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Company Response

15 Mar 2021

BASF responded

BASF is strongly committed to fostering a responsible and sustainable battery materials supply chain. We welcome the opportunity to inform via the Business & Human Rights Resource Center about our due diligence regarding Nornickel and to respond to concerns raised recently by NGOs and affected stakeholders. Feedback from concerned stakeholders is an important part of assessing the impact and effectiveness of Nornickel’s actions. Therefore, we appreciate engagement and input by affected stakeholders and relevant experts as well as encouraging both, Nornickel and civil society, to engage with each other directly. As part of our due diligence, we investigate raised allegations and follow up on them with Nornickel.

BASF strictly aims to avoid causing of or contributing to human rights violations and environmental damages in its operations. As we are embedded in many value chains and societies, we expect and rely on our business partners to respect human rights and environmental standards and regulations, too. We encourage them to prevent those adverse impacts from reoccurring, and mitigate and remedy them within their responsibility. We also take action to support our partners in their efforts to meet their respective responsibilities.

We are well aware of the public scrutiny of Nornickel’s actions addressing environmental and human rights concerns and they are taken seriously as part of our due diligence efforts. We are in regular contact with our supplier Nornickel on sustainability matters. These include recent incidents and the findings from the mining-specific TfS (“Together for Sustainability”) audits conducted in 2017 at Nornickel’s sites in Polar and Kola (both in Russia) and in Harjavalta, Finland. A number of follow-up actions have since been implemented, while others are still outstanding and are included in site-specific action plans. We continue to follow up on the audit results to ensure improvement in line with good international industry practices. Nornickel has committed to becoming certified according to the standards of the International Council on Mining and Metals (ICMM) and the Initiative for Responsible Mining Assurance (IRMA) which we recognize and welcome. These certifications involve comprehensive audits. This engagement with Nornickel is part of our due diligence management in accordance with the UN Guiding Principles and our Human Rights position as well as our Supplier Code of Conduct.

Nornickel is an important company in sourcing and production of nickel and cobalt, which are essential raw materials for BASF’s high-performance cathode materials. The cooperation between BASF and Nornickel leverages both companies’ expertise to provide a supply chain for electric vehicle battery cell producers in Europe.

We take our commitment to the UN Guiding principles seriously and review our suppliers’ progress according to a defined timeframe based on the sustainability risk identified. Following the severe impacts of incidents in the recent months, concerned stakeholders are asking companies to cease their business relationship with Nornickel. As in all of our supplier relationships, in the case of ongoing, serious violations of the standards defined in our Supplier Code of Conduct or international principles, we reserve the right to impose commercial sanctions. These can go as far as termination of the business relationship. This should be explored when there are no reasonable options for supporting the business partner to mitigate the impacts or prevent them from reoccurring. We are seeing considerable efforts on Nornickel’s side.

We continue to closely follow up on specific topics of concern with Nornickel as part of our due diligence efforts and will further seek to exchange with affected stakeholders.