Workstreams

• Implementing human rights due dilligence into practice
• Respecting human rights in raw material value chains and supply networks
• Setting up and piloting a sector-wide grievance mechanism

Implementing human rights due dilligence into practice

In the multi-stakeholder process, guidelines on integrating due diligence requirements into business management processes were developed.

Within the working group 'Implementing human rights due diligence into practice'. all members shared their knowledge, experience and challenges encompassed in implementing due diligence in global supply and value chains. A scientific study accompanied the process in order to identify hurdles in the implementation of due diligence obligations. The sector dialogue has identified stakeholder engagement and management approaches for the upstream supply chain as topics for the further cooperation process. Each member company of the sector dialogue will develop an action plan corresponding to one of these focus topics and continues the exchange in the multi-stakeholder format.

Further, the members devoted themselves to this two thematic focus areas:

Due diligence in politically sensitive contexts

In some instances, companies face situations in their value chains in which states do not adequately fulfill their duty to protect human rights or violate human rights themselves. There is sometimes a tension between economically significant relationships and potential violations of human rights. In the context of the thematic focus, experience and recommendations on dealing with human rights risks in certain regions were collected and made available internally to members.

Thematic focus Effectiveness indicators and process proposal

The implementation of human rights due diligence is an ongoing process that companies must regularly review and improve. Within the thematic focus group, a practical guide entitled "Effectiveness of preventive and remedial measures" was published by a service provider. The issue of measuring effectiveness is a relevant topic that members continue to address regarding the action plans.

Respecting human rights in raw material value chains and supply networks

Raw material supply chains present significant human rights, social and environmental risks for the automotive industry. They are often very complex, with numerous subcontractors in a market dominated by a few large enterprises in key positions. Both these factors make it harder for any single enterprise to influence the market as a whole and therefore render individual measures less effective. However, collaborative action creates an opportunity to bring about far-reaching changes in the interests of those who could be affected by supply chain activities.

The focus of the sector dialogue is on the raw materials copper and lithium. Responsible copper and lithium mining, among other things, constitute an important contribution to the sustainable decarbonisation of Germany’s automotive industry and therefore to its long-term competitiveness. Demand for lithium and copper is forecast to increase by a factor of 18 and 10 respectively as we transition fully to electric drives.

Pilot project copper - Benefits and limitations of voluntary sustainability standards as part of human rights due diligence using the example of the copper supply chain

Using the copper supply chain as an example, the objective of the project was to help enterprises integrate voluntary sustainability standards appropriately into their own due diligence processes and to identify complementary measures. In a first step, criteria and a methodology for evaluating and comparing voluntary sustainability standards were developed with the support of a service provider and applied to two copper standards. Building on this, the project group commissioned an analysis of the extent to which standards can contribute to the prevention of human rights risks in the copper supply chain and when additional measures are required. These were compiled in a Guidance Note for complementary measures by the service provider.

In the form of a Practical Guide "Integrating standards in human rights due diligence" the project group makes its combined findings available to companies.

Pilot project lithium – Dissemination and promotion of cross-country recommendations for responsible lithium mining & recommended actions

The objective of this project was to disseminate and communicate jointly developed cross-country recommendations for responsible lithium mining and recommended actions through a dialogue with external stakeholders. Through the sector dialogue, German automotive firms were able to share their experience of calling on their business partners to implement the recommendations. The project held a series of discussion sessions with external stakeholders – primarily enterprises in the lithium supply chain and both state and civil society actors in mining regions – in order to promote the recommendations, examine specific aspects in more depth and develop greater influence.

The cross-country recommendations for responsible lithium mining and recommended actions were developed in a two-stage process. A final version and a joint, public positioning by the sector dialogue automotive industry and its members took place in September 2023.

Setting up and piloting a sector-wide grievance mechanism

Grievance mechanisms help enterprises to identify adverse human rights impacts at an early stage, to take appropriate action and to provide suitable remedy for those affected. It follows that all enterprises are individually responsible for setting up an effective grievance mechanism. In practice, many enterprises find this core element of human rights due diligence particularly challenging. One approach that allows for the pooling of resources is to establish a sector-wide mechanism that can also act as an early warning system and provide effective access for those affected. Against this background, participants in the sector dialogue have developed a concept note for a cross-company grievance mechanism using Mexico as an example, since many German automotive companies operate in the country and particular human rights risks have been identified.

Pilot project – Setting up and piloting a sector-wide grievance mechanism for the automotive industry in Mexico

The objective of the project is to establish an effective cross-company grievance mechanism and pilot it in Mexico. This will operate alongside each enterprise’s own internal grievance mechanism and will help to close any protection and accountability gaps. The cross-company grievance mechanism will cover the entire upstream value chain of its member companies in Mexico. In addition, the piloting in Mexico aims to generate findings for the further development of  both operational-level and cross-company grievance mechanisms.