Board of directors’ report

Valuing our people’s wellbeing and diversity is about everyone the company interacts with, including employees, suppliers, customers, and local communities. People are at the core of value creation within the company and represent both a risk and an opportunity.

WWL has 7 497 employees spread across the world and prides itself in being a responsible employer by providing a safe, challenging and fulfilling work environment. The company believes that there is a strong correlation between employee satisfaction, employee engagement and value creation, and considers employees to be its greatest asset.

The company also has a responsibility towards its suppliers to provide a safe work environment, and to ensure that there are no violations of human rights in the supply chain.

Diversity

WWL’s broad geographic reach is matched by the diversity of its workforce. The company views this diversity as a key asset in meeting the current and future needs of the business. The company makes all final hiring decisions itself, although external recruitment specialists are used from time to time.

As a group, the employees represent a great breadth of knowledge, experience, culture and background. That breadth is a major contributing factor towards ensuring that the group is prepared to succeed in an uncertain future.

As the future success of the company is also important to its employees, customers and investors, it is important that the diversity of today is preserved and enhanced in the future.

Managing Diversity
The main tool for assessing the diversity of the workforce across WWL is the Human Resources database. Based on the information it contains, management decisions in relation to diversity are made. Each of the companies in the group has its own Human Resources departments which together form the global HR under WWL’s Chief Human Resource Officer.

The company is thoroughly committed to the principle of meritocracy in all hiring and promotional processes; the most qualified candidate will prevail. At the same time the company aims to ensure its workforce mirrors the demography of its various recruitment markets.

If a hiring or promotion decision is challenged on the grounds of diversity, the aim is to put weight on a diverse workforce, provided all other objective criteria are similar.

Evaluation of results
Detailed information on the breakdown of the workforce is currently restricted to the white-collar employees of the group.

Total number of employees by region

Total number of employees by employment contract (permanent and temporary), by gender (office workers only)

Total number of employees by employment type (full-time and part-time), by gender

Total number of employees by employment contract (permanent and temporary), by region

The company does have external white-collar consultants and contractors who support with the development of specialised business software and provide global general IT support services. However, the number is not significant. There are no significant seasonal variations in the numbers reported above for the white-collar workforce. Data is compiled from the global HR system for white collar employees supported by manual input from local HR managers with regards to blue-collar workers.

The overall gender balance for the white-collar employees of the group is 58:42 male to female, which could be considered acceptable in what traditionally has been seen a male dominated sector. As the group was formed in April 2017, it is not possible to comment on the historical development of the gender balance. For both genders and across all major geographical regions an overwhelming majority of employees are on fulltime and permanent employment contracts.

Ambitions and next steps
During 2018 measures will be taken to be able to provide the same level of detail in the breakdown of production workers as is presented here for white collar workers.

A diversity project will also be undertaken during the year. It will consist of setting targets, minimum standards and ambitions related to the diversity of the workforce.

Safe operations

Safety is the underpinning of WWL’s operations. This is true for all people, including employees, contractors, suppliers, and property. There is no compromise in striving for industry leading safety performance across all fields of operation, both on land and at sea. Fittingly, the scope of safe operations KPIs cover the entire group’s operations and the ultimate responsibility for safety rests with the CEO.

Safety is key to employee retention and morale, it is closely linked to high quality and efficient operation, and excellence in safety is expected by all stakeholders.

That a safe working environment is demanded by employees needs no explanation. The safe operations of the company are also important to other stakeholders due to their being linked to quality and good risk management, as well as simply being what responsible businesses expect of each other.

Managing safety on sea and land
Overseeing safety management in ocean operations is the responsibility of the Corporate Planning Officer’s ‘Marine Operations Management’ team, which has expert competence to follow up safety performance across the fleet, driving the implementation of fleet-wide safety initiatives and leading the investigation of any incidents.

In ocean operations, WWL uses the services of ship management companies who directly oversee the safety on-board. The company follows up on safety performance and initiatives with the different ship managers. The WWL ocean operations safety policy stipulates that vessels owned or controlled by the company shall be operated with high focus on safety of crew, property and the environment. Our ship managers shall adhere to all rules and regulations applicable to each vessel, their own rules and any requirements specified by the Marine Operations Management team.

To monitor the safe operations, each ship manager is measured on safety KPI’s. These include, but are not limited to: WWL Safety & Quality Inspections; Lost Time Injury records; Port State Control records; Incident frequency and incident follow-up records.

During the latter part of 2017 WWL started reporting the deficiency ratio for Port State Control (PSC) inspections as a preventative safety KPI. Port authorities have PSC officers who board vessels routinely to conduct safety and compliance inspections. Items which are neither regarded as fully compliant nor non-compliant are termed ‘deficiencies’ and must be followed up within a specified interval. The ratio of deficiencies to the total number of inspections is a good leading indicator of preventative safety performance.

The company’s land operations are undertaken by both direct employees and outsourced labour. Safety is directly overseen by WWL in both cases and is under the responsibility of the President of WW Solutions. Daily safety management is taken care of by operational management.

Among the key principles of WW Solutions’ safety policy is that it is unthinkable to identify a hazard and not act. Also, it conveys the understanding that all accidents, injuries, losses and near misses are preventable and must be reported. Naturally, it also includes the commitment to comply with all applicable safety rules and regulations.

WW Solutions’ approach to safety is built on the actions of the company’s leadership as well as individual accountability. Leadership plays a vital role promoting and reinforcing a safe workplace while, from the front line to the top management team, everyone has an individual responsibility to comply with policy and maintain a safe working environment.

In 2017 the North American division of WW Solutions launched the ‘Safety 1st’ initiative. It is a programme aligned to the OSHA regulation standards, with 13 Safety Plans. In the event of an accident the Safety 1st programmes calls for a thorough, standardised investigation to understand the root cause of the incident and identify corrective action(s) to be implemented so as to avoid a recurrence.

During the latter part of 2017 a new safety reporting and analysis platform was developed for use by the entire WW Solutions organisation. At the same time, a preventative safety ‘ImpACT’ KPI was defined and implemented. The KPI represents the number of Safety ImpACTs implemented to resolve unsafe conditions. ‘ImpACT’ is an amalgamation of Impact and Action and is a reference to initiatives taken in response to any one of four categories of unsafe condition. These are: safety risk (potential danger), Incident, near miss (no injury), Incident without lost time (injury but fit to work next shift), Incident with lost time (injury and unfit to work next shift).

Evaluation of results
The 2017 Lost Time Incident Frequency (LTIF) for all ocean operations was 0.62. A group-wide target for 2017 was not set because WWL was not founded until April of that year. However, the result does compare favourably with the 2016 compound result of 1.26 for the three constituent operating companies of WWL. The LTIF result was positively affected by various safety campaigns as well as Situational Awareness training for both officers and crew. Situational awareness is being aware of what is happening around you in terms of where you are, where you are supposed to be, and whether anyone or anything around you is a threat to your health and safety. Full year results on the PSC deficiency ratio for preventative safety performance are also not available as that reporting initiative only commenced at the end of the year.

Regrettably there was one fatality relating to ocean operations during 2017 in which a male member of the crew was run over during cargo operations at Pyeongtaek in Korea. Independent incident investigation concluded that the stevedore company responsible for operating the tugmaster had not followed safety protocol.

The number of incidences of occupational diseases in 2017 was zero across the fleet, as was the number of incidents of absenteeism. Data on number and types of injuries is not available for 2017 due to differences in the granularity of data recorded by different Ship Managers. The breakdown of each type of incident mentioned by region and gender is also not available.

WW Solutions achieved a global result for LTIF of 21.7 in 2017. Due to differences in the safety KPI used by various parts of the landbased organisation prior to the launch of WW Solutions, no global LTIF goal was set for the company in 2017. For the same reason there are no historical results to compare against. The ImpACT preventative safety KPI was implemented late in 2017, so the first full year result will be for 2018. Data on types of injury, absenteeism, and occupational diseases by gender and region are not available for 2017.

Ambitions and next steps
The 2018 safety target for ocean operations is to achieve a LTIF of less than 1.0 and to implement Port State deficiency ratio reporting with a target of less than 1.0 as an indicator of preventative safety performance. The gaps in GRI reporting relating to injury type will also be filled.

In 2018 WW Solutions will start to report its preventative safety ImpACT KPI and LTIF results on its new performance reporting and analysis platform. The company’s LTIF goal for 2018 is 22.1. As the ImpACT KPI is new for most of the company, it has been decided to let the reporting of the metric stabilise before defining a target. The company also plans to undertake the global rollout of its Safety 1st programme, including a mobile phone application for capturing unsafe conditions by anybody in the organisation. It will also address gaps in its GRI reporting relating to injury type, absenteeism and occupational disease.

Human and labour rights in ship recycling

One of the social issues of shipping is how vessels are recycled at the end of their service lives. In too many cases those working on breaking up vessels must endure unsafe and unhealthy conditions. WWL ‘green recycles’ the vessels that it owns. It has direct influence over whether the approach taken protects the human and labour rights of those undertaking the recycling work. Recycling is supervised on site by a specialist ship management team and overseen by WWL’s Marine Operations Management.

Clearly this issue is material for those who do the work of recycling. However, the Norwegian State Pension Fund’s decision to divest several shipping companies with poor vessel recycling standards, shows growing investor impact too.  Additionally, the forebears of the company have been recycling vessels with due regard to human and labour rights for many years and it is important to the company’s employees that the practice should continue.

Process control and incentives
WWL is firmly committed to green recycling of vessels to industry-leading environmental and social standards. Maintaining control over the process, which is essential to achieving such standards, is done in three ways. First, before any recycling process begins with candidate facilities / yards being vetted by one of a competent and known surveyor. Such yards must have proper safety management, craned berths or floating docks and handling and storage of all materials. Secondly, the vessel is sold through cash buyers to a specific yard to be recycled to specific standards and within a specified timeframe.  There is no possibility for the vessel to be recycled other than as Wallenius Wilhelmsen intends. Thirdly, the actual recycling is supervised by a qualified partner who has the right to halt work on safety or environmental grounds. Also, the payment structure for the yard is set up such that they are incentivised to achieve particular safety and environmental performance results.

During the vetting process the yard must be able demonstrate that employees have the necessary qualifications and that working hour and payment regulations are being adhered to. Prior to the commencement of recycling, the Inventory of Hazardous Materials (IHM), which is important in guiding and planning the safe dismantling of a vessel, is updated. During recycling the Ship Manager’s site superintendent has the right to halt activities if working conditions or processes are deemed to be unhealthy or unsafe, or if Personal Protective Equipment (PPE) is inadequate. Towards the end of the process it is ensured that items from the vessel that can be repurposed, such as furniture, domestic appliances, and computers are offered to the local community. 

Evaluation of results
The WWL group did not recycle any vessels in 2017 because no vessel in the group’s fleet had reached end-of-life.

Ambitions and next steps
During 2018 the company will formalise its long-standing green approach to vessel recycling in a green recycling policy. That policy, which will be published on the WWL website, will include reference to the human and labour rights aspects of ship recycling. Additionally, a contract term will be drafted for all future long-term vessel charters that will stipulate that the vessel, if redelivered close to the end of its service life, must be recycled in a manner consistent with WWL’s green recycling policy. The company also has an ambition to have the clause inserted in existing long-term charter parties. The proportion of vessels in the group’s fleet that are on long term charter is approximately 20%. Finally, in the interests of transparency, the company will publish details of how its owned vessels have been green recycled since 2000 on its website.

Training and development

WWL places great importance to employee training and development. The scope of this is universal; it applies to all employees of the organisation. Performance and career development reviews are currently the primary means by which employees are mentored and coached.

An organisation that is learning is more aware and better prepared to succeed in the evolving and unpredictable markets in which WWL  competes. A workforce that is supported in its development tends to be more fulfilled. WWL’s ability to maintain its competitiveness and to be a driver of innovation is also in the interests of the company’s customers and investors.

Focus on development
A new review process was launched at the start of 2018. It requires more frequent performance and career development dialogues to be conducted. The emphasis is also shifting from past performance to future development.

Evaluation of results
In 2016 100% of white collar workers were invited to take part in a development dialogue. The completion rate was 92% for managers and 97% for the rest of the organization. Due to the major restructuring process in 2017 the process was put on hold. Data on training activities for blue-collar workers was not available for 2017.

Ambitions and next steps
In line with the WWL  Board-approved strategy for Human Resources, separate projects on Performance Management, Talent Development and Leadership Development are planned for the strategy period from 2018 to 2022. The data gap on training and development for blue-collar workers will also be addressed during 2018.

Working conditions and welfare

WWL believes that there is a clear link between working conditions and welfare provided by a company on the one hand, and the quality of work on the other. This applies for all those in its workforce, but has special significance for vessel crew because it is relevant for them during work, recreation and resting hours. Therefore, focus is on crew working conditions and welfare.

The company believes that industry-leading work and living standards for crew are central to reaching and maintaining the highest levels of safety and quality in vessel operations. Furthermore, it supports good morale, which is critical in retaining talented crew, and fosters a good and open dialogue between ship and shore.

The value of good working conditions and welfare for crew needs no further explanation. The company anticipates that interest in the matter will grow among customers and investors, due to the increasing expectation from their stakeholders to take a more active role in ensuring at least minimum standards are met in their supply chains.

Managing crew working conditions
This topic encompasses the vessels in the owned fleet only and WWL’s Marine Operations Management are responsible for it. They pursue the company’s objectives through close collaboration with the various ship management companies used by the group.

A considerable body of regulation establishes minimum requirements for working conditions and welfare on-board, with which WWL is fully compliant. However, the company also ensures insulation, heating and vibration are all within comfortable levels and stipulates the quality of working clothing. Furthermore, it specifies the amount of money to be budgeted for catering services and up-keep of recreational areas.

To ensure crew can remain in contact with family and friends and access the internet, all vessels are equipped with satellite communication equipment which is made available at no cost to the crew. The company also supports seafarers’ families through support for social initiatives, like family days and spouse clubs, and by providing insurance programmes.

Evaluation of results
There are two main metrics to assess crew working conditions, the annual retention rate and the crew satisfaction survey. Regarding the former, the target was to retain 95% of crew over the course of the year. The 2017 result for the entire owned fleet was 98%. The crew satisfaction survey covers a wide range of topics including: treatment onboard (interaction crew / officers); interaction with shore including manning agents; recreation on-board; food and beverages; length of tenure (per rotation) and training. The survey covers a scale of 0-5, where 5 is good. The 2017 result, which represented the views of 30% of the owned fleet, was 4.4.

The results from both metrics are good and demonstrate that the programmes and initiatives are effective and should be continued. The validity of the survey is somewhat constrained by the fact it represented only a portion of the owned fleet.

WWL’s fleet comprises approximately 20% long-term charter vessels. The company has limited influence over working conditions and welfare on those vessels but indirectly promote such issues through quality standards in long-term vessel contracting.

Ambitions and next steps
As part of taking a more standardised approach to the marine operations management across the company’s owned fleet, the crew satisfaction survey will extend to the crew of all owned vessels in 2018.