Case study: How Hindalco respects and promotes the human rights of its employees
Hindalco Industries Limited is a flagship company of the Aditya Birla Group headquartered in Mumbai and an industry leader in aluminium and copper products, with mining and manufacturing operations spread across nine states in India. Hindalco seeks to conduct its business operations in a manner that respects the human rights and dignity of its people Tweet This!, promoting equal opportunity employment and propagating a work environment without any form of discrimination.
This case study is based on the 2018-19 Sustainability Report by Hindalco published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Hindalco has developed an employee-centric work culture, with its Code of Conduct and related policies – extending to all employees, contractual employees and other partners across Hindalco’s value chain – placing great emphasis on human rights issues including child labour, forced or compulsory labour, sexual harassment and discrimination. In order to respect and promote the human rights of its employees Hindalco took action to:
- support collective bargaining
- implement a Human Rights Policy
- provide employee benefits
- promote employee communication
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With this case study you will see:
- Which are the most important impacts (material issues) Hindalco has identified;
- How Hindalco proceeded with stakeholder engagement, and
- What actions were taken by Hindalco to respect and promote the human rights of its employees
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What are the material issues the company has identified?
In its 2018-19 Sustainability Report Hindalco identified a range of material issues, such as compliance management, GHG emissions, ethics and integrity, waste management, water availability. Among these, respecting and promoting the human rights of its employees stands out as a key material issue for Hindalco.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Hindalco engages with:
To identify and prioritise material topics Hindalco engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Employees
| · Emails and Meetings · Intranet Portals · Employee Satisfaction Surveys · Training Programmes · Performance appraisal reviews · Grievance Redressal Mechanisms |
| Customers | · Emails and Meetings · Customer Satisfaction Surveys · Grievance Redressal Mechanisms |
| Suppliers | · Emails and Meetings · Vendor Assessment & Review · Supplier Audits · Signed Contracts · Training Workshops and Seminars · Social Gatherings |
| Communities
| · Training & Workshops · Regular Meetings · Need Assessment & Satisfaction Surveys · CSR Reports |
| Investors and shareholders
| · Board Meetings · Annual Reports · Website |
| Government and regulatory bodies
| · Annual Reports · Communication with regulatory bodies · Formal Dialogues |
| Media | · Social Media · Press Releases · Interviews · Website |
| Industry associations | · Meetings |
What actions were taken by Hindalco to respect and promote the human rights of its employees?
In its 2018-19 Sustainability Report Hindalco reports that it took the following actions for respecting and promoting the human rights of its employees:
- Supporting collective bargaining
- Hindalco recognises that worker unions at all its operations in India and more than 68.87% of the total workforce are covered under the provision of collective bargaining, supports the right to collective bargaining of its workers and promotes full transparency and trust with its entire workforce. Hindalco’s long-term meaningful relationships with the unions and all settlements follow prevailing labour legislation at the national and state levels, while agreements with trade unions also cover all relevant health and safety topics for operations at respective locations.
- Implementing a Human Rights Policy
- Hindalco has developed a Human Rights Policy which reinforces its commitment to respect and uphold the human rights of all its stakeholders and guides the actions taken to fulfil this commitment. In order to identify potential human rights related risks, Hindalco has a due diligence process which is carried out annually through company-wide compliance monitoring. This entails undertaking a detailed monitoring at 100 of Hindalco’s sites to ensure compliance to various human rights related requirements such as no child labour, working conditions, minimum compensation, equal opportunity, freedom of association. Compliances to Factories Act and labour laws are audited by the legal team and findings are presented to the senior management. Additionally, every business unit has an SOP (Standard Operating Procedure) in place to ensure compliance to labour rights. Hindalco also assesses human rights related risks in its supply chain, which is a part of the overall supplier evaluation. The risks identified are addressed through the implementation of appropriate corrective actions, which can range from risk prevention through awareness sessions and precautionary measures, risk reduction through building capacity and safeguards or risk elimination through modifications in the business process or termination of contract. Cases of human rights violations are dealt strictly through warnings, counselling, penalties and even termination of employment, depending upon the severity of violation.
- Providing employee benefits
- Hindalco is committed towards providing benefits to its permanent employees as per defined plan obligations. These benefits include medical insurance, residential accommodation at plants, group personal accident insurance and parental leaves. Hindalco is also an equal opportunity employer, and believes in providing equal benefits to all its employees without any form of discrimination. The ratio of basic salary and remuneration of women to men is always 1:1 for respective job bands. The remuneration structure of Hindalco’s employees is based on their job roles and an industry-wide benchmarking exercise carried out periodically. During revisions of the remuneration structure, the views of all relevant stakeholders are taken into account.
- Promoting employee communication
- Hindalco believes communication is one of the critical aspects for developing a responsible work environment and, in case of any significant changes in operations, notifies all its management staff and workmen about it. The management staff is notified at least 3 months in advance, whereas workmen are notified as per requirements of local regulations. Hindalco also provides trainings to unionised employees on aspects such as skills, business objectives and values which result in better contribution to the Company and the Group, making sure that all its units are 100% compliant in terms of local and national laws, minimum wages, payment of wages, the Factories Act and all other prevailing regulatory requirements.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
2) Disclosure 402-1 Minimum notice periods regarding operational changes
3) Disclosure 405-2 Ratio of basic salary and remuneration of women to men
4) Disclosure 406-1 Incidents of discrimination and corrective actions taken
Disclosure 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees corresponds to:
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Earnings, wages and benefits
Disclosure 402-1 Minimum notice periods regarding operational changes corresponds to:
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Labor/management relations
Disclosure 405-2 Ratio of basic salary and remuneration of women to men corresponds to:
- Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
- Business theme: Equal remuneration for women and men
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Equal remuneration for women and men
- Sustainable Development Goal (SDG) 10: Reduce inequality within and among countries
- Business theme: Equal remuneration for women and men
Disclosure 406-1 Incidents of discrimination and corrective actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
- Business theme: Non-discrimination
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Non-discrimination
- Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Business theme: Non-discrimination
Disclosure 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk corresponds to:
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Freedom of association and collective bargaining
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References:
1) This case study is based on published information by Hindalco, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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