Workers in the value chain impacts, risks and opportunities
Epiroc is dependent on materials, components and services that may origin from countries and industries with potential risks for workers in these value chains . Given our global presence with sales in around 150 countries to customers within mining and infrastructure we recognize the impact our operations, products, services and business relationships may have on workers throughout our value chain. Epiroc is committed to uphold high ethical standards and conduct business responsibly in accordance with UN Guiding principles on business and human rights and other international standards and has therefore adopted due diligence processes to identify, prevent and mitigate negative impacts.
The scope of workers in the value chain includes:
- Workers operating and servicing our equipment in our downstream value chain. Product safety is described more under ESRS S4 XX.
- Workers included in our upstream value chain consist both of those who produce materials and parts, which we source for our production or operations, as well as those who provide services to us, such as temporary labor in our production or cleaning.
We define risk markets using environmental, human rights and corruption criteria from a third-party risk analytics firm. Examples of risks covered are labor standards, child labor and modern slavery.
Material impacts, risks and opportunities
Working conditions upstream
| If poor working conditions occur among suppliers and in countries we source from, this can harm workers and infringe on labor rights | ||
| Potential negative impact | ||
| Upstream | ||
| Short-term | Medium-term | Long-term |
| Rapid electrification may push Epiroc to source from countries with a heightened risk for human rights issues | ||
| Potential negative impact | ||
| Upstream | ||
| Short-term | Medium-term | Long-term |
| If poor working conditions occur among suppliers and in countries we source from, this can harm Epiroc’s reputation or lead to fines | ||
| Risk | ||
| Upstream | ||
| Short-term | Medium-term | Long-term |
We have a global supply chain where there may be systemic risks of poor working conditions like health and safety issues, inadequate wages or unsecure employment conditions, excessive working hours and restrictions of labor rights, especially in lower tiers, as transparency is limited, and informal or temporary labor can be more common. Systematic human rights and labor rights issues are especially prevalent in regions with weak legal frameworks or less stringent labor and human rights standards. Identified higher-risk regions are parts of Asia, the Middle East, Africa, South America and Latin America, based on insights from our third-party risk analytics firm. Epiroc’s local presence and sourcing locally can carry heightened risks of negative human rights impacts in certain regions. However, it also provides benefits, including stronger relationships with business partners and a reduced carbon footprint from transportation. For Epiroc, the risks are heightened during acquisitions, as the acquired company’s suppliers may not have been screened according to our standards. Furthermore, agency and temporary workers within our own and suppliers’ operations run a higher risk of exploitation.
The extraction of metals and minerals such as tantalum, tin, tungsten, gold, cobalt and mica is a high-risk supplier area due to possible extraction in conflict-affected and high risk areas with weak regulatory frameworks. Workers in these supply chains, often from marginalized or vulnerable communities like migrant workers and indigenous peoples, face increased risks of exploitation, poor working conditions, and inadequate wages. Other human rights challenges include land rights and access to water. These minerals are needed in some of our products, like batteries and electric components, and we use our dedicated conflict minerals, cobalt and mica program to ensure responsible sourcing.
Existing and emerging legal requirements to ensure respect for human rights across value chains, require companies to strengthen their risk management practices. Failure to demonstrate compliance can damage our reputation, lead to customer loss, penalties, and fines.
Working conditions downstream
| If poor working conditions occur downstream, this can harm workers and infringe on their labor rights | ||
| Potential negative impact | ||
| Downstream | ||
| Short-term | Medium-term | Long-term |
| Electric mining equipment improves worker health for customers | ||
| Actual positive impact | ||
| Downstream | ||
| Short-term | Medium-term | Long-term |
| Failure to consider risks of poor working conditions and that human rights are not respected downstream, could harm Epiroc’s reputation | ||
| Risk | ||
| Downstream | ||
| Short-term | Medium-term | Long-term |
Workers downstream in our value chain may face hazardous work environments and may be deprived of their ability to fully exercise their labor rights, such as the right to a safe workplace, fair wages, and reasonable working hours. If poor working conditions were to occur downstream, and if Epiroc were to unknowingly support operations with human rights violations, this could result in reputational damage for Epiroc. This can lead to customer loss, stock devaluation, penalties and fines.
Electrification of mining equipment improves working conditions for Epiroc customers in mines by reducing diesel fumes, noise level and vibrations, leading to a healthier work environment. We also provide numerous solutions to improve the safety of those using our products through automation, electrification and digitalization. Read more in ESRS S4.