On Dec. 20, 2006, COSCO Group head office held a press conference for release of 2005 Sustainable Development Report of COSCO Group. At the press conference, we got to know that experts who participate in audits of management system and sustainable development report of COSCO Group point out that the Sustainable Development Report of COSCO Group had created five firsts.

1. COSCO Group is the first state-owned enterprise that compiled sustainable development report according to GRI reports; 2. It is the first enterprise in the world that compiled its report according to GRI2006, the latest version of GRI. 3. It is the first Chinese enterprise that implemented Global Compact and established the management system on sustainable development, which has been certificated; 4. It is the first Chinese enterprise that has its sustainable development report audited; 5. It is also the first enterprise in Asia that applied the VeriSustain approval standards of Det Norske Veritas (NDV) in audit of sustainable development report.
The 2005 Sustainable Development Report of COSCO Group showed that the group is an enterprise with high justice, openness and transparency. In the report, timetable for increase or improvement of indicators, which COSCO Group doesn’t have or can’t achieve at present, was included to ensure the balance of the sustainable development report and the transparency of the operation. With an aim to ensure the accuracy, faithfulness, comparability and reliability of the sustainable development data, COSCO Group has developed the data collection and information processing system for the sustainable development report, so as to realize the scientific management of data processing processes of the sustainable development report.

Audits of the sustainable development management system of COSCO Group head office and the sustainable development report of COSCO Group were completed smoothly on Nov. 7-Nov. 11, 2006. Det Norske Veritas and the Global Compact Promotion Office of the China Enterprise Confederation jointly audited the sustainable development report of COSCO Group. Members of the joint audit team unanimously believe that the modern enterprise management system of COSCO Group head office is effective in ensuring the fulfillment of sustainable development strategy and the Sustainable Development Report 2005 of COSCO Group has been complied in accordance with GRI requirements. COSCO Group has established data collection and information processing system for sustainable development report and has required all its second-tier companies to join the sustainable development management system. COSCO Group head office and second-tier companies will establish a scientific platform to improve the sustainable development management system and the overall level of sustainable development report in the future.

After 45 years, COSCO Group has developed into a global enterprise mainly engaged in ocean shipping, manufacturing & reparation of vessels and floating devices, and logistics- and transportation-related businesses. At present, it owns and operates over 700 modernized vessels with the carrying capacity of 40 million tons. Annual transportation volume of COSCO Group exceeds 300 million tons. Ocean lines of COSCO Group cover over 1,500 ports in 160 countries and regions worldwide. Fleet size of the group ranks the first place in China, and the second place in the world.

COSCO Group head office has insisted on innovation of management system for many years. It has followed the world’s up-to-date management standards to establish the operational management system with special Chinese characteristics of COSCO Group. By introducing scientific management concepts and measures, it has improved its corporate structure continuously, upgraded the corporate management platform, and laid firm bases for rapid development of COSCO Group. It has developed from a follower of advanced management system certification method into a developer of advanced management system certification method.

COSCO Group realized that in economy globalization, competition between transnational companies has transformed from “hardware” to “software”. Focus of the competition has transformed from technologies and products to corporate social responsibilities and social ethnics. Advanced concepts and practices on corporate responsibilities have become core competitiveness of enterprises and can provide great space for development of enterprises. In 2004, COSCO Group, under the named of its president, submitted a written application to the United Nations, showing its willingness to join the Global Compact Initiative. It hoped to establish close communication and cooperation with UN offices in China to promote the fulfillment of COSCO Group’s corporate social responsibilities by making use of the platform of the UN, to play active role in fulfillment of the objectives to build up of a well-off society in an all round way, and support the UN’s objectives to improve human rights protection, labor standards and environmental protection.

In January 2005, COSCO Group got an approval from the UN to become a member of Global Compact. It has established the Global Compact corporate social responsibilities management system in accordance with the 10 principles of Global Compact, formulated the plans for implementation of COSCO Group Global Compact and sustainable development, and issued the Guiding Opinions on Construction of a Resource-saving Enterprise and Implementation of Global Compact, calling on the construction of a resource-saving and harmonious enterprise.

Currently, COSCO Group head office has redesigned its business flows according to the Guidelines on Corporate Social Responsibilities Management System of Global Compact and GRI Sustainable Development Guidance, and integrated the articles and terms of Global Compact into its decision-making processes and business procedures. It has established the Management Procedures of Social Responsibilities and the Harmonious Enterprise and the Sustainable Development Reporting System, and has implemented the requirements of Global Compact social responsibilities in practical actions of employees of COSCO Group through working standards and authorization. COSCO Group has adopted four major contents of the scientific development view, i.e. human-orientation, comprehension, coordination and sustainability to evaluate the development of the enterprise. It has guided the management innovation with scientific development view to build up a resource-saving and harmonious enterprise and realize the sustainable development of COSCO Group.

COSCO Group, as the pilot unit for implementation of Global Compact social responsibilities of the Global Compact Promotion Office of the China Enterprise Confederation, has abided by the principles and implementation requirements of Global Compact. It has started from the establishment of Global Compact social responsibilities management system to redesign its business flows in accordance with the sustainable development requirements, to develop and set up information system for Global Compact social responsibilities and to ensure the continuous improvement of the faithfulness, integrality, continuity and comparability of the annual report. COSCO Group has started from the strategic height to determine the long-term, middle-term and short-time sustainable development objectives, integrated these objectives with the 11th Five-year Plan and the annual plan, and carried out inspections to ensure the fulfillment of these objectives.

With an aim to ensure the systematic and strategic implementation of Global Compact and sustainable development, COSCO Group has established the Global Compact social responsibilities management system and the management system of sustainable development report under the framework of ISO9000 Quality System, and taken the system establishment and compilation of sustainable development report as working tasks of the group in 2006. In 2006, COSCO Group head office has redesigned its business flows according to the Guidelines on Global Compact Social Responsibilities Management System and GRI Sustainable Development Guidance. On Feb. 23, 2006, COSCO Group head office has passed the joint certification of ISO9001:2000 Quality Management System, ISO14001:2004 Environment Management System and OHSAS18000 Occupational Safety & Health Management System of the Det Norske Veritas, Quality Certification Company of China Classification Society and the Approval and Certification Center of the China Research Institute of Safety Production. After making primary evaluation on comprehensive risk management system of COSCO Group head office, they believe that the modern enterprise management system of COSCO Group head office has reached international levels. The system is farsighted and systematic, and has laid firm bases for the implementation of scientific development view in an all-round way and the leap-forward development of COSCO Group.

Besides building up a resource-saving enterprise and realizing the sustainable development of the enterprise, COSCO Group’s participation in Global Compact also has following meanings: Firstly, it can improve the diplomatic image of COSCO Group in the world; Secondly, it enhances social responsibilities and corporate citizen consciousness of COSCO Group and promotes the healthy development of the enterprise; Thirdly, it brings COSCO Group’s efforts in corporate social responsibilities to the standards of Global Compact, and discloses aforesaid actions in form of sustainable development report to set up a platform for cooperation and communication with first-class transnational companies; Fourthly, it strengthens the communication between COSCO Group and the United Nationals and international organizations to improve the public relation efforts of the enterprise.