SUSTAINABILITY REPORT2017

National Business and Human Rights Action Plan: imple­men­tation of human rights due diligence

GRI 102-16; GRI 102-17; GRI 408-1; GRI 409-1

As a values-oriented family-owned company, Tchibo integrated due diligence regarding human rights into its business practices many years ago. We firmly believe that our business activ­ities must not be at the expense of people and the environment. 

On 21 December 2016, the German government adopted the National Action Plan on Business and Human Rights (NAP). The aim of the Action Plan is to implement the Guiding Principles on Business and Human Rights unani­mously adopted by the United Nations in 2011. The UN Guiding Principles do not create any new human rights standards or contain any additional obliga­tions in inter­na­tional law but are based on existing binding and non-binding human rights instru­ments, such as the United Nations Inter­na­tional Human Rights Charter and the core labour standards of the Inter­na­tional Labour Organ­i­sation (ILO). The UN Guiding Principles formulate require­ments for govern­ments and business on national and inter­na­tional level. For the first time, they provide a frame of reference that makes companies, as well as govern­ments, respon­sible for respecting human rights in global supply and value chains, and for preventing human rights viola­tions. The UN Guiding Principles were developed under the aegis of former UN Special Repre­sen­tative Prof. John Ruggie and with the partic­i­pation of state and private protag­o­nists.

In the NAP, for the first time the German government, too, enshrines the respon­si­bility of German companies for respecting human rights within a defined framework. It formu­lates clear expec­ta­tions based on the three pillars of the UN Guiding Principles: Protect, Respect, Remedy. Following these three pillars, it is the state’s task to protect human rights. Companies have a respon­si­bility to respect human rights and to establish the necessary management struc­tures. Grievance mecha­nisms should be estab­lished to redress human rights viola­tions. 

The process by which companies are to orient themselves in the imple­men­tation comprises the following five core elements:

  • Draw up a human rights policy statement
  • Develop proce­dures to identify actual or potential adverse impacts on human rights in their value chains
  • Implement measures to avert poten­tially adverse impacts and review of the effec­tiveness of these measures
  • Establish grievance mecha­nisms
  • Ensure regular reporting

Decla­ration of Principles regarding Respect for Human Rights

As a values-oriented family-owned company, Tchibo integrated due diligence regarding human rights into its business practices many years ago.  Our business conduct is guided by globally recog­nised standards and guide­lines, in particular the Inter­na­tional Charter of Human Rights, the ILO Decla­ration on Funda­mental Principles and Rights at Work, and the OECD Guide­lines for Multi­na­tional Enter­prises. The main inter­na­tional conven­tions and principles are laid down in the Tchibo Code of Conduct (CoC) and serve as a guideline for all Tchibo employees. The minimum require­ments for working condi­tions and environ­mental standards defined in the Tchibo Social and Environ­mental Code of Conduct (SCoC) apply to the producers of our consumer goods.

In May 2018, we reaffirmed our position on corporate respon­si­bility for respect for human rights in a policy statement in which we commit ourselves to respect human rights based on the UN Guiding Principles: companies have a respon­si­bility to respect human rights in their global value and supply chains and to prevent human rights viola­tions, while it is the duty of the state to protect human rights. 

We implement our human rights due diligence in the consumer goods and coffee value chains on two levels: on the one hand, we are directly involved at the level of the factories and coffee farms, and on the other, we engage in initia­tives and alliances throughout the industry to initiate systemic changes and improve­ments. 

Proce­dures to identify actual or potential adverse impacts on human rights

Our goal is to avert poten­tially adverse effects of our business activ­ities on human rights. To achieve this, we must first identify which risks exist at what points in the value chains.

This is why we regularly carry out compre­hensive analyses in our consumer goods value chain, based on which we develop strategies and measures to respect human rights and prevent human rights viola­tions. The focus is on our cooper­ation with existing producers and the awarding of contracts to new producers. We prioritise factories with regard to their respect for human rights and culture of dialogue between managers and employees. One important instrument for identi­fying and counter­acting human rights risks at suppliers with whom we have been working for a long time is our WE (Worldwide Enhancement of Social Quality) quali­fi­cation and dialogue programme for suppliers. Through dialogue with management and employees, we gain a deeper insight into the everyday life of the factories. If we identify risks there, we can work with the people on site to take targeted measures to mitigate risk and introduce improve­ments, such as higher occupa­tional safety standards. 

At industry level, we work together with other stake­holders in multi-stake­holder initia­tives that jointly establish prevention programmes and achieve signif­icant changes for the entire industry. 

It is more difficult to system­at­i­cally identify human rights risks in the Coffee sector. To this day, there has only been limited trans­parency in the supply chain worldwide. It is often difficult to trace which individual coffee farmers have grown and harvested our green coffees. Depending on the country of origin, the beans for a single container may have been supplied by several thousand farmers. Tchibo also sources its green coffees from various countries in Central and Latin America, Africa and Asia. In these areas around the equator, coffee is grown under widely differing working condi­tions. That is why we consider it our essential task, together with all stake­holders in the coffee supply chain, to create greater trans­parency right to the origin, and thereby identify the main abuses of human rights. In this way, for example, we were able to obtain specific indica­tions of illegal child labour on coffee fields in Guatemala. So that is precisely where we start: Together with the Coffee Care Associ­ation and Save the Children, the world's largest children's rights organ­i­sation, we are promoting education and care for the children of migrant workers and harvesters in various regions of Guatemala.  

Measures to avert poten­tially adverse impacts and review of the effec­tiveness of these measures

Consumer Goods value chain

To avoid and prevent poten­tially negative effects of our business, we take measures at two levels: on the one hand at the factory level, and on the other at industry level.  

Cooper­ation with our producers is based on the Tchibo Social and Environ­mental Code of Conduct (SCoC), which forms part of all purchasing contracts and obligates suppliers to comply with the minimum working condi­tions and environ­mental standards we define. Before awarding a contract, we audit producers to check whether they meet our require­ments. The contract is only awarded if the audit proves that all require­ments have been met. 

Our aim is to improve and ensure respect for human rights and working condi­tions at our factories long term. Together with the German Society for Inter­na­tional Cooper­ation (GIZ)and the Federal Ministry for Economic Cooper­ation and Devel­opment (BMZ), we therefore developed the WE dialogue programme in 2007. It helps local producers to be aware of and respect human rights, identify problems in their opera­tions and gradually improve working condi­tions.

The WE programme has already enabled us to achieve a great deal with our producers: for example, getting them to take the initiative to implement occupa­tional health and safety measures, or develop more perfor­mance-related remuner­ation. But we also see where we come up against our limits in the factories. Urgent human rights require­ments such as living wages, freedom of assembly, and the ban on forced labour cannot be resolved at the level of individual producers – which is why we are engaged in industry-wide initia­tives and alliances for systemic change.

One important step on this path was the signing of our global framework agreement with the Indus­triALL Global Union in 2016. The agreement gives the employees of our consumer goods suppliers a robust instrument empow­ering them to form or join democratic trade unions. The idea is to make it easier for them to negotiate wages, social benefits, and working hours with their employer or across the industry. Pilot projects were success­fully initiated in Myanmar and Turkey in 2017. 

To address systemic challenges, we are engaged in sector-wide alliances, such as the Alliance for Sustainable Textiles, the ACT on Living Wages initiative, and the Accord on Fire and Building Safety in Bangladesh. Signif­icant progress has been made within the framework of the Accord, for example: five years after it was concluded, around half of the 1,600 factories in which members of the Accord have their products produced are considered safe. Read more about our commitment to the Consumer Goods value chain here.

Coffee value chain

In the coffee value chain, too, we believe it is essential to develop solutions at farm and sector level. Since 2008, we have been purchasing certified and validated coffee qualities from inter­na­tionally recog­nised standard organ­i­sa­tions such as Fairtrade, Rainforest Alliance, UTZ and the 4C baseline standards in the growing regions relevant to us. The certi­fi­ca­tions are based on human rights reference instru­ments, including the ILO core labour standards. In addition, our Tchibo Joint Forces!® training programme supports coffee farms in their gradual conversion from conven­tional to environ­men­tally and socially compatible coffee farming. To counteract illegal child labour in Guatemala, we have been supporting educa­tional projects and childcare facil­ities in various coffee-growing regions of Guatemala since 2011. In 2017, we also launched the multi-stake­holder initiative Mainstreaming Sustainable Coffee Production, in which we intend to tackle complex systemic challenges together with govern­ments, industry players and civil society. Read more about our commitment to the coffee value chain here.

Employees

Our employees are respon­sible for respecting human rights in their working environment. This is based on the Tchibo Code of Conduct (CoC) intro­duced in 2007, which we updated in 2017. In our CoC, we have estab­lished guide­lines for ethical business practices, fair conduct and full compliance with the law. These are binding for all employees of Tchibo GmbH and the inter­na­tional business units. They governs our dealings with business partners and customers and provide guidance in day-to-day business. We have defined important values of our company in the form of 13 basic rules. The CoC is based on the ILO's core labour standards. It prohibits all forms of corruption, and granting or accepting of an undue advantage. If an employee violates any of the principles, they face sanctions under labour law. 

All managers regularly confirm that they have under­stood and complied with the rules of the CoC, explained them to their staff and have reported any breaches they have become aware of. They also sign that they verify compliance with the CoC. Each new employee receives a copy of the CoC. We inform our employees about new devel­op­ments via the intranet as well as directly, through their super­visors. Compliance with the require­ments of the CoC is verified in internal audits by the Group auditors of maxingvest ag. A whistle­blowing hotline operated by an independent body serves as an anonymous point of contact so that employees, suppliers and customers can report possible cases of misconduct.

Respect for human rights has a high priority in our corporate culture and thus in our everyday dealings with one another. We offer all employees equal oppor­tu­nities and reject all forms of discrim­i­nation based on age, gender, background, sexual orien­tation, religious belief, physical consti­tution and other personal charac­ter­istics. We maintain an open, appre­ciative dialogue, and create oppor­tu­nities for partic­i­pation. Read more about our employee commitment here.

Customers

We also incor­porate human rights due diligence in our customers’ data protection, the details of our adver­tising, and in our product labelling. For example, in adver­tising we ensure that we do not discrim­inate against anyone, and in adver­tising commu­ni­ca­tions we adhere to the principles of compe­tition law. More on this in the Compliance and Customers & Products section.

Estab­lishment of grievance mecha­nisms

It is important for us to know when, how and where viola­tions of human rights principles have occurred, because only then can we take appro­priate counter­mea­sures. We have therefore estab­lished various grievance proce­dures so that employees and external parties can alert us to possible or actual viola­tions of human rights, and we can identify and reduce poten­tially negative effects of our business activ­ities at an early stage.

Our SCoC obligates producers of our consumer goods to set up grievance proce­dures for employees and/or their repre­sen­ta­tives. In addition, our WE dialogue programme creates the space and oppor­tunity for employees to address short­comings openly and criti­cally, and to work together with management on improve­ments. We inform employees about their rights, encourage them to exercise them, and support them in demanding these rights. So the local human rights experts who organise the WE programme at the factories act not only as trainers but also as moder­ators and facil­i­tators of dialogue and processes. Being at the local factories regularly and over a longer period of time, they build up the necessary trust among the employees so that they are the first point of contact to flag possible human rights viola­tions. A solution can then be worked out together with the factory managers. 

In our collab­o­ra­tions with stake­holders, we are working on estab­lishing grievance mecha­nisms in the supply chain. Under our inter­na­tional framework agreement with the Indus­triALL Global Union, we make particular efforts to assert the right of employees to form trade unions. This gives them a structure in which human rights viola­tions can be prevented and grievances resolved directly on-site. As part of the Accord on Building and Fire Safety in Bangladesh, we worked with trade union repre­sen­ta­tives, members of NGOs and trading companies to establish a cross-factory grievance system. 

We also accept complaints directly. Complaints can be addressed anony­mously to Tchibo directly via NGOs and Indus­triALL as well as via the email address social­com­pliance@tchibo.de. The email address is noted in our global framework agreement and in the SCoC. Our producers are required to disclose this infor­mation to all employees, along with the Code of Conduct.

Regular reporting

We believe that trans­parency is an important prereq­uisite for advancing the imple­men­tation of human rights due diligence on a broad scale. That is why we have, for many years, reported openly on progress as well as on obstacles on the path to becoming a 100 % sustainable business in our Sustain­ability Reports. In the Sustain­ability Report 2017, for the first time we are devoting a separate section to our imple­men­tation of human rights due diligence, to demon­strate how we meet our respon­si­bility to protect human rights in the context of the NAP. We will continue to keep you informed about our commitment to respect and uphold human rights in our annual Sustain­ability Report.