Modern Slavery Statement

for the period 1 January – 31 December 2023

Bank of Communications Co., Ltd. Sydney Branch (“BoComAU”) as reporting entity.

In Australia, BoComAU is registered as a foreign company with ARBN 137 909 963. BoComAU obtained its banking authority from APRA on 13th October 2011, and an Australian Financial Services Licence, No. 409837, on 19 October 2011. BoComAU operates as a branch of Bank of Communications Co., Ltd. (‘BoCom’ or the ‘Bank’). It also established sub-branches in Brisbane in 2015 and in Melbourne in 2018.

Founded in 1908, BoCom is one of the note-issuing banks with the longest history in modern China. After restructuring, BoCom officially opened on 1 April 1987, becoming the first state-owned joint-stock commercial bank in China, with its head office located in Shanghai. The Bank was listed on the Hong Kong Stock Exchange in June 2005 and on the Shanghai Stock Exchange in May 2007. In 2015, the State Council approved the Deepening Reform Plan of BoCom. In the past few years, the Bank deepened reforms in: corporate governance; the development of policies and priorities in line with the national strategies; the improvement of organisational functions and institutional mechanisms; fintech; credit risk; anti-money laundering; and institutional management and incentives. These initiatives have helped the Bank to implement the benefits of the reform plan and fuel the momentum of transformation.

Structure, Operation and Supply Chains

As a foreign ADI, BoComAU is managed by the local senior management team headed by the General Manager, with oversight from Senior Officer Outside Australia[1], who has delegated authority from the Bank’s Board of Directors. 

All of the operations of BoComAU are currently conducted with wholesale customers in Australia and wholesale BoCom clients doing business in Australia. Further, BoComAU supports BoCom domestic branches in China, through offering remittance, international settlement, trade finance, lending and other traditional wholesale banking products.

Operation in Accordance with Laws and Regulations

Adhering to the principle of “compliance comes first” in all its business operations, the Bank has developed infrastructure to support compliance culture in the workplace. The Bank demonstrates its observance with the laws and regulations in its policies and procedures and relevant business operations. The Bank firmly promotes combating corruption, bribery and fraud and modern slavery in its business operations. It does this by strengthening supervision and internal governance frameworks with primary focus being on risk prevention in all of its manifestations.

BoComAU outlines responsibilities and accountabilities of key employees as required by the regulators. We do this by drawing clearly articulated accountability obligations and accountability maps where accountability is aligned with authorisation. The General Manager receives Power of Attorney from the Head Office to do everything necessary to conduct and operate a banking business in Australia. Said authorisation is then delegated to the senior management team and the department heads ensuring everyone acts within their authorisation and their agreed responsibilities.

Risk of Modern Slavery within Branch Operations and Supply Chains

BoComAU offers banking products and services through its two core frontline business, Corporate Banking and Financial Institutions. The Branch may be exposed to modern slavery risk through its commercial loan and trade refinance portfolio.

BoComAU’s banking business activities are supported by a network of service providers and suppliers. BoComAU’s supply chain provides services for direct banking operations which include domestic and international counterparty banks, correspondent banks, settlement agents and services, rating agencies and platforms, securities and other financial services brokers. Professional services such as legal, audit, consulting and training.

BoComAU’s supply chain also includes goods and services providers such as for office supplies, maintenance and cleaning services, computing and network systems, risk management systems, and payments systems.

The Branch may be exposed to modern slavery risk through the activities of the Branch in purchasing supplies/services from manufacturers/providers of those supplies/services. All relevant service providers and suppliers were reviewed for modern slavery risk under the Third Party Due Diligence Procedures.

Actions taken to Assess, Address and Remediate, Modern Slavery Risks

BoComAU strives to take appropriate actions to prevent or mitigate negative impacts of modern slavery risks such as forced labour and child labour which can potentially arise from our business activities. In 2021, the Branch carried out an end-to-end business risk analysis to identify potential source of modern slavery risk in the business and developed appropriate controls to manage those risks. During the reporting period, the Branch reviewed and refreshed the policies and procedures supporting its modern slavery framework.

Suppliers and Service Providers

BoComAU remains committed to observing very high standards of integrity and efficiency in the conduct of its business. The Branch’s Code of Conduct outlines how it conducts its business and how it treats its clients, employees, suppliers and other third parties it interacts with.

The Branch’s Modern Slavery Policy outlines the framework for identifying, assessing and mitigating modern slavery risk in the business operations. It also outlines the responsibilities of each employee in relation to managing the modern slavery risk posed by the service providers and suppliers to the bank.

The Branch’s Third Party Due Diligence Procedure supports the modern slavery framework. This Procedure details the risk-based due diligence process for third parties who are part of a commercial transaction, including third-party agents and intermediaries, suppliers and other business partners. This process includes Enhanced Due Diligence where required.

Before entering into any third-party relationships, BoComAU carefully assesses the modern slavery risks posed by the third-party relationship by undertaking initial due diligence. These arrangements are reviewed annually or during contracts renewal.

The business unit which proposes to engage a third party is required to gather general and specific information about the third party through the use of a template questionnaire. In addition to the information provided by the third party, the business unit is required to gather information about the third party from independent sources for the purpose of identifying risks and business opportunities. In the context of a commercial transaction, BoComAU gathers information on third parties, such as:

·         consultants, accountants, lawyers, advisors, brokers, freight forwarders, agents, sales representatives, distributors and other representatives;

·         vendors, suppliers, manufacturers, contractors and other service providers; and

·         business partners such as co-investors, joint venture partners and strategic partners.

All material engagement arrangements with a third party must be evidenced by a written, legally binding agreement that includes an obligation to comply with the modern slavery legislation. Senior management approval is required before engaging a material third party supplier or service provider.

 

Customers and counterparties

As required under the AML/CTF laws, BoComAU conducts due diligence on its customers and counterparties. The customer due diligence process includes gathering business and ownership information. The process also includes screening for: reputational risk or adverse information relating to breaches of its obligations or fines, and reprimands from regulatory bodies; involvement in a high risk industry such as cash intensive businesses; and doing business in a high risk jurisdiction known for money laundering, corruption, and poor governance practices. The above information is taken into consideration when allocating a risk rating to the customer. Senior management approval is required before on-boarding a high risk customer or counterparty.

Employees

 

The risk of modern slavery through the Branch’s hiring practice is low. The Branch only hires employees that live and are permitted to work in Australia in accordance with the law. The Branch has local and expatriate employees from the head office.

 

BoComAU is committed to respecting human rights in the workplace and has implemented policies and procedures that comply with local regulations in relation to employment, recruitment and the workplace environment, including;

·         Code of Conduct

·         HR Policy

·         Work Health and Safety Policy

·         Recruitment Procedures

·         Whistleblower Policy and

·         Guidance for Epidemic Prevention

 

During the reporting period, the Branch conducted training for all employees on the modern slavery framework. Throughout the year, the Branch conducted training sessions and other learning activities to promote understanding of expected behavior in the workplace and the importance of respect and professionalism and the prohibition of bullying and harassment. 

Assessing Effectiveness of Actions taken to Prevent/Detect Modern Slavery

The senior management of BoComAU takes the lead in executing the BoCom group’s Corporate and Social Responsibilities (CSR) and Environmental, Social and Governance (ESG) strategy and policies. Senior management periodically reports to Head Office on the status and outcomes of these strategies.

 

BoComAU uses a variety of tools to monitor BoComAU’s activities against a suite of obligations.  Regular and ad-hoc monitoring is done by the Compliance & Legal Department, and results of the monitoring activities are reported to the Branch Risk committee for noting. Any exceptions identified are monitored and tracked until completion.

Impacts of COVID-19

The COVID-19 pandemic continued to impact BoComAU’s business environment including its customers, employees and suppliers throughout the year with the impact weakening compared with prior years. The Branch continued to ensure that its suppliers, especially small businesses, were supported and paid on time.

 

During the reporting period, the Branch also maintained appropriate pandemic measures to ensure the health and safety of employees through continued flexible work arrangements and the provision of protective supplies to all employees.

Process for Consultation

BoComAU does not own or control any entities in the context of the Modern Slavery Act, and thus a process of consultation is not applicable.

Approval

This statement is approved by the principal governing body of Bank of Communications Co., Ltd. Sydney Branch, the Senior Officer Outside Australia on 23 April 2024.