“Inadequate response to wage theft and intolerable working conditions”: Speech by Tilman Massa

Dear Ladies and Gentlemen,
Dear Management Board and Supervisory Board,

My name is Tilman Massa and I am speaking on behalf of Association of Ethical Shareholders Germany. With the voting rights transferred to us, we demand much more effective measures from Delivery Hero against the climate crisis and for the protection of the environment and human rights. I have to ask you in particular about the working conditions at your subsidiary Talabat, which has repeatedly made negative headlines because of poor working conditions and unpaid wages at a subcontractor. We cannot exonerate you, Executive Board and Supervisory Board, for insufficient implementation and transparency in human rights due diligence and climate protection measures.

Working conditions and human rights due diligence: wage theft at subsidiary Talabat

At least 48 migrant workers in Qatar who worked for your subsidiary, the food delivery service Talabat, have become victims of wage theft, as reported, among others, by the FAZ at the beginning of the year. The victims, mostly people from Uganda, Ghana and Kenya, worked as drivers for two of Talabat’s subcontractors, Infinity Limousines and Infinity Delivery Services, in the capital Doha, delivering food, among other things, but received no wages for months – in some cases as long as eight months. They only made ends meet with tips.

Those affected have reported to the human rights organization Fairsquare that efforts to claim outstanding wages are systematically suppressed by Infinity, passports have been confiscated and open complaints lead to deportations.

One of the former migrant workers, Francis Nanseera, has been deported to his home country in East Africa after a nine-month stay in Qatar and has published a detailed account of his experience with Infinity on the media platform Open Democracy. Here is just a small excerpt:

“Infinity treated us so negligently that if someone fell sick, they’d have to beg medication off others who had previously been in hospital. I’ve often wondered what the Germans would think if they knew how it was for us. I like to think that they would feel for us. At any rate, I can’t imagine that if we were working over there, with the original company, they would ever treat us the way Infinity did.

I never saw a penny for the months I spent working in the service of Talabat. My contract said I would be paid 1800 Qatari rials a month, or about $500. After arriving in Qatar an account was opened for me that, I soon found out, I could neither control nor access. I received notifications that money was being transferred into that account, but without a way to get to it the money never became mine. This did not just happen to me. It was the same for a team of over 160 riders.

We mainly survived on freebies and tips, and supported each other through it all by pooling funds and shopping collectively. We had one meal a day or, at times, no meal at all.”

Francis Nanseera

FairSquare called on you and Talabat last December to ensure that the wages due were finally paid and the intolerable working conditions ended. You then launched an investigation and subsequently confirmed the central allegations: according to you, 48 couriers were affected by the wage theft. You ended the cooperation with the Infinity subcontractors. This may be a logical step, but you should also do your utmost to ensure that the breach of the law is clarified and that those affected receive their rights. You yourself do not want to pay the outstanding wages. At the same time, it is unlikely that the people who have already been deported will ever receive their earned wages through the back pay system in Qatar. I have the following questions for you on this:

1. What are you doing to ensure that this breach of the law is cleared up and that the outstanding wages are paid?
2. Do you have up-to-date information on what Talabat is doing to ensure that this breach of law is clarified and the outstanding wages are paid? What are your demands and expectations of Talabat in this regard?
3. What lessons have you learned and what consequences have you drawn from these incidents in order to identify exploitative working conditions at your subsidiaries and their subcontractors – not only at Talabat – and to put a stop to them or prevent them?
4. There are reports of poor working conditions at Talabat not only in Qatar. In the United Arab Emirates last May, foreign Talabat workers went on strike for better pay and working conditions. However, independent trade unions, public protests and strikes are not allowed there. What are you doing to ensure that your subsidiaries and their subcontractors have the right to form or join workers’ organisations and independent trade unions?
5. Talabat workers in the United Arab Emirates also report that they are employed by agencies that illegally charge them for work permits and other fees. They report having to pay for fuel themselves, earning the equivalent of less than $700 a month, but only when they work 12 to 14 hours a day, seven days a week. Are you aware of these allegations, and if so, what are you doing about them?
6. Based on the evidence, have you initiated a more extensive, systematic risk analysis of wage theft and other labour rights violations at your subsidiaries and their subcontractors? If yes, what is the status or the result? If not, why not?
7. What are you doing to ensure that living wages are paid at all your subsidiaries and their subcontractors?
8. How many of your subsidiaries and their subcontractors have an elected works council?
9. Do you have a group-wide grievance mechanism and if so, to what extent is it used?
10. As of next year, the Supply Chain Act (LkSG) will also apply to Delivery Hero. You will then also be obliged to conduct systematic analyses of human rights risks at your subsidiaries abroad. Wage theft and other violations of the ILO core labour standards are not only clear, outlawed violations of international human rights standards, but also a central component of those human rights risks in the rights catalogue of the Supply Chain Law, which you will have to check from next year. What is the current status that you will also be able to fully comply with the requirements of the Supply Chain Act from 2024 at the latest?

Climate footprint and climate targets

I also took a look at your climate footprint from last year: Your direct greenhouse gas emissions increased by a whopping 384 percent compared to 2021, and in total you were responsible for a CO2 footprint of well over 4 million tonnes CO2e in 2022, an increase of over 15 percent.

Your climate protection strategy at least provides for the opposite direction, but concrete targets for reduction, let alone concrete measures along the entire value chains in accordance with the requirements of the Paris Climate Protection Agreement: missing.

According to the latest annual report, you intend to announce new CO2 reduction targets this year after receiving feedback from the Science-Based Target Initiative. My questions are:

1. What is the current status here and can you already give rough key data on your new climate targets and climate strategy?
2. Do you intend to adapt your climate targets to a 1.5 degree compatible path? Have you already considered such a scenario and do you know by how much more you would have to reduce your CO2 footprint than planned so far? 3.
3. But I also don’t want to waste a lot of time with theoretical discussions about climate targets. Do you have concrete plans and paths of measures that would put you on such a path? After all, the Science-Based Target Initiative reviews your targets, not concrete measures.

For Europe and Latin America, you stated that you would operate in a climate-neutral manner – by means of offsetting and tree planting. The trade with corresponding CO2 certificates has recently fallen into disrepute even more. Several media have uncovered that apparently almost all certificates from forest protection projects of the leading certifier on the offset market, Verra, are worthless. Here are my questions:

1. Have you drawn any conclusions from this for your climate strategy and offset plans, and if so, which ones? If not, why not?
2. have you offset your greenhouse gas emissions via such providers and if so, to what extent, from which provider and which projects were supported with this?

Regarding Agenda item 6: Proposal to amend § 16 of the Articles of Association (authorisation of the Executive Board regarding virtual general meetings)

We reject your proposal to authorise the Executive Board to decide on the conduct of a virtual general meeting.

The format and manner in which a general meeting is conducted affect elementary shareholder rights. Therefore, the general meeting, and not the board, should decide on the conditions and format of future general meetings. Furthermore, the AGM should also decide whether a hybrid format should be implemented as another option, combining the advantages of a face-to-face AGM with those of a purely virtual event.

While most other public limited companies have already implemented such a hybrid format by deciding to hold this year’s AGM purely virtually, you have proven that you do not want to take advantage of new opportunities for a shareholder-friendly expansion of participation possibilities. My questions on this are:

1. If you hold another virtual AGM next year, would you also offer the possibility to submit questions in writing in advance and make the answers transparent for everyone? In this way, the right of all shareholders to ask questions and receive information can be better implemented and the discussion at the general meeting can be focused on important points and follow-up questions. Of course, written questions should not replace questions at the general meeting and the exchange with you.
2. Do you plan to explore the possibility of a hybrid AGM? Please give reasons for your answer.
3. Do you already have preferences and plans as to whether the next AGM should be held purely virtually or again in presence, and according to what criteria will you decide?

Thank you for your attention.

2 Follow-up questions:

1. Do the back payments of unpaid wages also concern those persons who are no longer in Qatar, among other things because they have been deported due to complaints?
2. You answered that your inspections revealed further companies or subcontractors with irregularities or violations and that you subsequently terminated contracts. Which companies are these? If you do not mention any names, can you at least name the countries concerned?

Delivery Hero Annual General Meeting 2023 responses to Qatar questions

Implementation of human rights due diligence in general:

“The Supply Chain Due Diligence Act applies to Delivery Hero as of January 1, 2023. We/The Company therefore already started implementation last year and established a working group for this purpose. This year, we also appointed a Human Rights Officer.

We are in good exchange with the International Labor Organization (ILO). We have also developed a methodology for identifying areas and affected groups of people at higher risk and implementing the necessary measures to ensure compliance with the law throughout the Group. A few examples of our actions: first, drafting and adopting the policy statement, then revising the code of conduct for third parties such as contractors or suppliers, then conducting training; developing due diligence questionnaires for third parties, adapting contractual clauses, and establishing a grievance mechanism within the group.”

On Talabat and payment of living wages:

“All contracts our subsidiaries enter into with logistics or subcontractors include clauses that ensure drivers are paid. Typically, the promised payments to drivers are above legal minimum wage requirements. Even in countries where there are no statutory minimum wages, we define fair wages based on external data such as consumer price indices. Compliance with the contracts is regularly audited. In addition, we are in regular contact with our drivers via our driver app, to ensure that drivers are paid on time and fairly. As soon as violations are reported to us, our subsidiaries respond immediately and initiate measures up to and including termination of the respective subcontractor.”

On Talabat in Qatar:

“As described by you, the reports relate to two logistics subcontractors we worked with in Qatar. We have taken the reports very seriously and have conducted an internal investigation together with external lawyers. These investigations revealed that some employees of these subcontractors who also delivered food orders for Talabat were indeed affected. As a result, cooperation with the two subcontractors was terminated immediately. We respect local laws. The welfare of our drivers is extremely important to us. We expect the same from all subcontractors we work with and have set our expectations contractually with the subcontractors.”

Consequences and lessons learned:

“All contracts with subcontractors are continuously reviewed and adjusted as necessary. Our primary goal is to ensure a safe working environment for drivers. Furthermore, our subsidiaries work even more closely with the respective government authorities and, in our markets, with the drivers. For example, Talabat has launched a regular survey of drivers to ensure that all wages are paid on time and in full. Where violations are reported to us by drivers, our subsidiaries promptly seek out these reports and respond accordingly.”

Action on unpaid wages:

“All contracts that our subsidiaries enter into with logistics or subcontractors include clauses that require them to be in full compliance. The relevant contracts oblige our subsidiaries to monitor compliance with contractual obligations as well as to terminate the contracts if there are any breaches of the law.

In the present case, all outstanding wages were paid to the drivers and the contracts with the relevant subcontractors were terminated. Talabat has also ensured that all drivers were able to transfer to other trusted subcontractors so that they have an income with which to continue to support themselves.”

On strike at Talabat in UAE 2022:

“The right to form unions is limited in some countries, as you know. So, also in some of our markets there are legal hurdles to unionize. That also applies to the United Arab Emirates.

Delivery Hero and its subsidiaries in these countries are legally prevented from granting drivers rights that they are not entitled to, based on local laws. However, we always strive to maintain constructive dialogue with our drivers and understand their concerns and demands. Our concern is to ensure that our drivers are satisfied with the applicable working conditions.”

Further systematic risk analysis on wage theft:

“As a result of the Qatar incidents, we have launched internal investigations in all countries in the region where we operate. As a result, some subcontractors were given warnings and, in some cases, terminated as a result of these investigations. Furthermore, contracts were adjusted. In addition, we have started to send regular surveys directly to our drivers in order to be informed about compliance violations at an early stage in the future and to be able to take appropriate countermeasures.”

Illegal payments to labor agencies in the United Arab Emirates:

“We are aware of the problem. We have taken comprehensive steps to prevent such incidents in the future. Among other things, we have adapted contracts with subcontractors in such a way that subcontractors are no longer allowed to charge drivers unjustified fees or costs. In addition, we have reported corresponding cases to the relevant regulatory authorities and requested them to initiate official investigations against the subcontractors in question.”

Follow-up question whether all drivers who have been deported from Qatar have also received their money:

“We have made an extreme effort and also tried to reach out to those affected and also provide legal support. As I said, we have paid the wages, in arrears. Even though Infinity is not our company, we still did the right thing: gave support there and paid in arrears. There is the problem that sometimes we have not reached drivers and have not been given the opportunity to contact them. So, it’s very difficult to pay them, so I can’t promise that everyone was paid retrospectively. Because, as I said, in several cases we didn’t get the contact details. But as far as possible, we tried everything to pay the money. As I said, it hit us hard. Of course, we also work with millions of drivers, with hundreds of subcontractors. Even before these incidents in Qatar, we regularly checked contracts or subcontractors, even terminating them. The checks were supplemented even more after the incident in Qatar. We currently employ more than 1.7 million drivers within the group and we rely on the quality and their welfare to simply serve our customers. Therefore, we attach great importance to say that the consequences for the companies are up to termination of contracts, and immediately without notice if we find that drivers are not paid or mistreated. If they are not paid: Delivery Hero has already paid, because we have transferred the money to the subcontractor, and of course we assume that this money is then passed on to the drivers. So just to be sure and make sure of that, we are doing such investigations where we are just asking the drivers for support to let us know if they have received the money, what is due to them. So, we’re going to continue that because that’s a second step to make sure they receive the money.”

Follow-up quetion which subcontractors in which countries were dismissed due to further internal investigations:

“Unfortunately, we cannot disclose the countries, for reasons of competition law. We simply do not want this information to be easily accessible to our competitors. Nevertheless, we will insist on compliance with the contracts in all countries and threaten subcontractors with either penalties or termination of the contracts without notice, because it is not in our best interest that our driver community suffers as a result.”