Attachment

STAKEHOLDERS ENGAGEMENT

INDICATOR CODE: 102-40- List of stakeholder groups
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See page 16 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 8 to 17 of the Report.
LOCATION IN THE REPORT: Page (s): 16 to 21.
INDICATOR CODE: 102-42 - Indentifyin and selection stakeholders
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See page 16 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 8 to 17 of the Report.
LOCATION IN THE REPORT: Page (s): 16 to 21.
INDICATOR CODE: 102-43 -Aproach to stakeholder engagement
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See page 8 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 16 to 21 of the Report.
LOCATION IN THE REPORT: Page (s): 16 to 21.
INDICATOR CODE: 102-44 - Key topics and concerns raised
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See pages 6, 7 and 13 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 13 and 14 of the Report.
LOCATION IN THE REPORT: Page (s): 13 and 14.

REPORTING PRACTICES

INDICATOR CODE: 102-21 - Consulting stakeholders on economic, environmental, and social topics
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): >The Company’s Bylaws establish the responsibilities of the various governance bodies.
>The matters under the responsibility of the Board of Directors are, as a rule, defined and forwarded by the Executive Board for deliberation.
>In addition to the matters to be discussed by the Board of Directors, there is a list of topics included in the agendas of the monthly meetings, for follow-up and guidance.
>There is also the Ombudsman’s Office Advisory, which reports directly to the Board of Directors and has a communication channel available to all stakeholders. Quarterly, the Ombudsman’s Office presents a summary of the most important reports, broken down by type and status. If the report received by the Ombudsman’s Office is addressed to the Board of Directors, it follows the same service procedures. The manager of the Ombudsman’s Office Advisory, during his/her periodic presentations, communicates how the demands were handled.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-45 -Defining report content and topic Boundaries
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See page 13 of the Report
PERFORMANCE
(qualitative and quantitative information):
See page 13 of the Report
LOCATION IN THE REPORT: Page (s): 13
INDICATOR CODE: 102-46 -Defining report content and topic Boundaries
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See pages 12 and 13 of the Report.
PERFORMANCE
(qualitative and quantitative information):
TABELA PAGINA 4 e 5.
LOCATION IN THE REPORT: Page (s): 12, 13 and Attachment
INDICATOR CODE: 102-47 - List of material topics
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See pages 13 and 14 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 13 and 14 of the Report.
LOCATION IN THE REPORT: Pge (s): 13 and 14.
INDICATOR CODE: 102-48 -Restatements of information
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): There have been no restatements in relation to last year.
PERFORMANCE
(qualitative and quantitative information):
There have been no restatements in relation to last year.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-49 - Restatements of information
MATERIAL TOPIC RELATED: All
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): There were no significant changes in the list of material topics and their boundaries over the previous year.
PERFORMANCE
(qualitative and quantitative information):
There were no significant changes in the list of material topics and their boundaries over the previous year.
LOCATION IN THE REPORT: Page (s): Not applicable

EMPLOYEES AND EMPLOYMENT

INDICATOR CODE: 404-3 - Percentage of employees receiving regular performance and career development reviews
MATERIAL TOPIC RELATED: Employees and Employment
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): At Chesf, all active employees undergo performance assessments observing the requirements for participation (not including disability retirees, loaned employees, directors, and young apprentices). The assessment is part of a Performance Management process, which comprises three modules: Planning, Follow-up, and Assessment. Competencies are considered according to job position and individual, team, and corporate goals.
The process is supported by an electronic system and involves assessor and participants. At the end of the assessment, each employee is place in the quadrant that expresses the average of their performance in term of competencies and results. For each quadrant, appropriate developmen actions are recommended and the process is completed with the creation o an Individual Development Plan (PDI - Plano de Desenvolvimento Individual) intended to close the gaps identified in the assessment of each employee.
The performance assessment methodology applied in the Company include the use of Goals (Corporate, Team, and Individual) and General Competencie – associated with the position of each employee. The result of the assessmen of these items places each employee in a performance quadrant, which ha specific development and career actions.
PERFORMANCE
(qualitative and quantitative information):
Given the organizational restructuring implemented over the past two years, the Performance Management process was not conducted in 2017. Therefore, the last assessment occurred in 2015.
LOCATION IN THE REPORT: Page (s):97

CORRUPTION AND MANAGEMENT OF ETHICS

INDICATOR CODE: 102-19 - Delegating authority
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): The General Meeting, as the highest governance body, delegates power to the Board of Directors and to the Executive Board through the Company’s Bylaws. The Executive Board, appointed by the Board of Directors, is formed by:
> Presidency;
> Corporate Management Department;
> Economic and Financial Department;
> Engineering and Construction Department;
> Operations Department.
The Executive Board is responsible for proposing the organizational structur that will operationalize the business. This and other duties of this body ar set out in the Company’s Bylaws. Each hierarchical level of the organizationa structure has its own duties, responsibilities, and competencies set out in th internal norms.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-20 - Executive-level responsibility for economic, environmental, and social topics
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): In Chesf’s organizational structure, the financial and economic topics are distributed among the Supervisory Board of Economic and Financial Planning and Control, the Supervisory Board of Economic and Financial Execution, and the Supervisory Board of Accounting, linked to the Economic and Financial Department. Environmental issues are under the responsibility of the Supervisory Board of Expansion Planning and the Environment, linked to the Engineering and Construction Department. Social actions are under the responsibility of the Supervisory Board of Institutional Relations, linked to the Presidency. Those responsible for the economic, environmental, and social topics report to their respective Directors.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): 52
INDICATOR CODE: 102-23 -Chair of the highest governance body
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The Chairperson of the Board, Chesf’s highest governance body, is not the President of the Company. Chesf’s Chief Executive Officer is appointed by the Board of Directors, among its members. Pursuant to the Internal Rules and Regulations of the Board of Directors, the Chief Executive Officer cannot hold, albeit temporarily, the position of Chairperson of the Board.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): 52
INDICATOR CODE: 102-24 -Nominating and selecting the highest governance body
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Pursuant to the Company’s Bylaws, the Board of Directors, formed exclusively by Brazilians, has up to six members elected at the General Meeting for two-year terms and are eligible for three re-elections. One of the members is appointed by the Minister of Planning, Development, and Management, and another member is elected as employee representative and is chosen by the direct vote of their peers (among active employees, in an election organized by the Company, in conjunction with the trade unions that represent them, under the terms of the legislation in force). In June 2017, within the Holding company, the Policy on the Appointment of Representatives in Subsidiaries, Affiliates, Foundations, and Associations of the Eletrobras companies was approved.
The Policy on the Appointment of Representatives in Subsidiaries, Affiliates, Foundations, and Associations of the Eletrobras companies sets out that: a) Representatives must have the minimum qualification required, under the criteria prescribed for Eletrobras in Law No. 13,303/16 and in Decree No. 8,945/16, demonstrating relevant achievements in their area of activity or ability that offers significant contribution to the Board; have knowledge on the Company’s business environment and objectives, analytical capability, and be in line with the organization’s values and principles; have proven knowledge and experience, moral integrity, unblemished reputation; and have the technical expertise required for the position. b) As set forth in Law 13,303/16 and in Decree 8,945/16, the Eligibility Committee will provide their opinion to aid shareholders in appointing administrators and Members of the Fiscal Council, about whether or not they meet the requirements and whether there are restrictions for their election, in state-owned companies. c) Board members and directors, including the President, the General Director, and the Chief Executive Officer, will be chosen among individuals with unblemished reputation, proven knowledge, who are natural persons, residing in Brazil. Administrators must also meet the following requirements: I - be a person with unblemished reputation; II - have proven knowledge compatible with the position to which they were appointed; III - have the educational background required for the position to which they were appointed; and IV - in terms of professional experience, have at least one of the following: c.1) ten years of experience, whether in the public or private sectors, in the field of operation of the state-owned company or in an industry that relates to that of the position to which they were appointed as Senior Director; c.2) four years working as a Director, Board Member, Fiscal Council Member, or Senior Manager in a company whose size or business purpose is similar to that of the state-owned company; the term Senior Manager should be understood as any position in the two highest non-statutory hierarchical levels of the Company; c.3) four years working as a political appointee or trust position that corresponds to level four, or higher, of Grupo-Direção e Assessoramento Superiores - DAS (Senior Management and Advisory Group), in legal person governed by public law; c.4) four years working as a graduate professor or researcher in the field of operation of the state-owned company; or c.5) five years working as an independent professional whose activities relate to the field of operation of the state-owned company. Their education should include an undergraduate or graduate course that is recognized or accredited by the Ministry of Education. The following courses will always be deemed compatible for any state-owned company: a) Business Administration or Public Administration; b) Actuarial Sciences; c) Economic Sciences; d) International Trade; e) Accounting or Auditing; f) Law; g) Engineering; h) Statistics; i) Finance; and j) Mathematics. d) In addition to the cases set out in the Bylaws and/or Shareholders’ Agreement and/or Management Agreement, the following individuals cannot be appointed to the Board of Directors: I - representatives of the agency that regulates the state-owned company; II - Ministers of State and State or City Secretaries; III - political appointees in the direct or indirect federal public administration, who are not permanently employed as civil servants; IV - statutory directors of political parties and individuals serving terms in the Legislative of any federal entity, even if on leave; V - relatives, by blood or otherwise, up to the third degree, of the individuals set out in items I to IV; VI - individuals who have taken part, over the past thirty-six months, of the decision-making structure of political parties; VI - individuals involved, over the past thirty-six months, in activities pertaining to the organization, structuring, and execution of election campaigns; VIII - individuals working for trade union organizations; IX - natural persons who have entered into agreements or partnerships, whether as vendors or buyers, requesters or bidders, of any type of goods or services, with the Federal Government, with the state-owned company in question, or another company.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-26 - Papel do mais alto órgão de governança na definição do propósito, valores e estratégia da organização
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The Executive Board created a Planning Committee that, in conjunction with the Planning, Innovation, and Sustainability Advisory Board, assists the Executive Board in preparing and monitoring the execution and achievement of the goals set out in the Corporate Planning. The Strategic Map of the Corporate Planning is approved by the Executive Board and ratified by the Board of Directors. The results achieved are periodically presented to the Board of Directors and the Fiscal Council.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-27 -Collective knowledge of highest governance body
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): In 2017, Eletrobras, as the Holding company, offered a training course called “Governance, Integrity, and the Capital Market,” in partnership with the Brazilian Institute of Corporate Governance (IBGC), to all Board Members and Directors of the Eletrobras companies. This training began in 2017 and will end in 2018.
PERFORMANCE
(qualitative and quantitative information):
Page (s): Not applicable
LOCATION IN THE REPORT: Page (s): 53
INDICATOR CODE: 102-28 - Evaluating the highest governance body’s performance
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): The Executive Board and the Board of Directors conduct annual performance assessments based on the methodology defined by the Holding company. Annually, directors conduct self-assessments and evaluate the Executive Board as a collegiate body. The members of the Board of Directors conduct self-assessments and evaluate the Board of Directors and the Executive Board as collegiate bodies. The results of this assessment process are discussedby the Board of Directors and the Executive Board and reported to the controlling company. In 2017, the Variable Pay process (RVA - Remuneração Variável) was implemented to assess the performance of Directors.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-29 - Identifying and managing economic, environmental, and social impacts
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf’s Board of Directors is the first level in the Company’s administration scale. The Board of Directors, in conjunction with the Executive Board, is responsible for analyzing and approving Chesf’s Business Plan (BP) and Strategic Planning (SP), which involve the analysis of the risks and opportunities arising out of economic, environmental, and social issues. During the preparation of the BP and of the SP, Chesf also engages other strategic departments, which assist in the identification of the main risks and in the evaluation of opportunities that aim to achieve the proposed strategies and goals. Furthermore, the Board of Directors monitors on the achievement of the financial, operational, and social and environmental goals set out in the Agreement on Corporate Performance Goals (CMDE).
In order to support the highest governance body in the identification an management of impacts, risks, and opportunities, the Company follows th Planning and Management process of the Eletrobras System - the majorit shareholder, based on the Strategic Plan of the Eletrobras System and on th Eletrobras Business and Management Master Plan. Due diligence processe have been discussed by the compliance areas of Eletrobras and its controlle companies, in addition to other areas involved, for defining criteria an procedures. As with other projects and actions within the scope of the Integrit Program, these processes are supported by the Executive Board and by the Boar of Directors; however, these processes have not been implemented at Chesf.
The main stakeholder consulted is the majority shareholder. There are als interactions with regulatory agencies, the National System Operator (ON - Operador Nacional do Sistema), customers, and commercial partners.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): 45
INDICATOR CODE: 102-30 -Effectiveness of risk management processes
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The decision-making process at the Company, regardless of its importance and relevance, explicitly involves the consideration of the associated risks. The Board of Directors and the Executive Board, in decisions pertaining to economic, environmental, and social matters, require technical support that point out and evaluate the potential risks associated. Moreover, Chesf’s Board of Directors oversees the corporate risk management system that has been implemented to prevent and mitigate the most relevant risks to which the Company is exposed, assessing and approving policies and guidelines.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-33 - - Communicating critical concerns
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Strategic topics are first analyzed by the Executive Board and then, when necessary, are included in the agenda of the meetings of the Board of Directors. Chesf’s Board Member and Chief Executive Officer has a permanent communication channel with the Chairperson of the Board and the other members, so as to address critical concerns in a timely manner.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-35 -Remuneration policies
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Chesf is a quasi-public corporation, incorporated under Decree-Law No. 8,031, dated October 3, 1945, controlled by Eletrobras and integrates the Public Administration, that is, a state-owned company.
As provided in Decree No. 89,309/84, article 4, item ‘I’, sub-item ‘a’, an Decree 9,035/17, Annex I, article 41, item VI, sub-item “i”, the Departmen for the Coordination and Governance of State-Owned Enterprises (SEST governs the companies in which the Federal Government, whethe directly or indirectly, owns the majority stake of the capital stock wit voting rights and is responsible for approving the compensation o members of the Board of Directors and of the Executive Board.
The General Meeting is responsible for determining the compensation of members of the Board of Directors and of the Executive Board, as provided in article 9, III c/c article 20 §2, of the Company’s Bylaws. Thus, the compensation policy for members of Chesf’s Board of Directors and Executive Board is defined by its majority shareholder, which, ultimately, is the Federal Government. In this context, considering that the compensation of the members of the Board of Directors and of the Executive Board, in 2017, was approved by the relevant authorities and that article 152 of Law No, 6,404/76 sets out that said compensation be determined based on their responsibilities, time dedicated to their duties, competence and professional reputation, and the market rates for such services, it can be concluded that these were the factors that steered the compensation policy and led to its approval. Seeking to substantiate such totals, below is an excerpt from the minutes of Chesf’s 69th General Meeting, which provides on the compensation of the members of the Company’s Board of Directors and of the Executive Board for 2017:
“6. propose the amount of BRL 6,694,452.26 (six million, six hundred and four thousand, four hundred and fifty-two reais and twenty-six cents) for payment of compensation to the members of Chesf’s Executive Board and Board of Directors between April 2017 and March 2018 and to establish an amount of up to BRL 44,102.35 (forty-four thousand, one hundred and two reais and thirty- five cents) as monthly compensation to be paid to the Chief Executive Officer and of up to BRL 42,002.24 (forty-two thousand and two reais and four cents) as monthly compensation to be paid to the other Directors; said amounts include all components of their compensation, namely the salary, Christmas bonus, vacation pay, meal allowance, housing allowance, health insurance, life insurance, cost-of-living allowance, complementary pension fund, relocation allowance, irreducibility, personal advantage, education allowance, hazard pay, funeral insurance, quarantine, RVA, INSS (social security), and FGTS (Severance Indemnity Fund for employees). Directors may choose between the amount corresponding to the compensation for their position or job in the entity of origin and the highest compensation paid to an employee at the state-owned company for which they were elected, appointed, or assigned, under the terms of Decree-Law 2,355/1987 and the corresponding salary shall not include any eventual benefits granted to Company employees under the Collective Bargaining Agreement in terms of pay raises nor any other raises, such as those for merit, promotions, or any other non-linear increases added to the compensation of employees.
7.Establish the compensation of the members of the Fiscal Council and of the Board of Directors as 10% of the average monthly compensation paid to the members of the Executive Board, under the terms of Law 9,292, dated July 12, 1996, not including, for either collegiate body, the other benefits.
8. Delegate power to Chesf’s Board of Directors to make the individual distribution of the amounts earmarked for payment of compensation to the members of the Executive Board, according to the global amount set for each period less the total allocated to the Board of Directors itself and considering the monthly nominal values set forth in this General Meeting.” Chesf’s compensation policy for members of the Board of Directors and Executive Board is defined at Federal Government level, taking into account the aspects set out by Law (article 152 of Law 6,404/76), which do not have any direct relation with the economic, environmental, and social topics. Chesf does not have in place a policy for attraction bonus or incentive for recruitment and clawbacks1 applied to the highest governance body and to senior executives. The Department for the Coordination and Governance of State-Owned Enterprises (SEST), which is legally competent to approve the compensation of the members of the Boards of Directors and Executive Boards of state-owned companies, does not approve payments of this nature. In relation to the termination and retirement policy of the highest governance body and executives, the end of a director’s term entails payment of the following: balance of compensation and prorated vacation pay. Executive Board members not employed by the Company are entitled to a complementary pension fund paid by the Company and contracted from a financial institution that is active in the market. Executive Board members employed by Chesf are entitled to a complementary pension fund offered by Chesf Assistance and Social Security Foundation (FACHESF - Fundação Chesf de Assistência e Seguridade Social).
1 Corporate Governance Practice that allows for the confiscation of executives’ salaries or bonuses in case of mismanagement or accounting frauds.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-36 - Process for determining remuneration
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The determination of Chesf’s compensation starts by defining base pay. When an employee is hired by the Company through a civil servant exam, their initial base pay (attraction salary) has already been defined. The amount varies according to the base category, pursuant to the Career and Remuneration Plan (PCR - Plano de Carreira e Remuneração). Exceptions are employees allocated to job positions with higher education, whose professions are regulated by CREA (Engineering, Architecture, Agronomy, and Veterinary Medicine). In these cases, the attraction salary shall not be lower than the salary floor for the category. Compensation also varies according to fixed- pay components (such as Seniority Differential Pay and Bonus Pay, among others) and to variable-pay components (such as differential pay for Hazard, Night-Shift, and Hardship, among others). Base pay may vary over time according to advancements in each employee’s career, considering the results of performance assessments and Collective Bargaining Agreements (ACT - Acordos Coletivos de Trabalho). Only those employees who meet the criteria set out in the Performance Management System (SGD - Sistema de Gestão de Desempenho), based on the assessment of their competencies and the achievement of the established goals are eligible for salary raises for merit.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-37 - Stakeholders’ involvement in remuneration
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Chesf periodically conducts an Organizational Climate Survey, in which one of the items assessed – Career and Compensation – aims to gauge how each employee sees their compensation in relation to the rates practiced by the market (Electric Utilities Sector). Readjustments and, consequently, salary increases result mainly from each employee’s advancement in their careers, pursuant to the Career and Remuneration Plan (PCR) and to Collective Bargaining Agreements (ACT), which are the product of meetings between the Company (Holding)/CHESF and its employees, represented by the trade union leaders of each region. In 2017, no Climate Surveys were conducted.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-38 - Annual total compensation ratio
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): The average annual compensation paid to the highest-paid employee in the Company is 6.4 times higher than the average annual compensation paid to the other employees. The monthly average, in 2017, is BRL 68,523.70. In 2017, the average monthly compensation, excepting the highest-paid employee, is BRL 10,665.42.
Calculation methodology :
> Highest-paid employee: salary + seniority-based pay + AGFI (additional pay for incorporated function) + hazard differential pay.
> Other employees (all): salary (all) + seniority differential pay.
> Other employees (managers): salary + seniority differential pay + bonus pay or AGFI (additional pay for incorporated function)..
> Other employees (other): salary + seniority differential pay + hazard differential pay + overtime + unhealthy-work differential pay + other additional pay set out by law.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 102-39 -Percentage increase in annual total compensation ratio
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Calculation methodology:
> Ratio = 2.8
> Highest-paid individual: increase of 14.9%
> Total of employees: 5.2%
The difference between the highest-paid individual and the total of employees results from the payment of hazard differential pay in a period of seven months in 2017. The average total annual compensation of all employees, excepting the highest-paid employee, is BRL 10,665.42.
PERFORMANCE
(qualitative and quantitative information):
> Percentage of increase to the compensation of the highest-paid individual in the organization: 14.9%
> Percentage of increase to the average total annual compensation of all employees: 5.2%
> Total average annual compensation of all employees, excepting the highest- paid employee: BRL 10,665.42
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 202-2 - Proportion of senior management hired from the local community
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): At Chesf, 100% of senior management positions are held by employees who live in the local community.
1) Senior Management: Chief Executive Officer and other Directors;
2) Major Operating Units: Company Headquarters;
3) “Local”: region of Brazil. In the case of Chesf, Northeast Brazil.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 405-1 -Diversity of governance bodies and employees
MATERIAL TOPIC RELATED: Corrupção e Gestão da Ética
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Staffing of governance bodies does not follow specific internal rules. Chesf is a federal quasi-public company controlled by Eletrobras and, ultimately, by the Federal Government. The members of the Company’s Board of Directors and of the Executive Board are appointed by the Controlling Company, in strict compliance with legal criteria, namely those set out in Laws 6,404/76 and 13,303/16, whose provisions do not cover criteria pertaining to gender, race, or age. Chesf’s governance bodies are: the Executive Board, the Board of Directors, and the Fiscal Council.
% DE INDIVÍDUOS QUE INTEGRAM OS ÓRGÃOS DE GOVERNANÇA DA ORGANIZAÇÃO, DISCRIMINADO POR GÊNERO
GÊNERO 2016 2017
Homens 82,35 100
Mulheres 17,65 0
% DE INDIVÍDUOS QUE INTEGRAM OS ÓRGÃOS DE GOVERNANÇA DA ORGANIZAÇÃO, DISCRIMINADO POR FAIXA ETÁRIA
FAIXA ETÁRIA 2017
Abaixo de 30 anos 0
Entre 30 e 50 anos 21,43
Acima de 50 anos 78,57
% DE EMPREGADOS POR CATEGORIA FUNCIONAL, DISCRIMINADO POR GÊNERO
GÊNERO 2017
Homens Cargos com exigência de nível universitário: 20,67%;
Cargos sem exigência de nível universitário: 55,85%;
Cargo gerencial: 3,78%
Mulheres Cargos com exigência de nível universitário: 8,15%;
Cargos sem exigência de nível universitário:10,77%;
Cargo gerencial: 0,78%
% DE EMPREGADOS POR CATEGORIA FUNCIONAL, DISCRIMINADO POR FAIXA ETÁRIA
FAIXA ETÁRIA 2017
Abaixo de 30 anos Cargos com exigência de nível universitário: 1,07%;
Cargos sem exigência de nível universitário: 3,11%;
Cargo gerencial: 0,02%
Entre 30 e 50 anos Cargos com exigência de nível universitário: 18,34%;
Cargos sem exigência de nível universitário: 24,96%;
Cargo gerencial: 2,96%
Acima de 50 anos Cargos com exigência de nível universitário: 9,41%;
Cargos sem exigência de nível universitário: 38,55%;
Cargo gerencial: 1,58%
% DE INDIVÍDUOS, DISCRIMINADO POR OUTROS INDICADORES DE DIVERSIDADE, QUANDO RELEVANTES (COMO GRUPOS MINORITÁRIOS OU VULNERÁVEIS)
2017
Em órgãos de governança da organização Percentual de empregados - Grupo Minoritário - Indígenas: 0%;
Percentual de empregados - Grupo Minoritário - Pessoas com deficiência: 0%;
Percentual de empregados - Grupo Minoritário - Negros (as): 0%
Por categoria funcional Grupo Minoritário - Indígenas Homens: 0,61%; Percentual de empregados - Grupo Minoritário - Indígenas mulheres: 0,17%; Percentual de empregados - Grupo Minoritário - Pessoas com deficiência homens: 3,18%; Percentual de empregados - Grupo Minoritário - Pessoas com deficiência mulheres: 0,78%; Percentual de empregados - Grupo Minoritário - Negros homens: 6,31%; Percentual de empregados - Grupo Minoritário - Negros mulheres: 0,97%
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): 97
INDICATOR CODE: 103- Management approach GRI 205 - Anti-corruption
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): > The topic of Anti-corruption is deemed material because of the companies’ growing concern for ensuring that their business environment is free of fraud and corruption. Law 12,846/2013 (Anti-Corruption Act) set out the Company’s strict liability for harmful acts conducted on its behalf or for its benefit, which reinforces the need for defining integrity policies and programs widely disseminated to all employees and stakeholders, clearly defining the standards of conduct required by the Company in the conduction of its activities and in the relationship with stakeholders. Specifically for state-owned companies, the need for implementing and enhancing integrity programs continues to grow, considering that regulatory agencies, such as CGU, have become stricter in their inspections and recommendations concerning this topic.
> Anti-corruption initiatives and procedures have been implemented considering both the workforce and the Company’s stakeholders because the impacts from wrongful acts may affect a number of operations/processes, such as procurement, sponsorships, donations, and the interactions with Special Purpose Entities (SPEs) in which the Company holds interest and with various other public authorities and entities with which the Company maintains institutional relations.
> A Company may be affected by the wrongful acts of its employees, within the Company itself, and by any irregularities committed on its behalf by third parties with whom it maintains business relations. These impacts may affect the Company’s image before the market and its stakeholders, and have financial repercussions, considering the strict liability and the sanctions set forth in the Anti-Corruption Act.
> Chesf implemented the Integrity Program in 2015, adhering to the Compliance Manual, which is unique to all Eletrobras Companies and, since then, the Company has developed actions and projects that are fully aligned with the Holding and with the other companies of the group that make up the Compliance Steering Committee (CDC), a discussion forum that is held weekly via videoconferencing and that allows for the ongoing enhancement of the integrity practices and procedures. In 2016, the program was fine tuned and is now called “Eletrobras 5 Dimensions Program,” to better represent the evolution of the maturity of the Eletrobras companies in managing corporate integrity, demonstrating the initiatives adopted in each dimension. The five-dimension model is based on the guidelines put forth by COSO (Committee of Sponsoring Organizations of the Treadway Commission) and by the Office of the Comptroller General (CGU) and involves the following dimensions: 1. Development of the Management Environment of the Integrity Program; 2. Risk Assessment; 3. Structuring and implementation of Policies and Procedures; 4. Communication and Training; and 5. Monitoring, Remediation Measures, and Application of Penalties. The consolidation and the ongoing enhancement of the Integrity Program involved a number of initiatives in 2017, encompassing different departments and processes, such as the online ethics and integrity training course, made available to all employees, the launch of the Eletrobras companies’ independent whistleblower channel, and other actions involving suppliers and other stakeholders, which will continue in 2018.
> The goal of the management approach adopted for this topic is to consolidate a culture of corporate integrity, so that all employees understand the importance of conducting their activities based on the ethical principles and standards of conduct established by the Company. The actions and procedures implemented, which are fully aligned with the guidelines set forth by the Eletrobras Holding, seek to enhance controls and mitigate risks of fraud and corruption that may have very negative impacts for the Company, both in terms of image and financial.
> The Company’s policy pertaining to integrity and ethics is provided in the following documents: the Compliance Manual and the Code of Ethics of the Eletrobras companies, which can be found on Chesf’s Portal on the Internet, at: http://www.chesf.gov.br/empresa/Pages/Comissao: Etica/ Codigo: Eticae: Conduta.aspx http://www.chesf.gov.br/licitacoes/Documents/ Manual%20de%20Compliance%20-%202a%20edição%20-%20Chesf.pdf
> In addition to being subject to the Brazilian Anti-corruption Act, Chesf, as a Company controlled by Eletrobras, also has to comply with the American Anti-Corruption Act (FCPA – Foreign Corrupt Practices Act), since Eletrobras’s shares are listed on the New York Stock Exchange (NYSE). In addition to complying with national and international anti-corruption acts, the Company is committed to conforming to all related recommendations issued by regulatory agencies, such as CGU, which audits corporate integrity in state-owned companies. However, it should be noted that, in addition to its regulatory compliance, the Company’s main commitment is to developing an ever-more consolidated environment based on ethics and integrity, thus avoiding any negative impacts on its image and businesses.
> Seeking to further enhance the Integrity Program at the Eletrobras companies, the Holding retained, in November 2017, the services of a consulting company to assist in the implementation of new projects and initiatives. Over the course of its work, in 2018, goals and indicators related to the program should be set out.
> The department in charge of running the Integrity Program is called APC (Compliance and Risk Management Advisory), which reports directly to Chesf’s Presidency. Senior management is responsible for providing the resources and for developing the integrity management environment across the Company, as set out in dimension 1 of the 5 Dimensions Program, which has been done consistently, considering that Chesf’s Executive Board and Board of Directors continually monitor Integrity Program actions via the monthly presentations made by the department responsible for the activities of the program (APC) during the meetings of these collegiate bodies.
> The resources for the operation of the department responsible for conducting the Integrity Program include a specific area for the team and equipment suitable for conducting the activities.
> Before August 2017, all fraud- or corruption-related complaints were received by Chesf’s Ombudsman’s Office, which forwarded them to be analyzed and handled by the Compliance department. As of August 21, 2017, a new complaint management and handling process was implemented at the Eletrobras companies, which centralizes receiving of complaints at an independent channel (outsourced) and the participation of the Integrity System Committee (CSI), with representatives of the Holding and of the other companies of the group. After the complaints are received and sorted by the independent channel, the committee defines how they should be handled, ensuring the standardization of the process and the remediation of any eventual irregularities found, seeking to enhance internal controls.
> Among the specific actions implemented at Chesf under the integrity program, we highlight the “background check” procedure of the representatives appointed as Board Members of the SPEs in which Chesf holds interest. Moreover, among the actions started in 2017 and under implementation, we highlight the due diligence and risk classification procedures of suppliers and companies sponsored by Chesf, in addition to a more comprehensive assessment of the fraud and corruption risks at the Company (FRA - Fraud and Risk Assessment), which is ongoing and supported by a specialist consulting company.
> The management approach is evaluated by the Company’s internal audit and by external auditors and regulatory agencies. In relation to external audits, between late 2016 and early 2017, CGU conducted a corporate integrity audit at Chesf, which generated recommendations for improvement that will be monitored by the regulatory agency in a future audit. Furthermore, the external auditor that conducts SOX compliance tests also assesses the controls pertaining to management of the Integrity Program. Chesf’s Internal Audit included the audit of the corporate integrity of its annual planning, as recommended by CGU. In addition, the implementation of the new whistleblower channel of the Eletrobras companies, in 2017, which is in its consolidation stage, will enable the integrated management of the indicators related to all complaints received by the companies of the group, and the continuous understanding and enhancement of controls and procedures, to avoid and remediate any eventual irregularities found.
> As reported in the previous item, management of the indicators of the new Whistleblower Channel will enable the enhancement of controls and adjustments to the management approach, as necessary. In addition, the management approach is also adjusted based on recommendations by regulatory agencies and internal and external audits.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 205-1 Operations assessed for risks related to corruption
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf’s risk matrix identifies two specific risks related to “Fraud and Corruption” and the risk that refers to the American and Brazilian Anti-corruption Acts (FCPA/ LACBRA). Over the past two years, risks related to anti-corruption acts were assessed based on the development of the Company’s Integrity Program; however, a comprehensive and in-depth assessment of all processes and business areas has yet to be conducted to identify the most vulnerable areas and to define actions to mitigate risk and follow up on goals and results. In November 2017, Eletrobras retained the services of a consulting company to assist in the enhancement of the group’s Integrity Program and a fraud and corruption risk assessment (FRA – Fraud and Risk Assessment) is included among the deliverables of such work. An initial assessment has already been conducted from the general perspective of the Eletrobras group, and the specific assessment of each company, with the local divisions, is underway and should be completed in the first quarter of 2018.
In 2017, the four operations that are more prone to fraud/corruption were considered; they correspond to the four processes mapped in Eletrobras Technical Note as the most prone to risks of corruption in the group, namely:
> Suppliers;
> Representatives in senior management positions;
> Donations in connection with partnerships (such as research projects, sponsorships, and social projects);
> Partners in joint ventures (partners in SPE).
Among the four segments above, two were assessed in 2017 (suppliers and representatives in senior management positions), totaling 50% (considering only these four operations). In 2018, this number should increase after the preparation of the fraud/corruption risk map.
In the assessments conducted to date, no significant risks have been identified. The fraud/corruption risk assessment (FRA – Fraud and Risk Assessment) that is underway will generate the fraud and corruption risk map, enabling the identification of the most significant risks.
There are no cases to be reported as examples of this indicator in 2017. The fraud and corruption risk assessment will enable the prioritization of the main risks identified and the adoption of new actions and procedures, throughout 2018, to mitigate risks and enhance the Integrity Program.
PERFORMANCE
(qualitative and quantitative information):
Total number of operations assessed for risks related to corruption: 2 Percentage of operations assessed for risks related to corruption: 50%
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 205-2 Communication and training about anti-corruption policies and procedures
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): At Chesf, the Integrity Program is communicated in a number of ways, such as internal newsletters, videos, Employee’s Compliance Handbook, and others, made available on the intranet. Furthermore, all employees sign, as they join the Company, a document confirming receipt of the Code of Ethics, which also contains specific items that cover topics on anti-corruption.
Senior management (Executive Board and Councils) receives monthly reports on the progress of the Integrity Program.
The training actions concerning ethics and integrity are jointly planned by the corporate education department and the other departments involved, such as the Compliance department and the Ethics Committee. Some actions are carried out by the University of the Eletrobras Companies (Universidade das Empresas Eletrobras - UNISE) as well, seeking to broadly communicate the integrity concepts to all employees of the group.
These actions were communicated to suppliers via specific contract clauses and via a document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” an attachment to all agreements.
One of the highlights for 2017 was the online training on ethics and integrity, offered by Universidade Eletrobras (UNISE), which widely disseminated to all employees ethical principles and corporate integrity concepts, and Chesf achieved a completion rate of 97%.
PERFORMANCE
(qualitative and quantitative information):
Total number of members of the governance body who were communicated about the organization’s anti-corruption policies and procedures, broken down by region: 13
% of members of the governance body who were communicated about anti- corruption policies and procedures, broken down by region: 100%
Total number of employees who were communicated about anti-corruption policies and procedures, broken down by region: 4,121; Midwest 1; South 0; Southeast 0; North 0
Total number of employees who were communicated about organization’s anti- corruption policies and procedures, broken down by employee category: Managerial level: 188; Employees with higher education: 1,188; Employees without higher education: 2,746
% of employees who were communicated about the organization’s anti-corruption policies and procedures, broken down by employment category: 100%
Total number of business partners who were communicated about organization’s anti-corruption policies and procedures, broken down by region: 22 (considering the business partners related to partners of SPEs) % of business partners who were communicated about the organization’s anti-corruption policies and procedures, broken down by region: 100% (considering the business partners related to partners of SPEs)
Total number of members of the governance body who received training on anti-corruption, broken down by region: 13
% of members of the governance body who received training on anti-corruption, broken down by region: 100%
Total number of employees who received training on anti-corruption, broken down by region: 4,264; Midwest 1; South 0; Southeast 0; North 0 (the total number of employees trained exceeds the number of employees in the workforce in December 2017 because the employees who opted for voluntary termination were considered in this calculation)
% of employees who received training on anti-corruption, broken down by region: 97%; Midwest 100%; South 0; Southeast 0; North 0
Total number of employees who received training on anti-corruption, broken down by employment category: Managerial level: 188; Employees with higher education: 1240; Employees without higher education: 2,837 (the total number of employees trained exceeds the number of employees in the workforce in December 2017 because the employees who opted for voluntary termination were considered in this calculation)
Total number of employees who received training on anti-corruption, broken down by employment: Managerial level 100%; Employees with higher education 99%; Employees without higher education 96%
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 103 Management approach GRI 206 - Anti-competitive Behavior
MATERIAL TOPIC RELATED: Corruption and Ethics Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): The topic of anti-competitive behavior does not apply to Chesf, since the Company operates on the market through concessions and government authorizations.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable

SPECIFIC PURPOSE ENTITY > MANAGEMENT APPROACH - GOVERNANCE >

INDICATOR CODE: NA
MATERIAL TOPIC RELATED: Specific Purpose Entity
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Chesf’s investments in Generation via Special Purpose Entities (SPE) amount to 16,570.81 MW, which correspond to 3,074.54 MW equivalent, totaling BRL 522.5 million. Of this total, BRL 434.3 million was invested in the Special Purpose Entities (SPEs) ESBR, Norte Energia, and Sinop (Hydroelectric Projects) and BRL 87.9 million was invested in the SPEs Baraúnas I, Morro Branco I, and Mussambê (Wind-power Projects).
To learn more, refer to page 46 of Chesf’s 2017 Annual and Sustainability Report.
PERFORMANCE
(qualitative and quantitative information):
To see the information, refer to pages 46 and 47 of Chesf’s 2017 Annual and Sustainability Report.
LOCATION IN THE REPORT: Page (s): 46 and 47

COMPLIANCE ISSUES

INDICATOR CODE: 307-1 - Non-compliance with environmental laws and regulations Describe how the area manages this indicator. What are the main policies, commitments, goals, and how these results are measured
MATERIAL TOPIC RELATED: Compliance Issues
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): Chesf complies with the standards and legislation in force governing the environmental management of its projects and facilities. Upon receiving notification from a licensing agency, non-compliance is analyzed and administrative defense procedures are conducted, when applicable. Should the case escalate to the judicial level, the Company’s organizational structure has a unit responsible for protecting and monitoring its interests. Management of environmental disputes includes the Administrative, Civil, and Criminal spheres. At Chesf, the administrative sphere is handled by the environmental department, with the support of the Company’s legal department. In the Civil and Criminal spheres, proceedings are handled by the Legal department, with the support of other related departments.
PERFORMANCE
(qualitative and quantitative information):
Chesf has been following the criterion set out by Eletrobras in previous years, that is, “significant fines” are those that reach at least 1% of Chesf’s Net Operating Revenue (NOR). There were no significant fines in 2017.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 417-3 - Incidents of non-compliance concerning marketing communications | What are the main policies, commitments, goals, and how these results are measured
MATERIAL TOPIC RELATED: Compliance Issues
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Chesf’s communications are in line with the Policy on Communication and Engagement with Stakeholders of the Eletrobras companies, with the Code of Ethics and Conduct, and with the relevant applicable legislation, especially advertising and sponsorship actions, which also comply with the guidelines issued by the Department for Social Communication of the Presidency of the Republic (Secom) and with decisions from supervisory agencies. In 2017, there were no instances of non-compliance at Chesf, given that the Company has been following the norms in its corporate conduct.
In 2017, the Department for Social Communication of the Presidency of the Republic started a new Annual Investment Planning system (PAI - Plano Anual de Investimentos), an improvement process that provides greater traceability to external auditors and to Secom itself. The PAI system produced a new procedure to safeguard the integrity of the Company’s official information concerning the Institutional Advertising and Public Utility areas. All external campaigns standardized by Secom will be within the PAI system.
PERFORMANCE
(qualitative and quantitative information):
There were no cases.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 418-1 -Substantiated complaints concerning breaches of customerprivacy and losses of customer data
MATERIAL TOPIC RELATED: Compliance Issues
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Chesf works with transparency and ethics and is always open to listening to its customers. Therefore, in addition to the Ombudsman’s Office and to the Citizen Information System (SIC - Sistema de Informação do Cidadão), there are other communication channels through which consumers can request information, such as: Customer Service Center (CAC - Centro de Atendimento ao Cliente), Contact Us, emails, and telephone numbers, available on the Company’s website. Safeguarding customer data privacy and satisfaction is critical. Hence, the energy trading and transmission team is trained, qualified, and committed, and strictly complies with the Code of Ethics. Actions are taken to ensure data security with a Reliability and Compliance Clause, agreed upon in the Contract and based on transparency and ethics, respecting consumer privacy. Therefore, over the years, no information has been leaked or sent to third parties other than those who are parties to the agreements signed. One of the Company’s procedures is its biannual customer satisfaction survey.
There have been no complaints concerning customer data leakage, theft, or loss.
PERFORMANCE
(qualitative and quantitative information):
There were no cases.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 419-1 - Non-compliance with laws and regulations in the social and economic area
MATERIAL TOPIC RELATED: Compliance Issues
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): The fines related to this indicator are due to non-conformities identified by the National Electric Energy Agency (ANEEL), substantiated in the issuance of Violation Notices.
Regulatory management involves tracking changes in legislation that are in the pipeline in the legislative branch and at ANEEL; Chesf’s participation in Public Hearings and Consultations of its interest; coordination of rate review and adjustment for Transmission and Generation; proposing and monitoring the implementation of measures to improve processes in order to comply with regulatory standards; and the Company’s defense with ANEEL, especially concerning the issuance of Terms of Notification and Violation Notices originating from this regulatory agency.
The fines recorded in 2017, resulting from non-compliance with laws and regulations related to social and economic matters, were not significant.
PERFORMANCE
(qualitative and quantitative information):
There were no cases of significant fines (greater than 1% of NOR).
LOCATION IN THE REPORT: Page (s): Not applicable

VOLUME OF ASSETS > MANAGEMENT APPROACH - GOVERNANCE >

INDICATOR CODE: 103-2 -The management approach and its components
MATERIAL TOPIC RELATED: Volume of assets
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Generation System
In 2017, two major generation projects were completed, Casa Nova II and III power plants. The first is already generating revenue and the second, still under implementation, will start generating revenue by early 2018. These projects marked the resumption of Chesf’s investments in projects that had been suspended. The projects of the Wind-Power Collection Facilities (ICG - Instalações Coletoras de Geração Eólica), the wind farms, were also completed and large-scale projects for solar and wind power generation are on the Company’s radar. An area was created in the Engineering Department to deal specifically with investments in diversification of the energy matrix. This area is composed of three departments that focus on wind, solar, and hydro power, which advance beyond studies, prioritizing expansion projects for generation of energy from alternative sources.
In terms of solar power generation, the Company continued to develop the studies concerning two Solar Power projects. Together, these projects amount to 230 MWp and will be implemented if successful in the upcoming auctions for energy sales. Chesf also conducts measurements in 17 solarimetric stations, located in the semi-arid portion of Northeast Brazil, aiming to develop its own solar generation projects with photovoltaic and solar thermal technologies in order to take part in auctions.
Within the scope of the Research and Development and Innivation Program (R&D+I), the Company has been developing the following solar generation projects:
Petrolina Solar Complex - PE (3 MWp), In 2017, Chesf launched the Petrolina Solar Power Reference Center (CRESP), a research environment that comprises four projects, two based on photovoltaic technology and two based on concentrated solar thermal technology.
The construction of the 2.5-MWp photovoltaic power plant, including its civil infrastructure, started in June 2017 with completion expected for April 2018. The conceptual project for the Central Tower concentrating solar thermal power plant is being prepared. Upon completion of this phase, there will be a Call for Proposals in order to select the company that will develop the project, expected to be published in June 2018. The parabolic trough concentrating solar thermal power plant is being studied by Chesf together with CEPEL. A Call for Proposals to hire the company that will develop the plant as well as the research institutes is expected for July 2018.
Floating Photovoltaic Power Plant in the Sobradinho Reservoir (5 MWp) Also in 2017, a navigability study was conducted in the reservoir of the Sobradinho hydroelectric power plant, near the reservoir, for the implementation of the floating photovoltaic power plant. All materials required for the installation of the first stage of the project, whose installed capacity is estimated at 1 MWp, were received and inspected. This stage is scheduled to start in March 2018 and end in July 2018.
Other highlights in solar power are the programs in which the Company takes part, called “Solar Thermal Power Plants for Generation of Electricity” and “Solar Program for Generation of Electricity - Northeast Solar.” It is a cooperation initiative for the sustainable development between Brazil and Germany, funded by the German government, via the German Development Bank (the KfW) and in cooperation with GIZ (German Agency for International Cooperation), for climate change mitigation measures under its new financing framework, which seeks to foster technologies that favor protection of the global climate (DKTI). In 2017, the feasibility report for implementation of a solar thermal and photovoltaic power plant in the municipality of Bom Jesus da Lapa (BA) was completed and submitted. Currently, Chesf has been developing photovoltaic projects in the region, seeking to take part in upcoming solar energy auctions.
Transmission system The beginning of the revenue stream corresponding to the facilities of the Basic Network of the Existing System (RBSE - Rede Básica do Sistema Existente) –assets that entered before May 2000 and were pending – was one of the year’s major achievements and has allowed for investments in the Plan for Improvement of the Existing System, implemented in 2017 and with actions defined for 2018. Among the actions is the replacement of equipment for greater reliability in the System across Chesf’s entire operation, for example, in substations, transmission lines, and telecommunications.
With the restructuring of Chesf’s functional organization chart, a new conception was implemented in the Engineering Department, focusing on Enterprise Management. The Enterprise Implementation Supervisory Board was created, a new area with departments exclusively dedicated to procurement of goods and services for the projects, contract management, and enterprise management. The monitoring procedures were maintained, with monthly meetings for presentation of indicators, action plans, and results, in which the strategic goal for implementing transmission developments is assessed.
Over 2017, a total of 25 projects were completed, expanding Chesf’s Transmission System with the energization of 275 km of lines, in addition to six new Substations and reinforcements to the facilities, which added 3,135 MVA to the Company’s transformation capacity. Revenue generated by the transmission system reached BRL 1.18 billion. Therefore, the Company plans to complete all transmission projects by 2019.
DESCRIÇÃO
SE Fortaleza II - Instalação do 4o banco de autotransformadores 500/230 kV, 3 x 200 MVA, e conexões
LT 230 kV Morro do Chapéu II / Irecê e SE Morro do Chapéu II 230/69 kV - Nova SE
SE Igaporã III-500/230 kV; SE Pindaí II-230/69 kV; LTs 230 kV Igaporã III / Pindaí II CS, Igaporã III / Igaporã II C1,
C2; Seccionamento LT 500kV Ibicoara / Bom Jesus da Lapa, na SE Igaporã III
SE Pici II - Instalação de transformador 230/69 kV - 100 MVA, em caráter provisório
LT 230 kV Teresina II / Teresina III C1/C2 - Nova LT, SE Teresina III - Nova SE
LT 230 kV Itabaiana / Itabaianinha - Recapacitação
SE Picos - 2 BCs 230 kV, 15 MVAr cada, e respectivas conexões
LT 230 KV Mossoró IV / Mossoró II - Nova LT, SE Mossoró IV 230/69 kV (ICG) - Nova SE
SE Touros 230/69 kV (ICG) - Nova SE, LT 230 kV Touros / Ceará Mirim II - Nova LT
LT 500 kV Garanhuns II / Angelim II C1 - Substituição do cabo para-raios convencional por OPGW (12 km)
LT 230 kV Sobradinho / Casa Nova II e SE Casa Nova II 230/34,5 kV
SE João Câmara II - 3o TR 230/69 kV - 180 MVA e conexões associadas
SE João Câmara II - 02 BC 230 kV - 50,5 MVAr e conexões associadas
SE Piripiri - 2o BC 230 kV - 30 MVAr
SE Penedo - BC 230 kV - 2x15 MVAr
LT 230 kV Paulo Afonso / Angelim C4 - Substituição de cabos para-raios por OPGW (221 km)
LT 500 kV Angelim / Recife II C2 - Substituição de cabo para-raios por OPGW
SE Itabaianinha - Instalação do banco de capacitores 230 kV - 50 MVAr
SE Cotegipe - 4o TR 230/69 kV - 100 MVA
LT 230 kV Paulo Afonso III / Cícero Dantas C1 - Recapacitação para elevar limite de carregamento
LT 230 kV Sobradinho / Juazeiro da Bahia II C1 e C2 - Recapacitação, de 251 MVA para 350 MVA
SE Jardim - 3o ATR 500/230 kV - 3x200 MVA e conexões associadas
Transformador de aterramento 40 ohm/fase por um de 20 ohm/fase na SE Goianinha
SE Piripiri - Substituição TR 69/13,8 kV - 5 MVA por 10 MVA
SE Bom Nome - 1o TR substituição de 39 MVA

In the same year, Chesf connected wind farms to the National Interconnected System (SIN), which ensured an increased transformation capacity and allowed for transmission of more energy, with greater quality, to residential, commercial, and industrial consumers in the Northeast. All projects associated with the Wind-Power Collection Facilities (ICGs) were completed, among which the completion of ICGs Touros, Igaporã II, Morro do Chapéu II, and Mossoró IV.
Under the terms of concession agreement 019/2012, Chesf implemented SE Igaporã III 500/230 kV, whose connection to SIN was made through the 230-kV line, which was energized in 2015 and incorporated into Chesf’s assets. The Company also completed two 500-kV line sections with 70 km, designed and built by Chesf and transferred to Transmissora TAESA, since it is the result of the sectioning 500-kV LT Bom Jesus da Lapa II/Ibicoara.
Furthermore, among the highlights is the reinforcement in services provided to the metropolitan regions of Fortaleza, Teresina, Aracaju, and Salvador and the greater reliability across the entire system in the region. The works conducted in the Fortaleza II and Pici II Substations, in Ceará, were critical to reinforce the availability of energy in the metropolitan region of the capital of Ceará. In Salvador, the transformation reinforcement in the Cotegipe Substation was completed. In the metropolitan region of Teresina, the new Teresina III substation was delivered. Moreover, the energization of the second 100-MVA transformer of the Arapiraca III substation, which was completed in 2016, should be considered.
It should be noted that, in 2017, Chesf transferred to Energisa SE the 69-kV Zebu/ Xingó transmission line (56.5 km) and the 69-kV Xingó substation (12.5 MVA). With this transfer, the resulting increase for the Chesf system was 218.6 km of transmission lines. In addition, Enel Green Power transferred to Chesf the 230-kV Tabocas do Brejo Velho Substation.
In this portfolio, it should be noted that Chesf completed three reinforcement projects ahead of the schedule set out by the Regulatory Agency: SE Fortaleza II - Installation of the 4th 500/230-kV autotransformer bank; SE Pici II - Installation of a temporary 230/69-kV transformer - 100 MVA; and SE Piripiri - Replacement of TR 69/13.8 kV - 5 MVA with 10 MVA.
Works to improve transmission were also completed, corresponding to six projects to replace grounding transformers and four 69-kV line entrances to serve power utility companies.
PERFORMANCE
(qualitative and quantitative information):
In 2017, Chesf’s volume of investments in its own assets was BRL 898.3 million. Of this total, BRL 256.7 million was allocated to the generation system; BRL 597.9 million was invested in the transmission system; and BRL 43.7 million in other expenses for infrastructure. Between 2013 and 2017, the Compound Annual Growth Rate (CAGR) was -9.9%.
LOCATION IN THE REPORT: Page (s): 62 and 66

SUPPLIER MANAGEMENT

INDICATOR CODE: 102-9 -Supply chain
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): At Chesf, supplier contracting is governed by Laws 8,666/93 and 10,520/2002 and by Decree 5,450/2005. The entire process follows the requirements of Calls for Proposals and assessment of criteria for legal entitlement, technical qualification, economic and financial qualification, tax and labor good standing, and compliance with certain legal conditions to ensure human rights and compliance with environmental legislation.
Seeking the evolution and enhancement of controls, Chesf has been structuring a supplier management approach that will be based on the Supply Chain Risk Matrix, which will support the specific actions taken for the risks identified. In addition, a system should be implemented for contractual assessment of suppliers, which will result in supplier recognition and development actions. Also part of the commitment to improving its supplier management, the Company plans to resume its program called Meeting with Suppliers, which used to be held annually. Currently, the Company is planning specific actions for suppliers that have recurring problems with labor documentation and preparation of a communication program to raise awareness of suppliers and their contractors and service providers about issues pertaining to child labor, degrading work conditions, compulsory labor, human rights, and environmental topics.
PERFORMANCE
(qualitative and quantitative information):
In 2017, a total of 448 agreements were signed with 308 suppliers, totaling BRL 800.1 million. Of these suppliers, 101 were considered “essential to the business,” since they were contracted to carry out construction works and provide services and equipment for generation and transmission of energy. This represents 146 agreements and totals BRL 474.6 million, accounting for 32.8% of the total number of suppliers hired; 32.6% of the agreements executed; and 59.3% of the amount contracted over the year.
Although the bidding process does not prioritize local contracting, currently, nearly 45% of Chesf’s suppliers are located near the Company’s major operations.
For direct hiring under BRL 16,000, called Low-Value Acquisitions (ABV - Aquisições de Baixo Valor), 813 agreements were executed with 388 suppliers, totaling BRL 5.6 million.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 204-1 - Procurement Practices
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): At Chesf, supplier contracting is governed by Laws 8,666/93 and 10,520/2002 and by Decree 5,450/2005. The entire process follows the requirements of Calls for Proposals and assessment of criteria for legal entitlement, technical qualification, economic and financial qualification, tax and labor good standing, and compliance with certain legal conditions to ensure human rights and compliance with environmental legislation.
PERFORMANCE
(qualitative and quantitative information):
In 2017, a total of 448 agreements were signed with 308 suppliers, totaling BRL 800.1 million. Of these suppliers, 101 were considered “essential to the business,” since they were contracted to carry out construction works and provide services and equipment for generation and transmission of energy. This represents 146 agreements and totals BRL 474.6 million, accounting for 32.8% of the total number of suppliers hired; 32.6% of the agreements executed; and 59.3% of the amount contracted over the year. For direct hiring under BRL 16 thousand, called Low-Value Acquisitions (ABV - Aquisições de Baixo Valor), 813 agreements were executed with 388 suppliers, totaling BRL 5.6 million.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 308-1 - New suppliers that were screened using environmental criteria
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Environmental criteria are set out in technical specifications, terms of reference, and similar documents, containing the obligations of the supplier hired. Depending on the hiring, these criteria are broken down by: (a) final disposal of the solid waste generated in engineering works and services; (b) reverse logistics of tires, printer cartridges, and spent light bulbs; (c) transportation and final disposal of pruning waste; (d) handling of herbicides when contracting landscaping cleaning and conservation work; (e) disposal of waste contaminated with askarel, requiring compliance with environmental standards in handling, breakdown, decontamination, incineration, and disposal of the ashes generated after incineration of non-recyclable liquid and solid waste in industrial class I landfills - Hazardous, inherent to all PCB waste (askarel); (f) securing Waste Transportation Authorizations (ATR - Autorizações para Transporte de Resíduos), pursuant to Federal Decree 96,044/88; (g) management of environmental aspects of the engineering works and services in electric power transmission lines and substations, which include handling the topsoil that corresponds to the fertile layer moved during the earthwork services, restoration of areas eventually degraded by construction activities, and requirement for the suppliers contracted to provide training on the environment and environmental education to their employees.
Since the Company contracts through bidding processes and follows specific legislation, it does not select the most advantageous proposal considering only environmental criteria, although these are considered in the technical specifications. Chesf’s supplier contracting process mandatorily follows legislation. Hence, the adoption of environmental criteria is not a requirement for screening suppliers. The only exception is that suppliers are required to present a statement attesting that they were not legally sanctioned for any environmental administrative violation, under the terms of art. 72, § 8, item V, of Law 9,605/98 - Environmental Crimes Act, in bidding processes.
PERFORMANCE
(qualitative and quantitative information):
In 2017, a total of 91.2% of new suppliers were assessed and selected based on environmental criteria.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 308-2 -Negative environmental impacts in the supply chain and actions taken
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf does not assess suppliers for environmental impacts. However, in its RFPs, Chesf requests that companies submit a statement attesting that they have not been sanctioned for environmental violations and sets out a series of requirements in its technical specifications, terms of reference, and similar documents concerning the obligations of the supplier selected. A consolidated mapping of its supply chain has not yet been developed.
Actual and potential environmental impacts have not been mapped. However, based on the preparation of the Supply Chain Risk Matrix, the Company intends to identify suppliers that have potential environmental impact, although the study does not foresee mapping of such impacts.
PERFORMANCE
(qualitative and quantitative information):
Not available for the cycle..
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 414-1 - New suppliers that were screened using social criteria
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf does not subject its suppliers to due diligence processes for social impact. Last year’s report related to screening criteria for labor practices. However, the Company adopts certain social criteria, such as labor and social security issues that, in conjunction with disclosures 407, 408, and 409, make up the list of social criteria: right to collective bargaining; child labor; forced labor; and labor and social security issues. Furthermore, matters such ensuring social and cultural diversity and prohibiting any type of harassment, prejudice, and discrimination are clearly stated in our agreements or in the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” mentioned in all agreements.
Mapping of actual and potential environmental impacts unfulfilled. From the elaboration of the Suppliers Chain Risk Matrix, it is intended to identify suppliers with the risk of environmental impact, although there is no expectation that this study will map the impacts themselves.
PERFORMANCE
(qualitative and quantitative information):
In all bidding processes and agreements executed, clauses on protection of labor rights are considered. Consequently, all suppliers selected in 2017 were screened using labor practice criteria. Therefore, no new suppliers were selected using social criteria.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 414-2 - Negative social impacts in the supply chain and actions taken
MATERIAL TOPIC RELATED: Supplier Management
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): There is no process in place to assess social impacts in the supply chain.
PERFORMANCE
(qualitative and quantitative information):
Not available for the cycle.
LOCATION IN THE REPORT: Page (s): Not applicable

SATISFACTION (EMPLOYEES/CUSTOMERS)

INDICATOR CODE: 102-43 - Approach to stakeholder engagement
MATERIAL TOPIC RELATED: Satisfaction (Employees/Customers)
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See page 12 to 21 of the Report
PERFORMANCE
(qualitative and quantitative information):
See pages 12 to 21 of the Report
LOCATION IN THE REPORT: Page (s): 12 to 21
INDICATOR CODE: 102-44 - Key topics and concerns raised
MATERIAL TOPIC RELATED: Satisfaction (Employees/Customers)
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): See pages 13 and 14 of the Report.
PERFORMANCE
(qualitative and quantitative information):
See pages 13 and 14 of the Report.
LOCATION IN THE REPORT: Page (s): 13 and 14

HEALTH AND SAFETY

INDICATOR CODE: 103 - Management Approach - GRI 403: Occupational Health and Safety
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf manages this topic as follows:
1. Defines policies and guidelines on Occupational Health, Quality of Life, and Workplace Safety Engineering;
2. Coordinates and integrates the actions of Regional Branches into the various activities affected to the occupational health, quality of life, psychosocial, and workplace safety agencies;
3. Proposes, coordinates, and conducts studies and research on Occupational Health, Quality of Life, and Workplace Safety Engineering
4. Manages and runs programs that foster a preventive occupational health and safety culture;
5. Manages the implementation and certification of Occupational Health and Safety management systems;
6. Inspects the occupational health and workplace safety engineering actions with Company and contractor teams;
7. Identifies and analyzes occupational incidents, accidents, and diseases across the Company;
8. Advises various departments of the organization on issues involving Occupational Health, Quality of Life, and Workplace Safety Engineering.
Considering the need to define Occupational Health and Safet policies to ensure that the Company fulfills its mission, preservin the physical, mental, and psychosocial integrity of its staff, Ches developed a Normative Resolution that covers the following topics:
1. Establish guidelines to provide its employees with a safe and healthy workplace.
1.1 Ensure compliance with technical and legal provisions concerning employees’ health and safety, under the terms of Section V of Heading II, of the Consolidation of Labor Laws, of Occupational Health and Safety and its Regulatory Standards;
1.2 Understand that no task can be performed without taking the employee’s health and safety into consideration, and that no motive, whether urgency, importance, or others, may be used to excuse any instance of non-compliance with Occupational Health and Safety requirements;
1.3 Consider Occupational Health and Safety as an integral part of the Strategic People Management, engaging managers, also by example, and other professionals as a success factor;
1.4 Establish that all Company employees, regardless of their hierarchical level, are responsible for compliance with Occupational Health and Safety regulations, for themselves or third parties;
1.5 Ensure that all Occupational Health and Safety goals an indicators are associated with the corporate strategy;
1.6 Consider Occupational Health and Safety attitudes as part of the professional advancement of Company employees;
1.7 Constantly disseminate information and training as key tools in the development of the awareness and skills of Company employees and Occupational Health and Safety stakeholders;
1.8 Identify, assess, control, and mitigate risk factors concerning health and safety of the people involved with the Company, including those that may affect the population, in order to prevent accidents in all activities in the production processes;
1.9 Provide the necessary means to the Occupational Health and Safety agencies, allowing them to perform their activities;
1.10 Conduct constant research on new Occupational Health and Safety technologies.
2. Provide that the Corporate Management Department, though the People Management Supervisory Board (SGP - Superintendência de Gestão de Pessoas), is responsible for issuing Normative Instructions describing the procedures for compliance with the guidelines set forth in this Normative Resolution.
3. Establish that, in order to ensure Occupational Health and Safety, equal rights will be guaranteed to all its employees, and that there will be no discrimination on the basis of disability, ethnic origin, race/color, gender, age, marital status, religion, health status, sexual orientation, social or regional origin, political views, or any other condition of difference.
4. Determine that, in line with the Company’s commitment to the Federal Government’s gender equity policy, all terms eventually used in the document in Portuguese to refer to personnel, employees, beneficiaries, and equivalent that are used in their masculine gender form refer, in fact, to its collective form, which includes men and women.
5. Establish that all cases not covered in this Normative Resolution will be escalated to the Executive Board.
Occupational Health and Safety is the responsibility of the Corporate Management Department (DG), through the People Management Supervisory Board (SGP) and the Occupational Health and Safety Department (DGPS - Departamento de Saúde e Segurança do Trabalho), which performs a normative role in all companies and an executive role in the Recife and Natal regional offices and provides assistance for the Occupational Health and Safety agencies of other regional offices.
It should be noted that all employees are responsible for compliance with Occupational Health and Safety requirements, within the scope of their specific duties.
PERFORMANCE
(qualitative and quantitative information):
In 2017, the Occupational Health and Safety departments (OHS) proceeded with the actions and programs aimed at improving the health and quality of life of employees and at preventing occupational accidents and diseases, in addition to actions to control hazards and risks involved in the activities developed by the Company. All routine activities were conducted, as well as a number of new specific preventive actions, such as the Human Error Downtime Prevention Project (DEH - Desligamentos por Erro Humano), involving the Company’s Management, Operations, and Engineering Departments. The main goal is to reduce incidents caused by human error in the Electric Energy Operating System, including: structuring of the project, definition of the methodology to identify the risk factors that cause them, corporate awareness campaign, review of previous reports, and pilot cases applying the new methodology. Another project that generated great internal repercussion was “Previna-Se” (Protect Yourself), in partnership with the Substation Maintenance Department (DOMS), which, in its second year of activities, presented the results for identification of hazards and preparation of procedures, through a communication campaign. The purpose of this project is to reinforce the culture of safety and improve the working conditions of the employees involved in this segment of operation. The initiatives to raise awareness of employees are part of the program called Fique Alerta para a Segurança Dez (Keep an eye out for Top Safety), whose goal is to prevent occupational accidents and diseases and operational failures, stimulating employees to learn more about the Company standards, about the Regulatory Standards defined by the Ministry of Labor and Employment, and important tips concerning health and safety in the workplace. Through videos, lectures, and campaigns with the collaboration of facilitators from the Headquarters, all Regional Offices, and a number of agencies within Chesf, the idea was to disseminate the culture of occupational health and safety as the responsibility of all, culminating with Chesf’s III Quiz on Occupational Health and Safety Knowledge, in which employees took online quizzes on these topics, and the winners from the Headquarters and Regional Offices were brought together for a final round. The maintenance process was completed for the 2nd Cycle of the Certification of the Occupational Health and Safety Management System (SGSST) pursuant to the international standard OHSAS 18.001:2007, referring to the activities of the Xingó Power Plant - UXG.
Other diagnostic actions were executed to comply with the requirements of standard OHSAS 18.001, in order to implement SGSST at the Paulo Afonso IV Power Plant. This power plant resumed its Research and Development Project (R&D) about the Methodology for Application of Online Noise Control and Monitoring Solutions, aiming to implement noise control solutions at the power plant. Actions to record, follow up on, and address incidents and instances of non-compliance were intensified through an electronic Incident and Non-Compliance Control System (CIN).
It should be noted that, in 2017, there was a significant drop in the number of typical lost-time accidents, which affected the aggregate lost time accident Frequency Rate, which reached an all-time low. This result posted by Chesf in recent years had a positive impact on the decrease in the Accident Prevention Factor (FAP - Fator Acidentário de Prevenção), significantly reducing social security contributions resulting from Occupational Environmental Risk (RAT - Risco Ambiental do Trabalho). Within the OHS management process, Chesf requires the companies hired to comply with the legislations in effect, formalized through the Safety Plan. In order to gauge the efficiency of these plans, audits are conducted during the provision of services.
In 2017, one of the highlights was the involvement of occupational health and safety in the construction works of the Casa Nova II and III Wind Farm, with a low accident rate due to the appropriate Occupational Health and Safety Management for a project of this size. Permeating all these projects, the Occupational Health and Safety Portal has been recording and communicating all actions, in addition to programming occupational health and safety events held at the Headquarters and Regional Offices. In terms of Health and Quality of Life, the following activities were conducted: Retirement Preparation Program (PPA - Programa de Preparação para Aposentadoria) – aiming to provide adequate guidance for employees in general on relevant matters related to their preparation for retirement. The program covered topics such as health, social security, financial literacy, entrepreneurship, and the psychosocial aspects of the process. The distance learning course “Safe and Healthy Behavior” was resumed and is being offered to a second group of students. The course covers prevention of failures, errors, workplace accidents and health improvement. The course is offered to installation workers in all regional offices. The Company also conducted a Flu Vaccination Campaign, inoculating 2,200 people against the H1N1, H3N2, and Influenza B viruses in the Headquarters and Regional Offices. The following actions to promote Quality of Life stand out: continuation of the activities of the Health Promotion Center, in Recife, in partnership with SESI - PE, at no cost to Chesf, and of the Health Promotion Center (CPS), in Sobradinho; continuation of the Organic Farmers’ Market in Salvador and Recife; Chesf’s III Anniversary Tournament at the Headquarters and Regional Offices; mobilization of groups to take part in Street Runner Race Events in Salvador, Fortaleza, and Recife. The Company constantly seeks to optimize financial resources, maintaining or increasing the quality of the Company’s OHS actions.
Chesf also has in place various channels for grievances and complaints, including the Ombudsman’s office, link “Fale Conosco” (“Contact Us”) at the Occupational Health and Safety Portal on Chesf’s intranet (Chesfnet), Customer Information Service, and an email address exclusively for matters pertaining to Occupational Health and Safety (saudeeseguncadotrabalho@chesf.gov.br).
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 403-1 - Workers representation in formal joint management–worker health and safety committees
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): Chesf is divided into seven regional offices, in addition to the headquarters, and has decentralized Internal Accident Prevention Committees (CIPAs), pursuant to Regulatory Standard 5 (NR 5), of the Ministry of Labor and Employment (MTE). According to this Regulatory Standard, CIPAs are joint committees made up of an equal number of representatives elected by employees and appointed by the employer. Pursuant to NR-05, CIPAs’ main responsibilities are:
> To identify the risks of the process and of the workplace and prepare a risk map, with the participation of as many employees as possible and with the assistance of Chesf’s Occupational Health and Safety Engineering Service (SESMT);
> To develop preventive actions to solve occupational health and safety problems in the Company;
> To participate in the implementation of the preventive measures required and in the control of their quality, and assess the priority actions in the workplaces;
> To conduct periodic inspections and safety checks in the workplace and working conditions, seeking to identify risks to health and safety of workers;
> To disclose information on occupational health and safety;
> To collaborate in the development and implementation of the Program for Medical Control of Occupational Health (PCMSO), of the Environmental Risk Prevention Program (PPRA), and of other occupational health and safety programs; among other responsibilities provided for in NR-05.
Focus on worker safety continues to be one of the premises for Chesf which, throughout the year, conducted a number of actions to minimize risks in its facilities. The Company has an Occupational Health and Safety Policy and other internal standards that seek to ensure a safe workplace for its employees and to comply with the Regulatory Standards set out by the Ministry of Labor and Employment (MTE). Assessments of hazards and risks in the activities are conducted periodically. The main risks considered in these assessments are electric shocks and the thermal effects of electric arcs, since over 50% of employees are exposed to these risks. Other risks refer to noise caused by generation operations, chemical risks at the laboratories and print shops, and biological risks in infirmaries and in the Paulo Afonso hospital.
To protect its workers, Chesf has in place a series of procedures other than those provided for in legislation: the Environmental Risk Prevention Program (PPRA) and the Program for Medical Control of Occupational Health (PCMSO) – with occupational health exams in addition to those set out in NR-07. On a daily basis, employees use Collective Protective Equipment (CPE) and Personal Protective Equipment (PPE) to perform various activities. Although the Company does not provide protective equipment to contractors and subcontractors, its use is a requirement from the Occupational Health and Safety Plan and is inspected in safety audits. In addition, the Company systematically monitors safety indicators concerning the Accident Frequency and Severity Rates and other proactive indicators, developed based on the Incident and Non-Compliance Registration and Control System (CIN).

It should be noted that Chesf is certified by the Occupational Health and Safety Management System (SGSST), in compliance with the requirements set out by the Occupational Health and Safety Assessment Services (OHSAS 18001:2007). OHSAS has contributed with managing the accident prevention system, reinforcing the internal safety culture and producing results in assessment of risks and in mitigation of impacts on the operations.To control and follow up on CIPAs’ actions implemented at the Company, Chesf uses the CIPA Management System (SGC). The SGC has the tools required for the good performance of the committees and makes available to users the minutes of the general and extraordinary meetings and the documents and reports produced. The system makes it possible to efficiently manage the committees and to disclose and implement the best practices adopted in other areas of the Company.
PERFORMANCE
(qualitative and quantitative information):
At Chesf, 100% of employees are represented by CIPAs, which are formal health and safety committees formed by Company and employee representatives. Due to decentralization, Chesf has 21 CIPAs, divided as follows: five in the Paulo Afonso Regional Operations Department; four in the Headquarters and in the Recife Regional Operations Department; four in the Salvador Regional Operations Department; three in the Natal Regional Operations Department; two in the Fortaleza Regional Operations Department; one in the Sobradinho Regional Operations Department, and two in the Teresina Regional Operations Department
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 403-2 - Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Management of Occupational Health and Safety at Chesf is the responsibility of the People Management Supervisory Board (SGP), through the Occupational Health and Safety Department (DGPS), which seeks best practices for safety, health, and well-being of its employees and contractors. Chesf has certification in compliance with the requirements set out by the OHSAS 18001:2007 standard. In addition, it has established its Occupational Health and Safety Policy (OHS), approved by senior management.
The occupational health and safety culture is consolidated every year through initiatives and programs to prevent occupational accidents and diseases, to control hazards and risks in the activities conducted, and to promote health and quality of life. Training courses and PPE are provided to Company employees, as set out in the regulatory instructions. The use of PPE by contractors is mandatory and set forth in the RFPs and agreements.
The occupational health and safety issues involving the companies contracted to provide services are monitored as required in the Occupational Health and Safety Plans that cover the occupational health and safety aspects related to the activities and services to be performed, such as: training courses, occupational health certificates, collective and personal protective equipment and measures, among others. Compliance with the requirements of the Safety Plans is also a condition for payment of invoices issued by these companies.
These results are assessed in the Company through management of the indicators of the aggregate Lost Time Accident Frequency and Severity rates (TFAT and TGAT) and of the Sickness Absence Rate (IAT). The accident rates, TFAT and TGAT, are determined based on the number of lost-time accidents occurred and on the lost days pertaining to such accidents, both considered in relation to the number of hours Companies employees are exposed to risks.
PERFORMANCE
(qualitative and quantitative information):
Types of injury for employees (men): contusion, response to external stress, bruise, cut, fracture, sprain, burn, and contamination.
Types of injury for employees (women): contusion, fracture, bruise, sprain, hematoma, distention, and puncture wound.
2017 2016 2015
TAXA DE LESÕES PARA EMPREGADOS, DISCRIMINADA POR REGIÃO
Sede 0,00000427 0,00000633 0,00000721
Regional Recife 0,00001030 0,00000906 0,00001408
Regional Natal 0,00000347 0,00000732 0,00000474
Regional Fortaleza 0,00000154 0,00000824 0,00001674
Regional Teresina 0,00000576 0,00002016 0,00000185
Regional Paulo Afonso 0,00000192 0,00000723 0,00000656
Regional Sobradinho 0,00001619 0,00001789 0,00000999
Regional Salvador 0,00002075 0,00001725 0,00002380
TAXA DE LESÕES PARA EMPREGADOS, DISCRIMINADA POR GÊNERO
Homens 0,00000666 0,00000874 0,00000930
Mulheres 0,00000746 0,00001332 0,00001222
TAXA DE DOENÇAS OCUPACIONAIS PARA EMPREGADOS, DISCRIMINADA POR REGIÃO
Sede 0 0 0
Regional Recife 0 0 0
Regional Natal 0 0 0
Regional Fortaleza 0 0 0
Regional Teresina 0 0 0
Regional Paulo Afonso 0 0 0
Regional Sobradinho 0 0 0
Regional Salvador 0,000000943 0 0
TAXA DE DOENÇAS OCUPACIONAIS PARA EMPREGADOS, DISCRIMINADA POR GÊNERO
Homens 0,0000001327 0 0
Mulheres 0 0 0
NÚMERO DE DIAS PERDIDOS PARA EMPREGADOS, DISCRIMINADO POR REGIÃO
Sede 80 90 789
Regional Recife 25 35 35
Regional Natal 195 3 1
Regional Fortaleza 30 1344 116
Regional Teresina 50 113 0
Regional Paulo Afonso 12 80 18
Regional Sobradinho 104 33 17
Regional Salvador 18 70 97
NÚMERO DE DIAS PERDIDOS PARA EMPREGADOS, DISCRIMINADO POR GÊNERO
Homens 332 1715 1045
Mulheres 182 53 28
TAXA DE ABSENTEÍSMO PARA EMPREGADOS, DISCRIMINADO POR REGIÃO
Sede 0 0 0
Regional Recife 1,56 1,52 1,30
Regional Natal 0 0 0
Regional Fortaleza 1,75 1,54 1,62
Regional Teresina 1,82 1,53 1,78
Regional Paulo Afonso 1,94 1,83 1,84
Regional Sobradinho 2,50 2,06 1,76
Regional Salvador 1,48 1,45 1,38
Total Chesf 1,70 1,60 1,49
TAXA DE ABSENTEÍSMO PARA EMPREGADOS, DISCRIMINADA POR GÊNERO
Homens 1,38 1,33 1,23
Mulheres 2,93 2,61 2,67
NÚMERO DE FATALIDADES (ÓBITOS) DE EMPREGADOS, POR REGIÃO
Sede 0 0 0
Regional Recife 0 0 0
Regional Natal 0 0 0
Regional Fortaleza 0 0 0
Regional Teresina 0 0 0
Regional Paulo Afonso 0 0 0
Regional Sobradinho 0 0 0
Regional Salvador 0 0 0
NÚMERO DE FATALIDADES (ÓBITOS) DE EMPREGADOS, POR GÊNERO
Homens 0 0 0
Mulheres 0 0 0
LOCATION IN THE REPORT: Page (s): 70 and 86
INDICATOR CODE: 403-3 - Workers with high incidence or high risk of diseases related to their occupation
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): In view of the standardized procedures used in the activities developed by Chesf, of the use of Collective Protective Equipment (CPE) and Personal Protective Equipment (PPE), and of the Executive Planning prepared for each of these activities – with the hazard and risk analysis and prevention –, it is considered that there is no high incidence or high risk of specific diseases for Chesf employees.
Unhealthy-Work, Hazard, and Hardship differential pay are provided in the constitution. The law provides for the first two, which are regulated by the Ministry of Labor for specific situations. The Hardship differential pay (for continuous rotating shifts) was included through a Collective Bargaining Agreement (ACT).
In order to manage the risks related to occupational diseases, Chesf goes beyond what is defined by law, including the Environmental Risk Prevention Program (PPRA) and the Program for Medical Control of Occupational Health (PCMSO), with occupational health exams that in addition to those set out in NR-07, and properly controls the Unhealthy-Work, Hazard, and Hardship conditions to which its employees are subjected. The main risks considered in these assessments are electric shocks and the thermal effects of electric arcs, since over 50% of employees are exposed to these risks. Other risks refer to noise caused by generation operations, chemical risks at the laboratories and print shops, and biological risks in infirmaries and in the Paulo Afonso hospital.
PERFORMANCE
(qualitative and quantitative information):
In 2017, no employees were involved in occupational activities with high incidence or high risk of specific diseases.
LOCATION IN THE REPORT: Page (s): 70 and 86
INDICATOR CODE: 403-4 - Health and safety topics covered in formal agreements with trade unions
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): The 2016/2018 Collective Bargaining Agreements – national and specific – include a number of clauses, among which the following had already been set forth in the 2015/2016 agreement:
> Maintenance of joint occupational health and safety committees, ensuring their operation;
> Implementation of an integrated occupational health and safety management system, covering all operational and administrative departments of the Company;
> Discussion of the actions developed in the joint occupational health and safety committees;
> Investigation of fatal accidents, through an integrated committee, minimally by a safety engineer and by trade union representatives;
> Compliance with NR-10;
> Guarantee of proper travel conditions (medical or physical therapy) for treatment of employees involved in occupational accidents, through the provision of adequate transportation to injured employees;
> Provision of medication required for injured employees.
PERFORMANCE
(qualitative and quantitative information):
Occupational health and safety topics are covered in 100% of the formal agreements (local and global) with trade unions. In the most recent agreements, the topics were:
2016/2018 National ACT: Clause Sixteen - Leave Time for Family illness; Clause Twenty-Eight - Hardship Differential Pay; Clause Thirty-One - Unhealthy-Work Differential Pay; Clause Thirty-Seven - Occupational Health and Safety Committee; Clause Thirty-Eight - Supplementary Sick Pay; Clause Forty-Two - Basis for Calculation of Hazard Differential Pay.
2016/2018 Specific ACT: Clause Two - Employee Training; Clause Ten - Permanent Disability or Death Benefits for Workplace Accidents; Clause Thirteen - Joint Committees (payroll liabilities, camping, technical responsibility, occupational health and safety, and transportation); Clause Sixteen - Occupational Health and Safety; Clause Seventeen - Compliance with NR-10; Clause Nineteen - Assistance to Injured Employees.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: GRI-EU25 - Report the number of injuries and fatalities to the public involving company assets including legal judgments, settlements and pending legal cases of diseases
MATERIAL TOPIC RELATED: Health and Safety
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): There were no decisions, agreements, or lawsuits about diseases.
PERFORMANCE
(qualitative and quantitative information):
2017 2016 2015
NÚMERO DE INDIVÍDUOS AFETADOS POR ACIDENTES ENVOLVENDO OS ATIVOS DA EMPRESA
0 3 0
NÚMERO DE FATALIDADES ENVOLVENDO OS ATIVOS DA EMPRESA
0 3 0
NÚMERO TOTAL DE CASOS LEGAIS RESOLVIDOS RELACIONADOS À SAÚDE E SEGURANÇA, INCLUINDO DOENÇAS E JULGAMENTOS QUE AFETAM O PÚBLICO E OS POTENCIAIS RISCOS ASSOCIADOS A ESSES CASOS
0 0 0
NÚMERO TOTAL DE CASOS LEGAIS PENDENTES RELACIONADOS À SAÚDE E SEGURANÇA, INCLUINDO DOENÇAS E JULGAMENTOS QUE AFETAM O PÚBLICO E OS POTENCIAIS RISCOS ASSOCIADOS A ESSES CASOS
4 0 0
LOCATION IN THE REPORT: Page (s): 70 and 86

COMMUNITIES

INDICATOR CODE: 202-2 - Proportion of senior management hired from the local community
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): -
PERFORMANCE
(qualitative and quantitative information):
At Chesf, 100% of senior management positions are held by employees who live in the local community
> Senior management: Chief Executive Officer and other Directors
> Major Operating Units: Headquarters;
> “Local”: regions of Brazil and, in the case of Chesf, Northeast Brazil.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 203-2 -Significant indirect economic impacts
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Chesf’s Social Responsibility department monitors all activities in connection with social projects, seeking to analyze the significant economic impacts from actions carried out in the region benefitting from them. The goal is to have a positive influence on the locations where they are implemented and contribute to improving the local economy, professional training and qualification, and creation of jobs.
The guidelines that steer Company practices based on principles of social responsibility, incorporating them into its management model, are provided in Eletrobras’s Social Responsibility Policy. Among other guidelines, the document governs the private social investment in social projects, actions, and programs and establishes an ethical and transparent dialogue with stakeholders, taking into consideration their expectations, needs, and social, cultural, economic, political, and environmental contexts, and committed to sustainable development
All ongoing Social Responsibility projects positively impact the benefitting community and, consequently, the neighboring areas. They contribute to changing productivity of local organizations and to the economy as a whole, to reducing poverty levels, enhancing professional skills and knowledge, and generating direct and indirect jobs.
The Sobradinho Reservoir Project, in Bahia, helps local farmers and fishermen deal with the drought. The knowledge acquired enables the community to develop and improve systems for family farming production, agro-industries, fishing and fish farming.
Helping maintain the Nair Alves de Souza Hospital in Paulo Afonso benefits the underprivileged population of 22 municipalities in the states of Bahia, Alagoas, Pernambuco, and Sergipe, caring for over 100,000 residents. Daily, the hospital provides first-aid, obstetric, orthopedic, pediatric, and maternity care and is equipped with a nursery with incubators, men’s and women’s medical clinics, surgical clinics, ECG room, radiology, cast room, physical therapy, social services, among others.
The educational project Construindo o Cidadão do Amanhã (Developing Citizens of Tomorrow) contributes to finding shelter to at-risk homeless adolescents from the communities of Coque, Coelhos, and Joana Bezerra, in Recife (PE). These areas are densely populated, with high levels of poverty and social exclusion. The project operates on an extended schedule, with a focus on using free time during the week and requires attention concerning the aspects of education and complementary activities, especially in terms of training for employability, in addition to reinforcement of concepts such as family inclusion, rights, duties, and rules for coexistence.
Chesf’s Social Responsibility management is based on the 2030 Agenda and on the 17 Sustainable Development Goals. The SDGs steer Eletrobras’s Social Responsibility Policy.
In 2017, the social responsibility project “Development of Actions for Agricultural Producers and Fishermen in the Vicinity of the Sobradinho Reservoir - BA,” in partnership with Embrapa Semiárido, won the Jorge Furtado Regional Development Award, in the category Innovative Projects for Implementation within the Territory.
The project promotes actions involving research, technology transfer, and training of technicians, producers, and fishermen, in order to strengthen the infrastructure of agricultural activities, ensuring a productivity level that allows for the improvement of income of producers and the replication of production units in the communities of municipalities located in the vicinity of the Sobradinho Reservoir (BA), in addition to dealing with droughts. Currently, the work primarily involves expansion of the areas, assessment and monitoring of actions, which has led to the purchase of a large volume of materials to be distributed among producers, seeking to further increase the scope of the actions.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 413-1 -Operations with local community engagement, impact assessments, and development programs
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): In 2017, actions were conducted under the Environmental Education Program (PEA) on the following Federal Transmission Lines (LT): Jardim/Penedo, Banabuiú/Mossoró, Paulo Afonso/Bom Nome, Bom Nome/Milagres and Luiz Gonzaga/Milagres, Milagres/Coremas and Messias/Recife II, pursuant to IBAMA’s Normative Instruction IN 02/2012.
The overall goal of the program is to develop environmental education actions for the local population and workers involved in the operation of the projects, seeking to raise awareness and involve them in the implementation, monitoring, and assessment of local social and environmental projects. To this end, the purpose of the program is to guarantee the use of participatory methodologies that ensure respect, plurality, and cultural diversity and that reinforce collective and organized actions, thereby enabling the understanding of local environmental issues and their complexity.
PERFORMANCE
(qualitative and quantitative information):
Environmental educommunication actions were developed in transmission lines in operation in order to raise awareness of the communities. Activities are conducted with students and teachers from the schools that surround the projects about the sustainable use of natural resources, with a focus on the impacts of slash and burn under right-of-ways, in addition to coexisting with Transmission Lines. In 2017, these actions focused on the following Transmission
Lines: Arapiraca/Penedo, Jardim/Penedo and Rio Largo/Arapiraca - AL (seven workshops and 804 participants); Presidente Dutra/Teresina - PI/MA (six workshops and 199 participants); Recife II/Pau Ferro, Angelim/Recife II, Recife II/Goianinha and Angelim/Pau Ferro (six workshops and 745 participants); Rio Largo/Braskem, Messias/Recife II and Messias/Maceió (six workshops and 790 participants).
The methodology of the work started with a study of quantitative data and of the target audience. Subsequently, educational actions were planned for schools and, finally, meetings were held and educational materials were distributed. The other environmental educommunication actions included the activities carried out in the communities located in the vicinity of Transmission Lines Paulo Afonso/Olindina, Paulo Afonso/Bom Nome, Bom Nome/Milagres, and Luiz Gonzaga/Milagres, intended to contribute to the development of social values and knowledge associated with conservation of the environment and preservation of isolators, considering local specificities and their main issues. In 2017, Chesf proceeded with the Social and Environmental Action Plan (PAS), in the Paulo Afonso I, II, III, IV, and Apolônio Sales UHEs - Paulo Afonso Complex and Xingó UHE. This Plan was created to govern and integrate environmental actions, in connection with the company-community relationship.
PAS is an environmental management process anchored on environmental communication, education, and health, in which social players, through knowledge and practice, incorporate a new way of thinking and acting when facing relations between society and nature. PAS operations are limited to the area of influence of the projects of the Paulo Afonso Hydroelectric Complex and of the Xingó UHE. The actions carried out by Paulo Afonso PAS involve five municipalities located in three states (Bahia, Pernambuco, and Alagoas), and the actions referring to Xingó PAS involve six municipalities in three states (Alagoas, Sergipe, and Bahia). In Paulo Afonso PAS, the actions originated from a development process based on workshops, seeking an effective participation in the development of the plan. One hundred sixty-seven action proposals were listed, analyzed, and broken down into 11 major categories, and five programs were defined: Social and Environmental Educommunication; Environmental Education and Health; Conservation of Natural Resources and Restoration of Degraded Areas; Education, Arts, Culture, and Environment, and Corporate Strengthening and Sustainability. A “project portfolio” was then created for PAS, comprising 50 projects. The first phase in the implementation of PAS started with hosting Municipal Forums, during which the community environmental committees (CAC - Comissões Ambientais Comunitárias) were created and representatives were elected to become members of the Municipal Environmental Committees (CAM). The second phase in the implementation was consolidated with the beginning of the execution of projects prioritized during the Forums to be executed within five years. Currently, an organizational process is in place, with the participation of youths from the five municipalities. Participatory Social and Environmental Diagnostic Workshops were developed at Xingó PAS and Xingó PAS held the 1st Inter-Municipal Meeting and Social Organization Forum. Number of Projects served: 17 Transmission Lines and six UHEs (five in the Paulo Afonso Complex - PA I, II, III, IV, and Apolônio Sales, and one in Xingó).
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 413-2 - Operations with significant actual and potential negative impacts on local communities
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Significant negative impacts on local communities are generally due to the implementation of the projects. These impacts are common when the projects are being implemented: soil degradation, suppression of vegetation, property relocations, movement of machinery, emission of noise and particulate matter, increase in traffic of vehicles and people in the area, among others. However, most impacts are mitigated through a series of programs established by Environmental Licensing or by corporate initiative, such as: Restoration of Degraded Areas, Compensation Programs, Control of Traffic and Emission of Particulate Matter, Reforestation, Social Education and Communication, among others.
Due to the long drought that has been affecting the São Francisco River Drainage Basin, based on the Technical Notes prepared by the National System Operator (ONS) and on the Letters issued by the National Water Agency (ANA), IBAMA has been issuing Special Authorizations for Chesf to reduce the flow rate of the Sobradinho and Xingó reservoirs. In compliance with the environmental constraints established by IBAMA, Chesf conducts monitoring programs for the São Francisco River during the reduced flow rate, such as Monitoring of Water Quality, Monitoring of the Saline Wedge and Rescue of Ichthyofauna. In addition, Chesf periodically carries out communication campaigns, referring to the process for reducing the flow of the reservoirs. The definition of the temporal perspective for the solution of the aforementioned conflict (reduction of the flow rate in the São Francisco River) took into account that this type of conflict occurs mainly due to the variability of the rainfall cycle (natural phenomena such as La Niña and El Niño, which occur in two- to seven-year cycles) - see book “Variabilidade e Mudanças Climáticas no Semiárido Brasileiro (“Variability and Climate Change in the Brazilian Semi-Arid) (2011).”
PERFORMANCE
(qualitative and quantitative information):
In general, the operation of the projects does not produce additional negative impacts on the surrounding communities, considering that the operation and maintenance of equipment is conducted on-site, such as the case for power plants and substations. For transmission lines, periodic inspections are conducted without producing impacts on the local community.
Monitoring of impacts on local communities is assessed through the activities conducted under the Environmental Communication and Education Programs carried out by the Company in compliance with environmental licensing, which facilitate interaction with the population, who have the opportunity to provide their insights on the presence of the projects around them.
Chesf also makes available to society the Environmental Contact Us (meioambiente@chesf.gov.br), the Field Burning/Environmental Hotline (0800-979-3090), and the Ombudsman’s office (ouvidoria@chesf.gov. br), in order to ensure the access of all to the Company and to use these channels as a tool to monitor possible local impacts. Periodic reports are prepared for the programs and annual reports are prepared for the channels. A course of action is taken when an impact is reported.
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INDICATOR CODE: GRI-EU20 - Approach to managing the impacts of displacement (DMA)
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): When population displacement is required, dialogues, studies, and negotiations are carried out with the communities affected. All actions are steered by the Guidelines for Settlement of Populations Affected by Energy Projects, a document prepared by a working group formed by representatives of all Eletrobras companies. In relation to indigenous and quilombola populations, the actions comply with international agreements signed by Brazil and with the specific Brazilian laws and regulations.
Chesf conducts social and environmental studies before implementing the projects, in addition to a diagnostic of the current situation of the surrounding communities, when it is possible to identify those affected. Social and economic studies on the surrounding community seek to assess eventual impacts on these societies and, within the licensing process, mitigation actions for potential impacts are set out by the licensing agency.
PERFORMANCE
(qualitative and quantitative information):
Currently, Chesf has two wind projects under implementation, CGE Casa Nova II and CGE Casa Nova III, located in a rural area, whose population did not need to be displaced. It should be noted, for example, that the impacts from these projects are positive, such as the compensation paid to the owner of the land where the towers of the wind farm are installed.
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INDICATOR CODE: GRI-EU21 - - Contingency planning measures, disaster/emergency management plan and training programs, and recovery/ restoration plans
MATERIAL TOPIC RELATED: Communities
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): In order to prepare, implement, and manage the contingency plan, Chesf implemented the RN-03/2013 AS-10 standard - Management of Contingency Plans of the Facilities, which defines the principles, guidelines, and responsibilities that govern the identification, assessment, handling, monitoring, and communication processes concerning the potential risks inherent to Company facilities. Each type of plan contains the responses to its risks and general guidelines for their main stages, so that actions can be taken to prevent a Severe Contingency State or to return to a Business Continuity state. Processes are established to ensure that the contingency procedures remain compatible with their continuity objectives, assessing their level of implementation and effectiveness.
The RN standard for Management of Contingency Plans recommends that plans should be tested for their effectiveness according to the characteristics and specificities of each segment of the contingency plans (natural disasters, environmental disasters, operational safety and security, cyber security, occupational health and safety, and property security), which may include drills; however, they are not mandatory for all segments, since they depend on technical feasibility and resources available.
At the power plants, drills are conducted for plans involving Fire Prevention and Fire Fighting, Assistance to Victims, and Area Evacuation, which are part of the occupational health and safety contingency plan and aim to test and validate the actions of the Emergency Response Team, with the participation of the fire department. These drills may be held annually; however, they depend on the availability of technical and financial resources in each power plant and, therefore, their frequency is not determined.
For management of water resources, Chesf and ONS jointly prepare the Annual Flood Prevention Plan, approved by the National Water Agency (ANA) and by the National Electric Energy Agency (ANEEL), which is revised and updated annually. The Company also has Drainage Basin Flood Control manuals in the locations where its main reservoirs are located. These manuals contain guidelines such as “Events and Actions for Operation in the Wet Season.”
The substations and power plants that are part of the National Interconnected System (SIN), under Chesf’s responsibility, have the following types of plans: Natural Disasters, Operational Safety and Security, Cyber security, Environmental Disasters, Health and Safety, and Property Security. With these procedures, the Company should be prepared to face Severe Contingency incidents, through actions planned and known by the directly affected employees and by the entire managerial hierarchy of each facility. Actions to control incidents are established to preserve people’s lives and integrity, including those of the parties involved in the Contingency Plans, as well as business continuity.
PERFORMANCE
(qualitative and quantitative information):
There was no specific case in 2017.
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BIODIVERSIDADE

INDICATOR CODE: 304-1 - Operational units owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
MATERIAL TOPIC RELATED: Biodiversity
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): After Chesf understands the impacts of its operation, it is possible to work to prevent, mitigate, and offset negative impacts. Knowing that hydroelectric power plants may cause significant impacts on wildlife and flora in Permanent Preservation Areas (PPA), during the studies for new projects, Chesf uses geoprocessing tools that allow for complex analyses by integrating data from various sources and creating georeferenced databases that result in lower impact on biodiversity.
In addition, during implementation and operation, the area of influence is monitored in order to correct any deviation, which could lead to changes to the project. In the case of transmission projects, for example, procedures are adopted to increase the height of towers and programs are implemented for selective replanting and rescue of wildlife and flora in the vicinity of the projects. Additionally, Chesf maintains a fish farming station to stock the river and reservoirs with fish, as well as a forest nursery that produces and distributes native seedlings in the region in order to restore riparian woods and other degraded areas.
PERFORMANCE
(qualitative and quantitative information):
The information required for this item concerning the areas that are owned, leased, or managed by Chesf is being consolidated by the Corporate Management Department.
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INDICATOR CODE: 304-2 - Significant impacts of activities, products, and services on biodiversity
MATERIAL TOPIC RELATED: Biodiversity
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The impacts depend on the type, size, and location of each project. This type of impact-related assessment is conducted through environmental studies associated with the implementation of the projects. Whenever impacts on biodiversity are identified, mitigation actions are defined by the licensing agency and conducted by the Company.
After Chesf understands the impacts of its operation, it is possible to work to prevent, mitigate, and offset negative impacts. Knowing that hydroelectric power plants may cause significant impacts on wildlife and flora in Permanent Preservation Areas (PPA), during the studies for new projects, Chesf uses geoprocessing tools that allow for complex analyses by integrating data from various sources and creating georeferenced databases that result in lower impact on biodiversity.
In addition, during implementation and operation, the area of influence is monitored in order to correct any deviation, which could lead to changes to the project. In the case of transmission projects, for example, procedures are adopted to increase the height of towers and programs are implemented for selective replanting and rescue of wildlife and flora in the vicinity of the projects. Additionally, Chesf maintains a fish farming station to stock the river and reservoirs with fish, as well as a forest nursery that produces and distributes native seedlings in the region in order to restore riparian woods and other degraded areas.
The most significant negative impact from Hydroelectric Power Plants is on rheophilic fish, affecting their movement, reproduction, recruitment, and biodiversity. Chesf has in place ichthyofauna monitoring programs, operates a fish farming station in Paulo Afonso, and conducts stocking actions with various species that are native to the basin as a way to mitigate and offset impacts from the operation of hydroelectric projects.
Chesf also conducts actions to monitor, control, investigate, and mitigate impacts on biodiversity during the implementation and operation of its projects and facilities. These actions are assessed and the eventual impacts on the area of influence of the project are monitored, which can lead to modifications and adjustments to the projects, such as change to the routes of transmission lines, for example. Adjustments are conducted to preserve and/or mitigate the interference of the business in areas with high biodiversity value.
When substances that do not occur naturally in the habitat are used, the environmental licensing process establishes control and mitigation actions set out by the relevant legislation.
We have no reports of the introduction of invasive species, pests, or pathogens in Chesf’s activities.
As a positive impact from the operation of hydroelectric projects, we have the Regularization of the Flow Rate, which, in periods of low volume, ensures a satisfactory flow rate to maintain the multiple uses and environmental services. Concerning transmission projects, as a positive impact, we can highlight the availability of electricity, which enables the development of the regions and communities served. Conversely, in the analysis of transmission line projects, whose product transported presents no potential risk of degradation to the environment, most environmental impacts relate to the construction and installation of transmission lines. Most of them occur on the right of way, which in general includes the areas that provide support to the construction work.
PERFORMANCE
(qualitative and quantitative information):
Chesf has in place ichthyofauna monitoring programs, operates a fish farming station in Paulo Afonso, and stocks the reservoir with species of fish native to the basin as a way to mitigate and offset impacts from the operation of hydroelectric projects. For transmission projects, various programs are conducted to mitigate and offset impacts, such as restoration of degraded areas and programs to monitor wildlife and flora.
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INDICATOR CODE: 304-3 - Habitats protected or restored
MATERIAL TOPIC RELATED: Biodiversity
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf adopts the Eletrobras companies’ Environmental Policy, which has Biodiversity among its theme guidelines. The policy provides that the Eletrobras companies must develop their activities in strict compliance with the Brazilian environmental laws and with the international agreements to which Brazil is a signatory and that this topic must be incorporated into decision-making processes.
Projects such as power transmission lines generally produce low impacts on Permanent Preservation Areas (PPA). Chesf works to minimize damage and avoids erecting towers in these areas. Moreover, part of the vegetation may be suppressed for the installation of towers, producing impacts on local wildlife and flora. However, there are programs for selective reforestation and projects to rescue wildlife and flora and to address displacement of animals in the vicinity of the projects. These actions occur in the transmission projects and in the reservoirs of hydroelectric power plants.
In hydroelectric power plants, one of the points of attention is the change to the water regime of rivers, which produces impacts on the aquatic wildlife. In order to minimize these impacts, Chesf maintains a fish farming station to stock the river and reservoirs with fish and develops programs to monitor the aquatic ecosystem. In an attempt to restore riparian woods and other degraded areas, the Company has a forest nursery to produce and distribute seedlings that are native to the region.
PERFORMANCE
(qualitative and quantitative information):
In 2017, Chesf proceeded with the development of a program to restore 10 ha of Atlantic Rainforest in the Mata do Junco Wildlife Reserve (RVS Mata do Junco), in the state of Sergipe. Between 2016 and 2017, a total of 20,000 Atlantic Rainforest native seedlings were planted. In 2017 alone, approximately 10,000 seedlings were planted. Currently, a company hired by Chesf is monitoring and maintaining the area (replanting), with the support of technicians from the State Department for the Environment and Water Resources/SE.
Also in 2017, the “Program for Promoting Reforestation of Permanent Preservation Areas in the Vicinity of the Reservoirs of the Pedra and Funil Power Plants” was maintained. In terms of total reforested area, the program reached the mark of 100 hectares, in which 100,147 seedlings were planted, meeting the initial goal of the program, which was to plant 100,000 seedlings in 100 hectares. The areas planted under the Program for Promoting Reforestation of Permanent Preservation Areas in the Vicinity of the Reservoirs of the Pedra and Funil Power Plants were broken down as follows:
> Pedra UHE (Caatinga biome): 20.93 ha and a total of 20,800 seedlings planted;
> Funil UHE (Atlantic Rainforest biome): 79.07 ha and a total of 79,347 seedlings planted
The Program for Restoration of Degraded Areas related to the Xingó UHE continued in 2017, with the planting of 90,747 seedlings. This program is restoring 392.11 ha using seeds collected and processed by Chesf.
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INDICATOR CODE: 304-4 - IUCN Red List species and national conservation list species with habitats in areas affected by the organization’s operations
MATERIAL TOPIC RELATED: Biodiversity
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): In compliance with the requirements of the Operating Permits of its projects (generation and transmission) concerning wildlife and flora, Chesf has conducted monitoring programs to identify and minimize potential impacts that could affect biodiversity. The result of these programs is presented in reports that are sent to the relevant environmental agencies on a regular basis.
This recommendation has been accepted and considered in the preparation of the reports: once presented and analyzed, the data generated is compared with secondary data (research papers, surveys, EIS, and Simplified Environmental Reports (RAS), among others) from previous studies conducted in the areas of influence of the project or near these areas. The analysis allows for the clear gauging of the potential impacts to the biome.
Although the monitoring programs are still ongoing, a number of impacts on the wildlife and flora have already been identified, including impacts not caused by project, but rather by predatory activities conducted by the population in these areas. The information is added to the partial reports and sent to the relevant environmental agencies. It should be noted that these reports propose mitigation measures for the impacts identified.
PERFORMANCE
(qualitative and quantitative information):
The monitoring programs conducted by Chesf identified the following:
> The species Celeus obrieni (Kaempfer’s woodpecker), considered “critically endangered”.
> No species considered “endangered” were recorded.
> Two species of birds, two of mammals, and one of reptiles considered “vulnerable” were recorded. Birds: Xiphocolaptes falcirostris (Spix, 1824) - Moustached Woodcreeper and VU Penelope jacucaca - White-browed Guan VU; Mammals: Leopardus tigrinus (Schreber, 1775) - Oncilla – and VU Thylamys karimii (Petter, 1968) - Fat-Tailed Mouse Opossum VU; Reptiles: Colubridae Liophis atraventer – Common water snake VU.
> Three bird species considered “near-threatened” were recorded: Synallaxis frontalis - (Sooty-Fronted Spinetail); Petrim Primolius maracanã - (Blue-Winged Macaw); and Maracanã Polioptila plumbea – (Tropical Gnatcatcher).
> 20 species of amphibians, 34 of reptiles, 102 bird species, 25 of mammals, and 9 of bats, classified as of “least-concern” were recorded.
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INDICATOR CODE: GRI-EU13 - Biodiversity of offset habitats compared to the biodiversity of the affected areas
MATERIAL TOPIC RELATED: Biodiversity
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf adopts the Eletrobras companies’ Environmental Policy, which has Biodiversity among its theme guidelines. The policy provides that the Eletrobras companies must develop their activities in strict compliance with the Brazilian environmental laws and with the international agreements to which Brazil is a signatory and that this topic must be incorporated into decision-making processes.
Projects such as power transmission lines generally produce low impacts on Permanent Preservation Areas (PPA). Chesf works to minimize damage and avoids erecting towers in these areas. Moreover, part of the vegetation may be suppressed for the installation of towers, producing impacts on local wildlife and flora. However, there are programs for selective reforestation and projects to rescue wildlife and flora and to address displacement of animals in the vicinity of the projects. These actions occur in the transmission projects and in the reservoirs of hydroelectric power plants.
In hydroelectric power plants, one of the points of attention is the change to the water regime of rivers, which produces impacts on the aquatic wildlife. In order to minimize these impacts, Chesf maintains a fish farming station to stock the river and reservoirs with fish and develops programs to monitor the aquatic ecosystem. In an attempt to restore riparian woods and other degraded areas, the Company has a forest nursery to produce and distribute seedlings that are native to the region.
PERFORMANCE
(qualitative and quantitative information):
The environmental recovery of a degraded area is a complex process that requires a vast range of knowledge in order to meet the specific goal, i.e., to improve the environmental quality of the degraded site. The Mata do Junco Wildlife Reserve (RVS Mata do Junco) was defined by the licensing agency as an area for compensation for the required suppression of vegetation for the implementation of the transmission line LT 230-kV Jardim-Penedo.
The degraded area of RVS Mata do Junco is being restored with the reforestation of Atlantic Rainforest areas, totaling 10 hectares. The restoration also means that the degraded site will have the minimum conditions required to establish a new dynamic balance, developing new soil and landscape.
The Mata do Junco Wildlife Reserve was established through State Decree 24,944, dated December 26, 2007, totaling an area of 894.76 hectares, and the Responsible Managing Unit (UGR - Unidade Gestora Responsável) is the Department of Protected Areas, Biodiversity, and Forests (SEMARH-SE). This unit was created to protect the habitat of Coimbra’s titi Callicebus coimbrai and the springs that supply water to the municipality of Capela (SE).
The time frame for execution of the restoration services is 24 months.
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ENERGY MATRIX

INDICATOR CODE: GRI-EU2 - Net energy output, by primary energy source and regulatory regime
MATERIAL TOPIC RELATED: Energy Matrix
GLOBAL COMPACT: N/A
SDG: N/A
DMA (disclosure management approach): Losses are inherent to the energy generation and transmission process, where the production of net energy is calculated by subtracting the energy generated – which has been decreasing in recent years due to the water crisis in the São Francisco River – from its overall losses.
PERFORMANCE
(qualitative and quantitative information):
Chesf’s total loss rate in 2017 was 3.79%, resulting in a total net production of 14,631.96 GWh
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INDICATOR CODE: 203-1 - Infrastructure investments and services supported
MATERIAL TOPIC RELATED: Energy Matrix
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Chesf harmonizes its investments in infrastructure and services with the stakeholders and economy involved. Concerning the community social facilities, the Company strategically acts to implement actions and private social investment projects, aiming to reduce social inequality and promote the sustainable development of the regions where it operates. The guidelines that steer Company practices based on principles of social responsibility, incorporating them into its management model, are provided in Eletrobras’s Social Responsibility Policy. Among other guidelines, the document governs the private social investment in social projects, actions, and programs and establishes an ethical and transparent dialogue with stakeholders, taking into consideration their expectations, needs, and social, cultural, economic, political, and environmental contexts, and committed to sustainable development. The Social Responsibility Policy is based on guiding documents, such as the United Nations Global Compact (UN), the Sustainable Development Goals (SDG), the treaties and conventions of the International Labor Organization (ILO), the guidelines of the Organization for Economic Cooperation and Development (OECD) for multinational companies, and the international standard ISO 26000.
The Company reaffirms its commitment to the communities where its developments and projects are located, in order to contribute to the development of a partnership. Through the Policy on Communication and Engagement with Stakeholders of the Eletrobras Companies, Chesf highlights the benefits of the regional presence of the Company for local development, respecting the interests of the communities where it operates and the sustainable use of natural resources.
Chesf also voluntarily commits to initiatives that foster sustainable growth and citizenship, such as: the Women’s Empowerment Principles; the Pro-Gender and Race Equality Program; and the Corporate Commitment to the Fight Against Sexual Violence Against Children and Adolescents. Another highlight is Chesf’s Corporate Volunteering Program intended to stimulate, organize, support, and recognize the participation of its employees in benefit of society. The actions are planned and conducted to address the interests of internal audiences, Company business, and the needs of the community.
PERFORMANCE
(qualitative and quantitative information):
In 2017, the resources for private social investment totaled BRL 35.2 million, earmarked for the areas of Health, Food Safety, Education, and Employment and Income Generation, benefitting thousands of people from underprivileged communities, especially in the municipalities of Paulo Afonso, Sobradinho, Casa Nova, Sento Sé, Remanso, and Pilão Arcado (in the state of Bahia), and in the city of Recife (Pernambuco).
The positive impacts drive local economies through the demand for new services, contribute to the quality of life of local residents by improving education, health, and food safety, training on citizen rights, creating jobs and generating income. The project “Actions to Develop Agricultural Producers and Fishermen from the Vicinity of the Sobradinho Reservoir - BA”, conducted in partnership with Empresa Brasileira de Pesquisa Agropecuária do Semiárido (Embrapa), has been significantly improving the quality of life in the communities of the five municipalities served in the state of Bahia (Sobradinho, Casa Nova, Sento Sé, Remanso, and Pilão Arcado), benefitting over 2,000 people. Currently, the work primarily involves expansion of the areas, assessment and monitoring of actions, which has led to the purchase of a large volume of materials to be distributed among producers, seeking to further increase the scope of the actions. In 2017, the project won the Jorge Furtado Regional Development Award, in the category Innovative Projects for Implementation within the Territory.
Furthermore, in 2017, Chesf invested BRL 35 million in the Nair Alves de Souza Hospital, a medical care unit that benefits the population of 22 municipalities within a radius of 250 kilometers from the municipality of Paulo Afonso, in Bahia, where its Power Generation Complex is located.
In social project “Construindo o Cidadão do Amanhã” (Developing Citizens of Tomorrow), in partnership with Instituto Dom Helder Câmara, BRL 162,000 was invested, with the goal of contributing to finding shelter to 80 adolescents, aged between 12 and 16, who are socially vulnerable and live in the communities of Coque, Coelhos, and Joana Bezerra, which are very violent and have the lowest Human Development Index (HDI) in the city of Recife (PE).
The social project at the Cristo Redentor Shelter, located in the vicinity of the Joairam Substation, in Pernambuco, provided assistance to 25 socially vulnerable senior citizens, with an investment of BRL 106,704.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: GRI-EU1 - - Installed capacity, broken down by primary energy source and by regulatory regime
MATERIAL TOPIC RELATED: Energy Matrix
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Chesf’s energy generation process is concentrated in Northeast Brazil and is influenced by the rainfall regime in the region. In all, the Company has 12 hydroelectric power plants, with 10 reservoirs with total storage capacity of 55.8 billion cubic meters of water, responsible for 99.8% of its total energy production in 2017. It also has a biofuel-fired thermal plant and two wind farms that, in conjunction with the hydroelectric power plants, total an installed capacity of 10,670.23 MW.
PERFORMANCE
(qualitative and quantitative information):
2017 2016 2015
Capacidade Instalada Total (MW) 10.670,23 10.613,13 10.613,13
Hidrelétricas - UHE (MW) 10.208,80 10.208,80 10.208,80
Pequenas Centrais Hidrelétricas - PCHs (MW) 53,53 57,53 57,53
Solar (MW) 0 0 0
Eólica (MW) 61,1 0 0
Térmica (MW) 346,8 346,8 346,8
Biomassa 0 0 0
LOCATION IN THE REPORT: Page (s): 27

ENERGY EFFICIENCY

INDICATOR CODE: 302-5 - Reductions in energy requirements of products and services
MATERIAL TOPIC RELATED: Energy Efficiency
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Chesf has innovation as strategic for its businesses, intended to create perpetuity based on modern, efficient projects and with sustainability criteria. The mission is to generate technical and operational, economic, social, and environmental benefits, creating value for the Company and for society at large. Considering the present challenges, the Company seeks constant innovation and, in its 2017-2021 Strategic Corporate Planning Map, it put forth actions to invest in research projects with Research and Development institutes. To this end, it has a structured flow for the Research, Development, and Innovation Programs (R&D+I), which includes an Internal Norm, IN-AS 03.001 - Management of Research, Development, and Innovation Projects and Research and Development Management System (SGPPED). Chesf has been developing solar power projects to participate in ANEEL’s energy auctions.
PERFORMANCE
(qualitative and quantitative information):
Three projects with this purpose are underway, two of which are R&D projects:
> Petrolina Solar Platform (3 MW): the project includes the installation of a photovoltaic plant planned to begin commercial operation in 2018;
> Floating Solar Photovoltaic Platform in the Sobradinho Reservoir (5 MW): project in partnership with Eletronorte, expect to enter into commercial operation in 2018;
> “From concept to market: development and implementation of an innovative method that ensures a systematic and continuous value creation process in the development of R&D+I projects for Chesf.” The main goal is to create an innovation method for Chesf and for the electric utilities sector, which will monitor projects from inception to delivery to the market, cascading to the production chain and, consequently, to the sector. The project is expected to be completed in June 2019.
LOCATION IN THE REPORT: Page (s): Not applicable

CLIMATE CHANGE

INDICATOR CODE: 201-2 - Financial implications and other risks and opportunities due to climate change
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Within its structure, Chesf has an organizational unit called Compliance and Risk Management Advisory (APC), which is responsible, among other activities, for: planning and coordinating the internal control and integrated risk management activities, in line with the Risk Management Policy of the Eletrobras Companies; supporting the Company’s business areas in revising and enhancing internal controls and in applying the risk management methodology; and proposing revisions and updates to the Policy and its Risk Matrix.
Chesf sees global climate change and potential amendments to the environmental legislation as the main threats to its activities, while the Company takes this opportunity to expand its generation through renewable sources. In the short term, the Company considers the risk of exposure to be low in relation to international and/or voluntary agreements, considering that the goal set by Brazil in the 2015 Climate Change Conference - COP 21, albeit ambitious, sets out a 37%reduction in its GHG emissions by 2015 and 43% by 2030 (reduction associated with freezing the expansion from thermal sources of fossil energy).
Hence, the main actions relate to the increase of its wind power generation and to the development of projects for solar photovoltaic generation, which ensures energy security during periods of low levels in the reservoirs of the hydroelectric power plants that are part of the National Interconnected System.
Since Chesf’s energy matrix is mainly composed of renewable sources and water, the industry-specific goals for reduction of GHG emissions will have low impact on the operations of the Company. In order to minimize the risks of climate change on hydroelectric generation (in which Chesf is responsible for the operation of 14 UHEs that total 10,268.33 MW) and on demand for water for other purposes, such as irrigation and human supply, Chesf works to keep its energy matrix primarily composed of renewable and alternative sources.
Seeking to anticipate potential risks, Chesf adopts preventive measures (such as recording its GHG emissions since 2003), through energy efficiency programs and reduction in the use of fossil fuels by its ground fleet. In the process to monitor the regulatory risks identified, in addition to potential mitigation actions, the Company has teams in water-related areas (Water Resources Committees, Watershed Committees, and Agencies) and energy-related regulation forums, (Regulatory agencies and electric utilities associations) and takes part in forums and working groups associated with this topic. Chesf’s energy generation capacity is concentrated on the use of hydroelectric power plants, directly affected by the increase in global warming.
Uncertainty regarding the availability of water resources exposes the Company to physical risks. In order to prevent losses in its activities, the Company has in place actions such as :
> Network management and monitoring in the collection and transmission of information on water regimes of rivers and reservoirs, rainfall, and liquid discharge in measurement stations and weather-related information in the drainage basins where the projects are located;
> Specific procedures to control floods with issuance of forecasts on inflows to reservoirs and definition of flood- control volumes in reservoirs during the wet season;
Communication procedures for local communities about the conditions of rivers and reservoirs, especially in the event of critical events;
> Real-time monitoring of information on the levels upstream (reservoirs) and downstream from the projects;
> Storage and management of rainfall information resulting from the monitoring network, through the Water Resources Management System;
> Use of rainfall and water modeling for integrated management of hydropower projects, covering the operation of reservoirs, propagation of discharges, fulfillment of requests for other uses, and hydrodynamic modeling of rivers and reservoirs in the drainage basins where projects operated by the Company are located;
> Georeferenced survey of areas subject to floods for various levels and flow rates;
> Compliance with the operational guidelines for the reservoirs that are part of the Interconnected System;
> Survey and monitoring of restrictions of flow rates and levels in the drainage basins where projects operated by Chesf are located;
> Preparation of studies and expert opinions required for managing water resources
PERFORMANCE
(qualitative and quantitative information):
In addition to physical and regulatory risks, Chesf considers the risks for the Company’s reputation and image, based on its positioning and on its actions in addressing climate-related issues. Considering reputational risks, Chesf adopts actions to mitigate impacts related to the aforementioned climate change and is transparent to its stakeholders in its sustainability actions. Among the communication and transparency actions are the publishing of its Annual Social and Environmental Responsibility Report, since 2008, and of its Sustainability Report, in compliance with the Global Reporting Initiative (GRI) guidelines, since 2009. In these reports, the Company consolidates and reports its main actions and strategies concerning economic, environmental, and social matters, as well as the participation as a respondent of the Carbon Disclosure Project, since 2006.
Chesf sees the growing obligation to report GHG emissions as an opportunity to make the reporting of its activities to its stakeholders more transparent, fostering a perception of greater value of its brand in the market. The main financial implications related to the opportunities identified involve generation of carbon credits via CDM projects, under the Kyoto Protocol. The Company also recognizes the opportunities from voluntary agreements, with the advent of alternative markets for the development of projects and trading of carbon credits, when not eligible according to UNFCCC standards.
Regarding changes in physical parameters, the main opportunities identified were the changes incorporated into the supply chains and/or clients: Chesf believes that variations in temperature can boost the demand for energy because of the increased use of cooling systems, which consequently expands trading of energy and economically increases Company activities. In order to manage this opportunity, Chesf invests in the expansion of the Energy Generation Complex, having as main projects the development of hydroelectric power plants and wind farms. In addition, it explores other opportunities and implements programs that include retrofitting its hydroelectric power plants, stimulus to the production of technologies, and development of alternative energy projects, prioritizing solar and wind power generation, with great potential in Northeast Brazil. Chesf’s operation strategy regarding climate change has been grounded on a number of pillars set out in its Statement of Commitment (http://www.chesf.gov.br/sustentabilidade/Style: Library: Canal/Meio: Ambiente/Declaracaode: Compromissoda: Eletrobrassobre: Mudancas: Climaticas.pdf) and steer the practices and the future planning of the Company.
The Eletrobras companies have developed studies and analyses to assess the impact, on its businesses, of matters concerning risks, vulnerabilities, and opportunities related to global climate change. To this end, in 2015, a continuous development project was formalized by senior management of the Holding company to address this topic through a study that will be conducted by a cross-functional working group that brings together technicians from various departments of the Company (strategic planning, risks, environment, water resources, finance, and sustainability). In addition, a task force was created in the Climate Strategy WG (WG3) of the Environmental Committee (SCMA), composed of representatives from all Eletrobras companies, to address the Adaptation to Climate Change, in view of the reduced availability of water resources for generating electricity and of the increased number of extreme weather events, which have affected the facilities of the energy generation, transmission, and distribution complex in our country. The idea is to, based on the identification of potential negative impacts, work on the inception of new projects and to rethink old ones, revising processes and identifying vulnerabilities, in order to propose measures that suit this new regime.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 305-1 - Direct (Scope 1) GHG emissions
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Since 2009, Chesf has annually published its GHG Emissions Inventory, in conjunction with the other companies of the Eletrobras Group. This document reports its GHG emissions to its stakeholders and its answers support a series of questionnaires and environmental reports required by the market, including: the Carbon Disclosure Project, ISE-Bovespa, and the Dow Jones Sustainability Index. Chesf’s operational strategy on climate change is based on a number of pillars set out in the Environmental Policy of the Eletrobras companies and in its Statement of Commitment, which guide the practices and future planning of the companies. Representatives of the Eletrobras companies take part in various forums to discuss and propose solutions to matters related to climate change, at corporate and public- policy level. As a member of the Eletrobras Companies, Chesf is part of the Technical Chambers for Water, Climate, and Energy of the Brazilian Business Council for Sustainable Development (CEBDS); of the Businesses for Climate Platform (EPC); of the Climate Change Working Group of the Environmental Forum for the Electric Utilities Sector (FMASE); of the Brazil GHG Protocol; and of the Brazilian Forum on Climate Change (FBMC).
Chesf has been setting goals to decrease the consumption of some resources that involve energy, aiming to boost efficiency, enhance environmental management, and reduce its GHG emissions. The first phase took place between 2013 and 2015, considering consumption in 2012 as a baseline, when the Company set its own goals for reducing consumption of fossil fuels by its ground fleet (Scope 1) and for consumption of electricity from the public distribution network (Scope 2), with a subsequent impact on the numbers for GHG emissions.
Subsequently, new goals for these two indicators were established in Eletrobras’s 2015-2019 Business and Management Master Plan (PDNG), proposing an annual reduction of 0.2%, considering 2014 as a baseline. After assessing the first period of goals (2013-2015) and considering the great effort already made by the companies, the 2017-2021 PDNG established the goal for annual reduction of GHG emissions at 0.2% for each company, totaling 1% until 2021.
For the GHG Emissions Inventory, the Eletrobras companies use an operational control approach, where the Company is responsible for 100% of the GHG emissions of the units in which it has operational control and is not responsible for those produced by operations in which it only holds shareholding interest. The Inventory follows the IPCC methodology (2006) and the Greenhouse Gas Protocol - GHG Protocol guidelines (WRI, 2004). Emissions from Chesf’s hydroelectric power plant reservoirs were not considered since there is still no consensus among the international scientific community on a methodology to estimate such emissions and calculate the emissions budget (or net emissions) from bodies of water.
Since 2016, in connection with the work of the Climate Strategy WG (WG3) of the Environmental Committee of the Eletrobras companies (SCMA), a new task force was created to estimate emissions and removals produced by the activities of the Eletrobras companies that lead to changes in land use. The task force for Adaptation to Climate Change continues to operate, identifying potential negative impacts from the decreased availability of water resources upon generation of electricity and the increased number of extreme weather events, which have affected the facilities of the energy generation, transmission, and distribution complex in our country. Consequently, it is necessary to work on the inception of new projects and to rethink old ones, revising processes and identifying vulnerabilities in order to propose measures that suit this new climate regime. Also, the work plan of WG3 includes addressing the carbon footprint of the activities of the Eletrobras Companies.
PERFORMANCE
(qualitative and quantitative information):
In its GHG Inventory, the Company reported the emission of 10,796.80 tons of CO2eq in Scope 1.
EMISSÕES (tCO 2 eq) 2017 2016 2015
Escopo 1
(Emissões diretas de GEE)
191.084,55 16.170,69 10.796,80
LOCATION IN THE REPORT: Page (s): 64 and 65
INDICATOR CODE: 305-2 - - Indirect (Scope 2) GHG emissions
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Since 2009, Chesf has annually published its GHG Emissions Inventory, in conjunction with the other companies of the Eletrobras Group. This document reports its GHG emissions to its stakeholders and its answers support a series of questionnaires and environmental reports required by the market, including: the Carbon Disclosure Project, ISE-Bovespa, and the Dow Jones Sustainability Index. Chesf’s operational strategy on climate change is based on a number of pillars set out in the Environmental Policy of the Eletrobras companies and in its Statement of Commitment, which guide the practices and future planning of the companies. Representatives of the Eletrobras companies take part in various forums to discuss and propose solutions to matters related to climate change, at corporate and public-policy level. As a member of the Eletrobras Companies, Chesf is part of the Technical Chambers for Water, Climate, and Energy of the Brazilian Business Council for Sustainable Development (CEBDS); of the Businesses for Climate Platform (EPC); of the Climate Change Working Group of the Environmental Forum for the Electric Utilities Sector (FMASE); of the Brazil GHG Protocol; and of the Brazilian Forum on Climate Change (FBMC).
Chesf has been setting goals to decrease the consumption of some resources that involve energy, aiming to boost efficiency, enhance environmental management, and reduce its GHG emissions. The first phase took place between 2013 and 2015, considering consumption in 2012 as a baseline, when the Company set its own goals for reducing consumption of fossil fuels by its ground fleet (Scope 1) and for consumption of electricity from the public distribution network (Scope 2), with a subsequent impact on the numbers for GHG emissions. Subsequently, new goals for these two indicators were established in Eletrobras’s 2015-2019 Business and Management Master Plan (PDNG), proposing an annual reduction of 0.2%, considering 2014 as a baseline. After assessing the first period of goals (2013-2015) and considering the great effort already made by the companies, the 2017-2021 PDNG established the goal for annual reduction of GHG emissions at 0.2% for each company, totaling 1% by 2021.
For the GHG Emissions Inventory, the Eletrobras companies use an operational control approach, where the Company is responsible for 100% of the GHG emissions of the units in which it has operational control and is not responsible for those produced by operations in which it only holds shareholding interest. The Inventory follows the IPCC methodology (2006) and the Greenhouse Gas Protocol - GHG Protocol guidelines (WRI, 2004).
Emissions from Chesf’s hydroelectric power plant reservoirs were not considered since there is still no consensus among the international scientific community on a methodology to estimate such emissions and calculate the emissions budget (or net emissions) from bodies of water.
Since 2016, in connection with the work of the Climate Strategy WG (WG3) of the Environmental Committee of the Eletrobras companies (SCMA), a new task force was created to estimate emissions and removals produced by the activities of the Eletrobras companies that lead to changes in land use. The task force for Adaptation to Climate Change continues to operate, identifying potential negative impacts from the decreased availability of water resources upon generation of electricity and the increased number of extreme weather events, which have affected the facilities of the energy generation, transmission, and distribution complex in our country. Consequently, it is necessary to work on the inception of new projects and to rethink old ones, revising processes and identifying vulnerabilities in order to propose measures that suit this new climate regime. Also, the work plan of WG3 includes addressing the carbon footprint of the activities of the Eletrobras Companies.
PERFORMANCE
(qualitative and quantitative information):
In order to calculate emissions from consumption of electricity, losses in transmission, and losses in distribution, the emission factors of the National Interconnected System (SIN) were used, which are calculated and published by the Ministry of Science, Technology, and Innovation (MCTI).
In its GHG Inventory, the Company reported the emission of 231,712.50 tons of CO2eq in Scope 2.
EMISSÕES (tCO 2 eq) 2017 2016 2015
Escopo 2
(Emissões indiretas de GEE e energia)
277.861,85 220.693,80 231.712,50
LOCATION IN THE REPORT: Page (s): 64 and 65
INDICATOR CODE: 305-3 - Other indirect (Scope 3) GHG emissions
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Since 2009, Chesf has annually published its GHG Emissions Inventory, in conjunction with the other companies of the Eletrobras Group. This document reports its GHG emissions to its stakeholders and its answers support a series of questionnaires and environmental reports required by the market, including: the Carbon Disclosure Project, ISE-Bovespa, and the Dow Jones Sustainability Index. Chesf’s operational strategy on climate change is based on a number of pillars set out in the Environmental Policy of the Eletrobras companies and in its Statement of Commitment, which guide the practices and future planning of the companies. Representatives of the Eletrobras companies take part in various forums to discuss and propose solutions to matters related to climate change, at corporate and public-policy level. As a member of the Eletrobras Companies, Chesf is part of the Technical Chambers for Water, Climate, and Energy of the Brazilian Business Council for Sustainable Development (CEBDS); of the Businesses for Climate Platform (EPC); of the Climate Change Working Group of the Environmental Forum for the Electric Utilities Sector (FMASE); of the Brazil GHG Protocol; and of the Brazilian Forum on Climate Change (FBMC).
Chesf has been setting goals to decrease the consumption of some resources that involve energy, aiming to boost efficiency, enhance environmental management, and reduce its GHG emissions. The first phase took place between 2013 and 2015, considering consumption in 2012 as a baseline, when the Company set its own goals for reducing consumption of fossil fuels by its ground fleet (Scope 1) and for consumption of electricity from the public distribution network (Scope 2), with a subsequent impact on the numbers for GHG emissions. Subsequently, new goals for these two indicators were established in Eletrobras’s 2015- 2019 Business and Management Master Plan (PDNG), proposing an annual reduction of 0.2%, considering 2014 as a baseline. After assessing the first period of goals (2013-2015) and considering the great effort already made by the companies, the 2017-2021 PDNG established the goal for annual reduction of GHG emissions at 0.2% for each company, totaling 1% until 2021.
For the GHG Emissions Inventory, the Eletrobras companies use an operational control approach, where the Company is responsible for 100% of the GHG emissions of the units in which it has operational control and is not responsible for those produced by operations in which it only holds shareholding interest. The Inventory follows the IPCC methodology (2006) and the Greenhouse Gas Protocol - GHG Protocol guidelines (WRI, 2004). Emissions from Chesf’s hydroelectric power plant reservoirs were not considered since there is still no consensus among the international scientific community on a methodology to estimate such emissions and calculate the emissions budget (or net emissions) from bodies of water.
Since 2016, in connection with the work of the Climate Strategy WG (WG3) of the Environmental Committee of the Eletrobras companies (SCMA), a new task force was created to estimate emissions and removals produced by the activities of the Eletrobras companies that lead to changes in land use. The task force for Adaptation to Climate Chang e continues to operate, identifying potential negative impacts from the decreased availability of water resources upon generation of electricity and the increased number of extreme weather events, which have affected the facilities of the energy generation, transmission, and distribution complex in our country. Consequently, it is necessary to work on the inception of new projects and to rethink old ones, revising processes and identifying vulnerabilities in order to propose measures that suit this new climate regime. Also, the work plan of WG3 includes addressing the carbon footprint of the activities of the Eletrobras Companies.
PERFORMANCE
(qualitative and quantitative information):
In its GHG Inventory, the Company reported the emission of 1,200.50 tons of CO2eq in Scope 3.
EMISSÕES (tCO 2 eq) 2017 2016 2015
Escopo 3
(Outras emissões indiretas de GEE)
2.815,12 1.060,35 1.200,50
LOCATION IN THE REPORT: Climate Change
INDICATOR CODE: 305-4 - Intensity of greenhouse gas (GHG) emissions
MATERIAL TOPIC RELATED: Mudanças Climáticas
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Since 2009, Chesf has annually published its GHG Emissions Inventory, in conjunction with the other companies of the Eletrobras Group. This document reports its GHG emissions to its stakeholders and its answers support a series of questionnaires and environmental reports required by the market, including: the Carbon Disclosure Project, ISE-Bovespa, and the Dow Jones Sustainability Index. Chesf’s operational strategy on climate change is based on a number of pillars set out in the Environmental Policy of the Eletrobras companies and in its Statement of Commitment, which guide the practices and future planning of the companies.
In the previous GHG Inventories, it can be observed that Chesf’s emission intensity is considerably low when compared with the average emission intensity of the international electric utilities sector, including Brazil. This is because most of Chesf’s generation matrix is from sources that have low GHG-emissions – approximately 97% of its total net generation.
PERFORMANCE
(qualitative and quantitative information):
Emissions Intensity is calculated using the ratio between GHG emissions (sum of Scopes 1 and 2) and generation of energy and using the ratio between GHG emissions (sum of Scopes 1 and 2) and net operating revenue (NOR).
Calculation of Emission Intensity includes:
> Scope 1: emissions from Stationary Sources (company-owned UTE, generators, and others), Mobile Sources (ground and air) and Fugitive Sources (SF6).
> Scope 2: emissions from consumption of electricity and losses in transmission, CO2, CH4, N2O, and SF6.
Chesf does not consider Scope 3 emissions to calculate emission intensity..
LOCATION IN THE REPORT: Page (s): 64 and 65
INDICATOR CODE: 305-7 - Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Management of climate change includes developing plans to reduce greenhouse gas emissions within Chesf’s operations. Therefore, a database is being implemented to monitor consumption of fuel by its fleet, seeking to maintain achievable and measurable goals.
Other enhancement, technical, and operational actions focus on process efficiency, on route planning and control through georeferencing tools, and on effective use of equipment, with preventive maintenance actions, technology upgrades, and replacement with more efficient models, with low levels of emissions.
PERFORMANCE
(qualitative and quantitative information):
Since the Camaçari thermal power plant did not operate in 2017 because of the operational suspension ordered by ANEEL in August 2016 its air emissions were considered at zero for the period.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: GRI-EU5 -Allocation of CO2 e emissions allowances or equivalent, broken down by carbon trading framework
MATERIAL TOPIC RELATED: Climate Change
GLOBAL COMPACT: N/A
SDG:
DMA (disclosure management approach): Management of climate change includes developing plans to reduce greenhouse gas emissions within Chesf’s operations. Therefore, a database is being implemented to monitor consumption of fuel by its fleet, seeking to maintain achievable and measurable goals.
Other enhancement, technical, and operational actions focus on process efficiency, on route planning and control through georeferencing tools, and on effective use of equipment, with preventive maintenance actions, technology upgrades, and replacement with more efficient models, with low levels of emissions.
In addition, since 2009, in conjunction with the Eletrobras companies, Chesf has annually published its GHG Emissions Inventory, a document that is readily accessible and informs stakeholders about the responsibility of the Eletrobras companies in terms of Greenhouse Gas Emissions (GHG).
PERFORMANCE
(qualitative and quantitative information):
In 2017, in its GHG Inventory, the Company reported the emission of 243,709.8 tons of CO2eq in Scopes 1, 2, and 3. The YoY increase of 2.4% is mainly associated with increased losses in transmission, which can be explained by the expansion of Chesf’s transmission network.
Currently, the solar and wind power projects developed by the Company do not consider a technical analysis of the CO2 emissions avoided or a financial analysis of return in carbon credits, since, from a cost-benefit standpoint, they are not seen as attractive given their small scale.
LOCATION IN THE REPORT: Page (s): Not applicable

WASTE

INDICATOR CODE: 301-1 - Materials used by weight or volume
MATERIAL TOPIC RELATED: Waste
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): This indicator is managed through disposal process reports and material handling reports (per type of material), regularly issued by the Asset Management System (SIGA - Sistema de Gestão de Ativos). Chesf does not dispose of cartridges, since it has in place reverse logistics procedures with suppliers of this type of material.
All materials were purchased from external suppliers.
Todos os materiais foram comprados de fornecedores externos.
Measurement: Measurements are obtained directly from the Materials Handling – Outbound (MMSA) and Outbound (SA) reports issued by the Asset Management System (SIGA).
Information for the sale of scrap, obtained from the Disposal Reports, is also in the SIGA.
PERFORMANCE
(qualitative and quantitative information):
PESO TOTAL OU VOLUME DE MATERIAIS NÃO RENOVÁVEIS
2017 2016 2015
30.063 -- --

Breakdown of the units
Isolators (over 230kV) (UN) = 29,800
Three-phase transformers (over 230kV) (UN) = 222
High-voltage circuit breaker (UN) = 41
Total equipment (UN) = 30,063
PESO TOTAL OU VOLUME DE MATERIAIS RENOVÁVEIS
2017 2016 2015
62.287 -- --

Breakdown of the units
We considered the quantities of the items below, considering packages (packs and reams) as 1UN.
Ink/toner cartridges (unit) = 4,286
Recycled envelopes (unit) = 31,374
White envelopes (unit) = 9,283
White and colored paper (pack) = 111
Recycled paper (pack) = 76
Offset printing paper (sheet) = 7,050
White printing paper (reams) = 6,754
Recycled printing paper (reams) = 3,353
Total number of units = 62,287
To supplement the information, data on the sale of scrap is provided below:
Scrap disposed = 481.9 tons = including all types of scrap (iron, galvanized iron, steel, aluminum, copper, and insulated copper) disposed of in 2017..
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 301-2 - Recycled input materials used
MATERIAL TOPIC RELATED: Waste
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): This indicator is managed through disposal process reports and material handling reports (per type of material), regularly issued by the Asset Management System (SIGA).
Chesf does not dispose of cartridges, since it has in place reverse logistics
PERFORMANCE
(qualitative and quantitative information):
PPERCENTUAL DE INSUMOS RECICLADOS USADOS NA FABRICAÇÃO DOS PRINCIPAIS PRODUTOS E SERVIÇOS DA ORGANIZAÇÃO (%)
2017 2016 2015
68 -- --
Estimation method: data obtained from SIGA reports - materials that left the stockroom
Recycled printing paper (reams) = 3,353 (Total consumption = 10,107) = 33%
Recycled paper (pack) = 76 (Total consumption = 187) = 41%
Recycled envelopes (unit) = 31,374 (Total consumption = 40,657) = 77%
Total recycled = 34,803/ Total consumption = 50,951/ Percentage = 68%
LOCATION IN THE REPORT: Page (s): Not applicablel
INDICATOR CODE: 306-2 - - Waste by type and disposal method
MATERIAL TOPIC RELATED: Waste
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): At Chesf, the premises that support the approach for management of solid waste, effluents, and air emissions are guided by the Principle for the Internal Coordination of the Environmental Policy of the Eletrobras Group, approved and published in 2013 and seeks to “ensure the incorporation of the environmental dimension into Company processes.”
Disposal of Class I and Class II (A and B) Waste complies with the laws and standards in effect, especially with Art. 9 of the National Policy on Solid Waste - Law 12,305/2010: “in managing solid waste, the following order of priority should be followed: non-generation, reduction, reuse, recycling, and treatment of solid waste and environmentally-friendly final disposal of waste.”
Most Class I Waste is disposed of by a specialist contractor, in compliance with the laws and regulations in effect. For Class II Waste generated at the Headquarters, Chesf has signed an agreement with a contractor, in which it sets out that the waste should be collected at Chesf and disposed of at CTR Candeias, where it is weighed to determine the amount due for payment to the contractor. This information on weight is regularly collected by the Infrastructure Department (DGLI), area responsible for the facilities infrastructure and services processes at Chesf with the contractor.
PERFORMANCE
(qualitative and quantitative information):
2017
Reúso 0
Reciclagem 43,90
Compostagem 0
Recuperação, inclusive recuperação de energia 4,39
Incineração 0
Injeção subterrânea 0
Aterro 3,7
Armazenamento no local 206,83
Outros (terceiros) 0
TOTAL DE RESÍDUOS GERADOS 258,82
2017
Reúso --
Reciclagem 37,87
Compostagem --
Recuperação, inclusive recuperação de energia --
Incineração --
Injeção subterrânea --
Aterro 984,69
Armazenamento no local 1.171,10
Outros (terceiros) --
TOTAL DE RESÍDUOS GERADOS 2.193,66
LOCATION IN THE REPORT: Page (s): 70 and 86
INDICATOR CODE: 306-3 - Significant leakages
MATERIAL TOPIC RELATED: Waste
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): NA
PERFORMANCE
(qualitative and quantitative information):
No leakages were recorded; however, there is no equipment to record measurement.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 306-4 - Transport of hazardous waste
MATERIAL TOPIC RELATED: Waste
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Transportation of hazardous waste in the Company complies with the existing internal standards, prepared in compliance with ANTT Resolution 5,232, dated December 14, 2016, that approves the Complementary Instructions to the Regulation on Land Transportation of Hazardous Products, among others.
PERFORMANCE
(qualitative and quantitative information):
Waste transported is calculated as follows: total weight of hazardous waste transported = weight of hazardous waste transported from Chesf for final disposal in disposal service companies not owned by Chesf + weight of hazardous waste transported from the site where it is generated for temporary storage in a location managed by Chesf.
Chesf does not import or export hazardous or non-hazardous waste.
2017 2016 2015
TRANSPORTE DE RESÍDUOS PERIGOSOS (T)
Resíduos perigosos transportados 82 9,65 25,98
Resíduos perigosos importados 0 0 0
Resíduos perigosos exportados 0 - -
Resíduos perigosos tratados 52 - -
Resíduos perigosos transportados para outros países 0 - -
TOTAL DE RESÍDUOS GERADOS 134 9,65 25,98
LOCATION IN THE REPORT: Page (s): Not applicable

PARTICIPATION IN COMMITTEES AND INTEGRATED STUDIES

INDICATOR CODE: 415-1 - Political contributions
MATERIAL TOPIC RELATED: Participation in Committees and Integrated Studies
GLOBAL COMPACT:
SDG: N/A
DMA (disclosure management approach): Chesf does not make contributions to political parties or campaigns.
PERFORMANCE
(qualitative and quantitative information):
Not applicable
LOCATION IN THE REPORT: Page (s): Not applicable

HUMAN RIGHTS

INDICATOR CODE: 103-2 - Management Approach - Indicators with Human Rights topics
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Material topic - Non-discrimination
The organization monitors the existing communication channels, i.e., internal and external channels, through the Ombudsman’s Office, the Ethics Committee, and the Whistleblower Channel of the Eletrobras Companies (the latter, starting on August 21, 2017). In addition, there are internal standards that address this topic, in line with the corporate values and with the Code of Ethics and Conduct, fostering respect and dignity and preventing and tackling violence and mobbing in the workplace, aiming to enhance business management. This topic is covered in the internal standards RN-01/2013 AS-08 and IN-AS.09.002 “Promotion of Respect, Prevention and Tackling Violence and Mobbing in the Workplace.”
Material topic - Freedom of association and collective bargaining:
The document “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers” is listed in the RFPs and agreements executed between Chesf and its suppliers, which state, in their Proposal Cover Letter, that they understand the terms of the document. All RFPs issued by Chesf for the provision of services (such as cleaning and maintenance, security and reception) are prepared based on the salaries and benefits ensured through Collective Bargaining Agreements or in the Collective Labor Agreements of the corresponding categories. Hence, the Company requires that proposals presented by suppliers to provide such services comply with the provisions of such Agreements. Throughout the performance of these agreements, the management and inspection departments are responsible for reporting any violation of the rights of service providers and for ensuring that salaries and benefits comply with the corresponding collective bargaining agreements. These workers can also access the whistleblower channels through the Ombudsman’s Office, the Supplier Service Center (CAF) or the Whistleblower Channel. It should be noted that the Company’s Union Relations department does not participate in the collective bargaining of the workers employed by Company suppliers.
Material topic - Child labor and forced or compulsory labor:
The Procurement Logistics Policy of the Eletrobras Companies, the Corporate Sustainability Policy of the Eletrobras Companies, the Code of Ethics and Conduct of the Eletrobras Companies, the Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers:
> Item 3.2 of the Code of Ethics and Conduct of the Eletrobras Companies: oppose anti-competitive behavior, child labor, abuse and exploitation of children and adolescents, forced labor or degrading working conditions, and any type of physical, sexual, moral, or psychological violence and any other practices in violation of the principles of this Code of Ethics and Conduct, of the Corporate Integrity Program, and of the policies of the Eletrobras Companies, including in the production chain of its suppliers, and report violators;
> Item 5.1.7 of the Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers: repudiate and not tolerate the use of child labor, except for apprentices over 14 years of age;
> Item 5.2.2 of the Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers: not hire providers of goods and services that use child labor, that subject their employees to degrading working conditions or forced labor, and that do not comply with the labor and social-security laws and with all laws and regulations in effect; ;
> Item 6.4.2.2 of the Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers: not use child labor, except for apprentices over 14 years of age;
> Corporate Sustainability Policy - Executive Boards of the Eletrobras Companies: approve the terms of this Policy and ensure its implementation, enforcing compliance with its principles in all decisions;
> Sustainability Committee of the Eletrobras System: promote integration between the Eletrobras Companies and propose Action Plans that enable the effective implementation of the principles set out in this Policy;
> Organizational Units: implement the Action Plans proposed by the Sustainability Committee of the Eletrobras System;
> Procurement Logistics Policy of the Eletrobras Companies - Strategic Procurement Logistics Committee of the Eletrobras System (CELSE): propose and monitor procedures that comply with this policy and, where appropriate, submit proposals to adjust the guidelines presented; act through working groups with representatives appointed by the companies;
> Eletrobras’s Procurement Department: act as a manager in the implementation of this policy and coordinate joint purchases;
> Procurement Department of the Eletrobras Companies: implement the activities arising out of this policy;
> Eletrobras’s Executive Board: approve this policy and ensure its implementation;
> Executive Board of the Eletrobras Companies: approve and enforce dissemination and implementation of this policy in their companies;
Management is responsible for supervising agreements and for reporting cases that violate commitments assumed by suppliers. In addition, suppliers, contractors, and service providers have access to the Ombudsman’s Office, to the Supplier Service Center (CAF), and to the Whistleblower channel.
Material topic - Safety practices:
Training courses comply with the policies and management approach on corporate education, which are set out by internal standards, especially through the Normative Resolution on Corporate Education at Chesf and through the Normative Instruction on Corporate Education. There are no goals or objectives concerning training in the area of safety. However, safety indicators are adopted, monitored, and serve as baseline for educational initiatives. The Company has an Educational Council, which is a group responsible for setting out strategic guidelines for Corporate Education Plan (PEC), in line with the demands of the business. Its competencies include: monitoring of results and recommendation of eventual enhancements for educational programs and actions.
The Company’s Corporate Education Plan covers active and loaned employees. Only the educational actions aimed at this audience are duly recorded on RHSin - Integrated Human Resources System. Indicators on corporate education are monitored quarterly, comparing the number of hours employees dedicated to training courses with the goals established in the Company’s Education Planning, prepared at the beginning of each year.
Material topic - Rights of indigenous peoples and human rights assessment:
Chesf guides its performance based on the Environmental Policy of the Eletrobras Companies, which includes “relationship with society” as one of the Guidelines of the Environmental Policy of the Companies. The Environmental Policy seeks to govern the approach to environmental issues in the Eletrobras Companies, in line with principles of sustainability and its general guidelines are: Integration with Internal Audiences, Integration with External Audiences, Relationship with Society, Sustainable Use of Energy Resources, Scientific and Technological Development, and Environmental Management.
Chesf’s Environmental Policy is available on the Company’s website at http:// www.chesf.gov.br/sustentabilidade/Style: Library: Canal/Meio: Ambiente/ politica_ambiental.pdf. The Policy was approved at Chesf through DD- 46.07/2013, dated November 11, 2013, and DL-451.03/2014, dated June 5, 2014.
The Ombudsman’s Office is a communication channel between Chesf and its stakeholders, allowing for their collaboration in the control of Chesf’s activities. Its purpose is to guide, transmit information, and collaborate to enhance the activities developed by the Company. Reports are individually analyzed and handled accordingly, seeking to address the demands and escalate them for resolution.
The Ombudsman’s Office is also responsible for the Citizen Information Service (SIC) at Chesf and safeguards the means to ensure the effective constitutional right to information, interacting internally to increase the Company’s transparency, in compliance with Law 12,527/2011. Moreover, Chesf has an environmental channel, with a toll-free number and an institutional e-mail to address environmental issues.
Material topic - Supplier social assessment:
Chesf does not subject its suppliers to due diligence processes on social impact. However, the Company adopts social criteria, such as labor and social security issues that, in conjunction with disclosures 407, 408, and 409, make up the list of social criteria:
- Right to free collective bargaining;
- Child labor;
- Forced labor;
- Labor and social security matters.
Furthermore, matters such as guarantee to social and cultural diversity and repudiation of any type of harassment, prejudice, and discrimination are clearly stated in our agreements, whether directly or through the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” referred to in all agreements.
All these topics are perceived by the Company as important contributions to society, seeking to foster, through its supply chain, the best practices in sustainability. These practices are based on the ethical principles of human dignity, of respect for people, and of sustainability.
However, we understand that there is room for improvement in this process, in addition to the formalization of requirements in RFPs and agreements, such as the due diligence process on social impact, which must be duly structured.
PERFORMANCE
(qualitative and quantitative information):
The performance of the above topics can be checked at the following indicators.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: Total number of incidents of discrimination and corrective actions takens
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The internal standards of conduct and relationship between Chesf employees and its stakeholders are established through the Code of Ethics and Conduct. This document applies to all internal audiences, from senior management to interns and young apprentices.
PERFORMANCE
(qualitative and quantitative information):
In order to guide and advise senior managers and the internal audience on rules of conduct, Chesf has in place an independent Ethics Committee with decision-making powers. The Ethics Committee receives reports from internal and external channels and through the Ombudsman’s Office and the Whistleblower Channel of the Eletrobras Companies (the latter available after August 21, 2017).
In 2017, no cases associated with discrimination were identified.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 407-1 - Operations and suppliers where the right to freedom of association and collective bargaining may be at risk
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): The right to freedom of association and collective bargaining is set out in the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” which is extensively communicated on the Company’s website and referred to in all RFPs, known to all suppliers. The Contract Management department is responsible for handling eventual cases that violate such right.
All RFPs issued by Chesf for the procurement of services (such as cleaning and maintenance, security and reception) are prepared based on the salaries and benefits ensured through Collective Bargaining Agreements or through the Collective Labor Agreements of the corresponding categories. Hence, the Company requires that the proposals presented by suppliers for providing such services respect the provisions in the Agreements.
Throughout the performance of these agreements, the administration and inspection areas are responsible for reporting any violation of rights of workers of contractors providing services and for ensuring that salaries and benefits comply with the respective collective bargaining agreements. These workers can also access the whistleblower channels through the Ombudsman’s Office, the Supplier Service Center (CAF), or the Whistleblower Channel.
PERFORMANCE
(qualitative and quantitative information):
No cases were reported in 2017.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 408-1 - -Operations and suppliers with significant risk of incidents of child labor
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): All agreements with providers of services and materials are based on the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” as an attachment to the agreements where the conducts expected from contractors are listed.
The Company also has an Ombudsman’s Office (ouvidoria@chesf.gov.br or http://www.chesf.gov.br/empresa/Pages/Ouvidoria/Ouvidoria.aspx) and a supplier service center (caf@chesf.gov.br), both provided on the website.
Supplier commitments:
> To be familiar with the contents of the primer called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” available on Chesf’s portal.
> Not to employ individuals under the age of 18 in night shifts or hazardous or unhealthy work, nor individuals under the age of 16 in any activity, except as apprentices, 14 or older;
> Not to have employees working under degrading or forced labor conditions;
> Not to have been legally sanctioned for any environmental administrative violation;
> Not to have been sanctioned for environmental violations..
Chesf reserves the right to audit the contractor’s facilities or sites where services are performed to check for compliance with legislation – which prohibits the use of forced and compulsory labor, employment of individuals under the age of 18 in night shifts or hazardous or unhealthy work, and employment of individuals under the age of 16 in any activity, except as apprentices, 14 or older. When any such case is identified, the Company intervenes to immediately remove the child from the irregular situation, formally notifies the supplier, sends out the administrative sanctioning proceedings, and escalates the case to the Federal Attorney General’s Office.
The Company is a signatory to the National Committee on the Fight Against Sexual Violence Against Children and Adolescents. Also in connection with the operations with potential risk of incidents of child labor, Chesf sets forth a series of requirements for contractors, including the submission of a record listing all workers hired, and inspects the staff used in the provision of the service.
There were no incidents of child labor during the reporting period.
PERFORMANCE
(qualitative and quantitative information):
No incidents of child labor were identified in 2017. The following agreements were assessed:
> Contractors working outdoors, such as those clearing the right of ways of Chesf’s transmission lines. Ten suppliers whose agreements were in effect in the reporting period were listed.
> Contractors working in maintenance of transmission lines and energized substations and contractors hired for cleaning and conservation activities in substation areas. Eight suppliers whose agreements were in effect in the reporting period were listed.
LOCATION IN THE REPORT: Page (s): Not applicablel
INDICATOR CODE: 409-1 - Operations and suppliers at significant risk for incidents of forced or compulsory labor
MATERIAL TOPIC RELATED: Direitos Humanos
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): All agreements with providers of services and materials are based on the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” as an attachment to the agreements where the conducts expected from contractors are listed.
The Company also has an Ombudsman’s Office (ouvidoria@chesf.gov.br or http:// www.chesf.gov.br/empresa/Pages/Ouvidoria/Ouvidoria.aspx) and a supplier service center (caf@chesf.gov.br), both provided on the website.
Compromissos dos fornecedores:
> To be familiar with the contents of the primer called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” available on Chesf’s portal.
> Not to employ individuals under the age of 18 in night shifts or hazardous or unhealthy work, nor individuals under the age of 16 in any activity, except as apprentices, 14 or older;
> Not to have employees working under degrading or forced labor conditions;
> Not to have been legally sanctioned for any environmental administrative violation;
> Not to have been sanctioned for environmental violations.
Chesf reserves the right to audit the contractor’s facilities or sites where services are performed to check for compliance with legislation – which prohibits the use of forced and compulsory labor, employment of individuals under the age of 18 in night shifts or hazardous or unhealthy work, and employment of individuals under the age of 16 in any activity, except as apprentices, 14 or older. When any such case is identified, the Company intervenes to immediately remove the child from the irregular situation, formally notifies the supplier, sends out the administrative sanctioning proceedings, and escalates the case to the Federal Attorney General’s Office.
PERFORMANCE
(qualitative and quantitative information):
There were no incidents of forced or compulsory labor in 2017. Contractors working outdoors were assessed, such as those clearing the right of ways of Chesf’s transmission lines. Ten suppliers whose agreements were in effect in the reporting period were listed.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 410-1 - Security personnel trained in human rights policies or procedures
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Indicators on corporate education are monitored quarterly, comparing the number of hours employees dedicated to training courses with the goals established in the Company’s Education Planning, prepared at the beginning of each year. The policies and management approach on corporate education are set out through internal standards, especially through the Normative Resolution on Corporate Education at Chesf and through the Normative Instruction on Corporate Education.
The Eletrobras companies launched, through Universidade Unise, the online course “Integrity and Ethics - Compliance”. The course has five modules and totals approximately two hours, and is mandatory for all employees, in compliance with the recommendations set forth in the inspection reports issued by the regulatory agencies. This action includes the set of activities provided in the “Eletrobras 5 Dimensions Program,” which represents an enhancement to the Integrity Program (Compliance). The goal is to achieve a greater level of robustness and maturity for the Company’s integrity practices, comprising a number of actions and projects that need to be implemented by the Eletrobras companies in order to meet the legal requirements and recommendations of regulatory agencies and to reinforce the corporate integrity environment. The course is part of Dimension 4, which refers to communication and training actions, and covers topics such as ethics and transparency, accountability and control of public administration, administrative corruption, and anti-corruption practices.
PERFORMANCE
(qualitative and quantitative information):
Training proved to Company employees:
TABELA PAGINA 88**************************************************************************************
Corporate education requirements for contractors..
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 411-1 - Incidents of violations involving rights of indigenous peoples
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Chesf’s Corporate Social Responsibility Policy has a norm that addresses the rights of indigenous peoples. It is norm RN-02/2016 AS-16, which sets out, as one of the Company’s guidelines, the development of qualified engagement and relationship with its stakeholders, fostering ethical and transparent dialogue, taking into consideration their expectations, needs, social, cultural, economic, political, and environmental contexts, paying special attention to vulnerable groups – such as traditional and indigenous communities –, recognizing their cultures and specific social organizations.
PERFORMANCE
(qualitative and quantitative information):
No incidents were recorded in 2017. The four cases being handled refer to incidents that occurred in previous years.
Current status of previous cases:
1) Fulni-ô: Administrative Proceeding 1.26.005.000007/2015-12, brought by the Federal Attorney General’s Office in Garanhuns/PE, in which Chesf’s permission to use the areas located within the Fulni-ô Indigenous Land was renegotiated, in exchange for compensation, for the passage of 230 and 500 kV Transmission Lines PA III/Angelim C1, PA III/Angelim C2 and C3, PA III/Angelim C4, Luiz Gonzaga/ Angelim C1 and PA IV/Angelim II C2, which are 7.5 km long and 192 meters wide, totaling 163.7 hectares. The Federal Attorney General’s Office is expected to issue a Conduct Adjustment Agreement (Termo de Ajustamento de Conduta).
2) Truká: Inquérito Civil no 1.26.001.000006/2002-85, instaurado pelo MPF - Polo Salgueiro/Ouricuri, no qual a Chesf manifestou sua discordância em relação ao valor indenizatório estimado no Estudo de Impactos Socioambientais e de Valoração Econômica dos Danos Ambientais causados pela implantação da LT 69 k: V Cabrobó/Pedra Branca.
3) Tumbalalá: with the Tumbalalá Indigenous People – a tribe that has recently been recognized as an indigenous group – descendents of Truká, who migrated from the Assunção Island to the riverine area of the municipality of Abaré/BA. The territory proposed for demarcation by FUNAI comprises the municipalities of Abaré and Curaçá, reaching the land and agro-villages of the Pedra Branca Irrigated Perimeter. There are potential conflicts between the indigenous people and the population resettled in that perimeter, the population who lives in the Pedra Branca and Pambú settlements, and riverine farmers. Chesf disputed the proposal for demarcation, within the legal deadline and, so far, FUNAI has not issued any statements or sent the process for deliberation by the Ministry of Justice.
4) Kantaruré: Administrative Proceeding/Civil Investigation 1.14.006.000003/2009-99, brought by the Federal Attorney General’s Office in Paulo Afonso/BA, in connection of the passage of the transmission line 500 kV LT Sobradinho Luiz Gonzaga on the lands of the Kantaruré people. IBAMA is expected to issue statements about the studies conducted by FUNAI.
Current status of the remediation plans:
1) Fulni-ô: The Federal Attorney General’s Office is expected to issue a Conduct Adjustment Agreement (Termo de Ajustamento de Conduta).
2) Truká: Chesf expressed its disagreement concerning the amount of the compensation estimated in the Social and Environmental Impact Study and in the Valuation of the Environmental Damage caused by the implementation of the transmission line 69-kV LT Cabrobó/Pedra Branca.
3) Tumbalalá: Chesf disputed the proposal for demarcation, within the legal deadline and, so far, FUNAI has not issued any statements or sent the process for deliberation by the Ministry of Justice.
4) Kantaruré: IBAMA is expected to issue statements about the studies conducted by FUNAI.
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 412-1 - Operations that have been subject to human rights reviews or impact assessments
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): In the environmental licensing process, Chesf conducts social and environmental studies in the area of influence of its projects and facilities, among which are the studies for diagnosis of the anthropogenic environment. Studies of the anthropogenic environment include the identification of the populations affected and of the impacts from the implementation and operation of the projects, including cases that require relocation. The results of these studies enable the preparation and execution of programs that contain mitigation actions, such as: environmental education program, social and environmental communication program, cultural preservation program, relocation program, among others. In relation to the indigenous and quilombola populations, the actions are governed by international agreements signed by Brazil and by the specific Brazilian laws and regulations.
PERFORMANCE
(qualitative and quantitative information):
In the reporting cycle, five operations were subjected to human rights reviews or human rights impact assessments. The total number of operations that have been subjected to reviews or assessments corresponds to the projects located in the area of operation of the Social and Environmental Action Plan (PAS).
NÚMERO DE OPERAÇÕES SUBMETIDAS A ANÁLISES OU AVALIAÇÕES DE IMPACTOS RELACIONADOS A DIREITOS HUMANOS
2017 2016 2015
5 5 -
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 412-2 - Employee training on human rights policies or procedures
MATERIAL TOPIC RELATED: Direitos Humanos
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): Indicators on corporate education are monitored quarterly, comparing the number of hours employees dedicated to training courses with the goals established in the Company’s Education Planning, prepared at the beginning of each year.
The policies and management approach on corporate education are set out through internal standards, especially through the Normative Resolution on Corporate Education at Chesf and through the Normative Instruction on Corporate Education.
The Eletrobras companies launched, through Universidade Unise, the online course “Integrity and Ethics - Compliance”. The course has five modules and totals approximately two hours, and is mandatory for all employees, in compliance with the recommendations set forth in the inspection reports issued by the regulatory agencies. This action includes the set of activities provided in the “Eletrobras 5 Dimensions Program,” which represents an enhancement to the Integrity Program (Compliance).
The goal is to achieve a greater level of robustness and maturity for the Company’s integrity practices, comprising a number of actions and projects that need to be implemented by the Eletrobras companies in order to meet the legal requirements and recommendations of regulatory agencies and to reinforce the corporate integrity environment. The course is part of Dimension 4, which refers to communication and training actions, and covers topics such as ethics and transparency, accountability and control of public administration, administrative corruption, and anti-corruption practices.
Up to 2016, the number of active employees in December of the previous year was considered to calculate corporate education indicators, However, this methodology was revised and, today, the number of employees in December of the current cycle is used - in this case, 2017 - as reference to determine the results of corporate education.
The increase in the results presented between 2016 and 2017 is due to the online course called “Integrity and Ethics - Compliance,” taken by all employees. This action includes the set of activities provided in the “Eletrobras 5 Dimensions Program,” which represents an enhancement to the Integrity Program (Compliance).
PERFORMANCE
(qualitative and quantitative information):
In 2017, in relation to the human rights policies and procedures alone, the Company offered 14,842 hours of training to 103% of employees. For the purposes of comparison, the total number of hours in educational actions was 185,648. It should be noted that the rate of employees trained on December 31, 2017 exceeded 100% because of the decrease in the number of employees throughout the year. Thus, the number of employees trained exceptionally exceeded the Company’s total workforce.
NÚMERO TOTAL DE HORAS DEDICADAS AO TREINAMENTO EM POLÍTICAS DE DIREITOS HUMANOS OU PROCEDIMENTOS RELATIVOS A ASPECTOS DE DIREITOS HUMANOS RELEVANTES PARA AS OPERAÇÕES DA ORGANIZAÇÃO
2017 2016 2015
14.842 7.675 75.896
PERCENTUAL DE FUNCIONÁRIOS TREINADOS EM POLÍTICAS DE DIREITOS HUMANOS OU PROCEDIMENTOS RELATIVOS A ASPECTOS DE DIREITOS HUMANOS RELEVANTES PARA AS OPERAÇÕES DA ORGANIZAÇÃO
2017 2016 2015
103 6,2 51
LOCATION IN THE REPORT: Page (s): Not applicable
INDICATOR CODE: 412-3 - Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
MATERIAL TOPIC RELATED: Human Resources
GLOBAL COMPACT:
SDG:
DMA (disclosure management approach): All RFP processes and agreements include human rights clauses. Since the Company contracts through bidding processes and follows specific legislation, it does not select the most advantageous proposal considering only environmental criteria; however, they are included in all RFPs, agreements, and attachments.
It should be noted that Chesf does not actively seek new suppliers, considering that its procurement is conducted through RFP processes.
All agreements with providers of products and services are based on the document called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” referred to in all agreements. This document lists the conducts expected from contractors. The Company has an Ombudsman’s Office (ouvidoria@chesf.gov. br) and Supplier Service Center (caf@chesf.gov.br), both provided on the website.
Supplier commitments
> To be familiar with the contents of the primer called “Principles and Commitments of Corporate Conduct in Chesf’s Relations with Suppliers,” available on Chesf’s portal.
> Not to employ individuals under the age of 18 in night shifts or hazardous or unhealthy work, nor individuals under the age of 16 in any activity, except as apprentices, 14 or older;
> Not to have employees working under degrading or forced labor conditions;
> Not to have been legally sanctioned for any environmental administrative violation;
> Not to have been sanctioned for environmental violations.
In order to approve monthly payments and terminate agreements, Chesf requires contractors to produce proof of payment concerning transportation allowance, meal allowance, and INSS and FGTS collection, the employee attendance record, and the list of employees terminated, if any. In addition, Chesf reserves the right to audit the contractor’s facilities or sites where the services are performed to check for compliance with legislation – which prohibits the use of forced and compulsory labor, employment of individuals under the age of 18 in night shifts or hazardous or unhealthy work, and employment of individuals under the age of 16 in any activity, except as apprentices, 14 or older..
Agreements for significant investments require the approval of the Board, i.e., agreements exceeding BRL 5 million.
PERFORMANCE
(qualitative and quantitative information):
In 2017, a total of 29 agreements and contracts for significant investments were executed and 100% contain human rights clauses. Contracts for significant investments are those that refer to the Company’s core activity and require approval from the Board.
NÚMERO TOTAL DE ACORDOS E CONTRATOS DE INVESTIMENTO SIGNIFICATIVOS QUE INCLUEM CLÁUSULAS REFERENTES A DIREITOS HUMANOS OU QUE FORAM SUBMETIDOS A AVALIAÇÕES DE DIREITOS HUMANOS
2017 2016 2015
29 15 18
PERCENTUAL DE ACORDOS E CONTRATOS DE INVESTIMENTO SIGNIFICATIVOS QUE INCLUEM CLÁUSULAS REFERENTES A DIREITOS HUMANOS OU QUE FORAM SUBMETIDOS A AVALIAÇÕES DE DIREITOS HUMANOS
2017 2016 2015
100 100 100
LOCATION IN THE REPORT: Page (s): Not applicable