Wednesday, April 22, 2020

Shipping Line Promises to Do Better in Future by Signing Up to UN Initiative

Historic Misdeeds Have No Place in Modern Management
Shipping News Feature

JAPAN – WORLDWIDE – This week saw shipping line Kawasaki Kisen Kaisha, known universally known as K Line, join the United Nations Global Compact (UNGC), an initiative proposed by the UN, based on CEO commitments to implement universal sustainability principles and to take steps to support a set of specific goals. The ocean carrier has also joined the Global Compact Network Japan, which is UNGC 's local network in Japan.

The UNGC is a voluntary initiative in which companies and organisations act as good members of society and participate in the creation of a global framework for sustainable growth by demonstrating responsible and creative leadership. Signatory companies and organisations are required to support and implement the UNGC’s 10 principles on human rights, labour, environment, and anti-corruption.

The 10 principles to which signatories to the UNGC agree to abide are:

  • Human Rights – Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses
  • Labour – Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; Principle 6: the elimination of discrimination in respect of employment and occupation.
  • Environment – Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.
  • Anti-Corruption – Principle10: Businesses should work against corruption in all its forms, including extortion and bribery.

This last will doubtless be noted with some sense of irony by regular followers of the seemingly endless litany of antitrust and cartel cases involving ocean carriers worldwide in the past few years. In August 2019 the Federal Court of Australia imposed a fine of A$34.5 million on K Line, the largest ever criminal fine imposed under the country's Competition and Consumer Act.

The scandal came after in 2018 the company was fined €39.1 million (after a substantial discount for cooperation) by the European Commission as one of five RoRo carriers which colluded over a six year period to 2012, and in 2017 K Line were one of 7 carriers fined for similar activities by the Mexican authorities.

K Line now says it is putting Environment, Social and Governance issues at the forefront of its management policies and that it is strengthening its efforts to contribute to the realisation of a sustainable society, thus engendering the improvement of its corporate value.