic Social and Cultural Rights, the International Covenant on Civil and Political Rights and the core labour standards set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work.
Henry Schein is committed to operating our business lawfully and ethically and is committed to only working with manufacturers and suppliers that are aligned with our values. We expect everyone in our supply chains to operate in accordance with all applicable modern slavery laws.
We value and observe laws regarding corporate social responsibility, environmental protection, workplace safety, staff inclusion and diversity. Consistent with this philosophy, Henry Schein has been recognised by Ethisphere, a global leader in defining and advancing the standards of ethical business practices, as one of the World’s Most Ethical Companies since 2012.
These values and commitments are reflected in our global Mission Statement and Corporate Charter and Supply Chain Resilience Statement.
We are committed to ongoing engagement with our suppliers, manufacturers, and stakeholders to better collaborate in assessing and addressing modern slavery risks. We are also committed to undertaking steps to identify and prevent modern slavery.
Assessing the effectiveness of actions taken to assess and address modern slavery risks
As outlined above, Henry Schein requires relevant employees globally to complete online training modules which include training, guidance and information on modern slavery. At the end of each training session each employee must complete an assessment to demonstrate that they have understood the content of the training. This is one way that we assess the effectiveness of the training sessions.
In addition, Henry Schein conducts regular audits, site visits, business reviews, supplier scorecards, third-party verifications and other means to assess the effectiveness of compliance, including with respect to modern slavery. Any areas of potential non-compliance or other identified actions are followed-up until they are successfully addressed and closed.
Consultation
The Henry Schein Trust and the entities which are owned and controlled by the Henry Schein Trust as set out earlier in this statement are part of a well-integrated business. Our Corporate Supply Chain Transparency steering committee continually monitors changes to global modern slavery regulations and communicates with all Henry Schein affiliates and subsidiaries to maintain compliance. Senior management from the relevant companies were engaged and consulted in the preparation of this statement.
Approval
This Modern Slavery Statement is made in accordance with section 13 of the Modern Slavery Act 2018 (Cth).
This statement was approved by the Board of Directors of Henry Schein Regional Pty Limited acting in its capacity as trustee for The Henry Schein Regional Trust on 29 August 2024.
Signed for and on behalf of Henry Schein Regional Pty Limited in its capacity as trustee for The Henry Schein Regional Trust
Mike Covey
Director, Henry Schein Regional Pty Limited