In November 2020, Ethical Consumer viewed Aldi South Group’s corporate website for information about how the company managed workers' rights in its supply chain.

Supply chain policy (rudimentary)

Aldi South Group'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.

Overall, Aldi South Group’s supply chain policy was considered rudimentary.

Stakeholder engagement (rudimentary)

Aldi South Group was listed as a member of the Ethical Trading Initiative on the organisation’s website when checked by Ethical Consumer in November 2020.
Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's supply chain audits. No statement was found to indicate that this was the case with Aldi South Group.
It was also expected for workers to have access to an anonymous complaints system, free of charge and in their own language. Aldi South Group’s website stated: “We have created independent points of contact within all national organisations of the ALDI SOUTH Group. Our employees and, in most countries, our third-party service providers and suppliers can contact these alert lines in order to report potential instances of non-compliance, discrimination, or other forms of misconduct. To ensure that incidents are in fact reported and the individuals remain anonymous, all information is anonymised and treated as confidential on request before being forwarded to the responsible parties within the ALDI SOUTH Group.” As this was only stated to be available to supplier workers ‘in most countries’ (implying not all), and it was not clear if there was a cost associated nor in which languages it was available, this was judged not to be adequate.

Overall, Aldi South Group’s approach to stakeholder engagement was rated rudimentary.

Auditing and reporting (poor)

Aldi South Group’s website stated “In order to be able to monitor compliance with these social standards at production facility level and to continue to foster these together with our business partners, we have developed and implemented our Social Monitoring Programme. Business partners are integrated into this programme according to an assessment and prioritisation of their respective supply chain risks (based on commodity groups and sourcing countries).” In addition to its Social Monitoring Programme, Aldi’s website stated that it implemented “ALDI Social Assessments (ASAs) & ALDI Producer Assessments (APAs)”, in which ALDI employees together with external auditors and business partner representatives, in countries considered to be high-risk.
No results of audits were found to be published
No transparent schedule for audits was found to be published
No policy was found committing the company to auditing labour standards across the entire breadth of the supply chain
No mention of the costs of audits was found.
Ethical Consumer expected companies to give details of their policy for handling instances of non-compliance with the code, and for this policy to include a staged approach to dealing with violations. The following statement on Aldi’s website satisfied this criterion: “Following every audit, a Corrective Action Plan (CAP) is developed which sets out an individualised timeline for eliminating any issues that may have been found. Our business partners are obliged to implement the measures together with the production facility’s management. Our CR departments closely monitor the process to ensure successful remediation.”

Overall, Aldi South Group’s approach to auditing and reporting was rated poor

Difficult Issues (rudimentary)

Ethical Consumer looked for acknowledgement that problems of audit fraud exist and a systematic approach to addressing audit fraud. The following statement on Aldi’s website satisfied this criterion:
“We consider third party social audits to be an important first step in gathering information about the human rights situation in our production sites and initiating improvement. We are also aware that they may not always provide a true picture of working conditions and may fail to identify hidden issues such as forced labour, discrimination or harassment.
We therefore commit to adopt an approach to ethical trade that goes beyond compliance and does not rely solely on social audits, complementing our audit approach with additional activity such as our own on-site visits, communication to and training for business partners, production facilities and producers, participation in multi-stakeholder initiatives, capacity building and projects on the ground.” Furthermore, the company’s 2018 Modern Slavery Statement contained the following assertion: “Our teams regularly carry out announced, semi-announced and unannounced site visits and assessments of supplier facilities to check they meet our ethical standards and requirements”

Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers, or preference for long term suppliers. It would also include measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.

Aldi’s approach to Difficult Issues was rated rudimentary.

Overall, Aldi received Ethical Consumers Middle rating for Supply Chain Management and lost half a mark in this category.

Reference:

cr.aldisouthgroup.com (30 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%.

Aldi South scored 19% overall – up from 1% in 2018 – broken down as follows:

transparency 31%

workers' rights 19%

farmers rights 17%

womens' rights 10%

As the supermarket received red (0-20%) or orange (21-40%) ratings across the board, it was marked down under Human Rights.

Reference:

Behind the Barcodes 2019 (12 August 2019)

In November 2020, Ethical Consumer viewed the Siepmann Stiftung and Aldi South Group family tree on the corporate database Hoovers. It showed that the group had one susidiary in China, which at the time of writing Ethical Consumer considered to be an oppressive regime.

Reference:

Generic Hoovers ref (2020)

In November 2020, Ethical Consumer searched Aldi South Group website for a cotton sourcing policy.

The company's International Buying Policy for Cotton was downloaded. This document outlined the company's target to source 100% sustainable cotton in the future:

"By 2025, we will [...] require the cotton used for our own-brand products to be of either recycled origin or certified according to one of the following internationally recognised sustainability standards:• FAIRTRADE • Global Organic Textile Standard (GOTS)• Organic Content Standard (OCS) 100/blended• Cotton made in Africa (CmiA)• Better Cotton Initiative (BCI)"

The company was not a signatory to RSN but had a detailed public commitment regarding sourcing cotton from Uzbekistan and Turkmenistan:

"We prohibit our business partners from using cotton sourced from countries where cultivation and harvesting are systematically associated with human rights violations. For example, ALDI has contractually prohibited the use of cotton grown in Uzbekistan and Turkmenistan for the production of its merchandise."

As a result of its policy, the company retained full marks in the Human Rights category due to the commitment not to source from Uzbekistan and Turkmenistan.

Although the target to source 100% of its cotton from certified sustainable sources was commendable, due to the fact this target was not yet attained, Aldi South Group was marked down under the Pollution & Toxics and Controversial Technology categories for the reasons outlined below.

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. 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.

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. 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.

Reference:

cr.aldisouthgroup.com (30 January 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 Aldi - 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.
Aldi lost whole marks in the categories of Pollution & Toxics and Workers' Rights in light of this story.

Reference:

SWEET FRUIT, BITTER TRUTH (May 2016)

In August 2017 the Guardian published an article entitled, 'Aldi Australia tries to gag truck drivers' union after claims of unsafe practices'. The article detailed how Aldi had moved to gag a workers' union who claimed that the company imposed unsafe work schedules on its drivers. "The Transport Workers Union accuses Aldi of using its wealth and size to bully drivers into unsafe practices including skipping rest breaks and truck maintenance in order to meet tight delivery times."

Aldi lost a mark in the Workers' Rights category in light of this story.

Reference:

https://www.theguardian.com/australia-news/2017/aug/29/aldi-tries-to-gag-truck-drivers-union-after-c

In November 2020, Ethical Consumer searched Aldi South Group's website for information on the company's cocoa sourcing policies. The website showed a number of products with cocoa as a key ingredient and it was considered a significant part of the company’s offering.

Aldi South Group's website stated "We require the sustainability standards UTZ/Rainforest Alliance, Fairtrade or organic when buying products containing cocoa and we have already converted the majority of the cocoa used in our private label products."

It stated the following goal: "All cocoa used in relevant own-brand products will be from certified sources by the end of 2020." However, it stated that at the time of writing 88% of products were certified.

Although it was seen to be moving in the right direction, due to the fact that the company was still sourcing some uncertified cocoa, and the issue of child and slave labour in cocoa supply chains had been known since before 2000, it lost half a mark in the Workers' Rights category.

Reference:

cr.aldisouthgroup.com (30 January 2019)