2022 Universal Registration Document

3.4.4.1. Risks and Applicable Rules for the prevention of serious violations of Human Rights and Fundamental Freedoms

Risk Analysis and risks identified relating to Human Rights and fundamental freedoms

The Group expanded its mapping by identifying the potential key Human Rights risks worldwide and in 27 markets. L’Oréal relied on the reporting framework of the Guiding Principles on Business and Human Rights (UNGP Reporting Framework). This identification process takes into consideration the severity, scale and remediability, as well as the likelihood of its impacts for people throughout its value chain. This study was conducted with an NGO specialised in the area, providing independent analysis.

As a result of this analysis, the following salient risks were identified in the context of the application of the French Law on Duty of Vigilance:

• the risk of child labour among the employees of the Group’s Suppliers;
• the risk of forced labour among the employees of the Group’s Suppliers;
• the risk of job discrimination because of gender, age, disability, gender identity and sexual orientation of the employees of L’Oréal and the employees of the Group’s Suppliers; and
• the risk of a lack of decent living wage⁽¹⁾ for the employees of the Group’s Suppliers.

Another risk identified concerns the Human Rights of communities potentially impacted by the Group’s activities (respect for the environment, right of access to water, consideration of Human Rights in the choice of raw materials and, in particular, the right of access of local populations to their land and respect for their traditional knowledge under the Nagoya Protocol).

Applicable rules on Human Rights

Subsidiaries and Suppliers must comply with the minimum core rules, which consist of the following rules that result from an analysis of the risks related to the activities of the Group and its Suppliers.

Non-discrimination: Acts of discrimination are serious violations of Human Rights that remain anchored in all regions of the world in which L’Oréal is present. Discrimination related to gender, sexual orientation and gender identity, disabilities, family situation, age, political and philosophical opinions, religious beliefs, union activities, or related to ethnic, social, cultural or national origins or pregnancy are prohibited. L’Oréal bans pregnancy testing when employees are hired within the Group, and requires its Suppliers to comply with this standard.

Bullying and sexual harassment: Bullying and sexual harassment are prohibited in the Group.

Child labour: L’Oréal’s presence in certain regions of the world that are particularly at risk for child labour, including Asia and Latin America, has led the Group to identify this issue as a priority.

To take into consideration the vulnerability of young workers, L’Oréal has set the minimum hiring age at 16 years old.

The Subsidiaries and Suppliers are required to check the age of all new employees upon hire.

L’Oréal prohibits night work and work hazardous to health and safety for employees younger than 18 in its Subsidiaries.

Forced or compulsory labour: L’Oréal refers to the definition of forced labour set out in Convention 29 of the International Labour Organization: “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. In certain regions of the world where L’Oréal operates, certain practices that violate internationally recognised Human Rights, such as holding the identity papers of migrant workers, are common. Any form of forced labour is prohibited. As a result:

• unless there is a legal obligation, employees’ identity papers, passports or any other personal documents may not be held from them. In the event of a legal obligation,these documents must be returned to employees at their first request;
• employees may not be asked to pay for recruitment costs or to make cash deposits to obtain employment;
• if workers from foreign regions are hired, the employer must pay the costs related to these hires;
• the use of prison labour is possible only when it is voluntary within the scope of a professional reinsertion programme, and paid at the market rate. Suppliers must request authorisation from L’Oréal before they use this type of labour;
• security personnel must only ensure the safety of people and property; and
• any salary withholding must be strictly authorised by law. It may not under any circumstances be used for the purpose of confiscation, for the direct or indirect benefit of the employer.

Employees must have access to drinking water and toilet facilities. They must be free to move around their place of work, with the exception of areas to which access is restricted for confidentiality or safety reasons.

Working hours: Working hours, including overtime, may not exceed 60 hours a week for employees whose working time is monitored. All employees must also be granted at least one day of rest for every seven-day period, or two consecutive days of rest for every fourteen-day period. They must have reasonable breaks when they work.

Freedom of association and right to collective bargaining: Violations of freedom of association and the right to collective bargaining, such as discrimination against employee representatives, may occur in all regions of the world in which L’Oréal operates.

Employees’ freedom of association and right to collective bargaining must be respected:

• elections of employee representatives must take place without interference from the employer, preferably by secret ballot;
• employee representatives have access to the work premises subject to safety and/or confidentiality requirements, if any;and
• discrimination against employees conducting union activities is prohibited.

In regions where freedom of association and the right to collective bargaining are limited or discouraged, L’Oréal authorises its employees to meet independently in order to discuss their professional concerns.