Child and Forced Labour as well as Child Protection

Effect

The REWE Group is aware that the global supply chains in retail and the tourism sector can have a wide range of social impacts. The company sources a large number of products and product components for its private label product ranges through supply chains which can extend across several countries. Human rights violations can occur in the extraction and processing of raw materials and in production. This also applies to destinations where DER Touristik, the travel and tourism business segment of REWE Group, offers tourism services. Child and forced labour is an especially serious form of human rights violation and therefore a key topic for the REWE Group. The company has identified the topic as particularly sensitive in the relevant supply chains and countries (see section Strategic Approach and Social Aspects in the Supply Chain).

According to the International Labour Organization (ILO), 160 million children between the ages of five and eleven are affected by child labour worldwide and 25 million adults and children are victims of forced labour. Child labour harms the physical and mental development of children and young people and prevents them from attending school. Almost 70 per cent of the children work in agriculture, the most common reason is poverty. Forced labour is not restricted to certain age groups and is often accompanied by restrictions on freedom of movement, withholding of wages and personal documents as well as indebtedness to the employer. As it often affects legal or illegal immigrants or temporary workers, forced labour is generally not reported and therefore difficult to monitor.

In its retail business, the REWE Group can make a positive contribution to the fight against forced and child labour by cooperating with suppliers and implementing standards or on-site training programmes in the relevant supply chains.

According to estimates by international organisations, millions of girls and boys worldwide are affected by child labour in tourism every year. Sexual exploitation can also occur in this sector. With its travel and tourism segment DER Touristik, the REWE Group feels it has a special responsibility to protect children and young people at its holiday destinations. DER Touristik has identified many risks. In the case of performances, for example, the boundaries between children merely participating as actors in the tourism activities and child labour can be blurred. The same applies to community-based programmes that aim to integrate communities and families into the tourism value chain. In addition, tourism services such as visits to schools or orphanages have a demonstrably negative impact on the rights of children and their educational prospects due to the resulting dependencies and the disruption of protected spaces. Furthermore, the tourism infrastructure offers contact points with the informal sector, within which children are exploited in various ways.

Principles

The Guideline on Sustainable Business Practices applies to all business relationships of the REWE Group and is based on the United Nations Universal Declaration of Human Rights, the Conventions of the International Labour Organization (ILO) and the UN Global Compact. The prohibition of forced labour is laid down therein: No one should be forced to work against their will or under threat of punishment. It also establishes the avoidance of exploitative child labour. The REWE Group complies with the ILO’s standards on child labour and with the respective national laws. In the event of a deliberate gross violation of the values set forth in the guideline, the REWE Group reserves the right to impose sanctions.

Furthermore, in October 2022, the REWE Group updated its Supplier Code of Conduct (“REWE Supplier CoC”) for compliance with its corporate due diligence in the supply chain. It applies as of 1 January 2023 and outlines the minimum human rights and environmental standards that suppliers must observe and comply with in business transactions with companies of the REWE Group. The REWE Supplier CoC also takes into account the requirements of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG).

In the reporting period, the REWE Group has also updated its Declaration of Principles which outlines the company’s strategy for respecting human and environmental concerns. The REWE Group specifically addresses the risks that arise in the supply chain with regard to the area of action People and Environment through systematic supply chain management. For instance, the REWE Group is committed to strengthening human rights and preventing human rights violations. This commitment applies to its own business operations as well as to the global supply and value chains.

In its Guideline on Fairness, the REWE Group is committed to strengthening human rights and improving working conditions within the supply chains of all private label products of REWE and PENNY in Germany as well as toom Baumarkt DIY stores. The focus is on the issues of child and forced labour as well as child protection, living wages and incomes, and women in the supply chain.

In addition, in its Guideline on the Prevention of Child Labour for REWE and PENNY in Germany as well as toom Baumarkt DIY stores, the REWE Group specifies its requirements and measures with regard to the prevention and elimination of child labour and defines a binding framework for business partners. Various other Guidelines, for instance on high-risk raw materials such as cocoa, cotton and natural stone, describe specific challenges with regard to forced and child labour and the objectives, measures and requirements for suppliers derived from them.

A major reason for child labour is poverty. This is why the REWE Group, in addition to measures to fight child labour, also focuses on promoting living wages and incomes (see Living Wages and Incomes).

Due to the particular risks faced in the tourism industry, DER Touristik Group has adopted its combine-wide Child Safeguarding Guideline on the World Children’s Day on 20 November 2022. This outlines the processes, measures and requirements the company places on its worldwide units for the protection of children’s rights and child safeguarding in tourism. The prevention of sexual exploitation of children in tourism remains one of the key topics of DER Touristik’s commitment to child safeguarding. DER Touristik Group signed “The Code”, a code of conduct for the protection of children from sexual exploitation, in travel and tourism in 2016. It is based on the UN Declaration of Human Rights and the UN Convention on the Rights of the Child. By signing, DER Touristik has committed to the Code and is actively implementing the associated criteria.

Strategic Approach

Similar to its approach to more responsible supply chains, the REWE Group has adopted a four-stage process in its strategic approach for REWE and PENNY in Germany: product range and risk analysis, derivation of focus topics, implementation of measures, monitoring and reporting.

In an analysis last conducted in 2019, the risks of forced labour were identified for all countries over which the supply chains of the private labels of REWE and PENNY in Germany extend. In a second step, products and raw materials were analysed with regard to the risk of forced labour. The data obtained was then linked to the country risks, before a qualitative hot spots analysis was conducted. The occurrence and causes of forced labour were examined specifically in relation to these hot spots in case studies. Based on all of the analysis results, appropriate measures to minimise risks were developed.

DER Touristik conducted a risk analysis from 2021 to 2022 to gain insights into how the rights of children are affected by various activities within the tourism value chain and at its partners. Firstly, it showed that relevant risks in these value chains can be easily identified. Secondly, it was concluded that products and activities related to community-based tourism as well as visits to social projects require the existing regulations to be specified (see also Effect und Principles). On this basis, the product portfolio will be gradually adjusted and high-risk activities delisted.

Responsibility and Resources

Implementation of strategies and measures regarding child and forced labour is the responsibility of dedicated teams and departments in the respective sales lines. For more information, please refer to Management Approach Green Products. When implementing human rights due diligence in the supply and value chains, the Corporate Responsibility Departments of the sales lines and the procurement organisations are of particular importance.

Implementation

In order to combat child and forced labour in the cultivation of raw materials and to ensure socially acceptable working conditions, the REWE Group relies in particular on internationally recognised certification standards. The most important organisations are Fairtrade, the Rainforest Alliance, Cotton made in Africa, MSC, ASC, GGN GlobalG.A.P. (GGN) and Naturland. They ensure high standards in the cultivation of raw materials and more transparent supply chains. Child and forced labour are prohibited under these standards. With regard to the raw material palm oil, the standard of the Roundtable on Sustainable Palm Oil is also key – this aims to ensure that no child labour or forced labour takes place on plantations. For more information on child and forced labour in the extraction of raw materials see Focus Raw Materials – Food and Focus Raw Materials – Non-Food and Services.

In addition, compliance with the prohibition of child and forced labour in processing and production is regularly monitored through social audits, mainly in accordance with the amfori BSCI standard (see Social Aspects in the Supply Chain). All production sites in the first stage of the supply chain in defined risk countries are inspected during these audits. They take place both announced and unannounced. The respective company is then given a rating based on the audit findings. If the audit reveals a case of child or forced labour, the audited company does not receive an overall rating. Instead, the amfori BSCI zero-tolerance mechanism takes effect: The auditor issues a warning message, stops the audit, and collects evidence to prove the violation. The violation is then reported to the amfori BSCI office within 24 hours of its detection. Within 48 hours of the allegation, the Auditing Department checks the facts, the evidence as well as the training and competencies of the auditor. Within 72 hours of detection, all affected amfori BSCI participants form an ad-hoc remediation group to define the next steps and initiate measures, the implementation of which will be checked.

Strategically relevant production sites also participate as part of the Capacity Building Training Programme in the Factory Improvement Training (FIT) of the REWE Group. Here, the challenges of the production sites are addressed individually. If there are risk factors for forced or child labour in a factory, these are dealt with during the training. For more information, see Social Aspects in the Supply Chain.

The REWE Group has also created a toolkit to support its business partners and production sites in implementing the requirements for preventing and combating child labour. It is based on the binding framework of the Guideline on the Prevention of Child Labour.

In order to be able to react quickly in cases of child and forced labour, the REWE Group has been cooperating with the children's rights organisation “The Centre of Child Rights and Business” since 2018. The organisation advises companies on the implementation of strategies and programmes to ensure children's rights in supply chains. Through this cooperation, the REWE Group benefits from the expertise and network of the organisation, maintains a dialogue with relevant stakeholders within the working group and can use tools developed by the organisation. If cases of child labour are detected, “The Centre” helps the company to implement solutions.

DER Touristik communicates its policy on child safeguarding internally and externally. The implementation of the Policy Statement on Child Safeguarding includes a training programme that involves tourism-related departments, destination agencies, tour guides, hoteliers, relevant partners and service providers and communicates measures and requirements for child safeguarding that have been defined for various activities and products. The implementation of the requirements is reviewed annually in the form of portfolio analyses and monitoring.

In addition, DER Touristik actively implements the six criteria of the industry initiative The Code in its focus on the prevention of sexual exploitation of children in tourism:

• Establish a policy and procedures against sexual exploitation of children
• Train employees in children’s rights, the prevention of sexual exploitation and how to report suspected cases
• Include a clause in contracts throughout the value chain stating a common repudiation and zero tolerance policy of sexual exploitation of children
• Provide information to travellers on children’s rights, the prevention of sexual exploitation of children and how to report suspected cases
• Support, collaborate and engage stakeholders in the prevention of sexual exploitation of children
• Report annually on the implementation of the six criteria of The Code

Important stakeholders in the implementation of requirements and measures for child safeguarding are the employees of the tourism units and in particular the partners and service providers in the destination areas who are being trained and involved through appropriate programmes. Traveller are also made aware of the need to respect and protect children’s rights. For example, DER Touristik provides internal and external stakeholders with extensive information through its Policy Statement on Child Safeguarding, which aims to promote responsible practices in tourism and strengthen the rights of children and families in relation to tourism through communication measures.

Involvement of Stakeholders

The REWE Group's stakeholders rated the topic of child and forced labour as relevant for the company in the Materiality Analysis. They are informed annually about the effectiveness of measures taken via the Sustainability Report and in various dialogue formats (see Stakeholder Dialogue). This exchange allows stakeholders to provide important input on the issue.

DER Touristik is in constant dialogue with various stakeholders through various committees on the protection of children's rights and child safeguarding in tourism. These include ECPAT (organisation supporting the protection of children), “The Code” of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism, the Child Safeguarding Working Group of the German Travel Association DRV, the Roundtable Human Rights in Tourism, Kindernothilfe (Supporting Children in Need) and Tourism Watch, the British travel association ABTA, authorities, child safeguarding experts, competitors, industry members and numerous other stakeholders.

Customers, suppliers, partners and other stakeholders can submit their grievances or comments. For this purpose, the REWE Group has established reporting and grievance mechanisms. For more information, please refer to the Compliance section.

Specifically for supply chains, the REWE Group promotes the establishment of effective grievance mechanisms. In this way, the company aims to ensure that grievances in the supply chains can be detected. This also concerns the reporting of cases of child and forced labour. As part of audits and certifications, the REWE Group already checks at its private label suppliers of REWE and PENNY in Germany whether production sites offer their employees grievance options. The REWE Group has developed a systematic process for dealing with grievances (for more information, see Social Aspects in the Supply Chain).

In 2022, the REWE Group Buying, the procurement company for REWE and PENNY in Germany received three grievances (2021: 4). All cases were handled by applying a systematic process. The grievances concerned good working conditions, wage payments and freedom of association.

The REWE Group relies on numerous measures and projects to systematically fight against child and forced labour and ensure child safeguarding. These are presented for the reporting period below sorted by topic: