中远海运能源运输股份有限公司

COSCO SHIPPING Energy Transportation Co.,Ltd.

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2016 Corporate Social Responsibility Report Hong Kong Stock Exchange Stock Code：1138

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CONTENTS
Strategy Cooperation Beauty Happiness
Leading a Sustainable Future 11 Promoting Industry Win-win Growth 20 Committing to Build Green Shipping 41 Creating a Better Life Hand in Hand 48
The Value of Responsibility and Strategy 12 Supporting Global Energy Supply 22 Committing to Green Operation 42 Caring for Employees’ Growth 50
Responsible Business Rules 15 Improving Shipping Intrinsically Safety 26 Building Green Ships 44 Launching Fixed-point Poverty Alleviation 65
Stakeholder Engagement 17 Professional Service for Global Customers 32 Promoting Green Office 47 Joining Actively into Social Welfare Activities 66
Promoting Win-win Cooperation with Partners 37
CHAIRMAN’S STATEMENT 02 OUR COMMITMENT 69 APPENDIX 72
ABOUT US 04 KEY DATA 70 ESG Guidance Table 72
Comparison Table of the Ten Principles of UN
75
CORPORATE GOVERNANCE 06 Global Compact
76
About the Report
Readers’ Feedback 77
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2016 Corporate Social Responsibility Report 03

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02 COSCO SHIPPING Energy Transportation Co., Ltd
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CHAIRMAN’S STATEMENT

In the end of June, 2016, COSCO SHIPPING Energy Transportation Co., Ltd was restructured, which not only marks the restructuring integration work of COSCO SHIPPING business has made great achievements, but also means that the development of China and even the global energy transportation has opened a new chapter.

The establishment of COSCO SHIPPING Energy is an inevitable choice to comply with the new trend of global energy and international market and adapt to the new demand of China energy security strategy. It is also an important step to implement “the Belt and Road Initiative”, deepen the reform of the state-owned enterprises and improve quality and efficiency. Besides, it has made a significant breakthrough in actively fulfilling the social responsibility and pursuing the sustainable development.

The restructured COSCO SHIPPING Energy adheres to the strategic guidance, formulates to be “the Most Admirable and Reliable Global Energy Transportation Service Provider”, builds up the corporate value of “Integrated Capacity, Infinite Capacity”, puts forward the “Four Global Leading” strategic goals of operation capacity, business structure, security marketing and business model, and leading the sustainable future with strategies.

The restructured COSCO SHIPPING Energy adheres to the innovative development, commits to better ensure global energy supply and achieves “the World's First Tanker Fleet” and the “China Unique” operation capacity of LNG transportation. The business model of interaction between domestic and international trade, the black and white oil, the large and small fleet and the flexible and diversified business model are initially shaped. The shipping security ability is further advanced, and there has been no general or more safety accidents around the year. The success ratio against typhoons and piracy is 100%. We have completed the layout of globalization in Britain, America, Singapore and other countries, and provided excellent service for our customers with customer

satisfaction reaching 100%.

The restructured COSCO SHIPPING Energy adheres to the green development, strictly complies with the international and domestic environmental protection laws and regulations, establishes and improves the environmental management system and green operations. We introduce the new technology to build the energy conservation, environmental protective, safe and efficient transportation fleet, reasonably arrange the routes, and carry out the low speed navigation, make efforts to reduce the energy consumption and pollution emissions in the process of ship navigation, and protect the blue sea and sky with heart of awe.

The restructured COSCO SHIPPING Energy adheres to the people-oriented principle, safeguards employees' legitimate rights and interests in accordance with law, and takes good care of the safety and health of staff especially the crew. We focus on employees’ capacity cultivation and career development, and ensure their balance between work and life. We also attach great importance on the friendly relationships with community, undertake the fixed-point poverty alleviation, public welfare support, community governance, sea rescue and other social missions, try to achieve the harmonious development among enterprises, employees and operating in communities.

There is still a long way to go, and we shall never stop. The establishment of COSCO SHIPPING Energy is only the first step on this long journey. Our faith and steps of pursuing the sustainable development will never be ceased. We will continue our efforts on safe development, cooperative development and innovative development, achieve the original will with patience, and lead the industry with confidence, stride forward to be the world first-class enterprise that is “More Large-scale, More Global, More Competitive and More Valuable”.

2016 Corporate Social Responsibility Report 05

COSCO SHIPPING Energy Transportation Co., Ltd

ABOUT US

COSCO SHIPPING Energy Transportation Co., Ltd (short for” COSCO SHIPPING Energy”) is the subsidiary of China COSCO SHIPPING CORPORATION Limited that is engaged in such energy as oil and gas transportation with its former of China Shipping Development Co., Ltd （ 01138HK ， 600026SS ） and is headquartered in Shanghai. We are determined to be “the Most Admirable and Reliable Global Energy Transportation Service Provider”. Relying on the national strategy of “the Belt and Road Initiative”, targeted at serving the globalization management strategy of the large petrochemical enterprises and strategic partners, we offer our customers with the whole ship, globalized and all-weather excellent service.

By the end of 2016, we have occupied 100 tanker capacities with 14.67 million dwt; 1 LNG ship has been put into operation with 0.17 million cubic meters. The age of self-owned vessels was 7.6 year on average, and the tanker capacity scale ranked “the First around the World”.

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Corporate slogan Corporate Vision Development
Concept
Integrated Capacity, Be “the Most Admirable Safe Development
Infinite Capacity and Reliable Global Energy
Cooperative Development
Transportation Service
Provider” Innovative Development
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Organization Structure of COSCO SHIPPING Energy

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Labor Union Office
Discipline Inspection Department/Audit
and Supervision Department
Work Department of Party
Committee
Legal and Risk Management
Department
Human Resource
Department
Financial Department
Strategic and Corporate
Management Department
Safety Supervision
Department
Operational Security
Department
Ocean Operations
Department
Coastal Operations
Department
Board Office
General Manager Office
Strategic Committee Audit Committee Appraisal Committee Remuneration and Nominations Committee
B
Manager
s
oard of Directors
Board of Supervisors
Party Committee
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General
Meeting of
Stockholders
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COSCO Shipping Tanker (Shanghai) Co.,
Ltd(100%)
Huahai Petro Transportation & Trading
Co., Ltd(50%)
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Shanghai Beihai Shipping Co., Ltd(40%)

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COSCO SHIPPING Tanker (Singapore)
Pte. Ltd(100%)
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China Shipping Development (Hong China Shipping (Singapore) Petroleum Pte. Ltd(5%) Kong) Marine Co., Ltd(100%) China Energy Shipping Investment Co., Ltd(51%) COSCO SHIPPING LNG Investment Arctic Purple LNG Shipping Limited(50%) (Shanghai) Co., Ltd(100%) Arctic Green LNG Shipping Limited(50%) Arctic Blue LNG Shipping Limited(50%) North China LNG Shipping Investment Aries LNG Shipping Limited(30%) Co., Ltd(90%) Capricorn LNG Shipping Limited(30%) East China LNG Shipping Investment Aquarius LNG Shipping Limited(30%) Co., Ltd(70%) Gemini LNG Shipping Limited(30%) Cargo Branch of China Shipping Development Co., Ltd(100%) Shenzhen Sanding Oil Shipping & Dalian Huachang Shipping Co. Ltd(100%) Trading Co., Ltd(51%) COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co. Ltd(100%) COSCO SHIPPING Tanker(UK) Co., Pan Cosmos Shipping & Enterprises Co. Ltd(100%) Ltd(80%) Sino-Ocean Shipping Co., Ltd(50%) DA-IN Ferry Co., Ltd(15%) COSCO SHIPPING Tanker(USA) Co., COSCO Shipping Tanker (Dalian) Haven Automation Ltd(80%) Co., Ltd(57.5%) Shenzhen COSCO LPG Shipping Co., Ltd(70%) Offshore Oil Shipping Co., Ltd(43%) China Shipping Finance Co., Ltd(25%) COSCO Shipping Tanker (Dalian) Electronic Co., Ltd(60%) COSCO (Dalian) Shipyard Co., Ltd(2.24%) COSCO Finance Co., Ltd(3%) COSCO Shipping Tanker (Dalian) Co., China LNG Shipping (Holdings) Limited(50%)

COSCO Shipping Tanker (Dalian) Co., Ltd(100%)

2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

CORPORATE GOVERNANCE

Good corporate governance can improve its scientific decision-making and risk prevention capabilities, ensure its normal and effective operation, and promote its sustainable development. COSCO SHIPPING Energy strictly comply with the domestic and overseas laws and regulations, companies listed securities regulatory rules, the Articles of Association of COSCO SHIPPING Energy Transportation Co., Ltd and other rules and regulations, constantly improve the corporate governance system in light of the actual situation of company's management, make reasonable adjustments on related issues in a timely manner, enhance the effectiveness of corporate governance mechanism and improve the science of Board of Directors’ decision-making.

Continuing to Strengthen Internal Management in 2016

Revise the Detailed Rules of Auditing Committee of the Board of Directors, further define the responsibility scope of the audit committee members, increase the internal auditing, and internal control and risk management and supervision responsibilities.

Formulate the Information Disclosure Delay and Immunities Transaction Management System of COSCO SHIPPING Energy Transportation Co., Ltd.

Revise the Investor Relations Management System and the Information Disclosure Affairs Management System.

Governance Structure of COSCO SHIPPING Energy

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General Meeting of
Stockholders
Board of Directors Board of Supervisors
Remuneration
Strategic Audit Nominations
and Appraisal
Committee Committee Committee
Committee
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2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

Improve Governance Structure

Since the reform and restructure on June 6, 2016, we have quickly improved the corporate governance structure that consisted of the general meeting of shareholders, the board of directors, the corresponding special committee, the board of supervisors and the general manager according to the Corporate Governance Standards for Listed Companies, Shanghai Stock Exchange Listed Company Governance Guidelines of China securities regulatory commission, Code on Corporate Governance Practices of Stock Exchange of Hong Kong Limited and other rules and regulations. We also guarantee the coordinated running and effective balance of every governance body, maintain the continuity and stability of corporate governance and improve its science and effectiveness of decision-making.

Shareholders The Board of The Special Committee of the The Board Bill Board of Supervisors Meeting Directors Meeting Board of Directors Meeting Review Meeting 2times 14times 10times 65times 7times

Note: The data above is till the end of 2016, all the meetings and decisions strictly abide by the statutory procedures, and we ensure the decisions of the board of directors are lawful and compliant.

The Top 10 Stakeholders Shareholdings of COSCO SHIPPING Energy (by the end of December 31th, 2016)	The Top 10 Stakeholders Shareholdings of COSCO SHIPPING Energy (by the end of December 31th, 2016)	The Top 10 Stakeholders Shareholdings of COSCO SHIPPING Energy (by the end of December 31th, 2016)	The Top 10 Stakeholders Shareholdings of COSCO SHIPPING Energy (by the end of December 31th, 2016)
China Shipping (Group) Company	38.12%	GF Fund- Agricultural Bank of China- GF CSI Financial Asset Management Plan	0.62%
HKSCC NOMINEES LIMITED	31.86%	Zhongou Fund - Agricultural Bank of China- Zhongou CSI Financial Asset Management Plan	0.62%
Central Huijin Assets Management Co., Ltd	2.30%	Industrial and Commercial Bank of China- Lion Value Growth Stock Securities Investment Fund	0.37%
China Securities Finance Co., Ltd	0.89%	Southern Fund- Agricultural Bank of China- Southern CSI Financial Asset Management Plan	0.31%
Harvest Fund- Agricultural Bank of China- Harvest CSI Financial Asset Management Plan	0.62%	Huang Peiling	0.31%

The “Three Meetings and One Level” Member Structure of COSCO SHIPPING Energy

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50% 50%
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0.60%
Shareholder Executive
Representative Director
Supervisors 27.27%
Non-executive
45.45% Director
Employee
Representative
Supervisors 27.27% Independent
Non-executive
Director
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Members of the Board of Directors

Members of the Board of Supervisors

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Special committees
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Members in the Board Senior executives of Supervisors 4people 9peoplepeople

Member of the board 11people

9peoplepeople

Strengthening Information Disclosure

In 2016

Reception of investors

We formulate the information disclosure affairs management and investor relations management measures that meet the information disclosure requirements of a listed company. Disclose the relevant information normally, accurately, completely and timely through performance recommendation, reverse road show, conference call, investor relations website, released annual report, the social responsibility report and other methods, actively cooperate with the CSRC and the listed company association on its survey and consultation, answer and provide feedback on the investors’ related concerns, understand the appealing of the small and medium-sized shareholders through various channels, and ensure that all shareholders get effective information in a timely manner. By the end of 2016, we have released 121 announcements.

over 100 times Answering incoming investors call

over 500 times

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Improve Improve Strengthen
Information information the Investor
Disclosure Disclosure Relations
System Channels Management
Release the Informa- The newspaper speci- Receive the investors and ana-
tion Disclosure Delay fied are China Securi- lysts’ visiting and answer their
and Immunities Trans- t i e s J o u r n a l a n d calls in time
action Management Shanghai Securities Conduct the daily surveys of
System of COSCO SHIP- News investors
PING Energy Transpor- The website specified
Maintain a good relationship
tation Co., Ltd. are the Shanghai Stock with the small and medi-
Revise the Information Exchange Website, the um-sized investors through
Disclosure Affairs Man- H o n g K o n g S t o c k calls, online Q&A, e Disclosure
agement System Exchange Website and o f t h e S h a n g h a i S t o c k
Improve the informa- the company's official Exchange and other ways
tion disclosure process website
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Strategy

Leading a Sustainable Future

COSCO SHIPPING Energy adheres to the strategic leading, builds up the value of responsibility that corresponds to the enterprise’s sustainable development, sticks to abiding by the responsible business rules, promotes the substantial stakeholder engagement, and ensures our operation complies with legal ethics, conforms to our own development needs and the stakeholder demands. We use strategy to lead the sustainable future of our company and the society.

The Value of Responsibility and Strategy

Responsible Business Rules

Stakeholder Engagement

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COSCO SHIPPING Energy Transportation Co., Ltd

THE VALUE OF RESPONSIBILITY AND STRATEGY

The Value of Responsibility

We take the corporate slogan of “Integrated Capacity, Infinite Capacity” as the power, regard the government, shareholders, customers, partners, employees, communities, environment and other stakeholders as the indispensable important power that guarantees company’s development, and commit to responsible for each stakeholder.

Social Responsibility Values Model

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Be
respo-
nsible
for com-
munities
P u b l i c i z e
the corporate
Be value to the
respon- local community,
sible for and achieve the
employees harmonious and
Adhere to friendly relationship
the people- between enterprise and
centered, community.
Be responsible maintain the
for partners rights and interests of
Adhere to the employees, accomplish
p r i n c i p l e o f the common promotion
mutual benefit between employees and
and reciprocity, corporation.
d e v e l o p f r o m
the cooperation,
and cooperate
from the win-win
situation
Be responsible for shareholders
operationAdhere to the principle of transparent ， operate scientifically to achieve
maintenance and appreciation of assets
value, and guarantee the legitimate rights
and interests of each shareholder.
Be responsible for customers
Take the good faith as the highest
criterion, adhere to the tenet of
customer-centric and provide the
excellent and reliable service for
customers.
Be responsible for environment
Strictly follow the environmental
protection requirements of energy
conservation and emissions reduction,
try our best to reduce the effects of
maritime operations on the marine
ecological environment
Be responsible for government
Conduct operation according to
law compliance, guide the company
development with the concept of
scientific development, maximize the
economical, social and environmental
creating value
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Challenges and Opportunities

Based on the external macro view, we adhere to focus on both the reality and the perspective, use the SWOT analysis tools, and systematically review our advantages, disadvantages, opportunities and challenges that we encounter in the process of operation and development. From it we formulate the strategic countermeasures to promote sustainable development of company.

We have significant economies of scale and development advantages, and have good cooperation relations with over 200 foreign and domestic petrochemical companies and oil trading companies

We completed the restructure and reform in June, 2016. It still needs time and efforts to integrate further

The transport business of the third countries is obviously low, and we have not much cooperation with BP, SHELL, EXXONMOBIL and other international oil giants. Our overseas network construction has just started, and the competitiveness in international market needs to be further improved

We have the most balanced global ship type structures, the youngest age and the highest degree of modern oil tanker fleets. Our team advantages are obvious

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We have the advantages of multiple market
linkage among the domestic and international
trade, the crude oil and refined products,
the large and small fleets and the oil and
gas
Internal
external
Advantages
Challenges
Disadvantages
Opportunities
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The adjustment of global oil and gas trade and transportation structure brings the opportunity of market structure adjustment

With the slow recovery of world economy, the growth of domestic economy has slowed down, and the demand of shipping market is not prosperous

The historically low level of international shipping market brings the opportunity of fleet low-cost expansion

The situation of capacity exceeding demand still exists, and enterprises operate under increasing pressure

The rapid growth of global LNG capacity brings the opportunity of business development

The effect of OPEC cutting capacity agreement and many other factors all have stronger uncertainties

The adjustment of energy strategy after America's new President took office, the energy demand growth in Asian countries such as China and India

2016 Corporate Social Responsibility Report 15

COSCO SHIPPING Energy Transportation Co., Ltd

Sustainable Development Strategy

We take “ Being the Most Admirable and Reliable Global Energy Transportation Service Provider” as corporate vision, focus on the “Four Global Leading” strategic goals of operation capacity, business structure, security marketing and business model, adhere to the strategy leading, innovation-driven, reform deepening, development speeding up, commit to the shift from the follower in the international market to the leader, consolidate and strengthen the main national energy transport fleet status, ensure the safety of such national strategic energy transportation as oil and gas, build up to be the global first competitive fleet and the world's first-class operating energy transport enterprise.

Being the Most Admirable and Reliable Global Energy Transportation Service Provider

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Development
Goals
Way of Impl-
ementation
Development
Concept
Development
Vision
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Stronger than competitor's crisis consciousness, stronger than rival’ s courage, better than competitor's innovation ability

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Shift from the follower in industry to the lead in the market
Achieve Shift from giving priority to China market to pay equal atte-
ntion to domestic and international markets
“Three Shifts”
Shift from the main crude oil transport fleet to pay equal
attention to various ship types
Global Leading of Operation Capacity
Achieve Global Leading of Business Structure
“Four”
Global Leading of Security Marketing
Global Leading of Business Model
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Through the production of new ships, acquisition of second-hand ships, large-scale acquisitions on fleets, acquisitions or restructure of POOL and other measures simultaneously, we achieve the capacity growth. Focus on handling the relationship between scale of development and structure optimization as well as risk control, and take the three aspects of strategic considerations including “Scale Growth”, “Profitability” and “Anti-risk ability” into account.

Constantly improve the proportion of stable income business, continuously consolidate the oil market advantage of domestic trade crude, accelerate to expand LNG transportation business; Dynamically achieve the flexibility of each subdivided market management operation and the maximization of the efficiency of resources disposition, establish the leading position of product oil in domestic trade, and seize the opportunity to develop China's product oil export market.

RESPONSIBLE BUSINESS RULES

Operating in Accordance with the Law of Compliance

Comprehensive Risk Management and Internal Control

We stick to operate in accordance with the law of compliance, strictly abide by the international convention and the national laws and regulations, and ensure to operate in accordance with the laws and regulations. Before signing a contract, the legal audit shall be conducted by the legal department to effectively guard against legal risks, reduce such financial risks as directly because of being fined or indirectly affected by reputation; the commitment terms including the ban of special connection transaction and the commercial bribery are incorporated into the contract between our company and partners, promote the operation of upstream and downstream industry chain in accordance with law of compliance; always integrate the legal popularization work closely with company's actual management, carry out legal publicity and education, knowledge questionnaire problem solving and other activities, strengthen corporate legal system construction, and raise the legal consciousness of managers and employees. In 2016, there were no major punishments due to violation of laws and regulations in our company.

Under the background of company’s reform and restructure, comprehensive risk management and internal control is the key to guarantee company’s steady operation. We strictly abide by the policies and regulations, follow up the work methods of “Strengthening Foundation and Body, Make the Top-level Design and be Pragmatic and Efficient”, formulate the Manual of Comprehensive Risk Management and Internal Control System Management, systematically explore every risk of various business points, make critical control measures and the core early warning indicators, standardize company's systematical process of risk management and internal control; actively explore the special risk management, conclude 56 major risk sources from the five dimensions of strategic risk, financial risk, market risk, operational risk and legal risk. The annual top ten risks are voted and identified by all staff up and down and conduct risk response in advance; manage the risk management of major projects. Concerning the site selection off coast branches, the working group of risk management assesses and responses from various aspects including political environment, corporate governance, legal compliance requirements of local operation, tax demands, labor requirement and commercial bribery, and ensures the safety advance of our key overseas projects.

Continue to build the leading safety management performance in industry; Give full play to the advantages of internal coordination, focus on forging a unified safety marketing brand, safety management system and safety management personnel; build the external cooperation mechanism, improve the marketing ability and promote the industry voice and influences.

Domestic trade transportation market: To make innovation cooperation mode improves the efficiency and effectiveness of resource utilization capacity; explore customer needs deeply, and offer the entire logistics solutions for clients; guide counterparts to establish industry alliance, and improve market competition environment.

International trade transportation market: To make innovation on the cooperation mode with the big owners; promote to sign the security services agreement with big owners, and improve the industry barriers to entry while provide value-added services to customers.

2016 Corporate Social Responsibility Report 17

COSCO SHIPPING Energy Transportation Co., Ltd

Anti-corruption and Anti-commercial Bribery

COSCO SHIPPING Energy strictly abides by the business rules of incorruptible employment, takes anti-corruption and commercial bribery as the focus of company management, continually improve systems and mechanisms and strengthen the responsibility implementation, promote integrity risk prevention and control work solidly, carry out the feedback of inspection group from the Group Party, exploit the sword role of internal supervision and auditing, develop the integrity education at all levels, and form the long-term mechanism of “Dare not Corruption, Cannot Corruption, Do not Want Corruption”. In 2016, there were no increasing lawsuits about integrity in COSCO SHIPPING Energy. During the year ended 31 December 2016, we complied with the relevant laws and regulations relating to bribery, extortion, fraud and money laundering.

Improve the anti-corruption

Improve the anti-

corruption system mechanism

Elaborate the content of "Two Duties for One Post", put forward requirements on leaders at all levels to implement “Two Responsibilities” effectively and carry out “Two Duties for One Post" through signing letters of responsibility and collective interviews. E s t a b l i s h t h e h i e r a rc h i c a l m a n a g e m e n t o f d i s c i p l i n e inspection and the two levels management of internal audit.

We have printed and distributed Measures for the Administration of Disciplinary Inspection and Supervision Work, Measures for the Administration of Discipline Inspection Audit Meeting, Measures for the Management of Discipline Inspection Audit Work Report and other systems.

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Promote integrity risk Conduct integrity prevention and control education at all levels

Comprehensively launch the risk prevention By visiting the prevention duty crime warning education base, and control work in energy system. online answering on integrity knowledge and other activities, further enhance the integrity consciousness of leaders and Focus on such high-risk domains as employees.

Focus on such high-risk domains as employees. oil polluted water, “Special Affiliated Enterprises”, and propose preventive Open the column of “Wind Energy” and “Discipline measures interpretation” in WeChat platform, and open the “Supervision-and-audit Information” column on OA platform Send personnel to contact “Lianyunhu” to propaganda the integrity working spirit to all the staff.

Send personnel to contact “Lianyunhu” and investigate at “Zunyitan” for the risk prevention and control work, guide the ship to conduct the integrity risk investigation.

Organize the discipline inspection organizations that are directly affiliated company to educate others, learn from Case Warning Education Materials.

STAKEHOLDER ENGAGEMENT

Substantive Issues Analysis

According to the work process and methods of social responsibility issues management that are developed by research institutions, we collect and recognize the social responsibility issues from many stakeholders and sources, and analyze and determine the substance and importance of issues in accordance with the analysis matrix of “the Impact on Company-the Influence on Stakeholders”, and provide guidance to carry out the social responsibility work with diversification and target.

Recognition on Social Responsibility Issues

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Sources of Issues Issues List
International standard guidelines: the United Nations Global Compact 10
Principles, International Organization for Standardization ， ISO26000 Guidance
on Social Responsibility(2010), Global Reporting Initiative Sustainability Reporting Anti-corruption and
Experience Guidelines (GRI4.0), Hong Kong Stock Exchange Environment, social and a n t i - c o m m e r c i a l
source governance reporting instructions(2016). b r i b e r y ; s e c u r e
global energy supply;
Benchmarking: Such as Maersk group sustainable development report, Nippon e x c e l l e n t s e r v i c e ;
Yusen Kabushiki Kaisha social responsibility report and so on. responsible purchase;
Safety shipping; Green
Company’s monitoring on policy legal environment and social and natural
shipping; Climate
environment
change; Green office;
Internal The social and environmental impact analysis in company’s operations operating Rights and interests
o f e m p l o y e e s ;
source
Collect social responsibility issues from the inside Career development;
O c c u p a t i o n a l
Corporate public opinion monitoring safety and health;
C o m m u n i t y
External Investors visiting, customers survey, meeting with government, media participation; Sea
Source communication, community visiting, social organizations and communicating with rescue; the fixed-point
experts outside poverty alleviation;
Staff volunteers
Theory
Triple bottom line theory, stakeholder theory, the pyramid model
Source
Peak Guaranteeing Global Energy Supply
Climatic Change
Safety Shipping
Green Shipping Excellent Service
Anti-corruption and Anti-commercial Bribery
Midpoint
Community Participation Occupational Safety and Health
Responsible Procurement
Sea Rescue Fixed-point Poverty Alleviation
Career Development
Green Office Employee Right and Benefit
Staff Volunteers
Trough Midpoint Peak
The Impact on Companies
The Analysis Matrix of Social Responsibility Issues
The Impact on Stakeholders
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2016 Corporate Social Responsibility Report 19

18 COSCO SHIPPING Energy Transportation Co., Ltd

List of Stakeholders

Type of Stakeholders	Type of Stakeholders	Appealing and Expectations
			Company Responses

Shareholders	State-owned Assets Supervision and Adminis- tration Commission of the State Council	Preserving and increasing the value of state property Consciously accept the oversight of state-owned assets supervision and administration Play the leading role of state-owned enterprises and actively fulfill the social responsibility	Promote the sustainable and steady growth of business and profit. The operating income is up to 13.006 billion yuan Strengthen the communication and report with the state-owned assets supervision and administration commission Release the 2015 corporate social responsibility report, and actively implement such CSR projects as company poverty alleviation
	2 major shareholders and 132552 minority shareholders	Transparent operation, Major decisions are public to shareholdersa Steady growth of share prices	Constantly improve profitability There were 2 times general meeting of stockholders in 2016. Release the annual report and social responsibility report on a regular basis Maintain the steady dividend policy
Government	Central government Shanghai municipal government Dalian municipal govern- ment	Operate in accordance with the law of compliance Promote employment and local economic and social development Strengthen environmental protection	Observing laws and disciplines, there was 0 corruption lawsuit case in 2016. Create tens of thousands of jobs Drive the development of upstream and downstream The performance of environmental protection all reaches the standard.
Customers	CNOOC, PetroChina and other big customers and small and medium-sized customers	Energy transportation is safe, efficient and lower The service is qualified and respond quickly	Optimize the layout of global network, offer the closely service and the customer satisfaction is 100% Open channels of customer complaints, and the complaint handling rate is 100% Conduct the shipping safety management well, 100% successfully respond to the pirates and natural disasters
Employees	3368 employees 6300 crew	The steady growth of wages and benefits Opportunities for Career Advancement Safe and healthy working environment the open channel of interests expression	Provide better benefits We have launched 284 times trainings of all kinds with 5109 employees attending Conduct staff’s comprehensive mutual medical security plan, comfort the frontline staff and care for the employees in difficulty Launch the workers congress, employees symposium and other communication meetings
Suppliers	666 suppliers	Stable business relationship fair open and just business procurement capacity promotion and mutual growth	Provide the fair opportunity and select the best Require reasonable price and high quality service Conduct responsible procurement and grow up together with suppliers
Partners	Jimei University Dalian Maritime University Shanghai Maritime University Guangzhou Institute of Navigation	Cooperate to play their respective advantages to achieve mutual benefit and win- win results	signing a strategic cooperation agreement Open the ships to university students for internships Senior leaders also undertake part-time professors at university
Media	Newspaper and magazine, news agency, new media	Transparent operation Timely communicate and respond to major issues	There were 5 times media communication meetings and press conference Release 89 news information
Coummunity	Shanghai, Dalian and other operations; Targeted anti-poverty county Yongdecounty in Yunnan province	Protect the community living environment Promote the development of community out of poverty	Fund for community to build and the public poverty alleviation Launch the fellowship activity with the street and community residents, hold the activities of sending love and warm
Social Organizations	Association of Chinese Ports, China Association of Port-of-Entry and other social organizations that concerns about ocean transportation	Protect our marine environment participate in the supporting the development of the environment and community and other programs for public good Promote the development of ocean shipping industry	Release the CSR Report to disclose performance in society, environment and other aspects on our own initiative Attend 12 times industry forum meetings Donate to social organizations or pay membership dues.

Cooperation

Promoting Industry Win-win Growth

COSCO SHIPPING Energy adheres to innovative development and win-win cooperation. While ensuring the supply of global energy and the safety of shipping nature, we innovate in the relationships with clients and partners, strive to become the maker of industry rules, the integrator of industrial resources and the offer of the whole logistics solutions, promote the mutual benefit and sustainable growth of the value chain of energy transport industry.

Supporting Global Energy Supply Improving Shipping Intrinsically Safety

Professional Service for Global Customers

Promoting Win-win Cooperation with Partners

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COSCO SHIPPING Energy Transportation Co., Ltd

SUPPORTING GLOBAL

ENERGY SUPPLY

We take “being the Most Admirable and Reliable Global Energy Transportation Service Provider” as the development vision, and regard the oil and as transport as the two development engines, commit to the development operation of tanker and LNG fleet, innovate in the energy transport business model, strengthen the intensity of market development in domestic and foreign trade, and provide strong transportation guarantee for global energy supplies. In 2016, the volume of goods transported by tankers is 103.81million tons, including 95.26 million tons crude oil transportation and 8.55 million tons refined oil product.

In 2016, we continue to exploit the backbone of “Stateowned Oil with State-owned Transport”, completed 4 4 . 1 3 m i l l i o n t o n s 外贸油品运输 imported supply of goods transportation for 5 main Oil transport of domestic oil companies, international trade accounting for 52.1% of our

In 2016, we completed 16.378 billion tons sea miles turnover of domestic oil transport with an increase of

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外贸油品运输
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0.3%, and the market share of domestic oil Oil transport of transport kept around domestic trade 55%.

total transport in international trade; complete 331.565 billion tons sea miles turnover of international oil transport with a fall of 4.37%(mainly because of part proprietary ships transferred to rent)

After assets integration, we established “the Only in Domestic” market position, LNG projects were promoted continuously and steadily, and the economic benefit is rising steadily. In 2016, there was 1 ship put into operation in the subsidiary of Shanghai LNG with about 36.31 million yuan revenue of the whole year and 19.58 million yuan operating profit. The joint venture CLNG now has 6 ships in operation with the revenue of 1.041 billion yuan and the net profit of 0.369 billion yuan. The income from investment confirmed was about 0.108 billion yuan; Besides, the subsidiary of East LNG, North LNG was confirmed 11.59 million yuan and 19.82 million yuan revenue respectively. Now there are 23 LNG ships under construction with 3.98 million cubic meters, which all will be delivered by the end of 2020.

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外贸油品运输
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Building the World-class Operation Scale

As an energy transport company, promoting the large-scale, enlargement and high-end oriented of the shipping fleet is the key to ensure energy safety and efficient supply. In 2016, through merger and reorganization, we transferred the bulk assets to COSCO Group, acquired 100% stock rights of Dalian Ocean at the same time, and became the specific oil and gas transportation enterprise. We adopt acquisition, lease and other methods to possess and control 137 oil tankers of all kinds and LNG transport ships (105 state-owned ships in total). The whole scale of transport capacity is over 17 million DWT. We become the largest oil and gas transportation enterprise. In 2016, there were 5 new ships put into operation including CESI Gladstone Fleet and “Yuanzhihu’ Fleet, further improving our ship structure and modern level.

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The large-scale of
The LNG transport is
tankers ranks “the First Modern tanker fleet
“China Only”
in the Global”
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The most balanced ship structure, the youngest ship age and the highest modern level of tanker fleet around the world.

105 own ships, 14.68 million DWT; rent 7 tankers (6 VLCC and 1 PANAMAX), 1.97 million DWT; include the joint venture, 23 tankers under construction, 4.01 million DWT, the large-scale of tankers ranks “the First in the Global”

1 1 L N G s h i p s a re p u t i n t o operation(1 own ship), 1.35 million cubic meters, including 23 LNG ships invested by joint ventures under construction, the LNG transport is “China Only”

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The vessel of “Tianhongzuo” is the new ship that was first delivered after the reform and restructure of Group energy sector, and is also the first 65000thousand ton crude oil ship built Shanhaiguan Shipbuilding Industry Co., Ltd

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“CESI Gladstone” is the most advanced LNG ship around the world, which drives the industry development of nearly a thousand equipment manufacturers in the country, and accelerates the internationalization process of metallurgy, shipbuilding, electromechanical, marine manufacturing and other national industries.

The Vessel of “Yuanzhihu” is the First VLCC Ship After Reform and Restructure of COSCO Shipping Energy

2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

Optimizing the Business Structure of Domestic and

Foreign Trade

We are committed to building the world's leading business structure, geared to the needs of customer requirements, and strengthen customer thinking. Based on the trade end and supply side, we rethink the shipping market development strategy, give consideration to the two-way development of domestic and foreign trade, enrich the crude oil, refined oil products, liquefied natural gas (LNG) and other business sectors, and guarantee the global energy transport with sustainable competitive power.

Foreign Trade

Domestic Trade

Market

I m p r o v e m a r k e t analysis ability, seize market opportunities, a d h e r e t o t h e diversification strategy and the operation level outperforms the market.

Integrate industrial resources, lead the model innovation, improve the service s t a n d a r d a n d consolidate the leader position in industry

Innovating in Diversified Business Model

Business model innovation is the key of enterprise’s successful competition. We take full advantage of the strong customer marketing ability in domestic trade crude oil transport market, the high ship management level, the high market share and brand recognition, make innovation in diversified business model including “Longkou Model”, “Laizhou Model”, “Weizhou model”, “Xingzhong Model” and “Ship and Routeing”, Strengthen the integration of upstream and downstream industry chain, establish closer ties of capital assets with related parties, improve the efficiency and effectiveness of operations of the ship, and build the new ecological shareable development.

Exploring the New Pattern of “Ship and Routing Liner”, Promoting Win-win Results of Improving Quality and Efficiency

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Affected by seasonal climate, the vessel unloading operation around Bohai Sea Area is highlighted inefficiencies when in winter, and seriously affects the normal production and operation. In 2016, we explored the effective path of improving quality and efficiency, put forward the operating model of “Ship and Routing Liner” based on clients’ actual practice and demand, provided the fixed ship and route for customers, which not only improved the operation efficiency of our ships, but also reduced the shipping quality disputes substantially.

Since 2016, we have conducted this pattern through collaboration with 6 customers. Take the “Ship and Routing Liner” as an example, as one of the ship routes pioneered the routing, the average turnover days of this route in the first three quarters of 2016 was 0.5 days less than that in 2015, improving 7% ship route efficiency; the average loading capacity increased by 1000 tons than that in 2015, improving 2% ship route efficiency; the average oil consumption reduced 6 tons than that in 2015, reducing 3.6% cost. The increasing efficiency and reducing cost helped improve about 10% ship route efficiency in total.

Refined Oil Products Transport Market Seize the good trend of global refining capability improvement and Chinese petroleum products export growth, develop international oil transportation market, form effective complementation with crude oil transportation of foreign trade business

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COSCO SHIPPING Energy Transportation Co., Ltd

IMPROVING SHIPPING INTRINSICALLY SAFETY

Oil transport industry has high safety risks and standards. Making shipping safety is not only an effective means to provide valueadded service for our customers and obtain the core competitiveness, but also a competitive strategy to lead formulating industry standards and raise barriers to entry in segmented market. COSCO SHIPPING Energy establishes the development strategy of “Global Leading Safety Marketing”, takes the “Safety Priority” as the principle, the “Intrinsically Safety" as the core and the “Safety Development” as the main line, considers safety as our core competitive power, make innovation in safety concept, model, path and build the safety brand, strives to provide the safest and best logistics solutions for global customers.

Safety Production Concept

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The safety risk is All the accidents Guaranteeing safety Safety has
the highest risk in is the priority of
are preventable absolute priority
company every employee
Safety is the investment, Intrinsically Guaranteeing safety is Prevention first,
brand and core Safety and safe the greatest care to comprehensive, all
competitive power. development employees staff and whole
process
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2016 Safety Performance Table of COSCO SHIPPING Energy

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Performance Performance
Unit 2016 Unit 2016
Index Index
Investment in 10 thousand The success rate of
15279 % 100%
production safety yuan preventing typhoon
The success rate of
Severe accidents Unit 0 % 100%
anti-piracy
ISPS passing rate of
Major accidents Unit 0 % 100%
checkup
Potential safety
Accidents Unit 0 hazard checking and wTimes 12
controlling activities
Potential safety
Ordinary accident Unit 0 Items 16213
hazard
Minor accidents Unit 5 Rectify and reform Items 15901
PSC passing rate of The rate of rectify and
% 100% % 98.08%
checkup reform
The passing rate
Dying event of
of zero defect % 75.30% Unit 0
occupational injury
annotation
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Strengthening Safety Management System

We adhere to the function orientation of “Leading and Dominating, Fusion and Collaborative, Serving and Supervising”, focus on the five core elements of “Personnel Safety, Equipment Safety, Environment Safety, Standards Safety and Management Safety”, strengthen the top-level design and system construction, accelerate the deep integration of team, culture, policy and system, give full play to its synergy effect, learn from each other, continuously strengthen the security basic management, constantly improve safety management performance, promote the high standards and high efficiency of energy system security management.

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01 02 03
Refine safety Innovate in safety Strictly control
responsibility management means safety risk
Release 12 related rules and Take “Intrinsically Safe and Safe Through propaganda the “Meetings
regulations of safety management Development” as the goal, focus before Work”, evaluation of
successively, establish and on the “Five Preventions”, make daily work and ship risks, the
improve the safety production solid progress on over 10 reform e s t a b l i s h m e n t o f i n c e n t i v e
responsibility system of “the and innovative measures including mechanism, encouragement
Same Responsibility of Party and total control, dual channels, director of NEAR MISS report and other
Government Administration, Two following ships, Inspection center methods, we constantly lead the
Duties for One Post, Control and of Singapore, crew performance risk control and hidden danger
Administrate Cooperatively, Claim e v a l u a t i o n , h i d d e n d a n g e r identification further. Dalian Oil
Responsibility for Misconduct”, identification, pre-job training and Ship submitted 1118 NEAR MISS
establish a strict, scientific and looking back, strive to move the reports, and Shanghai Oil Ship
fair safety assessment incentive threshold of security management submitted 837 NEAR MISS reports.
mechanism. forward.
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Openned Port Security Checks Promoting the Level of Ship Safety Management

On June 14th, 2016, we conducted the open security check with Ningbo Maritime Bureau on “Ludingtan” vessel, aiming at narrowing the distance between the ship and port through the open and transparent check, and established a platform with learning from security check, and launched the onsite training on the existing general and preventive problems in the process of ship safety management, learned from each other, promoted the level of ship safety management between port and ships, and further enhanced the implementation of actual work management standards.

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COSCO SHIPPING Energy Transportation Co., Ltd

Improving Safety Level of Ships

Optimizing Ship Structure

The Age Structure of COSCO

SHIPPING Energy Ships

The ship and its equipment performance are the important indicators of security technology status. Since our merger and restructure, we have constantly adjusted the fleet structure, promoted the usage of new ships, accelerated the elimination of old ships, minimized the security risks of old ships resulting from equipment aging and high attrition rate, and improved the intrinsic safety of the whole ships. By the end of 2016, our ship age has been 7.6 years on average.

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over 15 years
0-3 years
10-15 years
6%
3-7 years
33%
24%
33%
7-10 years
4%
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Full Life Cycle Maintenance of Ships

Strengthening the maintenance of ship structure, mechanical and electrical equipment and important system is the key to guarantee the safe operation of ships. We promote the maintenance concept of the whole life cycle plan of ships, by means of safety investment and reasonable degree evaluation, start with the new building ships, carry out the comprehensive demonstration of ship’s full life cycle, and draw up the detailed maintenance plan. In the process of ship operation, we strengthen the ship maintenance and always ensure that the ship is seaworthy and cargo-worthy.

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Ballast tank coating maintenance Old ship repair management Maintenance of main engine remote control system and
speed regulating system
7ships 8ships 3ships
Complete METE Install shipping Ship guide equipment Annual maintenance
software shipment management plan maintenance of boiler repairs plan
application information system
18ships 63ships 25ships 7ships
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Eliminating Security Risks

We move the threshold of security management forward, strengthen suppliers management, strictly carry out the supplier access mechanism audit system, and implement the “One-vote Veto” and blacklist system to the suppliers with major safety and quality accidents. In 2016, we had annual negotiations with more than 20 main suppliers including paint, lubricating, materials, spare parts and repairs, eliminated 2 suppliers with low standards, canceled 2 small brand chemicals suppliers and avoided accidents from the security source 。

Building Security Brand Image

We increase the security to the strategic height of marketing, build safety to be products, make innovation on the cooperation model of safety service, spare no effort to display company’s image and brands, improve the power and influence in industry, commit to dedicated to bring customers the best and safest service and become Dupont in shipping industry.

Take the safety service UNIPEC UK as the template, strengthen the connection, service and cooperation with the domestic major oil companies, ports and harbors, display the image of company’s safety, technology and service, and constantly expand the domestic influences.

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Continue to improve “Qinzhou Operation Model” and “Weizhou Model”, actively participate in the rules formulation of government and authorities, raise the voice and increase the power of influence, and become the leader in domestic industry and the rule maker.

Take every opportunity to show the company image and brand, preach our security concept and the best management practices, and become the leader of industrial safety management ideas.

Strengthen the cooperation with external professional companies, Maritime universities and classification society, constantly conduct R&D and make innovation on security technologies; Regularly visit international big companies like SHELL, BP and EXXONMOBIL and create a favorable environment for company development.

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We participating in holding “China Oil Transport Security Forum”

On December 8th, 2016, the 7th “China Oil Transport Security Forum” was successfully launched in Dalian with the theme of “Safety Sharing and Innovative Development” by COSCO Shipping Energy and other units. Since established in 2010, “China Oil Transport Security Forum” has set up communicating platform for China energy production, sales, transport and other related parties, and made a great contribution to the healthy development of China oil transport. COSCO Shipping Energy actively organized and participated in this activity, and effectively improved our position and raised voice in oil transport industry.

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COSCO SHIPPING Energy Transportation Co., Ltd

Strengthening Security Risk Prevention and Control

Collisions with rocks, fire explosion, industrial accidents, pirate robbery and extreme weather are the five important security risks to the shipping company. We focus on the improvement and optimization of people, ship, environment, management and standard, continuously strengthen employees’ training and evaluation, maintenance, seasonal prevention, risk evaluation and management change, system improvement and implementation and other risk management means, and ensure the double safety of customers’ goods and crew.

Safety Risks and Prevention Measures

Collisions with Rocks

Launch a special navigation safety inspection for one month

Pirates Robbery

After the ship collision accident happened in brothers unit, we launched the topic analysis meeting and arranged the anticollision work

C o m p i l e a n d i s s u e t h e s e c u r i t y information every month, timely report last year’s anti-piracy situation analysis of every sea area, its characteristics and the recent anti-piracy status

At the same time playback CCTV monitoring of the ship and solemn duty to discipline

Strengthen training drills, adhere to the risk assessment, follow-up monitoring, strengthen the ship on duty, participate in navy escort, employ armed security guards

There was no major collision accident in 2016

Our ships went through 109 times in the Indian Ocean, 11 times in the Gulf of Aden, 23 times in West Africa and 132 times in Southeast Asian waters. The successful rate of anti-pirates was 100%

Industrial Accidents

Hold two workshops industrial injury prevention successively

Make industrial injury prevention measures

Fire Explosion

Conduct industrial injury prevention training to onshore staff

We have issued Report on Fire explosion accident of Jingjiang Factory, Jiangsu Province, Circular Telegram On Further Strengthening the Management of Dangerous Chemicals and Circular Telegram On Strengthening Ship Smoking Management and Security Control

Issue training materials to ships

There was 0 dying from industrial injury accidents in 2016

Extreme Weather

Organize ships to actively conduct propaganda activities of “119 Fire Prevention Day”

Strengthen the surveillance and monitoring of restricted visibility, typhoon, strong convection, cold wave, winds and other seasonal weather

There was no fire explosion accidents in 2016

H o l d w o r k s h o p s i n t i m e , m a k e arrangement to carry out the preventive measures as early as possible, and arrange personnel on duty when necessary

In 2016, the successful rate of antityphoon was 100%

Conducting the Construction of Safety Culture

We focus on building a team of high standard crew with excellent business and physical quality, safety consciousness and qualified capacity. Match the crew team reasonably according to their qualifications and business ability; strengthen the crew training, By sent before training, pre-service training, safety personnel training, labor protection supervision inspector training, skills competition training, orientation training, shore-based safety education and other aspects of trainings, we promote the crew's business skills and professional quality. We conduct Dupont safety culture learning, security prize essay, production safety month and other activities, strengthen the concept of safety development and enhance the quality safety of all crews. In 2016, we completed 31 times crew safety trainings in total with 527 persons attending it.

Frontline Staff Presence of Safety Management

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Good boatswain
Fan Shibin——
“Tonglinwan” cautious
and conscientious good
boatswain
T h e y o u n g
captain Zhou Hongli—
—“Draw the Blade of
Sword Earlier, Sharpen
up the Edge”芒
G o l d e n
commissar Si Hongjie
——“As Long as He
Stays, We Will Feel
Comfort”芒
O v e r s e a s
supervision manufacture
expert Chen Ming
——“Break through the sea
ice and develop channel G o l d e n
forward” Chief Engineer Zhou
Shijian
——“Since Choose the
Distance, Only Trials
and Hardships”
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COSCO SHIPPING Energy Transportation Co., Ltd

PROFESSIONAL SERVICE FOR GLOBAL CUSTOMERS

“Goal 17. Strengthen the implementation means and revive the global partnership for sustainable development.

Based on partnership experience and resource allocation strategy, encourage and promote effective partnerships between public-private sector and civil society.”

Promoting Customer Service Ability

Customer satisfaction is an important power of enterprise progress. We constantly strengthen customer service work, improve customer service system, optimize service procedure, improve customer complaints handling ability, focus on customer demand, meet customer expectation, constantly improve customer experience and satisfactory. In 2016, we received 76 commendatory letter in total, the rate of complaints handling was up to 100%, and the customer satisfactory was 100%.

—— The United Nations “Sustainable Development Agenda in 2030”

We closely focus on the development strategy of “Big Customers, Big Cooperation and Big Service”, further shift to the operating model of “Customer-centric”, continue to improve customer service ability, accelerate the globalization process of layout, deeply conduct customer communication activities, and strive to provide the most professional attitude and service for global customers.We have also been strictly conforming to the Advertising Law of China and fully disclosing the risks related to our products and services. By the end of 2016, we maintained good cooperation relations with more than 220 customers around the world, and our routes covered around the world.

In 2016, we formulated the following management systems to improve customer service ability effectively:

Ocean Chartering Business Administrative Measures of COSCO SHIPPING Energy Transportation Co., Ltd (Trial Version)

Implementation Detailed Rules for Agent Management of COSCO SHIPPING Energy Transportation Co., Ltd

Management Measures for Charterers Credit Rating of COSCO SHIPPING Energy Transportation Co., Ltd (Trial Version)

Accelerating Global Layout Process

As the world's biggest oil transport logistics enterprise and China only LNG transport service provider, we accelerate the global layout and overseas branches construction, and have formed full coverage of the world's major energy trade center branches including Hong Kong, Singapore, London, Houston and other places, promote COSCO Shipping Energy to further enhance the level of management effect and fleet remote control with the help of regional advantage, provide global customers with 24 hours across time zones all-weather, all-round and all ships transport service, and effectively enhance the competitiveness of COSCO Shipping Energy in the field of international energy transport.

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Status of Global Layout
UK Company-London
Big oil companies in the UK,
British refinery plant/traders
Hong Kong Company-Hong Kong
and so on
Oil companies in Hong Kong, local
traders in Hong Kong and so on
USA Company-Houston
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USA Company-Houston
Big oil companies in America, American
refinery plant/traders and so on
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Singapore Company-Singapore
Big oil companies in Singapore, local
traders in Singapore and so on
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Primary Functions of Overseas Branches: Provide customers with personalized service in a region Regional market development and market information collection Fleet Regional Business Managed Security Service

Flow Chart of Company Customer Complaint Processing

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Promise processing
time
Department investigation
and handling
Written report
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Receive complaints
Timely feedback
Summarize and archive
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2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

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“Big Customers, Big Cooperation and Big Service”

We have established strategic cooperation relationships with China Petrochemical Corporation (SINOPEC), China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC), Zhenhua Oil Holding Co., Ltd (Zhenhua Oil) and SINOCHEM GROUP (SINOCHEM), practice the big customer strategy, establish customer thinking, and achieve the shift from shipcentric to providing all high-end service for customers.

The five strategic customers above 44.13[million tons] Total foreign trade cargo

In 2016, the carrier oil amount of our foreign trade for the five strategic customers above was about 44.13 million tons, accounting for 52.1% of total foreign trade cargo.

52.1[%]

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Weizhou Operation Model

Weizhou terminal is an oil drilling platform under CNOOC, and is the only sea terminal undertaken all transportation tasks by COSCO Shipping Energy. Based on many years of experience, COSCO Shipping Energy creatively initiates the operation and management mode of “Weizhou Terminal” revolving around guaranteeing the platform transportation service. In 2016, the guarantee team of Weizhou operation completed 35 times terminal oil extraction in total, the average trip time is shortened by 1.45 days. The marine utilization and operating efficiency are improved substantially. The hedging surface is up to 100%.

“Hope COSCO Shipping Energy can play a crucial role in guaranteeing marine oil terminal production and stable domestic marine oil transportation.”

——CNOOC

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Graph Work Pattern of “Big Customers, Big Cooperation and Big Service”

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“Big Customers, Big Cooperation
and Big Service”
Providing Customized Service for
Big Customers
Domestic Trade -Customer Foreign Trade -Regular
Manager System Visit System
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The service team consists of sales Visit big customers centrally every
managers and scheduling, and provides month and understand customer's real
personalized service for owners needs
Establishing Strategic Cooperation
Relationships with Big Customers
SINOPEC CNPC CNOOC Zhenhua Oil SINOCHEM
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Ensuring Customer Information Security

We strictly implement the system of secrecy. Through conducting encryption processing to important data with technological means, implementing ISO17799 information security management system, formulating information security management procedure, signing confidential agreement with employees and customers, safekeeping the information of customers and the related parties and other means, we ensure customer privacy and information security aren’t violated or leaked. Except for company employees, agent authorized by customers, partners and subsidiaries, we ensure that do not share customer information with others, and don't let it out or sell information about clients or potential clients.During the year ended 31 December 2016, we complied with the relevant laws and regulations relating to privacy in all material respects.

Strengthening Customer Communicating and Exchanges

Through holding promotion conference, communication meeting and talks with stakeholders and other means, we make business operations open and transparent, listen attentively to the views and suggestions of stakeholders, strive to keep good communication and contact with all stakeholders, enhance mutual understanding and trust, and optimize company external development environment.

2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

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Making First Appearance on Founding Congress

On June 6th, 2016, COSCO Shipping Energy Held the founding congress and promotion conference, promoted corporate vision, development strategy, the historical opportunity of routing selection and so forth to customers, which marked the world's largest energy transport enterprises set sail.

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Communicating and Meeting Enhancing Understanding

We actively conduct communication activities with stakeholders. Through the face-to face communication with customers, we further experience the new changes of global economic order, investment structure, trade structure and transport structure, and firm the confidence and determination on implementing Follow Ip strategy and Go Out policy under the background of the reconstruction of global economic order and the construction of national “Belt and Road Initiative”. In 2016, we mainly communicated with Maersk (China), NAVIOS, China Oil International Business Co., Ltd, CHINA TALLY, China United Oil (America) Corporation, China United Chemical(America) Corporation, SHELL (America) Corporation, EXXONMOBIL 、 KOCH and COSCO Shipping (America) Company, and earned mutual trust.

PROMOTING WIN-WIN COOPERATION WITH PARTNERS

We take the common development with partners as the foundation of enterprise sustainable development, actively build the strategic cooperation mechanism with cooperative companies, achieve mutual benefits and reciprocity, and join hands to grow up; establish industry cooperation platform, promote the benign development of industry; regulate supplier management work, build responsible supply chain, and achieve the sustainable development of the whole society.

Strengthening Corporate Cooperation

We actively expand international and domestic market, develop LNG upstream and downstream industry chain, constantly improve company development potential, and commit to becoming the international first-class level of partner in ship, construction and management aspects.

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D o m e s t i c
Market
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International
Market
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Explore to develop LNG upstream
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Strengthen the close cooperation

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Visiting China Oil International Business America
Meeting with Customers from Maersk Corporation
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COSCO SHIPPING Energy Transportation Co., Ltd

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Considering Clients' Demand as Our Duty and Growing Together with Customers

In December, 2016, the Crude oil distribution customer suddenly increased their demand plan to the Qingdao Storage Branch of CNPC Oil and Fuel Co., Ltd, and required to complete delivery task by the end of month, otherwise the customers of this company might have to halt their production. While this incident coincided with the lasting fog effect in north, Ships were backlog in ports, and the ship transporting plan was extremely tense. Faced with this situation, COSCO Shipping Energy actively coordinated customers and reasonably dispatched ships. Meanwhile, because of the lower oil temperature in the process of distribution, it had been impossible to meet customer’s demand only by shore tank heating, COSCO Shipping Energy coordinated for heating ships in the first time till it met customer’s demand. Ultimately it ensured the delivery of task execution on time with good quality.

“The qualified service provided by you keeps our reputation, and helps win our customers’ support and recognition for us. We truly believe that with

your strong support, both of us will create more brilliant future.

Enhancing Industrial Communication

The overall development prospect of industry is an indicator of enterprise development. We constantly strengthen the communication and collaboration with industry partners in the process of our development, through participating in the Industry Association/ Institutes organized and established by the competent authorities at all levels of government, Maritime Organization, Maritime colleges and ship owners, actively build the trade platform of industry chain” Ship Cargo Trade” and other work, share development experience with industrial partners and create bright future.

Association/Institutes Attended in 2016

Association of Chinese Ports China Association of Port-ofEntry Shanghai Maritime Association Shanghai Academy of Ship and

China Maritime

COSCO Shipping Charitable Foundation

The World Shipping Council of Dalian Maritime University

Shanghai Academy of Ship and Ocean Engineering

——The Qingdao Storage Branch of CNPC Oil and Fuel Co., Ltd

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Associations of exercising
members’ rights(Direct
affiliations that has
joined)
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China Ship Owners Association Shanghai Ship Owners' Association Chinese Navigation Society International Association of Independent Tanker Owners China Maritime Law Society

Shanghai Ship Owners' Association

Building Responsible Supply Chain

We stick to the fair and transparent procurement principle, focus on the impact of suppliers on society and environment. Procurement, regulate company procurement and outsourcing business management process and the control process of suppliers with Outsourcing and Supplier Management Program, regulate the entry, selection, evaluation and elimination mechanism, put forward the specific requirements including security, environmental protection, occupational health and energy management to suppliers. At the same time, the commercial bribery is introduced in part of the contract clause as one of the offer, gradually improve the social responsibility management consciousness and spirit of accountability of suppliers and achieve the sustainable development together with suppliers.

Cooperative suppliers in total

666

The supplier audit coverage

85[%]

In 2016, we had 666 cooperative suppliers in total, including 106 Hong Kong, Macao and Taiwan and overseas suppliers, 560 mainland suppliers. The supplier audit coverage was 85%.

“Goal 13. Take immediate action to respond to climate change and its impacts. Improve the education, understanding and abilities of personnel and institutions on slowing down and adapting to climate change, reducing the impact and early warning.”

—— The United Nations “Sustainable Development Agenda in 2030”

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green shipping, and lead the industrial sustainable
Committing to Green Operation
Building Green Ships
Promoting Green Office
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2016 Corporate Social Responsibility Report 43

COSCO SHIPPING Energy Transportation Co., Ltd

COMMITTING TO GREEN OPERATION

We integrate green into all aspects of company operations, carry out the environmental protection laws and regulations, continuously improve the environmental management system, strengthen the environmental management and the staff training of environmental protection and energy saving, improve the ship pollution prevention consciousness and skills of key personnel, adhere to the green office and centralized purchasing, reduce environmental impact and promote company green development. In 2016, COSCO Shipping Energy had no environmental pollution accidents.

The total energy consumption The per unit of energy consumption 11,53.646[million tons] 3.1803[tons standard coal/] of standard coal thousand ton miles

The total water consumption 142,519[cubic meters]

Strengthening Environmental Protection Management

Environmental management system is the enterprise strong support of low carbon operation. In 2016, we effectively carried out the relevant laws and regulations of environmental protection and international conventions, continue to improve the “Energy Management System”, and strengthen the comprehensive, all staff and the whole process control on energy management; strengthen the marine environmental protection and energy saving consciousness and skills training of staff, especially the key personnel, improve the capacity of environmental protection; strengthen the communication with related parties, effectively propaganda and implement the latest environmental management requirements and company green development.During the year ended 31 December 2016, we complied with the relevant laws and regulations relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste in all material respects.

Promoting Green Shipping

With the growing concern for the shipping industry impact of climate change, we actively practice corporate citizen responsibility, reasonably arrange the routes and implement low speed navigation, strengthen the cooperation with ship owners, reduce pollutant emission, advocate to save water, improve resource utilization, and strive to reduce the environmental impact in the process of navigation of ships.

Area Major Measures Performance Under the premise of safe navigation, arrange the speed reasonably Explore the best benefit speed plan, and formulate the best benefit speed measure million tons Advocate Dalian Oil implements extreme speed down in typical ships of VLCC、SUEZMAX、PANAMAX, low speed and form the ship navigation technology management of extreme speed down 2.2242 kg/thousand ton mils navigation Strengthen the speed down navigation management of ship marine main engine, and adjust the new host running speed and fuel consumption indicators in time. 6704.38 tons

Conduct trace analysis of ship speed down on a regular basis

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Strengthen the cooperation of owners, carry out the exchange of capacity.

Regulate oil heated advanced and monitored, and reduce the energy consumption

Improve port oil discharging efficiency, and reduce the pollutant emission.

Strengthen oil bunker, usage, oily waste water treatment and other whole process management Reduce and control Cooperate with Antarctic Pole China Oasis to pollutant develop marine sewage treatment plant and waste incineration system emission Further strengthen the daily oil consumption tracking and monitoring of ship, regulate the fuel consumption daily content and unified file and record Focus on the monitor on shipping oil consumption, cargo oil heating consumption, and analyze the result on a regular basis. Dalian Oil Transport implements the quota management system of ship primary pollutant and monitor on daily report. Strengthen the Improve the water saving consciousness of crew management of Advocate the cycling use of living water Strengthen the rainwater collection, and saving water supplement fresh water supply of the ship

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2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

BUILDING GREEN SHIPS

We seize the revolution opportunity of global ship intelligence brought by “Made in China 2025 Strategy”, vigorously promote the application of energy conservation and environmental protection technology in shipping, initiatively modify or eliminate the high polluting and high energy consumption ships, build the energy saving, environmental protection, safe and efficient transport fleet, and establish ships new standards.

Promote the performance of BWM convention

According to the requirement of “the performance technological expert team of Group BWM Convention” and the addition plan of ship ballast water treatment system finally decided by the 70th meeting of amendment of the international maritime organization marine environment protection committee, there are 21 ships installing ballast water treatment system, including 1 current ship installment and the other 20 new ships installment.

~~Promote the application~~ of low-sulphur fuel

The promotion usage scope of low-sulphur fuel is expanded from port area to more overseas area, and reduces the oceans pollutant emission

L e a k p r o o f , c o n t a i n m e n t a n d harmful gas emissions control, ballast water and ballast tank and sludge t re a t m e n t a n d o t h e r e ff e c t i v e t a r g e t e d designs

rudder and fin and other energy-saving devices

M a x i m i z e capacity by optimizing the arrangement of cargo compartment

Integrating Green Concept into New Shipbuilding

COSCO Shipping Energy strengthens the cooperation with R&D institution, practices green environmental protection concept, integrate the reduction of energy consumption and the improvement of oil consumption efficiency into the basic technology requirement of new shipbuilding, and build a safe and reliable energy conservation and environmental protection oil and gas fleet.

Taking the VLCC Oil Tanker Under Construction as an Example:

The oil consumption per day is 79.7 Estimated by the Middle East –China route tons, which is 14.3 tons less than that of and 15 design speed navigations, 4290 tons oil traditional ships, falling by 15.2% consumption and 13361 tons carbon emissions can be reduced every year.

K e e l l i n e a r M e e t t h e optimization improves structure of common ship propulsion efficiency norms. The cargo area effectively. The energymeets COT-PSPC, and s a v i n g a d v a n t a g e s i s sets up permanent check obvious compared with channel similar VLCC

Energy Saving Technology Application of 308 thousand DWT Supertanker ( VLCC)

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COSCO SHIPPING Energy Transportation Co., Ltd

PROMOTING GREEN OFFICE

Conserve resources, act from me first. We integrate the energy conservation and emissions reduction, low-carbon lifestyle into daily work, save every drop of resource, put an end to waste, adhere to the centralized purchasing and strive to build green office space.

35000 tons fuel oil cost D o u b l e t a i l T h e u s e o f or equivalent emissions fin lines design special antifouling in a year improves ship navigation paint enhances the performance and lower stability of the hull and saves the fuel energy consumption consumption as well as reducing emissions

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E l e c t r i c U n d e r t h e
propulsion system condition of normal
has the characteristics navigation, it obtains
of small noise and natural evaporated
vibration, which reduces gas of cargo space for
the damage to crew power
health
Equip with the Significantly
most environmental reduce CO2, NO
protection dual fuel emissions and the NO
propulsion system emission meets the
TierIII IMO standard
T h e n e w E q u i p w i t h
b a l l a s t w a t e r
type of stern shaft
treatment plant, and
sealing system can
avoid the damages to
prevent the lubricating
the water quality and
oil leakage and cause
marine environment the marine biological
pollution system
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Energy Saving Technology Application of the First LNG Vessel CESI Gladstone Manufactured by APLNG Transportation Project

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The total office water consumption The total office electricity consumption
6000 [tons] 685000 [degree]
video conferences
450 [times]
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The total fuel consumption of official
vehicles
69233 [litres]
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Water Electricity Implementing
Paperless Office
Conservation Conservation Centralized
P r o m o t e v i d e o Advocate reasonable P u r c h a s e e l e c t r i c Procurement
conference system and reduce business travel moderate office water consumption appliances of green e n v i r o n m e n t a l Ecentralized purchasing s t a b l i s h t h e
U s i n g O A o f f i c e platform and reduce I m p r o v e w a t e r -saving awareness of protection and energy-saving management system ainformation collection n d u n i f y t h e
the paper transferring employees
platform
I n t h e p r o c e s s o f
purchase bidding,
g i v e p r i o r i t y t o
green, environmental
protection and energy
saving office supplies
and suppliers.
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Happiness

Creating a Better Life Hand in Hand

COSCO SHIPPING Energy sticks to people-orientation, focuses on employees’ rights and growth, strengthen employees’ engagement management with dialogue, interaction and other methods; improve employees’ development ability by expanding career development, conducting employee trainings; We also attach great importance on the friendly relationships with communities, through fixed point poverty alleviation, public welfare assistance and other means, help communities improve their respective development capacities, strive to achieve the common development of company, employees and communities.

Caring for Employees’ Growth Launching Fixed-point Poverty Alleviation Joining Actively into Social Welfare Activities

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COSCO SHIPPING Energy Transportation Co., Ltd

CARING FOR EMPLOYEES’ GROWTH

We stick to the concept of “Only Talents Prosperity can Make Business Flourishes”, safeguard the legitimate rights and interests of employees in accordance with law, strengthen the training and management of employees, respect the demand of employees balancing work and life, actively build the equal, non-discriminatory, democracy and harmonious development environment, achieve the common growth of company and employees.

Safeguarding Employees' Legitimate Rights and Interests

"Goal 8. Promote persistent inclusive and sustainable economic growth, promote full and productive employment and everyone has a decent job.

By 2030, all the men and women, including the youth and the disabled, all achieve full and productive employment, get decent jobs and realize same work equal pay;

Immediately take effective measures to ensure the prohibition and elimination of the worst forms of child labor, eradicate forced labor. By 2025, Terminate all forms of child labor, including recruiting and using child soldiers;

Protect labor rights, and promote to create a safe and secure working environment for all workers, including migrant workers, especially migrant women and employment instability."

——The United Nations “Sustainable Development Agenda in 2030”

We strictly abide by the Labor Law of P.R. China and other laws and regulations, the international convention promised by Chinese government, international labor standards and law and regulations relating to preventing child and forced labour, ensure the legitimate rights and interests of employees in equal employment, career development, democratic participation and other aspects.

Equal Normative Employment

We stick to employment by law, adhere to the principle of “Open, Fair and Just” in recruitment and dismissal, in accordance with "COSCO SHIPPING Energy Transportation Co., Ltd Personnel Management Guide" , and put an end to any discrimination,advocates equal employment, applies same standards on pay scale,as well as reasonable working hours and holidays; clearly ban the use of child labor, oppose to the forced labor, and avoid any related violations occurrence. We focus on establishing harmonious labor relations, sign labor agreement with every employee, pay the social insurance according to the relevant provisions of the state and local, gradually improve the compensation management measures and performance evaluation mechanism of cadre, staff and crew, provide the salary and welfare fully matched with their values, and stimulate their endogenous driving force, in strict accordance with the "COSCO SHIPPING Energy Transportation Co., Ltd compensation management practices (Trial)" and other policies.

employees 3368[people] new employees 108[people]

During the year ended 31 December 2016, we had 3368 employees, including 9 disabled employees, 140 minority employees, 108 new employees, 15 expatriate employees and 0 foreign employee.

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0.60%
5.30% 3.30%
5.80%
Senior executives Master or above
28.70%
Middle Bachelor
40.10%
management
Low-level Junior college
88.30% managers 27.90%
General staff Technical secondary
school and other
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Staff academic structure of
COSCO SHIPPING Energy
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Staff position structure of COSCO SHIPPING Energy

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4.50%
7.20%
Age 25 and under
27.40% Age 26-35
Age 36-45
34.70%
26.20% Age 46-55
Age 56 and above
Staff age structure of
COSCO SHIPPING Energy
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Component of Employees’ Compensation
Post wage and Performance Supplementary
Age wage
benefit wage salary wage
Reflect different Reflect difference of Reflect the Reflect national
responsibility of labor accumulation difference of labor special treatment
various positions contribution
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Establishing and Improving Compensation and Welfare System

COSCO Shipping Tanker (Dalian) Co., Ltd regards talents as the most valuable wealth of enterprise, implement the post performance salary, adopt the method of “Payment by Post, Payment by Skills and Payment by Performance”, pay employee's salary according to their position grade, skills, qualifications and work performance, and allows employees value to win fully recognition and the fairest return.

Employees’ Welfare Provided by COSCO Shipping Tanker (Dalian) Co., Ltd

Training	Annual paid vacation	Social Insurance (endowment insurance, medical insurance, unemployment insurance, industrial injury insurance and maternity insurance)	On traffc accident damage insurance	Public accumulation fund for housing construction, enterprise annuity, healthy check-up, heating subsidies, lunch

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Launching the Seminar of “Keeping Seafarers' Rights and Owner's Interests”

To celebrate the 6th “Day of the Seafarer”, the Seminar of “Keeping Seafarers' Rights and Owner's Interests” was launched in the 5th floor of Ocean Plaza hosted by Liaoning Maritime Safety Authority and organized by COSCO Shipping Tanker (Dalian) Co., Ltd. The associate professor of Liaoning Normal University, maritime law Doctor Liwei was invited. He explained the labor contract, overtime pay, service time, social insurance and other matters related to crew’s vital interests in detail, and introduced the legal risks that need to be avoided from the perspective of enterprises in signing labor contracts, the lowest salary, probation period, non-competition, rules and regulations, contract workers sent by enterprises and other aspects. Over 200 crew from 10 companies attended this seminar.

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Coverage rate of labor Coverage rate of social
contract insurance
100 [%] 100 [%]
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To t a l n u m b e r o f T h e a v e r a g e t i m e o f
Employee turnover rate
separated employees employees paid annual leave
91 [persons] 2.8 [%] 11.3 [days]
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Focusing on Gender Equality

5.80% We respect the legal rights and interests and special benefits of female employees, establish female worker committee, launch female worker symposium regularly, understand their requirements and opinions, carry the Labor Protection Special Law of the Women Staff out seriously, implement the wedding Male leave, maternity leave and parental leave of female workers, Employees focus on ensuring the return after parental leave of female workers, and guarantee the female workers enjoy equal 94.20% Female rights with men in marriage, pregnancy, birth, breastfeeding Employees promotion, rise, evaluation of professional technical titles and qualifications and other benefits, and ensure female workers’ Employee Gender Structure of COSCO equal opportunities for development. In 2016, the return rate SHIPPING Energy after parental leave of our female workers was up to 100%.

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Launching Essay Activities to Celebrate the “Women's Day”

To show female workers and the vast majority of the crew’s family members and carry forward the spirit of their silently contribution for enterprise development, COSCO Shipping Tanker (Dalian) Co., Ltd launched the essay activities to celebrate the “Women’s Day”, our ship shore workers responded actively, contributed article wholeheartedly, expresses their misses, worries, gratitude and blessings to their mothers and wife in narrative, prose, poetry and other literature, and the admiration for female colleague’s hardwork. This activity won the consistent high praise of company ship shore staff, and further inspired the gathering strength of cadres and workers.

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Encouraging Employees’ Engagement

We attach great importance to the democratic management and the subject status of employees, establish and improve the workers congress system, the system of joint conference for staff and workers' congress, staff supervisor system, take labor union, workers congress and staff meeting as a platform for permanent communication with employees, solicit the reasonable suggestions from the grassroots widely, ensure all the employee's right to know about the company’s handling plan in the form of a written feedback, and promote employees to participate in decision-making and management of company maximum furthest.

In 2016, we formulated the Detailed Rules for the Workers Congress of COSCO SHIPPING Energy, the Measures for the Management of Union Funds Balance of Payments of COSCO SHIPPING Energy, the Measures for Meals Management Committee of COSCO SHIPPING Energy and other systems; Launched the first Membership Representative conference, produced the first Labor Union Committee, the Review Committee, elected the chairman of Labor Union, the director of the review committee, the director of the Female Worker Committee, and improved the organization structure of the Labor Union.

In 2016, the construction rate of company labor union was 100%,and we received 18 employee suggestion schemes, and the scheme handling rate was 100%; we launched 3 employee seminars with 70 employees attending, solicited reasonable suggestions and made them effectively implemented.

Labor Union of COSCO SHIPPING Energy Transportation Co., Ltd

Labor Union Labor Union of LNG Labor Union of Dalian Oil Shanghai Oil of Shanghai

Labor Union of Guangzhou Branch

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Workers democratic management
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Institutional
Basic guarantee
assurance
Communicating platform Management mechanism
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----- Start of picture text -----

Labor union, congress system, the
workers congress, system of joint conference
employees for staff and workers'
conference congress and staff
supervisor system
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We Launched the First Workers Congress and the Joint Conference for Staff and Workers' Congress

On July 8th, 2016, we launched the first workers congress and the joint conference for staff and worker’s congress of COSCO SHIPPING Energy Transportation Co., Ltd, 37 representatives recommended by corporate organ, Shanghai Oil, Dalian Oil and Shanghai LNG attended this conference. The establishment of Labor Union was an important component of the reform and restructure of COSCO SHIPPING Energy, and marked the Labor Union of COSCO SHIPPING Energy stepped into the orbit of standardization and regularization.

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Contributing Ideas and Exerting Efforts for 20 Key Problems

In 2016, we conducted the activities of “Contributing Ideas and Exerting Efforts for 20 Key Problems” among all employees. This activity was launched in online BBS, and there were 614 employees registering and discussing in 10 days (accounting for 80% of onshore employees), 1879 posts and comments. This big discussion inspired the enthusiasm of the staff involved in democratic management, created the atmosphere of promoting reform to deepwater area, and the new view and new atmosphere constantly sprung up.

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Promoting Staff Development Ability

We take the staff growth and development as the first task of human resources management, improve the personnel training system and promotion management, strengthen staff training and cultivation, organize employee skills competition, and grow up together with staff hand in hand in the development of enterprises.

Clearing Career Development Channel

We broaden the talent development channels, provide professional talents with diversified growth options through cadre exit mechanism, dual-channel promotion mechanism of post and rank, breaking through the transformation of technology and management jobs and other methods, and ensure the capacities and specialties of employees can be given full play.

In 2016, we actively established talent pool of various fields, explored the professional manager system, strived to build a highgrade, expertised and advanced talent team in the fields of shipping operation, capital operation, marketing, ship management, party construction and other aspects, cultivated expert-type talents with solutions for complex problems in professional fields, and promoted the introduction plan of professional talents. Meanwhile, we strengthened the team construction of backbone crew, and built the first-class crew team matching the development of ship team advancing with the times to meet the development demand of fleet.

Improving Staff Training System

With the goal of talent development, we constantly improve the training work mechanism and training system, and optimize the training process. We promote the R&D on the training content, improve the course system, enrich training resources, improve training efficiency according to the business category, and conduct pertinent cultivation to employees through internal trainings, external trainings, autonomous trainings and other methods, and build a learning, knowledgeable, technical and innovative employee team.

In 2016, the total investment of company trainings was 3.916 million yuan. 284 times employees training had been conducted with 5109 employees attending and 58 training hours per person.

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0.40%
3%
4%
Senior executives
Middle management
Low-level managers
General staff
89%
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the total investment of company trainings

3.916 million yuan

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training hours per person
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58 hours
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Employees academic New employee Skill improvement On-the-job training qualification training of orientation training training headquarters The content includes but Implement the required Constant knowledge updating E m p l o y e e a c a d e m i c not limited to corporate technical knowledge and a n d s k i l l s i m p ro v e m e n t improvement lear ning, c u l t u r e , r u l e s a n d skills trainings on related trainings resulting from post grade and certificate of regulations, professional positions, and ensure the promotion, post shift and i n d u s t r y e n g a g e m e n t q u a l i t y a n d a c a d e m i c employees of headquarters other post changes for the qualification and other updating adjusting the requirement of purpose of improving the trainings. post. qualifications of headquarter employees.

The content includes but not limited to political Job-transfer training can be theories, knowledge of the regarded as the combination party, laws and regulations, of new employee orientation shipping business, security t r a i n i n g a n d o n - t h e - j o b m a n a g e m e n t , B o a rd o f training. Directors management, strategic development, Unqualified employees shall asset management, finance participate in on-the-job management, discipline training according to relevant inspection & audit, human requirements. resources, administrative management, information management and other trainings.

Table Employees Training Content System

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Launching “Win-win Cooperation” Outward Bound

On every Friday of the period from October 14th, 2016 to December 6th, COSCO Shipping Tanker (Shanghai) Co., Ltd continuously organized employees and launched 4 times outward bounds. Each outward bound lasted for 3 days and 2 nights. During the trainings, everyone cooperated with each other and strived to overcame various difficulties, and completed many training projects including ”Heading for Future Together”, “Kapai Wind and Cloud”, “Tower of Hanoi” and “Battle City”, further strengthened the deep integration with land and shore employees, improved employees psychological quality and group cohesiveness, and enhanced the executive ability and innovation capacity.

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“With outward bound, we deeply understand the importance of
teamwork, rapport, cooperation, communication, inspiration, devotion,
thanksgiving and trust. Every successful challenge cannot be without the
support and help of team members, every action taken cannot be without
our own courage and trust on others, every task completed cannot be
without everyone’s coordination and common effort.”
—— Employees of COSCO Shipping Tanker (Shanghai) Co., Ltd
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Staff Training Proportion of COSCO SHIPPING Energy at All Levels

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COSCO SHIPPING Energy Transportation Co., Ltd

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Launching the Training Classes of Security Guards

To further improve the security guard response ability of ships and the security guard capacity of crew, from October 10th, 2016, to 13th, COSCO Shipping Tanker (Dalian) Co., Ltd held the 2016 training classes of security guards.

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The outside experts and professional personnel of relevant departments were invited to this training class and gave onsite teaching and guidance. They mainly explained the related topics including ISPS performance trainings, the Gulf of Aden escort and ocean anti-terror measures, the international antipiracy cooperation mechanisms, fire prevention knowledge and emergency trainings, and answered the security questions security guards met in their practical work. Over 40 employees ranging from captain, political commissar, chief engineer, boatswain to crew chief of frontlines attended the training classes.

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Establishing and Improving Business Skills Training Mechanism of New Captains

Shanghai Oil requires that every new captain shall pass the shifting group training, and invites senior crew to attend onshore emergency exercise at least once in each year. Senior crew,especially captains,take advantage of senor crew seminar, the security management evaluation and other opportunities to receive the trainings.

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Organizing Employees Skill Competition

We take the skill competition as one of the measures taken to cultivate and select the outstanding reserve-talented persons, actively organize the diversified labor skills competition, stimulate the enthusiasm of employees, and improve their professional capacities and comprehensive qualities.

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Launching Skill Contest and Improving Crew’s Quality

COSCO Shipping Tanker (Dalian) Co., Ltd attaches great importance to the skill trainings of the frontline crew especially the backbone crew. Through launching various skills competitions, we allow the frontline employees with excellent skills to display their capacities, and play a significant role in improving crew’s comprehensive quality and adjusting the fleet development.

Skill contest of boatswain and crew chief In September, 2016, we launched the skill contest of boatswain and crew chief in the crew training base. There were 55 boatswains and crew chiefs to participate in the 6 technology trainings of boatswains and 5 technology trainings of crew chiefs competitive projects respectively.

Skill contest of ship kitchen workers

From July 4th, 2016 to 8th, we conducted kitchen workers training competition in training base. There were 26 kitchen workers from the frontline to attend this training contest. Judges has carried on the detailed evaluation score according to the rules of the game on the color, smell, taste, shape, knife skills, cooking finish and so on of players work, voted the awards of the three categories of cooking, pastries and comprehensive skills.

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Cultivating Global Talents

We accelerate the talent pool construction of expatriate cadres, cultivate the international talents with hierarchy, category, plan and importance, gradually introduce the high-end, urgently demanded overseas operation management talents, strengthen the assessment on expatriate cadres, give full play the platform role of overseas branches in exercising talents, and provide the storage and support of human resources for company globalization strategy.

In 2016, we actively organized the selected examination on the talent pool of expatriate cadres. All the employees from the 5 departments of headquarters costal, ocean, operation, security and finance should complete the tests. There were 76 employees attending it in total. After several rounds of entrance exams and interviews, now there have been 13 employees entering into the expatriate talent pool of Group, and made a solid foundation for the UK and American business development and employees storage of overseas branches construction.

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Corporate
globalization strategy
Storage and support of human
resources
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----- Start of picture text -----

Conduct the construction of Give play to the platform
expatriate talent pool role of overseas branches in
exercising talents
----- End of picture text -----

We Focusing on the Cultivation of Global Talents

Balancing Employees' Work and Life

We highly focus on the physical and mental health of employees, provide them with warm, happy and healthy work and living environment through focusing on occupational health, caring for employees, enriching cultural and sports activities and other methods, balance their work and life, and strengthen their loyalty and cohesion.

Focusing on Occupational Health

We strictly implement the relevant state regulations and standards on labor safety, provide employees with work conditions and places in accordance with labor security requirements, send out labor protection supplies, purchase medical insurance for employees, organize employees to have healthy check up regularly, improve employees’ physical examination archives, help employees improve the ability of reducing psychological stress and emotional management through propaganda education, seminar, trainings and other methods, and build the stereoscopic defence for employees’ health. In 2016, the coverage rate of employees’ physical examination was 100%.

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Organizing Onshore Employees

to Have Physical Examination

COSCO Shipping Tanker (Dalian) Co., Ltd has always highly focused on employees health, and arranges employees to have physical examination regularly with the concept of “People-oriented” and caring for employees, and propaganda the healthy hygiene knowledge through launching health lectures and other activities, which wins the wide support and praises of employees. Meanwhile, it provides driving force for further inspiring employees’ enthusiasm and strengthening company cohesion.

Enhancing Caring for Employees

We continuously conduct the caring and visiting activities to employees and their family members, coordinate the work of dealing with various problems of employees in Shanghai through helping employees who are in difficulty and conducting visits to employees and their families, we strive to make company to become employees’ “the Second Family”, create better company environment, further strengthen their loyalty and cohesion as well as their families’ acceptance and support. In 2016, we had helped 112 employees in difficulty and distributed 1129000 yuan in help and support.

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14%
6%
80%
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Affected Aid
Medical Aid
Help and Support on Difficulty
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Support Amount Distribution Proportion of COSCO SHIPPING Energy

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Visit the frontline crew Carry out employees’
and their families problems
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Help employees in difficulty

Conduct the comprehensive Visit crew on board in New medical mutual guarantee Year, Spring Festivals, holidays scheme of employees. and high temperature seasons, and send warmth and give Organize to visit the affected out heatstroke prevention employees, crew, the retired productions to employees on cadres and disease trapped board.

Actively contact the related departments to implement the staff accommodation, daily life, their children entering school and other problems in Shanghai.

Organize to visit the affected employees, crew, the retired cadres and disease trapped employees

Coordinate to carry out the headquarters staff refund, health physical examination, medical treatment in Shanghai and other matters

T h r o u g h o r g a n i z i n g r e c r e a t i o n a l a c t i v i t i e s , symposium visits and other f o r m s , s t r e n g t h e n t h e understanding and support of crew’s family.

L a u n c h t h e a c t i v i t y o f “ E d u c a t i o n A s s i s t a n c e i n Golden Autumn”

Organizing Director of Family Members Contacting Station to Launch Summer Beach Activities

In summer of 2016, COSCO Shipping Tanker (Dalian) Co., Ltd organized over 20 Directors of Family Members Contacting Station and crew from Liaoning, Shandong and other places to launch summer beach activities in Golden Mountain of Lvshun. Thank for their contribution and efforts they made to the crew’s family, and hope they could be assurance, and continue to play a good bridge between company and crew.

“Company’s caring and love to the crew and families is the most driving force to encourage them to do the director better.”

——Director of Family Members Contacting Station

Building Corporate Culture

We take being “the Most Admirable and Reliable Global Energy Transportation Service Provider” as our corporate vision and propaganda it widely, implement corporate vision and value scheme internally and externally through subject research, brand building, subject propaganda and other means and channels, build corporate culture and strengthen company cohesion and centripetal force.

Corporate Vision “Be the Most Admirable and Reliable Global Energy Transportation Service Provider” Subject Research Brand Building Subject Propaganda Carry out the research Implement brand image Implement propaganda on core values of firstcommunication plan, make scheme with the theme of ”Story of ’Excellent’ class energy transport corporate promotional film Person”, tell the story of enterprises and enterprise culture manual, energy people working take advantage of founding wholeheartedly revolving assembly, listing subsidiaries, a ro u n d t h e “ R e f o r m , oil transport security forum, Development, Innovation, new ship and important Risk Control and Party information released to invite Construction”, inspire and lead all the staff to relative media to report onsite “Compare, Learn, Catch, Help and Surpass” with the example around us.

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COSCO SHIPPING Energy Transportation Co., Ltd

Enriching Employees’ Life

We encourage and advocate employees’ balance between work and life, launch various healthy and uplifting cultural and sports activities, enrich employees’ life, reduce their work pressure, and strengthen their coordination abilities and company cohesion.

The first The COSCO SHIPPING Energy representative team consisted of COSCO SHIPPING “COSCO Energy headquarter, Shanghai Oil and LNG, formed a swimming team, football SHIPPING Cup” team, table tennis team, badminton team and cheer team, fully showed the spirit o f sports activity “Integrated Capacity, Infinite Capacity”

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Hiking fitness of Golden Autumn employees and families

Company headquarters organized two times team to hike in Chongming Dongtan wetland, visit in LNG ships, hike in Dishui Lake and visit maritime museum activities

The first workers games of COSCO Over 500 athletes from the organ body, ship and grass-roots level of Dalian Oil Shipping Tanker Transport participated in 17 competitions, 5 interesting projects and the tug of war (Dalian) Co., Ltd contest.

LAUNCHING FIXED-POINT POVERTY ALLEVIATION

As the director unit of COSCO Shipping Charitable Foundation, we actively participate in the fixed-point poverty alleviation (Aiding Tibet) work plan of China COSCO Shipping Corporation Limited, earnestly implement the central requirements about poverty alleviation work and the project funding plan of 9 counterpart poverty alleviation (Aiding Tibet) counties including Luolong and Yongde in the “13th Five Year Plan”. According to the group's unified deployment, steadily push forward the poverty alleviation, through deploying cadres, providing funding support and other means, we take the assistance in education, assistance in infrastructure construction, Assistance in hygiene, economic product development and other assistance as the starting point, promote the self-development ability poor regions, and achieve the sustainable development.

Assistance in education

Funding Project of “COSCO's Hope Class”

Since the beginning of 2007, we have launched 4 “COSCO's Hope Classes” in Yongde country. There were 50 students recruited in every session. The undergraduate online rate of students from the first 3 “COSCO's Hope Classes” was 100%, established brand name of “COSCO's Class” among the candidates and parents in country.

Assistance in Building Schools Infrastructure Projects

The Wan primary school of Dachushui village, Dedang town, Yongde country is located in the southeast of Yongde country. There are 127 students and 7 teachers with the area of 2680 square meters, including 500 square meters steep hill. At present, the classroom is crowed, and there are still 16 children of school age not in school. We provided part of funding for solving the new school buildings and related facilities construction

Assistance in Hygiene

“Waves Wishes” Pairing Support

The youth league of company recommended the political theory, sinology, enterprise Reading and management, navigation technology, turbine management and other good readings communicating to young crew. All the league branch of company ships actively responded and activities of young organized the young crew to select books in which they are interested to read, and crew make their personal learning plans, and had reading communicating as the unit of league branch of company ships

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Choosing Excellent Employees to Participate in Outside Training

The “second generation” youth talent cultivation project of Pudong new area co-hosted by the party committee, the human resources and social security bureau and the Youth League Committee of Pudong new area allowed more young talents to show on stage, develop with opportunity and create with incentives, cultivated and built a backup talents team for the second startup of Pudong new area. On November 1st, 2016, the 5th training class of the “second generation” youth talent cultivation project of Pudong new area was held officially. 1 youth representative attended in the study and communication of the 5th class, and had four months training revolving around the theme of “Innovation in Social Governance”.

Take one-on-one way, provide long-term pair support for excellent students with difficult family living conditions. At present, “Wave Wishes” activity has paired 110 pairs. There are 110 primary, middle school and college students getting this funding.

“Sailing Chasing Dream” Lincang Elementary Education Donation Activities

Since the beginning of 2007, “Sailing Chasing Dream” activities had been conducted by stages and in batches to support Lincang education projects. Conduct project assistance in students’ living facilities and teachers office facilities of primary school in the poor areas of Lincang city

Assistance in grassroots

Making Innovation in Propaganda Carrier

Establish the Wechat official account of “Public Service Platform of Yongan Community”, promote the related work, policy and learning content carried out by community, broaden the scope of all kinds of public information, and improve the efficiency of serving public. Enriching the Pattern of Activities.

Conduct the theoretical knowledge contests of “Two Study and One Action”; Organize all staff to collectively pledge during July 1 of Party member, and organize the community party members to launch the soliciting article event with the theme of “the Day Joining the Party”; Sign an agreement of the co-construction of spiritual civilization and the sharing of popular science resources between community and school with the first middle school of Yongde county Propagating Scientific Knowledge

Invest part of money to assist in the construction of 2 village clinic and accessory works with 240 square meters in Zame village, Wumulong town and Longzhuwa village, Conggang town, improve the poor rural medical and health conditions and solve the problem of villagers’ difficulty in medical treatment.

Assistance in country s u r p l u s l a b o r f o r c e output

Recruit large numbers of workers i n Y o n g d e c o u n t r y , o f f e r b e t t e r employment conditions, encourage farmers to move out for work, solve the poverty issue fundamentally, change the “Blood Transfusion” into “Hematopoietic”.

Through developing community website, producing science banner panel and issuing publicity materials, propaganda low carbon production and living, daily life popular scientific knowledge such as health regimen and life tips. Yongan community was awarded the honorary title of “Popular Science Demonstration Community in Yunnan Province”

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JOINING ACTIVELY INTO SOCIAL WELFARE ACTIVITIES

We actively participate in salvage, cultivate future industrial talents together with stakeholders, and continuously promote the public welfare and employees voluntary activities. While make contributions in finance and human resources to the improvement of community living quality, we improve the external development environment and improve our sustainable development capacity.

Actively Participating in Salvage

We respect and focus on the public interests and fully carry forward the humanitarian spirit. Through participating in maritime search and rescue exercises, the formulation of sea rescue emergency plan and other means, we improve salvage skills, And in the critical moment that the human life, property and safety of other ships are seriously threatened, respond in the first time according to the coordination and arrangement of maritime search and rescue center, give a hand and build marine safety with all parties.

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“Rongci Vessel” Participating in the Largest Maritime Search and Rescue Exercise

On May 19th, 2017, the “Rongci Vessel” of COSCO SHIPPING Energy participated in the largest maritime search and rescue exercise in Zhuhai Guishan island waters. This exercise was firstly adopted the method of combining the national level drill with onsite exercise. 42 units including the 19 ministries and commissions of the state power and its subordinate, Guangdong provincial government, Hong Kong and Macao SAR government and non-governmental forces cooperated to complete it. It used 35 ships, four aircrafts, over 1300 people, and had been the maritime search and rescue exercises with the most units and departments so far.

On the exercise day, the chemical ship acted by the “Rongci Vessel” had a collision accident. The cargo storage went into explosion and fire, which would cause serious influence on the life, property safety of the ship, the marine environment and the production and living of inland and island residents nearby. After explosion, all the crew of chemical ship immediately launched self-help action according to the ship's emergency response procedures. At the same time under the guidance of country's emergency assistance and company emergency response command group, we successfully put out the fire and avoided even greater calamities. In the exercise, the “Rongci Vessel” showed high level of training, completed all the courses required in this exercise with high quality and high standards.

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The performance of “Rongci Vessel” of COSCO SHIPPING Group reflected the first ship management level of COSCO SHIPPING Group, and also reflected the first-class emergency perform professional response and comprehensive qualities of general crew. Thanks very much for all your contributions to the successful completion of exercise.

——A Leader from State department of Transportation

Cultivating Industrial Talents Hand in Hand

We keep close cooperation with Jimei University, Shanghai Maritime University, Guangzhou Institute of Navigation and other navigation colleges and universities, and apply our own resources and excellent service on the cultivation of future qualified maritime talents through entering into cooperative agreements, open ships for college students’ internship, senior leaders with additional post of university professors and other methods.

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Open ships for college
students’ internship
Sign a
Operate and
strategic Ways of
manage the
cooperation
framework Cooperation ships for
internship
agreement
Senior leaders with
additional post of
university professors
----- End of picture text -----

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Joining Hands with Colleges and Universities to Strengthen Ship Bridge Resource Management (BRM) Training

COSCO SHIPPING Energy requires every direct affiliate to conduct simulator trainings on bridge resource management in approved onshore institutes for drivers on a regular basis, and constantly improve the bridge resource management ability and business skills. Dalian Oil Transport signed a long term agreement with Dalian Maritime University. 2 Bridge Resource Management Trainings are launched every year, and result of the training was positive.

Striving to Give Back to Society

We highly focus on people’s livelihood, and proactively assume social responsibility, and we are actively involved in public welfare undertakings, launch the education assistance, voluntary service, environmental protection and other welfare activities, and give back to community.

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“Setting Sail•Chasing Dream” Basic Education Public Welfare Project

In 2016, as the director unit of COSCO Shipping Charitable Foundation, we actively participate in the fixed-point poverty alleviation (Aiding Tibet) work plan of China COSCO Shipping Corporation Limited, and promoted “Setting Sail•Chasing Dream” basic education donation project in Anhua, Hunan province.

The “Setting Sail•Chasing Dream” basic education donation project was the charitable project launched by China COSCO Shipping Corporation Limited and implemented by COSCO Shipping Charitable Foundation. Since from 2007 to 2015, COSCO Shipping Charitable Foundation carried out 9 “Setting Sail•Chasing Dream” basic education donation projects in the primary schools of minority poverty areas, Lincang city, Yunnan province according to the principle of “Comprehensive Promotion, Outstanding Improvement and Students First”, invested 14.19 million yuan to purchase 31652 sets of desks and chairs for study, 2861 sets of desks and chairs for meals, 7182 sets of bunk beds, 2529 sets of office desks and chairs for teachers, 1035 sets of desks for teachers in 141 primary schools around the 6 countries of Lincang city. This project got the central financial support twice, and won the China charity award in 2009.

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Desks Before and After Project Implemented

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“Golden Belt” that Connecting Lujiazui Area

Lujiazui street is located in the core area of Lujiazui financial district and financial city in Shanghai free trade area. This region is clustered with more than 80 commercial office buildings, over 10000 companies, including more than 2700 Chinese and foreign financial institutions and over 0.2 million employees. Since 2015, the street has explored and formed the “Golden Belt” pattern of “Two Floor Linkage and Two Ends Expanding” to improve the efficiency and level of community governance. As the director unit of golden belt project, we actively participate in community innovation and serve its development.

“Love” on the Tip of Tongue

In 2016, COSCO Shipping Tanker (Shanghai) Co., Ltd invited employees to make manual biscuit, cake, nougat and other food for sale with the theme of “Love on the Tip of Tongue”. On March 4th, “Love on the Tip of Tongue” participated in the public welfare charity sale of brothers unit in No. 118 Yuanshen Road, and raised 1493 yuan love fund specially used for aiding the needy students.

“Lightening Wishes”

We actively participated in the “Lightening Wishes” Lujiazui young love public welfare action led by Lujiazui street, and respond to 1 or 2 New Year's wishes of Lujiazui community families’ children every year, help children acquire gifts and present New Year greeting cards, and lighten their new year’s wishes with love.

OUR COMMITMENT

2017 is an important year of the “13th Five Year Plan”, and will embrace the 19th congress of the Party. COSCO SHIPPING Energy Transportation Co., Ltd will be guided by the spirit of the central economic work conference, comprehensively implement work deployment of Group work conference, grasp the new normal economic development, revolving around the new energy strategy, target at the “Four Global Leading”, actively undertake the economic, social and environmental responsibility, improve sustainable competitiveness, and achieve the common development of enterprises and the economic society.

Development Work Direction Goals Enhance the level of value management and investor relations management, achieve the two-wheel driven of business Lead development and capital operation Further improve the system of information disclosure, and constantly improve the quality of corporate information sustainable disclosure development Integrate company information resources, eliminate information isolated island, strengthen the comprehensive data analysis ability, enhance the level of informationization future Start with the “Four Global Leading” strategic goals of “Operation Capacity, Business Structure, Security Marketing and Business Model”, launch the standard management in an all-round way Promote the comprehensive fusion of the safety culture, concept, system and measures of energy system, establish the unified security management system in energy sector Strictly implement the safety system, strengthen the implementation of production safety responsibility system and supervision management mechanism Take shifting from the center of ship to provide customers with the entire high-end service as the reform direction, Promote provide customers with one-stop service integrated with freight, dispatching, business and claims industrial Conduct customer manager system, take customers as the center to form a special team, stick to the forerunner of process, promote the reengineering and optimization of business process synchronously, improve the customer win-win experience and service levels, achieve reunification of the marketing and customer service growth Take providing across time zones, 24-hour uninterrupted customer service for global clients as the goal, highlight the geographical advantage of the network, provide the entire personalized service for big customers within the areas, achieve the comprehensive sharing of the customer service resources in energy sector Deepen the exchange and communication within industry, expand industry upstream and downstream value, improve the supplier evaluation system, create the responsible and win-win supply chain Improve environment management system, establish a sound system of energy conservation and emissions reduction Commit to Promote the construction of low carbon fleet, realize saving energy resources consumption and reduce emissions with build green continuous ship management improvement and technology innovation Promote the low speed navigation, and constantly improve solid, liquid waste and waste gas treatment shipping Advocate green new development model, and develop the energy-saving technology represented by LNG with high efficiency and low emission Solve the structural problems of talents, establish the market mechanism of talents selection and employment, explore the professional manager system, completes the internationalized talent development planning, promote the competition for a post and eliminate the last system Create bright Establish and improve training system, optimize the allocation of compensation system, carry out the comprehensive assessment and evaluation system, establish long-term incentive mechanism, and improve the use efficiency of company life hand in human resources Strengthen democratic management, promote caring employees, improve employee demand response mechanism hand

Solve the structural problems of talents, establish the market mechanism of talents selection and employment, explore the professional manager system, completes the internationalized talent development planning, promote the competition for a post and eliminate the last system Establish and improve training system, optimize the allocation of compensation system, carry out the comprehensive assessment and evaluation system, establish long-term incentive mechanism, and improve the use efficiency of company human resources Strengthen democratic management, promote caring employees, improve employee demand response mechanism Improve sea rescue management work, enhance the emergency response ability and the ability of resource allocation, and help to ensure the safety of maritime Counterpart support and the poverty alleviation work promote regional economic and social development Hold the concept and spirit of voluntary service deep inside, innovate and improve the volunteer service organization pattern, and promote the normalization, standardization and institutionalization of voluntary service

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KEY DATA

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Category Index Unit 2016year
A stock H stock
Total assets 0.1 billion yuan 580.22 580.22
Operating income 0.1 billion yuan 130.06 125.20
Net profit 0.1 billion yuan 19.55 19.34
Self-owned ships set 105 105
10 thousand DWT/10 thousand
Gross tonnage 1468/17 1468/17
cubic meters
Volume of freight 0.1 billion tons 10365 10365
Economic Rotation volume of freight
0.1 billion tons 3479 3479
Performance transport
Volume of crude oil shipment 10 thousand tons 9496 9496
Volume of refined oil
10 thousand tons 855 855
shipment
Average boat age year 7.6 7.6
Number of total suppliers Unit 666 666
Number of total suppliers Unit 106 106
Mainland suppliers Unit 560 560
Environment Performance ton 67863.0189
The unit turnover emission of
kg/thousand ton miles 0.1935
nitrogen oxide
The amount of sulfur oxide
ton 46802.082
emission
The unit turnover emission of
kg/thousand ton miles 0.1335
sulfur oxide
The amount of greenhouse
ton 2540573.018
gases emission
The unit turnover emission of
kg/thousand ton miles 7.2441
greenhouse gases
The amount of carbon dioxide
ton 2425907.917
emission
The unit turnover emission of
kg/thousand ton miles 6.9172
carbon dioxide
Environment The amount of oil pollutant
ton 63641
Performance emission
Oil content of oil pollutant ton 10930
The amount of hazardous
ton 368.135
wastes emission
The unit turnover emission of
kg/thousand ton miles 0.001
hazardous wastes
The amount of non-hazardous
ton 10376.89
wastes emission
The unit turnover of non-
kg/thousand ton miles 0.0296
hazardous wastes emission
Total energy consumption
10 thousand standard coal 1115364.6
(electricity, gas and oil)
The unit turnover of energy Ton standard coal/thousand ton
3.1803
consumption miles
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Unit oil consumption 10 thousand tons 79.34
Unit oil consumption kg/thousand ton miles 2.28
Oil and gas conservation ton -10477
Lubricating oil consumption ton 6704.38
Total water consumption cubic meter 142519
Water conservation cubic meter 161607
The total office water
ton 6000
consumption
The total office electricity
degree 685000
consumption
The total fuel consumption of
liter 69233
official vehicles
Total number of employees person 3368
Number of expatriate workers person 15
Number of new employees person 108
Number of minority
person 140
employees
Number of the disabled person 9
Coverage rate of labor
% 100
contract
Coverage rate of social
% 100
insurance
return rate of parental leave % 100
Total investment in trainings 10 thousand 391.6
Times of employees’ trainings Term 284
Training hours per person hour 58
Social Customer Satisfaction % 100
Performance Number of Customer
piece 11
Complaints
Complaints Handling Rate % 100
Customer Satisfaction % 100
Number of Customer
piece 1
Complaints
Complaints Handling Rate % 100
The supplier audit coverage % 85
The passing rate of zero
% 75.30
defect annotation
success rate of preventing
% 100
typhoon
The success rate of anti-piracy % 100
ISPS passing rate of checkup % 100
Potential safety hazard
checking and controlling Times 12
activities
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APPENDIX

ESG Guidance Table

Subject Areas, Aspects, General Disclosures and KPIs

Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs
	“Comply or explain” Provisions		Recommended Disclosures		Page
	A. Environmental
Aspect A1: Emissions	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste. Note: Air emissions include NOx, SOx, and other pollutants regulated under national laws and regulations. Greenhouse gases include carbon dioxide, methane, nitrous oxide, hydrofuorocarbons, perfuorocarbons and sulphur hexafuoride. Hazardous wastes are those defned by national regulations.			/	P42、P43、P45
	KPI A1.1	The types of emissions and respective emissions data.			P45
	KPI A1.2	Greenhouse gas emissions in total (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility).			P45
	KPI A1.3	Total hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility).		/	P45
	KPI A1.4	Total non-hazardous waste produced (in tonnes) and, where appropriate, intensity (e.g. per unit of production volume, per facility).			P45
	KPI A1.5	Description of measures to mitigate emissions and results achieved.			P45、P46
	KPI A1.6	Description of how hazardous and non-hazardous wastes are handled, reduction initiatives and results achieved.			P45、P46
Aspect A2: Use of Resources	General Disclosure Policies on the effcient use of resources, including energy, water and other raw materials. Note: Resourcesmaybeusedinproduction, in storage, transportation, in buildings, electronic equipment, etc.			/	P43、P44、P49
	KPI A2.1	Direct and/or indirect energy consumption by type (e.g. electricity, gas or oil) in total (kWh in ’000s) and intensity (e.g. per unit of production volume, per facility).		/	P49
	KPI A2.2	Water consumption in total and intensity (e.g. per unit of production volume, per facility).			P73
	KPI A2.3	Description of energy use effciency initiatives and results achieved.			P45、P46、P47、 P48、P49
	KPI A2.4	Description of whether there is any issue in sourcing water that is ft for purpose, water effciency initiatives and results achieved.			P45
	KPI A2.5	Total packaging material used for fnished products (in tonnes) and, if applicable, with reference to per unit produced.			Not suitable
Aspect A3: The Environment and Natural Resources	General Disclosure Policies on minimising the issuer’s signifcant impact on the environment and natural resources.			/	P45
	KPI A3.1	Description of the signifcant impacts of activities on the environment and natural resources and the actions taken to manage them.			P45

Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Subject Areas, Aspects, General Disclosures and KPIs	Page
	“Comply or explain” Provisions	Recommended Disclosures
B. Social
Employment and Labour Practices
Aspect B1: Employment	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to compensation and dismissal, recruitment and promotion, working hours, rest periods, equal opportunity, diversity, anti-discrimination, and other benefts and welfare.			/	P52、P53、P54
			KPI B1.1	Total workforce by gender, employment type, age group and geographical region.	P52、P53、P55
			KPI B1.2	Employee turnover rate by gender, age group and geographical region.	P54
Aspect B2: Health and Safety	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to providing a safe working environment and protecting employees from occupational hazards.			/	P26、P27、P63
			KPI B2.1	Number and rate of work- related fatalities.	P26
			KPI B2.2	Lost days due to work injury.	P26
			KPI B2.3	Description of occupational health and safety measures adopted, how they are implemented and monitored.	P 2 7、P 3 0、 P31、P63、P64
Aspect B3: Development and Training	General Disclosure Policies on improving employees’ knowledge and skills for discharging duties at work. Description of training activities. Note: Training refers to vocational training. It may include internal and external courses paid by the employer.			/	P58
			KPI B3.1	The percentage of employees trained by gender and employee category (e.g. senior management, middle management).	P58
			KPI B3.2	The average training hours completed per employee by gender and employee category.	P58
Aspect B4: Labour Standards	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to preventing child and forced labour.			/	P50、P52
			KPI B4.1	Description of measures to review employment practices to avoid child and forced labour.	P52
			KPI B4.2	Description of steps taken to eliminate such practices when discovered.	Not suitable

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Comparison Table of the Ten Principles of UN

Operating Practices	Operating Practices	Operating Practices
Aspect B5: Supply Chain Management	General Disclosure Policies on managing environmental and social risks of the supply chain.		/	P39、P41
		KPI B5.1	Number of suppliers by geographical region.	P41
		KPI B5.2	Description of practices relating to engaging suppliers, number of suppliers where the practices are being implemented, how they are implemented and monitored.	P41
Aspect B6: Product Responsibility	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to health and safety, advertising, labelling and privacy matters relating to products and services provided and methods of redress.		/	P32、P35、P37
		KPI B6.1	Percentage of total products sold or shipped subject to recalls for safety and health reasons.	Not suitable
		KPI B6.2	Number of products and service related complaints received and how they are dealt with.	P34
		KPI B6.3	Description of practices relating to observing and protecting intellectual property rights.	P34
		KPI B6.4	Description of quality assurance process and recall procedures.	P36
		KPI B6.5	Description of consumer data protection and privacy policies, how they are implemented and monitored.	P34、P37
Aspect B7: Anti- corruption	General Disclosure Information on: (a) the policies; and (b) compliance with relevant laws and regulations that have a signifcant impact on the issuer relating to bribery, extortion, fraud and money laundering.		/	P16
		KPI B7.1	Number of concluded legal cases regarding corrupt practices brought against the issuer or its employees during the reporting period and the outcomes of the cases.	P16
		KPI B7.2	Description of preventive measures and whistle-blowing procedures, how they are implemented and monitored.	P16
Community
Aspect B8: Community Investment	General Disclosure Policies on community engagement to understand the needs of the communities where the issuer operates and to ensure its activities take into consideration the communities’ interests.		/	P67、P68
		KPI B8.1	Focus areas of contribution (e.g. education, environmental concerns, labour needs, health, culture, sport).	P64、P66、P67、 P68、P69、P70
		KPI B8.2	Resources contributed (e.g. money or time) to the focus area.	P63、P70

Global Compact

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Disclosure
Main disclosure level and principles of the
position
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Main disclosure level and principles	Main disclosure level and principles	Disclosure of the position
Human Rights	(1) Enterprises should respect and maintain the internationally recognized human rights	P52
	(2)Never participate in any behavior that disregard for or abuses human rights	P52
Labor Standards	(3) Enterprises should maintain the freedom of association, and accept the rights of bargaining	P56
	(4) Eliminate all forms of forced labor radically	P52、P54
	(5)Eliminate child labor	P52
	(6) Put an end to any discrimination in employment and industry	P52
Environment	(7) Companies take precautions to deal with environmental challenges	P43-P49
	(8)Take the initiative to increase the responsibility of environmental protection.	P43-P49
	(9)Encourage the development and promotion of harmless environmental technology	P46-P48
Anti- Corruption	10)Enterprises should oppose all forms of corruption, including extortion and bribery	P16

2016 Corporate Social Responsibility Report

COSCO SHIPPING Energy Transportation Co., Ltd

About the Report

Report Scope of Time

Readers’ Feedback

Dear Readers,

This report is from January 1st, 2016 to December 31, 2016 (including reconstruction). Part of contents is beyond the scope above.

Report Scope of Organizations

COSCO SHIPPING Energy and its subsidiaries. To facilitate elaboration and reading, “COSCO SHIPPING Energy Transportation Co., Ltd” is short for “COSCO SHIPPING Energy” and “we”. “COSCO Shipping Tanker (Shanghai) Co., Ltd” is short for “Shanghai Tanker”; “COSCO Shipping Tanker (Dalian) Co., Ltd” is short for “Dalian Tanker”; “COSCO SHIPPING LNG Investment (Shanghai) Co., Ltd” is short for “Shanghai LNG”.

Release Cycle of Report

Every financial year. This report is the first social responsibility report released after COSCO SHIPPING Energy restructured.

Report data description

Thanks very much for reading “COSCO SHIPPING Energy Corporate Social Responsibility 2016”. Flaws and omissions are hard to avoid in the process of writing this report. We are looking forward to your valuable suggestions and give feedbacks to us so as to help us improve further.

Thank you.

COSCO SHIPPING Energy Transportation Co., Ltd

March 28th, 2017

Multiple Choice Questions (please tick √ in the corresponding position)

（1）This report comprehensively and accurately reflects the significant impact of COSCO SHIPPING Energy on economy, society and environment?

All information and data included in this report come from the official documents and related statistics of COSCO SHIPPING Energy.

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Report Reference Standard

Environmental Information Disclosure of Listed Companies of Shanghai Stock Exchange Guidelines, the Annex II Compilation Guidelines of Company Performing Social Responsibility Report of No.1 Annual Report of Listed Companies in 2009 Memos, Hong Kong Stock Exchange Environment, Social and Governance Reporting Instructions(2016), the United Nations Global Compact 10 Principles, International Organization for Standardization ， ISO26000 Guidance on Social Responsibility(2010), Global Reporting Initiative Sustainability Reporting Guidelines (GRI4.0).This report has been prepared in compliance with the Environmental, Social and Governance Reporting Guide in Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Release Form of Report

（2）The response and disclosure of this report to the stakeholders’ concerns ？

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（3）Is the information, index and data disclosed in this report clear, accurate and complete ？
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（4）The readability of this report, i.e. the logic thread, content design, language and words and format design ？

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The report is released with the two forms of print and online publication, and the search and download of online publication link is: http://www.coscoshippingenergy.com/

Open Questions

Report Language Version

This report has the 4 versions of full version (Chinese Simplified, Traditional Chinese, English version) and Chinese simple version. If any questions, the Chinese Simplified version shall prevail.

What do you think is the part of this report that makes you most satisfied?

Report Obtaining

Board Office of COSCO SHIPPING Energy

Add: 18th Floor, No. 118, Yuanshen Road, Pudong New Area, Shanghai, the People’s Republic of China.

What ‘s your advice on our social responsibility report released in future?

Postal Code: 200120 Tel: 021-65967678

Fax: 021-65966160 Email: [email protected]

This report is made from environmentally friendly recycled paper

Add: 18th Floor, No. 118, Yuanshen Road, Pudong New Area, Shanghai, the People’s Republic of China. Postal Code: 200120 Tel: 021-65967678 Fax: 021-65966160 Email: [email protected]

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Dida Inc. — Environmental & Social Information 2017

50671_rns_2017-07-25_870664dd-f4c5-4c53-88d9-f10185228a61.pdf

中远海运能源运输股份有限公司

CHAIRMAN’S STATEMENT

satisfaction reaching 100%.

ABOUT US

Organization Structure of COSCO SHIPPING Energy

CORPORATE GOVERNANCE

Continuing to Strengthen Internal Management in 2016

Governance Structure of COSCO SHIPPING Energy

Improve Governance Structure

Strengthening Information Disclosure

In 2016

Strategy

THE VALUE OF RESPONSIBILITY AND STRATEGY

The Value of Responsibility

Social Responsibility Values Model

Challenges and Opportunities

Sustainable Development Strategy

RESPONSIBLE BUSINESS RULES

Operating in Accordance with the Law of Compliance

Comprehensive Risk Management and Internal Control

Anti-corruption and Anti-commercial Bribery

Improve the anti-

corruption system mechanism

STAKEHOLDER ENGAGEMENT

Substantive Issues Analysis

Recognition on Social Responsibility Issues

List of Stakeholders

Cooperation

SUPPORTING GLOBAL

ENERGY SUPPLY

Building the World-class Operation Scale

Optimizing the Business Structure of Domestic and

Foreign Trade

Innovating in Diversified Business Model

IMPROVING SHIPPING INTRINSICALLY SAFETY

Safety Production Concept

2016 Safety Performance Table of COSCO SHIPPING Energy

Strengthening Safety Management System

Openned Port Security Checks Promoting the Level of Ship Safety Management

Improving Safety Level of Ships

Optimizing Ship Structure

SHIPPING Energy Ships

Full Life Cycle Maintenance of Ships

Eliminating Security Risks

Building Security Brand Image

We participating in holding “China Oil Transport Security Forum”

Strengthening Security Risk Prevention and Control

Safety Risks and Prevention Measures

Collisions with Rocks

Pirates Robbery

Industrial Accidents

Fire Explosion

Extreme Weather

Conducting the Construction of Safety Culture

Frontline Staff Presence of Safety Management

PROFESSIONAL SERVICE FOR GLOBAL CUSTOMERS

Promoting Customer Service Ability

Accelerating Global Layout Process

Flow Chart of Company Customer Complaint Processing

“Big Customers, Big Cooperation and Big Service”

Weizhou Operation Model

Graph Work Pattern of “Big Customers, Big Cooperation and Big Service”

Ensuring Customer Information Security

Strengthening Customer Communicating and Exchanges

Making First Appearance on Founding Congress

Communicating and Meeting Enhancing Understanding

PROMOTING WIN-WIN COOPERATION WITH PARTNERS

Strengthening Corporate Cooperation

Considering Clients' Demand as Our Duty and Growing Together with Customers

Enhancing Industrial Communication

Association/Institutes Attended in 2016

Building Responsible Supply Chain

COMMITTING TO GREEN OPERATION

Strengthening Environmental Protection Management

Promoting Green Shipping

BUILDING GREEN SHIPS

~~Promote the performance~~ of BWM convention

Dida Inc. Environmental & Social Information 2017

Promote the performance of BWM convention