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DSME 2010 Environmental and Social Report
Creating Sustainable
Values
04 CEO’sMessage
06 CompanyOverview
09 CorporateHistory
10 CorporateGovernance
11 EthicalManagement
12 QualityManagement
13 StakeholderCommunication
16 MajorPerformances
18 BusinessResults
20 VisionandStrategy
22 NewGrowthEnginesforSustainableGrowth
26 EnvironmentalManagement
31 ActivitiesandPerformance
38 EnvironmentalActivitiesHighlights
44 EmployeeSatisfaction
46 SafetyandHealth
52 SocialContribution
54 CSRHighlights
57 AwardsandRecognition
Sustainability of DSME
Economic Value
Environmental Value
Social Value
Reporting Objective
DSME has published its Environmental & Social Report annually since 2005. Our Sixth report discloses information on our sustainability management to stakeholders with environmental, social and economic factors considered in a balanced manner.
Reporting Scope and Period
This report, in principle, covers the environmental management and social contribution activities of the head office and Okpo Shipyard from January 1, 2010 to December 31, 2010. The activities of our affiliates and joint ventures are not included.
General Information on This Report
This report is published in both Korean and English. You can download the report from our website (www.dsme.co.kr). If you want to receive a copy, please contact us (see our contact information below). Any feedback will be reflected in our sustainable management; you can inform us of your views through our reader survey (see page 58 of the report), by email or by phone.
Reporting Guidelines
This report was prepared based on GRI G3 Guideline and Ministry of Environment Environmental Report Guideline.
Contact Information
Environmental Management Group, HSE Operation Team
ADDRESS Aju-dong 1,Geoje-si, Gyeongsangnam-do, 656-714, Korea
TEL +82-55-680-2668
FAX +82-55-680-7164
E-MAIL [email protected]
About This Report
Driven by new ecologically friendly technologies and growth engines, we achieved our vision to become the ‘World’s No.1 Integrated Heavy Industries Group’ by 2020, and obtained balanced growth through a management system that raises the corporate, social and natural value together.
CEO’s Message
GreetingstoallourstakeholdersshowingunsparinginterestandaffectionforDSME,
As the CEO of DSME, a company leading the global shipbuilding industry, it is a great honor to meet you through this report detailing DSME’s performance over the past year. This report seeks to highlight DSME’s commitment to protecting the environment as we seek ways to achieve balanced, sustainable growth for the future.
2010 marked the 10th anniversary o f DSME’s independent management and was a period of outstanding achievements, despite the downturn in the shipbuilding and marine market due to the ongoing global economic turmoil. We recorded revenue of KRW 12 trillion, operating income of KRW 1 trillion, and received orders worth USD 10 billion.
Moreover, nine vessels built by DSME were recognized as being of the highest standard by world-renowned shipbuilding journals, reaffirming our unparalleled technological prowess and product quality. We also succeeded in developing mega-scale containerships with higher energy efficiency and reduced pollutant emissions, paving the way for us to lead the ecologically friendly shipbuilding market.
Understanding that sustainable development is the key to overcoming the environmental crisis confronting humanity and threatening our future, in 1991 DSME formed the industry’s first exclusive Environmental Preservation Department to promote sustainable growth and development.
Since then, we have practiced green management; making the realization of green shipbuilding our primary vision. With the creation of our systematic environmental management system, DSME became the industry’s first company to acquire ISO14001 – environmental management systems – certification. Through this system, we also enhanced corporate competitiveness and innovatively reduced energy costs by establishing an exclusive energy management system and a waste resources recycling system.
We also actively worked to fulfill our corporate social responsibilities (CSR) in order to share the rewards of our success with the community and society. For example, in March 2010, the Korean Naval ship ROKS Cheonan was sunk in an explosion with the loss of many lives. Upon hearing news of this disaster, we immediately dispatched the offshore crane, Daewoo No. 3600, to assist in the
recovery of the submerged vessel, despite the impact this had on our production line. We also believe in the spirit of unity and importance sharing and engage in a wide-range of volunteer activities to benefit the greater community. Our social contribution activities, as such, have been widely praised with DSME recognized as one of the top three companies for excellence in CSR activities in 2010.
Distinguishedstakeholders,
DSME is moving into the future, guided by our vision of moving beyond our current title as the world’s number one shipbuilder to becoming the ’World’s No.1 Integrated Heavy Industries Group’, with revenues of KRW 40 trillion and operating income of KRW 10 trillion by 2020. To this end, we heavily promoted R&D in high efficiency ecologically sustainable technologies including green ship technologies, thereby ensuring we remain at the forefront of the global shipbuilding industry. With global production networks in Russia, Angola and South Africa, our entry into overseas markets is in full swing, and we have even established a joint venture to produce wind generators in Canada. As such, our business diversification can be seen in important areas with huge growth potential: wind power, onshore plants and new and renewable energies.
Ecologically friendly is not only the most important principle we abide by, but its represents infinite potential for new growth as we actively endeavor to become the world’s foremost comprehensive heavy industry group. DSME will breathe new life into green management and the environment so that we may look forward to a better, more fruitful future together with our stakeholders and other members of the society. DSME will strive to bolster our competitiveness through the development of cutting-edge technologies, while enhancing our corporate fundamentals. Our dedication and innovation as we explore these new frontiers will never cease.
I would like to ask for your continued unwavering support as our vision takes us on a path toward a bright new future.
Thank you.
CEO & President, DSME
Nam,SangTae
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Company Overview
As a leading shipbuilding and marine company, we effectively utilize our differentiated technologies, comprehensive world-class infrastructure and global network.
General Information Organization
Company Name Daewoo Shipbuilding & Marine Engineering Co., ltd.
Established October 11, 1973
CEO Nam, Sang Tae
Head Office
85, Da-dong, Jung-gu, Seoul, Korea
Phone: +82-2-2129-0114 Fax: +82-2-756-4390
Shipyard
1, Aju-dong, Geoje-si, Gyeongsangnam-do, Korea
Phone: +82-55-680-2114
DMHI (Romania)
DSSC (China)
DSEC (Busan, Korea)
Welliv (Geoje, Korea)
Location DSME E&R (Seoul, Korea)
Subsidiaries
DSME Construction (Seoul, Korea)
Shinhan Machinery (Ulsan, Korea)
DeWind (USA)
DSSW (Chenranam-do, Korea)
DSME Oman (Oman)
NIDAS Marine (Nigeria)
DSME Canada Holding (Canada)
Target Revenue KRW 12 trillion (Plan for 2011)
Yards 4 million square meters
Employees 30,000 (Including sub-contractors)
Production Commercial vessel 70 vessels/Year
Capacity Specialty vessels 10 vessels/Year
Offshore & Onshore Plants 30~40 Units
Commercial vessels Tankers, Container carriers, Bulk carriers, Ore carriers, lNG & lPG carriers, Pure car and truck carriers, Chemical carriers, Product tankers, Passenger ferries, and others
Offshore Plant Fixed platforms, RIGs, FPSO/FPU/FSOs for offshore Key Products oil and gas exploration & production, Onshore plants such as chemical plants, Desalination plants and Power plants, Industrial facilities such as Off-loading facilities, Steel structures such as Steel bridges and Steel cages
Specialty vessels Submarines, Destroyers, Battle ships, Submarine rescue vessels, AUvs, and other specialty vessels
AuditCommittee
CEO
CorporateUnit
CentalR&DInstitute
G.O.C
Strategy&BusinessPlanningOffice
CorporateEthicsoffice
FinancialOffice
OperatingDivision
ProductionDivision
Engineering&TechnologyDivision
HSEOperationTeam
QualityManagementTeam
IndustrialApplicationR&DInstituteGeneralManager
ofShipyard
MarketingEngineeringTeam
GeneralManagerofBusiness
NewBusinessTeam
OffshoreBusinessDivision
ShipBusinessDivision
BOD
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Com
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Corporate History Since our launch in 1973, we have grown into one of the world’s top shipbuilding and marine companies, extending beyond Korea’s borders and opening a new chapter in the industry.
Network
Subsidiaries
DSME operates 12 subsidiaries worldwide dedicated to strengthening our presence in new growth businesses such as wind power and energy development. Our well-established offices around the world will be instrumental in continuing our sustained growth in offshore, shipbuilding and power.
Branch Offices
DSME operates 10 branch offices worldwide with locations in Houston, the epicenter of the E&P business in the U.S., as well as in london in the U.K., Greece, and Japan to ensure efficient overseas business operations.
london
Mangalia (DMHI)
Greece
Dubai
Tokyo
Perth
Singapore
U.S.A. (DeWind)
Houston
Brazil
Shanghai
Subsidiaries
Affiliates
Branch Offices
Shandong (DSSC)
luanda
Oslo
Seoul (DSC, DSME E&R)
Seoul (Komarf)
Ulsan (Shinhan Machinery)
Changwon (Doosan Engine)
Busan (DSEC)Geoje (Welliv)
Gwangyang (DSSW)
1973Held groundbreaking ceremony for the Okpo Shipyard as the Korea Shipbuilding & Engineering Corp. begins construction
1978Acquired Okpo Shipyard
Established Daewoo Shipbuilding & Heavy Machinery Co., ltd. (DSHM)
1979Built our first chemical carrier
1981Held the ceremony to mark the completion of the Okpo Shipyard
1983Completed construction of Dock II
1984Established the Ship & Marine Technology Research Institute
Acquired several international certifications
1985launched the MAST Business Innovation Movement
Completed construction of the world’s first double hull 300,000-ton vlCC
1987Established the Daewoo Shipbuilding labor Union
1988Initiated self-recovery efforts as part of the rationalization measures for shipbuilding industry
1989launched the new innovative business vision of ‘Hope 90s’
1991Gained first profit since establishment
1992Business normalized
Acquired ISO 9001 certification
1993Ranked world’s No.1 in the amount of ship orders
Completed the construction of Korea’s first tactical submarine
1994Merged with Daewoo Heavy Industries ltd.
1997Acquired environment management certification ISO 14001
1998Completed the construction of the first naval battleship
Exported passenger ferries for the first time
1999Received the Presidential Award for Precision Technologies and the One Hundred Technologies Award
Began workout program as part of the Daewoo Group’s restructuring
2000Began process to spin off Daewoo Shipbuilding, Conversion of investment in December
Established new business vision ‘Global Best by 2010’ – a business innovation strategy for the new millennium
2001Completed the workout program
Relocated to newpremises
Became the globalleader in lNG carrierorders
2002Selected ‘trust’ and ‘passion’ as DSME’s core corporate values
Commenced PI project
2003Named the world’s best shipbuilder by Maritime Asia’s lloyd’s list
2004Operated the first PI system in the shipbuilding industry
launched the Future leadership Center
2005Constructed and delivered the world’s first lNG-Rv
Won the Transparent Management Grand Prize from five economic organizations
Named the best corporation in the Korea Best Corporation Awards
lNG-Rv selected as a top 10 new technology by the Ministry of Commerce, Industry and Energy
2006DSSC began full operations
Received orders worth over USD 10 billion
Recognized as the best in corporate governance for the 4th consecutive year 2007Received the Transparent Management Award
Received Grand Prize at the 2007 labor-Management Cooperation Awards
Received USD 6 billion Export Tower Award at the 44th Trade Day Ceremony
2008Established Seyoung Educational Foundation (with Geoge College)
Recorded sales of KRW 11 trillion
2009Received USD 10 billion Export Tower Award at the 46th Trade Day Ceremony
Established DeWind Co.
2010Completed the construction of the Ocean Plaza
Building the Foundation
Preparing for Quantum Leap
Realizing‘Hope 90s’
Second Leap Forward
Going Global, Being the Best
Surging for Sustainable Growth
Held Groundbreaking ceremony for the Okpo Shipyard as the Korea Shipbuilding & Engineering Corp. begins construction
1970 1980 1990 2000 2010
1973 Held the ceremony to mark the completion of the Okpo Shipyard
1981 launched the new innovative business vision of ‘Hope 90s’
1989Became the global leader in lNG carrier orders
2001 Named the world’s best shipbuilder by Maritime Asia’s lloyd’s list
Named the best corporation in the Korea Best Corporation Awards
2003 2005
Recognized as the best in corporate governance for the 4th consecutive year
2006 Established DeWind Co.
2009
Completed the construction of the Ocean Plaza
2010
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Cor
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DSME builds trust among its stakeholders by practicing transparent and ethical management in all sectors of business.
Since declaring its commitment to ‘ethical management’ in January 2010, DSME has continued on the path to become an ethical company trusted by all its stakeholders, including customers, shareholders, employees, partner companies and the community. DSME employees have pledged to practice ethical management in every business decision. We have built consensus on the importance of ethical management across the enterprise, and encourage corporate ethics through training programs and awareness campaigns that target all employees.
Guideline for Codes of Ethics
• Ban on the exchange of gifts /entertainment/conveniences
• limitations on networking activities with stakeholders
• limitations on donations made at celebratory or condolence events
• Ban on monetary exchanges• Ban on influence peddling and unfair
solicitation• Ban on the intervention of interest or undue
claims• Ban on the issuance of undue commands• Distinction between public and private matters• Ban on political intervention• Fair competition• Compliance with the law and regulations
Ethical Management
Code of Ethics
Daewoo Shipbuilding and Marine Engineering strives to provide superior products and services. We pursue mutual prosperity with our stakeholders with the goal of becoming a respected integrated heavy industries group. Our Code of Ethics sets forth the ethical standards that must be observed by our employees at all times.
1. We will do our best to ensure the timely delivery of superior products and services that meet customers’ expectations.
2. We will protect customers’ interests and safety, and refrain from conduct that may harm customers.
3. We will humbly accept customers’ complaints and suggestions, and will honor our promise to customers.
1. We will increase corporate value through rational investment and efficient business activities.
2. We will respect shareholders’ rights and reasonable demands, and treat all shareholders with fairness and equality.
3. We will comply with the relevant laws and accounting standards when handling and reporting financial information.
1. We will provide equal opportunities to all qualified partner companies and select partner companies based on fair standards and transparent procedures.
2. All transactions will be conducted fairly from equal footing, and we will not unfairly grant special favors or cause damages under any circumstances.
3. We will cooperate with partner companies to promote mutual development and clean transactions.
1. We will contribute to social development and the growth of the national economy through sound profit generation and sustained growth, job creation, faithful payment of taxes and social contributions.
2. We will respect the traditions and cultures of local communities and strive to advance said communities.
3. We will strive to protect nature, prevent pollution and conserve resources.
1. We will respect the dignity and values of each employee and will not discriminate based on regional or academic background, gender, race, religion or physical disability.
2. We will provide employees with a clean and safe working environment, encourage creative thinking, and offer fair opportunities for growth and development.
3. We will conduct fair employee evaluations based on their abilities and performances and will provide reasonable compensation.
4. Employees will share the company’s vision, and will objective and faithfully carry out their given duties.
5. Employees will abide by the company’s policies and regulations and will refrain from unjust activities such as false reporting or misrepresentation that could damage the company’s interests.
6. Employees have an obligation to protect the company’s tangible and intangible assets and information, and will refrain from personal use of said assets and information.
7. Employees will treat each other with mutual respect as colleagues and will refrain from giving or receiving money or favors.
Chapter 1 Emphasis on Customers
Chapter 2 Respect for Shareholders
Chapter 3 Win-Win Cooperation with Partner Companies
Chapter 4 Contribution to National and Social Development
Chapter 5 Mutual Development of the Company and Employees
Corporate Governance
We strive to maximize shareholder and corporate value based on transparent and sound corporate governance spearheaded by the Board of Directors.
Transparent management that meets global standards is overseen by the Board of Directors (BOD) and the Audit Committee, the top two decision-making bodies of the DSME. The BOD is comprises of inside and outside directors, and the company discloses audited financial statements and information on its financial performance every quarter.
Board of Directors
Category Name Profile
Inside Director Nam, Sang Tae Currently CEO & President of DSME
Former vice President of DSME
Graduated from Yonsei University
Inside Director Kim, You Hun Currently Head of Financing Division of DSME
Former Head of International Business Division of KDB
Graduated from Sungkyunkwan University
Inside Director lee, Young Man Currently vice President & CTO of DSME
Graduated from Busan University
Outside Director & Song, Hee Joon Currently Professor at Ewha Womans University
Audit Committee Member Graduated from Seoul National University
Outside Director & Kim, Young Il Former Secretary General of Global Korea Forum
Audit Committee Member Graduated from Korea University
Outside Director & Kim, Ji Hong Currently Professor of KDI School of Public Policy & Management
Audit Committee Member Graduated from Seoul National University
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Quality Management Stakeholder Communication
We practice first-class quality management based on continued quality training for employees in combination with systematic and thorough quality management systems.
Enhancing stakeholder value is our ultimate goal as we strive to effectively communicate in a wider variety of methods.
Systematic Quality Management SystemDSME operates the "Total Quality Information Center" to conduct quality management in a systematic manner. Through the center, real-time quality monitoring information is collected daily and analyzed. In addition, the Worker Qualification Management System helps prevent any deviations in quality and ensures all our resources are effectively utilized. In particular, inspectors are dispatched to each site to oversee quality management, ensuring the required quality levels are met by our partner companies.
Self-quality System and Quality TrainingAt DSME, a three-stage autonomous quality system has been established. The worker-supervisor-quality manager’s control system, along with the employees’ high skill-set, plays a fundamental role in producing the finest quality products, with the world’s highest quality in welding and painting guaranteed. To maintain such outstanding quality management, we conduct function and quality training two or more times a year per employee, and conduct the same level of training with our partner companies.
Maximizing values for customers, employees, shareholders, partner firms and local communities is the ultimate goal pursued by DSME. Accordingly, we actively communicate with stakeholders to incorporate their views in our business activities through various communication channels.
Major Activities in 2010
Shareholders: Shareholders’ meeting (1), IR and Non-Deal Roadshows (4), Participation in shareholder conferences in Korea and overseas (6), Meetings with domestic and overseas investors (320), Annual Reports and Factbooks, Conference calls, etc.
Customers: Handling customer complaints, Operation of ship after service website (http://as.dsme.co.kr/jsp/intro.jsp), HSE workshops, HSE Plaza, Publication of Okpo Gazette
Employees: Management Consultative Committee, labor-Management Committee, Industrial Safety and Health Committee, Operation of ethical counseling center, Cyber hotline, etc.
Sub-contractors: Industrial Safety and Health Committee of Sub-contractors, Supporting events for sub-contractors and ship business owners, Green partnerships, labor-management events, Established cooperation system for sub-contractors
Community: Operation of Geoje College, Supporting cultural programs, Community cleaning up, Support for the Militia Council, etc.
Name of Certification Certification Authority Date
ISO 9001 QMS Certificate DNv Certification 1992. 12. 15 ~ 2013. 12. 15
Certificate of Welding Germanischer lloyd (G.l) 1992. 02. 01 ~ 2013. 05. 31
QA Certificate of Nuclear Systems Korea Electric Association 1997. 08. 27 ~ 2011. 08. 19
Certificate of Defense Quality Management System Defense Agency for Technology & Quality 2000. 10. 25 ~ 2012. 10. 24
Certificate of Accreditation of Calibration laboratory Korea laboratory Accreditation Scheme (KOlAS) 2000. 12. 09 ~ 2014. 03. 14
Certificate of Accreditation of Testing laboratory Korea laboratory Accreditation Scheme (KOlAS) 1996. 12. 28 ~ 2014. 03. 14
QA/QC Status
Quality PhilosophyTrust with Customers + Self-motivation + Pride
Quality Philosophy Key Word
TrustwithCustomers
Self-motivation
Pride
Quality Management System
DSME’s Practical Quality Philosophy
• Fulfill the promise made to our customers in advance of their requests
• Always remember that we are responsible for the products and performance quality of DSME
• Strive continuously to improve the quality of our products and services
• Always remember that we produce the world’s best products at the world’s leading shipyard
• Complete our assignments correctly the first time
Service
Resources
OperatingQualityManagementSystem: Evaluate customer’s satisfaction and define necessary activities / verify our output meets customer needs
Quality
ProvidingTop-qualityService: Provide after-sales services on a real time basis with e-A/S net
OptimizingResources: Foster the highest quality specialists and maximize efficiency for all our facilities
ProducingZeroDefectProducts: Enhance monitoring technologies during production stages
Production
•HSEForums,IHWT(IntegratedHSEWorkshopTeam)meetings•Customernewsletters•Callcenters•ShipA/Swebsites,etc.
•Socialvolunteergroups,etc.
•Meetingswithpartnerfirmrepresentatives
•SeminarsforpartnerfirmCEOs•GlobalTop
Cooperation,Workshopsforpartners,etc.
•ManagementConsultativeCommittee,Labor-ManagementCommittee•Portalcommunities•Ethicalcounselingcenters,etc.
•Shareholders’meetings,IRs,Conferences•e-Mail/phoneconsultations,Disclosures,etc.
Share- holders
Customers
Business Partners
Employees
Local Community
Communication Channel
Qua
lity
Man
agem
ent·
Sta
keho
lder
Com
mun
icat
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We plan for better tomorrow
DSMEseekstobecomeaworld-classintegratedheavyindustriesgroup
basedoninnovationandunsparingeffortinthefaceofchallengeaswestrive
tobecomeatop-notchglobalcompany.Backedbystablegrowthandstrongerglobalcompetitiveness,thisvisionfor
ourfuturewillproduceevengreaterreturnsforallstakeholders.
ECONOMIC VALuE
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Major Performance
2010 was an outstanding year of achievements in all aspects – not only in financial performance such as revenue and operating income, but also in developing new growth engines and sustainable management.
Exceeded revenues of KRW 12 trillion, operating income of KRW 1 trillion and orders worth USD 10 billion
In 2010, after two years absence, DSME rejoined the ‘10-1 trillion club’ – a term for firms that achieve more than 10 trillion won in revenue and 1 trillion won in operating profit on a yearly basis – by recording revenues of KRW 12.0745 trillion, operating income of KRW 1.0111 trillion and net income of KRW 780.1 billion. We successfully obtained an order volume of USD 10 billion in two years, overcoming the global financial crisis though outstanding technological innovation and product quality.
Established a global production network in Russia, Angola and South Africa
DSME completed registration of its joint venture with Russian shipbuilder Zvezda (tentatively entitled Zvezda-DSME), in June 2010. We began construction on a state of the art shipyard capable of building merchant ships, specialty vessels and offshore plants. Additionally, DSME has forged long-term ties with South Africa, making inroads to its marine sector in July. We also acquired equity for a shipyard in Angola, thereby forming a global production network connecting Africa, the Middle East, Russia and Korea.
Successfully developed a cargo hold using world-class technology
DSME exclusively developed a stand-alone lNG cargo hold essential for the construction of lNG carriers or lNG-FPSOs. We also exclusively developed a new membrane-type ‘twin-array’ cargo hold for lNG-FPSOs, developing a cargo hold with new technology and a new crosstie-free structure for the first time in the shipbuilding industry.
Reached new milestone with the delivery of DSME’s thousandth ship
DSME reached a new milestone with the delivery No. 4184 (a 14,000 TEU containership) in 2010, having successfully constructed and delivered one thousand ships since our first order (No. 2001, ‘Bow Pioneer’ – a 22,500 DWT chemical carrier) was delivered to Norway 28 years ago.
DSME’s over 9 ships selected as the outstanding vessels
A total of 9 DSME vessels have been selected as the outstanding vessels by different magazines: 2 by the recent edition of the British journal, ‘Naval Architects’; 3 by ‘Marine log’ and ‘Maritime Reporter’; and 1 by ‘Fair Play.’ In all, we have produced 111 ships over 29 years, all of which have been recognized for their excellence. We also successfully constructed and delivered our first exclusively developed drillship within a year, marking our successful advancement into the drillship market.
Developed vertical EGW 2G welding machine and robotics for double skin construction
DSME developed a vertical EGW, 2G welding machine that can reduce the cost of raw materials and the attachment and demoli t ion costs by approx imate ly KRW 140 mi l l ion and reduce incidences of musculoskeletal disease in our workers. Our ‘six-axis vertical multi-joint mini welding robot’ developed for the first time in Korea is expected to be used for internal welding for a double skin structure. The robot will help prevent incidences of musculoskeletal disease that occur due to working in restricted spaces. We also developed a blasting robot for a double skin block and grit recovery.
Established a wind power plant and secured our North American presence
As part of our initiative to develop new growth industries and advance to new markets, DSME formed a joint venture to produce wind power generators with the provincial government of Nova Scotia, Canada. We also signed an MOU with Nova Scotia Power, Inc. (NSPI) to supply wind power facilities. The signing of the MOU secured DSME a stable client for our products and wide-ranging business opportunities based on new and renewable energies.
Developed wind turbine installation vessel
With the development of a DSME wind turbine installation vessel, we took a step closer to achieving our vision of becoming one of the world’s big three producers of wind power generators by 2020. With a length of 145m and a width of 45m, the vessel can operate at a maximum speed of 11 knots (20km/hour), shipping 5 wind turbines capable of producing 5 megawatts. We now have a firm presence in the green energy market as far as the growing offshore wind complex construction sector is concerned.
Formed GOC to aid localization abroad
DSME formed the Global Operation Center (GOC) to take the lead in our overseas localization efforts. GOC will support various tasks such as commercializing DSME’s brand value, technologies and know-how; exploring business opportunities in different parts of the world; and supporting our subsidiaries and partners at home and abroad in the shipbuilding and marine sector.
Successfully developed an ‘Onboard facility management system’
DSME successfully developed the Computerized Maintenance Management System (CMMS) which manages ships and offshore plants in real time. The CMMS is embedded in ships and offshore plants, performing maintenance and repairs during navigation and operation through a convergence of IT and shipping technologies. Ship owners can now manage facility conservation, layout management and material purchasing through the system, and more effectively manage their major facilities.
Continued to successfully investin the offshore business
Investments to realize our vision of becoming the World’s No.1 Integrated Heavy Industries Group will continue through to 2020. In May 2010, we completed construction of Quay H, which is used to moor offshore plants such as drill ships and rigs, and now serves as a specialized marine inner wall. Additionally, our fifth 900-ton ‘Goliath Crane’ was introduced to the Nuetae Production Site in September 2010, and the Heavy Zone P.E. is now in full operation with a completion ceremony held to mark the occasion.
Completed construction of Ocean Plaza – the area’s new landmark
The construction of DSME’s new premises, entitled Ocean Plaza, was completed in December 2010. Ocean Plaza is currently home to 2,000 engineers, with 1,800 others working in the Harmony Center (customers’ service center) including the owners of commercial vessels, those specializing in ship classification, design sub-contractors, and employees in our subsidiaries. The Ocean Plaza was fully completed at the end of March 2011, and contains the ‘Happiness Hall’ for employees’ leisure and welfare, a gym, a theater and a wedding hall, a playground and a child care center.
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Total assets(Unit: KRW billion)
2008 2009 2010
15,95415,136
14,177
Net income(Unit: KRW billion)
2008 2009 2010
402
578
780
Current ratio(Unit: %)
2008 2009 2010
95.09 96.03
89.82
Net income growth(Unit: %)
2008 2009 2010
24.68
43.75 35.09
Business Results
Summarized Statements of Financial Position
과과 2010 2009 2008 Change
I. Current assets 7,297,363 9,019,958 9,382,402 △1,722,595
II. Non-current assets 6,879,366 6,116,400 6,571,152 762,966
Total assets 14,176,729 15,136,358 15,953,554 △ 959,629
I. Current liabilities 8,124,447 9,392,880 9,866,698 △1,268,433
II. Non-current liabilities 2,009,048 2,485,899 4,018,989 △ 476,851
Total liabilities 10,133,495 11,878,779 13,885,687 △1,745,284
I. Paid-in capital 961,954 961,954 961,954 -
II. Capital surplus 728 200 200 528
III. Capital adjustments -29,949 -31,643 -30,843 1,694
Iv. Accumulated other 965,021 865,684 20,328 99,337 comprehensive income
v. Retained earnings 2,145,480 1,461,384 1,116,228 684,096
Total shareholders’ equity 4,043,234 3,257,579 2,067,867 785,655
Total liabilities and 14,176,729 15,136,358 15,953,554 △ 959,629 shareholders’ equity
(Unit: KRW million) Key Financial Ratios
과과 2010 2009 2008
(Unit: KRW million)
Stability Current ratio 89.82 96.03 95.09
Debt-to-equity ratio 250.63 364.65 671.50
Total borrowings to total assets 17.39 13.88 1.87
Interest expenses to operating income 922.94 1,038.81 7,041.07
Profitability Operating income margin 8.37 5.50 9.31
Net income margin 6.46 4.64 3.63
ROA 5.50 3.72 3.31
ROE 19.29 21.69 20.93
Growth Sales growth (2.96) 12.35 55.88
Operating income growth 47.71 (33.64) 236.25
Net income growth 35.09 43.75 24.68
Total assets growth (6.34) (5.12) 92.51
Summarized Statements of Income
과과 2010 2009 2008 Change
I. Sales 12,074,505 12,442,519 11,074,644 △ △ 368,014
II. Cost of sales 10,677,528 11,463,815 9,749,867 △ △ 786,287
III. Gross profit 1,396,977 978,704 1,324,777 418,273
Iv. SG&A expenses 385,900 294,181 293,226 91,719
v. Operating income 1,011,077 684,523 1,031,551 326,554
vI. Non-operating income 1,108,227 1,877,344 1,859,230 △ △ 769,117
vII. Non-operating expenses 1,094,972 1,793,814 2,311,096 △ 698,842
vIII. Income before income taxes 1,024,332 768,053 579,685 256,279
IX. Income taxes 244,200 190,549 177,957 53,651
X. Net income 780,132 577,504 401,728 202,628
(Unit: KRW million)
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Bus
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sR
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Vision & Strategy
In order to realize our vision of being the ‘World’s No. 1 Heavy Industries Group’, we will continue to develop our business strengths and pursue new growth engines.
VisionDSME has actively pursued its vision of becoming the World’s No. 1 Heavy Industries Group by 2020. In line with this, we strive to reaffirm our market leadership in shipbuilding and offshore businesses by 2015. Our flexible corporate culture based on trust and passion, and our management system designed to rapidly respond to changes, serve as the major force driving our vision.
KRW16trillion
KRW23trillion
KRW40trillion
Vision Road Map
Preparing for Take-off
• Build a foundation for corporate restructuring
• launch new business areas and products (Modular plants, F-lNG, Wind Power, etc.)
• Encourage a more creative culture
2010~2012
Entering the Top Tier
• No.1 in Shipbuilding & Offshore business
• Enter the top-tier of the global energy plant industry
• Balance business portfolio with growth and relevance
2013~2015
World’s No.1 Heavy Industries Group
• Obtain leading positions in business domains (Shipbuilding/Offshore/ Plant/New renewable energy)
• Establish a self-continuous cycle of sustainable growth
2020
SupportBusinesses
Energy
Plant
Offshore
Shipbuilding
Vision 2010
Vision
Business Domain
Infrastructure
Strategic Goals
World’s No.1 Integrated Heavy Industries Group
Financing Shipping Logistics Construction Services
Major Business Growth Business New Business Areas
Shipbuilding Offshore Plant Energy
•Creativity&AutonomybasedonTrustandPassion•EffectiveManagementSystemtoRespondPromptlytoEnvironmentalChange
Core Businesses
Support Businesses
ReshapingBusinessPortfolio
SecuringNewCoreCompetences
EffectiveBusinessDiversification
SecuringSuitableResources
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Vis
ion
&S
trat
egy
Enterprise-wide Strategic InitiativesWe have put in place 16 strategic tasks to enhance key business areas and management infrastructure, enterprise-wide, to ensure we realize our vision.
16 Strategic Initiatives for Vision
01 Selectionandconcentrationinships
02 Strategiesforexpansionofsub-categoryships
03 Settingupaproductionsupportsystems
04 Rapidshifttooffshore
05 Strengtheningkeycompetenciestosecureacomprehensivemarinebusinessmodel
06 Strengtheningmarketdominancebyexpandingmarineordervolume
07 Toutingleadershipinnext-generationoffshoreproducts
08 Advancingintomodular-orientedonshoreplantsandsecuringleadership
09 Strengtheningcompetenciesintheplantbusiness
10 Strengtheningcompetenciesinthewindmarket
11 Strengtheningleadershipinoilandgas
12 Strengtheningcompetenciesinrespondingtolocalcontents
13 Strengtheningcompetenciesinmanufacturingmajorequipmentandmaterialsandcommercializingthem
14 Initiatingprojectstosupportstrengtheningkeybusinesses
15 Greaterefficiencyinbusinessoperation
16 Innovationinpersonnel/corporatesystems
Shipbuilding Offshore Plant Energy
Management Infrastructure
Support Business
New Growth Enginefor Sustainable Growth
01
02
05
03
06
04
05. Research on sustainable technologies for future generations – Green Ships
In a bid to develop alternative green energies for future generations, DSME held the Green Ship Workshop in 2010 to encompass environmentally efficient ‘green’ ships and new technologies. Discussion topics during the workshops included: IMO regulations and responses; strategies to strengthen ship-specific competitiveness in EEDI (Energy Efficiency Design Index) and EEOI (Energy Efficiency Operation Index); identifying ship market trends and owner demands; new concepts, trends and strategies on alternative energies; and new green ship technologies and strategies such as energy saving equipment.
04. Energy – opportunities to leap forward driven by rapid growth
The energy business, divided into wind power and oil and gas, has huge growth potential. Our strategy in the wind power market, which we believe has the greatest growth potential among the new and renewable energies, is to develop a corporate complex and later expand it into an offshore wind farm. As such, we are actively working to develop on/offshore products, while investing in wind farms in North American and Europe. In the oil and gas business, we are trying to produce synergy through equity investment in mines, attracting orders in ships and offshore projects, and by advancing into new markets. Our 2020 target revenues in the wind and oil and gas sectors are KRW 7 trillion and KRW 2 trillion, respectively.
01. Shipbuilding – securing dominance as a market leader
Shipbuilding is DSME’s main area of business, ranking first in the market for many years with revenues of KRW 8 trillion in 2010 (out of total corporate revenues of KRW 12 trillion). Our dominance remains firm in lNG carriers and oil tankers. We also boast strengths in constructing a wide-range of specialty ships such as bulk carriers, roll-on roll-off carriers, chemical carriers, passenger ferries and military vessels. We will ensure we maintain our dominance by sustaining our competitiveness and improving profitability in response to fierce competition from new-comers.
06. DeWind – expanding our presence in the U.S. market
De Wind, a subsidiary of DSME, acquired an order for 10 wind generators worth USD 30 million from US-based little Pringle. The wind generators ordered are 2 megawatt D8.2 model exclusively developed by DeWind. They will be installed in the Texas Panhandle, and will begin generating power from this summer. Driven by the synergy of DSME’s manufacturing know-how in shipbuilding and DeWind’s wind technologies, our plan is to become one of the world’s top three wind facility producers with a 15% market share by 2015.
02. Offshore – a robust business area to drive future growth
DSME’s offshore business has grown rapidly, raising revenues of over KRW 4 trillion, making up one third of DSME’s total sales. We boast competitiveness in wide-range of products: dominance in rigs; stable sales in drillships; with strong performances in DSME’s recently developed and exclusive models. We plan to proactively promote sales in the form of package deals that will generate orders and secure value from resource developers through to consumers. Our 2020 target revenue for the offshore business is KRW 9.2 trillion through the ongoing conversion of production facilities.
03. Plants – a new business area for the future
DSME is breaking new ground in the plant business based on our abundant offshore experiences. We expanded our business scope to not only include oil and gas modules and plants, but also power generation plants based on our experience in constructing large-scale modules and technical know-how in project management. We will develop into a company that can oversee the entire manufacturing process from the basic design, manufacturing, and procurement of material and equipment. Our goal is to join the world’s top ten in the plant business by investing KRW 1 trillion over 10 years towards M&A of engineering companies, R&D and developing facilities to manufacture materials and equipment. We aim to have this new area of business obtain revenues of over KRW 4 trillion by 2020.
07 07. Establishing a Cental R&D Institute
As part our bid to transform into integrated heavy industries, DSME established a research center to lead our future business development and strategy. Established through the integration of existing research units, the research center embodies 200 researchers, and the number of researchers will increase to over 400 as we actively attract new foreign talent over the next two to three years. The center will conduct research seeking to create a new demand in specialized fields, while producing such innovative technologies as the robots used to make shipbuilding more efficient and competitive.
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New
Gro
wth
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for
Sus
tain
able
Gro
wth
We draw greener tomorrow
DSMEseekstobecomeacompanythatcreatesenergywhilebreathingnewlifeintotheenviron-mentandgrowinginharmonywithallthecrea-
turesontheplanet.ThetomorrowofferedbyDSME,throughourcommitmenttoeco-friendly
managementandnewandrenewableenergy,isahealthierandmorevibrantplanetthatthe
futuregenerationscancherish.
ENVIRONMENTAL VALuE
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Env
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Environment Management SystemDSME has established an environmental management system (ISO 14001 certified) to ensure continued improvement in our environmental performance. In order to carry out our environment policy, we have implemented company-wide goals and individual targets for each team. In addition, our environment management system is evaluated on a quarterly basis by internal HSE (Health, Safety, and Environment) reviews, with the results are reported to the head of each business unit to ensure the ongoing improvement of the system.
DSME is moving towards its vision of becoming an eco-friendly shipbuilder by creating and implementing an advanced environmental management system.
Environment PolicyWe have established a strong environmental policy to guide us in our ongoing efforts to protect our natural surroundings and respond to climate change. Environmental regulations are observed and pollutant emissions minimized at the corporate level, with awareness of environmental protection shared and practiced by all our employees.
Mid-to Long-term Goals for EnvironmentDSME is moving toward becoming an eco-friendly shipbuilder by building an advanced environmental management system. As a part of these efforts, we established a multi-phase master plan in 1991, and have been carrying out relevant activities. Green management has been implemented beyond the corporate level to encourage community engagement. We have set specific plans into action to ensure we become global leader in green management and production by 2015.
Environmental Management
1.Adheretoenvironmentalregulationsandminimizethedischargeofpollutants
Continue to develop environmental technologies to reduce consumption of raw materials and energy
2.Encourageemployeestofollow‘greenprinciples’
Educate employees on environmental principles and encourage them to adopt ‘green’ practices
3.Takeprecautionsagainstenvironmentalaccidents
Maximize the efficiency of environmental management by monitoring and reducing the creation of pollutants in all operation processes
4.Continuethe3Rsmovement
Help protect the environment by following the 3Rs practices of Reduce, Reuse and Recycle
5.Discloseenvironmentinformation
Regularly disclose environment information to ensure the transparent reporting of environment policy and its implementation
HSE Operation Team
Environmental Management Group
General Manager
of Shipyard
• Review company-wide environmental policies and measures
– Establish company-wide environmental goals and plans for preventive measures
– Manage environmental performance index
• Review and study environmen-tal effects
• Environmental PR, training & evaluation
• Check/improve onsite environ-mental incongruities
• Environment-related civic ap-peals/authorities/NGOs
• UNFCCC – Establish GHG inventory – Develop reduction program
Environmental Management
• Authorize air/water envi-ronmental facilities/new investments/reviews/improve-ments/pollution measurement results management
• Operate wastewater/sewage water treatment facilities
• Authorize marine environ-ment facilities/improvements/results management
• Operate water surface cleaner(marine pollution prevention and production support)
• Manage toxic/soil pollution causing facilities/review/im-prove/results management
Air/Water/Marine Management
• Establish and execute waste treatment plan
• Waste disposal/account settle-ment/results management
• Waste collection and facility management
• 3Rs promotion – Reduce – Reuse – Recycle
• Conduct and evaluateseparate discharge activity
• Operate waste materialrecycling center
Waste Resource Management
Environmental Management Organization
ISO14001
Environmental Goals and Action Plans
1991~2006 2011~2015
• Minimize pollutant discharge – Increase recycling of gray-water – Decrease the volume of wastes and waste paints generated – Decrease dust scatthering – Decrease the volume of toxic
material used
• Expanding waste recycling – Increase separate discharge
activity – Improve waste disposal methods – Recycle residual materials – Encourage eco-friendly design
and purchasing activities
• Open environmental facilities
• Increase the number of projects which support local residents and environmental groups
• Create local ‘green’ areas
• Execute climate changeresponse strategies
– Reduce greenhouse gas emissions
– Establish new and renewable energy business
• Design and build eco-friendly ships
• Establish an advanced resource recycling system
• Establish an environmental team
• Declare vision to becomean eco-friendly shipbuilder
• Acquire ISO 14001 certification
• Set out principles of environmental management
• Establish the DSMEEnvironment Award
• Reduce and eliminateenvironmental accidents
• Adhere to environmentalregulations and expand environment-related investment
Optimizing environmental management
Optimizing environmental management – Creating an eco-friendly DSME
Becoming a global eco-friendly leader
Adopting environmental management
Phase I
2006~2009
Phase II
2009~2011
Phase III Phase IV
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Environmental MonitoringTo effectively respond to various environmental accidents, DSME has established and documented a response system. Reported incidents are treated with a standard 7-step process. This enables us to deal with the situation in the most appropriate manner for maximum efficiency. In the case of a minor accident, steps are taken immediately at the site. An improvement request form is then filed for future reference. When a more serious incident occurs, the incident is reported directly to the head of shipyard. This is then followed up by joint efforts to contain the incident preemptively.
Environmental Performance EvaluationFor each environmental indicator we employ, we set strict standards of measurement in order to accurately quantify our environmental performance. We analyze the components of each indicator set forth under the GRI Guidelines and ISO 14001, and select indicators that are appropriate for DSME. Each worksite has set in place an evaluation system that is best suited for each setting.
Environmental Education
Classroomeducationabouttheenvironmentfornewrecruits
DSME offers classroom education on the environment to new employees working in offices and production lines, as well as subcontractors, in order to create an eco-friendly workplace. Based on DSME’s environment standards, participants receive information on work instructions, installation of environmental facilities and the 3Rs (Reduce, Reuse, Recycle). DSME also continuously educates its staff about the environment through regular publications and weekly education materials, thereby enhancing employees’ understanding of environment management in general and establishing an eco-friendly workplace.
Improvingmonthlyenvironmentalcampaignbroadcast
We broadcast monthly announcements, beginning with an ‘green start song,’ that contain topics designed to keep employees interested in environmental matters. Employees at DSME help make and develop these monthly broadcasts.
Report of incongruities
Company-wide Improvement Execution Safety Environment Management Division Management Division Representative
Correction/Improvement
①
⑤
Approval
Reportofresults
②
③ ④
④ ⑤
Regular/Ordinarymonitoring
Discoveryoffailure/Preventivemeasures
Filing/Reporting
Confirmationinquiry
Notifyinquiry
Reporting/Establishingamendmentplan
Confirminquiryresults
Notifyinquiryresults
Post-incidentmanagement
Operational System Chart for Environmental Accidents
① Report form for safety, environmental incongruities
③ HSE Improvement form
⑤ Results notification
② Safety and environment information filing and ledger
④ Daily HSE information
* Safety environment information treatment process (DSM-S-308)
Related standards and forms
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EnvironmentalManagementIndex(100)
Environmentalstandardconformity
index(5)
Environmentalaccountingindex(5)
Environmentalactivitiesindex(15)
Stakeholderindex(5)
OperationalPerformanceIndex
(OPI)(40)
Resourceutilizationindex(6)
Hazardoussubstanceutilizationindex(4)
Wastedischargeindex(15)
Air/waterpollutantemissionindex(15)
ManagementPerformanceIndex
(MPI)(50)
Environmentalmanagementsystemoperationindex(20)
Performance Sub-category
Evaluation Item
Evaluation Index
Index Standard 2008 2009 2010
Environmental Performance Index Guideline
1. Suitability of EMS plan 3.0 3.0 2.5 2.4
2. Execution rate/schedule 6.0 6.0 5.5 6.0
3. Satisfactory level of execution 6.0 7.2 5.0 6.0
4. Regular management 5.0 7.0 6.0 5.0
1. Regulation violations 3.0 3.6 4.2 4.8
2. Fines 2.0 2.4 2.8 3.2
1. Environmental expenditures 3.0 1.5 0.0 2.0
2. Environmental benefits 2.0 0.8 0.0 0.0
1. Requests to improve environmental incongruities 10.0 20.0 20.0 18.0
2. Environmental cleanup activities 5.0 5.0 3.0 4.0
1. Information sharing with residents (onsite visitors) 1.5 2.7 2.4 1.2
2. Frequency of contact with stakeholders (environment-related) 1.5 2.5 1.9 3.1
3. Environment-related civic appeals 2.0 2.0 1.2 2.0
1. Major raw material use ·Steel 1.5 2.4 2.4 2.7
·Paint 1.5 0.6 2.4 2.4
2. Water use 1.5 1.8 2.7 2.7
3. Energy use 1.5 2.1 2.7 3.0
1. Hazardous chemical use 4.0 0.0 8.0 8.0
1. Waste generation volume (basic unit) 4.0 8.0 8.0 8.0
2. Waste recycling rate 4.0 6.4 6.4 5.6
3. Wastewater recycling rate 4.0 8.0 8.0 0.0
4. Waste separation efficacy rate 3.0 4.2 4.8 5.4
1. Emission of air pollutants ·Total dust emission 3.0 0.6 1.8 4.2
·Total SOx emission 3.0 5.4 5.4 4.2
2. Emission of water pollutants ·COD 3.0 0.0 0.0 0.0
·BOD 3.0 1.8 0.0 0.0
·SS 3.0 6.0 0.0 1.8
1. Analysis of air quality ·PM10 1.5 1.2 1.5 1.8 around company ·SOx 1.0 2.0 2.0 1.8
·Ozone 1.5 0.3 1.8 0.0
1. Analysis of water quality ·COD 1.5 3.0 0.0 2.7 around company ·DO 1.5 1.8 0.6 0.9
1. Results of company ·BTEX 1.5 1.5 3.0 3.0 soil quality ·TPH 1.5 0.0 0.0 0.0
Total 100 120.8 116.0 115.9
Waterqualityindex(3)
Soilqualityindex(3)
EnvironmentalPerformanceIndex
EPI(10)Airqualityindex(4)
Environmental AccountingIn order to carry out our environment policies, we implemented company-wide goals and individual targets for each team. In 2010, we conducted pre-reduction activities such as the reduction of waste paint and recycling heavy water. The benefit of this environmental effort, that is the costs saved by investing in environmental investment, is projected to increase continuously.
Response to Climate ChangeDSME strives to reduce its CO2 emissions and also comply with Korean government’s Basic Act on low Carbon and Green Growth. In addition, by establishing a three-phase master plan in preparation for the United Nations Framework Convention on Climate Change (UNFCCC), DSME is carrying out relevant activities to cope with global warming, one of the most important issues facing the world.
We contribute to environmental preservation through systematic energy management systems and production costs reduction policies that actively promote the reduction of pollutant emissions.
Activities & Performance
Phase I2009
Establishabase-lineformanagementofGHGemissions
• Organizing response teams in the shipbuilding industry
• Promoting enhanced awareness through PR activities
• Calculating GHG gas emissions
Establish a base-line for man-agement of GHG emissions
SettinguptheGHGreductionprogramandtargets
• Building GHG inventory• Develop the GHG management
system (managed by worksites and processes)
• Establish GHG reduction tasks
Reduce GHG emissions / Conducting tasks to
respond to the climate change convention
Phase II2010~2012
AchieveGHGreductiontargetsandintroduceaverificationsystem
• Achieve mandatory reductions (Selecting energy saving/efficiency maximization tasks by process)
• Carry forward CDM business related climate change (Securing emissions rights)
• Research climate change-related business such as CDM
• Participate in emission trading schemes
Respond to the mandatory reduction period
Phase III2013~
Master Plan for Responding to uNFCCC
Achievement of GHG Mitigation
GHGInventoryEstablishmentandVerification
DSME calculates GHG emissions based on its own GHG inventory, is verified by the Korean Standards Association to enhance the credibility of the results.
Boundaries Okpo shipyard at DSME (excluding Seoul office and subsidiaries)
Period Year of 2008 and 2009
GHG category Six greenhouse gases defined by the Kyoto Protocol (CO2, CH4, N2O, HFCs, PFCs, SF6)
verification institution KSA (Korean Standards Association)
Date of verification May 19, 2010
*InventorybasedonISO14064,IPCCGuidelinesandtheWRIGHGProtocol
Certification&VerificationofGHGInventory
(unit: KRW thousand)
1. Environment management system activity costs (auditor/personnel costs of support team) 480,434
2. Education costs (internal/external training related to environment) 181,848
3. Energy/resources saving costs (reduction/recycling costs) 6,000
4. R&D activity costs (manufacturing/product improvement costs) 0
5. Global environment conservation costs (greenhouse effect/ozone depletion, etc.) 0
6. Worksite ‘greening’ costs 780,000
1. Environment improving investments 883,895
2. Prevention facilities operation costs (depreciation/repairs and maintenance/ 4,838,834 renovations/personnel/electricity costs)
3. Pollutant discharge measurement costs (in-house/ commissioned/ automatic measurements) 434,536
4. Pollutant discharge cleanup costs (disposal/management costs to commissioned firm) 5,486,670
1. Pollution prevention/restoration costs 53,280
2. Environment taxes 31,971
3. Fines and penalties 925
1. Environmental report/Annual report publishing costs 55,000
2. Social contribution activity costs - Stakeholder cooperation costs - Environment conservation costs 329,543 (charity/environment volunteer work) - Regional cooperation costs
3. Social forestation costs 0
1. Reduced costs due to preventive activities - Reduced costs from less waste paint 1,062,076 - Reduced water costs from reusing heavy water
2. Benefits from recycling - Scrap iron/metal/wasteship/slug/ recycled resin/wastepaper sales 5,903,108
* excluding sales from scrap iron
Environmental costs (cost reductions -6,597,752 minus expenditures)
Environmental 13,562,936 expenditures
Cost 6,965,184 reduction
Pollution prevention 1,448,282 costs
Pollution cleanup 11,643,935 costs
Environment risk
86,176 management costs
Social 384,543 costs
Cost reductions due to 6,965,184 environmental activities
Category Amount Cost Category Amount Sub-category Amount Details Amount
Breakdown of Environmental Costs
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Act
iviti
es&
Per
form
ance
ResponsetoGHGEnergyTargetManagement
DSME is implementing an MRv system to respond to the government’s ‘GHG Energy Target Management’ in compliance with the Basic Act on low Carbon and Green Growth. We will do the utmost in GHG management by devising a GHG emission statement and identifying potential areas of reduction.
GHGEmissions
Training on Response to the uNFCCC
• MarchHeld a seminar for executive directors
• JuneConducted training on responses to the UNFCCC: 20 DSME employees completed the course
• NovemberConducted a seminar organized by the government
OutletStatus DSME Anjeong National DSME DSME Okpo Shipyard Situation Okpo Shipyard Industrial Complex
Number of Outlets 78 14
Pollution prevention facilities Filtering dust collectors 64 14
Absorbers 6
Scrubber 4
Centrifugal power 10
Gravity 5
Oxidation 2
Other boiler related 9
environmental facilities
Total 100
VOCEmissions
VoluntaryAgreementonVOCReduction
DSME signed an agreement with the government to reduce the emissions of volatile organic compounds (vOC) in November 2007. Since then, we have been working to reduce vOC emissions by 30% of its 2006 emission levels by 2011 through the adoption of eco-friendly paint. The amount of vOC generated in 2010 amounted to 4,937 ton, 35% lower than 2006 levels.
ReductionPlan
Air Quality
AirQualityaroundtheWorksitesin2010
We have regularly measured the air quality around all our worksites since 2005 to ensure the health and wellbeing of local residents and employees, as well as to ensure we meet our internal environmental standards. According to the measurements, in 2010 the air quality at DSME sites was much better than the legal standard in all areas including PM10, NOx, and SOx.
Type Legal Standard Limit Measurement Outcome
PM10(ug/㎥) 100 46
NOx(ppm) 0.06 0.009
SOx(ppm) 0.05 0.013
O3(ppm) 0.06 0.022
CO(ppm) 9 0.4
Emission Sources 2008 2009 2010
Stationary combustion 22,708 22,882 24,486
Mobile combustion 25,483 31,368 30,901
Mobile combustion (Sea Trial) 104,778 152,376 105,332
Process/leak 18,180 18,513 16,894
Electricity purchased 194,810 200,958 206,812
Total 365,959 426,097 384,425
(Unit: CO2 Ton/Year)
5,334
20112006
7,656
7,656
2009
4,935
5,797
2008
5,385
6,022
2007
7,488
6,227
2010
4,937
5,585
8,000
6,000
4,000
2,000
0
(Unit: Ton/Year)
Plan vOC emission
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Act
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Per
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Water Quality
SewageWaterTreatment
The company’s sewage water is collected at the sewage water treatment facility in each region, and then transferred and treated at DSME’s comprehensive sewage water treatment facilities. The quality of the treatment water discharged from the comprehensive units is set at 30% below the legally permitted discharge level. The biologically treated water is, in turn, supplied to yards and re-used as tap water for miscellaneous purposes, thus contributing to reducing water usage.
WastewaterTreatment
Wastewater generated from the shipbuilding process is discharged after being treated at DSME’s exclusive wastewater treatment plant, with discharge levels set at 30% below the legally permitted limit. Wastewater that cannot be treated exclusively by DSME is treated through a wastewater treatment company contracted explicitly for this purpose designated by the government.
Water Quality Status (Water density)
Marine Environment
HoldingCampaignstoPreventMarinePollution
DSME holds campaigns to prevent marine pollution from ships that enter and exit its ports. Through this campaign, DSME promotes its marine environmental management standards and measures to prevent marine pollution. As such, we conduct ongoing marine environment protection activities by educating captains of DSME’s tugboats and other vessels about the Marine Environmental Pollution Management Act and cases of marine pollution.
Sewage Water Quality Waste Water Quality
Sewage water treatment facility
wastewater treatment facility
laundry wastewater treatment facility
20
15
10
5
0BOD
20.0
6.4
SS
20.0
7.3
100
80
60
40
20
0
90.080.0
25.5
10.1
COD SS
100
80
60
40
20
0
90.080.0
20.1 4.5
COD SS
Wastewater Treatment System
DischargeFlowadjustment
sump
Neutralization,reaction,
integration,condensation
Depositionfacillity
Filtrationsump
FiltrationtankWaterinflow
(Unit: ppm)
Sewage Water Treatment System
Restroom
Sewagewatertreatment
facility
Filter Dischargesump
Canteen Showers
Pumpingpit
Reactiontank Microfilter
Filtersdwatertransfertube
Reusedwatertank
Usedinballastingandwaterpressure
test
Procedureofgraywaterreuse
DischargeReuse
legal standards
DSME’s average in 2010
Status of Water Reuse/Recycle
2.2 billion ton/year
Intake water volume
149 thousand tonVolume of reused or
recycled water
Sewage/Waste Water Status
1,049 thousand ton
Volume of sewage water
22 thousand ton
Volume of waste water
52.42 ton
Volume of collected
marine water
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Act
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Waste Emissions and Recycling Status
Soil Environment
SoilPollutionManagement
DSME has a total of 49 oil storage sites with the potential for soil pollution within each storage yard. As such, we conduct precise inspection of the soil and underground water through regular monitoring and thorough soil management. We frequently monitor soil pollution, commissioning the work to inspection agencies designated by the Ministry of Environment.
RecyclingofWasteMaterials
In order to promote the in-house recycling of waste materials in an effective way, we operate a waste materials recycling center. We encourage the recycling of materials through the evaluation of separate discharge. In addition, we distribute recycling bins around working areas and promote employee participation in recycling. We saved KRW 910 million through the recycling of waste materials in 2010.
Management of Hazardous Chemicals
StrengtheningtheHazardousChemicalsManagementActivities
We have strengthened our hazardous chemicals management activities on multiple fronts. We specify the nature of the items on the order form used to purchase chemical products by performing the required MSDS submissions, attaching warning labels, and ensuring receipt of goods. Additionally, we conduct thorough inspections of chemicals products purchased and keep the MSDS list up-to-date, including such details as the status of suppliers and the amounts supplied, MSDS, content and date of receipt. As the chemical material management system has been amended, we have replaced the existing enterprise-specific warning labels, and have designed stickers to be attached to gas containers, completing the replacement of the warning labels. We have also updated the manual on hazardous materials management.
StatusofOilTank
No. of Oil Storage Sites 49
Indoor Tanks 24
Outdoor Tanks 14
SoilEnvironmentStatus
Three separate oil pollution inspections in 2010 gave us a passing grade in each case, reaffirming our efficient soil management.
Inspection Agencies Date of Inspection Inspection Items Inspection Outcome
Geojae City Hall 5/26 BTEX, TPH Adequate
Nakdong River basin Environmental Office 6/1 BTEX, TPH Adequate
Gyeongsang National University 9/30 BTEX, TPH Adequate
Agricultural Biotechnology Research Center
Waste Resources Management
27.2 ton
Hazardous chemical use
Work Process of Waste Material Recycling Center
Scrap ironrecyclingprocess
Sort scrapirons
Findwastesnotcared
Collect Move to waste material
recycling center
Collectscrapiron Movetoscrapiron
storageplace
Gatherscrapiron Sellscrapiron
Sortabandonedscraps
Recycle Move to waste material
recycling center
Reuse at thefield
Existing Process
Additioal Process
Collect wastes
not cared
(Unit: 1,000 tons)
In-house Treatment
20
15
10
5
02008
7.6
1.0
2010
1.5
2009
Total Waste Generated
200
150
100
50
02008
161
2010
156
2009
170
Consignment of Waste Treatment
40
30
20
10
02008
34
39
2009
Recycling Volume
150
120
90
60
30
02008
121
2009
129
2010
116
2010
39
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Act
iviti
es&
Per
form
ance
Environmental Activities Highlights
Environmental improvement in the Company
We analyzed process-specific areas of major environmental improvement, including improving the in-house environment, and conducted intensive training to promote eco-friendly behavior on DSME sites. Moreover, as a result of the implementation of monitoring and guidance on theme-specific activities, a 32% improvement was made in 2010 compared to the previous year. The target for 2011 is to raise this environmental improvement
rate by another 20%.
Developing the Energy Management System (EMS)
We established the Energy Management System (EMS) in 2010 to respond to government policies and our own internal initiatives to reduce costs through efficient energy management. The system enabled standard energy management, information sharing, real-time energy usage monitoring, and the monitoring and controlling of plant facilities. Moreover, reducing energy usage by 5~15% each year is expected to greatly contribute to stronger corporate competitiveness. We also applied the system to the DSME’s head office and to our partner companies, thus laying the groundwork for mutually beneficial innovative projects among large enterprises and SMEs. We plan to maximize our energy reduction strategies based on the accumulated data by further enhancing the system, and establishing a carbon inventory.
Significant savings of material loss/damage
In 2010, the purchasing costs for lost or damaged materials amounted to KRW 3.95 billion, down by KRW 7.39 billion or 65% compared to 2009 (KRW 11.34 billion). This can be attributed to DSME’s improved processes for treating lost or damaged materials, and efforts to reduce such losses or damages in vessel construction. Monthly records for each unit were compiled and distributed to encourage enterprise-wide interest, with due diligence reports written when necessary.
120
100
80
60
40
20
0Jan Feb Mar Apr May
114.3
39.5
Jun Jul Aug Sep Oct Nov Dec
2009 2010
65% Reduce
• Saving energy costs through
automatic operation of the facilities
• Minimizing losses through alarm
systems upon facility breakdowns
• Enhancing efficiency by optimized
facility operation
• Alignment of the energy management process
• Energy usage monitoring
• load reduction through formalization
and standardization of work
• Reducing the energy costs
by over 5~15%
• Reducing maintenance
costs
• Optimizing the utility/
production quality
EnergyCost
Reductions
Actively
Respondingto
GovernmentPolicies
Alignment
oftheEnergy
Management
Process
(Unit: KRW)
Recycling of available resources
As a result of our multiple efforts to recycle available resources through waste reduction, we saved KRW 1.96 billion in costs in 2010. In April alone, we saved KRW 800 million through sites of 826 square meters by recycling discarded electric wires. Moreover, our recycling center achieved cost-savings worth KRW 910 million, and also saved KRW 250 million, that is, double our target amount through reused and soft water recycling. Our 2011 recycling target for available resources is KRW 2.2 billion, up 12.2% from the amount we recorded in 2010. We plan to promote the usage and sharing of information on the recycling of surplus resources, and strengthen guidance
and reviews so that electric wire and other reusable resources are not damaged due to poor management.• Preparing for an energy
target management system
• Establishing a basis
for a carbon inventory
• Establishing a basis
for a certification of Energy
Management System
• Promoting DSME’s corporate
image by actively responding
to government policies
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Env
ironm
enta
lAct
iviti
esH
ighl
ight
s
Total2010Performance
KRW1.96billion2010Target
KRW3.7billionAchievementRate
52%
Reused /Soft Water
2010 PerformanceKRW250million
2010 TargetKRW100million
Achievement Rate240%
Reusing Electric Wires
2010 PerformanceKRW800million
2010 TargetKRW3,000million
Achievement Rate27%
Recycling Center
2010 PerformanceKRW910million
2010 TargetKRW600million
Achievement Rate145%
Receiving the Environmental Ministerial Award at the Green Start Network Contest
In November 2010, DSME received the Environmental Ministerial Award presented by the Ministry of Environment and the Green Start Network for our activities to spread the culture of green living by distributing energy-saving leaflets and saving activities.
Producing and promoting eco-friendly soaps
We seek to recycle wastes in order to protect the environment through small acts in our daily lives. One such example is that we recycle edible oils generated in our in-house restaurants by making soap. In 2010 alone, we produced 10,000 bars of soap using recycled oil. These bars of soap were then distributed to administrative institutions and social welfare organizations in each region. Through this campaign, DSME was able to reinforce our image as an eco-friendly company.
Designated as the Green Wheel Sites of Excellence
DSME encourages the use of bicycles for commuting to and from work and for in-house mobility as a means of promoting green lifestyles and ecological awareness among employees, as well as reducing hazardous gas emissions. We created bike paths enterprise-wide, installed bike stations, and conducted education and campaigns promoting safe bike usage. As a result, DSME received the ‘Green Wheel Sites of Excellence’ award from the Ministry of the Environment as last November.
Goal and Results of Green Office
Green Office Activities
Arranging/Tidyingupwork
performance
Converting/Embodyingwork
methods
Improving/Simplifying
tasks
Maintaining/Managing
performances
Makingworkperformances
asassets
Enhanced Office Productivity
MakingBusinessOutcomesasAssets
Changes/InnovationinWorkingMethods
Improvedofficeenvironment Performancespeed-up
Simplifiedreporting(one-pagereporting)
Reductioninofficegoods/costindocumentmanagement
Implementing the Green Office Certification
We conducted a campaign to enhance work efficiency by regarding all work performance as corporate assets, and sharing and managing documents efficiently in office. Accordingly, 9.5 million pieces of paper were disposed of over three months according to the campaign goals. The campaign was divided in three stages – basics, utilization and application – in order to achieve each target effectively. Over 700 document archives were reduced, saving office space of 780 square meters. Developed eco-friendly, high-efficiency
mega-scale containerships
DSME successfully developed an 18,000-TEU – an eco-friendly, high-efficiency mega-scale containership that uses much less fuel than existing containership models. The hull of the mega-scale containership, which has already received two orders, was optimized. As a result, the containership can transport 60% more cargo using only 10% additional horsepower, reducing transportation costs by about 30% compared to existing containerships. The container loading mechanism was also improved, thereby minimizing disruptions to the marine eco-system due to ballast water. We also plan to deploy systems driven by liquefied natural gas instead of fossil fuels. Propulsion efficiency will increase as we apply a dual stern-hull system, and state-of-the-art technologies such as waste heat recovery systems and gas emission purification systems. Through these measures, DMSE’s ships will transform into genuine eco-friendly vessels.
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ironm
enta
lAct
iviti
esH
ighl
ight
s
We make tomorrow happier
DSMEseekstobecomeacompanythatsharesthehopesofthefuture
withallmembersofsocietyandmaketheworldamorebeautifulplace.
TheworldDSMEdreamsofisonewhereallemployeesreflectthehopes
andidealsofDSMEasweworktosharethefruitsoftheirlaborwith
theworldaroundus.
SOCIAL VALuE
Soc
ialV
alue
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Employee Satisfaction
DSME carries out human resource management in a systematic manner to foster the talent necessary to drive our global shipping and offshore business.
HR PolicyDSME carries out fair and reasonable personnel policies in all areas such as recruiting, evaluation, benefits and training to foster talent that can lead our global shipbuilding and offshore business. Under our HR philosophy of fostering total solution providers to drive the future development of the integrated heavy industries, we have continuously increased investment in human resources development and training.
Human Resources Development & Welfare Programs DSME focuses on strengthening the internal competencies necessary to successfully implement our corporate vision and strategies by developing our employees’ skills and abilities, and strengthening our employees’ desire for self-fulfillment.
Job Rotation System
Our job rotation system enables employees to experience a variety of jobs in our business sites and move beyond Korea, thereby providing opportunities for diverse job experiences and establishing the vision for growth in each employee and the company.
Training for Retirees on Life Planning
DSME offers training programs for retirees to assist them enjoy a more stable post-retirement life: career planning and adaptation to post-retirement life, business start-ups and retraining; how to communicate with spouses; preparations for children’s wedding; life planning; and health management. We have also implemented a labor-management culture to relieve retirees of anxiety and better adapt to the post-retirement life.
2010 Employee Satisfaction Activities
Special Lecture of Couples’ Leadership
We held a special lecture on ‘Couples leadership’ for 30 married couples at DSME in June 2010, helping build a ‘DSME couples’ leadership movement’ to create happier homes.
Holding HR Seminars
We held HR seminars at the Seoul Office and the Okpo Passion Building with the presence of team directors and leaders for two days in January 2010. Employee satisfaction increased as the seminars touched upon issues such as organizational restructuring, wage peaks, the specialist system and vacation periods.
DSME’s Welfare Benefit Monitors
A launching ceremony for the ‘1st line of employee benefit monitors’ was held on August 13, 2010 at the Okpo Passion Building. Through an enterprise-wide selection process in August, the ceremony was attended by 36 ‘employee benefit monitors’, who monitor inconveniences in receiving employee benefits and accessing facilities on DSME sites, and other matters in relating to employees benefits.
HRD System
Human Performance Improvement & Support for Employees’ Desire for Growth
Value Creator: Nurturing talents creating high performance(Team-players,Globalisedexperts,Innovators)
HRD Mission (Including Vision)
5 Core Success Points
HRD Strategy
Leadership Center
• Internalizing core values
• Achievement through work
• Respecting standards and rules on work
• Establishing and strengthening the leader training system (A/l)
• Fostering global elites
• Securing the business capacity to carry out management tasks
• Strengthening neces-sary capacity for each level (Job R&R)
• Innovation of on-site culture
• Mutually beneficial labor-management relationship
• Creating accident-free work sites
Professional Center Culture InnovationDSME Spirit Center
DSME Leadership Model
HRM: Securing talent, placement, evaluation, migration, institution, system
DSMESpirit-drivenHRD(Corevalues&Attitudes)
Competency-basedHRD Innovation-orientedHRD
Training Goal & Direction
Housingsupport: DSME’s dormitory has employee apartments with capacity to accommodate 2,300 families, and dormitories with over 2,500 rooms for singles. We also conduct programs such as loans for housing and funding support to help our employees enjoy a stable personal life.
Educationalsupport: We operate schools ranging from kindergarten to high school so that our employees and their families are provided with a first-class education. In addition, we provide high school and college scholarships to our employees and their families. In 2008, DSME acquired Geoje College in order to develop professionals for the shipbuilding industry, customize human resources development for incumbent employees, and establish a R&D system for a shipbuilding industry.
Healthcaresupport: We operate an affiliated medical clinic, health classes and a healthcare center within the shipyard and a general hospital outside the shipyard, and support our employees and their families with their regular medical needs. Moreover, we support the medical expenses (operation and hospitalization costs) of employees with immediate family members suffering from congenital heart disease or childhood cancer.
Supportingexpenses forcongratulationsandcondolences: DSME not only supports our employees in celebrating milestones in their family life, but we also provide funding for celebratory and condolences events held by employees of our partner firms and their families. We also grant our employees leaves of absence during significant events, such as moving homes, 60th birthdays, and childbirths.
Culturalandrecreationalsupport: We host a variety of cultural events such as concerts, plays, lectures and exhibitions to enhance the wellbeing of our workers and local citizens, and support about 300 groups within the company dedicated to sports, hobbies, and social relationships. Athletic meets, talent contests, and cultural events are also held for foreign workers in our company. Moreover, we do our best to enhance the quality of our employees’ lives by allowing our employees to use the company’s condominium for rest and recreation.
Welfare
Em
ploy
eeS
atis
fact
ion
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Safety and Health
DSME conducts specific and systemic safety and health programs for employees to ensure a healthy and safe workplace in all our production sites.
DSME’s vision for the health and safety environment (HSE) is to comply with the basic principles of respect for human dignity and wellbeing. Accordingly, we operate specialized HSE management systems to ensure effective safety, health and environmental management pursuant to four principles.
HSE CredoWe, the management and staff of DSME, value, respect and care for every person and stakeholder, and all our HSE activities will continuously serve and promote these core values.
HSE Management Principles and Key Figures All employees at DSME are at the forefront, complying with OHSAS 18001/KOSHA 18001 (health and safety) and ISO 14001 (environment) certifications, and are guided by the core values of safety, health and the environment in all our activities. As such, we seek sustainable development by implementing a safe and accident-free work environment.
HSE Organization ChartSafety officers are allocated in every production site to strengthen on-site safety.
HSE Management SystemOur HSE management system sets goals for safety, health and the environment, and enables employees to abide by specific codes of action and guidelines to achieve those goals. Managers are regularly evaluated on the outcome of HSE management and continue to make improvement, thereby preventing potential HSE risks.
HSE Vision, Management System & Code of Conduct
Result
No injury,No illness,
No pollution
Promotion
Goalaccomplishment
HSE VisionPeopleorientedmanagementtoimprovethequalityoflife
Unanimousparticipation(labor/management,partnercompanies)
Sharing
Stimulation
Provicingguidelines Fosteringawarenessandculture
HSECodeofConduct(Obligation,Behavior)
HSEManagementSystem(OHSAS,EMS)
EducationonasystematicapproachEducationonastronginfluence
HSEFaith
HSE Code of Conduct
TheGoldenRuleofHSENever, under any circumstance, compromise any HSE standards.
IncidentPreventionProactively take accident prevention measures by identifying hazards and risks and immediately eliminate or mitigate any dangerous elements.
HealthManagementContinuously strive to improve the work environment, create an incident & injury free illness-free workplace, and enhance the quality of life and health of every person.
EnvironmentalCareProactively engage in environmental care activities to achieve a pollution-free eco-friendly shipyard.
IndividualCommitmentFaithfully conduct ourselves in a manner consistent with our HSE principles and standards.
2010 HSE Credo
CEO’sHSEManagementPrinciples- Sense of Ownership - Accident-free, Disease-free, - Pollution-free business sites
OfficeDirectors’HSEPrinciples- Accident-free by securing safe - and pleasant business sites
HSE Organization Chart
Head of Production Division
General Manager
of Shipyard
ProductionDivisionHSEGroup
Production Team HSE Group ProductionSupportTeamHSEGroup
In-doorProductionTeamHSEGroup
Pre-productionTeamHSEGroup
Out-doorProductionTeam1HSEGroup
Out-doorProductionTeam2HSEGroup
ProjectCompletionTeamHSEGroup
OffshoreProductionTeam1HSEGroup
OffshoreProductionTeam2HSEGroup
HSEPlanningGroup
HSEOperationGroup
HealthAssistantGroup
HSECoordinationGroup
EnvironmentImprovementGroup
HSE Operation Team
Saf
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*1000daysoftrialsisontheprocessforelection,basissupportandchairperson2G
Group
Group:41groups
Unaccomplished:7%
FirstTry100Days:22%
SecondTry100Days:15%
Consecutive200Days:56%
Category
Total
Consecutive 100Days
200Days SecondTry FirstTry Unaccomplished
Group(unit) 41 23 6 9 3
Rate(%) 100 56 15 22 7
Individuals
4/4Quarter
3/4Quarter
2/4Quarter
(Unit: Person)(Unit: Group)
2010 Achievements of Safety Mileage
Total:2,786people
924
2/4Quarter
947
3/4Quarter
915
4/4Quarter
Safety and Health Facilities
Safety Education Facilities
11 facilities that can accommodate up to 1,900 people
• HSE Experience Hall: safety training for new employees, experience training for employees who have worked at DSME for three months, various special safety training programs
• In-house safety training sites: can accommodate 1,700, Passion HANMADANG Collective Safety Training
• Safety training bus: adopted in Korea for the first time for field-specific customized training
Health and Welfare Facilities
DSME systematically manages the health of its employees through a wide range of facilities from industrial accident counseling rooms to in-house clinics in order to offer counseling, accident prevention, accident handling, health check-ups and rehabilitation services.
Fire Protection Facilities
DSME is equipped with fire protection facilities and equipment to minimize any injuries to personnel and damages to facilities upon the occurrence of an accident. As well as in-house fire brigades with fire engines, we also have and ambulances with medics on our sites.
Safety Management ActivitiesDSME has formed enterprise-wide consensus on its goal to prevent major accidents, and actively works to make all its business sites accident-free through its advanced safety system. Furthermore, to promote safety-conscious behavior, DSME conducts rank-specific safety leadership activities.
Voluntary Safety Activities
In order to convey our message of safety management, we conducted a safety campaign by networking closely with employees and asking them practice safety on their way to work —encouraging the use of bike helmets and other protective measures.
Safety Mileage System
We seek to boost morale and achieve our goal of an accident-free, safe workplace environment on all of our sites. To convey our message of safety and raise safety awareness among employees, we conduct a safety mileage system and reward groups and individuals that successfully complete 100 accident-free days. In 2011, we plan to expand the mileage system, setting aside KRW 2 billion in order to further encourage safety awareness among all our employees.
Other Safety Management Activities
We held a Safety Seminar to eradicate major enterprise-wide accidents, implemented a safety campaign to improve work habits, held a safety campaign for representatives of partner companies and organized a contest on World Safety Day that was attended by ship owners.
Operation of the Safety Risk Warning System
We ensure that each DSME unit has a safe work environment by classifying risk into four stages (normal, caution, danger, and warning) according to the safety level of each production site. We seek to establish measures for improvement upon the occurrence of a danger or higher rating through enterprise-wide special safety training and campaigns.
ThewinnerofthesafetycontestheldontheWorldSafetyDay
안전 위험경보
조직 1113주 1114주 1115주 1116주
(전주) (금주) (차주)
전사
생산지원팀
내업팀
외업2팀
해양생산1팀
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HSE Education and Campaigns
Rank-specific Safety Education System
Our rank-specific training has raised the awareness of safety issues, enhanced the effectiveness of training new employees in partner companies and allowed us to designate the appropriate levels of safety training for each employee.
Establishment and Implementation of Rank-specific HSE Training Stage
Team Director/Representative
Group Leader
Intermediate Manager
Office Worker/Technician
unit Director
Production Associate
Foreigner
Newemployeerecruitment
training(8H)
HSEcybertraining(16H)
OJTforHSEmembers
(2H)
TBMtraining(4H)
Reviewonsafety
experiments(0.5H/Month)
Supervisortraining
(16H/Year)
Newemployeerecruitment
training(8H)
HSEcybertraining(16H)
Regulartrainingfor
officeworkers(1H/Month)
Specialtrainingbysites
(6H)
Emergencyhandlingtraining
(4H)
Regulartrainingfor
officeworkers(2H/Month)
Newemployeerecruitment
training(8H)
OJTforHSEmembers
(2H)
Reviewonsafetyexperiments(0.5H/Month)
Specialtrainingbysites
(6H)
Regulartrainingfor
officeworkers(2H/Month)
Regulartrainingforforeigners
(3H/Semi-quarter)
Supervisortraining
(16H/Year)
Regulartrainingfor
officeworkers(1H/Month)
Supervisortraining
(16H/Year)
Supervisortraining
(16H/Year)
Production and Distribution of Safety Training Materials
Understanding and consensus on safety training was raised through the production and distribution of video clips on safety, as well as publication of an HSE booklet and the establishment of a database of safety training materials.
Enterprise-wide Anti-smoking Campaign
We conduct an enterprise-wide anti-smoking campaign to enhance employee health and form a healthy working environment. Since holding a declaration ceremony in November 2010, we have operated a mobile anti-smoking counseling room. We also hold seminars by selecting managers who quit smoking in each team. All employees including 4,736 secretarial workers and 7,930 production associates completed their pledge to quit smoking. We plan to conduct an enterprise-wide anti-smoking review down the road.
Operation of a Health Promotion Booth
We are engaged in a health promotion campaign in conjunction with a public health center in Geojae. A total of 833 employees took part in various programs such as anti-smoking, alcohol reduction, nutrition, mother and child healthcare and psychological health.
2010 HSE Training Performance
SupervisorTraining
ProductionAssociateTraining
OfficeWorker/TechnicianTraining
NewEmployeeTraining(Directmanagement)
JobTraineeTraining
Short-termConstructionWorkersfromOutsideContractors
EmployeesunderDirectManagement
JobTrainees
TrainingHoursbyPrograms
Trainees
(Unit: Hour/Person/Year)
(Unit: Person)
16
36
12
8
8
Saf
ety
and
Hea
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950
2,171
656
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Social Contribution
DSME fulfills all its responsibilities as a corporate citizen, promoting ethics and socially beneficial values through active and systematic social contribution and community-based activities.
In 1993, DSME initiated a social volunteer group consisting primarily of employees that wish to make the world a better place. Currently, we work to bring warmth and hope to society through the DSME Public Charity Group, which we established in 2003.
CSR Overview and Organization
CSR Slogan“The joyofsharingand togetherness” is the slogan selected to foster awareness of the importance and necessity of social contribution and to encourage participation by all our employees. It is widely used to promote social contribution events and projects such as vests for a charity group.
Category Major Activities
ExecutiveOffice Urgent relief activities (Salvaging the naval vessel ‘ROKS Cheonan’) volunteering to clean up oil spills (Recovery of local bay area) Support for the Militia Council and elderly living alone, Poverty-experience Support for rural villages, Environment preservation, Model CSR Awards
PublicVolunteer’sCommittee volunteer activities for the local community (love sharing, Support for communities Birthday parties, Renovation of gym facilities) Environmental preservation (Ocean cleaning, Saving the environment)
Damuldan love nation (Relief activities at home and abroad, Support for Chinese Korean)
love company (Safety campaign, Cleaning activities, One company one rural area campaign)
love community (Support for athletic facilities for local schools, Support for the elderly living alone, Sisterhood of one company one rural area)
TheSoundofNewBudsCommittee Care children
Blood donations
Programs for hospitalized children
TrueLoveWelfareCommittee Assist the elderly who live alone and provide welfare facilities
Scholarships
Bathing the disabled, Meeting with the disabled
TechnologySharingCommittee Building homes and providing repairs
HopeCommunityService Bathing the elderly
Support for welfare facilities (Food drives, Cleaning buildings, labor)
Assist the elderly living alone (Birthday parties, Picnic)
UnderwaterVolunteerGroup Cleaning underwater
Major Activities of DSME Public Service Group
DSME’s system
for social contribution
activities
CSR System
Establishmentofinfrastructureforsocialactivities(Social contribution calendar, Self-effort
management, Social contribution fund)
Executives’andworkers’social
contributionactivitiesbasedonlocal
community
Korea’srepresentativesocialcontribution
activities
Community-drivenglobalsocial
contributionactivities
Head
Head of Operating Division
Public Volunteer’s Committee
Public volunteer’s Committee (2,681 members)
Damuldan (1,529 members)
The Sound of New Buds Committee (1,352 members)
True love Welfare Committee (939 members)
Technology Sharing Committee (78 members)
Hope Community Service (47 members)
Underwater volunteer Group (57 members)
CSR Organization
Deputy Head
Head of HR & Administration
Team
Executive Office
Secretary-general
leader of Corporate Culture Group
Secretariat
2 dedicated personnel
Infrastructure for Social Contribution
Social contribution calendar
DSME operates a social contribution calendar on the company's internet portal so that any employee may volunteer for an activity of their choice. The social contribution calendar is designed to automatically link their accomplishments with the Social volunteer History Management System, which records the projects and the number of volunteer-hours performed by each employee.
Social contribution award system
We are creating an environment where employees actively participate in social contribution activities by giving social service awards to high-performing individuals and groups that work to help the disabled and undernourished children.
Soc
ialC
ontr
ibut
ion
Donating computers to social welfare facilities
The DSME Public Charity Group carried out its activities by visiting social welfare centers and orphanages in the community and providing them with computers. The volunteers took outdated computers, cleaned and upgraded them, and donated them to social welfare centers like Seongjiwon and Seongrowon, and to orphanages.
CSR Highlights
CSR Highlights
Volunteering to clean up oil affecting Maemuldo Island
In August 2010, employees at DSME and local residents were at the forefront of cleaning an oil spill to save coastline areas affected by an oil spill off Maemuldo, near our production site. 200 employees took part in the effort, working through the weekends, with DSME donating adsorbents, protective clothing, gas masks, rubber gloves and meals for employees.
Supporting the Militia Council
DSME conducted a unique project, the first-of-its-kind in Korea, to support the elderly living alone who used to serve student soldiers. DSME signed a sisterhood affiliation agreement with the Militia Council of Korea in November, promising to support 100 impoverished households as well as aged former-militia members living alone. By donating rice, electric mats and gift certificates, we helped the elderly survive the harsh winters. As such, our charity continues by supporting various events and volunteering.
The labor-management offering donations to help the needy
In January 2011, management and the employees of DSME donated KRW 160 million to Geojae Metropolitan Government to help the impoverished. The fundraising event held by the management and employees was attended by over 8,700 – over 70% of all our employees. Moreover, we purchase local produce worth over KRW 3 billion every year to feed our employees, helping revitalize the local economy as well as protecting local businesses.
Volunteering to repair houses
A total of 15 employees from the Technology volunteering Group, the Sea Trial Operation Group and the Submarine Design Group repaired the house of an elderly woman in Jangseungpo. After the repairs, the volunteers shared a lunch of pork and liquor prepared by a community hall in Jangseungpo, providing companionship to the elderly in the center. volunteers who had learned massage techniques provided foot massages for the elderly to help relieve their fatigue.
Volunteering in communities during the Month of the Family
The DSME Public volunteer’s Committe reached out to different parts of the community, engaging in various volunteering activities in May – the month of the family. These events included an outing to a train village at Gokseong, South Jeolla Province with 65 seniors; the ‘Smiling Day’ event where volunteers enjoy a meal and a movie with 35 orphans; providing slip prevention taping on the stairs at Okpo Welfare Center; and giving out 17 bags of rice to restaurants for the elderly. Members of the Hope Charity Group, which consists of wives of employees, held an event on Parents’ Day to visit elderly people living alone, and gave them carnations.
Employees’ children joining the poverty-experience camp
We held a poverty-experience camp for 70 children of employees and executives during the summer holidays in 2010, so they could learn about the suffering experienced by disadvantaged children. The purpose of the camp was to provide our future global leaders with empathy and understanding by experiencing the life of children growing up in the least developed countries.
Supporting the salvage of the ‘ROKS Cheonan’
‘Daewoo No.3600’, one of the largest offshore cranes in Korea, was dispatched to assist in the rescue of the ‘ROKS Cheonam’, and played a central role in salvaging the sunken vessel. After receiving the navy’s request for support in March 2010, ‘Daewoo No.3600’ immediately set out for Baekryeongdo, pulled by three tugboats at a top speed of 4 knots (approximately 7.4km/h) for approximately five days. The offshore crane was accompanied by an anchor boat and 35 DSME employees. For several days, ‘Daewoo No.3600’ played a key role in the salvage activities – a national
crisis – despite its critical role in DSME’s production facilities. Officials from a veteran support organization observing the salvage encouraged
the participating DSME employees by visiting the site. After the local media disclosed the risks taken by the ‘Daewoo No.3600’ crew
while salvaging the sunken ship in stormy waters, our website was flooded with messages of praise and encouragement.
Helping colleagues
To support the wives of employees diagnosed with acute leukemia, 80 employees in partner companies and the head office held a blood drive. We strive to promote empathy and awareness in the community, including raising funds for colleagues suffering financially due to illness in the family.
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Awards and Recognition
DSME’s technological prowess, contribution to the national economy and transparent management has been recognized by several prestigious domestic institutions, further confirming our status as a leader in the domestic shipbuilding and marine industries.
2010• CEO Nam Sang-tae awarded the 2010 Entrepreneur of Korea Award [KMAC]
• Awarded the Bronze Prize in the 2010 Korea Technology Awards presented by the Minister of Knowledge Economy [Ministry of Knowledge Economy]
• Recognized as a Company of Excellence in labor-Management relations [Ministry of Employment and labor]
• Recognized as a Company of Excellence at the 2010 Korea CSR Award [Hankyorae Newspaper]
• Received the Environmental Ministerial Award at the Green Start Network Contest [Ministry of Environment]
• Designated a Green-wheel Business Site [Ministry of Environment]
• Awarded the Grand Prize at the CIO Awards [CIO Communication]
2009• Received the Korean Export Management Award [Ministry of Knowledge and
Economy]
• Designated a leading Resource Recycling Company [Ministry of Environment]
• Won 10 billion dollar Export Tower Award on Trade Day
• Recognized for Outstanding Security Inspections - Best Security Corporation [Ministry of Defense]
2008• Presidential Recognition for Services in Shipbuilding on Shipbuilding
and Marine Day
• Awarded the Presidential Award in the 2008 Korea IT Innovation Awards
• Received the Global Management Award
• Awarded the Top Class Company CEO Prize
• Obtained ISO 27001 certification
2007 • Awarded the Presidential Award in the Korea Technology Awards (shared by 3
shipbuilding companies) [Korea Industrial Technology Foundation]
• CEO Nam Sang Tae awarded the Gold Tower Order of Industrial Service Merit, Won 6 billion dollar Export Tower on the 44th Trade Day
• Received Certification of Manufacturer of World's Top Class Products [Korea Industrial Technology Foundation]
• Recognized as a Company of Excellent Governance [Corporate Governance Service]
• Awarded the Grand Prize in the large Enterprise Section of the 19th labor- Management Cooperation Awards [Korea Employers Federation]
• Recognized in the Transparent Management Section at the 5th Korea Ethical Management Awards [New Industry Management Academy]
2006• Received Ghassan Ghandour (Gulf marine) Industrial Service Medal on the 43rd
Trade Day
• lGN-Rv selected as one of the top ten new technologies [Ministry of Commerce, Industry and Energy]
2005• Awarded Grand Prize for Best IR of the Year [MoneyToday]
• Recognized as the Best Corporation in the Fourth Annual Korean Best Corporation Awards, Received the World-class Business Grand Prize [Korea CEO Association]
• Awarded 21st Century Management Grand Prize in the Technology Category [The 21st Century Top Management Club]
• Won the Excellent Transparent Management Award [Five business associations]
2004• Awarded Grand Prize for Best IR of the Year [MoneyToday]
• Won Stevie Awards [IBA]
• Won the Best Talent Management Award [Korea Management Association]
• Won the top prize in the Green Management Award [Korea Management Association]
• Recognized for having the best corporate governance [ClSA, Asian Corporate Governance Association] Included in the top 6 firms along with Samsung Electronics, POSCO
• CEO Jung Sung leep named the 2004 CEO of the Year in Asia in the transport category by Asia Equities Market Report [Institutional Investor Research Group]
• Ranked 19th in sales and net profits among the top 100 Korean firms [Joint selection by Korea Information Service & Hankyung Business Weekly]
• Recognized as a Company of Excellent Governance [Corporate Governance Service]
• CEO Jung Sung leep won the 13th Dasan Financial Awards' CEO category [Korea Economic Daily]
• Awarded top prize in the Community Service in local Economy Category [lions Club]
• Ranked 3rd in the third annual survey of corporate transparency [Financial weekly Economy 21, Samsung Economic Research Institute]
2003• Awarded Grand Prize for Best IR of the Year [MoneyToday]
• CEO Jung Sung leep awarded the Gold Tower Order of Industrial Service Merit, Won 2 billion dollar Export Tower on the 40th Trade Day
• Awarded the Helios Awards for Performance and Partnership [BP Group]
• Awarded the Global CEO Prize [Maeil Business Newspaper]
• Named the workplace with best health and safety practices in the shipbuilding industry [Ministry of labor]
• Recognized as a Company of Excellent Governance [Corporate Governance Service]
2002• Awarded Tower Order of Industrial Service in vocational Ability Development
Training Promotion Contest [Ministry of labor, Human Resources Development Service of Korea]
• Awarded the Best in Corporate Management Improvement Award [Korea Management Association]
• lNG carrier named a world-class product [Ministry of Commerce, Industry and Energy]
• Named a top investment candidate among the domestic shipbuilding industry [Maeil Business Newspaper]
2001• Obtained OHSAS 18001 certification
• Awarded the silver prize in the National Convention on Quality Control Circles on Export Day
• lNG carrier awarded the Iron Tower Order of Industrial Service Merit for commercializing new technologies [Korean Agency for Technology and Standards]
• lNG carrier selected as one of Korea's top ten products [Samsung Economic Research Institute]
• lNGC IAS certified as New Technology (NT) and Excellent Machine (EM) [Ministry of Commerce, Industry and Energy]
• lNGC IAS named one of Korea's top ten new products to lead the new millennium [Ministry of Commerce, Industry and Energy]
• Obtained Defense Quality System Certification [Ministry of Defense]
Win-win Management Activities with Partner Companies
Holding regular family seminars to create synergy by expanding communication channels with our partnership companies
DSME held its first meeting with the heads of its partner companies, attended by CEOs from domestic partner companies and DSME management. The purpose of the meeting was to expand communication channels and increase synergy between companies through regular bi-monthly seminars. The seminars, beginning in May 2010, were held to expand communication and share matters of mutual cooperation. DSME strives to create synergy for better, more effective communication, and to establish a management system befitting DSME’s prestige as the number of partner companies steadily rises.
Holding meetings of the Industrial Safety and Health Committee
Fully aware of the various issues facing the company, labor and management jointly held the Industrial Safety and Health Committee, attended by the DSME president and the chairman of the trade union, in order to gather opinions and promote a safe working environment.
Global Top Cooperative’s General Meeting
Our external cooperative council, The Global Top Cooperative, held its general meeting on January 15, 2010, with the presence of employees and executives including DSME president Nam Sang-tae and the heads of 14 partner companies. Ten employees received awards of merit from the council for excellence in work performance. Plaques of honor were given to 24 companies for excellence in their comprehensive evaluations, which covered trading volumes, quality and meeting deadlines. Plaques of thanks were awarded to 8 companies for contributing to the enhancement of productivity and cost reductions.
Partnership between the parent company and partner companies
On January 26, 2010, DSME held a partnership ceremony with all our partner companies that was attended by DSME president Nam Sang-tae and 124 CEOs from our partner companies. The ceremony was held to recognize the efforts of each partner company throughout the year, and to commit to the second-phase of our vision under our F1 Strategy. As President Nam said during the ceremony, “The passion and participation of our partner companies is essential for DSME to become the World’s No. 1 Heavy Industries Group under the second phase of the F1 Strategy.” The head of the cooperative for our partner companies, said, “In order to achieve the DSME’s vision, we will ensure that we establish a genuine partnership between the parent and partner companies.”
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Ministry of EnvironmentEnvironmental Report Guideline
General Status
Description Index Page
CEO’s message 1.1 04~05
Introduction Company profile 1.2 06
About the report 1.3 02
Summary 1.4 02
Environmental policy 2.1 26
Environmental Mid-to long-term environmental goals 2.2 26vision and Strategy Environmental goals accomplished in the year 2.3 26
Environmental goals of the following year 2.4 26
Environmental management system 3.1 27
Environmental accident response system 3.2 28
Environmental audit 3.3 28Environmental
Environmental education 3.4 28Management System Environmental performance evaluation (EPE) 3.5 29
Environmental accounting 3.6 30
External environmental investment 3.7 30
Resource use 4.1 36~37
Water use 4.2 34~35
Energy use 4.3 39~40
Response to climate change 4.4 31
Use and emission of ozone depletion materials 4.5 32~33
Emission of air pollutants 4.6 32~33
Emission of water pollutants 4.7 34~35
Environmental Impact Waste discharge and recycling 4.8 36~37and Performance Soil contamination management 4.9 36
Environmental impact assessment 4.10 29
Eco-friendly products 4.11 23, 41
Eco-friendly packaging 4.12 -
Eco-friendly transportation 4.13 41
Health and safety 4.14 46~51
Noise and vibration 4.15 -
Harmful chemical substance management 4.16 37
Ecosystem preservation effort 5.1 38~41
Eco-friendly supply network management 5.2 41
Stakeholders legal compliance 5.3 30Partnership Certification and awards 5.4 12, 57
Environmental communication activities 5.5 02, 40, 54
Response to international environmental regulation 5.6 31
DSME Environmental ReportsEnvironmentalReport
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2005 2006
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DSME 2010 Environmental & Social Report Reader Survey
DSME places great value on the opinions of the readers. Please take a moment to consider the following questions.
Your invaluable feedback will be reflected in future reports.
1. Please state your affiliation.① Employee ② Shareholder ③ Customer ④ Supplier ⑤ NGOs⑥ local resident ⑦ Investment analyst ⑧ Student or academic ⑨ Others
2. How satisfied are you with the report?① Extremely satisfied ② Satisfied ③ Neutral ④ Unsatisfied ⑤ Extremely unsatisfied
3. Which section was of the most interest to you?① Sustainability of DSME ② Economic performance ③ Environmental performance ④ Social performance
Environmental Management Employee Satisfaction
Activities and Performance Safety and Health
Social Contribution
4. Please comment on areas that need improvement and information you would like to see in future reports.
5. If you have further comments, please specify.
△Please provide us with the following information if you would like to receive the DSME Environmental & Social Report in the future.
Name :_____ Address :________
Telephone :__ Fax :__ E-mail :____
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Ministry of EnvironmentEnvironmental Report Guideline
General Status
Description Index Page
CEO’s message 1.1 04~05
Introduction Company profile 1.2 06
About the report 1.3 02
Summary 1.4 02
Environmental policy 2.1 26
Environmental Mid-to-long-term environmental goals 2.2 26vision and Strategy Environmental goals accomplished in the year 2.3 26
Environmental goals of the following year 2.4 26
Environmental management system 3.1 27
Environmental accident response system 3.2 28
Environmental audit 3.3 28Environmental
Environmental education 3.4 28Management System Environmental performance evaluation (EPE) 3.5 29
Environmental accounting 3.6 30
External environmental investment 3.7 30
Resource use 4.1 36~37
Water use 4.2 34~35
Energy use 4.3 39~40
Response to climate change 4.4 31
Use and emission of ozone depletion materials 4.5 32~33
Emission of air pollutants 4.6 32~33
Emission of water pollutants 4.7 34~35
Environmental Impact Waste discharge and recycling 4.8 36~37and Performance Soil contamination management 4.9 36
Environmental impact assessment 4.10 29
Eco-friendly products 4.11 23, 41
Eco-friendly packaging 4.12 -
Eco-friendly transportation 4.13 41
Health and safety 4.14 46~51
Noise and vibration 4.15 -
Harmful chemical substance management 4.16 37
Ecosystem preservation effort 5.1 38~41
Eco-friendly supply network management 5.2 41
Stakeholders legal compliance 5.3 30Partnership Certification and awards 5.4 12, 57
Environmental communication activities 5.5 02, 40, 54
Response to international environmental regulation 5.6 31
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DSME HSE Operation Team1, Aju-dong, Geoje-si, Gyeongsangnam-doKorea
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Head Office
85, Da-dong, Jung-gu, Seoul, Korea
Tel: +82-2-2129-0114 | Fax: +82-2-756-4390
Okpo Shipyard
1, Aju-dong, Geoje-si, Gyeongsangnam-do, Korea
Tel: +82-55-680-2114 | Fax: +82-55-681-4030
CAP INES 4,600TEU CONTAINERSHIPOwner: B.SchulteDelivery: Jan. 27, 2010
DAR SALWA 318K VLCCOwner: KOTCDelivery: Oct. 13, 2010
BARCELONA KNUTSEN173.4 CBM LNGCOwner: KuntsenDelivery: Apr. 21, 2010
ARCTURUS VOYAGER320K VLCCOwner: Maran TankerDelivery: Jul 19, 2010
MSC SAVONA14,000TEU CONTAINERSHIPOwner: CP OFFENDelivery: Mar. 19, 201
EXPEDIENT150.9K CBM LNG-RVOwner: EXMAR NVDelivery: Apr. 2, 2010
VIRGO STAR317K VLCCOwner: VelaDelivery: Jun. 23, 2010
AGROS4,380TEU CONTAINERSHIPOwner: MARLOW NAVIGATIONDelivery: Jul. 29, 2010
CMA CGM CORTE REAL13,300TEU CONTAINERSHIPOwner: CMA CGMDelivery: Aug. 16, 2010
Outstanding Vessels in 2010
To limit environmental impact, this report was printed with soy-based ink,
and the content has been reduced to fit about 60 pages.
