UN Global Compact Communication on Progress (COP) 2020 - Human rights

UN Global Compact Communication on Progress (COP) 2020 - Human rights

HUMAN RIGHTS

Principle 1: Supporting human rights

Principle 2: Exclusion of human rights abuses

Policy statement and international frameworks

As an international trading company with extensive global supply chains, we see it as our responsibility to respect human rights and prevent human rights abuses. With our Human Rights Policy Statement at ALDI Nord, we have been committed to upholding the ‘United Nations Guiding Principles on Business and Human Rights’ (UNGP) since 2018.

Our experience shows that it is time to take the next step and seek legal regulation regarding corporate human rights due diligence. That is why we are in favour of a European regulation on supply chain responsibility. In September 2020, we published a position paper on the topic. In our view, a law of this nature is an important part of an international solution to create fair competitive conditions and drive change.

In 2008, we committed to complying with the amfori BSCI Code of Conduct (CoC) by joining the ‘amfori BSCI’ (Business Social Compliance Initiative). Its guidelines and our policy statement are based on numerous international agreements, including the core conventions of the ‘International Labour Organization’ (ILO), the ‘Universal Declaration of Human Rights of the United Nations’ (UN), the ‘UN Convention on the Rights of the Child’, the ‘UN Convention on the Elimination of All Forms of Discrimination against Women’ and the ‘Guidelines for Multinational Enterprises’ of the Organisation for Economic Co-operation and Development (OECD). The values and norms contained in these agreements are also reflected in other standards and regulations of ALDI Nord, including our Corporate Responsibility (CR) Policy, which has been in force for several years, as well as the ‘Additional Agreement on Social Standards: Commitment to humane and fair working conditions in our supply chains’. These provide ALDI employees and our business partners with a binding framework for action. In the reporting year, we also published new guidelines on dealing with forced and child labour. With these guidelines, we reiterate that all forms of servitude or slavery, forced or compulsory labour, serfdom, human trafficking, involuntary labour or child labour are unacceptable in our business and along our supply chains. For International Women’s Day 2021, we also sent a clear signal to reduce discrimination and promote equality by signing the United Nations’ ‘Women’s Empowerment Principles’. As part of this, we are committed to equal pay for work of equal value, and to gender equality – both along the global supply chains and within our group of companies.

Human rights due diligence in our supply chains

We are aware that the production of goods along complex supply chains comes with risks. We therefore continuously identify human rights risks and take action to mitigate negative impacts in our supply chains. We achieve this via a range of practices, including continuous hotspot analyses, monitoring, research and dialogue with stakeholders. In addition, we continuously carry out assessments to identify potential risks in our supply chains. In 2020, we started to regularly conduct cross-resource-group risk assessments related to human rights and environmental aspects in our supply chains. The aim of these analyses is to make risks comparable with each other, which allows us to identify which product groups, resources, production countries and cross-cutting issues we need to address with high priority due to their risks and impacts. We also conduct Human Rights Impact Assessments (HRIAs) for the selected high-priority product groups or resources to gain a deeper insight into the supply chains. Furthermore, HRIAs allow us to engage with stakeholders and derive effective measures. If we identify specific human rights violations in our supply chains, we can respond immediately and take corrective action. In 2021, we will conduct a total of three HRIAs on human rights risks in risk supply chains. We aim to publish the initial results and the resulting measures on our websites by the end of 2021. We aim to conduct up to 12 HRIAs – at least one assessment for each high-risk supply chain – and publish the results by the end of 2025.

Auditing working conditions on site

To ensure compliance with human rights requirements in our supply chains, we audit the working conditions of our producers on site. Since 2019, we have carried out inspections known as ALDI Producer Assessments (APAs) in our high-risk supply chains in cooperation with external service providers. In the reporting year, we conducted APAs in our supply chains for fruit and vegetables such as pineapples, bananas or citrus fruits. At the end of 2020, we developed an approach that links our supplier evaluation (CRSE) (see ‘Labour rights’) with the APAs. Since the beginning of 2021, around 55 audits have been carried out in the pineapple and banana supply chains in Africa and Latin America; these were completed at the end of May 2021. We will continue to pursue the approach of linking the two auditing methods in 2022, expanding them to include avocado and citrus products.

We also regularly assess the working conditions at our suppliers’ production facilities in high-risk countries in the non-food segment through comprehensive social audits and certifications carried out by external service providers, as well as with our own inspections of production facilities (ALDI Social Assessments – ASAs). On site, we enter into an exchange with stakeholders and those potentially affected in order to better identify and prevent possible human rights violations at an early stage. In the event of serious violations of our requirements, a contractually defined process comes into effect. Possible consequences range from written warnings to termination of the business relationship. In the year under review, we performed 307 ASAs in nine countries, half of them in China (50 per cent). Due to the COVID-19 pandemic, we conducted about two-thirds of the ASAs remotely for the first time this year to protect workers on site. Staff from the CR departments in Bangladesh and Hong Kong conducted the audits via video conferencing, while local service providers carried out the on-site checks. At 59 of the production facilities audited, there were critical deficiencies in areas such as occupational health and safety. Such deficiencies are often the result of structural challenges in the production countries. We also work to address these kinds of findings through multi-stakeholder initiatives such as the ‘German Partnership for Sustainable Textiles’ (Bündnis für nachhaltige Textilien). When problems are identified, we endeavour to develop solutions together with suppliers and producers to improve working conditions along our supply chains, for example. In the case of repeated violations or lack of progress, we usually block the production facility in question from receiving new orders.

Certification standards for the buying of high-risk resources

In future, we will focus in particular on the high-risk resources identified in the relevant countries of origin. We will achieve this by implementing targeted measures within the framework of international responsible sourcing strategies. Numerous steps have already been taken to reduce human rights risks in our food and non-food supply chains. These include the use of established auditing and certification standards in the buying process and the qualification of production facilities for apparel textiles in the high-risk country Bangladesh within the scope of the ALDI Factory Advancement (AFA) Project. During the reporting period, we worked with several production facilities and business partners to further develop the AFA Project. The aim is to make factories independent of external AFA Project trainer support. So far, these facilitators have helped local workers and managers independently address workplace issues and find their own sustainable solutions. Selected employees and managers have now assumed trainer roles at the production facilities. As a result of the COVID-19 pandemic, the production facilities had to temporarily stop their activities, and the project was suspended for four months from April. We also replaced the face-to-face events with online training and sensitised the production facilities with information material on how to deal with the coronavirus. The focus is on the occupational health and safety guidelines for reopening the production facilities after closure and the COVID-19-related safety guidelines for daily operation of the factory.

Our cooperation with a non-governmental organisation (NGO) from Bangladesh in the AFA Project came to an end in April 2021 (for more on the project, see the Sustainability Report 2019). We are currently developing a follow-up programme that combines on-site training and workplace activities. Plans include a childcare facility in the community, which can also be used by parents from factories that do not produce for ALDI, extending responsibility beyond our own supply chains.

In addition to our own internal checks, we also want our customers and NGOs to be able to trace the origin of our textiles and shoes. The publication of our main production facilities, including their addresses and the approximate number of employees, is a necessary first step towards ensuring the traceability of our products all along the supply chain and complying with the ‘Transparency Pledge’ formulated by an alliance of nine human rights groups and trade unions. Since 2020, we have also been publishing all our main production facilities on the ‘Open Apparel Registry’ platform.

Continuous improvement and transparency

Implementing due diligence on human rights is a continuous development process. We therefore constantly analyse our Corporate Responsibility (CR) strategies, as well as our processes and tools. Beyond that, we are currently planning online training sessions for our suppliers on human rights policies and procedures at ALDI Nord. Our progress, measures and goals are disclosed transparently within the scope of our sustainability reporting and on our websites.

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