VW appoints supply chain watchdog to ensure ethical sourcing practices

Volkswagen appoints supply chain watchdog to ensure ethical battery supply

Announcement comes amid concern over nickel production

VOLKSWAGEN has today announced that it has partnered with an agency to ensure the raw materials needed for the manufacture of its electric vehicle batteries are responsibly sourced.

The announcement comes amid growing concerns regarding the provenance of metals such as cobalt and nickel, two of the key elements in the lithium-ion batteries used in modern electric cars.

The German carmaker has entered a “strategic partnership” with RCS Global, an agency that specialises in supply chain analysis. The company calls itself “the proven leader in data-driven responsible sourcing of natural resources” and already has partnerships with companies including Sony and Nokia.

The focus of the partnership, according to VW, is on auditing its suppliers “for conformance with human rights, safe working conditions and environmental protection along the supply chain all the way back to the mines.”

VW and RCS have identified 134 “sub-suppliers” and 18 mines in the carmaker’s supply chain. The majority of these have reportedly already been audited. The expanded audit operation has also allowed VW to introduce due diligence measures for each type of raw material that VW sources.

Serious audit violations will lead to disqualification from VW’s supply chain. This would apply to small-scale mining operations where “child labour cannot be ruled out”, says VW.

Cobalt’s chequered history is well reported. In the Democratic Republic of Congo (DRC), where 60% of the world’s cobalt is sourced, so-called “artisanal” miners operate unregulated, often employing illegal and unethical practices such as child labour.

The Times reported on Monday that a number of indigenous communities in Russia wrote to Tesla CEO Elon Musk, requesting that he no longer employ the services of Russian company Nornickel, one of the world’s biggest suppliers of nickel. The company became embroiled in scandal over summer after one of its plants spilt more than 20,000 tons of diesel into a Siberian river. President Putin also criticised the company for failing to report the disaster promptly. It has since embarked on a full cleanup operation.

Driving.co.uk approached several electric car makers earlier this week to clarify from where they source the raw materials for their EV batteries. BMW said that its main nickel supplier is Nornickel. However, it has in the past committed to not using cobalt sourced from the DRC.

Volkswagen responded to Driving.co.uk’s inquiry today. A spokesperson said: “For the success of electric mobility, access to essential raw materials, such as lithium, cobalt and nickel, is very important. In addition to adequate availability and price stability, crucial factors are socially and environmentally responsible mining.

“Ensuring that the raw materials entering the supply chains are extracted, produced, processed in a responsible manner, is the key condition for us as a responsible company and to customers’ acceptance of the end product – particularly for products that aim to be sustainable products.”

VW pointed out that two of its new electric offerings, the ID.3 and the ID.4, are produced with a “neutral CO₂ balance and handed over to customers with a carbon-neutral footprint”.

The company has not yet confirmed specifics on where it sources its raw materials, however.

Volkwagen has been working hard to repair the damage to its environmental credibility after the “dieselgate” scandal, the effects of which are still trickling through the court system, rocked the company five years ago. It was announced earlier this week that a motion passed in the German courts that allows Martin Winterkorn, VW Group’s former chairman, to be tried alongside four other VW employees on criminal gang charges.

Driving.co.uk has requested further information from VW, including confirmation of where its nickel is currently sourced.

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