Modern Slavery Act Transparency Statement 2017

Introduction from the Chief Executive Officer

At Aker Solutions, corporate responsibility is about proactive and precautionary business decisions that reflect the company’s commitment to integrity, accountability and sustainability. In our line of business, we often operate in markets that face socio-economic challenges such as poverty and corruption. With an expanding global footprint our assessments have become more comprehensive, complex and challenging, and the results sometimes require difficult decisions. Nevertheless, we are determined to never compromise our integrity and reputation and we recognize our responsibility to positively impact societies and strive to ensure that they benefit from our operations.

With reference to Aker Solutions’ first Modern Slavery Act Transparency Statement, and pursuant to Section 54 of the UK Modern Slavery Act 2015, we hereby present our second Modern Slavery Act Transparency Statement. We confirm our continued commitment to implementing and enforcing effective systems by adopting a zero tolerance approach toward modern slavery and human trafficking to ensure that this is not taking place in our own business or our supply chain.

This statement covers the financial year ending December 31, 2017 and has been approved by Aker Solutions’ Board of Directors.

Luis Araujo
Chief Executive Officer, Aker Solutions

Our Business

Aker Solutions is a global provider of products, systems and services to the oil and gas industry. The company is principally engaged in the design, supply and maintenance of oil and gas production equipment, as well as the provision of subsea lifecycle services, operational services and engineering services.

In 2017 Aker Solutions expanded the business portfolio by taking its first step into offshore wind with an investment in a floating wind technology company that brings the company’s oil and gas engineering expertise into a fast-growing renewable energy market.

Aker Solutions continues to prioritize international growth while safeguarding its existing market positions. The company is represented in all major offshore oil and gas basins around the world, from the Gulf of Mexico and Brazil to the North Sea, Africa, Middle East and Southeast Asia.

Aker Solutions had about 13,800 permanent employees in 24 countries at the end of 2017. The main office is in Fornebu, Norway. Aker Solutions ASA is listed on the Oslo Stock Exchange.

More details about our locations can be found here.

Our Supply Chain

Aker Solutions’ supply chain management team works with around 8,000 direct and indirect suppliers across the globe and employs approximately 700 people. Supply chain management includes strategic sourcing, category management, supplier development and accreditation, material planning, procurement, inventory management and logistics. The majority of the products Aker Solutions procures include tubes, valves, actuators, forgings, connectors and instrumentation. Sourcing IT services, travel and temporary personnel are also important parts of the company’s indirect procurement.

Policies

Policies are crucial for developing effective and consistent anti-slavery and anti-trafficking standards across Aker Solutions’ business and for influencing suppliers’ and employees’ decision making on a day-to-day basis. A list of the policies in place to address modern slavery and human trafficking can be found below along with links where appropriate. All of these policies are endorsed by and signed off at a senior management level due to the high level of importance within the business.

For completeness and consistency across the business, these policies are shared widely internally and can be made available in other languages if required.

• Aker Solutions’ code of conduct: This continues to be the company’s key governing document and the foundation of its drive to uphold the highest levels of integrity. The code of conduct addresses important principles and sets clear rules and expectations for behavior and ethical standards.
• Aker Solutions’ business integrity policy: This supports the company’s code of conduct by defining responsibilities for implementing its integrity principles and procedures across the global business.
• Aker Solutions’ whistleblowing procedure: This establishes a process for whistleblowing so as to detect, prevent and combat corrupt and/or unethical behavior in Aker Solutions’ business and supply chain and to ensure that there are clear and observable procedures for reporting a concern to the whistleblowing channel and for how such matters are handled. A link to the whistleblowing channel can be found here.
• Aker Solutions’ country risk procedure: This supports the business integrity policy and aims to reduce Aker Solutions’ risk exposure when it conducts business in countries associated with high corruption, reputational and/or political risks.
• Aker Solutions’ supplier approval group procedure: This describes the process to approve, requalify and disqualify suppliers and subcontractors of Aker Solutions and describes applicable roles and responsibilities.
• Aker Solutions’ supplier and subcontractor declaration form: All suppliers must sign this declaration form in order to be approved on Aker Solutions’ supplier qualification and information system (SQiS) and to be able to deliver to Aker Solutions. This form includes minimum ethical requirements that Aker Solutions’ suppliers must comply with.

In addition to the above, Aker Solutions continues to adhere to the Voluntary Principles on Security and Human Rights and to be a member of both the UN Global Compact (the world’s largest corporate sustainability initiative) and Trace International (an international organization promoting transparency and compliance with anti-corruption rules). Aker Solutions’ commitment to human and labor rights is also addressed in the Global Framework Agreement between Aker ASA and the Norwegian and International Trade Unions Fellesforbundet, IndustriALL Global Union, NITO and Tekna which dates from 2008. This Global Framework Agreement focuses specifically on standards such as non-discrimination and the prohibition of child and forced labor.

The principles of all of these agreements, initiatives and memberships underpin Aker Solutions’ respect and support for international standards and are reflected in the company’s visions and values and through its policies. Aker Solutions uses its influence with suppliers to ensure that they also respect human and labor rights.

Due Diligence and Risk Assessment Processes

Aker Solutions’ presence in many countries combined with global tender activities requires a proactive approach and assessment of potential prospects in markets associated with high integrity risks. New activities in countries associated with having high corruption, reputational and/or political risks are subject to assessments by Aker Solutions’ business integrity and compliance function.

These assessments include an analysis of the risk for corruption, human or labor rights infringements, negative publicity and environmental damage. They are carried out before any commitments are made. Depending on the results of these assessments, Aker Solutions may decide not to bid for the potential prospects if the risks are deemed to be too high. If the prospect is deemed as having an extraordinary risk, the company may require the corporate risk committee to conduct a separate evaluation.

The aim of these assessments is to avoid participation in activities that are considered unethical or illegal. Aker Solutions increased the number of assessments it carried out on potential opportunities to 135 in 2017 from 97 in 2016.

In relation to Aker Solutions’ supply chain, the company’s supplier base is qualified and monitored through the supplier qualification and information system (SQiS). This system requires suppliers, direct or indirect, to meet specific requirements to become an Aker Solutions supplier.

The SQiS uses a rigorous qualification, monitoring and performance evaluation process to measure and predict supplier performance. This provides a fact-based and risk-based approach to supplier selection and development. The qualification requirements can be increased or decreased depending on the complexity of the product or service to be supplied and on the country or location of the supplier. This can be done by conducting technical audits or due diligence analysis to confirm compliance with Aker Solutions’ requirements.

The SQiS system enables Aker Solutions to continuously monitor the performance of its qualified suppliers, with daily screening of financial and compliance information, and can be integrated with the company’s internal audit management tool. This tool tracks audit reports and findings, lost-time incidents and near-misses and HSE and operational performance. It can also issue alerts when certifications are expiring.

Aker Solutions’ supplier audit program is risk-based and determines where the company should focus its audits. In 2017, Aker Solutions conducted 186 external audits of suppliers.

In 2017, 859 new suppliers were prequalified for Aker Solutions’ qualified supplier list. This process includes screening on quality management, health, safety and environmental management, corporate social responsibility, anti-corruption and compliance management, human and labor rights management, supply chain management, human resources and process management. The screening results in prequalification or rejection. The supplier qualification summary is available to all purchasing departments. This information, combined with operational performance evaluations, provides the procurement department with a solid risk picture of the suppliers, enabling an informed selection.

Aker Solutions’ terms and conditions templates for suppliers (Aker Solutions General Conditions for Purchase) still require that suppliers comply with all applicable laws, rules and regulations of any governmental, judicial or regulatory body having jurisdiction over the work or worksite. This includes laws relating to the organization of labor and fundamental human rights norms as described in the UN’s Universal Declaration of Human Rights. These terms and conditions also require that suppliers undertake to fulfil the requirements of the supplier and subcontractor declaration form.

With respect to the wider business, Aker Solutions’ global procedure on whistleblowing continues to encourage all employees, customers and other business partners to report any concerns, breaches of the code of conduct, other internal policies, or laws and regulations related to the direct activities of Aker Solutions’ business or its supply chain. This includes any circumstances that may increase the risk of slavery or human trafficking. Reports are handled by the company’s business integrity and compliance department.

Effective Action

Aker Solutions understands that as a global organization it is at risk of being drawn into human or labor rights violations. The company considers the risk of direct involvement in such infringements to be low. However, indirect involvement in violations could be a risk due to the size of the company’s supply chain.

In order to ensure that modern slavery and human trafficking is not taking place within Aker Solutions or in its supply chain the company has implemented the policies listed above. In order to increase effectiveness of the policies Aker Solutions provides continuous training, details on which are provided below. 

The company has also continued to carry out internal audits and uses the SQiS system as detailed above to qualify and monitor its suppliers. 

No human rights grievances against Aker Solutions were filed through formal channels in 2017.

Training

Continuous focus and awareness of compliance and business integrity is important to ensure that Aker Solutions’ employees know what to do if they find themselves in a difficult situation. Although the policies listed above are applicable globally, the company also places importance on interacting with employees on the ground to ensure that the local context is considered in its communication and training material. This is to ensure that expectations of business conduct are understood in the context where the training is conducted.

Business ethics training was reinforced in 2017. The company updated all of its training material to reflect updates in the anti-corruption policy framework, new trends and risks. Aker Solutions introduced a new eLearning course that is mandatory for all employees, and which specifically addresses human and labor rights. The company has committed to provide annual code of conduct training, to all employees going forward.

In addition to the above, Aker Solutions provided tailor-made training to personnel in its supply chain function in 2017 as it was identified that this function potentially has a greater risk exposure to unethical situations due to the nature of the job. Aker Solutions wants to ensure that all employees in this function are aware of what to do in such situations. Seventy-three percent, or 371, of the personnel in the supply chain function completed the two-hour classroom-based course. The course focused on various areas such as conflicts of interest, gifts and hospitality, country risk and human and labor rights.

Aker Solutions has also continued to interact with investors, customers, suppliers, governments and national authorities, banks, non-governmental organizations and industry groups, owners, employees, collaborative partners and the like through a variety of channels. This has helped Aker Solutions better understand its stakeholders’ information needs, interest in and influence on the business and corporate responsibility work.

Further Steps

Aker Solutions is continuously taking additional steps to ensure that human and labor rights violations, including slavery and human trafficking, do not take place in the company’s supply chain or in any part of the business. The company is finalizing its targets in this respect for 2018.  Aker Solutions has already made a commitment to further enhance human rights criteria defined and implemented in the supplier qualification process and to implement monitoring of human rights risk in the company’s supply chain.

Mr. Øyvind Eriksen
Chairman, Aker Solutions ASA
Date: March 22, 2018