SUSTAINABLE DEVELOPMENT REPORT for the year 2017 Index

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Managing Director’s Message 3 Introduction 5 Organisational and Operational Boundaries 6 Organisational Profile and Governance 7 Safety 25 Our People 33 Our Communities 45 Carbon / Environment 52 Abbreviations 64 Data 69 Global Reporting Initiative (GRI) Standards Content Index 86 Contact 104 Assurance Statement 105

The China Navigation Company / Sustainable Development Report 2017 Managing Director’s Message 3

• Owned and operated over 120 vessels. Behaving safely Our people • Shipped 21 million metric tonnes of commodities. Our most important goal is to work With the expansion of our business and global • Made 2,600 port calls across 105 countries. without causing any harm to people and footprint, in 2017, we employed 3,076 people • Employed 3,076 employees in 49 countries. the environment. 2017 saw a significant in 49 countries. This represented an increase • Embarked on our first safety maturity improvement in CNCo’s safety records with of 26% for seagoing employees and 34% for assessment. 10 Lost Time Injuries (LTIs). Safety excellence shore-based employees compared to 2016. ashore and at sea is our top priority. Sustainability at CNCo means respecting Our people are at the core of CNCo’s business people, their safety and the environment; At the end of 2017, CNCo appointed Green- operations and our people goal is to be helping the communities in which we operate Jakobsen, a consultancy highly experienced an Employer of Choice. We recognise the in to thrive and helping to create a resilient in safety in the maritime industry to conduct a contributions and hard work of our employees environment through decarbonisation and global safety maturity assessment. We want through long service awards and reward and Dear friends of CNCo, optimising energy efficiency. Our sustainability to build an industry-leading safety culture and recognition programmes. The quality of our strategy is aligned with the Swire group’s this assessment will help us improve our safety people is key to the success of the Company. Welcome to the seventh externally assured environmental strategy, “SwireTHRIVE”. programmes and advance towards Zero Harm. We work to maintain a productive, safe and Sustainable Development Report for The China healthy organisation, employ the right talent Navigation Company (CNCo). CNCo’s core values of continuity, endeavour, and enhance employee performance. excellence, integrity and teamwork underpin In 2017, CNCo continued to work hard on our approach. These principles, together achieving our organisational goals, seeking with our sustainable development objectives efficiencies, improving safety practices and and CNCo’s Code of Conduct, apply to the enhancing customer experiences. Over the way we do business and collaborate with the 2017 calendar year, CNCo: communities where we operate.

Sustainability at CNCo means respecting people, their safety and the environment; helping the communities in which we operate in to thrive and helping to create a resilient environment through decarbonisation and optimising energy efficiency.

The China Navigation Company / Sustainable Development Report 2017 Managing Director’s Message cont. 4

Our communities with the Hong Kong International Convention for the Safe and Environmentally Sound We believe in doing right by our communities. Recycling of Ships (HKC). Our commitment to From supporting the seafaring community safety ensured that there were zero injuries and to developing cricket talent in Papua New pollution incidents and led to better working Guinea and supporting environmental research conditions for the workers. programmes, we invest in worthy causes and are committed to building long-term, rewarding relationships with our partners and our Industry leadership communities. CNCo is an active member of the Sustainable One of our key markets, the Pacific Islands, Shipping Initiative (SSI). We are also a leading face an immense waste management company on the Ship Recycling Transparency challenge. In 2017, CNCo entered into a Initiative (SRTI) creating a paradigm shift on Memorandum of Understanding with the how vessels are recycled at the end of their Secretariat of the Pacific Regional Environment working life. Programme (SPREP) to ship recyclable waste from eligible Pacific Island ports to be Our annual Sustainable Development sustainably treated and recycled in suitable Reports keep our stakeholders informed of ports in Asia Pacific. our sustainability progress in an open and transparent manner. We will continue working with our customers, peers, suppliers and Thriving environment communities towards a thriving future and to be the leading provider of sustainable shipping CNCo is committed to decarbonising our solutions and our customers’ partner of choice. business. We build and operate a fleet of CNCo is committed to decarbonising our business. We build and modern and fuel-efficient vessels to optimise operate a fleet of modern and fuel-efficient vessels to optimise energy energy efficiency and reduce our environmental footprint. We measure and monitor the energy efficiency and reduce our environmental footprint. consumption and emissions of our operations and set challenging targets to improve every year. James Woodrow In 2017, CNCo oversaw the successful Managing Director sustainable recycling of two vessels at the end of their working life. This was done at a ship recycling facility in Alang, India, in compliance

The China Navigation Company / Sustainable Development Report 2017 Introduction 5

This Sustainable Development (SD) Annual Report covers the operations of The China Navigation Company Pte Ltd and its associated group companies (CNCo) from 1 January to 31 December 2017, with any point data being as at 31 December 2017.

For this 2017 annual report, we transitioned Standard: ISO 26000:2010, viz. Governance, from the Global Reporting Initiative (GRI) Human Rights, Labour Practices, The “G4 Guidelines” to the “GRI Standards” Environment, Fair Operating Practices, as the basis for disclosure. This report has Consumer Issues, and Community Involvement been prepared in accordance with the “GRI and Development. These are reported under Standards: Core” option. the broad headings of ‘Safety’, ‘Carbon and Environment’, and ‘Our People’ and CNCo reports its full performance in all the ‘Communities’ throughout this report. areas covered by the Social Responsibility

CNCo reports its full performance in all the areas covered by the Social Responsibility Standard: ISO 26000:2010 and in accordance with the “GRI Standards: Core” option.

The China Navigation Company / Sustainable Development Report 2017 Organisational and Operational Boundaries (as at 31 December 2017) 6

THE CHINA NAVIGATION COMPAN

Organisational Boundaries

Ship Owners and Agencies, Branches and Liner Trades Liner Trades Bulk Division Bulk Division Bulk Logistics Division JV and Associates Managers Regional offices in: (owned fleet) (chartered fleet) (owned fleet) (chartered fleet) (owned fleet)

CNCo Pte Ltd Australia 4x Challenger Class Tonnage as detailed 4x Swire B.Delta39 Tonnage as detailed 1x Cement Carrier 67 Canada Singapore 5x Mihos in Fleet Profile handysize (grabbers) in Fleet Profile Quadrant Pacific Ltd Fiji e Hong Kong 8x S Class MPV31 20x Swire B.Delta39 60 India 1x N Class B170 ee age handysize (loggers) ee age Guadalcanal Travel Services Swire Bulk Indonesia 4x Chief Class MPV22 50 4x Imabari38 Swire Bulk Logistics New Caledonia Swire CTM Bulk Logistics Ltd 1x CV1100 handysize (loggers) Swire Shipping New Zealand Papua New Guinea 50 People’s Republic of China (PRC) 3 x Green Dolphins Tradco Shipping Limited handysize Republic of China (ROC) 25 Samoa Mandarin Shipping Group Ltd Pacifica Shipping Singapore Polynesia Line Ltd United Kingdom 25 United States of America PT Mitrabahtera Segara Sejati Tbk (MBSS)

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

Vessel HFO MDO GHG emissions and LO consumption

Vessel NOx SOx PM and VOC emissions

Scope 2 GHG Office Electricity Usage

Scope 3 GHG Management Air Travel

Crew Air Travel

Operational Boundaries

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 7

Organisational profile CNCo also owns: The China Navigation Company Pte Ltd (CNCo) is the The China Navigation Company Pte Ltd • 50% shares in Swire CTM Bulk Logistics wholly owned deep-sea ship-owning and operating arm – (CNCo) is the wholly owned deep-sea ship- Limited, a joint venture with C Transport and oldest operational entity – of the Swire group. owning and operating arm – and oldest Maritime SAM registered in Monaco; operational entity – of the Swire group. • 25% shares in Mandarin Shipping Limited CNCo was founded in 1872 to operate registered in Hong Kong; Mississippi-style paddle-steamers on China’s • 67% shares in Quadrant Pacific Ltd, a joint Yangtze River. Since then the Company has managing shareholdership with Ahrenkiel expanded globally. CNCo is one of the oldest Shipping; independent British shipping companies still • 25% shares in Mitrabahtera Segara Sejati managing its own tonnage in-house. (MBSS) in Indonesia; • 60% of Guadalcanal Travel Services; and CNCo is a Singapore-registered company and • 50% of TradCo Shipping in Solomon Islands. is a wholly-owned subsidiary of The China Navigation Company Limited, registered in London. Neither company is publicly quoted Pacifica Shipping (Pacifica) is an operating on any stock exchange. As can be seen from division of The China Navigation Company the Organisational and Operational Boundaries New Zealand (NZ) Limited. Pacifica operates diagram (see page 6), The China Navigation MV Spirit of Canterbury, a New Zealand- Company Limited is also the parent company flagged coastal container ship. CNCo also for a number of agencies and has branches owns the New Zealand coastal cement carrier and regional offices in Australia, Canada, MV Aotearoa Chief; this is operated by The China, Fiji, Hong Kong, India, Indonesia, New China Navigation Company NZ Limited. Caledonia, New Zealand, Papua New Guinea, Samoa, American Samoa, Taiwan, United Polynesia Line Ltd. (Polynesia Line) is owned Kingdom and United States of America. by CNCo. Polynesia Line operates a shipping network from the United States to the Pacific Islands, offering a fortnightly service from Los Angeles and Oakland to Tahiti, Tonga, Samoa and American Samoa and the wider Pacific. Polynesia Line operates two chartered-in vessels: MV Polynesia and MV Cap Taputapu.

The China Navigation Company / Sustainable Development Report 2017 CNCo at a glance 8

>120 owned & operated vessels in 3 Operating Divisions 233 Commodities 21 million mt per annum 3.4m Dwt fleet capacity 2,652 port calls 105 countries serviced 16 Global offices

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 9

CNCo's shipping coverage

The China Navigation Company / Sustainable Development Report 2017 3 Operating Divisions 10 Over 120 Owned & Managed Vessels

Swire Shipping Swire Bulk Swire Bulk Logistics 30 Multipurpose Liners 90 Handysize Bulk Carriers 1 Cement Carrier and 2 Transloaders

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 11

The Company operates a global network of Divisional update: Swire Shipping multipurpose liner, dry bulk and bulk logistics Swire Shipping at a glance services through its three business divisions: In an increasingly competitive market, Swire Swire Bulk, Swire Bulk Logistics and Swire Shipping focused on optimising its network Shipping. in 2017 to ensure customers continue to receive the highest possible service levels and 30 schedule integrity. Swire Shipping owned & operated vessels Major service enhancements were launched As a multipurpose liner shipping specialist, on routes from North Asia to South Pacific, Swire Shipping has an unrivalled reputation as well as the Trans-Tasman trade between for service, operational excellence and Australia and New Zealand. Swire Shipping 50 reliability, and is equipped to handle breakbulk, also launched a weekly service connecting containerised, refrigerated and bulk cargoes, Asia with Guam and Saipan. Agency network in 50 countries connecting over 400 ports globally. Preparations were also made in 2017 for the It maintains a worldwide agency network commencement of a new office in American 2,400 in addition to its own representative offices Samoa (Pago Pago) where Swire Shipping across Asia Pacific, the Pacific Islands, North and its affiliate company Polynesia Line, have port calls America and Europe, providing its customers been previously represented by a joint venture with dedicated service and expert market agency business. The opening of a new office knowledge. At the end of 2017, Swire Shipping is in line with Swire Shipping’s business model owned 23 multipurpose vessels and had to operate close to its customer base, which 15 chartered-in tonnage with a total of 30 vessels also resulted in new offices opening in Fiji and Offices in 15 countries supporting our liner trades. Samoa in 2016. 5,000 customers As a multipurpose liner shipping specialist, Swire Shipping has an unrivalled reputation for service, operational excellence and reliability, 1.8 million and is equipped to handle breakbulk, containerised, refrigerated and bulk cargoes, connecting over 400 ports globally. network miles

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 12

Swire Bulk These are scheduled for delivery in 2020 / Swire Bulk at a glance 2021. The vessels are a TIER II design and Swire Bulk operates a rapidly expanding global incorporate the new super-eco design features fleet. A large, modern fleet provides greater which will expand our fleet and enable them to flexibility, the surety of supply and a consistent continue to be the market leader by DWT and 90 technical standard to perform large volume efficiency in the handysize sector. freight contracts. owned & operated vessels People / Places Swire Bulk is represented in seven offices The shore-based Swire Bulk team increased around the world - London, Melbourne, Miami, its headcount by 25% to 62%. This will allow Shanghai, Singapore, Tokyo and Vancouver. It adequate resources to trade a fleet of up to 96 operates an average fleet size of 90 handysize 120 vessels, in line with our strategic forecast vessels on the water at any one time. Despite by the end of 2020. The regional offices have countries served the challenging trading conditions, Swire been bolstered with the introduction of new Bulk continues to expand its footprint and Chartering Managers in Miami and Melbourne; market presence in tandem with a strategic while the Vancouver office was established 650 newbuilding programme that will deliver the at the end of 2017 and has a mix of internally largest and most eco-friendly handysize fleet transferred personnel and new hires. port calls trading today. The global presence across seven offices At the end of 2017, Swire Bulk owned 24 delivers improved coverage of the market and modern Swire B.Delta39 handysize bulk time zones. This in turn generates improved 16 million carriers, four Imabari38 loggers, three “Green access to our customers and cargo volumes, mt carried (per annum) Dolphin38” handysize bulk carriers and had a offering a more robust cargo platform to number of chartered-in vessels. In 2017, Swire expand the Swire Bulk fleet. Bulk traded an average of 90 vessels. Customer development 2.8 million In 2017, there was greater diversification Divisional update: Swire Bulk across both customer accounts and types of dwt / fleet capacity commodity. Logs remain a core component of Vessels / Fleet the Swire Bulk business plan. However, there 2017 saw the successful completion of has also been natural growth in other markets negotiations for eight Oshima 37k DWT and new trades, on the back of the expanded 7 vessels and two Hakodate 34k DWT vessels. global footprint across 2017. global offices

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 13

Swire Bulk Logistics accordingly by increasing the production by 6.2% to 434 million tonnes, although Swire Bulk Logistics at a glance Swire Bulk Logistics is the industrial shipping these increases have not yet translated to division of CNCo. Deploying purpose-built a significant increase in freight rates due to vessels, Swire Bulk Logistics specialises in excess logistics capacity in the market. the handling of dry bulk materials at sea, 3 through floating transhipment vessels, and Amidst these conditions, MBSS, in which intermediate supply chain solutions to provide CNCo has a 25.68% stake, continued to specialised self unloading operations value-added services for our customers in implement various initiatives to improve the Asia-Pacific region. Working together with its safety and operational excellence, Swire Bulk and Swire Shipping, the division implementing cost efficiency and streamlining offers horizontally-integrated services and its organisational and business processes to a global network to provide innovative and increase productivity. 1,100 sustainable marine supply chain solutions for vessels unloaded our customers through long-term partnerships. In MBSS, safety continues to be the top priority and an on-going journey. MBSS Swire Bulk Logistics owns and operates a incident statistics have showed a remarkable purpose-built cement carrier, MV Aotearoa improvement. Thanks to the ‘boots on deck’ Chief, in Auckland, New Zealand, in a long-term on-board safety training for the crew, the 5,000 partnership between CNCo and Golden Bay number of incidents reduced by 10% year-on- Cement, a division of Fletcher Building Limited. year (y-o-y) while the Total Recordable Incident river vessels unloaded rate decreased by 24% y-o-y to 2.62%. MBSS Divisional update: Swire Bulk Logistics places strong emphasis on protecting the environment and MBSS’s bespoke, on-board MV Aotearoa Chief, the first cement carrier training programmes reinforce this message. in CNCo’s fleet, on charter to Golden Bay 10,000 Cement from December 2016, successfully Commercially, MBSS acquired several new more than 10,000 days on hire completed her first year of operation in New clients on long-term contracts towards the Zealand in 2017. The vessel has a carrying latter part of the year and also renegotiated capacity of 9,000 tonnes, the equivalent of some contracts from spot charter to time over 350 road tankers being taken off the charter basis. Several assets were deployed roads on each voyage and incorporates to assist a leading global company on salvage 35 million the latest technology in electronic engine projects; and parlayed MBSS’s technical management, providing optimum fuel asset management capabilities into asset mt handled since inception efficiency and low emissions. management services for one of the clients, both of which delivered new revenue streams In Indonesia, the raising of coal prices led to for the Company. Photo credit: Martin Budz Indonesian coal producers responding

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 14

Organisational Governance While CNCo has no direct public shareholders, There are two women on CNCo’s ExCom CNCo management regularly review the it manages and operates all its businesses representing different nationalities. CNCo operating practices and the Enterprise Risk CNCo strongly believes that it is imperative in compliance with both the John Swire and is trying to attract more women into Management framework that ensures: to act with probity, transparency and Sons (UK)’s, and CNCo’s Corporate Code management positions and is addressing it accountability in order to achieve our long- of Conduct. We also have in place policies, through Leadership Development training and • satisfactory and sustainable returns to its term objectives. guidelines and procedures that comprise our succession planning (see Our People section parent company; organisational governance suite. All policies of this report). • the interests of stakeholders are The parent company’s Board of Directors is are regularly reviewed by the CNCo Executive safeguarded; the highest-level governance and oversight Committee (ExCom) and updated as required. The interests of internal and external • overall short and long-term business risk is body and sets the strategy for its subsidiary stakeholders relating to SD are fed back to understood and managed appropriately; companies. The Chairman of the Parent The General Manager for Sustainable the ExCom by the GM SD following both • the delivery of high-quality services; and Company Board of Directors is Mr. B. N. Swire. Development (GM SD) reports directly to the stakeholder engagement and surveys / • the highest standards of ethics are The CNCo Board of Directors at 31 December Managing Director and is a member of the feedback. The “interests” includes both risks maintained by our employees in all dealings. 2017 comprised nine members, of whom four ExCom, allowing him to provide SD input at and opportunities, and how we manage our were Independent Executive Directors. a strategic level, and at an early stage of any economic, environmental and social impacts. new project deliberation and planning. The shareholders are directly represented on CNCo’s SD Report is reviewed by the Managing the CNCo Board of Directors and use this The composition of CNCo’s ExCom is shown Director prior to publication to ensure accuracy platform to provide governance direction. in the organogram below. and inclusion of all material issues.

arnaby Sire JS&S Chairman

ames ooro Managing Director

Commerial Finance Director Fleet Director Global Head of GM - Business GM - Sustainable GM - Swire Bulk GM - Swire Bulk GM - Swire IT Director Director Human Resources Excellence Development Logistics Shipping

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 15

The Designated Person Ashore (DPA) has been CNCo has a Corporate Philanthropic (CP) an internationally legally required position Committee which meets on an ad hoc since 1993, peculiar to the shipping industry basis and reviews / approves requests for under the International Maritime Organisation community investment or CP sponsorships. At (IMO) International Ship Management Code, the operational level, there are Sustainability which provides an international standard for Working groups, comprising cross-functional the safe management and operation of ships representatives who meet quarterly in Singapore and for pollution prevention. and in the main regional offices of Auckland, Sydney, Port Moresby and Suva. They seek to The DPA role was instituted in the marine embed sustainability into our office operations. industry to ensure that one named person has direct access to the highest level of CNCo’s Welfare Committee has oversight of management. This legal responsibility and the social / welfare strategy areas. It plays an authority of the DPA includes monitoring the important role in creating a more cohesive safety and pollution prevention aspects of organisation where the employees are the operation of each ship and ensuring that engaged and satisfied, making CNCo their adequate resources and shore-based support Employer of Choice. are applied. We have in place a formal “Whistleblowing” CNCo is also a part of the various thematic procedure through which concerns on working groups at the Swire group level and potential governance, social or environmental is a part of the Swire group Sustainability issues can be fed back quickly, and Committee responsible for setting targets and anonymously if required, to a senior member of sharing best practices among the private and the management team. Reporting of material public companies of the Swire group. concerns is formally tracked and addressed.

The DPA role was instituted in the marine industry to ensure that one named person has direct access to the highest level of management.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 16

Anti-corruption, anti-trust and • Preventing Harassment in the Global key stakeholders, including governments the root causes of corruption in the maritime monopoly practices Workplace and international organisations, to identify industry. More information about MACN can and mitigate not only the symptoms, but also be found at www.maritime-acn.org The Company has zero tolerance towards In early 2018 we have added two more corruption and anti-competitive behaviour. compliance training modules for specific CNCo's Corporate Code of Conduct (CoC) employees / functions: is a comprehensive governance document Zero tolerance transits that defines how employees must behave in • European Union General Data Protection the course of their duties. Our anti-corruption Regulation (GDPR) One of the challenges that CNCo, like many other shipping companies globally, faces is the and anti-trust governance processes are also • UK Modern Slavery Act (Based on UK Act, expectation in some ports and canals for “benefits” for the processing of work that should be covered within this Code. but applicable to all our businesses globally) undertaken as a matter of course. CNCo has Zero tolerance towards corruption and has been a member of the Maritime Anti-Corruption Network (MACN) since 2015 to contribute towards the The CoC, together with internal controls, sets This training is held biennially and is part of the maritime industry’s vision and aim of being free of corruption. CNCo has been working hard for a strong foundation to prevent any corruption induction programme for new employees. over two years now to support our senior seafarers and to eliminate demands for “facilitation and anti-competitive / anti-trust behaviours. payments” completely and is now seeing material success. The Company carries out training for all Like many other shipping companies globally, employees within the CNCo group, testing their one of the challenges that CNCo faces is the Incident data from MACN’s incident reporting mechanism also showed that demands in the Suez understanding of those principles and how they expectation in some ports for “benefits” for the Canal can be accompanied by threats of retaliation to the Captain and ship if cigarettes are not apply to the daily work / duties. processing of work that should be undertaken provided to the authorities. Refusal of pilots to cooperate has led to heavy delays, making timely as a matter of course. CNCo has been working passage difficult. MACN launched a “Say No” campaign for the Suez Canal on International Anti- Any and all incidents of potential or actual non- hard for over four years now to eliminate these Corruption Day 2015. compliance are reported to the CNCo Audit payment demands for “facilitation payments” Committee and investigated. In 2017, as in the completely and is continuing to see material previous years, CNCo was not involved in any success with the average cost per ship in 2017 The impact of the campaign legal actions for anti-competitive behaviour, being half of what it was in 2016. resulted in: Less Frequent anti-trust, or monopolistic practices. Demands, Improved Operating Facilitation payments risk is covered under Environment (duress and In 2016 we adopted a stand-alone Anti-Trust CNCo’s Business Unit Risk Register. All ships threats on-board), companies Policy and launched an on-line anti-trust training are required to report all such requests and with few transits are successful for relevant employees to support compliance such reports are reviewed at the quarterly in saying “No”. with this. We now have a governance CNCo Risk Review Committee and by the compliance training programme which includes: internal and external Audit Committees.

• CNCo's Corporate Code Of Conduct CNCo has been a member of the Maritime • Global Anti-Bribery Act (Based on UK Act, Anti-Corruption Network (MACN) since 2015 but applicable to all our businesses globally) and continues to contribute towards the • Global Anti-Trust (Based on UK Act, but maritime industry’s vision and aim of being applicable to all our businesses globally) free of corruption. MACN works closely with

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 17

Child / Forced & Compulsory Labour / ensure that pre-employment screening is Modern Day Slavery Act conducted prior to the offer of employment. Our Supply Chain Sustainability Code of As a business with a history and an ethical Conduct spells out all principles to which we framework of good employment practice, require our suppliers to adhere covering, inter CNCo is committed to providing good working alia, forbidding forced and child labour. conditions for its employees, according to universal international standards, and to CNCo’s CoC covers employment “not protecting their safety and health. permitting any breaches of employment law or the use of children (under 16 years of age) We recognise that modern slavery (which or forced labour”. While the Code states the includes child / forced and compulsory labour) minimum age of a child as being 16 years of as an issue that has become increasingly age, we ensure that we are aligned with that visible and we must take seriously all moral in the UNICEF / UNESCO Convention on the and legal duties in this regard. Rights of the Child (1989), and do not employ anyone of “less than 18 years of age”. CNCo’s Corporate Code of Conduct (CoC) requires the entire CNCo group of companies The sole exception to this would be that, to comply with all applicable local, national and in accordance with International Labour international laws and regulations in each of Organisation (ILO) Convention 138 (Minimum the countries / jurisdictions in which it operates Age Convention, 1973) Article 6, we and with all CNCo’s company policies. That exclude from our definition of “labour” and requirement includes ensuring that CNCo (and “employment” any applicability to a person its suppliers) do not engage forced / child / between the ages of 16 and 18, who is bonded or prison labour, or apply unjustifiable undergoing “a formal course of education or disciplinary measures to our employees. programme training being undertaken by young persons in schools for general, vocational The CoC is supplemented by our Global or technical education or in other training Human Resources (HR) procedures which institutions”.

The CNCo group will not tolerate the practice of modern slavery in any form and is committed to continue to work with all of its stakeholders and relevant regulators to combat this issue, wherever it may become aware of it.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 18

As part of our compliance with the UK Modern We have put measures in place to defend Day Slavery Act (MSA) (2015), we carried out a our Company from potential cyberattacks. number of self-assessments for our higher risk CNCo has policies and procedures governing suppliers in 2017. These assessments gave cybersecurity practices and all CNCo us an insight into the state of supplier maturity employees are required to observe these. against modern slavery areas and allowed us to propose improvements to strengthen their We have a dedicated team of professionals governance systems. managing cybersecurity risks and prioritising our approach to risk management by focusing on: No serious non-conformities were recorded. These will be supplemented by physical audits • Our people, in 2018 as required. • Our processes, and • The technologies we employ. We undergo annual internal audit against our modern slavery initiatives and commitments Humans are often the primary target and made under our MSA statement. For more the weakest link in the security chain for information on MSA related actions taken and potential cyber breaches, as phishing e-mails planned for 2018 please see our Statement on are widespread. Our strategy focuses on Modern Slavery and Human Trafficking (2017) cybersecurity education and building awareness on our website: https://bit.ly/2xATebz among our people at sea and ashore.

The CNCo group will not tolerate the We hold regular training sessions covering practice of modern slavery in any form and is existing and emerging threats: educating committed to continue to work with all of its our employees on ways to identify potential stakeholders and relevant regulators to combat cyber threats, staying safe on-line, as well as this issue, wherever it may become aware of it. emphasising reporting of any suspicious articles.

Cybersecurity Our training involves performing periodic cybersecurity assessments / phishing e-mail At CNCo, we recognise the importance of ensuring At CNCo, we recognise the importance simulation tests to identify weaknesses and of ensuring the highest standards of addressing them through further strengthening the highest standards of cybersecurity for our systems, cybersecurity for our systems, network and our procedures. data. There has been an increase in cases of network and data. cyberattacks both globally and specifically in We also focus on our network infrastructure the marine sector, with ransomware attacks which is designed to reduce and contain the and email scams for fraudulent transactions risk of a malware outbreak. now being a common occurrence.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 19

Sustainable Development Strategy The six key environmental issues of the The China Navigation Company has been in business since 1872. SwireTHRIVE strategy are material to all Our strategy is fully aligned with the Swire divisions across the Swire group and all of Our business has stood the test of time because we have always looked ahead and made group’s environmental strategy, “SwireTHRIVE”, its operating companies. In addition to those decisions based on long-term sustainability. which aims to mitigate operational risks and six focus areas of SwireTHRIVE, CNCo’s build long-term resilience by driving higher strategy covers other areas which are material We don’t see our business as separate from the world. We depend on it and wish to help shape it standards, greater efficiency and increased to our Company. We have aligned these positively. innovation in key areas. CNCoTHRIVE issues under these three pillars: So when we build businesses, we seek to build communities. When we employ people, we help The aim of SwireTHRIVE is to consider our • Thriving People, them to fulfil their potential. When we use resources, we seek to protect the environments that potential impact on the environment while • Thriving Environment, and provide them. continuing to prosper in the long term. • Thriving Communities. SwireTHRIVE focuses on environmental The world in which we operate is facing some of the most pressing social and environmental sustainability because the success of people, These commitments are detailed in CNCo’s challenges of our time. We are committed to being part of the solution. communities and Swire itself depends on a Sustainable Development strategy (introduced thriving natural environment. The key issue in 2016 - see page 73). All our current and areas of SwireTHRIVE are Carbon, Waste, future sustainability initiatives are aligned with Because when we help the world in which we Water, Sustainable Materials, Biodiversity and these three pillars. Climate Resilience. operate to thrive, so do we.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 20

Sustainable Development Goals

Our SD strategy is aligned with the relevant United Nation’s (UN) Sustainable Development Goals (SDGs) that we consider most important to its stakeholders. We have also aligned CNCo’s material issues to demonstrate the linkages between them. We aim to track how our organisational goals and actions contribute to achieving the wider sustainability agenda.

The UN explicitly acknowledged in the past that the achievement of the Millennium Development Goals (MDGs) was simply not possible without the involvement of the private sector, and thus the MDGs evolved into the SDGs. We started tracking our progress towards achieving the relevant SDGs in 2017. Our progress in 2017 is included on page 75 (SDGs and CNCo Thrive strategy with progress).

Our SD strategy is aligned with the relevant United Nation’s (UN) Sustainable Development Goals (SDGs) that we consider most important to its stakeholders.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 21

Supply chain and Procurement In 2015, we launched the SAP Enterprise Key projects commenced to create business To promote the best procurement practices, we management Resources Planning system, which established opportunities were: IT procurement process learn about the latest industrial developments the critical foundation of procurement “procure- standardisation, HR and corporate travel by participating in professional networks. CNCo has grown and expanded since 2012 to-pay” process and supplier database. services procurement programme, supplier CNCo's Group Procurement Manager has been and now operates over 120 vessels worldwide. Subsequently, the Procurement department on-boarding project, centralised contract a Council member of the International Marine In 2014, a Central Procurement Department collaborated with Swire Shipping and Swire management system and vendor consolidation. Purchasing Association (IMPA) since 2014, was set up to standardise procurement policies Bulk divisions to launch a bunker procurement In light of the upcoming bunker regulations and and was also appointed as Honorary Member and procedures across the group and to drive transformation programme in 2016. Bunker the need to manage marine fuel environment of Singapore Association of Ship Suppliers continuous business improvement. fuel was the first procurement category to be holistically, CNCo introduced a robust bunker & Services (SASS). She is also an Associate centralised in our headquarters in Singapore. procurement end-to-end supply chain process of the Chartered Institute of Procurement The department’s mission is to provide and enhanced our data analytics capability. and Supply (CIPS), a globally-recognised value-added services to derive savings and The programme covered deployment of procurement organisation. The first pilot minimise risks. At the beginning of 2018, supplier performance platform, establishing a CNCo works with thousands of diverse professional procurement training course will the Procurement Department positioned formal supplier relationship scheme, as well suppliers globally, with the majority located be launched in 2018, with eight high-potential themselves as the Group Procurement office as bunkering and supplier audit programme. in Australia, China, New Zealand, Papua New employees embarking on a 12-month CIPS to gain leverage, improve global standards for It helped to achieve tangible savings year-on- Guinea and Singapore. Together with our key diploma programme. This globally recognised efficiency, build up competitive advantage and year and set strict governance system in our internal stakeholders, Group Procurement qualification will strengthen CNCo’s quality in mitigate supply chain risks. global fuel supply chain. aims to build stronger partnership with services delivery. suppliers and ensure that they adhere to the same environmental, social and governance CNCo Supplier Code of Conduct can be found standards as CNCo. on our website: https://bit.ly/2Dszr3y

CNCo has grown and expanded since 2012 and now operates over 120 vessels worldwide.

Left: Group Procurement and Ship management visited our own vessel MV Shansi for lubricant oil services delivery and stock location review.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 22

Awards

The Most Impactful SD Project and The Best Sustainable Development Project

The Sustainable Ship Recycling Project, Swire group Sustainable Development Forum (2017)

CNCo’s sustainable ship recycling efforts win Swire awards

CNCo and Swire Pacific Offshore (SPO) were big winners at the annual Swire Sustainable Development (SD) Forum held in Hong Kong in November. Our sustainable ship recycling efforts beat all the sustainability projects within the Swire group to clinch both the Best and the Most Impactful SD awards. For more information please see page 58.

L to R: Carmen Chan, management trainee (MT); Chloe Chua, MT; Simon Bennett, GM Sustainable Development (SD); Lydia Pavlova, Manager SD and Kent Heng, MT.

CNCo and Swire Pacific Offshore (SPO) were big winners at the annual Swire Sustainable Development (SD) Forum held in Hong Kong in November.

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 23

Stakeholder Engagement and Materiality We conducted an extensive stakeholder Future (a not-for-profit organisation which works stakeholders and to CNCo. We have identified engagement exercise in 2016. As a result, we globally with businesses to address sustainability 13 high priority topics (top quadrant) and this We conduct materiality assessments have identified and ranked the importance challenges) and CNCo’s senior leaders. report has been written to address material regularly as a follow-up on the Sustainable that our stakeholders give to the various areas as per GRI requirements. Development presentations for shore-based components that make an organisation Material topics also covered those identified and seagoing employees. Our stakeholder “Socially Responsible”. through an independent scan for issues of consultation programme for seagoing concern to CNCo’s current business and peer employees covers office visits, officers and Surveys were conducted by reaching out to group views to ensure we covered a broader crews’ fora and training programmes during 105 external stakeholders, 235 CNCo shore- view on what is important to our business. the Safety Awareness Courses in Singapore. based employees and 81 seagoing employees to understand what is important to them. For The process considered material issues For shore-based employees it is undertaken more information on the survey structure itself, affecting our Value Chain which is our Build / during the induction programmes and other please see our 2016 SD report (pages 3-5). Operate / Transfer (BOT) framework. This can events (presentations at international and be found on page 71. Singapore-based conferences and events), peer Following the surveys, we developed a Material group discussions as well as formal surveys Issues matrix (see page 72) in consultation The materiality matrix shows the relative (see below) and informal ad hoc feedback. with our sustainability partner: Forum for the importance of issues we identified to external

The materiality matrix shows Materiality Assessment Process the relative importance of issues we identified to external stakeholders and to CNCo. Prioritise Prioritise Independent Peer group Internal Materiality External Internal scan for review to Materiality Matrix stakeholders’ stakeholders’ issues of identify issues Workshop approved by expectations expectations concern to of importance CNCo’s senior CNCo to our peers leaders

The China Navigation Company / Sustainable Development Report 2017 Organisational Profile & Governance 24

Strategic Scorecard Future. Progress reports and measurements are tracked monthly throughout each year to Our strategic scorecard is aligned with a number ensure we remain on track to meet the longer- of areas of importance to our stakeholders term nature of the strategic goals. and provides direction and sets specific Key Performance Indicators (KPIs). At the end of 2017, we were on track against the majority of the goals. We also updated a Our Strategic Scorecard is reviewed each number of KPIs across set strategic objectives year by CNCo’s senior leaders, facilitated to ensure that they remained relevant to our through our partnership with Forum for the evolving businesses and operations.

OPERATIONAL WINNING TEAM INNOVATIVEWINNING CUSTOMER REWARDING ve s Develop an industry leading workforce SOLUTIONS PARTNERSHIPS EXCELLENCE and provide rewarding careers as an employer of choice RELATIONSHIPS Provide value enhancing Establish and enhance long-term, mutually beneficial Promotee innovation, operational excellence and provide safe, healthy solutionsEnhance for our customersrelationships and provide competitive, and secure work environments professional and innovative solutions torelationships our with our stakeholders

Obj ect i customers s l CAUSE ZERO HARM ACHIEVE NET ZERO EMBED “SEA CHANGE” TO EMPLOY THE RIGHT PEOPLE, SECURE A FULLY ALIGNED DELIVER MARKET LEADING ENGAGE IN STRATEGIC FOSTER SUSTAINABLE ENVIRONMENTAL IMPACT OPTIMISE PERFORMANCE ACROSS ALL IN THE RIGHT JOB, IN THE RIGHT AND ENGAGED WORKFORCE SERVICES ACROSS PARTNERSHIPS WITH OUR KEY PARTNERSHIPS IN THE KEY BUSINESS UNITS PLACE, AT THE RIGHT TIME COMMODITY SECTORS CUSTOMERS AND SUPPLIERS COMMUNITIES IN WHICH WE Go a ACROSS ALL BUSINESS UNITS OPERATE

2030

EEDI COMPLIANCE INDEX AT ≤ 80% ACHIEVE GOLD STANDARD FOR PROCESS ACHIEVE ANNUAL STAFF RETENTION ALL BUSINESS UNITS ARE IN THE TOP DESIGN 5 COMMODITY- SPECIFIC KEY CUSTOMERS TO OPERATE DEMONSTRATE THAT ALL RELEVANT LTIFR AT ZERO FOR ALL RELEVANT LINER AND BULK EXCELLENCE ACROSS OF ≥ 95% QUARTER OF A&E. AS MEASURED NEW CARGO-HANDLING SOLUTIONS ACROSS 2 BUSINESS UNITS COMMUNITY PROJECTS ARE DELIVERING SHIPPING VSLS ON DELIVERY TO CNCo ALL BUSINESS UNITS BY BIENNIAL STAFF SURVEY POSITIVE, AND INCREASING, SROI

ZERO HARM DELIVER THE ANNUAL DEVELOP 1 MARKET-LEADING KEY CUSTOMERS RATE CNCo AS EXISTING VESSEL DESIGN EFFICIENCY ALL STAFF PARTICIPATE DEVELOP 3 HUBS TO PROMOTE TRAINING PLANS AND ENSURE LOW COST SHIPPING SOLUTION THEIR PARTNER OF CHOICE SUPPORT DEVELOPMENT OF TO BE ≥ 50% BETTER THAN BASELINE FORTRESS PACIFIC ALL STAFF ACTIVELY PARTICIPATE IN THE REWARD AND RECOGNITION PROGRESSIVE LEGISLATION AIMED ON DELIVERY TO CNCo (WEST, CENTRAL, EAST) IN THE CNCo LEARNING AND Our StrategicPLATFORM Scorecard is reviewed each yearAT SIGNIFICANTLY IMPROVING ZERO SPILLS OF MARINE SUSTAINABILITY DEVELOPMENT PROGRAMME DEVELOP 5 SERVICES WHICH DEVELOP 2 VALUE-ADDED SERVICES POLLUTANTS WITH ALL KEY CUSTOMERS CHANGE THE WAY CUSTOMERS DO FLEET OPERATING EFFICIENCY

PI s BUSINESS/OPERATE MORE IMPLEMENT AN TO BE ≥ 50% ALL STAFF ALIGNED TO SUSTAINABLY IAW THE OPPORTUNITY K by CNCo’s senior leaders, facilitated through our INTEGRATED IT STRATEGY BETTER THAN BASELINE REGISTER ESTABLISH THREE "SWIRE SPORT" ACROSS ALL BUSINESS UNITS TECHNICAL AND MANAGEMENT ESTABLISH 3 SUSTAINABLE COMPETENCY FRAMEWORK AGRI-CARGO PROJECTS TO DELIVER PROGRAMME IN OUR PACIFIC ISLAND SOCIO-ECONOMIC VALUE IN OUR KEY COMMUNITIES partnership with Forum for the Future.COMMUNITIES 2020 IMPLEMENT 3 PILOT TECH. OR OPS. IMPLEMENT NETWORK PROMOTE CADETSHIPS FROM INNOVATIONS THAT CAN DEMONSTRATE A OPTIMISATION TOOL TO DELIVER THE PACIFIC ISLANDS TO MEET 25% 50% REDUCTION IN AN ATMOSPHERIC ENVR. REDUCTION IN COST BASE BY 5% OF SWIRE SHIPPING’S ANNUAL IMPACT OF THE LINER, BULK (AGAINST 2016 BASE LINE) REQUIREMENT AND BULK LOGISTICS FLEETS

The China Navigation Company / Sustainable Development Report 2017 Safety 25

Safety is our top priority in CNCo. We continuously CNCo has a Health and Safety Policy in strengthen the Company’s safety culture that place which states our commitment to Zero we embarked on in the latter part of 2016 had strive to provide a safe and healthy working environment Harm to all personnel and at all our business a noticeable effect resulting in a year with / operations sites ashore and at sea. We are zero fatalities and a reduced 10 LTIs. Very and to cultivate a safe mindset for both our employees committed to ensuring that Occupational importantly, the majority of those 10 LTIs were and contractors alike. By having a strong safety focus Health and Safety (OH&S) considerations are of a less severe nature than in the previous year. an integral part of our decision-making process together with robust reporting and learning culture we and culture. CNCo’s philosophy is never to Even with all the initiatives implemented during allow business objectives to compromise the the latter part of 2016 and the first half of 2017, make safety everyone’s priority. Our goal is to build an health and safety of its employees, customers, it was decided to undertake a Safety Maturity industry leading safety culture. visitors, contractors and the wider community. Assessment by a third-party consultancy We take responsibility for safety at sea, at port firm, Green-Jakobsen, a consultancy highly and in our offices. This Policy is available on all experienced in safety, leadership and human our vessels and offices globally and is updated resource management in the maritime industry. periodically. In 2017, CNCo conducted a Global Safety Culture Assessment to help improve our safety 2017 saw a significant improvement in programmes and to advance the progress CNCo’s safety records. The strong push to towards the Company's goal of a Zero Harm culture.

CNCo conducted a Global Safety Culture Assessment to help improve our safety programmes and to advance the progress towards the Company's goal of a Zero Harm culture.

The China Navigation Company / Sustainable Development Report 2017 Safety Excellence - Fleet 26

>2,000 Seafarers 96,000 TRIP Risk Assessments conducted annually. 350 Fleet Risk Assessments available aboard each vessel database. 37 Enhanced Safety Awareness Courses conducted. (3 per month) 560 Seafarers trained in CNCo's Safety & Risk Awareness programme annually. 10 Safety culture elements assessed externally.

The China Navigation Company / Sustainable Development Report 2017 Safety 27

CNCo’s strong safety culture makes me feel at ease The assessment covered ten safety culture safety were inconsistent. Safety initiatives were areas, namely: generally based on reactive learning from actual I joined CNCo as an engine cadet for many reasons, in particular, for the priority given to safety incidents and industry findings or pushed by in this company. Since this is my first time on board a ship, all the uneasiness I would have had 1. Executive Commitment customers. Safety initiatives were mostly driven just disappeared. The safety culture on board and the way the ship’s personnel function regardless 2. Health and Wellbeing by a few persons in the organisation. of nationality or race make me feel most welcome. In the three months on board, I feel like a part 3. Risk Management of the crew and not just another worker / trainee. 4. Safety Leadership CNCo’s maturity level had significant variations. 5. Competence and Performance Management Two areas stood out positively: “Executive The seniors always listen to my ideas and give me feedback on what they think is missing and 6. Training Programmes Commitment” and “Training Programmes”, guide me. The seniors on board have shown me that the main goal of this job is get work done 7. Safety Communication whereas four areas were slightly below with Zero incident and are strict about the safety procedure one follows when doing a job, for 8. Safety Reporting the industry average: “Safety Leadership”, example PPE details such as which gloves are most suitable for the task at hand. 9. Safety Management Systems “Competence and Performance Management”, 10. Officers’ and Managers’ Commitment “Safety Reporting”, and “Officers’ and All these have enabled me to have a very pleasant learning experience on how to work safely and Managers’ Commitment”. efficiently and I hope to keep learning. The result of the assessment was announced in December 2017 and revealed that the overall These findings will be used in safety culture by Samitha De Silva, engine cadet, MV Kweilin safety maturity level of the Company was at the programmes in CNCo’s on-going efforts to level where all necessary safety management improve our safety performance with particular systems were in place and there was a emphasis on the areas where we were found general understanding of how to ensure safety lacking compared to industry peers. Our goal is performance. However, the efforts towards for CNCo to become an industry leader in safety.

Global Safety Culture Assessment findings will be used in safety culture programmes in CNCo’s on-going efforts to improve our safety performance with particular emphasis on the areas where we were found lacking compared to industry peers.

The China Navigation Company / Sustainable Development Report 2017 Safety 28

Among other safety initiatives taken during A senior officers’ attachment programme was MV Szechuen holds Zero Harm day 2017, the recruitment and promotions also introduced to ensure that all newly-hired procedures for cadets and officers were further Masters and Chief Engineers, as well as in- Just as CNCo offices organise regular crisis simulation exercises to test our emergency strengthened with the introduction of a Safety house officers promoted to these ranks, spend preparedness, it is equally important that our crew are well-versed to handle any emergencies on Recruitment Assessment Tool. All new hire two full weeks in the head office in Singapore board the vessels. cadets and officers, plus all in-house candidates familiarising themselves with office procedures, for promotion to senior officer ranks, must take departmental structure and getting acquainted On 16 September 2017, the crew and officers ofMV Szechuen actively participated in a Zero and pass an on-line safety assessment. The with the office employees with whom they will Harm day. The day started at 8 in the morning with everyone going through the latest safety assessments gauge the candidates’ safety have to interact once they join a ship. videos followed by several discussions conducted by the Chief Officer and nd2 Engineer. Hands- profiles and this tool proved to be accurate, on training and drills were conducted after the desktop discussion. The crew started with a fire providing the crewing department with important drill at the incinerator room followed by an abandon ship drill in the afternoon. information during the interview for recruitment and / or promotion.

All new hire cadets and officers, plus all in-house candidates for promotion to senior officer ranks, must take and pass an on-line safety assessment.

The China Navigation Company / Sustainable Development Report 2017 Safety 29

Port safety inspections Swire Shipping – onshore H&S performance • Leading the way in Zero Harm projects: Enhancing the Safety Culture; and Safety CNCo’s Zero Harm goal applies to all our employees and stakeholders alike. In early April, Swire • In 2017 the Swire Shipping shore-side Measurements and Benchmarking. Shipping’s Operations and Logistics team visited our stevedores in Papua New Guinea’s Port Safety Sub-Committee developed a simple Moresby and Lae ports to carry out safety inspections. During the visit, the team engaged reporting process to encourage ships’ • While Near Miss reporting has declined, in productive discussions with the stevedoring companies on ways to enhance performance Masters to report on contractor’s safety we will continue to encourage all on-board standards and to improve the safety of the stevedores. It is encouraging to see our operations team attitude and compliance with the use of personnel, stevedores and other stakeholders working proactively with our vendors to drive higher safety standards. Protective Personal Equipment (PPE) after to look for and promulgate these important each port call. Following this introduction, lead indicator reports as part of our vessels have a reporting compliance with preventative incident avoidance strategy. PPE and safety standards consistently recorded at 100% versus a target of 95% on • We have changed the way we accept a rolling 6 month and year-to-date basis. Dangerous Cargo, by centralising the Dangerous Cargo approval process to ensure • All serious Near Miss incidents are that IMO-class cargo is vetted throughout the investigated and the findings jointly reviewed enquiry, booking and shipping process. between Swire Shipping and the service provider, then widely promulgated via a “4- • Continually measure, analyse, report and box” report. In 2017 we recorded a total of 59 action safety behaviour reports from vessels, Near Miss reports submitted by our vessels agents and other stakeholders to identify and shore-side operators. gaps in safety awareness and behaviour and to engage with port service providers, Looking forward, we will focus on the following: particularly in some ports in Asia and the Pacific Islands. • The Swire Shipping Operations team is to participate actively in CNCo’s safety culture • Introducing health and safety clauses to all project. new vendor contracts to ensure our partners follow CNCo’s safety philosophy.

Vessels have a reporting compliance with PPE and safety standards consistently recorded at 100% versus a target of 95% on a rolling 6 month and year-to-date basis.

The China Navigation Company / Sustainable Development Report 2017 Safety 30

Swire Bulk fleet H&S performance • All vessel operators will visit at least one CNCo Fleet Safety Statistics ship each annually to deliver CNCo’s safety • The Swire Link auto-messaging system has message and personally impress our safety been upgraded by adding the stevedore priority concern to the Master and crew. safety standards reporting to the departure message. This ensures that the reports are • A dry bulk informal forum has been started received from all port calls by all vessels. by engaging eight large shipping companies based in Singapore with Oldendorff, Cargill, • Safety presentation and lectures will be Berge Bulk and Western Bulk among them. made on board vessels by shore teams’ Senior Operations executives meet bimonthly representatives whenever logistically to discuss dry bulk operating matters related convenient and possible to board the vessels. strictly to the non-commercial issues of safety, rule compliance and regulatory matters.

All vessel operators will visit at least one ship each annually to deliver CNCo’s safety message and personally impress our safety priority concern to the Master and crew.

The China Navigation Company / Sustainable Development Report 2017 Safety 31

Zero Harm – Stakeholder Engagement For stevedores and port workers The Heinrich / Bird safety pyramid (2017) • Monitoring stevedores’ safety performance Over the course of the year, efforts were • Frequent best practice safety sharing made to re-introduce or reinforce safety within CNCo and with stevedoring companies and For ship recycling activities Ship Recycling Facilities. Our initiatives and • Working with the management of selected achievements cover the following areas: Ship Recycling Facilities that we have or may use in Alang, India, on improving their health For seagoing employees and safety standards as well as • Cadet Training Programme environmental compliance • Mandatory Safety Awareness Course • Recycled three CNCo vessels (2016 / 17) at • Senior Officers’ Attachment Programme approved facilities in Alang under supervision • Safety Management System from a monitoring team appointed by CNCo • Safety Campaigns and videos with zero fatalities and LTIs

For shore-based employees CNCo’s senior leadership remains strongly • Office training workshops committed to improving the Company’s health • Every employee has safety SMART goals and safety performance; this topic remains the embedded in their Key Performance first item on the agenda at the monthly ExCom Indicators Meeting. The results depicting our Lost Time Injury Frequency (LTIF) indicate that we are on track in progressing our safety culture with the goal of achieving an interdependent safety culture over the coming years.

CNCo’s senior leadership remains strongly committed to improving the Company’s health and safety performance; this topic remains the first item on the agenda at the monthly ExCom Meeting.

The China Navigation Company / Sustainable Development Report 2017 Safety 32

Office Safety Standards Fire warden and emergency evacuation representatives who are trained to ensure that With our commitment to developing and employees are safely evacuated to a dedicated sustaining a work environment and culture that meeting point in the event of an emergency. supports the safety, security and welfare of our people, we have developed an aligned set of First aid representatives who are able to basic standards that are more relevant for our attend to minor first aid incidents within the onshore offices. office as and when they may occur.

Our basic office safety standards include: Incident Reporting tools to encourage employees to report any safety concerns if and Safety committees that meet on a regular when the need arises. basis to discuss a range of safety concerns and act as safety ambassadors within the We have Office Safety Committees established business when initiatives are rolled out. in all our major offices.

Clear Emergency Evacuation guidelines for The full list of CNCo Safety Statistics employees to understand and adhere to in the can be found in the data section of the report event of an emergency. on page 79.

With our commitment to developing and sustaining a work environment and culture that supports the safety, security and welfare of our people, we have developed an aligned set of basic standards that are more relevant for our onshore offices.

The China Navigation Company / Sustainable Development Report 2017 Our People 33

Our people are at the core of CNCo’s business operations. Employment information Our business strategy continues to focus on growing our global operations. CNCo’s We are committed to providing a continuous learning As at the end of 2017, the CNCo group expansive geographical footprint covers offices environment where employees are empowered to employed 3,076 people in various locations across Australia, Canada, China, Fiji, Hong around the world. Our employees come from Kong, India, Indonesia, Japan, New Zealand, reach their highest potential. We value our multinational 49 countries. Papua New Guinea, Samoa and American Samoa, New Caledonia, Taiwan, Singapore, workforce and actively promote an inclusive and diverse 999 of our employees were shore-based, while United Kingdom and United States of America. workplace with a strong focus on safety excellence. the remaining 2,077 (945 Officers and 1,132 crew members) were seafarers. Our seagoing The geographical breakdown of our office team continued to grow in line with the employees by key* (*over 5% of total global increase of the size of our fleet; it grew 26% employee count) locations: year-on-year from 2016 (note: each full-time Singapore (Head Office) – 30.5%, Papua New employee position on a ship requires more Guinea – 19.6%, Australia – 12.8%, and New than one person to fill as a proportion of crew Zealand – 12.2%, Fiji – 8.2%, China – 7.1% are on leave at any time). Our shore-based with the remaining 9.5% based in Canada, employee numbers increased by 34% in 2017 Hong Kong, India, Indonesia, Japan, New as we continued to grow our global operations Caledonia, Samoa, Taiwan, United Kingdom and established / transitioned new offices in and United States. Fiji, New Caledonia and Samoa, resulting an increase of 107 personnel.

As at the end of 2017, the CNCo group employed 3,076 people in various locations around the world. Our employees come from 49 countries.

The China Navigation Company / Sustainable Development Report 2017 Our People 34

Our seagoing employees come from 30 countries, an increase from 22 in 2016.

Estonia UK 2 Ireland 12 2 Ukraine 1 Croatia Russia Canada 2 1 1 27 Romania China Bulgaria Montenegro 1 USA Serbia 1 1 Hong Kong Myanmar 2 27 Thailand 1 Philippines El Salvador Malaysia Sri Lanka 1 Singapore 1 Papua New Guinea Indonesia 2 Solomon Islands Tuvalu Samoa 1 2 Australia Fiji Tonga 1

New Zealand 0

Total number of sea staff 2,077

The China Navigation Company / Sustainable Development Report 2017 Our People 35

97% of our shore-based workforce were employed on a full-time basis. The number of employees who were “contractors” is very low (3%) and most of them are skilled professionals working as consultants on a contract basis to assist with projects such as the implementation of new IT systems.

Note: Some seagoing employees, particularly all our Filipino seafarers, are employed, as required by the Philippine law and managed by the Philippine Oversea Employment Agency (POEA) on a contract by contract basis. We do not classify these as “contractors” as all Overseas Filipinos Workers, be they seamen, doctors, nurses, etc. are employed on this basis.

22% of our shore-based employees were in Type of employment Breakdown of management vs support roles management roles, with the remaining 78% in 3% support functions.

22%

97% of our shore-based workforce were employed on a full-time basis. 97% 78%

Full-time Management Temporary Support

The China Navigation Company / Sustainable Development Report 2017 Our People 36

94% of our office workforce were classified CNCo seafarers are covered by a collective as “local”, similar to 2016 figures. We bargaining agreement (CBA) or equivalent. All define “local” as those who are a national contractual conditions are in accordance with or permanent resident of the country the International Labour Organisation (ILO) of employment. 4% were classified as Maritime Labour Convention (MLC) 2006. “expatriates”. The number and rates of employee hires Around 43% of this expatriate employee and employee turnover can be found on pages percentage are parent company managers 84 and 85. who have a centrally-planned rotation through internal postings within the wider Swire group. Employee turnover remains a valuable indicator The rest are employed as industry experts and of the Company’s sustainability and is an on- have long-term careers with the Company going area of focus for the Company. Overall worldwide. employee retention in 2017 for shore-based employees was 85% and 93% for seagoing Globally, all our contracts comply with the employees (officers and crew). Both shore- relevant local employment laws. We continue based and seagoing employee retention rates to provide benefits that are additional to local remain consistent y-o-y. legislations such as medical insurance for shore-based employees. For all seafarers this We continue to monitor and analyse turnover include private healthcare, life insurance and rates against national average figures and in paid pension arrangements (or cash in lieu). light of changes within the business and the Type of contract industry. We conduct exit interviews and seek to 2% 4% rectify any firmly trending reasons for turnover where they are viable and within our control.

94% of our office workforce were classified as “local”, similar to 2016 figures. We define “local” as those who are a national or permanent resident of the country of employment. 94% Contract Expat Local

The China Navigation Company / Sustainable Development Report 2017 Our People 37

Diversity in the workplace / Anti- The CNCo Pte Ltd Board of Directors and remarkably low number of women at sea is a welcoming, positive, innovative and out- discrimination and anti-harassment comprises nine male members. We have two reflective of the shipping industry (excluding the performing work environment. senior female managers who sit on CNCo’s cruise sector) in general. We seek to encourage For a multinational shipping company, with Executive Committee, double the number more women to join CNCo, having, for many A diverse workforce is one whose members employees from 49 countries, having an in 2016. While it is worth noting that gender years, a gender-blind employment process are not discriminated against. Accordingly, inclusive, cohesive and supportive culture is diversity has historically always been skewed supported by the creation of a culture where we require full compliance with applicable key to our continuing sustainability. We create in the shipping sector, we recognise this as women feel safe and are supported. In addition employment and other laws and will not a welcoming, positive, innovative and high a challenge and a potential detriment. The to our clear and explicit policies on equal tolerate unlawful discrimination*, or harassment performing work environment by promoting Company, and in particular our HR‘s Learning opportunities and anti-harassment, we provide or any other breaches of applicable law. Our equal opportunities, diversity and inclusion and Development Department, continues a Confidential Reporting hotline to deal with equal opportunities practices commit us to and respect in the workplace. This is done working on strategies to better balance gender any issues. We will start supporting a female ensuring there is no unjustified discrimination through policies, Code of Conduct, induction diversity at all job levels within the Company. cadet programme in Papua New Guinea in 2018 in the recruitment, retention, skills training and programmes, forums, seminars and training. We are planning to focus more on higher aimed at attracting more women seafarers. competence development of our employees on Diversity and Inclusion in 2018 / 2019. the basis of aspects including: age, disability, In 2017, 52% of the shore-based employees We take a strong stance with regards to any ethnicity or ancestry, family responsibilities, were males and 48% were females. This split There were seven (or 0.3%) female officers form of harassment in the workplace. We have gender identity, language (while noting that has remained consistent over the past few among our seagoing employees which almost a robust system in place to address such proficiency in the English language is a legal years. doubled from four in 2016. The unacceptable situations in a timely manner. We have in place requirement of the marine industry), marital Equal Opportunities, Diversity, Inclusion and status including civil partnerships, nationality, Respect in the Workplace policy which aims political views, pregnancy, race, religious to further embed diversity and equality into all beliefs or creeds, or sexual orientation. our operations to ensure that we benefit from

*Decisions become a form of unlawful discrimination when race, creed, national origin, ethnicity, or gender cause one person to be treated differently than another. Some states have laws that also protect against discrimination on the basis of marital status or sexual orientation.

Female Male These are called protected classes. There are some established cases of “lawful discrimination”, e.g. convicted embezzlers being considered for accounting roles, unfit candidates for fire-fighters, “tall” 483 516 people as cabin crew on Dornier 328 aircraft, etc.

The China Navigation Company / Sustainable Development Report 2017 Our People 38

CNCo aims to have a workforce that as In 2017 as part of CNCo’s annual training far as practical reflects the diversity of the programme for all shore-based employees, stakeholder communities in which our business we conducted the Code of Conduct and units operate worldwide. Preventing Harassment in the Global Workplace courses. These courses set out CNCo’s values, As an Equal Opportunity employer, we ensure principles and commitment to compliance with that there is no instance of men and women applicable laws and aim to help employees with the same competence and / or experience deal with the ethical dilemmas that they may being paid differential rates for performing the encounter in their everyday work. same work. Salaries are set by the internal Compensation and Benefits Department, and are CNCo was notified of eight claimed cases in accordance with the local geographical market of discrimination or harassment in 2017 guidelines so that we can both attract and retain through our Confide Line or the DPA. All cases the best talent. were immediately investigated by Senior CNCo Management and treated with utmost Executive pay is determined after discussions confidence. Four cases resulted in immediate with external consultants, and are combined dismissal of the discriminator / harasser, with with the use of benchmarking data from the employees relieved of their duties at the similar organisations. CNCo does not provide next port of call. performance-based pay, equity or shares as Shore-based employees by gender part of its remuneration packages regardless of For the rest, matters were resolved with the seniority. parties, with a strong emphasis put on CNCo’s zero tolerance towards discrimination and Bonuses are awarded for performance on a harassment in the workplace. Complainants discretionary but equitable basis. Pensions were offered free counselling sessions. This are provided as a minimum as per statutory helps to demonstrate that we have solid systems requirements. For seagoing employees, all and processes in place to deal with any alleged 52% contractual conditions are, as a minimum, in and actual situations, leading to a culture which accordance with the ILO MLC 2006. is free of discrimination and harassment.

48% As an Equal Opportunity employer, we ensure that there is no instance of men and women with the same competence and / or experience being Male paid differential rates for performing the same work. Female

The China Navigation Company / Sustainable Development Report 2017 Our People 39

Total number of permanent employees by 1.80% 1.10% employment type and gender

Male Female

Full time / Permanent contracts 505 465 50.55% Temporary contracts 11 18

46.55%

Male Female Full time / Permanent contracts Temporary contracts

CNCo shore-based employees by age group

Under 30 y.o. 30 to 50 y.o. Over 50 y.o. Total 21.7% 59.1% 19.2%

Under 30 y.o. 30 to 50 y.o. Over 50 y.o. ExeCom Committee members 0% 64% 36%

30 to 50 y.o. Over 50 y.o. CNCo Board 20% 80%

The China Navigation Company / Sustainable Development Report 2017 Our People 40

Percentage of shore-based employees by gender and country

Australia 73 55 128 Male Canada 3 2 5 Female China 25 46 71 Male Female Total Staff Fiji 40 42 82 Hong Kong 2 11 13 India 3 2 5 Indonesia 6 Japan 2 New Caledonia 6 9 15 New Zealand 53 69 122 Papua New Guinea 118 78 196 Samoa 5 5 10 Singapore 153 152 305 Taiwan 2 8 10 United Kingdom 15 4 19 United States 10

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 280 290 300 310

Total shore-based employees

In 2017, 52% of the shore-based employees were males and 48% were females. This split has remained consistent over the past few years.

The China Navigation Company / Sustainable Development Report 2017 Our People 41

Employer of Choice Rewards & Recognition Programme

CNCo has been the Employer of Choice We believe that it is important to reward and for most of our seagoing and shore-based recognise people based on performance, employees. The average length of service has results and behaviours allowing employees decreased from 2016 figures and is 4.90 years to feel valued and appreciated at work. In for officers (from 5.76), 5.38 for crew (from 5.94) June 2017 we launched a Global Reward and 5.4 years for the shore-based employees and Recognition Programme to reward and (from 6.38). This is to be expected as we are recognise employees for extraordinary efforts. in a growth phase and our employee numbers increased by 26% for seafarers and 34% for The programme operates on two platforms: shore-based employees. formal and informal. Informal rewards can be as simple as saying “thank you” for a job well done in the form of a “Thank You” card Long service awards and an optional small token of appreciation. Formal rewards work by nominating a team CNCo recognises employees for their long or individual who has applied themselves Shore-based Seagoing service and ongoing contributions to the and achieved greatness in line with the employees employees business by presenting them with Long Service predetermined framework. Awards. In 2017, we issued 81 awards to 10 years of service 31 19 employees ashore and at sea for lengths of The framework is focused on safety, ideas 15 years 8 6 service ranging from 10 to 35 years. When for improvements (i4i), company values, 20 years 7 4 added up, the total length of service amounts achievement of strategic or business 25 years 2 2 to 1,095 years. improvement projects, or significant contribution 30 years 1 0 towards the achievement of business plans 35 years 1 0 CNCo has a number of welfare committees linked to CNCo’s strategic objectives. formed of passionate volunteers in various offices around the world. They promote team building, networking and employee bonding in a social and fun setting. A number of social Thank you for being a STAR events are held throughout the year and are an important part of the Company’s culture. The reward and recognition initiative has been successfully launched in Papua New Guinea in September 2017. A number of employees have been appreciated for going the extra mile and being great team players.

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Employee alignment and engagement Safety Awareness Courses (SACs) for senior Cooks in training survey officers and junior officers and ratings, covering 556 sea employees. In addition, six ‘safety Among the various roles on ships, one of the most important roles is that of the Chief Cook. 1,801 colleagues participated in the 2017 induction’ courses and eight ‘engine and The Chief Cook is in charge of the Galley (equivalent to our kitchen) and plays a pivotal role in CNCo Employee Alignment and Engagement electric cranes training’ courses were provided providing nutritious, varied and enjoyable food that fuels the team on-board. Survey. The survey measured eight alignment for new seafarers. and engagement factors across areas such Seven CNCo Cooks from three countries, the Philippines, Sri Lanka and PNG, attended a catering as long-term direction, senior management All of these are discretionary training courses training event held in Manila at the Oceanic Hospitality training centre from 25 to 29 September leadership and effectiveness, performance and and are not required under the SOLAS STCW 2017. The comprehensive five-day training course comprised a three-day Advanced Practical investment in people and systems. legislation. However, CNCo sees such training Training and two-day Theoretical Training (which includes the use of the on-board catering as critical to maintaining and enhancing software module). The 2017 results showed a significant the safety of our seagoing employees and improvement from the 2014 results in all areas. all stakeholders. The goal of the SACs is to To-date, 58 CNCo cooks have completed Oceanic’s Advanced & Theoretical training course. Compared with other companies who have emphasise and reinforce the Company’s safety used this survey, CNCo is in the top quartile of culture and to promote Zero Harm. The SAC both alignment (69%) and engagement (76%). emphasises practical safety management CNCo scored the highest in the areas of skills, explores the benefits of leading safety engagement, team leadership and long-term indicators and looks at accident root cause direction. analysis, proactively recognising hazards and understanding safety control, mitigation and recovery measures. Performance management, training and development The total cost of the discretionary training in 2017 was around USD 3.2 million which Seagoing employees is double that of the 2016 spend and was a CNCo puts significant emphasis on safety very significant investment given the current training for our seafarers. In 2017, we ran 59 shipping market conditions.

The 2017 Employee Alignment and Engagement Survey results showed a significant improvement from the 2014 results in all areas, with CNCo being in the top quartile of both alignment (69%) and engagement (76%).

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Our Cadetship Programme is on-going with We continue to run the ”GOALS” programme the recruitment of cadets from China, Hong and “Greenbelt” programme which equip Kong and the South Pacific Islands. As a individuals with more advanced skills and sustainability objective, CNCo has committed training such as Lean Six Sigma methodology to recruit 25% of our required cadet intake from in the area of business improvement and our key and core stakeholder communities in excellence. This training is on-going. the South Pacific Islands by the end of 2020. We are on target to achieve this in three years’ We also continued to run Leadership time with the present rate being 15% and Development Programmes in Singapore trending upwards. for Team and Operational Leaders. These programmes seek to equip leaders and In 2017, 1,460 CNCo seagoing employees managers with the requisite leadership received 138,896 hours of training, or an competencies and skills so that they can lead average of 66.87 training hours per seafarer their teams more effectively. CNCo employees (from 14.23 in 2016). were encouraged to access the extensive selection of on-line learning resources through All CNCo seafarers received a performance SwireConnect to learn new skills and acquire evaluation review conducted by the Master new knowledge at their own convenience. or Chief Engineer at least twice a year. The appraisal looks at personal characteristics, Performance management for office employees Leadership training continues in 2017 team work, aptitude and leadership qualities is done using the SMART Goals on-line system. among other specific skills sets. The process Performance assessments include a review As part of their career development CNCo organises leadership training courses (Team Leader is intended to highlight areas for improvement of SMART goals, performance against Swire Development Programme and Operational Leader Development Programme). The development and training opportunities, and identify values and job competencies. of our employees remains a key element in CNCo’s People Journey (right people, right place, individual’s strengths for a robust recognition everyone engaged). and promotion programme. Driving performance and developing potential framework Shore-based employees CNCo continues to invest in learning and Robust performance and development development. Across the group, shore-based processes are critical in ensuring a good level As a sustainability objective, CNCo has committed to employees received 2,996 hours of training, of understanding on how employees can with an average of three training hours per contribute to the overall business objectives, recruit 25% of our required cadet intake from our key and employee. While this was a decrease from prior how they can reach their full potential and have core stakeholder communities in the South Pacific Islands years, the overall cost of training for shore- a long and rewarding career with CNCo. based employees in 2017 increased by 54% to by the end of 2020. USD 187,602.

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The driving performance and developing Partnering with local universities and industry Management trainee programme commences in PNG potential framework aims to support both our bodies, it is a rotational programme that allows people and our business by: graduates to gain a solid understanding of the CNCo’s successful management trainee (MT) programme was rolled out to one of our key shipping industry and our business in a hands- markets, Papua New Guinea at the end of 2016. I commenced my management trainee • Creating a culture of high performance, led by on and practical way. programme with the Swire Shipping Coffee Bulking Department (SSCB) on 24 October 2016, our leaders. based in Lae. I came on board with no experience and knowledge about coffee or the processes • Developing the capability of our managers The programme allows trainees to develop their involved in exporting it and three months on, I’ve memorised the process from receiving a to inspire and drive high performance and shipping and commercial knowledge, skills shipping instruction to the fumigation of a TEU-Bag / Bulk and finally the dispatch of original manage poor performance. and experiences while having access to high documents to buyers. From the get-go, the colleagues have all been friendly and helpful. It’s been • Developing the capability of our team quality training programmes on a personal, a hectic and challenging period and I have gained so much from the very hands-on experience members to ensure they have the skills and professional and technical basis. There is also and enjoyed every day of it. behaviours to proactively develop themselves significant exposure to industry networking, for now and the future. senior management and key business leaders Going onto its second year in operation, the SSCB is currently exporting coffee for 11 exporters. • Improving our performance policies and with the opportunity to join a vessel trip. All shipments are done in 20ft’ containers. Bag shipments have a maximum of 320 x 60kg bags processes to deliver value to all employees. while bulk shipments have a maximum of 360 bags per container. CNCo is proud to offer such a programme and A three-tiered framework has been developed to be contributing to the on-going development CNCo’s business is global in nature. We have experienced employees and the processes are to support managers in driving performance: of local industry talent. sound. I have nothing but admiration and respect for everyone I have come across thus far.

• Developing Performance (Basic level); • Performing (Intermediate level); and Emotional support helpline by Sharmaine Siaguru, • High Performance (Advanced level). Management Trainee, Lae Since the introduction of “Befrienders office (left in photo) The framework was launched at the end of Worldwide” email helpline in 2016, CNCo has 2017 with materials to be rolled out in phases also established a Befrienders’ e-mail helpline throughout 2018. service, available in both English and Chinese languages. In addition, an English voice Refreshed Management Trainee Programme helpline service is also provided.

The CNCo Management Trainee programme Befrienders Worldwide has an international has been redesigned to be a truly global network of over 350 crisis helplines in 36 graduate programme aimed at attracting, countries that provides emotional support to engaging and developing local talent within those in despair. The inputs and outputs of the the areas in which we operate and the global enhanced services are strictly confidential in shipping industry. nature.

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We believe in doing right by our communities and investing Supporting seafarers worldwide CNCo also provides on-going support to the ASSM Dependents Association (ASSMDA), an in worthy causes. We support charities and community We have long-term global partnerships with independent, not-for-profit association in the both The Mission to Seafarers and Sailors’ Philippines formed by the partners and relatives organisations as well as our employees in need. Our support Society who care for and support seafarers of of our Filipino seafarers. ASSMDA provides for our communities focuses on Education, Community, all races, religions or ranks around the world. voluntary assistance and social support to the This support is provided through fundraising seafarers’ families in times of need and aims Health, Youths, Environment and Biodiversity. We are events and other collaborations. to improve their livelihoods through organising committed to establishing long-term, mutually rewarding value-added social activities. relationships with our partners and our communities.

Asian Challenge conquering Mount Fansipan

From 21 to 24 April 2017, four teams (11 colleagues) from CNCo participated in the Sailors’ Society’s Asian Challenge to scale Vietnam’s Mount Fansipan (Indochina’s highest mountain) to raise funds in support of the charity’s projects around Asia.

The 23 teams who participated in the Asian Challenge have raised more than USD 200,000 so far. Well done to the CNCo teams for successfully conquering Mount Fansipan to support this meaningful cause.

We have long-term global partnerships with both The Mission to Seafarers and Sailors’ Society who care for and support seafarers of all races, religions or ranks around the world.

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Seafarers Drop-in Medical Centres open in Tacloban and Bantayan Island in the Philippines

Donations were made by CNCo, Swire Pacific Offshore (SPO) and our shore- based and seagoing employees for the victims of Typhoon Haiyan in 2013 for the activities managed by ASSMDA. The balance of funds left was pledged to provide long-term, physical, community support by way of Seafarers Drop-in Medical Centres in the region.

Over 18 months period in 2016 / 17, ASSMDA has been working closely with Sailors’ Society, Habitat for Humanity, the Associated Marine Officers’ and Seamen’s Union of the Philippines (AMOSUP) and the local Barangay Mayors and their health authority leaders to bring this plan to fruition.

It was with huge pride therefore that in late June 2017, all the parties involved were able to grace the official opening of these two Seafarers Drop-in Medical Centres; one in Palo near Tacloban in Leyte province and the other on Bantayan Island in Cebu province. The centre in Palo includes a birthing facility and will benefit approximately 1,000 households whilst its counterpart in Bantayan, will help almost 7,000 local families.

As part of the official opening ceremony, key representatives of AMOSUP, Donations were made by CNCo, Swire Pacific Offshore ASSMDA, Habitat for Humanity Philippines, Sailors’ Society, SPO and CNCo (SPO) and our shore-based and seagoing employees for the handed over a bible, candle and ceremonial key to the Barangay Captains, Municipal Mayors, Municipal Health Officers and Midwives. victims of Typhoon Haiyan in 2013 for the activities managed by ASSMDA.

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Swire Shipping Talent ID Programme takes flight Supporting our key stakeholder In 2017, 195,432 men, women, boys and girls communities across 10 different provinces participated Cricket PNG (CPNG), in association with Swire Shipping, launched the Swire Shipping Talent ID in cricket ranging from introductory school Programme in September 2015 with the aim to find the next Barramundi and Lewas players. Swire Shipping Talent ID Programme in PNG – initiatives right up to representing PNG in After the success of the Swire Shipping programme in 2016, CPNG is looking to take the Swire Sport Programme international formats. 48% of these participants programme to the next level with camps planned in 10 regions targeting Under-15 and Under-17 were females. youths. The 2017 Swire Shipping Talent ID Programme will be divided into three stages, where Cricket Papua New Guinea (CPNG) is the the CPNG High Performance Department will be targeting different associations throughout the sole organisational body that is a member of The growth of cricket in PNG is indebted to the year, with a competition component at each stage. the International Cricket Council, covering tireless work of CPNG as well as its sponsors participation in Papua New Guinea (PNG) from who allow the continual development of young The first Swire Talent ID Programme in Lae was conducted from 3 to 6 March 2017 and attracted school children to their two international sides cricket talent. A big part of this development more than 20 players from 12 to 17 years old. The programme included a basic coaching course for both men and women. initiative sits with the Swire Shipping Talent ID and talent identification clinic, followed by an exhibition match. Programme. CPNG, in association with Swire Shipping / The Swire Shipping Talent ID Programmes include sessions on coaching, strength and CNCo has been running the Swire Shipping Every player of the U19 PNG’s men’s side conditioning, mental application, elite cricketer’s expectations, theory, training for potential Talent Talent ID Programme since September 2015, squad that reached the Junior World Cup in ID coaches in the regions and matches. with the aim to find the next Barramundi New Zealand came through the Swire Shipping and Lewas players from around PNG. The Talent ID programme. programme is conducted by CPNG’s High Performance Department tasked with managing PNG’s 4,000 cricket talent across the country.

CPNG, in association with Swire Shipping / CNCo has been running the Swire Shipping Talent ID Programme since September 2015, with the aim to find the next Barramundi and Lewas players from around PNG.

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Swire Sport programme Helping to rebuild the Hanabuada Village

Swire Shipping and PNG Cricket have collaborated on the Talent ID programme across PNG for At least 150 villagers in Papua New Guinea were left homeless (and some of our Swire Shipping two years. Swire Shipping are proud sponsors of the youth programme which brings to youths the colleagues were also affected) after a fire tore through 18 homes in Hanuabada Village, just five benefits of sport as well as the chance to one day play for the Barramundis (men’s first team) or minutes from downtown Port Moresby, on 19 August 2017. the Diamonds (women’s first team). This is part of our Swire SPORT programme in the Pacific. Through a fundraising activity coordinated by the Sydney office, the Swire Shipping team managed to raise AUD5,000 for the villagers. In collaboration with key customers, Brian Bell and KK Kingston, Swire Shipping received fantastic discounts which allowed the donations to go a lot further. With the donation, the team purchased an assortment of household goods from bedding, water storage and kitchenware for the 18 families. Swire Shipping and PNG Cricket have collaborated on the The Swire Shipping team in PNG spent their Saturday to help clean up the village in partnership Talent ID programme across PNG for two years. with World Vision. Over the course of the day, tonnes of rubbish were collected and removed from the village. It was a meaningful day for our colleagues in PNG doing their part for the local community in times of need.

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Corporate Philanthropy and Volunteering Cleaning up the waters in Singapore

In 2017, we ran three events for our Singapore employees: In our journey towards sustainability, we believe in doing right by our communities. One of the focus areas is environment and biodiversity. • Kallang River clean-up in partnership with Waterways Watch Society • Weeding at Sungei Buloh Wetland Reserve On 15 June 2017, 42 CNCo and Swire Pacific Offshore employees in Singapore headed to the • Project ‘Painting Smiles’ in partnership with Central Singapore CDC & Lions Befrienders Waterways Watch Society’s office where they learned about the overwhelming amount of rubbish Senior Activity Centre (Bendemeer) that accumulates in Singapore waters daily and what individuals and organisations can do to make a difference to keep the waters clean.

The volunteers spent the afternoon on kayaks and paddleboats, clearing the debris and floating rubbish around the Kallang Basin. Cyclists cycled around the areas from Kallang River to Marina Bay Sands, retrieving rubbish near the waters and nearby coastal areas.

The team collected about 56 kilograms of trash, and more importantly, each of them returned home with a heightened sense of environmental consciousness and a deeper sense of appreciation of the clean river we see every day.

Our employees in Singapore spent 364 hours doing voluntary work in 2017.

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Environment and Biodiversity Supporting research programmes CNCo seafarers participate in conservation projects

Partnership with Endangered Species Swire National Oceanographic Centre Ocean CNCo partners the Endangered Species International (ESI) in South Mindanao in the Philippines International Monitoring System (SNOMS) on mangove and coastal reef conservation and to protect the endangered Philippine forest turtles. Under this partnership, CNCo seafarers volunteer their time to work in the field alongside the CNCo partners Endangered Species CNCo continues to support the UK National ESI personnel on various conservation and community engagement activities. A total of 22 teams International (ESI) in South Mindanao in Oceanography Centre (NOC) through a multi- from CNCo and Swire Pacific Offshore participated in this project since its inception. Teams the Philippines on mangrove and coastal year SNOMS programme, a part of the ocean found their involvement in this programme to be very enriching and meaningful. reef conservation and to both protect the monitoring project, by installing monitoring endangered Philippine forest turtles and equipment on board one of our liner vessels. enhance their biosphere to encourage CNCo sponsored the upgrading and reinstallation population growth. Under this partnership, of the SNOMS data collection box and the on- ASSM volunteers (who are CNCo seafarers) going operational data collection expenses. work in the field alongside the ESI on various conservation and community engagement The measuring devices were installed on MV activities. We had to scale down the number of Shengking in 2016 to provide vital data on the trips to South Mindanao in 2017 and hope to oceans’ ability to slow the build-up of carbon resume our partnership in 2018. dioxide in the atmosphere and mitigate ocean acidification leading to coral bleaching and threatening some crustacean species.

CNCo partners Endangered Species International (ESI) in South Mindanao in the Philippines on mangrove and coastal reef conservation and to both protect the endangered Philippine forest turtles and enhance their biosphere to encourage population growth.

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Waste recycling project in the Pacific Following a fortuitous meeting at a Clean Islands Seas workshop between CNCo’s GM SD, SPREP and United Nations Environment Moana Taka Partnership Programme (UNEP) representatives at the UN Environment Assembly 3 in Nairobi in The 26 Pacific Island Countries and Territories December 2017, CNCo and SPREP have (PICT) represented in the region by the signed a Memorandum of Understanding Secretariat of the Pacific Regional Environment (MOU) to address critical waste management Programme (SPREP), the regional coordinating issues in the Pacific Islands under the project organisation for the protection and sustainable “Moana Taka Partnership”. Under this project, development of the Pacific Islands’ environment, CNCo will provide both containers and ocean are responsible for managing 10% of the world’s freight carriage on a free of charge basis for oceans. Their eight million population are almost certain type of recyclable waste from PICT to wholly dependent on imports and have limited be sustainably treated and recycled in suitable land mass and few options to properly process and competent facilities in Asia Pacific. or recycle waste on the islands. This is a win-win situation for CNCo and The PICT has amassed a huge amount of SPREP as Swire Shipping has a number of waste, much of it hazardous, and includes empty containers in PICTs that need to be large amount of plastics collecting in their repositioned to other locations at the Pacific overflowing landfills. These are being washed rim. This project presents a golden opportunity into the surrounding seas when typhoons come to move the ever-increasing quantity of through. Waste also continually enters the recyclable waste out of the Pacific to the region on ocean currents from fishing vessels countries with competent and sustainable Under this project, CNCo will provide both containers and from cruise ships and container ships. It is recycling plants. The project started in the not commercially viable for the PICT to ship out beginning of 2018 and we will report progress and ocean freight carriage on a free of charge basis for / locally recycle these waste streams. in our next SD report. certain type of recyclable waste from PICT to be sustainably treated and recycled in suitable and competent facilities in Asia Pacific.

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We will help create a resilient environment that provides for Our Environmental Goals and Commitments of a reduced Energy Efficiency Operational CNCo has in place a number of policies Index (EEOI) or the energy we expend moving our future by pursuing a long-term goal of decarbonisation (viz. our Environmental and Sustainable one unit of cargo, per one nautical mile by and optimising energy efficiency and protecting and, where Development Policies) and continues to seek 22% below our baseline by the end of 2020. innovative ways to minimise the impact of our This is about 3% more aggressive than the viable, enhancing the biodiversity of the environment. business on the environment and biodiversity IMO target. This is a key goal to advance in the regions in which we operate. Over the our journey towards “net zero environmental years, we have made significant progress impact”. towards environmental sustainability by adopting a proactive approach towards Our progress for the bulk and liner fleets’ sustainable shipping, expanding our fuel- EEOI since 1 January 2014 (using 2013 as a efficient fleet and implementing a number of baseline) is shown in the graphs on pages 82 operational initiatives. and 83. The EEOI figures for liner fleet show a downward trend from May 2017, but with CNCo’s Environmental Policy includes our a slight increase towards the last quarter of over-arching commitment to a target of “zero the year. Bulk EEOI has also been on the way pollution” incidents and our ultimate goal is for down over the 12 months period. While we our operations to have a “net zero impact” on are still 13% above our target we have been the environment and its biodiversity. We have making progress by deploying more fuel- set an internal, science-based target, in line efficient ships, rationalising individual trades with the IMO’s recent commitment to align with and focusing on operational efficiency. We will the United Nations Framework Convention on continue to monitor emissions for each ship on Climate Change (UNFCCC) Paris agreement. a per voyage and an annual basis and use the We are working actively to achieve a KPI IMO EEOI metric as our baseline.

Over the years, we have made significant progress towards environmental sustainability by adopting a proactive approach towards sustainable shipping, expanding our fuel-efficient fleet and implementing a number of operational initiatives.

Photo credit: Genevieve Deschenes

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Other objectives (KPIs) towards achieving net us to reduce our air emissions as well as our zero environmental impact by 2030 include: operating costs.

• Ensuring that our Energy Efficiency Design We have established a dedicated department Index (EEDI) compliance index is at ≤ 80% with the main objective of collecting and for all relevant liner and bulk vessels on analysing fuel use data across our managed delivery to CNCo (deriving more transport fleet. Our Fleet Efficiency Manager manages work efficiency from less fuel). Progress by implementation of Marorka™ - an on-line the end of 2017 was EEDI = 76.18%. reporting and monitoring performance • Ensuring that our Existing Vessel Design management system across 36 CNCo vessels. Efficiency (EVDI) to be ≥ 50% better than the We use Marorka™ to optimise hull and baseline upon taking delivery of the vessels. propeller performance, voyage execution and • Implementing three pilot technical or fuel accounting on our vessels. MarorkaTM also operational initiatives that can lead to a 50% helps us to monitor and control performance reduction in an atmospheric environmental on a real time basis (every 15 minutes). impact of the liner, bulk and bulk logistics fleet. The initiatives to improve fleet fuel efficiency performance include:

Environmental initiatives and achievements ✓ Monitoring voyages on-line and taking actions in case of speed deviation. In a challenging and competitive market, ✓ Optimising and monitoring trim across CNCo is always looking for innovative ways to multipurpose vessels (MPV) and bulk manage our operating costs more efficiently carriers fleets. and effectively. Over the past few years, CNCo ✓ Using high quality anti-fouling and slime has benefitted from the John Swire and Sons release technology paints for under-water (JS&S) SD Fund to finance investments aimed hull areas. at improving the environmental efficiency of ✓ Premature dry-docking of a number of CNCo’s fleet. They proved to be effective and poor performing vessels to clean or renew continue to show emission reduction results. the under-water paint system to improve fuel efficiency. In a challenging and competitive market, CNCo is always CNCo has dedicated resources and ✓ Monitoring hull and propeller performance. implemented a number of initiatives to improve ✓ Monitoring electrical and boiler looking for innovative ways to manage our operating costs fuel efficiency which simultaneously allowed consumptions across the fleet. more efficiently and effectively.

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CNCo has taken an innovative step in creating The following initiatives are carried out an internal fleet efficiency KPI scorecard regularly as part of our efforts to improve fuel which tracks monthly fuel performance of the efficiency: vessels. The scorecard showcases excess consumption of fuel in metric tonnes and 1. Propeller polishing – six-monthly propeller its development throughout the year. The polishing leads to a reduction of fuel scorecard is the basis for decision-making on consumption by an average of 3%. both operational and technical performance 2. Anti-fouling paint application – all new CNCo improvements across the fleet. vessels, MPV and bulk carriers, are coated with high performance anti-fouling paints that We brief our Captains and Chief Engineers deliver at least 5% of fuel savings. prior to them joining a vessel on all aspects 3. Trim optimisation – we estimate that an of fuel efficiency to enable them to contribute average of 1% in fuel savings was achieved by effectively. We also run monthly seminars for the optimally trimming the vessels. senior officers to ensure their full understanding of the Company’s goals and objectives in Those efforts translated into USD 6.8 million relation to operating our vessels efficiently. In in fuel savings and the reduction of 60,685

2017, CNCo introduced financial incentives tonnes of CO2 (tCO2) emissions to the for our officers to drive greater fuel efficiency environment over the reporting period. performance. This was done through the annual appraisal process where the officers’ efforts are For our industry leading efforts in this area, recognised and rewarded. We also assigned CNCo won the 2018 Seatrade Maritime Fuel specific fuel-related targets for particular Efficiency Award in April 2018. voyages and an award is given to the vessel as an appreciation for achieving the target.

In 2017, CNCo introduced financial incentives for our officers to drive greater fuel efficiency performance.

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Other initiatives (GHG) emissions of 1,445,205 tCO2 from our CNCo receives Blue Circle Award for green efforts operations. This is a 23.1% increase on the All CNCo ships have bilge and garbage prior year and is linearly related to the increase CNCo was a proud recipient of the Vancouver Fraser Port Authority’s (VFPA) Blue Circle Award management plans. All the new vessels are our fleet size by 12.7%. for our voluntary efforts to reduce air emissions in the Port of Vancouver. We are among twelve fitted with ballast water treatment plants shipping lines and two cruise lines to have received the eighth annual Blue Circle Awards, and all new engines are TIER II compliant Scope 2 emissions are immaterial in relation which recognise marine carriers that excel in environmental stewardship and attain the highest for NOx emissions. Our new Swire B.Delta39 to our Scope 1 emissions (0.026%) and participation rates in the port authority’s EcoAction programme. bulk carriers are equipped with an advanced contributed 371.8 tCO2 (equivalent to 738,518 incinerator and oily water separator plant. kWh of electricity consumption) to the figure The EcoAction Programme recognises a variety of fuel, technology and environmental above. Scope 3 emissions from shore and crew management options that are eligible to receive discounted harbour due rates. Vessels may qualify

air travel contributed 5,263 tCO2 which is a low for one of three levels Gold, Silver or Bronze. Presently, CNCo vessels are of the Silver level and Energy consumption and emissions contributor (0.36%) to total GHG footprint. we are working on processes to achieve the Gold level.

Emissions from combusting marine fossil fuels in We also measure SOx / NOx / Particulate internal combustion engines in 2017 amounted Matter (PM) and Volatile Organic Compounds to 1,444,834 tCO2 (equivalent to 462,497 metric (VOCs). As they are related to Scope 1 tonnes of energy consumption) representing emissions, their numbers have been fluctuating 98.93% of our Scope 1 emissions (HFO / MGO / accordingly with an average of 24% increase LO Marine fuel and refrigerants). on 2016 figures.

Scope 1 plus Scope 2 (from use of commercial A summary of all these figures are presented in electrical power) gave a total Greenhouse Gas the Environmental Summary on page 81.

Our new Swire B.Delta39 bulk carriers are equipped with an advanced incinerator and oily water separator plant.

L to R: Tom Longworth; Alex Pattison, Country Manager, USA; and Andrew Wong, Trade Manager, at the awards ceremony on 30 May.

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Environmental training to this training, monthly Health, Safety and Biodiversity with global biodiversity regulations, a greater Environment (HSE) meetings are held on all understanding and emphasis of ecosystem We continue to provide environmental CNCo vessels where relevant environmental At CNCo, we understand that biodiversity resilience is required. There is a need to assess education to our seafarers through the Safety topics are raised and discussed. is important to maintain a resilient natural and identify biodiversity issues of concern Awareness Courses by including a module environment. There is a need to protect and to eliminate or minimise the adverse impacts on energy efficiency awareness containing in- Responsibility in our supply chain enhance the ecosystems that we operate in on biodiversity. We produced Biodiversity depth explanation of a Ship Energy Efficiency and have an impact on to help nature flourish. Issues of Concern (BIC) and Biodiversity Management Plan (SEEMP) and other CNCo has in place a Responsible Cargo Various inputs to our operations such as fuel, Action Plan (BAP) for our business to develop measures. Carriage Policy (RCCP). We recognise the paints, ballast water, food and packaging, understanding of the potential impacts and importance of conserving species diversity cargo packing materials, lubricants and mitigate them. CNCo provides training on the optimum and we have a responsibility not to consume chemicals are vital to our operations and help use of the SEEMP to all Ship Managers or facilitate trade in any flora or fauna or their to improve the efficiency of our vessels. and seagoing employees via computer- produce that may threaten the sustainability based training, available on all our ships. of any species. We amended our “Standard However, these inputs may also result in We provide our seafarers with various Terms and Conditions for Bookings and negative impacts on the biodiversity in the environmental awareness modules via our Quotations” accordingly to include the need to areas in which we operate. To achieve our extensive VideotelTM collection. In addition comply with our RCCP. goal of sustainable development and in line

We continue to provide environmental education to our seafarers through the Safety Awareness Courses by including a module on energy efficiency awareness containing in- depth explanation of a Ship Energy Efficiency Management Plan (SEEMP) and other measures.

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Industry Leadership responsible and environmentally sound recycling of ships through which over 99% CNCo is a founding member and an active of the ship by weight is reused, either ‘as participant of the Sustainable Shipping Initiative is’ or in re-constituted form. CNCo is a lead (SSI). The SSI is a coalition of shipping leaders company in the SSI Sustainable Ship Recycling from around the world, formed to take practical Working Group (SSR WG) which evolved during steps to tackle some of the sector’s greatest 2017 into the Ship Recycling Transparency opportunities and challenges. The group is Initiative (SRTI). SRTI’s vision is of a world working to achieve a vision “of an industry in where ships are recycled responsibly – socially, which sustainability equals success”. By being environmentally and economically – meeting an active member of the SSI, CNCo works and going beyond international conventions alongside competitors, regulators, suppliers, and norms. It aims to: financial institutions etc., united by the common goal to show that collaborative action • improve transparency in the ship recycling is possible, and to mobilise support across the value chain; whole shipping supply chain, demonstrating • increase disclosure of ship recycling policies that shipping can contribute to and (will only) and practices; thrive by operating in a sustainable manner. • allow and encourage cargo owners, investors and other stakeholders to make Going in lock-step with the addition of our new informed decisions when using shipping tonnage is the sustainable retirement of tonnage companies and to incentivise improvements; that is being replaced as it reached the end • create a level playing field for ship owners of its economic life. The most environmentally on ship recycling. efficient solution to this retirement is the

CNCo is a founding member and an active participant of the Sustainable Shipping Initiative (SSI). The SSI is a coalition of shipping leaders from around the world, formed to take practical steps to tackle some of the sector’s greatest opportunities and challenges.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 58

Sustainable Ship Recycling was taking place (at our additional cost), Leading the way in sustainable recycling to ensure that capacity-building continued CNCo has a Sustainable Ship Recycling Policy and that standards and best practices were R. L. Kalthia’s Ship Recycling Facility (SRF) in Alang, India, completed the sustainable recycling in place stating that all vessels at the end of maintained. The SRF willingly accepted all of two CNCo multipurpose vessels – MV Chenan and MV Chengtu. While the Hong Kong their working life will be sent for recycling to third-party advice on improving operations Convention (HKC) has not been ratified by enough states to come into force globally, R. L. Kalthia’s yards that, as a minimum, adhere to the Hong from all three parties who were empowered to SRF was one of the first four facilities in Alang to proactively raise its game and become, as a Kong International Convention for the Safe stop any / all work if it was seen that personnel minimum, compliant with the HKC. and Environmental Sound Recycling of Ships were in danger of injury, or that there is a risk (HKC) that was adopted on 15 May 2009 of an environmental pollution event. This is R. L. Kalthia SRF invested in the redesign of its yard with impermeable floor to prevent hazardous (even prior to its full ratification); and that, are noteworthy as with the exchange of the bill of substances from dirty blocks leaking into the sub-soil and polluting the environment. It also certified by a reputable independent third party sale, CNCo, as prior owners, no longer had established formal and robust management systems to manage the yard generically and to to ISO 9001:2015, ISO 14001:2015, OHSAS any liability or responsibility for the ship. We manage the specific demolition of each new ship beached there at the end of its economic life 18001:1999 and preferably, ISO 30000:2009. believe this is a significant paradigm shift in in a safe and environmentally sound way. All its workers are provided with Personal Protective This policy ensures that CNCo recycles any sector, post-sale of an asset. Equipment (PPE) and must undergo training to ensure that they are competent to do both its assets in a sustainable, safe and in an complex and routine tasks. The facility was audited by ClassNK for over a year before it was environmentally responsible manner. CNCo sustainably recycled two vessels at the awarded a Statement of Compliance (SoC). end of their working life at SRF in Alang, India: During the year, we oversaw the successful This HKC SoC was a minimum requirement for CNCo to allow any SRF to tender for the work of sustainable recycling (zero injuries, zero MV Chengtu demolishing our ships. As part of the award of the contract, CNCo engaged an external pollution incidents, increased level of HKC 9,396 tons of recycled material independent auditor to conduct spot audits during recycling and set up a Compliance Monitoring compliance and social commitment at the 53.73 tons of hazardous waste Team (CMT) of ex-seafarers who were based in the yard throughout the process. The external Ship Recycling Facility (SRF)) of two of our 28.68 tons of Oil / Bilge water auditor, the CMT (and the Owner’s Rep) had the responsibility and authority to stop any work at ships, MV Chengtu and MV Chenan, at an 99.97% recycled, components re-used any time that may lead to injury or environmental pollution. HKC compliant SRF in India. All the four SRFs who bid for this work fully accepted our MV Chenan Both vessels were recycled (63,500 man-hours in total) without any Lost Time Injury (LTI) or fatality. requirement for external independent auditing, 9,403 tons of recycled material visits by our GM SD and the stationing of 64.74 tons of hazardous waste a three-man HKC Compliance Monitoring 40.23 tons of Oil / Bilge water Team at the SRF when demolishing work 99.74% recycled, components re-used

During the year, we oversaw the successful sustainable recycling of two of our ships, MV Chengtu and MV Chenan, at an HKC compliant SRF in India.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 59

Eco-Office and Green Guidelines Environmental Council Eco-Office Certification since 2012. Our employees have embraced To help reduce the Company’s carbon Eco-Office practices together with the footprint, CNCo strongly encourages approach to environmental sustainability. employees to follow the Swire Pacific group’s We continue to educate and engage our Green Guidelines which are based on the employees in environmental activities ranging Green Office and Eco-Office practices. from corporate volunteering for conservation and We look at applications of the Eco-Office environmental causes (see Our Communities principles such as the Reduce-Reuse-Recycle section of the report for more information), approach, reduced electricity usage, use of partnering with NGOs / NPOs and organising FSC certified paper, double-sided printing, “Lunch and Learn” seminars on sustainability- more efficient use of the aircon / heating and related topics in the Singapore office. follow good recycling practices to further reduce our carbon footprint wherever possible. To view the Swire Green Guidelines, CNCo’s offices have held the Singapore please visit: https://bit.ly/2xPfuxY

To help reduce the Company’s carbon footprint, CNCo strongly encourages employees to follow the Swire Pacific group’s Green Guidelines which are based on the Green Office and Eco-Office practices.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 60

Sydney Office says goodbye to the wasteful bin Sustainability efforts in Papua New Guinea - Recycle, Reduce, Reuse CNCo is a company that is dedicated to providing sustainable solutions. Whether it be supplying customers with green containers to building eco-efficient vessels, the culture of being We used to go through a lot of plastic in the environmentally responsible is all around us. With this in mind, something stuck out. We live in a PNG Branch offices, from lunch containers, wasteful society (as much as we hate to admit it). One time use items are on the rise and because plastic cutlery, water bottles and shopping. of this, Australia is starting to see big issues with our landfill. We need to do our bit to help the So the sustainability team thought there environment we live in and to reduce our footprint on this planet. must be something they can do to be more environmental friendly!! At a slight cost but In June 2017, CNCo’s Sydney office had a waste bin makeover and the team said goodbye to their giving a large environmental benefit, all PNG individual desk bins forever as waste stations were set up around our office. These stations offer employees are given a “sustainability kit”, recycling facilities for everyone to use and are just a walk away from the desks. So far we are which includes: managing to fill waste and paper / cardboard bins most days and working towards filling the glass / plastic and aluminium ones as well to ensure most waste is recycled. • their own personal Swire Shipping drinking bottle to assist in reducing the usage of plastic drinking bottles, The Sydney office team have made a fantastic • a Swire Shipping tote shopping bag to effort in the first few weeks of working encourage the reduction of one-use plastic towards being an environmentally responsible shopping bags, and office. • their own personal Swire Shipping cutlery set which completely removes the need for plastic cutlery.

CNCo’s Sydney office had a waste bin makeover and the team said goodbye to their individual desk bins forever.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 61

PNG forms Sustainability Committees

Sustainability committees have been formed in Lae and Port Moresby offices in February 2017 to promote CNCo’s sustainable development initiatives.

Both committees are committed to rolling out some office initiatives such as recycling, reducing paper consumption and saving energy. They will also be working with their communities to organise clean-up projects and to involve CNCo employees in volunteering to raise environmental awareness.

In Port Moresby, a project to clean the Hanuabada Village started in collaboration with Love Your Coast. The project involved Cricket PNG removing the rubbish that has collected over many years in Hanuabada Village and provide a clean platform to implement long-term strategies through education and awareness.

Sustainability committees have been formed in Lae and Port Moresby offices in February 2017 to promote CNCo’s sustainable development initiatives.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 62

Climate Change and our business It is believed that under a business-as-usual 1. Carbon Intensity of the ship to decline 3. GHG emissions from international shipping to scenario and if other sectors of the economy through implementation of further phases of peak and decline - to peak GHG emissions from UNFCCC Paris Agreement and IMO Emission reduce emissions to keep global temperature the Energy Efficiency Design Index (EEDI) for international shipping as soon as possible and reduction strategy increase below 2°C, the maritime sector could new ships - review with the aim to strengthen to reduce the total annual GHG emissions by represent a very significant 10% of global GHG the energy efficiency design requirements for at least 50% by 2050 compared to 2008 while The UNFCCC Paris Climate Agreement and emissions by 2050. ships with the percentage improvement for pursuing efforts towards phasing them out as the UN Sustainable Development Goals urge each phase to be determined for each ship called for in the Vision as a point on a pathway governments and private sector companies to Shipping has historically avoided external type as appropriate; for CO2 emissions reduction consistent to the work together and take urgent action to combat global binding regulations, as seen in the Kyoto Paris Agreement temperature goals. climate change and its negative impact on the Protocol (Article 2.2 - The Parties included in 2. Carbon intensity of international shipping world, the people and the environment. Shipping Annex I shall pursue limitation of emissions to decline - to reduce CO2 emissions per It is believed that 40% of the total reduction is one of the fastest growing sources of transport of GHG from marine bunker fuels, working transport work unit (EEOI), as an average required can be achieved through enhanced Greenhouse Gas (GHG) emissions. Maritime through the International Maritime Organisation) across international shipping, by at least 40% design and operations. The balance will have transport emits around 850 million tonnes of CO2 and the subsequent Paris Agreement; Shipping by 2030, pursuing efforts towards 70% by to be achieved by switching to alternate fuel or annually and is responsible for about 2.7% of and Aviation were explicitly excluded for these 2050, compared to 2008; and offset under a Market Based Measure (MBM) global GHG emissions (Source: IMO report to the agreements due to issues introduced by the such as an Emissions Trading Scheme (ETS). IPCC 3rd Greenhouse Gas study). transboundary nature of their businesses.

Shipping emissions are predicted to increase After over a decade of study and discussions, between 50% and 250% by 2050 – depending in April 2018, IMO at MEPC-72 finally adopted on future economic and energy developments an emission reduction strategy in line with if no action is taken. This is not compatible the UNFCC Paris Agreement of December with the internationally-agreed goal of keeping 2015. This requires that the shipping industry global temperature increase to well below 2°C must reduce its total annual GHG emissions. compared to pre-industrial levels, and which Relevant excerpts from the adopted strategy requires worldwide emissions to be at least on the level of ambition set by the IMO are: halved from 1990 levels by 2050.

Shipping emissions are predicted to increase between 50% and 250% by 2050 – depending on future economic and energy developments if no action is taken.

The China Navigation Company / Sustainable Development Report 2017 Carbon / Environment 63

Climate Change and our business This expected internal report on climate-related across the world from climate-related hazards to modify vessels to keep them competitive financial disclosures will help all CNCo’s and that such impacts are projected to in carbon-constrained markets, catastrophic CNCo is fully aware of, and understands the stakeholders, including its senior management increase in the years and decades to come.** asset stranding of entire fleets will probably not concerns of global governments and the public and Board of Directors, better evaluate the risks **https://bit.ly/2OP5A6r occur solely due to climate policies. Vessels about climate change risks. We recognise that are most pertinent to our business and must be designed for flexibility and ease of that the use of fossil fuels to meet the world’s develop adaptation and mitigation plans, plus Transition risks: transitioning to a lower-carbon modification so they can deliver acceptable energy needs contributes to the rising determine potential opportunities for CNCo. economy may entail extensive policy, legal, cash flow, maintain value, and maintain liquidity concentration of GHG in the atmosphere, technology, and market changes to address both before and after the implementation of which will result in further increases in global There are a number of climate change related mitigation and adaptation requirements related GHG policies. temperatures. We recognise the dangers of considerations that our business needs be to climate change. Depending on the nature, inaction and we are committed to reducing aware of and we have plans to address them: speed, and focus of these changes, transition CNCo’s biofuel trial in partnership with Argent CNCo’s environmental impact. There is risks may pose varying levels of financial and Energy in 2016 on CNCo’s bulk carrier MV Wulin a growing demand for climate-related Evolving Policy environment: policy actions reputational risk to organisations. Supply and was the first attempt to look at the alternative information by investors, lenders, insurers and around climate change continue to evolve. demand can shift as climate-related risks and energy sources to decarbonise our business. other stakeholders. Some examples include implementing carbon- opportunities are increasingly considered. We are still planning to pursue the use of biofuel pricing mechanisms to reduce GHG emissions, from non-food feed stocks in the coming years The Task Force on Climate-related Financial shifting energy use toward lower emission Future-proofing:navigating decarbonisation and look at other alternative energy technology Disclosures (TCFD)* was released in June 2017 sources, adopting energy-efficiency solutions, also suggests that because of the nature of to fuel our fleet. Discussions on this are and provides voluntary, consistent climate- and encouraging greater water efficiency shipping markets and the ability of owners expected to continue in 2018 and beyond. related financial risk disclosures for use by measures. The risk and financial impact of policy companies in information to investors, insurers changes depend on their nature and timing. and other stakeholders. TCFD helps companies understand what financial markets want from Physical risks: risks resulting from climate disclosure to measure and respond to climate change can be event-driven or due to longer- change risks and encourage firms to align their term shifts in climate patterns. Physical risks disclosures with investors’ needs. We are aware may have financial implications for organisations, of TCFD and are in dialogue with the rest of the such as direct damage to assets and indirect Swire group of companies to determine which impacts from supply chain disruption. climate change scenarios are most relevant to Organisations' financial performance may also each operational company. be affected by temperature changes affecting organisations' premises, operations, supply While the recommendations of the TCFD chain, transport needs, and employee safety. primarily relate to listed entities and as we transit into a lower-carbon economy, we have, Ports are an important economic actor—at as good business practice, assess climate- local, national, and international scales—that related risks and opportunities for CNCo. have been identified as being vulnerable to future climate changes. There has already *Source: https://www.fsb-tcfd.org been major damage and disruption to ports

The China Navigation Company / Sustainable Development Report 2017 Abbreviations 64

AMSA Australian Marine Safety Authority GEDO Australian government DCC Greenhouse and Energy Data Officer ASA Australian Shipping Association GHG Greenhouse Gas/es ASSM Anscor Swire Ship Management (manning agency) GJ (unit) Giga-Joule, 1 billion joules of energy AVL Approved Vendor List GRI Global Reporting Initiative

BFO Bio Fuel Oil H2 Hydrogen BHP Brake Horse Power HCFC Hydrochlorofluorocarbon/s CAD Competence and Assurance Department HCV High Conservation Value CAR Audit-driven Corrective Action Report HFO Heavy Fuel Oil – a residual fossil fuel CARB California Air Resources Board HHV Higher Heating Value, also known as gross calorific value, of a fuel is defined as the CBA Collective Bargaining Agreement amount of heat released by combusting a specified quantity and returning the CCoC Corporate Code of Conduct temperature of the combustion products to 150°C. LHV assumes all the water component is in liquid state at the end of combustion CFC Chlorofluorocarbon/s CNCo The China Navigation Company Pte Ltd HKC Hong Kong Convention for Safe and Responsible Recycling of Ships (2009) CoC Certificate of Competency HOF Head Office (in Singapore) CSR Corporate Social Responsibility HSE Health, Safety and the Environment CCBA Climate, Community and Biodiversity Alliance HSSE Health, Safety, Security and the Environment CP Corporate Philanthropy/pic ICAO Inter Civil Aviation Organisation DCC Australian government: Department of Climate Change ICS International Chamber of Shipping DECC UK government: Department of Energy and Climate Change IEA International Energy Agency (UN) DEFRA UK government: Department for Environment, Food and Rural Affairs IFO Intermediate Fuel Oil - residual fuel. Usually 180 or 380 CST viscosity DP Dynamic Positioning IHM Inventory of Hazardous Material, per the HK Ship Recycling Convention DPA ISM Code: Designated Person Ashore ILO (UN) International Labour Organisation DPl Deficiencies per Port State Inspection IMO (UN) International Maritime Organisation E&P Exploration and Production INED Independent Executive Director ECA Emission Control Area ISM International Management Code for the Safe Operation of Ships and for Pollution EEOI Energy Efficiency Operational Index Prevention, (International Safety Management (ISM) Code) as chapter XI of SOLAS EPA US government: Environmental Protection Agency IUCN International Union for Conservation of Nature and Natural Resources ESI Endangered Species International KBA Key Biodiversity Area ETS Emission Trading Scheme KPI Key Performance Indicator FOE Fleet Operational Efficiency

The China Navigation Company / Sustainable Development Report 2017 Abbreviations 65

kW hr (unit) Kilo Watt hour, is a unit of energy equal to 1,000 Watt hours or 3.6 mega Joules RFQ Request For a Quote LHV Lower Heating Value, also known as net calorific value, of a fuel is defined as the RWC Restricted Work Case amount of heat released by combusting a specified quantity and returning the SAC Safety Awareness Course temperature of the combustion products to 150°C. LHV assumes all the water SD Sustainable Development component is in vapour state at the end of combustion SDG Sustainable Development Goals LMS Learning Management System SECA Sulphur Emission Control Area/s LO Lubricating Oil SEEMP Ship Energy Efficiency Management Plan LTI Lost Time Injury SIN Singapore LTIFR Lost Time Injury Frequency Rate SMS Safety Management System MARPOL IMO International Convention for the Prevention of Pollution from Ships, 1973, SMTC Swire Marine Training Centre, located in Loyang, Singapore as modified by the Protocol of 1978 and later SOLAS IMO International Convention for the Safety of Life at Sea, 1974, as amended in 1980 and later MCA (UK) Maritime and Coastguard Agency

MDO Marine Diesel Oil – a distillate fuel SOX Oxides of Sulphur MGO Marine Gas Oil – a distillate fuel (higher fraction than MDO) SPO Swire Pacific Offshore (Group) MHE Material Hazardous to the Environment SRF Ship Recycling Facility MLC ILO Maritime Labour Convention, 2006 SSA Singapore Shipping Association MPA Maritime and Port Authority of Singapore STCW IMO International Convention on Standards of Training, Certification and Watch-keeping for Seafarers, 1978, as amended in 1995 and later MSA UK: Modern Slavery Act (2015) MTC Medical Treatment Case TBT Tributyl Tin (antifouling)

NGER Australian National Greenhouse Gas and Energy Reporting Act tCO2 Tonnes of Carbon Dioxide

NI Nautical Institute tCO2e Tonnes of Carbon Dioxide equivalent. This is CO plus the other four “natural GHG of CH , N O and the "industrial GHG" of SF and Hydroflurocarbons NOX Oxides of Nitrogen 4 2 6 OFW Overseas Filipino Workers TRCF Total Recordable Case Frequency Rate OPEC Organisation of Petroleum Exporting Countries TRIP Toolbox Risk Identification Permit PEU Performance Evaluation Reports UKBA (UK) Bribery Act (2010) PM Particulate Matter ULS Ultra Low Sulphur content PO Purchase Order/s UNFCCC United Nations Framework Convention on Climate Change POEA Philippines Overseas Employment Agency VCS Verified Carbon Standard PSCI Port State Inspection Compliance Index VOC Volatile Organic Compound/s PSI Port State Inspection y-o-y Year on Year change QHSE Quality, Health, Safety and Environment 5S “Seiri, Seiton, Seiso, Seiketsu, and Shitsuke” or “Sorting, Set in order, Systematic REDD Reduced Emissions from avoided Deforestation and forest Degradation cleaning, Standardizing, and Sustaining”

The China Navigation Company / Sustainable Development Report 2017 Data 66

In this section:

67 Fleet Profile 73 Sustainable Development Strategy 75 SDGs and CNCo Thrive strategy with progress 79 Safety Statistics 81 Environmental Summary 82 Energy Efficiency Operational Index 84 New Hires and Staff Turnover 86 Global Reporting Initiative (GRI) Standards Content Index 104 Contact 105 Assurance Statement

The China Navigation Company / Sustainable Development Report 2017 Fleet Profile 67 Bulk - In Operation as at 31 December 2017

Vessel Name EVDI ESI 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) (m³) Rating

Eredine 4.65 33.700 B+ 2014 9681871 39855 24785 13019 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Erradale 4.68 40.900 B+ 2014 9681883 39757 24785 13021 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Erisort 4.53 35.600 B+ 2014 9681895 39763 24785 13022 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Eriskay 4.78 18.100 B+ 2015 9681900 39810 24785 13021 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Fengning 4.66 32.000 B+ 2015 9690884 39836 24785 13022 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Fengtien 4.58 18.800 B+ 2015 9690896 39782 24785 13035 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Foochow 4.74 43.700 B+ 2015 9690901 39758 24785 13022 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Funing 4.63 41.300 B+ 2015 9690913 39784 24785 13019 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Hanyang 4.66 38.000 B+ 2016 9714226 39802 24785 13019 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Hoihow 4.55 39.400 B+ 2015 9714238 39721 24785 13029 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned and operated Logs Fitted Handysize Bulk Carrier Hunan 4.70 38.700 B+ 2016 9714252 39100 24785 13024 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Hupeh 4.72 32.700 B+ 2016 9714264 39772.9 24785 13022 180.0 30 N/A 47181 48908 4 x 36T Singapore Owned, Managed Logs Fitted Handysize Bulk Carrier Liangchow 4.62 37.200 B+ 2015 9715191 39685 24785 13028 180.0 30 N/A 47181 48908 4 x 36T Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Lintan 4.72 33.600 B+ 2015 9715206 39641 24785 13033 180.0 30 N/A 47181 48908 4 x 36T Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Luchow 4.65 37.400 B+ 2015 9715218 39728 24785 13019 180.0 30 N/A 47181 48908 4 x 36T Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Luenho 4.56 42.400 B+ 2016 9715220 39752 24785 13028 180.0 30 N/A 47181 48908 4 x 36T Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier

Pakhoi 4.61 18.500 B+ 2016 9721554 39777 24785 13026 180.0 30 N/A 47181 48908 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Pekin 4.60 37.100 B+ 2016 9721566 39200 24785 13026 180.0 30 N/A 47181 48908 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Powan 4.55 19.400 B+ 2016 9721578 39200 24785 13036 180.0 30 N/A 47181 48908 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Poyang 4.58 38.200 B+ 2016 9721580 39500 24785 13028 180.0 30 N/A 47181 48908 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Taiyuan 5.58 43.240 C+ 2016 9768928 37657 23175 12202 180.0 30 N/A 45238 46995 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Tientsin 5.45 37.260 C+ 2016 9768930 37657 23175 12202 180.0 30 N/A 45238 46995 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Tsingtao 5.46 34.060 C+ 2016 9768942 37657 23175 12202 180.0 30 N/A 45238 46995 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Tunsin 5.59 40.890 D 2016 9768954 37800 23175 12202 180.0 30 N/A 45238 46995 4x24T Grab / 30.7T Log Hong Kong Owned, Managed Logs Fitted Handysize Bulk Carrier Wuchang 4.71 35.000 B+ 2013 9657844 39128 24785 12537 180.0 30 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Owned, Managed Handysize Bulk Carrier Wuchow 4.77 22.000 B+ 2013 9657856 39090 24785 12543 180.0 30 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Owned, Managed Handysize Bulk Carrier Wuhu 4.71 34.000 B+ 2014 9657868 39182 24785 12545 180.0 30 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Owned, Managed Handysize Bulk Carrier Wulin 4.89 35.000 B+ 2014 9657870 39049 24785 12538 180.0 30 N/A 47661 48908 4 x 30T + 4 x 12cbm Grabs Hong Kong Owned, Managed Handysize Bulk Carrier Nanning 5.39 37.430 D 2016 9753272 38910 25569 13052 179.9 32 N/A 48818 50852 4 x 35T - 26M Singapore Owned Handysize Bulk Carrier Newchang 4.77 34.170 B 2017 9753284 38907 25569 13064 179.8 32 N/A 48818 50852 4 x 35T - 26M Singapore Owned Handysize Bulk Carrier Ninghai 5.41 26.320 D 2017 9753296 38877 25569 13603 176.9 32 N/A 48818 50852 4 x 35T - 26M Singapore Owned Handysize Bulk Carrier Bunun Dynasty 5.91 N/A D 2014 9707821 37795 23281 12101 180.0 30 N/A 45238.33 46994.86 4 x 35T Hong Kong Operated Logs Fitted Handysize Bulk Carrier

The China Navigation Company / Sustainable Development Report 2017 Fleet Profile 68 Bulk - In Operation as at 31 December 2017 cont.

Vessel Name EVDI ESI 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) (m³) Rating

Bunun Elegence 5.16 N/A C 2013 9659751 45556 27440 27440 183.0 30 N/A 53620.5 56269.5 4 X 30T Hong Kong Operated Handysize Bulk Carrier Daiwan Ace 5.97 N/A C 2014 9672206 34358 21514 11203 180.0 30 N/A 40510 41753 4 x 30.5T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Daiwan Glory 6.57 N/A D 2015 9173832 35531 22314 11139 177.0 30 N/A 44199 45626 4 x 30T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Daiwan Justice 6.28 N/A D 2016 9709312 34327 21525 11201 180.0 30 N/A 42911.2 44146.9 4 x 30T Panama Operated Logs Fitted Handysize Bulk Carrier Daiwan Wisdom 7.85 N/A F 2010 9427134 31960 19825 10514 175.5 29 N/A 39681 40909 4 x 30T Panama Operated Logs Fitted Handysize Bulk Carrier Glengyle 5.93 N/A D 2015 9727285 37679 23269 12101 180.0 30 N/A 45238 46995 4 x 30T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Gold Oak 5.89 N/A D 2017 9806342 37732 23232 12101 180.0 30 N/A 42103.5 43860 4 X 30.5T Panama Operated Log fitted Handysize Bulk Carrier Greentec 6.85 N/A D 2008 9493509 33266 20763 11627 180.0 28 N/A 40432 42565 4 x 30T Hong Kong Operated Handysize Bulk Carrier Indigo Silva 6.76 N/A E 2013 9642162 38090 23273 12139 180.0 30 N/A 45369 47125 4 x 30.5T Marshall Islands Operated Handysize Bulk Carrier IVS Kittiwake 6.85 N/A D 2007 9310769 32555 19885 11140 177.0 28 N/A 40896 42857 4 x 30.5T Panama Operated Logs Fitted Handysize Bulk Carrier Magpie SW 5.14 N/A B 2015 9692739 34302 21561 11199 180.0 30 N/A 42911.2 44146.9 4 x 30T Panama Operated Logs Fitted Handysize Bulk Carrier Mimitsu 6.02 N/A D 2012 9527958 38447 23855 11814 184.8 31 N/A 46315.5 47235.9 4 x 30T Panama Operated Handysize Bulk Carrier New Izumo 6.56 N/A C 2010 9496161 33193 21483 10828 177.0 29 N/A 41207 42630 4 X 30.5T Panama Operated Handysize Bulk Carrier Ocean Satoko 7.02 N/A E 2011 9610638 37215 22662 12531 186.4 28 N/A 45205 47899 4 x 30T Panama Operated Handysize Bulk Carrier Port Philip Bay 4.99 N/A B 2015 9687148 37614 22385 12178 180.0 30 N/A 46436 46834 4 x 30T Panama Operated Bulk Carrier Supernova 6.91 N/A E 2012 9610212 36367 21699 12253 176.5 29 N/A 45414.1 47089.7 4 x 30.5T Panama Operated Handysize Bulk Carrier

Uni Harmony 5.49 N/A C 2016 9775165 37655 23303 12101 180.0 30 N/A 45238 46994 4 X 30.5T Hong Kong Operated Handysize Bulk Carrier Unicorn Ocean 6.82 N/A E 2011 9623659 38503 24020 12015 183.0 30 N/A 47183.3 48141.6 4 x 30T Singapore Operated Box Shaped Type Bulk Carrier Union Mark 5.94 N/A D 2016 9775153 37644 23250 12101 180.0 30 N/A 45238 46994 4 X 35T Marshall Islands Operated Handysize Bulk Carrier Union Taylor 5.93 N/A D 2014 9691644 34693 23216 12010 180.0 30 N/A 45238 46994 4 x 30.5T Marshall Islands Operated Logs Fitted Handysize Bulk Carrier Unison Medal 5.90 N/A D 2014 9687150 37431 22476 12147 180.0 30 N/A 46436 46834 4 x 30.5T Hong Kong Operated Handysize Bulk Carrier Unison Power 6.77 N/A E 2011 9579406 38145 24735 12342 189.0 30 N/A 47629.8 49213.3 4 x 30T Hong Kong Operated Handysize Bulk Carrier Western Aida 6.93 N/A F 2012 9609677 37452 22668 11856 187.0 29 N/A 47948.1 49687.1 4 X 30T Cyprus Operated Grab fitted Handysize Bulk Carrier Western Miami 5.34 N/A D 2015 9743215 39260 24868 12926 179.9 30 N/A 48000 46100 4 x 30.5T Philippines Operated Handysize Bulk Carrier Xing Ning Hai 5.29 N/A B 2014 9728332 34442 21532 11201 180.0 30 N/A 42911 44146 4 x 30T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Xing Zun Hai 4.73 N/A B 2015 9725380 38947 24991 12931 179.9 30 N/A 48159 48280 4 x 30.5T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Yochow 5.72 N/A B 2015 9728394 34398 21538 11201 180.0 30 N/A 42911 44147 4 x 30T Hong Kong Operated Logs Fitted Handysize Bulk Carrier Yunnan 5.72 N/A B 2015 9728409 34398 21538 11201 180.0 30 N/A 42911 44147 4 x 30T Hong Kong Operated Logs Fitted Handysize Bulk Carrier

The China Navigation Company / Sustainable Development Report 2017 Fleet Profile 69 Liner - In Operation as at 31 December 2017

Vessel Name EVDI ESI 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) (m³) Rating

Island Chief 20.07 N/A B+ 1990 8810449 13387 10352 5804 158.1 22 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner Kiribati Chief 19.78 N/A B+ 1990 8809189 13668 10357 5802 158.1 22 876 N/A N/A 3 x 60T Hong Kong Owned, Managed Liner Melanesian Chief 20.20 N/A B+ 1990 8809191 13387 10352 5804 158.1 22 981 N/A N/A 3 x 45 T Hong Kong Owned, Managed Liner Micronesian Chief 20.21 N/A B+ 1991 8901705 13557 10350 5802 158.1 22 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner Kokopo Chief 19.60 N/A B+ 1991 8907412 13387 10352 5804 158.1 22 981 N/A N/A 3 x 45T Hong Kong Owned, Managed Liner Kweichow 16.17 N/A F+ 1994 9070694 25524 18451 8250 184.9 28 1257 28831 29819 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner Kwangtung 15.75 N/A F+ 1994 9070709 25524 18451 8250 184.9 28 1257 28831 29819 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner Kweilin 16.20 N/A F+ 1994 9103104 25410 18468 9201 184.9 28 1257 32608 33756 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner Kwangsi 15.77 N/A F+ 1995 9103116 25607 18468 9253 184.9 28 1257 31472 33077 2 x 26T, 3 x 35T Hong Kong Owned, Managed Liner Nanchang 21.84 N/A D+ 1995 9082805 23016 16800 8662 184.0 25 1728 N/A N/A 3 x 40 T Hong Kong Owned Liner Spirit of Canterbury 24.83 N/A D+ 2005 9319557 14053 9910 5032 148.0 23 1102 N/A N/A - New Zealand Owned, Managed CV1100 Shansi 14.72 26.8 B+ 2013 9614476 30700 25483 11814 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Shantung 14.45 26.4 B+ 2013 9614488 30814 25483 11819 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Shaoshing 14.71 16.4 B+ 2013 9614490 30769 25483 11808 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Shengking 14.86 46.2 B+ 2013 9614505 30813 25483 11813 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Shuntien 14.54 28.3 B+ 2013 9614517 30852 25483 11810 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner

Siangtan 10.41 37.9 A+ 2013 9614529 30756 25483 11805 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Soochow 14.42 28.7 B+ 2014 9614531 30721 25483 11817 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Szechuen 14.84 38.8 B+ 2014 9614543 30688 25483 11813 199.9 28 2118 41881 44807 4 x 60T Singapore Owned, Managed Liner Coral Chief 15.16 N/A A+ 2015 9689938 22035 18723 7681 175.2 28 1617 N/A 12310 3 x 60T Hong Kong Owned, Managed Container Ship Highland Chief 14.85 N/A A+ 2015 9689940 22035 18723 7681 175.2 28 1617 N/A 12310 3 x 60T Hong Kong Owned, Managed Container Ship New Guinea Chief 14.92 N/A A+ 2015 9689952 22027 18723 7688 175.2 28 1617 N/A 12310 3 x 60T Hong Kong Owned, Managed Container Ship Papuan Chief 14.98 N/A A+ 2015 9689964 22032 18723 7683 175.2 28 1617 N/A 12310 3 x 60T Hong Kong Owned, Managed Container Ship Antung (ex MCP Salzburg) 17.73 N/A D 2008 9383481 7664 5338 2309 117.0 20 618 9601 9601 2 x 40T Cyprus Operated General Cargo Polynesia (ex Hansa Salzburg) 23.23 N/A D 2011 9516753 23301 18358 10334 175.4 27 1740 N/A N/A 2 x 45T Germany Operated Container Ship Queen Esther 18.67 N/A D 2016 9700251 25238 24145 8016 185.0 30 2194 N/A N/A 3 x 45T Malta Operated Container Ship Mia Schulte 13.50 N/A B+ 2015 9676735 30231 27279 10011 188.9 30 2345 N/A N/A 3 x 45T Singapore Operated Container Ship Max Schulte 13.93 N/A B+ 2015 9676711 30337.3 27279 10007 188.9 30 2345 N/A N/A 3 x 45T Singapore Operated Container Ship

The China Navigation Company / Sustainable Development Report 2017 Fleet Profile 70 Bulk Logistics - In Operation as at 31 December 2017

Vessel Name EVDI ESI 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) (m³) Rating

Aotearoa Chief 20.09 N/A D 2016 9764960 9577.75 8745 2623 124.7 20 N/A N/A 9221.42 2 X 12.5T New Zealand Owned, Managed General Cargo

The China Navigation Company / Sustainable Development Report 2017 Data 71 Value Chain analysis

Our Value Chain covers the three distinct stages of our operations: Build* Operate Transfer**

1 Building the vessels Economic Local economic development. Employment creation. Local economic development. 2 Operating the vessels, and then Ethical governance at ship building site. Supply chain value and opportunities. Ethical governance at SRF site. Facilitation of global economy and trade. Monitoring cost of sustainable ship recycling. 3 Transferring the ownership of the Global and local economic development. vessel whether for onward trading Ethical governance. or safe and environmentally sound recycling. Environmental Drive demand for improved standards in the Drive demand for improved standards in the Drive demand for improved standards in the We call this our BOT framework industry. industry. industry. (Build/Operate/Transfer). It helps us Positive step change in reducing environmental Improved performance (EEOI, biofuel, reduced Reduced environmental impact during to understand where our business is footprint during design phase. emissions through operational efficiencies) recycling. having a (positive or negative) impact. Better management of construction phase. during operations. R&D/more environmentally-responsible R&D/more environmentally-responsible Reduced environmental impact and carbon options for reuse and recycling. features. footprint. Influencing the demand for sustainable ship Influencing the demand for sustainable Reduced waste to land and sea. recycling. products/services. Influencing the demand for sustainable products/services.

Social Drive behavioural change and demand for Drive behavioural change and demand for Drive behavioural change and demand for improved standards in the industry. improved standards in the industry. improved standards in the industry. Improved working conditions at ship building Improved working conditions. Build capacity of Ship Recycling Facilities yards. Improved H&S practices. (SRF) in India. Improved H&S practices. Improved human rights and labour practices. Improved working conditions at SRF. Improved human rights and labour practices Employment creation and work opportunities. Improved safety standards at SRF. * The Buying phase is omitted due to Employment creation. Community development. Improved human rights and labour practices. the negligible value Improved social indicators and positive impact Employment creation. on overall wellbeing of workers. Improved social indicators and positive. ** The Transfer phase mainly focuses impact on overall wellbeing of workers. on ship recycling when we demand continuing responsibility post completion of sale rather than sale for onward trading at which point our liability and opportunity to add or Governance: Strong organisational governance / Leading by example to raise industry standards and further sustainable development destroy value ceases across economic, social and environmental areas.

The China Navigation Company / Sustainable Development Report 2017 Data 72 Consolidated Materiality Matrix

Health & Safety Transparency Diversity & Ethical and Materials in supply Inclusion uncorrupted Waste Fuel Price chains company Financial Stability Changing Clear Customer Workforce Human transparent Food security Expectations demands Rights and comms Modern Big Data & Slavery Air pollution Systems Extreme Cybersecurity ol d er s Community Integration Labour h Water weather Investment & e standards and

k pollution events Development Ship recycling

a relations s t

o t Competition Marine Innovation ce Automation from low-cost n Biodiversity Capacity

a carriers t (Regulation + r Tech innovation) 3D Printing GHG Climate Im p o Emissions Change Alternate Fuels reduction Geopolitical Technological Changing instability Internal capacity to innovate and Resource supply chain Social R&D ows structures Specific: Economic - Trade Barriers Shipyard - Protectionism Environmental - Sanctions Capacity Political

Signi cance of Impact on the Business

The China Navigation Company / Sustainable Development Report 2017 Data 73 Sustainable Development Strategy

Thrive Thriving People We will respect and care for our employees and other stakeholders, CNCo. has been in business since 1872. unlocking the potential for all of us to grow by:

Our business has stood the test of time because we have always • Safeguarding the health and safety of all our employees and stakeholders looked ahead and made decisions based on long term sustainability. by driving sustained safety excellence;

We don’t see our business as separate from the world. We depend • Adopting a diverse and inclusive approach to securing the best talent; on it, and wish to help shape it positively. • Improving our corporate governance to reflect our stakeholders’ interests;

So when we build businesses, we seek to build communities. When • Respecting the human rights of all of our employees and other stakeholders. we employ people, we help them to fulfil their potential. When we use resources, we seek to protect the environments that provide them. Relevant SDGs The world in which we operate is facing some of the most pressing social and environmental challenges of our time. We are committed to being part of the solution.

Because when the world in which we operate thrives, so do we.

*The Sustainable Development Goals (SDGs) is a set of seventeen aspirational global goals to end poverty, protect the planet, and ensure prosperity for all. For more information please visit: https://sustainabledevelopment.un.org

The China Navigation Company / Sustainable Development Report 2017 Data 74 Sustainable Development Strategy cont.

Thriving Environment Thriving Communities

We will help create a resilient environment that provides for our future by: We will work with communities wherever we operate to improve people’s lives by: • Pursuing a long-term goal of de-carbonisation and optimising energy efficiency; • Connecting with and empowering the local communities that we touch;

• Turning today’s waste into tomorrow’s resource; • Strengthening our supply chain through responsible and ethical sourcing of services and materials; • Using natural resources and systems responsibly and sustainably; • Offering services to enable our stakeholders to live more sustainably. • Protecting and, where viable, enhancing the biodiversity of environments that our operations impact.

Relevant SDGs Relevant SDGs

The China Navigation Company / Sustainable Development Report 2017 SDGs and CNCo Thrive strategy with progress 75

Relevant SDG Goals Links to Thrive Strategy Relevance to CNCo's operations

Safeguarding the health and safety of all our employees and See progress in the Safety, Our People, Carbon / Environment and Our Communities sections stakeholders by driving sustained safety excellence. of the report

Areas covered: Health and Safety Policies and standards / Labour practices / Employee welfare and benefits / D&A Policy / Emotional support helpline Environmental Policies and procedures to ensure No Harm to the environment and communities Long Service Awards and recognition programmes Training and development Waste disposal and responsible ship recycling in line with international conventions - improved social standards Livelihood projects for communities in the Philippines (ASSMDA - Corporate Philanthropic projects) Seafarers Drop-in Medical Centres in Tacloban and Bantayan Supporting seafarers worldwide in partnership with The Mission to Seafarers and Sailors’ Society

Adopting a diverse and inclusive See Our People section of the report approach to securing the best talent. Areas covered: Respecting the human rights of all of our employees and other EODIR Policy in place stakeholders. Diversity in the workplace/Anti-discrimination and anti-harassment Use of gender inclusive language Gender neutral employee attraction and retention polices and procedures Equality in pay structures and rewards HRM practices supporting women in the workforce Ensuring that funded activities benefit both genders Leadership development programmes

Using natural resources and systems responsibly and sustainably. See Carbon / Environment and Our Communities sections of the report

Areas covered: Environmental protection of water catchment areas and water resources (Ship recycling and Community projects: Partnership with ESI and Corporate Volunteering events) Environmental policy / “Zero Pollution” incidents and “Net Zero Impact” on the environment and its biodiversity Biodiversity Issues of Concern (BIC) and Biodiversity Action Plan (BAP) Water treatment on vessels and recycling practices Safe ship recycling practices minimising release of hazardous chemicals into the water Protection of wetlands and waterways clean up (CP projects), mangroves (SGCT and Partnership with ESI)

The China Navigation Company / Sustainable Development Report 2017 SDGs and CNCo Thrive strategy with progress cont. 76

Relevant SDG Goals Links to Thrive Strategy Relevance to CNCo's operations

Pursuing a long-term goal of de-carbonisation and optimising See Carbon / Environment section of the report energy efficiency. Areas covered: Decarbonisation through exploring alternative fuel options / R&D into alternative energy sources (Biofuel trials) Energy efficiencies (Clean or Clean Design) for owned vessels Initiatives to improve fuel efficiency / Use of Marorka™ Internal fleet efficiency KPI scorecard KPIs for reducing our EEOI Eco-office/green office practices

Adopting a diverse and inclusive See Our People and Safety sections of the report approach to securing the best talent. Areas covered: Respecting the human rights of all of our employees and other Inclusive labour practices across all countries of operation stakeholders. Good and safe working conditions Equal pay for work of equal value Strengthening our supply chain through responsible and ethical Sound labour rights incorporated into organisational policies and procedures (HR and SPSM sourcing of services and materials. Contracts and Manuals) Human rights impact assessments (when required) Equal opportunities and respect in the work place (EODIR Policy) H&S standards Modern Day Slavery assessments Supply Chain Sustainability issues / Supplier audits

Adopting a diverse and inclusive See Our People section of the report approach to securing the best talent; Areas covered: Respecting the human rights of all of our employees and other EODIR Policy and its enforcement ashore and at sea stakeholders. Grievance mechanism Social protection policies and min. wage in line with National labour laws Equality in pay structures and rewards Modern Day Slavery assessments Local content hiring policies

The China Navigation Company / Sustainable Development Report 2017 SDGs and CNCo Thrive strategy with progress cont. 77

Relevant SDG Goals Links to Thrive Strategy Relevance to CNCo's operations

Turning today’s waste into tomorrow’s resource. See The Environment section of the report

Using natural resources and systems responsibly and sustainably. Areas covered: Environmental Management policies and practices Strengthening our supply chain through responsible and ethical Hazardous materials management practices and disposal sourcing of services and materials. Sustainable ship recycling practices (Recycling of MV Chenan and MV Chengtu) Membership of Ship Recycling Transparency Initiative SD Policies, committees, working groups Transparent SD reporting in accordance with GRI standards Supply Chain Sustainability working group and CoC Sustainable procurement practices and policies

Pursuing a long-term goal of de-carbonisation and optimising See Carbon / Environment section of the report energy efficiency. Areas covered: Decarbonisation through low carbon technologies and minimising use of fossil fuels / R&D into alternative energy sources Energy efficiencies (Clean or Clean Design) for owned vessels Initiatives to improve fuel efficiency / Use of Marorka™ Internal fleet efficiency KPI scorecard

Protecting and, where viable, enhancing the biodiversity of See Carbon / Environment and Our Communities section of the report environments that our operations impact. Areas covered: Going beyond legislative compliance Zero Harm Policies / Investment in clean and green technologies/ Green guidelines Biodiversity Issues of Concern (BIC) and Biodiversity Action Plan (BAP) Ballast water regulations Corporate Philanthropic investments (Partnership with ESI, employee education and volunteering)

The China Navigation Company / Sustainable Development Report 2017 SDGs and CNCo Thrive strategy with progress cont. 78

Relevant SDG Goals Links to Thrive Strategy Relevance to CNCo's operations

Improving our corporate governance to reflect our stakeholders’ Working with NGOs on environmental conservation and biodiversity related projects interests. See Governance and Our People sections of the report

Areas covered: Code of Conduct Whistleblowing Policies / Third party due diligence Antitrust Policies/Sanctions Procurement practices and guidelines / Supply Chain Sustainability Code of Conduct Anti-bribery Policy and training for employees Privacy Policies, procedures and training Cybersecurity training

Connecting with and empowering the local communities that we See Our Communities and Carbon / Environment sections of the report touch. Areas covered: Offering services to enable our stakeholders to live more Stakeholder engagement at international fora sustainably. Members of Sustainable Shipping Initiative Corporate Philanthropic investments in our key stakeholder communities Partnerships with Universities, Research Institutions and NGOs Working with Governments in the areas of assistance required in LDCs where we operate Civil Society partnerships for SD

The China Navigation Company / Sustainable Development Report 2017 Safety Statistics 79

Injuries Near Misses

6.00 2014 2015 2016 2017 2014 2015 2016 2017 450 449 444 431 418 414 417 413 400 407 387 387 392 4.00 372 362 359 350 352

300 305

2.00 250

200

Personal injuries / 1 million man hours worked 150 0.00 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 No. of Near Miss Reports 100

TRCF per 1 mill LTIF per 1 mill 4 per. Mov. Avg. 4 per. Mov. Avg. MANHOURS MANHOURS (TRCF per 1 mill MANHOURS) (LTIF per 1 mill MANHOURS) 50

0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Quarter

The China Navigation Company / Sustainable Development Report 2017 Total Recordable Cases* 80

*Total Recordable Cases comprises: Lost Time Injuries + Medical Treatment Cases + Restricted Workday Cases

Rank Type of Accident Tasks Performed

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 Duty Engineer Arm injury Swimming during off duty OOW Back / lumbar injury Handling scupper drain cover 3/E Shoulder injury Handling steel plate Junior E/O Dizzy / uncomfortable Closing hatch cleats Ele. Cadet Hand / finger injury Lifting heavy items ETO Foot injury Exercising in gym C/O Head injury Working on deck GP-E / MTM / Wiper Face injury Securing free fall lifeboat 3/O Leg / knee injury Working on hatch ram 5/E Eye injury Working in crew mess room Fitter Reading reefer temperature Bosun Moving in cabin / accommodation AB / IR / GP-D Working in ER Working in cargo hold Working on crane / crane wire

The China Navigation Company / Sustainable Development Report 2017 Environmental Summary 81

2015 2016 2017 Total vessels (owned and managed/operated) 54 79 89 as at 31 December

Scope 1 emissions (tCO2e) 751,749 1,173,375 1,444,834

Emissions from marine fuel 97.93% 98.77% 98.93%

Scope 1 Energy Consumption (mT) 225,309 352,050 462,497

Scope 1 Fuel Consumption (mT) 223,452 350,028 460,110

Total Energy consumption (kWh) 2,624,859,666 4,104,665,784 5,392,743,430

EEOI - liner fleet (UoM: gCO2e/NRT-nm) 5.18 5.96 5.66

EEOI - bulk fleet (UOM: gCO2e/t-nm) 11.28 13.95 11.81

Electricity consumption (kWh) 584,970 595,839 738,518

Electricity emissions (tCO2) 284.07 291.66 371.79

Flights (tCO2) 5,483 5,135 5,263

SOx emissions (mT) 16,075 25,111 31,186

NOx emissions (mT) 18,866 29,487 36,550

Particulate Matter emissions (mT) 1,517 2,369 2,945

VOC emissions (mT) 288 450 555

Spills MV Ningpo: Nil Nil Oil Spill at Marsden Point 1 December 2015

The China Navigation Company / Sustainable Development Report 2017 Energy Efficiency Operational Index 82

Liner EEOI (6M Rolling Average)

0

70

0

0

0

0

Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov-Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov-Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov-Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov-Dec- 14 14 -14 14 -14 14 14 14 14 14 14 14 15 15 -15 15 -15 15 15 15 15 15 15 15 16 16 -16 16 -16 16 16 16 16 16 16 16 17 17 -17 17 -17 17 17 17 17 17 17 17 Target 5.34 5.33 5.32 5.30 5.29 5.27 5.26 5.24 5.23 5.21 5.20 5.18 5.17 5.15 5.14 5.12 5.11 5.09 5.08 5.06 5.05 5.03 5.02 5.00 4.99 4.97 4.96 4.94 4.93 4.91 4.90 4.88 4.87 4.85 4.84 4.82 4.81 4.80 4.78 4.77 4.76 4.74 4.73 4.72 4.70 4.69 4.68 4.66 Actual 5.30 5.26 5.22 5.16 5.05 4.92 4.83 4.93 4.81 4.79 4.85 5.04 5.87 6.73 7.13 7.82 7.94 7.88 7.16 6.16 5.94 5.26 5.17 5.18 5.27 5.21 5.15 5.21 5.23 5.37 5.27 5.41 5.57 5.66 5.89 5.96 6.32 6.73 7.30 7.31 6.95 6.73 6.44 5.97 5.31 5.49 5.62 5.66

Target tual

The China Navigation Company / Sustainable Development Report 2017 Energy Efficiency Operational Indexcont. 83

Bulk EEOI (6M Rolling Average)

10

10

10

120

110

100

0

0

Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar Apr- May Jun- Jul- Aug- Sep- Oct- Nov- Dec- 14 14 -14 14 -14 14 14 14 14 14 14 14 15 15 -15 15 -15 15 15 15 15 15 15 15 16 16 -16 16 -16 16 16 16 16 16 16 16 17 17 -17 17 -17 17 17 17 17 17 17 17 Target 12.5 12.5 12.5 12.4 12.4 12.3 12.3 12.3 12.2 12.2 12.2 12.1 12.1 12.1 12.0 12.0 12.0 11.9 11.9 11.9 11.8 11.8 11.8 11.7 11.7 11.6 11.6 11.6 11.5 11.5 11.5 11.4 11.4 11.4 11.3 11.3 11.3 11.2 11.2 11.2 11.1 11.1 11.1 11.0 11.0 11.0 11.0 10.9 Actual 12.6 12.8 12.9 13.3 14.2 14.0 14.3 14.1 13.8 13.2 11.8 11.7 11.5 10.8 10.6 10.6 11.3 11.7 11.2 11.4 11.4 11.4 10.9 11.2 11.8 12.4 12.6 12.8 13.0 12.8 12.7 13.0 13.4 13.7 13.8 13.9 13.7 13.4 12.9 12.7 12.6 12.3 12.7 12.2 12.3 12.0 11.8 11.8

Target tual

The China Navigation Company / Sustainable Development Report 2017 New Hires 84

New Hires during 2017 by Country, Age Group and Gender Identity New Hires Rate

Country / Age Group Male Female TOTAL Country / Age Group Male Female TOTAL Country Rate

Australia 6 9 15 Samoa 1 2 3 Australia 12% <30 2 2 <30 1 1 Canada 60% 30 to 50 3 5 8 30 to 50 1 1 2 China 25% >50 3 2 5 Singapore 38 34 72 Fiji 98% Canada 1 2 3 <30 12 10 22 Hong Kong 0% 30 to 50 1 1 30 to 50 18 19 37 India 0% >50 1 1 2 >50 8 5 13 Indonesia 50% China 6 12 18 Taiwan 1 1 Japan 0% <30 1 5 6 30 to 50 1 1 New Caledonia 13% 30 to 50 4 7 11 United Kingdom 4 4 Papua New Guinea 9% >50 1 1 30 to 50 4 4 Samoa 30% Fuji 38 42 80 United States 1 1 Singapore 24% <30 11 19 30 30 to 50 1 1 Taiwan 10% 30 to 50 21 21 42 New Zealand - 5 11 16 United Kingdom 21% >50 6 2 8 China Navigation New Zealand United States 10% Indonesia 3 3 <30 2 2 4 New Zealand - 28% 30 to 50 3 3 30 to 50 2 7 9 China Navigation NZ New Caledonia 1 1 2 >50 1 2 3 New Zealand - 16% <30 1 1 2 New Zealand - 1 8 9 Swire Shipping New Zealand Papua New Guinea 12 5 17 Swire Shipping New Zealand New Zealand - 0% <30 5 1 6 <30 1 4 5 Quadrant Pacific 30 to 50 7 4 11 30 to 50 3 3 New Zealand - 0% >50 1 1 Pacifica Shipping

GRAND TOTAL 117 127 244 Overall 24%

The China Navigation Company / Sustainable Development Report 2017 Staff Turnover 85

Turnover during 2017 by Country, Age Group and Gender Identity Turnover Rate

Country / Age Group Male Female TOTAL Country / Age Group Male Female TOTAL Country Rate

Australia 7 5 12 Singapore 20 29 49 Australia 9% <30 1 1 <30 5 8 13 Canada 0% 30 to 50 3 4 7 30 to 50 13 18 31 China 18% >50 3 1 4 >50 2 3 5 Fiji 9% China 7 6 13 Taiwan 1 1 Hong Kong 92% <30 3 1 4 >50 1 1 India 20% 30 to 50 4 5 9 United Kingdom 1 1 Indonesia 33% Fuji 3 4 7 <30 1 1 Japan 0% <30 1 1 United States 1 1 New Caledonia 0% 30 to 50 3 3 6 <30 1 1 Papua New Guinea 13% Hong Kong 1 11 12 New Zealand - 3 3 6 Samoa 10% 30 to 50 3 3 China Navigation New Zealand Singapore 16% >50 1 8 9 <30 1 1 2 Taiwan 10% India 1 1 30 to 50 2 2 4 United Kingdom 5% <30 1 1 New Zealand - 2 5 7 United States 10% Indonesia 2 2 Swire Shipping New Zealand New Zealand - 10% 30 to 50 2 2 <30 1 1 China Navigation NZ Papua New Guinea 13 12 25 30 to 50 1 2 3 New Zealand - 12% <30 8 4 12 >50 1 2 3 Swire Shipping New Zealand 30 to 50 5 8 13 New Zealand - 2 3 5 New Zealand - 100% Samoa 1 1 Quadrant Pacific Quadrant Pacific <30 1 1 30 to 50 1 3 4 New Zealand - 100% >50 1 1 Pacifica Shipping New Zealand - 2 2 Pacifica Shipping Overall 15% <30 1 1 >50 1 1

GRAND TOTAL 63 82 145

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 86 General Standard Disclosures - Core

GRI GRI Standards Disclosure Title Reported Cross-reference / Answers / Notes / Omissions Report location: Page Standard Disclosure Number/URL Number Number General Disclosures Organisational Profile GRI 102 102-1 Name of the organization The China Navigation Company Pte Ltd (CNCo) Yes N/a

GRI 102 102-2 Activities, brands, For description of activities please see "Organisational Profile and Governance" section of the report. products, and services Yes CNCo does not provide any services that are banned in certain markets. Similarly CNCo's services are not the subject of Pages 7 - 13 stakeholder questions or public debate.

GRI 102 102-3 Location of headquarters HQ is in Singapore Yes Page 21

GRI 102 102-4 Location of operations For description of countries of operations please see "Organisational Profile and Governance" section of the report. Yes Page 7

GRI 102 102-5 Ownership and legal form The China Navigation Company Pte. Ltd. is a Singapore registered company and is a wholly-owned subsidiary of The China Yes Navigation Company Limited, registered in London. Page 7

GRI 102 102-6 Markets served Please see "Organisational Profile and Governance" section of the report. Yes Pages 7 - 13

GRI 102 102-7 Scale of the organization Please see "Organisational Profile and Governance" and "Our People" sections covering the size of the fleet and locations of employees / offices and number of employees. Please also refer to the organisational boundaries diagram. All financial Yes Pages 6, 7-13 and 33 statements are confidential.

GRI 102 102-8 Information on employees "Our People" section of the report: "Employment Information" and "Diversity in the workplace / Anti-discrimination and anti- and other workers harassment" sub-sections. We consider our seafarers as our employees despite them being employed through a manning agency. Therefore all work is done by employees. Partial Pages 33-40 There were no variations in employment numbers.

GRI 102 102-9 Supply chain See "Supply chain and Procurement management " section of the report.

CNCo's supply chain covers: • Bunker fuel supply chain Yes • Operations, e.g. services required at port and terminals Page 21 • Logistics, e.g. container movement related services • Ship Management, e.g. spare parts and maintenance • IT and Corporate related services

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 87 General Standard Disclosures - Core cont.

GRI 102 102-10 Significant changes to the CNCo established new offices in Fiji and Samoa at the end of 2016, however we included them into our reporting framework organisation and its supply in 2017. Yes Page 11 chain

GRI 102 102-11 Precautionary Principle or CNCo manages all risks that have the potential to impact our operations. We are measuring, monitoring and reporting our approach Environmental impact and have a number of initiatives in place to reduce out greenhouse gas emissions and other negative environmental impact.

Additionally, the GM SD reports directly to the Managing Director, enabling the provision of sustainability input in the early Yes stages of relevant strategic decisions together with upcoming movements in the regulatory area, nascent risks and Pages 52-55 opportunities and their potential impact on CNCo.

See Section on "Carbon and Environment" for more details. We have a Group Risk Manager who oversees and manages corporate risks.

GRI 102 102-12 External initiatives Fair employment practices (TAFEP) Singapore since April 2013 Yes N/a

GRI 102 102-13 Membership of Singapore Shipping Association associations Sustainable Shipping Initiative Yes World Ocean Council N/a Maritime Anti-Corruption Network (MACN)

Strategy GRI 102 102-14 Statement from senior See MD's message decision-maker Yes Pages 3-4

Ethics and Integrity GRI 102 102-16 Values, principles, CNCo's values, principles, standards and norms of behaviour are outlined in our Code of Conduct which is available on standards, and norms of company's intranet. The Code is applicable to all employees ashore or at sea, it sets the highest standards of business ethics behaviour which is approved by the Managing Director. There is on-line training on the Code that all employees must take and answer questions which confirm their understanding of it. CNCo's Code of Conduct Yes Page 21 Swire Values are introduced during the induction programme and are included in the performance management framework for all shore staff.

Governance GRI 102 102-18 Governance structure See "Organisational Governance" section of the report Yes Pages 14-15

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 88 General Standard Disclosures - Core cont.

Stakeholder Engagement GRI 102 102-40 List of stakeholder groups Investors: Shareholders / JS&S Board / UK JS&S Head office Subsidiary Companies: as per the Organisational boundaries chart Employees: sea staff, shore staff, Senior execs / mid Managers / Managers / other Suppliers: Legal / HR / Auditors / Suppliers of goods and services Yes Communities: Local key s/h communities / Corporate Philanthropic funds recipients Page 23 Government and Regulators: Classification societies / Ports Shipping Industry actors: Peers / SRF

GRI 102 102-41 Collective bargaining CNCo seafarers are covered by collective bargaining agreements (CBA) or equivalent. All contracts are fully compliant with the agreements Maritime Labour Convention (MLC) 2006. Land based employees are not covered by collective bargaining agreements. Yes N/a The percentage of employees covered by CBA is 32%.

GRI 102 102-42 Identifying and selecting See "Stakeholder Engagement and Materiality" section of the report. Key stakeholders that are important to our operations stakeholders were engaged.

Key stakeholders (refer to stakeholder groups under indicator 102-40) having influence over CNCo were identified for engagement. Main categories were: Employees shore and offshore / Suppliers/Communities and NGOs. Yes Page 23 We define stakeholders as individuals or organisations that are directly or indirectly affected by CNCo's business activities. Influence is determined by the level of involvement stakeholders have and impact is measured by their ability to bring out / affect change.

GRI 102 102-43 Approach to stakeholder See "Stakeholder Engagement and Materiality" section of the report. engagement 2016 SD report provided information on stakeholder engagement by s/h groups. We aim to run engagement and 2016 SD Report Yes consolidation of results once every 3 years. All information gathered through various type of engagements was used to Pages 3 -5 determine materiality for this report.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 89 General Standard Disclosures - Core cont.

GRI 102 102-44 Key topics and concerns See "Stakeholder Engagement and Materiality" section of the report. raised Materiality assessment by stakeholder group was covered in 2016 SD report (pages 3-5). Taking the results of those surveys, we developed a Material Issues matrix in consultation with our sustainability partner: Forum for the Future (a not-for-profit organisation which works globally with businesses to address sustainability challenges) and CNCo’s senior leaders. Yes Page 23 and 72 Material topics also covered those identified through an independent scan for issues of concern to CNCo’s current business and peer group views to ensure we covered a broader view on what is important to our business.

Key topics by External stakeholders are as follows:

Supplier/Vendor Has strong governance and business ethics - 96% Builds long term partnerships – 91% Follows labour practices and human rights -87% Aims for Zero Harm Goal – 83%

Customer/Client Aims for Zero Harm Goal – 96% Has strong governance and business ethics -89% Builds long term partnerships -89% Follows labour practices and human rights – 81%

Business Partner Has strong governance and business ethics -93% Engages its people - 93% Recycles ships sustainably – 86% Builds long term partnerships – 86%

Other Aims for Zero Harm Goal – 100% Manages a sustainable supply chain -100% Follows labour practices and human rights – 100% Has strong governance and business ethics - 92% Does its part for the Envt- 92% Builds long term partnerships – 92% Engages its people - 92%

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 90 General Standard Disclosures - Core cont.

Reporting Practice GRI 102 102-45 Entities included in the See "Organisational and Operational boundaries" diagram consolidated financial Yes Page 6 statements

GRI 102 102-46 Defining report content See "Introduction" and "Organisational profile and Governance" section of the report. and topic Boundaries We have undertaken multiple stakeholder consultation processes to determine the most material topics for business and defining this report content. Sustainability Context is defined by the ISO 26000:2010 as well as our Sustainable Development Strategy.

Materiality was determined by issues with a weighting over 75% (see 2016 SD report pages 3-5 ) by internal and external stakeholders. Material topics were also identified through an independent scan for issues of concern to SPO’s current Yes business and peer group views to ensure we took a broader approach to what is important to our business. This was Page 5, 23 presented in a consolidated Material Issues Matrix (see page 72).

We run an internal workshop with our senior management team and Forum partners to come with the consolidated Matrix which looked at the importance and impact of topics on the organisation. We have identified 13 high priority topics (top quadrant) and this report has been written to address material areas as per GRI requirements.

The value chain analysis on page 71 also assisted with understanding of the ESG issues within our boundaries/ value chain.

GRI 102 102-47 List of material topics See "Materiality Matrix"

Material issues are assessed based on: • Significance of Impact on the Business - where CNCo's performance could affect economic, environmental and social Yes impacts Page 72 • Importance to Stakeholders - where CNCo's performance on those issues could substantively influence the assessments and decisions of stakeholders

GRI 102 102-48 Restatements of There have been no restatements of data however initiatives which started in prior years and continued during the reporting information Yes period are covered. N/a

GRI 102 102-49 Changes in reporting We opened a new office in Suva, Fiji and Apia, Samoa at the end of 2016 however they have been officially included into our reporting framework from Jan 2017. We have also added the new vessels and expanded the scope to cover more offices. The Yes rest of the boundaries remained the same. Page 11

GRI 102 102-50 Reporting period 1 January to 31 December 2017 Yes Page 5

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 91 General Standard Disclosures - Core cont.

GRI 102 102-51 Date of most recent Sustainability report for 2016 calendar year report Yes N/a

GRI 102 102-52 Reporting cycle Annual Yes N/a

GRI 102 102-53 Contact point for Contact section of the report. GM - Sustainable Development is the key contact. questions regarding the Yes Page 102 report

GRI 102 102-54 Claims of reporting in Report for the year 2017 has been prepared in accordance with the Global Reporting Initiative’s GRI Standards: Core option. It accordance with the GRI will be externally assured with the assurance statement added to the report. Yes Page 5 Standards

GRI 102 102-55 GRI content index This table Yes Pages 66 and 86-101

GRI 102 102-56 External assurance This report will be externally assured with the assurance statement added to the report. The external assurer is independent from CNCo and has an impartial opinion.

Yes We believe that to be clear and transparent is critical to our success in communicating with our stakeholders. The external Pages 103-105 assurance of our SD report validates any statements or claims we make.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 92 General Standard Disclosures - Core cont.

Material Topics Health and Safety GRI 103 103-1 -Explanation of the Safety is our top priority in CNCo. We continuously strive to provide a safe and healthy working environment and to cultivate 103-2 material topic and its a safe mind-set for both our employees and contractors alike. By having a strong safety focus together with robust reporting 103-3 Boundary and learning culture we make safety everyone’s priority. Our goal is to build an industry leading safety culture. - The management approach and its We continue to measure and monitor safety statistics and have a number of initiatives to improve safety across our fleet and components within our offices. - Evaluation of the Yes Pages 25-32 management approach See "Safety" section of the report on our approach / policies and statistics. CNCo has a “whistle-blowing” procedure in place to report any issues that may negatively affect health, safety or environment. This process can be an entirely confidential. Some relatively minor issues were reported through this channel with each case thoroughly investigated and appropriate action taken where required.

GRI 403 403-1 Workers representation in Vessel H&S committees operate on board each vessels with 45% of our seafarers represented on the joint H&S committees. formal joint For the offices, we have H&S committees in key locations: Singapore / Australia / NZ / PNG / Fiji (comprised of management–worker one representative from each department attending Quarterly meetings, however every employee is welcomed to attend any health and safety Yes relevant H&S meeting and speak if he/she has an issue that they wish to raise personally). This equates to 100% of our N/a committees workforce at every shore location.

GRI 403 403-2 Types of injury and rates Tables included in the report and references are provided in the "Safety" Section of the report. of injury, occupational diseases, lost days, and CNCo reports Total Recordable Cases which are comprised of: Lost Time Injuries + Medical Treatment Cases + Restricted absenteeism, and number Workday Cases in accordance with shipping Industry guidelines. Regional breakdown is not recorded because vessels operate of work-related fatalities Partial on a world-wide basis. Similarly, breakdown by gender is not considered important or currently required by the industry and Pages 79-80 therefore is not recorded.

Partial as data is not broken down by gender or region.

GRI 403 403-3 Workers with high Company provides care for all seagoing and shore-based employees whose workplace is controlled by the organisation. For incidence or high risk of seafarers we look after their health and welfare by providing gyms on board our vessels and improving cooks skills. diseases related to their occupation Seafarers are at an above average risk to develop mental problems ranging from a sense of isolation, loneliness, severe Yes homesickness all the way up to the risk of committing suicide. In 2016, CNCo partnered Befrienders Worldwide (BW), an Page 44 international network of crisis helplines to set up a dedicated e-mail and hotline service for CNCo employees who are feeling depressed or need emotional support. Befrienders Worldwide has an international network of over 350 crisis helplines in 36 countries that provides emotional support to those in despair. The services are confidential in nature.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 93 General Standard Disclosures - Core cont.

GRI 403 403-4 Health and safety topics Following topics are fully covered (100%) in CBA for seafarers: Working hours, sickness and injury (incl. sick pay), covered in formal compensation for disability and death, medical treatment, insurance. agreements with trade Yes N/a unions

GRI 416 416-1 Assessment of the health All persons, including third party contractors and client personnel on board Company vessels are subject to the same health and safety impacts of and safety requirements. SMS Section 5 deals with the safety, Health and Environment Management. All persons are product and service provided with a vessel induction and appropriately supervised throughout their stay on board. A record of induction and categories training is maintained on board. Personal Protective Equipment, Medical Locker and Pandemic Locker Equipment are maintained on board in accordance with the SMS Section 5. During the latter part of 2017, a Safety Maturity Assessment was conducted by a third party consultancy specialising in maritime safety. The aim was to gauge the safety maturity level both on Yes board the ships and ashore in the functions dealing with the ships. The results from the survey will be used to determine N/a which areas need improvement and how to ensure such improvement will indeed materialise.

Office H&S Committees meet regularly to assess impact of H&S issues and put measures in place to rectify it as necessary. 100% of CNCo services are assessed for improvement in the H&S area.

GRI 416 416-2 Incidents of non- Accidents / incidents that have caused injury or damage to a third party employee or third party equipment / assets are compliance concerning recorded using a Third Party Accident / Incident Report (TPA). In 2017 a total of 4 TPA’s were reported. the health and safety Yes Page 30 impacts of products and Contractor Safety is reported on page 30. There was an incident on MV Pakhoi where a stevedore fell from a ship stanchion services ladder. Court case is pending.

Ethical and Uncorrupted Company GRI 103 103-1 - Explanation of the We have high standards of business ethics and corporate governance, including zero tolerance towards any corrupt practices. 103-2 material topic and its This includes curtailing the practice of facilitation payments, as well as conducting due diligence on the ethical record of 103-3 Boundary transactional partners, including customers and suppliers. Our Code of Conduct is our main governance document which - The management together with other policies and procedures sets strong foundation on how we conduct our operations. Code of Conduct approach and its Yes CNCo has a “whistle-blowing” procedure in place to report any governance issues that may have a negative affect on CNCo. components Page 21 - Evaluation of the See "Governance" section of the report for more information. management approach No material issues were reported through this process during the reporting period.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 94 General Standard Disclosures - Core cont.

GRI 205 205-1 Operations assessed for CNCo's Corporate Code of Conduct is a comprehensive governance document that sets out rules on how CNCo group risks related to corruption employees must behave in the course of carrying out their duties. One of the areas covered by the Code is anti-corruption. The Code together with internal controls set a strong foundation to prevent any corruption related incidents. The Company carries out anti-corruption / anti-bribery training and on-line test for employees within the group to ensure their understanding of what is required of them. Yes Page 16 All our business operations are assessed for risks related to corruption. Any incidents of potential or actual non-compliance are reported to the Internal Risk Management Committee and investigated. The company has Zero tolerance towards corruption. For more information see "Anti-corruption, anti-trust and monopoly practices" sub-section of the "Governance" section of the report.

GRI 205 205-2 Communication and For more information see "Anti-corruption, anti-trust and monopoly practices" sub-section of the "Organisational Profile and training about anti- Governance" section of the report. corruption policies and procedures All Governance body members (100%) were trained on Anti-corruption as covered by CNCo's Code of Conduct. All CNCo Yes employees must comply with the Code of Conduct which covers AC. 100% of shore employees must pass the on-line training Page 16 administered through on-line portal.

CNCo's service agreements have antibribery clause.

GRI 205 205-3 Confirmed incidents of There were no incidents of corruption reported in 2017. corruption and actions Yes N/a taken

GRI 206 206-1 Legal actions for anti- There were no legal actions for anti-competitive behaviour, anti-trust, and monopoly practices in 2017. competitive behaviour, anti-trust, and monopoly Yes N/a practices

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 95 General Standard Disclosures - Core cont.

Financial Stability GRI 103 103-1 -Explanation of the Ability to generate revenue to cover operating costs, reduce debt, return capital to investors and make the necessary 103-2 material topic and its strategic capital investments to ensure long-term business success. Strong management of the balance sheet and cash flow to 103-3 Boundary maintain trust from investors, business partners and employees. - The management approach and its CNCo's sole shareholder is John Swire and Sons Limited which is a private limited liability company. Despite very challenging components Yes market conditions and strong competition, CNCo continues to expand its operations and invest in new tonnage. Many efforts Pages 3 and 4 - Evaluation of the have been made to seek efficiencies and cut costs to ensure profitability. management approach CNCo is a private company and does not publish financial statements. See MD's section for more information.

GRI 201 201-2 Financial implications and See "Climate-related risks and opportunities" section of the report other risks and opportunities due to Partial Pages 62-63 climate change

Human Rights and Modern Slavery GRI 103 103-1 -Explanation of the Providing a fair and safe working environment that is free from discrimination and harassment, respecting human rights and 103-2 material topic and its complying with all legal requirements related to employment conditions is critical to CNCo's sustainability. This includes 103-3 Boundary ensuring that all employees receive proper instruction regarding their own rights and are in a position to seek immediate help - The management if those rights are violated. In addition to the Code of Conduct we have "Equal Opportunities, Diversity, Inclusion and Respect approach and its in the Workplace" Policy. For more information see "Our people" section of the report. We also comply with UK Modern Day Code of Conduct components Yes Slavery Act 2015 (MSA) which covers our business and our supply chain (see MSA Statement on our website). MSA Statement - Evaluation of the Page 18 and 21 management approach CNCo has a “whistle-blowing” procedure in place to report any issues related to human rights and potential violations of the MSA. This can be an entirely confidential process. No material issues were reported through this process during the reporting period.

GRI 406 406-1 Incidents of discrimination CNCo was notified of eight cases of discrimination or harassment in 2017 through our Confide Line or the DPA. All cases were and corrective actions immediately investigated by Senior CNCo Management and treated with utmost confidence. Four cases resulted in taken immediate dismissal of the discriminator / harasser, with the employees relieved of their duties at the next port of call. For Yes the rest, matters were resolved with the parties involved. Pages 37-38

For more info see "Diversity in the workplace/Anti-discrimination and anti-harassment " section of the report.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 96 General Standard Disclosures - Core cont.

GRI 408 408-1 Operations and suppliers CNCo complies with the UK MSA. As part of that commitment we will not tolerate child / forced or compulsory labour within at significant risk for our business or in our supply chain. We publish an annual statement which is available on our website which details actions incidents of child labour taken and planned. In 2017 we carried out a number of self-assessments for our higher risk suppliers. MSA Statement Yes See section on "Child and Forced & Compulsory Labour / Modern Day Slavery Act" There were no cases of child labour in Pages 17-18 2017.

GRI 409 409-1 Operations and suppliers See section on "Child / Forced & Compulsory Labour / Modern Day Slavery Act". at significant risk for In 2017 we carried out a number of self-assessments for our higher risk suppliers. incidents of forced or Yes Pages 17-18 compulsory labour There were no cases of forced or compulsory labour in 2017.

GRI 412 412-1 Operations that have been We employ seafarers from many countries with a large percentage coming from: China, Pacific Islands, Philippines, Sri Lanka subject to human rights and Ukraine. We use manning agencies in those countries which are responsible for recruitment and management of human reviews or impact capital. We work with the manning agencies to ensure that they have all the necessary governance in place to prevent any MSA Statement assessments Partial potential human rights violations. We conduct due diligence using self-assessment questionnaires as well as physical audits Page 18 when possible. We also work with our high risk suppliers including shipyards to make sure that they comply inter alia with MSA provisions.

GRI 412 412-2 Employee training on We provided essential training to our management teams most likely to encounter potential issues with regard to modern human rights policies or slavery in line with best international practices. We also raise awareness of modern slavery of our seagoing and shore-based MSA Statement Partial procedures employees through monthly newsletters and presentations. Page 18

GRI 412 412-3 Significant investment In 2017, we have added the requirement for all new and re-contracted suppliers to comply with UK MSA by including a agreements and contracts relevant clause into CNCo’s Service Agreement template and by designing a specific MSA questionnaire to be a part of the that include human rights supplier on-boarding and management. MSA Statement Partial clauses or that underwent Pages 17-18 human rights screening More information can be found under "Child / Forced & Compulsory Labour / Modern Day Slavery Act" section of the report

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 97 General Standard Disclosures - Core cont.

Labour Standards and Relations GRI 103 103-1 - Explanation of the Providing all statutory benefits that cover workers' basic needs, working and rest hours, minimum employment age as well as 103-2 material topic and its protecting basic worker rights, enhancing workers' job security and improve terms of employment including provision of 103-3 Boundary healthcare. CNCo aims to be the Employer of Choice by treating people with respect and providing them with good and safe - The management working conditions, equitable remuneration and benefits. In addition to compliance with all statutory requirements which approach and its includes ILO Maritime Labour Convention (MLC) for our seagoing employees, we aim to go beyond legislation in ensuring that components our employees are well looked after and safe. We have in place governance structures supported by our policies and Code of Conduct Yes - Evaluation of the procedures. For more information see "Our people" section of the report. Page 21 management approach CNCo has a “whistle-blowing” procedure in place to report any issues related to labour practices. This can be an entirely confidential process. Seagoing employees can also contact DPA to raise any issues related to the conditions of their employment. No material issues were reported through this process during the reporting period.

GRI 401 401-1 New employee hires and See "People" section of the report and tables in the Data Section employee turnover Yes Pages 84-85

GRI 401 401-2 Benefits provided to full- All of the statutory benefits are provided as an absolute minimum in all of CNCo's key locations for all employees. Additional time employees that are benefits for full-time employees include: not provided to temporary or part-time employees - Life insurance and disability coverage - Bonus payments and long service awards

All of our seafarers receive: Yes - Private Healthcare Page 36 - Pension arrangements or cash in lieu for all seafarers - Life Insurance - Collective Bargaining Agreement in place with International Transport Federation (ITF) affiliates - Discretionary training

Key locations are defined as countries where more than 3% of our employees are based.

GRI 401 401-3 Parental leave Out of 28 employees who were granted maternity and paternity leave during the reporting period, 24 returned to work. Partial N/a

GRI 402 402-1 Minimum notice periods 30 days notice is provided for the seafarers. regarding operational Notice period is specified in collective agreements which are in place for CNCo seafarers. N/a changes

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 98 General Standard Disclosures - Core cont.

GRI 407 407-1 Operations and suppliers CNCo seafarers are covered by collective bargaining agreements (CBA) or equivalent. All contracts are fully compliant with the in which the right to Maritime Labour Convention (MLC) 2006. freedom of association and collective bargaining Yes We only consider our direct employees to be material. We do not assess the rights to freedom of association of our suppliers, N/a may be at risk as it is not material for a shipping company.

Changing Workforce Demands GRI 103 103-1 -Explanation of the During the time of fast technological developments in the field of wide spread e-communications there is fast growing 103-2 material topic and its expectation of existing or potential sea going employees that shipping companies should provide access to internet to 103-3 Boundary facilitate easier connectivity with families at home. And more generally, having improved working conditions on board. - The management approach and its CNCo carries out Employee Engagement and Alignment surveys every two years to provide opportunity to all CNCo components employees to state their views on issues requiring attention. Those issues are recorded, reported to Senior Management and Code of Conduct Yes - Evaluation of the actions taken are reported back to employees. For seagoing employees, CNCo also holds seafarer forums in various countries Page 21, 42 management approach to inform them about Company's strategic direction, forthcoming developments and to provide feedback and answer any questions they might have.

No material issues were reported during the reporting period.

Cybersecurity GRI 103 103-1 -Explanation of the The pace of digitisation has far exceeded regulation to control and manage data privacy and protection, leading to data and 103-2 material topic and its liability breaches that can cost millions, and compromise data of customers. In the marine sector, increased automation and 103-3 Boundary integration via online platforms, have simultaneously increased the risk of cyberattacks that threaten to halt operations and - The management safety of crew on board. CNCo takes those risks seriously and identified Cybersecurity as a material issue for business. We approach and its have Information Security Policy which is available on Corporate Intranet. components Yes Page 18 - Evaluation of the In 2017 all the office employees completed the on-line cybersecurity awareness course. Regular communication on security management approach measures is provided via e-mails, NiuSwire and town hall meetings.

For more information see "Cybersecurity" section of the report. Any security issues reported were dealt with immediately and with minimum disruption to the customers.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 99 General Standard Disclosures - Core cont.

Clear and Transparent Communications GRI 103 103-1 -Explanation of the In addition to acting responsibly, companies are expected to effectively communicate their sustainability efforts to internal 103-2 material topic and its and external stakeholders. Sustainability is a way to position and differentiate CNCo in the long term. We are constantly 103-3 Boundary looking for ways to reach out to our stakeholders to tell the story about our Sustainability journey. This SD report is a - The management comprehensive record of what we do to ensure that CNCo is an ethical company that is doing business in a socially and approach and its Yes environmentally responsible manner. This report components - Evaluation of the We aim to foster a dialogue with our stakeholders by using various forms of communication and solicit feedback. management approach

Ship Recycling GRI 103 103-1 -Explanation of the CNCo is committed to the safe, sustainable and responsible recycling of its vessels at the end of their economic life at 103-2 material topic and its carefully selected and independently certified Ship Recycling Facilities. Doing so properly safeguards the health and wellbeing 103-3 Boundary of ship recycling workers and ensures that harmful chemicals and toxins are not released into the environment. CNCo - The management identified Ship Recycling Facilities which are early voluntary adopters of the Hong Kong International Convention for the Safe approach and its and Environmentally Sound Recycling of Ships (HK Convention) in Alang, India. CNCo have been building capacity at selected components Yes yards to be ClassNK Certified, HK Convention compliant, and getting them to improve their social conditions. Additional Pages 57-58 - Evaluation of the voluntary investment included placing monitoring teams at the yard with the mandate to “STOP any unsafe act”. management approach See "Sustainable Ship Recycling" section of the report. No grievances were recorded during the reporting period.

GRI 306 306-2 Waste by type and CNCo sustainably recycled 2 vessels at the end of their working life at Ship Recycling Facilities in Alang, India: disposal method MV Chengtu 9,397 tons of recycled material 53.73 tons of hazardous waste 28,680 tons of Oil / Bilge water 99.97% recycled, components re-used.

Yes MV Chenan Page 58 9,403 tons of recycled material 64,745 tons of hazardous waste 40,230 tons of Oil / Bilge water 99.74% recycled, components re-used.

The Ship Recycling Facilities we use in Alang are managing waste disposal. All waste products which could not be recycled, were collected by qualified contractor(s) to dispose of in accordance with the local regulations.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 100 General Standard Disclosures - Core cont.

GRI 306 306-3 Significant spills No significant spills were recorded from operations or during ship recycling in 2017. Yes Page 81

GRI 306 306-5 Water bodies affected by There were no water discharges and / or runoffs during ship recycling. water discharges and/or Yes N/a runoff

Transparency in Supply Chains GRI 103 103-1 -Explanation of the Understanding our supply chain risks, conducting due diligence on our suppliers and supply chain partners to ensure that our 103-2 material topic and its supply chain is fully compliant with any regulatory, environmental and H&S requirements as well as free of human rights 103-3 Boundary violations and modern slavery. We have in place Supply Chain Sustainability Code of Conduct and a due diligence process for - The management suppliers. To start, we are focussing on high risk / high value suppliers. approach and its Supply Chain Sustainability components Yes For more information see "Supply chain and Procurement management" section of the report and Code of Conduct for Code of Conduct - Evaluation of the Suppliers. Page 21 management approach No grievances or issues were recorded during the reporting period.

GRI 308 308-1 New suppliers that were Environmental and Social criteria are included in the Supply Chain Sustainability Code of Conduct. We have developed Supply screened using Chain Sustainability questionnaire (for self-audits and for the follow up physical audits) for high risk suppliers. The environmental criteria questionnaire covers main areas of sustainability risks and asks for evidence on how those risks are managed. Around 20 strategic suppliers submitted self-audit questionnaires and were assessed. We are working on developing and rolling out a Yes wider supplier assessment and audit programme in the next couple of years using risk based approach. N/a

Percentage of suppliers screened is 0.004% (out of 5,000).

GRI 308 308-2 Negative environmental SD Supplier self-assessment questionnaire asks about supplier's environmental impacts: impacts in the supply chain and actions taken - What are the company's main environmental impacts? - What is the company doing to manage its environmental risks and impacts?

Answers to those questions are assessed by procurement department and if any issues found, raised with the SD Yes Department. Those areas are also covered during high risk supplier audits. N/a

Around 20 of high risk suppliers were audited during the reporting period. No suppliers were identified as having significant actual or potential negative environmental impact.

Percentage of suppliers assessed is 0.004% (out of 5,000).

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 101 General Standard Disclosures - Core cont.

GRI 414 414-1 New suppliers that were Labour practices criteria are included in the Supply Chain Sustainability Code of Conduct and questionnaire. We have screened using social developed a separate MSA specific questionnaire for high risk suppliers to undergo the self-audit process. The questionnaire criteria covers the main areas of social risks and asks for evidence on how those risks are managed. CNCo complies with the Modern Day Slavery Act.

Yes For more information see "Child / Forced & Compulsory Labour / Modern Day Slavery Act" section of the report. Around 20 Pages 17-18 new suppliers responded the MSA self-audit.

Percentage of suppliers screened is 0.004% (out of 5,000).

GRI 414 414-2 Negative social impacts in Only High Risk suppliers are assessed. Supplier self-assessment questionnaire covers areas related to supplier's social impacts the supply chain and such as labour practices and human rights. actions taken Yes Answers to those questions are assessed by relevant departments and SD team. Around 20 suppliers were assessed in 2017. N/a No suppliers were identified as having significant actual or potential negative social impact. More high risk supplier audits are planned for 2018.

Big Data and Systems integration GRI 103 103-1 -Explanation of the Big data analytics are applied to many industries to promote better quality decision-making processes. Big data is voluminous, 103-2 material topic and its with variety and velocity of data generated and collected from multiple systems is stored in either structured or unstructured 103-3 Boundary form. Data driven decision making is important for operational efficiency improvements, route and supply-chain optimisation, - The management ship operational efficiency, cargo tracking and regulatory compliance as well as fuel savings (Bunker costs) etc. approach and its components By using big data and system integration CNCo can improve energy savings from operations, safety, schedule management, - Evaluation of the fleet planning, fleet allocation, service planning, chartering, condition monitoring and maintenance, environmental management approach Yes regulation compliance, hull and propeller cleaning, retrofit and modification. For new buildings, sensor data collected from N/a past vessels will be used for design optimisation. Data collected from ship’s sensors using IOT will be helpful for predictive analysis, which is necessary to avoid delays and increase the ship’s overall operational efficiency.

CNCo acknowledges the importance of big data in the efficiency and the efficacy of our operations. We established the position of Data Compliance Manager to assist us in this area and the position will commence in 2018.

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 102 General Standard Disclosures - Core cont.

Diversity and Inclusion GRI 103 103-1 - 107:107Explanation of Ensuring that the business offers the right conditions for all employees to thrive, regardless of gender, race, cultural, and 103-2 the material topic and its other differences. This includes the examination of deep structural inequalities within the businesses, including the 103-3 Boundary distribution of minorities in upper management and the design of vessels to manage diverse needs. Evidence shows that - The management diverse teams perform better, so part of this is redesigning the business for higher performance. approach and its components We continue to seek to encourage more women to join CNCo fleet by creating a culture where women feel safe and are - Evaluation of the supported. We have in place "Equal Opportunities, Diversity, Inclusion and Respect in the Workplace" Policy which aims to Code of Conduct management approach Yes embed diversity and equality into all our operations to ensure that we benefit from a welcoming, positive, innovative and out- performing work environment, which is essential to CNCo’s continuing success. In addition to the policies we provide an Pages 21, 37-38 Advice and Guidance whistleblowing hotline to deal with any potential issues.

Please see "Diversity in the workplace / Anti-discrimination and anti-harassment" section of the report for more information.

There have been no grievances reported during the period covered by this report.

GRI 405 405-1 Diversity of governance The balance of the Executive team from the gender, age and ethnic diversity perspective is a recognised issue for CNCo: all bodies and employees Board Members are male; two out of ten ExCom members are females with the balance being men. This issue is being addressed through Leadership Development training and succession planning. Employee breakdown by gender and age group Yes are included in the report. Page 37, 84-85

See "Our People" section of this report for more information.

GRI 405 405-2 Ratio of basic salary and This is not tracked or reported. remuneration of women No N/a to men

GRI 406 406-1 Incidents of discrimination No incidents of discrimination were recorded in 2017. and corrective actions Yes N/a taken

The China Navigation Company / Sustainable Development Report 2017 Global Reporting Initiative (GRI) Standards Content Index 103 General Standard Disclosures - Core cont.

Community Investment and Development GRI 103 103-1 -Explanation of the Support of local communities in countries and communities where CNCo has a major presence is important to us. Support 103-2 material topic and its may come in the form of investments in education and talent development, as well as specific projects to address specific 103-3 Boundary development challenges for that community, including environment, waste management, health, education, etc. CNCo - The management believes that long-term value creation depends on the sustainable development of the Company and giving back to the approach and its different communities in which CNCo operates and which it impacts. Our SD Policy covers this commitment. Sustainable Development Policy components Yes - Evaluation of the CNCo has a “whistle-blowing” procedure in place to report any community related issues. No material issues were reported management approach through this process during the reporting period. Pages 45-51

See "Our Communities" section of the report.

GRI 413 413-1 Operations with local See "Our Communities" section of the report. CNCo invests in our key stakeholder communities due to the global nature of community engagement, our operations. A number of Corporate Philanthropic (CP) projects are being implemented in various geographic locations impact assessments, and Partial with numerous employee engagement activities. We calculate Social Return on Investment for large Community Investment Pages 45-51 development programs projects to ensure that they create value to the communities. We monitor our CP projects to measure impact.

GRI 413 413-2 Operations with The nature of our global operations means that we serve many communities worldwide by transporting goods between significant actual and various ports. We have more impact in small island states in the Pacific as we are an integral part of their economy and have potential negative impacts been operating in that region for decades. We also employ a large number of seafarers from China / Philippines / PNG / Sri on local communities Lanka / Ukraine and the Pacific Islands which we consider our key stakeholder communities. We have a number of Community Investment and Corporate Philanthropic projects in those countries. Every project is carefully evaluated prior to Yes initiation to ensure that there is no negative impact on local communities. Pages 45-51

The environmental impact is kept to minimum as we comply with all current environmental regulations and deal with any incidents promptly and in full cooperation with local authorities.

The China Navigation Company / Sustainable Development Report 2017 Contact 104

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

Simon Bennett General Manager Sustainable Development The China Navigation Company 300 Beach Road #27-01 The Concourse Singapore 199555

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

The China Navigation Company / Sustainable Development Report 2017 Assurance Statement 105

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 Co. Pte. Ltd. (CNCo) commissioned Copeland & Partners Limited to conduct independent assurance of its 2017 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 SD Report covering the calendar year 2017 and to determine conformance of the report contents with the requirements of the Global Reporting Initiative (GRI) Standards: Core option. An assessment of the company’s SD initiatives and reporting was also conducted, and recommendations were provided to management on the company’s overall performance.

Methodology

The assurance process, which was conducted from October 2018 to February 2019, involved a desktop review of CNCo’s 2017 SD Report to identify a representative sampling of data and information, as well as claims regarding management systems, performance and corporate strategies, for verification. Information was provided by 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, claims and content included in the report and the company’s strategies for managing CNCo’s sustainability issues and plans for improvement. Based on this review process, observations were made which resulted in CNCo making minor amendments to the report and its GRI Content Index.

Findings

Based on the claims and data sampled, CNCo’s 2017 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 being in accordance with the requirements of the GRI Standards: Core option, in terms of its coverage of the required principles and general disclosures, and identified material topics and disclosure items. 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 continues to engage its stakeholders on sustainability. CNCo’s material sustainability issues are substantively covered as well as the challenges associated with the impacts of climate change on the business. The report describes the company’s efforts to develop its staff, keep its operations safe, and reduce its environmental impact as a responsible player in an industry that operates under a global framework, moving towards decarbonisation.

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Assurance Statement 106

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

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 and commitment to:

• Make safety excellence the top priority both ashore and at sea with zero fatalities in 2017, and tangible improvements in terms of reduced Lost Time Injury as well as the seriousness of the injuries. • Maintain a continuing commitment to the Zero Harm goal, as demonstrated by the hiring of a third-party consultancy firm to conduct a Safety Maturity Assessment. • Invest in its seafaring communities, thereby making a positive impact close to CNCo's operations. Examples include partnerships with organisations such as The Mission to Seafarers, the Sailors' Society and the Anscor Swire Ship Management (ASSM) Dependents Association. • Enter into a Memorandum of Understanding with the Secretariat of the Pacific Regional Environment Programme (SPREP) to solve a serious waste management challenge by using empty CNCo containers being shipped to their next destination to transport recyclable waste from Pacific Island ports to be sustainably treated and recycled in the Asia Pacific region. • Dedicate funds and resources to the sustainable recycling of two vessels at the end of their working life in Alang, India, thereby providing significant employment in the region and earning the company a double award for The Most Impactful SD Project and The Best Sustainable Development Project, at the Swire Group Sustainable Development Forum 2017. • Implement environmentally-responsible initiatives, such as propeller polishing, use of anti-fouling and slime release paint and trim optimisation, resulting in significant fuel consumption and greenhouse gas emission reductions. CNCo was recognised for this initiative by winning the 2018 Seatrade Maritime Fuel Efficiency Award. • Diversify the business across a wider variety of customers and types of commodities to improve the economic sustainability of CNCo’s business. • Report transparently on the regrettable cases of discrimination and harassment identified in 2017 and how they were addressed by management in an appropriate manner. • Continue to provide the CNCo General Manager for Sustainable Development with a direct reporting line to CNCo's Managing Director and a seat on the Executive Committee to provide sustainability input on new projects. • Adopt a leadership role in the industry by upholding anti-corruption practices and advocating against 'facilitation payments' with initiatives such as the "Say No" campaign, which already delivered an improved operating environment, including for CNCo’s staff. • Align CNCo's strategy (CNCoThrive) with the group’s (SwireThrive), link it to the UN Sustainable Development Goals, and track performance and progress. • Leverage the purchasing power of the company to drive continuous business improvement with a Central Procurement Department that is able to gain efficiencies, save costs and minimise risks. • Provide continued commitment to staff training and development with a significant increase in investments towards the ongoing training of both seagoing and shore-based employees. • Report transparently on the process to determine executive pay and bonuses by management and to integrate these focus areas into its operations. • Engage its internal and external stakeholders on an ongoing basis to gather feedback on CNCo’s sustainability initiatives and performance and the company’s material issues, and to disclose material issues by key staff groups.

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Assurance Statement 107

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

Recommendations for Future SD Strategy and Reporting

The commitment and resources that CNCo has dedicated to integrating sustainability into its business processes and to managing potential risks and opportunities is commendable, as is the progress made in addressing the recommendations of the previous assurance process. Going forward, CNCo is encouraged to maintain its comprehensive approach to addressing and reporting its sustainability performance and to focus on the following key areas:

• Deepening CNCo's approach to assessing its environmental footprint as part of its ultimate "net zero impact" goal. • Continuing CNCo’s efforts to develop internal, science-based targets to reduce greenhouse gas (GHG) emissions, towards its decarbonisation goals. • Expanding the scope of management incentives beyond fuel-saving efficiency to encourage new ways of doing business and truly elevate standards in the industry. The waste recycling project in the Pacific Islands (Moana Taka Partnership) is a good example of innovation with a positive environmental impact. • Expanding reporting to include details of the super-eco design features of CNCo's new building programme and disclosing data of how it will impact positively the overall GHG footprint of the CNCo fleet. • Helping improve general industry standards by demanding high sustainability performance from suppliers and conducting regular, onsite audits to monitor compliance. • Continuing progress towards the goals set as part of the CNCo Strategic Scorecard. • Deepening CNCo’s commitment to biodiversity protection as directed by its Biodiversity Issues of Concern (BIC). • Following on from the Safety Maturity Assessment, creating a plan to embed 'Safety Leadership', 'Safety Reporting', 'Competence & Performance Management, and Officers', and 'Managers' Commitment' further in the company culture. • Working towards gender equality in CNCo's management with initiatives such as the leadership development training and succession planning. • Maximising the efficiency of the significant number of training hours provided by CNCo to its employees, and covering additional programmes such as the benefits of diversity in the workplace and a harassment-free environment, the importance of resource stewardship on board and at shore, and in general, the protection of the environment. • Continuing stakeholder engagement initiatives and reporting on results to provide a transparent and balanced view of material issues by stakeholder group and disclosing the results of the independent scan conducted to identify concerns raised by business and peer groups.

Anne Copeland Managing Director & Sustainability Advisor, Copeland & Partners Ltd February 11th, 2019

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