Update from 19.01.2024: Volkswagen’s answers are now also published here under the respective questions.

[...] We, the undersigned organizations, note the publication of the ESG audit results of the SAIC Volkswagen plant undertaken by Löning- Human Rights & Responsible Business GmbH. In our letter dated July 11, 2023, we expressed our extensive concerns about the credibility of an audit in the Uyghur Region.

Following the publication of the audit findings, staff from Löning posted a statement on LinkedIn, distancing themselves from the audit, claiming “no other team member from Löning participated in, supported or backed this project.” An article in the Financial Times provides more detail on this internal disagreement on conducting this audit. Consequently, this has raised more questions regarding the credibility of the findings from the audit, and we have the following questions:

1. Löning staff have distanced themselves from the audit due to the human rights situation in China and the Uyghur Region, noting: “The human rights situation in China and Xinjiang and the challenges in collecting meaningful data for audits are well known and are also present in this project.” Were you aware that no other team member at Löning approved of this audit? If so, why did you decide to proceed?

• Answer from Volkswagen: “We do not comment on internal processes at the Löning company. In addition, we refer to the statements made by Mr. Löning via LinkedIn.”

2. Markus Löning, Managing Director at Löning, acknowledged the challenges related to collecting data. How did you account for this in conducting the audit? How did you account for this in analyzing the results of the audit?

• Answer from Volkswagen: “We publicly communicated the main contents of the audit in the management summary of the audit results (https://www.volkswagen-group.com/de/esg-controversies-15846). In addition, Mr. Markus Löning and Dr. Manfred Döss, Member of the Board of Management of Volkswagen AG, Integrity and Legal Affairs, were publicly quoted on the results of the audit. Please understand that we do not comment on further details of the audit.”

3. According to Markus Löning, the main basis for the audit was a review of documentation relating to the 197 employees at the plant rather than interviews, adding that this could be “dangerous”. Löning told the Financial Times: “Even if they would be aware of something, they cannot say that in an interview”. Nevertheless, 40 individuals were interviewed for the audit. If the firm understood that the interviews were dangerous to the participants and were unlikely to generate the information necessary, why was the safety of those 40 individuals put at risk? Additionally, if it was understood that interviews would not garner the necessary and reliable information needed, why was the audit conducted?

• Answer from Volkswagen: “We publicly communicated the main contents of the audit in the management summary of the audit results (https://www.volkswagen-group.com/de/esg-controversies-15846). In addition, Mr. Markus Löning and Dr. Manfred Döss, Member of the Board of Management of Volkswagen AG, Integrity and Legal Affairs, were publicly quoted. Please understand that we do not comment on further details of the audit.”

4. According to Markus Löning, his senior strategy adviser, Christian Ewert, who oversaw the project, has over 20 years experience of social audits in China. What experience does Christian Ewert have with state-imposed forced labour contexts, and what indicators are applied in this context?

• Answer from Volkswagen: “Please understand that we will not answer any questions relating to our contractual partners and their employees as part of the audit.”

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5. What further measures are Volkswagen AG and its joint ventures taking to preventively identify, minimize, and exclude risks of state-imposed forced labour at suppliers in China?

• Answer from Volkswagen: “The Volkswagen Group takes its responsibility as a company in the area of human rights very seriously worldwide – including in China – and adheres closely to the UN Guiding Principles on Business and Human Rights.
  These are part of the company’s Code of Conduct. Volkswagen takes a firm stand against forced labor in connection with its business activities worldwide.
  We not only set high standards within the Volkswagen Group, but also work to ensure compliance with these values along the supply chain. We are already implementing processes to safeguard human rights, systematically identifying our risks and developing measures to prevent human rights violations on this basis. We use our sustainability rating (S rating) for this purpose. For the particularly sensitive raw materials supply chains, we have also implemented a risk management system for due diligence in the procurement of raw materials (Raw Materials Human Rights Due Diligence Management System).
  Volkswagen AG has a careful global partner and supplier selection process and monitoring measures in place. Suppliers in the People’s Republic of China that are commissioned directly by the Volkswagen Group are already in the scope of sustainable procurement measures and are committed to complying with our Code of Conduct for Business Partners.
  Suppliers must accept our sustainability requirements and commit to meeting them in order to enter into a business relationship with the Volkswagen Group. Our direct suppliers are expected to pass on these sustainability requirements to their business partners along the supply chain. Since 2019, we have been evaluating the sustainability performance of our relevant business partners with a sustainability rating (S rating) before the final procurement decision is made. If a supplier does not meet our requirements for compliance with sustainability standards, they are generally not considered for the award of a contract. There is therefore a direct incentive for suppliers to improve their sustainability performance.
  However, if the Volkswagen Group becomes aware of any allegations, it immediately investigates them via our Supply Chain Grievance Mechanism. Serious violations, such as forced labor, can lead to termination of the contract with the supplier if no remedial action is taken. We are therefore actively reviewing and using our existing procedures and looking for new solutions to prevent forced labor in our supply chain.
  The mechanism is accessible via our website, an e-mail address and an anonymous channel and is open to all stakeholders and potentially affected persons such as employees of suppliers, social organizations or representatives of communities in the immediate vicinity of our production sites. The cases are handled according to a binding guideline, managed by the Group and together with the brands and regions of the Volkswagen Group.”

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