Lekela Power B.V. – Modern Slavery Statement 2021

This is Lekela Power’s fourth Modern Slavery Statement which has been prepared to outline the steps taken during the year ending 31 December 2021, to prevent modern slavery and human trafficking in our supply chain and operations in line with the Modern Slavery Act 2015 (the Act).

In our aim to develop a sustainable and equitable future for all through renewable energy projects, Lekela condemns all forms of slavery or human trafficking. We commit to ensuring that we do not work with any party who we have reasonable grounds to suspect is engaged in or has supply chains which involve slavery or human trafficking.

A.     Structure & Supply Chain

Lekela builds and operates renewable energy generation platforms across Africa and as such, we recognise the increased risk of modern slavery and human trafficking in the construction sector and some of the geographical areas where we operate, 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 within Lekela Power and its subsidiaries – including implementing auditing and verification, providing training to all staff, and following up on non-conformities to uphold internal accountability, and conform to international human rights frameworks.

Delivering renewable power projects typically involves three main phases: development, construction and operations. We have determined that we are most exposed to the potential risk of modern slavery during the construction phase of our projects. During this phase the risk is twofold. (1) We procure sophisticated technology (such as wind turbines) from third parties with their own complex supply chains and (2) we engage primary contractors to construct our generation sites who will in turn often sub-contract with local service providers.

In the first case, the Tier 1 energy technology suppliers that we work with are substantial enough to meet the threshold under the Modern Slavery Act (2015) and are therefore required to independently disclose how they manage modern slavery risks in their operations and supply chains. 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 the second case where we engage with Tier 1 and Tier 2 suppliers, we believe that it is imperative to maintain effective oversight of the entire construction process to ensure that the expected standards are met, especially in regions where regulation of labour and working conditions can fall short of international standards.

As Lekela has developed, our business has become more weighted towards owning and managing operational assets. For operational assets both the workforce and direct supply chain reduces in size, which reduces the risk of unethical employment practices commensurately.

Section E below further sets out how we mitigate our risks during construction and how we manage inherent risk during operations.

B.      Policies in relation to slavery and 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, our fifth and most recent issue covering our activities in the financial year ending December 31^st, 2021.  In this, we demonstrate the steps we are taking to manage environmental and social risks effectively - including that of slavery, forced labour and human trafficking - and to act as a sustainable business.

In addition to the Code, which sets out our approach to ethical business dealings, Lekela also has a Social Policy that establishes how we treat our workforce and communities, an anti-bribery and corruption policy which highlights potential indicators of modern slavery – such as cash payments or unusual relationships with authorities – and a due diligence mechanism for risk assessment and follow-up of any non-compliances identified. We commit to upholding the standards as set by the UN Global Compact Principles on Human Rights & Labour, the UN Guiding Principles on Business & Human Rights, as well as the frameworks set by the ILO in relation to identifying and preventing forced labour, as specified in the ILO Forced Labour Convention (1930).

We commit to granting all employees and contracted workforce: Freedom of movement, Freedom to terminate their employment, Freedom of association and to join unions or organised working groups, Freedom from threat of violence, harassment or intimidation on any grounds, Access to remedy, compensation and justice for any infraction of their rights.

We prohibit: Compulsory overtime, The use of child labour, Discrimination on any grounds, Confiscation of worker’s original identification documents.

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

• • to treat all Lekela employees and require all engaged businesses to treat their own employees fairly, and 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 to only 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 supply chain.

The Lekela Social Policy is reviewed annually to maintain alignment with legislation and best practice. We also implement Labour Management Plans as part of our workforce due diligence to assist in monitoring labour conditions and provide a formal and confidential structure for reporting grievances.

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

Based on periodic risk assessments, our due diligence processes in relation to slavery and human trafficking risk are reviewed regularly, with any priority issues highlighted to Lekela’s management team and board through the ESG Committee.

While Lekela has good supplier due diligence processes, it does not yet currently have a formally documented procurement policy describing this. In recognition of this we aim to put in place a risk assessment process that will flag conditions to undertake additional supplier reviews at the bid-stage of contracts. In the meantime, any Tier 1 energy technology supplier that we appoint completes the Slavery and Trafficking Risk Template (STRT) as part of the due diligence process. This open-source template is designed to help companies assess their supply-chains by highlighting areas of concern and where improvements can be made to better manage modern slavery and human trafficking risks.

Additionally, the STRT is applied in respect of all Tier 1 suppliers in two phases: an initial assessment, followed by an enhanced due diligence review in cases where the completed STRT demonstrates a high-risk rating. Additionally, as part of the risk assessment process, Lekela assesses 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 have implemented, Lekela 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. In 2020 we began to cover actions and process relating to Modern Slavery in our internal reporting. This ensures that our annual disclosures are supported with the appropriate attention of internal stakeholders.

Regarding our supply chain, this year we identified the following potential risks:

• • Forced labour and exploitation of migrant workers in construction
  • Forced, child and prison labour in the manufacturing sector

To mitigate these, we engage our suppliers and contractors to ensure the appropriate safeguards and reporting mechanisms are in place to take immediate action against any violations.

E.      Goals and effective actions 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 at or supply 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 to their appointed sub-contractors. Construction agreements are executed to ensure that our sites are fully compliant with the ILO 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. Awareness sessions on modern slavery and human trafficking are also undertaken with Lekela staff whose functions cover labour, community and social workstreams.

Next Steps: During 2022 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

Across our supply chain and within our organisation, we recognise the importance of building awareness on modern slavery and its indicators. We keep under review appropriate ongoing training 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.

At the end of 2021 we piloted an office-wide training programme for our London HQ team in identifying modern slavery and human trafficking risks. This cohort included the whole business development department, HR, ESG managers, finance and the legal team all based in London. To date, we have trained over 20% of Lekela staff and due to the success of the training programme this year we will adapt the content and aim to roll it out across all operational sites by the end of 2022.

Approval

This statement was approved by the management board of Lekela Power B.V. on 22 August 2022.

Chris Antonopoulos