Corporate Social Responsibility

ArmorGroup’s Board regularly reviews those social, environmental and ethical matters that may be of significance to the Group and acknowledges that understanding and continually seeking to improve the Group’s performance in these fields brings benefits to its shareholders, its employees, its clients and its other stakeholders. Many of the Group’s policies on such matters are encompassed in its ISO 9001:2000 accreditation and are subject to biannual audit by an external accrediting body.

The Group’s Chief Administrative Officer has responsibility for social, environmental, ethical, external stakeholder and employee-related issues at Board level with regional and country management having responsibility for the implementation of the Group’s policies in each operating location. There is a well established procedure for reporting deficiencies and concerns and for whistle-blowing to the Chief Administrative Officer or the Senior Independent Director and for ensuring that matters raised are considered and acted upon without delay. The Group is committed to being a socially responsible corporate citizen and, as such, subscribes to the principles of corporate social responsibility and the following summarises the initiatives and plans in the following key areas:

• Relations with employees;
• Health and Safety;
• Impact on society;
• Impact on the environment;
• Relations with suppliers and partners; and
• Relations with customers

Relations with Employees

ArmorGroup places great value in the welfare and commitment of its 9,000 employees as well as in the expertise they provide its clients. The importance placed on the treatment of its employees, and their families in the case of serious incidents, is manifested through a comprehensive Human Resource function in the UK and the US, overseen by the Group’s Chief Administrative Officer. This features:

• Liaison officers in Nepal, India and Fiji for the recruitment and welfare of its 800 employees from those countries;
• A Welfare officer, based in London, to provide full-time support to sick and injured employees and their families; and
• Comprehensive insurance programmes which respond to injured, or disabled employees.

The Group’s employees work in many of the world’s most hostile environments afflicted by war, terrorism, collapsed infrastructure or the remoteness of their location. ArmorGroup works hard to ensure its employees are as well protected and cared for as possible to carry out the task they are employed to do. Examples of recent initiatives are:

• Investing $4 million in building a high security base in Kabul and an effective communications and logistics infrastructure across Afghanistan;
• Providing a satellite tracking system, linked to local and regional 24/7 response centres in case of emergency, for ArmorGroup vehicles in Iraq, Afghanistan and Nigeria; and
• Providing comprehensive protective equipment for its convoy security teams in Iraq, including vehicles armoured to a minimum B6 level, body armour, helmets and fire resistant suits.

Where employees suffer injury or work-related sickness and are unable to work to normal capacity then the Group retains them on payroll and co-ordinates medical care, including psychiatric assessment where appropriate, until such time as the casualty is certified fit to return to full-time service, or is certified disabled and receives contractual disability payments.

Communication and consultation with employees takes place on a wide range of issues. The senior management team offers an open door approach to employees. Similarly, it is policy to copy the widest circle of involved employees when transmitting by e-mail, to produce a culture of responsibility through involvement.

There are also a wide range of further channels for communications including: newsletters; executive management briefings and meetings; and regular management and daily team briefings at a regional and local level.

The Group complies with local employment legislation wherever it operates and also issues the following formal guidance to employees on the payroll:

• Code of Conduct; within a Staff Handbook specifically designed for and issued to all employees serving outside the UK and US which lays down strict conditions for compliance with host nation laws, respect for local culture, for the issue/use of firearms, and for the prohibition of any offensive action. The Group commits to assisting host nations investigate any breach of the law and commits to assisting international war crimes investigators.
• Staff Handbook; issued to all full-time employees in the UK offices and distributed to regional offices for local interpretation within the spirit of the Handbook. This lays down contractual/non-contractual conditions of service including sections on employee personal behaviour, health and safety, welfare, equal opportunities, disciplinary and grievance procedures and ‘whistle-blowing’ practice.

Employees are encouraged to own shares in the Group and the Group operates a Share Option Scheme and a Performance Share Plan by which to incentivise and reward committed employees.

The Group is an equal opportunities employer, and its policies ensure that it will consider persons for employment on the basis of their merit and suitability for each vacancy, regardless of nationality, race, religion, age, gender, or disability, provided that their nationality, race, religion, age, gender, or disability will not place employees in unnecessary and foreseeable danger, after taking into due consideration the risk factors inherent in the Group’s business.

Health and Safety

It is the Group’s policy to promote safety at work and to seek the co-operation of employees for that purpose. In the furtherance of this policy the Board has appointed a Health and Safety Advisor and requires that he:

• Promotes Health and Safety during the planning of corporate projects, including the procurement of equipment, their installation and use;
• Provides an accident reporting register, first aid equipment and trained first aiders, fire fighting equipment and trained fire wardens and ensures that employees know how to access these facilities; and
• Ensures that reports from employees relating to Health and Safety are recorded, considered and acted upon without delay.

The Group’s operations provide ongoing Health and Safety training to relevant staff and managers and it seeks to share best practice around the Group and the many diverse locations in which it operates. The Group launched a new safety programme in December 2006, since rolled out to global management. This initiative will tighten incident reporting mechanisms and will produce improved incident data, from which lessons can be learned, to further reduce the likelihood of accidents occurring.

Impact on society

The Group has a positive impact on the communities within which it operates because without the benefit of ArmorGroup’s protective security services the humanitarian, reconstruction and commercial activities carried out by the Group’s extensive client base would be unfeasible. ArmorGroup helps to create the space and stability within which aid, economic recovery and development of infrastructure can thrive.

The Group has a stringent ethics procedure in place to ensure its employees act at all times within the relevant international and local legal and humanitarian frameworks. ArmorGroup adheres to a number of international codes of conduct covering the behaviour of the Group and its employees globally, including:

• Universal Declaration of Human Rights, 1948;
• Code of Conduct of the International Red Cross and Red Crescent, 1994;
• US Foreign and Corrupt Practices Act, 1997;
• UK/US Government’s Voluntary Principles on Security and Human Rights, 2000; and
• UK Anti-terrorism, Crime and Security Act, 2001.

The Group also uses source documents, as outlined in the Group Procedures Manual, to drive its Quality Management System, which is certified to ISO 9001:2000 and ISO 27001:2005.

The Group has published a detailed policy document laying down its standards for the use of firearms and application of deadly force to ensure that its approach remains transparent and its actions accountable in an increasingly violent world. The Group will complement this development in 2007 with a bespoke training package for employees in the law of armed conflict, to ensure that its employees fully comprehend the implications of their actions and the Group’s determination to abide by International Humanitarian Law.

As a matter of policy ArmorGroup engages with government, humanitarian, academic and media organisations on the issues surrounding the private security industry and is a driving force in efforts to regulate the industry:

• Providing advice to government regulatory initiatives in the UK, US, Belgium and Switzerland;
• Advising academics and international humanitarian organisations on the development of global Standard Operating Procedures;
• Developing and disseminating, in September 2004, the PSC industry’s first paper calling on the UK Government for regulation of the industry ; and
• Funding and intellectual support to the establishment of the (UK) British Association of Private Security Companies, the (US) International Peace Operations Association and equivalents in Afghanistan and Iraq.

The Weapons Reduction and Mine Clearance division has the most obvious impact on society in that it is one the world’s largest providers of environmental remediation from landmine and unexploded ordnance (UXO) pollution through battlefield clearance and the control of conventional weapons. It operates globally, supporting sustainable humanitarian and reconstruction programmes to remove the menace of landmines, thereby assisting clients and communities to live and work safely in post-conflict environments.

Over the last 10 years ArmorGroup teams have reduced mine and UXO pollution in 20 different countries, destroying over 12 million items of unexploded ordnance and removing over 170,000 land mines.

ArmorGroup’s approach to mine action also encompasses the need to build sustainable local and national capacity through comprehensive education, training, supervision and management. The Group strives to achieve local interaction in support of affected communities and for results which enable those communities to more fully use their environment.

The Group’s training division has also had a lasting impact on the communities in which it operates, leaving a legacy of better qualified and trained students in over 160 countries over the last 15 years. ArmorGroup has also been involved in many programmes which have improved the skills of those it has trained and improved their communities, including:

• Technical training for Afghanistan’s counter-narcotics police;
• Driver awareness training for local adolescents living near its Virginia training facility; and
• Training of Ugandan employees in the handling and management of Explosive Detection dogs, enabling them to use these skills overseas.

ArmorGroup interacts with local communities in the majority of locations at which it operates and has a progressive policy of working closely with them, with particular focus on providing employment opportunities. The Group places great emphasis on its people, investing heavily in training and personal development, as well as reviewing the impact of operations on local communities. It works hard to ensure that its employees, its clients and the local communities work in partnership to better achieve security and to improve local conditions.

The Group has established a number of medical centres at its field sites to improve the well-being of employees and local contractors, which are also used by the local community and provide education, examination, and treatment where appropriate. Other examples of its work within communities include:

• Mentoring police in the Basra and Muthanna provinces of Iraq, including supporting the building of the country’s first juvenile detention centre and the creation of its first national forensics department; and
• Supporting the professional education of promising students from Afghanistan and Iraq at ArmorGroup’s training facilities in the UK.

Environmental impact

The Group considers its responsibility to preserve the environment to be of utmost importance and hence it is the Group’s policy, wherever it conducts activities and business, to ensure that procedures are identified to give proper regard to the conservation of the environment.

The nature of the Group’s protective security business, however, means that its activities will be influenced, and often constrained, by the attitude and environmental policies adopted by its clients since the majority of these Group activities are carried out at client sites and premises using clients’ vehicles and equipment. In the light of this, the Group does not review and report against an environmental plan of its own, but its stated environmental policy does reinforce a commitment to promote environmentally friendly practices, co-operate with and support the efforts of environmental organisations, and to assess the environmental impact of materials that are used in the Group’s business.

Where the Group has control over its facilities, however, it can and does have a more proactive stance: for example, its US training business operates an Environmental Management System which conforms to ISO 14001. The Group also has an ongoing remediation programme, introduced in 2004, to dispose of the metals from the bullets expended on its firing ranges which could potentially pollute the land if not extracted on a regular basis. The Group introduced a systematic process to filter the sand berms and arranges for the lead to be disposed of by a registered chemicals disposal company.

In 2005, approximately 20 tons of lead was removed from the Group’s facility in Virginia and in 2006 approximately 4.5 tons of lead from the facility in Texas. The Group carries out monthly self-testing and recording of ph levels in the berms and also has an annual third party assessment.

The Group’s Weapons Reduction and Mine Clearance division, which is involved in the clearance and disposal of unexploded ordnance and discarded weaponry, adheres to the environmental policies laid down in national and International Mine Action Standards.

The Group has a stated formal waste disposal, energy economy and recycling policy which include procedures for the recycling of: waste fuels and lubricants; tyres; batteries; and computers, printer toner cartridges and other similar consumables.

The Group is dedicated to strict compliance with all relevant environmental legislation and regulations and ordinances governing pollution, as well as specific client requirements. In such cases where environmental reviews are needed and where the Group does not have the necessary specialist expertise itself, it seeks appropriate external specialist advice as is the case at its training facilities.

The Board reviews its environmental policy, impact, and subsequent findings at least every 12 months and in response to recent pronouncements on climate change is drawing up revised policy to minimise its environmental impact and to encourage, where this might be appropriate, its clients and suppliers to do likewise.

Relations with Suppliers, Partners and Contractors

ArmorGroup has a relatively small number of suppliers as many of its vehicles and other specialist equipment are supplied by its clients. However, the Group works hard to ensure its suppliers are credible, reputable and reliable and continues to ensure suppliers conform to the high standards required by the Group, its employees and its clients. It works primarily with major international suppliers, with its relationships coordinated through its Logistics manager based in London.

ArmorGroup works closely with local partners to support its activities. Many of the Group’s carefully selected and fully vetted partners have had relationships with the Group for many years and so are able to market the full range of security services offered.

Before entering into any formal or informal partnerships with individuals or companies the Group carries out a comprehensive due diligence process to ensure that the potential partner has no reputational or ethical issues. ArmorGroup has dismissed partners whose conduct fails to meet the Group’s code of ethics.

An enhanced policy on “whistle-blowing” was launched in 2006 to remind Group managers of the Group’s active opposition to corruption and bad practices and to encourage them to report instances, with the comfort of knowing that they are afforded suitable protection when doing so.

Relations with Customers

ArmorGroup is particularly careful about the manner by which it relates to the customers it serves, due to the significant ethical and reputational issues involved in its industry, and its stance towards them is detailed in its Ethics Policy. The level of care is such that executives will consider the ethics of business they secure or accept with the same degree that they consider the profitability of a given piece of business; the sole difference being that the Group may provide a service with limited profitability in certain circumstances but will never knowingly provide an unethical service, or even an ethical service to an unethical customer.

Customer relationships are critical to the success of ArmorGroup’s operations and, as such, its on-site security managers and country management are responsible for daily liaison with customers. However, to provide an additional layer of customer satisfaction the Group plans and implements quality measurement and monitoring activities on all contracts. These regular operational audits assure uniformity and excellence of service and recommend improvement if and when required.

ArmorGroup conducts on-going measurement and monitoring of contract activities including: analysis of client complaints; contract non-compliance; inspection reports; and results of internal audits. ArmorGroup also conducts quality inspection activities at all stages of an operation and maintain records of such inspections.