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Country risk ratings and countries subject to Woolworths ethical sourcing audits This document explains Woolworths’ country risk assessment process and sets the criteria for deciding which countries should be subject to a Woolworths’ ethical sourcing audit, an approved waiver or an exemption. Country risk information source All risk data used to establish WoW Country Risk Matrix is sourced from Maplecroft Global Risk Analytics. Additional sources of risk data may be used for further industry sector or region specific assessments. Maplecroft is a leading global risk analytics, research and strategic forecasting service provider. It offers a wide ranging portfolio of risk indices, interactive maps, expert country risk analysis, risk calculators, scorecards and dashboards for 197 countries. These technological solutions identify emerging trends, business opportunities and risks to investments and supply chains worldwide. Indices used to evaluate country risk? The key indices used to classify all countries according to their level of risk from ethical sourcing perspective are: • Supply Chain/Labour Rights and Protection Index

This index is made up of a cluster of indices for child labour; forced labour; trafficking; freedom of association and collective bargaining; discrimination in the workplace; and working conditions.

• Health & Safety Index

• Corruption Risk Index

• Rule of Law Index

Appendix 1 - Country Risk Matrix Appendix 2 - Definitions of Indices Country risk classification Individual risk index scores and classification • Each risk index is scored between 0-10 (0= highest risk and 10= lowest risk) • The scale of 0-10 is divided into 4 levels of severity:

Risk Level Risk score Colour grading Very high 0 - 2.5 High >2.5 – 5.0 Moderate >5.0 – 7.5 Low >7.5 - 10

Overall country risk classification for our ethical sourcing decisions The overall country risk rating is done in two phases: Phase 1 The three indices of Supply Chain/Labour Rights and Protection, Health & Safety and Corruption risk indices are combined to rate overall country risk for the purpose of our ethical sourcing decisions. Lowest scored index determines the overall rating in phase 1.

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Phase 2 Countries that have all three Phase 1 indices rated ‘Moderate’ receive an overall ‘Moderate’ rating. Countries with a mix of ‘Moderate’ and ‘Low’ rating in Phase 1, are assessed using an additional index. The Rule of Law Index is used as an indicator of law enforcement to ensure our efforts remain focused on countries that have ineffective legal and regulatory practices and enforcement. If the Rule of Law index is ‘Low’, the country is given an overall rating of ‘Low’ (see Appendix 1). Countries subject to ethical sourcing audits Overall Country Risk Rating

Options to discuss

Very High High Moderate

Subject to full scope of WoW ethical audit or a limited number of approved waivers.

Low

Exempt from ethical audits.

Note: regardless of any exemptions or waivers, Woolworths reserve the right to ask for or commission an ethical audit if: ● specific areas of risk emerge in exempt countries; ● our staff visit the facility and believe that an ethical audit is warranted; or ● we are alerted by a credible third party regarding mistreatment of workers, dangerous

working conditions and other breaches of labour laws and conventions.

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APPENIX 1 - Country Risk Matrix

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APPENDIX 2 - DEFINITIONS OF RISK INDICES The Supply Chain/Labour Rights and Protection Index The Supply Chain/Labour Rights and Protection Index measures the risk of association with, and involvement in, violations of labour rights in 197 countries. The index is composed of six different indices: child labour; forced labour; trafficking; freedom of association and collective bargaining; discrimination in the workplace; and working conditions. Labour rights exist as fundamental human rights in the workplace and are underpinned in the International Bill of Human Rights (the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights). Labour rights are enshrined in the International Labour Organisation's (ILO) labour conventions which are in the form of international treaties and have been largely ratified by states. However, labour rights violations persist, particularly in the developing world, including in the emerging economies, and often, domestic laws violate international labour standards despite a state's ratification. At a minimum, states and employers are expected to implement the core labour standards as defined by the ILO: • Freedom of association and collective bargaining

• Prohibition of all forms of forced labour • Elimination of the worst forms of child labour • Non-discrimination in employment

Definitions Sub- indices comprising the Labour Rights and Protection Index

The Child Labour Index

The Child Labour Index is a component of Maplecroft’s Labour Rights and Protection cluster of indices. The Child Labour Index indicates the risk of child labour to business and global supply chains. Risks include the perceived complicity of companies through association with the employment of children by business partners contributing to a value chain. The risk of direct employment of children may arise due to deficiencies in the establishment and implementation of mechanisms to prevent child labour at the national and/or provincial level. Violations of the prohibition of child labour impose obstacles to the exercise of children's rights to education, childhood, development, play and health.

The Forced or Involuntary Labour Index

The Forced or Involuntary Labour Index is a component of Maplecroft’s Labour Rights and Protection cluster of indices. The Forced and Involuntary Labour Index indicates the risk of forced labour to business and global supply chains. Risks include the perceived complicity of companies in forced labour through violations committed by business partners that contribute to value chains. Maplecroft calculates the index by analysing the frequency, duration,

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coverage and severity of reported forced labour violations in 197 countries, as well as structure and process indicators such as legal frameworks and the efficacy of their implementation.

The Discrimination in the Workplace Index

The Discrimination in the Workplace Index is a component of Maplecroft’s Labour Rights and Protection cluster indices. The Discrimination in the Workplace Index indicates the risk of discrimination in the workplace to business and global supply chains. The Index examines the extent to which individuals are treated less favourably, directly or indirectly, in access to employment and/or in the workplace because of their gender, age, ethnicity, religion or belief, disability, contraction of HIV/AIDS, migration status, nationality, sexual orientation or gender reassignment or based on any other grounds not related to the requirements of the job which a person is required to undertake. The Index investigates the extent to which individuals are treated less favourably than others in comparable position and situation, without reasonable and objective justification, when accessing employment and during employment, especially in relation to working conditions, such as compensation, working hours and health, safety and security, training and promotion opportunities. Additionally, it highlights the extent to which workers may be subjected to harassment and hostility in the workplace as a form of unjust or prejudicial differentiation of such workers from other employees in the workplace on grounds, such as their gender, age, ethnicity, religion or belief, disability, contraction of HIV/AIDS, migration status, nationality, sexual orientation or gender reassignment.

The Working Conditions Index

The Working Conditions Index is a component of Maplecroft’s Labour Rights and Protection cluster of indices. The Working Conditions Index measures the prevalence and gravity of sub-standard working conditions, particularly in relation to minimum wage, working hours, and health and safety in the workplace. Businesses are exposed to these risks through the practices of state and non-state actors which limit the right of a person to just and favourable working conditions. Risks arise from the potential existence of poor working conditions in companies' global value chains (i.e. in their own operations, or in those of their suppliers, subcontractors, distribution networks or business partners). Violations of the right to just and favourable working conditions include the payment of wages that are below living wage and thus do not support a worker and their family; discriminatory pay gaps; unreasonably long working hours; workplace conditions below health and safety standards, including the failure to provide effective protective equipment where necessary or equipment that is safe to use and the failure to provide adequate occupational health and safety (OHS) training to prevent injuries.

The Trafficking Index

The Trafficking in Persons Index is a component of Maplecroft’s Labour Rights and Protection cluster. The Trafficking in Persons Index indicates the risks to business and global supply chains posed by the illegal trade of human beings for the purpose of exploitation. Companies may face trafficking risks in any region of the world and at all stages of operation, supply and distribution.

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In view of the global extent of the phenomenon, no individual company can conclude that it is safe from the risk of complicity in human trafficking, whether by the nature of the sector in which it operates or the context in which it is established.

The Freedom of Association and Collective Bargaining Index

The Freedom of Association and Collective Bargaining Index is a component of Maplecroft’s Labour Rights and Protection cluster of indices. The Freedom of Association and Collective Bargaining Index measures the level of risk posed to business by allegations of complicity or direct involvement in violations of the rights to freedom of association and collective bargaining.

Maplecroft quantifies human rights risk that responsible business is exposed to through possible association with, and exposure to, human rights violations at a country level, based on the most recently published data in 2012/2013.All data sources are disclosed on www.maplecroft.com. The Health & Safety Risk Index Maplecroft's Health and Safety Risk Index assesses the risk associated with poor occupational health and safety in 186 countries. In accordance with the Occupational Health Safety Convention 1981, for the purpose of this index, 'health', in relation to work, indicates not merely the absence of disease or infirmity, it also includes 'the physical and mental elements affecting health' which are directly related to safety and hygiene at work. The World Health Organization (WHO) has summarised the various definitions of occupational health and safety (OHS) and has characterised OHS good practice as an activity that: ● Protects and promotes the health of workers by preventing and controlling diseases and

accidents and by eliminating occupational factors and conditions hazardous to health and safety at work

● Develops and promotes healthy and safe practices, work environments and workplaces

● Enhances the physical, mental and social well-being of workers and support for the development and maintenance of their working capacity, as well as professional and social development at work

● Enables workers to conduct socially and economically productive lives and to contribute positively to sustainable development

The International Labour Organization (ILO) estimates that two million people die annually from occupational accidents and diseases, and approximately 4% of the world's GDP is lost through the cost of injury, death and disease through absence from work, sickness and disability and survivor benefits. This makes good OHS a crucial goal for businesses and employers who wish to have a safe and productive workforce. Corruption Risk index The Business Integrity and Corruption Index is a component of Maplecroft’s Access to Remedy cluster of indices. The Business Integrity and Corruption Index indicates the risk to companies and global supply chains presented by inadequate integrity and corruption. The prevalence and persistence of corruption in the public and private sectors, as well as the efficacy of government efforts to combat corruption can pose significant risk to business reputation and operation. Rule of Law Index

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The Rule of Law Index assesses the risk relating to the ineffectiveness of legal and regulatory practices, based upon judicial independence, judicial effectiveness, and the comprehensiveness, transparency and consistent application of business-relevant regulation in a country. According to the United Nations, the rule of law refers to a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated. Rule of law, therefore, serves as a check on abuses of private and state power, ensuring fair access and equitable justice. It ensures that individuals and groups can succeed in defending their legal rights. This holds particular importance in the protection of human rights. From a business perspective, the rule of law is important for consistent oversight and enforcement of the laws. On a broader level, the rule of law ensures that the political and judicial systems are predictable and act in the interest of society, fostering economic and social development. In countries where politicians are not accountable to the people and are able to exert significant influence over the judiciary, the application and enforcement of laws and regulations can change suddenly. This creates a climate of uncertainty, distrust and instability.