Due Diligence Assessment for Silex Gas Norway (2024)
Silex Gas Norway AS (Silex) is one of the five owners of Gassled JV, which is Norway’s gas infrastructure operated by Gassco. Silex is committed to upholding the principles of the Norwegian Transparency Act. This act promotes businesses’ respect for fundamental human rights and decent working conditions in the production of goods and provision of services. It also ensures the public is informed about how businesses address negative impacts on fundamental human rights and decent working conditions.
In the following, Silex will account for the work being done with due diligence assessments, in accordance with the requirements of § 5 of the Transparency Act.
Responsibility and Governance:
The CEO of Silex has the overall responsibility for managing actual and potential negative consequences for fundamental human rights and decent working conditions and ensuring compliance with the Act and reporting any findings to the Board of Directors. The responsibility for sustainability management is delegated to the Technical and HSEQ Director, who will ensure that due diligence assessments are carried out, as well as providing assistance in managing the actual and potential negative consequences of the company’s operations.
Anchoring in Internal Guidelines and Procedures:
Our work with human rights and decent working conditions is thoroughly anchored in our internal guidelines and routines. This commitment is outlined in the company’s policy document «Management of Corporate Social Responsibility,» which aligns with the international standard ISO 26000 for social responsibility.
In our internal guidelines, we have reinforced the commitment to human rights and decent work. We prioritize risks associated with labor rights violations and environmental impacts. Our criteria for prioritizing these risks include the severity of potential impacts and the likelihood of their occurrence.
Human Rights Approach:
Silex is an owner of the Gassled joint venture, which has assets in operation in Norway, UK, Belgium, France and Germany.
Gassled has an operator (Gassco), Technical Service Providers (TSPs), suppliers and multiple sub-suppliers working on the assets and in the supply chains. All these companies deliver products and services to Gassled, and many workers are involved in Silex’s human rights scope.
Silex’s vision is to be acknowledged as the leading infrastructure owner with a high focus on safety, reliability, cost efficiency and zero carbon emission. Our compliance with our Code of Conduct and Human rights is a key enabler in this endeavor.
Risk management is an integrated part of all our business processes and decisions. Silex evaluates risk to people in asset operations and supply chain activities as part of the monitoring program. Risk to people’s human rights is reported to the Board of Directors as part of the internal risk reporting process. The Technical and HSEQ Director is tasked with the oversight of our human right’s due diligence processes.
Risk Areas and Prioritization:
The human rights due diligence assessment, which aligns with the specific due diligence carried out by Gassco, has not revealed any «negative impact» to date. We remain vigilant in updating our risk assessments and will provide transparency regarding any significant risks identified and the measures taken to address them.
Silex has implemented a series of preventative measures to mitigate the negative impacts of our operations.
As an owner of Gassled, Silex is subject to a paramount duty to oversee all parties performing work on behalf of the company, particularly the Operator Gassco but also the TSP’s companies. This duty includes ensuring that the Operator complies with the applicable regulations and interact with the TSP companies for the follow-up of suppliers and compliance with the requirements of the Transparency Act in accordance with Offshore Norway’s guideline no. 148 for the Transparency Act, where it is assumed that the operator’s role applies correspondingly to the TSPs. Silex oversees this through several well established arenas and through an annual monitoring program which outline Silex quality assurance activities towards the Operator.
Silex Gas Norway is amongst other reviewing and approving procurement strategy and procurements according to agreed decision and approval matrix between Gassco and the Gassled owners. Requirements on suppliers through ethical guidelines and standards related to health, safety, and the environment (HSE) is part of the strategy.
- During pre-qualification, a supplier’s procedures for upholding HSE, decent working conditions, and human rights are mapped out. Investigations are conducted to determine if there have been any incidents of corruption, child labor, human rights violations, breaches of workers’ union rights, etc. This information is collected from the suppliers themselves, as well as through internet searches and the use of external resources. The extent of these investigations is based on a risk-based approach. Identified issues may impact the supplier’s participation in the tendering process.
- The Operator of our asset imposes requirements on its suppliers through ethical guidelines that cover, among other things, decent working conditions and the human rights of employees. These guidelines include provisions for follow-up and sanctions.
- It is Silex Gas Norway’s objective to ensure that our business activities do not harm people, the environment, or material assets. We require that our business partners adhere to the same objectives, as specified in Silex’ governing policy ‘Code of Conduct’.
Following the due diligence assessments performed in accordance with OECD guidelines, Silex has requested the Operator to map and assess the actual and potential negative consequences of our operations on fundamental human rights, decent working conditions, and the environment. These assessments have also addressed issues related to corruption.
As part of this effort, the Operator has mapped the first tier of our supply chain with the assistance of an external provider. This provider has, among other actions, conducted searches in various databases (Orbis, RDC, and DowJones Riskcenter Financial Crime) and investigated whether any of the suppliers actually or potentially violate human rights and standards for decent working conditions, breach sanction rules, engage in corruption, have questionable HSE conditions, or are involved in criminal cases, etc. In addition, ongoing mapping of Gassled’s project portfolio and operational tasks is carried out, including a risk assessment based on the complexity and scope of the work involved.
The results of the mapping have not revealed any actual negative consequences as a result of Silex’ activities, and the risk of negative consequences related to our operations and supply chain is considered small.
Measures and Contribution to Risk Reduction:
We strive for continuous improvement in our practices and are committed to adhering to ethical guidelines, HSE standards, and respect for human rights in all our operations.
In 2022, certain priority areas for improvement were identified, which the company has worked on in 2023, and these areas will also be carried forward into 2024. The areas of improvement are:
- Quality assure the operator’s and the TSPs’ tendering processes to secure that the supplier has established its own policy and guidelines for Corporate Social Responsibility, and whether it has been involved in incidents related to corruption, child labour or breaches of human rights or the rights of employees to unionise. Information on such matters will be quality assured through the Operators’ work processes. Possible conditions uncovered will directly impact in qualifying the supplier for participation in the tendering process.
Throughout 2023, the Operator has established and implemented new procurement processes to set clearer qualification requirements for suppliers regarding human rights and decent work conditions. These processes will be further improved and developed in 2024. A professional forum for procurement across the Gassled assets in the different countries (Procurement Collaboration Arena) was established in 2023. The forum, which consists of procurement personnel from Operator’s headquarter in Bygnes and all the operating terminals on the continent and UK, will work on standardizing work processes and continuous improvements in 2024. The Operator has also joined «HURI» Offshore Qualific, which is a global audit service related to human rights.
Further, Gassco has in 2023 started the work to develop checklists regarding human rights and decent working conditions for supplier follow-up in project execution. In addition, it has been required that suppliers are registered in Magnet JQS and have undergone verification there before signing. Magnet JQS is a pre-qualification tool facilitated by Offshore Qualific on behalf of the operator companies on the Norwegian continental shelf. A dedicated Company Representative (SR) has been appointed to follow up on the framework agreements. The SR ensures that suppliers adhere to human rights and decent working conditions.
In 2023, a work process related to the follow-up and updating of agreements and contracts for existing suppliers was established. At the same time, the existing portfolio of agreements was reviewed. This resulted in new agreements being concluded in accordance with the Supply Regulations. In 2024, the work to replace existing agreements will continue.
Gassco is subject to the Supply Regulations, and from 1 January 2024, a requirement was introduced that Gassco must emphasize climate and environmental considerations by at least 30 percent in project procurement. Silex is as previously mentioned reviewing and approving the procurements strategy above a value according to the agreement between Gassled and Gassco and will throughout 2024 secure that considerations are performed and adhered to by the Operator.
2. Increase the focus on working environment and risk for work related injury at the processing plants. Information on such matters is obtained from the suppliers themselves and monitored through key performance indicators. Each work-related incident will be followed up, and mitigation actions identified and implemented.
Silex spent significant time on following up work related to incidents in 2023, and that mitigation actions to prevent reoccurrence are targeted and implemented. Further, Silex is reviewing the Operator’s reporting process and classification. This will be further followed up in 2024 together with Operators compliance towards ‘Leasing of workers Act’ (‘Innleieloven’) which entered into force 1 April 2023.
Annual Update and Approval:
The human rights due diligence process will be reviewed and updated annually, with the next approval by the Board of Directors due by 31 March 2025.
Contact for Inquiries:
Questions regarding this due diligence assessment or Silex Gas Norway’s human rights policies can be directed to the Technical and HSEQ Director, by e-mail or phone.
Document Signatory:
Kurt Georgsen, CEO
Date: 23/02/2024