NEPTUNE ORIENT LINES LIMITED SUSTAINABIILTY REPORT 2014 - APL
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NEPTUNE ORIENT LINES LIMITED SUSTAINABIILTY REPORT 2014
Purpose of report This annual report shares the activities and performance of the NOL Group’s environmental, safety, security and social programmes with customers, employees, shareholders and communities at large. The reporting period is from 1 January to 31 December 2014. This report is available online at www.nol.com.sg. CONTENTS Letter to Our Stakeholders 1 Corporate Profile 2 Promoting Responsible Business Practices 4 Fostering a Safe and Healthy Workplace 5 Securing Supply Chains 10 Protecting the Environment 14 Supporting Communities 22
Neptune Orient Lines Limited Sustainability Report 2014 1
Letter to our
Stakeholders
We live in an age in which sustainable development has become This environmental performance is attributable to
an integral part of conducting business. This is also true of the improvements we have made in operational efficiency, voyage
NOL Group. Against a backdrop of tough operating conditions optimisation and technical developments, as well as the injection
in 2014, our team has continued our commitment to corporate of fuel-efficient and environmentally-friendly tonnage into our
sustainability. global fleet.
Focusing on responsible business practices, supply chain In an era of economic and geopolitical uncertainty,
security, safety and health, we implemented measures and the Group will carry on taking a proactive stance in driving
initiatives that help us maintain ethical business conduct, corporate sustainability, for the good of people, environment,
safeguard our assets and operations, as well as enhance employee and business. By preparing for the future, we look to improving
well-being both on board our vessels and within the corporate our competitiveness and ensuring that our company will thrive
environment. in the long term.
Through continual engagements with key stakeholders, NOL
articulated our accountability to our employees, customers and
regulators, learnt about new issues that required addressing and
collaborated to find the best solutions.
I am also delighted to report that NOL’s liner business further
reduced its carbon footprint in 2014, cutting its carbon dioxide NG YAT CHUNG
emissions by 40.4% from the 2009 level. Group President and CEO2 Neptune Orient Lines Limited Sustainability Report 2014
Corporate profile (as at end June 2015)
Core Business
Offices in More than Covering all aspects of global cargo container
45 7,500
transportation, the NOL Group's business
offerings are delivered through APL.
APL combines high-quality intermodal
countries employees operations with the latest information
technology to offer 80 weekly services
at more than 150 ports worldwide.
EMPLOYEE DISTRIBUTION (excluding seafarers)
By geography By gender By age
Americas Greater China Asia Pacific Female Male 29 & below 40 - 49
Europe & Southeast Asia – others 30 - 39 50 & above
Middle East
14% 21% 15%
47% 35%
14%
27% 20%
53%
24% 30%
APL GLOBAL SERVICE NETWORK ACROSS MAJOR TRADE LANES
Trans-Atlantic
U.
pe S .
ro
Eu
Europe
Asia
North
Intra-Europe America
Intra-Asia
Eu
ro
pe
.
U. S
Africa
U.S.
Asia Asia
Asia-Europe
Asia
Trans-Pacific Latin-America
Oceania Au
s tra AmeLri
atin South
lia ca America
AustraliaNeptune Orient Lines Limited Sustainability Report 2014 3
FINANCIAL PERFORMANCE
GROUP COST SAVINGS GROUP COST SAVINGS 2014 GROUP VOLUMES CARRIED
(US$M) Breakdown of major cost categories (‘000 FEUs)
Bunker & Terminals, Others
Network- Land Operations,
related Equipment
2014 430 2014 2,911 FEUs
21%
2013 470 2013 3,015 FEUs
2%
US$430M 77%
2012 504 2012 3,088 FEUs
REVENUE NET ASSET VALUE PER SHARE1 NET (LOSS)/PROFIT1
(US$M) (US$) (US$M)
9,422 9,211 9,512 8,831 8,617
1.25
0.98 461
0.83 0.80 0.67
(474) (412) (76) (260)
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
RETURN ON EQUITY1 CORE EBIT1,2 BASIC (LOSS) /EARNINGS PER SHARE1
(%) (US$M) (US¢)
578
16 17.88
(16) (18) (4) (14) (355) (183) (167) (76) (18.38) (15.98) (2.95) (10.05)
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
1
2011 and 2012 figures have been restated for comparative purposes due to retrospective application of Amendments to FRS 19: Employee Benefits (Revised), which
is effective from financial year 2013.
2
With effect from 2013, in addition to interest expense, the definition of Core EBIT has changed to exclude other finance expense and income. Core EBIT from
2010 to 2012 have been restated accordingly.4 Neptune Orient Lines Limited Sustainability Report 2014
Promoting
responsible
business
practices
Ensuring high standards of corporate governance and transparency is vital to
achieving sustainability at NOL.
Integrity and respect underpin the NOL oversees the development, adoption and The clause places a greater responsibility
Group’s interactions with its stakeholders. compliance with the Company’s ethical on vendors for compliance with specific
The Group believes ethical interactions framework, policies and procedures. The consequences for breach.
with shareholders, customers, suppliers, Committee also designs the framework The Group’s Vendor Code of Conduct
business partners and among employees to investigate ethics matters, and is available on http://www.nol.com.sg/
must always be upheld. Employees at recommends disciplinary actions. wps/portal/nol/vcoc in English, Simplified
all levels are expected to contribute An ethics hotline, managed by an Chinese and Spanish.
towards providing a safe and healthy work independent third party provider, is
environment. accessible to NOL Group employees round Procurement practices
As the Group navigates through a the clock. Any ethics concern or incident Global sourcing, purchase of equipment
difficult business environment, it remains may be reported through the hotline, and fuel as well as managing the
committed to a corporate culture of which complements other available expenditure for vessel and land
compliance. Achieving high standards of channels for reporting ethics matters, operations are important factors towards
ethics, integrity and business practices in including the Group President and Chief business competitiveness and meeting
accordance with all applicable laws is the Executive Officer, or the Chairman of the customer expectations.
responsibility of every employee. Audit Committee of the NOL Board. An The Group strives to implement
online tool is used by the Group to track procurement best practices and achieve
Corporate Code of Conduct and monitor reported incidents or concerns cost leadership in the industry. It regularly
NOL’s Corporate Code of Conduct covers for informed decisions to be made in areas evaluates suppliers and contracts, and
property, people and conduct, and finance. of ethics compliance. reviews purchasing processes on bunkers,
The Code is available on the NOL website at: equipment, terminals, vessel spares,
http://www.nol.com.sg/wps/portal/nol/gcoc. Vendor Code of Conduct vessel slot costs and land. Vendors are
Employees are required to uphold the Vendors and suppliers to the NOL Group appraised on an ongoing basis to ensure
Group’s standards of ethics and integrity in are also expected to conduct their compliance towards company practices.
all their business activities and interactions. business activities in full compliance The regular vendor audits also track their
Access to the Corporate Code of Conduct with applicable laws of the country and operations in relation to health, safety and
is readily available in 3 languages – location of their operations as well as the environment.
English, Simplified Chinese and Spanish. international regulations. NOL’s Vendor Through effective vendor and contract
Acknowledgment of compliance is required Code of Conduct articulates legal, ethical management, NOL continues to establish
every year. and moral standards expected of its and maintain long-term relationships with
vendors and external partners. reliable, ethical and strategic vendors, who
Ethics Compliance In 2014, the Group enhanced the are capable of delivering the products
The Ethics Committee, which comprises contractual compliance clause to be and services which the Group requires to
senior executives of the NOL Group, included in all new and renewal contracts. conduct its business.Neptune Orient Lines Limited Sustainability Report 2014 5
Fostering
a safe and
healthy
workplace
Staying alert and wearing protective gear at all times are a given at all
APL terminals.
APL recorded seven The NOL Group is committed to fostering Contingency planning and preparedness
a safe work place and maintaining strict Contingency planning is a core activity at
consecutive years of zero standards with the highest priority given APL. Through its Safety and Environmental
fatality since 2008 to ensuring safety. Management System (SEMS), APL enables
The Group’s businesses, APL and APL its shore-based and shipboard personnel
Logistics*, maintain strict operational to swiftly respond to an emergency and its
standards to prevent accidents and injuries. potential environmental impact.
APL average vessel Lost Policies and programmes are also in place APL outlines the management of
Time Injury Frequency to maintain and enhance the physical and human resources, coordination and
improved 56.7% mental well-being of their employees. communications procedures, and a range
of technical and logistical responses in its
SAFETY AT APL Vessel Emergency Manual. They would
APL advocates “Safety First” on board all be applied on board every APL ship and
APL vessels recorded its vessels and at the terminals that by key shore-based personnel during
zero Port State Control it operates. Its safety practices are in an emergency.
accordance with international and local Each year, APL would involve ship and
detention in 2014 regulations; as well as safety codes and shore-based personnel in training and
conventions including: drills to ensure preparedness and that
a) International Convention for the their responses are in accordance with the
Safety of Life at Sea (SOLAS); SEMS. SEMS is certified by the American
b) International Convention on Standards Bureau of Shipping. APL regularly reviews
of Training, Cer tif ication and and improves on the SEMS so that safety is
Watchkeeping for Seafarers (STCW); not compromised and SEMS stays relevant
c) International Convention for the in the evolving environment.
Prevention of Pollution from Ships
(MARPOL); Effective bridge management
d) Maritime Labour Convention (MLC); and Notwithstanding that its ships are built
e) Pacific Coast Marine Safety Code safe by design and equipped with
(PCMSC). technologically-advanced equipment,
* NOL divested APL Logistics on 29 May 20156 Neptune Orient Lines Limited Sustainability Report 2014
Fostering
a safe and
healthy
workplace
APL practises stringent bridge management improves on its practices to ensure all its technical knowledge but also adopt the
on board its vessels. ships and crew members return safely to right attitude in safety management. As
Bridge Team Management (BTM) is the ports. such, training is important in fostering a
an essential component of APL’s Safety at safety culture at APL.
Sea initiative that emphasises on sound Behaviour-Based Safety Through its Safety Mentoring
navigational procedures and policies. APL’s Behaviour-Based Safety (BBS) programme, senior Masters are deployed
Through effective BTM, APL ensures that programme engages employees in taking on board as mentors to conduct workshops
its Masters and Deck Officers are adept in personal responsibility for safety, and and safety-related training during voyages.
anticipating and responding to potential promotes feedback from workplace These selected senior Masters undergo
issues through their respective roles. observations. Employees also get to training by professionals who train them
analyse risks by severity and probability, as to observe and study the minds and
The key elements of BTM include: well as mitigate the risks with appropriate behaviours of shipboard staff, as well as
• Having a detailed passage plan and control measures. communications skills to provide effective
maintaining it throughout the ship’s Every month, APL’s Vessel Safety and constructive feedback for corrective
course; Committee on APL ships meets with actions or areas of improvement.
• Having contingency plans for high the shipboard staff on updates and APL also runs a Personnel Safety and
risk areas; issues concerning safety. To encourage Health Training programme that covers
• Recognising safety threats and taking more active participation, topical safety the proper use of equipment such as
actions to mitigate or avoid them; and discussions have been organised from high voltage equipment and first-aid
• Communicating effectively throughout time-to-time. The ultimate purpose is devices including the automatic external
all types of situations. for safety precautions to become an defibrillators that are used to treat sudden
intuitive part of daily operations for cardiac arrest.
BTM training is mandatory for all Deck all employees. With increased vessel size and
Officers. Annual audits are also conducted complexity, more collaboration among
to ensure adherence of safety protocols. Reinforcing safety culture through the teams on board is necessary to
In 2014, APL audited seven vessels during training ensure safe and efficient ship operation.
port arrivals, departures and passages. APL ensures that its personnel are As such, APL enforces protocols in
Through the audit reports, APL checks and equipped with not only the most advanced Bridge Resource Management, EngineNeptune Orient Lines Limited Sustainability Report 2014 7
A deck officer uses a laser rangefinder to aid tight vessel maneuvering to ensure
the ship berths safely.
Resource Management and Marine Promoting safety through collaborations its vessels in 2014. The laser rangefinder
Resource Management to enable a In 2014, APL launched a Safety Culture Survey provides the teams on the bridge and
better appreciation of the different to review the safety needs of its employees, mooring station accurate measurement
functions of the larger vessels among as well as identify potential room for of the distance and clearance during tight
shipboard officers. improvement. The three-month survey was vessel maneuvering.
conducted jointly with the American Bureau
Proper hazardous materials management of Shipping and Lamar University, USA, and Monitoring and analysing performance
APL also ships hazardous cargo such involved more than 1,000 ship and shore APL uses a comprehensive incident
as flammable gases, corrosive and staff. Survey findings – including areas where reporting system to monitor and measure
spontaneous combustibles amongst APL excelled, and where enhancements can safety and environmental performance. It
others. As it conducts its business, APL be made – were analysed to strengthen tracks Key Performance Indicators such as
ensures that these products are shipped policies and devise new strategies to ensure Lost Time Injury (LTI) frequency, incidents
in accordance with the International shipboard safety. and near misses, audit findings, inspection
Maritime Organization’s mandatory APL remained supportive of all industry deficiencies, and port state interventions.
International Maritime Dangerous Goods efforts that promote safety. APL continued Incidents and near misses are
Code and all other relevant national and to actively collaborate with the relevant investigated to determine the root causes
local regulations governing international authorities and agencies to strengthen and to take appropriate corrective and
shipping and intermodal transport. overall maritime safety. In particular, APL preventive actions. Any lessons to be
APL exercises extreme care and has worked closely with the Singapore learned are extracted and communicated
follows strict procedures to ensure the Maritime and Port Authority and Singapore to the fleet. This system enables setting of
safe shipments of these products. Shipping Association to enhance port performance targets that drive continuous
Meanwhile it plays a responsible role in safety as well as navigational safety in the improvement. Illnesses aboard ships
helping its customers understand and Straits of Malacca and Singapore. are also monitored by the fleet’s Safety
comply with the numerous requirements Department.
and re gulations governing the Safety through innovation
transportation of dangerous and hazardous APL continues to invest in technology to Vessel safety
cargo through its Hazardous Materials enhance safety. Leveraging innovation, Through rigorous application of preventive
Response Center. APL deployed laser rangefinders on all and corrective measures, APL has been8 Neptune Orient Lines Limited Sustainability Report 2014
Fostering
a safe and
healthy
workplace
recording reduced lost work days from safety awareness. In the U.S., LTIF at APL’s is a computer-based voluntary global
injuries sustained on the job. Dutch Harbour and Los Angeles terminals ship reporting system used worldwide by
APL recorded seven consecutive years decreased from 7.2 in 2012 to 5.0 in 2014. This search and rescue authorities to arrange
of zero fatality since 2008. In 2014, APL’s was a result of concerted efforts in addressing for assistance to persons in distress at sea.
average vessel Lost Time Injury Frequency the safety risks that were prioritised to Sponsored by the United States Coast
(LTIF) was 0.84 incidents per million man be addressed . Guard, the AMVER system manages a
hours, an improvement of 56.7% compared In Japan, as a result of the terminals’ database of vessel information, sail plans
to 2013. stringent safety practices, no lost time and location reports from participating ship
The APL fleet also recorded zero Port injury have been reported in the past owners to identify the best suited ship or
State Control detention and no major five years. ships to respond to a distress situation.
accident in 2014. APL vessels have been commended
Rendering assistance to distressed annually for their readiness to send
Terminal safety victims at sea position reports and divert their sail plans
APL owns and operates five terminals, APL has been a long standing supporter of to assist those in distress if needed. The
all of which meet applicable national the Automated Mutual Assistance Vessel acknowledgement further underlines
regulations for port safety. Rescue System (AMVER). The AMVER system APL’s commitment to safety at sea.
APL’s Kaohsiung terminal in Taiwan
holds dual certification from the Taiwan
Occupational Safety & Health Management
System and Occupational Health & Safety APL Vessel lost time injury frequency
(per one million man-hours)
Assessment System (OHSAS) 18001:2007.
The terminal recorded six injuries in
2014. Of these, two were involved in traffic 4
incidents when commuting to and from
work. The other four were being hit or cut 3.19
by objects while at work. 3
The injured parties received medical
2.30
treatments and fully recuperated before 2 1.94
resuming to their work. The incidents
were investigated and standard operating
1
procedures were modified to prevent 0.84
recurrence. Training was also conducted
for terminal employees to reinforce their 0
2011 2012 2013 2014
* NOL divested APL Logistics on 29 May 2015Neptune Orient Lines Limited Sustainability Report 2014 9
Annual checks in NOL headquarters in Singapore help employees monitor
their general health.
SAFETY AT APL LOGISTICS* rating in North America continued to All APL vessels comply with the
At APL Logistics*, data is used to prioritise outperform the national average recorded Maritime Labour Convention, which sets
and drive safety programmes. Each month, by the U.S. Bureau of Labor Statistics. requirements for crew welfare and living
statistics are drawn with the purpose of standard on board vessels. Recreational
analysing the frequency and severity of EMPLOYEE WELLNESS facilities are also provided to support a
safety incidents by location and cause. Across the NOL Group, employee wellness healthy work life balance.
This is followed by a Pareto analysis, which programmes are implemented to foster In addition, the vessels are equipped
identifies the top causes for the majority healthy lifestyle choices, with the aim to with WIFI and broadband internet access
of the incidents, and thus the area APL reduce health risk factors and maintain a for crew members to stay in touch with
Logistics* need to focus on to determine productive and active workforce. their family members and friends. Also, with
the most effective solutions. This may take In 2014, NOL received the biennial Voice Over Internet Protocol technology,
the form of custom training, management Singapore Health Award (Gold) from the the crew can make phone calls at affordable
intervention, site reviews or work Singapore Health Promotion Board for its rates while at sea and when off duty. These
re-engineering. Implementation is then efforts in keeping employees healthy. These are but some of APL’s efforts to take care
scheduled, drawing on both internal and include regular lunchtime health talks, of its crew and their physical and mental
external resources. leisure activities and health screenings at well-being while at sea.
Once solutions are implemented, the NOL headquarters.
tracking continues in order to determine
progress. As the areas of concern fall from
the Pareto analysis, new locations and APL Logistics* OSHA frequency
causes rise to the top. The improvement (North america)
cycle continues in this manner indefinitely.
In addition, monthly topical safety 2.0
meetings are conducted by frontline
supervisors to reinforce the message 1.7
1.5 1.5
that the frontline has ownership of their 1.4
own safety. Frontline supervisors are also
encouraged to form their own teams to 1.0
tackle localised safety concerns, and this
has proven to be very successful.
0.5
As a result of the company’s relentless
focus on safety, its Occupational Safety &
Health Administration (OSHA) frequency 0
2012 2013 2014
* NOL divested APL Logistics on 29 May 201510 Neptune Orient Lines Limited Sustainability Report 2014
Securing
supply chains
APL won the inaugural Rear The NOL Group is committed to upholding Through voluntary participation in
the integrity of its global supply chain. these programmes, these businesses
Admiral Richard E. Bennis In view of the ever-evolving regulatory have benefitted from trade facilitation,
Award for excellence in developments, risks and threats, the including access to customs simplification
maritime security Group continually reviews its security and greater market competitiveness.
procedures and protocols to ensure it
responds promptly to any change in Customs-Trade Partnership Against
regulatory requirements, or maritime Terrorism (C-TPAT)
NOL established a Security and supply chain security threats. The C-TPAT is a joint programme between
Operations Centre to In particular, its container shipping the U.S. Customs and Border Protection
business, APL, is dedicated to supporting (CBP) and a range of global trade
proactively address pioneering initiatives and technologies stakeholders. The programme is designed
cybersecurity threats designed to advance security in the to provide maximum protection for global
supply chain. supply chains and enhance U.S. border
security through close cooperation
GLOBAL SUPPLY CHAIN SECURITY between the CBP and businesses involved
INITIATIVES in import handling and shipment.
Governments around the world have APL and its stevedoring services
implemented a wide range of supply provider, Eagle Marine Services, as well
chain security initiatives to improve as APL Logistics*, have been certified
maritime and intermodal cargo and members of C-TPAT since 2003, and were
operator protection. successfully re-validated in 2013. They
Ensuring that the best practices also provide support where possible
are adopted, APL and APL Logistics* to help their customers in the industry to
have implemented security practices revalidate their C-TPAT status.
according to the guidelines of the U.S.
Customs-Trade Partnership Against Secure Trade Partnership (STP)
Terrorism; Singapore Customs Secure The STP programme, administered by
Trade Partnership and European Union Singapore Customs, provides a framework
Authorised Economic Operator. to guide supply chain stakeholders in
* NOL divested APL Logistics on 29 May 2015Neptune Orient Lines Limited Sustainability Report 2014 11
An operations supervisor inspecting reefer containers to make sure they are in
optimum condition to ship fresh produce safely and securely.
developing, implementing, and improving enhance security for ships and port facilities value and/or sensitive cargo to adopt
their supply chain security measures and involved in international trade. an added level of security by using an
practices. An enhanced version of STP, In compliance with the ISPS, APL has indicative (non-keyed) theft deterrent
called STP Plus, stipulates more robust developed and implemented security plans barrier seal.
security criteria. based on threat assessments, as well as
APL has been STP and STP Plus certified appointed security officers for the company SECURITY EXERCISES AND TRAINING
since 2007 and 2009 respectively. and all its ships and marine terminals. Every NOL employee plays a crucial role
in the Group’s security efforts. As such,
European Union Authorised Economic ENSURING CARGO SECURITY all of them undergo a mandatory general
Operator In compliance with the U.S. Customs security awareness session on basic supply
The European Commission (EC) granted and Border Protection (CBP)’s “10+2” chain security processes and procedures
the Authorised Economic Operator (AEO) programme, APL provides advance on a global e-learning platform. Security
status to APL and APL Logistics* in 2009 information on its cargo shipment bound information is updated regularly to keep
in recognition of the companies’ reliable for the U.S. 24 hours prior to loading. employees abreast of the most recent and
operations and security measures that APL also adheres to the 24-hour advance relevant security issues and regulations.
comply with customs regulations within manifest rules in other countries, including In addition, as part of NOL Group’s
the European Union. Canada, China, Europe, Japan and Mexico. continuing efforts to review and enhance
Specifically, the EC is satisfied that APL maintains that container integrity port and vessel security, APL conducts
APL and APL Logistics* have carried out must be sustained to protect against the annual maritime security exercises
thorough risk assessments in relation to introduction of unauthorised material and/ involving its security personnel, law
their businesses in the region, and taken or persons. Adhering to ISO 17712:2013, enforcement agencies and other relevant
steps to mitigate the risks identified APL complies with the U.S. mandate that stakeholders. In 2014, exercises were held
through internal procedures and requires all maritime cargo containers at its terminals in Los Angeles and Dutch
appropriate control measures. destined for the United States be secured Harbour in the U.S., Kaohsiung in Taiwan,
with a high-security ISO compliant seal. as well as Yokohama and Kobe in Japan.
INTERNATIONAL SHIP AND PORT All laden containers taken into APL’s Its Singapore-flagged and U.S.-flagged
FACILITY SECURITY (ISPS) custody must be secured with seals that ships also carried out separate exercises
The ISPS code is a set of mandatory and meet or exceed ISO 17712 high security in accordance with the requirements of
recommended measures developed by seal standards. Additionally, APL also the ISPS and the Maritime Transportation
the International Maritime Organization to advises customers who are moving high Security Act.
* NOL divested APL Logistics on 29 May 201512 Neptune Orient Lines Limited Sustainability Report 2014
Securing
supply chains
In July 2014, APL and one of its reviews and updates these practices to biannual award recognises APL for its
vessels participated in a joint exercise be prepared for different piracy situations. strong commitment to U.S. security
conducted by the Republic of Singapore and the marine transportation system,
Navy’s Information Fusion Centre (IFC) to INDUSTRY PARTICIPATION particularly its outstanding contributions
strengthen the security in the Singapore To ensure the relevance of its security b eyo n d M aritim e Tr ansp o r t ation
and Malacca Straits. Managed by the practices and measures, APL actively Security Act requirements, such as APL’s
Republic of Singapore Navy, the IFC is engages maritime stakeholder groups participation in supply chain security
a regional Maritime Security (MARSEC) on government legislation, initiatives programmes: C-TPAT, Singapore’s STP
information-sharing centre. IFC facilitates and issues affecting the maritime Plus and EU AEO.
information-sharing and collaboration transportation industry. The groups
between partners to enhance maritime include: INFORMATION SECURITY
security, as well as timely and effective • World Shipping Council’s Security NOL is committed to respecting personal
responses from partner countries for Advisory Committee; data privacy, safeguarding confidential
MARSEC incidents. • BIMCO (Baltic and International information and ensuring the security of
Maritime Council) Maritime Security data within its custody and control. The
ANTI-PIRACY MEASURES Committee; Group’s information security programme
Piracy poses a serious threat to the safety • Singapore Shipping Association’s is modelled after the ISO 27001 standard,
of seafarers, and the integrity of global Maritime Security Subcommittee; which provides requirements for an
supply chains. By adopting industry-led • U.S. Department of State Overseas information security management system
Best Management Practices (BMP), APL Security Advisory Council; and (ISMS) – a systematic approach involving
vessels have geared up a robust defence • U.S. Coast Guard’s Area Maritime people, processes and IT systems to manage
against piracy. Security Advisory Committee. sensitive company information so that it
BMP involves carrying out risk remains secure.
assessments, building and maintaining RECOGNITION To safeguard information and processes
communication channels with the naval For its commitment to security, APL concerning the Group’s assets, stakeholders
authorities, implementing self-protective received the inaugural 2013-2014 Rear and vital businesses, all personnel with access
measures, as well as increasing vigilance Admiral Richard E. Bennis Award for to NOL computer systems and facilities –
and piracy response through training Excellence in Maritime Security. Conferred from employees, commercial agents to
and drills. Additionally, APL regularly by the United States Coast Guard, this external contractors – must comply withNeptune Orient Lines Limited Sustainability Report 2014 13
Deck officers are on watchkeeping round-the-clock for potential hazards
and threats.
the Group’s information security policies. approach. NOL achieves this through policy
Regular internal audits are also conducted enforcement, preventive measures as well
to ensure compliance with established as regular assessment of the Group’s IT
policies and standards. security landscape to devise short-term
plans and long-term strategies to address
Upholding the Global Privacy Policy immediate and potential cybersecurity
Every NOL employee is required to exercise threats.
care in handling data in accordance with In 2014, a Security Operations Center
the Group’s Global Privacy Policy to ensure was established to specifically handle
the proper collection, use, retention and cybersecurity incidents and implement
distribution of confidential or sensitive data. processes to proactively address security
To further enhance the implementation of threats to the NOL group worldwide.
data privacy compliance, a Personal Data Plans are underway for NOL to further
Protection Committee was formed in 2013 adopt the Framework for Improving Critical
to oversee compliance with the Global Infrastructure Cybersecurity in 2015.
Privacy Policy. Released by the U.S. National Institute of
All corporate entities within NOL are Standards and Technology in February
also bound by the International Intra 2014, the framework consists of standards,
Group Data Protection Agreement, which guidelines, and practices to promote the
requires them to ensure compliance protection of critical infrastructure to
with the Global Privacy Policy and manage cybersecurity-related risks.
European Union (EU) standards (for transfer
of personal data of EU citizens outside of
the EU) when migrating personal data
within the NOL group of companies.
Ensuring security in cyber space
Cybersecurity threats are ever-evolving
and need to be addressed with a proactive14 Neptune Orient Lines Limited Sustainability Report 2014
Protecting the
environment
APL reduced its The NOL Group is committed to protecting • implement pollution prevention
the environment it operates in. measures and processes;
fleet carbon dioxide As a responsible corporate citizen, • promote activities to conserve
emissions by 40.4% the Group ensures compliance with all resources and energy and to minimise
from the 2009 level applicable environmental regulations and and recycle waste; and
legal requirements. • strive for environmental excellence
Governed by its Environment Policy, through continual improvement.
the company identifies and manages
APL vessels operating environmental risks, evaluates its operations ADHERING TO INTERNATIONAL
in Emissions Control continually to mitigate environmental STANDARDS
impact and implements pollution- The NOL Group ensures that all its vessels
Areas comply with prevention measures. adhere to the International Convention
stricter sulphur content NOL believes that every stakeholder for the Prevention of Pollution from Ships
of just 0.1% plays a role in protecting the environment. (MARPOL 73/78), the main international
Therefore, NOL and APL have continually convention covering prevention of
engaged in open dialogue with stakeholders marine pollution from ship operations or
and encouraged a shared responsibility for accidents. The Group also closely follows
environmental excellence. the guidelines and standards set by the
International Maritime Organization (IMO),
ENVIRONMENT POLICY as well as Flag States and Port States.
NOL has an Environment Policy that Moreover, APL uses metrics tools
commits the Group to sound environmental provided by ISO14001 to maintain an
stewardship in all of its activities. effective Environmental Management
Applicable to NOL’s worldwide System (EMS). These tools enables APL
operations, the policy underlines the to measure and analyse the impact of its
Group’s commitment to: business on the environment, in order to
• identif y, assess and manage identify and work on areas for improvement.
environmental risks; The scope ranges from lowering its carbon
• evaluate operations to mitigate footprint, using low sulphur fuel, to
adverse impacts on the environment; adopting advanced systems.Neptune Orient Lines Limited Sustainability Report 2014 15
The NOL Group continuously improves on its operational efficiencies to mitigate
the impact of its business on the environment.
REDUCING CARBON FOOTPRINT Efficiency Design Index (EEDI) exceeds the including a 50% reduction on the Initial
In 2014, APL successfully reduced its fleet IMO’s requirements on EEDI for the same Registration Fees, as well as a 20% rebate
carbon dioxide emissions associated with type and size of ships. on Annual Tonnage Tax.
cargo transportation and handling by The newbuildings have been certified
40.4%, compared to its emissions level by the Singapore Maritime and Port Improving vessel operations
in 2009. Authority (MPA) under its Green Ship APL has been implementing measures
The accomplishment was attributable Programme. The programme recognises to improve its ships’ environmental
to improvements in operational efficiency, Singapore-flagged vessels that adopt performance. Amongst the approaches,
voyage optimisation and technical energy-efficient ship designs to reduce slow steaming – the reduction of vessel
improvements, as well as the injection of fuel consumption and carbon dioxide speed to save on cost and fuel – has
fuel-efficient and environmentally-friendly emissions. been making the largest contribution
tonnage into its global fleet. The certification qualifies the vessels towards lowering its carbon footprint
APL’s annual corporate carbon for financial incentives by the MPA, per TEU. This is made possible by its
footprint was verified by third-party
classification society Lloyd’s Register
Group. Carbon dioxide emissions were
APL co 2 emissions reduction against 2009 level
reported in accordance with ISO 14064- (%)
1:2006.
Improving Energy Efficiency Design 50
Index
40 40.4
In 2014, the NOL Group received the
final 10 of 34 newbuildings that were 33.8
30
ordered as part of its vessel fleet renewal
programme. 21.9
20
Technologically-advanced, energy-
14.3
and fuel-efficient as well as cold-iron 10
11.4
capable, the newbuildings produce lower
carbon and criteria pollutant emissions 0
than previous designs. In fact, their Energy 2010 2011 2012 2013 201416 Neptune Orient Lines Limited Sustainability Report 2014
Protecting the
environment
6
6
5
Green features of a newbuilding
2
3
4
7
9
1
8
1 Rudder Performance: 2 Cold Iron Capable: 3 Electronic Main 4 Ballast Water 5 Online Energy
Full spade twisted Capable of connecting Engine: Treatment System: Efficiency Monitoring
rudder minimises to shore power while Electronic main engine Early adoption and System:
cavitation and improves at berth to reduce optimises low load installation of an Provides integrated
performance. emissions. operation and reduces approved ballast data and remote
fuel oil consumption water treatment telemetry with
and emissions. system to prevent graphical analysis
the spread of invasive of fuel usage to aid
aquatic species. optimisation.
6 Voyage Planning 7 Shielded Oil Tanks: 8 Hull Coating: 9 Hull and Trim Green Passport:
Tools: Double-hulled fuel Self-poishing, anti- Optimisation: This voluntary
Effective voyage oil tanks protect fouling paint reduces Optimised hull form certificate ensures safe
planning and against oil pollution. drag, fuel consumption and trim reduces hull and environmentally
execution reduces and emissions. resistance and results in sound ship recycling
fuel consumption less fuel consumed for by documenting all the
and emissions. propulsion. hazardous materials used
during construction and
throughout the life
of the vessel.Neptune Orient Lines Limited Sustainability Report 2014 17
APL newbuildings are built with optimised hull form and trim, minimising
carbon emissions.
advanced route optimisation systems, APL also provides carbon dioxide tractors used by APL since 1997 meet all
which aid in planning the most emission numbers for cargo movement on-road emission specifications stipulated
fuel efficient and on-time voyages. over a particular trade lane upon customer by the U.S. Environmental Protection
APL also improves its vessel operations request. Calculated using the Clean Cargo Agency and the California Air Resources
through the following: Working Group (CCWG) methodology, Board (CARB), and exceed standards for
• Hull and propeller polishing; customers can use these numbers to operation in terminals.
• Application of environmentally-friendly determine the most environmentally In Los Angeles, APL’s terminal was the
hull coatings; friendly way of moving their shipments, first in the U.S. to have a full-service on-
• Weather routing and real time vessel and make environmentally-responsible dock rail facility, which ensures a greater
controls; choices. service reliability and reduced carbon
• Trim optimisation; emissions compared to trucking. It is
• Optimisation of vessel utilisation; Green terminal facilities also installed with electric rail mounted
• Optimisation of vessel load through All APL-operated terminals world-wide cranes for loading rail cars. There are eight
consolidation and alliances; and employ electric gantry cranes to load and loading and nine storage rail tracks,
• Electronic engine controls. discharge cargo from vessels. This reduces which hold the equivalent of nearly
As a result of these measures, APL has diesel emissions from cranes. Also, all three trains worth of cargo.
been recording a steady decline in fuel
consumption, which translates to lower
carbon emissions. APL will persist with
its efforts to identify solutions to further
BUNKER CONSUMPTION
improve its operation and fuel efficiency.
Bunker Consumption (’millions MT) (LHS)
Bunker Consumption/FEU Volume (MT) (RHS)
Calculating carbon footprint
To identify areas of improvement, ’millions
the Group measures and analyses data MT MT
collected from as many aspects of its 3.0 1.1
operations as possible.
2.4 1.0
APL’s carbon reduction initiative began
with a review conducted in 2010 on APL’s 1.8 0.96 0.9
corporate wide fuel consumption from MT
1.2 0.8
2009, covering any fossil fuel directly 0.81
0.6 MT 0.78 0.7
purchased for and consumed by ships, MT
terminal cargo handling equipment, and 0 0.6
warehouse material handling equipment. 2012 2013 201418 Neptune Orient Lines Limited Sustainability Report 2014
Protecting the
environment
Offering sustainable logistics solutions Reducing sulphur oxide emissions In 2014, all APL vessel calls at the Port
Over at APL Logistics*, carbon calculators Ships trading in designated Emission of Los Angeles achieved speed reduction
have been developed to measure carbon Control Areas (ECAs) are required to use to 12 knots within 20 nautical miles of
dioxide emissions in the warehouse, as well fuel oil on board with a sulphur content the Point Fermin lighthouse at the port.
as compare various modes of transport for of no more than 0.1% from 1 January 2015, In fact, 84% of APL vessel calls saw speed
the most environmentally-friendly logistics against a previous limit of 1%. reduction to 12 knots beyond 20 nautical
solutions to be made. This contributes The stricter rules come into effect miles to 40 nautical miles of the lighthouse.
data to a carbon footprint dashboard under the International Convention for
introduced by the company to measure the Prevention of Pollution form ships Practising cold-ironing
and manage its carbon footprint and that (MARPOL) Annex VI (Regulations for the Cold-ironing is the process of ships at
of its customers. Prevention of Air Pollution from Ships), berth being connected to shore power
APL Logistics’* primary focus is helping specifically under regulation 14, which for electricity. During cold-ironing, vessels
its customers manage and ‘green’ their covers emissions of sulphur oxide and shut down auxiliary engines that have
supply chains. Through various innovative particulate matter from ships. historically powered shipboard electrical
products, services and diagnostic tools To ensure compliance, APL modified systems and switch to using shoreside
developed for its customers, APL Logistics* the tanks and pipelines on all its ECA- electrical power, reducing emissions from
reduced more than 1.6 million tons in calling vessels to facilitate fuel switch to burning fuel on the ship to keep the systems
carbon emissions from 2011 to 2014. low-sulphur fuel when they enter the ECAs running.
of the Baltic Sea; North Sea; North America; The state of California has mandated
CUTTING EXHAUST GAS EMISSIONS and United States Caribbean Sea. cold-ironing for container ships while
NOL recognises that fuel combustion berthed in its ports. From 2014, the
produces criteria pollutants in the exhaust Cutting nitrogen oxide emissions requirement is for the fleet’s total onboard
gas emissions – including nitrogen oxide, APL has been participating in the Port auxiliary engine power generation to be
sulphur oxide and particulate matter. of Los Angeles Vessel Speed Reduction reduced by at least 50% from the fleet’s
To mitigate the environmental programme, which seeks vessels to baseline power generation.
impact of exhaust gas emissions, the voluntarily reduce their speeds to In preparation for the regulation, APL
Group adopts stringent processes, invests 12 knots as they approach or depart the retrofitted six container ships for cold-
in technology and infrastructure and port, thereby reducing the vessels’ ironing in 2014, while 28 of its newbuildings
supports industry efforts to find solutions nitrogen oxide emissions. came fully cold-iron capable.
to reduce such emissions.
* NOL divested APL Logistics on 29 May 2015Neptune Orient Lines Limited Sustainability Report 2014 19
A modular Alternative Marine Power box on an APL vessel connects shore-side
power to the vessel when it berths at the ports of Los Angeles and Oakland.
APL has been cold-ironing its vessels’ transit. Known as ballast water, it is often in tackling the ballast water issue and
engines while they berthed in the ports taken on in the coastal waters in one region developing solutions through strategic
of Los Angeles and Oakland since 2011, after ships discharge waste water or unload partnerships. As a member of the Global
before the regulation kicked-in. With its cargo, and discharged at the next port of Industry Alliance for the GloBallast
vessels’ auxiliary diesel engines switched call, wherever more cargo is loaded. Programme, a joint initiative of IMO,
off after berthing, emissions of nitrogen While ballast water is essential for United Nations Development Programme
oxide, sulphur dioxide, and particulate safe and efficient shipping operations, and Global Environment Facility, APL joins
matter are reduced. APL is mindful that ballast water discharge the cause to assist developing countries in
To facilitate cold-ironing by the industry can contain invasive species which when reducing marine bio-invasions.
in California, APL is also working with the transferred, may survive to establish
Pacific Merchant Shipping Association to a reproductive population in the host Sustainable ship disposal practices
provide feedback and recommendations environment, out-competing native species NOL studies industry best practices and
for the at-berth regulations to CARB. and multiplying into pest proportions. reviews sustainable ship-recycling practices
Committed to protecting ocean as part of its ongoing sustainability efforts.
MINIMISING ENVIRONMENTAL biodiversity, APL takes great care in For end of life vessels, NOL only works
IMPACT ensuring that its vessels do not introduce with a shortlist of buyers who hold ISO
NOL is mindful that many aspects of a ship such species at the various ports they call. certifications for safe handling and disposal
can adversely affect the environment, APL vessels actively perform mid- of hazardous materials. These buyers have a
ranging from its construction material, ocean ballast water exchange. The track record of working with major carriers,
container performance, operational approach replaces most of the coastal and have demonstrated best practices in
discharge, to recycling process. It is water with open ocean water, removing ship demolition.
imperative to consider all possible most of the coastal organisms that were All APL line-haul vessels have a Green
environmental impacts that a vessel originally entrained in the ballast tank. Passport, which documents the hazardous
could create and implement preventive Meanwhile, every new vessel of APL materials used in construction of the
or mitigative measures to ensure is equipped with the latest ballast water ships. The Passport accompanies the ships
sustainability. treatment technology, compliant with throughout their operating lives and is
the IMO Ballast Water Management updated during equipment changes. Its
Managing ballast water Convention. ultimate owner will then deliver the Green
Cargo carriers use a huge amount of water APL recognises the importance Passport with the vessel to the recycling
for stability and maneuverability during of supporting the global momentum facility to allow for proper processing of20 Neptune Orient Lines Limited Sustainability Report 2014
Protecting the
environment
the materials, in order to minimise any sealants that does not contain any volatile business. This practice is part of a systematic
unnecessary risks to the environment and organic compounds, as well as eco-friendly series of outreach initiatives since 2009 to
human health during the recycling process. water-based paint which does not release engage employees on a more personal
harmful vapours during the drying process. level. By helping employees understand
Regulating sewage discharge To maintain refrigerated cargo at the the significance of its operational impact
With limited capacity in sewage storage in necessary temperature, APL has 2,248 on the environment, NOL hopes to
holding tanks, proper planning is critical in electrical plugs in all of its container motivate them to proactively contribute to
reducing the risk of sewage discharge into yards on the U.S. West Coast. This results the Group’s continuous efforts in ensuring
the sea. Environmental impact resulting in carbon reduction and a corresponding environmental sustainability.
from sewage discharge from ships include reduction in generator fuel, compared to APL also conducts mandatory practical
the introduction of nutrients which cause when diesel generators were used in port training for its crew members aboard
algal blooms and reduced oxygen levels, to supply power to the refrigerated ships, covering a wide-array of subjects
threatening marine life. Potential health containers. that range from company policies and
risks for people who come into contact procedures, flag state requirements,
with polluted water during recreational ENGAGING STAKEHOLDERS Vessel General Permit inspections to
activities or who consume contaminated Communication, education and Hazardous Materials handling. There is
seafood can arise. involvement are key to gaining the also a computer based training programme
APL complies with MARPOL Annex IV understanding, support and participation aboard every vessel that all crew members
through its Safety Management System of our stakeholders on our journey must complete.
that is audited by classification societies towards environmental sustainability.
for compliance. With its stringent controls, SUSTAINING PARTNERSHIPS
quality management and training, APL has Providing information and training In this multi-stakeholder environment,
eliminated the risk of incidental sewage The NOL Group keeps its employees it is impossible to achieve sustainability
discharge and achieved its annual goal of wo rldw id e info r m e d o n gl o b al alone. Forming partnerships with industry
no accidental discharge in 2014. environmental issues and developments, groups allow all stakeholders to combine
as well as the Group’s environmental their attributes and efforts in order to
Improving container performance ef forts. This is done through its achieve more.
APL requires all its container floorboard sustainability reports, the intranet, and
suppliers to be accredited by the Forest other forms of internal communications. Clean Cargo Working Group (CCWG)
Stewardship Council and to use only On a regular basis, APL also conducts CCWG is a global business-to-business
renewable sources of wood supplies. In environmental seminars for the relevant initiative dedicated to environmental
addition, new containers use water-based departments and functions of the liner performance improvement throughNeptune Orient Lines Limited Sustainability Report 2014 21
Self-polishing, anti-fouling paint are used to coat APL vessels to reduce drag, fuel
consumption and harmful emissions.
measurement, evaluation and reporting The CRT is a coalition of importers, Alaska waters or calling port of Dutch
in maritime transportation management. exporters, trucking companies, clean truck Harbour into the Network’s Alternative
A member of the CCWG since 2004, APL manufacturers, and ocean carriers who have Planning Criteria (APC) plan. The APC
makes use of practical tools developed by gathered to facilitate the implementation allows vessel operators like APL to propose
the group to measure, evaluate and report of practical and sustainable solutions to alternative pollution prevention measures
the environmental impacts of its global reduce port truck pollution at U.S. ports. where standard regulatory compliance
goods transportation. APL uses the tools CRT seeks to balance the environmental measures are not feasible.
to track and benchmark its performance, needs of port communities with an efficient
and report in a standard format to its flow of commerce. RECEIVING RECOGNITION
customers, who will then be able to The Group’s environmental performance
make informed decisions in choosing an North American Marine Environment continued to be recognised. It received the
environmentally-responsible carrier. Today, Protection Association (NAMEPA) following awards in 2014:
CCWG tools represent the industry standard APL is a board member of NAMEPA • Blue Circle Award by Port Metro
for measuring and reporting ocean carriers’ and supports its efforts in promoting Vancouver
environmental performance on carbon environmental awareness amongst the The award recognises APL’s emissions
dioxide emissions. wider public and school communities. reduction achievement in 2014 under
CCWG is made up of about 40 member Through its activities, NAMEPA emphasises the EcoAction Programme, which
companies, including top world liner fleet on the importance of the world’s oceans promotes low emissions practices for
operators and over a dozen global shippers. and the maritime industry’s role and actions ocean-going ships entering the port.
As an elected member of the group’s to preserve it. APL has been winning the award every
Steering Committee, APL helps to oversee year since the programme started
CCWG’s approach in driving improvements Alaska Maritime Prevention and in 2010.
in global goods transport, namely Response Network (Network) • 75 Green Supply Chain Partners by
performance measurement and reporting, In 2014, APL became a board member of Inbound Logistics magazine
as well as promotion of environmentally the Network, a non-profit maritime The award recognises APL’s efforts
responsible practices. organisation that provides management towards attaining its carbon emissions
practices and capabilities exceeding reduction target, including its green
Coalition for Responsible Transportation environmental regulations to vessels ships and energy-efficient initiatives,
(CRT) operating in Alaska. such as slow steaming and upgrading
APL has been a CRT member since 2011 To ensure compliance with the U.S. cargo handling equipment at APL
and was elected to CRT’s Board of Directors Coast Guard’s requirements and U.S. terminals.
in 2012. federal law, APL enrolled vessels transiting22 Neptune Orient Lines Limited Sustainability Report 2014
Supporting
Communities
NOL continues to The NOL Group is committed in developing Management University (SMU) every year.
its talent pool, strengthening its expertise NOL endowed the S$400,000 scholarship
enhance the maritime and enhancing its capabilities through programme in the name of the late Mr Lua
talent pool through training and innovating solutions. In 2014, Cheng Eng, former Chairman and CEO of
scholarships, internships APL invested over 7% of its operational the NOL Group, at SMU in February 2011.
human resource costs in training its In addition, NOL sponsored a total
and industry programmes
shipboard and shore-based staff. In addition of S$500,000 over a course of five years,
to on-going training initiatives, APL also starting from 2011, to the building of Kwa
specially developed a training programme Geok Choo Law Library at the Singapore
APL shipped over to help its seafarers better appreciate the Management University. Named after
new technology onboard its newbuildings. the late Madam Kwa Geok Choo, wife of
US$9.9 million worth As a global citizen, NOL believes in Singapore’s first prime minister, the late
of medical aid to help doing its part to improve lives around the Mr Lee Kuan Yew, the law library is expected
patients in Bangladesh world. It delivers aid, supports education to be fully operational by 2017.
and enables the communities where the To raise the profile of seafaring
and the Philippines
Group has a presence. and maritime jobs and help develop a
strong and sustainable pool of maritime
Supporting education talents in Singapore, APL supports
NOL recognises that education is a key industry programmes that are driven by
pillar in developing talent for the long stakeholders including the Singapore
term sustainability of the maritime industry. Maritime Officers Union, Maritime Port
As such, NOL initiates and supports the Authority of Singapore, Singapore
promotion of education, training and Workforce Development Agency and
programmes that can lead to employment the Singapore Shipping Association. This
in the industry. includes giving talks at career fairs and
In Singapore, the NOL Lua Cheng Eng industry initiatives to create awareness
Memorial Scholarship – which includes a and inspire young talents to pursue a
S$12,000 grant and internship opportunity profession in the maritime industry. An
at NOL – is given to two outstanding example of an industry initiative which
business students at the Singapore APL participates in is the Tripartite Nautical
* NOL divested APL Logistics on 29 May 2015You can also read
