ASI response to “Asleep at the Wheel” report
For ASI, human rights in global supply chains continues to be a priority issue that is addressed through ASI Standards, mandatory auditor training and oversight of assurance processes. ASI continues to agree with HRW that audits and certifications are an important tool but not the whole answer to supply chain due diligence.
2 February 2024
For ASI, human rights in global supply chains continues to be a priority issue that is addressed through ASI Standards, mandatory auditor training and oversight of assurance processes. ASI continues to agree with HRW that audits and certifications are an important tool but not the whole answer to supply chain due diligence (for example EU due diligence regulations: What is ASI’s role? , ASI Certification: Are Audits Sufficient for Due Diligence?, and Human rights due diligence ). However, we firmly reject HRW’s characterisation of ASI as a ‘flawed’ scheme’ with a ‘failure to meaningfully investigate … risks of links to forced labour’.
What do ASI’s Standards require on forced labour?
ASI’s Standards strongly uphold the responsibility of business to respect human rights.
As an ISEAL Code Compliant Member, ASI implements best practice in standards-setting, including multi-stakeholder decision-making and public consultation processes and periodic revisions.
The latest version of the ASI Performance Standard (V3.1, April 2023) directly addresses forced labour risks in three sections:
- 1: Human Rights Due Diligence, with respect to the UN Guiding Principles on Business and Human Rights
- 8: Conflict-Affected and High-Risk Areas, with respect to the OECD Due Diligence Guidance for the Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
- 3: Forced Labour, with respect to the ILO Forced Labour Convention and which includes a new requirement since May 2022 for publication of a modern slavery statement.
Previously Certified Entities are migrating onto this version as part of their audit cycle. As part of the transition to the new version, ASI has maintained a strong focus on the expanded human rights and forced labour requirements. See, for example, this published reminder to members and auditors to pay attention to human rights, forced labour and responsible sourcing criteria in April 2023.
The ASI Chain of Custody (CoC) Standard enables a link between verified practices at successive steps of the supply chain under the ASI Performance Standard, to the products produced by ASI Certified Entities. While it is based on a mass balance system, controls exist for CoC Material (Performance Standard required) and non-CoC material (due diligence processes required to identify and address risks).
Section 7 of the CoC Standard sets out that due diligence must additionally be applied towards non-CoC Material, to exclude material that is high-risk or does not comply with requirements (CoC 7.1, 7.2, 7.3).
- CoC criterion 7.1 refers to Performance Standard criteria 9.1 (UNGPs) and 9.8 (Conflict-Affected and High-Risk Areas). The Entity would also apply these under their ASI Performance Standard Certification: a pre-requisite for CoC Certification and which also addresses forced labour risks under criterion 10.3 Forced Labour.
- CoC criterion 7.2 addresses risk assessment and mitigation.
- CoC criterion 7.3 requires a complaints resolution mechanism.
In 2022, approximately 20% of global primary aluminium production from aluminium smelters was both ASI Performance Standard and Chain of Custody (CoC) Certified (13.5 million tonnes out of 68 million tonnes; the HRW report incorrectly states 10% but has confused material flows – from ASI CoC Certified to ASI CoC Certified Entities – with production – which can go from a CoC Certified Entity to both CoC and non-CoC Certified Entities.)
Are there ASI Certified Entities in Xinjiang?
As noted in the HRW report (p35), Xinjiang’s aluminium industry is centred on aluminium smelting (electrolysis of refined alumina from bauxite into aluminium metal). To date, no Xinjiang-located aluminium-smelting facility (or other aluminium-related operation) has sought ASI Certification, either individually or as part of a wider-scoped Entity. There have been no ASI audits carried out within Xinjiang province.
Furthermore, aluminium smelting in Xinjiang is coal-powered and the GHG intensity of aluminium production is above ASI’s threshold for smelters (Performance Standard criterion 5.2), a de facto exclusion of such operations from conformance to the Standard and thus ASI Certification.
As a result, ASI does not anticipate that any Entities with facilities located in Xinjiang will seek to be audited against ASI Standards because of the political sensitivities of forced labour risks, the GHG emissions intensity requirements, and the fact that ASI publishes audit findings of all certifications.
Are ASI Certified Entities sourcing from Xinjiang?
At 31 December 2023, ASI had 77 members headquartered in China. As noted in the report, HRW asked ASI about two ASI Certifications, Chalco Ruimin and Shanghai Sunho Aluminium Foil, and potential links to forced labour through direct or indirect supply. Parts of ASI responses, which detailed how auditors reviewed conformance for criteria on forced labour, were included in the report. ASI also advised HRW that the relevant auditors have been notified of their inquiries ahead of forthcoming surveillance audits.
In the first case, the evidence of direct supply in published material noted in the HRW report pre-dates the timing of the ASI audit. The United States’ Uyghur Forced Labor Prevention Act (UFLPA) came into effect in mid-2022, and the Driving Force report was published in December 2022. During December 2022 to February 2023, ASI engaged in discussions with identified members on these issues to enhance understanding on ASI criteria and international customer expectations. The audit took place in May 2023.
The HRW report questioned why there was not direct reference to ‘Uyghur forced labour’ in that audit report. ASI’s response noted that: “The auditor’s finding for criterion 9.8b states that no critical human rights issues regarding child labour or forced labour were found. Reference to ‘Uyghur forced labor’ was likely not incorporated in the audit report due to political sensitivities in China on this specific issue.” In other words, while forced labour risks and processes were reviewed during the audit, specific language on this region was not published.
In the second case, the HRW report identified a potential linkage to supply through its ownership structure. As noted above, in response to the 2022 Driving Force report, ASI conducted outreach to all ASI members on forced labour risks in December 2022 to February 2023. From a number of discussions, ASI’s understanding is that supply chains were adjusted to meet the UFLPA, along with international customer expectations. In this case, the most recent re-certification audit was undertaken in January 2022 (following certification and surveillance audits in 2019 and 2020 respectively), which pre-dates those discussions. A surveillance audit is scheduled for 2024 and this matter will be assessed.
ASI agrees that auditing human rights risks in many contexts is challenging. Yet that doesn’t make the process ‘inherently flawed’ or worthless. The alternative is either nothing, or some other process of inquiry which will face the same challenges. The HRW report criticises ASI for acknowledging political sensitivities, but at the same time includes essentially the same advice on how to address these sensitivities in practice: “that car companies can ask business partners to disclose their supply chains without referencing Xinjiang explicitly, such as by requesting information on suppliers for commercial reasons or by using neutral terms such as the need to comply with international regulations” [p81, HRW report].
What steps is ASI taking to tackle the risk of forced labour involving Uyghurs and other Turkic Muslim communities in aluminium supply chains?
Human Rights Watch asked ASI this question in December 2023. ASI’s response was that actions include:
- Review of published reports (e.g. Horizon Advisory, OHCHR, Driving Force reports in 2022)
- Detailed discussions with co-author of Driving Force report in 2022 and 2023
- Sharing the Driving Force report individually with all named ASI members
- Presentation on the Driving Force report by one of the co-authors, Kendyl Salcito, to the ASI Standards Committee on 25 January 2023
- ASI webinar on Human Rights Due Diligence requirements by Kendyl Salcito (January 31) – shared with members and auditors, and published on the ASI website
- Promotion of Driving Force webinar organised by the co-authors, which had a deeper dive on the report findings, to ASI members and auditors
- A range of individual discussions with members and stakeholders on the issues raised in these reports
- Mandatory auditor training module on modern slavery risks
- Commissioned Pillar Two to develop an additional auditor training module focused on practical auditing of UN Guiding Principles (in development for delivery in February 2024)
- Monthly Auditor Update newsletters that cover supply chain risks and auditing techniques
- Quarterly calibration calls with ASI accredited auditors which address a range of risks and questions, including relating to human rights and labour violations
- Witness assessments of audits (2 in China in 2023, out of 8 globally across 6 countries) to observe auditor practices on site (including for labour issues)
- Continuing to monitor the issues as part of ASI oversight processes (including pre-audit risk reviews, reviews of audit plans, reviews of audit reports).
ASI works to support auditors in their work on the ground through regular training and communications, and human rights issues have been a key focus. The ASI Standards Committee and Human Rights Working Group has also been working on new additions to the Assurance Manual on retaliation risks. ASI’s Oversight Mechanism – which includes reviews of audit plans and submitted audit reports – aims to ensure both quality assurance and a cycle of learning for all participants. Ongoing review of evolving regulation and published articles, information and research play a key role.
For an overview of the ASI assurance process, see: 10 things you need to know about the ASI assurance process
ASI is working to drive change
A comprehensive supply chain due diligence approach ultimately relies on collective action by committed actors. ASI aims to play a strong role – but not the only role – in driving this engagement for the aluminium sector.
Programs like ASI use a range of strategies to drive positive change. These include continual improvement of standards and guidance for responsible practices, managing an audit program for these standards for those who volunteer to implement them, supporting learning and education for companies implementing the standards and auditors who assess them, and building broader understanding of evolving science, insights and expectations on key topics through global supply chains. Engagement is a key tool for change. Beyond companies, ASI also engages directly with a range of rightsholders to build capacity and effective participation, including in the ASI Standards Committee.
ASI is tackling a range of complex issues at scale, working with a wide range of stakeholders, and providing an end-to-end platform for participation and action. ASI Standards, Certification and audit reports provide direction and insights in the aluminium value chain that did not exist prior to 2018. Working together with all interested stakeholders, ASI will continue to drive towards our collective and respective goals – including on human rights due diligence.
Dr Fiona Solomon
ASI Chief Executive Officer
www.aluminium-stewardship.org
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