The Supply Chain Act requires companies to pay more attention to human rights. VW has now presented its first annual report on the subject. However, the most controversial location is left out.
In its first annual report under the Supply Chain Due Diligence Act, the Volkswagen Group identified two human rights violations, including one case of wage slavery. Overall, however, the group gives itself a good report card. The two violations were the only ones found during the review of more than 60,000 suppliers in 90 countries.
The most serious case involved an indirect supplier, i.e. the supplier of a supplier. According to the information, this involved withholding appropriate wages, wage slavery and violations of occupational health and safety. VW responded immediately and remedied the problem. When asked, the company did not want to provide details. The second violation concerned the use of prohibited chemicals in fire extinguishing agents. Here, too, VW responded immediately.
“Volkswagen openly explains where there is potential for improvement and how concrete measures are being implemented in these areas,” said the company’s human rights officer, Kerstin Waltenberg. “However, we are not stopping at the analysis; we have also initiated initial measures to improve the way we deal with the risks.”
Xinjiang not part of the report
According to VW, the controversial plant and test track in the Chinese province of Xinjiang are not covered by the Supply Chain Due Diligence Act: Both are not operated by VW itself, but by a joint venture with the Chinese manufacturer Saic. In addition, they do not supply anything to other group companies. “It is still not the case that we are ignoring the plant because of this,” Waltenberg stressed in November.
The site, which opened in 2013, has been criticized for possible human rights violations in the province. Since February, the Wolfsburg-based company has been negotiating with its Chinese partner about the future of the site. Uighurs, members of other minorities and human rights organizations have been reporting for years that hundreds of thousands of people in Xinjiang are being put into re-education camps against their will, some are being tortured and forced into forced labor. The Chinese government denies these allegations.
The German Supply Chain Due Diligence Act came into force in 2023. It requires larger companies to exercise due diligence to ensure compliance with human rights throughout their production and must submit an annual report on this. The threshold at which the law takes effect was lowered from 3,000 to 1,000 employees in 2024. The EU also passed a supply chain law this year.
Source: Stern
