Netherlands: Report finds that wind turbine manufacturers are not meeting due diligence obligations under OECD Guidelines; incl. company responses

In November 2019, ActionAid and SOMO (Centre for Research on Multinational Corporations) released the report Human Rights in Wind Turbine Supply Chains Update 2019, which analyses responsible business policies and practices of seven wind turbine manufacturers supplying the Dutch market: General Electric (GE), MHI Vestas Offshore Wind, Siemens Gamesa, Nordex, Goldwind, Lagerwey and ENERCON. The report finds that while some small steps were taken towards increased due diligence, wind turbine manufacturers are not meeting expectations laid out by the OECD Guidelines. The Business & Human Rights Resource Centre invited all seven companies included in this study to respond. Their responses are included below.

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Company non-response
11 February 2020

GE did not respond

Company non-response
11 February 2020

Goldwind did not respond

Company response
10 February 2020

Siemens Gamesa's response

Author: Siemens Gamesa

...General reflections on the research methodology

The publication falls short of analyzing wind turbine manufacturers' due diligence across their entire supply chain...The report is based solely on desk-research from publicly reported information and the results stand risk of being related more to how a company communicates on its due diligence processes rather than assessing actual implementation of the publicly communicated due diligence processes. We would like to comment in detail on the following points made in the report:

2.1 Step 1: Embed responsible conduct in policies and systems

...Siemens Gamesa makes clear statements about the conduct it expects from suppliers in the company's Code of Conduct for Suppliers and Third Party Intermediaries, and its corresponding Booklet for Code of Conduct for Suppliers and Third Party Intermediaries, encompassing a broad scope of human rights topics that can be characterized as one of the most strict in the wind market...

2.2 Step 2: Identify risks of adverse impacts

...Siemens Gamesa implements a risk-based due diligence process to assess compliance with our Code of Conduct, identifying any areas of non-compliance and highlighting opportunities to promote improved performance. This includes systematic screening of new and existing suppliers through background checks and risk assessments associated with the sector and countries of operation...

2.3 Step 3: Take action to cease, prevent or mitigate adverse impacts

...Regarding conflict minerals specifically, Siemens Gamesa implemented its due diligence in partnership with Siemens AG and strictly adheres to what is required by the EU...

2.6 Step 6: Provide remedy where appropriate

...As stated in the Siemens Gamesa Compliance internet page, all complaints coming from the Integrity Hotline are managed by a third-party supplier who ensures the protection of the data and anonymity...

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Company response
3 February 2020

ENERCON and Lagerwey's response

Author: ENERCON

...the information in this statement applies to the entire ENERCON group, including one of our innovative development units Lagerwey, since it was completely integrated into ENERCON by the end of 2019.

ENERCON is not sustainability report obligated, which is why reports are not publicly available. ENERCON has a policy in place, which refers to our company's vision "ENERGY FOR THE WORLD"...

Our understanding of sustainability is also reflected in our Supplier Code of Conduct, which addresses legal and ethical principles such as: Compliance with applicable laws in general and more specifically with regards to gifts and benefits, fair competition, conflicts of interest, money laundering, embargo and trade control regulations, ENERCON property and confidentiality, occupational health and safety and environmental protection, tolerance and equal opportunities (including gender equality), forced labor, child labor...It is mandatory to our entire onboarding suppliers to contractually commit to respecting the Supplier Code of Conduct...

Currently we do not specifically refer to concrete minerals sourcing in our risk identification. Nevertheless, we have implemented a more detailed risk assessment and supplier audits for special minerals and products...The results of the "Human Rights in Wind Turbine Supply Chains Update 2019"report do not reflect the actual circumstances regarding the due diligence process at ENERCON correctly...At European level, ENERCON actively engages in the drafting of principles for supply chain sustainability in the context of an industry-wide initiative. Moreover, ENERCON is also involved in advancing the RBC Agreement for the Wind Energy Sector (facilitated by the Dutch Social and Economic Council (SER)) to improve the due diligence in the company and sector further.

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Company response
31 January 2020

MHI Vestas Offshore Wind's response

Author: MHI Vestas Offshore Wind

Mitigation of Adverse Impacts

MHI Vestas uses a risk-based approach and asks our suppliers to sign and follow the MHI Vestas Offshore Wind (MVOW) supplier Code of Conduct. It is an integrated part of the sourcing process so all new supplier agreements must contain a signed Code of Conduct...Our segmentation showed that 1% of our supplier base is considered high risk, and the appropriate audits are being initiated.

Implementation and Results Tracking

MHI Vestas ensures that our due diligence processes are appropriate to the risk level we face. Thus far, the risk level we have faced (with 99% of our supply chain in low risk countries) has been low. That is changing with a higher footprint in high risk countries. Therefore we have updated our due diligence process, which we described in last year's annual CSR report...

Transparent Communication

MHI Vestas reports on our progress within all CSR/Sustainability focal points in our company's Annual Report...We are in the process of updating the MHI Vestas website with CSR reports; however, specific data and related activities can be found in our annual CSR reporting

Download the full document here

Company response
28 January 2020

Nordex's response

Author: Nordex

Thanks for your mail and the invitation to respond. We do not have any additional comments to the report at this stage.

Human rights are important to Nordex. While working towards setting up further processes and standards within the company, we approach this topic also on an industry level in the working group Sustainability and the Supply Chain from WindEurope.

Report
23 November 2019

Human Rights in Wind Turbine Supply Chains Update 2019

Author: ActionAid and SOMO

...The present research assesses to what extent the wind turbine manufacturers conduct risk-based due diligence to prevent such impacts, in accordance with the government-backed OECD Guidelines for Multinational Enterprises (OECD Guidelines)...The report finds that while some small steps have been taken, the wind turbine manufacturers are not meeting the expectations for due diligence laid out by the OECD Guidelines. With the exception of GE, which acts on a number of specific risks related to conflict minerals, the manufacturers are generally unable to show how they have prioritised risks on adverse impacts on stakeholders, which concrete actions they have taken to prevent or mitigate harmful impacts, nor whether they monitor the implementation and results of these actions. Four of the seven companies (MHI Vestas Offshore Wind, Goldwind, Lagerwey and Enercon) have not committed publicly to acting in accordance with the OECD Guidelines or the UNGPs...

The report recommends that wind turbine manufacturers that have not yet committed to the OECD Guidelines should do so immediately and that all companies should focus on improving their due diligence policies and practices in accordance with the OECD Due Diligence Guidance...The Dutch government needs to take action to ensure that wind turbine manufacturers are abiding by the government expectations laid out in the OECD Guidelines. Given the positive impact that the Dodd-Frank mandatory due diligence legislation in the United States appears to have had on GE's due diligence policies and practices, the Dutch government should introduce broad mandatory due diligence legislation that requires companies to undertake effective and thorough due diligence across their operations, supply chains and business relationships....

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