Employment

In this section:

Summary Respect in the Workplace

Details of the breakdown of CNCo’s seagoing workforce as at 31 Dec 2012 are shown in the tables in the Data Section.

This shows the numbers of sea staff (who are found to split almost exactly 50:50, officers: crew), working on full-time and “fixed-term” contracts, and their nationalities.

None of our employees worldwide would be regarded as self-employed.

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We employ people in a total of 372 positioons in the offices ashore in our three significant employment locations: Singapore (Head Office) – 48.1%, Australia – 33.2% and New Zealand – 18.8%.

This is an increase of around 10% over 2011 and primarily reflects a) additional Superintendency for our new significant building programmes and b) the establishment of Swire Bulk.

Of these onshore employees, 54.0% of the total is male and 46.0% female, a swing away from parity of around 1.6%. However at the management level by the end of 2012, 77.6% were male and 22.4% female, a move of 1.5% towards higher female representation.

At the support staff level the gender disparity has increased by 4.0% with males dropping to 38.6% and females increasing to 61.4% from 2011 levels.

In the process of recruiting new personnel we emphasise that CNCo is an equal opportunities employer. We welcome diversity in the workplace, believing that it adds material value to an organisation by helping workers to approach their jobs from different perspectives.

For new employees, CNCo has had discussions both internally and with our external consultants to ensure that Persons With Disability (PWD) with the right skill set are including when seeking any new employees.

In 2012 CNCo published and promulgated a revised Corporate Code of Conduct however this continues to explicitly state, inter alia:

Respect in the Workplace

CNCo is committed to providing an inclusive work culture and appreciates and recognises that all people are unique and valuable and should be respected for their individual abilities.

CNCo will not tolerate harassment or discrimination on the basis of gender, religion, race, nationality or ethnic origin, cultural background, social group, disability, sexual orientation, marital status, family status, age or political opinion. The Code requires all Relevant Persons to behave with courtesy and respect towards everyone encountered in the course of business.

Only eight employees (2.1%) of our shore staff were temporary, as we actively seek to offer and maintain long-term employment. This is not a material change from 2011. The average length of service in New Zealand has increased year-on-year from 5.05 to 5.29 years, in Australia from 6.50 to 7.05 years but dropped slightly in Singapore from 3.3 to 3.2 years.

The lower absolute figure for Singapore compared to Australia and New Zealand is largely a function of the Head Office relocation and start-up in Q3 2009.

Staff turnover or attrition in New Zealand in 2012 was 6.61%. Benchmarking data are hard to find, but New Zealand Government Statistics Office and third-party studies do refer to the country as “a nation of job hoppers” with a common turnover rate of around 14% annually.

In the larger job market of Australia in 2012 the rate was a comparable 7.4%. The local AMMA and ABS statistics on labour mobility for the maritime sector reports an average rate of around 11%, twice the rate of 2010, so in both locations the CNCo attrition rate is half to two thirds of applicable benchmarks, which is pleasing, but still not yet good enough.

The major initiative in 2012 was the commissioning of an Alignment and Engagement (A&E) survey that was circulated to ALL shore and sea staff in July 2012.

In Singapore the turnover rate at 14.19% was marginally higher than the 2011 rate of 13.8% with the great majority of these voluntarily departing employees left “seeking better terms and conditions elsewhere”. This compares favourably (being 15% lower) with our Singapore benchmark rate of the published annualised monthly resignation rate figures for the Administrative and Support Services sector from Singapore Ministry of Manpower of 16.6% but it is still too high and reducing this was the subject of extra effort in 2012.

In particular we recognise that whilst we have an excellent cadre of employees, the physical separation between the onshore support staff and the seagoing operational staff that is peculiar to the shipping industry means that we must spend more time and resources than many other industries in ensuring and maintaining good lines of dialogue between the two working environments.

We continued with our in-house monthly magazine, “NiuSwire”, which first came out in Nov 2011, and which has grown bigger and more professional looking with each edition. This serves as a valuable way of keeping all the widely geographically spaced parts of the company “glued together”.

However, the major HR initiative in 2012 was the commissioning of an Alignment and Engagement (“A&E”) survey that was circulated to ALL shore and sea staff in July 2012. We used an independent company experienced in this field to ensure it was competently done and fully respected the confidentially of all the respondents.

The purpose of the A&E survey was to allow all employees to be able to totally confidentially contribute their opinions as to what CNCo was doing right, and wrong, to collect ideas for improving all work areas, to measure how connected we are as a company, and obviously how aligned and engaged all our employees are with the company’s vision and values. The response was significantly higher than the survey company had experienced in other sectors. This was especially pleasing considering the logistics of getting responses from the physically more remote ships.

The results were presented to senior management in late 2012 and have prompted the need for more detailed “focus groups” during the first half of 2013 to get deeper into some of the comment areas to allow us to determine in detail what should be done (stop/start/continue) to rectify/enhance/change the issues raised.

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Given the wide variety of our nationality and work locations, we do not herein give a detailed breakdown of types of employment contracts or remuneration / pension entitlements as this would a) be of little material value to anyone in a different region, b) not justify the resources required to produce the detail. Suffice to say, ALL of our contracts are in accordance with local employment law as a minimum and are blind to gender identity or age, whilst recognising experience and competence/qualifications.

Worldwide, 93.3% of our staff are classed as “local”, slightly higher than in 2011. (“local” is defined as a national or permanent resident in the country of employment). The balance of 6.7% are classed as expatriate. This apparently high number of expatriates is a function of 80% of them being parent company managers who are rotated through internal postings to gain wide sectorial experience throughout the group as they progress during their career.

We employed a total of 385 seafarers to fill positions at sea as at 31 Dec 2012. However, given that some officers will be on paid leave earned on prior voyages at sea and that, as noted below, all of our Filipino seafarers are employed through Anscor Swire Ship Management, a Swire JV manning agency, on single trip contracts as required by national law, there will be a variable number ashore whose employment can be regarded as linked to the company, but is not be counted herein.

Of these 385, 34.5% or 133 are Filipino, our biggest provider of seafarers, 28.8% or 111 are from Peoples’ Republic of China (“PRC”) and 78 or 20.3% are from PNG, see Table LA 1.1. For long term “cabotage trades” we would always seek to employ local staff. However despite this, we seek to run all of our operations to a single “international” standard.

These employment figures are materially lower than in 2011, as we recycled four of our older ships in early 2012. We strenuously sought, with some success, to retain as many of the displaced seafarers as possible, recognising that they were intimately familiar with our Safety Management System (“SMS”), ethos, vision and values, and that we would need to recruit/re-employ more than this as our new ships will be delivered in 2013 and beyond.

In interpreting these figures it should be borne in mind that it would be meaningless to state which country or region the sea staff (the majority) are working, as due to the trans-border nature of working at sea the geographical distribution is very dynamic and fluid and thus would only be a snapshot at a moment in time.

With respect to the ratio of sea staff on permanent / fixed term contracts, we strongly seek to have all sea staff on permanent contracts of employment.

This gives the seafarer security of employment, enables our operations and service to benefit from familiarity with company equipment, and reduces the resources required by the company inculcating the company vision, mission and ethos to new employees.

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The China Navigation Company employs seafarers from more than 10 different nationalities covering more than 5 different religious faiths within its global marine operations.

However employment of seafarers (and all other Overseas Filipino Workers (“OFW”) in the Philippines is strictly controlled by the Philippines Overseas Employment Agency “POEA”. This is the government body regulating employment and minimum terms and conditions and generally safeguarding their working conditions abroad, however the administration of this demands single tour-of-duty contracts strictly following the POEA format. We believe this single-trip contract (though not the other employment provisions) are against the best interests of both our seafarers and the company and its business.

Unfortunately, at the current time, it is illegal to employ a Filipino seafarer under a direct contract with an overseas company but we continue to actively engage the relevant authorities in discussions to change this, whilst in no way reducing their legal employment protection.

Currently only our seafarers employed in Papua New Guinea are covered by a Collective Bargaining Agreement. We have been working on changing this to 100% during 2012 in order that we can have this in place well prior to the adoption of Maritime Labour Convention (“MLC”) 2006 convention, expected to be in Q3 2013, but negotiations with some of the requisite (non-Filipino, non-PNG) parties have been more protracted than we expected or hoped.

The China Navigation Company employs seafarers from more than ten different nationalities covering more than five different religious faiths within its global marine operations which involves 14 owned ships plus 15 chartered ships (as at 31 Dec 2012). They currently call at many ports worldwide but are predominantly working within the Asia Pacific region, demarcated by Vladivostok in the north, Port Klang in the west, Lyttleton on New Zealand’s South Island in the south and Vancouver, Canada in the east, with a significant presence in trades to and from Papua New Guinea.