Human rights compliance

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 checking to ensure that the standards are complied with. As a risk-based measure, we ourselves perform checks 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 one 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:

  1. identification of potential human rights risks (risk assessment),
  2. definition, implementation and management of preventive measures and countermeasures (program implementation),
  3. 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
  4. 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 civil society organizations and local populations.

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 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.

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. (See daimler.com/company/corporate-governance/compliance/principles.html and Compliance)

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.

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