Annual Report 2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT (CONTINUED) China Merchants China Direct Investments Limited Annual Report 2021 82 SOCIAL RESPONSIBILITY (CONTINUED) Prevention of Child and Forced Labour It is prohibited by the Investment Manager to employ any child or forced labour in the operations and services. To avoid victimisation in the workplace, sound and effective human resource procedures are in place to conduct prudent due diligence on employees’ backgrounds to ensure the compliance with labour laws and regulations. The human resource procedures are regularly reviewed in response to the change in regulatory requirements and market trends. The Investment Manager has no tolerance to the employment of child and forced labour, and should such violation is discovered, responsible person will be subjected to internal disciplinary actions or handled by authorities when deemed suitable. During the Reporting Period, there were no cases of non-compliance noted in relation to relevant laws and regulations regarding child and forced labour, including but not limited to Employment Ordinance (Cap. 57, Law of Hong Kong). Supply Chain Management The Company and the Investment Manager mainly engage with professional service providers for service such as risk advisory, business consulting and legal advisory. A transparent and fair procurement procedure is in place for selecting our professional service providers. All professional service providers are selected on a competitive basis and critical factors are taken into account. Such factors include, but not limited to, reputation, price, integrity and competence. The quality of their service is closely monitored to ensure that the service provided is in accordance with agreed contractual terms. The staff is trained to enact with reference to the procurement procedures to make sure that proper internal controls are well in place. Ethical standards and our ESG policy are taken into consideration when it comes to service provider selections. The Company and the Investment Manager will avoid those service providers who are publicly known to have significant ESG non-compliances. With this practice, we believe the environmental social risks of our supply chain are properly managed and are kept to minimal. Feedbacks are provided regarding their ESG performance whenever it is possible and suitable. The service providers are closely monitored and we reserve the right to review their ESG policies and procedures and their ESG regulation compliance evidence. We also encourage our service providers: ‧ complying with our anti-fraud policies; ‧ respecting employees’ right and equal opportunity; and ‧ integrating sustainability principles into business operations.