STATEMENT UNDER S.54 OF THE MODERN SLAVERY ACT 2015

1.    Introduction 

Cubico Sustainable Investments Holdings Limited (“CSIHL”) wholly owns Cubico Sustainable Investments Limited (“CSIL”) and they are referred to collectively hereafter as “Cubico”.  This is a statement made by Cubico in accordance with section 54 of the Modern Slavery Act 2015 and covers the financial year from 1 January 2017 to 31 December 2017. 

2.    Background

Cubico is one of the world’s leaders in providing renewable energy, the fastest-growth energy source, across the Americas and Europe. Our portfolio includes onshore wind, solar photovoltaic and solar thermal assets. 

We are fully committed to playing a significant role in the transition towards a clean energy world optimizing the use of natural resources while respecting the environment and the social development of the communities in which we are present.  

Our organisation is split broadly between corporate activities and operational activities.  

Corporate Activities 

Our corporate activities are performed at the following offices: London (where we are headquartered), Stamford (USA), Madrid (Spain), Milan (Italy), Lyon (France), Melbourne (Australia), Mexico City (Mexico) and São Paulo (Brazil).  Employees in these offices undertake skilled activities including project origination and execution and corporate services (finance, tax, legal, HR).  We also have an office in Fortaleza (Brazil) where both corporate activities (providing legal, technical and finance/accounting support to the Brazilian projects) and operational activities (providing day-to-day operational support to the Brazilian projects) are undertaken.  

Our corporate activities have only an occasional dependence on temporary workers and contractors and the nature of that work is mainly of a professional service nature. 

Operational Activities 

Our operational activities constitute the building and management of our renewable energy assets ‘on the ground’. We predominantly outsource the construction of new assets to contractor(s) experienced in these areas. Once our assets are in service, we predominantly outsource the operation and maintenance work. Our asset management services, which include providing support and resources to the relevant project companies to enable effective supervision and monitoring of the assets and oversight of contractors, and to provide certain corporate, legal and other back-office services are partially outsourced. 

All outsourced construction, operation and maintenance and asset management activities are managed through contracts with the various third parties in commercially agreed forms and are generally on a medium or long term basis.  

3.     Slavery and trafficking policies 

Operating to high ethical standards is central to our organisation. Both our General Code of Conduct and our Anti-bribery and Corruption Policy make clear that good corporate governance and the professional ethics of our employees are the pillars upon which Cubico’s activity is based. 

We welcome the increased focus brought to bear by the United Kingdom’s Modern Slavery Act 2015 and have tasked the Legal and Compliance team with implementing controls to address the risks of modern slavery occurring in our operations and supply chains. 

During 2017 our organisation furthered its commitment to combating slavery and trafficking, updating policies to make them more explicit about modern slavery as follows: 

  • ·                we added specific reference in our General Code of Conduct requiring our employees to ensure that neither Cubico, nor the third parties it engages, are complicit or involved (directly or indirectly) in any practice which amounts to modern slavery; 
  • ·                we revised our Business Partner Vetting Guidelines to place increased focus on the need to assess whether suppliers, joint venture partners, sellers, developers, acquisition targets and other stakeholders with whom we engage (together referred to as “Third Parties”) maintain appropriate standards with respect to the prevention of modern slavery in their own operations and supply chains; and 
  • ·                we increased the focus in our Procurement Policy on the importance of ensuring that our business is truly sustainable and does not engage in or benefit from (directly or indirectly through our supply chain) modern slavery and the need for those engaged in procurement to be vigilant to the risks. We also provided those engaged in procurement with provisions to be included in contracts with Third Parties which give contractual force to our zero tolerance of modern slavery.

At certain key points in our relationships with Third Parties that are categorised as medium or high risk, we commission KYC Reports which incorporate an assessment of the risks of modern slavery. 

During 2017 we have also introduced a Supplier Code of Conduct which sets out the standards we expect from all those who work for and with us with respect to combating modern slavery, anti-bribery and corruption and health and safety standards. All medium and high risk Third Parties are now contractually required to adhere to this policy. 

4.    Risk assessment 

Corporate Activities

We have assessed that, given our internal operating standards, the risk of modern slavery occurring in our corporate activities is relatively low.  However, we remain vigilant to the risks particularly with respect to the limited low skilled outsourced labour that we engage at our offices (e.g. cleaning services). 

Operational Activities

We have also assessed the risks of modern slavery occurring in our operational activities and identified key areas of focus to be: 

  • ·                  Our high risk jurisdictions: Cubico has a global footprint and operates in a number of jurisdictions. Some of those jurisdiction pose a higher risk than others and are monitored more closely as a result.
  • ·                  The high levels of outsourcing of operational activities (as described above): Whilst Cubico predominantly contracts with large, well established suppliers we acknowledge that even they do not always have their own directly employed local work forces in the remote locations of some of our projects.
  • ·                  The nature of the work undertaken, including:

o        construction of assets and the infrastructure that supports them;

o        outsourcing of operation and management activities associated with finished assets; and

o        outsourcing of low skilled maintenance work at assets, particularly in higher risk jurisdictions.

Slavery and trafficking risks are already taken into account in the assessments made when Cubico is deciding whether to acquire or develop assets in a new country.  The Legal and Compliance team have a central role in advising the organisation on those risks. 

5.       Due diligence and actions to address risks

Our procurement practices and controls (which include insisting on a contractual right to audit a supplier where appropriate) have mitigated the risks of modern slavery in our organisation and supply chains.  However, the increased focus that we have placed on modern slavery (as described above), particularly with respect to our procurement practices, will further enhance our risk management.  

At the start of 2018 we appointed a Global Health and Safety Manager who regularly undertakes site visits. Modern slavery falls within his remit and his ability to assess our risks in this area on site therefore enhances our risk management practices and controls. 

6.       Our proposals for 2018 and beyond

We are committed to combating the risks of modern slavery occurring within our organisation and supply chains.  Cubico’s Internal Auditor and Procurement Manager alongside the Legal and Compliance team,  have specific remit to further address the risks and will lead initiatives to: 

  • ·                continue mapping of our supply chain so that additional initiatives can be developed in the areas of highest risk;
  • ·                finalise and put into practice our slavery and trafficking questionnaires to develop our risk analysis and selection of suppliers;
  • ·                continue to carry out due diligence and audits on suppliers and our own assets which will continue to have an increased focus on modern slavery risks;
  • ·                enforce the requirements of the Supplier Code of Conduct which we introduced during the course of 2017;
  • ·                liaise directly with our Global Health and Safety Manager on issues/risks he identifies and make recommendations to Cubico’s Legal and Compliance team; and

Modern slavery will continue to be a standing agenda point in respect of all quarterly risk management meetings which are attended by all heads of country. 

As part of our ongoing commitment to monitoring the risk of modern slavery in our organisation and supply chain, during 2018 we have undertaken a risk assessment through which we have gathered feedback from 22 stakeholders in Brazil, Italy, Mexico, Spain and Italy in the following areas of the business: 

  • origination and execution;
  • construction and operations;
  • legal;
  • finance; and
  • the country office. 

The results of this assessment will be key to shaping our proposals for 2018 and beyond. 

7.      Training

As noted in our 2016 statement we acknowledge that our employees are our ‘eyes and ears’ when it comes to vigilance on the risks of modern slavery.  We have therefore invested in an e-learning modern slavery module which is being rolled out in 2018. 

This statement is made by Cubico Sustainable Investments Holdings Limited for itself and on behalf of Cubico Sustainable Investments Limited and the board of directors of both companies have approved it and will update it annually.