China Huaneng Group is the largest power generation company in China, with generation capacity of about 80 GW, 10% of the national total, and sales revenue of about USD $10 billion. It is 100% state-owned. It employs over 100,000 people.
It is investing heavily in renewable energy, including a large new hydropower project in Tibet, and two new carbon capture facilities in Shanghai. In November 2010 it issued a bond for RMB 1.5 billion.
It does not publish an annual report in English, but it does publish a sustainability report, available through the UN Global Compact website at http://www.unglobalcompact.org/participant/2059-China-Huaneng-Group . It has published a complete report for 2008 (english and Chinese, attached), and a partial one for 2009 (in Chinese only) http://www.unglobalcompact.org/COPs/detail/2164
The 2008 report includes sections on human rights, labour, environment and anti-corruption. The labour policy is summarised as: “Adhere to fair and just employment policy, strictly follow national laws and regulations on labour relationship management and labour contract, so as to strengthen the management of employees’ labor contract. Establish workers’ congress system and the system of making the Company affairs public, so as to ensure 100% employee membership in trade unions at all levels, and strengthen democratic participation of employees.” (p.54). According to the labour section, in 2008 the female-male ratio was just over 3:1; one-third of employees were under 35; and 48% of all employees had college degrees. It states that: “In 2008, we further strengthened the employee congress system and the company affairs openness system, perfected the employee democratic management. At the same time, we worked out the plan and methods for constructing the employee congress system, gave relevant opinions on strengthening and improving the run of trade union, and took advice widely through seminars and symposium. All enterprises affiliated have established trade union organizations in accordance with Trade Union Law, and ensured to get 100 percent employee attendance. Trade union organizations at all levels carefully performed their responsibilities and signed collective labor contracts on behalf of employees to protect their legal rights and interests.” (p.42)
One of theGRI indicators which it does NOT disclose is EC5 “Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.” (p. 51)
It has a windpower subsidiary, Huaneng Renewables, which was scheduled to be floated on the Singapore and Hong Kong stock exchanges in December 2010, but this was cancelled. According to one analysts “Huaneng planned to spend nearly one-third of its proceeds, or HK$2.7 billion, acquiring wind power projects in northern regions of the mainland and countries such as Australia, New Zealand, Brazil, Russia and India or where wind supply was abundant and regulations on the industry mature” (South China Morning Post December 6, 2010 Top wind power firms compete for IPO funds)
In December 2010 it agreed to buy 50% of US-based international power generation company Intergen.
It owns 51% of Huaneng Power International, a company which is listed on the New York, Shanghai and Hong Kong stock exchanges. Barclays Bank owns 5% of its shares. (Sales: USD $11.2 billion, Employees: 33,587, Website: www.hpi.com.cn ) Despite its name, this also operates mainly in China. It has a ‘no competition’ agreement with China Huaneng Group. In December 2010 it agreed to buy 30% of a Hainan Nuclear Power Co from China Huaneng Group, for RMB 174 million in cash.
Huaneng Power International wholly owns one overseas subsidiary in Singapore, Tuas Power Ltd, with sales of USD $1.6 billion, an installed capacity of 2,670 MW and about 25% of the Singapore market. This was bought from the Singaporean company Temasek in March 2008 by China Huaneng Group (and sold 3 months later to Huaneng Power International). At the time of the sale, Temasek stated that unions were closely involved in the takeover process: “Temasek has also kept in close touch with the board, management and union leaders of Tuas Power during this sale process. Mr Wong Kim Yin, Managing Director, Investments, Temasek said, "We are pleased to announce the successful conclusion of the Tuas Power divestment process. China Huaneng is an established player with a strong track record in the power business. Its proposal through SinoSing was the most attractive. It emerged as the winner based on clear considerations of price and acceptable commercial terms. We have no doubt that the future growth and development of Tuas Power as an anchor power provider in Singapore will benefit from the experience and resources that China Huaneng brings." Paying tribute to the board, management and staff of Tuas Power, Mr Wong added, "I would also like to put on record our thanks to the board, management and staff of Tuas Power, and especially to the leaders and members of the Union Of Power And Gas Employees for their support and advice through the years of restructuring and also through this first sale process. They have ensured that Singaporeans continue to enjoy high quality electricity supply through their professionalism, dedication and commitment. I am confident that they will find a supportive and constructive long term shareholder in China Huaneng." Mr Nachiappan RKS, General Secretary of Union of Power and Gas Employees ("UPAGE") said, "It's been a long journey since the days when Singapore Power was first corporatised. There have been many changes, and sometimes things can be difficult. We understand and appreciate the need to provide electricity competitively and reliably for Singapore, and we are glad we have had Temasek as an understanding shareholder, working with us to prepare for this sale. We look forward to working with the new shareholder in the same spirit of a long-term tripartite partnership." ( http://www.temasekholdings.com.sg/media_centre_news_releases_031408.htm ).
China Huaneng Group
CEO: Cao Peixi
Address: 40 Xueyuan Nanlu Beijing, 100088
Sales: USD$21.8 billion
Company website: http://www.chng.com.cn:81/n16/n2862/index.html
Un Global Compact: http://www.unglobalcompact.org/participant/2059-China-Huaneng-Group
Fortune 500 no. 313: http://money.cnn.com/magazines/fortune/global500/2010/snapshots/11445.html