Two women working on field drying coffee beans

December 2021

Increasing transparency: the importance of Human Rights Impact Assessments

Sarah Bollermann
Group Director of Corporate Responsibility International

Taking a strong stance on human rights is an integral part of ALDI’s Corporate Responsibility commitment. Our International Policy Statement provides the framework through which we want to ensure that human rights are being respected across all our business activities and our supply chains. The publication of our first three Human Rights Impact Assessments (HRIAs) for Avocados, Brazil nuts and Coffee, represents an important step in bringing ALDI’s Vision 2030 for the focus area of “Human Rights” to life.

In a world of global supply chains, human rights violations are a problem affecting every economy, industry, and sector. ALDI‘s well established systems of risk analyses, audits, and supplier assessments help us to identify the actual and potential risks in our food and non-food supply chains. However, we know that some supply chains require a much deeper understanding, so that we are able to effectively prevent, mitigate, and remedy potential and actual negative impacts on human rights. HRIAs are a major building block on this journey towards greater supply chain transparency.

What is a Human Rights Impact Assessment (HRIA)?

Global commodity supply chains are often long, complex and marked by limited traceability, especially when it comes to bulk goods like coffee or nuts. This complexity not only limits transparency on potential human rights impacts, but also limits how much leverage ALDI has to address these impacts. HRIAs help us build a detailed understanding of potential positive and negative ways business activities (e.g., harvesting, manufacturing, procurement) can impact internationally recognised human rights, such as working conditions, gender equality or land tenure.

In comparison to our Human Rights Risk Assessment (HRRA) for food supply chains in 2018, HRIAs focus on specific supply chains and geographical areas. An HRIA offers a deep dive into human rights challenges, and gives detailed insights into the realities for workers and communities along a supply chain. Our main goal was to fully understand the areas where we could make a difference for rightsholders in our supply chains. We partnered with the human rights experts at Ergon Associates to ensure a credible process, aligned with international frameworks, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines on Multinational Enterprises. The following steps were taken to get the most robust results:

Review of supply chain activities & supply chain mapping
Scope of impacted human rights
Baseline analysis of gathered secondary information (e.g. national legal regulations)
Stakeholder engagement with the help of local consultants
Impact assessment to identify the saliency of issues
Development of a dedicated human rights mitigation action plan

ALDI‘s first three HRIAs in high-priority food supply chains

Three Latin American supply chains were in scope for our first ALDI HRIAs - Brazilian Coffee, Peruvian Avocados and Bolivian Brazil nuts. The selection was based on an analysis of our high-priority supply chains, the relevance of the individual sourcing country for ALDI business and the potential added value that can be generated through these assessments.

ALDI's Human Rights Impact Assessments as of December 2021

Avocados from Peru

Export agriculture is an expanding source of formal employment in Peru, and avocado production is significantly increasing. Although avocado production provides an important source of income and contributes to livelihoods for many workers and their families, our analyses shows that most human rights challenges link to labour rights and working conditions. Risks also exist for smallholders due to their vulnerable position in the export value chain. Impacts usually have more than one root cause, including sectoral or contextual drivers. For instance, Avocado production is marked by fluctuating demand for labour throughout the year. This results in strong reliance on temporary and seasonal employment, which in turn can undermine the effectiveness of workplace grievance mechanisms for harvest workers due to lack of awareness of the procedures in place.

Human Rights Impact Assessment Report: Avocados from Peru

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Person with a cardboard full of avocados

Brazil nuts from Bolivia

Brazil nuts are one of the most valuable non-timber products of the North Amazonian region of Bolivia. Due to the socio-economic importance of the product to the region, both positive and negative impacts can be felt across local communities. The HRIA identified most negative impacts during harvest operations and processing at factory level. Most are driven by multiple root causes, including sectoral, regulatory, and contextual drivers. A good example is how Brazil nut collection takes place in remote rainforest areas, this makes effective oversight and labour law enforcement during harvesting extremely difficult, leading to negative impacts on human rights. At the same time, the livelihoods generated by the Brazil nut harvest incentivise communities to protect forests from more destructive usage, such as logging. This helps to protect the land of indigenous communities and their way of life.

Human Rights Impact Assessment Report: Brazil Nuts from Bolivia

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Coffee from Brazil

Brazil is the world‘s largest coffee producer and is a sector that faces numerous challenges such as price volatility, climate change, and labour shortages. Our report shows that the most negative impacts are found in crop development, farm maintenance and harvest operations, and smallholders and women seem to be particularly affected. Most impacts were found to have more than one root cause, such as challenges relating to occupational health and safety on farms. As an example, low awareness among farmers, as well as weak regulation and oversight are key factors underlying a generally reported lack of protective measures when handling agrochemicals. Pollution of soil and water from pesticides used across the agricultural sector is also a nationwide issue. By scaling up certified coffee the risks can be mitigated through the application of good practices and the provision of trainings for farmers.

Human Rights Impact Assessment Report: Coffee from Brazil

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Our way forward

Through these first three HRIA projects, we were able to gain in-depth knowledge of our supply chains and the various impacts on human rights that may occur. Among others, the HRIA projects highlighted the need to address specific root causes for gender inequality or to support smallholders in becoming more resilient and receiving a fair share of value. The increased understanding of our potential link to some of the issues is a good starting point to identify areas where ALDI has the greatest leverage to enhance our positive impacts while mitigating negative ones. Key ALDI levers to bring about change include supplier selection and engagement, purchasing practices and development of producer capacities. The HRIA findings will help strengthen our standards and due diligence, enabling ALDI to build on its commitment to mitigate, prevent and/or remedy potential impacts in our supply chains. From a day-to-day perspective, the HRIAs have allowed us to develop supply chain specific Human Rights Action Plans (HRAP). These plans will guide the Corporate Responsibility and Buying Teams within the ALDI SOUTH Group to deliver improved human rights for workers and communities.

This is just the beginning

Having conducted our first three comprehensive HRIAs successfully is not where we want to stop. ALDI aims to carry out twelve HRIAs in high-priority food and non-food supply chains by the end of December 2025.