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SBM Offshore
Modern Slavery Statement 2023 (Financial Year)
Introduction
This statement is made on behalf of SBM Offshore N.V. and its subsidiaries (together referred to as the “Company” or “SBM Offshore”) and sets out the steps taken by the Company during financial year 2023 to seek to prevent modern slavery from taking place within SBM Offshore or its supply chains. SBM Offshore provides floating production solutions to the offshore energy industry, both in hydrocarbon and in renewable market segments, over the full product lifecycle.
SBM Offshore performs services all over the world. More details can be found at: https://www.sbmoffshore.com/about-us
SBM Offshore Organization Structure and Supply Chain
SBM Offshore provides floating production solutions to the offshore energy industry, both in hydrocarbon and renewable market segments. SBM Offshore’s main activities to date are the design, supply, installation, operation and life extension of Floating Production Storage and Offloading (FPSO) vessels. These are either leased to clients or supplied on a turnkey sale basis. SBM Offshore is also active in the alternative energy market and the research and development of products for future energy markets.
The governance of human rights is with the Group HSSEQS & Operational Excellence Director, who is also a member of the Executive Committee. The functional ownership of human rights sits within the group sustainability team, which is responsible for the:
- Continuous improvement of internal procedures and guidelines.
- Engagement with internal and external stakeholders.
- Assessment and addressing of human rights risks in the operations, yards and supply chain.
- Planning, implementation and monitoring of response actions.
- Setting of targets and assessment of the effectiveness of the results.
SBM Offshore’s supply chain activities are a key contributor to Quality and Operational Excellence in its projects and operations. The Supply Chain department’s ambition is to provide the best value to SBM Offshore’s overall goals and objectives. SBM Offshore expects its suppliers to act responsibly, in line with the Code of Conduct and its Supply Chain Charter. The latter provides expectations and guidance to address environmental, social and governance related impacts – in line with SBM Offshore’s material topics. The supplier qualification process adopts a risk-based approach in assessing suppliers for SBM Offshore’s business needs as well as screening for environment and social risks such as climate targets and human rights.
Our Policies in Relation to Modern Slavery
SBM Offshore uses United Nations Guiding Principles on Business and Human Rights (UNGPs), International Labour Organization (ILO) Conventions and best practices as a guide to embed human rights within SBM Offshore to achieve no harm to its own workforce and workers in the value chain.
Human rights targets and performance align with SBM Offshore’s adoption of the United Nations Sustainable Development Goals (SDGs) and are in line with SBM Offshore’s risk appetite. Potential human rights risks are captured in SBM Offshore’s risk management system.
SBM Offshore has published Human Rights Standards and a Modern Slavery Statement since 2020, in which SBM Offshore expresses its commitment on issues such as – amongst others – forced labor, working and living conditions, living wage and freedom of association. In 2023, SBM Offshore updated its Human Rights Standards, further strengthening commitments on access to grievance mechanisms and subsequent grievance resolution.
The above commitments and standards are embedded in SBM Offshore’s corporate values, Code of Conduct, Health Safety, Security and Environment (HSSE), Human Rights and Process Safety policy, and its Supply Chain Charter. Policies and standards set out the principles that SBM Offshore expects to be upheld by its employees, contracted workers, suppliers of any tier and business partners wherever in the world SBM Offshore operates.
Risk Assessment and Management
SBM Offshore has no appetite for non-compliance of itself or its suppliers with SBM Offshore’s human rights standards. Human rights actions and targets aim to address the impacts, risks and opportunities identified, in accordance with SBM Offshore’s human rights risk appetite. Regular assessments, due diligence and reports of potential human rights violations are the main sources of impacts, risks and opportunities identification. These are captured in SBM Offshore’s risk management system. In its regular assessment and due diligence processes SBM Offshore strives to include direct consultations with own workers and workers in the value chain.
SBM Offshore human rights risk assessments highlighted the need to focus first and foremost on construction yards subcontracted for execution of major Floating Production Systems projects, decommissioning activities and our supply chain. Construction and decommissioning activities are characterized by difficult working conditions, subcontracting of work and a complex supply chain.
Due Diligence Processes
SBM Offshore acknowledges that, despite having firm human rights policies, some activities carried out by some of its subcontractors have sometimes not met the desired standard, especially in places where local regulations differ from international standards. To uncover and remedy such activities, SBM Offshore conducts human rights assessments and due diligence in its own operations and within its supply chain, aligning with its risk appetite.
SBM Offshore’s due diligence approach on human rights leads to an understanding of salient issues and their recording in a company-wide tool for risk management, mitigation and prevention. As part of human rights assessments, SBM Offshore tracks progress on corrective actions of the identified human rights issues through specific action plans. SBM Offshore has identified and maintained its four salient issues: forced labor; overtime, pay and fines; accommodation; mental health and wellbeing.
Key Performance Outcomes in 2023
Due diligence screening, as part of significant investments in its construction and supply chain activities, resulted in the following key outcomes in 2023.
Construction:
- 8 yards, with whom SBM Offshore was considering pursuing commercial activities, underwent desktop due diligence screening.
- 9 ESG audits against the IFC Performance Standards were conducted by a third-party assessment consultancy related to the financing of several projects. The resulting social action was merged with the ongoing worker welfare action plans.
- SBM Offshore is currently monitoring worker welfare action plans for 5 yards with ongoing construction activities and no new worker welfare due diligence assessments were completed this year. The findings from the assessment were aligned with SBM Offshore’s salient issues and Human Rights Standards including:
- indicators of forced labor (as defined by ILO) mostly in relation to payment of recruitment fees, excessive overtime, and limited rest periods.
- substandard living conditions.
- Following the assessments and audits, SBM Offshore worked collaboratively with the yards to develop action plans related to prevention, mitigation and remedy, to close out on issues. Some examples of topics identified and closed out include:
- identification of recruitment fees in the Asia-Pacific area of SBM Offshore’s supply chain. As a result, corresponding action plans have been developed in collaboration with construction yards with the aim of preventing or eliminating the risks of this type of forced labor.
- identification that yard workers had to pay for their own medical checks, as a result the yard agreed to cover the initial health check for all workers on the yard.
- findings that workers’ contracts and offer letters were not provided in the workers’ native language: the yard now translates all offer letters and contracts in a language understandable to workers.
- some subcontractors retained passports of the workers. The yards now ensure that all workers including workers in their supply chain possess their personal ID and passports.
Supply Chain:
During 2023, 100% of suppliers signed the SBM Offshore Supply Chain Charter. As part of embedding human rights into business, SBM Offshore developed qualification questionnaires in four languages (English, French, Portuguese and Chinese).
SBM Offshore performed a desktop human rights risk assessment for all new suppliers from criticality D and above, based on SBM Offshore’s Human Rights Standards. Based on the outcome, SBM Offshore engaged with suppliers for understanding, to raise awareness, aiming for improvement. In case of potential risks, identified during qualification, SBM Offshore reached out to individual suppliers. Non-qualification will be a result of continued potential high risk to and if it considers there is a continued potential high risk to human rights.
In 2023, 90.4% of new suppliers underwent screening based on forementioned procedures. 460 new suppliers were assessed, using the desktop human rights questionnaire, of which:
- 83% were categorized as potential low-risk;
- 14% were categorized as potential medium-risk;
- 3% were categorized as potential high-risk;
- 0% were confirmed as actual high risk, and therefore 0 terminated agreements.
After detailed assessment and engagement took place, two suppliers remained categorized as potential high risk temporarily. SBM Offshore is engaging with them on the implementation of an action plan.
Training
SBM Offshore actively promotes human rights training and awareness through classroom sessions, webinars, and safety moments. In 2023, SBM Offshore provided a specialized awareness session on human rights as part of Life Day, with 1,695 SBMers attending this online session worldwide. Additionally, 91% of target employees have completed online training on business and human rights. In December, 348 own workforce, value chain workers attended the Worker Welfare Day training.
Future
SBM Offshore continues to progress on its human rights journey and the need to strengthen certain parts of its internal work processes. This includes performing further due diligence on medium-risk suppliers, in-depth analysis for regional suppliers and developing professionals within different disciplines that have the competency and confidence to communicate SBM Offshore’s human rights expectations in a compelling way.
SBM Offshore will prepare for any requirements in the light of the Corporate Sustainability Due Diligence Directive (CSDDD) which is expected to become effective in 2026.
The information presented in the statement has been prepared in accordance with the requirements of the UK Modern Slavery Act 2015 and associated regulations. The signing has been delegated to the CEO of SBM Offshore.
This document has been signed by Oivind Tangen, to be published on www.sbmoffshore.com
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