General limitations

• By looking at all value chain for each material, the research team was exposed to large volumes of data and areas to explore and investigate. As such, the data included in the RMO does not intend to be exhaustive, however it rather focused and prioritised providing a reasonable overview of critical information to map the value chain and identify most salient risks.
• Information conveyed in public reporting on ESG impacts is often contested and not uniformly reported. This creates challenges in verifying accuracy and as such any reports are best treated as indicative. Certain risks therefore might require further enquiry and investigation with relevant stakeholders.
• Within the timeframe available to develop the RMO, stakeholders’ interviews have focused on addressing research gaps at indicative level and not on specific materialised impacts or reported incidents.
• The manufacturing and intermediary products stages of most materials require further analysis, considering the many companies involved at these stages and the diverse use of the materials.
• The assessment has been partially subject to English language bias. Beyond English, Portuguese and Chinese have also been used to search for information where relevant. This may create a data bias against certain geographical regions such as Latin America and Asia.
• Whether or not a situation, environmental or human rights abuse had been resolved remained unclear in many cases as following initial reporting there is often little follow up. As such, it was very difficult to obtain latest position on a given incident or situation.
• It was difficult to accurately identify contemporary relevant stakeholders, particularly companies involved. This was due to changes in the parties in many cases, as well as sometimes confusion in public reporting.
• In some instances, placing company operations within a precise value chain stage has been challenging given that publicly available information was not always clear whether a given set of circumstances or impacts related to mining or processing operations, and, if the latter, which processing operations.
• The ESG risk identification and analysis does not intend to assign responsibilities to specific parties. It rather focuses on identifying which impacts are already or potentially taking place, so to direct further analysis and due diligence.
• Risk identification has been more extensive on the upstream stages of the value chains, specifically mining and processing stage. Once the material is further transformed in intermediary or manufacturing products, a broader analysis would be required and tracing down impacts across manufactures has been considered out of scope. Further risk identification would require combining the existing data with specific automotive manufactures supply chain mapping.

Commodity specific limitations

Bauxite / Aluminium

• Reporting on the mining stage was more extensive than for other value chain stages, with evident limitations for casting, intermediary products, semi-fabrication and manufacturing stage which deserve further analysis.
• In some instances, lack of consistency of reports in terms of clearly differentiating between alumina refining and aluminium smelting made attribution of impacts to a certain value chain stage more difficult.
• The recycling stage deserves further analysis as drawing impacts specific to aluminium within the current scope presented limitations.

Graphite (Natural)

• Reporting on graphite was considerably low compared to other minerals, presenting graphite as somewhat of a blind spot. As result, a notable segment of public reporting expressing concern over graphite cited situational indicators for concern, rather than specific instances of ESG breaches.
• The opacity of the global graphite supply chains and distortions in trade data that, for example, present traders as major graphite exporters, rendered it more challenging to clarify the issue of scope of risk, despite the fact that there were clear indictors of risk sources that could potentially contaminate the supply chain (e.g., North Korea and Pakistan).
• Distinguishing between natural and synthetic graphite production was often difficult and, in some cases, appears to have likewise caused confusion among certain market intelligence analysis. Reporting on impacts on communities generally referenced graphite production “factories” without specifying whether factory processes related to the processing of natural graphite or synthetic graphite.
• Distinguishing between different graphite processing, and sometimes even between the impacts of mining and processing, was rendered difficult by generic or vague reporting. Reporting often discussed impacts without reference to specific triggers or causes, leaving this down to deduction, where possible. In one case, minerals experts reported confusion as to why certain triggers such as high dust particle emissions should be generated by a processing facility of the nature described in reporting.

Iron ore – Steel

• Limited reporting was available for the beneficiation, fabrication and recycling stages which all deserve further analysis in terms of materialised impacts and risks.
• As the value chain looked at iron as raw material and then steel production as main application, the analysis has been limited to iron, and for steel production impacts identified focused on the actual processing and operations, and it did not look into other components in detail.

Leather

• The leather value chain analysis has sought to identify reporting that relates specifically to leather for auto making and not to general leather making or auto production in a given country or region. This has meant that a wide variety of impacts may not be explicitly referenced in this report due to the fact that links to auto leather making (relevant to Daimler value chain) have not been made clear or explicit. Nevertheless, even in the absence of specific examples, cattle growing/ranching for auto leather, slaughter, tanning, and production should still raise serious human rights concerns when they take place in or countries with poor human rights, rule of law or environmental records.
• This leather value chain analysis has drawn many sources. It has included information relating to human rights violation cases which may be out of date but are encompassed to provide indicative risk. This does not mean that risks and impacts reported earlier have not been resolved or are still relevant, rather they indicate patterns and local nuance. Furthermore, maintaining follow up to such cases is often extremely difficult in light of competing events and limited resources.
• As actors in the leather value chain produce not only for Automotive companies (but also for fashion, furniture, and more), individual environmental and human health impacts of auto leather value chains specifically can be difficult to isolate. This study has attempted to isolate what are more likely risks related to the auto leather value chain.
• The leather value chain is highly complex. Much data is reported using terms interchangeably such as “leather” and “leather goods” without clarity on whether such data regards imports, exports, or other volumes and refers to partially treated hides, finished hides, or finished products (such as leather fashion goods, etc).
• The individual impacts of a single production facility can be challenging to isolate if it is located in the vicinity of other industrial activities that can co-mingle. This is particularly an issue where slaughterhouses and tanneries are located in industrial complexes. Cattle are farmed for their beef meat more than for their leather (hides which can be turned into leather are often considered a by-product), so meat usage as a primary driver of cattle farming activity should be kept in mind. Discussion of slaughterhouses is regarding beef production as it is difficult to separate human rights risks of activity in these facilities between hide removal (for potential leather) and the primary activity of such facilities which is meatpacking (cutting of carcasses).
• The impacts of leather are often a notable contributing factor in the adverse human rights and environmental impacts of rainforest clearing. This is especially an issue where rainforest is cleared for cattle farming, but often also for agriculture such as for soy growing, etc (land may be used for one activity after another over time). The value chain analysis do not illustrate the full extent of the risks posed by these sectors as each would merit a study in their own right, but considerable public material is available regarding efforts to end deforestation related to cattle meat and soy production, and there is considerable overlap in industry initiatives and efforts as many actors recognize the overlapping impacts. Where relevant overlap is mentioned.

Magnesium

• Limited public information is available on magnesium impacts. When data was available, in some instances, it has proven difficult to link reported impacts to specific value chain stages or to clearly define the severity and cause of impact because of the limited information available.
• Accessing market information beyond the mining stages has been challenged by the limited publicly available information.
• The OECD data on trade provides values in US dollar instead of volume of traded material, which instead would provide a more accurate analysis.

Manganese

• Limited public information is available on manganese impacts. When data was available, in some instances, it has proven difficult to link reported impacts to specific value chain stages or to clearly define the severity and cause of impact because of the limited information available.
• Accessing market information beyond the mining stages has been challenged by the limited publicly available information.
• The OECD data on trade provides values in US dollar instead of volume of traded material, which instead would provide a more accurate analysis.

Molybdenum

• As molybdenum is often extracted as a by-product of other principal minerals (copper, etc.), there was minimal information available on molybdenum mining, refining, etc. alone, on its own with its own separated impacts. Much of the information was extracted from information gleaned from copper mining, or tungsten mining, etc.
• Minimal public information available on trading, warehousing, transportation.
• Minimal public information available on some of the later stages of the value chain, including component manufacturing, product manufacturing, and recycling and disposal. This could be because molybdenum is often extracted as a by-product of other minerals, and therefore is found in minimal amounts toward the later value chain stages.

Nickel

• The sheer volume of reporting in respect of nickel mining and processing operations created a heavy bias on the upstream processes involved in nickel production. It also meant that several cases could not be included simply due to scope limitations, and the impacts reported.
• Some situations appear to be protracted and evolving, whereas others are simply seldom reported on. Nearly all materialised risk were considered temporally relevant either because events had taken place during the reference period (as well as before it) or because reporting on events had taken place during the reference period in a manner that suggested that the issues remained unresolved.
• Reporting tended to focus on nickel production “projects”, which could involve both mining and processing. This made it difficult to distinguish which part of the value chain a given impact related to. For example, many metallurgical facilities are set up as projects to reduce transportation costs locating smelters and refiners close to mines. Moreover, legal arrangements between entities operating each facility can vary and be complex. As such, nickel has been proven more difficult to disaggregate actions between mining and refining in numerous cases, either because impacts coalesce or because of the way in which cases are reported. It can be likewise difficult to distinguish between smelters and refiners where reference to impacts is particularly focused on human health or environmental outcomes rather than modes or triggers of harm.
• There were certain instances of companies implicated in serious ESG risks in one location but having operations elsewhere that are best in class for lower impact. In some cases, these companies would continue to operate extremely damaging operations elsewhere, claiming that impacts were being addressed without resolving the situation, or else ceasing damaging activities but failing to address historical impacts.

REE

• In some instances, it has proven difficult to link reported impacts to specific value chain stages or to clearly define the severity and cause of impact because of the limited information available.

Rhodium

• The rhodium value chain analysis draws mainly on sources dated 2015 or later. It has therefore excluded notable amounts of data relating to human rights impacts reported on prior to 2015 (though a certain amount has been included where there are indications of ongoing issues). This does not mean that risks and impacts reported earlier have necessarily been resolved or are no longer relevant. Rather, maintaining follow up to such cases is often extremely difficult in light of competing events and limited resources.
• As rhodium is a platinum group metal that is frequently a co-product or by product from the extraction or processing of other target minerals, its impacts are often impossible to disaggregate from those of other co-products, and are, in any case, subsumed under the wider category of PGMs in human rights reporting.
• Rhodium/PGMs can be a co/by-product of the mining and processing of non-PGMs, particularly nickel and chromium. Some illustrative human rights case studies from the nickel and chromium value chains have been provided in this study, where relevant (e.g., for Russia and Canada). However, for a fuller understanding of the human rights risks and impacts associated with these sectors readers are advised to read both the nickel value chain risk profile produced for Drive Sustainability and the Chromium value chain mapping and human rights risk analysis presented elsewhere in this series for Daimler.
• It is important to note that rhodium may not be specifically targeted for mining as part of some PGM projects, and in others may not be a key mineral targeted, though may still be produced. This can create ambiguity about whether any given PGM (or other) mine even produces rhodium. As such, this study has focused its attention specifically on mines and facilities identified as having capacity for rhodium production in market intelligence data.
• The underrepresentation of midstream industrial processes in human rights reporting can particularly arise in relation to minerals processing operations where they take place in the vicinity of mining activities or other industrial processing. This is due to the fact that the impacts of such facilities are not always well understood among the general population, and the fact that their impacts can be difficult to disaggregate from the impacts of other activities. As such, they can become underrepresented. In the context of rhodium, it is notable that in Russia, most human rights related/ESG reporting has related to processing facilities, whereas in South Africa, most reporting relates to the mining activity. This disparity likely represents where the balance of issues is felt to lie in each country but also creates potential bias in the presentation of issues affecting each value chain segment in these countries.
• As specific impacts of rhodium use in manufacturing are very difficult to identify, this analysis has focused on mining and processing with the view that the specific human rights impacts of companies like BASF, Johnson Matthey and Umicore would merit a separate analysis.

Tantalum

• Considering that tantalum is often extracted as by-product, risk identification specific to tantalum has been more difficult, as many reports do not differentiate or make explicit the implications of tantalum specific production.
• Data available on 3Ts’ mines in eastern DRC is often aggregated across 3Ts minerals (especially when two or more occur in the same area), and not in all cases it was possible to single out tantalum specific impacts.

Tin

• The analysis has drawn mainly on sources dated 2015 or later. It has therefore usually excluded data relating to human rights impacts reported on prior to 2015. This does not mean that risks and impacts reported earlier have necessarily been resolved or are no longer relevant. Rather, maintaining follow up to such cases is often difficult in light of competing events and limited resources.
• Where mining and processing are vertically integrated or take place within the same vicinity (i.e., refining and smelting) it can be difficult to attribute impacts to a specific stage of the value chain due to reports using a single geographical location or company as the main reference point.
• The substantial role of ASM mining in tin ore production and particular attention on this issue among media outlets and NGOs means that the research for this analysis has strong ASM, and by extension, conflict minerals coverage. Indeed, both factors are very significant human rights risks in the tin supply chain. Regardless, it should be noted that the impacts of largescale mining (LSM) can also be particularly significant and widespread for local communities where they are not properly managed. Reporting on such instances is not always as comprehensive as it is on ASM (in part because of more potential liability issues surrounding such coverage). It is important to not therefore that LSM impacts can also therefore tend to be underrepresented in human rights reporting compared to ASM.
• The underrepresentation of more largescale industrial processes in human rights reporting can particularly arise in relation to smelting operations where they take place in the vicinity of mining activities or other industrial processing. This is due to the fact that the impacts of smelters are not always well understood among the general population and the fact that their impacts can be difficult for the lay person to disaggregate from the impacts of other activities. As such, these impacts can likewise be underrepresented.

Zinc

• The value chain stages refining, smelting and roasting were combined, as much of the literature seemed to combine these stages or use the terms interchangeably, and it has proven more difficult to associate impacts to specific value chain stages.
• Minimal public information available on trading, warehousing, transportation.