“Ethical appraisals of industrial activity – particularly in non-Western countries – can be demanding, but we lack neither the tools, commitment nor the will to proceed in the appropriate way,” says Senior Vice President Tom Einar Rysst-Jensen.
Tom Einar Rysst-Jensen, who is head of Aluminium Metal's Smelter Growth unit, has broad experience of impact analyses in connection with commercial projects.
He previously worked for Hydro’s former oil and gas business, and has been involved in processes that deal with industrial projects, whether these are linked to the bauxite, alumina, electrolysis or energy business areas.
“The tools we use are useful for helping us take a precautionary approach when preparing new agreements and activities. This means we make sure that agreements don’t breach Hydro’s Code of Conduct and that we comply with national and international legislation,” he says.
He points out that the procedures adhered to by Hydro include a risk assessment of the country the project takes place in.
“We look into a country's social and economic conditions plus a whole series of different aspects. Transparency International’s corruption perceptions index (CPI) is one tool that helps us to form a picture of the risk and thus the potential for various kinds of behavior. If we decide that the risk is high, we mobilize further resources to clarify the relevant problems and identify remedial measures.”
Rysst-Jensen explains that an 'integrity due diligence' process is performed as part of Hydro’s assessment of potential partners or consultants. The background and previous activities of companies and individuals are thoroughly checked. Information relating to the judicial system and the media is collated.
“In cases where this process discloses something of a potentially suspect character, further investigations are undertaken, and the information that emerges is subject to comprehensive review by the company’s combined expertise,” he points out.
“If we are to go ahead, the uncertainty must be identified and brought under control. In such circumstances the threshold for entering into a partnership needs to be high and other options assessed,” emphasizes Rysst-Jensen.
“How does Hydro ensure the circumstances are identified that indicate a project should be terminated?”
”When working together with third-parties, this will be continually assessed and also considered at the project milestone stages where we review the overall status. One of the questions raised is whether the motives for cooperation may have changed, or whether things have moved in another direction than was originally foreseen. The responsibility for the continuous assessment of consultants rests with the project manager and line management.”
"Is the approach any different if it's a question of taking over a project and the contracts already signed?"
“Such cases are also considered on an independent basis, as if the project were a new initiative. An independent appraisal of potential problems is also carried out before a project is taken over.”
"Has Hydro got better at tackling the ethical aspects of cooperative ventures?"
“Yes, absolutely in my opinion. Meanwhile the setting for such assessments is continually being reviewed, while the consequences of making mistakes have become more serious.”
Strive to set example
Rysst-Jensen emphasizes that demands for greater transparency should be welcomed.
“This is in our interest, and we will strive to set an example for others. At the same time we must be able to take part in a debate regarding the wisdom of different requirements and rules, and how these are enforced.”
“I would add that we should respect the fact that other cultures do not judge matters at the same time, or in the same way, as we do, and we must not sit in judgment of others. At the same time we must not lose sight of our own guidelines. Some of our challenges lie in establishing operations in conditions that are very unlike our own. Crucial to our work in connection with the ethical problems arising out of industrial activity is a discussion of dilemmas, both internally and externally.
“But some of our requirements are absolute, such as those that relate to corruption and child labor, for example. But there are also numerous other complex dilemmas to be considered. When engaged in countries where there is a need for industrial development, it’s the gray areas that are difficult, but Hydro is working systematically and transparently to tackle these problem areas. This means we are continually reinforcing our ability to judge such complex challenges.”