Modern Slavery Statement FY2020 MODERN SLAVERY STATEMENT 2020

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Introduction

This Modern Slavery Statement is made pursuant each operating company within Snowy Hydro. to the Modern Slavery Act 2018 (Cth) (MSA). This This Statement was reviewed by the Executive Modern Slavery Statement is made on behalf Committee and approved by the Board of Snowy of Snowy Hydro Limited (ACN 090 574 431) and Hydro Limited, which has governance over all each of its wholly owned subsidiaries, including group companies. Red Pty Limited, Australia Pty Ltd and Direct Connect Australia Pty Ltd Snowy Hydro is a dynamic, integrated energy (collectively “Snowy Hydro”, “we”, “our”), for the business. Our role is to ensure energy security, financial year ending 30 June 2020. underpin the transition to renewables, and increase competition in energy markets. Our vision This Statement was prepared in consultation is to delight our customers with service, backed with management representatives on behalf of by our generation assets and retail businesses.

Snowy Hydro has a strong corporate culture based on our company values:

Safety Teamwork Ownership Agility Decency Courage

Safety is always We help each We take pride We are We treat others We speak our number one other succeed in our work adaptable the way we’d up and act priority through and own our and embrace like to be for what’s support and choices change treated important trust

In keeping with our core values, Snowy Hydro Snowy Hydro’s operations are almost entirely recognises the responsibility and opportunity in Australia, and undertaken by employees that we have to play a role in the eradication of on individual agreements or under enterprise modern slavery. We have always been committed agreements. to ensuring that human rights abuses play no part Snowy Hydro’s supply chain largely comprises well in our business or in any of our supply chains. known, long term suppliers, with no evidence of This Statement provides an overview of who modern slavery. Snowy Hydro undertakes limited Snowy Hydro is - our structure, operations, supply procurement in industries, regions, or for products chains and governance; an assessment of the risks and services with known risks of modern slavery. of modern slavery in our operations and supply We have identified three sectors/suppliers chains; the control measures we have implemented within our supply chain with a higher potential to manage those risks; and the effectiveness of inherent risk of modern slavery practices, and those controls. Snowy Hydro has a robust Risk we have undertaken additional due diligence Management Framework in place and has assessed and verification to confirm that there are no the risk of modern slavery under that Framework. actual or suspected modern slavery practices in

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those parts of our supply chain and the controls businesses. We have taken additional targeted in place to manage this risk are effective. We measures to support the ongoing viability of continue to undertake ongoing verification these suppliers during this time. measures to ensure these control measures remain effective. Snowy Hydro will continue to review our modern slavery risk management practices against In addition to this sector specific due diligence, industry best practice and, if required, strengthen Snowy Hydro has standard controls in place those practices to ensure they remain effective in to control the risk of modern slavery practicies FY2021 and beyond. in our supply chain, as well as the additional controls of enhanced standard contract terms This statement was approved by the Board of and the implementation of a formal modern Snowy Hydro Limited on 10 March 2021. slavery training program. The COVID-19 pandemic in 2020 has had a disproportionate impact on a number of local regional suppliers which Snowy Hydro relies upon. This in turn has impacted on the livelihoods Paul Broad of the individuals who are involved in those Managing Director and CEO

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Contents

Introduction, including the process of consultation with all 3 operating companies within Snowy Hydro

Snowy Hydro’s structure, operations, supply chains and governance 6

Snowy Hydro’s assessment of modern slavery risk in our operations 11 and supply chains

Snowy Hydro’s actions to address modern slavery risk and 14 measuring the effectiveness of these actions

Snowy Hydro’s Response to COVID-19 17

Looking ahead 18

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Our structure, operations and supply chains

Our Structure

Snowy Hydro Limited is the ultimate holding water and releases it for the use of irrigators, company of the group, and is a producer, town water supplies and the environment. supplier, trader and retailer of energy in the National Electricity Market (NEM) and a leading Snowy Hydro has two wholly-owned energy provider of risk management financial hedge retail businesses, Red Energy Pty Limited and contracts. In addition, Snowy Hydro Limited is a Lumo Energy Australia Pty Ltd. Snowy Hydro also water manager operating under a stringent water has a wholly-owned moving services company, licence. Snowy Hydro captures, stores, diverts Direct Connect Australia Pty Ltd.

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Our Operations

16 Power Stations and 1.1 million customers One-third of renewable 5,500MW total generation energy to the National Electricity Market

Snowy Hydro has more than 5500 megawatts pumped-hydro power station about 800m (MW) of generating capacity across New South below the surface. Work on Snowy 2.0 has Wales, Victoria and South Australia including the been underway since early 2019, with road iconic 4100MW Hydro-electric upgrades, permanent bridges over waterways Scheme, the 300MW Valley Power gas-fired and earthworks to prepare for tunnelling all power station, the 320MW Laverton North gas- completed. Snowy 2.0 is a major regional fired power station in Victoria; the 667MW gas- infrastructure project bringing significant fired power station at Colongra in New South investment and thousands of jobs to the Wales and 136MW of diesel generation at Port Snowy Mountains. Stanvac and Angaston in South Australia. Snowy Hydro is the fourth largest retailer in Snowy Hydro has also established an offtake the National Electricity Market through two agreement with renewable developer Equis for award-winning retail energy companies - Red 100MW of large-scale solar generation at Tailem Energy and Lumo Energy. Our retail businesses Bend in South Australia, which commenced have more than one million customer accounts in April 2019. Additionally, Snowy Hydro has in the NEM including households, Small to procured 888MW of wind and solar derivative Medium Enterprises (SMEs) and Commercial and offtake agreements as part of its Renewable Industrial customers (C&I) across Victoria, New Energy Procurement Program. South Wales, the Australian Capital Territory, The Snowy 2.0 project, which is currently under South Australia and Queensland. Snowy Hydro construction, is a major expansion of the Snowy also owns Direct Connect, one of Australia’s Scheme, linking Tantangara and Talbingo largest moving services companies, moving reservoirs with tunnels and an underground renters and home-owners across the country.

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Snowy Scheme Map

SNOSNOWY-TUMUTTUMUT DEVELOOPMENTPMENT

Snowy 2.0 UnderUndergrounoundd PPoweowerr StatStationion Snowywy 2.0 Projectoject

PPoweowerr or PumpingPumping StationStation

UUnderndergrground Power StationStation SNOSNOWY-MURRAYAY Tunnelunnel DEVELOOPMENTPMENT River Water StStorageorage

Kosciuszkosciuszkoo NationalNational ParkPark Snowy Hyddrroo LimitLimiteedd Water CaCattcchmenthment BouBoundarndary

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Our Supply Chain

In FY2020, Snowy Hydro directly engaged more The majority of Snowy than 2,500 suppliers. Excluding the Snowy 2.0 Hydro’s supply chain for project, approximately 98.8% of our total spend in our supply chain was with local suppliers, its existing generation assets followed by suppliers located in India (0.4%), the and retail business is within United States (0.4%) and New Zealand (0.3%). Australia, and generally Snowy Hydro has appointed a joint venture of world class, experienced, construction involves the engagement contractors to deliver our Snowy 2.0 project in Australia. 27% of the total spend in our supply of skilled labour for the chain was on the Snowy 2.0 Project. While provision of both goods and the suppliers engaged by Snowy Hydro for that Project are local and the work is being services, or the acquisition undertaken in the Snowy region, they have their of large items of equipment. own international supply chains. Snowy Hydro has taken the proactive steps outlined in this Statement to assure itself that modern slavery risks are being controlled within that supply chain.

Our suppliers (excluding Snowy 2.0 project)

0.4% 0.4% United States India 98.8% local Australian suppliers

0.3% New Zealand

• Other countries - 0.1%

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Our Governance

The Board of Snowy Hydro is responsible for the The Board has established an Audit and corporate governance of all companies within Compliance Committee. The role and Snowy Hydro, including the adoption of appropriate responsibilities of the Audit and Compliance policies and procedures, and is supported by Committee include overseeing the adequacy dedicated Board Committees who assist the Board of the systems in place to identify and manage in discharging their governance responsibilities. human rights risks and are documented in its Board approved Charter. Snowy Hydro’s corporate governance framework is outlined in the diagram below. Our corporate In accordance with this Charter, Snowy Hydro’s governance documentation, including the assessment and ongoing management of Corporate Governance Statement and the modern slavery risks is reported through the associated charters are available on our website. Audit and Compliance Committee.

Corporate Governance Framework

CEO & MD Board of Directors Delegated Authority

Board Committees

Safety, Audit & People & Snowy 2.0 Operations & Snowy 2.0 Portfolio Risk Compliance Culture Funding Environment Committee Committee Committee Committee Committee Risk Committee

Key Management Committees

Executive Safety, Snowy 2.0 Executive Audit Executive Portfolio Operations & Investment Review Executive & Compliance Risk Management Environment Risk Committee Governance Committee Committee Committee Committee

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Modern Slavery Risk Assessment

Snowy Hydro identifies and assesses potential Our modern slavery risk is managed consistently risk of modern slavery in its operations and with our established Snowy Hydro risk framework. supply chains by reviewing country and industry Snowy Hydro has a risk based approach which risk indicators provided by organisations such informs our actions and prioritises: as the Global Slavery Index and the International Labour Organisation among others. These assessments inform our areas of focus. Most severe risks that cause the most harm to We have identified the key factors that influence people or where delayed response would make the risk of modern slavery practices in our them irremediable; operations and supply chains, being:

Risks that are caused or contributed to by Snowy Where a product is manufactured Hydro; and Geographies or processed, or where service delivery occurs. Risks that are not caused or contributed to by Product Snowy Hydro, but Snowy Hydro has the ability to The sectors from which we and service influence the level of risk and/or whether that risk procure goods and services. categories materialises.

Vulnerable For example, migrant workers and Appropriate control measures are then populations base-skilled workers. implemented which take into account the materiality of the relevant risk, followed by ongoing assurance measures to assess the Work For example, third party labour effectiveness of those controls. practices arrangements.

Company- The practices of individual specific suppliers.

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Operations

Snowy Hydro’s operations either individual agreements are almost entirely located or applicable Enterprise in Australia, with our retail Agreements, and we have business having a small a robust payroll system. As at 30 June 2020, Snowy Hydro’s total direct office in New Zealand and a workforce was 1782 people, with 93.3% of them working on an ongoing basis. 86.1% are full time single employee in Mumbai. employees and 13.9% work part time. Most of Snowy Hydro’s employees our employees are based in Victoria (62.3%) and (35.1%), with 2.6% based in are engaged directly on other locations.

Snowy Hydro’s Workforce 2.6% 13.9% Other locations Part-time 35.1% 86.1% NSW Full-time 62.3% VIC

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Supply Chains

Snowy Hydro has identified the following key Snowy Hydro has assessed sectors/suppliers in our supply chain which have modern slavery risk in our a higher potential inherent risk of modern slavery: supply chains based on • The international supply chain for the Snowy 2.0 Project, which will involve the procurement workforce profile, the type of of electrical & mechanical components from labour involved in the delivery countries including China, as well as Germany and other parts of Europe; of services or production • Our retail business’ call centre operations in of goods, particularly when Mumbai; and there is base-skilled labour, • Snowy Hydro’s clothing supply contractors, who and industry prevalence. source from countries including Bangladesh, China and India, and catering and cleaning Snowy Hydro’s supply chain largely comprises contractors. well known, long term suppliers, with no In FY2020, Snowy Hydro conducted additional evidence of modern slavery. Snowy Hydro assurance and verification activities in respect of undertakes limited procurement in industries, these key sectors/suppliers to ensure that the regions, or for products and services with known risk of modern slavery in these areas is effectively risks of modern slavery. controlled. We have a number of standard controls, some of which were strengthened in FY2020, to mitigate the risk of modern slavery in its supply chains.

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Actions to address Modern Slavery Risk and Measuring Effectiveness of these Actions Specific sector / supplier risk controls

(including auditors and quality inspectors for Snowy Hydro has offshore manufacturing). undertaken the following The relevant contractors will also be required to actions in relation to the provide their own Modern Slavery Statements. key sectors/suppliers in our Call centre operations in Mumbai supply chain which have a Snowy Hydro has extensive experience with higher potential inherent risk outsourced call centre operations, with its retail subsidiary having utilised the Mumbai call of modern slavery: centre for approximately 11 years. Snowy Hydro has appointed a global provider of services to Snowy 2.0 Project manage the Mumbai call centre. The qualified and experienced contractors Snowy Hydro has undertaken a detailed appointed to deliver the project are responsible assessment of the service provider’s processes for managing all aspects of the international and policies and has confirmed the adequacy supply chain. Their appointment includes specific of the controls in place internally to manage a contractual requirement to comply with all the risks of modern slavery practicies, and has modern slavery laws, not engage in modern confirmed the legal basis for salary and wage slavery and to develop and maintain effective payments to the supplier’s employees. policies and procedures to manage these risks. The Snowy Hydro Group Companies’ As part of its procurement process, Snowy catering, cleaning and clothing supply Hydro confirmed that the contractors have the contractors capability and effective processes and controls to manage all risks in their international supply Snowy Hydro has undertaken a detailed review chain, including modern slavery risk, and do not of the relevant suppliers’ contracted rates of have a history of modern slavery practicies. pay against relevant industrial award rates, and assessed their controls in place including ethical Snowy Hydro conducts ongoing verification and sourcing and whistleblower policies, and audit assurance of its contractors’ compliance with and training practices. The effectiveness of the their obligations in respect of modern slavery controls are regularly assessed via ongoing risks with support from independent experts contractor performance discussions.

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Standard Modern Slavery Risk Controls

Supplier due diligence Supplier contracts Snowy Hydro’s Supplier Prequalification Procedure Snowy Hydro mandates its stringent includes the following standard processes: requirements for the control of modern slavery risks through our contracting process with our • Snowy Hydro undertakes proactive due suppliers. Specific modern slavery provisions diligence into sectors/suppliers we engage have been incorporated into our standard form with that have a higher inherent risk of modern contracts. slavery. This involves detailed assessments of the supplier’s relevant policies, procedures In FY2021, Snowy Hydro is supplementing these and practices. Discussions with the relevant contractual requirements with a Supplier Code of suppliers are then undertaken to understand Conduct. All suppliers will be required to comply potential modern slavery risk areas and the with this Code, which sets out the minimum measures those suppliers are undertaking in standards that Snowy Hydro requires of its order to manage those risks; and suppliers in respect of legal compliance, ethical business, risk management, human rights and • In addition to sector/supplier specific due social sustainability, environmental sustainability diligence, all suppliers are required to answer and governance. Non-compliance with this Code a standard set of modern slavery questions. will be addressed under the contract with the The answers to those questions identify any relevant supplier. modern slavery risks in sectors/suppliers that do not have a higher inherent risk of modern slavery. Should any modern slavery risks be Remediation processes identified in those suppliers, Snowy Hydro will Any areas of concern or identified improvement undertake the targeted due diligence noted opportunities are raised with the relevant above for that supplier. supplier, with Snowy Hydro assisting the supplier Contractors cannot be engaged by Snowy Hydro to develop plans which provide for corrective if we are not be satisfied that any modern slavery actions with agreed timeframes. The timely risks are being appropriately managed. implementation of those plans are then tracked as part of the formal performance reviews that Snowy Hydro has in place with that supplier under the relevant contracts.

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Reportable Conduct Measuring effectiveness Snowy Hydro has established an effective Snowy Hydro measures the effectiveness of our whistleblower reporting and investigation actions to assess and address modern slavery framework, providing mechanisms to raise risks in the following ways: genuine concerns regarding actual, unethical, unlawful or undesirable conduct, without fear • Snowy Hydro regularly benchmarks its of reprisal and with the support and protection practices against globally reputable of Snowy Hydro. Using multiple technologies, organisations which have more extensive employees, contractors and their family exposure to the sectors/suppliers we engage members are able to report grievances or issues with that have a higher inherent risk of modern anonymously, and Snowy Hydro will take all slavery. Snowy Hydro already has in place a practicable steps to protect their identity. An range of measures which have been identified independently operated Whistleblower Hotline by those organisations as being key to service to allow for anonymous reporting. successfully managing modern slavery risks. All reports pertaining to any breach of law, These include having a continuous on-site regulation or policy are thoroughly assessed and presence at relevant offshore supplier facilities; investigated. engaging independent inspectors to undertake regular audits; and regularly conducting Information about this framework is available on interviews with supplier personnel without the our website. presence of their management; • The implementation of our modern slavery Training actions is formally overseen by a cross- functional group consisting of senior Developing awareness in our workforce of management, who undertake ongoing modern slavery risks is crucial and we recognise verification measures to ensure they remain the importance of training as a control in effective. The results of these reviews, addressing the risk of modern slavery. including identified improvements and timely In FY20, we provided targeted training to senior implementation of those improvements, are employees involved in the engagement of reported to and reviewed by the Snowy Hydro suppliers which have a higher potential inherent Executive Team and our Board; risk of modern slavery. The training was provided • Any new modern slavery risks which are to ensure these employees are appropriately identified are escalated to this cross-functional informed of the risks and legislative requirements group and are thoroughly investigated with associated with modern slavery and equipped the relevant control measures reassessed and with the knowledge and tools to manage and improved on if required; and escalate such risks. • We have in place an internal Audit and In FY21, this training will continue to be Assurance Program and engage independent implemented more broadly across the business experts to undertake regular reviews of our to include relevant employees such as project modern slavery risk management practices, as managers and site supervisors. well as the practices of relevant suppliers.

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Response to COVID-19

Snowy Hydro relies on a significant number of rates and/or working conditions for personnel smaller regional suppliers in and around the employed by otherwise stable businesses. communities in which we operate. The ongoing During the initial onset of the pandemic, Snowy viability of these businesses has a material Hydro identified key suppliers in its supply chain influence on the livelihoods and wellbeing who were vulnerable to ongoing viability risk. of the individuals who are directly/indirectly Discussions were then held with these suppliers involved with those businesses. Snowy Hydro is and a range of targeted support measures were aware that the COVID-19 pandemic has had a provided, including paying those suppliers pronounced impact on these suppliers as they on more prompt payment terms and bringing manage reduced cash flows during this time. This forward scheduled purchases to provide in turn can increase the risk of unacceptable pay additional cash flow support.

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Looking ahead

In FY21, we will build on the actions set out in this In FY21 and beyond, Snowy statement, focusing on: Hydro will further our efforts • Deepening engagement with those suppliers to identify and remedy identified as having an increased potential inherent risk of modern slavery and further modern slavery risks in engagement with other suppliers; our operations and supply • Continuing our close partnership with our chains. We recognise our construction contractors on the Snowy 2.0 project to obtain assurance of the effectiveness commitment to addressing of their processes to address modern slavery; modern slavery risk requires • Rolling out our training program focusing on sustained effort through increasing modern slavery awareness, identifying potential red flags of modern slavery and continuous improvement escalating appropriately, to on the ground staff; so that our actions remain and • Refining the mechanisms used to assess the effective in addressing effectiveness of our actions in addressing modern slavery. modern slavery risk.

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