Social matters
Respect for human rights
The principles of METRO include respect of all human rights, as set out in the United Nations’ Universal Declaration of Human Rights, the International Bill of Human Rights, the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights and the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO). This is manifested in our Policy for Human Rights, which applies to our own employees and to our business partners within our value chain1For the METRO AG holding company, the aspect of human rights in the supply chain is not essential because of its business orientation, but rather only in relation to its own employees.. Our goal is to identify and prevent violations of fundamental human rights in our own business operations and in the supply chain. We also strive to systematically improve working conditions in our supply chain.
Respect for similar values is also important to us on the part of our business partners. We formalised this in the METRO Code of Conduct for business partners. It includes compliance with human rights according to the International Bill of Human Rights, the OECD Guidelines for Multinational Enterprises, UN and ILO standards, occupational and social matters based on the principles of the International Labour Organization’s (ILO) 4 core labour standards, provisions for environmental protection and corporate ethics, in particular anti-corruption and anti-bribery, antitrust and competition laws as well as data protection. Furthermore, all of our own-brand contracts and framework contracts for brand suppliers contain a social standards clause that gives us legal means to enforce our requirements.
In case of violations of our basic human rights principles, our employees can contact their supervisors or the company’s compliance officers. Using a tool that is publicly accessible via the METRO compliance page, every internal and external individual, including stakeholders of our suppliers, can report incidents. It is important for us that our suppliers also provide such a reporting system. The reported incidents will be promptly investigated and processed by our experts to take appropriate action, if necessary. We are also committed to working with our suppliers and within the group to remedy impacts, utilising joint initiatives and collaborating with stakeholders, and not obstructing access to other legal remedies.
Global labour and social standards in the supply chain and supplier development
In order to contribute to ensuring socially acceptable working conditions within our procurement channels and to prevent potential infringements, the application of social standard systems is a key part of the purchasing process in addition to the contractual manifestation of our requirements. We will require our producers to be audited in accordance with the supply chain management standard set out by the Amfori Business Social Compliance Initiative (Amfori BSCI), the Sedex audit according to SMETA or an equivalent social standards system. This applies to all producers in defined risk countries (based on the Amfori BSCI assessment) in which METRO SOURCING International (MSI) and METRO Food Sourcing (MFS) have imported goods manufactured. It also applies to all other producers who manufacture own brands or own imports for our sales lines. This risk assessment did not have to be adjusted in connection with the Covid-19 pandemic either, as it is generally applicable. For many years now, we have been working on the basis of a corresponding process for our non-food producers2This includes merchandise producers (non-food own-brand products and own non-food imports) in high-risk countries that carry out the final value-creating production step, for example produce the final item of clothing.. Since 1 June 2019, the same process was established analogously for all food and near-food producers in the own-brand sector. The national subsidiaries were trained in this respect and will be gradually integrated into the process over the next 1–2 years. Due to the disruptive circumstances of the Covid-19 pandemic, especially for supply chain management, only METRO Food Sourcing has fully implemented the process so far. The national subsidiaries in Turkey, Germany, India and Pakistan as well as our purchasing companies Valencia Trading Office (VTO) and Rotterdam Trading Office (RTO) are still in the process of introducing the process.
As of 30 September 2020, 675 of 863 active own-brand non-food producers and 60 of 109 corresponding food/near-food producers had undergone the audit process. Within this group, 99% (665) of non-food producers and 100% (60) of food/near-food producers have passed the audit. Effective 1 January 2019, non-food producers who fail the audit can only be commissioned as METRO contracting parties if they achieve an acceptable audit result. In other words, they have to receive an A, B or C for the Amfori BSCI assessment or an audit that is acknowledged as equivalent3A METRO company was granted an exemption in August 2020 for the (post-) coronavirus period to continue to use individual producers with D audit results if their D audit results are attributable to coronavirus-based failure. These producers will be granted a 6-month grace period until they can demonstrate a follow-up audit result of A through C.. Until further notice, all food/near-food suppliers with Amfori BSCI D (and in exceptional cases also E) audit results (and corresponding equivalents of other standards recognised by METRO) can also be commissioned by METRO. This procedure realistically reflects the challenging way of re-integrating suppliers into the process and gradually working towards ensuring socially acceptable (working) conditions.
The verification of compliance with our requirements is performed via an internal IT-based process management database, which provides an overview of the portfolio management of the affected suppliers and the associated producers. The database is also used to monitor compliance with contractual agreements during the initiation and suspension of business relationships. The necessary documents are checked before the conclusion of a contract. Misconduct with regard to the so-called deal breakers specified by METRO in the course of ongoing business relations will trigger suspension of the supplier. Deal breakers include specific findings in the areas of child labour, forced labour, occupational safety hazards with regard to fire safety and ethical behaviour. If misconduct is discovered at suppliers and their producers concerning one of these areas, they are required by METRO to develop short-term and long-term solutions to remedy the deal breaker issue. New orders or follow-up orders are suspended until the findings in the deal breaker process have been resolved.
Supplier development was also identified as a significant topic for the business activities of our operational business4Due to the company alignment, the aspect of supplier development is not significant for the holding company, METRO AG.. By training small and medium-sized suppliers on aspects of food safety, hygiene and implementation of fair working conditions, we support them in meeting relevant standards and thus help them successfully market their goods. The importance of this collaboration became particularly apparent with the outbreak of the Covid-19 pandemic, when it was used to compensate for the largely cancelled Amfori BSCI and Sedex audits with intermediate measures. With a questionnaire, instructions and discussions we were able to offer our producers assistance and thus fulfil our due diligence obligation to emphasise the respect of human rights even without audits. Special attention was paid to stricter hygiene rules and potential human rights violations as a consequence of the sometimes severe economic losses, such as the risk of unregulated overtime.
In order to contribute to the improvement of the social requirements in our production plants and thus to further increase the proportion of valid social audits, MSI, MFS and METRO Turkey work together with our local producers and support them with training courses that serve to teach understanding and compliance with the social standards. Since the start of the project in financial year 2017/18, the national subsidiaries in Turkey, Pakistan, Ukraine and Bulgaria have completed a training course on forced labour for employees in key positions, which is being conducted together with Amfori BSCI. Spain, Serbia, Croatia and Myanmar followed suit in financial year 2019/20. Successively, all METRO national subsidiaries will complete this training. The original target to achieve this by 30 September 2020 could not be kept due to process-related delays and circumstances caused by Covid-19.
- With regard to the description of risks associated with non-compliance of standards by our suppliers, we refer to the section on ‘Supplier and products risks’ in chapter 5 Opportunity and risk report. We did not identify any significant risks.
