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Responding department: Corporate Responsibility Management

Stock Exchange symbol: (DAI:GR)

Does your company have a publicly available commitment to respect human rights?

Our public commitment to human rights is documented annually in our Sustainability Report (see Report 2014, page 43) and emphasizes our strong commitment to human rights: “The respect of human rights is one of our top priorities. As an automotive manufacturer, we attach great importance to employee rights, fair working conditions, and rejecting all forms of discrimination, forced labor, and child labor. The responsibility for human rights issues is essentially based on the UN Guiding Principles on Business and Human Rights. In line with the requirement for a human rights policy formulated there, we have specified operational responsibilities and approaches in our Integrity Code, the Supplier Sustainability Standards, and our supplier agreements as a key requirement for all employees and business partners.”

Furthermore we are LEAD Member of the UN Global Compact where human rights is one out of four central pillars. Therewith, we committed ourselves to report annually on our initiatives regarding human rights, labor standards and employee rights, environmental protection, and the fight against corruption in the COP (Communication on Progress).

Our human rights approach is essentially based on the UN Guiding Principles on Business and Human Rights. In line with the requirement for a human rights policy formulated there, we have specified operational responsibilities and approaches in our Integrity Code, the Supplier Sustainability Standards, and our supplier agreements as a key requirement for all employees and business partners.

Additional Links:

Daimler Integrity Code [link]

Commitment to UN Guiding Principles on Business and Human Rights [link]

Daimler Sustainability Report 2014 – Ethical Responsibility [link]

Daimler Sustainability Report 2014 – Sustainability Program 2020/Human Rights (p 176/177) [link]

Daimler Sustainability Standards for Supplier [link]

How are human rights governed in your company?

The responsibility for human rights issues belongs to the Board of Management division “Integrity and Legal Affairs” and is corporate wide managed within this division.

To ensure the involvement of relevant corporate functions, human rights issues also are dealt within our central management committee for sustainability, the Corporate Sustainability Board (CSB), headed by Dr. Christine Hohmann-Dennhardt (member of the Board of Management for Integrity and Legal Affairs) and Prof. Dr. Thomas Weber (member of the Board of Management for Group Research & Mercedes-Benz Cars Development). Within this governance structure we aim for a cross divisional approach to human rights involving all business units.

For further information please see our Daimler Sustainability Report 2014 – Strategy/Sustainable Management

 

How are human rights managed within your company?

The Daimler approach to the respect of human rights, differentiates between own production locations, for which Daimler is currently developing a comprehensive “Human Rights Respect System” extend beyond the existing risk reviews, Sales & Marketing, where Daimler conducts mainly individual reviews, direct suppliers (Tier 1), and other business partners and downstream suppliers (indirect influence).

Supply Chain/Human rights and suppliers. Human rights are an integral part of the Supplier Sustainability Standards and the contract terms for direct suppliers. Daimler relies on appropriate communication and training measures to enable addressing human rights in the highly complex supplier chain, on which they have only an indirect influence. Daimler examines the observance of sustainability standards by its suppliers in a multi-step process on the basis of a risk analysis, which Daimler carries out by country and merchandise category.

For further information please see our Daimler Sustainability Report 2014 - „Suppliers“ [link]

Due diligence – reviews of production sites. The specific human rights approach at Daimlers production facilities includes a risk assessment conducted in form of a due diligence process in keeping with the UN guiding principles, which facilitates the identification of country-specific risks. Among other tools, Daimler uses the instrument of the Human Rights Compliance Assessment (HRCA) of the Danish Institute for Human Rights for this purpose. We have already achieved the goal formulated in 2011 of conducting a total of 19 country analyses by the end of 2015.

  • 2012: Germany, Mexico, and Egypt.
  • 2013: Japan, France, Hungary, South Africa, Brazil, India, Spain, and the U.S.
  • 2014: Czech Republic, Turkey, Argentina, Canada, and Indonesia.
  • 2015: The countries Portugal, Romania, and the United Kingdom are currently assessed.

Results of the assessments. The country analyses do not indicate significant need for action for the Daimler units in majority shareholdings, but have identified optimization potential in individual locations with regard to special financial benefits of the company (such as special payments during maternity leave or social benefits for socially disadvantaged groups), background checks for high-risk service providers or information gaps relating to the awareness of integrity-promoting instruments. Daimler has closed the identified gaps. Consequently, the regulations extend beyond the locally applicable legal requirements. In addition, based on the analyses, in the reporting year 2014 Daimler did not have any cases of child or forced labor, violations against the right to collective bargaining or freedom of association. Indigenous peoples are not affected by the corporate activities at our production locations under review.

From HRCA to the “Daimler Human Rights Respect System.” Based on the experience gained from the compliance assessments, which will be completed by the end of 2015, Daimler began to develop a concept for a systematic and continuous “Daimler Human Rights Respect System” to replace the Human Rights Compliance Assessments starting in 2016. The concept for this system comprises four key process steps:

1. Risk identification: The following constituent parameters are decisive for the identification of potential human rights risks, among others: the general human rights situation in defined countries with operating Daimler units, the business model of these units, and the possibility of exercising influence.

2. Program management: To enable systematic management of potential human rights risks for Daimler, a variety of different measures is already available or will still be developed as part of our program management.

3. Monitoring: A monitoring system oriented primarily to high-risk units supports the regulatory process of Daimler’s human rights approach. The adequacy and effectiveness of the system can be reviewed and improved on a continuous basis.

4. Reporting: The fourth process step of the “Daimler Human Rights Respect System” calls for extensive regular reporting aimed at providing information on critical issues and fulfillment of external reporting requirements.

Because the development of this concept could not draw upon existing systems, the concept was developed in a cross-functional process. In addition, feasibility and requirements analyses were carried out and key issues were discussed with external stakeholders at the “Daimler Sustainability Dialogue” 2014, whose recommendations we are gradually integrating.

For further information please see:

 Daimler Sustainability Report 2014 – Daimler Human Rights Respect System [link]

 Daimler Sustainability Report 2014 – “Daimler Sustainability Dialogue” 2014 [link]

Examples for awareness-raising initiatives on implementing Human Rights in our Management:

Training programs: The respect of human rights is an important part of our integrity approach and element of our Integrity Code. Therefore, human rights are included in the web-based training courses, we rolled out in 2013, on our shared values and principles of behavior for more than 100,000 employees throughout the Group. In 2014, nearly 40,000 more employees from different hierarchical levels completed extensive web-based training on integrity/human rights, compliance and law. Our training strategy has an annual planning cycle for the program — from the needs analysis and execution to the feedback and monitoring process. Our local trainers are provided with modular training documents that can be used for specific target groups according to the risk associated with the participating functions. Each new employee receives an introduction to integrity and compliance (in which human rights are included) as part of their welcome package. In general, we address human rights issues in our training programs for all employees and with more intensive advanced training provided for selected target groups (e.g. internal and external security staff).

Managers as role models. Our Integrity Code also defines the expectations on our managers, who have a special responsibility to promote the culture of integrity at Daimler as role models. Modules on integrity are included in all seminars for qualification of new managers. In addition, integrity and compliance (incl. human rights) are important criteria in the annual target agreements and target achievements of our managers.

For further information please see:

Daimler Sustainability Report 2014 – “Culture of integrity” [link]

What is the company’s approach to the engagement of stakeholders (including workers, and local communities impacted by the company’s activities), on human rights issues?

Our business activities affect the interests of many people in different countries and regions. We therefore seek the dialog with all stakeholders in order to exchange experiences and address controversial topics without any restrictions (For overall concept, see our Sustainability Report/Stakeholder Dialogue [link] ). Due to the rising importance, the dialogue on human rights issues has been intensified and made more systematic in recent years, by, for example, the materiality analysis, the Sustainability Dialogue, the feedback on our sustainability program and the political dialogue.

Our Stakeholder Survey confirms the high materiality of human rights for both, the company (92 points out of 100) and our stakeholders (90).

For more information, please see our Daimler Sustainability Report 2014 – “Materiality Analysis”  [link]

A central element for the exchange with our stakeholders on human rights issues is the “Daimler Sustainability Dialogue” event. Already in 2009, we have established an own Human Rights working group. Thus we attach great importance to the “Daimler Sustainability Dialogue”, held annually in Stuttgart since 2008, which brings various human rights stakeholders and experts together with representatives of our Board of Management and the executive management. At the Sustainability Dialogue events, we deliberately initiate discussion and dialog in the spirit of constructive criticism about human rights topics and dilemma situations that are especially relevant for us and society. Also we seek input there for the development of the Daimler Human Rights Respect System. Our aim is to translate the agreements made in this context most optimally into verifiable targets and initiatives that can be advanced during the year in cooperation with our stakeholders.

In line with our objective of promoting the establishment and observance of sustainability standards around the world, we are now organizing “Daimler Sustainability Dialogues” in other countries as well. Thus far, events have been held in China, the U.S., Argentina and Japan. Our Corporate Sustainability Board has decided to promote further internationalization in close collaboration with the respective national entities. The honor of being cited as a cross-industry best practice example in the 2013 Corporate Responsibility Index of the Bertelsmann Foundation shows us that we are on the right track, which we will continue to pursue rigorously.

 

Political dialog and representation of interests. With regard to human rights, experts from Daimler accompanied, as a representative of the industry, the UN “Ruggie-Process” in formulating the UN Guiding Principles for Business and Human Rights. Furthermore, Daimler is part of political initiatives, such as “Econsense”, where we are patron of the human rights project group, and in that function are actively involved in the development of the “German National Action Plan on business and human rights” of the German Federal Government.

For more information, please see our Daimler Sustainability Report 2014 - Stakeholder Dialog [link]

Priority human rights issues: What are some of the priority human rights issues for your company?

The company selected the following issues from a checklist:

  • Health (including workplace health & safety, prevention of pollution)
  • Workplace diversity / non-discrimination
  • Forced labour and human trafficking (including in supply chains)
  • Sexual harassment
  • Freedom of association and trade union rights
  • Freedom of expression and/or right to privacy / digital rights
  • Operations in conflict zones
  • Relations with security forces
  • Conflict minerals
  • Transparency in payments to governments / responsible tax practices
  • Product misuse
  • Women
  • Children (including child labour)
  • Racial and ethnic minorities

How are human rights commitments and information about how the company addresses its human rights impacts communicated, internally and externally?

Daimler communicates its engagement and information about human rights issues via different channels. The focus of our public external communication is on our internal governance of human rights and our commitment, as well as our different processes according to our differentiation between our production locations, Sales & Marketing, and other business partners and downstream suppliers in dealing with human rights.

Specific dilemma situations, e.g. the results of our Human Rights Compliance Assessments are presented in the Human Rights working group at our Sustainability Dialogue for further discussion with external experts. For example, last year, when we presented the results, we identified and discussed concrete challenges. This year, we will continue the discussions on the basis of the progress we made during the year.

Internally, in our Daimler sustainability governance we have established an organizational structure which reaches and reports into all business divisions.

In addition, we have a variety of communication media to address information on human rights issues internally and externally:

Daimler Annual Report

Daimler Sustainability Report

UN Global Compact Progress Report

GRI

Supplier Sustainability Standards

Business Partner Brochure

Daimler Website

Daimler Intranet

Internal Employee Magazines

What provisions does your company have in place to ensure that grievances from workers and affected communities or individuals are heard, and can you provide examples of remedies provided?

In the event of suspected human rights violations our whistleblower system BPO is globally available internally and externally to provide “access to remedial action”, also in line with the third pillar of the UN Guiding Principles on Business and Human Rights. It receives reports of irregular conduct from employees and external parties worldwide around the clock, through different reporting channels, as well as anonymously — to the extent permitted under local law. A prerequisite for the acceptance of the system is that it is designed fairly, takes into consideration the principle of proportionality, and gives equal protection to whistleblowers and affected parties.

With respect to our suppliers, a supporting complaints management process is also established via the World Employment Committee, particularly for labor issues within the supply chain.

For more information, please see our

Daimler Sustainability Report 2014 – Whistleblower System

[link]

Which external and collaborative human rights initiatives does your company participate in, and what is the nature of your involvement?

Daimler AG participates in a range of human rights initiatives, such as:

- German National Action Plan: The action plan aims to apply the guiding principles of the United Nations for business and human rights for the activities of German companies nationally as well as globally in their value and supply chains. From business side, Daimler is one of the involved parties in the process of developing this plan.

- Econsense – Forum for Sustainable Development of German Business, where Daimler is patron of the human rights project group

Other initiatives are:

  • The UN Global Compact.as a Member of the LEAD Group
  • Global Reporting Initiative (GRI)
  • Kommission Arbeitsschutz und Normung
  • World Business Council for Sustainable Development (WBCSD)
  • Wittenberg-Zentrum für Globale Ethik e.V.
  • Deutsches Netzwerk Wirtschaftsethik (DNWE) inklusive Forum Compliance & Integrity
  • Transparency International (TPI)  
  • Charta der Vielfalt e.V
  • EWMD (European Women Management Development)
  • Global Summit of Women
  • Frauen in die Aufsichtsräte e.V. (FidAR)

Which are the key one, two or three elements of your approach to human rights that been developed or amended since June 2011? Please indicate if these actions were in response to the UN Guiding Principles.

Daimler already began much earlier, in 2009, to develop its own human rights approach. Since 2009, as well, there is an own human rights working group at the annual Daimler Sustainability Dialogue to discuss human rights issues.

Furthermore, Daimler was actively involved in the Ruggie-process to develop the UN Guiding Principles and already took several steps to implement them e.g.:

- 2011 – 2015: Initiation of the realization of a Human Rights Compliance Assessment (with support of the Danish Institute for Human Rights) in 19 countries with Daimler units in majority shareholdings.

- 2014 – 2015: On the basis of the HRCA results, Daimler began to develop a concept for a systematic and continuous “Human Rights Respect System”, starting in 2016.

For further information, see the Daimler Sustainability Report 2014 – Human Rights Respect System [link]

What are some of the obstacles and challenges that your company encounters in implementing its human rights commitments?

As a global operating company, Daimler will have to adjust its human rights approach to its integrity ambition and the political and economic challenges. We will consider them when implementing the UN Guiding Principles into the company structure.