Human Rights Assessment

dormakaba acknowledges the responsibility to respect human rights as outlined in the UN Guiding Principles on Business and Human Rights (UNGP).

Why it matters

In today’s ever more interconnected and globalized world, there is increasing public focus on how companies are respecting human rights in their operations as well as through their business relationships across value chains. That means demonstrating that they are not harming the fundamental dignity and welfare of people as they go about their legitimate work and generate the jobs, wealth and growth that benefit all communities. Human rights are rights inherent to all human beings, irrespective of nationality, place of residence, sex, national or ethnic origin, color, religion, language or any other status. Above all, human rights are interrelated, interdependent and indivisible.

As a global company with highly complex supply chains, dormakaba is exposed to increased risks of being directly or indirectly linked with human rights violations. We therefore treat the respect of human rights as a priority and require our business partners to do the same.

Key activities

Our human rights commitment was published in the financial year 2019/20 in the form of the dormakaba Statement of Commitment on Human Rights. It was elaborated based on a gap assessment, stakeholder consultations and the salient issues identified (see details in the following section) and approved by our Chairman and CEO, Riet Cadonau. In prioritizing these salient issues, dormakaba recognizes that some groups may be at greater risk of negative human rights impacts due to their vulnerability or marginalization. We also recognize that the evaluation of the severity of potential impacts may change and that other issues may grow in importance over time. We will therefore regularly re-assess salient issues and human rights risks based on internal and external stakeholder feedback and expert judgments.

In line with the “Protect, Respect, Remedy” Framework provided by the UN Guiding Principles on Business and Human Rights (UNGP) and as outlined in the Statement of Commitment on Human Rights, dormakaba recognizes the important role the company has in respecting human rights. We are guided by international human rights frameworks, which include but are not limited to the UNGPs, the Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the Core Labor Conventions of the International Labor Organization (ILO) and the OECD Guidelines for Multinational Enterprises

We are committed to fully respect the personal dignity, privacy and individual rights of our colleagues, customers, suppliers and other stakeholders. Our commitment to respect human rights extends to all individuals throughout the value chain, and we use the relationships with co-manufacturers, independent suppliers, and other business partners to encourage and promote the principles of the Statement of Commitment on Human Rights throughout our network. We believe that we can influence others through leading by example and therefore communicate proactively about our commitment.

Our aim is to conduct Human Rights Due Diligence (HRDD) throughout our business to proactively assess, identify, prevent and mitigate actual and potential adverse human rights impacts on potentially affected rightsholders across the value chain. We also use HRDD to identify where we can better support and promote individuals’ ability to live and exercise their fundamental human rights.

We have defined the following HRDD process and outlined it in the Statement of Commitment on Human Rights to ensure dormakaba will be able to effectively implement our commitment to respect human rights:

Process of Human Rights Due Diligence (HRDD)

dormakaba focused on the following areas in the financial year 2019/20:

1. Communicating our policy commitment
2. Assessing actual and potential impacts
3. Integrating findings and committing to appropriate action
4. Tracking and communicating performance
5. Supporting remediation of adverse impacts by providing access to grievance

Communicating our policy commitment

In the financial year 2019/20 we shared our policy commitment publicly on our corporate website as well as on various local dormakaba websites. Internally, the document was shared with all members of the Executive Committee and made available on our social intranet. Further, we developed an eLearning video which was also distributed to employees via our Intranet. The animated film takes the viewer through explanations of what saliency means and why the exemplary topics of occupational health and safety, customer safety and migrant workers issues were considered salient and prioritized for action.

Assessing actual and potential impacts

dormakaba does not attribute more importance to one human right over another. However, for the implementation of our human rights commitment, dormakaba prioritizes human rights issues that are most salient to the business – identified via a formal human rights saliency assessment conducted in the financial year 2018/19 in accordance with the UNGPs.

This included consultations with 20 key internal and external stakeholders including human rights experts, customers and suppliers, which generated a focused list of salient human rights issues for dormakaba and formed the basis for the company’s Statement of Commitment on Human Rights, which came into effect in August 2019.

The stakeholder consultations were focused on the potential gross risk of human rights impacts on rightsholders, as opposed to a standard risk assessment approach, which looks at the risk to the company. The company’s current management of human rights-related topics were not evaluated. In other words, saliency was defined based on the inherent human rights risk, without reference to how well our company manages the topic already. Thirteen issues appeared as most relevant, and these were further analyzed in terms of the company’s leverage and the potential severity of impact. Severity here is defined by the scale, scope and remediability of the potential human rights impacts on people.

dormakaba Human Rights Saliency Matrix

Among the broader human rights issues identified, dormakaba commits to focus on the salient human rights issues (in alphabetical order) defined below:

Given the challenges of limited transparency in the value chain, our salient issues will be analyzed in more detail through human rights impact assessments in high-risk areas in order to develop appropriate measures. In the financial year 2019/20, we committed to carrying out such a human rights impact assessment based on the phase model below.

Phases of a Human Rights Impact Assessment

To gain a better understanding of migrant workers’ risks and vulnerability at dormakaba, we carried out a survey to examine where we employ migrant workers, what type of work they were doing, which countries they came from and whether recruitment agencies were used in the recruitment process. We then compared the results to a migrant workers risk index provided by Verisk Maplecroft. We found that we employed around 600 foreign workers in 12 countries categorized as high or extreme risk for migrant workers by the index. In nine of these countries, migrants were employed for low-skilled jobs in production. This worker profile is considered more vulnerable to exploitation than office workers. We also examined the countries of origin of the foreign workers, excluding migration patterns from industrialized nations to emerging nations from the analysis. In only three countries – Malaysia, Russia and Taiwan – we were using third-party recruitment agencies, which was another indicator of potential risk.

To round off the scoping for the HRIA (Phase 1 & 2), this data was supplemented by occupational health and safety indicators such as whether hazardous materials or production processes were used, as well as the types of potential human rights issues in the supply chain that are linked to the materials used in the manufacturing of our products by location. Based on the analysis, the geographical scope for the HRIA was set for Malaysia and Singapore.

To complete the preparation (Phase 3), we hosted kick-off meetings with local management and relevant job functions for these locations and set up local coordinators to support the project. Further, we consulted local sales and procurement teams to develop a business stakeholder map and consulted with local NGOs to further develop our stakeholder map and to gain insight on local context.

We were unable to complete Phase 4 as planned in April 2020 due to the Covid-19 pandemic but we aim to do so in the financial year 2020/21, should travel restrictions allow.

Integrate findings and take appropriate action

Based on the human rights-related risks and impacts identified, dormakaba will develop prevention and mitigation measures integrated into company operations, training programs, policies and management systems. This will be achieved through the implementation of a human rights roadmap which was established in the financial year 2018/19 and approved by the Executive Committee in the context of the HRDD process development.

dormakaba is committed to a continued dialogue with internal and external stakeholders to continuously improve its HRDD. Where our ability to influence potential human rights issues is limited, we strive to enhance leverage through (industry) collaboration and partnership with key stakeholders, including employees, suppliers, civil society organizations and businesses partners to prevent or mitigate negative human rights impacts.

Track and communicate performance

dormakaba will track the effectiveness of our actions and influence to ensure human rights are respected in the value chain through a system with concrete targets and key performance indicators monitoring the implementation of the human rights roadmap. Where possible, dormakaba will strive to measure the actual impacts of our actions on the human rights of potentially affected rightsholders.

Respect for human rights is an integral part of our global sustainability strategy and through the new Statement of Commitment on Human Rights, we commit to transparently report on the progress of our efforts in our annual sustainability report as well as through the annual Modern Slavery Statement to publicly account for how human rights issues are addressed.

Remediating adverse impacts

Access to grievance

In the financial year 2019/20, the dormakaba whistleblowing system and tool were evaluated by an external party for conformity to the effectiveness criteria for grievance mechanisms laid out by the UN Guiding Principles on Business and Human Rights. The criteria are:

• Legitimate
• Accessible
• Predictable
• Equitable
• Transparent
• Rights-compatible
• Source of Continuous Learning
• Based on Engagement and Dialogue

Generally, the criteria of Legitimate, Predictable, Equitable and Rights-compatible were met well. Considering that the whistleblowing system has been implemented recently, some criteria such as Source of Continuous Learning (i.e., identifying lessons for improving the mechanism) and Based on Engagement and Dialogue (i.e., a feedback mechanism for users regarding the processes of the system itself) could not yet be fully assessed. For the target group of dormakaba employees, the grievance mechanism also met the Accessibility criteria well. A description of our reporting channels is included in the dormakaba Code of Conduct and a communication campaign was launched, including print media (poster campaign) for local implementation to reach production workers.

The assessment was also intended to be a source of continuous learning and for evaluating areas for potential improvement, e.g. such as raising awareness of the system for other intended users such as external business partners, suppliers, etc. Accessibility for external users who are unable to read or have no internet access is by the very nature of a web-based tool more challenging.

In the planned Human Rights Impact Assessment, we will evaluate if and how to prioritize potentially vulnerable groups and identify potential measures to ensure the whistleblowing system is effective and accessible for them. These groups may be related to our already identified salient human rights issues and could include, for example, outsourced workers, migrant workers, employees in the supply chain, etc. To raise more awareness of the whistleblowing system within the supply chain, informational materials on the Supplier Code of Conduct will be amended to include it.

Access to remedy

When adverse human rights impacts are uncovered due to our business activities or from linkages to our operations, we are committed to taking timely and transparent action to remediate in a fair and equitable manner in line with the UNGPs. Where we find impacts linked to our business relationships, we will use our influence to encourage suppliers and business partners to respect human rights.

Our performance

As regards our approach towards human rights, our biggest achievement in the financial year 2019/20 were the migrant workers’ risk assessment, as part of our Human Rights Impact Assessment scoping phase, and becoming a member of the Responsible Labor Initiative.

However, the biggest challenge of limited leverage and limited transparency in the upstream and downstream value chain remains. This is especially true at the mineral extraction stage or in terms of improper use of our products by end users. This is why we have planned to conduct a supply chain traceability project in the financial year 2020/21.

Outlook

In the financial year 2020/21, we will focus on completing the Human Rights Impact Assessment, should travel restrictions allow. A key focus will be to further assess the salient issues of conflict and child labor through the supply chain traceability project mentioned above. We will also integrate sustainability and human rights objectives in performance management for main contributors to these strategies in line with the newly defined Sustainability Charter. In addition, we will also start developing a Zero Recruitment Fees policy.