Funded Projects on Corporate Due Diligence
A total of 13 promising projects were selected from two rounds for funding by the INA Due Diligence Fund (DDF), which are implemented by one or more private-sector actors in cooperation with one or several public-benefits partners. More details about the currently funded projects can be found here.
Round 1
Enhancing traceability in raw cotton supply chains in Pakistan
Commodity:
Cotton
Region:
Punjab and Sindh, Pakistan
Target Group:
495,000 cotton farmers, 10 commission agents, 40 intermediaries, 20 ginners, all brokers cooperating with the pilot gins, as well as up to 77 spinners
Funding:
EUR 99,991.00
Partners:
Adidas AG is a Germany-based global leader in the sporting goods industry.
Better Cotton, a multi-stakeholder initiative, is the world's leading cotton sustainability initiative with the aim of promoting sustainable production methods.
Project description
The textile sector has one of the most complex value chains in the global economy, with a multitude of intertwined sub-sectors. The cotton supply chain in Pakistan is a vivid example of this complexity. There, raw cotton is traded from farms to processing facilities, which are usually 100 to 150 km away from the production areas. Often, multiple intermediaries and markets are involved in this process, which makes the supply chain very opaque, also due to a lack of infrastructure. This means downstream traders and customers encounter a number of difficulties in exercising the due diligence to verify exactly where their cotton is actually sourced from.
The project aims to improve the traceability of cotton at the beginning of the supply chain. The goal is to trace the cotton supply chain from the farms to the processing facilities and from the gins to the spinning mills, and thus to make it more transparent. For this purpose, a traceability system is to be developed and implemented together with all relevant actors.
Workshops will be conducted with all project participants as part of project implementation. The purpose is to impart skills and knowledge in the areas of sorting, recording, use of bale identification materials, technical solutions for data tracking and recording, and use of the Better Cotton Platform. After that, the cotton bales will be marked at the gins with unique codes to enable subsequent traceability. In addition, suppliers will be asked to comply with the Better Cotton CoC standard for cotton segregation. The project participants will receive ongoing support from Better Cotton. The system offers companies the opportunity to better understand the individual stages of cotton and to exercise human rights and environmental due diligence along the cotton supply chain. The partnership hopes to be able to further improve and expand this cotton traceability system.
Cross-company grievance mechanism in the cocoa sector
Commodity:
Cocoa
Region:
Côte d’Ivoire
Target Group:
0.8–1.3 million smallholder cocoa farming households and workers, especially women and children
Funding:
EUR 120,000.00
Partners:
The partnership consists of three multinational corporations, namely Nestlé Deutschland AG, Mondelēz Europe GmbH and Ferrero Deutschland, a non-profit organisation that represents the chocolate industry, Stiftung der Deutschen Kakao- und Schokoladenwirtschaft, and four non-governmental organisations that represent civil society, Inkota-Netzwerk, Rainforest Alliance, Fairtrade Deutschland e.V. and Hamburger Stiftung für Wirtschaftsethik.
Project description
Human rights violations such as child labour, hazardous and exploitative work, etc. continue to occur in coca growing communities. Women and other vulnerable groups in particular often have less agency to influence the system they live in, among other things because of their limited economic means. Consequently, their voices and choices are significantly restricted. Although more and more companies have grievance mechanisms in place, they have so far not put a particular focus on smallholder farming households. As a result, many grievance mechanisms mostly address employees of the company and do not reach rights holders at the start of the value chain.
In order to examine which criteria must be met so that a cross-company grievance mechanism can be successfully implemented in the Ivorian cocoa sector, a feasibility study will be carried out together with partner organisations in Côte d’Ivoire. A possible future grievance mechanism should be specifically tailored to the needs of affected people in smallholder communities and will be developed in collaboration with rights holders in cocoa farming communities. For this purpose, cocoa farmers will take part in interviews and workshops as part of the feasibility study.
If the criteria can be met, an approach for the implementation of a grievance mechanism could be developed on that basis and implemented accordingly in a second pilot phase. The mechanism will be designed in a way that the complaint will be forwarded directly to the companies upon first notification. In addition, the grievance mechanism is to be monitored by an independent organisation/institution to ensure that appropriate follow-up measures are implemented.
Generating new income opportunities for women through Gum Arabic harvesting
Commodity:
Gum Arabic
Region:
Karamoja, Uganda
Target Group:
750–1,000 women
Funding:
EUR 95,000.00
Partners:
Norevo GmbH is an internationally established trader and processor of various natural raw materials based in Hamburg. Native Seeds Moyo is a community-based organization based in Northern Uganda working for poverty alleviation and improving life quality.
Project description
In the Karamoja region, hundreds of thousands of people suffer from severe and acute malnutrition due to rising food prices and severe droughts. A neglected source of income is Gum Arabic, which is traditionally harvested by women from the Acacia Senegal trees growing in the region. Local monopsony power favours extremely low prices and unfair trading practices. Poor harvesting practices lower prices further and threaten the long-term health of the trees. Despite its great potential, harvesting Gum Arabic has so far remained unattractive.
Norevo GmbH and Native Seeds Moyo aim to jointly establish a sustainable Gum Arabic value chain in Karamoja. The aim of the project is to train local women's groups on the harvesting and processing of Gum Arabic. This is intended to improve the quality of the Gum Arabic for sale to Norevo, which should enable women to obtain significantly higher prices.
In the training courses, the women will learn how to select the right trees, how to tap them sustainably, how to estimate the optimal drying and harvest time and how to clean the Gum Arabic correctly. In addition, a place for processing the Gum Arabic will be established and the transport to the collection point in Uganda and on to Germany will be organised. Quality inspections will be carried out regularly to ensure that the quality of the Gum Arabic meets market demands. A grievance mechanism is to be put in place to prevent intermediaries from pushing prices down and thus ensure long-term fair incomes for the target group.
Recommendations for a joint grievance mechanism in the Brazilian coffee supply chain
Commodity:
Coffee
Region:
Alta Mogiana, São Paulo (Jeriquara and Pedregulho), and Minas Gerais (Claraval, Ibiraci), Brazil (comprising approx. 5000 coffee farms)
Target Group:
Stakeholders involved in coffee cultivation, including smallholder farming households, entrepreneurs, seasonal and plantation workers
Funding:
EUR 100,000.00
Partners:
The partnership consists of the four coffee producers Melitta Group Management GmbH & Co. KG, Jacobs Douwe Egberts DE GmbH, Nestlé Deutschland AG and Ofi (Olam Food Ingredients) / Olam Deutschland GmbH, either based in Germany, the Netherlands or Switzerland, the civil society organisation Solidaridad Deutschland e.V. and the German Coffee Association (Deutscher Kaffeeverband e.V.), representing the interests of the entire German coffee industry.
Project description
Brazil has a legislative framework in place to protect labour rights which also applies to the Brazilian coffee supply chain. Despite this framework, informality persists, particularly in the form of temporary labour arrangements in rural regions. These (temporary) workers are more vulnerable to labour rights violations.
The partners pursue two goals with this project. They aim to develop recommendations outlining how a basic grievance mechanism can be adapted to the local Brazilian context. It should be transparent and tailored to rights holders in the coffee supply chain. The project partners also aim to examine how grievance cases can be jointly managed by a grievance management body on a pre-competitive level and/or what preventive measures can be taken.
To this end, the project partners have carried out a field study to assess the degree of compliance with human rights-related and environmental risks in accordance with the German Due Diligence Act (LkSG). Based on these empirical results and consultations with key stakeholders from the Brazilian coffee sector, recommendations on how the grievance procedure can be adapted to the needs of vulnerable groups will be developed. This is intended to a) enable an efficient joint grievance mechanism, b) gather insights on how to safeguard the accessibility, practicability, transparency, and legitimacy of these mechanisms, c) identify root causes of human rights violations and environmental offences, thus optimising regular risk analyses, and d) develop joint preventive measures. The results will be made publicly available and disseminated in the coffee sector of the project regions, Brazil and, where appropriate, beyond.
Risk assessments of sourcing areas of botanical ingredients
Commodity:
Botanicals (incl. herbs and spices)
Region:
Brazil, Cameroon, China, Egypt, Ghana, India, Indonesia, Madagascar, Mexico, Morocco, Peru, South Africa, Tanzania, Vietnam
Target Group:
Smallholder farmers and collectors
Funding:
EUR 40,000.00
Partners:
Mast-Jägermeister SE is a German liquor manufacturer that sells its alcohol worldwide. Union for Ethical Biotrade UEBT is a non-profit organisation that has established a globally recognised standard for ethical trade in natural resources.
Project description
Botanicals are often an important source of income for local communities and can provide a strong incentive to conserve natural habitats. For companies involved in the procurement of agricultural commodities, including niche products such as botanicals, supply chain risk assessments are an important part of due diligence. However, information on human rights and environmental risks in the cultivation and processing of botanicals is scarce because production volumes are often low. Detailed risk assessments in such supply chains are therefore often complex and time-consuming. However, they are crucial for deciding on mitigation or prevention measures.
UEBT and Mast Jägermeister SE have together implemented a seven-month project to identify the human rights and environmental risks in the sourcing areas of botanical ingredients used by Jägermeister and to use these risk assessments to define possible follow-up risk mitigation activities. To support this, Jägermeister partnered with UEBT in developing a risk database which is part of a larger due diligence platform that UEBT has established. The database includes general country risks as well as specific risks related to cultivation, wild collection and local processing of botanical ingredients such as herbs and spices.
Risk assessments were carried out for 18 Jägermeister botanical supply chains from 11 countries. This provided an opportunity to further integrate risk information on these botanicals into a leading risk database for botanicals. The information can now be accessed by a multitude of companies in the beauty, food & beverage, natural pharmaceutical and herbs & spices sectors. Jägermeister also used the UEBT due diligence platform and assessed all supply chains in the scope of this project. As a result, full risk information for 18 botanical ingredients is now available on a supply chain level, country level and sectoral level. On the basis of this project, Jägermeister will now set up an internal due diligence process and take action with its suppliers.