To ensure that human rights are respected and protected, Daimler has developed a systematic due diligence approach called the Daimler Human Rights Respect System (HRRS). It aims to protect the human rights of our own employees and to ensure that human rights are respected at our direct suppliers (Tier 1) and at risk-relevant points of the supply chain beyond Tier 1. Through our systematic approach to ensuring respect and protection for human rights, we aim to be exemplary for the automotive and mobility services sectors.
Management system for due diligence regarding human rights
The Human Rights Respect System is designed to enable the early identiﬁcation and avoidance of systemic risks and possible negative eﬀects of our business activities on respect for human rights. The HRRS is oriented upon our Group-wide Compliance Management System (CMS).
Human rights in our majority holdings and in the supply chain
Our goal is to implement the HRRS across all the risk categories of our Group’s majority holdings and its supply chain, step by step, in the period until 2030.
For Daimler, respect for human rights is a fundamental component of responsible corporate governance. Respect for human rights is therefore a key component of our Group-wide sustainability strategy. We are committed to ensuring that human rights are respected and upheld throughout our organization and by our suppliers.
The following standards and guidelines in particular serve as a frame of reference for our conduct and are of central importance for our due diligence obligations as deﬁned by the HRRS:
- the UN Global Compact,
- the UN Guiding Principles on Business and Human Rights,
- the Universal Declaration of Human Rights,
- Germany’s National Action Plan on Business and Human Rights, and
- the Core Labor Standards of the International Labour Organization.
Our expectations, which are based on these standards and guidelines, are clearly deﬁned and described in our Integrity Code and the Daimler Supplier Sustainability Standards. The latter deﬁne our requirements with regard to working conditions, human rights, environmental protection, safety, business ethics and compliance, and are also part of our general terms and conditions. We demand that our direct suppliers worldwide commit themselves to observing our sustainability standards, communicating them to their employees and to upstream value chains, and then checking to ensure that the standards are complied with. As a risk-based measure, we ourselves perform audits in critical supply chains in order to verify compliance with our standards by further members of the supply chain. These audits begin with the Tier 1 supplier and extend to the critical points in the supply chain, and even down to the mines if necessary.
We are gradually expanding our Human Rights Respect System (HRRS) in a process that also includes regular consultations with external stakeholders. The HRRS, which orientates itself on our Group-wide Compliance Management System (CMS), utilizes a risk-based approach in its focus on Daimler majority holdings (including our production locations) and our supply chain.
Due diligence with the Human Rights Respect System. As a proactive risk management system, the HRRS is designed to identify and avoid systemic risks and possible negative eﬀects of our business activities on human rights early on.
The HRRS thus primarily protects third parties and is aimed at exerting its eﬀect along our supply chain as well. It consists of four steps that are to be applied to Daimler majority-owned companies and the supply chain:
- identiﬁcation of potential human rights risks (risk assessment),
- deﬁnition, implementation and management of preventive measures and countermeasures (program implementation),
- monitoring of the eﬀectiveness of the measures, in particular at higher-risk units and in supply chains that are at a high risk of human rights violations (monitoring), and
- periodic internal reporting on relevant issues, compliance with external reporting requirements (reporting).
The HRRS also involves consultation and exchange with rights holders (for example our employees and their representatives) and external third parties such as civic organizations and local residents.
Identiﬁcation of human rights risks at Daimler majority holdings. The risk assessment is a two-step process. The ﬁrst step involves a categorization of the majority holdings on the basis of predeﬁned criteria, such as the risk situation in speciﬁc countries and risks associated with speciﬁc business operations. In the second step, units that display a heightened human rights risk are subject to an on-site assessment.
The modular approach we employ here takes into account fundamental human rights standards such as those deﬁned in the Universal Declaration of Human Rights and the Core Labour Standards of the International Labour Organization (ILO).
During the reporting year, we made adjustments to our risk assessment methods and also had external stakeholders verify our risk assessment process. The feedback we receive from stakeholders is used to further develop and improve the risk assessment system. We are also currently developing an eﬀective approach to program implementation, monitoring and reporting.
Identiﬁcation of human rights risks in our supply chain. Since 2008 we have deﬁned our expectations towards our suppliers regarding sustainability in our Supplier Sustainability Standards. Upholding human rights and in particular stipulations concerning working conditions are key components of these requirements. In order to ensure that we can meet our human-rights due-diligence obligations even more systematically, we have developed risk classiﬁcations tailored to various product areas (such as production materials and services). This enables us to identify services and raw materials that may pose risks to human rights, including minerals that are potentially associated with conﬂicts. During the year under review, we started using our analyses here as a basis for deﬁning and implementing measures that can also be applied beyond the level of our direct suppliers if necessary.
The measures are multifaceted: For example, in cases of certain identiﬁed high-risk materials, such as cobalt, we use questionnaires prior to new awardings in our supply chains. The goal is to document the sustainability performance not only of our direct suppliers but also beyond them. This questionnaire is supplemented with a speciﬁc questionnaire on supply chain transparency and human rights due diligence that is based on the requirements of the ﬁve-step framework of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conﬂict-Aﬀected and High-Risk Areas. Our employees carefully review the information provided by the potential battery suppliers during the onsite assessments.
As part of our contract awarding process for the supply of battery cells, we have also commissioned an external auditing company to audit our cobalt supply chain and conducted compliance dialogs with suppliers ourselves. We also hold compliance dialogs with companies that are not our direct suppliers but are located at important points of our supply chain, for example in the mining industry. Our aim is to gradually expand this procedure to suppliers of other raw materials. We also provide instructional materials to our suppliers in order to raise awareness on human rights issues related to raw material supply chains in general.
Cross-functional teams work on the development and implementation of suitable preventive activities and countermeasures. The teams consist of human rights and compliance experts in close cooperation with the operational procurement units.
Further information on this topic is available in the chapter Sustainability in the supply chain
In addition to our own measures, we are also active in raw materials initiatives that complement and amplify the impact of our measures to promote the responsible procurement of raw materials. These initiatives currently focus on the responsible use of cobalt, steel and aluminum.
Further information on this topic is available in the chapter Sustainability in the supply chain
Further Group-wide measures. Within our sales organization, we conduct individual audits of potentially critical transactions in cooperation with the units that are involved. During our ongoing training sessions, we also inform our employees and make them aware of their obligation to respect and safeguard human rights as described in our Integrity Code. Employees and external parties can use various channels, such as the BPO (Business Practices Oﬃce) whistleblower system and the World Employment Committee, to report suspected human rights violations and obtain “access to remedy” as deﬁned by the third pillar of the UN Guiding Principles on Business and Human Rights.
Our principles and guidelines
The BPO whistleblower system
According to our assessments, no cases of child labor, forced labor or violations against the right to collective bargaining or freedom of association within the Daimler Group were reported in 2018. Our company systematically investigates individual cases of potential violations in the supply chain, including the use of child labor for the extraction of raw materials. In addition to these measures, we reviewed and followed up on reports of incidents and tips we received from the general public. In cases where we identify a need for action, we implement the necessary measures, alone or in cooperation with our partners.
Involvement at the executive level. The responsibility for human rights issues lies with the Integrity and Legal Aﬀairs Board of Management function. The member of the Board of Management responsible for Integrity and Legal Aﬀairs is regularly informed about human rights activities. This is supplemented by regular reports submitted to the Board of Management and the Corporate Sustainability Board (CSB), as well as to the Procurement Council (PC) within the framework of our sustainability strategy.