Modern Slavery Act - Drax
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Introduction

“We believe in doing the right thing”

In this, our fourth Modern Slavery Statement, we outline the progress we’ve made in 2019 and our planned improvements for 2020.

We’re making this Statement for the financial year ending December 2019 and according to the requirements of section 54 part 6 of the Modern Slavery Act 2015.

This Statement applies to all companies within the Drax Group (“Drax”) that are required to publish a Statement, as listed in the ‘statement approval’ section.

For further information on Drax and our earlier Modern Slavery Statements, please see our websites:

Organisational structure

Drax operates an integrated value chain across three core areas of activity in the US and the UK:

  • Biomass production
  • Power generation and system support services
  • Business to Business (B2B) energy supply and management solutions Safety, sustainability and operational excellence underpin all our activities.

Our UK and US biomass production assets include:

AssetDescription
Daldowie Fuel Plant, UKDaldowie Fuel Plant processes sludge from a wastewater treatment plant and converts it into dry, low-odour fuel pellets. Daldowie can convert 1,000 tonnes of sludge into 23.5 tonnes of biomass pellets for use as a sustainable fuel source. This safely disposes large volumes of sludge that might otherwise end up in landfill.
Drax Biomass, USDrax Biomass International manufactures compressed wood pellets produced from sustainably managed working forests (in Louisiana, Mississippi and Arkansas) that supply fuel to Drax Power Station. Headquartered in Monroe, Louisiana, the company owns and operates three wood pellet manufacturing plants: Amite BioEnergy in Gloster, Mississippi; Morehouse BioEnergy near Bastrop, Louisiana; and LaSalle BioEnergy, near Urania, Louisiana. A port facility in Baton Rouge, Louisiana manages the shipping of the compressed wood pellets.

Our UK power generation assets include:

AssetDescription
Drax Power StationDrax Power Station is the biggest renewable generator in the UK. It supplies 11% of the UK’s renewable power and generates enough power to keep the lights on in more than 6 million homes.
Cruachan Power StationCruachan Power Station is one of only four pumped hydro storage stations in the UK and has a capacity of 440 MW – enough to power more than 90,000 homes.
Hydro-electric power stationsLanark consists of two hydropower stations – at Bonnington and at Stonebyres – and has a total capacity of 17 MW. Galloway comprises six power stations (Drumjohn, Kendoon, Carsfad, Earlstoun, Glenlee and Tongland), eight dams and a series of tunnels, aqueducts and pipelines that help to control the flow of the water - and has a total capacity of 109 MW.
Combined cycle gas turbines (“CCGTs”)Drax has four CCGTs - Damhead Creek (805 MW), Rye House (715 MW), Shoreham (420 MW) and Blackburn Mill (60 MW).

Our UK energy supply businesses include:

AssetDescription
Haven PowerHaven Power supplies and manages electricity for large industrial and commercial customers, as well as smaller businesses. Haven Power supplies renewable electricity as standard, and at no extra cost to customers.
Opus EnergyOpus Energy supplies electricity and gas to businesses and has partnerships with over 2,000 independent UK renewable energy generators. This provides a market for power from renewable energy sources such as wind, solar, hydro and anaerobic digestion.

Our modern slavery programme

 Governance

Our Modern Slavery Working Group (MSWG) is responsible for the development and delivery of our modern slavery programme.

Our Ethics and Business Conduct Committee (EBCC), a sub-committee of our Executive Committee, oversees our modern slavery programme.

The MSWG provides a quarterly report on its activity to EBCC for review.

The EBCC provides an annual report on its decisions and activity to the company’s Audit Committee, which comprises executive and non-executive directors.

The EBCC:

  • Has approved a protocol, based on guidance from the Home Office, that we must follow if we discover modern slavery in our business or supply chain
  • Is responsible for making sure that Drax takes steps to investigate and remediate the risk of modern slavery, both within our own business and our supply chainNo cases of modern slavery have been escalated to the EBCC to date. We continue to work with our employees and suppliers to raise awareness and promote transparency in our supply chains.

Progress in 2019:

  • The company restructured the MSWG to ensure inclusion of representatives from across our business (i.e. Sustainable Business; Business Ethics; Procurement; Fuel Procurement; HR; Biomass Sustainability Compliance; and Freight and Logistics) and to improve the effectiveness and timeliness of delivering actions
  • The MSWG developed a 3-year rolling continual improvement programme, with an accountable lead assigned to each workstream, to drive action and provide progress updates at each bi- monthly meeting
  • Our modern slavery programme was subject to internal audit and achieved a positive outcome

“The MSWG developed a 3-year rolling continual improvement programme, with an accountable lead assigned to each workstream.”

In 2020, we plan to:

  • Strengthen the EBCC agreed protocol by adding a detailed remediation plan
  • Assess the effectiveness of our modern slavery training through employee focus groups

 Risk Assessment

“We’re committed to identifying and addressing modern slavery that could be connected to both our business and supply chain.”

Due to the controls and practices we’ve adopted (as described in the ‘employment practices’ section), we believe the risk of modern slavery in our own business is very low.

Because our supply chain is varied and complex, the risk of modern slavery is higher.

We have over 2,500 suppliers across our procurement activities. We engage with them in many different industries, including forestry, mining, manufacturing, freight and logistics, engineering, construction, IT and site services.

The Global Slavery Index, which is built into our due diligence platform, continues to contribute to the risk assessment of relevant potential suppliers. If the assessment of an organisation regarding modern slavery is medium or higher risk, we issue a supplementary survey for completion. The survey includes questions on underage workers, employee rights and freedoms, use of foreign and migrant workers, due diligence processes, policies and procedures.

From a modern slavery perspective, we currently consider our supply chains involving Belarus, Russia, Ukraine, India (sub tier 1) and China (sub tier 1) to be higher risk.

Supply chain mapping

The following graphics provide statistics on our 2019 fuel supply procurement activity. Of those countries listed, we consider Belarus, Russia and Ukraine higher risk for modern slavery and carry out additional due diligence on these supply chains.

2019 fuel procurement by country:



Non-fuel supply:

The following graphic provides statistics on our 2019 non-fuel procurement activity, by percentage of spend and geography, on our tier 1 supply. 100% of our spend is with tier 1 suppliers based in countries that are lower risk for modern slavery.

We have good transparency of our fuel supply chains. It’s more challenging to map the supply chain for non-fuel suppliers and their sub-contractors (e.g. those involved in the production of smart meters or replacement parts for our generating assets). In 2019, our Procurement team commenced a project to map these supply chains.

In the meantime, our policy is to carry out due diligence on all suppliers prior to contracting. We also endeavour to include obligations within our agreements with suppliers for them to cascade our standards to sub-contractors.

Progress in 2019:

  • Completed our annual risk assessment, in line with Home Office guidance, and reported on it to the EBCC
  • Updated our Group-wide modern slavery risk register, which was subject – like the risk assessment – to review by the EBCC
  • Issued the modern slavery survey to appropriate third parties and assessed responses, following up as required
  • Commenced a project to map our higher risk non-fuel supply chains, including our smart meter manufacturing supply chains
  • Progressed the consolidation of our approved supplier list across our power generation assets

In 2020, we plan to:

  • Progress the non-fuel supply chain mapping project, including the selection and adoption of a new tool to assist the mapping process, as necessary
  • Reflect any updates to the Global Slavery Index in our due diligence platform, as required

 Due Diligence

“We’re committed to conducting business with honesty and integrity, and in accordance with applicable laws and regulations.”

Country approval

Our due diligence system automatically calculates the geographic risk assessment of potential third parties, based on several system-hosted indices. In relation to modern slavery, these include the Global Slavery Index.

The EBCC must approve conducting business in higher risk countries before it happens. The EBCC can consider blanket country approvals or specific contract approvals, depending on the consolidated commercial interest in the underlying country and the level of identified risk associated with the territory.

Supplier approval

Following country approval, potential suppliers residing in those jurisdictions can be put forward for due diligence.

We carry out due diligence checks on suppliers and, where appropriate, their associated persons and supply chain. Should we identify concerns during the process, we may procure enhanced due diligence from a specialist service provider before escalation to the EBCC. The EBCC will decide whether to appoint the supplier.

As reported in our 2018 statement, we implemented a new due diligence platform which all our business units use, both in the UK and the US.

We use the platform to perform both the initial due diligence and the continuous monitoring of suppliers. Designated employees at the local business units review the monitoring alerts and, if appropriate, escalate to the Group Business Ethics team.

Biomass supplier audits

To supplement our existing due diligence procedures for low volume, non-woody biomass, we engaged a third-party audit company in 2019 to complete two audits. The audit scope includes human rights and covers the risks identified at a regional level. Suppliers seeking approval and appointment need to address all findings.

Modern slavery instances

In 2019, our due diligence processes identified no instances of modern slavery.

Progress in 2019:

  • Improved our third-party due diligence process by building a request form into Drax’s self-service portal, to help employees trigger and then track the completion of due diligence. Various internal communications and our mandatory learning programme supported the deployment of the functionality
  • Strengthened the modern slavery survey hosted within our due diligence platform
  • Agreed with the EBCC a due diligence approach relating to trial volumes of potential new fuels
  • Completed audits – including human rights content – on two sunflower mills in Russia
  • Identified the manufacture of our smart meters as a potential risk area and reviewed an independent audit report conducted at the manufacturing facilities in China in 2019. Though this audit focused on production and quality management processes, it provided evidence of safe working conditions. We intend to include further monitoring in the non-fuel supply chain mapping project.

In 2020, we plan to:

  • Evaluate the appropriateness of our approach to trial fuel volumes, including benchmarking with another UN Global Compact Modern Slavery Working Group member
  • Strengthen the human rights content of our third-party fuel supplier audits

 Policies and Procedures

“We expect our people to work in accordance with our business values and principles. Our HR policies and procedures ensure our people have the appropriate rights to work and are employed in accordance with applicable legislation.”

We provide online access to our “Doing the right thing” handbook. This mandatory, principles-based handbook forms part of our business ethics documentation framework and sets out our values and the behaviours we expect from our people. The handbook is supplemented by policies, procedures and guidance that provide further information on the obligations applicable to Drax and how we will comply with them. All our written materials are readily available to employees via our Group Business Ethics SharePoint.

We have a Corporate Crime policy in place that provides specific detail in respect of modern slavery, in addition to our Due Diligence guide.

Should an employee fail to meet the standards expected by the business, we’ll fully investigate the matter in line with the relevant terms of employment and disciplinary procedures. If necessary, we’ll take disciplinary action.

Progress in 2019:

  • Drafted Employee and Supplier Codes of Conduct

–  Noting that the Employee Code of Conduct will incorporate the current “Doing the right thing” handbook

–  Engaged a third-party to work with us to create interactive versions of the Codes

–  Embedded eLearning will also feature in the Codes, helping us to reach out to more suppliers on the topic of modern slavery

  • Updated our Corporate Crime policy (including modern slavery content)

–  The revised document was subject to external legal review and Board approval

–  The policy was rolled out as a mandatory read to all employees, temporary workers and relevant consultants via our Learning Management System (c. 3,000 people)

  • Integrated our new generating assets into our Business Ethics programmes and documentation framework

In 2020, we plan to:

  • Seek Board approval for the new Employee Code of Conduct
  • Publish the Employee Code of Conduct
  • Separate the content of our Corporate Crime policy into its constituent parts (such as a Human Rights policy, in relation to Modern Slavery)

 Employment Practices

“We do not tolerate any form of human trafficking, forced or bonded labour or the exploitation of children or vulnerable persons in our own business or our supply chains. We’re committed to tackling this abhorrent crime.”

We strive to be an inclusive workplace and value diversity, with policies and practices in place to encourage this. We currently employ over 2,900 people across the UK and the US.

Our HR strategy centres around valuing people and focusing on talent, raising business performance, building capability through our people, and developing a high performing organisation. Our employees are at the heart of our success and are key enablers of our business strategy and our ethical culture.

A safe and healthy workplace is paramount to our business and so our employees benefit from a range of policies that support them. These include policies designed to enable wellbeing, to accommodate different work and lifestyle preferences, to encourage employees to raise grievances or concerns, and to support a diverse, inclusive and ethical workplace.

Drax is committed to maintaining high standards in its employment practices and to giving colleagues employment security. A high proportion of our employees are on permanent contracts.

Although the risk of modern slavery taking place within our business is much lower than through our supply chain, our recruitment procedures nevertheless incorporate several steps designed to eliminate such risks. These include:

  • Carrying out “right to work” checks and ensuring that the agencies we use to supply temporary workers carry out equivalent checks
  • Carrying out pre-employment checks to verify the identity of prospective employees and to ensure they are over 16 years of age
  • Completing disclosure and barring service checks for specific roles to enable us to make safer recruitment decisions
  • Making sure that an employment contract is in place before the commencement of employment at Drax

We respect our employees’ rights in areas such as freedom of association and collective bargaining. Overall, 24% of the workforce across Drax is covered by a collective bargaining agreement. For the rest of the workforce, employee forums are in place, enabling a two-way dialogue between the senior leadership team and employees. We maintain healthy relationships with our trade union partners and attend monthly meetings to discuss potential issues (e.g. employment terms and conditions, learning and development, business change) that may affect members. We also undertake annual negotiations on pay and conditions of employment.

We communicate with employees both formally and informally, including through posters, leaflets, our intranet, a quarterly newsletter, and open forum meetings involving members of the senior leadership team. Each week, the CEO takes questions from across Drax on a wide range of topics and we share his responses with the whole workforce.

Progress in 2019:

  • Expanded our approach to wellbeing
  • Harmonised the level of core benefit cover across Drax i.e. healthcare
  • Rolled out unconscious bias training for all managers
  • Introduced ways to improve engagement and communication with employees

In 2020, we plan to:

  • Further expand our approach to physical and mental health with the introduction of a Wellbeing programme
  • Continue to embed our communication and engagement channels with employees

“We communicate with employees both formally and informally, including through posters, leaflets, our intranet, a quarterly newsletter, and open forum meetings involving members of the senior leadership team.”


 Supplier Contracts

We’ve incorporated provisions on human rights and modern slavery into our Corporate Responsibility Statement (CRS), which we seek to include within appropriate agreements.

The CRS expects suppliers to have the relevant policies and procedures in place. These should aim to safeguard against direct or indirect engagement in activities that would constitute an offence under the Modern Slavery Act 2015.

Progress in 2019:

  • Drafted improved guidance for suppliers, to be incorporated into the new Supplier Code of Conduct

In 2020, we plan to:

  • Seek approval from the Board for the Supplier Code of Conduct
  • Publish the Supplier Code of Conduct

 Awareness and Training

In 2019, we built on the modern slavery awareness and training that we’d previously provided. Our key deliverables are set out below.

Progress in 2019:

  • Issued our Corporate Crime policy (including policy level detail on modern slavery) as a mandatory read to all colleagues, temporary workers and relevant consultants (c. 3,000 people) via our Learning Management System
  • Deployed, as mandatory learning, a third-party modern slavery specific eLearning package to all managers and ‘at higher risk’ teams (c. 1,000 people) via our Learning Management System
  • Provided a modern slavery focused session to Procurement colleagues from across Drax.

– The session included a refresher on the background to the law, compliance requirements, our programme, our ethical concerns and a discussion on how to improve the mapping of our non-fuel procurement supply chains

  • Continued our Biomass Sustainability Compliance team’s programme to promote modern slavery awareness when conducting biomass supplier site visits and to reinforce our ethical requirements
  • Continued to issue our “Doing the right thing” eLearning videos (including a specific module on modern slavery and due diligence) to all new starters, as part of our induction programme

In 2020, we plan to:

  • Assess the effectiveness of our modern slavery training through employee focus groups and feed this insight into the development of future training materials
  • Develop and deploy our own in-house refresher eLearning material
  • Deploy the Employee Code of Conduct (including modern slavery content) as a mandatory read to all employees, temporary workers and relevant consultants, (including short videos on modern slavery and other topics) and embed it within our new starter induction process.
  • Deploy the Supplier Code of Conduct (including short videos on modern slavery and other topics)

 “Speak up” Culture

We encourage those working on behalf of Drax to challenge unethical behaviour and promote a speak up culture. Colleagues can raise concerns with their line managers, the Group Business Ethics team, or a member of the EBCC. Alternatively, an independently- operated and confidential speak up hotline and web portal is available. This enables employees to raise concerns anonymously, should they wish. The service forwards any issues raised to the Group Business Ethics team, who (in accordance with confidentiality preferences) acknowledge, triage and organise investigation of the matter. The Group Business Ethics team then reports the issue to the EBCC, the Audit Committee and, if required, the relevant authorities.

Drax will not seek to punish (or otherwise retaliate against) anyone expressing genuine concern.

No concerns relating to modern slavery were raised through our reporting processes in 2019.

Progress in 2019:

  • We selected a new third-party speak up service that all employees and suppliers can use
  • Appointed a Whistleblowing Officer to oversee speak up activities
  • Commenced quarterly reporting to the EBCC on speak up matters

In 2020, we plan to:

  • Implement and communicate our new third-party speak up service
  • Review and update our Whistleblowing policy, for approval by the Board
  • Report directly to the Board, instead of the Audit Committee, on speak up matters
  • Create and deploy a dedicated Whistleblowing programme, including an annual risk assessment and risk register
  • Create and deploy non-retaliation guidance
  • Publish our Employee and Supplier Codes of Conduct (that reiterate our speak up culture, reporting options and details)

Working together

“We seek to work in partnership with others to strengthen our learning and approach”

Home Office consultation

In 2019, we responded to the Home Office “Transparency in Supply Chains Consultation”. We’re supportive of several of their proposals including “mandatory reporting areas” and of the new online registry being proposed.

Modern Slavery registries

In 2019, we engaged with the Modern Slavery Registry and TISCreport.com to improve the transparency of our Modern Slavery Statement reporting.

Sustainable Biomass Program (SBP)

The SBP is a certification system designed for woody biomass, mostly in the form of wood pellets and wood chips, used in industrial, large-scale energy production.

SBP proactively encourages the adoption of standards and due diligence processes that include promotion
of human rights. For suppliers to be approved under the certification scheme, they must satisfy multiple requirements, including those relating to modern slavery due diligence. Further information on the Sustainable Biomass Program and it’s independent board can be found on the SBP website.

Bettercoal

Drax continued its engagment with Bettercoal in 2019. Established by a group of major European utilities, Bettercoal is a global, not-for-profit initiative that promotes the continuous improvement of corporate responsibility in the coal supply chain.

The organisation provides greater assurance that the coal we procure comes from mines that take a responsible approach to safeguarding workers, communities and their local environment. More information on Bettercoal can be found on its website.

UN Global Compact

In 2018, we became participants in the UN Global Compact (UNGC) – a voluntary corporate sustainability initiative that encourages businesses worldwide to adopt sustainable and socially responsible practices. Further information on the UNGC can be found on its website.

In addition to our general participation, we’re members of both the UNGC’s Advisory Group (which governs the UK Network) and its Modern Slavery Working Group. Such involvement enables us to collaborate with, and benchmark our activities against, our peers.

Our Annual Report for financial year end 2019 will contain the details required for our “UNGC Communication on Progress”. These include the actions we’ve taken to demonstrate our commitment to all 10 of the UNGC principles and to the Sustainable Development Goals we’re actively progressing.

Progress in 2019:

  • Participated in all the UNGC Modern Slavery Working Group meetings
  • Hosted a UNGC peer Modern Slavery Statement review, including three other members

In 2020, we plan to:

  • Leverage our membership of UNGC Modern Slavery Working Group by collaborating with another member to share learnings on due diligence approach for trial fuel volumes

Stakeholder Engagement

Like many businesses, we have a diverse group of stakeholders who are affected by our global activities. These include our shareholders, investors, employees, temporary employees, contractors, customers, suppliers, communities and local authorities, government regulators and policymakers, schools and colleges, academics, think tanks, non-governmental organisations (NGOs), network operators, trade and industry associations.

We conduct an ongoing mapping exercise to assess how the stakeholder landscape is developing and to ensure we’re recognising, and responding to, the expectations of a broad range of stakeholders across our businesses.

KPIs and looking ahead

“We’re committed to continual improvement and aim to strengthen our compliance programme year on year”

Key Performance Indicators (KPIs)

We have internal modern slavery KPIs that measure the effectiveness of our programme. We consult the EBCC on progress and performance.

2019 KPIProgress
Employee training levelsBuilding on our training programme from previous years, in 2019 all employees, temporary employees and relevant consultants received our updated Corporate Crime policy as a mandatory read via
our learning management system. In addition, all managers and teams ‘at higher risk’ of encountering modern slavery received a mandatory eLearning module to complete.
Identify and use opportunities for collaboration to verify and resolve risk issuesParticipation in the UN Global Compact (including membership of its Modern Slavery working group) continued throughout 2019.
Steps taken to upskill our high-risk suppliersOur Biomass Sustainability Compliance team has continued its programme to promote modern slavery awareness when conducting biomass supplier site visits and meetings.
Actions taken to strengthen our supply chain auditing and verificationContinuation of relationships with SBP and Bettercoal. We initiated a programme of fuel supplier audits, and reviewed an independent audit report conducted at the Chinese manufacturing facilities for our smart meters.
Investigations undertaken into reports of modern slavery and remedial actions takenNot applicable in 2019 due to zero reports.
Maintain up to date due diligence information on supply chains that are high risk for modern slaveryModern slavery survey enhanced and issued where relevant.

Planned initiatives consolidation for 2020

As described throughout this Statement, we’ll explore how to strengthen our activities in human rights and modern slavery during 2020. This will include:

Programme element Initiatives
Governance• Strengthen the EBCC agreed protocol by adding a detailed remediation plan
Risk assessment• Progress the non-fuel supply chain mapping project, including the selection and adoption of a new tool to assist the mapping process, as necessary
• Reflect any updates to the Global Slavery Index in our due diligence platform, as required
Due diligence• Evaluate the appropriateness of our approach to trial fuel volumes, including benchmarking with another UNGC Modern Slavery Working Group member
• Strengthen the human rights content of our third-party fuel supplier audits
Policies and procedures• Seek Board approval for the new Employee Code of Conduct
• Publish the Employee Code of Conduct
• Separate the content of our Corporate Crime policy into its constituent parts (such as a Human Rights policy, in relation to Modern Slavery)
Employment practices• Further expand our approach to physical and mental health with the introduction of a Wellbeing programme
• Continue to embed our communication and engagement channels with employees

Statement approval

We’re committed to doing the right thing. We believe this approach, and the measures we’re taking, demonstrate how effectively we’re identifying and addressing any modern slavery that could be connected to our business and supply chain.

The Drax board of directors has approved this statement for our financial year ending 31 December 2019. We’ve completed it according to the requirements of section 54, part 6 of the Modern Slavery Act 2015. It applies to all companies within the Drax Group that are required to have a Modern Slavery Statement, including:

  • Drax Biomass Inc.
  • Drax Corporate Limited
  • Drax Generation Enterprise Limited (former Scottish Power Generation Ltd)
  • Drax Group Holdings Limited
  • Drax Group plc
  • Drax Power Limited
  • Drax Smart Generation Holdco Limited
  • Drax Smart Sourcing Holdco Limited
  • Drax Smart Supply Holdco Limited
  • Haven Power Limited
  • Opus Energy (Corporate) Limited
  • Opus Energy Group Limited
  • Opus Energy Limited
  • Opus Energy Renewables Limited
  • Opus Gas Supply Limited

This statement was signed by:

Dwight Daniel Willard Gardiner (known as Will Gardiner)
Chief Executive Officer Drax Group plc

25 February 2020

Previous modern slavery statements

Downloadable versions of our previous statements.

Drax Group Modern Slavery Statement 2018