Policy Owner: Kadai Ltd

Applies to: International markets, distributors, agents, retailers, commercial partners and other overseas trading relationships

Review Frequency: Annually and following any significant international, political, legal, human rights or reputational development

1.0 Purpose

Kadai is committed to conducting its business responsibly, ethically and in a manner consistent with the values of the company.

As a relatively small independent brand, Kadai recognises that its reputation, customer trust and public perception are particularly important to the long-term success of the business.

Commercial opportunity alone will therefore not determine whether Kadai enters or continues to operate within an international market.

Before entering a new country, and throughout any existing international trading relationship, Kadai will consider the legal, ethical, human rights, social and reputational conditions associated with that market.

Kadai reserves the right to:

• decline to enter a particular country or market;
  
• withhold approval for a distributor or partner to operate within a particular country;
  
• place conditions upon entry into a market;
  
• suspend further expansion or supply;
  
• temporarily pause trading while concerns are investigated; or
  
• permanently withdraw from a country
  

Where Kadai reasonably considers that continuing or commencing trade would conflict with the principles contained within this policy or expose the Kadai brand to unacceptable ethical or reputational risk.

Commercial value, potential turnover or previous investment in a market will not override serious ethical concerns.

2.0 Our Ethical Principles

Kadai believes that businesses have a responsibility to consider the wider consequences of where and how they trade.

Our approach is guided by principles of:

• respect for internationally recognised human rights;
  
• equality and non-discrimination;
  
• dignity and fair treatment;
  
• freedom from exploitation;
  
• responsible employment practices;
  
• freedom of expression;
  
• fair and impartial justice;
  
• responsible and lawful business conduct;
  
• opposition to bribery and corruption;
  
• environmental responsibility;
  
• responsible sourcing;
  
• transparency and accountability; and
  
• protection of the reputation and integrity of the Kadai brand.
  

These principles will be considered when assessing both countries and individual commercial partners.

3.0 Ethical Trading Standards

Kadai will not knowingly commence or continue trading within a market where, following reasonable assessment, the company concludes that there are serious, systemic or well-evidenced practices which fundamentally conflict with Kadai's ethical standards or create an unacceptable risk to the company.

The following areas will form part of that assessment.

3.1 Human Rights

Kadai will consider credible evidence of serious or systematic violations of internationally recognised human rights.

Particular concern may arise where there is evidence of:

• torture or cruel, inhuman or degrading treatment;
  
• arbitrary arrest or detention;
  
• enforced disappearance;
  
• extrajudicial killing;
  
• persecution by state authorities;
  
• serious restrictions upon fundamental freedoms;
  
• systemic state violence or oppression;
  
• discriminatory application of laws;
  
• executions or severe punishments following manifestly unfair judicial processes; or
  
• other grave or widespread violations of fundamental human rights.
  

A pattern of human rights concerns may be sufficient for Kadai to refuse entry into, suspend trading with or withdraw from a market.

3.2 Women's Rights and Gender Equality

Kadai supports equality between women and men and considers the treatment and legal status of women when assessing international markets.

Material concerns may include laws, policies or widespread practices that:

• significantly restrict women's freedom of movement;
  
• prevent or materially restrict women from working or pursuing particular occupations;
  
• restrict women's access to education;
  
• significantly restrict women's ability to own property or conduct business;
  
• deny women equal legal standing;
  
• impose male guardianship or comparable restrictions upon adult women's independence;
  
• restrict women's participation in public life;
  
• discriminate substantially against women within family, employment or criminal law;
  
• fail to provide reasonable protection against violence, rape, exploitation or abuse; or
  
• impose severe or discriminatory penalties upon women for conduct that would not result in equivalent treatment of men.
  

Kadai will consider both the written law of a country and credible evidence about how women are treated in practice.

3.3 Equality, Minority Rights and Protection from Discrimination

Kadai believes that individuals should be treated with dignity and should not face serious persecution, criminalisation or disproportionate punishment because of who they are.

When assessing an international market, Kadai will consider the legal and practical treatment of individuals and minority groups, including on the grounds of:

• sex or gender;
  
• race;
  
• colour;
  
• nationality;
  
• ethnic origin;
  
• religion or belief;
  
• disability;
  
• sexual orientation;
  
• gender identity; or
  
• membership of another minority or vulnerable group.
  

Serious concerns may include countries in which:

• homosexuality or consensual same-sex activity is punishable by imprisonment, corporal punishment, the death penalty or other severe penalties;
  
• laws impose grossly disproportionate punishments upon LGBT+ people compared with equivalent conduct by other members of society;
  
• particular ethnic, racial or religious groups are systematically denied fundamental rights;
  
• minorities are subjected to state-sponsored discrimination, persecution, segregation or violence;
  
• individuals are prevented from practising or changing their religion or belief;
  
• discriminatory laws materially restrict people's ability to work, live, associate, form relationships or participate in society;
  
• authorities fail to provide meaningful protection against serious discriminatory violence; or
  
• state institutions actively encourage, facilitate or participate in persecution of minority groups.
  

Kadai recognises that laws and social attitudes vary internationally. The existence of cultural, religious or political differences from the United Kingdom will not in itself prevent Kadai from trading within a country.

However, where those differences result in serious violations of fundamental human rights, persecution, criminalisation or grossly disproportionate punishment, they may result in Kadai refusing to enter or deciding to withdraw from that market.

3.4 Justice, Rule of Law and Fair Treatment

Kadai considers access to fair and impartial justice an important component of responsible international trade.

Concerns may arise where credible evidence demonstrates:

• widespread arbitrary detention;
  
• serious absence of judicial independence;
  
• significant political interference in criminal proceedings;
  
• fundamentally unfair trials;
  
• corruption within the judicial system;
  
• discriminatory enforcement of criminal laws;
  
• disproportionate or inhumane punishments;
  
• systematic denial of access to justice.
  

The existence of a different legal system from that of the United Kingdom will not in itself prevent Kadai from trading within a market. The assessment will focus on the seriousness of any actual human rights, equality or rule-of-law concerns.

3.5 Freedom of Expression, Journalism and Media

Kadai believes that journalists, individuals and organisations should be able to report, communicate and express legitimate opinions without facing serious state persecution.

Concerns may include:

• imprisonment or persecution of journalists because of legitimate reporting;
  
• serious suppression of independent journalism;
  
• arbitrary detention of journalists, campaigners or human rights defenders;
  
• severe state censorship;
  
• systematic suppression of peaceful criticism;
  
• intimidation, violence or murder against journalists; or
  
• serious restrictions upon access to independent information.
  

Kadai will consider both the scale and severity of these restrictions when assessing a market.

3.6 Modern Slavery, Forced Labour and Human Trafficking

Kadai has zero tolerance for modern slavery, forced labour and human trafficking within its own operations or commercial relationships.

Serious concerns include:

• forced or compulsory labour;
  
• human trafficking;
  
• slavery or servitude;
  
• debt bondage;
  
• confiscation of workers' passports or identity documents;
  
• restriction of workers' freedom to leave employment;
  
• recruitment practices that leave workers vulnerable to exploitation;
  
• exploitation of migrant workers; and
  
• other practices that prevent individuals freely choosing or leaving employment.
  

Where credible reports, investigations, news coverage or other reliable evidence identify serious concerns relating to poor labour standards, forced labour, modern slavery, human trafficking or the exploitation of workers within a country or market, Kadai reserves the right to review its involvement in that market.

Where Kadai reasonably considers that such concerns are sufficiently serious, systemic or incompatible with the company’s ethical standards, Kadai may refuse to enter the market, suspend further trading or supply, or withdraw from the country altogether.

3.7 Child Labour

Kadai will not knowingly support or benefit from exploitative child labour.

Kadai expects its international partners and supply chains to respect internationally recognised principles regarding minimum working ages and the elimination of hazardous or exploitative child labour.

Credible evidence of serious or widespread child labour concerns will form part of Kadai's market assessment.

3.8 Workers' Rights

Kadai expects reasonable standards for workers throughout its international commercial relationships.

Areas considered may include:

• safe and healthy working environments;
  
• freedom from forced labour;
  
• freedom from discrimination;
  
• reasonable working conditions;
  
• payment of lawful wages;
  
• freedom from physical or psychological abuse;
  
• reasonable working hours;
  
• freedom of association where lawful; and
  
• protection from serious exploitation.
  

Kadai recognises that employment laws and employment practices differ between countries. The existence of different employment standards alone will not automatically prevent trade, but serious exploitation or abuse may do so.

3.9 Bribery and Corruption

Kadai has zero tolerance for bribery and corruption.

Kadai will comply with the UK Bribery Act 2010 and will not authorise, offer, request, accept or facilitate improper payments in order to secure commercial advantage.

This includes so-called facilitation payments.

Before entering higher-risk markets, Kadai may conduct additional due diligence on distributors, agents, intermediaries, government connections and payment arrangements.

Kadai will not enter or continue a commercial relationship where it reasonably believes that doing so requires, facilitates or exposes the company to serious bribery or corruption.

3.10 Conflict, War Crimes and Serious International Incidents

Kadai will take particular care when considering markets affected by armed conflict or serious international disputes.

Factors may include credible findings or substantial evidence concerning:

• genocide;
  
• attempted genocide;
  
• ethnic cleansing;
  
• crimes against humanity;
  
• war crimes;
  
• unlawful attacks against civilians;
  
• systematic violations of international humanitarian law;
  
• serious state-sponsored violence;
  
• unlawful aggression or occupation;
  
• major international sanctions; or
  
• other grave breaches of international law.
  

Where such concerns arise, Kadai may refuse market entry, suspend trading or withdraw from that market even where trading would otherwise remain technically lawful.

3.11 Corruption and Government Integrity

High levels of corruption, abuse of public office, demands for unofficial payments or a lack of meaningful commercial transparency may create unacceptable risks for Kadai.

Where appropriate, consideration will be given to:

• public-sector corruption;
  
• bribery risks;
  
• misuse of state power;
  
• transparency of government institutions;
  
• reliability of regulatory authorities;
  
• commercial transparency; and
  
• the ability of businesses to operate without participating in corrupt practices.
  

3.12 Environmental and Responsible Business Conduct

Kadai will also consider serious environmental or responsible-business concerns where they are directly relevant to the company's activities or commercial partners.

These may include:

• deliberate or serious environmental harm;
  
• illegal extraction or sourcing of materials;
  
• significant breaches of environmental law;
  
• irresponsible waste disposal;
  
• environmental practices causing serious harm to communities; or
  
• repeated environmental misconduct by a proposed commercial partner.
  

4.0 Reputational Risk

Kadai may decline, pause or withdraw from a market where continued association with that country, organisation or commercial activity could reasonably cause material damage to the reputation, goodwill or integrity of the Kadai brand.

This may apply even where no law prevents Kadai from trading within that market.

Factors may include:

• significant and credible international criticism;
  
• widespread public concern;
  
• findings by respected international organisations;
  
• significant media scrutiny;
  
• concerns raised by customers, employees, retailers or commercial partners;
  
• incompatibility with Kadai's publicly stated values;
  
• risk of Kadai appearing to endorse or benefit from serious unethical conduct; or
  
• circumstances likely to materially undermine customer or stakeholder trust in Kadai.
  

5.0 Assessment of New International Markets

Before Kadai authorises material commercial activity within a new country, an International Market Ethical Review should be completed.

The review should consider, where relevant:

1. UK Government/FCDO overseas business risk information;
   
2. applicable UK sanctions and trade restrictions;
   
3. United Nations human rights information;
   
4. International Labour Organization information;
   
5. recognised international human-rights reports;
   
6. rule-of-law and corruption assessments;
   
7. reputable independent human-rights organisations;
   
8. credible national and international journalism;
   
9. treatment of women and minority groups;
   
10. labour and modern-slavery risks;
    
11. political and security conditions;
    
12. the proposed distributor or commercial partner;
    
13. reputational implications for Kadai; and
    
14. the overall commercial justification for entering the market.
    

6.0 Regional Distributor Agreements

The appointment of a distributor for a wider geographical region does not automatically constitute Kadai's ethical or commercial approval to begin trading within every individual country located within that region.

Where a distributor is appointed for a group of countries or regional territory, Kadai reserves the right to require individual market approval before substantive trading begins within any particular country.

Kadai may therefore:

• approve some countries within a distributor's territory but not others;
  
• delay entry into an individual country;
  
• require further due diligence before approving that country;
  
• impose additional conditions upon trading within that country; or
  
• refuse approval where the country does not meet Kadai's ethical, reputational, legal or commercial requirements.
  

The existence of territorial exclusivity within a distribution agreement should not, unless expressly agreed otherwise in writing by Kadai, be interpreted as requiring Kadai to commence or continue supply into every country forming part of that territory.

7.0 Distributor and Commercial Partner Standards

Approval of a country does not automatically constitute approval of a particular distributor, retailer, agent or other commercial partner.

Kadai expects international partners to conduct themselves consistently with the principles of this policy.

Kadai may refuse, suspend or terminate a relationship where a partner is involved in serious misconduct including:

• bribery or corruption;
  
• forced or child labour;
  
• serious worker exploitation;
  
• discrimination;
  
• human trafficking;
  
• criminal activity;
  
• serious human-rights abuses;
  
• misleading or unethical commercial practices;
  
• misuse of the Kadai brand;
  
• conduct materially damaging to Kadai's reputation; or
  
• attempts to require Kadai to act contrary to this policy.
  

Contractual protections should be included within international distribution and commercial agreements where appropriate.

8.0 Continuing Review of Existing Markets

Ethical market approval is not permanent.

International circumstances can change and Kadai may reconsider an existing market at any time.

A review should be undertaken where there is:

• significant political or legal change;
  
• armed conflict;
  
• imposition of new sanctions;
  
• credible reports of serious human-rights violations;
  
• significant deterioration in women's or minority rights;
  
• major corruption allegations;
  
• serious concerns regarding a distributor;
  
• significant international condemnation;
  
• substantial adverse media coverage; or
  
• another development capable of materially changing Kadai's ethical or reputational assessment.
  

Following review, Kadai may continue trading, introduce additional safeguards, temporarily suspend trading or withdraw from the market.

9.0 Decision-Making

International market decisions should be proportionate to the level of risk identified.

Where significant ethical concerns exist, the matter should be referred to Kadai's senior leadership for consideration before new trading activity is approved.

The decision should consider:

• the nature of the concern;
  
• its severity;
  
• whether it is isolated or systemic;
  
• the reliability of the evidence;
  
• whether circumstances are improving or deteriorating;
  
• Kadai's connection to or ability to influence the issue;
  
• potential harm to individuals;
  
• legal requirements;

• reputational consequences;
  
• the conduct of the proposed commercial partner; and
  
• whether safeguards could reasonably reduce the identified risk.
  

For significant or controversial markets, the reasons for the decision should be documented.

Kadai may seek external legal, compliance or specialist advice where appropriate.

10.0 Consistency and Non-Discrimination

Kadai's ethical trading decisions will be evidence-based.

Countries will not be excluded simply because of their:

• nationality;
  
• predominant religion;
  
• ethnicity;
  
• culture;
  
• geographical region; or
  

Assessment will instead focus upon objectively identifiable laws, conduct, human-rights conditions, business practices, international obligations and the resulting ethical and reputational risks to Kadai.

The same principles should, as far as reasonably possible, be applied consistently to all international markets.

11.0 Kadai's Right to Decline or Withdraw

Nothing within this policy requires Kadai to enter or remain within a particular international market merely because doing so is lawful or commercially profitable.

Kadai reserves the right, acting reasonably and following appropriate assessment, to decline, postpone, suspend or withdraw from international trading activity where the company considers that: the ethical, human-rights, legal, commercial or reputational risks associated with that market are incompatible with Kadai's values or the long-term interests and reputation of the brand.

Protecting the integrity and reputation of Kadai may therefore take precedence over an international commercial opportunity.

12.0 Policy Review

This policy will be reviewed annually and whenever significant changes occur.

Approved by: Christo Mckinnon-Wood

Date: 07.08.26

Next Review Date: 01.08.27