About the CSR Report 4 04、Care for employees and Environmental Safety 72 I. Talent attraction and development 74 A Message from the Chairman 6 II. Employee communication and care 82 III. Protection of working environment 86 Stakeholders and Issue Management 9

、Promotion of Education and 、Business Status and 05 01 Contribution to Society 88 Operating Strategies 24 I. Promotion of education 90 I. Company profile 26 II. Contribution to society 92 II. Operating strategies 30

III. Compliance 33 CONTENTS IV. Risk control 35

02、Partnership and Customer Management 38

I. Supplier management 40 II. Associate partner 44 III. Customer management 45 IV. Cargo safety 48

03、Environmental protection and Sustainable Shipping 50

I. Energy management 52 II. Emission management 59 III. Waste and water resource management 61 IV. Sustainable shipping development 68 Corporate Social ｜ Responsibility Report ｜

Interval of issuance disclose relevant performance information, the information of the fleet regarding the environmental and educational training also involves our subsidiaries in Britain and We have issued the Corporate Social Responsibility (CSR) Report Singapore. The information about the expatriates covers the individuals under the since 2013. The CSR Report covers the actions and achievements centralized management the Evergreen Group (Evergreen International Corporate). There of the Evergreen Marine in regards to its economical, social, and is no substantial change of the Company in terms of the scale, organizational structure, environmental aspects in 2016 (from January 01, 2016 to December 31, or ownership that may seriously affect the CSR Report during the report period. For more 2016).

About the CSR Report information about the organizational structure of the Company, refer to Pages 16 to 18 of We issue the CSR Report every year, the 2015 report was released the 2016 Annual Report. on September 30, 2016. The next issue will be released in November The information is disclosed under the editing structure of the CSR Report according 2018. to the “core＂ options of the GRI G4 (Global Reporting Initiative).

Editorial policy All the local or important operating bases disclosed or referred External assurance to in the CSR Report indicate those in the Taiwan area. To completely We commissioned Deloitte Taiwan to conduct limited assurance in accordance with the ROC Statements of Assurance Engagements Standards No 1. “Assurance Engagements other than Audits or Reviews of Historical Financial Information＂.

Contact information You are welcome to download the CSR Report from our website https://www. evergreen-marine.com/tw/ (PDF file).

If you have any question about the CSR Report, please contact us:

CSR Committee, Evergreen Marine Corporation Address: No.163, Sec. 1, Xinnan Rd., Luzhu Dist., Taoyuan City Tel.: 03-312-3247 E-mail: [email protected]

4 2016 EMC CSR Report 5 Corporate Social ｜ Responsibility Report ｜

The year 2016 was a tough year for all the container shipping service environmental protection pages on our website to describe our emission control and waste disposal providers in the world. In addition to the low growth rate of the global trading measures for the fleets, and instantly reply to the query of our customers about the information of our business and the recession of the global economy, the acquisition and merger of environmental protection. We won the Excellent Environmental Protection Award from the Los Angeles the five giants in the shipping industry, the bankruptcy of the international top- Harbor Department as a praise for our outstanding performance in executing the Vessel Speed Reduction seven shipping companies. The increasingly dropped freight due to imbalance of (VSR) program of the San Pedro Bay, California, in 2015 and our contribution to the protection of the

A Message from the Chairman the supply and demand on every shipping route brought great challenge to the environment. In addition to the environment-friendly fleets, the e-Commerce website (ShipmentLink.com) operation of the shipping companies. In the pessimism of the participants over the of the Company introduced a comprehensive service platform to continuously improve the quality of our development of the market, all of the Evergreen folks persisted in keeping with the e-Service. We introduced online registration and remittance information upload functions in the Greater operating philosophy of sustainability and positively enhanced the management China Region to enable the customers to understand the status of the remittance by clicking the mouse. of the operating income and cost, increased the fuel-saving efficiency, extended The navigation safety is our most concern in the training of the employees in terms of the the cooperation with our strategic associate partners to develop new markets, management and business operation. The EVERGREEN Seafarer Training Center is equipped with and improved the training of the employees in order to strengthen the core comprehensive training facilities and provides various training courses. A total of 30 professional training competitiveness of the Company. Thanks to the growth starting in the fourth courses in 359 phases were held in 2016 and 2,576 seafarers participated in the training. Our seafarer quarter, all the business indicators including the utilization of the shipping space training center is recognized by the U.K. Maritime and Coastguard Agency (MCA) and the Maritime and and the average freight income have been substantially improved. Port Authority (MPA) of Singapore. The “ship-shore rotation＂ system originated from us has been a good Regardless of the unprecedented impact on the container shipping market example in the industry since it was put into practice. It not only provides an opportunity for the seaman in 2016, we always believe that we must be serious with environmental protection, to work on land, but also facilitates the conformity of the shipping schedule arrangement, allocation of employee care, and public service responsibility under our operating philosophy of shipping space, loading and unloading at the wharf, and ship repair to the requirements of the marine sustainable development while pursuing the highest income and shareholders´ work with the help of the outstanding seamen and their professional knowledge. This is very helpful to interests, because only placing more importance on the environmental protection improve the overall operation efficiency of the entire transportation service chain. The seamen will have and CSR can we demonstrate the value more opportunities for their work on the ship and land and can take more care of their family thanks to of the sustainable development. the ship-shore rotation and expiration system. A tacit understanding will be formed in the ship-shore cooperation by changing the roles of the seamen. Creativity always originates from professionalism and In the environmental insight. In addition to the internal and external professional training, our online learning system enables the protection, all of our new employees to learn professional knowledge required for their work and improve their competence at any ships meet the requirements time. of the latest environmental protection standards in As for the social responsibility, we have provided maritime schools and colleges with cooperative the industry. We also take education programs and practical training opportunities for many years. We are currently implementing continual actions to cooperative education programs with 3 maritime colleges in Taiwan and promoting the Intern Pre-selection improve existing fleets and, thus, system. A fixed number of candidates for the internship are provided to each school and college every ensure compliance with year to train the talents needed for the shipping industry in the future. As for the projects, we enhance the the requirements of the cooperation with the National Kaohsiung Marine University to train maritime talents on a broader basis. California Air Resources We also offer special shipping technology classes for the graduates in the hope to train young people who Board (CARB). We have not yet graduated from maritime colleges with a series of complete professional knowledge and frequently update the techniques and give them an opportunity to work on a ship. We work with the Chang Yung-Fa Foundation

6 2016 EMC CSR Report 7 Corporate Social ｜ Responsibility Report ｜

for public service by sponsoring the activity of fostering a search and rescue dog and donating funds to the Taiwan Elites´ Search and Rescue Association to support them in their engagement in the rescue Stakeholders and Issue Management mission. We give required assistance to the victims in addition to the donation. We will continuously No business can be successful without the support and collaboration of the stakeholders. Hence, integrate the resources of the Evergreen Group and work with other public service organizations to take smooth communication and interaction are indispensable in business operations. As the most important shipping company in Taiwan, we know how important the opinions of the stakeholders are. Hence, we try care of disadvantaged minorities and promote various public welfare undertakings. Lecture courses on the to understand them and their concerns through analysis and give them feedbacks. Fair Trade Act, Evergreen Group Loss Prevention symposiums, and other courses beneficial to the public service are provided on an irregular basis as well. I. Identification of stakeholders The global container transportation market is still challenging in the future. The problems it may A. Analysis of stakeholders encounter include the uncertainty of the global politics and economy, possible emergence of possible trade protectionism, the temporary imbalance of the shipping capability, geopolitical conflict, and We generalized 9 types of stakeholders from the operating status in 2016 and our experience in the compilation of the annual reports over the past years. With the participation of 22 departments, we jointly fluctuation of the oil price. However, we believe that ships will navigate more safely with the development identified the stakeholders of each type and the degree of their relationship with the Company based of the technology and the implementation of the environmental protection convention will ensure a on the following five principles in the AA1000 international standard: Responsibility, Influence, Tension, more environment-friendly shipping industry. The transport in the form of alliances among the shipping Diverse perspectives, and Dependency. The supplier was our most important stakeholder in 2016 followed by the competent authority, customer, etc. companies will improve the utilization of the transport capacity on the market, and the cargo owner will expect more of the shipping company to have sound operating capability. With the spirit of Evergreen Ranking of the stakeholders by the degree of their relationship with - Challenge, Innovation, and Team - in mind, all of our folks will overcome the challenges positively and Evergreen Marine in 2016 innovatively. We will implement the corporate governance and take our corporate social responsibility Ranking Type of stakeholders Importance to Evergreen Marine conscientiously.

Ensuring the product and service supplied meet the requirements 1 Supplier of the Company

Helping the government agency understand the Company in the 2 Competent authority compliance with laws through communication with it.

3 Customer The source of our income

Anchor Chang, Chairman of Evergreen Marine Corp. (Taiwan) Ltd. 4 Employee The members and assets of the Company on dehalf of Evergreen Line 5 Shareholder/investor The person who funds the Company •The partners operating the shipping lines in an associate form Other shipping to meet the requirements of the customer 6 companies •Ensuring the shipping service provided meet the requirements of the Company Releasing latest news and publicizing the positive image of the 7 Media Company through smooth communication to help the public know more about the Company

8 Community and society Public safety environment around the Company

Social group and non- The major partners of the Company in the engagement of public 9 profit organization care and service activities

8 2016 EMC CSR Report 9 Corporate Social ｜ Responsibility Report ｜

B. Communication with stakeholders • Sustainable strategies and Investor service area on Any time their implementation Company's website We contacted the nine most important stakeholders of our business regularly or irregularly in different As specified ways to ensure full communication of every issue. Important financial and by the • Shipping management business information in competent Type of Communication Communication MOPS Item issue authority stakeholders tool frequency Shareholder Organization of informal 5 institutional investor • Supplier management E-mail, telephone Any time / investor • Information disclosure and conference or acceptance Irregular transparency • Sustainable strategies 1~2 times every of the interview request Meeting and their implementation year from institutional investors • Operating performance 1 Supplier • Risk control Supplier evaluation Every year Annual reports in Every year shareholders’ meeting • Information disclosure • Risk control and transparency Equipment efficiency Every month statistics table • Shipping management • Operating performance Regular Meeting • Sustainable strategies and (quarterly) • Sustainable strategies and their implementation their implementation Other Telephone, letter Irregular • Information disclosure and 6 shipping • Information disclosure and transparency transparency companies Telephone/email Competent Meeting Irregular 2 • Compliance • Operating performance authority Personal visit • Work environment safety • Risk control Visit, conference Irregular and labor health protection • Compliance • Ship safety • Ship safety • Product risk E-mail, telephone Any time • Pollution control and Telephone/email Any time • Service quality and customer 7 Media environmental protection Visit Irregular satisfaction survey • Shipping management • Protection of customer 3 Customer privacy • Operating performance • Shipping management Company’s website Any time • Compensation, welfare, and • Sustainable strategies and employee care their implementation • Environmental impact and • Sustainable strategies and e-Bulletin board Irregular ecological conservation their implementation Community • Operating performance Personal visit Irregular Top-management 8 and • Compensation, welfare, instructions at operation Every month society and employee care • Sustainable strategies and meeting their implementation 4 Employee Regular and irregular Every month, any • Compliance • Pollution control and meeting time environmental protection Company’s NOTES • Operating performance Any time Telephone/email Operating System Social group • Social care and practical Management meeting Irregular • Corporate governance and 9 and non-profit pubic service activity Telephone and e-mail Any time Personal visit credible business operation organization

10 2016 EMC CSR Report 11 Corporate Social ｜ Responsibility Report ｜

II. Analysis of important issues Item no Category Important issue Meaning to Evergreen Marine

A. Understanding of sustainability issues Facing the fluctuating international trade market, Shipping 1 Economic issue we develop our business by positively seeking We developed a questionnaire and surveyed the 9 types of stakeholders and internal top management for strategic alliances. management to understand to what extent the stakeholder were concerned about different sustainability issues and how high the impact of these issues was on our business operation. The sustainable development of an enterprise involves a wide range of issues. We generalized 23 sustainability issues from We operate our business honestly and credibly Corporate and persist in the policies of anti-corruption, anti- the characteristics of the industry, international tendency, and important facets of sustainability. These 2 Compliance governance discrimination, and fair competition. issues included corporate governance, economic issue, environmental issue, labor and human rights issue, social issue, product liability issue, etc. Keeping the ship and cargo in a safe state is a In 2016, we received 182 effect responses to the issues that external stakeholders were concerned 3 Economic issue Ship safety constant commitment of the Evergreen Marine about and 16 effect responses to the impact issue that internal management was concerned about. The to customers result of the analysis gave a ranking of the 23 issues on the concern and impact. We made a matrix as shown below with these issues as a basis. We pay attention to all the risks identified during Corporate 4 Risk control the business operation and develop complete governance risk control measures Sustainable strategies and ◆ their implementation Shipping High management Sustainable As one of the top-5 shipping company in the Information Operating performance – Compliance Corporate disclosure ▲ + 5 strategies and their world, we are especially concerned about our Degree of stakeholders governance and transparency implementation social responsibility. ＊ – Ship safety Work environment safety and labor health protection Risk control ◆ × We are dedicated to improving the operating Operating ■ 6 Economic issue performance to the expectation of the Corporate governance and credible performance business operation shareholders and investors Medium ▲ Pollution control and environmental protection Human Service quality and rights Impact on customer satisfaction survey ＊ Protection of customer privacy Since the shipping industry is facing higher risk ▲ Work environment and business Compensation, Labor and human than other industries, we are more careful about equality operation due to welfare, and 7 safety and labor ● the personal protection measure and labor climate change employee care ×Product risk rights issue – ◆ health protection health status. ● ’ Supplier management concern Pollution control We know very well how shipping affects the Talents recruitment and trainin ＊ Low 8 Environmental issue and environmental global environment and are dedicated to ■ ×Environmental impact and ecological conservation protection reduction of the impact. Social care and – Public affairs and international participation practical We rely on the trust and support of the Labor-capital pubic service + Protection of costumers for our business operation and take activity relations ■ Energy/resources usage, energy saving, 9 Product liability issue and carbon reduction customer privacy all required measures to protect the information Low Medium High of the customers. Degree of impact on business operation We selected the issues that attracted high attention of the stakeholders and had high impact on B. Management of important issues our business operation and the issues that had a high or medium degree of concern or impact, where appropriate, as the important issues of 2016. A total of 9 important issues were generalized during the We have established complete management policies as well as measurement and management selection. They were shipping management, compliance, ship safety, risk control, sustainable strategies systems to ensure managing and responding to all the important sustainability issues. We also follow-up and their implementation, operating performance, work environment safety and labor health protection, annual performance and set goals for the future in the hope to make improvement in all aspects every pollution control and environmental protection, and protection of customer privacy. year.

12 2016 EMC CSR Report 13 Corporate Social ｜ Responsibility Report ｜

Boundary Important Important Measurement and 2016 Management policy Future goal issue consideration management system performance highlight Internal External

Ensure stable and premium Conduct regular internal and Plans were made for all the associate Operate shipping lines on different Customer, shipping service of the Evergreen external license review and respond shipping lines on time and delivered associate bases to meet the service Shipping Evergreen other Marine on every shipping line to stakeholder’s opinions to the responsible department for requirements of the customer and management Marine shipping and conduct review of shipping implementation. Review of shipping improve our competitiveness in the companies performance line performance was conducted. operation of the shipping lines.

Keep business relationship with •Make sure the performance When viewing the design plans • Continuously design more Shipping the shipping companies and ship indicators in the ship model test of two new 2800 TEU ships to be environment-friendly and low fuel management survey institutions in Taiwan, Korea, and seal trial results comply with manufactured by CSBC and Imabari consumptive ship to enhance the and Japan; update and exchange the construction specifications Shipbuilding, it was conformed competitiveness of our fleets Evergreen Ship design Supplier the latest international regulatory and international regulatory that the fuel saving, environmental •The on-site supervision team Marine requirements, changes of external requirements. protection, and easy-to-maintain identifies problems in the shipyard environment, and application of •The feedbacks from internal ship ideas of the Company have been and help to improvement of the new technology to the design of using departments and ship survey applied to the new ships construction. new ships. institutions

Compliance Ensure that the ships of the Provide appropriate reports to There were no hefty fines imposed “Zero” violation of environmental (environmental Evergreen Competent Evergreen Group meet the related departments for further due to violation of the environmental laws or regulations and shipping Marine authority international requirements and the arrangement according to the laws laws or regulations in 2016. responsibility) regulations of the port state and regulations

• We introduced e-mail audit •Check every month to know •Seven training courses on anti- • Used the AI mail audit software software to audit the official how each business department competition laws were arranged continuously to audit the emails of mailboxes of the Company. conducts its self-inspection of and a total of 256 employees of the business department and sift • Provide educational training emails to ensure implementing the Evergreen Group participated out possible emails that violate the courses to enhance the the policy of the Company on the in the training. laws or regulations. employees in their warehouses compliance of the competition law •Senior executives repeatedly • Keep good interaction with of the competition law, credible • Use the internal meeting, stated the importance of the the competent authority of the business operation, moral orientation training for new credible business operation competition law and visit it actively behavior, and prevention of employees, announcement on the and the enhancement of the to help it understand the practical bullying and sexual harassment at internal electronic bulletin board, supplier management process shipping business. workplaces. feedback from stakeholders, and at the management meeting. • Keep using various employee Compliance Compliance complaint mailbox. They also emphasized business communication tools to enhance (antitrust law, entertainment principles and the the compliance awareness of the discrimination Evergreen Competent importance of the honesty and employees. at workplace, Marine authority uprightness. related to •The orientation training courses corruption) titled “Credible Business Operation, Moral Behavior, and Corporate Social Responsibility” were provided for new employees. The training was provided in 3 phases and a total of 51 new employees participated in the training. •There was no complaint received against any violation of the moral behavior guidelines in 2016.

14 2016 EMC CSR Report 15 Corporate Social ｜ Responsibility Report ｜

Boundary Important Important Measurement and 2016 Management policy Future goal issue consideration management system performance highlight Internal External

Implemented the stowage of With the Operation Department as The stowage technique was Implement alliance operation based the core, supervise the operation improved to reduce the re-stowage on mutual help and cooperation. Evergreen Evergreen dangerous goods according to the centers in the world to understand and thus the re-stowage charge by Ship safety Ship safety Marine, Marine, International Maritime Dangerous their execution status and rate their 5%. employee customer Goods Code. performance every quarter.

• Exchange rate risk: Use the The Finance Division implements All the risk management tasks in Continuously monitor the level forward exchange agreement as risk management according to 2016 were completed in line with of capital a possible risks, acquire a hedge tool the regulations that the Board the internal execution procedure market information at any time • Interest rate risk: Borrow money of Directors established. It works and reported to the Board of to minimize potential adverse with a floating rate closely with the operation units to Directors. impact on the financial status of •Price risk: identify, assess, and avoid financial the Company, and ensure all of (1) Decentralized investment risks. the operations meet the laws and portfolio internal procedures. (2) The fuel procurement team increases the hedge ratio appropriately Evergreen Shareholder/ Risk control Risk control •Credit risk: Marine investor (1) Consider the financial condition, previous experience and other factors to assess the credit quality of the customer (2) The Board of Directors established individual risk limits (3) Only trade with the financial institution that has good credit rating • Liquidity risk: Supervise the demand forecast of current funds

•Deploy marine alliances, contract • Conduct strict shipping schedule • The global operation expenses •Continuously improve the associate shipping business, and management and assess the in 2016 were reduced by about competitiveness of the associate use 350 ships for operation of 41 operating performance of each 7% in comparison with 2015. shipping lines. shipping lines. line The container supply factor was • Continuously implement all the •Establish the Corporate Social •The Corporate Social Responsibility reduced from 1.64 in 2015 to 1.59 issues involved in the corporate Responsibility Committee. The Committee reports the CSR in 2016. social responsibility. President is appointed as the implementation status of the •The stakeholder engagement was chairperson and the head of Company to the Board of Directors conducted through operation Sustainable Sustainable Shareholder/ each department is appointed once a year. of the CSR Committee and strategies strategies Evergreen investor, as the committee member. The with the help of the CSR Report and their and their Marine customer Committee is responsible for the compilation. implementation implementation economic, environmental, and social issues and stakeholder engagement.

16 2016 EMC CSR Report 17 Corporate Social ｜ Responsibility Report ｜

Boundary Important Important Measurement and 2016 Management policy Future goal issue consideration management system performance highlight Internal External

• Conduct investment and capital • Important invest or capital • The financial report was declared Observe relevant laws and management in accordance with management shall be reported to and important information was regulations most strictly and ensure internal management regulations the Board of Directors for approval disclosed every quarter in 2016 instant disclosure of financial and processes. and declared according to relevant according to relevant laws and and related information and its • Ensure compliance with laws and regulations. regulations. transparency. Operating Economic Evergreen Shareholder/ regulatory requirements, compile • Ask CPA to issue an audited performance performance Marine investor financial statements with proper financial report every quarter expressions, and disclose in accordance with laws and important financial and business regulations and declare it to the information. competent authority.

•Establish safety, health, and work • Monitor the implementation of the • All the employees were asked to Continuously implement the rules safety, health, and work rules observe and implement the safety, “prevention of musculoskeletal • Sponsor safety and health • Implement educational training of health, and work rules. disorders induced by repetitive training courses new and existing employees for • Educational training of new and operations and related works”, • Provide free physical examination; their safety and health existing employees was provided “prevention of ailments induced by set up dispensaries and medical • Follow up the result of the physical for their safety and health. exceptional workload”, “prevention personnel to give advice on the examination for subordinates •Free physical examination was of wrongful physical or mental harm result of the physical examination. • Provide educational training of provided and implemented for caused by the actions of others • Provide periodical fire fighting subordinates for fire fighting and subordinates. during the execution of job duties”, Occupational Evergreen and evacuation training evacuation. •Periodical educational training and “maternal health protection at Competent health and Marine, • Observe occupational safety of subordinates for fire fighting the workplace”. authority safety employee laws; develop and implement and evacuation was provided and occupational injury prevention implemented (including hands-on and other protection measures operation). • Set up security and guard forces • The four programs specified working 24 hours a day in Article 6, Paragraph 2 of the Work Occupational Safety and Health environment Act were implemented. safety and labor health protection We have established the An independent reporting mailbox •No labor practice complaint was Continuously promote friendly “Employee Complaint ([email protected]) received, dealt with or reconciled workplaces and minimize the Regulations” as a basis for the is set up for internal and external via the official complaint system in occurrence of labor practice employees to make complaint personnel This mailbox is under 2016. complaints about damage to their rights, the responsibility of a designated • There were two labor-management unfair treatment, or any discipline person. The identity of the dispute cases in 2016. They were cases in which other employees Labor practice Evergreen complainer and the contents of the then submitted to the labor Competent are involved. They also provide complaint Marine, complaint are kept confidential. The affairs bureau and settled under authority a remedy for the action of the system employee complainer is protected from any mediation. Company in violation of relevant inappropriate treatment due to the labor laws or regulations to protect complaint. harmonious labor-capital relations and the rights of the employees.

18 2016 EMC CSR Report 19 Corporate Social ｜ Responsibility Report ｜

Boundary Important Important Measurement and 2016 Management policy Future goal issue consideration management system performance highlight Internal External

• Observe the BWM Convention • Research on the assessment and • In addition to the L-type ships that • Follow up and observe the •Sail through the area where additional installation of the ballast have been equipped with ballast “International Convention for whales populated by slowing water treatment equipment to water treatment equipment, we the Control and Management down the ship or navigating the meet regulatory requirements have procured such equipment of Ships' Ballast Water and specified waterway to minimize • Participate in the environmental since 2016 Sediments ” (BWM Convention) the impact on the whale programs of relevant agencies and • We participated in the “Vessel of the International Maritime conservation area. slow down the ship in the specified Speed Reduction Program” Organization and the Ballast Water •Prevent the spread of Asian area sponsored by the National Oceanic Management Discharge Standards gypsy moths via the cross-border • Obtain licenses/permits required and Atmospheric Administration. of the United States Coast Guard transportation. by the port administration, control We won the Excellent (USCG) the effective period of the license/ Environmental Protection Award •Take the environmental protection Competent permit using system programs, because all of our ships reduced ideas into account at the fleet Evergreen authority, and establish on-board inspection the speed voluntarily to maintain planning phase to create Biodiversity Marine community, SOPs the air quality in the port area and environment-friendly fleets and and society protect the marine ecology. continuously participate in relevant • We created the system program environmental programs. control to monitor the effective • Continuously pay attention period or the license/permit to to relevant information, make avoid ignorance. No violation announcements to each fleet has been identified since in time, provide the latest implementation of the system information, and provide program. educational training for the employees on the ship to improve Pollution their prevention knowledge and control and response measures. environmental protection Ship Ship There were no cases of serious Ship Create professional shipping safety •Observe all the international safety environmental pollution or violation Take provision of safe, premium and and environmental protection and environment conventions to of environmental regulations in effective shipping service as our management systems avoid pollution of the air, water 2016. mission. Ensure our management source, and environment system and establishment of policies Land • We are dedicated to prevention of by executing periodical inspection Entrust professional vendors to pollution due to illegal fuel spilling, to make sure achievement of the make CO2 test around the office garbage dumping, or disposal of intended goal building every six month any hazardous substances. We also Competent commit ourselves to saving energy Land Overall condition Evergreen authority, and reducing carbon for protection Increase ventilation systems to (environment) Marine community, of the earth. maintain good working environment and society Land • The CO2 value around the office building meets the environmental requirements.

20 2016 EMC CSR Report 21 Corporate Social ｜ Responsibility Report ｜

Boundary Important Important Measurement and 2016 Management policy Future goal issue consideration management system performance highlight Internal External

Ship Ship Ship Ship •Ensure that the ships of the •Control the waste disposal and • The marine oil-water separator Continuously observe the Evergreen Group meet the sewage discharge operation to and sewage treatment device international requirements for international environmental meet the requirements of the that meet the requirements of the unloading ashore as well as requirements and the international convention International Convention for the reduction and control of the environmental regulations of the •Statistically review the Prevention of Pollution from Ships recover quantity. Continuously port state. implementation effectiveness were used for treatment of the reduce the waste and minimize • Establish garbage management of the garbage management sewage. A standard stricter than the discharge volume of the programs to meet the program every year, and the international requirements waste oil and wastewater. Reduce requirements of the international continuously follow up the latest was used to ensure that discharge the consumption volume of the convention development of the environmental was conducted in the area 15/25 garbage bags. regulations nautical miles away from the shore. Land The gray water was stored in the Land The sewage of the high cube Land gray water cabinet additionally Reduce the production of the container is treated by the sewage The sewage treatment is periodically attached to (or modified on) the sewage and waste to have a treatment plant, and professional declared to the environmental ship before the discharge. cleaner environment. Pollution Competent Wastewater/ vendors are entrusted to have protection bureau every half year. •The ash recovered from the control and Evergreen authority, sewage and domestic waste burned in the Professional vendors are entrusted incinerator and unloaded ashore environmental Marine community, waste crematory. to have domestic waste burned in in 2016 was increased by 4.14% protection and society the crematory once every week. compared with 2105; the quantity of the plastic garbage in 2016 was reduced by 6.07% compared with 2015; the waste oil per ship was reduced more in 2016 than 2015 by 16.06%. •Medical waste was unloaded ashore for disposal

Land The sewage treatment plant kept running normally and the discharge was well controlled. Wastes were well sorted and managed

We respect the protection of The measurement is conducted after There were no cases of infringement Employees are informed when any customer’s privacy, provide the personal information protection upon customer’s privacy in 2016. relevant laws or regulations are employees with the educational training is completed. updated. training on the protection of personal information to ensure that they understand and observe Protection Competent Customer Evergreen relevant laws, and protect the of customer authority, privacy Marine privacy of the customer thoroughly. privacy customer

22 2016 EMC CSR Report 23 01 Business Status and Operating Strategies

I. Company profile II. Operating strategies III. Compliance IV. Risk control Business Status ｜ and Operating Strategies ｜

Highlights the customers for our investment of the resources The B-type container ship was delivered in Q3 and efforts in the e-Commerce field, and won of 2017. With the help of the newly developed • The attendance rate of the directors at the BOD meeting was 95% in 2016. the “E-Commerce Excellence Award＂ from Sea Sword Bow (SSB), it can effectively reduce • Evergreen Marine participated in the OCEAN Alliance to expand the operation scale. Log-Net, an US logistic information institution for the wave drag during the navigation and save three consecutive years including 2017. more fuel in comparison with the ship using the • No violation was identified in 2016. bulbous bow. We commit ourselves to playing the role of “a guardian of the green earth＂. Dr. Chang We participate in may environmental Yung-Fa, the founder of the Evergreen Group, protection programs and use the low speed Corresponding to the UN SDGs said “shipping companies should not wait for sailing mode to reduce the GHG emission and ＂ improve the air quality around the port. The SDG17 new regulations to follow. We should make use of the latest marine technology with positivity result of these endeavors was significant over As the top-5 container shipping company in the world, we are dedicated and perspective to protect the marine ecology, the past years and the GHG emission rate of the safety of the port, and happiness of mankind fleets was reduced every year. What we have to develop more shipping routes, direct-call ports, and associate shipping done is beneficial for reducing the risk of hitting modes for our business operation. We spare no efforts to pursue We used advanced shipbuilding techniques the blue whale, humpback whale, whalebone to build a green fleet of next-generation in 2005. sustainable shipping business while reviewing the supplier and cargo whale, or other huge marine life. This is very “ ＂ “ ＂ The Double Skin Hull , Built-in Oil Tank , helpful for conservation of endangered marine using a carefully established management system to ensure compliance with all the requirements and the AMP system of the S-type green ship life. during promotion of the international trade. were perspective designs that anticipated the regulatory requirements at the time. The ship was With the operation philosophy of “Creation honorably selected as the Ship of the Year under of Profits, Care for Employees, Contribution to the Lloyd's List Maritime Asia Awards in the next the Society＂ in mind, we will be continuously I. Company profile year. The L-type green ship was put into service devoted to providing credible shipping service in 2012. It has better environmental protection and promoting the development of the trade effectiveness thanks to the advanced technology, business, and do what we can for the world. A.History of the Evergreen Marine and can further reduce the GHG emission rate.

The Evergreen Marine Corp. was founded ships. We were honorably ranked the No. 1 by Dr. Chang Yung-Fa on September 1, 1968. container shipping company in the World. Starting with a 15-year-old general bulk ship, the founder worked very hard to develop the We have provided comprehensive container Company to the scale of the present day. The service for all the cargo owners in the world with Company has a service network stretching to the our brand name Evergreen Line since 2007. We five continents in the world and creates many have also promoted strategic cooperation with glorious achievements in the container shipping our partners in the industry via shipping alliances, history. associate shipping lines and space exchanges to provide cargo owners with a dense shipping We started the fleet containerization plan service network. in 1975 and developed the regular container service between the Far East and the east To help the cargo owners all over the coast of the United States with brand-new fast world grasp the business opportunity, we full container fleets. We are the first shipping build a proprietary e-Commerce website www. company in Taiwan that develops full container ShipmentLink.com and provide ShipmentLink service. In 1984, we unprecedentedly developed Mobile for them to check the sailing schedule the regular east-west full container service and cargo transportation status at any time using around the world with our brand-new G-type their smartphones We were highly recognized by

26 2016 EMC CSR Report 27 Business Status ｜ and Operating Strategies ｜

We are a member of the Ocean Alliance Our capital in 2016 was NT$35,123,560,000, B. Scale and performance of the organization and provide cargo owners with a shipping service the consolidated revenue was NT$124,467, network of higher quality by forming alliances 608,000, and the total shipping weight was Evergreen Marine organization chart PUBLIC RELATIONS DEPT. with CMA, COSCO, and OOCL, operating 4,875,509 TEUs. associate shipping lines, and executing space exchange. STOCKHOLDERS' HUMAN RESOURCES DEPT. MEETING (Unit: NT$thousand)

CLINIC DEPT. Year 2014 2015 2016 Item BOARD OF DIRECTORS FINANCE DIV. CHAIRMAN 144,284,374 133,813,687 124,467,608 GENERAL AFFAIRS DEPT. Operating revenue AUDIT COMMITTEE OCCUPATIONAL SAFETY & HEALTH DEPT. Operating cost 136,937,563 132,194,363 127,955,772 COMPENSATION COMMITTEE PROJECT DEPT.

Gross profit 7,346,811 1,619,324 (3,488,164) AUDITING DEPT. INSURANCE & CLAIM DEPT.

MARKETING DIV. CORPORATE SOCIAL Pre-tax income (loss) 3,239,358 (4,682,496) (8,808,983) RESPONSIBILITY COMMITTEE LOGISTICS DIV. PRESIDENT Income tax expense 1,184,694 (56,801) (243,672) COMPETITION MARITECH DEPT. COMPLIANCE TEAM.

SEAMAN DEPT. Net income (loss) 2,055,164 (4,739,297) (8,565,311)

OPERATION DEPT. CHIEF EXECUTIVE VICE Net Income attributable to PRESIDENT shareholders of the parent 1,176,039 (4,408,079) (6,607,986) OPERATION COORDINATION DEPT. company

MAINTENANCE DEPT. Net Income attributable to 879,125 (331,218) (1,957,325) non-controlling interest

SUPPLY DEPT. EPS 0.34 (1.26) (1.88) SHIPBUILDING DEPT.

Note: For more information about the welfare plan and obligation of the Company, please refer to our 2016 financial statement (https://www.evergreen-marine.com/tw/tbf1/jsp/TBF1_FinancialReports.jsp). Note: This organization chart was approved at the KAOHSIUNG TERMINAL DIV. regular shareholders´ meeting in 2017.

28 2016 EMC CSR Report 29 Business Status ｜ and Operating Strategies ｜

II. Operating strategies B. Operating guidelines and strategies Facing the challenges of the imbalanced supply and demand of the market and the fluctuation of the A. External challenges freight in 2016, we kept steady and flexible in the execution of our operating strategies and responded to the common pessimistic myth of “new and normal recession＂ of the market in a positive manner. We joined the OCEAN Alliance to lower the operation cost, increase the service port network, and strength The 2016 global container shipping market TEUs or grew by 1.5% compared with 2015. the competitiveness. experienced the acquisition and merger of Facing the circumstance where the supply five giants in the shipping industry and the exceeded the demand and, thus, the freight bankruptcy of the international top-7 shipping dropped increasingly, shipping companies strove OCEAN Alliance company. Though the largest ever ship-breaking to survive by adjusting the sailing schedule scale and blank sailing adjustment occurred in and reducing the capacity. The idle container 2016, the shipping capability of the industry was shipping capacity increased up to 142,000 TEUs always higher than the market demand. The at the end of 2016. According to Alphaliner´s imbalanced supply and demand of the space statistics, the average profitability of the global brought about irrational price competition leading shipping companies was -5.2% in Q1, among the shipping companies and the freight -9.2% in Q2, and -7.8% in Q3. The global top-7 dropped increasingly to the lowest level in the Korean shipping company applied to the court history. Every shipping company was facing great for bankruptcy protection at the end of August. operation challenges. The market was changed substantially because the cargo owners had higher awareness of risk IMF gave a forecast of the 2016 GDP and changed their criteria in the selection of growth rate down to 3.1%. WTO expected a shipping service providers. However, rise of the 1.7% growth rate of global commodity trade freight came too late to improve the overall amount in 2016, indicating that this was the year performance in the third quarter. Fortunately, the when the global trade and yield amount grew Our short-term, medium-term, and long-term operating strategies are described below: indicators of the shipping companies including most slowly ever since the financial crisis in 2009. the utilization of the shipping space and average Short-term strategies As for the supply and demand of the freight income were generally recovered in the market, the total shipping capacity of the global fourth quarter. • Increase the service loops from 26 to 40 associate shipping loops. container fleets in 2016 increased by 300,000 • Increase the operation density of the direct ports from 301 to 411 arrivals and departures.

Increase the shipping loops Increase the operation density of the direct-call ports from 301 from 26 to 40. to 411 arrivals and departures.

30 2016 EMC CSR Report 31 Business Status ｜ and Operating Strategies ｜

Medium-term strategies III. Compliance • Build 36 new ships efficiently to improve the competitiveness. We commit ourselves to establishing anti-bribery/anti-corruption, anti discrimination, environmental • Deploy important strategic wharfs. protection, and fair competition policies. As the top-5 shipping company in the world, we are especially • Create the economic scale by adding new shipping capacity. concerned about our social responsibility and ensure smooth communication with all the involved • Complete the service network. stakeholders. A. System management The internal regulations governing the implementation of the anti-bribery/anti-corruption, anti 189 Vessels + 36 New Vessels discrimination, and credible business operation are described below: 1. Corporate Governance Rules 250 Service Ports + Wharf Deployment Applicability BOD members 1. Establish an effective corporation governance system 2. Protect shareholder’s equity Description 3. Enhance the BOD function 1M TEUs Capacity + 324,000 New Capacity 4. Respect the stakeholder’s rights 5. Improve the transparency of information

114 Countries + 316 Service Bases 2. Important Internal Information Processing Procedure Directors, managers and employees; other persons who know the important internal Applicability information of the Company due to their status, occupation, or control relationship.

Establish a good system for precessing and disclosure of important internal information Long-term strategies Description to avoid inappropriate disclosure of the information and ensure the consistency and correctness of the information that the Company announces outwards. • Optimize fleets continuously and improve the competitiveness. • Participate in e-Commerce platforms and Initiate industry innovation • Adjust the organizational structure and train talents 3. Code of Ethical Management • Observe environmental regulations and ensure sustainable operation Directors, managers, employees, trustees, and the person who have the substantial Applicability control capability

1. Observe relevant rules or other laws and regulations governing business practices Description 2. Conduct business activities fairly and transparently 3. Set up an independent reporting mailbox for internal and external personnel.

4. Code of Ethical Conduct Applicability Directors, managers, and employees Optimize fleets Participate in Adjust the Observe 1. Observe moralities and persist in the principle of credibility continuously e-Commerce organizational structure environmental and improve the platforms and Initiate and train talents regulations and ensure Description 2. Treat customers, competitors, and employees fairly competitiveness. industry innovation sustainable operation 3. Enhance moral awareness

32 2016 EMC CSR Report 33 Business Status ｜ and Operating Strategies ｜

To protect employees from acting in violation of the competition law during execution of the daily The antitrust litigations of the Evergreen Marine in recent years are summarized in the following table: business, the Competition Compliance Team introduced the email audit software to audit the official Case Fact in contention Start date Current status mailbox. The personnel responsible for the audit check and judge the emails that are sifted out as high- risk mails. The department concerned will take further action once an outbound mail is found violating the The European Commission The European Commission made a raid on competition law. confirmed that the Evergreen the Evergreen Marine branch in Britain on Marine did not violate the The European May 17, 2011 and focused on the practice in competition law. However, to Commission which different shipping companies issued eliminate the misgivings of investigated at a similar time point an announcement of May the European Commission, the price general rate increase to a similar amount. B. Implementation of laws and regulations 2011 Evergreen Marine promised raising case of The European Commission found possible to change the process the Evergreen involvement of this act in the price signal We have established the reporting and summarizing process for each violation case. For example, of the quotation to the Marine between the shipping company and, thus the oil pollution case must be reported internally and the Maritech Department must take further handling customer. The European a violation of the “concerted action＂ Commission accepted the actions in addition to dealing with the pollution on the ship right away. There were no hefty fines imposed requirement in the competition law. due to violation of the environmental laws or regulations, or any cases in violation of the credible business first implementation report. operation or involved in discrimination, forced or compulsory labor, or infringement upon the rights of the The Russian The Russian antitrust agency came to the The Evergreen Marine indigenous people in 2016. anti-monopoly Evergreen Marine branch in Russia on claimed that it did not agency February 15, 2013, to investigate whether act in violation of the investigated the announcement of GRI to a similar amount February competition law and signed the price issued by the Evergreen Marine and other 2013 a reconciliation agreement C. Antitrust issue raising case of shipping companies at a similar time point was with the competent authority. the Evergreen a “concerted action＂ of the carriers and, The court approved the thus, violated the antitrust law of Russia. agreement. To help employees understand the issues related to the competition law, the Competition Marine Compliance Team arranged 7 training courses on antitrust in 2016. The course was classified into 3 categories:

A)Concept of the competition law, violation judgment criteria, and compliance rules B) EU's commitments and compliance rules C) Rules governing participation in the meeting/activity of another company in the same trade IV. Risk control A total of 256 employees participated in the training. The competition law checklists have been made one after another for the agents in different countries. It contains the market information, the do's and A. Operating risk management don'ts in quotation, etc. The risks that we control during the business operation include the strategic and operating risks, market risk, legal risk, and financial risk. The responsible department reviews the risk concerned on a regular basks and the Auditing Department is responsible for audit of the departments to make sure their audit management execution status.

B.Emergency response system

We adopt a fleet Safety and Environment (SE) Management System which has passed the certification of the American Bureau of Shipping (ABS). We are dedicated to providing a safe and good working environment, taking full actions to prevent any hazard to the work, protecting the employees for their safety on the ship, preventing ocean pollution, executing risk management regarding operation of the ship, and anticipating the occurrence of disasters. We make the management manual to specify important operation items on the ship and provide a standard checklist to ensure standardized and consistent operation among the fleets.

34 2016 EMC CSR Report 35 Business Status ｜ and Operating Strategies ｜

We establish a complete training program for the fleet to deal with emergent accidents on the ship Evergreen Marine Emergency Response Instructions and improve the emergency response capability of the sailor. The Company and fleet conduct a ship-shore interactive simulation exercise on a regular basis to ensure that the Company can give effective support START right after occurrence of the disaster and the personnel on the ship and shore can maintain smooth communication. Another purpose of the exercise is to protect the life of the sailors and the safety of the Maritech Department and Maintenance Department heads cargo, reduce the damage to the ship, and minimize the impact on the marine environment. Collect required records and information after receiving the report from the captain.

Annual program of regular education, training, and exercise on the ship

Designated person (DP) Exercise frequency Type of disaster Identification of Judge and determine the type of the accident accidents Abandonment of ship Once every month Fire Maritech Departmen Analyze the report Once every two months Enter into enclosed space and search and rescue

Once every quarter Steering engine failure

Towed by a tugboat Organization and Designated person (DP) responsibility Determine emergency response team members and lead the operation Collision, reporting and warning

Ship flooding/heeling/foundering

Pipe leakage/leakage due to hull damage All the emergency response team members Review the captain’s report, conduct investigation, and develop emergency response measures Fuel spillage/fuel compartment overflow

Once every year Ship grounds/strikes reefs Emergence Designated person (DP) Sailor falling into water/salvage response measures Determine emergence response measures and report to the captain

Main engine failure (malfunction)

Generator failure Take follow-up actions for further maintenance and/or correction items.

On-board emergency medical treatment

Hazardous substance training

Communication All the emergency response team members When any emergency accident or disaster occurs, the captain reports to our ship management Act according to the Emergency Response Communication Procedure department and the competence authority of maritime administration according to the reporting procedure of the management system, and takes appropriate emergency response procedures specified in the management system. The designate person of the Company organizes a cross-department emergency response team to provide the ship with the best emergency guidance and other required supports. END

36 2016 EMC CSR Report 37 02 Partnership and Customer Management

I. Supplier management II. Associate partner III. Customer management IV. Cargo safety Partnership and ｜ Customer Management ｜

Highlights Purchase region Purchase Europe/ • Issue CSR questionnaires to suppliers and have a return rate of 100% Purchase category Asia information America China Mediterranean/ (Incl. Taiwan) • The overall customer satisfaction with our service are scored 4.74 Africa

• Help the Institute of Transportation, MOTC, develop dangerous cargo management regulations Number of suppliers 584 187 235 313 Trailer, Feeder, train transport service Local purchase 100% 100% 100% 100% amount (%)

I. Supplier management Number of suppliers 305 210 3377 390 Empty container yard (storage and repair) Local purchase 100% 100% 100% 100% A.Evergreen Marine's value chain amount (%) Number of suppliers 19 2 Harmonious cooperation of the upstream, midstream, and downstream suppliers is required for provision Container body, freezer manufacture, container of complete shipping service. Our suppliers are organized as follows: Local purchase leasing 100% 100% amount (%)

Number of suppliers 34 95 209 128 Ship spares Local purchase Shipbuilding company 7.30% 20.39% 44.85% 27.47% Terminal machinery and Associate shipping amount (%) equipment manufacturers company Fluvial barge Number of suppliers 14 20 63 20 Container Dock Barge Marine fuel and store Upstream manufacturer Midstream Container yard Downstream Local purchase Railway company 26% 5% 49.34% 19.65% Freezer amount (%) and container repair Trailer company manufacturer vendor Number of suppliers 2 Container leasing company Insurance company Ship Marine fuel oil supplier Local purchase 100% amount (%)

Number of suppliers 1 Terminal machinery Local purchase 100% The important suppliers cooperating with us in 2016 did not change a lot in comparison with the amount (%) previous year. They are mainly the shipbuilding company, terminal machinery and equipment manufacturer, Number of suppliers 130 container manufacture and leading company, freezer manufacturer, railway company, etc. General affair and office supplies Local purchase 100% amount (%)

B. Supplier evaluation

We have established the “Supplier Transaction Management Instructions＂, “Business Partner Management Instructions＂, and other internal regulations for the procurement department to follow. A procurement evaluation review meeting is convened if necessary. The procurement department chooses qualified suppliers according to the given selection procedure and conduct the evaluation at least once every year. New suppliers must meet all the relevant international and foreign regulations as well as the rating requirements to ensure that the quality of the suppliers complies with the requirements of the

40 2016 EMC CSR Report 41 Partnership and ｜ Customer Management ｜

Company. Otherwise, they shall not be registered in the supplier list of the Company. More than 1,000 suppliers maintained good cooperation relationship with the Company in 2016. We executed the following Yes No evaluation items:

Quality

Supplier's social impact Service assessment

Supplier evaluation Labor practice Environmental Environmental Environmental Implementation of and human rights Testing policy management accidents anti-bribery, anti-corruption, assessment system fair competition, and ethical management

Environmental Price assessment

To understand the implementation status in the aspects of environment, labor practice, of the supplier's corporate social responsibility, human rights, and CSR. 158 questionnaires were we issued questionnaires to our upstream, effective in 2016. (All of them were returned.) midstream, and downstream suppliers (such as The results of the survey in these environment, shipbuilding companies, terminal machinery labor practice, human rights, and social impact of and equipment manufacturers, container the suppliers were used as one of the references manufacturers/leasers, freezer manufacturers, and for selection of new suppliers and elimination of Labor practice/ Overtime pay/ No child labor Trade union, Public and railway companies) to survey their implementation existing suppliers. human rights paid holiday collective labor accidence policy bargaining insurance

42 2016 EMC CSR Report 43 Partnership and ｜ Customer Management ｜

C. Selection of suppliers Name CKYHE OCEAN Alliance Strict organization subject to a contract for Organizational Associate platform The record about whether the supplier affects the environment or society is used as a reference for difference at least 5 years the selection. Different financial status of platform Sound and robust financial status of Financial status members members For example, ship equipment for our fleets is purchased with the environmental protection as the first Lack of sailing schedule management Centralized arrangement via a sailing priority such as use of the pollutant-free bottom anti-fouling paint, asbestos-free gaskets, stern lubricant Shipping management center and difficult communication schedule management center containing environment-friendly material, exhaust and desulphuization equipment, gray water discharge control system, etc. The supplier providing repair service is requested to carry out the construction in accordance with the Labor Safety Act and other relevant laws and regulations. Compliance is used as a B. Cooperation mode and outlook reference for assessment during the annual supplier evaluation. A number of task forces will be formed according to the functionality and responsibility of each department of the Company at the initial stage of the OCEAN Alliance. The task force is responsible for communication with the corresponding units of other alliance members (including regular/irregular meetings and communication by phone/mail) with respect to the assigned work such as adjustment of the II. Associate partner shipping route/point, arrangement of the fleet/sailing, integration of the information and electronic data system, etc.

A. Overview of the associate operation Besides，the OCEAN Alliance will found the Operations Coordination Center (OCC) in Hong Kong. All the alliance members will send their representatives to OCC for coordination of the shipping line As more larger vessels were built and environmental laws required more than ever, more shipping operation matters. companies are running their business in alliances to effectively reduct the operating cost, increase the sailing frequency, and improve the service ports network by jointly putting ships into service and exchanging or selling shipping space.

We organized the CKYHE Alliance with 5 shipping companies including COSCO, Kawasaki Kisen, III. Customer management and YangMing Marine Transport in 2014 to jointly run the east-west major transoceanic shipping routes. In 2017, we will further organize the OCEAN Alliance with COSCO, CMA, and OOCL in the hope to optimize A. Maintenance of customer relations the value of the associate operation with a strict contractual organization and deepened cooperation mode. Provision of complete and premium service practical operation, check the operation quality for customers is always the first priority in the in different aspects, and improve the operation operation of our shipping service. The sales continually. Review of the self-inspection is Increase of the voyages and direct-call ports, department visits customers to canvass their conducted quarterly. Where any item is found improvement of the shipping range and quality, cargo, and the customer service department not achieving the preset goal, corrective actions reduction of the shipping time, and decrease of the cost helps customers solve their problems in are taken for the audited unit and overall internal Advantages of the exportation and importation matters. education training must be conducted to avoid Increase of the shipping route coverage and creation of a The customer service department arranges recurrence of the same mistake. 136 employees the associate global service network to provide customers with “on-stop irregular customer visit to understand their were subject to the spot check of the self- service” and improve the operating efficiency organization requirements and provide more professional inspection in 2016. All the audited personnel and customized service. To maintain the created an average score of 90 points (included) Improve the utilization of idle ships and equipment, increase of premium customer service level, we enhance and reached the preset goal value of more the loading factor, and enhancement of the cargo-generation the professional practice and etiquette of the than 4 points, wherein the average level of the capacity customer service personnel by implementing professional practice was 4.91 and the average the “Customer Service Management level of the etiquette level was 4.76. The person Improvement the coordination with the concerned parties and Project＂ and the management cycle mode of whose spot check score was too low will be first port administration to avoid repeated port of call, improve Plan → Do → Check → Action. We establish reviewed in the next spot check to ensure that complementary effect, reduce shipping hours, and increase sailings relevant operation indicators and standards we can maintain the premium customer service from the start of the training to the online level.

44 2016 EMC CSR Report 45 Partnership and ｜ Customer Management ｜

a case of consideration for customers Maintenance of C. Understanding of customer satisfaction

customer relations We firmly believe that the opinion of the customer is an important element for ensuring the service 1 quality. An external questionnaire survey is conducted regularly to understand the requirements of the customer and the items to be improved with reference of the feedback of the customer. By doing so, we To provide better service for the orchid customer, the reefer & special container department helped Dr. Huang Zhao-Jia from the Crop Science Division of Taiwan Agricultural Research Institute, Council of develop the service distinguishing from the competitors and win the trust of the customer and their long- Agriculture, Executive Yuan, use our reefer to transport two batches of orchids from Taida Horticultural Co, term support. We conducted questionnaire survey of customer satisfaction every quarter in 2016 by visiting Ltd. to the New York of the United States of America for temperature and humidity tests in 2016. The result customers or contacting them by e-mail or fax. A total of 1,082 effective questionnaires were recovered. of the test was excellent and showed a reduced damage rate of orchids to 3.64%, much lower than the The average score of customer satisfaction with the overall service was 4.74 and higher than our internal previous 10%. This experience was spread to the orchid farmers and we created a higher business benefits standard score of 4.5. This indicated that our service is satisfactory to the customer. for the customer. The “overall space-booking performance＂ item was added to the 2016 questionnaire. The 2 “service attitude＂ was highest recognized following by the “in-time delivery of cargo arrival notice＂, “communication approach between the space-booking person and you＂, and “correctness of the We helped deal with the awkward circumstance in which containers were left in the intermediate ports ＂ “ ＂ and could not be transported continuously due to the bankruptcy of Hanjin Shipping. The containers were documentation and information items. The easy-to-search of the website scored lowest. After switched and moved to our ships and transported to the destinations. understanding the opinion of the customer, we knew that the ShipmentLink was least recognized because the customer could not find individual fees from the web page. However, this resulted from the fact that we did not disclose the freight-related information on the website any more as required by the EU, and the customer service personnel only provided customer-related information. As for the additional “overall B. Improvement of customer service space-booking performance＂ item on the questionnaire, customers were asked to compare the current We provide human-friendly cordial service. We don´t use overall space-booking performance with the previous one. The resultant score of 4.64 points indicated that “ ＂ telephony and have designated personnel answer every call customers found a better than ever performance and gave a positive rating. personally. To provide customers with the “one stop service＂, the person answering the call understands the special requirements of the customer in detail and give it correct answer and service. If the Questionnaire survey of customer satisfaction from matters concerned are not in the scope of the person answering 2014 ~ 2016 the call, he/she will help the customer forward the call to the responsible unit and pass on the requirements of the customer. With this system, the customer can receive a satisfactory answer to Space booking confirmation speed his/her problem only with one call. We also develop a convenient 4.8 Total average Correctness of documentation e-Commerce platform (website: ShipmentLink) to provide service and information 4.7 24 hours a day and 7 days a week. The customer only needs to use Overall space-booking Counter B/L issuing speed this website at any time to check the information that it needs. The performance “Totally Integrated Service＂ provides customer members with 4.6 exclusive service. They can book space, make B/L, submit Verified Communication approach 4.5 In-time delivery of cargo Gross Mass (VGM), and check the bill of lading online, or set the between the space-booking arrival notice format and content they need and have the system to make the person and you customized analysis report for them. The system can also provide customer members with the cargo tracking information. The number Service attitude Correctness of freight information of members in the Taiwan area has reached up to more than 4,000. Bill of lading check time Easy-to-search of the website We cooperated with the International Maritime Organization (IMO) in the modification of the International Convention for the Professional ability Safety of Life at Sea (SOLAS). A VGM declaration portal was built on our website and mobile phone app respectively in 2016. It is very convenient for the customer to declare 2014 2015 2016 and check VGM information in different ways.

46 2016 EMC CSR Report 47 Partnership and ｜ Customer Management ｜

IV. Cargo safety B. Management of dangerous cargo We publish the “Evergreen Line dangerous Taiwan has not been amended for many years A. Freight transport regulations goods policy and forbidden list＂ on the website nor upgraded to the level of the international and provide customers with free labeling of IMDG Code, and the sources of the mother We always keep the safety of the employee, cargo, and ship as well as the zero accident in mind, dangerous cargo. Being an value-added service, law are spread among The Law of Ships and and load the containers that our customers deliver to us according to the International Convention for it can avoid incorrectness or loss of the labeling other port management regulation. This brings the Safety of Life at Sea (SOLAS) and the International Convention for the Prevention of Pollution From and, thus, being fined by the port administration about difficulty to the carrier, shipper, port Ships (MARPOL). We execute regular educational training of personnel and reduce the accidents by during the transport, and improve the image of administration company, and dock operating implementing risk management to ensure achieving the goal of perfectly safe transportation. the Evergreen Marine on the market. company. The terrible explosion occurred at the dangerous cargo storage area in Tianjin, China, We establish three loading instructions to ensure the intensity of the management. As a response to joining the OCEAN in August 2016 had great effect and brought Alliance, we adjusted the items of the dangerous about a global shock. In consideration of these cargo to be canvassed in 2016 subject to the occurrences, the Institute of Transportation of safe transport and management principles. the Ministry of Transport and Communications Cargo Stowage Dangerous Though the items became similar to other three proceeded to develop the dangerous cargo shipping companies after the adjustment, we still Transport Operation Cargo Control management regulations covering all the land, air, keep the idea of safe transport and our unique and sea transportation activities. As the largest considerations. Our dangerous cargo team is Procedure Instructions Instructions shipping company in Taiwan, we were invited comprised of professional personnel from the to participate the draw-up of the regulations. shipping and chemical fields. They can contain We provided our practical experience at the concealed and incorrectly reported dangerous meetings in the hope to develop complete, cargo from running on the OA service network flawless, and detailed regulations, bring the with the help of our integrated system to achieve Manage seven processes of Assignment of Ensure full compliance with shipping of dangerous cargo to the right track, the goals of common competitive cooperation, receiving, stowage, loading, responsibilities, collection of IMDG Code and other and improve the shipping safety. safe transport, and zero accidents. transport, unloading, loading information before international conventions delivery, and schedule stowage, establishment and local regulations of the We have established a complete dangerous management respectively of basic stowage (space port state during transport of cargo management practice. However, the distribution) principles, dangerous cargo to protect dangerous cargo management regulations in and stowage cautions as the safety of life at sea and the work rules for stowage prevent marine pollution personnel

48 2016 EMC CSR Report 49 03 Environmental protection and Sustainable Shipping

I. Energy management II. Emission management III. Waste and water resource management IV. Sustainable shipping development Environmental protection ｜ and Sustainable Shipping ｜

Highlights A. Use of energy and GHG • The first shipping company in the world helping with collection of the maritime boundary Ships on the sea measurement data. We reduce the energy consumption, minimize the pollution and GHG emission via various • Establishment of the policy to discharge wastewater/sewage 15/25 nautical miles away from the management and operation measures and design of the ships. Our efforts in the consumption of marine shore to protect the ecology at the coast and port. fuel, GHG emission, and continuous energy saving and carbon reduction were demonstrated in the reduction of the fuel consumption every year. The CO2 emission of the fleets also reduced continuously. Corresponding to the UN SDGs The emission rate in 2016 was less than 2007 by 40.27% (41.794g/TEU-KM). SDG7 Marine fuel consumption 1,746,194 1,739,380 1,754,691 Our fleets are equipped with the Load Stability Calculation System and 2,000,000 19 Marine heavy fuel oil Whether Navigation Information (WNI) System approved by the classification 18.8 consumption (ton) 1,500,000 18.792 18.674 society to optimize the sailing speed of the ship and monitor the fuel 18.6 Marine diesel oil consumption. This is what we do for the global mission of energy efficiency 1,000,000 18.4 18.2 consumption (ton) improvement. 18.06 500,000 18 29,640 112,215 111,677 17.8 Marine fuel oil SDG13 0 17.6 consumption rate (g/TEU-KM) The long-term operation of the shipping business has a close relation with the 2014 2015 2016 global ecological environment. We organize green container fleets, improve the green awareness among the employees, and dedicate ourselves to realizing Fleet CO2 emission a wonderful life for all of humanity. We acquire certificates from international 5,900,000 65 64.4 5,776,194 5,822,147 64.5 environmental assessment institutions to demonstrate our forward-looking 5,800,000 operating philosophy. 64.034 64 5,700,000 63.5 Fleet CO2 emission 2e SDG14 63 (Tons of CO ) 5,600,000 5,532,687 62.5 We have made garbage management plan for the solid garbage or liquid waste 61.996 62 produced during the transport. Disposal of the waste is planned appropriately 5,500,000 61.5 Fleet CO2 emission rate and related information is completed recorded in the garbage record book. 5,400,000 (g/TEU-KM) 61 We strictly observe international and local environmental protection regulations 5,300,000 60.5 when dealing with the waste and garbage to fulfill our obligations as a user of 2014 2015 2016 marine resources.

CO2 Annual Emission g/TEU-KM I. Energy management We observe all international local environmental protection conventions and we devote ourselves to preventing pollution, saving energy and reducing carbon, and protecting the earth. We have set up strict standards and operation procedures for every environmental protection and pollution prevention matter on the ship when it is sailing on the sea. We make use of the latest marine technology more positively and perspectively to protect the marine ecology, safety of the port, and happiness of humankind.

To thoroughly control the energy that we use for the shipping and the maximal reduction benefits, we execute comprehensive management of the ships on the sea, Kaohsiung Terminal Division, and office building to understand and review the use of energy in different natures and implementation of different energy reduction plans. Note: Refer to MEPC Circ.471 29 July 2005 for more information about the fuel oil CO2 emission factor. Note: The CO2 emission amount is acquired by calculating the CO2 [CO2 g/TEU-KM] produced by a 20＂ container per kilometer based on the total annual consumption of the fuel oil (the diesel oil and heavy fuel oil for the main and auxiliary engines on the ship).

52 2016 EMC CSR Report 53 Environmental protection ｜ and Sustainable Shipping ｜

Operation on land Kaohsiung Terminal Division GHG emission Kaohsiung Terminal Division 25,000 3.80 20,598.98 21,883.94 Direct GHG emission The source of the energy consumption at Kaohsiung Terminal Division is mainly the hosting machine. 3.70 20,000 18,567.41 (tons of CO2e) The types of the energy used are diesel, electricity, and gasoline for the company vehicles. 3.70 1.25 3.60 15,000 Indirect GHG emission 3.47 3.50 Though the business volume of the Kaohsiung Terminal Division increased over the past three years (tons of CO2e) 3.40 and reached the peak in 2016, the energy intensity is decreasing thanks to the effective control and 10,000 3.30 3.30 management. 4 ARMGCs (Automatic Rail Mounted Gantry Cranes) were put into service in mid-February 5,000 4,184.05 3,422.27 2,789.02 GHG emission intensity 3.20 (tons of CO2e/work load 2017 to share the operation in the storage area. It shares 12% of the work initially and is expected to share ) 0 3.10 more gradually in the future. ARMGC is controlled by the computer and can select the optimal route to reduce consumption of the energy and emission of the air pollutant, minimize the human error, and 2014 2015 2016 improve the energy efficiency.

Kaohsiung Terminal Division fuel oil consumption Office building 1,800,000 1.45 The energy used for the office building of the Evergreen Marine in Nankan, Taoyuan City, is mainly the 1,571,397 1,600,000 electrify for the office and the fuel oil for the company vehicles. The effect of the replacement with energy- 1.40 1.40 1,400,000 saving lighting facilities and air conditioners as well as turn-off of unnecessary lighting devices at noon and 1,286,335 Diesel oil receiving amount (liter) use of environment-friendly vehicles are demonstrated in the decreasing degree of power consumption 1,200,000 1.35 1,042,829 and energy intensity. 1,000,000 1.30 1.30 800,000 Gasoline consumption (liter) 1.25 Office building Office building 600,000 1.25 electricity consumption GHG emission 400,000 Fuel oil intensity (liter/ 1.20 7,500,000 265 3,900 0.138 work load) 262.55 200,000 0.136 32,317 25,262 26,787 7,400,000 3,850 0.136 0 1.15 260 2014 2015 2016 7,300,000 3,800 0.134 7,200,000 255 3,750 7,361,200 Kaohsiung Terminal Division electricity consumption 7,100,000 0.132 250 3,700 45,000,000 4 3,835 39,013,227 41,446,863 7,000,000 245.17 3,650 0.13 0.129 40,000,000 3.97 245 3.95 6,900,000 3,600 35,638,014 242.72 0.128 35,000,000 Power consumption 0.128 degrees for other 6,800,000 240 3,550 3,629 3.9 6,873,800 30,000,000 purposes 3,593 0.126 6,700,000 3,500 3.85 6,805,000 235 25,000,000 3.85 6,600,000 3,450 0.124 Power consumption 20,000,000 3.8 degrees for hosting 6,500,000 230 2014 2015 2016 3.77 machine 15,000,000 2014 2015 2016 3.75 Indirect GHG emission 10,000,000 Hosting machine power (tons of CO2e) use intensity Total degrees of power consumption 5,000,000 3.7 (degree/work load) GHG emission intensity 2 2 Energy Use Intensity(EUI) (degree/M ) (tons of CO2e/M ) 0 3.65 2014 2015 2016

54 2016 EMC CSR Report 55 Environmental protection ｜ and Sustainable Shipping ｜

a data retrieval system needed implementation of the laws and regulations, and construction of a data Company vehicle gasoline consumption retrieval platform. These measures are beneficial for preparing the implementation of MRV regulations 15,000 40 on one hand, and precisely recording our operating data via electronized operation on the other hand to execute centralized management, analyze the performance of the ship, and further improve the measures. 12,353 30 9,656 10,000 9,488 Gasoline consumption We take the following actions to reduce the CO2 emission rate: (liter) 28.61 21.97 21.92 20 (1) Slow down the speed of the ship and sail at a low speed 5,000 (2) Monitor the consumption of the fuel oil and operation of the main engine all the time to 10 Direct GHG emission ensure the propelling performance of the main engine (tons of CO2e) (3) Use the weather navigation to provide the fleet with real-time weather information and 0 0 the best sailing route to optimize the fuel efficiency 2014 2015 2016 (4) Improve the cargo loading and unloading efficiency and shorten the time for the ship to stay at the port (5) Plan the loading capacity of the ship appropriately to ensure the best economic benefits B. Energy saving and carbon reduction measures (6) Use special anti-pollution paint for the body of the ship Ships on the sea (7) Replace old ships with new ones We fulfill our commitments to the environmental protection and improve the energy efficiency by tracking and analyzing the energy consumption status of the ship. Effective operation of the ship is another Use the weather navigation to optimize the fuel efficiency commitment of us in order to achieve the energy saving and carbon reduction goal. We work with the WNI EU provides a 3-step development strategy for the shipping industry to implement environmental Real-time company continuously to fuel efficiency protection and emission reduction. The first step is to bring up the MRV [Monitoring, Reporting, and monitor the fuel consumption monitoring Verification] system. All the ships anchoring at or passing by any EU ports must be subject to the carbon of the fleets, optimize the fuel emission monitoring from January 1, 2018. The second step is to set a specific emission reduction goal for efficiency, reduce the carbon the shipping industry and the third step is to take further medium-term and long-term measures, such as emission, and do our best to implementation of compulsory measures to the market. protect the environment. Regular review Enhanced fleet management service analysis The WNI provided meeting Evergreen fleets with weather 1 2 3 navigation for 1,310 sailings in 2016, and a total of 5,738 Continuously measures tons of fuel was saved. The optimized prevention MRV system details are described below: reduction goal measures Bring up the effective Set specific emission Planning compulsory Evergreen Evergreen Evergreen Marine Marine Marine (U.K.) (Singapore)

We take two measures for the emission reduction issue. One of them is to keep contact with the Weather navigation sailings 806 192 312 register of shipping. It has established an implementation guide to meet the EU monitoring and reporting requirements and audits. This guide provides a credible basis for the sequential verification and allows Fuel saved (ton) 2,652 1,215 1,871 timely execution of the audit and verification activities. The second one is training to understand the Reduced CO2 emission 8258 3784 5826 requirements of the EU MRV, establish implementation guidelines and monitoring plans, execute such equivalent (ton) plans, and make reports. Assessment is conducted to understand the monitoring of existing data, whether the statistic method meets the requirements for full establishment of relevant measures, installation of Note: Refer to MEPC Circ.471 29 July 2005 for more information about the fuel oil CO2 emission factor.

56 2016 EMC CSR Report 57 Environmental protection ｜ and Sustainable Shipping ｜

Assistance in the PGGM (Pacific Greenhouse Gas Measurement) Project Office building The Taiwan government launched the PGGM (Pacific Greenhouse Gas Measurement) Project in We have replaced the lighting facilities of the Evergreen Marine Building in Nankan to LED and 2008 and built the largest air and marine GHG measurement platform in the world. We have participated inductive devices for many years. Company vehicles were replaced with new ones to improve the energy in this project since 2009 and collected the atmospheric data in the marine boundary layer under100 efficiency. Unnecessary lighting devices were turned off at noon. Two air conditioners that have been used meters. These data will be used in the research on global warming and climate change, and are helpful to for 23 years were replaced with new ones at the end of March 2016. The new air conditioners ran very understand the change process of the CO2 concentration in the atmosphere. well and had good energy saving effect. Electricity and water were saved by 68,800 and 1,116 degrees, respectively, in comparison with 2015, and 36.4 tons of CO2e emission was reduced. (Calculated based on the electricity emission factor [0.529 kg CO2e/degree] announced by the Bureau of Energy, Ministry of Economic Affairs, in 2016)

II. Emission management Air pollution control

A. Nitrogen oxide emission To control the NOx emission, the Supplementary Provision VI of the International Convention for the With the assistance in this project, we become the first shipping company in the world helping with Prevention of Pollution From Ships (MARPOL) specifies the nitrogen oxide emission standard for marine collection of the marine boundary measurement data. diesels subject to Tier I, Tier II, and Tier III phases. We implement the nitrogen oxide emission control in the ship building, equipment replacement and sailing phases to ensure full execution of the emission control. Operation on land Kaohsiung Terminal Division Building of ships The 5 ship side Gantry Cranes at the Kaohsiung container terminal • New ships are installed with the main engine and generator that meet the requirements for the have the Tandem function and nitrides emission rate at different phases (Tier I, Tier II, and Tier III). every crane can hoist two 40＂ containers at a time to reduce the Replacement of equipment times of movements between the sea and land sides, improve the • All the calibration, replacement with spare parts, or refitting that may affect the nitrides emission operation efficiency, and reduce rate are carried out according to the technique file of the manufacturer. The parameters of the the consumption of energy. The main engine (or generator) are recorded in the Main Engine (or Generator) Record Book for the E-RTG mode (electricity rather than administration of the port state to check, if needed, to ensure compliance with the emission diesel engine) is used in the back standard specified in the international convention. area of the terminal to reduce the • Only the spares that meet the specification number referred to in the “technique file” of the consumption of diesel. manufacturer shall be purchased or used for replacement to avoid use of inappropriate spares Since the E-RTG power supply system has been used for ten year, we have started replacing and and, thus, excessive emission beyond the standard. The spare number used for replacement and repairing the damaged facilities to reduce the carbon emission continuously and maintain the electricity the date of the replacement shall be recorded in the “Main Engine (or Generator) Record Book” consumption of the hoisting machine to the given ratio. for tracking purpose.

58 2016 EMC CSR Report 59 Environmental protection ｜ and Sustainable Shipping ｜

Sailing g/TEU-KM SOx Annual Emission • Sail the ship at economical speed, if appropriate, depending on the actual circumstances. • Reduce unnecessary ballast water as much as possible. • Maintain appropriate trim to improve the propelling efficiency.

The Evergreen fleets had a decreasing NOx emission rate. The emission rate was reduced by 60.01% in 2016 compared with 2007.

NOx Annual Emission g/TEU-KM

Note: The SOx emission rate is based on the total oil consumption of the fleet every year. It contains all types of the fuel oils consumed on the ship. SOx emission (g) = Fuel oil consumption (g)* sulfur concentration (%)/*2

III. Waste and water resource management Note: NOx emission = The emission on the certificate*effective output (%)*running hours NOx emission rate = NOx emission/number of containers/sailing distance A. Waste management and disposal (Emission on the certificate: The NOx emission registered on the EIAPP (Engine International Air Pollution As the WEF research report points out expectedly, the total weight of the plastic waste produced all Prevention Certificate), indicating the how many grams of NOx is produced when an engine outputs 1 kW and over the world will exceed the total weight of the marine fishes in 2050. As a user of the marine resources, runs one hour.) it is our obligation to minimize the impact on the ocean. We have made plans for the solid garbage or liquid waste produced during the transport and dispose them according to the international and local environmental regulations. We determine how the waste shall be handled according to the garbage B. Sulfur oxide emission management plan and related information is completed recorded in the garbage record book. We strictly observe international and local environmental protection regulations. We strictly observe the intragenerational regulations and reduce the sulfur oxide emission accordingly. We use the marine fuel oil that meets relevant regulations and confirm the concentration of the sulfur according to the Bunker Delivery Note (BDN) that the vendor provides every time when it supplies the fuel Ships on the sea oil. Fleet waste disposal policy The Evergreen fleets had a decreasing SOx emission rate. The emission rate was reduced by 50.33% in 2016 compared with 2007. We have a complete fleet garbage management plan to deal with all the hazardous waste and

60 2016 EMC CSR Report 61 Environmental protection ｜ and Sustainable Shipping ｜

solid garbage on the ship. The plan contains five principal procedures: Collection, Sorting, Disposal, (1) Incinerator ash management Retention, and Recording. Every Evergreen ship is equipped with stainless steel rubbish bins for sorting of the garbage. The seamen and visitors can throw their garbage in the rubbish bins according to the Our garbage management policy requires sorting of the garbage into flammable and nonflammable sorting instructions. The garbage is not throw in the sea to make pollution. We make the fleet garbage substances. The flammable garbage, including the rags contaminated with oil, wooden cases, cartons, management plan with reference to the Supplementary Provision V of the MARPOL. In addition to used napkins, and other wastes that cannot be recovered, are incinerated on the ship. The ash is treated reduction of the waste and hazardous substances, we encourage to arrange the waste to be unloaded appropriated to avoid production of poisonous substances and then delivered to an qualified vendor on on the shore for further treatment. It will be sorted for reuse, recycle, and reduction. By referring to the shore for further treatment. the international regulations and local regulatory requirements, we establish the 15/25 nautical miles Since more and more countries have prohibited unloading of oil contaminated rags and greasy filth policy to protect the environment around the coast and port and extend the applicability scope of produced during the operation to the shore, they have been incinerated in the incinerator on the ship the environmental regulations. We manage the waste based on a higher standard to demonstrate our within the scope of the legal standard. This is way more ash was produced in 2016 compared with previous determination to protect the environment. years. Incinerator Ash discharge volume: 2016 more than 2007 by 17.68%, 2016 more than 2015 by 4.14% ash management Ash Analysis

M3 Fleet Medical Plastic waste waste garbage management management reduction

Waste oil & water disposal Total quantity 60.580 32.770 27.250 23.960 26.620 32.210 43.220 61.055 68.457 71.293 Avg. quantity(per ship) 0.3365 0.2958 0.3286 0.3703 0.4483 0.5706 0.6167 0.7059

(2) Analysis of plastic waste volume

We prohibit incineration of plastic packages, cans, and bottles on the ship. The plastic garbage produced on the ship must be unloaded on the shore for recycle. Every fleet is equipped with a Pi water activation and filter equipment of large capacity to ensure the quality and hygiene of the drinking water. We encourage not to buy plastic bottle water to reduce plastic garbage. The plastic garbage volume has been reduced significantly over the past years.

Plastic garbage volume: 2016 less than 2007 by 39.16%, 2016 less than 2015 by 6.07%

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(3) Analysis of waste oil and water

Plastic Garbage Analysis To reduce the air pollution, we arrange contracted vendors to recycle the waste oil and water produced on the ship and send them to the institution approved by the government for reuse. Regular M3 maintenance of the main engine, generator, auxiliary boiler, pump and pipeline system is conducted on a regular basis to improve the fuel combustion efficiency and reduce production of waste oil and water.

Total waste oil and water: 2016 less than 2009 by 16.06%

Average production per ship: 2016 less than 2009 by 34%

(4) Medical waste unloaded on the Medical waste unloading shore for disposal statistics in 2016

Every Evergreen fleet has a dispensary 40 where emergency medical devices and drugs 33 are stored. A ship makes at least one application 30 for unloading of medical waste every year, and the recycle or disposal vendor that meets the 20 requirements of the government boards the Total quantity 789 688 538 486 441 448 488 517 511 480 12 ship to receive the medical waste and expired Avg. quantity(per ship) 6.647 6.001 5.459 5.091 4.984 4.834 4.649 4.619 drugs. Depending on the planned shipping route 10 and port, the ports that provide medical waste unloading service are Hong Kong, Singapore, 0 and Los Angeles. If the ship berths at none of Hong Kong Singapore

these ports, the medical waste shall be stored A total of 45 ships unloaded medical waste Sludge Analysis and sealed on the ship until it berths at the port on the shore in 2016 that provide this service. M3 Operation on land Waste produced by the Kaohsiung Terminal Division Kaohsiung Terminal Division 538.53 The Kaohsiung Terminal Division conducted 600 441.36 sorting and collection of the waste produced 426.2 393.8 during the operation of the container yard and 400 maintenance of the hosting machine. The waste 206.96 227.19 of the container yard are classified into general 200 garbage and recyclable waste. With continuous implementation of the waste sorting, the volume 0 of the recyclable waste were increasing every year. We entrust the qualified vendors that 2014 2015 2016 have been registered with the Environmental Total quantity 46934.4 43397.7 43565.1 42928.8 44991.3 41912.4 42162.1 39392.3 Protection Administration to transport the General garbage (ton) Avg. quantity(per ship) 579.44 535.77 537.84 487.83 459.09 391.71 383.29 382.45 garbage for incineration and burial at the Recyclable waste (ton) incinerator approved by the government.

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To protect the ecological environment, 1. Engine room bilge water the solid tire used for the ship side chassis is Waste produce Kaohsiung Terminal Division 2. Sewage gradually changed to recyclable full rubber tire in the office building water resources consumption Evergreen fleets use the sewage treatment to minimize the environmental pollution brought 31,705 100 device that meet the requirements of the about by non-recyclable waste. 31800 76.2 72 International Convention for the Prevention 80 31600 of Pollution from Ships all the time during 60 Office building the sailing. A standard stricter than the 31400 45 40 international requirements is used to ensure 31200 The Evergreen Marine office building in 20 that discharge is conducted in the area 30,949 Nankan produces normally general domestic 5.36 9.01 5.68 31000 15/25 nautical miles away from the shore. waste. Garbage sorting is implemented and 0 30800 the recyclable waste is handled by qualified 2014 2015 2016 3.Gray water is the discharge of the dishwater 30600 professional vendors under authorization for and dirty bathwater, laundry water, shower General garbage (ton) resource recycling and other appropriate water and wash-basin water. Though the 30400 2015 2016 treatments. Non-recyclable waste is collected by Recyclable waste (ton) applicable MARPOL does not cover the qualified professional vendors for incineration treatment of gray water, we take measures Annual tap water and burial under authorization. stricter than the requirements of the consumption (degree) Fresh water supply convention and install a gray water cabinet to the ship (ton) or additionally attach it to (or modify it) on the ship. The gray water is stored in the Kaohsiung Terminal Division B.Water resources recycle 108,239 cabinet. It is not discharged within 15/25 sewage treatment volume (CMD) 110,000 and discharge nautical miles away from the shore. 105,000 6000 4883.52 99,848 Ships on the sea 100,000 5000 95,744 Land 4000 Use of water resources 95,000 90,000 Kaohsiung Terminal Division 3000 Most of the fresh water used on the ship is 2000 85,000 1253.78 produced with the fresh water generator (with The purpose of the tap water that the 2014 2015 2016 1000 the seawater as the source). Fresh water is also Kaohsiung Terminal Division uses is mainly for supplied from the shore when the main machine washing the containers. Though the consumption 0 or fresh water generator must be stopped for of the water sources increased in 2016 due to Sewage treatment volume (CMD) maintenance or repair or the water tank must Engine the workload, the water intaking from the water 2015 2016 be cleaned in consideration of the factors such room bilge sources is not affected. The dirty water left from as the voyage or port and, thus, fresh water water washing of the container and hoisting machine is not adequate for use on the ship. It is up to is collected and led to the sewage treatment Annual tap water consumption the captain to select the port on the shipping plant at the container yard. The waste water is in the office building (degree) route where the price and quality of the water discharged to the sea only when it is purified to 26,500 are appropriate to add marine drinking water meet the required standard. The purified water is 25,891 25,965 Waste 26,000 and fresh water in consideration of the actual so far not recycled. demand. water emission 25,500 25,000 Gray management Office building 24,641 Sewage 24,500 water Tap water is used every day in our office Waste water emission management 24,000 building in Nankan. The wastewater is discharged Waste water produced on the ship sailing on into the municipal drainage and treated 23,500 the sea: appropriately. 2014 2015 2016

66 2016 EMC CSR Report 67 Environmental protection ｜ and Sustainable Shipping ｜

IV. Sustainable shipping development B. Design of containers We actively adjust the design of the material for the container floor, paint, and the sealant used in the A. Design of environment-friendly ships container to reduce the impact on the environment. All of our new ships meet the requirements of the latest environmental regulations. The energy efficiency improving and GHG emission reducing functions are integrated in the design to minimize the Material of the floor load to the environment using the state-of-the-art technology. For example, the Low-Load Turing EGB is Traditional containers are made of wood and, thus, bring about hewing of the tropical rain forest, adopted for the fuel consumption control mode of the main engine to save the fuel and reduce the GHG damage to the ecology, and influence on the conservation of water and soil. Bamboo-wood floors have emission at low cruise speed. The line of the ship body is optimized to meet the EEDI energy efficiency been applied to our new dry containers since 2013 to reduce consumption of the wood by 50%. Bamboo standard and possibly save more energy. features short growing period, hard texture, and wear-resistance. It is acquirable more easily. The total A space is reserved for the AMP system. This and the dock equipment may work together to number of the new dry containers that were equipped with bamboo-wood floor has been reached up to save energy and reduce carbon emission. To reduce production of NOx, new ships are equipped with 259,000 TEU in 2016, occupying 70% of the total containers. electronically controlled engines that meet the IMO´s NOx Tier II emission standard. In consideration of the stricter low SOx emission regulations in 2020, new ships are designed to ensure use of low-sulfur fuel oil, and a space is reserved for installation of the scrubber for removal of the sulfur. Bamboo-wood container percentage Environment-friendly refrigerant is used for the reefer and air conditioners of our new ships. These and the gray water holding tank and wastewater treatment equipment can jointly reduce the impact on the environment. 200,000 120% Bamboo-wood 32,600 100% 150,000 usage (TEU) ◆ Environment-friendly Refrigerant for reefers and Air Conditioners (GWP: Lower than 2,000) 80% ◆ Reserved Space for 100.000 60% Wood usage (TEU) ◆ Low SOx Emission Reserved for 142,740 AMP System ◆ 72,000 40% Fuel Compartment with 50,000 Protection Function 62,000 20% Bamboo-wood ◆ 28,000 27,200 Electric Deck 0 percentage (%) Machinery 0% 2013 2014 2015 2016 ◆ Airtight Stern Seal ◆ Gray Water ◆ Carbon Holding Tank Reduction ◆ Ballast Water ◆ Low Sulfur Fuel System Type Treatment Plant Paint ◆ ◆ Optimized ◆ Port Service Pump Minimum Ballast Design ◆ Hull Form with China established an atmosphere pollution prevention law in 2013 with a goal to reduce the emission Reducing Generator ◆ Nox Tier II Electronic Controlled Cargo Hold Sewage High Efficient Load Fuel Injection Engine with Low-Load ◆ Holding Tank Propulsion System of VOCs (Volatile Organic Compounds). For this, we tried water-based paint and applied it to 1,800 TEU Tuning EGB Fuel Control Mode Latest Drag-Reduction of containers in the CIMC Dalian plant in 2013. We will spare no effort to act according to the current and Anti-Fouling Coating futures.

■ Environmental Protection Notation with Classification Society (ABS: ENVIRO & GP Notation; Adhesive NK: EA & IHM Notation) Water-based sealant has been used as a replacement in the new dry containers of the Company since ■ Green Passport to Comply with Convention of Vessel Recycling 2014 to substantially reduce the odor and atmospheric pollution due to volatilization of the solvent.

68 2016 EMC CSR Report 69 Environmental protection ｜ and Sustainable Shipping ｜

C. Preservation of biodiversity Preservation of whales Ballast water We participate in the Vessel Speed Reduction Program in different regions of the Impact of ballast water on the environment world to reduce the risk of hitting the whale. What we have done were highly recognized The ballast water ensures the safety and stability of the ship. However, the ballasting and discharge and won the Excellent Environmental Protection of the ballast water produce harmful aquatics and pathogens that may transfer to the port in another sea Award from the Los Angeles Harbor Department. area. The International Maritime Organization approved the “International Convention for the Control We have devoted ourselves to the maintenance and Management of Ships' Ballast Water and Sediments＂ (BWM Convention) in 2004. It aims to prevent, of the marine ecology and harbor district for reduce, and finally eliminate the transfer of harmful aquatics and pathogens and, thus, the hazard to the many years and executed many environmental environment, human health, property, and resource by controlling and managing ship´s ballast water and protection projects in cooperation with the sediments. government agencies, research institutes, cargo owners, and the companies related to the Requirements of international regulations shipping service chain. We will still contribute to the sustainable development of the marine (1)The requirements and status quo of the BWM Convention environment.

The BWM Convention will take effect in September 2017. All the commercial ships must be We participated in the “Vessel Speed equipped with ballast water treatment equipment when they renew their IOPPC (International Oil Reduction Program＂ sponsored by the National Pollution Prevention Certificate) for the first time after September 08, 2019. Oceanic and Atmospheric Administration (NOAA) in 2016. We won the Excellent Environmental (2) The Ballast Water Management Discharge Standards of the United States Coast Guard (USCG) Protection Award from the NOAA because all USCG established the Ballast Water Management Discharge Standards in 2012. According to the of our ships reduced the speed voluntarily in the Standards, any ship that needs to change the ballast water at a port of the U.S.A. before 2016 Santa Barbara open seas away from the Port of must treat its ballast water via D-1 in the area 200 nautical miles away from the shore before it is Los Angeles and Long Beach. We participated allowed to discharge the water at the port. Any ship in the shipyard after 2016 and all the new in the Santa Barbara open seas speed reduction ships built after 2013 must be equipped with ballast water treatment equipment to meet the program in 2016. The ships involved in the requirements of the USCG. program included the S-type ship that won the “Ship of the Year Award＂ from the Lloyd's List Measures of the Evergreen Marine and the new L-type ship of the next generation that was delivered and put into service in recent In addition to the L-type ships that have been equipped with ballast water treatment equipment, we years. have procured the ballast water treatment equipment and installed it to the ships in service since 2016 to achieve the goal of green sailing.

All of our ships have an ballast water management plan. The ships of all types use the UV sterilization method to eliminate the microorganism in the ballast water. The A-type and P-type ships will be equipped with the ballast water treatment equipment within the scheduled time frame of the BWM Convention.

70 2016 EMC CSR Report 71 04 Care for employees and Environmental Safety

I. Talent attraction and development II. Employee communication and care III. Protection of working environment Care for employees ｜ and Environmental Safety ｜

Highlights natives. A total of 280 employees served on the ship. Of those, 234 of them were natives and 46 of them are foreigners including seamen from China. • Cooperation with the National Kaohsiung Marine University to offer special shipping technology classes for the graduates Structure of employees • The first“ship-shore rotation＂system in the industry • Launch of the Employee Performance Improvement Support Program Employees statistics Female Male Subtotal Percentage on December 31, 2016 Corresponding to the UN SDGs Over 60 1 69 70 0.04

SDG3 50-59 16 214 230 0.15

We provide all of our employees with free physical examination and place Age 40-49 88 411 499 0.32 importance on the hygiene of the ship. We set up complete medical equipment 30-39 129 333 462 0.29 and the dispensary provided medical consultation 24 hours a day to improve the health management capability of the employees. 20-29 86 225 311 0.20

Master degree 36 133 169 0.11

SDG8 Bachelor degree 230 711 941 0.60 We observe the laws and regulations related to occupational safety and health, Educational Junior college 47 244 291 0.19 and make the meeting of the Occupational Safety and Health Committee, background establishment of policies, and education training workable. We provide Senior high school 7 142 149 0.09 periodical fire fighting and evacuation training and establish preventive measures (vocational) for the employees who work at high risk to ensure a safe working environment. Junior high school 0 22 22 0.01 and below

Top management 5 74 79 0.05

Middle management 13 114 127 0.08 I. Talent attraction and development Official rank Supervisor 48 258 306 0.19

A. Overview of employees Non-management 254 806 1060 0.67

Business 15 195 210 0.13 Structure of employees Number of employees Professional 92 264 356 0.23 We recruit outstanding talents to from 2014 to 2016 enhance the advantage of the team, meet the Function Management 190 198 388 0.25 requirements of the extended global business, Land crew Sea crew introduce new ships of good performance, Year Total Technique 15 323 338 0.22 Male Female Male Female form alliances with other shipping companies, Marine service 8 272 280 0.18 and engage in associate shipping business to optimize shipping lines and service networks. 2014 911 268 329 9 1517 Taiwan 320 1206 1526 0.97 The number of employees has increased Region Europe 0 1 1 0.00 continuously over the past three years. The 2015 939 299 302 7 1547 number of Evergreen Marine´s employees was Asia 0 45 45 0.03 1,572 on December 31, 2016. Of those, 1,292 2016 980 312 272 8 1572 employees served on land and all of them were Total 320 1252 1572 1.00

74 2016 EMC CSR Report 75 Care for employees ｜ and Environmental Safety ｜

B. Recruitment and industry-academy collaboration (2) Lecture courses We have dispatched senior seamen to National Taiwan Ocean University to give lecture courses on Recruitment “Ship Operation Practice＂ and “Marine Engineering Practice＂ since 2016.

In consideration of the growth of the global cargo transport business and the training of international (3) Provision of cooperative education programs and practical training marine talents for the business in the future, we started the recruitment project in 2016 to select young people who have a macro view of the world to engage in the shipping business. opportunities for domestic maritime schools and colleges We have honorably acquired the “First Place in Accepting the Students from Domestic Maritime Number of new employees from 2014 to 2016 Schools and Colleges for On-Board Practical Training and in the Total Number of Days＂ from the Ministry of Transportation and Communications＂ for seven consecutive years since 2010. We arranged 75 students New Land crew Sea crew Total from domestic maritime schools and colleges to take practical training on the ship and 11 students to take employees Female Male Female Male practical training on the shore during the summer vacation in 2016. 2014 9 60 3 73 145

2015 10 58 5 48 121 2016 20 32 2 30 84 C. Fair promotion and treatment Number of employees leaving office (incl. retired employees) Human rights and compliance from 2014 to 2016 As a leading company in the global container transport service, we are especially concerned about Employees Land crew Sea crew our social responsibility and ensure smooth communication with all the involved stakeholders. We observe Total leaving office Female Male Female Male the “Universal Declaration of Human Rights＂ and the core labor standard of the “International Labor Organization Convention＂, and have never prohibit or obstruct our employees from forming associations 2014 9 32 1 22 64 freely. No discrimination, forced or compulsory labor, or infringement upon the rights of the indigenous 2015 10 57 1 31 99 people occurred in 2016.

2016 15 42 1 32 90 As for the management policy and procedure, we always prohibit child labor, eliminate discrimination in recruitment and employment, pay a fair wage, and carry out training, evaluation and promotion, and Industry-academy collaboration held labor-management meeting to ensure full communication. We form a special occupational safety and health team and conduct health, safety, quality, and environmental risk assessment according to the HSQE We work closely with maritime schools for many years including provision of on-board practical management system to protect occupational health and safety. training, dispatch of experienced instructors to give lessons at the school, provision of career lecture courses, etc. to attract outstanding talents to joint our shipping business.

(1) Special shipping technology D. Training of talents classes for the graduates Education and training We enhanced the cooperation with the National Kaohsiung Marine University in 2016 We persist in the ideal of “talents are the most important assets of an enterprise＂ of Dr. Chang to offer the first special shipping technology Yung-Fa, the founder of the Evergreen Group, and provide complete training courses for the employees. classes for the graduates. Qualified participants We ever won the “Training Award＂ under the “Lloyd´s List Asia Awards＂ of the authoritative medium after the class will have the opportunity to in the global shipping industry, Lloyd´s List, in 2014. This is a great recognition of our long-term devotion take 1-year practical training on the ship. The to the professional training of our employees on the ship and shore. The purpose of the training is to participant who has good performance during provide premium shipping service and ensure operation safety. the training can join the Evergreen fleet.

76 2016 EMC CSR Report 77 Care for employees ｜ and Environmental Safety ｜

1. Training of Land crew Number of training hours for the employees The training courses for Land crew on the shore include new employee training, departmental on the ship and shore in 2016 professional training, external professional training, training of management function, domestic cross- department rotation and international talent training, and study of language. Lecture courses on the Fair Land crew Sea crew Trade Act and Evergreen Group Loss Prevention symposiums are provided on an irregular basis as well. We introduced the functional analysis technique in 2004 and applied it step-by-step to the training Non- Non- of the employees. The training of employees in 2016 focused on helping the management personnel Item Management management Management management Subtotal Subtotal develop their management knowledge. For this, we arranged management training courses and provided Female Male Female Male Female Male Female Male them in different phases.

Employees 59 329 253 651 1,292 7 117 1 155 280

Total training Management training 1,659 6,474 5,792 11,861 25,786 312 1964 0 4072 6348 hours

Average 28 20 23 18 20 45 17 0 26 23 training hours External Internal professional training professional Educational training expenses for the employees on the ship and training shore in 2014-2016 (Unit: NT$) Company-level Dept.-level Study of Category 2014 2015 2016 orientation new employee language Land crew 1,582,978 1,855,639 2,201,539 training training Lecture courses

Sea crew 8,521,694 8,585,319 8,872,065 Land crew training map Total 10,104,672 10,440,958 11,073,604

78 2016 EMC CSR Report 79 Care for employees ｜ and Environmental Safety ｜

2. Training of Sea crew E. Rotation and development of internationalization For the seamen who are waiting ashore for assignment, we arrange professional training for them according to the 2010 amendment of the STCW Convention (International Convention on Standards Evergreen Marine is an international shipping company. We have of Training, Certification and Watch-keeping for Seafarers) and additional acclivities depending on deepened our base in Taiwan and deployed the resources all over their individual functions on the ship, including dissemination of policies, ship-borne system operation the world since our establishment. By offering various expatriation instructions, and professional function enhance courses to ensure that seamen can lean the latest shipping opportunities, we have trained many marine management talent Cross- knowledge and technology and enhance their professional marine engineering capability. at different levels who have internationalized operation visions discipline and capacities. rotation training The EVERGREEN Seafarer Training Center Rotation training We established the “The EVERGREEN Seafarer Training Center＂ in 1999 to develop various Multiple teaching aids and software for diversified teaching methods. The Center is dedicated to improving the We improve the functional capability and professional techniques of the seamen with a set of complete equipment and strict professional standards. productivity of the employees by implementing development In addition to train the seamen of the cross-discipline and cross-nation rotation training. opportunities shipping companies under the Evergreen This is helpful for the employees to extend Group, the Center offers opportunities their vision and developing their career while Ship-shore International promoting the business. By taking the to a fixed number of seamen from other rotation talents training, they can prepare themselves for shipping companies and provides them training training the needs of the business in the future. with the training courses required by the Convention according to the policy of the competent maritime authority in Taiwan. This is what we are doing for International talents training training of the seamen in Taiwan. Evergreen Marine has a service network stretching to the five continents in the world and employees have many expatriation opportunities. Of them, 379 employees were expatriated for execution of shipping business in 2016 (the statistics on December 31, 2016). We are one of the few companies that is internalized so deeply and broadly in Taiwan.

Rotation statistics from 2014 to 2016 180 156 157 162 162 112 164 160 140 125 116 120 100 90 80 60 40 20 0 2014 2015 2016

Cross-discipline Cross-nation Ship-shore rotation rotation rotation

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To take care of the life of the expatriates, we provide subsidies for their family, rent, airline ticket for visit to their family in addition to the arrangement of transfer, relocation, and living with relatives. We also B. Communication and complaint provide medical, accident and life insurance to ensure that expatriates can work abroad without concern. Labor's rights and interests

We observe the Labor Standards Act to protect the rights and interests of the labor. We ensure mutual communication and create harmonious labor-management relations by holding labor-management II. Employee communication and care meetings to seek for cooperation and make explanation.

A. Performance evaluation Employee communication Evaluation system We hold labor-management meetings and implement a regular or mutual communication system.

All of the employees have been subject to regular performance evaluation since their appointment to We value the communication with the employees and establish an regular or mutual communication review the results of their work. The result of the evaluation is used as a reference for the development of system via the departmental meeting, electronic bulletin board, employee training, seamen forum, official the career in the future. web pages of “Stakeholder Area ~ Employee Area＂ (http://www.evergreen-marine.com/tw/tbi1/jsp/ TBI1_Stakeholder.jsp). 1. Evaluation of Land crew New employees are assigned to each business unit after they have reported for duty and finished the orientation training arranged by the Human Resources Department. They are subject to evaluation of their Employee's complaints performance during the probation period prior to the end of the 3rd month after commencement of their “ ＂ job. We have established the Employee Complaint Regulations . An independent reporting mailbox ([email protected]) is set up for internal and external personnel. We did not receive, deal 2. Evaluation of Sea crew with, or reconcile any labor practice complaint, human rights complaint, or social impact complaint via the official complaint system in 2016. After being assigned to a ship, new seamen start a 3-month practical training (probation) and the supervisor on the ship evaluates the performance of these new seamen. With the help of the computerized seaman performance evaluation system, the supervisors at Labor-management disputes different levels conduct performance evaluation twice every year. The result of the evaluation is used as a basis for renewal of the contract and promotion. We value mutual communication and ensure smooth labor-management communication. We observe laws and regulation and are dedicated to creating a good atmosphere of harmonious labor-management relations. Employee Performance Improvement Support Program Capability The major point of the management in the future is how to improve the work efficiency of the employees and help them create the highest work performance within a given time frame to ensure the overall competitive strength of the Company. We have discovered the methods for improvement of the work performance through Motive Goal review and analysis since 2016, and helped the employees improve their performance continuously to support the development of the Company and maximize the benefits.

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C. Welfare and care Physical examination Employees are treasurable assets of the Company. In We treat our employees as the most important assets of the Company. In addition to observing addition to the checkup and general physical examination, relevant laws and regulations, we consider care for employees our mission and provide a friendly we hire labor health nursing staff to provide employees with workplace for the employees to work without concern. health management, prevention of occupational disease, health Employee welfare - All of the full-time employees can enjoy the following benefits improvement, and other health protection services. Sports and recreational facilities are available for the employees at the workplace to improve their health and physical condition and 1. Holiday Two holidays every week. enhance the competitiveness of the Company.

Hygiene inspection is conducted every six months on 2. Annual paid As specified in the Labor Standards Act. every ship of the Evergreen Marine to acquire the SSCEC leaves (Ship Sanitation Control Exemption Certificates) and meet the 3. Pension international hygienic conditions and standards. As specified in the Labor Pension Act. system There are three major points with respect to the health Labor insurance, national health insurance, group accident insurance, service and improvement of the seamen: medical insurance covering hospitalization and injury for the employees 4. Insurance traveling abroad for business, group term life insurance with a preferential The dispensary rate. provides medical Nourishing and healthy free lunch, overtime meal, and on-duty meal at the Every officer on the consultation 24 5. Meals canteen. A complete set of ship takes ashore hours a day. When a medical facilities medical and first seaman encounters Professional physicians give medical advices and general medical treatment. 6. Health care including drugs aid training before any accident or is sick Free physical examination. and medical starting the work, so and needs emergent Employees buying tickets for a domestic flight of UNI AIR or living in a devices that meet that they can have medical consultation, 7. Recreational hotel of the Evergreen Group in Taiwan or overseas can enjoy a preferential the requirements practical emergency the captain can activities discount. of the IMO medical treatment instantly contact (International capability and can the physician of the 8. Educational We provide regular and irregular educational training, professional lecture Maritime protect the safety dispensary by satellite courses, workshops, and subsidies for foreign language training every year. training Organization) is and health of the phone or email and available on the seamen during their acquire real-time 9. Operating ship. work period on the medical instructions performance Year-end bonus, dividends (listed company) and keep following bonus ship. the condition of the Wedding/funeral subsidy, wedding bonus, funeral money, injury or illness patient. 10.Other consolation money for injury or illness, emergency aids, family subsidy for subsidies transferee, allowance for expatriates

11.Clothes Evergreen Airline Services provides preferential clothes washing service.

24 clubs: basketball, tennis, softball, badminton, table tennis, swimming, 12.Clubs Taiji for the health, yoga, mountain climbing, golf, Latin aerobic exercises.

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3. We provide following safety and health III. Protection of working environment training of new and existing employees according to relevant occupational safety A. Fleet safety culture and health regulations. (1) Overview of relevant safety and health The feet management policy of the Evergreen Marine is described below. regulations required for the operation

1. We are dedicated to establishing all the safety protection systems to eliminate identified risks, and (2) General ideas and rules of occupational provide the seamen and other employees of the Company a safe and healthy working environment safety and health within the scope of the management system. (3) Self-inspection before, during, and after the operation 2. We are dedicated to preventing pollution due to greasy dirt, garbage, and hazardous substance, and reducing waste gas emission as much as possible. (4) SOPs (5) Emergency response measures 3. We are dedicated to meeting the requirements of applicable international safety and anti-pollution conventions, and do our best to observe the regulations with respect to protection of the air, (6) General sense and exercise of fire fighting and first aid ocean, and environment. (7) Other safety and health knowledge related to the work of the workers

4. We provide employees with free physical examination and consultation of the result. 5. We provide educational training of the employees for fire fighting and evacuation according to B. Focus on the safety of employees the Fire Services Act and its enforcement rules.

Our Occupation Safety & Health Department hires occupational safety and health staff and executes 6. We observe the Occupational Safety and Health Act and establish and implement the “prevention safety and health management and supervision according to the law in order to promote safe workplaces of musculoskeletal disorders induced by repetitive operations and related works”, “prevention and prevent occurrence of occupational disasters. Related tasks are described below: of ailments induced by exceptional workload”, “prevention of wrongful physical or mental harm caused by the actions of others during the execution of job duties”, and “maternal health 1. We observe the occupational safety and health management policy and make suggestions about protection at the workplace” the safety and health policy of the Company at the meeting of the Occupational Safety and Health 7. The office building is guarded by security guards 24 hours a day to protect the safety of the Committee that the President preside over every quarter. We are also engaged in the review, employees and properties of the Company. coordination and recommendation of the matters related to the safety and health.

2. We establish and announce the safety and health rules applicable to the Company according to relevant occupational safety and health regulations, and ask all the employees to observe and implement accordingly.

86 2016 EMC CSR Report 87 05 Promotion of Education and Contribution to Society

I. Promotion of education

II. Contribution to society Promotion of Education ｜and Contribution to Society ｜

Highlights B. Popularization of marine culture • 8 career lecture courses on “Away from Poverty by Sailing - Create a Golden Shipping Line for Yourself＂ were provided and about 2100 persons were benefited Various promotion and education activities were provided in • More than 60 marine culture lectures have been held in the Evergreen Marine Museum and the Evergreen Marine Museum. attracted about 3000 participants Dr. Chang Yung-Fa, the founder of the Evergreen Group, always valued the marine culture and • Scholarships and grant-in-aids to the amount of NT$116.2 million were provided for 386 education. He established the Evergreen Marine Museum on his own and donated 4.077 marine relics that students in China he bought around the world more than 30 years to the museum and had them become the permanent public properties of the society. The Evergreen Marine Museum is the largest private marine museum in terms of the area and collection in Taiwan. Corresponding to the UN SDGs Since its establishment in 2009, more than 60 marine culture lectures have been held in the Evergreen SDG9 Marine Museum and attracted about 3000 participants. It irregularly sponsors school children in remote villages to visit the museum and arouses their interest in the marine culture. We have rent docks at Kaohsiung Harbor for many years and rebuilt them in the hope to have them better and make use more of their capacities for larger ships, higher operation efficiency, less energy consumption and air pollution, and reduced operation risk for the employees. By doing so, we make a contribution Special exhibitions and public service activities held in the to the sustainable development of the infrastructures. Evergreen Marine Museum in 2016 are described below:

SDG10 1. Painting-the-Sea Contest: A painting-the-Sea contest with the theme of “Paint a Marvelous Ship＂ was held in May. All the We are dedicated to promote the “Away from Poverty by Sailing＂ and provide primary school pupils could participate in the contest. A “Angle Group＂ was specially arranged for the channels and information for potential sailing talents to enter the shipping children with disabilities and schools could recommend their works for the contest. The works that won the industry, give an equal opportunity for disadvantaged families, and help them be award and the works of the Angle Group were exhibited in the museum in the hope to call on the public lifted out of poverty. to be concerned with the art education of the pupils and the children with disabilities.

2. Sailing Camp: Many sailing camps were organized in the Evergreen Marine Museum in 2016. These activities had I. Promotion of education the purpose to promote marine education and were highly recognized, and the children could learn to love, know, and be close to the sea in these summer camps. A. Training of next-generation sailing talents

The Evergreen Group started from shipping service. Now we have expanded our territory to the shipping routes all over the world. Dr. Chang Yung-Fa, the founder of the Evergreen Group, always valued the training of the sailing talents. When visiting the poor families around Taiwan, Chang Yung-Fa Foundation hopes to extend the vision of their children by means of education. It raised the idea of “Away from Poverty by Sailing＂ to solve the financial problem of the disadvantaged families on the one hand, and reserve sailing talents for Taiwan on the other hand.

The personnel of the Chang Yung-Fa Foundation visit the schools in remote villages and share the joys and sorrows with the students so that they can personally go through the scene and understand the living conditions and work environment on the ship. These give the students from disadvantaged families a chance to reverse their life. A total of 14 career lectures had been provided from 2012 to 2015. 8 career lecture courses on “Away from Poverty by Sailing - Create a Golden Shipping Line for Yourself＂ were provided together with the Evergreen Marine in 2016 and about 2100 persons were benefited.

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3. Teachers’ Workshop Camp: B. Participation in public welfare service Almost one hundred teachers from junior and senior schools organized a workshop camp in the Evergreen Marine Museum. The activity included visiting the museum and DIY teaching. The members of • Chang Yung-Fa Foundation awarded grant-in-aids around Taiwan and the Evergreen symphony orchestra introduced marine music and the teachers were arranged to see the arranged shipping career lectures rehearsal. The orchestra was highly recognized by the teachers for its performance. To extend the care of Dr. Chang Yung-Fa, the founder of the Evergreen Group, for the children of 4. Prof. Li Qian-Lang Tells the History - Lectures on Taiwan Relics: disadvantaged families, Chang Yung-Fa Foundation provides (vocational) senior schools and colleges with grant-in-aids for the students from poor families. The total amount of the grant-in-aids in the first He called on the public to care half of 2016 was nearly NT$6 million. More than 20 thousand students have received the money and the for the relics and ancient buildings funds granted to the students have exceeded NT$300 million since establishment of the Chang Yung-Fa in Taiwan. A total of 4 lectures were Foundation in 1985. held and acquired a great response from the public. There was a full • Chang Yung-Fa Foundation, together with the Evergreen Marine, held the house for each lecture. “Rescue Hero - Search Dog Sunny Foster Ceremony” activity. In the future, we will sponsor Chang Yung-Fa Foundation and the Evergreen Marine jointly held the “Rescue Hero - Search Dog more marine culture and education Sunny Foster Ceremony＂ and donated NT$150,000 to Taiwan Elites´ Search and Rescue Association activities in the Evergreen Marine as a fund for the food, health care, training, and equipment for Sunny. The Foundation also denoted a Museum with the spirit of loving, multi-purpose hanging vest to Sunny, so that it can reach the location more faster where it cannot reach knowing, and being close to the on foot and execute the mission more quickly. We have devoted ourselves to public welfare activities for sea of Dr. Chang Yung-Fa, the many years. These include education, founder of the Evergreen Group, in medical service, assistance for disasters, mind. and care for people with disabilities and disadvantaged minorities.

In the collapse of the Weiguan Building in Tainan in January 2016, firemen II. Contribution to society and rescuers spared no efforts to rescue the victims and what the search and rescue dogs did cannot be ignored. Sunny A. Community relationship and development was one of the dogs joining search and rescue team. Though being injured during Investment in infrastructure the rescue, it actively joined the rescue team after the medical treatment. Its To support the development of the Kaohsiung Harbor and the operation requirements of the persistence in completion of the mission is Company, we rent 6 docks (Docks 79~81 at the 5th Container Terminal and Docks 115~117 at 4th very touching. Container Terminal) from Taiwan International Ports Corporation, Ltd. and partially rebuild the back area of Dock 117 to be an operation area for the remotely controllable Automatic Rail Mounted Gantry (ARMG). • Evergreen Marine cared This allows to store laden containers up to 5,000 TEU and can improve the operation efficiency in the back area, reduce the energy consumption, and minimize the air pollution. for the remote schools in Hsinchu and donated servers The amount of investment in the infrastructure of each ports in Taiwan and PCs We donated 15 high-end servers and Area 4th Kaohsiung Container Terminal 100 PCs to the Department of Education, Hsinchu County Government, to help local Total investment amount in 2016 NT$557,000 schools improve their teaching capability.

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up to more than 30 countries. Dr. Chang Yung-Fa said “the more the reader of the “Morality Monthly＂ C. Spread of ethical good deeds the better. I wished to issue a magazine long ago. It is always free no matter how the volume of circulation is.＂ The “Primary Morality School＂ was added to the “Morality Monthly＂ in April 2011. The enlarged Overseas charity activities word, phonetic symbol, and lovely illustration help the children read the magazine even without being • Grand-in-aids for the students accompanied by the teacher or parent. The magazine had its electronic version in 2016 to protect the environment and the earth. from poor families in China 1,700 schools, institutions, and teachers use the “Morality Monthly＂as the teaching material of the We assisted a total of 386 students from 20 character education. It is also used in the reading and discussion, writing of the reading results, speech priority maritime universities, Peking University, contest, and even in the writing and poster competition activities or used as the source of examination and Tsinghua University in 2016. The amount questions. Some correction schools use the“Morality Monthly＂as a reading or writing material for the of the subsidies was about NT$11.62 million. inmates. Many inmates find it beneficial after they leave the correction school. They change their address The “Friends of Tsinghua - Chang Yung-Fa and telephone number by mail or phone in the hope to receive the magazine continuously after they come Foundation Grant-in-Aid for Students from Poor back to the normal life. Families＂ benefited 29 students. As Dr. Chang Yung-Fa said, “The goal of the magazine is achieved when one of a million of people • Grand-in-aids for the students from poor families in the America is influenced positively.＂ Beneficial to San Francisco State University, University of Houston, and University of South Carolina

Morality Monthly

There are many touching paragons and stories in the society of Taiwan, but they are not reported. Media always focus on political struggles, gossips, and sensational stories. The news reporting the good and honest behaviors of the human being are usually not attractive to the public. In consideration that the bad social atmosphere and that the basis of the character education must be set up from the childhood, Dr. Chang Yung-Fa, the founder of the Evergreen Group, decided to issue a magazine that can arouse the good human nature and do what he could to correct the social atmosphere.

The first issue of the “Morality Monthly＂was released in January 2008 for the readers aging from 9 to 99. The simplified Chinese edition was issued in April 2009 to sew the seeds of morality to Singapore, Malaysia, and other Chinese regions. Now, the readers of the magazine reach

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