DN V Forum
Norwegian Prime Minister Jens Stoltenberg
Finding the green way Also inside: > CEO of the Ulstein Group Gunvor Ulstein on innovation > HSBC on sustainability > Eijkman Institute on biorisk
no 02 2007
Editorial: Market mechanisms for real and sustainable change
Prime Minister Jens Stoltenberg: “You have a key to reducing climate change”
Carbon bubbling in the North Sea
CEO of the Ulstein Group Gunvor Ulstein: “Innovation is our tradition”
HSBC: Money talks – about sustainability
Eijkman Institute: Combating avian flu
Boeing: Getting new wings
National Health Service: Committed to safety
Port infolink: Speeding up cargo handling in Europe’s busiest port
MOL tackles safety issues
Petrobras: Deeper and deeper
Vinashin: The sky is the limit
CEO of Aker Kvaerner, Martinus Brandal: Bringing out the dynamism
Meyer Werft: Finding IT-failures in advance
Last word: UN Climate Chief sees variable treaty
Market mechanisms for real and sustainable change A powerful tool for sustainable development is to creatively use market mechanisms. Idealism is valued, but market mechanisms are more effective tools for real and sustainable change – in particular when they can create a win-win situation. This may well be by creating markets where demand does not yet exist. The Kyoto Protocol – with its mechanism for quota trading – is a good example of how business and market incentives are built into an international ambition for protecting the environment. The objective of these mechanisms is to initiate projects that lead to additional emissions reductions of CO2 and other greenhouse gases. The mechanisms provide both buyer and seller with economic incentives. In this manner the mechanism of quota trading helps to reduce emissions at the lowest possible cost. In order to make the Kyoto trading mechanisms work, the world needs competent, credible and independent organisations to both validate the realism in the projects and verify the actual emissions reductions. The quota trading mechanism is dependent on the trust and confidence we are able to bring into the system. DNV is engaged by the United Nations Framework Convention on Climate Change (UNFCCC) in validation, verification and certification of many of the now more than 2,100 Clean Development Mechanism projects as well as in a number of Joint Implementation projects in different stages of their development.
We can confirm that the strict framework defined by the UN has been an important mechanism to secure the trust in the emissions reduction certificates. The certificates are successfully introduced as tradable assets in the market place.
In order to make the Kyoto trading mechanisms work, the world needs competent, credible and independent organisations to both validate the realism in the projects and to do the verification of the actual emissions reductions. Another aspect we have observed is that the present projects are based on existing technology. The mechanisms therefore lead to a global synchronising of the use of available technology – as intended. However, new technology also needs to be encouraged. I am a firm believer that the most effective way to address our environmental challenges is by developing new and cleaner technologies. Mechanisms to support the development and introduction of new technology must be found. We need a dramatic increase in our research and development of environmentally friendly technology.
HENRIK O. MADSEN President and Chief Executive Officer
“You have a key to reducing climate change” “DNV’s efforts represent a prerequisite for the success of our climate change policy,” said the Norwegian Prime Minister Jens Stoltenberg, who is aiming to have one of the world’s most ambitious environmental policies. He turned to DNV to discuss international quota trading and CO2 capture and storage. TEXT EVA HALVORSEN. PHOTO: BJØRN LANGSEM
“It is crucial that society at large has trust and confidence in the way the Clean Development Mechanism works. And this is where DNV comes into the picture: as an independent third party verifier. You have a key to reduce the climate change. What you are doing is extremely valuable to the environment,” said Norwegian Prime Minister Jens Stoltenberg while visiting DNV’s headquarters.
“I have travelled the world to learn about Clean Development Mechanism projects and quota trading mechanisms, and now I understand that world class expertise is available 15 minutes down the road,” the Prime Minister commented with a smile after his visit. Here between DNV’s CEO Henrik O. Madsen and DNV´s head of corporate relations Sven Mollekleiv.
The Norwegian Government is taking a strong line on green thinking and has issued an white paper calling for significant CO2 emissions reductions. Claiming that the white paper comprises the most ambitious climate goals any government in any country has presented for a parliament to discuss, the government promises that Norway will be carbon neutral by 2050. Norwegian emissions will be reduced by 30% from 1990-2020, and the country will surpass its Kyoto commitments by 10%. “Norway will be a pioneering country as regards environmental policy. In order for future generations to have access to a good environment and unsullied nature, environmental considerations must be a part of everything we do. We will develop our environmental policy based on the principle of sustainable development, which includes a requirement of solidarity with future generations, both internationally and in Norway,” said the Prime Minister.
The forecasts for Norway’s future CO2 emissions show that they will be approx. 59 million tonnes of CO2 equivalents (ie, all climate gas emissions converted into CO2) in 2020. The government proposes to reduce global emissions by 10-13 million tonnes. In addition, three million tonnes which will be captured in Norwegian forests until 2020 are included. This makes a total of 13-16 million tonnes. To achieve the goal of a 30% CO2 cut by 2020, Norway’s emissions in 2020 must not be more than 35 million tonnes. A cut of 13-16 million tonnes and increase in forests in Norway will mean that between half and two thirds of the emissions reductions will be made within Norway. The rest of the cuts are to be covered by the so-called flexible mechanisms of the Kyoto Protocol, which provide for transferable credits from greenhouse gas emission reduction projects. One of these is the Clean Development Mechanism, according to which industrialised countries or com-
panies can receive credits for financing emission-reduction projects in developing countries. DOMESTIC AND INTERNATIONAL EFFORTS
“To achieve our ambitious goals, we must invest in both domestic and international efforts, such as Clean Development Mechanism projects. We plan to cover some of our reductions through such projects. And for such mechanisms to work as intended, the world needs independent third party verifiers, such as DNV, to ensure trust and confidence. DNV’s contribution is a prerequisite for our climate change politics to succeed,” said Mr Stoltenberg. “An important aspect of the Clean Development Mechanism – in addition to the emissions reductions – is that, through this system, developing countries gain a new source of financing and state-of-the-art technology for their sustainable development, whereas we can supplement our DNV Forum no 02 2007
Luc Larmuseau, head of DNV’s climate change services:
Ensuring further growth “Today, DNV has more than 300 trained climate change auditors worldwide, representing both technical expertise and local presence. Our market dominance within the Clean Development Mechanism market; 46% of all validations as of July 2007 were performed by DNV, as well as several awards within the industry as ‘best verifier’, confirms DNV’s position as a world leading provider of third party services for climate change projects. We are now doing significant investments in resources, people and know-how to ensure further growth within this area. We will focus on key markets such as India and China, and continuing our focus on emerging services such as the voluntary services where the biggest opportunities are in the U.S.,” says Luc Larmuseau.
commitments to reducing our emissions at home,” he continued. DISCUSSIONS WITH DNV EXPERTS
Aiming to bring his country to the absolute forefront of climate friendly regimes, the Prime Minister spends much time studying all facets of the CO2 emissions issue. He arrived at DNV’s headquarters in June accompanied by four key advisors to discuss international quota trading and CO2 capture and storage technology with DNV’s experts. Mr Stoltenberg had expressed an interest in paying DNV a visit to discuss details and learn more about technological challenges and the quota trading mechanisms. DNV’s CEO Henrik O. Madsen presented DNV’s global position and role, concluding with the challenges he can see at this stage and what is expected from the political establishment, before the discussions started.
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Elisabeth Tørstad, head of DNV Cleaner energy and utilities:
A role to play in the big picture “In my opinion, Norway is sitting on a gold mine with regard to the possibilities of storing CO2 in the North Sea. Not only will the empty reservoirs secure a safe storage, but it will also drive the development of new technology and secure Norway as an important energy nation in the future beyond the oil and gas era. DNV has its competence background from 140 years of standard setting, and we are – through our global presence – in the position to bring forward our best practise experience. During these past years DNV has gained substantial experience within CO2 capture and storage, as well as within other technological areas to fight climate change, such as renewable energy and energy management. I believe we have a role to play in the big picture,” says Elisabeth Tørstad.
Carbon bubbling in the North Sea There is a huge potential for reducing CO2 emissions through extensive storage under the North Sea seabed. This is the conclusion of a report handed over to the Energy Ministers in the UK and Norway. TEXT: SVEIN INGE LEIRGULEN PHOTO: GETTYIMAGES
LORD PETER TRUSCOTT
Former secretary of State for Energy in the UK
ODD ROGER ENOKSEN © OED
Former Minister of Petroleum and Energy in Norway
As a significant commitment from the highest political levels and major oil and gas players in the UK and Norway, a task force was established in 2005 to determine broad, common principles for how and where CO2 could be stored in the North Sea sub-seabed. It has now delivered its first conclusions to the two countries’ Energy Ministers. Despite significant institutional uncertainties and associated risks, this report reveals a huge potential in reducing CO2 emissions. By the end of 2005, an “Agreed statement by the United Kingdom and Norwegian Governments” had been signed in London by these countries’ Energy Ministers. In this statement, they agreed to establish a North Sea Basin Task Force to develop common principles for managing and regulating the transport, injection and permanent storage of CO2 in deep geological formations beneath the bottom of the North Sea. Since then, the Task Force, composed of public and private bodies including DNV,
has worked to complete its first deliverables. Lord Truscott, Minister of State for Energy in the UK, and Mr Enoksen, Former Minister of Petroleum and Energy in Norway, received the Phase 1 report ‘Storing CO2 under the North Sea Basin’ in June. “This report is a result of the close cooperation that exists between our two countries. The transport and storage of CO2 is a major aspect of this work and the report proposes useful guidelines for the capture and transport of CO2 with relevance to both countries. This is an important input to our work on how to handle climate challenges,” Mr Enoksen said. “It is very timely in providing sound and consistent guidelines for both our countries on the transport and storage of CO2 beneath the North Sea. It means that both of us can effectively avoid future CO2 emissions, and make a real contribution to solving the worldwide problem of climate change,” signs Lord Truscott in the report.
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GAP ANALYSIS FROM DNV
“DNV’s role in the Task Force included to carry out the gap analysis to identify barriers to the deployment of carbon capture and storage,” explains Ståle Selmer-Olsen, DNV’s representative in the Task Force. “We assigned a ‘traffic light’ to help prioritise further actions to close these gaps,” he explains. The Task Force report concludes that the benefits to the UK and Norway from the successful deployment of carbon capture and storage in the North Sea Basin are enormous, but that it is clear that carbon capture and storage suffer from
uncertainties and associated risks to be managed. The recommendation is to amend existing North Sea legal and regulatory frameworks to enable carbon capture and storage. Furthermore, DNV’s idea of a management approach to carbon capture and storage projects using a risk-based qualification process for storage sites is recommended. Full accreditation of carbon capture and storage under the EU Emissions Trading Scheme (EU ETS) and Clean Development Mechanism/Joint implementation of the Kyoto protocol will be vital as commercial incentive. The benefits of independent verification of carbon
capture and storage projects were recognised. SECOND PHASE IN PROGRESS
Both Ministers have asked the Task Force to begin the second phase of its work with the aim of completing it in time to report to a further ministerial meeting in 12 months’ time. Phase II will build on the findings of Phase I and address the critical issues identified, share knowledge and follow up on the infrastructure study. Consideration will be given to widening the Task forces’ membership to include other North Sea region states.
! The North Sea Basin Task Force: The North Sea Basin Task Force is made up of representatives of the following government bodies and industry in Norway and the UK: n n n
UK Department of Trade and Industry UK Department of Food and Rural Affairs Norwegian Ministry of Petroleum and Energy
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n n n
Norwegian Ministry of the Environment UK Crown Estate British Geological Services
DNV, Statoil, Shell, Hydro, BP Alternative Energy AEA Energy & Environment managed the secretarial functions
“WATCHING STEEL PLATES COME IN AND A LARGE, COMPLEX SHIP SAIL OUT IS THE MOST EXCITING SIGHT I CAN IMAGINE. THAT MAKES ME PROUD.” GUNVOR ULSTEIN, CEO OF THE ULSTEIN GROUP.
TEXT: EVA HALVORSEN PHOTO: NINA EIRIN RANGØY
“Innovation is our tradition”
Orchestrating winning performance: Together, siblings Gunvor and Tore Ulstein are dynamite. With Gunvor Ulstein as the CEO and Tore Ulstein as deputy CEO and managing director of Ulstein International, they are now in the process of taking the family company a huge step forward.
DNV Forum met an enthusiastic Gunvor Ulstein at this year’s NorShipping exhibition. The 38-year-old is the CEO of the Ulstein Group, which is located in Ulsteinvik, at the island Hareid off the West Coast of Norway. After graduating from the Norwegian School of Economics and Business Administration (NHH) in Bergen, Norway, she worked her way up in the family company until she in 1999 was asked by her father – chairman of the board, Idar Ulstein – whether she wanted to take over as CEO of the “new” Ulstein Group (see fact box). “I was given just 10 minutes to make up my mind,” she says. “My father’s philosophy is that you either like an idea immediately and accept the offer, or you’re not the right person.” Anyway, she said yes and has since then, among other things, been awarded the prize as ‘Business woman of the year’ in Norway. The jury commented that: “She is extremely enterprising and active and has a huge work capacity. A dynamic and energetic person, she has a very good understanding of the business she manages.” She was obviously a good choise by Idar Ulstein. IMPRESSING THE MARITIME WORLD
“Ships are still going to be built in Norway, but we must be at the forefront when it comes to creativity and innovation,” states Gunvor Ulstein, the CEO of the Ulstein Group. “We have tradition and shipbuilding in our veins and we’ll survive.”
Ships have been built for the global market for generations in Ulsteinvik. Shipowners from all corners of the world have been impressed by the innovation and competitive ability to be found on this island. Shipping companies from all over the world come here to order offshore vessels – even from Korea and China, which have the world’s biggest shipbuilding environment in their backyards. Running a family-owned company must be a multi-faceted challenge? “There are no doubt some other factors
to be taken into account than in a normal stock listed or limited company. The family dimension is very good if the members manage to cooperate and work towards common goals – and we do, thankfully. The family aspect provides an extra positive dimension, which in our case generates additional energy. But, naturally, it’s challenging to have several generations of a large family, all of whom are entitled to give their opinion,” she says. Her elder brother, Tore Ulstein, is currently the Group’s deputy CEO and managing director of Ulstein International, and it is clear that these two work well together and that the chemistry between them is good. “In a family company like ours, we think about the generations to come and our employees. What we have is in a way on loan. It’s something we have to safeguard for the future.” However, she does not hide the fact that, as a family company in a small town, the Group’s social responsibility is different to that of most of its competitors. “The best way I can demonstrate our social responsibility is to ensure that the Group stays profitable and thus safeguard jobs,” she states, adding that they naturally also do all they can to ensure that the local community can develop. Ms Ulstein believes that limitations are something one imposes on oneself, and that there are great opportunities working from Norway. What is important in a global perspective is that conditions are such that companies have a level playing field. “We collaborate when we can, and compete when we have to. This leverages our market position and strengthens our feeling of solidarity with the Norwegian maritime cluster,” she comments. >
RENOWNED FOR INNOVATION
At the NorShipping exhibition the Ulstein Group – as last year – won the ‘Ship of the year’ prize. This year for its Normand Seven; a Vik-Sandvik design VS 4220 OCV. The jury pointed out that the ship has raised the Norwegian yard industry into a new, future-oriented niche. Handing over the prize, Norwegian Minister of Trade and Industry Dag Terje Andersen emphasised that Ulstein always does its best, and plays an important role in the Norwegian maritime cluster’s efforts to promote Norway’s maritime industry. What is important for encouraging innovation? “A prize like this is extremely valuable – it’s nice and draws attention to us. But we don’t make our living from prizes,” she underlines. “We make our living from innovative ship designs.” She says there are three aspects which must be present in order for innovation to take place: “One must have the desire, the ability and be allowed to experiment. And all these aspects are equally important. In addition, it’s important for a company like ours to be tolerant, have an open work environment and lots of good humour. These factors make conditions suitable for positive and good vibrations and innovative agility.” She does not get provoked by employees having time for informal communication in the office. “That’s often when the best ideas come up,” she says.
us,” says Ms Ulstein, “but we need more legs to stand on, both as regards products, services and geographical locations.” Under her management, the Group is now going to extend its product and service range and enter the short sea shipping segment. Her brother Tore Ulstein will play a key role here. Ever since the new Ulstein Group saw the light in 1999, it has gradually expanded its product and service portefolio and operations in Norway, as well as in Brazil, Turkey, Slovakia, Poland and China. Says Tore Ulstein: “Ulstein International will be the Group’s leader in its global endeavours, and important tasks will be acquisitions and mergers in addition to continuous international business development for the whole group”. As regards geographical locations, the plans are also clear. The Ulstein Group has been represented in China for 5-6 years and is now going to further develop an existing
collaboration with a group of yards. Brazil has a large offshore environment and the Group has also been represented in this country for a few years. It is now making efforts to gain access to shipyard capacity here without acquisitions. In addition, exciting developments are taking place i.e. in Turkey, and the Group is now making arrangements to increase its impact here. EXCELLENT RELATIONSHIP
DNV has been present at Ulsteinvik since 1969 and has accompanied the Group during its interesting developments. ”We have an excellent relationship, but we have had our discussions – and that’s the way it should be. DNV is an exciting organisation with lots of expertise. Together, we can continue to help strengthen the Norwegian maritime industry,” concludes Ms Ulstein, who is currently also the Vice Chairman of the DNV Council.
DONE THEIR HOMEWORK
How do you prepare for the future? “The world is getting smaller and growth is important for our long term survival, but for us it’s not a goal in itself to be huge,” she says, continuing: “Now we’ve done our preparations, and we’re ready to move on.” The Ulstein Group is heavily involved in the offshore sector and wants to continue focusing on this segment. Recently, Eidesvik ordered two large, state-of-the-art seismic vessels of the type ULSTEIN SX120. The contract’s total value is about NOK 1.3 billion and the ships will be delivered in the spring of 2010. “This contract has strengthened our position in the seismic market – a market that is highly interesting and important for
! The Ulstein Group: 1917: Ulstein mek. Verksted established as the industry switched from sail to engines, which had to be installed, maintained and repaired. 1957: Built the first steel vessel. Early 1960s: Started ferry construction. Mid-1960s: Started building long line-fishing vessels and trawlers. Later, ro-ro and pallet vessels, cargo and passenger vessels. 1965: Ulstein Propeller established. 1967: Ulstein Trading established. The 1970s: Construction of supply vessels, started developing their own vessel designs.
1985: Took over the BMW group in Bergen, followed by a number of acquisitions during the 80s and 90s. The group now had sales and service offices in 30 countries – 4000 employees. 1998: Took over the propeller manufacturer Bird Johnsen Co. Inc., USA. 1999: London-based Vickers Plc. took over the Ulstein ship equipment area, the famous UTdesign and the whole international network. The shipbuilding division was left, and was developed into today’s “new” Ulstein Group.
Innovation is hard work CEO Gunvor Ulstein’s sparring partner and number one colleague is her elder brother and Dr. Engineer Tore Ulstein, who is deputy CEO and managing director of the Ulstein International. From a technical perspective, what does innovation entail for you? “Innovation is hard, purposeful work,” he says. “It’s crucial in order for us to survive as a company in the years to come. We must always challenge fixed paradigms in order to develop new, exciting solutions. ULSTEIN X-BOW is a good example of this – we brought in industry designers early in the process in order to pull ourselves out of the ‘box’. One important challenge is to manage to work on innovation continuously, even now in a market that is at an all-time high.”
ment. The desire to always improve – both products and processes – is always present.”
How do you motivate your employees to be innovative? “This is a very important issue, and I’ve tried to set a good example by being curious and always challenging existing solutions. I try to come up with ideas and, through this, show interest and involve-
How do you get hold of the most talented people? And to keep them? “The fact that we are working on new, exciting solutions and have a relatively young, dynamic work environment lays a good foundation for recruitment. We want to give our employees an opportunity to
Does the environmental perspective play any role in your ideas on innovation? “Yes, but we can obviously focus more on the importance of this and the way in which we communicate our products. For example, the ULSTEIN X-BOW is a new hull design providing increased comfort and safety as well as lower fuel consumption and increased speed, as the bow inclines backwards and the forward hull has been significantly lifted.
develop through being given major challenges. Those who want to contribute and have good ideas are rarely stopped in our company. It’s also important to underline that we have a good working environment with lots of laughter. We’re also trying to strengthen our interaction with universities and colleges.” What do you think will happen in the future? What is most crucial to your success? “I have great faith in the future. There are loads of opportunities that I want Ulstein to take part in. The most critical resource over the next few years will be people with a good professional background who can and want to work in the maritime industry, i e, are curious and wish to contribute, and preferably wish to work for Ulstein. We will focus on diversity and internationalisation.”
Money talks â€“ ab
â€œThe biggest environmental and social impact we make is indirect, through our lending to and investing in companies. To help ensure that this is handled in a sustainable manner, HSBC applies a framework of sustainability policies including the Equator Principles,â€? says Head of Group Sustainable Development Jon Williams.
Setting sustainability standards HSBC, one of the world’s largest financial institutions, is setting the standard in terms of how banks demonstrate that project financing is done in a sustainable fashion. TEXT: CHARLOTTE A. F. ZWICK PHOTO: NINA E. RANGØY
“Ten years ago, the approach to what we now call sustainability was to turn off lights and give money to charity. There has been a huge change globally,” says Jon Williams, Head of Group Sustainable Development, HSBC Holdings plc. Drawing on more than 20 years experience as a banker, Mr Williams approaches his job from HSBC’s core banking business perspective. But his team is also staffed with professionals with a sustainability background from NGOs to environmental consultancies. One of the steps that HSBC has taken to ensure that its business is conducted in a sustainable fashion is to use the Equator Principles in its assessment of project financing deals. The Equator Principles are a set of voluntary guidelines that provide a framework for assessing and managing the environmental and social impacts related to project finance transactions. HSBC has committed to only providing loans to projects in which the borrower can and will meet the standards stipulated by the principles. For projects that are financed, action plans are created to manage the associated social and environmental impacts. Mr Williams believes that the Equator Principles have become a global market standard. They have achieved a critical mass of participation, with 54 banks as signatories, and cover 90% of global project
finance transactions. The total value of Equator Principles transactions approved by HSBC in 2006 was USD 5.171 billion. A LEVEL PLAYING FIELD
“The Equator Principles are important for us because they create a level playing field for project financing. Banks are competing to get the clients’ mandate, and the Equator Principles ensure we are conducting business on the same terms,” says Mr Williams. “The principles are based on international best practice and are consistent with the International Finance Corporation’s environmental and social ‘Performance Standards’. They help us deal with some of the challenging issues that arise in conjunction with complex and long term projects, which sometimes could undermine the economics of the deal.” “At the same time, the Equator Principles are also good for clients, because the standards are applied consistently and fairly. In general, having a global market standard is the best way to get sustainable criteria implemented,” notes Mr Williams. Each bank that adopts the Equator Principles commits to report publicly about its implementation process and experience, including the number of transactions that were screened. But financial institutions have been under increasing pressure to disclose more information about how the Equator Principles are applied.
Mr Williams adds, “HSBC reports extensively, principle by principle and by category of deal. But to protect the confidentiality of our clients, we do not disclose the details of individual deals.” NEW INDUSTRY STANDARD
In its 2006 Corporate Responsibility report, HSBC took its reporting on the Equator Principles to a new level when it had its adherence to the principles independently verified by DNV. “We decided to go ahead with a third party audit as a means of enhancing the credibility of our reporting, while maintaining confidentiality. We believe we are the first bank to take this step. The initiative has been received positively, by all types of interested parties including NGOs, other banks, lawyers and accountants.” “I believe other financial institutions will follow suit, and will continue to provide more detailed reporting of the volume and value of deals within the Equator Principles, as well as choosing third party verification. This will be part of a broader trend of increased reporting and independent verification of non-financial data,” concludes Mr Williams.
To learn more, see: http://www.hsbc.com/1/2/corporate-socialresponsibility DNV Forum no 02 2007
Jon Williams is Head of Group Sustainable Development at HSBC. His group reports directly to HSBC Group Chairman Stephen Green and works with all of HSBC’s customer groups and global businesses.
The HSBC approach to sustainability HSBC HAS A THREE STEP APPROACH TO SUSTAINABILITY: “The first step is to be profitable. Economic success allows HSBC to provide employment, pay taxes and carry out philanthropic initiatives,” says Head of Group Sustainable Development Jon Williams. “Secondly, we must have a sustainable long term client base. Ensuring our customers have confidence in both the service we provide and the way our business is conducted is crucial. Thirdly, HSBC believes that, if we are to succeed in the long run, we must make sure that we measure the social and environmental performance of our operations.” “To achieve this, HSBC manages its direct environmental impacts in terms of energy
use, water consumption, waste production and carbon emissions. We made a commitment in 2004 to be the world’s first major bank to become carbon neutral, and achieved this in 2005. The information in our annual Corporate Sustainability Report is externally audited by DNV. This includes a review of our carbon neutrality and the data in our global reporting system, which accounts for 96% of HSBC employees.” “Another aspect of our approach to corporate sustainability is our philanthropic activities, which are consistent with our approach to running the bank and working with clients.” More than 75% of HSBC’s total philanthropic expenditure is directed at the core areas of education and environment, with a focus on forming long term
relationships. Major projects include the HSBC Climate Partnership – a five year USD 100 million partnership to tackle the impacts of climate change worldwide – and Future First, which aims to combat global poverty through the provision of healthcare, education and shelter. “But the biggest impact we have is indirect, through our lending to and investing in companies,” notes Mr Williams. To help ensure that this is consistent with its commitment to sustainability, HSBC applies the Equator Principles to project financing and has also developed a set of Sector Policies covering the bank’s activities in specific sectors, such as forestry, chemicals, energy, mining and water.
Government workers spraying disinfectant at a bird market.
Combating avian flu Indonesia is now the country with the highest number of human fatalities caused by the H5N1 influenza virus, often referred to as ‘avian flu’. In an effort to tackle the deadly disease, the prestigious Eijkman Institute in Jakarta has built a new biosafety level 3 (BSL3) laboratory – with the help of DNV. TEXT: STUART BREWER PHOTO: SCANPIX
“Indonesia must remain alert to the dangers posed by avian influenza and other emerging diseases,” says Professor Sangkot Marzuki, Director of the Eijkman Institute. “This is a major issue with international implications; of the 105 cases confirmed to date, 84 have been fatal.” Recognising the importance of safety at its new laboratory in Jakarta, Professor Sangkot and his team asked DNV to certify the physical features of the laboratory, and are now working together to devise a safety management system. CAPABILITY PUSH
Professor Sangkot explains, “Funding for the new BSL 3 facility was approved by the government in 2005. We wanted to build it relatively quickly as we need the capability to do work on this and other diseases in months and not years. We recognised that DNV Forum no 02 2007
we needed an independent group to oversee the project and decided on DNV. DNV’s experience and approach was invaluable in making sure we got an excellent facility, despite the challenges in managing such a project in a developing country. We recently completed the development of the facility and are now working with DNV to develop our safety management system.” In recent years, the Institute has responded to the challenge of emerging diseases such as avian influenza by working closely with the Ministry of Health NIHRD (National Institute for Health Research and Development). The role of the Eijkman Institute in the national response to avian flu includes: n providing scientific and technological support to the national diagnostic laboratory network, including capacity building
leading research, in particular genomic research n providing a major back-up diagnostic facility in emergency situations ADOPTED MEASURES
Avian influenza was detected in poultry as far back as 2003 in Indonesia, when it affected the poultry industry in central Java. However, the disease began to receive intensified national and international attention after it took a toll on human life in 2005. Subsequent to bird flu breaking out in poultry, the Indonesian government adopted measures that meet the World Health Organisation (WHO) and Food and Agricultural Organisation (FAO) standards to cope with the disease. In addition to culling 30 million chickens and vaccinating 50 million fowl, the government has also ensured that 44 hospitals
and 300 public clinics across the country are prepared to treat bird flu cases. The Ministry of Agriculture is also stepping up animal surveillance and rapid-response activities to control the virus in poultry. “To supplement these efforts, we have fast-tracked the development of our facility to provide support to the national diagnostic laboratory network,” says Professor Sangkot, a research specialist in the area of infectious diseases and human genome diversity. BEST-PRACTICE MANAGEMENT SYSTEM
Commenting on DNV’s role, Dr Paul Huntly, global leader for biorisk services, says, “Initially, the main focus was to estab-
lish the physical safety features of the laboratory. Our scope of work was then extended to include the development of an effective, best-practice biorisk management system, incorporating safety management process and associated procedures. This work is ongoing and has been supported with funding from the Norwegian Ministry of Foreign Affairs. The longer term aim is to produce a template which will be of value to other facilities in Indonesia and elsewhere in the world.” Dr Huntly points out that DNV has recently developed the required element based structure for a comprehensive biorisk management system, and this has been peer reviewed by a number of emi-
nent groups and found highly appropriate in describing the scope of activities for biocontainment laboratories. NOT WITHOUT RISK
He explains, “Typically, these facilities conduct research, diagnostic and production activities on many organisms of serious potential threat to humans and animals, and are designed to ensure that the risk of worker exposure and release of materials to the community or environment is minimised. However, the work of such facilities is not without risk and there have been several cases of laboratory acquired infection (LAI), perhaps most notably in recent years were the three LAI’s with SARS virus DNV Forum no 02 2007
Professor Sangkot (middle) says that collaboration with DNV makes good sense. Seen here with DNV’s global leader for biorisk services Dr Paul Huntly (left) and Lim, J.T. from the DNV Singapore office, who is closely involved in the work at the Eijkman Institute.
Biorisk – in brief The management of biosafety and biosecurity have become vital issues, especially in light of the laboratory-acquired cases of SARS in Singapore, Taiwan and China in 2004. This is particularly true for operators of biological containment laboratories handling dangerous bacteria and viruses, such as anthrax, ebola and avian flu. DNV’s research department is working to exploit the company’s experience in managing risk in other industries by adapting and applying this to the laboratory setting. Specific projects include one focusing on personnel reliability issues within containment facilities, a laboratory biorisk management standard development project funded through the European Program on Critical Infrastructure Protection, as well as an EU research project BIOSAFETY-EUROPE, which aims to identify all the containment facilities in Europe and work towards harmonising biosafety and biosecurity practices within them. BIOSAFETY-EUROPE involves 19 other partners including the Institute for Infectious Disease Control in Stockholm, the Health Protection Agency in the UK, RIVM in the Netherlands and the Institute Pasteur in France.
in Singapore, China and Taiwan. A feature of these cases is that often there is a failure of the safety management system, as opposed to deficiencies in the facility and equipment employed.” He continues, “It is also our experience that in this field a great deal of emphasis is placed on the design and construction of the facility itself, but rather less attention can sometimes be paid to how the facility will be run and the staff deemed competent with regard to biosafety and biosecurity. This can be partly due to the difficulty in finding experienced personnel available in this field, but also to a lack of the necessary structures and frameworks around which facilities can build adequate biorisk DNV Forum no 02 2007
management systems. Such problems exist in Europe and North America, but can be particularly severe in developing countries.” INTERNATIONAL BENEFITS
As the Eijkman Institute is the leading national laboratory in Indonesia, Dr Huntly firmly believes that capacity building of biosafety and biosecurity (collectively known as biorisk) at this institute will have positive ripple effects, at a national level, with the potential for further international benefits from the project. “The aim is to develop and pilot a system for Eijkman Institute, but also to ensure that a generic model and supporting tools are developed for implementation in other
similar institutes in Indonesia and elsewhere,” says Dr Huntly. Considering the urgent need for laboratory research and diagnostic capacity in Indonesia, Professor Sangkot firmly believes there is a “large and growing need for such support not only in Indonesia, but in other regions who are struggling to manage real issues of potential global impact.” “We greatly appreciate the support provided by DNV and the Norwegian Ministry of Foreign Affairs. Indeed, we welcome any assistance from the world community,” he says and concludes, “At the end of the day, this is a global problem. If we reduce the risk here, this will bring positive benefits to the international community. ”
Getting new wings Boeing’s commitment to environmental performance gets new wings. The launch of the Boeing 787 Dreamliner, an environmentally progressive airplane programme, and customer curiosity about Boeing’s internal environmental efforts led the company to pursue ISO 14001 certification. TEXT: SCOTT LEFEBER AND CARLA KALOGERIDIS PHOTO: BOEING
Boeing’s Everett facility – home of the 747, 767, 777 and 787 programmes – has always been proud of its environmental management system. But, a few years ago, the time was right to make its environmental commitment story more public. For one thing, Boeing Everett was embarking on a new airplane programme that emphasised environmental performance. “Our new 787 airplane programme was known as the 7E7. Among other attributes, the ‘E’ stood for Efficiency,” explained Frank Migaiolo, Everett site environmental affairs manager. “It represented environmental improvements we made through technology. The airplane is so advanced it is setting an all-new level of performance in the industry. At this stage the 7E7 leaders felt that achieving ISO 14001 certification was a good idea.” The ISO environmental standards are designed to assist companies in developing, implementing and maintaining an DNV Forum no 02 2007
effective environmental management system. The selection of DNV as Boeing’s certification partner was a natural choice. “We had already worked with DNV on our quality aerospace certification,” he said, “and DNV maintained an excellent reputation in the industry.” EMPLOYEE MOTIVATION – NOT AN ISSUE
Undergoing certification requires all employees to get behind the goal and to familiarise themselves with environmental policy and how it relates to their daily activities. While some organisations may work hard to motivate their employees to support such an initiative, for Boeing Everett, that was never an issue. “Our environmental management system has always been employee-based,” said Mr Migaiolo. As a result, it wasn’t necessary to motivate the employees because much of the requirement was already ingrained in the culture, according to him.
Mr Migaiolo said Boeing used in-house training to communicate the ISO message – videos with site leaders followed up by web-based training. “We had three different training sessions for employees and we used posters, banners and electronic communications.” In fact, Mr Migaiolo said that no extra reward or bonus programme was necessary to get the job done. “Achieving ISO 14001 was its own reward,” he said. “From day one, our employees were excited and ready to take it on.” A FEW UNEXPECTED CHALLENGES
Nevertheless, the process wasn’t completely without its challenges. For example, Mr Migaiolo pointed out that Boeing practices were so ingrained that it was sometimes hard to document all the good work that the employees were already doing. A second challenge was communicating the substance of the project across such a large >
and diverse employee audience. “Before Boeing got on the ISO journey, our people could tell you exactly what they did from an environmental standpoint, but putting it down into a formal policy – that was an unexpected challenge,” he said. Assuring that everyone on site is on the same page is no easy task for a facility like Boeing Everett. The Everett complex, 30 miles north of Seattle, Wash., is Boeing’s largest site, spanning more than 1,000 acres and employing more than 25,000 people. In fact, Boeing’s Everett factory building is recognised by Guinness World Records as the largest building in the world by volume. ISO 14001 CERTIFICATION BENEFITS
Mr Migaiolo said the benefits of the certification have been numerous. “It’s one more accomplishment for customers to consider in their decision-making process,” he said. “Furthermore, it helps with our public image.” Another notable benefit is a change of approach from the inside. Mr Migaiolo noted that some of his experience involved doing things driven by compliance. “Now, we look at things from a new angle. As an environmentally conscious company, today we are constantly asking ourselves, ‘How can we make a difference?’ ISO helps us keep the momentum.”
Boeing Everett site environmental affairs manager
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! How is the 787 more environmentally progressive? In addition to bringing big-jet ranges to midsize airplanes, the 250-passenger Boeing 787 is very fuel efficient. The airplane uses 20% less fuel for comparable missions than today's similarly sized airplanes, yet at speeds similar to today's fastest wide bodies.
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The key to this performance is a suite of new technologies developed by Boeing. Half of the 787â€™s primary structure â€“ including the fuselage and wing â€“ is made of composite materials. Advances in engine technology will contribute as much as 8% of the increased efficiency of the new airplane.
To date, 47 customers worldwide have ordered 677 airplanes worth more than $110 billion at current list prices, making the Dreamliner the most successful commercial airplane launch in history. The first 787 is scheduled to enter passenger service in May 2008.
Committed to safety The National Health Service Litigation Authority and DNV are working together to improve the safety of NHS patients and staff. TEXT: STUART BREWER
The National Health Service (NHS) is Europe’s largest employer with 1.3 million employees and provides the majority of health care in the UK.
The National Health Service Litigation Authority (NHSLA), which is responsible for handling negligence claims made against NHS bodies in England, aims to improve the safety of NHS patients and staff. To meet this goal, a dedicated team of DNV’s UK-based healthcare experts will be providing the NHSLA with integrated risk management services over the next five years. “We look upon this as a partnership which we’re confident will improve both patient and staff safety and help the NHS to better manage its risks,” says Alison Bartholomew, Risk Management Director at the NHSLA. Even though more than one million patients are treated safely by the NHS every day, health care is far more risky than most industries. To illustrate this point, statistics reveal that in the western world, 10% of all patient care is marked by error, of which 5% are fatal. Studies also indicate that in Britain there are 40,000 deaths annually caused by errors – it is estimated that up to half are preventable. In 2005/06 the NHSLA paid some GBP 560 million on clinical negligence claims. Whilst surgery gives rise to the largest number of clinical negligence claims managed by the NHSLA, obstetrics accounts for a third of the value. The majority of non clinical claims handled by the NHSLA comprise injuries to NHS employees and in 2005/06 the NHSLA paid more than GBP 30 million to settle these claims. As Ms Bartholomew observes, “Whilst the safety of NHS staff is important in itself, it is also a factor in ensuring patient safety.” DNV Forum no 02 2007
RISKY BY NATURE
Acknowledging the risky nature of the healthcare industry, Ms Bartholomew is also quick to point out that important steps have already been taken to improve patient safety in the NHS but says more work needs to be done to build on improvements. Since the NHSLA was established in 1995 it has had a statutory duty to encourage good risk management practices in the NHS with the aim of reducing the number and cost of claims. The NHSLA has mainly achieved this objective through an evolving programme of standards, based on the identified causes of claims, and assessments supported by education. “In a report on patient safety published in November 2005, 26% of NHS chief executives ranked the NHSLA standards and assessments as the key driver for their boards to improve patient safety,” points out Ms Bartholomew and adds, “And, as one of the leaders in advocating patient safety, the NHSLA is increasingly working with other agencies on this important issue.”
“An important aim of the NHSLA is to contribute to a reduction in the number of negligent, or preventable, incidents occurring within the NHS. To meet this challenge the NHSLA needs a partner to deliver the services effectively, in essence to provide a robust framework to support the risk management activities of NHS bodies, and reduce the number and severity of adverse events.” Given DNV’s core competence in managing risk, Ms Bartholomew believes DNV is well placed to ensure the continued development and delivery of the NHSLA risk management programme and hopes “that a strong relationship will be established between the two organisations which will facilitate the delivery of an effective, efficient and enhanced service which will make a positive contribution to the national agenda for the NHS.”
COOPERATION WITH DNV
In an effort to further develop its risk management programme, NHSLA has awarded DNV a contract to deliver risk assessment, standards development and maintenance, and training services to the 400 NHS trusts and 150 NHS maternity services in England. Mark Boult, DNV’s healthcare market leader in the UK says that the scope of work focuses on improving the safety of NHS patients and staff and thereby reducing the potential for claims. He explains,
ALISON BARTHOLOMEW “We believe that working in partnership with DNV will help us build on progress to date and continue to improve both patient and staff safety,” says Alison Bartholomew, Risk Management Director at the NHSLA.
Speeding up cargo handling in Europeâ€™s busiest port The key to improving processes and boosting overall efficiency levels in the port of Rotterdam is simple, according to Port infolink: make relevant information easily accessible to everyone in the logistics chain. This organisationâ€™s new online services are producing great results. TEXT: JOACIM LUNDE PHOTO: DANNY CORNELISSEN
Handling nearly 380 million tonnes of goods each year, the port of Rotterdam is the most important entry gate for products bound for Europe. 500 sea-going vessels and barges, several thousand trucks and dozens of trains arrive every day. Such volumes pose vast logistical challenges and, in order to facilitate further growth, the Port of Rotterdam Authority established a wholly owned subsidiary focusing on efficiency improvements in the port. It was founded in 2002 and named Port infolink.
vessels’ arrival well in advance and provide port facilitators with information on their onboard cargo. An optimal data exchange between shipping companies, Customs, terminals and transporters has been imple-
THE NEED FOR A COMMUNITY SYSTEM
“The Port of Rotterdam Authority saw the huge potential of a community system that could manage the information flow in the port’s logistics chain,” says Bart Roozekrans, Managing Director of Port infolink. “Individually, all the actors in the port shipping agents, Customs, rail operators, ship owners and others - were doing an excellent job. But the cooperation between them regarding the conveyance of goods was not satisfactory. The bottleneck was information management.” Port infolink asked the consultancy company CIBIT, now part of DNV IT Global Services, to administer the architectural design and development of the new central port community system. “It was important for us to use an independent technical advisor with a high level of integrity and with no connections to the large programming houses. We also needed a company that could design a highly scalable yet cost-efficient system to cope with future services. CIBIT assisted us throughout the entire process and made our vision come true. It turned our ideas into a fully operational business community system,” states Mr Roozekrans. FIVE MILLION PHONE CALLS SAVED
At present, Port infolink offers 18 online services to its 3,000 users in order to make cargo management and transportation more effective. Shipping companies are now able to inform the port about their DNV Forum no 02 2007
mented, keeping disruptions related to Customs inspections to a minimum. Transporters can use information about the cargo’s status and actual position in the logistics chain to optimally plan their arrival and avoid unnecessary waiting times and trips. The optimal planning and smooth transition of goods has minimised costs and error rates and improved efficiency. Port infolink’s services have increased activity in the port without the need for hiring additional manpower or expanding the port area. Since everything is processed electronically, the need for paperwork and human interaction has been greatly reduced. Customs alone now produces 250 metres less paper and makes five million fewer phone calls every year. “Our central port community system produces great results because we make the logistics chain more transparent. But we don’t define ourselves as an IT company; we are a change advisor, facilitating cargo handling by making information accessible, useful and a key asset in planning. We suggest new procedures and supply connectivity, so that others can be proactive and achieve their maximum potential,” explains Mr Roozekrans.
Port infolink is working closely with the business community to develop additional services to improve the work flow even more. “The port users are our starting point. When we discover a need, it takes us about six months before our new related service is ready for pilot testing. Once it has been approved for launch, we put heavy emphasis on training and support to ensure that the users are comfortable using the service and make full use of its benefits,” says Mr Roozekrans. Mr Roozekrans is in no doubt that community systems are absolutely essential in order to make large ports like Rotterdam prosper and grow. “This is a necessary change. The information has always been available, but now it is systemised and shared with those that need it. Success cannot be achieved if innovation only resides within the individual companies, we all need to collaborate.”
Facts: The port of Rotterdam
Europe’s busiest port; 285 million tonnes of inbound cargo and 92 million tonnes of outbound cargo were handled in 2006 n Covers an area of 10,500 ha, stretching out for 40 km See also: www.portinfolink.com
Managing Director of Port infolink.
Captain Nemoto seen here in MOL’s Safety Operation Support Centre, which monitors vessel movement and weather conditions all year round. The centre plays a vital role in ensuring the safety of the MOL fleet.
tackles safety issues As a part of its new mid-term business plan, Mitsui OSK Lines (MOL) is focusing on efforts to enhance its operational safety. Moving forcefully on comprehensive safety measures, Japan’s shipping major is improving its safety performance while embarking on ambitious growth plans. TEXT: STUART BREWER PHOTO: MOL In his Tokyo office, MOL’s General Manager of Marine Safety, Captain Nemoto, is seated in the midst of challenging times. Says Captain Nemoto, “Our long-term vision is to make the MOL group an ‘excellent and resilient organisation that leads the world shipping industry’ and, as highlighted in our new three-year business plan (MOL Advance), we aim to operate 1,200 vessels and secure revenues of USD21billion at the end of the fiscal year 2012. At the same time, we need to ensure our growth is coupled with enhanced quality operations.”
Captain Nemoto is a man with a mission. MOL’s General Manager of Marine Safety is determined to enhance the company’s safety performance.
Given MOL’s recent poor accident record, Captain Nemoto is fully aware of the challenges that lie ahead. As reported in the media, MOL’s reputation was severely dented last year as the result of four major accidents including the loss of the 197,060-dwt ore carrier Giant Step, the loss of 4,813 cars from the 55,328-gt car carrier Cougar Ace, an oil spill from the 261,284-dwt VLCC Bright Artemis and a fire on board the 3,400-teu containership MOL Initiative. BACK TO BASICS
Captain Nemoto comments, “Our customers and other stakeholders suffered considerable stress and inconvenience as a result of these accidents. All MOL’s group management is taking this situation very seriously and we have gone back to basics to devote our full efforts to ensuring safe operations.” Subsequent to the accidents, MOL management took immediate steps to find the underlying causes of the series of casualties. It established an ‘Emergency Committee for Enhancement of Operational Safety’ under the secretaryship of Captain Nemoto. “The committee was established to analyse all aspects of the accidents and to put forward counter measures designed to improve the safety of our vessel operations,”
explains Captain Nemoto. “Our investigations involved both internal and external surveys to examine group-wide operational safety systems. We concluded that the main root causes were not only related to human errors. Indeed, in addition to addressing the issue of increasing workload on the seafarers, we needed to consider the use of fail-safe equipment and facilities that exceed international standards. Also, we realised that measures must be taken to adequately monitor and respond to today’s abnormal weather conditions.” Using the findings of its internal and external surveys as a basis for the root causes of the accidents, MOL has compiled several measures to enhance its safety systems. COMPREHENSIVE MEASURES
Captain Nemoto explains, “Basically, the measures are part of our efforts to realise MOL president Akimitsu Ashida’s pledge to enhance MOL’s safety performance. To this end, we are taking steps to thoroughly reinforce the safety of our ocean transport in terms of both hardware and software.” According to Captain Nemoto MOL management has announced plans to spend a massive JPY35bn (some USD DNV Forum no 02 2007
290m) on improving the company’s safety systems. “The outlay will be spread over three years as highlighted in MOL Advance. Among the projects MOL will be spending heavily on is a central ship-safety management centre in Tokyo called Safety Operation Support Centre. This safety body will monitor MOL’s 800-strong fleet, providing each ship with critical up-to-date weather and safety information.” Further funds will be spent on improving ship management procedures and training seafarers. “We will reinforce and improve education and training for all ranks at MOL training centres around the world. We will also introduce our competency evaluation system programme in MOL group ship management companies, manning companies, and MOL’s own training centres. We believe this comprehensive approach will enhance the competency of our seafarers in a reliable and efficient manner,” says Captain Nemoto. Captain Nemoto also revealed MOL’s plans to employ 400-500 new graduates from maritime colleges around the globe each year. “We believe seafarer shortages are affecting safety so we need to address this by employing more graduates to serve on our vessels today and in the future. In DNV Forum no 02 2007
this connection, we will use the MOLowned Spirit of MOL vessel exclusively to train the multinational graduates. They will receive both technical and operational training on this vessel as part of their training to qualify for their deck officer and engineer licences.”
Trond Hodne, DNV Maritime’s Regional Manager in Japan. “This basically involves a structural approach to safety. We find out where the owner is in terms of safety management procedures, find a base line to work from, then provide solutions and set goals,” adds Fred Yoshida, DNV Maritime’s Marketing Director in Japan.
COOPERATION WITH DNV
Commenting on DNV’s external review of MOL’s ship-safety systems, Captain Nemoto says, “We hired DNV to run a number of workshops at our Tokyo, London and Singapore offices involving company superintendents, fleet masters and engineers. The group discussions were useful and helped to identify safety issues faced by employees in their duties. We held similar workshops for our seafarers in Manila (Philippines), Mumbai (India) and Zadar (Croatia), which resulted in the identification of several issues, including communication problems and the need to enhance seafarer education and training, and restructure ship management practices.” “This is an excellent example of the value creation that Maritime Solutions, DNV’s management and technology consulting unit for the maritime industry, is able to provide for its customers,” says
Captain Nemoto adds, “The third-party review, combined with our own internal survey, was considered the best approach as it delivers reliable, long-term safety improvements. This is important as safety will be central to MOL’s business culture as we expand our fleet and services to meet the challenges ahead.” MOL’s efforts are already paying dividends. No serious accident has been reported this year to date. “Safety is our primary concern,” emphasises Captain Nemoto and concludes, “Even 99% is not safe enough. We must constantly challenge ourselves to think safety in order to avoid accidents in the future.”
Deeper and deeper South America’s number one producer of oil and gas has just achieved Brazil’s longstanding goal of having a self-sufficient oil industry. Recently, Petrobras has also won recognised awards for its transparency, sustainability and technology, and is now diving deeper into the Brazilian basin to double its production during the coming years. However, a number of challenges have to be overcome first. TEXT: SVEIN INGE LEIRGULEN PHOTO: PETROBRAS
DNV Forum wanted to discover what is going on deep below the Brazilian sea level and within the Petrobras organisation, so we asked Cristina Pinho, Petrobras’ general manager of production installation, for an update from the Latin-American oil major. Ms Pinho appears to be a charismatic mix of a skilled business manager and a mechanical engineer. Before taking up this position, she had a long technical career within the company, ranging from facilities installation manager to offshore production manager at a number of platforms and mooring and maritime terminal manager. So obviously, she knows her business very well from a number of dimensions. Our talk with her also revealed a broad knowledge of international business and politics – skills which no doubt smooth Petrobras’ progress deeper into the Brazilian basin
and its worldwide operations in the fields of oil, gas and alternative energy. “The challenges are numerous, but we will solve them,” she laughs confidently. DOUBLING PRODUCTION
Brazil wants to double its oil production by 2015 and maintain its newly won oil selfsufficiency – and increase its gas production. To reach these goals, Petrobras will make substantial investments by 2015. “We will invest USD 17.5 billion per year with one major goal: to almost double our production to 3.5 million barrels per day. And more than half of our investments are related to exploration and production,” she explains. The challenge is not the amount of money, but the lack of human and industrial resources in Brazil. “This is a general
problem for our country, and we have so many projects that the local industry can’t support all of them at the same time. Brazil today has more than 60% local participation in projects, and we even want to increase this significantly,” she states. Being the major driver in Brazil’s oil and gas business, Petrobras has a responsibility to deal with this challenge to develop the country’s industry. “That’s why the government launched the Programme of Mobilization of the National Industry of Oil and Natural Gas together with Petrobras. This programme’s objective is to improve the industry, the shipyards and human resources. We work very hard in order to obtain this support domestically,” she points out.
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Petrobras owns more than 100 production platforms, 63 exploration rigs, 16 refineries, and 30,000 km of pipelines.
DRILLING DEEPER INTO THE BASIN
Petrobras also has a number of technology development programmes. “Our PROCAP evolution started in 1986 with the PROCAP 1000. At that time, the main objective was to explore and produce oil down to depths of 1,000 metres. Today we have advanced to the PROCAP 3000, which deals with our operations down to 3,000 metres. Actually, all the new Brazilian developments are in deep waters of more than 1,000 metres, so apparently it was not meant to be easy to find oil in this country – it’s not like in the Emirates where all you need is a straw in the desert,” she notes with a hint of irony.
“Our reservoirs contain both light and heavy oil, but we want to discover more light oil and gas so as to significantly reduce the amount we import. Also, the increased demand from the Brazilian market is a major reason to increase exploration and production. Today, gas counts for only 10% of the Brazilian energy matrix, and we want to increase this to 15% during the coming years, and of course Petrobras has a very important role to play in reaching this goal. Regarding gas, we want to reduce our dependence on Bolivia and, by the end 2008, we will increase our production by 30% to 40 million standard cubic metres per day,” she says.
She continues; “We have reservoirs of light oil, but in some cases it’s difficult to drill there and sometimes there are high levels of contaminants, especially mercury. In one area, we have to drill 11 km between the soil and reservoir. This is a record for us. The good news is that we are going to establish a new programme which combines different disciplines to address these new challenges.” However, the new Santos basin is promising and is rich in light oil and gas. Petrobras have big plans for this area, with more than 10 new units planned to be installed in the next 15 years. “Parallel to this, there are huge fields of ultra heavy oil in the DNV Forum no 02 2007
Campos basin that we will develop until 2011 using two new installations. In Brazil, the heavy oil doesn’t have so many contaminants. It’s heavy, but is environmentally friendly – and actually not so difficult to process in our refineries,” Ms Pinho explains. A big focus for Petrobras in the future will be subsea separation. “We’ve established a four-year research project in which we will separate oil from water and re-inject this water into the reservoir,” she says. “We are using an oil and gas separation system with boosting (VASPS). This equipment has been in operation since 2004 in the Campos Basin, and has increased our oil production by 1.5 million barrels in three years. SUSTAINABILITY FOCUS
Petrobras is increasingly being recognised as a highly sustainable company that contributes to the development of Brazil. Goldman Sachs’ 2005 report on the Sustainable Investment Energy Sector cited the company as one of the world’s six best investment opportunities. Furthermore, Petrobras rose from seventh to second place in the ranking of the Management and Excellence Annual Multi-Client Study 2006, which highlights the 15 most sustainable and ethical oil companies in the world. Petrobras has also now been included in the Dow Jones Sustainability World Index, which acknowledges the most sustainable companies in the world. “This is an important recognition for us because we take economic, environmental and social questions seriously, and at the same time obtain good results,” Ms Pinho states. “In addition to the operational aspects, Petrobras has a huge focus on the social impact of its operations. This is in line with our efforts towards social responsibility, highlighted by the Petrobras Zero Hunger Program and the Petrobras Environmental Program,” she says.
Last year, Petrobras was also listed on the New York Stock Exchange. This is very important for Petrobras’ image and gives the company worldwide credibility. To achieve a listing here, a company must have tight governance, processes and transparency, while keeping its operations very well organised. SAFETY FIRST
Although Petrobras has huge growth ambitions, she emphasises that these cannot be achieved at the expense of health, safety and the environment. Back in 2002, the company experienced two major accidents, leading to an even greater focus on reducing the risks posed to employees and the environment. Ms Pinho explains; “Due to these accidents, we started a programme to ensure the excellence of operational issues which aims to increase the safety on our platforms and onshore stations, in addition to our programme for excellence in environmental and operational safety. Both programmes have already led to dramatic improvements. In 2006, Petrobras recorded the lowest accident rate with injury leave in its 53 years of existence – below the world average for this sector. “Clearly, one of our most important programmes is GIEN (Integrated Management of Naval Engineering), which gives us an instant response in the case of incidents. We established this together with DNV and I’m convinced it’s unique and very advanced. The main emergency centre is located in Macaé city -- north of Rio de Janeiro state -- and is supported 24/7/365 by DNV. Here we store and can access all the platforms’ and installations’ instantlyupdated main documents, and also have online access to response resources. In addition, we have connected protection centres in a number of strategic places in Brazil. With this in place, we can mitigate accidents quickly whether they occur at sea or on shore,” she points out.
ALTERNATIVE ENERGY IN BALANCE
In addition to oil and gas, last year Petrobras focused more of its attention on bio diesel and alternative energy. “Even though we are already producing ethanol or bio diesel, the country must plant a lot of new sugar canes to meet the extended demand. However, this will have to compete with other vegetables and plants intended as food. So, there will always be a balance between gas, ethanol, diesel and petrochemicals.” “The world will not have a substitute that can replace petrochemical products in the coming 100 years. Of this I am quite sure. The big issue now, however, is CO2 emissions. We are addressing this issue seriously by working hard to reduce our emissions. Although we have increased our activities, our CO2 emissions fell by 10% in 2006,” she concludes.
Petrobras’ general manager of production installation, Cristina Pinho.
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The sky is the limit Vinashin is a newcomer to the international shipbuilding arena. Based on its vision, this Vietnamese group intends to become an important player in it. TEXT: PER WIGGO RICHARDSEN PHOTO: VINASHIN
It is not only the vision of its new head office that stretches sky. So does its vision of new activities too. Vinashin (Vietnam Shipbuilding Industry Corporation) signed its first export contract in 2000. Four years later, its most important breakthrough was when Graig Shipping of Wales ordered a long series of new, unique, double-hull bulk carriers. The first two were delivered earlier this summer. Pham Thu Hang, the director of business and international relations in Vinashin, is proud of what has been achieved, but she is also grateful to those that have cooperated with the company. She says: “We, as a new shipbuilding group with limited experience, have been eager to learn all the way through from before the keel laying to after delivery. Graig Shipping has been patient, and our collaboration has been good, despite the original plans having to be postponed and this being our most challenging project to date, both in size and complexity.” “The third pillar in this model of cooperation has been class, – and in particular DNV. Your people have been important for ensuring the quality of each individual ship. But, even more important for Vinashin and our development as a shipbuilding corporation, DNV’s support and advice of all kinds have been vital,” she adds. However, although Vinashin has achieved a lot and passed the first impressive mile-
A milestone was passed earlier this summer when the two 53,000 dwt bulk carriers Graiglas and Florence were delivered from Vinashin to Graig Shipping. The workforce focus is now on the next almost 50 vessels (firm contracts and options for 53,000 dwt and 34,000 dwt ships). Blue Diamond is among these 50.
stones, it is its plans and visions for the future that are the most impressive. ENORMOUS GROWTH
Nguyen Van Hoc, the general director of Vinashin’s Pha Rung shipyard in Hai Phong that at the moment is working on its first Diamond 34,000 dwt bulk carrier for Graig Shipping, says:
“We are today 2,600 employees. In four years’ time we will be 10,000, delivering some 15 vessels a year that are up to 100,000 dwt, and have our own training school at the yard.” His counterpart at the neighbouring Nam Trieu yard that recently saw its first 53,000 dwt bulk carrier sail away, Tran Quang Vu, has ambitions, plans and DNV Forum no 02 2007
Pham Thu Hang, the director of business and international relations, is proud of what has been achieved and very optimistic when it comes to the future of the Vietnamese shipbuilding industry.
visions that exceed these. He says: “At that time (2012) we will have expanded our existing yards and constructed new ones, too. Our capacity will then be some 30 vessels from 10,000-150,000 dwt. Vinashin will even at that time have started to construct its first very large crude carrier that might be as big as 320,000 dwt.” As qualified people will be the bottleneck for achieving these and a lot of other plans, Vinashin, supported by the Vietnamese government, has decided to build Vietnam’s first maritime university. “Money you can borrow – pretty fast. People have to have qualifications and work experience – both of which take DNV Forum no 02 2007
time,” emphasises Mr Nguyen Duc Than, the general director of a third yard in the group, the Ha Long Shipyard.
boom in almost every shipping segment for the time being – a boom that has lasted longer than ever before. “The newbuilding market will fluctuate. At the moment it is up,” continues Ms Pham Thu Hang. “No one can predict exactly what the future will be like, but our capacity will not only be for newbuildings. It can be used for conversions and repairs too, and our geographical position close to a lot of trade routes is another advantage for Vinashin and Vietnam.” For Vietnam, the shipbuilding industry is an important instrument for becoming an industrial nation. The nation has been involved in several wars but this seems, impressively, to be a closed chapter of its history. Today, the 82 million people with an average age of just 26 years are eager to bring this nation to new heights. “We are all eager to do so,” concludes Ms Pham Thu Hang.
“Yes, our plans and visions are ambitious,” states the director of business and international relations Ms. Pham Thu Hang. “We intend to make Vietnam the world’s fourth largest shipbuilding nation. Based on global shipping’s actual market situation and with the full support of our own government, we will be able to meet these targets.” The timing of Vinashin’s aggressive entry into the international shipbuilding industry could hardly have been better. There is a
! About Vinashin Vinashin currently manages 28 shipyards in North and South Vietnam. It has a total workforce of 15,000. It is one of the largest state-owned corporations in this country.
Bringing out the dynamism Martinus Brandal, CEO of Aker Kvaerner, has just finished launching a new operational model for the company globally. “Making changes during periods of prosperity is vital,” he says. “Then everyone is forward looking and focused on the positive.” TEXT: HARALD BRÅTHEN PHOTO: AKER KVAERNER
“The greatest challenge is to retain and attract the best people,” says Martinus Brandal, CEO of Aker Kvaerner.
As new CEO, Martinus Brandal started off by selling off Aker Kvaerner’s Pulping and Power business. Following this, Aker Kvaerner’s six operational business areas were reorganised into five global ones. “I believe that timing is important,” he says looking back at the accomplishments of the past year. This qualified electrician comes from a sea-faring Norwegian family, and he sailed as a ship’s electrician for two years before going ashore and taking up studies to be an engineer. After 19 years with ABB, he joined the Aker Group in 2004 and took up several board appointments before becoming CEO of Aker Kvaerner in 2006. “The heads of the business areas are now responsible for the entire value chain – from marketing and sales all the way through to operations,” he explains. “This is a major business and mind-set change for us. We want to have a focused, efficient, market-oriented organisation in what we call a Global Business Area Operational Model. We are aiming for increased synergies, reduced costs, less bureaucracy and more operational efficiency – all of which lead to better earnings at the end of the day.” Aker Kvaerner’s financial goals for 2009 are the driving force behind this operation. “The challenge is to bring out the dynamism; to make all the employees motivated to change their behavioural patterns. I spend a lot of time on this, not least in those countries where the change will have the greatest impact,” explains Mr Brandal. BRINGING IN THE LOCALS
Of 28 countries, seven of the ten largest now have country managers that are to be Mr/Ms Aker Kvaerner in the country and responsible for optimising the operations. Five of the seven country managers are DNV Forum no 02 2007
locals: in Brazil, Australia, the USA, Canada and India, while an American is the country manager in China and a Norwegian is in charge of the Malaysian operations. “It’s important to have local managers and local knowledge in order to understand the local market and culture,” says Mr Brandal, who spends most of his time out of the office, meeting customers, building relationships, meeting employees and motivating people. He also believes it’s important to have an open dialogue within the company. “In such a change programme, communication and the processing of information become increasingly important and more and more difficult. As managers, we have to come up with ideas at an early stage and stay at the forefront.” PREFERRED ENERGY PARTNER
Aker Kvaerner’s vision states that Aker Kvaerner is to be the preferred partner for projects, products and services in the energy sector. “Together with our six values, this is the cornerstone of our international operations,” states Mr Brandal. And the already global Aker Kvaerner is becoming more and more international. Of revenue of NOK 50 billion in 2006, 35% came from the Norwegian continental shelf. Growth is now taking place in Southeast Asia, off the west coast of Africa and in the Americas (Brazil, Gulf of Mexico and Canada). “The market has hit an historic peak. We are experiencing strong markets within all the industries we serve – and we expect this trend to continue in the next three to five years,” he says. Technology development will continue to be a main focus area – with specific attention being paid to technology for in-
creased oil recovery development, subsea boosting and gas compression, tubing drilling, and well intervention among other things. Much of this development work is done together with clients. HIGH STANDARDS
But with the position as a strong global company comes responsibility – the responsibility to set high standards. “In a complex global business environment like ours, that’s not always easy. Our goal is to live up to our responsibility by living our values, and two areas of corporate responsibility are particularly important to us; New market entry requiring cultural understanding, and environmental protection.” With this in mind, the company is motivated to be part of future solutions regarding for instance CO2 capture technology and biofuels. LABOUR THE GREATEST CHALLENGE
The greatest challenge, however, according to Mr Brandal, is to retain and attract the best people – a challenge encountered in all countries and cultures. “This requires painstaking, hard work every day. I think we succeed at this and are viewed as an attractive employer. Last year we hired 4,500 employees – while 2,100 left the company of normal attrition – out of a workforce of 23,000. When recruiting and teambuilding, we often talk about how important it is to complement each other. That’s easy to say and more difficult to do,” says the 47-year-old CEO, whose natural modesty should not be misunderstood when tough and wide-ranging decisions are to be made.
Finding IT-failures in advance
“We’re often surprised when testing IT systems,” says Reinert Giere of Germany’s Meyer Werft.
We’re surrounded by software everywhere, and the shipping industry is no exception. As the use of software on board vessels is increasing, so too are the risks associated with it. TEXT: HARALD BRÅTHEN PHOTO: GETTY IMAGES
Two redundant GPS systems on a rig failed simultaneously. The software did not detect this failure, and consequently the dynamic positioning system changed the rig’s position by 70 metres. The drill string was cut and the rig was out of operation for several days, resulting in considerable financial loss. This is just one examples of software failure leading to serious consequences. DNV, yards and suppliers are therefore working together to reduce anticipated future risks in a joint industry project – the Safe Maritime ICT project – creating guidelines for the development and assessment of critical software intensive systems on board vessels. SOFTWARE EVERYWHERE
“You must realise that what you do with a click on the PC screen is not a game – it is reality,” states graduate engineer Reinert Giere, the head of Meyer Werft’s Electrical and Control Engineering Group at Papenburg in Germany. He is in charge of a staff of 30 that are responsible for all the electrical systems on board the ships built. Generators, electrical distribution and propulsion systems, automation, navigation – and the integration of all these subsystems into the ship’s network. “There is software everywhere on the ships we build. So it’s even more important that the software is correct and robust. We don’t programme it, but we stipulate the requirements for how it should be programmed,” explains Mr Giere. “We describe verbally what we want the systems
to do and stipulate input for different needs.” Meyer Werft believes this project is important because it sees the importance of finding possible failures in advance. “Our key persons at the Meyer yard have knowledge and experience gained from all our former built ships, but it is important to have other people’s experiences too,” says Mr Giere. “This especially applies to errors relating to ships that have been in operation for many years. As a yard, we often monitor the ship very carefully the first year, but often it is only the shipping company and manufacturer of the plant that know what takes place after that. This is often difficult to find out, since they often keep this information to themselves. However, in this project we share our experiences so that we can all improve.” LABORIOUS PROCESS
Mr Giere describes the laborious process to ensure software quality that is carried out at present. First of all, there is a factory acceptance test at which the owner, DNV and others are present. The next phase is to test all the systems together to see how they will act in real life. “During these tests, we also try to simulate errors to see what happens,” says Mr Giere, who admits that they are often surprised, during both the acceptance test and the end test, when fundamental problems which should not arise nonetheless do so. “The sub-suppliers are not always aware that they need to look upon a ship as >
Nina E. Rangøy
Meyer Werft builds beautiful cruise ships at Papenburg, on the River Ems, while LPG/LEG ships are built at Neptun Werft in Rostock.
something different from a land-based facility. At sea it is passenger safety that counts. We discover some errors at the yard, but the ship and its many IT systems are really tested during the sea trials – especially in poor weather conditions. That’s not a desirable situation. It’s important that those designing the plants are aware of the errors that may arise. The software must be adapted to the environment in which it is used. That means a higher work load during the design phase, but finding possible failures in advance also means fewer errors during the sea trials and the first year of operation.” CRUISE SHIPS – MORE COMPLEX SYSTEMS
Cruise- and LPG/LEG-companies are Meyer Werft’s main customers, and the yard will shortly be delivering cruise ships to NCL, AIDA, Celebrity and Disney.
“The customers want the most modern systems and have increasingly bigger plants, more complex systems and more integration,” states Mr Giere. “Integration is sometimes difficult, and it is especially difficult to integrate while also making sure there are no hidden failures.” Mr Giere underlines the importance of having IT built up so it can be operated intuitively. It is important – especially on cruise ships – to know how the system can be operated if the IT is not working. This is why the cruise company personnel monitor the building of the ships carefully and also learn a lot during the three-month period in which the systems are started up and tested. During this time, the focus is on knowledge transfer and sharing. Having worked for Meyer Werft for 15 years, Mr Giere cannot think of a better place to work.
“It’s rare today to be allowed to help build something from scratch where you see the product taking shape. It’s a good feeling to see the whole product and know you have been part of the entire process.”
Head of Meyer Werft’s Electrical and Control Engineering Group at Papenburg in Germany.
! About the Safe Maritime ICT project: A joint industry project with public funding (40%). Partners: n DNV n Aker Yards, France
n n n
Meyer Werft, Germany ABB Marine, Finland and Norway Bjørge Steinco Moland, Norway
n n n
Kongsberg Maritime, Norway L-3 Valmarine, Norway Wärtsilä, Norway
DNV Forum no 02 2007
news > New regional managers
Paal Johansen is DNV’s new regional manager in Korea and Helge Kjeøy is the new regional manager for South East Asia and Australia/New Zealand. Paal Johansen started his career in DNV in 1982. Over the years he has gained wide experience within the maritime area, and he has worked in Hong Kong, Japan, Saudi Arabia, Singapore, Rotterdam and Miami. He completed his MSc in Naval Architecture and Marine Engineering at the Norwegian Institute of Technology. In addition, he has participated in the Program for Executive Development at IMD, Lausanne, Switzerland. Helge Kjeøy joined DNV in 1979 after finishing his MSc from the Norwegian Institute of Technology. He currently heads the Department for Ships in Operation at the headquarters. He has previously worked in the Research Division and in the Offshore Division, in addition to 15 years in various positions within the maritime area. His international experience stems from Singapore and Dubai. Helge Kjeøy is the new regional manager in DNV Maritime South East Asia and Australia/NZ.
Paal Johansen is the new regional manager in DNV Maritime Korea.
DNV’s Marte Ness to Belize As a Red Cross delegate, Marte Ness is leading drinking water projects in villages in Belize that were hard hit by Hurricane Dean. Hurricane Dean resulted in power cuts in most of Belize, but fortunately no deaths or serious injuries were reported. It may take long time before the electricity supply returns, and several communities have lost access to water. Marte Ness will be responsible for water cleansing and sanitation. “Although we have to have the immediate needs in focus, my task is also to help identify future disaster preparedness activities in order to make people less vulnerable to hurricanes,” she says. DNV pays her salary while she is away as part of its Red Cross partnership. DNV Forum no 02 2007
“Drinking water is highlighted as one of the immediate needs in Belize, and I will be working with the Belize Red Cross,” says DNV’s Marte Ness.
news >> DNV takes over IACS chairmanship
On July 1 Tor E. Svensen, COO of DNV Maritime, assumed chairmanship of the International Association of Classification Societies (IACS). The chairmanship rotates on an annual basis between the 10 IACS members. “I believe that there is no alternative to class within the maritime safety regime. But the vital trust and respect we have in the marine community and in society at large, are easy to lose if we don't perform at the expected quality level - or do even better than expected,” Tor E. Svensen said. “To secure the class societies continued existence we must anticipate and prepare for what will be expected of us tomorrow, not wait until we are forced to follow a defensive strategy dictated by others,” says Tor E. Svensen, COO of DNV Maritime.
Integra Italia’s synthetic corks pass the test Integra is one of the pioneers within the packaging industry in receiving the ISO 22000 food safety management system standard certificate. It is the first company to be certified to this standard in Italy. Integra Italia’s objective is to provide reliable sealing in the food sector. Being certified to the ISO 22000 by DNV is a proof of the company's commitment. ISO 22000 is a fundamental standard that enables any company to identify relevant risks and to manage them efficiently, both from a food safety and cost effectiveness point of view. Integra Italia manufactures and distributes numerous types of seals; among them the Integra Plus synthetic cork.
Successful social responsibility approach in Chile DNV has secured the first contract in Chile for the Social Accountability standard SA 8000, signed with TNT Express Worldwide Chile Carga Ltda. The demand for social responsibility services in Chile is in the start-up phase. It is expected that other companies will follow as the standard gains a foothold in the market. The certification contract includes three TNT sites in Santiago.
DNV Forum no 02 2007
> Focus on HSE in the United Arab Emirates
TECOM Investments and four of its entities have been certified towards the Environmental Management System standard ISO 14001 and the Occupational Health and Safety standard OHSAS 18001. TECOM Investments have thus proved that they meet the requirements in the standards and know how they can influence both the external and the internal environment. TECOM Investments with 256 employees manages the infrastructure, like leasing, renting and repairing the buildings of Dubai Internet City, Dubai Media City, Dubai Knowledge Village and eHosting DataFort. TECOM is owned by Dubai Holding. DNV’s Torger Baardset and TECOM’s Abdulatif Al Mulla with the ISO 14001 certificate.
Orange goes for convergent billing solution French mobile operator Orange has initiated a strategic programme to move to a fully convergent billing solution which will handle all types of customers and services. Orange has seen significant growth in the UK the recent years in a highly competitive market. DNV has been selected to provide quality assurance for their new billing solution programme to ensure that the quality expectations for the programme are well defined and delivered. This will be achieved by engineering quality into what is to be delivered and into the processes for producing those deliverables. In addition DNV is providing quality-related support and guidance on a daily basis to the staff on the programme.
Tops performance list for class societies DNV has the highest performance factor among class societies in terms of port state control inspection results, according to figures published by the Paris Memorandum of Understanding on Port State Control. The figures are included in the Paris MOU's annual report for 2006. The data is based on thorough analysis of port state control findings over the past three years. “Quality throughout the value chain is our main target. Therefore I am pleased to see these figures,” says Olav Nortun, technical director of DNV Maritime. “It is mainly DNV’s customers, the shipowners, that can be proud as this is a result of their focus on maintenance and safety. Secondly it is a result of good cooperation between shipowners and class with a common focus on quality,” says Olav Nortun, technical director of DNV Maritime.
DNV Forum no 02 2007
news >> Audits for BP Alternative Energy
BP Alternative Energy has awarded DNV a contract to support in the delivery of a series of operational and maintenance audits of their Europe and Asia alternative energy assets. BP was one of the first major energy companies to publicly acknowledge the need to reduce carbon emissions. BP Alternative Energy was set up in 2005 and aims to invest USD8 billion in solar, wind, hydrogen and natural gas power technology over the next ten years. Today, BP Alternative Energy has established operations in Spain, Korea, the Netherlands, UK, and India. All of the locations will be subject to review. The sites involve both wind farms and combined cycle gas turbine power plants, and DNV’s consultants will be required to not only understand the health, safety and environmental risk implications of the activities but also comment on the effectiveness of the operational and maintenance processes. BP Alternative Energy invests USD8 billion in alternative energy.
DNV teams up with Morgan Stanley on carbon trading DNV is an important co-player in the launch of the Morgan Stanley Carbon Bank, which will assist clients seeking to become carbon neutral. ”Many companies have begun seeking ways to reduce their direct greenhouse gas emissions. Our new service will help them more easily and reliably take the next step to achieve a zero carbon footprint,” says Simon Greenshields, global head of Power, power fuels and carbon trading at the global financial services firm Morgan Stanley. The Morgan Stanley Carbon Bank will sell greenhouse gas credits to companies willing to voluntarily offset globalwarming emissions. Carbon credits will be procured from various sources, including Morgan Stanley’s own direct investments in emission reductions. Companies wishing to reduce their emissions must start by having their baseline emissions documented. This is where DNV comes in to establish and verify a baseline, and DNV will be the only company doing this job for the Carbon Bank’s clients. “This is the market’s first broadly offered service providing integrated carbon verification and offsetting capabilities based on the highest recognised international standards,” says Simon Greenshields, global head of Power, power fuels and carbon trading at Morgan Stanley.
DNV Forum no 02 2007
From left; Norways former Minister for Oil and Energy, Odd-Roger Enoksen, Norway’s Minister for Foreign Affairs, Jonas Gahr Støre, and CEO of DNV Henrik O. Madsen launched the first project under the “Barents 2020” umbrella in Tromsø, Norway.
Harmonising industry standards in the Barents Sea DNV is to head up a project of harmonising the industry standards for health, safety and the environment in the Barents Sea. Both Russian and Norwegian actors will be invited to participate. The standards will contribute to a level of safety at least commensurate with that in the North Sea and which also takes into account the demanding conditions in the High North. The project is the first
to be realised under the Norwegian Government’s "Barents 2020" initiative. The objective is to ensure that current and future petroleum activities and shipping movements in the Barents Sea are undertaken in accordance with standards that are appropriate for the extreme conditions in the Arctic.
Electronic charts may avert one in three groundings If Electronic Chart Display and Information Systems (ECDIS) are made mandatory on board ships, the number of groundings is likely to be reduced by a third according to a study carried out by DNV. For many ship types, collision is the dominant risk, while grounding is second. The effect of ECDIS has been documented in previous studies, but uncertainty has remained relating to the coverage of electronic nautical charts on which ECDIS performance depends, and which some have claimed is still inadequate. “These results support that an Electronic Chart Display and Information System should be implemented as a mandatory requirement for most ships,” says DNV’s Rolf Skjong.
DNV Forum no 02 2007
UN Climate Chief sees variable treaty Associated Press: The treaty that will eventually replace the Kyoto Protocol on climate change could be a potpourri of legal obligations, nonbinding commitments and aid arrangements for the developing world, but each nation should choose its own course, the U.N.’s top climate official said this summer. At the outset of a season of climate negotiations, Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change, said countries such as the United States are mistaken if they dismiss the Kyoto process on the grounds it is forcing them into unwanted legal commitments. “Countries themselves are in the best position to decide how they can achieve a target to which they commit,” he told The Associated Press from his headquarters in Bonn, Germany. “You should not seek to impose legally binding commitments on countries.”
President Bush called a conference in September in Washington of the world’s 15 biggest polluters, including India, China and several other countries not bound by the 1997 Kyoto Protocol, which expires in 2012. De Boer will head the U.N. delegation. That meeting took place three days after a broader meeting on climate change summoned by U.N. Secretary-General Ban Kimoon on Sept. 24 in New York. Both the Washington and New York talks were geared toward a major U.N. meeting in Bali, Indonesia, in December to discuss a successor agreement to Kyoto.
“IT MAKES SENSE TO GET THE BIGGEST BANG FOR YOUR BUCKS.” At the same time, he said, it was up to the industrialised nations to take the lead in fighting global warming, and that binding commitments give a strong signal to energy investors on where to put their money. De Boer’s comments appeared aimed at minimizing differences with the United States, which opted out of binding international agreements, but which is now trying to seize the initiative in shaping the next phase of world climate policy. The U.S. position has angered the European Union, which has adopted increasingly higher targets and imposed tough regulations on its member nations beyond their Kyoto commitments.
the world. The atmosphere doesn’t care where you reduce emissions as long as you reduce emissions,” says Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change.
YVO DE BOER, executive secretary of the U.N. Framework Convention on Climate Change.
The Kyoto agreement requires 35 industrial nations to cut their global-warming emissions 5% below 1990 levels by 2012. It also devised a carbon trading market and set up a system for nations to offset part of their obligations by sponsoring emissionreduction projects in developing countries. De Boer said 700 such projects - such as financing hydroelectric or wind power projects - are in the pipeline. De Boer said an important element in the post-Kyoto climate regime will be how countries can gain credit by helping the developing world. “It makes sense to get the biggest bang for your bucks, to identify the most costeffective emissions reduction options around
DNV Forum no 02 2007
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DNV Forum corporate magazine
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