1. INTRODUCTION
This report concerns the fiscal year ending December 31, 2023. It is published by Fenplast Inc. and its concerned subsidiaries, in compliance with the Combating Forced Labor and Child Labor in Supply Chains Act (the “Act”) in force in Canada.
References in this report to "Company," "we," "our," and similar terms refer to Fenplast Inc. ("Fenplast") or its subsidiary 9446-1753 Quebec Inc. (operating under the name Altek Doors and Windows) ("Altek"), which is included within the scope of this report.
This report presents the measures taken to prevent and mitigate the risk of using forced labor or child labor at any stage of the production of goods in Canada by the Company or their importation into Canada by the Company.
2. PREVENTION AND MITIGATION OF FORCED LABOR AND CHILD LABOR RISKS
The Company recognizes the fundamental importance of human dignity and equality. We believe that economic growth and social progress go hand in hand and, therefore, do everything possible to provide a safe working environment. We are committed to protecting human rights within our operations and business relationships.
During the previous fiscal year, we continued to conduct our business in accordance with our policies promoting employee well-being and due diligence in our contractual relationships with business partners. Additionally, we implemented the following measures to combat forced labor and child labor:
This report describes these measures and some additional initiatives we foresee in combating forced labor and child labor, which are constantly evolving.
3. OUR BUSINESS ACTIVITIES AND SUPPLY CHAINS
3.1. Our Activities
The Company is a Quebec-owned enterprise, in business since 1989, located on the South Shore of Montreal. The Company specializes in manufacturing doors and windows and distributes its products to retailers. The vast majority of sales are made in Quebec, with the remainder in Ontario.
Our head office is in Candiac, and we operate six manufacturing facilities in Quebec: in Candiac, Delson, Terrebonne, Drummondville, Saint-Apollinaire, and Saint-Joseph-deBeauce.
We care about the well-being and development of the people in our community, as evidenced by our continued involvement in charitable works and social causes related to children's well-being, physical activity, and health. This sustained community engagement demonstrates our roots in the community and our desire to conduct our business in a socially responsible manner.
Fenplast and Altek, along with their affiliated companies, employ approximately 1,100 employees. We sometimes use placement agencies to recruit temporary staff composed of agency employees, permanent employees referred by agencies, and foreign workers, who later become full-time employees of the Company. When we employ these workers, checks are conducted to ensure that all hiring respects workers' rights.
We select placement agencies based on several criteria, such as reputation, compliance with applicable laws and regulations, internal processes and rules aligned with our values (including identity and age verification, criminal background checks, employment references, and credit history), and personalized services offered to ensure proper worker integration.
In this regard, the integration of these workers is supported by our human resources team, and these workers benefit from furnished housing near the workplace and vehicles provided by the Company. Additionally, when recruiting a foreign worker, we commit to providing private medical insurance until the worker is eligible for provincial health insurance, and we ensure that there is at least one resource person at each site who can communicate in the workers' native language, ensuring continuous fluent communication with them.
3.2. Our Supply Chain
Our supply chain is characterized by the presence of numerous direct suppliers with whom we maintain long-term business relationships. Our senior management has had the opportunity to visit several of their facilities, demonstrating our in-depth knowledge of these business partners.
The Company's production activities require the use of the following main inputs: glass, thermos, stained glass, aluminum, PVC resin, secondary manufacturing products, and finished products. Secondary manufacturing products include hardware, wood, spacers, chemicals, and paint.
Generally, we procure most of our products from suppliers located in the United States and Canada (80%). Among the products purchased in North America are glass sheets, thermos, PVC resin, wood, spacers, and extrusion equipment. The same goes for hardware products, purchased from American suppliers, and paint, which we procure locally.
However, we recognize that our Canadian and American suppliers have their own supply chains, which may include suppliers located in foreign countries, particularly in various Asian countries, including China.
Moreover, in a small proportion, some of our direct suppliers are located overseas, notably in the United Arab Emirates and Turkey, representing about 15% of our total purchases, while the rest of our overseas products are purchased from suppliers located in China (5%). For example, the aluminum we use comes from the United Arab Emirates and Turkey, and the stained glass, representing minimal imports, is acquired in Asia or from local suppliers who themselves source from Asia.
In addition to production inputs, the Company procures machines and equipment for door and window manufacturing, notably from Germany, Italy, and Austria.
We believe that managing the social risks inherent in supply chains is our responsibility, as well as that of our suppliers, because respecting human rights is a collective responsibility, engaging all businesses, regardless of where they conduct their activities.
POLICIES AND DUE DILIGENCE PROCESSES
We recognize our responsibilities regarding human rights, consistent with our mandate, vision, and values, as reflected in our policies and practices. Additionally, we continue to integrate responsible business conduct into our policies and management systems, as it is an important issue that we care about.
3.3. Our Policies
Code of Conduct
The Company's Code of Conduct outlines certain rules and guidelines that we and our employees commit to respecting with regard to suppliers, customers, consultants, employees, and other business partners. The Code of Conduct requires the Company and its employees to exercise due diligence in concluding business transactions to avoid entering into agreements with individuals or companies involved in malpractices that could harm the Company's reputation. Although not expressly mentioned in the code, this could include avoiding contracting with companies that use forced labor or child labor in their operations.
Occupational Health and Safety
The Company places great importance on the health and safety of its employees. All new factory employees must consult local regulations to ensure they are aware of the standards required by the Company before starting their work within the company. We also place great importance on supervising the application of health and safety rules at work to prevent any situation that could harm the well-being of our employees.
Policy on Workplace Violence, Harassment, and Discrimination
The Company has a Policy to counter workplace violence, harassment, and discrimination to offer and maintain a workplace where everyone is respected and treated with dignity. This policy aims to inform all employees about what constitutes workplace violence, harassment, and discrimination and that such behaviors will not be tolerated by the Company. It also encourages employees who are victims of such behaviors to seek immediate help through the reporting mechanism provided in this policy.
Whistleblower Policy
Our Whistleblower Policy emphasizes the importance of offering protection against retaliation in the case of good faith reporting and allows anonymous reporting. Our Company fully recognizes the importance of encouraging our employees to express their concerns in case of wrongful acts or imminent situations, always aiming to provide a work environment that fosters professional development, respect, and the well-being of our employees.
3.4. Due Diligence Processes
As part of our initiatives to identify and mitigate risks related to forced labor and child labor, we have implemented a supplier evaluation system. This process covers a wide range of analysis criteria and includes the sourcing activities of our direct suppliers. We are currently at the preliminary stage of our process, but we intend to evaluate at least 80% of our direct suppliers by the end of 2024 and then conduct these evaluations periodically and provide qualitative feedback to the evaluated suppliers.
The Company has also visited some direct suppliers located in regions considered to have a higher risk of forced labor or child labor. In this regard, we conducted visits to our direct suppliers located in Turkey and the United Arab Emirates to verify product quality. During these visits, our inspectors did not identify any issues related to forced labor or child labor. In the future, we intend to include a human rights and working conditions component in our foreign inspection procedures, particularly when operations take place in a country where there is an increased risk of forced labor or child labor.
4. RISK ASSESSMENT AND CORRECTIVE MEASURES
As part of our risk assessment, we have begun identifying activities and supply chains that present risks of forced labor and child labor.
Although our risk analysis is at an initial stage, we recognize that some of our direct suppliers are located in regions that may present a higher risk of forced labor and child labor, particularly concerning goods manufactured in Turkey and the United Arab Emirates. We are sensitive to this reality and have therefore undertaken in-person visits to the production facilities of our direct suppliers located in these regions.
Additionally, we recognize the complexity of obtaining complete visibility over manufacturing activities that occur upstream in our supply chain. Nevertheless, we remain vigilant and committed to taking reasonable measures to avoid any association with business partners who use, directly or indirectly, forced labor or child labor.
The Company is committed to adhering to the highest possible standards of ethics, morality, and business conduct. Our Code of Conduct clearly outlines our employees' responsibility to exercise due diligence in concluding commercial agreements, and we have every intention of continuing to evaluate the activities of our suppliers, particularly in terms of sourcing.
To date, we have not identified any cases of forced labor or child labor within our operations and supply chain that would require remediation measures, nor have we identified any cases of income loss for vulnerable families that could result from such measures. We encourage our employees to report any wrongful acts, including human rights violations.
5. TRAINING
Understanding and complying with the Code of Conduct are employment requirements within the Company. Our employee integration programs include training on our Code of Conduct, our values, and a number of our human resources and safety policies.
Although the Company currently does not offer specific training to employees on the issues of forced labor and child labor, we remain attentive and sensitive to these issues.
6. EVALUATING THE EFFECTIVENESS OF OUR APPROACH
Ensuring that forced labor and child labor practices do not occur in our company and supply chain is and will always be subject to continuous improvement. Although we have not yet taken specific measures to evaluate the effectiveness of our actions, we are currently setting certain milestones that could allow us to conduct this analysis in the near future. Indeed, we intend to enhance the evaluation of our direct suppliers during 2024 by questioning them about the working conditions offered to their employees and visiting additional facilities. We will subsequently document and monitor the evolution of human resources practices of these suppliers and thus evaluate the effectiveness of our actions.
7. APPROVAL AND CERTIFICATION
This report was approved by the board of directors of Fenplast Inc. on May 30, 2024, in accordance with subparagraph 11(4)(b)(ii) of the Act and constitutes the report of our group for the fiscal year ending December 31, 2023.
In accordance with the requirements of the Act, and in particular its section 11, I certify that I have reviewed the information contained in the report for the entities listed in the first section of this report. To the best of my knowledge, and after exercising reasonable diligence, I confirm that the information contained in the report is true, accurate, and complete in all material respects for the purposes of the application of the Act for the aforementioned reporting year.
I have the authority to bind Fenplast Inc.
(s)Jean Marchand
Full Name : Jean Marchand
Title : Prsident
Date : May 30th, 2024