In December 2019 Ethical Consumer searched the Lidl website for information on how it managed its supply chain and viewed its Code of Conduct (COC). Ethical Consumer also viewed a questionnaire response received from Lidl in March 2019.

Supply Chain Policy - reasonable
The COC contained adequate clauses on child and forced labour, discrimination and freedom of association, and for regular working hours it stated that they "must not exceed 48 hours per week. Overtime shall not exceed 12 hours per week". In terms of living wages it stated, "The aim is to pay wages and provide other benefits in order to cover the cost of living, should the legal minimum wage alone be insufficient." However, as it was unclear what Lidl meant by 'benefits in order to cover the cost of living', this was not considered to be an adequate clause on living wage. It also stated, "Every contracted Business Partner of Lidl agrees to implement these social standards in their own company organisation, to impose them also on their respective business partners". Overall its supply chain policy was considered reasonable.

Stakeholder engagement - rudimentary
Lidl’s questionnaire stated, ‘Lidl International is a member of the BSCI (Business Social Compliance Initiative) within the framework of the European Foreign Trade Association. Lidl UK is a member of Sedex and a Sedex Stakeholder Forum (SSF) participant. Ethical audits within our supply chain are completed against the Ethical Trade Initiative (ETI) Base Code in addition to local law. Other MSIs & collaborative networks include: Stronger Together (project sponsor), Spanish Ethical Trading Forum, Food Network for Ethical Trade (FNET), BRC Ethical Labour Working Group, Seafood Ethics Common Language Group.’
However, none of these were considered to be multi-stakeholder initiatives. Lidl was not a member of the ETI. No mention was found of engagement with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits.
The company did have a number of complaints systems. These included an address to write to, a hotline and the "BKMS reporting tool". The latter was available in all languages, was free and available anonymously.
Stakeholder engagement overall was considered to be rudimentary.

Auditing and Reporting - poor
The questionnaire response stated, "Auditing requirements within our programme are risk-based and any Tier 1 production site for Lidl own-label suppliers deemed ‘high risk’ could be selected to complete a SMETA ethical audit"
"Sites beyond Tier 1 are risk assessed by Lidl UK and will be included in the scope of the ethical trade programme where deemed necessary. All sites rated ‘high risk’ will be re-assessed on an ongoing basis. Any non-compliances/non-conformances identified during the audit must be addressed by the site within the timeframes agreed at the closing meeting of the audit. The closure of the NCs must be managed via the Sedex platform (either through desktop review or follow-up audit) so that evidence of corrective actions taken can be shared with Lidl via Sedex and verified by the audit body."
Ethical Consumer expected that: Results of audits should publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
Lidl had a policy for non-compliance but did not appear to meet the other standards above. It did publish names, addresses and countries of the main production facilities for its own-brand textile and shoe range, updated every six months but not for the rest of its supply chain. Overall, its auditing and reporting was considered poor.

Difficult issues addressed - rudimentary
The questionnaire response stated: "All suppliers are expected to engage in a process of continuous improvement. If practical challenges are found in meeting certain expectations outlined in the Code of Conduct, suppliers are expected to demonstrate that they are making improvements towards meeting our standards. Lidl provided links to its approach to upholding human rights, aligned with the United Nations Guiding Principles on Business and Human Rights, and its Modern Slavery Statement.
Its April 2018 questionnaire response also stated "We appreciate the limitations of third-party auditing in promoting decent work and protection of rights in our supply chains, especially in relation to ‘hidden’ activities such as labour exploitation. We, therefore, place a strong emphasis on root cause analysis, ensuring we build strong long-lasting trading relationships with our suppliers and working collaboratively on industry initiatives." However, the company did not provide any evidence that it had long-term suppliers (e.g. statistics on the number of suppliers used for over five years).
Its website stated, that in its food supply chains it was involved in "capacity building through supplier engagement, delivering training to tackle modern slavery, and developing policies to focus on issues such as labour providers", and in textile supply chains "in Bangladesh, working in partnership with the German Association for International Cooperation (GIZ) to provide dedicated training programmes for production facilities to support compliance with international labour standards."
In 2018 Lidl UK had published a 'Responsible Recruitment in Supply Chains' policy, which its 1st tier suppliers were expected to apply to any labour providers used. Although this was a start, and Lidl reserved the right to audit compliance against this policy, it was not itself robustly monitoring its second, third, fourth tier etc. suppliers.
Overall its approach to difficult issues was considered rudimentary.

Given that Lidl's supply chain policy was considered reasonable, its approach to stakeholder engagement and difficult issues rudimentary and its approach to auditing and reporting poor, it received Ethical Consumer's middle rating for Supply Chain Management and lost half a mark un this category.

Reference:

https://www.lidl.co.uk (22 January 2019)

In June 2019 Oxfam released an update to its 2018 report on supermarkets. The report scored 16 of the biggest supermarkets in Europe and the US on how they tackled critical issues affecting the people working in their food supply chains. The specific areas covered were: transparency and accountability; respect for workers' rights; fair treatment of farmers; and fair treatment of women.

None of the supermarkets was found to be doing enough to ensure basic human rights in their supply chains. The report observed that some workers went to work and produced food all day, but went home hungry. All the companies were given marks out of 100 in each of the above categories. The lowest mark was 3% and the highest 38%.

Lidl scored 9% overall – up from 5% in 2018 – broken down as follows:

transparency 21%

workers' rights 6%

farmers rights 8%

womens' rights 0%

Lidl was the UK’s worst performing supermarket out of the six on our Behind the Barcodes’ scorecard. Morrisons was above it but scored 16%. It therefore lost a whole mark under Workers' Rights.
As of January 2020, Oxfam were targettinmg Lidl as the worst perfoming supermarket.
It said:
"Lidl does not have sufficient public policies on human rights. As is knowing they are the only supermarket not to have joined the Ethical Trading Initiative.
Lidl need to be clear about their policies to protect supply chain workers from abuse, inhumane working conditions, and being trapped in poverty."

Reference:

Behind the Barcodes 2019 (12 August 2019)

In May 2016 Oxfam Germany published a report called “Sweet Fruit, Bitter Truth: German Supermarkets’ Responsibility For The Inhuman Conditions Which Prevail In The Banana And Pineapple Industries In Costa Rica And Ecuador.”
The report followed an investigation undertaken by Oxfam Germany in 2008 which revealed the shocking conditions in the pineapple production industry in Costa Rica. In 2016 Oxfam found that little had improved.
Dr. Franziska Humbert, Advisor for business and human rights at Oxfam Germany and author of the report said “the conditions on plantations have barely improved over the past eight years. The water tanker is still needed to provide drinking water to the communities whose groundwater has been contaminated in the areas around pineapple plantations. Large companies which boast of their own sustainability dump their waste water right next to drinking water reservoirs, not even making any effort to hide it. Companies which share responsibility for the contamination of ground water do not pay any compensation to those affected, nor do they construct new waterworks. The workers’ complaints concerning their wages, working hours or the breaches of their trade union rights also shocked me.”
The report went onto blame supermarkets – in particular the German retailers including Lidl - for the untenable conditions which prevail in the banana and pineapple industries. It said “they abuse their market power in forcing down prices paid to producers and suppliers. For example, the import prices for pineapple decreased by around 45 per cent from 2002– 2014, despite increasing production costs. This contributes to the intensification of traditional exploitative structures in both countries, to the fact that the plantation workers’ wages in Costa Rica and Ecuador are too low to support a family, and to the perpetuation of unstable employment conditions. While the supermarket chains meticulously check the imported fruits’ appearance, refusing to accept entire deliveries due to even the smallest flaw, they take social and ecological criteria much less seriously. This investigation reveals (too) many violations of human and labour rights in the production of bananas and pineapples.”
The report talked about the use of highly hazardous pesticides and contamination of ground water. Many of the workers surveyed reported a high rate of disabilities, miscarriage and cancer in the areas around plantations. They also reported frequent respiratory disease, nausea, skin allergies and dizziness.
It said “The Ecuadorian banana industry uses highly poisonous substances such as Paraquat, which is not licensed for use in the EU, or the cancer-causing products Mancozeb and Glyphosate. Spraying pesticides from airplanes is standard. During a survey on a plantation which supplies Lidl amongst others, 60 per cent of the interviewed workers stated that they work on the plantations during or straight after airplane spraying has taken place – a clear violation of state-recommended re-entry safety periods. In Costa Rica too, workers of producers which supply German supermarkets report that pesticides are sprayed whilst they work on the fields.”
Issues such as repression of trade unions and precarious working conditions were also found.
Oxfam demanded that German supermarket chains do justice to their ecological and social responsibility.
Lidl lost whole marks under Pollutions & Toxics and Workers' Rights in light of this story.

Reference:

SWEET FRUIT, BITTER TRUTH (May 2016)

In March 2015 a factsheet by the Worker Rights Consortium called 'Anti-Union Firings and Violence at BEO Apparel (Bangladesh)' - a Bangladesh-based supplier of apparel to retailer Lidl - reported the following issues:
Accusations of beating workers and union representatives by staff from the Accord on Fire and Building Safety.
During a visit to a BEO factory Accord negotiators, who were trying to resolve an earlier dispute, witnessed the beating of a union representative and violence towards employees.
The Accord representatives alleged that, during negotiations to re-instate 43 workers who were fired for speaking out against health and safety issues at the factory, managers grabbed a union representative to stop him leaving the building.
They state that "Management’s actions instigated a broader clash with workers. During this clash, managers, some armed with wooden sticks or iron rods, beat a number of employees." One worker was said to have suffered significant wounds, and he and others were later treated at a nearby hospital.
Managers also locked the factory gate to prevent workers and Accord staff from leaving. The Accord group stated that they had to summon the police in order to finally get out.
The incident was the latest in a long line of issues at the factory which is owned by Mr. Ulrich Bornemann, a German national, who sells clothing to Lidl through importers Distra and Chicca.
Lidl, Distra and Chicca were all signatories of the Accord on Fire and Building Safety in Bangladesh which required its suppliers to comply with the terms of the Accord, which protects the right of workers who raise concerns about safety hazards in the workplace.
In early September 2014, the factory’s union, which was the legally recognised representative of the workers, conveyed a number of complaints to management about workplace issues, including the calculation of legally mandated holiday bonuses and safety concerns.
BEO fired 48 workers less than a week later (all union members) and the police then attacked those who protested the sacking, hospitalising five workers.
Despite numerous meetings and discussions between management, owners and the Accord the workers have yet to be reinstated, while the latest incident adds pressure on Lidl to intervene in the process.
In response to the allegations Lidl replied stating that it had only placed an order with BEO manufacturers via one of its suppliers Distra at the beginning of 2014. It went on to state that it had not had a business relationship with BEO since then.
Lidl lost a whole mark under Workers' Rights in light of this story.

Reference:

lidl supplier page (12 March 2015)

In December 2019 Ethical Consumer searched the Lidl website for information on how it sourced cotton. No information could be found. In March 2019 the company had sent Ethical Consumer a questionnaire response which was viewed.

According to Anti-Slavery international (ASI) website viewed by Ethical Consumer in August 2018, Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton.
The questionnaire stated: "Lidl has banned the use of Uzbek cotton in our products due to the well-documented risks of human rights violations in its harvest. This policy has been communicated to all levels of our supply chain." No information could be found relating to cotton sourced from Turkmenistan. Lidl therefore lost half a mark under Workers' Rights.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Regarding organic cotton and GM cotton the company stated: "A range of single textile articles have been produced using cotton according to organic-regulation EU 834/2007. We are continuing to increase the share of textiles made up of organic-cotton up to 10% by the end of 2017. Textiles in our range made with organic cotton can be recognised by the GOTS-Label." Due to the impacts of the widespread use of pesticides in cotton production worldwide the company lost half a mark in the Pollution & Toxics category as not all its cotton was organic.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Lidl stated: "Within our sourcing strategy we are phasing out the use of GM Cotton for the production of our own-branded labels. This commitment is underpinned by our decision to increase the share of organic cotton to 10% by the end of 2017." Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.

Overall Lidl received Ethical Consumer's worst rating for its cotton sourcing.

Reference:

Ethical Consumer questionnaire (14 March 2019)