The Finnish NGO Finnwatch published today, December 3, 2024, a follow-up report on the status of a supplier of Outokumpu back in 2021, Vale’s Onça Puma mine in Brazil. Since the original report, we have made significant steps in developing our human rights due diligence based on the United Nations’ Guiding Principles on Business and Human Rights (UNGPs).
During the past years, we have established an active and valuable dialogue with external stakeholders including Finnwatch to enhance our processes and supplier engagement around sustainability, including human rights. We are thankful for the feedback received through this dialogue which has pushed us to strengthen our supplier sustainability even further.
Outokumpu has around 7,400 suppliers globally. Out of these, at least 13 direct and 52 indirect raw material suppliers operate in so-called high-risk countries from an environmental and human rights perspective, covering approximately 8.5% of our total spend on raw materials. Through our work and supplier engagement, we strive to have our business partners follow our sustainability commitments, ethical principles and environmental standards.
Taking action on findings about the situation at Onça Puma
When Outokumpu learned about the issues in Onça Puma, we discontinued the orders for ferronickel and commissioned a human rights impact assessment conducted on-site by the third-party human rights expert consultancy Enact. We directly participated in the assessment and through this work, established a dialogue with Vale and with the local indigenous community, the Xikrin. We also developed monitoring for the identified key issues.
Back in 2021, Enact’s human rights experts identified that there were negative impacts in connection with the supplier’s activities. Enact concluded that, given the considered and particular circumstances at hand at the time, and in accordance with international standards (such as the UNGP), Outokumpu seemed to be directly linked to those potential adverse impacts as a result of its status as a purchaser of alloying metals from Vale. Enact did not find that the circumstances and context amounted to Outokumpu being seen as providing a contribution to the impacts.
In our own operations, we have built a supplier sustainability team reporting to the leadership team level, published a human rights policy and a Supplier Code of Conduct, and started to develop a comprehensive due diligence process covering the Outokumpu value chain. We have come a long way in improving our sustainability risk management throughout our supply chain, and increased supply chain transparency significantly. Today we know the origin of important primary raw materials all the way back to the mines.
Maintaining dialogue and supporting water assessments
To assess the current situation in Onça Puma and the maturity of Vale’s human rights due diligence practices, we conducted another on-site assessment in September 2024. The audit was led by our supply chain sustainability experts, accompanied by an external water chemist, Dr. Ann S. Maest, to assess the water management practices of Vale in Onça Puma and to analyze the results from all studies so far conducted: Vale’s water measurements, the one commissioned by the public prosecutor, and the reports by the University of Para.
The assessment results show that more studies are needed to identify the sources of the metals found in the cassava, the fish and the Xikrin. We have requested Vale to ensure that these studies are carried out. The assessment also revealed solid practices in several key areas, such as developing water management systems, water sampling procedures, and human rights due diligence processes. We have used, and will continue to use, the power we have as a potential customer to improve the situation after the findings.
Human rights due diligence – an iterative journey
Since 2021, human rights have been firmly established as part of the Outokumpu leadership team's agenda. We have appointed a Head of Human Rights at Group level, and we continue to push the development of our industry forward.
We produce stainless steel with raw materials from different parts of the world to end-users globally. As part of our commitment to be the leading producer of sustainable stainless steel, supplier sustainability is one of the most critical areas for us. We will continue to develop our due diligence and sustainable supply chains – this is a long-term journey, that requires collaboration and dialogue with civil society experts like Finnwatch, other human rights experts, unions, suppliers, customers, and other stakeholders.
Hannah Stratmann
Head of Supplier Sustainability & Quality