The following English translation is provided by the Company for information purposes only, based on the original and official document in Spanish available on the Company's website. In the event of any discrepancy between the English version and the Spanish original document, the latter will prevail.
In compliance with article 227 of Law 6/2023, of 17 March, on the Securities Markets and Investment Services, and complementary regulation, the company Construcciones y Auxiliar de Ferrocarriles, S.A. (“CAF” or the “Company”) hereby communicates the following relevant information in relation to the Jerusalem light rail project:
In the coming days, the report of the United Nations High Commissioner is scheduled to be published and submitted before the Human Rights Council within the framework of its 60th session, in which the database of companies that are directly or indirectly involved in any of the activities listed in the annual report of the United Nations High Commissioner for Human Rights dated 2 August 2024 (A/HRC/57/21) will be reviewed, and in which the inclusion of CAF is foreseen.
As stated in report A/HRC/57/21, as well as in previous reports of the same Body (A/HRC/43/71 of 28 February 2020 and OHCHR Office report of 30 June 2023), “OHCHR is mandated to make factual determinations of whether business enterprises are involved in one or more of the listed activities for the purposes of adding or removing business enterprises from the database. This work does not and does not purport to constitute a judicial or quasi-judicial process of any kind, nor does it provide any legal characterization of the listed activities or business enterprises’ involvement therein.”
The Jerusalem Project (or “the Project”) was awarded in 2019 to TransJerusalem J-Net Ltd., a company 50% owned by the Israeli construction company, Shapir Civil & Marine Engineering Ltd (Shapir) and CAF, with an estimated total value of €1,800 million. It includes the construction of the Green Line as well as the extension of the existing Red Line, which partially run through East Jerusalem. This construction phase is expected to conclude in 2027. The Project also includes the operation of both Lines for 15 years (with the possibility of extending the term to 25 years) and their maintenance for 25 years, through another company equally owned 50% by Shapir and CAF, which began operations in 2021.
Beyond compliance with the applicable regulatory framework, CAF is firmly committed to business ethics and the respect for Human Rights across all its operations, including its value chain, based on the highest standards of accountability and transparency. To this end, CAF has established a set of rules, procedures, and systems, adopted at the highest level, which together constitute a comprehensive Compliance System applicable to the entire Group, as well as to third parties contracting with CAF, with the purpose of preventing and addressing any conduct that could be unethical or contrary to the law, or CAF’s Internal Regulatory System. Particularly in the area of Human Rights, CAF has adopted a specific Due Diligence Policy, further developed through several detailed procedures, which reinforces at the highest level its ethical commitment across all its activities and business relationships.
CAF is fully aware of the complex legal and ethical implications linked to the Jerusalem Project, specifically in relation to International Humanitarian Law and corporate accountability, and of the importance of carefully balancing the protection of Human Rights with the need to provide the population with essential infrastructure for all communities without discrimination.
Accordingly, throughout the execution of the Project, CAF has implemented specific due diligence measures with three levels of intensity (general, enhanced, and intensified), in accordance with the Guide on Heightened Human Rights Due Diligence for Business in Conflict-Affected Contexts, published by the United Nations, in order to identify, prevent and mitigate, where appropriate, any adverse impact on Human Rights.
As a preliminary measure prior to the signing of the contract related to this Project, CAF conducted a legal analysis through consultations with independent and highly regarded experts, including professors of International Law and United Nations specialists, who confirmed the absence of any breach arising from CAF’s participation in the Project. This conclusion is further supported by the resolution of the Versailles Court of Appeal issued in relation to the Red Line, during the pre-expansion phase, which dismissed any violation of International Law by the companies involved in the Project. Additionally, the legal services of the competent Authority in Spain confirmed that the Project was in compliance with international law and identified no legal objection for the signing of the contract and the subsequent execution of the Project. Following these verifications, the company TransJerusalem J-Net Ltd. (now named CFIR Light Rail Ltd.) signed the concession contract on 26 September 2019.
In 2020, proceedings were initiated before the Spanish National Point of Contact, a collegiate interministerial body of the Government of Spain established to promote the effectiveness of the OECD Guidelines, whose final report was issued in 2022 without identifying any legal noncompliance by CAF nor the violation of any rights.
Furthermore, throughout the execution of the Project and to date, CAF has closely monitored the resolutions issued by various international bodies, always cross-checking them with external advisors and independent experts, who have consistently upheld their initial favourable conclusions.
On the other hand, CAF has conducted an initial risk assessment of the Project, followed by subsequent reassessments, without identifying any Human Rights violations or the materialization of any adverse impact to date. On the contrary, the Jerusalem Project generates positive impacts on the population, as confirmed by independent expert reports issued in 2023 and again in July 2025.
These reports, drawn up following on-site visits and interviews with users and representatives of various communities, highlight the social utility of the Jerusalem tramway, which constitutes an essential public service infrastructure and acts as a catalyst for the fulfilment of Human Rights such as freedom of movement, access to employment, healthcare, education, and places of worship for the entire population, without distinction, with particular benefit to the most vulnerable communities. Accordingly, the reports conclude that the Project has a positive, nondiscriminatory impact, providing access to basic social services and a sustainable and ecofriendly infrastructure.
Available mobility data confirm that members of the Arab community, who constitute a significant proportion of tram users, are those who use it most frequently (more than half of them use it three or more times per week), the large majority of whom report the highest level of satisfaction with the service, according to quality surveys periodically conducted by a specialized agency.
The company responsible for the operation and maintenance of the system follows a strict inclusive and non-discriminatory policy -about 25% of the employees are Arab. It also takes specific measures to prevent any discrimination on ethnic, national, religious or other grounds, ensuring that the transport system is accessible to everyone and that signposts and signals are multilingual, including both Arabic and Hebrew.
The aforementioned independent reports also underscore CAF’s high level of compliance with key international standards on corporate social responsibility and sustainability, as well as its adherence to Human Rights Due Diligence in accordance with the UN Guiding Principles and the OECD Guidelines.
The evidenced positive impacts, together with the absence of materialized negative impacts, support the effectiveness of the Due Diligence carried out to date, which is in any case subject to ongoing monitoring.
CAF reports annually, through its Non-Financial Information Statements – Sustainability Reports, on the due diligence measures applied to its projects, with specific reference, in a dedicated section, to those related to the Jerusalem Project, subject to independent external verification, with satisfactory results to date.
CAF remains committed to acting in accordance with the highest standards of integrity, accountability, and transparency, and to continuing to prioritize the monitoring of any material issue relating to ethics and Human Rights, as well as of the regulatory framework under which it operates.
In Beasain on 25 September 2025
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