In January 2020, Ethical Consumer viewed Aldi Sud’s corporate websites for information about how the company managed workers' rights in its supply chain. Aldi provided Ethical Consumer with a completed questionnaire in March 2019 and May 2018 which were also used.
Supply chain policy (rudimentary)
Aldi Sud's 'Social Standards in Production', last updated in 2015 was downloaded. This included adequate clauses on freedom of association, forced labour, discrimination and child labour. However clauses regarding wages and hours were governed by local laws which often do not provide adequate protection for workers. It therefore received a rudimentary rating for its supply chain policy.
Stakeholder engagement (poor)
In response to Ethical Consumer’s questionnaire in March 2019 Aldi stated that it had a compliance hotline: "The ALDI AlertLine is a confidential way for employees and suppliers to report to report concerns about ethics. The AlertLine is operated by an independent company with multilingual operators on staff and is available 24 hours a day, 7 days a week. Employees may also choose to remain anonymous when reporting concerns." The company said nothing about whether the costs of using this hotline were borne by the company or the employees; Ethical Consumer expects the company to cover all costs, no additional information was found to contradict this when checked in November 2020.
In response to its work within multi-stakeholder initiatives, Aldi stated that it had been a member of the German Partnership for Sustainable Textiles since 2015. Set up by the German Federal Ministry for Economic Cooperation and Development (BMZ) this multi-stakeholder initiative aims "to improve unsatisfactory social and environmental production conditions in the textiles industry". Ethical Consumer checked the organisation's website in November 2020, and found that Aldi South was still a member.
The company also stated that it was "signatories of the Accord for Fire and Building Safety in Bangladesh to improve working conditions within the Bangladesh textile industry." This was confirmed by the website for the Bangladesh Accord when checked in November 2020.
Aldi also mentioned its work with the following groups: Stronger Together, Business Social Compliance, Supplier Ethical Data Exchange, Food Network for Ethical Trade, Spain Supplier Ethical Trade Forum and British Retail Consortium (BRC). However, these were not considered to be multi-stakeholder initiatives at the time of writing.
In its 2018 questionnaire the company stated, "We use certification schemes, such as Utz and Fairtrade to improve conditions for farmers across a range of commodities, including cocoa." However this was not deemed to constitute systematic input from an independent trade union or NGO to verify audits.
Overall the company was considered to have a poor approach to stakeholder engagement.
Auditing and reporting (poor)
Aldi stated in its questionnaire to Ethical Consumer that, “Every supplier to ALDI is contractually required to provide details of the main production facility or site of manufacture for each ALDI product. Our Social Monitoring Programme (SMP) specifically addresses social standards in high risk product groups and countries. As part of this programme, suppliers must become SEDEX or BSCI members and provide independent third party ethical audits for production facilities in high risk countries to demonstrate compliance with our ethical requirements.
"Our Assessment schedule is based on several factors, including inherent risks from particular product types and/or countries and strategic importance of supplier and/or production facility.
"We do not publicly disclose audit results as audits are only one part of our Social Monitoring Programme.
"We work with our suppliers on the basis of continuous improvement of ethical standards in our supply chain to remediate issues identified by our Social Monitoring Programme according to our Severe Risk Policy. Remediation is carried out on a case-by-case basis, dependant on a number of factors including the severity of the issue, progress against Corrective Action Plan and the willingness of the supplier and production facility to work jointly towards improvement. Following every audit, corrective action plans are drawn up which lay out an individualised timeline for remediating any faults. Our suppliers are obliged to implement corrective measures together with the production facility management. Our CR and buying departments closely monitor the process. If no progress is seen in the implementation of the action plan, or if the supplier or the production facility management do not take appropriate action to resolve significant issues, such as fire and building safety, late payment of wages, or producing in unauthorised production facilities, we may decide to take further action. This may include the temporary or permanent exclusion of the supplier and/or the production facility from future tenders. We aim to work together with our suppliers and production facilities whenever possible and exclusions are only implemented as a final resort if the situation cannot be collectively rectified.”
Aldi received a poor rating for its auditing and reporting due to the following reasons: Aldi did not appear to have a commitment to audit its whole supply chain. While its policy for dealing with Bangladesh was to commit to assessing 100% of its facilities it was not clear what proportion of its remaining production sites around the world were being audited. Furthermore it was unclear how regularly sites were being assessed following its risk analysis. Ethical Consumer asked that companies demonstrated a transparent audit schedule i.e. high risk suppliers will be audited every 6 months.
While Aldi did have a staged approach to dealing with non-compliance within its supply chain, there was no disclosure of audit results nor any mention of cost of audits. Therefore the company received a poor rating for its auditing and reporting.
Difficult issues (reasonable)
Aldi stated in its 2018 questionnaire: "In 2013, we established our CR Unit Asia to directly monitor and address difficult issues on the ground in our sourcing countries e.g. China, Bangladesh, India, Thailand and Vietnam. We regularly carry out announced, semi-announced and unannounced site visits and assessments of suppliers and production facilities in high risk countries. We believe this provides a more accurate picture of the issues affecting a production facility and directly tackles the issues of audit fraud, lack of freedom of association and the lack of transparency that may arise from third party audits." Ethical Consumer considered this to be addressing the issue of audit fraud.
Aldi stated in its questionnaire, “We run scheduled mandatory Corporate Responsibility training days for all new starters in Aldi’s Corporate Buying department, which include sessions on social monitoring and supply chain issues. All existing buyers are encouraged to attend the sessions and regular one-to-one training is also provided to buyers...We have held a number of supplier conferences for our suppliers on our Social Monitoring Programme and supply chain issues. In addition, we encourage all of our suppliers and their suppliers further down the supply chain to attend modern slavery workshops and access free training materials provided by Stronger Together, which ALDI has been a project sponsor of since 2013."
The 2018 questionnaire also stated, "We maintain long-term supplier partnerships and have been working with many of our key suppliers for several years." Ethical Consumer considered it to be addressing purchasing issues within its supply chain.
Aldi also stated that through the German Partnership for Sustainable Textiles it was attempting to encourage "the establishment of living wages". However, this programme only applied to one small section of its supply chain. No further information was given about efforts to address living wages or legal restrictions on freedom of association. Overall it was considered to have a reasonable approach to difficult issues.
Overall, Aldi received a middle Ethical Consumer rating for Supply Chain Management.
www.aldi.co.uk/ (8 January 2020)