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Response by Volkswagen

Thank you for raising our attention to the case described below. Even though we do not comment on individual cases, we would like to generally describe our internal processes that come into play once we are alerted by such events from outside sources.

We have established a so-called “Ad-hoc case” process that is triggered once we receive hints on violations against our Code of Conduct for business partners on topics such as human rights, labor standards, environment and anti-corruption. These hints can come from victims of alleged abuses like workers in the supply chain and other affected groups and can also be triggered by media reports or by NGO reports.

Upon receiving such hints, we have to establish whether it is a company in our supply chain and the plausibility of these hints. This may include that we assemblean ad-hoc team that is built from sustainability experts from VW Group sustainability in supply chains and from local experts from the respective brands and regions. If we detect violations or can confirm the accusations, the supplier is asked to fill out a so-called 6D report in which they can report on the case and mitigating and corrective measures. This may also include an on-site check at the supplier site. We then check if the corrective measures are adequate.

We are always interested in developing our suppliers and not to simply terminate a business relationship. Nevertheless, where the supplier is not willing or not able to comply with our requirements, the business relationship may be terminated or not renewed. In 2018, this was the case for 18 suppliers with whom we either cancelled business or blocked them for further sourcing.

It is our primary concern to prevent violations against our code of conduct through continuous risk management and processes. However, we are well aware that no company will be able to 100% exclude abuses in their supply chain and have thus established various channels through which we can receive grievances. Such an early warning system enables us to address violations and prevent systematic problems in the supply chain. While these various grievance mechanisms (e-mail, ombudsman, and whistleblowing hotlineto report violations of the law or regulations of VW employees) are communicated broadly, they still might not be able to detect all violations. This is why we very much appreciate the work of BHRRC and other NGOs and encourage you to get in contact with us immediately once you receive further information on human rights abuses that might be in relation with our business.