Sustainable Development Plan 2013

In this section:

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

Our 2013 SD Plan was developed at the end of 2012 to guide our sustainability activities during 2013. In this section we report historically on the progress we achieved against our 2011 targets in 2012 and then look forward to detail the actions we planned to undertake during 2013.

In the few cases in which we missed some targets in 2012, we have carried them forward to remain as targets in 2013.

Achievement of SD 2012 Targets and KPIs during 2013
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.
2012 TARGET:
In addition to established policies, a Supplier Code of Conduct must be established and issued.
2012 RESULT:
A Supply Chain Sustainability Code of Conduct was issued. Version 01/2012 is posted on our website.
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 established at the Swire Shipping regional offices 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 the onshore port operations of working our ships alongside.
2012 TARGET:
The establishment of these groups must be extended to all CNCo and Swire Shipping main offices and are recommended for companies in which CNCo or Swire Shipping have significant interest. Once established these groups must communicate with each other in order to maximise SD output for minimum resource input.
2012 RESULT:
This was achieved in Australia, and at the end of the period Swire Shipping and John Swire and Sons in Sydney had formed a joint SD and HSEQ Committee. There has been liaison between the CNCo Singapore SD department and the Swire Shipping office in Auckland during the year, and a formal committee will be established at the time of the first SD Stakeholder Engagement meetings in NZ in 2013, after any location-specific issues have been identified.
2013 TARGET:
The establishment of these groups should be extended to CNCo’s office in PNG and Swire Shipping’s offices in New Zealand in 2013. Once established these groups should communicate with each other in order to maximise SD output for minimum resource input.
1.3
For the past five years CNCo has produced an annual Environmental Report. With effect from this report for the year 2012 we must build upon these and align them with the increased use of management metrics such that a more detailed Sustainable Development Report that reports issues that are material to our key stakeholders is produced going forward.
2012 TARGET:
A CNCo SD Report is to be produced to GRI level C+ by the end of Jul 2012. This is to be used as the basis for formal Stakeholder Engagement during the latter half of 2012 (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 be to level B+ (or A+) in future years.
2012 RESULT:
The CNCo 2012 SD Report was published to GRI 3.1 C+, but not until Q1 2013.
2013 TARGET:
A CNCo SD Report is to be produced to GRI 3.1 level C+ by Jun 2013.

This is to be used as the basis for formal Stakeholder Engagement during the early half of 2013 (and then annually thereafter) to determine whether our stakeholders feel that there are more (or less) material issues that should be reported.
1.4
CNCo is embarking in 2012 on the planning for a significant fleet rejuvenation programme from 2013, the first after some time. It is thus timely and prudent to review the external factors, both positive and negative, that may affect our business in the next 20 – 30 years, the general lifetime of a well operated ship.
2012 TARGET:
Undertake a workshop-based Future Scenario Planning initiative, facilitated by Forum for the Future, involving both internal and external stakeholders who are either familiar with our industry or not specifically familiar but recognised "futurologists" during 2012. The results are to be tested against current corporate strategies by the end of 2012, and then formally at annual intervals in the future.
2012 RESULT:
This was achieved. The process helped CNCo develop a Strategic Risk and Opportunity Register that was then to be tested against ongoing operations, planning and decision-making processes and developments at the beginning of 2013, at a meeting intended to also develop long term goals, plus the metrics to help measure our progress towards achieving these goals.
2013 TARGET:
Hold a ‘2020’* offsite meeting annually, starting in Jan 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 that year 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”.

*The 2020 meetings are annual retreats by the 20 most senior managers to review our business strategy up to the year 2020 as a minimum, and then beyond as far as is practical.
1.5
Increasingly we recognise that areas in which we work may not only have potential Environmental Issues but also potential Human Rights Issues. We wish to exercise the highest operational standards in both these areas for 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 and how an Environmental Impact Assessement (“EIA”) and / or a Human Rights Impact Assessement (“HRIA”) should be conducted.
2
Health and Safety
2.1
This is a mission-critical part of CNCo’s business and whilst logically reporting within the Sustainable Development discipline, given its importance it has long had its own dedicated department. The fundamental targets for CNCo are that zero harm shall be suffered by its employees, or be caused to the marine environment. This is managed within our Health, Safety and Environmental Management System.
2012 RESULT:
This was partly achieved. There were no oil spills in 2012 and the number of LTIs was more than halved from 9 to 4 during the year.
2013 TARGET:
Achieve Zero LTIs and Zero spills of marine pollutants. 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 and reduce the Port State Inspection Deficiency Rate to < 2.0 in 2013.
3
Environmental Impact
3.1
CNCo Head Office will undergo modifications in Q1 2012 after having settled into the new Singapore office for 2 years. On completion the opportunity should be taken to revisit general office housekeeping. It is also important from both Health and Safety, and operational efficiency standpoints that housekeeping standards on ships receive the same attention.
2012 TARGET:
The “5S” Methodology (a workplace organization method that describes how to organize a work space for 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”. Transliterated or translated into English there are five primary 5S phases: “sorting, set in order, systematic cleaning, standardizing, and sustaining”. These are to be instituted in CNCo Head Office after the Q1 modification, on all the new ships being built, and on a rolling basis on existing ships.
2012 RESULT:
CNCo Fleet management established a 5S working group to implement the 5S housekeeping standard on all existing and new CNCo vessels. It drew up a project charter stating the objectives and goals and this charter has been signed off by the MD as sponsor.

To accommodate and structuralise the initiative, several changes were made to the Safety Management System. The housekeeping policy has been updated to incorporate the practices of 5S. A 5S circular was produced and released. The 5S working group also produced a change management document that explains how any changes, including those affecting storage and housekeeping are to be handled. This initiative will be continued and built upon in 2013.
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 in the housekeeping training 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.
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. It is prestigious, with only 72 premises in Singapore being awarded accreditation over the seven years up to 2012.
2012 TARGET:
CNCo Head Office will gain Eco-Office certification within 2012. The specific scheme is not applicable to other countries, but the concepts and initiatives are identical. All other CNCo and Swire Shipping offices outside Singapore will be encouraged to adopt the same good practices either in or absent a similar scheme locally.
2012 RESULT:
This was achieved; CNCo Head Office gained Eco-Office certification in mid-2012. The learning points have been passed to Swire Shipping Offices in Australia and New Zealand.
3.3
CNCo is under-going a fleet rejuvenation programme. This will entail the retiring ships to be recycled. Conditions in many recycling yards, especially those using the beaching method, with respect to both worker safety and responsible disposal of hazardous waste, do not meet the standards defined in the Company’s policy for the recycling of ships.
2012 TARGET:
CNCo will formally adopt a Responsible Recycling Policy. This will require CNCo vessels being recycled to be sent only to yards that are independently certified to the highest international standards. These will include as a minimum ISO 9001, ISO 14001, OHSAS 18001, compliance with the HK Ship Recycling Convention whether or not it is yet ratified globally and preferably also ISO 30000:2009.
2012 RESULT:
This was achieved. Four ships were Responsibly Recycled at the beginning of 2012 - a full report is included in the EN22 Waste Materials Disposal section. The GM for Sustainability agreed to give a presentation on the learning points from this process to the biennial Tradewinds Ship Recycling Forum in Dubai in Q1 2013.
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 (e.g.) LR than was achieved in 2012.
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.
2012 TARGET:
13 areas for initial action have been identified by SSI and CNCo will work with the “Closed Loop Material Management” work-stream over the 18 months from April 2012 to Oct 2013. This seeks 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”.
2012 RESULT:
This was achieved. CNCo has been working on the “Closed Loop Material Management” work-stream since Q2 2012, and has arranged for an intern from Singapore’s Nanyang Technological University to be embedded in the ship building yard for the new “S” Class for the first half of 2013 to run a pilot project with a view to all SSI members reporting back at an industry event in Q3 2013.
2013 TARGET:
The GM SD to give a presentation on the learning points from this process 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.
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.
4
Supply Chain Management
4.1
CNCo recognises that it is not enough for our organisations to internally operate our businesses responsibly, but that it is critical to our business model to be sustainable that we ensure that our suppliers also operate to a minimum set of standards. These are contained in the Supplier Code of Conduct referred to in 1.1 above.
2012 TARGET:
In addition to issuing a Supplier Code of Conduct, CNCo must audit and measure compliance and as required take action to reduce non-compliance. This is likely to be both resource intensive and open-ended and will thus be pursued on an on-going basis and reported on in the next annual SD Report.
2012 RESULT:
This was achieved, albeit this is an ongoing process. Our results are reported in more detail in the Product Responsibility Section (PR1) and Community Impact Section (SO1).
4.2
In addition to CNCo issuing its Supply Chain Sustainability Code of Conduct in 2012, CNCo also took the proactive step of issuing one of the industry’s first “Responsible Carriage of Cargo Policy” (see http://bit.ly/1gfoNHQ). For more details of 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 to assure ourselves 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 remains keen to target this as Strategic Community Investment for term projects that are sustainable, working with partners on projects that are aligned with our business model, in areas where we can leverage the effect of each dollar.
2012 TARGET:
The existing Corporate Philanthropy (“CP”) Review Committee will work with all CNCo offices to identify projects and organisations that are in accordance with our internal guidelines.

These seek to:

  1. Involve Business Critical Community Engagement (“BCCE”);
  2. Be Strategic;
  3. Involve a Long-Term Partnership;
  4. Be Responsive to Community Needs;
  5. Normally avoid “One-Offs”; and
  6. Involve fewer but larger sums, rather than many small donations, as these have an impact multiplier.

In complying with the above guidelines, corporately we would generally direct our CP towards:

  1. Provision of Educational and / or Health Opportunities for Youth;
  2. Enhancing CNCo’s Presence in our Stakeholder Communities;
  3. Environmentally Sustainable issues;
    whilst as best possible simultaneously:
  4. Demonstrating a strategic fit with CNCo’s business; and
  5. Fostering or enhancing a Corporate Partnership with CNCo (rather than being disconnected philanthropy).

These will be supported by a mix of time, resources and money, and we will look at the feasibility of granting paid “Volunteer Days”, as appropriate. One area that CNCo sees as potentially being of particular interest for more support in 2012 and beyond is a deeper partnership with the PNG Maritime College in Madang, PNG.

2012 RESULT:
This is (and will be ongoing) work in progress. A CP Committee has been established and set itself ground rules. A review of what causes our employees to seek support has been undertaken, albeit with a lower take up rate than we would have preferred. Two CNCo teams committed to participating in the Sailors’ Society Mt Kinabalu Fund-raising Challenge to be held in Q1 2013, and this will be reported on in the next annual SD Report.

During the latter half of 2012, CNCo budgeted a very significant amount to support the Maritime College in Madang, Papua New Guinea during 2013, and we hope to leverage both this financial support but more importantly our resources to work with the College to achieve concrete results in 2013.
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 enhanced alignment in 2013.

CNCo wishes to ensure that its Corporate Philanthropy delivers the highest levels of social and environmental value for the investment made, and will begin a project to develop metrics to measure Social Return On Investment (SROI). This is a very nascent field, on which there is much ongoing research being undertaken, and this is therefore anticipated to be a long-term project.
6
Employer of Choice
6.1
Singapore is seeking to establish itself as a Maritime Hub, having 26 separate Institutes of Higher Education graduating young Singaporeans with learning 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 support the supply of short-term internship places to around 6-8 maritime undergraduates each year.
2012 TARGET:
CNCo will sponsor a number of both commercial and engineering undergraduates under the Singapore Maritime Foundation “SMFOne Scheme” over the next few years. It is sincerely hoped that this can become an entry stream for future local managers, provided the material issue of high labour mobility (found in all Singapore employment sub-sectors) can be successfully addressed.
2012 RESULT:
This was achieved. CNCo interviewed a number of potential undergraduates from NTU under the Singapore Maritime Foundation “SMFOne Scheme” for sponsorship as either Commercial or Engineering Management Trainees and selected one Engineering Management Trainee to start after she graduates in mid-2013. CNCo will repeat this process again in 2013.
6.2
Singapore Management University (SMU) will be launching a new Maritime Economics Concentration (“MEC”) under the School of Economics in August 2013. Under this concentration, SMU undergraduates will benefit from a structured and rigorous programme, which includes maritime modules, internship opportunities, overseas industry study missions, site visits and talks by industry practitioners. This will help build up the shore-based talent pool for Maritime Singapore.
2013 TARGET:
CNCo will continue to sponsor a number of both commercial and engineering undergraduates under either the Singapore Maritime Foundation “SMFOne Scheme” and/or the new “MPA Global Internship Award” over the next few years. It is hoped that this can become an entry stream for future local managers, provided the material issue of high labour mobility (found in all Singapore employment sub-sectors) can be successfully addressed.

CNCo will work with SMU in 2013 to support its new Maritime Economics Concentration course in areas that are relevant to our business, prior to the start of the course in Jan 2014.
6.3
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 untapped talent. Over and above our support of time, money and resources to the PNG 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 10% of CNCo’s annual requirement from suitable candidates in key developing communities in the Asia Pacific region within 2013 and beyond.