Global Leader in Ocean & Power

Samsung Heavy Industries Sustainability Report 2012 Global Leader in Ocean & Power About this report Contents Samsung Heavy Industries has published sustainability report on an annual basis since 2011. The company aims to inform 04 2012 Highlights internal/external stakeholders on its sustainability manage- 06 Message from the CEO ment practices and to better understand the needs and expectations of our stakeholders. Overview This report covers the period from January 1, 2012 to Decem- 10 Company Profile ber 31, 2012, and quantitative performance was calculated 12 Business Introduction based on the data of recent 3 years. The settling day (Decem- ber 31) was used as basis for data with annual variability, and 14 Eco-friendly Technologies specified information on term period of data collection were included when considered necessary. This report covers SHI Management headquarters, Shipbuilding&Offshore, Energy&Infra solution, 20 Vision & Strategy Power&Control systems, Wind energy. 22 Board of Directors This report was prepared in accordance with the ‘GRI G3.1 24 Compliance Management Guideline’, with the primary goal to publicize performances 26 Risk Management and plans on each indicator with utmost transparency. Items 28 SHI Stakeholder Engagement recommended on GRI Guideline can be found on GRI Guide- line index on page 72. In order to ensure the reliability of this report, we received third party assurance on contents and data Corporate Social Responsibility credibility. For detailed assurance results, refer to page 70. 32 Employee 37 Client SHI sustainability report can be viewed and downloaded 42 Partner Companies through SHI website (www.shi.samsung.co.kr). For more information, please contact the communication team at the fol- 46 Local Community lowing address. Feedback is always welcome. 52 Health, Safety and Environment 58 Green Management Cover story 64 Relevant Data on Sustainability Management The shape of circle stands for earth and ocean and embodies our dream of becoming a global leader in off- Appendix shore industry. 68 Awards and Membership 70 Third Party Assurance Statement 72 GRI G3.1 Guideline Index 76 Report of Independent Auditors 77 Financial Statement Communication team 33th FL, Samsung Life Insurance Seocho Tower, 1321-15 Seocho-Dong, Seocho-Gu, 137-955, Seoul, Korea Tel: +82-2-3458-6312 Fax: +82-2-3458-6398 2012 Highlights Samsung Heavy Industries 2012 Sustainability Report 4 5 2012 Highlights 01 Signed a contract with INPEX of Australia to build the world’s 06 Established an offshore engineering joint venture with AMEC of the U.K largest offshore gas disposal facility A joint investment among Samsung Heavy Industries, Samsung Engineering and AMEC of the U.K | As part of the efforts to The largest investment (KRW 3.48 trillion) & scale among plants of the enhance our business capacity in line with the rapid growth of the offshore plant market, SHI will establish the joint venture same kind | CPF is a type of floating offshore facility that produces and in Houston, U.S, to be fully utilized in designing offshore facilities. processes gas from gas fields. SHI has been once again recognized for its excellence in constructing offshore facilities by taking responsibility 07 Received an order for coal handling system ‘Samcheok Green Power’ for the entire production process, including design, purchase, An order for Samcheok Green Power 1 & 2 from Korea Southern Power | Samcheok Thermal Power Plant, which is to manufacturing and shipping. be completed by June 2016, will have a coal handling system ranging from loading and unloading at dock to storing and delivery. 02 Delivered the world’s first arctic drillship The world’s first & most expensive (USD 1,207 million) arctic drill 08 Shipped the 1000th SSAS ship | SHI has successfully constructed and delivered ‘STENA ICEMAX’, Control of a variety of equipment on ship through monitor- the world’s most expensive drill ship for polar regions, to the ship owner. ing | SHI has celebrated the shipment of the 1000th au- The drill ship has ice-resistant structure which allows drilling operation even tomatic system SSAS to the 105K shuttle tanker of the at 30 degrees below zero Celsius. 1967. 09 Delivered the world’s largest wind turbine installation vessel 03 Introduced the world’s first exclusive floating dock for offshore facilities Initiation of enlargement trend in the offshore facility market | The cooperation between the world’s first exclusive floating Simultaneous transportation and installa- dock for offshore facilities and an 8,000 ton offshore crane has contributed to cost competitiveness by shortening the tion of 12 units of 3.6MW-class wind farms construction schedule and reducing the cost of loading and unloading. | SHI has successfully delivered ‘Pacific Orca’, the world’s largest wind turbine installation vessel, to SPO in Singapore. This 04 Undertook the construction of FLNG for Shell vessel allows the installation of wind farms to a depth of 60m under water as well as LNG-FPSO at the world’s largest scale | SHI received an order from Royal Dutch Shell of ultra-large wind farms with a capacity of to construct a LNG-FPSO, the world's largest floating dock for offshore facilities 10MW or higher, which are currently under that has the dead load of 0.2 million tons, and began the construction with a steel development. cutting ceremony in the Geoje Shipyard on October. 10 Received an order for 12 units of 7MW-class 05 Advanced into the offshore wind power market in Scotland wind farms A MOU on offshore wind development project with the Scottish Development The world’s largest capacity and high efficiency |The order International and Fife Regional Council | SHI will base its offshore wind project was made by Daejeong Offshore Wind Power, and the wind farms at Methil, Fife, for pilot production and test of 7MW-class wind farms, and build a will be completed by the end of 2014 and operated from 2015 transmission network within the region to sell electricity from 2014. for commercial service. Message from the CEO Samsung Heavy Industries 2012 Sustainability Report 6 7 SHI aspires to be a global leader, enriching the future with the best products and technologies and seeking harmonious co-existence with nature. Respected stakeholders of Samsung Heavy Industries, I extend my sincere gratitude for your continuous interest and support for us. I am very glad to see the publication of the SHI Sustainability Report 2012 which discusses SHI's performance in sustainable management and shares the meaning with stakeholders. Last year SHI witnessed continuous growth based on the expansion of high value-added products, such as offshore facilities and special-purpose vessels, despite the lingering global economic crisis. In addition, SHI has become the first among industry competitors to achieve the ISO 50001 energy management standard, solidifying its position as the leader in the standardization of shipbuilding industry in areas ranging from quality and environment management to energy management. In an effort to promote shared growth, a variety of social contribution activities have been conducted; for instance, supporting local communities and the underprivileged. In 2013, the company will continue its commitment to sustainable management through ceaseless efforts for change and fundamental improvement. First of all, SHI will focus on expanding future growth engines, consolidating the foundation to grow into a world-class global shipbuilder. To that end, we will maximize profits by differentiating SHI offshore plants and special-purpose vessels from its competitors, while diversifying the business portfolio, which currently focuses on shipbuilding and offshore plant only, to include deep sea offshore and wind power facilities, and shipbuilding and offshore key equipment. Furthermore, we will strive to develop industry-pioneering eco-friendly products and conduct environment preservation activities, which include GHG emissions reduction, resource-cycling workplace set-up and energy conservation. Based on basics and principles, we will stress safety and quality management and promote compliance management and shared growth to meet the expectations of our stakeholders. Samsung Heavy Industries will contribute to establishing an affluent future society with its best products and technologies and will fulfill its responsibility as a global leader to achieve a peaceful harmonization with nature. I ask for your unwavering trust and support for us. Thank you. Samsung Heavy Industries President & CEO Dae Young Park Overview SHI pursues to be the best in all business divisions ranging from shipbuilding & offshore, E&I, power&control systems, wind energy. Operating facilities across the globe, the company seeks customer satisfaction and spurs the development >>> STENA ICEMAX of various eco-friendly technologies to realize SHI delivered the world’s first and most the best performance and quality. expensive arctic drillship ‘STENA ICEMAX’ to its ship owner in April 2012. Worth around USD1.2 billion, the drillship allows operation even at 30 degrees below zero Celsius. Overview Management Corporate Social Responsibility Appendix Samsung Heavy Industries 2012 Sustainability Report 10 11 Company Profile Samsung Heavy Industries aims to be the world's best in Shipbuilding & Offshore, E&I, Wind energy and Power&Control systems. Oslo Moscow Hamburg London Rongcheng Co., Ltd. Athens Shanghai Tokyo Houston Ningbo Co., Ltd. Dubai India Head Office/E&I Division Lagos Suwon Power

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