YTY has recently been made aware of allegations of certain instances of systemic forced labor at a supplier of ours, MediCeram Sdn. Bhd. (“MediCeram”), who is a manufacturer of ceramic formers, the type used in the production of single-use gloves.
Our relationship with MediCeram is a recently formed one, evidenced by our first commercial orders delivering in December 2024. In 2024, MediCeram comprised less than 0.5% of our total supplier spend, making them a very small part of our supply chain.
As an additional precautionary measure, prior to our commercial engagement, YTY conducted a risk assessment survey, whereby specific corporate policies, practices, and protocols were reviewed to determine MediCeram’s compliance with forced labor standards, and their general conformance to the high standards of professional conduct we expect of suppliers joining our network. Based on the documentation provided by MediCeram at that time, they were deemed to be in compliance.
In short, a number of credible steps were taken by YTY prior to establishing a commercial relationship to conduct reasonable due diligence and gain comfort with the fact that MediCeram was in compliance with forced labor regulations, and operated with acceptable employment practices. Furthermore, an additional, and more in-depth, assessment in the form of an on-site audit was planned for later this year as the size and scale of the relationship was expected to grow.
Our preliminary engagement with MediCeram after being made aware of the recent allegations suggests there have been instances of forced labor lapses, despite documentation provided to us at that time which indicated compliance. While we are disappointed to learn of this, our focus at this time is to constructively engage with MediCeram to determine why these lapses occurred, and what the timeline and path to remediation will be.
YTY remains committed to ensuring we maintain long-term supply relations with partners who are fully able to meet the high professional standards we set for them, which are in line with those we set for ourselves. At the same time, in situations like this, our preferred approach remains to engage with the supplier in question as they seek to regain compliance, rather than reactively cancelling current or future purchase contracts. This ensures ongoing employment and continued compensation for the affected employees. By the same token, if we do not see positive intent, and dedicated effort, on the part of the supplier to address forced labor concerns in a reasonable timeframe, we will not hesitate to conclude our relationship with them.
