BASF Report 2022

Material Topics in Focus: Responsibility for Human Rights, Labor and Social Standards

Projects such as the Pragati project on sustainable castor bean farming, founded by BASF together with Arkema, Jayant Agro-Organics and implementation partner Solidaridad, start on the ground to build specific expertise for sustainable and responsible supply chains.

The graphic depicts the different stations along the value chain. The topics in each chapter address the station shown in light blue. (here: Suppliers, BASF, Customers) (graphic)

BASF acknowledges its responsibility to respect internationally recognized human rights. For many years now, we have engaged in constructive dialog on human rights with other companies, nongovernmental organizations, international organizations and multi-stakeholder initiatives to better understand different perspectives and address conflicting goals. BASF is a founding member of the U.N. Global Compact and a member of the Global Business Initiative on Human Rights (GBI).

At a glance

  • Human rights due diligence as a Group-wide task
  • Systematic and extensive anchoring of human rights topics in company processes and culture
  • Commitment to respecting international labor and social standards enshrined in our global Code of Conduct
  • Chief Human Rights Officer appointed to oversee human rights risk management

Strategy and organization

We see human rights due diligence as an important, all-encompassing task that we can only perform by working together as a team throughout the entire organization. That is why we have embedded our responsibility for human rights into our Code of Conduct and set this out in our Policy Statement on Human Rights. We uphold our standards worldwide, including where they exceed local legal require­ments. All employees and leaders are responsible for ensuring that we act in accordance with our Code of Conduct and our Policy Statement on Human Rights. In everything we do, we are committed to complying with international labor and social standards.

We rely on a systematic, integrated, risk-based approach and established monitoring and management systems. BASF is also active in initiatives such as Together for Sustainability (TfS) and Responsible Care®, which promote sustainability in the supply chain. Our measures and criteria for monitoring and respecting human rights are integrated into supplier assessment processes and our global monitoring systems for environmental protection, safety and security, health protection and product stewardship (see page 114). They are also part of the evaluation of investment, acquisition and divestiture projects, assessments along the entire product life cycle, and systems to monitor labor and social standards. In addition, aspects of human rights topics are part of the global qualification requirements for security personnel and are incorporated into standard agreements with contractors.

Our compliance unit is responsible for steering human rights topics and coordinates cross-unit collaboration. As Chief Human Rights Officer, the head of our legal and compliance organization is responsible for overseeing human rights risk management. In our Human Rights Expert Working Group, representatives from various areas of our company work closely together to holistically assess and refine our approach to human rights governance. It includes employees from specialist departments – Corporate Compliance (coordination), Global Procurement, Corporate Legal, Corporate Human Resources, Environmental Protection, Health, Safety and Quality, Corporate Strategy & Sustainability, Corporate Security, Digital and Procurement Governance, Corporate Communications and Governmental Relations – and our operating divisions. The expert working group provides support and advice in challenging and critical situations, on the development of internal processes, and on the creation of information and training offerings, among other things. In this way, we want to ensure that we approach our human rights responsibility holistically and that we can continually improve our performance.

International labor and social standards

Our aim of acting responsibly toward our employees is embedded in our global Code of Conduct through our voluntary commitment to respecting international labor and social standards. This encompasses internationally recognized labor norms as stipulated in the United Nations’ Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy of the International Labour Organization (ILO). In order to meet the requirement to comply with these standards worldwide, we mainly approach our adherence to international labor and social standards using three elements: the Compliance Program (including compliance hotlines), close dialog with our stakeholders (such as with employee representatives or international organizations) and the BASF guideline on compliance with international labor norms, which applies Group-wide. This guideline concretizes the topics in our global Code of Conduct under “Human rights, labor and social standards” as these relate to our employees. In 2022, an additional guideline specified that these topics must also be considered and applied when working with temporary employees and freelancers.

Good to know

Human Rights Advisory Council

We established a Human Rights Advisory Council in 2020 to integrate external expertise. Its members include independent international human rights experts. The trust-based dialog on human rights topics helps us to better understand different perspectives and to deal more openly with critical situations. The meetings held in 2022, which were chaired by our Chief Compliance Officer, were attended by representatives from the Corporate Compliance and Corporate Strategy & Sustainability departments as well as other experts from the operating divisions or procurement as required. We maintained our dialog with the Human Rights Advisory Council in 2022, both with the body as a whole and in small groups. The Council provided an external perspective, for example, on the further development of our human rights position, on due diligence in challenging circumstances, and on the limits of corporate governance.

It forms the basis for our global, risk-based management process: We regularly monitor changes to the national law of all the countries in which BASF operates and evaluate our adherence to international labor and social standards. If the national law contains no or lower requirements, action plans are drawn up to successively close these gaps in a reasonable time frame. If conflicts with national law or practices arise, we strive to act in accordance with our values and internationally recognized principles without violating the law of the country concerned. As part of the management process, we regularly follow up on and document the results of the comparison between national law and our guideline, as well as measures to implement the guideline. This is part of our central due diligence system.

We monitor our voluntary commitment to international labor and social standards as part of our management process. As before, individual elements of the guideline are also reviewed as part of internal control processes such as Responsible Care audits at BASF Group companies. In addition to these quality assurance measures, compliance with international labor and social standards is an integral part of the standard questionnaire in the compliance management audits conducted by the Corporate Audit department.

Cooperation along our value chains

As an international company, we are a part of society in the countries in which we operate and have business relationships with partners around the world. We are confronted by the fact that there are states that do not honor their obligation to protect human rights. People are particularly at risk in such countries, and companies’ ability to act is often very limited. Here, too, we are committed to our values and contribute to the respect of human rights.

We have trustful working relationships with our partners (customers, suppliers, joint venture partners, contractors), expect them to comply with internationally recognized human rights standards and to expect the same of their partners further along the value chain. We work to ensure that our partners meet their respective responsibilities.

We can only achieve our goal of strengthening respect for human rights along our value chains if we work together. We have clearly defined our expectations in our Supplier Code of Conduct. We are in close contact with our business partners, especially in higher-risk areas and regions, and monitor the implementation of relevant standards and necessary measures for improvement. We use recognized assessments and audits to verify this. In 2022, we continued our work with our upstream supply chain, where we usually have no direct contractual relationships, less transparency and less influence. Here, we seek to increase our influence through collaboration with partners and stakeholders, and place importance on certifications such as the LBMA certificate for gold, the LPPM certificate for platinum group metals, and the Responsible Minerals Initiative’s Responsible Minerals Assurance Process.

We work together with partners, civil society and in cross-sector initiatives. These include the Global Battery Alliance and the Roundtable on Sustainable Palm Oil. Projects often start on the ground to build specific expertise for sustainable and responsible supply chains. Examples include the Sustainable Castor Initiative – Pragati in India, the Responsible Lithium Partnership Initiative in Chile, the Responsible Mica Initiative in India and the Cobalt for Development pilot mining project in the Democratic Republic of Congo. In 2022, BASF, Syngenta and Arisa also worked together on a multi-stakeholder initiative in the vegetable seeds business in India. The initiative, WISH (Wage Improvements in Seed Hybrids), addresses the issue of child labor and compliance with minimum wage.

Further development of our organization and processes

We again initiated various measures to further strengthen our organization and processes in 2022. These measures are also important against the background of new regulations, especially the German Supply Chain Due Diligence Act (SCA). These include the appointment of BASF’s Chief Human Rights Officer and the further development of our Policy Statement on Human Rights, including further explanations of our approach to human rights due diligence and priority risks for our company. Both of these measures were approved by the Board of Executive Directors in November 2022.

To strengthen due diligence in the supply chain, we have also enhanced and refined a range of measures, including supplier risk analysis as well as preventive measures such as the systematic business partner due diligence for new suppliers, our Supplier Code of Conduct, and the requirements to be embedded in suppliers’ contracts. We continue to expect our suppliers to enforce our standards at their suppliers and subcontractors, too. Furthermore, the rights of third-party workers in high-risk countries will be even better protected in the future through additional due diligence steps. These include risk-based controls and measures that promote transparency and awareness of human rights issues.

We have also been able to analyze and confirm BASF’s compliance with the specific environmental treaties covered by the SCA (­Minamata, Stockholm, Basel) in countries that have not yet ratified these conventions.

Information and awareness-raising measures, grievance mechanisms

Promoting awareness of human rights was again a focus topic in 2022. Workshop programs on this were held in our operating divisions. In addition, employees in all regions were informed about and sensitized to human rights topics through presentations and discussion formats for specific target groups.

Our grievance mechanisms, which we already improved in 2021 with the introduction of a standardized global hotline and reporting system, were also used in 2022. A total of 151 human rights-related complaints were received by phone as well as by post and e-mail (2021: 206). All complaints were reviewed and forwarded to the relevant departments for in-depth investigation. If justified, appro­priate measures were taken. The 65 closed and justified cases were primarily harassment cases, followed by cases of discrimination. Our grievance channels did not identify any instances of child labor or forced labor.

We report on our global targets, monitoring systems and measures to integrate human rights topics into our business activities in publications such as this report and online.

Responsible Care®
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Value chain
A value chain describes the successive steps in a production process: from raw materials through various intermediate steps, such as transportation and production, to the finished product.

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