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Case study: How SHI promotes compliance

Aspiring to become a top-tier player in the global shipbuilding and offshore industry, Samsung Heavy Industries (SHI) has, since its establishment in 1974, landed orders for 1,205 vessels and offshore platforms from world-renowned ship-owners. SHI proactively identifies and manages compliance risks related to its business areas, so as to respond to diversifying regulations and standards.  Tweet This!

This case study is based on the 2018 Sustainability Report by SHI published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Since SHI is doing business across the globe, it makes sure that it complies with country-specific regulations, international organisation guidelines and market disciplines. In order to promote compliance SHI took action to:

  • provide compliance training
  • improve employees’ compliance awareness
  • watch compliance trends
  • operate reporting channels

What are the material issues the company has identified?

In its 2018 Sustainability Report SHI identified a range of material issues, such as advancing environmental management, creating a safe workplace, undertaking innovation initiatives, promoting mutual growth with subcontractors, nurturing talent. Among these, promoting compliance stands out as a key material issue for SHI.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups SHI engages with:

To identify and prioritise material topics SHI engaged with its stakeholders through the following channels:

Stakeholder Group                Method of engagement
Shareholders & Investors ·      General Meeting of Shareholders

·      Website

·      Management Disclosures

Customers

 

·      Customer Satisfaction Surveys

·      Voc Surveys

·      International Exhibitions

Governments ·      Government-led Projects

·      Conferences

·      Discussion Meeting

Executives & Employees

 

 

 

·      In-house Bulletin Board

·      Newsletter

·      Management Status Briefing

·      Labour Association meetings

Subcontractors

 

·      Council Of Subcontractor

·      Year-round Communication Channels (On·Offline)

Media ·      Press Release

·      Website

·      Sustainability Reports

Local Communities

 

·      Social Contribution Activities

·      Sisterhood Ties

·      Social Media

What actions were taken by SHI to promote compliance?

In its 2018 Sustainability Report SHI reports that it took the following actions for promoting compliance:

  • Providing compliance training
  • SHI provides compliance training by job level and duty to prevent any legal violations and ensure the practicality of such training. In 2018, a total of 105 compliance training sessions were attended by 55,651 employees. ‘Tailor-made compliance training’ represents SHI’s leading compliance training programme. Upon request, compliance professionals visit the requesting department to offer customised training. Since 2018, SHI provided 15 sessions of collective compliance training to 1,340 manager-level employees across the company.
  • Improving employees’ compliance awareness
  • SHI takes a top-down approach in advancing compliance management. The CEO shares semi-annual compliance messages to underline SHI’s compliance management policy for all executives and employees, and executives and part leaders are periodically trained on compliance management. SHI also endeavours to improve employees’ compliance awareness in multiple ways: all employees sign the compliance oath every year, online compliance reviews are performed on a half-yearly basis, and each team receives them- specific training and conducts self-directed risk reviews on every third Tuesday designated as ‘Compliance Day’. Additionally, SHI has identified and awarded compliance top performers since 2016.
  • Watching compliance trends
  • SHI endeavours to eliminate compliance risks by identifying the relevant regulations, policies, issues and trends. To this end, SHI tracks regulatory revisions and other domestic and overseas compliance trends on a daily basis to reflect them in its compliance control system, also publishing and distributing compliance management newsletters every month by compiling compliance-related issues.
  • Operating reporting channels
  • SHI operates a range of reporting channels to facilitate communication with employees on compliance issues. Online channels include the corporate website, e-mail (compliance e-mail account), and the Compliance Online Petition & Discussion Portal (compliance management system), while offline channels include in-house phone and fax numbers and a post mail. In 2018, the number of the Compliance Post Box increased to eight to make it more convenient to access such reporting channels across the worksites. To facilitate the reporting process, reports are handled under the principle of confidentiality in accordance with SHI’s ‘Report Handling Guidelines’ and the ‘Red Flag Handling Criteria of Anti- Corruption Regulations.’ Once submitted, these reports are immediately forwarded to relevant departments and processed according to the investigation, analysis, countermeasure and feedback process, and some are addressed after obtaining approval from the CEO, CCOs, or team leaders depending on the characteristics of the reports submitted. SHI makes sure that the completion ratio of handling submitted reports amounts to 100%.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 205-2 Communication and training about anti-corruption policies and procedures

Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



 

FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

 

References:

1) This case study is based on published information by SHI, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

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