Prevention and risk management

The establishment of uniform sustainability criteria and the use of effective control instruments present a special challenge in a value chain that spans the entire world. That is why we have set up an effective system for monitoring our sustainability requirements within our procurement processes.

  • Regular review of our active suppliers. To identify possible sustainability risks in our supply chain with regard to child labor, environmental protection, corruption prevention, violation of freedom of association or violations of human rights at an early stage, we conduct a targeted risk analysis of our suppliers by country and commodity at regular intervals.
    This analysis enables us to identify suppliers that are subject to increased risk and to derive activities on this basis. In addition, we use media and database research to review cases of actual sustainability and compliance violations by our direct suppliers. We systematically follow up on all reports of violations.
  • Audits of new suppliers. Particularly in the case of new suppliers from high-risk countries, trained auditors ask specific questions concerning the compliance with sustainability standards during on-site assessments. In addition, we use a self-assessment questionnaire if required.
  • Escalation process for suspected and actual violations. In the event of a suspected or actual violation against our sustainability standards by a supplier, we follow an established escalation process, which begins with the request for an opinion and explanation of the measures taken to remedy the irregularities. If any doubts remain, we seek direct contact with the supplier or demand a written statement from the supplier’s company management. We work closely together with the employee representatives, especially in cases of suspected human rights violations. We follow up on all reports of violations.

If required, independent auditors conduct special sustainability audits at our suppliers. In justified cases we refrain from placing further orders or terminate the cooperation until it is demonstrated that the irregularities have been remedied.

 

Proof of origin of conflict minerals

Due to international crises, certain regions of the world are exposed to the risk that armed conflicts could be financed with the revenues from the sale of raw materials. In order to prevent conflicts arising from the trade with so-called conflict minerals (tin, tantalum, tungsten, and gold), a series of initiatives have been introduced aiming at a declaration of the origin and the responsible procurement of the raw materials. For example, Section 1502 of the US Dodd-Frank Act stipulates that companies listed on US stock exchanges must certify the source of these commodities along the entire supply chain.

In Europe, the European Union also envisages legislation on this matter. Daimler supports an approach for the establishment of responsible procurement of raw materials that is both purposeful and practicable, and engages in regular dialog with industry associations such as the German Association of the Automotive Industry.
 
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