SUSTAINABLE DEVELOPMENT REPORT for the year 2014 Index

Page

Managing Director’s Message 3 Introduction 4 Organisational and Operational Boundaries 5 2014 Hightlights 6 Our People 8 Our Community 20 Safety 23 Carbon / Environment 25 Awards and Recognition 30 Governance 31 Data Section 33 Abbreviations 41 GRI Assurance Statement 43 G3.1 Content Index GRI Application Level C 45 Contact 52

The China Navigation Company / Sustainable Development Report 2014 Managing Director’s Message 3

In order to continue recording China I am pleased to report that there were multipurpose vessels and five B.Delta39 more training and development opportunities Navigation’s sustainability journey over the no incidences of non-compliance with (39,000 dwt) handysize bulk carriers. These to build a winning team. We will continue to past decade, we have prepared an annual environmental laws and regulations during ships represent the most fuel efficient designs invest in relevant training to improve our safety Sustainable Development report. For the third 2014. currently on the water, fitted with systems and financial performance and to develop the consecutive year, the Sustainable Development to optimise speed and consumption ratios talent and competencies of our employees for Report for the year 2014 has been prepared in Our goal remains to achieve Zero Harm to to minimise their environmental impact. In the future. accordance with the Global Reporting Initiative’s our people, the environment and the ships and conjunction with the fleet renewal programme, Sustainability Reporting Guidelines (GRI C+), cargos in our care. While the safety initiatives the company has also started the process of In 2014 China Navigation participated in with a focus on transparency and clarity. introduced in 2011 and 2012 continue to sustainably recycling older vessels as they providing assistance to our communities most play their part in improving our safety culture, approach the end of their economic lives. affected by the devastation caused by natural This report is different from previous editions as four lost time injuries were reported in 2014 disasters, for example in the Solomon Islands the content has been organised into four main (no fatalities were recorded). As the fleet China Navigation takes a proactive approach and the Kingdom of Tonga. We continue to sections – People, Community, Safety and the expands, we will continue to develop a just towards sustainable shipping. We are a support the Mission to Seafarers and the Sailors’ Environment - to enable our stakeholders to culture based on reporting and learning to signatory to Hong Kong’s Fair Winds charter as Society in recognition of the valuable support understand the company’s commitment and prevent future incidents. Incident and near well as a founding member of the Sustainable which they provide to seafarers around the world. performance in these key areas of sustainability. miss communications have been improved Shipping Initiative (SSI). We continue to play an to increase the speed of communications, active role in supporting the SSI and participate Thank you for your interest and your continued Our vision (http://bit.ly/1NHYV90): highlight key learning points, support root in the working group tasked with creating a support for our sustainability journey. “to be the leading provider of sustainable cause analysis and identify best practices. In model for both the sustainable construction shipping solutions and our customers’ partner 2014 our Toolbox Risk Identification Permit and recycling of ships. China Navigation of choice”, serves as the framework for our (TRIP) reporting increased by 51% yoy, continues to work in partnership with Forum strategy and describes what we need to achieve averaging 155 reports/ship/month. for the Future to address major sustainability in order to grow and develop our business along challenges and opportunities currently facing sustainable lines. The execution of our strategy We continue to seek innovative ways to the shipping industry. is based on four main objectives: minimise the impact of our business on the environment. We are developing a road map China Navigation’s progress towards the • To build a winning team by developing an to support our long term objective that our development of a diverse, industry-leading industry-leading workforce and providing business will have a Net Zero Environmental workforce continues to build momentum. In rewarding careers. Impact and we will continue to report on our accordance with the growth of the business • To establish and enhance long-term, progress. and the expanded fleet, the team, both ashore mutually beneficial relationships with our key and at sea, has grown by about 20% over the stakeholders. Our 40-ship fleet renewal and expansion past twelve months. • To promote innovation, operational programme, including 12 multipurpose and excellence and provide safe, healthy and 28 handysize vessels, has been designed In 2014 we have made significant investments secure work environments. with the Swire group’s long-term sustainability in new IT systems, specifically in the areas • To provide innovative and value added objectives in mind. In 2014 we took delivery of finance, procurement, ship management solutions for our customers. of the final two S31-Class (31,000dwt) and human resources. We have also provided

The China Navigation Company / Sustainable Development Report 2014 Introduction 4

The China Navigation Company Pte Ltd (CNCo) launched the 2014 edition of its Sustainable Development (SD) report in October 2015.

This SD report comprises four main sections: Our People, Community, Safety and Carbon/ Environment. CNCo has continued its commitment to detail transparently its performance in the areas covered by the Social Responsibility Standard: ISO 26000:2010, viz. Governance, Human Rights, Labour Practices, The Environment, Fair Operating Practices, Consumer Issues and Community Involvement and Development.

For the third consecutive year, this report has been externally assured in accordance with the most widely used reporting framework, Global Reporting Initiation (GRI), version 3.1, to level C+. All data refer to the situation within the Operational and Organisational Boundaries (see page 5) and as at 31 Dec 2014, unless otherwise stated.

The China Navigation Company / Sustainable Development Report 2014 Organisational and Operational Boundaries (as at 31 Dec 2014) 5

TE INA NAVIATION OMPAN

100 owned, but independently managed

Head Office Agency Regional Offices Liner Trades Liner Trades Bulk Diision V and Associates (owned fleet) (chartered fleet) (owned fleet)

CNCo Pte Ltd 4x B.Delta3 6 - uadrant Pacific Limited Swire Shipping Agencies K 8x Challenger Class Tonnage as detailed Singapore 5x Mihos in Fleet Profile handysize (grabbers) 60 - Guadalcanal Travel Services Swire Shipping Agencies AS 3x B.Delta3 e 8x S Class MPV31 50 - Swire CTM Bulk Logistics Limited Swire Shipping Agencies HK handysize (loggers) 50 - Tradco Shipping Limited 3x N Class B10 ee age Swire Bulk Swire Shipping Agencies SIN 25 - Mandarin Shipping Group Limited Swire Bulk Logistics Swire Shipping Agencies PRC Swire Shipping Swire Shipping Agencies New Caledonia Swire Shipping Ltd AS 4x Chief Class MPV22 17x B.Delta3 Swire Shipping Ltd NZ e handysize (loggers) Swire Shipping Ltd apan 4x Imabari38 Pacifica Shipping handysize (loggers) Polynesia Line Ltd

Organisational Boundaries e

Scope 1 GHG Office Vehicular Vessel HFC and Petrol / Diesel / LPG etc HCFC consumption

Vessel HFO MDO and LO consumption

Scope 2 GHG Office Electricity Usage

Scope 3 GHG Management Air Trael Operational Boundries

Crew Air Trael

The China Navigation Company / Sustainable Development Report 2014 2014 Highlights 6

CNCo’s reporting and learning culture Commercially, CNCo had a reasonable year CNCo Owned Fleet remains positive. against a background of a weak dry bulk 60 30 market. There was a significant effort to Vessels on Order Vessels on Water Near Miss Reporting – The reporting of leading reduce overhead expenses throughout the 54 27 indicators (e.g. near misses) fell by 15% in organisation. Weighted Aerage Age response to the increase in Tool Box Risk 48 23.55 24 22.55 22.52 Identification Permit (TRIP) reporting where We continue to focus on the successful 21.55 hazards are identified before a work activity management of the company’s newbuilding 42 21 begins. programme while also preparing commercially for the arrival of these ships. 36 18 There was a 51% increase in the number of TRIPs reported in 2014, averaging 155 per ship The fully owned, managed and operated fleet 30 15 per month, up from 103 for the year 2013. profile and the list of ships under construction as at 31 Dec 2014 can be seen on pages 34 - 36. 24 12 No. of Vessels 11.5 The safety initiatives introduced in 2011 and 18 8.6 9 2012 continue to play their part in ensuring that The new building programme has significantly as the fleet expands, risks are controlled more lowered the age profile of the CNCo fleet, with 5.1 5.1 12 5.21 6

effectively. Unfortunately there were 4 LTIs for the average age dropping by 75% as the fleet (ears) Age of Fleet on ater Average 2014; one more than in 2013 weighted against size doubles over the period 2013 to 2016. 6 3 an increase in fleet size from 21 to 28 ships for the same period. 0 0 1 an 10 1 an 11 1 an 12 1 an 13 1 an 14 1 an 15 1 an 16 1 an 17 1 an 18

uarter

The new building programme has significantly lowered the age profile of the CNCo fleet

The China Navigation Company / Sustainable Development Report 2014 2014 Highlights 7

The emphasis on “eco-design” for our vessels CNCo continues to participate in the has given our 24 x W, E, F, H, L and P Class Sustainable Shipping Initiative to assist the B.Delta39 39,000 dwt bulk carriers an industry- industry and its partners to raise the standards leading energy efficiency. Seven were delivered of operations in the areas of health and safety up to the end of 2014. Another 17 logs-fitted bulk and the environment. One particular area is carriers are on order for delivery in 2015. Four identifying ship recycling facilities that do not Imambari38 design logs-fitted handysize bulk yet meet the conditions contained within the carriers are also on order for delivery in 2016. Hong Kong International Convention for the Safe and Environmentally Sound Recycling of The introduction of more efficient tonnage Ships (2009). to replace older tonnage continues to result in a reduced GHG footprint per tonne of Our largest Community Investment/ Corporate cargo carried. The eight new 31,000 dwt liner Philanthropy initiatives in 2014 were the ships also delivered operating efficiencies as provision of pro bono (free) or discounted planned. shipments supporting our key stakeholder communities in the South Pacific who were In 2014, CNCo acquired Pacifica Shipping, impacted by natural disasters. New Zealand’s leading coastal shipping service headquartered in Auckland, further increasing Internally CNCo launched a Voluntary Work CNCo’s commitment to the Pacific region. Leave Policy in 2014 to encourage our employees to volunteer their time for a charity of their choice.

The introduction of more efficient tonnage to replace older tonnage continues to result in a reduced GHG footprint per tonne of cargo carried.

The China Navigation Company / Sustainable Development Report 2014 Our People 8

Our people are our competitive advantage. We are committed to developing an industry leading team and to providing rewarding careers. We have a multinational workforce and strive to deliver an inclusive and diverse work culture. We promote equality and provide our employees with fair remuneration and a healthy and safe workplace. We are a dynamic organisation. Having a performance based culture is as important to us as ensuring that we have a fully aligned and engaged workforce.

The China Navigation Company / Sustainable Development Report 2014 Our People 9

Employment information Our teams, both ashore and at sea, have grown substantially over the last three years. This is At the end of 2014, CNCo employed 1,718 due to our business expansion: increased fleet people in various locations around the world. size and acquisition of new businesses and Our employees come from over 20 countries. restructuring. The year-on-year increase from 2013 levels is 19% for land-based staff and 650 of our employees were shore-based, 20% for sea staff. while the remaining 1,046 were seafarers (582 Officers and 464 crew members). 22 were Swire Shipping has significant employee based in shipyards in China, supervising our representation throughout the Pacific Islands, newbuilding programmes. however the majority operate under joint ventures or agencies and are not direct employees of CNCo.

1800

1600

1400

1200

1000 Land based

800 Sea staff

600

CNCo Staff Numbers The increase in the number of personnel at sea and on land over a three year period. 400

200

0 2012 2013 2014

The China Navigation Company / Sustainable Development Report 2014 Our People 10

Our office employees are based in four key as “expatriates”. About 29% of the expatriate officers (or 1%). This is reflective of the shipping locations: Singapore (Head Office) – 33%, PNG staff are parent company managers who have industry in general. We seek to encourage more – 21%, Australia – 17%, and New Zealand a centrally planned rotation through internal women to join CNCo by creating a culture where –14% with the remaining 15% being based in postings within the Swire group. The rest are women feel safe and are supported. In addition Canada, China, HK, India, Japan, Taiwan, UK employed as industry experts and have long to the policies on equal opportunities and anti- and USA. term careers with the company worldwide. harassment, we provide an Advice and Guidance hotline to deal with any potential issues. 94% of our staff are classified as “local”, Of the shore-based employees, 53% were similar to 2013 figure. “Local” is defined as a male (increase from 49% in 2013) and 47% national or permanent resident of the country of were female (decrease from 52% in 2013). employment. The balance of 6% are classified Among our sea staff, there were five female

Geographical spread of CNCo group shore personnel Other Locations Hong Kong 6% 2%

Shore Shore % of staff staff total China Australia 7% 17% Australia Singapore (Head Office) 211 33% PNG 139 21% NZ Australia 111 17% New Zealand 93 14% New Zealand PNG China 48 7% 14% Singapore Hong Kong 13 2% Singapore Others* 35 6% 33% China TOTAL 650 100 Hong Kong PNG *Canada, India, Japan, Taiwan, UK and USA 21% Other locations

The China Navigation Company / Sustainable Development Report 2014

1

Our People 11

Our seafarers represent 15 nationalities.

UK 1

Ireland Ukraine 02 Croatia China 1 22

Myanmar 0 Hong Kong India 01 Philippines

Sri Lanka Papua New Guinea 4 Malaysia Tuvalu 01 01

Australia 01

New Zealand 4

The China Navigation Company / Sustainable Development Report 2014 Our People 12

Percentage of the shore staff by gender and country

Countries Total Male Female Australia Male Employees Canada Female China Australia 111 59% 41% Hong Kong Canada 2 100% 0% India China 48 65% 35% Japan Hong Kong 13 15% 85% NZ India 6 67% 33% NZ Pacifica Japan 2 100% 0% NZ 58 41% 59% NZ QPL NZ Pacifica 16 38% 63% PNG NZ QPL 19 68% 32% Singapore PNG 139 56% 44% Taiwan Singapore 211 49% 51% UK Taiwan 10 30% 70% USA UK 10 60% 40% USA 5 100% 0% 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 Shore Staff - Total Employees

All our contracts comply with local employment Staff turnover remains a valuable indicator of • Australia - 19% compared to the national • PNG - 22% (no direct benchmark could laws. We provide additional benefits such as the company’s sustainability and is an on-going average rate of 13%. be found). private healthcare for all seafarers and medical area of focus for the company. Overall staff insurance for shore staff, and for all seafarers, retention in 2013 for Shore staff was 87% and • New Zealand- turnover rate for Pacifica • Singapore - 22% compared to the 16% life insurance and paid pension arrangements 98% for sea staff (officers). Shore staff retention Shipping was 38%, due to the change of national resignation rate in our sector. or cash in lieu. Given the different nationality was below our target of >95%, while sea staff ownership during 2014. For CNCo, the and work locations of our employees, we have retention remains high. rate was at 5% (compared to 8% in not provided a detailed breakdown on the types 2013) and QPL at 10%. The latter two are of employment contracts or staff benefits. In 2014 due to some changes within our still materially below the national turnover All CNCo seafarers are covered by collective business, the turnover rates for our four rate of 16% annually. bargaining agreement (CBA) in accordance with key locations were higher than the national the Maritime Labour Convention (MLC) 2006. average:

The China Navigation Company / Sustainable Development Report 2014 Our People 13

Long Service Awards

CNCo’s Long Service Awards recognise our employees for their long service and ongoing contribution to CNCo. In 2014, we issued 174 awards to employees ashore and at sea for lengths of service from 10 to 35 years.

A total of 2,475 years of service was recognised in 2014.

Shore Sea staff staff

10 years of service 15 64 15 years 13 45 20 years 4 24 25 years 0 4 30 years 1 3 35 years 0 1

A total of 2,475 years of service was recognised in 2014.

The China Navigation Company / Sustainable Development Report 2014 Our People 14

Employee Alignment and Engagement • 920 employees participated Investment in people Two-way communication between the onshore • Response rate of 76% support staff and the seagoing operational One of CNCo’s “Vision 2030” strategic goals • 2014 participation rate increased by 247% CNCo has been working on implementating a staff is critical. It is necessary to communicate is the creation of a winning team, where new learning and development programme to the strategic direction of the company and employees have the right job, at the right time Overall the 2014 results indicate a positive support the growth and development needs of business progress as well as to ensure that and in the right place, and are aligned and trend since 2012. the individual employee. This new framework will management listen to employee suggestions engaged with the company’s vision, strategic ensure that employees get the training they need and use their feedback to improve performance goals and values. Employee engagement, team leadership and to excel in their current roles and develop to of the company. This is done through team effectiveness were the highest scoring succeed in future roles. The training programmes management visits to offices and vessels, To measure the level of staff alignment and areas while areas such as investment in people will be rolled out over 2015 and 2016. officer forums as well as staff surveys. engagement, CNCo conducted an inaugural and investment in systems were identified as survey in 2012. The survey was repeated in areas for improvement. Investment in systems We continue to use our in-house monthly 2014 and the response rate placed CNCo in newsletter, NiuSwire, to keep everyone abreast the top quartile of companies using the survey. CNCo has invested in two new HR systems. of the latest news across the company. In These systems, one for shore personnel and Singapore, we hold monthly town hall meetings one for managing our sea staff will bring world where the Managing Director provides an class HR processes to our employees. update to the employees. 70 63 60 55 53 50

41 40

Alignment 30 Engagement The overall results give us a reason to celebrate as a

20 company. We have significantly improved our alignment Number of Respondents 10 and engagement over the 2012 survey results.

0 2012 2014

Percentage indicates the number of respondents who agreed/ strongly agreed with survey questions relating to Alignment and Engagement and were compared to a the surveying company’s database of 420 other organisations.

The China Navigation Company / Sustainable Development Report 2014 Our People 15

Diversity in the Workplace/ Human rights We have a policy on Diversity and Inclusion. When recruiting new employees, CNCo CNCo is committed to providing an inclusive ensures that Persons with Disability (PWD) work culture. We appreciate and recognise with the skill set matching our requirements that all individuals are unique and valuable and are considered in the selection process. In should be respected for their abilities. 2014, we employed one person with a physical disability in our Singapore office. CNCo does not tolerate harassment or discrimination of any kind. Our Corporate Code Human Rights (and Diversity and Inclusion) are of Conduct requires all employees to behave of great importance to our stakeholders and for with courtesy and respect towards everyone the sustainability of our business. Accordingly encountered in the course of the business. we ensure that we cover those topics in our induction training as well as during relevant We take a strong stance with regards to any courses and forums. forms of harassment in the workplace and have a robust system in place to address such situations in a timely manner.

CNCo appreciates and recognises that all individuals are unique and valuable and should be respected for their abilities.

The China Navigation Company / Sustainable Development Report 2014 Our People 16

Performance, career development and leading safety indicators, and looks at accident training root cause analysis, proactively recognising hazards and understanding safety control, CNCo places an emphasis on performance mitigation and recovery measures. management as the key factor to achieving organisational goals and delivering quality Out of the 13 SACs in PNG, 11 SACs were held services. In 2014, we introduced a new Smart at the National Maritime College in Madang Goals system to make the process more and two in Port Moresby. These courses were structured and consistent across the group. We aimed at locally employed seafarers from three believe that investment in our people is critical companies - CNCo and our sister companies, to the success of our business. Consort Express Line (CEL) and Steamships Trading Company (STC). The SAC is conducted separately for officers and ratings, with officers Shore staff undertaking a four-day programme and ratings a two-day programme. CNCo continues to invest in learning and development. In Singapore, our shore staff CNCo ran a total of four SACs in Singapore attended 4,000 hours of training with a total and one in Ukraine for our senior officers. SAC cost of S$200K. In Australia, training for shore is also always carried out prior to the delivery staff covered 1,003 hours with a total cost of of our new vessels, and includes “Log/Timber AUS$54K and in New Zealand, shore staff Carrying Training” for the officers and crew received 1,000 of training hours with a total identified for our B.Delta39 log-fitted ships. training cost of NZ$36K. Our Cadetship Programme is on-going with cadets from China, Hong Kong and from Sea staff the South Pacific Islands. As a strategic sustainability objective, CNCo has committed CNCo places significant emphasis on safety to recruit 15% of our required cadet intake from training for our seafarers. In 2014, CNCo ran a our major stakeholder communities in the South total of 18 Safety Awareness Courses (SAC). Pacific Islands by the end of 2016 (which has These are discretionary training courses, not been met already) and 25% by the end of 2020. required under the SOLAS/ STCW, but which CNCo considers to be very important. The goal In 2014, 140 CNCo seafarers received training of the SACs is to emphasise and reinforce the at a total cost of US$2.4M. company’s safety culture and promote zero harm. The SAC emphasises practical safety management skills, explores the benefits of

The China Navigation Company / Sustainable Development Report 2014 Our People 17

Performance management For shore staff, performance management is done using the Smart Goals system. All CNCo seafarers receive a performance Performance assessments include a review evaluation review conducted by the of smart goals, performance against Swire Captain and Chief Officer twice a year. The values and job competencies. All shore appraisal looks at specific skills set, personal staff undertook their annual performance characteristics, teamwork and leadership assessments in 2014. qualities, among others. The process highlights areas for improvement and training opportunities as well as individual strengths and feeds into the recognition and promotion programme.

First time at sea

For my first ship I signed up onMV Shuntien straight from the shipyard. I saw how the ship was constructed part by part, a unique experience that not every cadet gets to see. During my first month, I experienced many operations onboard the vessel. I learnt a lot, from how to organise stowage to checking equipment to proper cargo lashing and much more.

The crew mates onboard the vessel are nice and friendly. Everyone is willing to teach me how things work. A sense of humour always helps to keep things interesting, while having a chat every now and then in the lounge helps me relax.

Wai Chun Michael Lee / Cadet

The China Navigation Company / Sustainable Development Report 2014 Our People 18

Management Trainee Programmes

There are two management training young graduates, imparting them with business programmes in CNCo. The first is our graduate and industry knowledge, while deepening their trainee programme where we hire new cross-cultural learning – all valuable experience graduates from universities in Singapore, and for their future as CNCo and Swire leaders. the second is the John Swire and Sons (JS&S) management trainee programme, designed to Management trainees from JS&S are seconded develop candidates for leadership roles within to CNCo for a period of time before moving the wider Swire group. on to other businesses within the Swire group. All our graduates share a common interest For the Singapore management trainees, CNCo in shipping and we are excited to see how offers a multi-year structured job rotation that they energise our workforce and develop their provides graduates with opportunities to work careers in the coming years. and become proficient in different sectors of our shipping business. This programme aims to accelerate the professional development of Left to right: Gary Chin, Loh Zhanwen, Ooi Kang Sheng, Quah Su Xiang, Antony Riley, Joel Ng, Henry Stones

Ooi Kang Sheng “The maritime industry is definitely an eye- Commercial Management Trainee opener, and I am thankful to be surrounded by many supportive colleagues and supervisors A graduate from the Singapore Management who are so generous in imparting their University, Kang Sheng started his career knowledge of this industry. CNCo’s learning with CNCo in August 2014. He was placed in culture plays a vital role in my development. CNCo’s Swire Shipping division after a month- I strongly believe that CNCo is the right The aim of the programme is that, upon completion, long induction onboard MV Szechuen which company to begin my career. For now, my gave him an opportunity to gain first-hand goal is to study the organisation in detail, and our young talent will be ready to take on more experience of CNCo’s activities. understand how various functions operate. responsibilities and contribute towards their chosen Following which, I hope to gather a more hands-on experience.” area of expertise.

The China Navigation Company / Sustainable Development Report 2014 Our People 19

Anti-competitive behaviour, anti-trust, and In late 2014, CNCo hired a Group Purchasing monopoly practices Manager (GPM) to be responsible for the overall procurement strategy across the CNCo takes industry practices very seriously group. The Sustainable Development team and requires both our employees and has been working with the GPM to develop contractors to display the highest ethical the audit process of our suppliers to ensure standards, as described in our Corporate Code full compliance with our Supply Chain of Conduct. Sustainability Code of Conduct.

In 2014, CNCo was not involved in any legal actions for anti-competitive behaviour, anti- trust, or monopoly practices. As a prudent and responsible ship owner and operator, we will be introducing clear policies and guidelines in this area in 2015.

CNCo takes industry practices very seriously and Ethics and anti-corruption and training sessions have been held in Australia, Canada, China, Hong Kong, New requires both our employees and contractors to display CNCo does not tolerate any form of corruption Zealand, Taiwan and UK. An online Code of the highest ethical standards and we expect all employees to live up to the Conduct quiz was also conducted to ensure full high ethical standards as set out in our Code of understanding. All our employees are expected Conduct. to obtain the maximum score. Participants who do not meet this requirement are mentored CNCo’s requirement for probity, transparency through the quiz until they do. The test is and accountable conduct in all business repeated biennially to refresh our employees’ dealings is highlighted to all our staff upon awareness with the content of the Code. joining the company. A copy of our Code of The quiz was completed for our Australian, Conduct is given out to every new employee Canadian and New Zealand offices in 2014. during their induction. We have also produced, with the support of Following the introduction of Code of Conduct John Swire & Sons Ltd, a CNCo specific video training for our shore staff in Singapore, the explaining the Code of Conduct. training has been rolled out to other offices

The China Navigation Company / Sustainable Development Report 2014 Our Community 20

We believe in doing the right thing for our communities Supporting our seafarer community Supporting seafarers worldwide and we invest in worthy causes. We support charities and We are committed to supporting The Mission CNCo contributes towards the good work of community organisations as well as our employees in need. to Seafarers (MtS) and The Sailors’ Society the MtS globally. MtS runs the International through fundraising events and donations, Drop-In Centre (IDIC) located in Singapore’s Our support for the communities focuses in the areas of providing care and support to seafarers around Jurong Port and plays host to thousands of the world. seafarers who need a safe and relaxing place Education, Community, Health, Youth, Environment and to rest when they come ashore. In 2014, Biodiversity. CNCo’s support allowed the MtS to enhance Supporting our community the level of service and daily operations of the IDIC. Our support ensures that MtS continues As a company, we are committed to establishing to further the cause of caring for seafarers and long term, mutually beneficial relationships with upholding the provision of quality standards of our partners and our communities. welfare service to seafarers.

CNCo supports our communities in times of need through the provision of pro bono (free) or discounted shipments. In the past, we have worked with charitable organisations to deliver emergency items to Dili (East Timor), Honiara (Solomon Islands), Alotau (PNG) and the Kingdom of Tonga.

The China Navigation Company / Sustainable Development Report 2014 Our Community 21

Outreach in the Philippines disasters, such as Typhoon Haiyan/ Yolanda associations to provide coaching for youths in which we reported in 2013. PNG and the Solomon Islands. CNCo provides ongoing support to the ASSM Dependent’s Association (ASSMDA), Outreach in PNG Strategic partnerships for sustainable an independent, not-for-profit association in development the Philippines. ASSMDA was formed by the CNCo has been running SACs at the Maritime partners and relatives of our Filipino seafarers, College in Madang, PNG. In 2014, we provided CNCo takes a proactive approach towards and is registered with the Philippine Securities funds to carry out a site inspection and operational improvements that can be made and Exchange Commission. determine the cost of repairs for their Engine to deliver sustainability benefits combined Control Room simulator system following a with cost savings. They direct their efforts towards assisting small fire in the control system hardware. seafarers’ families in times of need. They Swire Shipping works in partnerships with a run projects to improve livelihoods through We also sponsor young people through primary/ number of clients such as Bell Bay Aluminium, organising activities such making candles, secondary/ technical/ vocational education Inghams, Starkist and Sunrice, to promote a dishwashing liquids, fabric conditioners in Madang. We are looking at extending this more sustainable way of running operations and and bracelets. They can be mobilised very support through our SwireSPORT programme, reducing our collective environmental impact. quickly to assist with relief work due to natural working in partnership with local sporting

Assisting those in need

In May 2014, Swire Shipping provided a charity shipment of computers, filing cabinets, keyboards and related office supplies from Sydney to Nuku’alofa, Tonga. This shipment was sent to Top and above: Bell Bay Aluminium/ Photo: Rob Burnett the island of Ha’api which suffered devastation from Cyclone Ian through the National Emergency Management Office of Tonga.

Another example of assistance included the free shipment of clothing, kitchen utensils, and building materials donated by New Zealand communities to flood victims in the Solomon Islands’ capital, Honiara. The shipment was delivered to the National Disaster Council in Honiara. Containers being packed

The China Navigation Company / Sustainable Development Report 2014 Our Community 22

Annual sustainability challenge Supporting scientific research awareness session conducted by Corporate Ambassadors from the National Volunteer and Since 2009, CNCo has partnered the Forum for CNCo works with a number of scientific Philanthropy Centre and held two beach clean- the Future (FFF), a not-for-profit organisation organisations such as the Commonwealth up events in Singapore. We also contribute which works globally with businesses to Scientific Research Organisation (CSIRO) towards the Swire group Charitable Trust address sustainability challenges. Our and the National Oceanography Centre at the that works with various non-governmental partnership helps us to proactively address University of Southampton to facilitate data organisations and educational institutions in and challenge our business strategy, ensuring collection using CNCo vessels. The data is Hong Kong and China to support education, that our commitment to sustainability translates used to study the changes in the weather arts and culture and environmental initiatives. into measurable and meaningful actions. patterns and the roles of the oceans as carbon This is done through annual meetings during sinks as well as the distribution of marine life. In order to measure the impact and success which the company’s leaders and FFF work of our Corporate Philanthropic projects, CNCo together to make CNCo a more sustainable developed a Social Return on Investment organisation. In 2014, CNCo provided office Corporate philanthropy and volunteering (SROI) framework or methodology which we space to their start-up office in Singapore on a apply to longer term/ larger projects. pro bono basis. In 2014, CNCo developed and launched a Voluntary Work Leave Policy to encourage Going forward we would like to encourage employees to volunteer for a charity of their more employee volunteering activities and are choice. Following the launch of this policy, aiming to engage at least 10% of our Singapore we introduced Corporate Volunteering to our based staff in voluntary work that is sponsored, Singapore based employees by organising an organised, or approved by the company.

ASSMDA Medical Mission Going forward we would like to encourage more employee In September 2014, ASSMDA embarked on a medical mission at Pila Laguna. 12 healthcare volunteering activities and are aiming to engage at least workers accompanied the members on the 10% of our Singapore based staff in voluntary work that is trip to the remote areas of the Philippines where they distributed medicine to hundreds sponsored, organised, or approved by the company. of people who required assistance and medical supplies. In addition, ASSMDA raffled 30 solar lamps and food items to assist families during brownouts that were occurring as a result of recent typhoons. ASSMDA members with the medical supplies at the Medical Mission

The China Navigation Company / Sustainable Development Report 2014 Safety 23

We continuously work towards our goal of zero harm and The safety initiatives introduced in 2011 and by 15% in response to the increase in TRIP 2012 continue to play their part in ensuring that reporting where hazards are identified before zero injuries. We are committed to maintaining the highest risks are controlled more effectively as fleet a work activity begins. (The policy not to size expands. However, there were four LTIs in prescribe a number of near miss reports safety standards and preventing accidents throughout 2014; one more than in 2013 weighted against remains, relying on the openness to report, the group. By having a strong safety focus together with an increase in fleet size from 21 to 28 ships for the integrity of our staff and our belief in a Just the same period. Culture approach to reporting). robust reporting and learning culture we make safety A monthly report is issued by the DPA to Instruction is provided at all internal Safety everyone’s priority. the Fleet with all safety and quality data Awareness training sessions to ensure that the consolidated to disseminate information on usage of near miss reporting as a proactive leading and lagging indicators to the Fleet. This safety tool is clearly understood. information is reviewed during OHSE meetings. Comments and remarks are reported back to TRIP activity creates a greater focus on management. safety for all work activities and has a positive impact on the number of near miss reports. CNCo’s reporting and learning culture remains It also identifies potential hazards so that positive. Near Miss Reporting – the reporting control measures can be implemented before of leading indicators (e.g. near misses) fell commencing any work.

The safety initiatives introduced in 2011 and 2012 continue to play their part in ensuring that risks are controlled more effectively as the fleet size expands.

Right: Log lashing course

The China Navigation Company / Sustainable Development Report 2014 Safety 24

There was a 51% rise in the number of TRIP The objectives of the “Quality Improvement reports in 2014, averaging 155 per ship per Plan” have been communicated to the Flag month, up from 103 for the year 2013. State and to the relevant Port State Control CNCo places considerable emphasis on the authorities. quality of the TRIP report. These reports are regularly reviewed by ship managers during Ship Management teams and independent vessel inspections and town hall meetings. auditors carried out over 50 Technical Inspections (SMTI) in 2014 and every ship has Three Port State detentions were recorded in undergone a Safety Quality Control Inspection. 2014 (Island Chief, Coral Chief and Kokopo The process for reviewing the findings has been Chief). accelerated to ensure that defect reporting and timely corrective action is prioritised. As a result, a “Quality Improvement Plan” was launched and will be monitored on a regular Stricter sanctions for poor performance have basis until improvements are confirmed and been applied following a thorough review. sustained. The plan will be controlled by a visual management process for defects. The 4-Box Alert continues to be a powerful and highly visual management tool where learning Further, CNCo’s new crew management from an incident can be captured quickly. The software platform, “Compas” (planned to be scope of 4-Box alerts has widened and is used introduced in 2015) will help to ensure that for all shore related incidents of a severe nature the right levels of experience, leadership and (ie actual injuries which result in a LTI or severe competencies are allocated to each ship near misses). across the fleet. The full CNCo Safety Statistics for sea staff can be found in the data section on page 37.

Ship Management teams and independent auditors carried out over 50 Technical Inspections (SMTI) in 2014 and every ship has undergone a Safety Quality Control Inspection.

The China Navigation Company / Sustainable Development Report 2014 Carbon / Environment 25

CNCo is committed to Zero Carbon Footprint at Sea This is largely a result of using more fuel fleet EEOI as constituting a relative 50% of our Pollution Incidents and efficient ships, rationalisation of the individual FOE and the liner fleet EEOI as providing the We monitor emissions for each ship on both trades, and a higher focus on the operational balance of 50% to give a single global figure ultimately to a Net Zero a ‘per voyage’ and an annual basis and have efficiency of each trade. showing how the company’s GHG footprint targets in place to reduce these emissions. reduction is performing as a whole. Impact on the Environment. We use the IMO EEOI metric (Energy Efficiency To enable us to track our bulk and liner fleets Operational Index or the energy we expend together to benchmark how the CNCo group is We have set an internal target of reducing our moving one tonne of cargo, one nautical mile) performing against our internal KPIs to reduce FOE to 20% below our baseline by the end as our baseline. emissions, CNCo has produced a simplified of 2016 and 50% below our baseline by the “whole fleet” EEOI metric that we have termed end of 2020. This is a key goal to advance The EEOI figures for both our liner and bulk FOE or Fleet Operational Efficiency. As the our journey towards “Net Zero Environmental fleets show a downward trend (using a rolling two types of ships have very different absolute Impact”. Our progress since 1 Jan 2013 is six month average to remove the data noise values for their EEOI, we combine the bulk shown in the graph on page 39. from seasonal weather events and trade flows).

Shipping containers turned green

CNCo introduced a new generation of eco- We also replaced wood flooring with bamboo friendly shipping containers with the support of as a more sustainable option cutting back the JS&S Sustainable Development Fund. on the use of timber. This initiative has a positive impact on the environment by Our “Green Boxes” are manufactured using a reducing emissions and taking us one step two coat water based coating (Valspar) which closer towards our long-term goal of Net Zero eliminates the use of solvent based, zinc-rich Environmental Impact. three coat system. This process allows us to reduce Volatile Organic Compounds (VOC) emissions by 94%. For each 1,000 green boxes CNCo built, approximately 22 tonnes of VOC emissions are eliminated.

The China Navigation Company / Sustainable Development Report 2014 Carbon / Environment 26

Carbon Footprint Ashore Zero Oil Spills

Our energy consumption ashore reduces year There were no spills of substances hazardous on year through more appropriate sizing of to the marine environment in 2014. Our target our main offices and we expect to see another for any oil spills of any size from our fleet improvement in 2015 as the various Singapore continues to be ZERO. offices in split locations are further rationalised. Our business travel footprint has increased by a similar percentage to the owned and managed Environmental Training Protection fleet size. This does not include the additional trips recorded due to the acquisition of Training in environmental protection is Polynesia Line in mid-2013 and Pacifica in early conducted through CNCo’s Computer Based 2014, and the work that has been undertaken to Training programme which includes a post grow the business of Swire Bulk Logistics. training assessment. This is carried out every three years and is a mandatory requirement for The annual CNCo group (at sea and ashore) every officer and rating. GHG emissions figures for 2014 and comparisons with earlier years can be seen in the table on page 38. The figures for Scope 1 and 2 GHG emissions from 2013 to 2104 are not comparable with each other as the methodology of data aggregation has changed.

There were no spills of substances hazardous to the marine environment in 2014. Our target for any oil spills of any size from our fleet continues to be ZERO.

The China Navigation Company / Sustainable Development Report 2014 Carbon / Environment 27

Eco-friendly Ship Design CNCo has also invested heavily in projects with sustainability benefits to minimise our Our commitment is incorporated into the environmental impact: design of our new S and Chief-Class vessels. Some of the features of these new vessels • Introduced trim optimisation for enhanced include: fuel savings.

• Using exhaust gases from the main engine • Use of premium hull coatings on all new and as well as generators for the production of existing vessels. steam. • Installed slide valves on main engines of • Using a hull form that optimises cargo existing vessels - for slow steaming and to capacity for low fuel consumption. reduce NOx output. This produces an estimated annual saving of 17,000 tCO2e • Wake ducts to improve (propulsion) (2.4% of our total emissions). efficiency. • Installing Kongsberg’s Marorka™ as the • Cargo cranes that consume 35% less power energy management system on our new than conventional electro-hydraulic cranes. vessels has allowed us to optimise vessel The absence of hydraulic oil also eliminates speed and fuel consumption to further possibilities of environmental spills. reduce emissions.

• Adoption of a newly designed Sea Water • Ballast water treatment system. Cooling System that utilises variable frequency motors on pumps for the main • Advanced incinerator and oily water engines and generators on board. separator plants.

• Large black and grey water storage tanks.

• Low powered energy efficient lighting.

CNCo has invested heavily in projects with sustainability benefits to minimise our environmental impact.

The China Navigation Company / Sustainable Development Report 2014 Carbon / Environment 28

Hong Kong Civic Exchange’s respect to potential pollution from emissions Fair Winds Charter in waters close to urban conurbations and the outcome of the UNFCCC CoP21 meeting. CNCo maintains active membership of the Hong Kong Civic Exchange’s Fair Winds Charter in voluntarily switching to low (or ultra-low) sulphur Sustainable Ship Recycling content fuel within Hong Kong port limits. We are also committed to Sustainable Ship Our membership of this voluntary initiative is Recycling. Our policy requires acceptable ship expected to lead to local legislation to comply recycling facilities to adhere to the Hong Kong with the use of low sulphur fuel when in port International Convention (even prior to its full limits during 2015. This means we will have ratification) and to be certified by a reputable a level playing field and a marked lower air independent third party to ISO 9001:2008, ISO pollution level in the local environment. 14001:2004, OHSAS 18001:1999 or alternately ISO 30000:2009. We are closely monitoring the increased interest in littoral communities in other areas with

Commitment to Reduce-Reuse-Recycle

During the green recycling of four D Class ships - Pacific Java, Pacific Flores, Pacific Celebes and Pacific Makassar in 2012, we removed eight modern cargo cranes for second hand market resale at a later stage. Four sets of cranes were sold in 2012 and the remaining four cranes were purchased by a second-hand machinery broker in 2014.

Left: Ships beached in India undergoing recycling

The China Navigation Company / Sustainable Development Report 2014 Carbon / Environment 29

Looking forward to 2015 and beyond • MV Papuan Chief’s main engine will be fitted • In our offices we are applying eco-office with the first Chinese built High Pressure principles such as reduced electricity usage, CNCo is: Selective Catalytic Reactor when she usage of FSC certified paper, double-sided • Exploring the use of using alternative, lower is delivered in August 2015. The objective printing, more efficient use of air- carbon fuels such as LNG and Bio-Diesel. of the trials will be to show that SCRs can conditioning/ heating, and good recycling • Investigating the use of fuel derived from enable two stroke engines to meet the new practices to further reduce our carbon waste fats to power CNCo ships and Tier 3 NOx rules. This is being done ahead footprint wherever possible. working with Wärtsilä to explore the technical of the legislation which will come into effect issues associated. in January 2016 for all new vessels.

CNCo showcases its Sustainability Journey

The Singapore Registry of Ships (SRS)/ Maritime and Port Authority of Singapore (MPA) held its first Sustainable Shipping Forum in November 2014.

This forum was an excellent platform to exchange insights and raise greater awareness on sustainable shipping efforts, and create thought leadership in the area of sustainable maritime transportation system. CNCo shared its work with the Sustainable Shipping Initiative and other sustainability initiatives at this forum.

Mr. Andrew Tan, CE, MPA with Tim Blackburn, MD, CNCo.

The China Navigation Company / Sustainable Development Report 2014 Awards & Recognition 30

Hong Kong Ship Owner of the Year Lloyds List Global and Asia Awards 2014 Asia awards ceremony held in Singapore on Recognition for Green Shipping 7 April 2014. These annual awards recognise CNCo was presented with the Hong Kong CNCo was a finalist in both the Global and the achievements in the Asian shipping industry. The Green Ship Programme under MPA’s Ship Owner of the Year award at the Seafarer’s Asia awards in the Safety category. CNCo’s Maritime Singapore Green Initiative encourages Awards 2014 in Hong Kong on 13 November submission focused on Swire values as a driver for Singapore-flagged ships to reduce carbon 2014. MtS, in cooperation with the Hong Kong sustainable performance now and into the future. International Seafarers’ Welfare Awards dioxide (CO2) and sulphur oxide (SOx) emissions. Ship Owners Association surveyed over 4,000 seafarers asking how they are respected, valued CNCo was shortlisted for the Shipping CNCo was presented with Green Ship and retained by ship owners/ managers. From Seatrade Asia Awards Company of the Year award at the International Certificates for four newly built ships: the responses received, CNCo was nominated Seafarers’ Welfare Awards, aimed at as the Hong Kong Ship Owner of the Year. For the second consecutive year, Swire Shipping, showcasing best practice in seafarers’ welfare MV Soochow, MV Szechuen, MV Eredine and was presented with the prestigious Ship in the maritime industry. The ceremony took MV Erradale Owner/ Operator award at the annual Seatrade place on 7 April 2014 at the UN ILO in Geneva.

Above Mr. Andrew Tan, Chief Executive of the Maritime and Port Authority of Singapore, presenting a Green Ship certificate to Tim Blackburn

Left Seatrade “Ship Owner/Operator Award“ Hong Kong Ship Owner of the Year 2014 Swire Shipping Singapore team at the Doris Luk with Reverend Stephen Miller Awards ceremony

The China Navigation Company / Sustainable Development Report 2014 Governance 31

The China Navigation Company Pte Ltd. CNCo has a Sustainable Development (SD) (CNCo) is a Singapore registered company Steering Group comprising the MD, the Fleet that is a wholly owned subsidiary of The China Quality Assurance Manager and DPA, the Global Navigation Company Limited registered in Operations Manager for Swire Shipping (and London. Neither company is publicly listed on head of the Shore-side Safety Committee) and any stock exchange. the GM for SD. This group meets quarterly and reviews all strategic aspects of SD, in particular As can be seen from the Organisational and Health, Safety, Environment, Social and Operational Boundaries diagram (see page 5), Governance issues, with a view to managing all The China Navigation Company Limited is operations in accordance with our SD Policy. also the parent company for Swire Shipping branded agency companies in Australia, PRC, There are also SD Working Committees which Hong Kong, New Caledonia, New Zealand, and comprise cross-functional representatives Taiwan. It also has a 50% share in Polynesia who meet quarterly in Singapore and the main Shipping Services Limited and Swire CTM regional offices of Sydney and Auckland. Bulk Logistics Limited, a joint venture with C They seek to operationalise the guidance and Transport Maritime SAM registered in Monaco, strategy set by the SD Steering Group. An HR a 25% share in Mandarin Shipping Limited Welfare Group was also set up in Singapore registered in HK and is a joint managing during 2014 with oversight of the social/ shareholder of Quadrant Pacific Ltd., one of people matters, some of which are related to New Zealand and Norfolk Island’s leading sustainability issues. shipping agency and logistics companies. The shareholders are directly represented on The parent company’s Board of Directors is the the CNCo Board of Directors and use this highest level governance and oversight body forum to give governance direction to the and sets strategy for its subsidiary companies. company. While CNCo has no direct public The Chairman of the parent company Board of shareholders, it manages and operates all its Directors is Mr. B. N. Swire. The CNCo Board businesses in compliance with both the John of Directors provides organisational oversight Swire and Sons (UK) and its own Code of and comprises nine members of whom four Conduct http://bit.ly/1NIS9QD. are non-executive directors including two independent directors.

The China Navigation Company / Sustainable Development Report 2014 Governance 32

Our Board is committed to observing robust The GM of SD directly reports to the MD and corporate governance practices, and senior is a member of the Executive Committee, management conducts regular reviews of allowing him to provide relevant input in the current practices including reviews of CNCo’s early stages of all strategic decision making. Enterprise Risk Management framework to ensure: The DPA has been an internationally legally required position since 1993, peculiar to the • the interests of stakeholders are shipping industry under the ISM code, where safeguarded; every Company must designate a person or persons ashore having direct access to the • overall short and long term business risk is highest level of management. The responsibility understood and managed appropriately; and authority of the designated person or persons includes monitoring the safety and • high-quality services are delivered to the pollution prevention aspects of the operation satisfaction of our customers; and of each ship and ensuring that adequate resources and shore-based support are • that the highest standards of ethics are applied, as required. maintained by our employees in all dealings.

Our Board is committed to observing robust corporate governance practices and senior management conducts regular reviews of current practices including reviews of CNCo’s Enterprise Risk Management framework

The China Navigation Company / Sustainable Development Report 2014 Data 33

This section reports all the supporting data that is used to provide the narrative in the Detail section. The data is aggregated from many sources - primarily the owned and managed fleet and our offices worldwide, that are contained within CNCo’s Organisational and Operational Boundaries. We review both the boundaries and which data is material for reporting to our stakeholders annually.

In this section:

34 Fleet Profile 36 New Building Programme 37 Safety Statistics 38 Environmental Summary 39 Consolidated Fleet Operational Efficiency 40 Materiality Index 41 Abbreviations 43 GRI Assurance Statement 45 G3.1 Content Index GRI Application Level C 52 Contact

The China Navigation Company / Sustainable Development Report 2014 Fleet Profile 34

In Operation as at 31 Dec 2014

Vessel Name EVDI Rightship Year IMO No. DWT GT NT LOA Max Capacity Hold Hold Cargo Gear (T) Country of Status Vessel Type or EEDI GHG Built (SSW (m) Breadth Nominal Capacity - Capacity - Registration Emissions’ MTs) (m) (TEU) Bale (m³) Grain (m³) Rating

Island Chief 19.497 B+ 1990 8810449 13387 10352 5804 158.1 22.0 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner

Kiribati Chief 19.211 B+ 1990 8809189 13668 10357 5802 158.1 22.0 876 N/A N/A 3 x 60T Hong Kong Owned, Managed Liner

Melanesian Chief 19.619 B+ 1990 8809191 13387 10352 5804 158.1 22.0 981 N/A N/A 3 x 45 T Hong Kong Owned, Managed Liner

Micronesian Chief 19.630 B+ 1991 8901705 13557 10350 5802 158.1 22.0 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner

Kokopo Chief 19.040 B+ 1991 8907412 13387 10352 5804 158.1 22.0 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner

Chenan 14.519 G+ 1992 9007374 25561 18391 9229 184.9 27.6 1123 32114 34103 3x26T, 2x31T, 1x20T Hong Kong Owned, Managed Liner

Chengtu 14.458 G+ 1991 9007362 25561 18391 9229 184.9 27.6 1123 32114 34103 3x26T, 2x31T, 1x20T Hong Kong Owned, Managed Liner

Changsha 15.634 F+ 1991 9003847 25561 18391 9229 184.9 27.6 1123 32114 34103 3x26T, 2x31T, 1x20T Hong Kong Owned, Managed Liner

Kweichow 15.710 F+ 1994 9070694 25524 18451 8250 184.9 27.6 1257 28831 29819 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner

Kwangtung 15.297 F+ 1994 9070709 25524 18451 8250 184.9 27.6 1257 28831 29819 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner

Kweilin 15.734 F+ 1994 9103104 25410 18468 9201 184.9 27.6 1257 32608 33756 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner

Kwangsi 15.320 F+ 1995 9103116 25607 18468 9253 184.9 27.6 1257 31472 33077 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner

Ningpo 20.240 D+ 1997 9134658 22900 16800 8662 183.9 25.3 1728 N/A N/A 3 x 40T Hong Kong Owned Liner

Nanchang 21.214 D+ 1995 9082805 23016 16800 8662 181.1 25.3 1728 N/A N/A 3 x 40 T Hong Kong Owned Liner

Ngankin 21.291 D+ 1996 9105994 23064 16801 8672 184.1 25.3 1730 N/A N/A 3 x 40 T Hong Kong Owned Liner

Spirit of Canterbury 24.121 D 2005 9319557 14053 9910 5032 148.0 23.3 1102 N/A N/A - New Zealand Owned, Managed CV1100

Shansi 14.720 B+ 2013 9614476 30700 25483 11814 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Shantung 14.449 B+ 2013 9614488 30814 25483 11819 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Shaoshing 14.710 B+ 2013 9614490 30769 25483 11808 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Shengking 14.856 B+ 2013 9614505 30813 25483 11813 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Shuntien 14.538 B+ 2013 9614517 30852 25483 11810 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Siangtan 10.409 A+ 2013 9614529 30756 25483 11805 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Soochow 14.420 B+ 2014 9614531 30721 25483 11817 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Szechuen 14.836 B+ 2014 9614543 30688 25483 11813 199.9 28.2 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

The China Navigation Company / Sustainable Development Report 2014 Fleet Profile continued 35

In Operation as at 31 Dec 2014

Vessel Name EVDI Rightship Year IMO No. DWT GT NT LOA Max Capacity Hold Hold Cargo Gear (T) Country of Status Vessel Type or EEDI GHG Built (SSW (m) Breadth Nominal Capacity - Capacity - Registration Emissions’ MTs) (m) (TEU) Bale (m³) Grain (m³) Rating

Antung 23.121 F 2007 9371957 7702 5316 2309 117.0 19.7 618 9523 9522 2 x 40T Malta Operated General Cargo (ex MCP London)

MCP Famagusta 23.091 F 2008 9371971 7709 5315 2309 117.0 19.7 618 9523 9522 2 x 40T Cyprus Operated General Cargo

Spirit of Endurance 28.898 D 2008 9387607 8211 7464 3085 129.6 20.6 702 N/A N/A - New Zealand Managed, Operated Container Ship

Ninghai 20.139 D 2003 9236444 23067 16802 8672 184.0 25.3 1728 N/A N/A 3 x 40T Marshall Operated Liner (ex Robert Rickmers)

Fernando 12.570 F 2003 9235359 30320 23132 9375 192.9 27.8 1829 24775 24775 2 x 100T, 2 x 50T Liberia Operated MPP

Wuchang 4.713 B+ 2013 9657844 39127 24785 12537 180.0 30.0 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Managed, Operated Handysize Bulk Carrier

Wuchow 4.772 B+ 2013 9657856 39090 24785 12543 180.0 30.0 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Managed, Operated Handysize Bulk Carrier

Wuhu 4.709 B+ 2014 9657868 39179 24785 12545 180.0 30.0 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Managed, Operated Handysize Bulk Carrier

Wulin 4.886 B+ 2014 9657870 39047 24785 12538 180.0 30.0 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Managed, Operated Handysize Bulk Carrier

Eredine 4.646 B+ 2014 9681871 39855 24785 13019 180.0 30.0 N/A 48908 47181 4 x 36T Singapore Managed, Operated Logs-Fitted Handysize Bulk Carrier

Erradale 4.677 B+ 2014 9681883 39757 24785 13021 180.0 30.0 N/A 48908 47181 4 x 36T Singapore Managed, Operated Logs-Fitted Handysize Bulk Carrier

Erisort 4.531 B+ 2014 9681895 39763 24785 13022 180.0 30.0 N/A 48908 47181 4 x 36T Singapore Managed, Operated Logs-Fitted Handysize Bulk Carrier

The China Navigation Company / Sustainable Development Report 2014 New Building Programme 36

! !

Ship Hull IMO Number Name Estimated Delivery

CX0348 9681900 Eriskay 2014 ZO – Zhejiang Ouhua Shipbuilding Co Ltd, China CX0349 9690884 Fengning 2015 4 x Chief Class MPV22k Multipurpose Liners – ZO664 -667 H664 9689938 Coral Chief 2015 All chartered by Swire Shipping ZO665 9689940 Highland Chief 2015 ZO666 9689952 New Guinea Chief 2015 8 x B.Delta39 - handysize Loggers L, P, Class ZO664 to 675 ZO668 9715191 Liangchow 2015 All chartered by Swire Bulk ZO667 9689964 Papuan Chief 2015 CX0350 9690896 Fengtien 2015 6 x Topaz CV1700 Class - Feeder container ships ZO696 - 699 ZO669 9715206 Lintan 2015 Owned by Mandarin Shipping – to be chartered out ZO670 9715218 Luchow 2015 CX – Chengxi Shipyard Co Ltd, China CX0351 9690901 Foochow 2015 9 x B.Delta39 - handysize Loggers E, F, H, Class CX345 to 356 CX0352 9690913 Funing 2015 All chartered by Swire Bulk ZO671 9715220 Luenho 2015 ZO672 9721554 Pakhoi 2015 IM – Imabari Shipbuilding, Japan CX0353 9714226 Hanyang 2015 4 x Imabari38 Loggers – handysize bulkers IM866 – 869 ZO673 9721566 Pekin 2015 All chartered by Swire Bulk CX0354 9714238 Hoihow 2015 CX0355 9714252 Hunan 2016 Aotearoa Chief ZO674 9721578 Powan 2016 1 x 9000t Cement Carrier CX0356 9714264 Hupeh 2016 To be chartered by NZ client ZO675 9721580 Poyang 2016 IM866 Taiyuan 2016 IM867 Tatung 2016 IM868 Tsingtao 2016 IM869 Tunsin 2016 Aotearoa Chief 2016 !! ! ! ! ! ! !! !

The China Navigation Company / Sustainable Development Report 2014

"#$! ! ! %&'()*'+,%-! Safety Statistics 37

Injuries Near Misses

TRCF per 1 mill LTIF per 1 mill 4 per. Mov. Avg. 4 per. Mov. Avg. MANHORS MANHORS (TRCF per 1 mill MANHORS) (LTIF per 1 mill MANHORS) 2011 2012 2013 2014 450

2012 2013 2014 400 8 350 7

300 6

250 5

200 4

3 150 No. of Near Miss Reports 2 100

1 50

Personal Inuries / 1 million man hours worked Personal 0 0 4 1 2 3 4 1 2 3 4 1 2 3 4 4 1 2 3 4 1 2 3 4 1 2 3 4

uarter uarter

The China Navigation Company / Sustainable Development Report 2014 Environmental Summary 38

2008 2009 2010 2011 2012 2013 2014

Total vessels (owned and managed/operated) 51 34 35 15 24 31 as at 31 Dec (plus 16 u/c) (+4 managed) (+6 managed)

Scope 1 & 2 emissions (tCO2e) 1,059,271 661,041 690,242 610,558 625,426 479,486

% GHG emissions of CNCo group that comes (99.9% marine fuels) (99.9% marine fuels) (99.8% marine fuels) (99.8% marine fuels) (99.8% marine fuels) (99.9% marine fuels) (99.9% marine fuels) from marine fuel

EEOI - liner fleet(tCO2e/tm) 30 31 30 27

EEOI - bulk fleet(tCO2e/tm) n/a n/a n/a n/a n/a Not a full year’s data 7

Scope 2 electricity consumed ashore (tCO2e) 286 237 241 197

Scope 2 GHG footprint for business flights 4284 4,547 3,098 4,467 (tCO2e)

SOx emissions (mT) 20,987 18,517 11,767 14,776 13,051 13,858 10,458

NOx emissions (mT) 17,506 15,510 16,259 12,236

Particulate Matter emissions (mT) 1,396 1,233 1,313 989

VOC emissions (mT) 261 231 241 185

Spills of substances hazardous to the marine 1 2 Nil environment (litres) (20 litres oil, with 3 (21 litres in total of litres entering the sea) hydraulic oil or sludge being transferred entered the sea)

The China Navigation Company / Sustainable Development Report 2014 Consolidated Fleet Operational Efficiency 39

To track our bulk and liner fleets together to enable us to benchmark how the CNCo group is month in the lower half, and the liner fleet EEOI as providing the balance of 50% - the grey line also performing against our internal KPIs to reduce emissions, CNCo has produced a simplified “whole normalised at 1 at the bottom of this page. fleet” EEOI metric that we have termed FOE or “Fleet Operational Efficiency”. These are then combined to give a single global figure - the blue “actual” figure against the scale of As the two types of ships have very different absolute values for their EEOI, we combine the bulk 2 in the baseline month, showing how the company’s fleet GHG footprint reduction is performing fleet EEOI as constituting a relative 50% of our FOE – the green line, normalised as 1 in the baseline against target that declines monthly – the orange line. 31

2.20

2.00 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

1.80

Actual Target 1.60 FOE (Bulk) FOE (Liner)

1.40

1.20

1.00

0.80

The China Navigation Company / Sustainable Development Report 2014 Materiality Index 40

The ratings of the various components that Some areas are considered more important make an organisation “Socially Responsible” than others (e.g. avoidance of pollution of are shown in Table (below). the marine environment, and requiring sound health and safety practices to be followed, This shows that all 12 areas we have identified rated >97%). are important (rated >92%).

Importance level Importance level of SD area of SD area

1 We do not cause spills or pollute the marine environment. 97% 7 We expect a high standard of sustainable and ethical performance throughout 95% our supply chain. We have a clear Supply Chain Sustainability Code of Conduct and take action to ensure that everyone in our supply chain meets 2 We have sound Health and Safety practices. Health and safety of our staff, 97% high standards in key areas of environmental protection, workers’ rights, and clients and their employees is our main priority. health and safety performance.

3 We are responsible and well governed. We operate ethically, with 96% 8 Our communication with stakeholders is clear, accurate and credible. We 94% accountability, transparency and respect for the rule of law. We do not have a positive and transparent approach. tolerate corrupt practices. 9 We are among the leaders in the industry with respect to Environmental 94% 4 We take care of our employees, providing good working environment and fair 96% Performance. compensation and benefits. 10 We encourage our staff, customers and supply chain to act in a socially 93% 5 We respect and add value to the community, providing fair and quality 95% responsible manner. employment opportunities, and deal fairly with any grievances and criticism. 11 We have a Corporate Philanthropy (charity) programme which provides 92% 6 We show leadership in reducing carbon and other greenhouse gas emissions 95% meaningful benefits to our communities. from our operations. 12 We work closely with both clients and suppliers to help them become more 92% environmentally sustainable.

The China Navigation Company / Sustainable Development Report 2014 Abbreviations 41

AMSA Australian Marine Safety Authority HFO Heavy Fuel Oil – a residual fuel ASA Australian Shipping Association HHV Higher Heating Value, also known as gross calorific value, of a fuel is defined as the ASSM Anscor Swire Ship Management manning agency amount of heat released by combusting a specified quantity and returning the BHP Brake Horse Power temperature of the combustion products to 150°C. LHV assumes all the water CAR Audit-driven Corrective Action Report component is in liquid state at the end of combustion CBA Collective Bargaining Agreement HOF Head Office (in Singapore) CCoC Corporate Code of Conduct HSE Health, Safety and the Environment CFC Chloro-fluoro-carbon/s ICAO Inter Civil Aviation Organisation CNCo The China Navigation Company Pte Ltd IFO Intermediate Fuel Oil - residual fuel. Usually 180 or 380 CST viscousity. CoC Certificate of Competency See http://intertek.ch/schwerol CSR Corporate Social Responsibility IHM Inventory of Hazardous Material, per the HK Ship Recycling Convention DCC Australian government: Department of Climate Change ILO (UN) International Labour Organisation DECC UK government: Department of Energy and Climate Change IMO (UN) International Maritime Organisation DEFRA UK government: Department for Environment, Food and Rural Affairs ISM International Management Code for the Safe Operation of Ships and for Pollution DPA ISM Code Designated Person Ashore Prevention, (International Safety Management (ISM) Code) as chapter XI of SOLAS ECA Emission Control Area IUCN International Union for Conservation of Nature and Natural Resources EEOI Energy Efficiency Operational Index KBA Key Biodiversity Area EPA US government Environmental Protection Agency KPI Key Performance Indicator ETS Emission Trading Scheme kW hr (unit) Kilo Watt hour, is a unit of energy equal to 1,000 Watt hours or 3.6 mega Joules FOE Fleet Operational Efficiency LHV Lower Heating Value, also known as net calorific value, of a fuel is defined as the GEDO Australian government DCC Greenhouse and Energy Data Officer amount of heat released by combusting a specified quantity and returning the GHG Greenhouse Gas/es temperature of the combustion products to 150°C. LHV assumes all the water GJ (unit) Giga-Joule, 1 billion joules of energy component is in vapour state at the end of combustion GRI Global Reporting Initiative LO Lubricating Oil HCFC Hydro-chloro-fluoro-carbon/s LTI Lost Time Injury HCV High Conservation Value LTIFR Lost Time Injury Frequency Rate

The China Navigation Company / Sustainable Development Report 2014 Data: Abbreviations 42

MARPOL IMO International Convention for the Prevention of Pollution from Ships, 1973, SECA Sulphur Emission Control Area/s as modified by the Protocol of 1978 and later SEEMP Ship Energy Efficiency Management Plan MCA (UK) Maritime and Coastguard Agency SIN Singapore MDO Marine Diesel Oil – a distillate fuel SMS Safety Management System MGO Marine Gas Oil – a distillate fuel SMTC Swire Marine Training Centre, located in Loyang, Singapore MHE Material Hazardous to the Environment SOLAS IMO International Convention for the Safety of Life at Sea, 1974, as amended MLC ILO Maritime Labour Convention, 2006 in 1980 and later

MTC Medical Treatment Case SOX Oxides of Sulphur NGER Australian National Greenhouse Gas and Energy Reporting Act STCW IMO International Convention on Standards of Training, Certification and NI Nautical Institute Watch-keeping for Seafarers, 1978, as amended in 1995 and later

NOX Oxides of Nitrogen tCO2 Tonnes of Carbon Dioxide OFW Overseas Filipino Workers tCO2e Tonnes of Carbon Dioxide equivalent. This is CO2 plus the other four “natural GHG PM Particulate Matter of CH4, N2O and the two industrial GHG of SF6 and HydroFluroCarbonsGHG PO Purchase Order/s TRCF Total Recordable Case Frequency POEA Philippines Overseas Employment Agency TRIP Toolbox Risk Identification Permit PSI Port State Inspection, DPl: Deficiencies per Port State Inspection, CARB: California ULS Ultra Low Sulphur content Air Resources Board, PSCI: Port State Inspection Compliance Index, TRCF: Total UNFCCC United Nations Framework Convention on Climate Change Recordable Case Frequency Rate VOC Volatile Organic Compound/s QHSE Quality, Health, Safety and Environment y-o-y Year on Year change RFQ Request For a Quote 5S “Seiri, Seiton, Seiso, Seiketsu, and Shitsuke” or “Sorting, Set in order, Systematic RWC Restricted Work Case cleaning, Standardizing, and Sustaining” SD Sustainable Development

The China Navigation Company / Sustainable Development Report 2014 GRI Assurance Statement 43

Copeland & Partners Limited

Anne Copeland 柯安娜 T +852 9833 5979 [email protected] http://www.anne-copeland.com/ 3B, Block 1, Victoria Garden, 301 Victoria Road, Pokfulam, Hong Kong, PRC 香港域多利道 301 號域多利花園 1 座 3B

Assurance Statement

The China Navigation Company Pte Limited (CNCo) commissioned Copeland & Partners Limited to conduct independent assurance of its 2014 Sustainable Development (SD) Report, in accordance with the scope below.

Objective and Scope The objective of the assurance process was to verify a representative sampling of the information included in CNCo’s 2014 SD Report and to determine conformance of the report contents with the requirements of the Global Reporting Initiative (GRI)’s Sustainability Reporting Guidelines (version 3.1) for Application Level C. An assessment of the company’s SD initiatives was also conducted and recommendations were provided to management on the company’s overall performance.

Methodology The assurance process, which was conducted from December 2016 to March 2017, involved a desktop review of CNCo’s SD Report to identify a representative sampling of data and information, as well as claims regarding management systems, performance and corporate strategies, for onsite verification. Discussions were held with CNCo’s General Manager for Sustainable Development and team, as well as representatives of the company responsible for risk management, human resources, training and development, health and safety, the environment and procurement to confirm a representative sampling of data included in the report, to review the report contents and strategies for managing CNCo’s sustainability issues and to identify gaps or areas for improvement. Based on this process, observations were made which resulted in CNCo making minor amendments to the GRI Content Index.

Findings Based on the claims and data sampled, CNCo’s 2014 SD Report includes accurate and robust information to support the company’s commitment to, and performance in, implementing its SD Policy and its self-declaration of the report meeting the requirements of GRI’s Application Level C in terms of its coverage of the required profile disclosures and material indicators. This report, which continues to evolve with CNCo’s continuous improvement in its sustainability performance, discloses information on the company’s approach to, and performance in, addressing the elements of ISO 26000:2010 - Guidance on Social Responsibility. The report format and content is web-based and the materiality of its content evolves in response to stakeholder feedback as the company engages its stakeholders on sustainability. CNCo’s material sustainability issues are substantively covered and the report also addresses challenges CNCo faces. These challenges range from further reducing its environmental/greenhouse gas footprint as a responsible player in an industry that operates under a global framework, to enhancing its working environment and safety management system and training.

The transparent disclosure of CNCo’s approach to sustainability and of its priorities and performance, is welcomed. It is also noteworthy to recognise the company’s initiatives to:

• Implement its strategic framework for managing risks, planning future scenarios, exploring opportunities and assessing materiality that is rooted in the company’s Enterprise and Strategic Risk Register, Business Unit Risk Registers and the corporate SD Plan with Targets and Key Performance Indicators, which are reviewed monthly to drive improvement actions across operations, with regular reporting to the Managing Director and the Board.

The China Navigation Company / Sustainable Development Report 2014

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GRI Assurance Statement 44

Copeland & Partners Limited

Anne Copeland 柯安娜 T +852 9833 5979 [email protected] http://www.anne-copeland.com/ 3B, Block 1, Victoria Garden, 301 Victoria Road, Pokfulam, Hong Kong, PRC 香港域多利道 301 號域多利花園 1 座 3B

• Maintain its comprehensive approach to providing safety awareness, resources, tools and training, supporting near-miss reporting and its commitment to achieve Zero harm in safety performance. • Provide training, development and support for employees and for seafarers globally, and their communities. • Disclose diversity metrics and CNCo’s initiatives to respect and enhance diversity. • Continue progressive improvements in the eco-efficiency of the shipping fleet, GHG and pollutant emission reduction and sustainable ship building and recycling, and influencing the global shipping industry. • Implement the “Green Boxes” environmentally-responsible containers that reduce emissions of VOCs, adopt sustainable materials such as bamboo and support the company’s long-term goal of Net Zero Environmental Impact. • Implement CNCo’s Responsible Cargo Carriage Policy and its requirements for not transporting endangered species. • Establish the position of Group Purchasing Manager (GPM) and the work of the GPM with the SD team to develop a process to audit suppliers. • Support scientific research and stakeholder initiatives related to biodiversity and climate change action. • Establish a Volunteer Leave Policy to further support employee volunteering and community engagement around the world. • Continued certification to the Eco-office initiative. • Maintain stringent anti-corruption practices, transparent reporting of the industry challenges.

Recommendations for Future SD Strategy and Reporting The commitment and resources that CNCo has dedicated to integrating sustainability into its business processes, to managing and planning for potential risks and opportunities, and making progress in addressing the recommendations of the previous assurance process is commendable. Going forward, CNCo is encouraged to enhance its existing efforts to:

• Build on its focused materiality matrix and share details of CNCo’s stakeholder identification and issue mapping, and engagement processes. • Engage and support other stakeholders in the industry and in CNCo’s value chain to further the sustainable design, operation and recycling of ships and the responsible carriage of cargo. • Diversify the Board and management and report on its oversight of how sustainability is integrated into the business, risk management and performance results and compliance. • Engage employees to enhance understanding of the ways sustainability issues are relevant to their work, receive updates on the company’s sustainability performance and share ideas and feedback. • Align reporting with international standards by transitioning from GRI G3 to G4 Standards.

Anne Copeland Managing Director & Sustainability Advisor, Copeland & Partners Ltd April 13, 2017

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G3.1 Content Index GRI Application Level C 45

STANDARD DISCLOSURES PART I: Profile Disclosures 1. Strategy and Analysis Profile Description Reported Cross-reference/ Direct answer/ Reason for omission/ Explanation Disclosure Partially 1.1 Statement from the most senior decision-maker of the organization. Page 3. Targets are addressed in the Strategic Framework which was not inluded 2. Organizational Profile Profile Description Reported Cross-reference/ Direct answer/ Reason for omission/ Explanation Disclosure 2.1 Name of the organization. Fully Cover Page 2.2 Primary brands, products, and/or services. Fully Organisational and Operational Boundaries of Report, page 5 Operational structure of the organization, including main divisions, operating Fully Organisational and Operational Boundaries of Report, page 5 2.3 companies, subsidiaries, and joint ventures. 2.4 Location of organization's headquarters. Fully Organisational and Operational Boundaries of Report, page 5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues Fully Our People Section, pages 11-12 2.5 covered in the report. Nature of ownership and legal form. Organisational and Operational Boundaries of Report, page 5 and Governance Fully 2.6 section, page 31 Markets served (including geographic breakdown, sectors served, and types of Customers include manufacturing, agricultural and resource processing companies, customers/beneficiaries). Fully freight and logistics companies, global forwarding companies, personal effects movers, 2.7 bulk shippers, P&I clubs, Marine consultants/ surveyors 2.8 Scale of the reporting organization. Partially Net sales, capitalisation omitted on purpose as CNCo is a private company Significant changes during the reporting period regarding size, structure, or Fully 2014 Highlights section, pages 6-7 2.9 ownership. 2.10 Awards received in the reporting period. Fully Awards & Recognition section, page 30 3. Report Parameters Profile Description Reported Cross-reference/ Direct answer/ Reason for omission/ Explanation Disclosure 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. Fully Cover and Managing Director’s Message, page 3 3.2 Date of most recent previous report (if any). Fully Managing Director’s Message, page 3 3.3 Reporting cycle (annual, biennial, etc.) Fully Managing Director’s Message, page 3 3.4 Contact point for questions regarding the report or its contents. Fully Page 43 3.5 Process for defining report content. Fully Introduction section page 4 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint Fully Organisational and Operational Boundaries of Report, page 5 3.6 ventures, suppliers). See GRI Boundary Protocol for further guidance. State any specific limitations on the scope or boundary of the report (see Fully Organisational and Operational Boundaries of Report, page 5 3.7 completeness principle for explanation of scope). Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period Fully Organisational and Operational Boundaries of Report, page 5 3.8 to period and/or between organizations. Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g.,mergers/acquisitions, change Fully Introduction section, page 4 3.10 of base years/periods, nature of business, measurement methods). Significant changes from previous reporting periods in the scope, boundary, or Fully Introduction section, page 4 3.11 measurement methods applied in the report. The China Navigation Company / Sustainable Development Report 2014 G3.1 Content Index GRI Application Level C 46

3.12 Table identifying the location of the Standard Disclosures in the report. Fully This table 4. Governance, Commitments, and Engagement Profile Description Reported Cross-reference/ Direct answer/ Reason for omission/ Explanation Disclosure Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or Partially Governanace Section, pages 31-32. Not by age or diversity. 4.1 organizational oversight. Indicate whether the Chair of the highest governance body is also an executive Fully Governanace Section, pages 31-32. 4.2 officer. For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non- Fully Governanace Section, pages 31-32. 4.3 executive members. Mechanisms for shareholders and employees to provide recommendations or Fully Governanace Section, pages 31-32. 4.4 direction to the highest governance body. Key stakeholder groups are: Investors and their advisors/ Subsidiary Companies / Employees/ Suppliers / Customers / Business partners / Government and Regulators / Fully Communities. Formal engagement was undertaked internally with subsidiaries, 4.14 List of stakeholder groups engaged by the organization. employees on-shore and offshore Stakeholders were indentified based on their ability to impact our business's Fully achievement of its strategy. During the reporting period stakeholder engagement 4.15 Basis for identification and selection of stakeholders with whom to engage. covered sea and shore based employees. STANDARD DISCLOSURES PART III: Performance Indicators Economic

Performanc Description Reported Cross-reference/Direct answer e Indicator Economic performance EC1 Direct economic value generated and distributed, including revenues, operating Revenues and opeating costs disclosed as percentages and philantrophic activities costs, employee compensation, donations and other community investments, Partially disclosed qualitatively. Recognised that financial reporting limited as CNCo is a retained earnings, and payments to capital providers and governments. private company. EC2 Financial implications and other risks and opportunities for the organization's To claim this as "Fully" you need to explicitly state management considers the financial Partially activities due to climate change. implications of climate change on the business; you state that you consider GHG EC3 Coverage of the organization's defined benefit plan obligations. Not EC4 Significant financial assistance received from government. Not Market presence EC5 Range of ratios of standard entry level wage by gender compared to local minimum Not wage at significant locations of operation. EC6 Policy, practices, and proportion of spending on locally-based suppliers at Not significant locations of operation. EC7 Procedures for local hiring and proportion of senior management hired from the Fully Our People section, page 10 local community at significant locations of operation.

Indirect economic impacts EC8 Development and impact of infrastructure investments and services provided Not primarily for public benefit through commercial, in-kind, or pro bono engagement. The China Navigation Company / Sustainable Development Report 2014 G3.1 Content Index GRI Application Level C 47

EC9 Understanding and describing significant indirect economic impacts, including the Not extent of impacts. Environmental Performanc Description Reported Cross-reference/Direct answer e Indicator Materials EN1 Materials used by weight or volume. Not EN2 Percentage of materials used that are recycled input materials. Not Energy EN3 Direct energy consumption by primary energy source. Fully Data section/ Environmental Summary, page 38 EN4 Indirect energy consumption by primary source. Fully Data section/ Environmental Summary, page 38 EN5 Energy saved due to conservation and efficiency improvements. Partially Carbon / Environment, page 27 Initiatives to provide energy-efficient or renewable energy based products and Not EN6 services, and reductions in energy requirements as a result of these initiatives. EN7 Initiatives to reduce indirect energy consumption and reductions achieved. Not Water EN8 Total water withdrawal by source. Not Not material EN9 Water sources significantly affected by withdrawal of water. Not Not material EN10 Percentage and total volume of water recycled and reused. Not Not material Biodiversity Location and size of land owned, leased, managed in, or adjacent to, protected Not EN11 areas and areas of high biodiversity value outside protected areas. Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside Not EN12 protected areas. EN13 Habitats protected or restored. Not EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. Not Number of IUCN Red List species and national conservation list species with Not EN15 habitats in areas affected by operations, by level of extinction risk. Emissions, effluents and waste EN16 Total direct and indirect greenhouse gas emissions by weight. Fully Data section/ Environmental Summary, page 38 EN17 Other relevant indirect greenhouse gas emissions by weight. Fully Data section/ Environmental Summary, page 38 EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved. Partially Indirectly covered in ship enhancement, page 27 Total tCO2e (HFC) emitted 917.38 tCO2e Fully EN19 Emissions of ozone-depleting substances by weight. Total tCO2e (HCFC) emitted 2795.36 tCO2e EN20 NOx, SOx, and other significant air emissions by type and weight. Fully Data section/ Environmental Summary, page 38 EN21 Total water discharge by quality and destination. Not EN22 Total weight of waste by type and disposal method. Not EN23 Total number and volume of significant spills. Fully Data section/ Environmental Summary, No spills, page 38 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of Not EN24 transported waste shipped internationally. Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water Not EN25 and runoff. The China Navigation Company / Sustainable Development Report 2014 G3.1 Content Index GRI Application Level C 48

Products and services Initiatives to mitigate environmental impacts of products and services, and extent of Partially EN26 impact mitigation. Carbon/ Environment section, pages 25-28 Percentage of products sold and their packaging materials that are reclaimed by Not EN27 category. Compliance Monetary value of significant fines and total number of non-monetary sanctions for Not EN28 non-compliance with environmental laws and regulations. Transport Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the Partially EN29 workforce. Carbon/ Environment section, pages 25-28 Overall EN30 Total environmental protection expenditures and investments by type. Not Social: Labor Practices and Decent Work

Performanc Description Reported Cross-reference/Direct answer e Indicator Employment Total workforce by employment type, employment contract, and region, broken Fully LA1 down by gender. Our People section, pages 10-12 Total number and rate of new employee hires and employee turnover by age Partially LA2 group, gender, and region. Our People section (not by age), page 12 Benefits provided to full-time employees that are not provided to temporary or part- Not LA3 time employees, by major operations. LA15 Return to work and retention rates after parental leave, by gender. Not Labor/management relations LA4 Percentage of employees covered by collective bargaining agreements. Fully Our People section, page 12 Minimum notice period(s) regarding significant operational changes, including Not LA5 whether it is specified in collective agreements. Occupational health and safety Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health Not LA6 and safety programs. Rates of injury, occupational diseases, lost days, and absenteeism, and number of Partially LA7 work-related fatalities by region and by gender. Safety and Safety Statistics - no occupational diseases. Pages 23, 37 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious Partially LA8 diseases. Our People, page 16 LA9 Health and safety topics covered in formal agreements with trade unions. Not Training and education Average hours of training per year per employee by gender, and by employee Partially LA10 category. Our People, page 16 Training hours by gender not disclosed Programs for skills management and lifelong learning that support the continued Not LA11 employability of employees and assist them in managing career endings.

The China Navigation Company / Sustainable Development Report 2014 G3.1 Content Index GRI Application Level C 49

Percentage of employees receiving regular performance and career development Fully LA12 reviews, by gender. Our People, page 17 Diversity and equal opportunity Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other Partially LA13 indicators of diversity. Governance section, pages 31-32 Equal remuneration for women and men Ratio of basic salary and remuneration of women to men by employee category, by Not LA14 significant locations of operation. Social: Human Rights

Performanc Description Reported Cross-reference/Direct answer e Indicator Investment and procurement practices Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone Not HR1 human rights screening. Percentage of significant suppliers, contractors and other business partners that Not HR2 have undergone human rights screening, and actions taken. Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of Not HR3 employees trained. Non-discrimination HR4 Total number of incidents of discrimination and actions taken. Fully There were no discrimination cases during the reporting period Freedom of association and collective bargaining Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant Not HR5 risk, and actions taken to support these rights. Child labor Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the effective abolition Not HR6 of child labor. Forced and compulsory labor Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the Not HR7 elimination of all forms of forced or compulsory labor. Security practices Percentage of security personnel trained in the organization's policies or Not HR8 procedures concerning aspects of human rights that are relevant to operations. Indigenous rights Total number of incidents of violations involving rights of indigenous people and Not HR9 actions taken. Assessment Percentage and total number of operations that have been subject to human rights Not HR10 reviews and/or impact assessments.

The China Navigation Company / Sustainable Development Report 2014 G3.1 Content Index GRI Application Level C 50

Remediation Number of grievances related to human rights filed, addressed and resolved through formal Not HR11 grievance mechanisms. Social: Society

Performanc Description Reported Cross-reference/Direct answer e Indicator Local communities Percentage of operations with implemented local community engagement, impact Not SO1 assessments, and development programs. Operations with significant potential or actual negative impacts on local Not SO9 communities. Prevention and mitigation measures implemented in operations with significant Not SO10 potential or actual negative impacts on local communities. Corruption Percentage and total number of business units analyzed for risks related to Not SO2 corruption. Percentage of employees trained in organization's anti-corruption policies and Not SO3 procedures. SO4 Actions taken in response to incidents of corruption. Not Public policy SO5 Public policy positions and participation in public policy development and lobbying. Not Total value of financial and in-kind contributions to political parties, politicians, and Not SO6 related institutions by country. Anti-competitive behavior Total number of legal actions for anti-competitive behavior, anti-trust, and Fully SO7 monopoly practices and their outcomes. Our People, page 19 Compliance Monetary value of significant fines and total number of non-monetary sanctions for Fully SO8 non-compliance with laws and regulations. MD Message, page 3 Social: Product Responsibility

Performanc Description Reported Cross-reference/Direct answer e Indicator Customer health and safety Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services Not PR1 categories subject to such procedures. Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life Not PR2 cycle, by type of outcomes.

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Product and service labelling Type of product and service information required by procedures, and percentage of Not PR3 significant products and services subject to such information requirements. Total number of incidents of non-compliance with regulations and voluntary codes Not PR4 concerning product and service information and labeling, by type of outcomes. Practices related to customer satisfaction, including results of surveys measuring PR5 customer satisfaction. Marketing communications Programs for adherence to laws, standards, and voluntary codes related to Not PR6 marketing communications, including advertising, promotion, and sponsorship. Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and Not PR7 sponsorship by type of outcomes. Customer privacy Total number of substantiated complaints regarding breaches of customer privacy Not PR8 and losses of customer data. Compliance Monetary value of significant fines for non-compliance with laws and regulations Not PR9 concerning the provision and use of products and services.

The China Navigation Company / Sustainable Development Report 2014 Contact 52

Request for feedback

In order that we may continually improve our reporting, we would be grateful for your views and comments on any aspects of this report via e-mail to the address below.

Contact Details

Thank you for reading this report

Simon Bennett General Manager Sustainable Development The China Navigation Company 300 Beach Road #27-03 The Concourse Singapore 199555

Tel +65 6309 3632 [email protected] www.swirecnco.com

The China Navigation Company / Sustainable Development Report 2014