Transparency Statement

Introduction

Lekela seeks to meet world-class standards in health and safety, environmental protection, social performance management and business integrity (including sound corporate governance and transparent accounting practices) across our operations. This includes taking all reasonable steps to eliminate the risk of slavery and human trafficking in any part of our business or supply chain. 

This transparency statement is issued on behalf of Lekela Power B.V. and its subsidiaries, including its UK incorporated subsidiary Lekela Advisors Limited (together “Lekela”), pursuant to Section 54 of the UK Modern Slavery Act 2015 (the “Act”) in respect of the financial year ending on 31 December 2018. 

Who are we?

Lekela has built a platform that develops, owns and operates wind and solar assets focusing solely on African countries. Taking projects from mid or late-stage development into long-term operation, we focus on delivering sustainable, reliable and competitively-priced power to governments, utilities and large-scale industrial projects.

To do this, we draw from our team’s extensive experience and expertise, and the energy heritage of our founder shareholders.  

Our current portfolio includes more than 1,300 megawatts across projects in Egypt, Ghana, South Africa and Senegal. You can find more information about our business here.

What are our views on modern slavery and human trafficking? 

Lekela condemns any form of slavery or human trafficking. We are committed to ensuring that we do not deal with any party that is engaged in slavery or human trafficking or has itself supply chains where instances of slavery or trafficking is taking place. We will not work with any party who we have reasonable grounds to suspect is engaged in, or has supply chains which are engaged in, slavery or human trafficking. 

Lekela’s approach to ethical business practices is outlined in our Code of Business Conduct (the Code) and described in our Annual Sustainability Report. Here we demonstrate the steps we are taking to manage environmental and social risks effectively (including that of slavery, forced labour and human trafficking) and act as a sustainable business.

We recognise the heightened risk of modern slavery and human trafficking in the sector and some of the geographical areas where Lekela operates, especially where we engage with contractors or third-party service providers. Below we set out the measures we have taken, and are planning to take, to mitigate this risk. 

What are we doing to mitigate the risk of slavery and human trafficking in our supply chains? 

A.     Structure and supply chain

Delivering renewable power projects typically involves three main phases: development, construction and operations. We have determined that we are most exposed to modern slavery risks during the construction phase of our projects. During this phase the risk is twofold. Firstly, we procure sophisticated technology (such as wind turbines) from third parties with their own complex supply chains and secondly, we engage primary contractors to construct our generation sites who will in turn often sub-contract with local service providers. 

In the first instance, the first-tier energy technology suppliers that we work with are of sufficient substance to meet the threshold test under the Act and are therefore required to disclose how they manage modern slavery risks in their operations and supply chains in their own right. We assess their compliance with the Act through these disclosures. This allows us to focus risk mitigation on areas where we can have the most impact (such as employment practices during construction). 

In regions where regulation of labour and working conditions can fall short of international standards, it is imperative that Lekela maintains effective oversight of the entire construction process to ensure that the expected standards are met. Section E below further sets out how we mitigate our risks during this phase. 

For operational assets both the workforce and direct supply chain reduces in size, which reduces the risk of unethical employment practices commensurately. Section E also sets out how we manage inherent risk during operations. 

B.     Policies in relation to slavery and human trafficking

In addition to the Code, which sets out our approach to ethical business dealings, Lekela also has a Social Policy that establishes how we would like to treat our workforce and communities.

The objectives of our Social Policy that relate to labour are: 

to treat all Lekela employees fairly and to respect their dignity, well-being and diversity; 

to require the businesses with which Lekela engages with to treat all their employees and contractors fairly, and to respect their dignity, well-being and diversity; 

to be objective, consistent and fair with all Lekela stakeholders; 

to work towards full compliance of Lekela operations with the International Labour Organisation Fundamental Conventions, the UN Declaration of Human Rights and IFC Performance   Standard 2: Labour and Working Conditions. 

In addition, Lekela aims only to engage with businesses which: 

do not employ forced labour of any kind, either directly or via their primary supply chain; and 

do not allow children to form part of their workforce, either directly or via their primary supply chain.

The Lekela Social Policy is reviewed annually to maintain alignment with legislation and best practice. We also implement Labour Management Plans, which are more fully described in Section E. 

While Lekela has good supplier due diligence processes, it does not currently have a formally documented procurement policy describing this. In 2019 we plan to implement a procurement policy that includes appropriate due diligence processes including an assessment of modern slavery and human trafficking risks.

C.     Due diligence processes in relation to slavery and human trafficking

As described above, we are aiming to document our due diligence processes in relation to slavery and human trafficking risk during the course of 2019. We intend to then roll out this risk assessment in respect of all first tier suppliers. This risk assessment process will consist of two phases: an initial assessment, followed by, in cases where a particular supplier type attracts a high risk rating, an enhanced due diligence review. As a first step, Lekela has commenced a supplemental review to assess suppliers’ compliance with Section 54 of the Act where the contract value is greater than USD 100,000. 

D.     Risk assessment and management 

In addition to the risk assessment measures we plan to implement (as set out in C above), Lekela already maintains an ESG risk register for each of our assets to track and manage project risk profiles. Labour and working conditions are key components of these asset-level risk registers. The project risk registers are reviewed quarterly by the ESG Committee, which reports to the board of directors of Lekela Power B.V.

E.     Effective action taken to address modern slavery

In addition to due diligence and risk assessment measures, Lekela implements practical steps to address modern slavery risks that may be presented by third parties contracted to work or act as suppliers to our assets. 

For Lekela’s assets under construction, we ensure that a Labour Management Plan is included as a schedule to engineering, procurement and construction contracts to hold our contractors to the same standards outlined in our Social Policy.  Contractors are required to extend these obligations in respect of labour and working conditions standards to their appointed sub-contractors. Construction agreements are executed to ensure that our sites are fully compliant with the ILO FC and IFC Performance Standards. Contractor adherence to Labour Management Plans is monitored by third parties who conduct labour audits during the construction process. The assessment of working conditions and labour rights of contractors and their sub-contractors is a key component of these audits. 

Our contracts provide that we can seek improvements over an agreed timeframe where we identify non-conformity with agreed Labour Management Plans by counterparties. While we will always first pursue improvements in contractor labour standards, Lekela reserves the right to terminate arrangements with the non-confirming counterparty if the remediation does not meet Lekela’s expectations.

In addition to Labour Management Plans and appropriate labour audits, Lekela requires that each asset maintains access to a ‘worker grievance mechanism’. This facility provides Lekela staff and contractors employed on our sites an anonymous route to raise concerns without threat of recourse.

For every asset, our management teams are required to comply with the Lekela Group Code of Conduct and Social Policy. In 2019 H2 we intend on implementing additional training for key personnel in our organisation and at our assets to increase capacity for identifying and managing modern slavery risks.

During 2019 we will continue to monitor our supply chain and our portfolio with a view to identifying and managing any heightened risk of modern slavery.

F.     Training on modern slavery and trafficking

We will also keep under review what ongoing training is appropriate for our staff, particularly those who manage key supplier relationships, those who have the highest visibility over workers employed and contracted at our assets, and those working with local communities. The first stage of this was undertaken in 2018 in Ghana with the delivery of IFC Performance Standards training to Lekela’s Community Liaison Officers. 

Approval 

This statement was approved by the management board of Lekela Power B.V. on 28 March 2019.

Chris Antonopoulos