Otosan employs 13,724 direct workers as of 2021, of which about 19% (over 2,500) are females. Together with contractor workforce (1,863) and Craiova plant workforce (5,563 direct and 33 contractor employees) the total operational headcount reaches over 20,000. The expansion investment in Kocaeli plants creates 2,500 construction jobs (currently at peak) and is expected to create 2,500 additional operation jobs in Kocaeli plants within 2022-2026 period.
Human Resources Policies and Procedures, Working Conditions and Terms of Employment, Workers' Organization:
Otosan has robust policies and procedures in relation to human resources which cover, working conditions, health and safety, gender and equal opportunities, grievance handling, child labor, forced labor and freedom of association consistent with PS2.
Each employee receives a handbook clearly indicating the terms and conditions of the employment, rights and the benefits, requirements for following the Company's EHS and ethical standards. All employees sign a code of conduct summarizing all workplace policies and requirements, accessible online at:
https://www.fordotosan.com.tr/documents/Kurumsal_Politikalar/calisma-lkeleri-ve-etik-kurallari.pdf
All blue-collar workers are covered by the collective bargaining agreement between the Turk-Metal Union and Metal Industrialists Union (MESS) that is effective during the period of 01.09.2021-31.08.2023.
Non-discrimination and Equal Opportunity:
Otosan has extensive and exemplary work on non-discrimination and equal opportunity, as expressed in their policies and have competent staff managing these programs. The company is a signatory of UN Women's Empowerment Principles (WEP). Female employees are involved in production activities as the company adopted vision to have gender balanced employment. Both men and women are trained in topics of code of conduct, anti-harassment and discrimination. The grievance mechanism is established and able to handle harassment related issues if needed and a psychologist is on board to assist with any sensitive complaints.
Grievance Mechanism:
Otosan has formal and well-established grievance mechanisms allowing anonymous submissions. All direct employees and contractors can report grievances through hotline, e-mail, online forms or through union representatives. During recent site visits, it was observed that contractor workers (especially those at the construction sites) are not aware of the grievance mechanism. As per ESAP 1, Otosan will strengthen their grievance mechanism to be able to capture contractor grievances more effectively and develop timely solutions to contractor grievances (including construction sub-contractors). Otosan will raise awareness of contractor workers regarding the grievance mechanism and provide easier access to contractor workforce (by way of identifying suitable means including provision of anonymous channels).
Occupational Health and Safety:
Otosan has competent health and safety experts assigned to plants and construction sites, reporting to a senior health and safety manager appointed at the corporate level. The construction site has over 50 OHS staff/supervisors including third party OHS auditors.
The company conducts job hazard risk analysis for construction and operations, implements preventive and mitigation measures accordingly. Adequate personal protective equipment, onboarding and on the job trainings are provided to all the employees and contractors, commensurate with the job risk.
During operation, major pressing, stamping and welding operations in the body shop will be fully carried out by automatized systems and robots. Painting process is also fully automated and takes place inside cabins that are not accessible to employees during the actual painting operations. Staff working in production lines of electric vehicles are required to go through electrical safety training.
Otosan plants' overall 2021 year-end Lost Time Incident Frequency Rate (LTIFR) for operations, is calculated as 3.39 and below the international benchmark for metal manufacturing (10.5). The average LTIFR rate for construction works in the first seven months of 2021 was 26, which is higher than international benchmark for construction (10). However, improvement is observed in the last two months (June & July 2022, LTIFR rates 5 and 10 respectively) with frequent OHS audits by both Otosan EHS teams and independent consultant and enhancement of OHS risk management practices at the construction site.
Workers Engaged by Third Parties:
All third-party workers in Otosan, including those assigned to construction sites are to respect and follow the labour and OHS standards as those followed by the direct employees, which is ensured by the procurement and OHS departments. Any accidents or incidents associated with third party employees are also recorded and monitored.
All production related activities in Turkiye plants are undertaken by direct employees, except for one contractor (DGR) that handles final products at the warehouses and parking. Recent media review and site visit observations indicate that there are issues with respect to overtime, grievances management, payment delays, vulnerability of workers to production stops (managed through unpaid leave) and PPE provision. Otosan has assessed the issues internally and followed-up with contractor however progress has been limited.
The capacity increase construction is led by one major civil works contractor that manages 68 different sub-contractors and five other technical contractors directly supervised by Otosan. The contractor management plans include sufficient oversight with regards to health and safety, whereas ongoing review of labor and working conditions is limited.
As per ESAP 2, Otosan will commission an independent labor audit for production and construction related contractors – engaging an external consultant having knowledge of IFC PS2 requirements and based on audit findings, develop an action plan for contractor's compliance with IFC PS2 and national labor code requirements.
Supply Chain:
A key risk in the manufacturing of EVs is potential exposure to lithium-ion cells and related components produced in countries where there are alleged claims of forced labour and child labor.
Supply Chain Code of Conduct of Ford Company and Sourcing Policy prohibit any form of forced labor and child labor:
https://corporate.ford.com/operations/governance-and-policies/supplier-code-of-conduct.html
Responsible Materials Sourcing Policy 2021: https://corporate.ford.com/social-impact/sustainability/responsible-material-sourcing.html
The client's supply chain for EV batteries of next generation 1-ton, all-electric, commercial vehicles follows policies and supply chain management systems and physical audits of the Ford Company as JV partner.
Otosan confirmed that the components of EV batteries are manufactured either in Turkiye or EU and that there are no components sourced from countries with alleged claims of forced labor and child labor.
Otosan provides trainings to all their suppliers in human rights and work environment, forced labor, child labor, freedom of association, gender equality, and environmental performance and requires suppliers to submit self-audit reports in these respects. The Company aims to complete on-site ESG audit of 50% of its suppliers by 2030. As per ESAP item 3, Otosan as a priority will map suppliers with high risk for forced labor and child labor in their primary supply chain and prioritize completion of physical audits for these suppliers in consistence with PS2 by 2023. If child labor or forced labor cases are identified, Otosan will take appropriate steps to remedy them. Otosan will continue monitoring its primary supply chain on an ongoing basis in order to identify any significant changes and if new risks or incidents of child and/or forced labor are identified, Otosan will take appropriate steps to remedy them.
