Declaration of Principles according to § 6 Supply Chain Due Diligence Act (LkSG) for the Depenbrock Group
1. The Company
The Depenbrock Group, headquartered in Stemwede, is a family-owned construction company since 1928. Nearly 1,400 employees are deployed at 20 locations in all areas of construction. In 2022, Depenbrock achieved an operating performance of around 750 million euros.
2. Responsibility and Aspiration
Taking responsibility for people, the environment, and the economy in our fields of activity is an essential part of our corporate strategy and culture. Our entrepreneurial actions are also guided by the aim of preserving the living environment for people today and for future generations. We aim to use necessary resources for our construction activities responsibly and in an environmentally sound manner. Our most important resource and largest stakeholder group is the people who contribute to our value creation on our construction sites every day, often under high commitment. Therefore, we expect our employees to treat all participants in the supply chain fairly and in compliance with human rights and the General Equal Treatment Act (AGG). This includes excluding any form of discrimination, corruption, child labor, forced labor, unfair payment, wage dumping, cartel agreements, and discrimination. In addition, occupational health and safety and integrity are indispensable parts of our actions. We also expect this commitment from our suppliers and subcontractors. Just as the responsibility for sustainable trade is firmly anchored in our corporate policy, we also wish for it to be lived and implemented beyond the boundaries of the company. The term "supplier" as defined by the LkSG refers to all subcontractors and suppliers mentioned below.
3. Risk Analysis
In the construction industry, there are unique risks and challenges regarding human rights and environmental responsibility due to the numerous trades involved and the variety of materials used. Our company has established specific procedures to meet the requirements of the LkSG. These include the identification, assessment, and management of risks that may arise in our industry. As a corporate group, we have integrated a risk analysis into our procurement processes in accordance with § 5 LkSG. In this analysis, all existing and new business partners are classified into risk groups based on a country index and an industry index. The criteria are weighted and prioritized. This risk analysis is carried out in each individual procurement process, ensuring continuous compliance. This ensures that our demands for a sustainable business partnership are consistently met.
As part of the risk analysis conducted as of December 31, 2023, it was determined that there is no knowledge of any violation of the due diligence obligations mentioned in § 2 LkSG in any current business relationship.
This already demonstrates the effectiveness of the compliance systems that have been in place even before the LkSG. In general, the management sees risks primarily in the area of indirect suppliers. In the case of direct suppliers, no significant risks related to the LkSG were identified after an extensive risk analysis. This is due to extensive control mechanisms that have been established within the Depenbrock Group for many years. As part of the general contractor liability, all subcontractors are checked for the prevention of undeclared work, avoidance of illegal employment, compliance with occupational health and safety, working conditions, and collective wage agreements.
Certificates of good conduct and wage confirmations are requested from subcontractors for this purpose. The indirect procurement risk primarily relates to electronic components or wood and steel products. These risks are mitigated by sourcing as regionally as possible. However, it is not possible to completely eliminate the indirect risks. Therefore, the Depenbrock Group generally requires all suppliers to also comply with the rights mentioned in § 2 LkSG along their supply chain.
4. Prevention measures in own business operations
With regard to the risks identified in the risk analysis, the Depenbrock Group has implemented or will implement the following prevention measures for its own business operations:
- Guidelines, process instructions, and management systems within the meaning of § 6 (3) No. 1 LkSG Guidelines for implementing the LkSG in procurement have been developed and implemented for all affected departments. In addition, detailed process instructions have been drafted to ensure ongoing compliance with the LkSG. The group also has an integrated management and sustainability system that ensures the integration of environmentally conscious and sustainable practices throughout the entire group.
- Development and implementation of suitable procurement strategies within the meaning of § 6 (3) No. 2 LkSG Based on the outlined risk criteria, all suppliers to the group are classified into risk groups. For certain suppliers, this can ultimately result in a prohibition of business relationships. Procurement can always identify, based on the risk group, which aspects need to be particularly considered when awarding contracts. This ensures optimal procurement for each product or service.
- Conducting training within the meaning of § 6 (3) No. 3 LkSG Employees in the affected departments are or have been trained on the expansion of procurement processes to include the LkSG. This training is repeated and updated as needed.
- Conducting control measures in accordance with § 6 (3) No. 4 LkSG
Quarterly, the Human Rights Officer will conduct an audit of the commissioned services and report any violations of the established procurement processes to the management. In addition, regular random checks will be carried out by the Human Rights Officer.
5. Prevention measures for direct suppliers
To minimize risks identified in the risk analysis, the Depenbrock Group will implement the following prevention measures for direct suppliers:
- Consideration of human rights and environmental expectations in the selection of suppliers, as defined in § 6 (4) No. 1 LkSG The risk group of each supplier will be assessed before any commissioning. Predefined measures to avoid human rights and environmental risks will be derived from this assessment. In the case of identified violations, the supplier will no longer be eligible for commissioning, or commissioning will only be possible after consultation with the Human Rights Officer and management, with the definition of individual control measures.
- Contractual assurances from direct suppliers, as defined in § 6 (4) No. 2 LkSG All suppliers of the Depenbrock Group are contractually obligated to comply with the provisions of the LkSG and will be subject to random checks by the Human Rights Officer. They are also required to ensure compliance with the LkSG within their own supply chain.
- Training and further education of direct suppliers, as defined in § 6 (4) No. 3 LkSG All risks related to the LkSG are assessed by trained personnel at our construction sites in relation to direct suppliers. In dialogue with our suppliers, topics such as occupational safety and the proper handling of hazardous substances or waste are also addressed. Therefore, there is ongoing communication at all our construction sites. Explicit training of direct suppliers is not planned in addition to the existing control measures, but it can be considered as an individual prevention measure if needed.
- Contractual control mechanisms, as defined in § 6 (4) No. 4 LkSG Every supplier of the group is obligated to comply with the LkSG. This obligation becomes a separate contractual component, and the Depenbrock Group reserves the right to exercise control, if legally possible. This right will be used in justified situations to prevent violations of human rights and environmental due diligence obligations.
6. Remedial measures, as defined in § 7 LkSG
In the event of a violation of the regulations mentioned in § 2 LkSG by a supplier, it is mandatory to report this to the Human Rights Officer. The violation will be noted in the supplier's risk group and the risk group will be elevated to the highest level. This will result in future commissions requiring approval from both the management and the Human Rights Officer. Furthermore, additional measures will be taken in such cases, which will be determined on an individual basis.
7. Complaint procedure according to § 8 LkSG
The Depenbrock Group has set up a whistleblower portal on its website for reporting violations of the LkSG. Any reported violations will be addressed to the trusted attorney Dr. Carsten Thiel von Herff. He will approach the Human Rights Officer and the management to report the reported violations.
These reports can be submitted anonymously or openly. If an open report is made, the whistleblower and their identity are given special protection. The whistleblower portal can be accessed through the following website: https://www.depenbrock.de/vertrauensanwalt.html
A procedural documentation is also available at this link.
With sustainability in the supply chain, especially in procurement management, we make an important contribution to becoming a role model within the construction industry with its many interfaces to upstream and downstream value-added levels. Moral and ethical standards are a prerequisite for our collective actions and business practices. People, as our most important resource, have a legitimate claim to fair treatment and payment. Protecting the environment is naturally as important as ensuring high-quality standards for our customers. We pay particular attention to shortening the supply chain to maintain an overview of the actors involved and ensure resource conservation. Our management is committed to all of this, paving the way for fair and sustainable supply in accordance with the LkSG.