Sustainable Development Plan 2014

In this section:

Structural Health and Safety Environmental Impact Supply Chain Management Corporate Philanthropy Employer of Choice

Our 2014 SD Plan was developed at the end of 2013 to guide our sustainability activities during 2014. In this section we report both historically on the RESULTS we achieved against our 2013 TARGETS, and then look forward to detail the TARGETS we planned to undertake during 2014. In the few cases in which we missed some targets in 2013, we carried them forward to remain as targets in 2014.


Achievement of SD 2013 Targets and KPIs during 2014
1
Structural
1.1
CNCo and its stakeholders will operate more sustainably and in a more integrated manner if they are working within a clear set of established policies and guidelines. In 2012, CNCo issued a Supply Chain Sustainability Code of Conduct. This is posted on our website
2013 TARGET:
see Supply Chain Management below
1.2
CNCo Head Office in Singapore has established both a top level Sustainable Development (“SD”) Steering Group and implemented a SD Working Group. Similar groups have been / will be established in Australia and New Zealand. We have also established a pan-company operations Shore Safety Committee that meets monthly to review Health and Safety issues involved in onshore port operations.
2013 TARGET:
The establishment of these groups will be extended to CNCo’s office in PNG and in New Zealand in 2013.
2013 RESULT:
The establishment of these groups in New Zealand and PNG will be undertaken in 2015.
2014 TARGET:
Increased support will be provided to Sustainable Development Steering Groups in our outports, following findings of our Alignment and Engagement Report, which found that SD initiatives may be overly focussed around Singapore.
1.3
For the past 5 years prior to 2013, CNCo produced an annual Environmental Report. With effect from 2013 report, we will build upon these and align them with the increased use of management metrics to produce a more detailed Sustainable Development Report that reports issues material to our key stakeholders.
2013 TARGET:
A CNCo SD Report is to be produced to GRI 3.1 level C+ by June 2014.

This is to be used as the basis for formal Stakeholder Engagement during the early half of 2014 (and then annually thereafter) to determine whether our stakeholders feel that there are more (or less) material issues that should be reported, and thus whether subsequent reports should produced be to level B+ (or A+) in future years.

This is to be used as the basis for formal Stakeholder Engagement during the early half of 2014 (and then annually thereafter) to determine whether our stakeholders feel that there are more (or less) material issues that should be reported.
2013 RESULT:
The CNCo 2013 SD Report has been produced according to GRI3 C+. The 2012 report was used to inform internal stakeholder engagement.
2014 TARGET:
CNCo’s SD Report detailing 2014 performance will be produced to GRI 4 (Core) by mid 2015. Formal engagement with external stakeholders will be undertaken in 2015, in accordance with our Stakeholder Communications Plan, to inform the scope of our 2015 reporting.
1.4
In 2012, CNCo undertook a workshop-based Future Scenario Planning initiative, facilitated by Forum for the Future, to review a wide range of external factors that might influence our business going forward and our fleet renewal programme in particular. This process was designed to form the basis of an ongoing annual review of corporate strategies against sustainability risks and opportunities.
2013 TARGET:
Hold a “20420” offsite meeting annually, inviting the 20 managers who will be responsible for the delivery of our 2020 strategic objectives. This will start in January 2013, to build on the Future Scenario Planning outputs of the Strategic Risk and Opportunity Registers and develop a Strategic Balanced Scorecard up to the year 2020 that will contain shorter term goals up to the year 2016 and KPI metrics to determine CNCo’s progress in getting to these goals. These internal goals mesh into the longer term industry-wide Vision 2040 to which we have signed up with the Sustainable Shipping Initiative; “for a sustainable shipping industry in 2040”.
2013 RESULT:
A strategic balanced scorecard was developed by CNCo management during the “20420” Strategic Offsite meeting in January 2013.
2014 TARGET:
To continue the programme of strategic review offsite meetings in January 2015 and beyond, with a view to maintaining a sustainable path and focus for the business.
1.5
Increasingly we recognise that areas in which we work may have potential Environmental Issues and Human Rights Issues. We wish to exercise the highest operational standards in these areas both from the point of view of the general public good and for enlightened self-interest.
2013 TARGET:
We will work over 2013 to establish a set of guidelines as to when an Environmental Impact Assessment (“EIA”) and / or a Human Rights Impact Assessment (“HRIA”) should be conducted.
2013 RESULT:
Guidelines were not developed in 2013 as CNCo did not enter into any new areas or localities where this might be required. This target will be carried forward to 2015.
2014 TARGET:
By end of 2015, we will establish a set of guidelines as to when an Environmental Impact Assessment (“EIA”) and / or a Human Rights Impact Assessment (“HRIA”) should be conducted and a broad structure for the assessments.
1.6
In 2012, CNCo implemented a “5S” methodology to improve health and safety and general housekeeping in our offices and on our ships, The “5S” Methodology is a workplace organisation methodology that defines how to organise a work space for safety, efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order that uses a list of five Japanese words: “seiri, seiton, seiso, seiketsu, and shitsuke”. Translated into English, 5S phases are: “sort, sweep, set in order, standardise and sustain”.
2013 TARGET:
  • To have all of our new S-Class vessels fully compliant on delivery.
  • To have at least one engine and one deck store on our existing Challenger and Miho class fleets fully compliant.
  • To have a focus on 5S included in our in house Safety Awareness Courses.
  • To have a 5S check during all ship managers’ technical inspections.
  • To achieve a reduction in near misses relating to “defective tools” and “poor housekeeping” by 50 % from the 2012 baseline
  • To achieve 100% accuracy in 5S store rooms for spare parts against the Amos inventory
2013 RESULT:
We made good progress towards these stretching targets in 2013, with all new S-Class vessels fully compliant on delivery, and achieving a reduction in near misses relating to “defective tools” and “poor housekeeping” by 50% from the 2012 baseline.

Progress on other 5S targets has been more difficult than first anticipated. A Computer Based Training (CBT) programme was produced and sent to every ship to clarify the importance of the 5S imitative. The time line for implementation was extended to the end of 2014 and further extended to the end of 1 Quarter 2015 for the Miho ships.
2
Health and Safety
2.1
CNCo is commited to Zero harm. Whilst logically reported within the Sustainable Development discipline, given its “mission-critical” importance it has its own dedicated department. The fundamental target for CNCo is that no harm shall be suffered by its employees or the marine environment. This is managed within our Health, Safety and Environmental Management System.
2013 TARGET:
Incur a Total Recordable Case Frequency (“TRCF”) of no more than 4.0

Increase the number of Near Miss and Toolbox Risk Identification Permits (“TRIP”) Reports by 10% over the figures for 2012

Reduce the Port State Inspection Deficiency Rate to < 2.0 in 2013.
2013 RESULT:
3 LTIs occurred on 2013, which exceeded our target of Zero. However, this maintains the improvement from 9, to 4 achieved in 2012.

We achieved our target of a Total Recordable Case Frequency of no more than 4, with a TRCF of 2.47 per million in 2013. This also marks an improvement over 2012 (3.5 per million). We increased (improved) our TRIP report by 20.1%, from 21,609 in 2012, to 25,956 in 2013 against our target of 10% increase.

Our Port State Inspection Deficiency Rate of 1.78 remained below 2.0 our target for 2013, although it showed a slight increase from 2012 (1.38).
2014 TARGET:
Achieve Zero LTIs,

Suffer a Total Recordable Case Frequency (“TRCF”) of no more than 4.0,

Increase the number of Near Miss and Toolbox Risk Identification Permits (“TRIP”) Reports by 10% over the figures for 2012

Reduce the Port State Inspection Deficiency Rate to < 1.80 in 2013.
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3
Environmental Impact
3.1
CNCo has committed to taking action to move its operations towards having a net zero environmental impact. CNCo is also mindful of the harm pollutants can do to the marine environment. It is thus critical that CNCo does all it can, technically and operationally, to observe all the requirements of MARPOL regulations and to prevent the release of substances that are deemed harmful and hazardous to the marine environment.
2013 TARGET:
Achieve Zero spills of pollutants hazardous to the marine environment.
2013 RESULT:
2 spills occurred in 2013, resulting in 1 litre of hydraulic oil and 20 litres of sludge entering the sea. The more significant of these, a spill of 20 litres of sludge occurred during a transfer of sludge to shore from Highland Chief at Honiara port on 5th May 2013. The relevant authorities were duly notified. Any harmful effects of the spill were successfully mitigated through absorption of the spilled sludge by the ship’s staff and the 3rd party sludge collectors. As a result of this incident, we modified our safety management system to ensure that a thorough checking of 3rd party oil or waste hoses is carried out before and during every hydrocarbon transfer, as well as asking for the temperature limitations for the hose.
2014 TARGET:
Achieve Zero spills of pollutants hazardous to the marine environment.
3.2
The Singapore Environment Council runs an Eco-Office Certification scheme that assists businesses to run their office premises in a more sustainable and environmentally responsible way. CNCo successfully achieved EcoOffice in 2012. EcoOffice is currently only available in Singapore, however, other schemes are available globally, such as BEAM (Management and Operation) and LEED for Existing Buildings.
2013 TARGET:
CNCo Head Office will retain Eco-Office certification through 2013 (ongoing). All other CNCo offices outside Singapore will be encouraged to adopt the same good practices using a similar scheme locally or without formal certification where this is not appropriate.
2013 RESULT:
CNCo’s head office Eco-Office certification is valid until 2014. No other offices have certified to EcoOffice or similar.
2014 TARGET:
CNCo Head Office will retain Eco-Office certification on an ongoing basis.

All other CNCo and Swire Shipping offices in New Zealand and Australia will be encouraged to adopt the same good practices using a similar scheme locally or demonstrate compliance with the principles of Eco-office or similar without formal certification where this is not appropriate. We will report on this in our 2015 report.
3.3
CNCo is under-going a fleet renewal programme. This will entail the retiring ships to be recycled. Conditions in many recycling yards, with respect to both worker safety and responsible disposal of hazardous waste, are considered unacceptable and not in accordance with the highest, fully achievable, international standards. In 2012, CNCo adopted a Responsible Recycling Policy that requires CNCo vessels being recycled to be sent only to yards that are independently certified to. These will include as a minimum ISO 9001, ISO 14001, OHSAS 18001 (or alternately ISO 30000), and compliance with the principles underlying both the EU Recycling Guidelines and the HK Ship Recycling Convention (whether or not either is yet ratified). 4 ships were Responsibly Recycled at the beginning of 2012.
2013 TARGET:
To continue to observe this policy for any and all CNCo vessels that are sent for recycling in 2013, and to work with the yards to achieve a higher level of conformance against independent 3rd party auditing by LR than was achieved in 2012.
2013 RESULT:
MV Erawan – click here for more details
2014 TARGET:
To continue to work with the SSI working group to establish the gaps that exist at selected beaching yards in South Asia and thus identify what must be done to bring them up to an acceptable standards.
3.4
In addition to 3.3 and looking at the long term future, CNCo is a member of the Sustainable Shipping Initiative (“SSI”) Steering Group. The SSI has a Vision for a sustainable shipping industry in 2040 that is designed to help the industry make long-term plans for future success. An industry with long-lived assets needs long-term thinking, and the SSI aims to help members think beyond the next regulation or design tweak.

Over the 18 months from April 2012 to Oct 2013, CNCo worked with the SSI’s “Closed Loop Material Management” (CLMM) work-stream. This sought to “Implement systems to trace and increase accountability of ship building materials and their sources, with the ultimate aim of having end-to-end responsibility and accountability for these materials”.
2013 TARGET:
CNCo to present on the learning points from the CLMM project, to the Tradewinds Ship Recycling Forum in Dubai in Q1 2013.

CNCo and all other SSI members to report back on the various pilot workstreams to an industry event in Singapore in September 2013.
2013 RESULT:
CNCo presented the results of the CLMM work in Dubai in Q1 2013, and the presentation was well received.
2014 TARGET:
Following the completion of the CLMM work, in 2014-15 CNCo will use the results of the study to inform a Natural Capital Valuation of ship recycling. Data will be used to assess future ship recycling options and policies and presenting opportunities feed-back into ship design.
3.5
Rightship – an industry body, has established an index to quantify the environmental design performance of existing ships (EVDI™) as the IMO standard (EEDI) only refers to ships delivered post 01 Jan 2013. IMO also has a standard for measuring the operational efficiency of existing ships (EEOI).
2013 TARGET:
On the principal that what is not measured cannot be managed efficiently, CNCo will develop internal targets for operational efficiency of existing owned and chartered ships plus criteria for selecting ships to charter based on the environmental and energy efficiency of their design. These targets will be based on 2012 baselines and will be set to become more stringent over time towards 2020.
2013 RESULT:
CNCo has adopted “EEOI” as our standard measure of ship operational performance, and have established a baseline EEOI of 31 as an average across our Liner fleet (2013) and 6.76 for our bulk fleet (2013).

CNCo has adopted EEDI and EVDI (where the latter is possible; it has some inherent inaccuracies for some ships in our niche sectors) as our standard measures of the design performance of our ships.

We are pleased to have adopted stretching targets against these metrics, meeting our 2012 commitment.
2014 TARGET:
We commit to demonstrating progress towards achieving a consolidated annual EEOI index at >=50% better than the baseline by 2020, with an interim target of >=80% by 2016. We are aiming to achieve, for all relevant liner and bulk vessels:

  • EEDI compliance index at <=80% better than the IMO baseline delivery to CNCo
  • EVDI rating >= ‘C’
4
Supply Chain Management
4.1
CNCo recognises that it is not enough for organisations to conduct their own business responsibly, but that it is critical that we ensure that our suppliers also operate to a minimum set of standards. In 2012, CNCo adopted a Supplier Code of Conduct, referred to in 1.1 above.
4.2
In addition to CNCo issuing its Supply Chain Sustainability Code of Conduct the company also took the proactive step of issuing one of the industry’s first “Responsible Carriage of Cargo Policy” (For more details on this see the Environmental Impact Mitigation Section, EN26).
2013 TARGET:
CNCo will work with suppliers with whom we have a total annual spend of > USD 1 million who are assessed as presenting a higher risk of non- compliance, to assure ourselves of the level of compliance and to establish such follow-up action with the suppliers as is required to reduce non-compliance.
2013 RESULT:
No audits or other supplier engagement was undertaken in 2013 to ensure compliance with our Supply Chain Sustainability Code of Conduct or “Responsible Carriage of Cargo Policy”, due to prioritisation of resources.
2014 TARGET:
In 2015, CNCo will work with suppliers with whom we have a total annual spend of > USD 1 million and who are assessed to have a potentially higher risk of non-compliance to assure ourselves of the level of compliance, and to establish such follow-up action with the suppliers as is required to reduce non-compliance.
5
Corporate Philanthropy
5.1
CNCo is committed to target this as Strategic Community Investment for term projects that are sustainable, working with partners on projects that are aligned with our business, in communities where we can leverage the effect of our investment.

Our existing Corporate Philanthropy (“CP”) Committee will continue to work with all CNCo offices to identify projects or partner organisations that meet our internal guidelines.
2013 TARGET:
Two CNCo teams have committed to participating in the Sailors’ Society Mt Kinabalu fund-raising Challenge to be held in Q1 2013.

We began drafting an “Employee CP Paid Volunteer Day Policy” in 2012, and are scheduling to issue this in 2013.

We will leverage both our financial support and our resources to work with the Maritime College in Madang, Papua New Guinea to achieve greater alignment in 2013.

CNCo wishes to ensure that its Corporate Philanthropy delivers the highest levels of social and environmental impact for the investment made, and will begin a project to develop metrics to measure Social Return On Investment (SROI). This is a nascent field, on which there is much ongoing research being undertaken, and this is therefore anticipated to be a long-term project.
2013 RESULT:
CNCo developed a Social Return on Investment methodology, which was used in the assessment of our philanthropic funding to Papua New Guinea Maritime College.

The publication of our “Employee CP Paid Volunteer Day Policy” has been delayed to 2014.

We are delighted to report that two CNCo teams completed the Sailors’ Society Mt Kinabalu Fund-raising Challenge 2013, and we plan to continue support our staff who wish to participate in this event in future years.

We continued to support the Maritime College in Madang, Papua New Guinea. However we recognise that more management support is required to optimise positive impacts, which was not available due to management changes in 2013-14. This will be pursued in 2015.
2014 TARGET:
We will continue to assess our relevant Corporate Philanthropy projects against SRoI criteria, and will update and improve our methodology for doing this as we learn lessons from its use. We will publish our Employee CP Paid Volunteer Day Policy” in 2014.
6
Employer of Choice
6.1
Singapore is seeking to establish itself as a Maritime Hub, with 26 separate Institutes of Higher Education offering young Singaporeans courses in a wide range of maritime disciplines. CNCo Head Office is a) under-represented with local managers and b) committed to support Singapore’s intention of being a Maritime Hub. CNCo already supports the supply of short-term internship places to between 6-8 maritime undergraduates each year.

In 2012, CNCo interviewed a number of potential undergraduates from NTU under the “SMFOne Scheme” and selected one Engineering Management Trainee who started with us after she graduated in mid-2013. It is hoped that this can become an entry stream for future local managers.
2013 TARGET:
CNCo will sponsor a number of both commercial and engineering undergraduates under the Singapore Maritime Foundation “SMFOne Scheme”.
2013 RESULT:
One Singaporean undergraduate studying at Newcastle University was found suitable for recruitment from the Singapore Maritime Foundation “SMFOne Scheme” for sponsorship in 2013 and joined CNCo at the start of 2014.
2014 TARGET:
In 2015, CNCo will seek to sponsor a number of both commercial and engineering undergraduates under the Singapore Maritime Foundation “SMFOne Scheme”.
6.2
We believe that outside our home base of Singapore and particularly in our key stakeholder communities of the Pacific Islands, there is also a wealth of potential talent. Over and above our support of time, money and resources to the Maritime College in Madang, PNG detailed in 5.1 above we seek to establish long-term, mutually beneficial relationships with our other partners and stakeholder communities, particularly in the youth and education areas that are aligned to our business.
2013 TARGET:
CNCo’s HR and Fleet Management departments will work to establish cadetships for 15% of CNCo’s annual requirement from suitable candidates in key developing communities in Asia Pacific region by the end of 2016, increasing to 25% by the end of 2020.
2013 RESULT:
Recruitment ongoing to meet the target by the end of 2016.
2014 TARGET:
CNCo’s HR and Fleet Management departments will continue to work to establish cadetships for 15% of CNCo’s annual requirement from suitable candidates in key developing communities in Asia Pacific region by the end of 2016, increasing to 25% by the end of 2020.