Labour Standards and
Human Rights

Pearson is a global company with 33,000 people, a network of suppliers and operations in more than 60 countries. We want Pearson to be known as a company that is brave, imaginative and decent all around the world. To help guide us, we have our Code of Business Conduct, which spells out our basic standards for conduct in Pearson and what we expect of anyone connected with our company - employees, suppliers and partners. We know that rules can't tell us how to behave but we think this is a good starting point. You can download the code at www.pearson.com/community/codeofconduct.htm.

We are also guided by the Global Compact's ten principles on labour standards, human rights, business ethics and the environment. Pearson became a founding signatory to the Global Compact at the United Nations in 2000 and we continue to be actively involved through our membership of the Advisory Committee.

Our business

We have applied the Global Compact to our own business and created our own set of guidelines on labour standards and human rights which we use to assess and report on our performance. These guidelines are:

• Diversity: We offer equal employment opportunities to all. The people we recruit and promote are selected on merit and suitability, and are not discriminated against because of gender, race, origin, background, religion, marital status, sexual orientation, disability or age.
   
• Employment Conditions: We comply with the relevant laws relating to employment and employment conditions in each country where we operate. We remain committed where such laws are lacking, to introduce our own guidelines. Subject to relevant laws in the countries where we operate, we fully respect the right of our people to freedom of association and representation either through trades unions, works councils, or any other appropriate forum.
   
• Workplace Violence: We are satisfied that we have systems in place to deal with physical and verbal abuse, or the threat of it, and any other form of intimidation within our workforce.
   
• Exploitation of Labour: We recognise that labour standards and conditions may vary from country to country. Pearson companies conduct business in many of the poorer countries of the world where living standards are low. Where Pearson companies directly control their activities in a country, we ensure that our people have satisfactory wages and working conditions, and that there is no exploitation of labour. Working terms take account of local economies.
   
• Human Rights: Pearson companies and people operate globally. Our products are produced and manufactured across the world and sold in many countries, often by companies we do not own which are operating on our behalf. In the course of conducting business in "high risk areas", we are committed to ensuring that we are not complicit in human rights abuses and continue to monitor this. If we were to find ourselves inadvertently implicated in abuses of human rights, we would take immediate steps to rectify such a situation.

In 2001, with the assistance of independent consultants, we put in place a procedure to assess our performance against these guidelines. We carry out an annual survey among our Human Resources professionals focusing on these guidelines. The 2004 survey covered 92 business operations in 45 countries. Together, these business operations surveyed employ 31,349 people out of a current universe of 33,000 employees. This represents 95% of all Pearson employees. The survey report can be found at www.pearson.com/community/progresscommunication.htm.

Based on this report, employee feedback to our Code of Business Conduct and our social, environmental and ethical risk assessment processes confirm that we have continued to meet the guidelines we have set ourselves.

Our Suppliers

Pearson spends around £2billion each year with our suppliers. Our most significant categories of supply are:

• Paper
• Production, primarily printing, and
• Distribution

The majority of our suppliers are located in North America and in Western Europe. However, some of our suppliers, particularly those providing print and production services are based in less developed countries. As our Code of Business Conduct and adherence to the UN Global Compact imply, we have certain principles we expect of all our suppliers wherever they are in the world. This is what we are doing to help ensure these standards are being maintained:

• Writing to many thousands of our suppliers to advise them of our commitment to the Global Compact.
   
• Introducing specific contractual commitments relating to labour standards and human rights into our key contracts, particularly those relating to paper supply, printing and distribution.
   
• Introducing a programme of supplier visits to assess supplier compliance with the Global Compact.
   
• Working with the UK book publishing industry to introduce common standards on labour standards and human rights.

We set a number of business targets in this area for 2004. Here is how we performed against them:

Business targets:

Target	£Performance
To ensure over 75% of our key printing contracts contain clauses relating to labour standards & human rights	Achieved
To extend our programme of in-depth supplier visits to assess compliance with the Global Compact to a further 3 countries	Achieved (Malaysia, Singapore & Australia)
To carry out a series of briefings to our global purchasing and production teams to explain their responsibilities on labour standards and human rights	Achieved
To work with the UK book publishing industry to agree common standards on labour standards and human rights.	Achieved

For 2005, our targets in this area are:

• To pilot an initial survey on labour standards and human rights issues for completion by potential new suppliers.
   
• To carry out an in-depth programme of supplier visits in India focusing on labour standards and human rights issues.
   
• To include a review of labour standards and human rights issues into commercial supplier visits conducted by members of the purchasing and production teams.
   
• To review with the heads of purchasing and production opportunities for further improving how their teams are involved in reviewing performance of suppliers against the Global Compact.
   
• To continue to work with the UK book publishing industry to promote the common standards on labour standards and human rights with suppliers.

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