Forum No_1_2009

no 01 2009DNV Forum

Also inside:> At the frontier of food safety> Testing a fuel cell on a ship> SCF Unicom’s Arctic ascension

Denise Bode, CEO of the American Wind Energy Association:

Wind power pays off

128 24

01 Editorial: Turning risks into rewards

02 News

08 Chasing the wind in the west, interview with leading lady on wind energy Denise Bode

12 Muhammad Yunus talking to DNV Forum on the financial crisis and climate change

16 SCF Unicom’s Arctic ascension, interview with Managing Director Sergey Popravko

20 Theodore E Veniamis on the state of affairs in world shipping and Greek maritime traditions

22 Telenor: Sustainable supply chain

24 With the Marine Stewardship Council, on a shared journey towards sustainable oceans

28 Hotel Maurya: At the frontier of food safety

32 Testing a fuel cell on a ship

34 DNV’s We do: Small step – Big impact

40 Last word: Sustainable performance during downturns

contents

28

1DNV Forum no 01 2009

2008 started with full order books, an all-time-high oil

price and a fierce fight for talent. The year ended with

a financial crunch and economies around the world

almost grinding to a halt. Nobody knows how long the

financial turmoil will last. What we do know is this:

Now is the time to take action in order to be prepared

when the sun starts shining again.

The global financial crisis is penetrating the real econo-

my faster and with more severe effects than anticipated

some months ago. We all need to address the challenges

posed by this financial turmoil that we’re in the middle

of. But this must not be at the cost of losing sight of the

future. That is where the opportunities lie for those who

manage the immediate risks properly. Now is the time

to balance the short term challenges with the ability to

keep focus on the long-term perspectives.

A large part of DNV’s service portfolio consists of inde-

pendent third-party services. We perform a balancing

act between business and society to ensure trust and

confidence. We do this through our key expertise in

identifying, assessing and managing risk. Another

important aspect of our service delivery is to provide

decision support. DNV delivers valuable decision

support with a risk-based approach to businesses

worldwide. In times like these it is vital to have the

best possible basis for decision-making, and we want

to be available for our customers to help them

improve their operations – also when times are tough.

In this context, I feel that DNV’s strategy and service

offerings have never been more relevant.

What has been clearly revealed by the credit crunch is

the economic global interdependence. Businesses need

partners that understand this global context and can

help them manage the risks inherent in dealing with

global operations, global supply chains and global

markets.

And when the world economy recovers and the wheels

start spinning again, we will still have to combat and

adapt to climate change. DNV has stepped up our

efforts to help customers achieve and maintain sus-

tainable performance. We will expand these efforts by

incorporating environmental and corporate-responsi-

bility-related services across our service portfolio.

The future is not cancelled. The winners of tomorrow

are those who manage the current situation by improv-

ing operations, while continuing to address the long

term issues: Climate change, ethical business, corporate

responsibility and safe operations.

Turning risks into rewards

HENRIK O. MADSENPresident and Chief Executive OfficerHENRIK O. MADSEN

"NOW IS THE TIME TO TAKE ACTION IN ORDER TO BE PREPARED WHEN THE SUN STARTS SHINING AGAIN"

2 DNV Forum no 01 2009

DNV opens office in ChicagoDNV has opened a new office in Chicago, Il linois, USA. The office is established to support growthof DNV’s certification and risk management business in North America.

DNV’s services have faced a growing demand across a number of industries driven by compliancemandates and the intensifying pressure that all businesses feel to distinguish themselves on the basis of quality. The Chicago office will become the center of DNV's US food safety team.

“Chicago is geographically a springboard to reaching the entire US market, but it isalso the center of many important food companies with whom we do business,” says Kathy Wybourn, Director of Food Safety Solutions for DNV in USA.

New all time high at DaewooOn 18 December 2008 there was steel cutting on the fifth drillshipin a series of five constructed at the Daewoo shipyard forTransocean. With this steel cutting Daewoo had nine deep waterdrilling units to DNV class under construction at the same time.This is the largest number of such offshore units that has beenconstructed to DNV class at the same yard at the same time in thehistory of DNV. The activity is set to remain high throughout 2009and 2010.

In January the second of two contracted semi submersible drillingunits, named West Aqurius, was delivered to Seadrill thus bringingthe number of units under construction down to eight.

"We are proud about the level of completeness we have achieved for the two Seadrill rigs. Both units were delivered ready to godirectly into operation, and we think this is quite a remarkable achievement for such complex drilling rigs," project manager Mr. YSLee from DSME says. From left to right: DNV project manager Magnar Helland, DNV project team member Seung Young Kang, DNVSite Manager Tomas E. Solli.

World record to DNV Fuel FighterOn 9 May the DNV sponsored hydrogen vehicle, the DNV FuelFighter, won its category in the Shell Eco-Marathon in Lausitz,Germany. The car was designed and built by ten students from the Norwegian University of Science and Technology (NTNU) inTrondheim. In addition to crushing all competition and beatingthe existing world record, the car won the prize for the lowestemissions of CO2. On its way back to Norway the DNV FuelFighter and the NTNU students made a stop at DNV's Hamburgoffice for a press event.

DNV Forum no 01 2009

High level visit from China to DNV

Chief of the International Liaison Department of the Chinese CommunistParty Wang Jiarui visited DNV headquarters in Oslo on 8 May. Arriving DNVheadquarters by boat, Mr Jiarui met with President and CEO Henrik O.Madsen. Mr Jiarui also met with several representatives from theNorwegian Government while in Norway, among others Minister ofForeign Affairs Jonas Gahr Støre and Minister of Finance KristinHalvorsen.

From left to right: H. E. Ambassador of the People's Republic of China Gao Jian; H.E. Ambassador of Norway Svein Sæther;President and CEO of DNV Henrik O. Madsen; Chief of theInternational Liaison Department of the Chinese CommunistParty Wang Jiarui; President of the World Business Council forSustainable Development Björn Stigson; Chief Operating Officerin DNV Bjørn K. Haugland.

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DNV at the helm of Barents 2020:Towards common standardsOil and gas exploration, production and transportation will increase in theBarents Sea in the years to come. Authorities and industry, both in Russiaand in Norway recognise the special challenges facing the industry in thisarea due to harsh weather and a special need to protect the environment.

A Russian – Norwegian cooperation project was therefore launched in early2008, led by DNV, with the aim to recommend standards for safeguardingpeople, the environment and asset values, applicable in the Barents Sea, inboth Russian and Norwegian waters.

The Norwegian Government through the Barents 2020 programme financedphase 1 and 2 of the project. The Russian and Norwegian project partnershave agreed on seven topics for phase 3 throughout 2009. The work will bepresented in a conference in Moscow in December, and the final report will besubmitted to relevant national authorities and standardisation organisationsfor their consideration.

Boosting welding competence in DNV During 2009 a selected group from DNVs energy and maritime business areas will take anInternational Welding Engineer qualification. The purpose of the project is to further developDNV’s expert competence within welding technology.

“Knowledge about welding processes is a key competence for our activities in the oil, gas and energy sector,” says Kim Mørk, director for Service and Technology Development.

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New opportunities for DNV in Mexico Towards the end of 2008 Mexico approved a comprehensive energy reform, open-ing up for more international engagement in the Mexican energy sector.

DNV has been established in Mexico since 1982, and today have two operationsin the country, one in the capital Mexico City and another smaller office in thestate of Jalisco. DNV in Mexico provides services within certification, training andinspection, climate change and the maritime sector.

DNV participated in the business delegation accompanying Their RoyalHighnesses Crown Prince Haakon and Crown Princess Mette Marit dur-ing their official visit to Mexico in March 2009. Their Royal Highnessesseen here with the Chief of Government in Mexico City, Mr MarceloEbrard (right).

Climate Change Academy andNetwork launchedThe shortage of competence and skills in climate changeis a major bottleneck limiting success for companiesoperating in the fast growing carbon business. DNV haslaunched a Climate change academy and network,focusing on important growth markets such as the USand the Middle East, aimed at addressing this issue.

The Climate change academy will from the beginning of 2009 offer a course portfolio that mirrors the currentcarbon market competence needs. Membership to theClimate change network is by invitation only and itsaim is to become a professional network building andsharing knowledge on key issues in the carbon market.

New country manager in FranceYuri Sakurada has started her new job as the first female country manager for DNV in France.

Yuri Sakurada is a Naval Architect from Osaka Prefecture University and started her professional career in DNV Japan as Surveyor in 1994. Since 2006, she hasbeen based in St Nazaire and Marseille, France. Before coming to France, YuriSakurada served in Japan, Norway and the Netherlands, mainly as an active surveyor for ships in operation.

Yuri Sakurada is the new country manager for DNV in France.

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Rough seas ahead for the maritime industry DNV Chief Operating Officer Tor E. Svensen predicts that 2009 will be a tough year for the maritimeindustry, but that DNV has the right strategy and resources to face the global economic crisis. “We have yet to see the full impact of the crisis. I know there have been order cancellations, and so far some 10% of the cancellations have directly affected DNV”.

Tor E. Svensen continues “although the climate in which we function is becoming more challenging,DNV’s business fundamentals have not changed. The foundation remains financially solid and we areconfident that we have the right strategy, resources and resilience to face this global crisis”.

DNV established in the U.S. climate changeservices marketIn order to meet the burgeoning demand for climate change services in the U.S., DNV hasopened a new office in Portland, Oregon. The new office is led by director of climate change strategies and markets Dr. Mark C. Trexler. He has extensive experiencewithin the field of climate change, among other things from his time serving on theIntergovernmental Panel on Climate Change.

In the U.S. DNV also has climate change services staff in Houston and New Jersey and will be expanding during 2009 to provide a variety of related services.

Boeing achieves major environmental certificationgoal On 25 February Bjørn K. Haugland, ChiefOperating Officer in DNV, handed over the environmental certificate ISO 14001 to BoeingVice President Mary Armstrong and BoeingCompliance and Services Director AileenYankowski. The event marked a milestone forBoeing as it established that the company hasreached one of its major environmental goals;getting all of its major manufacturing sites ISO14001 certified by the end of 2008.

“This event signifies the successful joint under-takings of management and employees in Boeingto increase the awareness of sustainable devel-opment throughout the organisation,” said Mr.Haugland, adding that “this has, without doubt,been one of the more extensive ISO 14001 certi-fication efforts we have seen”.

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Director of climate change strategies and markets Dr. Mark C. Trexler.

Environmentally conscious product designThe Taiwanese company ASUS, a global player within the information technology industry sector, hasreceived the EuP certificate. The EuP certificate, concerning environmentally conscious design ofproducts, was for their Notebook N series.

All products have some impact on the environment, which may occur at any or all stages of theproduct’s life cycle; raw material acquisition, manufacture, distribution, use and disposal. Theemerging legislation in this field, EuP being one of them, is now focusing on products more thanon the production.

Supply chain assessment for Italian cooperative

DNV has secured a contract with CONAD, one of the largest independent cooperatives inthe food and beverage industry sector in Italy. DNV will assess CONAD’s most critical sup-pliers according to CONAD’s ethical protocol, which is based on the Social Accountabilitystandard SA 8000. The assessment will help CONAD manage ethical risks in the supplychain as well as evaluate their suppliers according to these requirements.


Twenty years of growth for certificationIn 2009 DNV is celebrating the 20-year anniversary of accreditation to perform certification accordingto the ISO 9001 – Quality Management System standard.

DNV Certification B.V. in the Netherlands was accredited on 25 February 1989. Certification Ltd. in the UK wasalso accredited on 1 July that year. DNV is today among the three largest certification bodies in the world.

“It is a great achievement that we systematically over 20 years have built a world leading posi-tion,” says President and CEO Henrik O. Madsen. “We started based on the competence acquiredfrom our experience within the maritime and offshore industries, including our own standard forcertification of quality management systems.”

Verifying the UNICEF Italy Social ReportDNV in Italy has verified the sustainability reporting of UNICEF Italy, disclosing performance along social and economic parameters and the relationship between UNICEF and its stakeholders. The verification assures stakeholders that the information is trustworthy and that UNICEF Italy is working towards continual improvement.

The verification resulted in suggestions on how UNICEF can further improve communication with stakeholders and how to improve transparency related to strategies and performance on social issues. This will help UNICEF in maintaining their reputation towards their donors.

ISO for Dubai Maritime CityDNV has awarded quality, safety and environmental ISO certification to Dubai Maritime City(DMC) and its regulatory arm Dubai Maritime City Authority (DMCA), recognising theirstrong focus on quality, health and safety and environmental management practices.

DMC and DMCA have also been awarded the PAS 99 compliance certificate in recognition ofthe integration of their management systems and for reaping the benefits of adopting a single integrated management system covering all three spheres. They are the first andcurrently the only organisations in the Middle East to be awarded the PAS 99 compliancecertificate by DNV.

7

DNV to facilitate Europe’s CCS developmentDNV has been asked by the European Commission to facilitate a process to shorten the time from policy making to industry implementation of Carbon Capture and Storage (CCS).

The European Commission is focusing heavily on stimulating the construction and operation of a set of CCS demonstration projects by 2015. The successful operation of these is crucial for wide-scale com-mercial application of CCS within 2020.

Now, the Commission intends to generate early benefits from a coordinated European action by creating a knowledge-sharing network of CCS demonstration projects. DNV will facilitate this integrating and binding project on behalf of the Commission.

“The aim is to speed up, integrate, and optimise the wide-scale commercial application in Europe”, says DNV Chief Operating Officer Remi Eriksen.

Enterprise Risk Management survey finalisedAre oil and gas operators in the UK fully exploiting the benefits of Enterprise RiskManagement?

Based on the last year’s financial turbulence, DNV wanted to understand how Enterprise RiskManagement is adopted and applied on the UK continental shelf. Therefore, DNV surveyed senior executives from many of the top 20 operators. Learning’s are now compiled in a new report.

This report captures the consolidated findings, identifying both similarities and differences while suggesting areas of common weakness perhaps needing an industry-wide solution.

“We hope that these experiences and observations can help the energy industry improve itsapproach to managing its enterprise risks,” says Hari Vamadevan, Director of Operations in DNV.


“We look forward to collaborating with Dubai Maritime City in the future,” said Henrik O. Madsen, President and CEO of DNV. Seen here presenting Amer Ali, CEO of DMCA, with the PAS 99 compliance certificate.


Chasing the windin the westThe United States has used wind power for more than a century, and passedGermany in 2008 to become the world’s no. 1 in total wind power installation.“The potential for wind energy in the United States is formidable, and it’sthe only emission-free energy source that’s ready to deliver right now,” saysDenise Bode, CEO of the American Wind Energy Association (AWEA). TEXT AND PHOTO: ANDERS ØVREBERG ILLUSTRATION PHOTO: GETTYIMAGES



The images from old western films, with vast

dry landscapes, come to mind when Denise

Bode describes the potential for wind energy

in the United States. ‘Big sky’ states, such as

Oklahoma, Nebraska, Texas and Wyoming,

are simply enormous and the wind that

sweeps through them carries with it a solu-

tion to the growing energy problem.

“Right now the entire installed wind

energy capacity in the US is about 26,000

MW (megawatts), and accounts for about

2% of the total energy production. The

potential for wind energy in the state of

Oklahoma alone is estimated to be about

82,000 MW. If we look at the entire mid-

west and beyond, we are confident that

wind can deliver more than 20% of the

needed energy in the US,” says Denise

Bode, who actually started her career in

the energy field in the state of Oklahoma.

To realise such a potential, someone

dedicated to renewable energy must take

charge and lead.

THE ENERGY PRESIDENT

President Obama has made renewable

energy one of his priorities since taking

over the White House, and his policies

have had a major impact already.

“It has been a watershed year for wind

energy and renewable energy as a whole

after the inauguration of President Obama.

Renewable energy is one of the building

blocks of his new economic policy. The

stimulus package, which passed Congress

faster than anything I have ever seen, con-

tains multiple provisions to benefit the

wind industry,” says Mrs Bode.

During his long campaign, President

Obama part preached to and part educat-

ed America about renewable energy. This

teaching moment, as Mrs Bode calls it, has

been one of many. Reaching USD 140 per

barrel of crude oil was another. In June

2008, President Obama said: “A green,

renewable energy economy isn’t some

pie- in-the-sky, far-off future – it is now. It

is creating jobs – now. It is providing cheap

alternatives to USD 140-per-barrel oil – now.

And it can create millions of additional jobs,

an entire new industry, if we act – now.”

KEY POLICIES

It is a fact that the key to the success or

failure of wind energy lies with the policy

makers in Washington, and the AWEA is

working hard to move those policies. The

AWEA states, in its New Wind Agenda, that

what is needed to build the industry, espe-

cially in the face of the financial crisis, is

concrete measures such as tax credits, a

national renewable electricity standard

(RES), a cap on carbon emissions and a

national trading scheme, and not least

legislation and initiatives to develop a

high-voltage interstate transmission high-

way system for renewable energy. In addi-

tion to this, there is need for funding over

the federal and state budgets. And these

items are in fact included in President

Obama’s stimulus package.

Denise Bode is by and large very posi-

tive to current developments; “2008 was a

record shattering year for wind energy in

the US. We increased the nation’s total

wind power generating capacity by 50%,

and the industry is a job-creating dynamo.

Wind energy is now an important player

in the US, and the stimulus package will

boost the industry to further heights.”

A look at the numbers for 2008 shows

Bode is a recognised US energy policy expert. She has morethan 30 years of experience in the energy industry, whichincludes being the former CEO of the American Clean SkiesFoundation, serving on the Oklahoma CorporationCommission, and serving as President of the IndependentPetroleum Association of America (IPAA).


� Over 27,000 MW (27 GW) of new wind

power generation capacity came online

in 2008, 36% more than in 2007.

� The global wind energy capacity grew

by 28.8% last year to reach total global

installations of more than 120,800 MW

(120.8 gigawatts (GW)).

Key US policies to achieve 20% wind power The economic stimulus bill became US law

on February 17. 2009, and contains multiple

provisions to benefit the wind industry.

� National renewable electricity standard

– A 25% renewable electricity by 2025

standard, with near-term targets such

as the 10% by 2012.

� Renewable energy production tax credit

– A long-term extension to ensure policy

stability for the first time

� New interstate transmission highways

for renewable energy

– Legislation and initiatives to develop

a high-voltage interstate transmission

highway system for renewable energy

� National climate change legislation

– A cap-and-trade system calling for a

15% to 20% CO2 reduction by 2020

– To promote a near-term shift to renewable

energy and emissions reductions

� Federal agency support for siting wind

power projects and transmission lines

– Prioritise responsibly sited renewable energy

development on federal lands and create

streamlined, timely review processes

� Federal research & development and

programme funding

– Increase the annual funding level for wind

R&D and other programmes to USD 217

million over the next three to five years.

! Wind energy numbers

that wind energy even beat old fashioned

coal energy plants in added capacity for

the year. The added capacity for wind

power was 8,300 MW, while for coal it was

1,000 MW. “Until they find a way to

sequester carbon, they will not be building

many coal plants,” says Mrs Bode. “A wind

energy plant, on the other hand, can be

up running and producing electricity in

just six months.”

PLEASE IN MY BACKYARD

The large rural American landscape is not

just an empty wilderness. What do the peo-

ple there think of this new industry with its

tall whirring steel constructions? A survey

shows that they seem to like it very much,

and only time will show how fickle those

sentiments might be when a plant is

actually sited in their own backyard.

“Between 83% to 90% of the people

polled support wind energy. In the dry

rural states, people connect wind energy

with the wind mills that pumped up water

and saved them from droughts, so it’s more

like ‘please in my backyard’ in those

states,” says Mrs Bode.

WIND ENERGY ON THE GLOBAL SCENE

Wind energy is now an important player

in the world’s energy markets, states the

AWEA in a recent press release. The global

wind market for turbine installations in

2008 was worth about EUR 36.5bn or USD

47.5bn. In Germany and Spain, 20% of

the energy comes from wind. The United

States is far behind with a little over 2%.

But, with President Obama at the helm,

President Barack Obama picks up a bolt during a tour of the Cardinal Fastener &Specialty Company, on January 16, 2009 in Ohio. Obama visited the factory as part of his train journey to his inauguration ceremony in Washington, D.C. Cardinal Fastenermanufactures parts used to construct wind turbines, such as wind turbine bolts.

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“Crises create hardships. It is under such

circumstances you come up with the real

innovative ideas,” Muhammad Yunus,

Nobel Peace Prize winner and founder

of Grameen Bank told DNV Forum.

He is a living proof of exactly that.

From very modest beginnings in

Bangladesh, he developed the concept of

micro-credit. His unconventional business

model has not only lifted millions of peo-

ple out of poverty in Bangladesh and else-

where. He has also demonstrated how sus-

tainable environmental solutions work in

practice for the masses, through what he

calls social business.

“The financial crisis demonstrated the

deficiencies of the current system. We now

have a golden opportunity to change the

system, and base it more on sustainable

business models,” Mr Yunus argues.

Perhaps it is the only way for the finance

industry to regain public trust; to demon-

strate that they create value to society.

Mr Yunus is convinced that there is an

enormous willingness and entrepreneurial

potential among both individuals and busi-

nesses to address the climate challenge.

But the politicians must provide the right

frameworks.

TOUGHER EMISSION TARGETS

The UN’s 15th Summit on Climate Change

in Copenhagen in December will be

crucial in staking out a new course and

a new framework after the Kyoto protocol

expires in 2012. And Mr Yunus is clear on

his expectations: “Quota trading must con-

tinue in some form, but the Kyoto proto-

col has basically failed. The western world,

including the US, must lead by example

and agree to commit to a level that is sus-

tainable. A 50% reduction of CO2 emis-

sions by 2050 (compared to 1990 level)

is far from enough.” Mr Yunus also argues

that binding goals must be determined for

the short term as well as CO2 taxes. This

will automatically bring about technology

solutions and innovations.

A chance to change?The financial crisis and the economic recession have created completely new frame conditions for the fight against climate change. The question is: Will this put a solid brakeon governments’ and businesses’ commitment to invest in emission reducing activities? Or will new systems and governance practices emerge, where sustainable devel-opment and the environment will become more central? TEXT: PER BUSK CHRISTIANSEN PHOTO: NINA EIRIN RANGØY

Crisis:


Nobel Peace Prize winner Muhammad Yunussees the financial crisis as an opportunity tomake fundamental changes.


FIGHTING CLIMATE CHANGE

WITH SOCIAL BUSINESS

Mr Yunus has created many other businesses

based on the success of Grameen Bank.

One of them is Grameen Shakti (or

Grameen Energy), which combines the

concept of micro-credit with renewable

energy solutions for the poor.

Mr Yunus’ home country Bangladesh is

often referred to as the country most vul-

nerable to climate change. But that is just

one side of the story. Grameen Energy has

developed a solar home system and a bio-

gas solution to create clean energy for the

masses. In a country where most rural areas

are without electricity, the availability of

electrical power is enabling rural artisans

and traders to stretch working hours, cre-

ating extra income. The solar technology

has opened up many new business oppor-

tunities in the villages: Mobile phone

charging shops, TV halls, computer train-

ing centers and pay phone services. Run by

entrepreneurial villagers with micro-credit.

The social business caseGrameen Bank reversed conventional banking practices by lending to the poorest people. The basic ideais that all humans are entrepreneurs. They just need the opportunity to lift themselves out of poverty.Micro-credit has been the tool to do just that for millions. Unlike philanthropy it has proven scaleable andwith great spin-off effects. Mr Yunus calls it social business.

Muhammad Yunus presented the notion of social business at the World Business Forum in Milan. He also stopped by the DNV stand, where an ice sculpture of a polar bear symbolised the climate challenge we are all facing.



From his headquarters in Limassol, Cyprus,

managing director Sergey Popravko keeps

track of Unicom Management Service’s

(SCF Unicom) entire fleet of vessels on

a large computer screen in his office.

Increas ingly, new dots representing tankers

are seen on the top half of his screen, in

the Russian Arctic.

SCF Unicom, one of the exclusive ship

managers for the Russian state ship own-

ing company JSC Sovcomflot, is especially

renowned for its expertise in the chal-

lenges of shipping in the Russian Arctic.

From the calm warmth of the Mediter -

ranean it’s hard to fathom the extreme

conditions the tankers must weather. But

Mr Popravko, who is also Chief Operating

Officer of Sovcomflot, knows the Arctic

better than most. He has 30 years experi-

ence in the industry, working his way up

the ladder, with many Arctic voyages

under his belt.

MAJOR PLAYER

When new opportunities are opening up

in the Russian Arctic, with offshore proj-

ects such as Sakhalin, Varandey, Shtokman

and Yamal, SCF Unicom is stepping up as

a major player. Russia is becoming a prime

energy supplier to the world, and is pursu-

ing a new strategical approach in deliver-

ing Russian energy to the global market –

with emphasis on shipping, instead of pipe-

lines. The strategies of both Sovcomflot

and SCF Unicom are aligned with the

country’s strategy.

SCF Unicom became an independent

technical LNG manager operator as

recently as 2006. “We like to point out

that there are fewer LNG captains than

cosmonauts in Russia,” says Mr Popravko.

SCF Unicom has two ice class shuttle

Aframax tankers transporting Sakhalin-1

crude oil, and has already seen two winters

pass successfully. Three Varandey ice class

tankers are about to experience their first

real winter. More vessels for Sakhalin and

Varandey are to be delivered later this year

and next year.

“These two projects may give us the spe-

cific grounds to decide on what could be

the best solution for the Yamal project,”

SCF Unicom’s Arctic ascensionSergey Popravko knows the Russian Arctic in and out. He is at the helm of SCF Unicom, theship management company of JSC Sovcomflot, the world’s number one Arctic shuttletanker operator, and the world’s number one ice-class LNG operator.TEXT: KAIA MEANS PHOTO: KAIA MEANS AND UNICOM

Managing director of SCF (UnicomManagement Service’s) Unicom.

SERGEYPOPRAVKO


says Mr Popravko, speaking of the Russian

oil and gas project off the Yamal peninsula

in Northwest Siberia. DNV is involved in

the Sakhalin project, where SCF Unicom’s

technical expertise has brought a new

dimension to the cooperation.

“In the case of Sakhalin-1, the client

wanted the classical approach: an ice class

tanker follows an ice breaker. For the sec-

ond project, Varandey, our charterers pre-

ferred another approach. They wanted an

ice breaking vessel which doesn’t actually

need an ice breaker assistant, one that can

break ice by using its own propulsion sys-

tem,” Mr Popravko says.

This system is already used in the Baltic,

but until now it has not been tried in the

Russian Arctic.

“We have a unique chance to see both

projects, which are conceptually different.

Through operating and managing these

vessels, we can accumulate a great deal of

experience and know-how. And then we

can understand what could be the best

solution for transportation for Yamal

LNG,” he says.

SCF UNICOM-DNV PARTNERSHIP

Mr Popravko speaks highly of the coopera-

tion with DNV, mentioning the successful

results of the partnership on the Sakhalin-

1 project, which started in 2001.

“At that time we didn’t have today’s spe-

cific rules and recommendations on the

winterisation of ships. Ice class meant extra

steel plate thickness and extra power of

the main engine – but nothing about how

to protect equipment and vessels from the

low ambient temperature, and what partic-

ular steel grades you need. So there were a

lot of practical things to determine – even

how to protect the crew from the cold

weather. We started working with DNV on

this, and many of these things have now

become part of the winterisation rules of

classification societies like DNV,” says Mr

Popravko.

“We are ready to cooperate further,

because we still need to develop particular

projects of LNG transportation from the

Arctic, such as Shtokman and Yamal.”

Mr Popravko says SCF Unicom’s expert-

ise is part of its business strategy. “I think

that having in-house expertise and naval

architects is one of our core competences

and competitive advantages.”

ARCTIC IS COLD ENOUGH

He has kept an eye on the problems

encountered at the Norwegian Snøhvit

field, where low temperatures have halted

operations.

“They talk about global warming, but I

think the Arctic is still cold enough. You

always have some surprises and extremes

will become the norm,” he laughs.

SCF Unicom has two ice class shuttleAframax tankers transportingSakhalin-1 crude oil, and has alreadyseen two winters pass successfully.Three Varandey ice class tankers areabout to experience their first realwinter. More vessels for Sakhalin andVarandey are to be delivered laterthis year and next year.


SCF Unicom’s motto is ’Quality, Safety

and Reliability’. “Our core business is to be

an in-house ship manager, to add value to

Sovcomflot,” he says. Only a dozen of SCF

Unicom’s vessels are not Sovcomflot. “To

be abreast of what latest market develop-

ments are, and to understand trends, you

still need to have some third party portfo-

lio. But we are in a position to say no to

those that compromise safety,” he says.

“I think SCF Unicom has one of the best

reputations of ship management compa-

nies,” he says, continuing: “We can consid-

er ourselves Russian. But we are located

internationally in Cyprus, and we employ

internationally. We have various cultures

and experiences: Russian, Ukrainian,

British, Greek-Cypriot, Greek from the

mainland, Scandinavian, German.

Everybody contributes.”

VLADIVOSTOK

Mr Popravko grew up in Vladivostok, a

stone’s throw away from the city’s marine

academy. His father was a captain, his

mother a naval architect who taught at the

academy. “My mind was set when I was two

or three years old,” he says. “I wanted to be

a seaman.”

After graduating from the academy, he

started as an able seaman on chemical

tankers, rising to captain, and eventually

becoming chartering manager and then

CEO of the Russian shipping company

Primorsk. He also attended the World

Maritime University in Malmö, Sweden in

the mid-90s, earning an M.Sc in Technical

Management of Shipping Companies.

Mr Popravko is concerned about the

global crewing situation, despite the down-

turn it is predicted that there could be a

shortage of 40,000 officers worldwide by

2013.

“In most countries with a shipping cul-

ture, like Russia, the seafarer’s status has

dropped. When I joined the industry 30

years ago, in Russia – the USSR at that

time – the status of ship’s master was very

high. He was well paid and had power and

special status. He was an official represen-

tative of the Soviet Union. The status of

the master was almost up to that of movie

stars and diplomats. For various reasons,

however, that has slipped. It makes me sad.

That’s why it’s difficult to get young people

to see shipping as a worthwhile career. We

have to work hard to change this image,”

he says, pointing out that Unicom has put

extensive effort into its training and cadet

programmes, focusing on achieving high

crew retention rates.


MEMORABLE

It’s obvious that Mr Poprakvo has always

loved his job. One of the most memorable

experiences of his years at sea, he says,

happened on a round-the-world voyage

with a small product tanker. “We stopped

for overhauling in the middle of the

Pacific. It was 2000 miles to the nearest

coast. The depth was a few thousand meters.

And we were allowed to swim. You felt like

you were hanging in space. When you

turned your back to the vessel you saw

nothing but sea. And then you realise there

is nothing beneath you. And if you were

left alone…”

An equally memorable – but less pleas-

ant – experience happened in the Arctic,

when he was walking alone toward the

shore on watery ice floes in Point Schmit,

a harbour north of Chukotka in the

Russian Arctic. He slipped and fell into

the freezing waters, and the ice closed in

above his head. Luckily, he was young and

fit, and managed to pull himself up onto

the ice within a minute. “I wanted to sur-

vive,” he says with a laugh.

No wonder he’s concerned about pro-

tecting his crews from the fierce waters

of the Arctic.

SCF Unicom was founded in 1991,

as the exclusive ship manager for the

Russian State ship owning company JSC

Sovcomflot, Russia’s largest shipping

company.

SCF Unicom has headquarters in

Limassol, Cyprus.

It currently has a managed fleet of 73

vessels (4 million DWT), including crude

oil and gas tankers, dry cargo vessels,

passenger vessels and, of course, ice

class tankers.

The company offers crew management,

technical management, marine safety and

quality management, commercial opera-

tions management, claims management

and new building supervision.

As of December last year, Novoship

(where the Russian state had 60 percent

of the shares) and SCF Unicom’s parent

company JSC Sovcomflot merged.

The Sovcomflot Group fleet now compris-

es 124 vessels, 8.7M DWT, with an aver-

age tanker fleet age of six years,

one of the youngest fleets in the world.

An additional 31 new vessels are on

order.

The Sovcomflot Group is the second

largest Aframax operator and one of

the largest ice class tanker operators.

! Unicom Management Service (SCF Unicom) and Sovcomflot


In February, Theodore E Veniamis was

elected President of the Union of Greek

Ship-owners (UGS). Mr Veniamis is also

the founder, chairman and managing

director of the Golden Union group, a

Piraeus-based shipping company estab-

lished 32 years ago. Under his leadership,

the Golden Union group has flourished

and today enjoys an excellent reputation

and high level of customer commitment

due to its services to the dry cargo markets

and its excellent safety record. The

company currently operates dry bulk ves-

sels totalling more than 2 million dwt.

THE CYCLICAL NATURE OF SHIPPING

International shipping has, like most other

industry sectors, been navigating in stormy

waters for the past couple of months.

Following six years of unprecedented

growth reflected by a record number of

new orders, the shipping industry has now

been forced to face some cold facts. The

number of cancellations is increasing,

postponements are becoming increasingly

widespread and debts are piling up.

Furthermore, although Greek shipowners

still prefer to scrap older vessels and buy

second-hand, on a global scale lay-ups are

set to increase.

However, the future might not be totally

gloomy.

Mr Veniamis, who is currently serving

as chairman of DNV’s Greek Committee,

believes that international shipping will

survive the current crisis – just like it has

survived previous crises. “Maritime freight

markets are cyclical in nature. Shipping

crises are consequently a recurring phe-

nomenon. The unprecedented growth we

have witnessed in the freight market over

the past few years was not sustainable.

Now, once more, shipping is being called

upon to face this very testing period in

a responsible way,” says Mr Veniamis.

And he knows what he is talking about.

THE PHILOSOPHY OF GREEK SHIPPING

Maritime traditions in Greece date back

10,000 years and are as strong today as

ever. Greece currently manages the largest

merchant fleet in the world and controls

close to 15% of the world fleet measured

by deadweight. Furthermore, Greek

shipowners have had the largest share of

newbuildings during the recent financial

turmoil.

Nonetheless, the current financial crisis

is a global crisis that also affects the Greek

shipping industry. Although, according to

Mr Veniamis, perhaps not in the same

magnitude. “Over the years, the Greek

shipping industry has proved it has an

amazing ability and willingness to adapt

to the needs and requirements of a con-

stantly changing global environment.

Thus, during the current financial turmoil,

Greek shipping is better able to deal with

the industry’s highly unpredictable cyclical

nature,” says Mr Veniamis.

But, he adds, there is more to Greek

shipping than just that.

“There is a special philosophy in Greek

shipping. The majority of the industry is

based on family loyalties and values, not

corporate ownership. Shipping companies

built on a strong family foundation lead to

a different kind of trust and commitment.

I believe this foundation is part of the

reason why Greek shipping will get

through the crisis without breaking its

back,” says Mr Veniamis.

As a comparison, Norwegian shipping

traditions have also been built on a similar

family-oriented foundation. Today, the

maritime relations between Greece and

Norway are strong, and Greek shipowners

work closely with the Norwegian maritime

cluster; insurance, banking and classifica-

tion. For DNV, maintaining a good and

fruitful relationship with Greek shipping

is a priority.

REALISTIC VIEW

When it comes to predicting the future of

international shipping, Mr Veniamis takes

a cautiously realistic view. “It’s impossible

to predict the future. We know only the

past and the present. If we want an indica-

Navigating throughstormy watersTo Theodore E Veniamis, the President of the Union of Greek Shipowners, the current tur-moil in world shipping is due to the cyclical nature of maritime freight markets.According to him, the winner is the one who stays in the game even in difficult times suchas these. TEXT: JANNICKE WITSØ AND EVA HALVORSEN PHOTO: HENNING LILLEGÅRD


tion as to what the future will bring, we

need to make regular calculations, perhaps

as often as every month,” he says.

Although predicting the future might be

difficult, one thing is certain; concern for

the environment and sustainability will be

an important part of it.

According to Mr Veniamis, the shipping

community has worked on environmental

issues for years. “Operational pollution has

been reduced, and significant improve-

ments in engine efficiency and hull design

have led to a reduction in emissions and

increased fuel efficiency. The UGS sup-

ports global IMO-induced measures to

reduce emissions from international ship-

ping,” he says, emphasising that “these

measures should support sustainable devel-

opment without restricting economic and

trade growth.”

MY WORD IS MY BOND

For Mr Veniamis, trust and confidence are

two of the most important attributes in

shipping. “In the end, what matters in the

current situation is that trust and confi-

dence are re-established. Banks with ship-

ping portfolios should support their cus-

tomers and assist them in overcoming the

current difficulties. The motto ‘my word

is my bond’ should prevail again.

Speculation should be avoided, and the

financing of healthy shipping should not

be curtailed,” says Mr Veniamis.

In the end, he says “the winner is anyone

who stays in the game even in difficult times

such as these.”

Greek shipowners have had the largest

share of newbuildings during the recent

financial turmoil, currently standing at

1,072 newbuilding vessels – or 53.4 million

grt.

According to recent statistics released by

the Greek Shipping Co-operation

Committee, Greek interests control 4,161

vessels – equal to 263.5 million dwt or

156.2 million grt.

The average age of the Greek fleet has

decreased further and currently stands at

11.9 years, compared to the world fleet’s

average age of 12.9 years.

! Greek shipping

Theodore E Veniamis, the President of the Union of Greek Shipowners, (left) in discussion with DNV's President and CEO Henrik O.Madsen, DNV's Senior Vice President Ioannis Kourmatzis (right) and DNV's COO Tor E. Svensen (with his back to the camera) at DNV's headquarters in Oslo.


Telenor established a project to improve

their supply chain management in response

to the production of a Danish documentary

revealing substandard working conditions

at companies in the supply chain of

GrameenPhone, a Telenor subsidiary

in Bangladesh.

“I was really surprised when this project

landed in my lap,” says Stein Hansen,

referring to the HIT project, an acronym

for Health, Safety, Security and Environ -

ment (HSSE) in Telenor. Mr Hansen was

in charge of HIT from its inception in May

of last year until the project came to a close

March 1, 2009, when he became Senior

Vice President of the newly created

permanent Group HSSE Assurance unit

at Telenor.

By the time the documentary was aired,

investigations were already in motion, with

DNV personnel doing onsite assessments

of the tower manufacturers at the time

of broadcast. These assessments revealed

substandard working conditions at all the

plants, and it became evident that Telenor’s

policies regarding HSSE and business

conduct had not filtered through to

GrameenPhone’s suppliers. Mr Hansen,

who was Head of Group Technology at

Telenor ASA for six years prior to this,

was asked to lead the project.

GLOBAL SCOPE

“A lot of people think that we’ve only

included the Bangladesh supply chain in

the project, but that is not the case. It was

a group-wide project on working condi-

tions and environmental management

across Telenor’s Operating Companies

and our supply chains,” says Mr Hansen.

The Telenor Group is among the largest

mobile operators in the world with mobile

operations in 13 markets across the Nordic

region, central and eastern Europe and in

Asia. DNV was brought in to offer both

consulting and assessment services to the

project. The first step was to set up criteria

and select assessment candidates globally

to get an overview of the factual situation

in the supply chains. DNV’s global pres-

ence and ability to mobilise resources

locally gave the assessments a harmonised

approach and comparable results.

“We organised it very quickly, but DNV

was flexible – and we have cooperated

well,” Mr Hansen says. A number of 65

suppliers and sub-suppliers were audited

by DNV in the course of just a few months.

To manage the information and prioritise

the actions Telenor applied a risk based

approach. Mr Hansen, his team and DNV

worked together to bring new systems in

place. DNV’s EasyRisk Manager tool, tailor-

made to Telenor’s needs, was used to collect

information and apply risk categorisation. A

selection of almost 800 suppliers, where

the risk was assumed to be high, was asked

to complete a self-assessment electronic

online survey, and high-risk suppliers were

identified for further follow-up.

SAFETY IMPROVEMENTS

After the initial audits there have been

subsequent re-inspections. “We gave the

suppliers concrete plans for improve-

ments, and we’ve seen improvements,”

says Mr Hansen. “It could be things like

putting up fences around dangerous areas,

enforcing use of helmets, sorting of waste

materials, or cleaning the warehouse area.

In some cases we’ve done health checks

of employees. We’ve also gone through

employee contracts and made sure they’re

up to standard.” Other improvements

include posting danger signs where needed.

He is now hiring for the new Group

HSSE Assurance unit at Telenor, and

may eventually have up to 10 employees,

including HSSE auditors. “We’ve put a

system in place, with processes for how

we’re going to work on this globally. We

can’t guarantee that there aren’t substan-

dard conditions anymore, but we can say

that we’re working on it systematically. We

have a system, and if certain things haven’t

been caught by the system yet, we’ll have

to take them on in the next round,” he

says.

The EasyRisk Manager tool gives the

company a rating that represents the sup-

ply chain risk level globally. “Now we have

a baseline,” says Mr Hansen. “We’re going

to continue to measure it, and of course

the goal is to improve constantly,” he says.

Sustainable supply chainWhen Telenor needed a new system in place to improve their supply chain management,they turned to DNV. TEXT: KAIA MEANS PHOTO: SCANPIX

STEIN HANSEN

Senior Vice President of the newlycreated permanent Group HSSEAssurance unit at Telenor.


TAKING ON THE CHALLENGE

One thing that surprised Mr Hansen was

how positive many of the suppliers were to

the project. “Some have really taken the

challenge. Of course, others have done so

to a lesser degree,” he says. One positive

example is the owner of one of the gal-

vanisation factories that were included in

the original documentary highlighting the

problems in Bangladesh.

“Firstly, he said that it was good that we

demanded higher standards. They had

many international companies as cus-

tomers, and it was important to improve

and fulfil higher standards. Secondly, it

was at no great cost. He said he had used

0.5% of annual revenues on the improve-

ments. Not only that, but there was also a

visible improvement in absence rates. So in

the end they might actually have increased

profits. And he wasn’t the only example.

Of course, they didn’t all respond that

positively. But that’s our challenge – to get

this to become something positive.”

On the question of whether improving

working conditions globally is a satisfying

job, the response is matter-of-fact. “We’re

not near the finish line yet. The work is

just beginning now,” he says.

Street life in Dhaka, Bangladesh. A Danish documentary revealed substandard working conditions at companies in the supply chain of Telenor in Bangladesh.


On a shared journeytowards sustainable oceans


The current financial turmoil has left peo-

ple disillusioned and markets in disarray.

While economic growth is slowing down,

one concept remains: that of sustainable

development. The Marine Stewardship

Council (MSC) is a not-for-profit organisa-

tion and charity headquartered in London.

It was founded with the aim of establishing

a market-based programme that recognised

and rewarded sustainable fisheries.

Rupert Howes is the Chief Executive of

the MSC, which has offices in eight coun-

tries around the world. Since its establish-

ment, the MSC has worked towards ensur-

ing consumers are empowered to make

the best environmental choices when buy-

ing seafood.

Over the past two years, the MSC has

experienced unprecedented growth, driven

by an increasing environmental awareness

among consumers and the closely associat-

ed recognition by the market that sustain-

ability is a concept that is here to stay.

Today the MSC enjoys an unparalleled

position in the market for marine certifica-

tion and eco-labelling.

DNV is one of the entities that has been

accredited to certify according to the MSC

Chain of Custody standard. DNV is also in

the final stages of accreditation for MSC

Fisheries certification.

THE PRESSURE IS ON

The growing pressure on global marine

resources is one of the greatest environ-

mental challenges we are facing. The

demand for seafood is increasing – and

already exceeds the supply of wild capture.

200 million people around the world

depend on the fishing industry for their

livelihoods. Furthermore, around 2 billion

people depend upon seafood as their main

or only source of protein. Seafood is also

the most heavily traded primary product.

Thus a collapse in fisheries around the

world, would threaten not only the marine

environment but also food security and

the livelihood of millions of people.

THE STATISTICS ARE GRIM

Over the past few centuries, there has

been a significant decline in global fishery

resources and an increase in the number

of overexploited and depleted stocks. The

harvesting of major commercial species,

The Marine Stewardship Council (MSC) was establishedtwelve years ago in response to the call for more sustain-able management of the world’s oceans. At the time, thetask seemed far-fetched. Today sustainability has becomemainstream. TEXT: JANNICKE WITSØ PHOTO: GEIR EGIL SKAU

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such as cod, has declined. Adding to this

fragile state of affairs are the challenges

posed by increasingly widespread phenome-

na such as illegal, unregulated and unre-

ported fishing, and the wider environmental

impacts of by-catch and damage to marine

ecosystems and habitats. The statistics leave

us with a dire warning of just how quickly

man can deplete the bounty of nature.

PARTNERSHIP AND PROGRESS

The MSC was set up in 1997 by the World

Wildlife Fund (WWF) and Unilever, one

of the world’s leading suppliers of high-

turnover consumer goods. The aim was

to create a growing market for sustainable

seafood.

Today, the MSC is a partnership-based

independent organisation that works with

industry, governments and NGOs. Its mis-

sion is to use markets to identify and

reward sustainable fisheries management.

In order to reach its goal, the organisation

has developed standards for sustainable

fishing and seafood traceability.

“From the founding of the MSC in 1997,

it took two years to develop the MSC’s stan-

dard for environmentally responsible and

sustainable fishing. Workshops were held

around the world involving industry stake-

holders, scientists, fishery managers and the

conservation community. Fisheries certifica-

tion is a complex business, it is not just fish-

ing efforts that impact on the overall health

of a fishery – climate change, the availabili-

ty of nutrients, disease and natural preda-

tion as well as sea temperature changes can

all have an impact,” says Mr Howes.

Today, a record number of 41 fisheries

have been certified as being sustainable

in accordance with the MSC standard, up

from 26 last year. Close to six million

tonnes of seafood are covered by the pro-

gramme. And more than 2,500 individual

MSC-labelled products are now on sale

worldwide, currently valued at over USD

1 billion in global sales per year.

The MSC certification and eco-labelling

programme is a third-party programme.

Independent certifiers carry out assess-

ments of fisheries and businesses against

MSC standards. “I am pleased that DNV is

one of the entities that has been accredit-

ed to certify according to the MSC Chain

of Custody standard,” says Mr Howes. “I

think it is imperative to have a geographical

spread of the certification entities.”

BALANCING BETWEEN STAKEHOLDERS

According to Mr Howes, the MSC operates

in a difficult position between different

stakeholders. “However, we are a partner-

ship-based programme that works with all

of the stakeholders and whilst there are

sometimes differences of opinion we all

want the same outcome; healthy and pro-

ductive oceans.”

The MSC programme is rapidly gaining

popularity all over the world. Fisheries

involvement and market interest is particu-

larly strong in Northern Europe. However,

other markets are also becoming interested,

including Japan, South Africa, Australia,

New Zealand, North America and, increas-

ingly, southern Europe. Large retailers,

such as Wal-Mart, Carrefour, Metro,

Sainsbury’s and others, have built MSC

into their procurement policies. Today

MSC-labelled products are available in

41 countries worldwide.

THE WAY FORWARD

“Despite the downturn, I am optimistic

about the future. Our partners care deeply

about seafood sustainability and consumers

are increasingly demanding sustainable

products. The MSC provides that assurance

for seafood and we are currently seeing

continued growth across all markets,” says

Mr Howes.

With regard to competition in the mar-

ket, Mr Howes takes a pragmatic approach.

“For the past twelve years, the MSC has

worked towards developing a market that

desires eco-labelling. This market has slowly

gained ground. Competition is inevitable

but it is critical that any new labelling and

certification programmes are robust and

credible.”

One potential challenge he does fore-

see, however, is the possible confusion that

can be caused should several new and

comprehensive certification programmes

surface at once, without clear distinctions.

“In the end, these are unprecedented

times characterised by huge uncertainties.

World growth will slow down, but sustain-

ability will remain. What the MSC delivers

is assurance that seafood is caught in a sus-

tainable manner. That service won’t go out

of fashion in the near future. There’s rea-

son to be optimistic about this.”

Fisheries applying for assessment under

the MSC programme are usually

described using four reference points:

� the geographic area of fishing,

� the target fish stock,

� the fishing gear used and

� the management group(s) or

organisation(s) taking responsibility

for the certificate.

Other aspects of the fishery may also be

used to make it clear what is included

and what is not. Together, these are

known as the ‘unit of certification’ and

are decided by the client at the beginning

of the certification process, with advice

from the certifier. It could include an

entire fishery or just certain vessels

within a fishery, one species or several,

and includes reference to the gears or

fishing methods utilised within the fishery.

Read more at The Marine Stewardship

Council webpage: www.msc.org

! What counts as ‘a fishery’?


Our vision is of the world’s oceans teeming with life, and seafood supplies safeguarded for this and future generations – Rupert Howes, Chief Executive of the Marine Stewardship Council (MSC).


At the frontier of food safety


FULL SPEED IN THE KITCHEN: the famous Bukhara restaurant at the Maurya hotelin New Delhi has an open kitchen, allowing guests to watch as their meals areprepared. Bukhara was honoured to be named one of the “Top 50 Restaurants in the World and the Finest Restaurant in Asia” by Restaurants magazine in 2006.


When heads of state, global business lead-

ers and other high profile people visit New

Delhi in India, they often prefer to stay at

the ITC Maurya hotel; a 5 Star hotel

renowned not only for its luxury and

beauty but also for its food safety standards.

Situated in the heart of the city with a view

of New Delhi’s green belt, the hotel is a

tribute to the age of the Great Mauryan

Dynasty, which created the golden era of

Indian history.

The hotel lobby is as grand and luxurious

as one would expect, but being invited back -

stage is also an interesting experience.

Although not as luxurious and colourful as

the front of the hotel, the hallways are very

clean and tidy and everything seems calm

and systematic. The hotel is the workplace

of 545 employees, one of whom is Dr M

Khurshed Alam Khan.

In 2003 he was appointed R&D manager

of the ITC Hotels with a special focus on

food safety. A dedicated and highly skilled

food safety scientist, he immediately start-

ed methodical work to raise the food safety

bar to the highest level.

TREMENDOUS RESULTS

“This hotel chain has made huge invest-

ments in food safety. They have done a

great job and hired the best people and

the results have been tremendous,” explains

Dr Khan, and continues: “It has been a

pleasure to work on food safety here,

maybe most of all thanks to our CEO Mr

Nakul Anand, who is the most committed

food safety person I have ever met. He has

been a driving force and exceptionally

supportive all the way.”

The Maurya hotel in New Delhi belongs

to the ITC Limited, which operates more

than 100 hotels, 15 of which are ranked as

top class hotels. The Starwood Food Safety

Audit in the region (a preliminary self

check) revealed that eight ITC hotels of

the ten hotels audited scored above 85%,

whereas the average region score was

76.5%. The Maurya scored 93.5% – the

region’s highest score.

“These are very good results. In

Singapore, no hotel has ever scored

more than 83% and in Japan only four

hotels have scored 85%,” Dr Khan

proudly points out.

HOTELS ARE COMPLEX SYSTEMS:

Hotels are complex systems, with thousands

of semi-raw materials, ingredients, people

and processes and a continuous need for

training and testing. In 2004 Dr Khan took

the challenge of getting the Maurya hotel

certified according to the HACCP (Hazard

Best practice for

food safetyA long and systematic process has brought the Maurya hotel in New Delhi to the very forefront of the world’s luxury hotels when it comes to food safety.

TEXT: EVA HALVORSEN PHOTO: NINA EIRIN RANGØY


Analysis & Critical Control Points) food

safety standard, which is the international-

ly recognised operating method that helps

companies in the food and beverage indus-

try identify their food safety risks, prevent

food safety hazards and address legal com-

pliance.

“I contacted DNV, which I considered to

be the only company in India that could

handle this,” he says.

He wanted a chain-wide focus and one

common certified management system.

Maurya became the first hotel in the chain

to be certified in 2005, and six other hotels

followed shortly. At this point the ISO

22,000 food safety management system

had been established. In 2008 the Maurya

hotel became the first hotel in the chain to

be certified according to this standard as

well. Today another five hotels in the chain

are also certified according to ISO 22,000.

Today Dr Khan can claim that in the

luxury chain there is only one hotel left

uncertified, but he aims to have all 15

hotels certified by 2010.

“Then we’ll take it to the next level,”

he says with a smile.

LABS AT ALL THE LUXURY HOTELS

For 15 years, the ITC Hotel chain has had

small labs at the hotels, and in 2000 it

invested in high quality labs. Today the

chain has eight high quality labs with highly

educated employees. On our tour back-

stage, we also visited the Maurya lab. Here

Dr Khan works with two microbiologists full-

time, testing bacteria, water quality and air

quality. In addition they search for chemical

contaminants, legionnaires’ bacteria etc.

“We perform continuous testing to

ensure our position at the forefront of

food safety,” says Dr Khan.

The room next door is a classroom where

a team of eight employees learn about

HACCP, and the stairs leading up to the

kitchen have “Are you carrying any bacteria

into the kitchen?” painted between the steps.

SYSTEMATIC WORK

“During the past few years, I have been in

contact with DNV staff all over India and

have received valuable help and guidance.

It has been a difficult job, but through sys-

tematic work we have managed to enhance

our hotels’ food safety standards,” Dr Khan

concludes.

We ended our visit with a memorable

meal at the Maurya hotel’s famous restau-

rant; the Bukhara. The open display

kitchen allowed us to watch as our meals

were prepared, and we were fully con-

vinced that this food was not only exquisite

– it was also absolutely safe.

“We have made huge investments in food safe-ty,” says Dr M Khurshed Alam Khan. He is theITC Hotel chain’s R&D manager with a specialfocus on food safety. At the Maurya hotel laboratory he has two microbiologists workingfull-time. Here he is with microbiologistSuhavani Sharma.

The financial crisis is not putting a stop to the world’s first ship with a fuel cell.The testing of this technology, which may halve the climate emissions fromshipping, starts in a couple of months. TEXT: TORE STENSVOLD PHOTO: NINA EIRIN RANGØY

Testing a fuel cell on a ship

“I am convinced that fuel cells arethe way of the future; both onshore, offshore and onboard ships,” says DNV’s project manager TomasH. Tronstad.


A rather unusual offshore supply ship is

being built at the Westcon shipyard in

Norway. The gas-driven supply ship, which

belongs to the Eidesvik shipping company,

will be the test centre for the world’s first

fuel cell on board a merchant vessel.

The Viking Lady will be this pioneering

shipowner’s third supply ship to be run on

LNG. This gas will also be the fuel for the

320 kW fuel cell. This is in principle suffi-

cient to act as an auxiliary engine to ensure

a power supply on board, but not enough

for propulsion.

THE FIRST STEP

Fuel cells in ships may lead to an environ-

mental revolution in shipping. The

Norwegian-German Fellowship project is,

however, just the beginning. Following the

hopefully successful demonstration will be

more developments on reducing cost and

physical volume and increasing lifetime

and reliability. The fuel cell on the Viking

Lady is being built in addition to a normal

auxiliary engine, but will be connected to

the systems on board so that it can provide

a small contribution to the operations.

However, the most important thing will

be to conduct research and gain experi-

ence so that fuel cells have a future in

shipping.

“A huge amount of work remains to be

done. But owing to high efficiency and

clean emissions, I am convinced that fuel

cells are the way of the future; onshore,

offshore and onboard ships,” says DNV’s

project manager Tomas H. Tronstad.

CHALLENGES AT SEA

The fuel cell being tested on the Viking

Lady has been developed by Germany’s

MTU Onsite Energy.

More than 50 fuel cells of the same type

are used as back-up power generators on

shore, for instance in hospitals and univer-

sities. But it is one thing to stand firmly

and quietly on land and quite another to

place the sensitive technology on a ship

that rolls and pitches in the waves and in

a tough, salty climate.

“One of the biggest challenges is to ‘marine-

fy’ the technology and to integrate the fuel

cell with the traditional machinery-, control-

and electro systems,” says Mr Tronstad.

In the German-Norwegian project, the

fuel cell, all the equipment and the ship

will be adapted and modified. Many com-

panies and partners are providing technol-

ogy and equipment.

Ship-design company Vik-Sandvik is

designing and adapting the ship and

equipment location, while Wärtsilä Norway

has put together a package of electrical

and control systems that are being built in

a separate container. DNV has examined

the safety and risk aspects and prepared

classification rules.

In such a pioneering project, the impor-

tance of class is highlighted when it comes

to safeguarding the interfaces between the

various machinery disciplines.

TESTS ON SHORE

The next milestone is testing parts of the

equipment on shore at Wärtsilä’s facility at

Stord in Norway. The fuel cell itself will be

in another, larger container, which is almost

finished.

The actual heart of the engine, its core,

has not arrived in Norway yet, but it will do

so in a few months.

“The timetable is being kept. The first

equipment testing started on shore in

April,” states Mr Tronstad.

Eidesvik took delivery of the ship in

March and will start to lift components

on board later this summer.

“The goal is to start testing in the sea

in September. Everything is on schedule,”

says project developer Kjell Sandaker of

Eidesvik.

MONETARY CHALLENGES

This has not been the case all the time.

Project manager Mr Tronstad had to go

around ministries and government bodies

many times to obtain the public grants for

this development project in 2006.

Following a cautious start in 2003, there

was a need for almost NOK 100 million to

get to the next phase. That meant that

around NOK 50 million was required from

public funds. Not an easy amount to obtain

from those sources.

In total the project budget is NOK 115

million over six years, with roughly 45%

funding from the Research Council of

Norway, Innovation Norway and German

state funding. The remaining 55% is cov-

ered by the private partners .

� A fuel cell converts energy stored in a

source into electricity via a chemical

reaction with oxygen in the air.

� Energy sources may be hydrogen,

natural gas, propane, methane,

waste gases, etc.

� The emissions of harmful substances

are almost zero, depending on the

energy source.

� If hydrogen is used, only steam will

be emitted, while the emissions from

LNG and other carboniferous sources

will contain CO2, but much less than

if other technology is used.

www.fuelcellship.com

! What is fuel cell?

RUNS ON LNG: Eidesvik’s supply ship theViking Lady runs on LNG and will test outa 320 kW fuel cell prototype on board.

© E

idsv

ik

Reprinted by permission of

Teknisk Ukeblad.


Jørgen Kadal has always been conscious of

sustainability and of limiting his own per-

sonal footprint. “As a technologist, envi-

ronmental technology has always stirred

my curiosity. The environmental chal-

lenges we’re currently facing are too grave,

however, to allow us to wait for new tech-

nology to develop or new political solutions

to emerge. There’s so much that we can

do as individuals, for instance with regard

to our daily consumption and transport

needs. We simply cannot afford to wait,”

says Mr Kadal.

ADAPTING TO A NEW REALITY

For the Kadal family, the electric car trig-

gered a new awareness. “When my family

bought the electric vehicle seven years ago,

we were forced to adapt to a new reality.

All of a sudden we had to start planning

our daily lives and movements based on a

whole new set of conditions, with all the

limitations that owning an electric car

implies,” says Mr Kadal.

Seven years on, the experience has

been a positive one for the family. To Mr

Kadal, one of the most important teach-

ings has been that it is possible for individ-

uals to make an impact and to develop a

new awareness. “People tend to take things

for granted. We have an inbuilt impulse

to leave it to others to think of the conse-

quences,” he says, adding that “the fact

that my family and I managed to organise

our lives around this new set of conditions

made me think about what more could be

done.”

And it inspired him to take his ideas to

a whole new level.

THE BEGINNING OF WE DO

It was upon reading the DNV Strategy

2006 – 2010 that Mr Kadal was encouraged

to introduce his thoughts to DNV manage-

ment. “Reading the strategy made me

think that the organisation might be

receptive to input that would help reduce

the employees’ environmental footprint,”

he says. The immediate positive feedback

from President and CEO Henrik O.

Madsen was a source of personal inspira-

tion to Mr Kadal.

“It took me a long time to decide to

approach the CEO. His instant, positive

response and his involvement in this proj-

ect ever since have been very encouraging.

The strong foundation at the top of the

organisation has been an important suc-

cess factor for WE do,” says Mr Kadal.

BARRIERS TO CROSS

Today, WE do is a partnership between

the employees and the company, and the

scheme is entering its second year these

days. The partnership is based upon a real-

isation that individuals face a number of

Small step – BIG impactTo DNV’s Jørgen Kadal, the acquisition of the electric car brought about a new awarenessof just how easily one can make changes that matter in your everyday life. To DNV, thiswas to be the first step on a different kind of journey; one where facilitating the personalcommitment of employees through providing incentives to break barriers would take cen-tre stage. TEXT: JANNICKE WITSØ PHOTO: NINA EIRIN RANGØY

Seven years ago, the Kadal family bought an electric vehicle. No one, least of allJørgen Kadal, knew that this was to be the prologue to a successful venture thatwould inspire and engage 9,000 of his colleagues.


Buying the electric vehicle has been verypositive for the family; it has allowed usto relax and take things easy.

+

� A global environmental project that helps

close to 9,000 DNV staff to limit their

personal environmental footprint

� To achieve this DNV partially finances

personal environmental measures

� The upper limit is NOK 10, 000 per person

per year

� NOK 40 million is set aside to finance the

project

Some of the projects eligible for WE do

funding:

� Building a compost bin

� Converting a car to CNG/LPG/biofuel

� Buying an electric scooter

� Ins talling a heat pump

� Buying low energy appliances

� Ins talling solar panels (not in Europe)

� Using public transport

� Harvesting rain water for flushing toilets

and washing clothes (not in Europe)

� Ins talling wind turbines (not in Europe)

! This is WE do:


barriers, both psychological and financial,

to reducing their environmental footprint.

It is also based on a vision of the employ-

ees and DNV working together, and with

other players, to identify and remove some

of these barriers.

“In order to succeed, we rely upon

a good, constructive dialogue with the

authorities. We need a reliable framework

that works to our advantage,” says Mr

Kadal. “Right now I’m in dialogue with the

municipal authorities where I live. I have

suggested that they implement a financial

scheme that would remove barriers cur-

rently preventing people from investing in

environmentally friendly solutions in their

homes. One example is making it easier

for people to take on high cost initiatives

such as insulating their houses. The initia-

tive will result in a reduced energy demand

in the long run. However, there are many

small barriers in the legal and political

systems that are not so easy to remove

just like that,” he says.

DNV has also been in dialogue with the

Norwegian authorities, seeking to improve

the Norwegian tax scheme which currently

requires employees to pay taxes on the

financial contributions they receive for

their WE do projects. In principle, the cur-

rent system means that 50% of the finan-

cial support given to WE do projects is

retained as taxes.

BEST PRACTICE

In the end, Mr Kadal is pleased with the

result. “I think the WE do initiative is a

good example of how businesses and

organisations can make important and

lasting contributions towards a sustainable

future,” he says. Today the idea has spread

and other companies are now looking at

similar programmes for their employees.

So what about the electric vehicle and

some of the life lessons the past seven

years have taught him?

“You learn to relax and take things easy.

You simply can’t do everything at once,

given that the range of the electric car is

limited to 60-80 km per charge. One day

you might have to skip driving to the gro-

cery store if the car has already been used

to pick up your children from kinder-

garten. These limitations force you to think

about your own personal consumption and

your own environmental footprint in a

very pragmatic way,” says Mr Kadal.

“Limiting our environmental footprint can be done in many ways,” says HenrikO. Madsen, President and CEO of DNV.“WE do is an initiative that supports thepersonal commitment of individuals tolimit the environmental footprint of DNVemployees and their families. Further, weactively use the ISO 14001 standard to con-tinuously reduce the environmental foot-print of our operations. And last but notleast, through our services we hope tohelp our customers to safely and sustain-ably improve their performance.”

+


In 2008, DNV piloted its environmental programme,WE do. The programme aimed to reduce individualemployees’ environmental footprint in their dailylives – a footprint comparable to that of DNV’s operations. Since its launch, one of the aims of WE do has been to not only motivate employees, but to get other companies to follow suit as well.TEXT: JANNICKE WITSØ PHOTO: NINA EIRIN RANGØY

WE do…do you?

The global financial crisis is not beingtaken lightly in DNV, but neither is itscommitment to the environment. Withthis in mind, DNV remains dedicated tomaintaining a focus on environmentalissues and is renewing its WE do pro-gramme for 2009. Some changes havebeen made to the project list to reflectwhat will have the highest impact foremployees at a country and regionallevel.

Continuing from last year, DNV hasallocated NOK 40 mill for WE do.Employees will be able to apply forprojects from their regional list and

receive funding for 2/3 of the cost(before taxes) up to NOK 10 000 orNOK 20 000 over two years for desig-nated large projects, such as an electriccar.

WE do proved to be incredibly popularduring its pilot year. More than half ofall permanent employees applied for a project ranging from bicycles to cutdown on car use, implementing solarpanels, to environmental car conver-sions. The programme will continue for2009 and is projected to be renewed in2010 as well. +

+


SARIPAKA SRIKANTH

Job title:Surveyor

Workplace:Mumbai, India

We do project:Low emission car

In India, more and more cars run onLiquified Petroleum Gas (LPG ). I save 20Rupee per litre compared to petrol and I am polluting far less this way. I simplyhad a second fuel tank installed on thecar.

SARIPAKA’S WE DO PROJECT

My job as a surveyor at Bharati Ship-yard in Mumbai is to make sure thatvessels constructed here are safe andcomply with DNV Class Rules.

AT WORK WITH SARIPAKA

TARA PODNAR

Job title:Project Engineer

Workplace:Columbus, Ohio, USA

We do project:On-demand water heater

+

With the funding provided by DNV, Iinstalled an on-demand water heater.This has not only kick-started an effortto make our home more energy effi-cient, but also impressed our friendsand family.

TARA’S WE DO PROJECT

I work with pipeline operators to ensurethe integrity and safe operation of theirsystems. Here at the Columbus officewe have expertise in managing corro-sion, materials and structural integrityrisks for the pipeline industry.

AT WORK WITH TARA

+

+


DAVIDE BUSANI

Job title:Food Sector Manager

Workplace:Milan, Italy

We do project:Bicycle

I used the environmental fund WE do tobuy a bicycle. I realised that I could usea bike instead of a car for many smallerrands, like buying bread on Saturdaymorning or visiting friends at the otherend of the village.

DAVIDE’S WE DO PROJECT

My team helps companies in the foodand beverage sector improve the quality, safety and sustainability oftheir products.

AT WORK WITH DAVIDE

GUO KANG

Job title:Technical Manager

Workplace:Beijing, China

We do project:Solar water heater

In China, we have a saying that ‘childrenare our future’, so I used the WE dofunding to install a solar water heaterin my daughter’s school. It benefitsalmost 1,000 school children, who also get increased environmental awareness.

KANG’S WE DO PROJECT

I make sure that DNV’s validation andverification of emission reducing projectsunder the Clean DevelopmentMechanism in China are in line with therequirements from the United Nationsand our own internal standards.

AT WORK WITH KANG

+

+

last word!


Today we see that many companies are

struggling. They need to reduce their capaci-

ty and costs and be proactive, systematic and

innovative in order to make a profit and

simply survive the crisis. The economic

downturn makes a holistic approach to risk

management more important than ever.

As the recession develops, the risk of

having to lay off employees or even close

operations down is rising. Simultaneously,

internal and external stakeholders are

increasingly focusing on whether or not

companies operate in a socially and envi-

ronmentally acceptable manner. The focus

on corporate responsibility and reducing

the effects of climate change is here to stay.

HOW TO STAY IN BUSINESS

In times of uncertainty, markets, consumers

and other stakeholders will look for assur-

ance that they can have trust and confi-

dence in the companies they do business

with. It will be imperative for businesses to

have a long-term focus on demonstrating

that they have corporate responsibility

initiatives integrated into their strategy.

Aligned with this, a continuous and system-

atic risk management approach will ensure

sustainable operations.

In order to turn risks into rewards and

stay sharp, robust and competitive, busi-

nesses must handle risks in a professional

way. This also includes the management

of supply chains. The deconstruction of

supply chains, as well as ethical and envi-

ronmental demands, will force companies

to get in control and manage their supply

chains in a proactive, responsible and

sustainable manner.

SUSTAINABLE PERFORMANCE

The financial crisis has increased the need

for trust and confidence, and thus also the

need for independent, third-party certifica-

tion and assessment services. DNV wants to

be there for its customers to help them

optimise their operations – including when

times are tough. In this context, I believe

that DNV’s strategy and services have never

been more relevant. Through our Risk

Based CertificationTM, DNV helps companies

in a holistic and integrated way to manage

their risks and ensure consistency, trans-

parency and effectiveness through continu-

ous improvements.

The Risk Based Certification process is

increasingly becoming a powerful means to

get on top of the risk picture and prepare

businesses so as to ensure sustainable oper-

ations in a complex and new risk reality.

BJØRN K. HAUGLANDDNV Senior Vice President

Sustainable performance during downturnsHow can companies operating in an economic downturn ensure that they not only have a ticket to tradebut also a ticket to stay in business?

DNV worldwide

www.dnv.com

Regional officeHead office

DNV IS A GLOBAL PROVIDER OF SERVICES FOR MANAGING RISK. ESTABLISHED IN 1864, DNV IS AN INDEPENDENT FOUNDATION WITH THE OBJECTIVE OF SAFEGUARDING LIFE, PROPERTY AND

THE ENVIRONMENT. DNV COMPRISES 300 OFFICES IN 100 COUNTRIES, WITH 9,000 EMPLOYEES.

PUBLISHED BYDNV Corporate CommunicationsNO-1322 Høvik, NorwayTel: +47 67 57 99 00Fax: +47 67 57 91 60

EDITOREva HalvorsenTel: +47 67 57 97 [email protected]

DESIGN AND LAYOUTCoor Graphic [email protected]

PRINT07 Oslo as

COVER PHOTO© Anders Øvreberg

© Det Norske Veritas 2009

DNV Forumcorporate magazine

20,000/ 05-2009 0904-010

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Forum No_1_2009