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2018

Annual report

Valuing our people’s wellbeing and diversity

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

Wallenius Wilhelmsen has almost 9 500 employees across the world and prides itself on being a responsible employer and providing a safe, challenging and fulfilling working environment. The company believes that there is a strong correlation between employee satisfaction, employee engagement and value creation.

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

Diversity

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

As a group, employees offer a great range of knowledge, experience and cultural understanding, all of which are major contributing factors to ensuring the group is equipped to thrive in an uncertain climate.

The company’s future success is important to its employees, customers and investors, which means it’s essential that the diversity of employees is preserved and enhanced in the future.

The company also recognizes that for diversity to have a meaningful impact, the company also needs to strive towards a culture of inclusion where diverse opinions are treated with respect and taken into account.

Managing Diversity

The main tool for assessing the diversity of the workforce across Wallenius Wilhelmsen is the Human Resources database, and diversity-related management decisions are made based on its data. Each of the companies in the group has its own Human Resources departments which together form the global HR function under Wallenius Wilhelmsen’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 always 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

Data has been compiled from the global HR systems, which in accordance with the ambitions set for 2018, were upgraded to be able to provide a more granular break-down of the workforce diversity.

 

Total number of employees by region
Asia Pacific Europe Middle East and Africa America Total
1452 1636 6363 9451

 

Total number of production workers by contract type (permanent, temporary), by gender
Male Female Total M / F %
Regular/Permanent 5285 790 6075 87/13
Contract Labour/Temporary NA NA 1164 NA
Total NA NA 7239 NA

 

Total number of office workers by contract type (permanent, temporary), by gender
Male Female Total M / F %
Regular/Permanent 1246 887 2133 58/42
Contract Labour/Temporary 36 43 79 46/54
Total 1283 930 2212 58/42

 

Total number of office workers by employment type (full-time, part-time), by gender
Male Female Total M / F %
Full time 1280 906 2186 59/41
Part time 2 24 26 8/92
Total 1282 930 2212 58/42

 

Total number of employees by employment contract (permanent and temporary), by region
APAC EMEA America Total
Regular / Permanent 1127 1526 5555 8208
Contract Labour/Temporary 325 110 808 1243
Total 1452 1636 6363 9451

The company employs external consultants and contractors who assist in developing specialised business software solutions and provide general IT support services. Their number, however, is not significant. There are no major seasonal variations in the numbers reported above for the office workers, however, the number of production workers can fluctuate considerably according to operational demand at land-based facilities. Note that Wallenius Wilhelmsen does not employ any seafarers directly.

The total number of employees has increased quite significantly from the 7 497 in 2017 to 9 451 in 2018. The key factors contributing to this increase are the inclusion of the Keen organisation’s workforce, the inclusion of contract and temporary production workers, and the general increase in production workers due to increased activity in WW Solutions.

The gender balance for regular and permanent production workers is reported for the first time and is 87:13 male to female. The result reflects the fact that this type of work is generally much more sought after by men than women. The data does not cover temporary or contract production labour, however, those employees represent a relatively small fraction of the total production workforce and would reflect a broadly similar gender balance.

The overall gender balance for the office workers of the group is 58:42 male to female, which is unchanged from last year. This result earned the company ninth place on the 2018 SHE Index (www.shecommunity.no) of Norway’s 50 largest listed companies.

For both genders and across all major geographical regions, an overwhelming majority of both production workers and office workers are on permanent and full-time employment contracts, which is also unchanged from 2017.

As per the plan for the year, a diversity project was initiated in late 2018. Seeking a more diverse workforce and a more inclusive workplace is an effective means of boosting employee engagement and morale – while moving towards the goals of increased organisational innovation and creativity, and more diverse leadership. The project will consider diversity in all its forms, including age, nationality, experience and skills. A diversity project team has been established, and a project plan has been created.

Ambitions and next steps
The next step in the diversity project will be to undertake an audit to form a clear understanding of the diversity profile of the current organisation. This will enable appropriate goals and the actions to achieve them to be identified. In addition, measures will be taken to help reinforce a company mindset for diversity and inclusion. To do this, focus will be placed on diversity and inclusion in relation to the company’s values as well as through raising awareness of unconscious bias.


Safe operations

A focus on safety underpins Wallenius Wilhelmsen’s global operations. This is true for all people, including employees, contractors, suppliers and property. There is no compromise in striving for an industry-leading safety performance across all fields of activity, both on land and at sea. Accordingly, there are safety KPIs covering the entire group’s operations and the ultimate responsibility for safety rests with the CEO.

Safety is key to employee retention and morale, as it’s closely linked to high quality and efficient operations, as well as excellence in safety, which are expected by all stakeholders. The safe operations of the company are also important to other stakeholders – particularly because of links with quality and good risk management, as well as what responsible businesses expect of one another.

Managing safety on sea and land

Safety management in ocean operations is the responsibility of the Marine Operations Management team, which has the specialist competence to follow up safety performance across the fleet, drive the implementation of fleet-wide safety initiatives, and lead incident investigation.

WW Solutions’ operations are performed by both direct employees and outsourced labour. Safety is directly overseen by the company in both cases and, on a site level, is the responsibility of the site manager. At a corporate level, safety is the responsibility of the Global Way of Working team.

Evaluation of results

The 2018 Lost Time Incident Frequency (LTIF) for all ocean operations was 0.73, which compares favourably with the target for the year of 1.0. In all, there were 12 incidents which were accounted for by four slips, trips or falls, three hand injuries, two burns and three leisure time injuries.  It was the latter that explained the marginal increase on the 2017 result of 0.62.

The full year result for the fleet’s PSC deficiency ratio was 0.63, which fell short of the target of 0.5 and lagged the 2017 result of 0.49, which is also reported here for the first time as the reporting system was not finalised a year ago. The number of inspections for 2018 and 2017 were similar at 264 and 268 respectively, while the respective number of deficiencies were 167 and 130. The drop in performance was due to four vessel inspections which resulted in several deficiencies each in 2018, whereas there were two such inspections with a higher number of deficiencies 2017. The four vessels with several deficiencies all underwent altered trading patterns relative to the previous 12 months and thus became focus vessels on Paris MOU Port State control regime. While the result was ahead of the sub-standard level, which is set at 1.0, it still places the issue in the yellow ‘watch’ zone, particularly on those vessels which had the high deficiency rates.

Regrettably there was one fatality relating to ocean operations during 2018, however it was due to natural causes. The number of reported incidences of occupational diseases in 2018 was zero across the fleet, as was the number of incidents of absenteeism. The latter is to be expected due to the unique working circumstances involved.

WW Solutions achieved a global result for LTIF of 5.77  in 2018, which compares favourably with 2017 result of 21.7, as well as the goal of 22.1. It should be noted that 2018 was the first full year’s data with the current reporting system, which resolved some data quality issues with the previous system. In total there 260 Lost Time Incidents (LTIs) during the year, with 186 occurring in the Americas, 8 in APAC and the remaining 66 in EMEA. Data on the types of injury or the gender of those injured is not yet available. Similarly, data on absenteeism and occupational diseases is not available.

2018 was the first full year of the Safety ImpACTs preventative KPI reporting and it marked the kick-off of the global health and safety regulatory compliance solution, ‘Safety First’. Both are contributing to the safety culture of WW Solutions and, most likely, to its LTIF result too. Safety First entails the development of robust safety plans, processes and routines at individual sites and in due course will help develop a globally consistency approach.

The ImpACT preventative safety result is reported here for the first time with a full year result for 2018 of 1117. The KPI reflects the preventative safety efforts made and shared with the organisation. The high volume of ImpACTs has made a large contribution to the safety culture in the organisation. As the reporting metric has not yet stabilised, the decision has been made to let it mature further before setting a target.

Ambitions and next steps

The 2019 safety targets for ocean operations are to achieve a LTIF of less than 1.0 and to keep the Port State deficiency ratio below 0.5. In view of the stable and good performance on safety as well as the maturity of the approach that contributes to it, attention for 2019 will focus on maintaining and improving performance.

For Wallenius Wilhelmsen Solutions the 2019 LTIF goal is a 3% improvement on the actual result from 2018, which is 5.60. The company will also introduce category, gender, absenteeism and occupational disease reporting for safety incidents during 2019. For Safety ImpACTs the focus will be to improve the reporting and analysis solution before setting any numeric targets. Finally, the incorporation of local Safety First practices into the WoW framework will be evaluated.


Human and labour rights in ship recycling

The way a vessel is recycled at the end of its service life can be highly impactful to the people who undertake the work. In too many cases, workers must endure extremely poor safety and welfare conditions. Wallenius Wilhelmsen has direct influence over how the vessels it owns are recycled and has for many years taken a responsible ‘green recycling’ approach that has a positive outcome for workers at the recycling facilities.

The safety and welfare of the workers on Wallenius Wilhelmsen’s recycling projects is of great concern to the company because poor performance would have a harmful effect on employee perception and the company’s relationship with a growing number of external stakeholders. These stakeholders include investors, lenders and customers who are increasingly aware of the social risks regarding vessel recycling and are demonstrating a growing willingness to act against companies that fail to perform responsibly.

 

 

Process control and incentives

Wallenius Wilhelmsen’s Marine Operations Management team is responsible for overseeing how vessels are recycled. Maintaining control over the process, which is essential to achieving such standards, is ensured by closely following the company’s Vessel Recycling Policy.

The main points of the policy include appointing an independent surveyor to assess any candidate facilities. Such yards must have proper safety management, craned berths or floating docks, and the correct handling and storage of all materials must be ensured.

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. 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 to demonstrate that employees have the necessary qualifications, and that working hour and payment regulations are being adhered to. Prior to the 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, items from the vessel that can be reused or recycled, such as furniture, domestic appliances and computers, must be offered to the local community.

Evaluation of results

The Wallenius Wilhelmsen group did not recycle any vessels in 2018 because no vessels had reached end-of-life. During 2018, the company formalised its long-standing green approach to vessel recycling in a Vessel Recycling Policy, which has been published on the Wallenius Wilhelmsen website. The policy includes references to the human and labour rights aspects of ship recycling.

Wallenius Wilhelmsen was a founding member of a major industry initiative, the Ship Recycling Transparency Initiative (SRTI www.shiprecyclingtransparency.org ), launched in 2018. SRTI is an online platform for the disclosure of all the relevant policies and practices of shipowners in relation to vessel recycling. It is a response to the lack of transparency that has long existed in the area, and which has been a key factor in enabling irresponsible practices to continue. Apart from the obvious negative social and environmental impact, poor recycling practices put companies that take a responsible approach at a financial disadvantage when compared to those that don’t.

The information disclosed is available to any interested party and it is hoped that it will enable industry stakeholders, including customers, lenders and investors to make informed and responsible decisions in relation to vessel recycling. Wallenius Wilhelmsen is a steering committee member of SRTI and has been actively working to raise its profile and urge other companies to become SRTI members. Some of the world’s most prominent shippers have become signatories, thereby showing their support for the need for transparency in vessel recycling.

There was an aim to develop a contract term during 2018 for long-term vessel charters that would require a charter vessel being redelivered close to the end of its service life to be recycled in a manner consistent with Wallenius Wilhelmsen’s Vessel Recycling Policy. The clause was not developed as no long-term charter agreements were made for vessels that would be near recycling age at the time of redelivery.

Ambitions and next steps

To complement the detailed information already disclosed on the Ship Recycling Transparency Initiative’s platform, the company will publish details of how its owned vessels have been green recycled since 2000. This information will published on the corporate website.

During 2019, the company will examine the potential to ensure any existing long-term charter vessels that are redelivered at or close to recycling age are responsibly recycled. Similarly, if entering into any long-term charter agreements where redelivery would be at or close to the point of recycling, a contract term will be included to ensure the vessel is recycled in a manner consistent with the company’s Vessel Recycling Policy.

 

Training and development

Wallenius Wilhelmsen places great importance on employee training and development. The scope of this is universal: it applies to all employees. An organisation that is learning is more aware and better prepared to succeed in the evolving and unpredictable business environment in which Wallenius Wilhelmsen operates.

Training and development are important to the company and it’s workforce, because when employees are well-supported in these areas they tend to be more fulfilled, which leads to better performance and retention levels. Wallenius Wilhelmsen’s ability to maintain its competitiveness and drive innovation is underpinned by a workforce that is well prepared and fulfilled, which in turn also benefits the company’s customers and investors.

Focus on development

A new job goals and learning plan platform called ‘Go.Grow.Succeed’ was launched in 2018. It facilitates more frequent performance and career development dialogues while reducing the amount of process documentation. The emphasis of the discussions between employees and line management is oriented towards future development rather than past performance.

Evaluation of results

KPI’s have not been established for training and development, however, the Go.Grow.Succeed management system sends reminders to schedule the review discussions and can flag when they have not occurred.

Ambitions and next steps

The Wallenius Wilhelmsen Board-approved strategy for Human Resources outlines projects for Talent Management and Succession Planning, and Leadership Development. The overarching objective of the strategy and projects is to help develop and prepare the workforce for the challenges and opportunities that the fourth industrial revolution will involve. There will be an emphasis on innovation and the value of developing a growth mindset. Organisational agility and the associated network thinking that will dismantle organisational silos will also feature prominently. Both projects will get underway in 2019.


Working conditions and welfare

Wallenius Wilhelmsen believes that there is a clear link between the working conditions and welfare provided by the company on the one hand, and the quality of work on the other. This applies equally for workers of all kinds, but has special significance for vessel crew, particularly during recreation and resting hours, as well as while at work. For this reason, the focus in this section is on the owned fleet’s crew working conditions and welfare.

The crew of the owned fleet are not employed directly by Wallenius Wilhelmsen, but there is still a close working relationship between the company and the crew. 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.

Managing crew working conditions

This topic is the responsibility of the Marine Operations Management team, and encompasses the vessels in the owned fleet only because those vessels are under the operational control of the company. The team pursues the company’s objectives through close collaboration with its various ship management companies.

A considerable body of regulation establishes minimum requirements for working conditions and on-board vessel welfare. Wallenius Wilhelmsen actively monitors standards onboard through its ship managers to ensure regulatory compliance is maintained. The company also goes beyond the regulatory minimum. It ensures insulation, heating and vibration are all within comfortable levels and stipulates the quality of work clothing. Furthermore, it specifies the amount of money to be spent on catering services and the 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 family insurance policies.

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

Evaluation of results

Two main metrics are used to assess crew welfare working conditions on the owned fleet – 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 2018 result for the entire owned fleet was 98%, which was the same as in 2017, although those results applied for only a fraction of the owned fleet. The performance was consistent across individual vessels and crew nationalities.

The crew satisfaction survey covers a wide range of topics, including treatment onboard, interaction with shore (including manning agents), recreation on-board, food and beverages, length of tenure (per rotation), and training. The survey works to a scale of 0-5, where five is exceptional. The 2018 result, which represented the views of about 30% of the owned fleet, was 4.4, which, again, was the same as in 2017 and was consistent across both vessels and crew nationalities.

Both results are good and demonstrate that the programmes and initiatives are effective and should be continued. The validity of the crew satisfaction survey is somewhat constrained by the fact that it represented only a portion of the owned fleet. It had been planned to extend the survey so that it covered the entire owned fleet during 2018, but this didn’t happen due to other events.

Ambitions and next steps

A common template for crew satisfaction surveys for all ship managers will be developed and deployed in 2019 so that results for the year will reflect the views of seafarers from the entire owned fleet.