Voluntary Tax Transparency Code Report

 

Introduction

Kubota Australia Pty Ltd (Kubota Australia) is Australia’s leading supplier of agriculture, construction and power equipment, operating in Australia for over 40 years. It is part of the global Kubota Group of companies.

Since its foundation in 1890, the Kubota Group has delivered a variety of products that contribute to people’s lives and society, including iron water pipes for the development of modern waterworks, and agricultural machinery to increase food production and save labour. Today, the world faces many challenges in the areas of food, water and the environment, which are indispensable for human beings. The Kubota Group believes that its mission is to comprehensively solve the problems of food, water and the environment through its superior products, technologies and services, thereby continuing to support the future of the earth and humanity.

This report provides an overview of Kubota Australia’s tax strategy, governance and tax contributions made to Australian State and Commonwealth governments. The information provided in this Report is released on a voluntary basis in accordance with the recommendations and guidelines contained in the Board of Taxation’s Voluntary Tax Transparency Code (the Code).

Kubota Australia has chosen to voluntarily disclose this information, which is consistent with the Australian Government’s efforts to promote tax transparency. Kubota Australia has made this commitment to transparency because it believes it is important that companies help build trust in society by being transparent about how and where they pay taxes.

John O’Reilly

General Manager Finance and Administration

Kubota Australia Pty Ltd

_______________________________________________________________________________________

Part A Disclosures

The Part A Disclosures required of Kubota Australia by the Code are:

  • a reconciliation of the accounting profit to income tax expense;
  • a reconciliation from income tax expense to current year income tax payable; and
  • Kubota Australia and Kubota Group’s effective tax rates.

Kubota Australia published its tax disclosures in Note 13 of its 2020 and 2019 Financial Report’s. The tax reconciliations in Note 13 form the basis of Kubota Australia’ Part A disclosures for the Code (particularly reflected in response to question 1 below).

 

1. Reconciliation of accounting profit to income tax expense

Reconciliation of accounting profit to income tax expense
31 Dec 2020
AUD
$000
31 Dec 2019
AUD
$000
Profit before income tax
36,077
22,493
Tax at the Australian tax rate of 30%
10,823
6,748
Increase/ (decrease) in income tax expense due to:
- Entertainment and subscriptions (permanent non-deductible expenses)
(29)
94
- Adjustment for Transfer Pricing Advanced Pricing Arrangement
nil
nil
(Tax credits)/ (rebates)/ (offsets)
nil
nil
Under/Overs - Adjustment to prior year for provisions
(14)
22
Income tax expense
10,780
6,864

 

2. Reconciliation from income tax expense to current year income tax payable

Reconciliation from income tax expense to current year income tax payable
31 Dec 2020
AUD
$000
31 Dec 2019
AUD
$000
Income tax expense
10,780
6,864
Movements in temporary differences
2,113
(517)
Adjustment for permanent differences
nil
nil
Adjustment for Transfer Pricing Advanced Pricing Arrangement
nil
nil
Adjustment to prior year under/ overs for provisions
14
(22)
Income tax paid
12,907
6,325

Income tax expense is different to income tax payable, as income tax expense (an accounting concept) reflects amounts of accounting income which are assessable for tax / amounts of accounting expenditure which are deductible for tax, irrespective of when that assessment or deduction arises. Income tax payable reflects amounts which are assessable or deductible in the current year, which does not always align with the timing for these amounts being recognised in the income statement.

 

3. Accounting effective company tax rates for Kubota Australia and Kubota Group

Effective tax rates
31 Dec 2020
(%)
31 Dec 2019
(%)
Kubota Australian ETR
29.88
30.51
Kubota Group ETR
22.61
25.36

The above effective tax rates (ETRs) have been calculated as income tax expense divided by accounting profit for the Australian Kubota accounting consolidated group and the global Kubota accounting consolidated group.

The 2020 and 2019 Australian ETRs are 29.88% and 30.51% respectively. This reflects the impact of permanent adjustments in respect of non-deductible entertainment and subscriptions which increase the ETR above the headline Australian income tax rate of 30%.

_______________________________________________________________________________________

PART B Disclosures

Part B of the Code prescribes minimum disclosure standards in relation to Kubota Australia’s:

  • tax policy, strategy and governance;
  • total tax contributions;
  • international related party dealings.

 

4. Approach to tax strategy and governance

Kubota Australia is committed to achieving the highest standards in the areas of corporate governance and business conduct and its tax responsibilities are in line with this commitment. Kubota Australia has established a group Tax Governance Framework governing its tax strategy, which was reviewed and approved by the Board in 2017. The Board meeting scheduled for December 2021 will review and approve the updated version since 2017. It strongly believes in tax governance and has taken various actions to ensure that it follows best practice both on governance and transactional data.

Actions taken by Kubota Australia on “best practice” tax governance

  • A Tax Governance Framework document has been prepared and endorsed by the Board and is operational across Kubota Australia. The responsibilities imposed under the framework are carried out by experienced professionals who also draw on the use of external advisors.
  • Kubota Australia has implemented appropriate internal controls at a Board and managerial level in relation to the identification and management of tax risk, and a framework for escalation of tax matters from business units to the Kubota Australia Board as necessary.
  • Kubota Australia has engaged external advisors to undertake separate corporate income tax, GST and Fringe Benefits Tax operational assessments. The results of these assessments indicated that Kubota Australia operates within a robust, clearly defined control environment.
  • Kubota Australia dedicates appropriate resources to managing its tax obligations, and has always been able to meet ATO compliance obligations and requests within the timeframes granted. The ATO has previously rated Kubota Australia as a low risk taxpayer under its risk-categorisation framework.

 

5. Total tax contribution summary

The table below provides an overview of all the Australian Federal and State taxes paid and collected by Kubota Australia Pty Ltd in the 31 December  2020 income year (with comparatives to the 31 December  2019 and 31 December  2018 years).

Tax Contribution Summary
31 Dec 2018
%000
31 Dec 2019
$000
31 Dec 2020
%000
Income tax
13,732
6,31013,200
Fringe Benefits Tax
160
295259
Insurance duties - Workcover
153
174123
Customs duties
715
682807
Land Tax
50
5390
Payroll tax
757
806918
Local property tax
78
9697
GST (net of recoveries)
36,158
31,76740,037
Superannuation guarantee charge
1,428
1,5181,678

 

6. Information about international related party dealings

Kubota Australia Pty Ltd engages in various dealings with international related parties. Kubota Australia discloses these dealings at Note 31 of its Financial Report. Material dealings during the year included:

  • Purchases of goods from related parties located in Japan, Korea, Thailand, United States of America, Germany, France, Norway and Spain.
  • Payment of a fee for management services received from a related party in Japan.
  • Kubota Australia established a New Zealand subsidiary in 2019. Kubota Australia raised a fee for Management services in support of New Zealand operations.

Kubota Australia Pty Ltd and its related parties regularly review their transfer pricing policies to ensure their international related party dealings are conducted in accordance with the arm’s length principle.

 

7. ATO public tax transparency disclosures

Australia’s public tax transparency laws require the ATO to publish specific tax return information of public companies and foreign-owned companies with total income of $100 million or more, and Australian-owned private companies with total income of $200 million or more.

The ATO published data for the  2018-19 income year in September 2021 This would have included the following information in relation to Kubota Australia Pty Ltd based on its lodged income tax return for the year ended 31 December 2020:

Total income
$502,592,777
Taxable income
$43,999,664
Tax payable
$13,199,899

 

Supplier Code of Conduct

This code of conduct applies to all businesses that provide products or services for Kubota Australia Pty Ltd (Kubota Australia) and its subsidiaries, joint ventures, divisions, or affiliates. Kubota Australia requires suppliers and their employees to commit to this code of conduct as a condition of doing business

Kubota Australia suppliers must comply with the laws, rules, regulations, and Kubota Australia policies of the countries and locations in which they operate. They are expected to be familiar with the business practices of their suppliers and subcontractors, and ensure they operate according to this code of conduct. Kubota Australia may discontinue its relationship with suppliers who fail to comply with this code.

Social Responsibilities

Labour and human rights

Suppliers are expected to provide a fair and ethical workplace, maintaining high standards of human rights, with appropriate labour and human rights policies and practices in place

At Kubota Australia, we pride ourselves on providing an equal employment and gender equality workplace and expect our Suppliers not to discriminate against any employee based on age, disability, ethnicity, gender, marital status, political affiliation, race, religion, sexual orientation, gender identity, union membership, or any other status protected by law, in hiring and other employment practices. Consistent with the Workplace Gender Equality Act 2012, suppliers are expected to proactively support gender equality initiatives. Kubota Australia strives to promote and influence improvements in gender equality across its Supply Chain through procurement policies and practices. Kubota Australia also encourages Suppliers to explore opportunities to engage Aboriginal and Torres Strait Islander businesses in their supply chain.

Suppliers are expected not to bully or threaten employees or subject them to unlawful or inhumane treatment. This includes, but is not limited to, abuse and harassment which can be verbal, physical, sexual, or psychological. Consistent with The Modern Slavery Act 2018, suppliers are expected to proactively identify, address and where required by legislation, report on risks of modern slavery practices in their business operations and supply chains. You can read more in our Modern Slavery Statement.

Suppliers should take reasonable endeavours to ensure that any third-party labour agency it may use to fulfil services to Kubota Australia, is compliant with The Modern Slavery Act 2018[1], including payments, recruitment related fees and expenses in recruiting foreign contract workers.

All relevant Suppliers involved in the labour hire sector must hold a license under this scheme before Kubota Australia can engage their services. Please refer to the Victorian Labour Hire Authority , for more information.

Suppliers are expected to freely allow employees to associate with others, form and join (or refrain from joining) industrial organizations or associations of their choice and bargain collectively, or engage in any lawful industrial activity without interference, discrimination, retaliation or harassment.

Suppliers must abide by The Privacy Act 1988, which regulates the treatment of personal information about individuals. This includes the collection, storage, and disclosure of personal information about individuals.

Health and Safety

Suppliers are expected to provide a healthy and safe work environment, with comprehensive health and safety management practices in place.

Suppliers with employees who need to enter a Kubota Australia premises must ensure those employees meet any applicable requirements (e.g.: current police check) and be able to provide verified evidence.

Suppliers must comply with all other applicable laws relating to workplace health and safety and provide their employees with job-related training and consult with employees in relation to the provision of information and training.

Environmental Responsibilities

Suppliers are expected to conduct their operations in a way that minimizes the impact on natural resources and protects the environment, customers, and employees. They must ensure their operations comply with all applicable laws related to air emissions, water discharges, toxic substances, and hazardous waste disposal. Throughout the world, laws and regulations prohibit or restrict certain substances and/or require manufacturers and suppliers to provide information about restricted substances in their products. Suppliers must, therefore, comply with the Kubota Group’s environmental charter and when requested by Kubota Australia, provide regulatory compliance declarations for identified products.

Ethical Expectations

Ethics, Gifts and Gratuities

Suppliers must not offer gifts to Kubota Australia employees. This includes gifts of nominal value. Although giving gifts is acceptable in some cultures, Kubota Australia requests that suppliers respect its policy of not accepting gifts.

Improper Payments

Bribes, kickbacks, and similar payments are strictly prohibited. This ban applies even when local laws may permit such activity. Employees, suppliers, and agents acting on behalf of Kubota Australia are strictly prohibited from accepting or giving such considerations under any circumstances. Suppliers must, therefore, comply with the Kubota Australia’s Anti-bribery policy

Confidential Information

Proper management of confidential information is critical to the success of both Kubota Australia and suppliers. Suppliers must protect all Kubota Australia information, electronic data, and intellectual property or Kubota Australia technologies with appropriate safeguards. Any transfer of confidential information must be executed in a way that secures and protects the intellectual property rights of Kubota Australia and its suppliers. Suppliers may receive our confidential information only as authorized by a confidentiality or non-disclosure agreement and must comply with their obligations to not disclose the confidential information, to not use the information except as permitted by the agreement, and to protect the information from misuse or unauthorized disclosure. Our suppliers can expect Kubota Australia to similarly safeguard their confidential information when authorization is provided to Kubota Australia. Suppliers may not use the Kubota Australia trademark, images, or other materials to which Kubota Australia owns the copyright, unless explicitly authorized.

Supplier Management System

Suppliers are expected to have a management system that ensures they comply with applicable laws, regulations, and Kubota Australia policies, conform to this Supplier Code of Conduct, and identify and reduce operational risks related to this code. The system should also promote continuous improvement and compliance with changing laws and regulations.

Supply Chain Transparency

Supply chain transparency is required to confirm compliance to this code of conduct. To monitor this, Kubota Australia’s Compliance Officer will request documentation, conduct onsite audits, review, and approve corrective action plans, and verify implementation of corrective action.

Communication

Suppliers are expected to assist Kubota Australia in enforcing this Supplier Code of Conduct by communicating its principles to their supervisors, employees, and suppliers.

Corrective Action

Kubota Australia will address confirmed Supplier Code of Conduct non-compliance and Actions may include but not be limited to any of following:

  • Require a supplier to implement behaviour change and confirm implementation in writing
  • Require a supplier to implement behaviour change and provide evidence of this either in writing or via an on-site inspection by Kubota Australia representatives
  • Require specific action to be taken by a supplier and evidenced by a specified date
  • Terminate a contract

Contact Information

Any supplier may direct questions or comments about this code of conduct to his/her Supply Management representative or Kubota Australia’s Compliance Officer.

Non-Compliance Reporting

Violations of the Kubota Australia Supplier Code of Conduct can be reported confidentially via any of the following ways:

Telephone: 1300 582 582

Website: https://kubota.com.au/our-company/contact/

Mail: Compliance Officer 25 – 29 Permas Way Truganina VIC 3029 Australia

 

Anti-bribery Policy

Purpose

Kubota Australia Pty Ltd is committed to complying with the laws and regulations of the countries in which its businesses operate and acting in an ethical manner, consistent with the principles of honesty, integrity, fairness, and respect. Bribery and the related improper conduct referred to in this policy are serious criminal offences for both the company and any individuals involved. They are also inconsistent with Kubota Australia’s values. Laws prohibiting the types of improper payments covered by this policy apply in all the countries in which Kubota Australia has operations or engages in trading activities. Many laws, such as the Australian Criminal Code, the US Foreign Corrupt Practices Act and the UK Bribery Act, have application at home and abroad. The purpose of this policy is to:

(a) set out the responsibilities of directors, employees of Kubota Australia and its subsidiary companies, suppliers and agents acting on behalf of Kubota Australia in observing and upholding the prohibition on bribery and related improper conduct.

(b) provide information and guidance on how to recognize and deal with instances of bribery.

This policy applies to all directors, employees of Kubota Australia and its subsidiary companies, suppliers and agents acting on behalf of Kubota Australia

Definition of Terms

“Bribe Offering” shall mean an act of offering, or proposing or promising to offer, money or another kind of benefit (“Bribes”) to a Public Official or a private individual citizen, in pursuit of unjust operational profits.

“Bribe Acceptance” shall mean an act of accepting, or a demand or promise to accept, a Bribe.

Some indications of Bribery that may arise during working for or providing services to the Kubota Australia and its subsidiaries could include

A party insisting on receiving a commission or fee payment before committing to sign up to a contract with Kubota Australia and its subsidiaries

A party requesting payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made.

A party requesting that payment is made to a country or geographic location different from where the party resides or conducts business.

A party requesting an unexpected additional fee or commission to facilitate a service.

A party demanding lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services.

A party requesting that a payment is made to overlook potential legal violations.

A party insisting on the use of side letters or refusing to put terms agreed in writing.

Above events are not intended to be exhaustive.

“Public Official” shall mean any of the following persons:

a public official of a government or a municipal government

an official of an association established by a government or a municipal government

an official of an organization de facto controlled by a government or a municipal government

an officer or staff of a public international organization

an officer or staff of a political party

a candidate for public office

a person acting in place of the persons described above to do government affairs

Policy

Directors, employees of Kubota Australia and its subsidiary companies, suppliers and agents acting on behalf of Kubota Australia must:

(a) understand and comply with this policy

(b) not give, offer, accept, or request bribes, facilitation payments, secret commissions or other prohibited payments or engage in money laundering or cause any of them to be given, offered, accepted, or requested

(c) not approve any offers, or make, accept, or request an irregular payment or other thing of value, to win business or influence a business decision in favor of the Kubota Australia and its subsidiaries

(d) comply with any reporting and approval processes for gifts, entertainment, or hospitality

(e) not offer or receive any gifts, entertainment, or hospitality to or from public officials outside policy

(f) obtain required approvals for donations and sponsorship

(g) maintain accurate records of dealings with third parties

(h) be vigilant and report any breaches of, or suspicious behaviour related to, this policy

 

Directors and employees of Kubota Australia and its subsidiary companies:

Must not receive any gifts, entertainment, or hospitality from any party including suppliers and agents acting on behalf of Kubota Australia outside the KAU Conflict of Interest policy.

Maintain accurate records

(a) All accounts, invoices and other documents and records relating to dealings with third parties (including due diligence reports), must be prepared and maintained with strict accuracy and completeness. No accounts may be kept “off the books” to facilitate or conceal improper payments.

(b) Internal control systems and procedures adopted to comply with this policy will be the subject of regular internal compliance reviews by the Compliance Officer to provide assurance that they are effective in mitigating the risk of non-compliance

Reporting Breaches

Directors, employees of Kubota Australia and its subsidiary companies, suppliers and agents acting on behalf of Kubota Australia must report any breaches of, or suspicious conduct in relation to, this policy.

Reports should be made:

in accordance with the Kubota Australia’s whistleblower policy.

Consequences of a Breach

A breach of this policy by directors, employees of Kubota Australia and its subsidiary companies, suppliers and agents acting on behalf of Kubota Australia may be regarded as serious misconduct, leading to disciplinary action, which may include termination of employment or contractual agreements.

Breach of this policy may also expose an individual to criminal and civil liability and could result in imprisonment or in the imposition of a significant financial penalty

 

Whistleblower Complaint Process

 

About whistleblowing

In accordance with Australian law, a team member, former team member and their relatives, dependents, spouse or associates and suppliers may make a whistleblowing complaint with legal protection.

Making a Whistleblowing complaint is a way to report, and bring to the attention of Kubota, actual or suspected serous wrongdoing.
It is important to note that any party may make a report to appropriate authorities at any time where they feel they have reasonable grounds and do so in good faith.

Kubota strongly encourage the making of whistleblowing complaints to ensure we live our shared values and possess a safe and compliant company culture which will ensure our reputation and standing within in the markets and communities in which we operate.

What to report

As a person external to our business, should you have reasonable grounds or belief to suspect that misconduct has occurred, or that an improper state of affairs or circumstances exist within Kubota Australia you may choose to make a report. The subject of any report may include current or former team members (including employees and contractors), officers or Board members of Kubota Australia.

Misconduct may include, but is not limited to:

  • Breach of specific legislation
  • Dishonest, corrupt, or illegal activities
  • Serious breach of Policies and Procedures, including serious risks to health and safety
  • Fraud, theft, money laundering or misappropriation
  • Offering or accepting a bribe
  • Damage or sabotage
  • Harassment including sexual harassment, discrimination, bullying or victimization
  • Instruction to cover up or attempt to cover up serious wrongdoing
  • Engage in conduct that is likely to contribute to, or is likely to be considered as, a form of Modern Slavery

Protections

Kubota Australia shall apply principles of procedural fairness and natural justice to the conduct of any investigation and resultant findings arising under our Whistleblower Protection Policy and relevant laws.

A whistleblower’s identity, or any information likely to lead to the identification of the whistleblower must be kept confidential and not disclosed. The only exceptions are where:

  • the identity of the whistleblower is disclosed with the consent of the Whistleblower, is provided to ASIC, APRA or the AFP, or is given to a lawyer in order to obtain legal advice or representation; and
  • information likely to lead to the identification of the whistleblower (but not the whistleblower’s identity) is disclosed because it is reasonably necessary for the purpose of investigating the matter, and Kubota takes all reasonable steps to reduce the risk that the whistleblower will be identified.

Kubota have no ability to offer Whistleblower/s immunity against criminal or civil legal action that may be taken against them because of matters reported.

Who to report to

You may make a report to:

  • The nominated Whistleblower Protection Officer, Kubota’s Compliance Officer

by emailing at: kau_g.whistleblower@kubota.com

or

Anonymously via post to Kubota Australia Pty Ltd, Whistleblower Protection Officer (Compliance Officer), 25-29 Permas Way, Truganina, VIC, 3029

  • A General Manager or officer of Kubota Australia (such as a Board member) on 1300 582 582 on the understanding that they will need to refer this to the nominated Whistleblower Protection Officer.

Content of report

It is strongly preferred that you make a report in writing to ensure clear communication and to enable the best possible management of the matter.

Information you should pass on in your report should include:

  • Date of report
  • Identity of reporter (if disclosed/ known)
  • Substance of report
  • Any dates or details of when, where or how the reportable conduct occurred
  • The identity or level of seniority of the person/s who are the subject of the report
  • The perceived level of risk or gravity of the reportable conduct
  • Any other pertinent matters or evidence.

More Information

For more information you may contact our nominated Whistleblower Protection Officer, Kubota’s Compliance Officer.

Telephone: 1300 582 582

Email: kau_g.whistleblower@KubotaAustralia.com.au

Mail: Compliance Officer, Kubota Australia Pty Ltd, 25-29 Permas Way, Truganina, VIC, 3029

 

Modern Slavery Policy

Purpose of policy

This policy affirms our commitment to contribute to ending all forms of modern slavery and outlines our approach to reducing the risk of modern slavery practices within our supply chains and operations. It is consistent with our Ethical Framework, that expects a culture of high ethical standards, including compliance with applicable laws, contractual and other obligations. As a result, this Modern Slavery Policy is part of the Ethical Framework. This Policy supports the Modern Slavery Act (Cth) 2018

 

Context

Modern slavery describes situations where coercion, threats or deception are used to exploit individuals and undermine or deprive them of their freedom. Kubota Australia (KAU) strives to use, insights gathered through its business activities to contribute to ending all forms of modern slavery by ensuring our own supply chains and operations don’t contribute to modern slavery practices, and to take appropriate action to respond to the humanitarian impacts of modern slavery

 

Scope of policy

This Policy applies to all employees, suppliers, and business partners of entities controlled by KAU, including Kubota Finance and Kubota New Zealand

 

Definitions

Modern Slavery Act 2018 (Cth) being the Commonwealth legislation (the Act) enacted by the Parliament of Australia on 29 November 2018 (and may be amended from time to time).

Modern slavery for the purposes of this policy is defined as including eight types of serious exploitation and outlined in Section 4[1]

Operations is defined as activity undertaken by KAU and any of its subsidiaries

Partnership means all relationships between KAU and a Partner whereby KAU grants the Partner the possibility of using its name, emblem/logo or image in its communication and promotional materials, thereby potentially creating a public association of image between the Partner and KAU. This relationship includes arrangements of; sponsorships, cause-related marketing initiatives, and strategic alliances

Risks of modern slavery practices means the potential for KAU to cause, contribute to, or be directly linked to modern slavery through its supply chains and operations.

Kubota Australia is the term used to refer to Kubota Australia Pty Ltd and its subsidiaries, not the broader Kubota Corporation.

Kubota People include any current:

Members of a Governance Body (members of the KAU board)

Employees

Suppliers is defined as any organization or person who provides us with goods or services, including their subcontractors, agents, related entities, and consultants.

Supply chains is defined as the products and services (including labour) that contribute to KAU’s own products and services. This includes products and services sourced in Australia or overseas and extends beyond direct suppliers

 

What is modern slavery

Modern slavery is defined by the Modern Slavery Act (Cth) 2018[2] to include eight types of serious exploitation and which can be understood as:

trafficking in persons, which is the recruitment, harboring and movement of a person for the purposes of exploitation through modern slavery. Exploitation also includes the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices like slavery, servitude or the removal of organs.

slavery, which is where the offender exercises powers of ownership over the victim

servitude, which is where the victim’s personal freedom is significantly restricted, and they are not free to stop working or leave their place of work

forced labour, which is where the victim is either not free to stop working or not free to leave their place of work

forced marriage, which is where coercion, threats or deception are used to make a victim marry or where the victim does not understand or is incapable of understanding the nature and effect of the marriage ceremony

debt bondage, which is where the victim’s services are pledged as security for a debt and the debt is manifestly excessive or the victim’s services are not applied to liquidate the debt, or the length and nature of the services are not limited and defined

the worst forms of child labour, which involves situations where children are: exploited through slavery or similar practices, including sexual exploitation; or engaged in hazardous work which may harm their health or safety, or used to produce or traffic drugs

deceptive recruiting for labour or services, which is where the victim is deceived about whether they will be exploited through a type of modern slavery[3]

 

KAU approach to limiting the risk of modern slavery practices

KAU will work proactively to reduce modern slavery within our supply chains and operations, and we expect all organizations we engage with to do the same.

Supply Chain

KAU Supplier Code of Conduct

We expect all existing and new Suppliers to comply with the principles set out in our Supplier Code of Conduct. Fundamental to the Supplier Code of Conduct is an expectation that all Suppliers operate in full compliance with the laws and regulations in the jurisdiction where the goods are sourced, procured or services are performed. Suppliers must use best endeavors to ensure that there is no modern slavery in their supply chains and operations. In the event Suppliers identify any occurrence of, or material risk of modern slavery in their supply chains or operations they are to take practical and effective steps to address that occurrence or risk. Suppliers must notify KAU as soon as practicable of any occurrence of, or material risk of modern slavery they have identified and notify relevant authorities where appropriate.

KAU’s contractual terms

Our contractual terms reflect Supplier obligations outlined in the Supplier Code of Conduct, including compliance with Australian modern slavery laws and those foreign modern slavery laws that apply in the locations in which they operate.

Supply chain mapping and risk assessment

We encourage our suppliers to complete a Corporate Social Responsibility questionnaire which contains questions relevant to modern slavery. Answers to this questionnaire will provide us with a greater understanding of the risk of modern slavery within a supplier’s supply chains or operations and enable us to work with a supplier to reduce the risks identified. We will actively and progressively improve our understanding and oversight of all tiers of our supply chains

 

Operations

Modern Slavery Policy

KAU maintains a Modern Slavery Policy (this Policy) outlining our approach to reducing the risk of modern slavery practices within our supply chains and operations. The Policy provides guidance on the steps KAU takes to work with suppliers to reduce risks and the range of supports available for when a KAU person becomes aware that someone is at risk of or affected by modern slavery practices.

Incorporating modern slavery into other policies

When existing policies undergo policy review or new polices are under development, policy owners are required to identify existing modern slavery commitments that can be enhanced, or where modern slavery protections can be incorporated.

Human Resources

We are committed to ensuring the health, safety and wellbeing of our workforce and we maintain a suite of policies that are informed by and compliant with Australian workplace occupational health and safety law.

 

Supplier Screening

The Supplier Code of Conduct requires KAU to complete a supplier screening tool before entering into a partnership with another organization. Prospective suppliers automatically disqualify from public association with KAU if they are knowingly or deliberately engaged in activities running counter to:

The Movement’s objectives and Fundamental Principles

Principles of International Humanitarian Law

Internationally recognized standards of human rights, labour rights and protection of health

 

Communications, Engagement and Training

KAU team members will be provided communications and training opportunities to enhance their understanding of the causes and humanitarian impact of modern slavery, the Modern Slavery Policy and our approach to limiting the risk of modern slavery within our supply chains and operations. KAU team members with purchasing responsibilities are provided additional training on the KAU Supplier Code of Conduct, Corporate Social Responsibility tool and supporting suppliers to undertake due diligence. KAU team members who initiate and periodically review relationships with third parties are provided with training to apply due diligence processes.

 

Continuous improvement approach to reducing the risk of modern slavery

We are committed to applying a continuous improvement approach to how we reduce the risk of modern slavery practices within our supply chains and operations. We will seek feedback from KAU team members, Suppliers, and other parties regarding the success or otherwise of the actions we have taken to reduce the risk of modern slavery.

By 31 December each year we will publish a Modern Slavery Statement that outlines the steps we have taken over the reporting year to identify where our supply chains and operations may be contributing to modern slavery practices, and the actions we have taken to minimize these risks.

 

Reporting Concerns of modern slavery

Reporting unethical or unlawful conduct

A key part of supporting ethical standards is enabling KAU team members and suppliers to feel free and safe to speak up when there are reasonable grounds to suspect that KAU team members or any of KAU’s suppliers are not acting ethically or in accordance with laws and obligations. Concerns about compliance or ethical issues or illegal or unethical activities are to be reported according to our whistleblower policy

 

Responding to concerns of modern slavery practices

The Australian Federal Police is responsible for investigating suspected cases of modern slavery and can be contacted on 131 237 to discuss or report a suspected case. Contact can be made anonymously.

In an emergency and if someone is in immediate danger, please call Triple Zero (000) for police assistance

 

[1]  Modern Slavery Act (Cth) 2018. Available from : https://www.legislation.gov.au/Details/C2018A00153

[2] Modern Slavery Act (Cth) 2018. Available from : https://www.legislation.gov.au/Details/C2018A00153

[3] Department of Home Affairs. Commonwealth Modern Slavery Act 2018: Guidance for reporting entities (2018). Available from https://www.homeaffairs.gov.au/criminal-justice/files/modern-slavery-reportingentities.pdf

 

Modern Slavery Statement 2021

This statement, pursuant to the Australian Modern Slavery Act 2018 (“the Act”) (Cth), sets out the actions taken by Kubota Australia Pty Limited ACN 005 300 621 and its controlled entities (together referred to as “Kubota Australia”, “KAU”) to address modern slavery in our business and supply chain over the Calendar year ended 31 December 2021. This statement also includes the planned actions to mitigate the modern slavery risk in future.

 

About Kubota Australia

KAU is Australia’s leading supplier of agriculture, construction, and power equipment, operating in Australia for over 40 years. It is part of the global Kubota Group of companies (KBT).

Since its foundation in 1890, KBT has delivered a variety of products that contribute to people’s lives and society, including iron water pipes for the development of modern waterworks, and agricultural machinery to increase food production and save labour. KBT believes that its mission is to comprehensively solve the problems of food, water and the environment through its superior products, technologies, and services, thereby continuing to support the future of the earth and humanity.

Brand Statement

For Earth, For Life

The Kubota Group promises to continue supporting the prosperous life of humans while protecting the environment of this beautiful earth.

Mission

Food, water, and the environment are indispensable for human beings. The Kubota Group continues to support the future of the earth and humanity by contributing products that help the abundant and stable production of food, help supply and restore reliable water, and help create a comfortable living environment through its superior products, technologies, and services.

Vision

To be a company that can make the greatest contribution to society by earning the trust of the greatest number of customers.

 

Kubota Australia’s Structure, Operations, and Supply Chains

Structure

KAU is a company incorporated in Australia and our registered office is located at 25-29 Permas Way Truganina VIC 3029.

KAU is a subsidiary of Kubota Corporation, headquartered in Japan. Under the trading name of Kubota Australia Finance (KAF), KAU offers equipment finance. Kubota New Zealand Limited (KNZ) is domiciled in New Zealand. It is a wholly owned subsidiary of Kubota Australia. Under the trading name of Kubota New Zealand Finance (KNZF), KNZ offers equipment finance.

Operations

KAU conducts a diversified range of business activity which include agriculture, construction, and power equipment. KAF offers designated services to its corporate and retail customers by providing finance for new, demo and used Kubota machinery and equipment, including tractors, excavators, mowers, utility machinery/equipment, generators, and Krone equipment. KAF also offers finance for used equipment and machinery of competitor brands which are sold by Kubota Australia’s authorised dealers. KNZ, conducts a diversified range of business activity which include agriculture, construction, and power equipment in New Zealand. KNF offers designated services to its corporate customers by providing finance for new, demo and used Kubota machinery and equipment.

As of 31st December 2021, KAU employed 161 team members in Australia and 8 team members based in New Zealand. All team members are paid in accordance with local Australian and New Zealand requirements.

Supply Chain

KAU engages in various dealings with international related parties. Material dealings during the year included, purchasing goods from related and unrelated parties of KAU located in Australia, New Zealand, Norway, Netherlands, Indonesia, Japan, South Korea, Thailand, United States of America, Germany, France, and Italy. For the year ending 31 December 2021 KAU had a supply chain made up of approximately 2,100 suppliers.

KAU seeks to engage with suppliers that act consistently with Kubota values in relation to modern slavery and human rights. Our supplier code of conduct which is provided to every supplier we intend to do business with, outlines our expectations on supplier activity.

 

Kubota Australia’s Risks of Modern Slavery Practices

Supply Chain

In 2021 KAU conducted our initial modern slavery risk assessment of its Tier 1 supply chain. We engaged a specialist consulting firm who conducted a risk assessment on our current supply chain using risk assessment software along with their specialist industry knowledge. In assessing the risk, following factors were considered:

Geographic location of the Supplier

Annual value of the purchase with each supplier

Type of products or services procured

This risk assessment highlighted KAU’s highest Modern slavery risk within Tier 1 suppliers is with offshore suppliers. This assessment has allowed us to prioritise due diligence process according to the risk of modern slavery for suppliers. The risk assessment also identified following industry categories in our direct supply chain, where modern slavery risks are high:

Agricultural & Farm Machinery

Industrial Machinery.

 

This graph shows the breakdown of KAU’s suppliers considering the industry risk, location and total spend.

 

Operations

All employees of KAU (permanent and maximum term) reside and work in Australia and New Zealand as citizens or residents with a very small proportion of expatriates holding work visas. All employees are engaged via a legally reviewed Employment Agreement. Work at times is performed by Australian employees, via infrequent short-term travel, in respect to KNZ operations only.

KAU do not currently, nor have we during 2021 employed any casual employees.

KAU generally do not utilise employment agencies. All agencies utilised must be contracted via a Services Agreement which includes a requirement to be registered under any relevant Labour Hire laws and provide evidence of such to KAU.

All employees and workers placed by agencies are subject to probity processes based on the inherent requirements of their position, identity check, legal right to work check and criminal records history check at a minimum. All are assessed against the inherent requirements of the position they will fulfill based on a Position Description in line with process dictated by our Recruitment and Selection Policy.

KAU considers that our systems and controls are satisfactory to manage potential risks of Modern Slavery occurring through our employment practices.

 

Kubota Australia’s approach to tackle Modern Slavery practices

KAU has taken steps to strengthen its governance and controls to assess and respond to risk of Modern slavery in its operations and Supply Chain relationships. KAU has conducted a comprehensive review around current sourcing, selecting, contracting and on boarding of suppliers to further build awareness to Modern Slavery Risk identification.

In line with our intentions discussed in the initial MS statement of KAU in 2021, these include

  1. KAU has developed specific policies to mitigate Modern Slavery risks in its operations and supply chains. These policies have been reviewed and approved by Senior management and are made available to KAU employees, contractors, and business partners
    These policies are:
    Modern Slavery Policy
    Supplier Code of Conduct Policy
    Whistleblower Policy
  2. When onboarding new suppliers, applying a Modern Slavery risk assessment criterion, and adopting a risk-based approach. KAU’s compliance team manage the operational aspects of identifying Modern Slavery risks when engaging with new suppliers. Our process considers the potential risks of engaging with a supplier and include both a compliance review and a review of the Suppliers Modern Slavery policies and statements where they are available.
  3. Existing first tier suppliers are evaluated on a periodic basis to ascertain the levels of Modern Slavery risks. The assessment considers factors such as low skill labour by suppliers, goods manufactured in high-risk countries and services provided by suppliers using non-transparent contracting arrangements. KAU’s compliance team manage the operational aspects of identifying Modern Slavery risks when extending relationship with existing suppliers.
  4. All KAU and KNZ team members have been provisioned e-learning training to raise awareness of Modern Slavery. This includes Modern Slavery risks, practices, and requirements under the Modern Slavery Act. Training is provisioned upon commencement with the business and annually to all employees. From 2022 training completions are reported periodically to assist Managers to ensure compliance, although each Manager has full visibility at all times of employee training records, and this must be discussed quarterly as part of our Performance Management policy.
    All team members must notify our Compliance team immediately if they become aware of a potential act or an increased risk of Modern Slavery within business operations, supply chain or commercial partnerships.

Assessing and Reporting on effectiveness of actions taken by Kubota Australia

KAU has already commenced and intends to continue further developing frameworks and processes to appropriately review the effectiveness of KAU’s actions to assess and address modern slavery risks in KAU’s operations and supply chains.

KAU currently monitor compliance with our organisational policies and procedures through:

Internal audit and risk assurance reviews

Review of complaints raised under dispute resolution process

Review of concerns raised through whistleblower program

Centralised review of new supply contracts

Annual review of existing supply contracts.

During the reporting period:

There were no reports or complaints received by KAU in relation to Modern Slavery

KAU completed and submitted number of reports to Law enforcement bodies and none of the matters were concerned on Modern Slavery risks.

KAU continuously review how we can effectively monitor modern slavery risks further under our 2021-2022 compliance program.

 

Consulting with entities that Kubota Australia own and Control

This Modern Slavery Statement covers all controlled entities of KAU. Each controlled entity relies on KAU for the resources they require for their operations. KAU provides and procure all goods, services, and personnel requirements. Therefore, all controlled entities work under the management of KAU.

This statement is made after due consultations with key stakeholders in KAU and its controlled entities, including the relevant Business Unit Leaders and their team members. Stakeholders have been provided with the opportunity in our business forums to share their insight on the processes implemented to manage Modern Slavery risks during the reporting year. KAU will continue to monitor and report on the effectiveness of this Modern Slavery Statement to the Board of Directors of KAU.

The Kubota Australia’s Modern Slavery Statement 2021 was approved by its Board of Directors on 21 January 2022.

Tetsu Kojima

Managing Director