Re agenda item 3: Adoption of a resolution giving formal approval to the actions of the members of the Supervisory Board
The Association of Ethical Shareholders Germany proposes that the actions of the members of the Supervisory Board for the 2020 financial year not be approved.
The Supervisory Board is currently unable to credibly fulfill its role as a supervisory body of the Board of Executive Directors in order to help shape BASF’s realignment in a socially and ecologically just manner. Particularly with regard to the new Chairman of the Supervisory Board, Dr. Kurt Bock, there are clear reservations in other parts of the shareholder base about being able to critically and independently monitor the realignment of the Group that has been initiated by the Board of Executive Directors. While the Supervisory Board was approved by more than 98 percent at last year’s Annual Shareholders’ Meeting, almost a third voted against Bock’s election to the Supervisory Board. A number of fund management companies had already expressed their displeasure about the appointment.
Monitoring of human rights due diligence at BASF implausible
The problem can be illustrated in the area of sustainable supply chain management. Kurt Bock was an eloquent lobbyist against legal regulation of human rights due diligence for companies and opposed initiatives to reduce greenhouse gas emissions during his tenure as BASF’s Chairman of the Board of Executive Directors. Under Bock’s leadership, BASF climbed higher and higher in the rankings of those companies that fight effective climate policy most strongly through lobbying pressure.
This became clear, for example, in Bock’s comments on the Marikana massacre, which occurred on August 16, 2012, at the South African platinum mine of Lonmin, BASF’s largest platinum supplier. 34 mine workers who were on strike for better working and living conditions were shot dead by police, many of them in the back as they fled. In front of the widows of the murdered miners, who asked to be heard at BASF’s shareholder meeting in 2016, Bock downplayed Lonmin’s proven complicity in the massacre and threatened a scorched earth policy – to withdraw from South Africa entirely and without taking responsibility. The initial ignorance of responsible persons such as Kurt Bock has also ensured that the circumstances of the massacre have not been fully clarified to this day.
The miners who dig one of the most valuable metals in the world out of the ground for BASF continue to live with their families in corrugated iron hut slums without electricity or running water. The platinum lobby association “International Platinum Group Metals Association” (IPA), which is supported by BASF and is a greenwashing network without civil society participation, tries to conceal this. Bock failed to establish a risk management system capable of responding efficiently to grievances at its suppliers. Marikana is just one example of this.
It is incomprehensible how Kurt Bock, of all people, could now independently and critically evaluate the efforts of BASF’s current Board of Executive Directors to meet its own human rights due diligence obligations without admitting to his own failings.
With the Due Diligence Act already passed by the German Cabinet, it is now more important than ever for BASF to be able to demonstrate a functioning system for the systematic analysis of human rights risks in its own supply chains. If BASF cannot sufficiently identify human rights violations and proactively counteract them, it could face fines or even exclusion from public contracts.
However, BASF still seems to have massive problems identifying existing abuses even at direct suppliers, as the example of Nornickel shows.
Nornickel: Controversial business partner with disastrous environmental performance
At the end of 2020, indigenous groups from Russia and civil society organizations from around the world called on BASF to end business relations with raw material supplier Nornickel until its blatant disregard for indigenous rights and environmental protection requirements came to an end. But BASF’s initial response was so restrained that it gave the impression that it had not yet seriously addressed Nornickel’s abuses, even though BASF and Nornickel had entered into a strategic cooperation in 2019 regarding battery materials for electric vehicles. In May 2020, Nornickel caused the largest oil spill in the Arctic when 21,000 tons of diesel leaked from a power plant tank.
Only after indigenous groups and civil society organizations called on BASF to live up to its own standards did the company say it would work with Nornickel to address its human rights and environmental deficits. If BASF does not act independently, transparently and comprehensibly against such abuses in the future, even with direct business partners such as Nornickel, the requirements of the Due Diligence Act will not be met.
We submitted these questions to the Board of Executive Directors for BASF’s 2021 Virtual Annual Meeting:
Questions on the perception of human rights due diligence in general:
- Can you already ensure that BASF meets the requirements of the planned supply chain law for risk management to identify and proactively reduce human rights risks in its own supply chains?
- You advocate for a European, statutory regulation of corporate due diligence obligations. Which specific regulations are you in favor of and which are explicitly not?
Questions about the supplier Sibanye-Stillwater and the situation in South Africa:
- In January 2020, BASF conducted an audit of Sibanye-Stillwater. What are the results and can the audit and the results – in their entirety – be made public?
- To what extent were which raw materials purchased from Sibanye-Stillwater in the 2020 financial year? Please state the amount in euros and the quantity in weight, broken down by type of raw material.
- The living conditions of the people who dig platinum out of the ground for BASF remain poor. The current annual report states that the audit results published to date, which are not very transparent, have also identified “need for improvement” in the areas of “health and safety” and “environment.” What are they doing concretely to improve the living conditions of the mine workers in Marikana?
- When were BASF representatives last on site in Marikana?
- In your opinion, have the measures initiated by BASF contributed to an actual improvement in the living and working conditions of the people in Marikana?
- How effective do you consider Sibanye-Stillwater’s social and human rights plans for the communities surrounding the mines?
- Does Sibanye-Stillwater have a stakeholder engagement plan and is it effectively implemented; when were affected communities in Marikana last consulted?
- What actions have been taken by Sibanye-Stillwater to promote the health, social and economic development of communities affected by mining activities?
Questions about business relationships with Anglo American:
- To what extent were which raw materials purchased from Anglo American in fiscal 2020? Please indicate amount in euros as well as quantity in weight, broken down by type of raw material.
- Have you been able to identify specific grievances and backlogs at Anglo American with regard to compliance with international labor, social and environmental standards? If yes, which ones?
- Anglo American has relocated several communities in Mogalakwena, South Africa. Are you aware of this and can you verify that all necessary local, national and international legal requirements have been met in the process?
- Can you verify that Anglo American has paid the required compensation to the communities affected by the resettlement?
Questions about business relationships with Nornickel:
In 2019, BASF entered into a strategic cooperation with Nornickel regarding battery materials for electric vehicles. In May 2020, Nornickel caused the largest oil spill in the Arctic when 21,000 tons of diesel leaked from a power plant tank.
- What specific shortcomings has BASF identified at Nornickel in terms of social and environmental standards?
- Have specific timetables been agreed with Nornickel by when the shortcomings must be remedied? If so, what are the concrete plans?
- To what extent does BASF support or would BASF support Nornickel in meeting the standards of the Initiative for Responsible Mining Assurance (IRMA)?
- To what extent does BASF explicitly require Nornickel to also respect the rights of indigenous groups in Russia, in particular their right to free, prior and informed consent (FPIC principles)?
- Under what circumstances would BASF terminate the business relationship with Nornickel, even temporarily if necessary?