REC Silicon Annual Report 2019

REC Silicon Annual Report 2019 16 REC Silicon is committed to equal opportunity employment and practices. All employees and applicants are treated without regard to age, gender, sexual orientation, nationality, race, religion, disability, marital situation or any other protected status. REC Silicon’s policies clearly state the Company’s expectations and provide examples of unwelcome behavior and reporting and complaints procedures. Of the employees, 17 percent are women. In the management group, 25 percent are women, and 50 percent of the Board members are women. Human Rights REC Silicon’s Code of Conduct states that the Company supports fundamental human rights and will abstain from participating in any business activities that may compromise human rights, including child labor and forced labor. The main risk of human rights violations is in the Company’s overseas and extended supply chain. REC Silicon’s major purchases are electricity (produced regionally), industrial gases (produced at adjacent sites), andMetallurgical Grade Silicon (purchased from domestic and international sources). Ethics and sustainability are part of REC Silicon’s supply chain management process. The Company seeks to contract services, purchase materials, hire, and lease equipment in a manner that ensures that REC Silicon’s own sustainability policies are met. The Company’s standard terms and conditions require adherence to standards on human rights, freedom of association, child and forced labor, corruption, and occupational health and safety. All strategic suppliers had contractual clauses or are subject to regulations regarding respect for human rights. There were no human right violations reported in 2019. Anti-Corruption REC Silicon sets high standards of integrity and believes that a sound business must be based on value-based management and clear guidelines on ethics and sustainability. The Code of Conduct, the Anti- Corruption Policy, and related procedures describe the behavior expected of our employees. REC Silicon operates in a challenging business environment. The Code of Conduct and the Anti-Corruption Policy are backed by procedures that give practical guidance to help employees in their day-to-day work. Every employee is required to sign the Code of Conduct to acknowledge their commitment to adherence. New employees receive training on the Code of Conduct, including information about REC Silicon’s Anti-Corruption policy and procedures. REC Silicon investigates all potential integrity concerns and cooperates fully with the authorities. The Company takes every accusation of corruption seriously, performs thorough investigations, reports to the Board of Directors, and takes necessary action. No adverse action will be taken against an employee due to complaints submitted in good faith. Complaints can be made anonymously. No incidents of corruption were reported in 2019. Local Communities REC Silicon and its employees together donated approximately USD 50 thousand to local communities, compared to USD 84 thousand in the previous year. REC Silicon’s employees contributed 27 percent of the total by donating nearly USD 11 thousand in payroll deductions to UnitedWay. Employees also provided approximately 1,200 volunteer hours to programs and charitable organizations in 2019 compared to 2,000 hours in 2018. Because of reductions in the workforce, the number of volunteer hours contributed declined in 2019. However, REC and its employees remain committed to and are an integral component of local communities. During 2019, contributions were primarily made to community assistance projects, youth programs, and education. REC Silicon sponsored activities including Solar Races and Energy Science Days, a program that engages 1,400 students and dozens of REC Silicon employees annually. REC Silicon donated to education programs including Montana Tech in Butte and Big Bend Community College in Moses Lake. REC Silicon employees also participated in community clean-up drives, local charity events, and on-site blood drives. MARKETOUTLOOK Industry forecasts estimate that semiconductor device production will increase during 2020 which is expected to result in stronger demand for semiconductor grade polysilicon in the second half of the year. At the beginning of 2020, REC Silicon’s shipments of semiconductor grade polysilicon are expected to be seasonally weak due to contractual delivery times and reduced order levels to reduce customer inventory levels. Additional delays in the start-up of newwafer capacity and the completion of product qualifications may also adversely impact demand. For the year, REC Silicon’s shipments of semiconductor grade polysilicon are expected to grow in certain key segments and are forecast by customers to increase in total compared to 2019 due to the completion of product qualifications and a stronger demand profile in the second half of the year. Over the long run, macro demand factors associated with data transmission and storage, mobility, and increasing silicon content in automobiles and other consumer goods are expected to result in demand growth. Demand for silicon gases in certain semiconductor applications is expected to increase in 2020 compared to 2019. However, continued volatility in solar cell production, the shift of production of basic flat panel displays into China, and overcapacity in China are expected to adversely affect REC Silicon sales volumes. Competitive pressure due to overcapacity will continue to limit sales opportunities and is expected to place downward pressure on prices for silicon gases. For 2020 in total, current customer forecasts indicate that REC Silicon sales volumes of silicon gases will increase compared to 2019. In the longer term, demand for silicon gases is expected to recover due to technology improvements in flat panel display and semiconductor applications. In addition, macro-economic trends indicate that demand for consumer goods with silicon content is expected to grow. Board of Directors’ report