Arcelik has over 41,117 employees globally of which 26 percent are female. As of 2021, 16,464 (40 percent) of the employees work in the Turkey operations (14,891 direct employee, 1,573 temporary and 1,330 contractor workers). The Bangladesh operations currently have 526 employees of which 20 percent are female. There are only 6 contactor workers in the refrigerator production plant. When the new Singer Bangladesh plant becomes operational, the total workforce is expected to be around 900 direct employees.
Human Resources Policies and Procedures, Working Conditions and Terms of Employment, Workers’ Organization:
Arcelik’s commitments in relation to labor issues are summarized under the `”Global Human Rights Policy”, disclosed at the website: https://www.arcelikglobal.com/media/6236/15_global-human-rights-policy-en-1.pdf. The policy is consistent with PS2 objectives, and it covers working conditions, fair remuneration, health and safety, gender and equal opportunities, non-discrimination, prevention of child labor, forced labor and precarious employment, code of conduct, grievance mechanism and freedom of association. The policy applies to all the workforce in Arcelik and its subsidiaries, including migrant, temporary, seasonal or contractor staff.
All employees and business partners, including temporary employees and interns, are obliged to comply with the Global Code of Conduct and Related Code Policies available at https://www.arcelikglobal.com/media/5510/1_global-code-of-conduct_.pdf, which they receive and sign upon employment and follow regular trainings.
As noted, the two existing operational plants of Singer Bangladesh with a total of 526 employees will be closed, and their operations will be moved to new plant to be constructed in BSEZ in Dhaka. This new plant which will require 900 workers is expected to be operational at the end of 2023. The local labor regulations of Bangladesh require renewal of employee contracts for transitioning the workforce from one workplace to another, avoiding involuntary dismissal and workers who do not choose to be relocated are compensated. As per ESAP item #3, Singer Bangladesh will develop and implement a reemployment plan for the workforce associated with the two operational facilities to ensure that the workers provided with necessary guidance and consultancy to protect their rights and benefits. This plan is to also include provisions, as per the requirements envisaged for a retrenchment planning and implementation in PS2, for the workers who are not willing to continue to work with the company in the new operational plant. However, it should be noted that given the number of employment positions at the new plant exceeds that associated with existing operations, there will be employment opportunities for all workers at the existing facilities at the new plant to be constructed.
The company supports collective bargaining and unionization of employees and nearly 64% of the employees of Arcelik are covered by collective agreements in all countries where Arcelik has manufacturing plants as of the end of 2021. In Turkey, the workers of Arçelik are members of Turk Metal Trade Union. All hourly paid workers in Turkey work under a collective labor agreement. Singer Bangladesh factories have a Participatory Committee comprised of the company representatives and elected workers’ representatives.
In 2020, 73% of Arcelik production plants were audited for social performance including labor and working conditions for direct and indirect employees by SEDEX (Supplier Ethical Data Exchange) and BSCI (Business Social Compliance Initiative). The audit ratings are disclosed on the Arcelik website: https://www.arcelikglobal.com/en/company/bsci-sedex-social-accountability-audits/.
Non-discrimination and Equal Opportunity:
The company has disclosed its Board Diversity Policy (https://www.arcelikglobal.com/media/6314/arcelik-board-diversity-policy_25521.pdf) and Declaration on Equality at Work (https://www.arcelikglobal.com/media/5302/declarationonequalityatwork_02.pdf). These cover equal opportunities, equal pay for equal work, human rights principles, ensuring health, safety and wellbeing of female and male employees without any discrimination. The Company is a signatory of UN Women’s Empowerment Principles (WEP).
Arçelik and its associated subsidiaries are committed to maintain a work environment free of discrimination and harassment including sexual harassment as disclosed within Arcelik’s Global Anti-Discrimination and Anti-Harassment Policy as available at https://www.arcelikglobal.com/media/6317/16_global-anti-discrimination-and-anti-harassment.pdf. The grievance mechanism is suited to capture sensitive issues such as harassment, mobbing, gender-based violence and all employees receive trainings and briefings on gender issues.
Arcelik has a set of key performance indicators (KPI) to increase participation of women in the total workforce, specifically empowering women in management. In 2020, 17 percent of the Board of Directors were women and about 21 percent of the managerial positions were held by women. By 2030, Arcelik aims to increase women in all managerial positions and women in top management positions to 30 percent and 20 percent, respectively. Arcelik also targets to increase women in science, technology, engineering, and mathematics (STEM) related positions from 16 percent to 25 percent by 2030.
Grievance Mechanism:
Arcelik has a formal grievance mechanism allowing anonymous submissions. All employees, contractors, business partners and external stakeholders can report grievances via the website-based, independently operated ethics hotline and email (www.ethicsline.net, e-mail: arcelikas@ethicsline.net). Specific hotline numbers are also available in all the countries of operation. All cases are treated confidentially, following complainant’s preferences at each step as per the Global Whistleblowing Policy available at https://www.arcelikglobal.com/media/5515/3_global-whistleblowing-policy_.pdf. .
In 2021, 57 grievances were reported through Ethics Hotline channels and all the cases were resolved.
Occupational Health and Safety (OHS):
Arcelik has common OHS indicators and goals in all geographies to manage a large network of operations with the same principles and maintain high OHS performance while aiming to reach zero occupational accident and zero occupational disease targets. In the Eskisehir facilities, artificial intelligence is in use to prevent accidents which will be adapted in Singer Bangladesh facilities. As per the indoor measurement procedure that is also applicable to Arcelik’s subsidiaries, Arcelik measures workplace noise, personal dust exposure, thermal comfort, illumination, vibration and air quality including volatile organic compounds where applicable in line with the international and local regulations/ standards.
All production locations are observed to have low Lost Time Incident Frequency Rate (LTIFR). The average LTIFR of the group was reported to be 2.09 in 2020, compared to industrial benchmark of 6.0 for the manufacturing sector. LTIFR rate among contractors is slightly higher (4.23), though still within international benchmark. The average LTIFR rate of Turkey operations was 2.8 in 2020. For Singer Bangladesh, the LTIFR rate of the refrigerator plant is 6.6 and the manufacturing complex is 5.86 in 2021. As per ESAP item #4, Arcelik will develop and implement a time based action plan, to reduce the current LTFIR for contractors and Singer Bangladesh so as to align with the corporate average LTIFR. Arcelik also tracks and discloses occupational disease rate, which was reported as 0.1 globally for 2020.
The company has formulated and implemented overarching COVID-19 risk management and precautions protocol, going beyond the requirements of local laws and regulations.
Workers Engaged by Third Parties:
All third-party workers (security, housekeeping, gardening, etc.) and also workers employed temporarily at Arcelik and Singer Bangladesh are to respect and follow the labour and OHS standards as those followed by the full-time workers. All contractor workers are required to abide by OHS rules of Arcelik and show proof of their social security registration as required by their contracts. The records of all contractor workers and the contractor regulatory compliance as well as the environmental risk assessment of the contractor company are maintained in the contractor management system. The contractor workforce also has access to the company’s grievance mechanism. Any accidents or incidents associated with third party employees are also recorded and monitored. Instead of relying on the contractor firm, Singer Bangladesh makes payments directly to the temporary workers to ensure that proper wages and overtime is paid on time.
Management of construction safety during the construction work of the new Singer Bangladesh plant will be the responsibility of the project management contractor that has to ensure where applicable that each sub-contractor submits proof of compliance with good OHS practices. As noted above, the company will strengthen their corporate contractor management procedure such that this aligns with IFC’s good practice note on Managing Contractors E&S Performance as per ESAP item #2.
Supply Chain:
Arcelik has supplier management systems which includes identification, evaluation and auditing of critical suppliers (that make up 80% of purchasing turnover) within the scope of the Sustainable Supplier Index and Code of Conduct. These audits cover Arçelik’s requirements including compliance with laws, working conditions, human rights, OHS, and the environment. Arcelik terminates contracts with any supplier in cases where child labor, forced labor, bribery, or incidences of corruption are detected. Training programs are regularly organized for suppliers, and training is provided every year on sustainability, environmental management and environmental legislation, chemicals management, zero waste management, business ethics and working conditions, and occupational safety.
Arcelik has pledged not to work with suppliers that are not certified as per ISO 14001 Environmental Management System standards by 2023. Following Arcelik’s Code of Conduct applying to its global operations, Singer Bangladesh is to fulfil the requirements of Global Responsible Purchasing Policy available at https://www.arcelikglobal.com/media/5553/responsible-purchasing-policy_en.pdf.
The 3TG (tin, tantalum, tungsten and gold) minerals that Arcelik uses in the production of electronics and durable home appliances are extracted in high-risk conflict zones around the world. As per the UN’s guidelines and restrictions on these minerals, the company does not purchase raw materials from high-risk conflict zones or in a way that will financially support the conflict. Arcelik’s Conflict Minerals Policy is available at https://www.arcelikglobal.com/media/5644/conflict-minerals-policy_0307.pdf and a Conflict Minerals Management System is established to evaluate suppliers at risk.
Singer Bangladesh has in place a sourcing policy that addresses forced labor and will conduct due diligence on the suppliers of the 2 MW solar PV solar system in the event such is installed on the roof of the new plant in BSEZ. The company has also agreed to allow a review of its records by auditors, report relevant incidents, and if requested, provide a supply chain map and comply with any internationally recognized traceability protocol as feasible. Singer Bangladesh will use its best efforts to obtain similar representations and covenants from the solar panel suppliers.
