Human Rights

15 min

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

Our approach

At dormakaba, we want to lead by example and engage with our partners to drive more eco-friendly practices and support the protection of human rights. 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. This 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 company with global 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 top priority and require our business partners to do the same.

Our human rights commitment was published in FY 2019/20 in the form of the dormakaba Statement of Commitment on Human Rights and extends to all individuals throughout the value chain. It was developed based on a gap assessment, stakeholder consultations, and the salient issues identified (see details in the following section), and approved by our then Chairman and CEO. 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.

We are guided by international human rights frameworks, which include but are not limited to the “Protect, Respect, Remedy” framework of the UN Guiding Principles on Business and Human Rights (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.

Human Rights Due Diligence (HRDD)

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)

Assessing potential impacts to define salient issues

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 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.

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, we commit to focusing on the salient human rights issues (in alphabetical order) defined below:

Given the challenges of limited transparency in the value chain, our salient issues are regularly analyzed in more detail through human rights impact assessments or social audits in high-risk areas in order to develop appropriate measures. We have committed to conducting one social audit per financial year by 2027. The results of the social audit planned for FY 2021/22 are currently pending.

In order to achieve this, we leverage our membership with the Responsible Labor Initiative to work with local auditors to assess our operations based on the Responsible Business Alliance Code of Conduct. Previous audits revealed, for example, that migrant workers under employment had paid recruitment fees. However, under the Employer Pays Principle, the costs of recruitment should be borne not by the worker but by the employer.

Integrate findings and take appropriate action

As a result of previous social audits, we have developed relevant mitigation measures, including:

• Development of service agreement templates for labor agents and labor contractors to better address freely chosen employment and responsible recruitment practices
• Requirements for pre-departure training for foreign migrant workers on recruitment fees and the dormakaba whistleblowing system
• Training requirements for a wider range of stakeholders on the dormakaba supplier assessment and engagement program

Tracking and communicating performance

We commit to transparently reporting on the progress of our efforts in our annual sustainability report as well as to publicly accounting – through this report and our annual Modern Slavery Statement – for how human rights issues are addressed.

We track the effectiveness of our actions and influence to ensure human rights are respected in the value chain. We do this through a management system with concrete targets and key performance indicators, monitoring the implementation of the human rights road map.

Remediating adverse impacts

When adverse human rights impacts are uncovered due to our business activities or from links 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.

In FY 2020/21, when it was discovered that recruitment fees were paid by foreign migrant workers in Malaysia in the past, we committed to fully reimbursing these fees dating back to those that had been paid even ten years ago. All foreign migrant workers were interviewed to collect information on recruitment fees paid and reimbursements have been made within the recommended time frame by the Responsible Labor Initiative.

Access to grievance

The dormakaba whistleblowing system and tool have been 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, which were mostly met. 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.

Policy commitment

In addition to our Statement of Commitment on Human Rights, our Responsible Labor Directive and the specific Zero Recruitment Fees Directive lay out our policy commitments on human rights-relevant topics of labor conditions for our workforce. The directives give more concrete guidance and set minimum standards on topics such as freely chosen employment, working hours, workers’ accommodation, and responsible recruitment on a global level.

Our activities

During the current strategic cycle (2021–2027), we are focusing our efforts regarding the protection of human rights on the following activities:

• Ethical recruitment trainings
• Cobalt traceability
• Respecting the right to water

Ethical recruitment trainings

Based on the tools and training modules developed by the Responsible Labor Initiative, we commit to providing ethical recruitment trainings for our labor agents by 2027 in sending and receiving countries where we recruit foreign workers. This includes but is not limited to migration corridors between Nepal, Myanmar, and Malaysia, and between Taiwan and the Philippines. The aim of the trainings is to protect and reduce the risk of forced labor for migrant workers. Implementation is slated to begin in FY 2023/24.

Cobalt traceability

We are aware that the mining of cobalt is often linked to human rights violations, including child labor, especially when sourced from the DRC region. As a company procuring electronic components, we must take action to increase transparency in our supply chain, regarding human rights violations during the mining of high-risk minerals. Therefore, it is our goal to ensure supply chain traceability for minerals having high risk of child labor by 2027.

In the first (research) phase of our cobalt traceability work, we started consultations with human rights experts, and in partnership with the University of St. Gallen, we developed a study to gain deeper insight into tracing cobalt in fragmented supply chains related to the electronic components that we use in our products. The study assessed typical human rights risks, including child labor, as well as governance and traceability challenges.

The second phase started in FY 2020/21 with cobalt traceability dialogues with key suppliers. Our aim is to start conversations on human rights and environmental risks in joint upstream value chains and discuss opportunities for collaboration to meet increased legal and public expectations. We also want to gain a common understanding of sustainability engagements and learn more about the level of traceability of raw materials as well as delivered products. Based on a risk assessment, we invited suppliers from the electronics and copper supply chain to participate. As our copper suppliers are usually closer to the mining source, and since copper and cobalt have similar upstream supply chains, we expect deeper insights into the traceability of materials. The dialogues are ongoing.

Respecting the right to water

We recognize that the human right to water entitles everyone to have physical and financial access to sufficient, safe, and acceptable water for personal and domestic use. In our obligation to respect this right, we assess the level of water scarcity in areas where we operate. The latest analysis revealed that approximately 40% of our sites have the potential for high to extreme water stress, defined as a “water demand to supply ratio of 40% or greater for the respective municipality”. The water stress analysis is based on the two databases Aqueduct Water Risk Atlas by the World Resources Institute and AQUASTAT by the Food and Agriculture Organization. Seven manufacturing sites have been found to have (1) high or extreme water stress, and (2) high water consumption relative to other sites.

Water stress level by sites*

Outlook

During the upcoming financial year, we will finalize the supplier dialogues on cobalt traceability, and based on these results we will develop practical recommendations for improving procurement processes for cobalt and potentially for other raw material value chains. In addition, we will start collecting the newly introduced Extended Mineral Reporting Template from relevant suppliers, which includes information on cobalt supply chain due diligence. We will implement any corrective actions resulting from the social audit of our facility in Senai (Malaysia) and also conduct a further social audit of our manufacturing facility in Taishan (China).

The seven sites under the scope of our water stewardship targets have several initiatives planned, including employee awareness campaigns, water recycling for the fire system, implementation of drip irrigation systems, and water-saving faucets.