2014 Report En Samsung C&T

5/20/2018 2014 Report En Samsung C&T

1/72

Create the Future,

Lead the WorldSAMSUNG C&T CORPORATION

S u s t a i n a b i l i t y R e p o r t 2 0 1 4


2/72

Samsung C&T Corporation2

ABOUT THIS REPORTOverview

Samsung C&T Corporation Sustainability Report 2014 aims to report our economic, environmental and social initiatives and performance to our stakeholders. It

mainly covers sustainability management issues deemed important to both our stakeholders and the company. This report is available in the form of a brochure

or on our website (www.samsungcnt.com) for all the stakeholders.

Reporting Period

This report covers our major activities and accomplishments from January 1 to December 31, 2013. Some quantitative data in this report includes figures for

the last three years, 2011 to 2013. For key company information, including corporate governance and the board of directors, this report covers information up

to 2014.

Reporting Principles

Samsung C&T follows the Global Reporting Initiative (GRI) guidelines, which are international reporting standards on sustainability management. This years

report has been prepared in accordance with the Core Option of the recently revised GRI G4 Guidelines. It reports all the essential indicators of the Core Option

among the General Standard Disclosures, as well as covering the Disclosures on Management Approach (DMA) and more than one indicator concerning key

aspects identified through the Materiality Assessment.

CONTENTS

Corporate Profile

CEO Message

Global Samsung C&T

Corporate Governance

Creating Sustainable Value

Integrated Risk Management

Stakeholder Engagement

Material Issues

Ethics and Compliance

Environment

Safety and Health

Employees

Supply Chain

Local Communities

Key Sustainability Indicators

Independent Assurance Report

Independent Assurance Report of Greenhouse Gas Emissions

Association Memberships and Awards

GRI G4 Index

Overview

SustainableBusiness

Our Key

SustainabilityPriorities

Appendix

06

07

08

12

16

20

22

24

28

32

40

44

50

54

59

62

6466

68

Shareholders/Investors


3/72

3

Reporting Scope

Major topics for the Engineering and Construction Group and the Trading and Investment Group have been identified, respectively, based on the report contentdecision-making processes proposed by the GRI G4 Guidelines. For the connection between the identified issues and the Material Aspects of the GRI G4 Guidelines,

please refer to Material Issues and GRI G4 Aspects of the E&C Group and the T&I Group on page 25. This report covers DMAs by major Aspects and one or more Indica-

tors, as well as initiatives and achievements in other Aspects.

Reporting Boundaries

This report includes the business management activities of our domestic and overseas worksites, excluding entities invested by or affiliated with our company.

For environmental data, we have collected data on our entire operation sites in Korea and abroad. In the case of data on global operation sites of the Engineering

and Construction Group, we have collected data on operation sites within the top 70% in sales to enhance data credibility. We plan to broaden the scope of data

collection in the future.

For some data, such as greenhouse gas emissions, education/training and support performances, data on our value-chain partner companies are also included.

Concerning financial statements, this report contains the financial performances of Samsung C&T and its affiliated companies on a consolidated basis compiled in

accordance with the Korean International Financial Reporting Standards (K-IFRS), the Korean financial reporting standards adopted in 2011.

External AssuranceTo ensure the credibility of the report content and data, this report has received third-party assurance from Samil PricewaterhouseCoopers. The data on greenhouse

gas emissions in Korea received third-party verification from BSI.

Employees CustomersLocal

CommunitiesBusinessPartners

Government/Media


4/72

OVERVIEW

1/ Corporate Profile

/ CEO Message

/ Global Samsung C&T

/ Corporate Governance



5/72

Overview Sustainable Business Our Key Sustainability Priorities Appendix

5


6/72

Founded in 1938 as the parent company of Samsung Group, Samsung C&T has pioneered Koreas

overseas sales operations since it was registered as the first general trading company in Korea in

1975.

In December 1995, the company acquired Samsung Construction, and has since operated two dis-

tinct business groups: the Trading & Investment Group (T&I Group) and Engineering & Construction

Group (E&C Group). The company is actively engaged in operations around the world with a busi-ness presence in more than 50 countries.

What We Do

Company Name Samsung C&T Corporation

HeadquartersSamsung C&T Building, 14, Seocho-daero 74-gil, Seocho-gu, Seoul,

137-956, Korea

Foundation 1938 (Merged with Samsung Construction in 1995)

Total Assets KRW 25.4659 trillion

CEO Chi-Hun ChoiBusiness Areas Building,

Civil Infrastructure, Plant,

Housing & Development

Global Network and Sales (as of the end of 2013)

Engineering & Construc tion Group Trading & Investment Group Consolidated Subsidiaries

Regional Headquarters,

Subsidiaries and Offices

InternationalProcurement Offices

32

6

Subsidiaries 47Offices 53

Korea

Overseas

2

84

KRW1,348.1bil

Europe

KRW 757.6bil Americas

KRW 17,057.7bilKorea

92,700

KRW

28,433.4bilTotal Sales

As of the end of 2013

CEO Shin KimBusiness Areas Trading, Organizing

Corporate

Profile

KRW9,270.0 bilAsia, Middle East and Africa

E&C Group T&I Group



7/72

7


Greetings to Stakeholders

I would like to extend my sincerest gratitude to

you, our valued stakeholders, for your immense

support and continuous trust in us.

Despite the enduring global economic down-

turn in 2013, Samsung C&T marked meaningful

achievements in its construction and trading

businesses over the past year. The companys

Engineering & Construction Group achieved

more than $12.6 billion in annual overseas or-

ders, a record amount for a Korean construc-

tion company. In addition, the companys Trad-ing & Investment Group won an order for the

construction and operation of a power plant

in Chiles power generation market, which had

been dominated by leading global companies,

the first time a Korean company had done so,

thereby successfully opening a new market.

Such achievements are the result of concerted efforts made by our people at Samsung C&T to deliver the best value to

our customers and society.

With the impact of corporate activities on stakeholders and society gradually expanding, the values a company should

pursue are no longer confined merely to financial ones. Now, a company should be able to deliver positive value not only

to its diverse stakeholders, including its employees, partner companies, customers, and local communities, but also to

society as a whole.

Samsung C&T is engaged in an extensive range of CSR initiatives to become a company trusted by its stakeholders and

society, as well as to create value for the company. Our key social responsibility activities include efficient use of resources

and energy based on our global-standard environmental management system; enhancement of the support system for

shared growth with our partner companies; and social contribution activities tailored to the needs of local sites and over-

seas locations. In particular, as ethical management and safety management are matters that receive immense attention

and high demand from society, including our stakeholders, we at Samsung C&T recognize their importance and make

continuous investment and efforts in actively implementing them in every activity we are involved in.

Our valued stakeholders,

We hope that you will maintain your support for Samsung C&T, while keeping a close eye on the various activities we are

engaged in to create not only the companys value, but also sustainable values for society in general.

Thank you.

May 2014

Samsung C&T Corporation

President and CEO

Chi-Hun Choi

CEO Message


8/72

Global Samsung C&T

Engineering & Construction Group

Goal

Vision

Core Value

ProfitableGrowth

Safety

Employees Shareholders PartnersCommunities

Integrity Appreciation

Customers

STAKEHOLDERS

8 Samsung C&T Corporation


9/72

9


The Engineering & Construction Group is engaged in a broad portfolio of businesses including

building, civil infrastructure, plants, and housing and development. Our skilled manpower and tech-

nological prowess, as demonstrated by numerous landmark projects in each business field, have

allowed us to achieve competitiveness on the global stage. We will continue to expand our services

across the value chain to include full EPC services (Engineering, Procurement and Construction),

and independent power plant (IPP) and public private partnership (PPP) projects, ensuring that wewill be able to continuously and preemptively deliver the value customers desire as a global top-tier

company.

Building

Samsung C&T has been acclaimed for its cutting-edge technology, constructing some of the worlds

tallest and most intelligent high-rise buildings, including the Burj Khalifa in the United Arab Emirates,

and one of the Petronas Towers in Malaysia. Moreover, we have successfully constructed high-tech

production facilities (semiconductor, LCD, and biotech facilities) and we are expanding our business

scope to cover other sectors such as healthcare and aviation. Thanks to our accumulated technology

and expertise, in 2013 we successfully won orders for the Tanjong Pagar building project in Singa -

pore and the New Ulaanbaatar International Airport project in Mongolia.

Civil Infrastructure

Samsung C&T has developed global top-tier technologies in bridge construction, as indicated by

its successful completion of the Incheon Grand Bridge, a cable-stayed bridge with the worlds fifth-

longest span. In recognition of our capabilities, we have been actively engaged in global projects,

including the High Speed Rail C280 project in Taiwan, the Jurong Island reclamation in Singapore,

the Delhi Metro in India, and the Al Salam Underpass construction project in the United Arab Emir-

ates. We are also combining our existing strengths in subway, railway, bridge, tunnel, and harbor con-

struction toward becoming a leader in mining infrastructure. In 2013, we won contracts for global

civil infrastructure projects that include the Riyadh Metro project in Saudi Arabia, the Doha Metro

project in Qatar, and the Roy Hill project in Australia, consolidating our position as a leading civil

infrastructure contractor.

Plant

Samsung C&T has proven it has top-tier technologies by undertaking such projects as the Qurayyah

Independent Power plant project in Saudi Arabia, a nuclear power plant project in the United Arab

Emirates that is the world's largest Combined Cycle Power Plant (CCPP), and an LNG terminal project

in Singapore. In addition, we have made strong progress toward becoming a value creator by ex-

panding our business scope to cover operation and maintenance (O&M) services, going beyond our

role as an engineering, procurement and construction (EPC) player. In 2013, we consecutively won

new contracts including the Rabigh II Independent Power Project in Saudi Arabia, an LPG terminalexpansion project in Thailand, and a phosphate plant in Morocco.

Housing

Samsung C&T was the first company in Korea to introduce the brand concept into apartment

construction with its launch of the Raemian brand apartments. The company is also taking the

lead in enhancing housing culture by providing new products and exceptional customer services.

From residential to community and commercial facilities, we are evolving into a leader in providing

mixed-use residential and commercial complexes. We are proud to have received the first prize in

the National Customer Satisfaction Index (NCSI) apartment category for 16 consecutive years, and

constantly strive to realize homes where love among family members is conveyed, and where nature

and humans coexist harmoniously, as well as to provide a more comfortable and convenient living

environment with our cutting-edge technology.

Major Businesses


10/72

Vision

Management

Goal 2020

Management

Direction

Enhancement

of Four Core

Capabilities

Strengthen integrated global riskmanagement system

Expand business capabilities through efficientoperation of management resources

Secure and nurture core talents

Enhance execution of global businessstrategies

Global Top 10Trading Company

3rdin chemicals,5thin steel,

10thin coal and copper

Earnings Return on Equity

ROE

KRW

700billion

20%

Ensure competitiveness in trading

through selection and focus by 2015

Pursue stable growth based on core

capabilities by 2020

Global Samsung C&T

Trading & Investment Group



11/72

11


The Trading & Investment Group is engaged in a wide range of projects, focusing not only on the

traditional trading business, but also on organizing businesses that comprehensively integrate our

key competitive capabilities, such as a global network, market intelligence, marketing, and financing

capabilities.

We intend to create global value by strengthening differentiated competitiveness in trading and

organizing. To this end, we strive to effectively execute our global business strategies by exploringnew markets and strengthening our global network, while expanding our business capabilities by

efficiently operating management resources. We also aim to secure and foster core talent who will

lead our businesses, thereby continuously reinforcing our business expertise.

Trading _ Chemicals and Industrial Materials

With the goal of joining the ranks of leading global companies specializing in chemicals and materi-

als, Samsung C&T offers a wide range of trading and business solutions in chemicals and industrial

materials by fully leveraging our expertise and a global network accumulated over the past threedecades.

Trading _ Steel

Pursuing a vision of becoming a global steel trader, Samsung C&T exports, imports and engages in

intermediary trade of steel products around the world. We operate overseas coil centers in several

countries, including China and Malaysia, as well as overseas precision stainless steel plants in Roma -

nia and Japan.

Trading _ Energy and Minerals

Samsung C&T is engaged in the trading of minerals such as coal, copper and rare metals. We have

also secured coal and copper mines in Russia and Chile, while operating offshore oil and gas produc-

tion fields in the Gulf of Mexico and Texas in the United States.

Trading _ Living Industrial

Samsung C&T globally sources and trades various industrial materials such as textiles and wood pel-

lets, as well as mobile accessories. We also operate a palm plantation in Indonesia.

Organizing

As a global project organizer, Samsung C&T is involved in various projects with global partners

around the world in the field of plants and machinery, including power generation, plant, ship-

building and infrastructure projects, as well as in the green energy sector, such as wind/solar power

generation and sales of solar components and materials. In 2013, the second phase of the Ontario

solar and wind power generation cluster project was successfully launched in Canada. In the same

year, the company won an order for a gas combined power plant project in Chile, securing a solid

springboard for advancement into Latin America.

Major Businesses


12/72


Board of DirectorsThe Board of Directors (BOD) of Samsung C&T makes decis ions concerning not only major manage-

ment issues, but also matters related to corporate social responsibility, including ethical manage-

ment and corporate governance.

The BOD consists of three internal and four external directors. The CEO ser ves concurrently as the

Chairman of the Board, and external directors are nominated by the External Director Recommenda-tion Committee.

Committees under the BODSamsung C&T has set up three committees under its BOD the Management Committee, Audit Com-

mittee and Outside Director Recommendation Committee. The Management Committee consists of in-

ternal directors selected by the BOD and deliberates on matters mandated by the BOD and other major

management issues submitted for consideration by the Management Committee. The Audit Committee

consists of only external directors to ensure its independence. It carries out various activities, including

conducting audits on directors job performance, investigating subsidiaries, and conducting audits on or

investigating other major business management issues of the company. It also oversees company-wide

sustainability management activities. The results of

activities conducted by the Sustainability Manage-

ment Committee, consisting of key executives of

the company, are also reported through the Audit

Committee. Members of the Outside Director Rec-

ommendation Committee appoint external directors

who can contribute to creating value for the compa-

ny by evaluating the expertise and ethical standards

of outside director candidates. The Outside Director

Recommendation Committee consists of one inter-

nal and two external directors elected by the BOD,

with external directors making up the majority of the

committee.

Board of Directors Profile

Name Company and Position Remarks

Internal

Direc-

tors

Chi-Hun Choi

President and CEO,Head of Engineering &Construction Group

Samsung C&T Corporation

Chairman of the Board,Chairman of Executive Committee

Shin Kim

President and CEO of Trading &Investment Group,Samsung C&T Corporation

Chairman of Outside DirectorRecommendation Committee,Member of Executive Committee

Young-Jo SangHead of Management SupportDivision (T&I Group) and Manage-ment Planning Division, SamsungC&T Corporation

Member of Executive Committee

External

Direc-

tors

Chong-Ook RheeProfessor of Economics,Seoul Womens University

Chairman of Audit Committee

Hyun-Soo Lee

Professor, Architecture &Architectural Engineering,Seoul National University

Member of Outside DirectorRecommendation Committee

Kyu-Jae JeongChief Editorial Writer,

The Korea Economic Daily

Member of Audit Committee,Member of Outside DirectorRecommendation Committee

Chang-Hyun Yun President, Korea Institute of Finance Member of Audit Committee

*As of the end of January, 2014

Corporate

Governance

Board of Directors

Organization of the BOD and ItsCommittees

Management

Committee

Audit

Committee

Sustainability

Management

Committee

Outside

Director Recom-

mendation

Committee


13/72

13


Major Activities of the BOD and the Audit Committee

Major activities of the BOD in 2013 included approval of the companys participation in large-scale

global projects, amendment of regulations on operation of the Board of Directors and the Manage-

ment Committee, and review and approval of the 2013 business management plan. In 2013, the

Audit Committee was engaged in the following activities: evaluating the operation of the internal

accounting management system; finalizing audit reports; receiving reports on the progress of finan-

cial statement and accounting audits; receiving reports on meeting results of the Sustainability Man-

agement Committee; and receiving reports on results of services conducted by external auditors.

Compensation

Compensation for the BOD members and the management are differentiated according to the re-

sults of regular business target reviews and performance evaluations. The limit of the compensation

is approved by a resolution of the general shareholders meeting. In 2014, compliance will be added

to the evaluation criteria.

Sustainability Management CommitteeThe Sustainabili ty Management Committee, established in 2010, consists of key executives from the

company. Under the leadership of the CFO, the committee coordinates and supports overall sustain-

ability management activities including compliance, shared growth and publication of sustainability

reports.

The results of its meetings are reported to the Audit Committee on a regular basis. Major issues

dealt with by the committee in 2013 include finalization of detailed plans such as risk management

strategies and PR initiatives in response to the changing external environment, compliance support,

and inspections, monitoring and training aimed to strengthen fair trade, as well as a report on the

publication of the Samsung C&T Corporation Sustainability Report 2013.

In 2014, we plan to carry out various activities with the goal of internalizing compliance and safety.

Date Agenda BOD MeetingAttendance

Jan. 28, 2013Two agenda items, including approval of the 62nd business report

and financial statements6 / 7

Feb. 21, 2013Four agenda items, including HQ guarantee of the Prai combined

cycle power plant in Malaysia6 / 7

Mar. 15, 2013Four agenda items, including participation in the Rabigh 2 thermal

power plant project in Saudi Arabia7 / 7

Apr. 25, 2013Two agenda items, including renewal of payment guarantee for the

Gangdong mixed-use development project7 / 7

Jul. 25, 2013Four agenda items, including amendment of regulations on the

operation of the Board of Directors/Management Committee7 / 7

Oct. 17, 2013Approval of financial statements for the first through third quarters

in 20136 / 7

Dec.13, 2013 Five agenda items, including approval of transaction ceilings withaffiliate persons for 2014 and four additional items

7 / 7

* For more information, please consult the DART website managed by the Financial Supervisory Service

(http://dart.fss.or.kr), which is the repository of Koreas corporate filings.

BOD Performance

BOD PerformanceIn 2013, a total of seven BOD meetings were convened. The attendance rates of the internal and

external directors stood at 100% and 89%, respectively.


14/72



15/72


SUSTAINABLEBUSINESS

2

15

/ Creating Sustainable Value

/ Integrated Risk Management

/ Stakeholder Engagement

/ Material Issues


16/72


Creating Sustainable Value

Value Chain

Supplier Partnerships / Signing of Project Contracts

Based on our brand value, global network, and capabilities to in-

tegrate our various businesses, Samsung C&T provides early stage

support for exploring potential projects, including financing andbusiness planning/proposal services.

Financing / Legal Affairs / Risk Management

Samsung C&T manages any obstacles that may be encounteredunexpectedly by customers in the project process including financ-

ing, legal and other risks.

Financing / Logistics / IT / Marketing

Samsung C&T plays diverse roles in the trading process ranging

from financing and logistics to marketing.

EPC (Engineering, Procurement, Construction)Samsung C&T mobilizes employees and suppliers with

top-tier capabilities at each stage of a project, from engineer-

ing and procurement through construction. Through ongoing

technology R&D activities, we enhance not only our internal

capabilities but also customer value.

Materials &Product Purchasing / Processing

In order to match suppliers with customers by taking

into consideration imbalances in regional demand

and supply and price differences, Samsung C&T estab-

lishes partnerships by identifying regional characteris-

tics and exploring promising items and customers.

F/S (Feasibility Study), Financing

Prior to project development, Samsung C&T

conducts feasibility reviews from multiple

perspectives. We also support the arranging of

financing to facilitate smooth development of

our projects.

Engineering / Procurement / Construction

SupplierPa

rtnerships/

SigningofProjectContracts

Materials&ProductP

urchasing

/Processing

Financing / Logistics / IT / Marketing

Financing / Legal Affairs / Risk Management

Exploring Promising Items &

Customers

Project Development

Exploring and Securing

Projects

TRADING

ORGANIZING

53%

32%

Salesby Business

Group

Sales by Region

E&C Group T&I Group

Korea

Asia, Middle East and Africa

EuropeAmericas

60%

5%3%

47%

E&C Group

T&I Group


17/72

17


Samsung C&T is a unique company in that it concurrently operates in two industries with different characteristics engineering and con-

struction, and trading and investment. The combination of the two different businesses has led to positive synergies that allow the company

to implement strategies and policies that can respond to the external environment in an efficient and preemptive manner throughout the

entire value chain. Such efforts have ultimately led to the creation of business models that can contribute towards boosting the value of the

company.

O&M (Operation & Maintenance)

Going beyond the traditional business areas of construction

companies, Samsung C&T offers total solutions across the

entire value chain by providing O&M services to customers

on an ongoing basis after the completion of projects.

Project Management / Project Completion

Based on its accumulated project operation capabilities, Samsung C&T

scrutinizes its successfully completed projects to ensure they become

internal assets, which contributes to its project management capabili-

ties. Samsung C&T also strives to maintain strong networks with its

customers that can lead to future opportunities.

Product Sales / Customer Use

Samsung C&Ts trading sector not only handles obstacles caused

by imbalances between suppliers and customers up until the final

stages of the value chain involving product sales and customer use,

but also fully fulfills a role as a main player at each stage of the value

chain.

Operation / Maintenance

Project Management / Project Completion

Product Sales / Use by Customers

21,545.5

25,325.9

28,433.4

Sales Unit : KRW 1 bil

2011

2012

2013


18/72


Samsung C&Ts Engineering & Construc-

tion Group won a US$1.214 billion contract

for the Rabigh II independent power plant

project tendered by the Saudi Electricity

Company (SEC). The project will deliver a

2,100MW combined-cycle gas-fired power

plant to Rabigh, 150km north of Jeddah,

the second-largest city in Saudi Arabia. The

Engineering & Construction Group will not

only provide engineering, procurement and

construction (EPC) services, but also partici-

pate in project planning and development

through an equity investment and engage

in operation and maintenance in the future,

thereby securing diverse revenue models.

Rabigh II Independent Power

Plant Project in Saudi Arabia

Riyadh Metro Project

in Saudi Arabia

Roy Hill Project in

Australia

Samsung C&Ts Engineering & Construction Group won a con-

tract for the Package III portion (Lines 4, 5, and 6) of a massive

subway network expansion in Riyadh, Saudi Arabia tendered

by the Arriyadh Development Authority (ADA). This is a turnkey

project in which the subway infrastructure and rail system are

tendered in a single package. Construction of the lines is takingplace concurrently. In congested downtown areas, we will apply

advanced construction methods that enable rapid construction

and establish detailed resource procurement plans in order to

successfully carry out the project. Based on its extensive experi-

ence in partnering with the worlds leading construction com-

panies and winning large-scale projects, Samsung C&T expects

to win additional business opportunities in the global railway

infrastructure market in the future.

Major Projects by

Business Group in 2013

The Roy Hill project, tendered by Roy Hill Holdings, is an EPC project that will deliver both an iron ore processing

plant and infrastructure, including a railway and a port. By winning this contract, Samsung C&T has established

itself as a mining plant and infrastructure player, an area considered to be one of the new growth engines for

the company. It also sees Samsung C&T make a successful entry into the construction market in developed

countries and mega/complex projects market. The Engineering & Construction Group will successfully imple-

ment the project by establishing project implementation strategies through thorough market analysis and by

maintaining close cooperation with local construction companies.

The Roy H ill project in Australia i s a mega-project that delivers an iron ore processing plant with an annual processing

capacity of 55 million tons, a 344km-long railway, a port and container yards with hourly processing capacity of 12,700

tons in four different locations. Therefore, it is extremely important to possess supporting technologies and real-time

integrated management capabilities. Samsung C&T is effectively employing the technologies and capabilities it has ac-

cumulated while successfully implementing diverse projects around the world. We are carrying out integrated manage-

ment through daily meetings and real-time field monitoring. We are also managing social and environmental impacts,

including the protection of local cultural heritage and other historical sites, and the protection of endangered animals

and plants through habitat relocation. Meanwhile, we offer safety education to workers and visitors to enforce our top

priority of Safety First. When selecting new partners, we consider their health and safety record as a major selection

criterion. The employees involved in the Roy Hill project are doing their utmost to successfully complete the project,

thereby securing new business opportunities for Samsung C&T as it joins the ranks of the top global mining EPC players.

STAKEHOLDER'S INTERVIEW

Australia Roy Hill Project Head Office, E&C Group _ Senior Vice President Suk Lee

E&C Group


19/72

19


Ontario Project in Canada

Samsung C&Ts Trading and Investment Group signed the

Green Energy Investment Agreement (GEIA) with the Gov-

ernment of Ontario in 2010 to construct the worlds largest

solar and wind power generation cluster with a capacity of

1,369MW. As of March 2014, the construction of the phase

one solar and wind power plant is underway, with a capacity

of 270MW completed in Chatham-Kent and a wind and so-

lar power generation plant with a capacity of 250MW under

construction in Haldimand. In addition, the construction of

phase two, with a total capacity of 550MW, will commence in

2014, including construction of a wind power plant in Huron

in March 2014.

The Trading & Investment Group of Samsung C&T won an order for construction of the Kelar gas-

combined power plant, with a capacity of 517MW, in Chile in November 2013. The project holds

a great significance in that a Korean company was able to enter Chiles power generation market,

which had been dominated by European companies. The groundbreaking ceremony for the proj-

ect tendered by BHP Chile, a local subsidiary of BHP Billiton, was held in February 2014. The BHP

Kelar power plant is scheduled for completion in 2016, supplying power to two copper mines

operated by BHP for 15 years.

Demand for expansion of power plants, including this project, is steadily rising as BHP continues

to expand its mining projects in Chile. However, the expansion of coal-fired thermal plants in Chile

is becoming difficult due to environmental problems. Thus, Samsung C&T anticipates additional

business opportunities for gas-fired combined cycle power plants in the future.

BHP Kelar Project in Chile

Samsung C&Ts Trading & Investment Group is actively seeking independent power plant (IPP) projects as one of its

growth businesses. We possess core capabilities for project organizing including investment, financing and partnering.

The Manzanillo LNG terminal project and the Norte II 433MW combined cycle power plant project in Mexico are some of

the projects that show our outstanding project organizing capabilities. Most notably, the 517MW BHP Kelar project holds

a great significance in that we have pioneered the power generation market in Chile. Chilean citizens have very high

standards for safety, health and environmental protection. Therefore, we plan to select local personnel in charge of safety,

health, environment and local CSR activities to carry out top-notch sustainability management activities in accordance

with strict standards set jointly with our clients. We will repay our clients' trust placed in us with our outstanding project

execution capabilities, and timely completion of projects, thereby becoming a locally trusted power developer.

Plant&Machinery Division,T&I Group _ Senior Vice PresidentKi-Jung Kim


T&I Group


20/72


Effective risk management is a core element driving the value creation of a company. Amid in-

creasing uncertainties over the global economy, risk management should not only focus on de-

fensive aspects, but also lead to the creation of new opportunities through preemptive measures.

Samsung C&T's Engineering & Construction Group and Trading & Investment Group have estab-

lished systems for identification of, responses to, and management of risks by sector and carry

out activities to ensure these systems are firmly rooted in all of our operations across the globe.

Risk Management SystemSamsung C&T Corporation conducts risk management through a process designed to identify

assess respond tomonitor and report risks. We have established optimized risk managem ent

systems by sector in consideration of the characteristics and differences of the construction and

trading businesses. The risk identification, control and monitoring results are ultimately reported to

the Audit Committee under the BOD.

E&C Group

With increased orders for overseas mega-projects, the importance of the risk man-

agement capabilities of the Engineering & Construction Group is emphasized more

than ever. We have classified the risks related to our construction projects into 43

core risk factors in five areas (strategic, environmental, financial, compliance, and op-

erational) to preemptively manage elements that may undermine the companys value creation for

customers and its growth.

E&C Groups 43 Core Risks in Five Areas

Possibility of losses by changes in external conditions, including business environment,

competitors, customers, policies and regulations (uncontrollable areas)

Characteristics by country, price fluctuations, clients, business petitions, external labor

unions

Environmental Risks

M&As, new business strategies

Risks associated with the possibility of failures in strategies adopted by

the organization

Strategic Risks

Direct or indirect impacts by non-compliance with domestic and

international regulations

Fair trade, compliance

Compliance Risks

Losses resulting from errors, corruption, and inefficiency caused by problems associated

with employees, processes and systems in the organization

Operation of overseas bases, business management plans, IT security, cost information

security, document security, facility security, manpower allocation, execution capabilities,

partner companies capabilities, contract terms and conditions, contract administration,

selection of partner companies, participation of subsidiaries in joint ventures, granting of

credit, design errors, capabilities of facility design planners, ground obstacles, omission

of site characteristic calculations, project delays, feasibility studies, bidding, project direct

petitions, errors in specification application calculat ion standards, safety incidents, environ-

mental incidents, natural disasters, material quality, construction quality

Operational Risks

Integrated Risk Management System

ResponseMonitoring

& ReportingAssessment

System

Risk Registry LAS EVM PJT Portal

Organization

BusinessDivisions

ManagementSupport Division

Response

Assessment

Operation

Limit managementIssue management

Inspection/Assessment

InspectionAssessment Training

Organization

Business divisions/

Regional

Headquarters

ManagementSupport Division

System

S-ERP ERMS I-ONE Patners-ONE LSS

Preliminary Management

Market conditionsBusiness Model Customers

Integrated Risk

Management

Identification

E&C Group

T&I Group

Financing, foreign exchange transactions, changes in foreign ex-

change rates and interest rates

Financial Risks

Possibility of financial losses resulting from changes in interest rates,

stock prices, liquidity, credit ratings, etc.


21/72

21


T&I Group For the Trading & Investment Group, a solid network with overseas customers is the key to its business operation. Therefore, we

place paramount importance on the management of not only financial risks, but also nonfinancial risks, including the political

and environmental characteristics of countries where our customers are located. Therefore, the Trading & Investment Group

conducts company-wide management of a total of eight risk factors including risks associated with changes in the internal and

external environments of customers. We have established detailed standards for each area to identify and respond to the risks concerned.

Risk Management Enhancement Activities

E&C GroupWith the expansion of its markets and products, the Engineering & Construction Group has introduced the Project Life Cycle

(PLC) Management System to carry out preemptive risk management. We operate the Plan-Do-See-Feedback (PDSF) system in

which quality projects are explored and developed through country surveys, risk surveys and company-wide collaboration in a

phased manner from the project exploration stage. In addition, the company-wide support department and business divisions

provide support for early Field setup through project MOB (Mobilization), while enhancing the efficiency of sales activities through project

screening at the marketing and proposal phase and resolving problems in advance through early detection of risks at the implementation

phase by holding monthly PLC management committee meetings. Also, the Engineering & Construction Group provides online education

courses and training courses tailored to the characteristics of business tasks aimed at raising employees awareness of risk management,

thereby fostering independent risk management capabilities.

T&I Group The Trading & Investment Group strives to strengthen its capabilit ies to bui ld and manage an organizational culture where al l

the employees recognize the importance of risk management and take action based on our global risk management system.

The group laid the groundwork for enhancing preemptive BM management and the check and balance function by establish-

ing a new risk management system called the Enterprise Risk Management System (ERMS) following the adoption of the S-ERP

in 2013. In addition, employees check on and improve risk management on their own through the My Risk Care Week program, which has

been implemented since 2007. In particular, the group has reinforced safety and environmental management of operation sites with in-

creased importance placed on safety and environmental management in recent years.

Furthermore, Samsung C&T has established a taxation management system to effectively manage tax-related risks amid its global business

expansion.

T&I Groups Risk Factors in Eight Areas

Risk of non-fulfillment of contracts or contingent liabilities caused by a downgrade of credit ratings due to the bank-

ruptcy of customers and deterioration of financial conditions or other external factors such as rises in raw material pricesPartner

Risk of changes in the structural environment of the industry caused by changes in the life cycle and value chain of the

industry, as well as changes in competitors and replacements; direct risks caused by poor management of customers,

corporate and brand image, and local communitiesIndustry

Risk of failure to achieve business goals due to inappropriate business strategies, business structures, investment deci-

sions, etc.Business

Risks associated with fluctuations in market prices, including market products such as metal and petrochemicals, ex-

change rates, and derivativesMarket

Risk of property damage and incidents caused by natural disasters such as earthquakes and tsunamis, explosions, firesand environmental pollution; risks caused by changes in the global environment such as financial crises and climate

changeEvent

Risks caused by noncompliance with laws and regulations (trade, taxation, accounting standards, etc.) and business regula-

tions of countries affecting business, as well as noncompliance with internal regulations such as corruption and irregularitiesCompliance

Direct risks caused by changes in the political environment (politics, policies, regulations, etc.) of the countries con-

cerned, uncertainties over or changes in macroeconomic policies and economic conditions (inflation, economic reces-

sion, etc.) and indirect risks caused by overall impacts on the business environment due to such changesCountry

Risks caused by inappropriate internal processes, manpower and systems involving sales, procurement, inventory, logis-tics, production, management and project operation or negligent management/ management failureOperation


22/72


Customeruse

Feasibility Study

Financing

Materialsand productpurchasing

Processing

Building

Civil infrastruc-ture

Plants

Housing

ChemicalandIndustrialmaterials

Steel

Energy andMinerals

Livingindustrial

Plants andMachinery

Greenenergy

Customer use

Operation andManagement

Projectmanagement

Samsung C&T classifies major stakeholders into six groups shareholders and investors, employees, customers, local communities, business

partners, and media and the government. Each stakeholder group has diverse interests and requirements, and we operate communication

channels suitable for the points of contact by stakeholder groups. In addition, we carry out activities that can connect the value pursued byour stakeholders with our efforts to create value.

VALUECHAIN

STAKEH

OLDER

Supplier partnerships

Signing of project contracts

Customers

Shareholders

Investors

Local communities

BusinessPartners

Employees

Government Media

Stakeholder Engagement

Projec

tdevelo

pmen

tExp

loration

ofcustomersforpromisingitems

Explorationandsecuringofprojects

Eng

ineering

/Procuremen

t/

Con

st

ruction

Financin

g

/Lo

gistic

s/IT

/Mark

e

ting

Fin

ancin

g/Legal/Riskm

anagement

C

onstru

ctionC

ompletion

Product

s

al

es

Proje

ct

comple

tion


23/72

23


Areas of Interest

The government manages the companys compliance with its legal and social

responsibilities, while the media demands the companys transparent disclosure

of information as a medium connecting stakeholders and the company.

Samsung C&Ts Response

Samsung C&T actively engages in government policies and complies with

relevant regulations, while transparently disclosing information of interest for

stakeholders through the media.

Ethical

management

Supply chain

Safety and

health

Safety and

health of

employees

Areas of Interest

Employees hope that they are offered a safe and pleasant working environ-

ment. They place importance on the formation of an organizational culture that

promotes both the organizations development and the cultivation of personal

capabilities.


Coming from an organizational culture that consolidates and promotes solidarity

among employees, Samsung C&T supports employees development of profes-

sional capabilities. In addition, the company strives to create an environment

where employees can focus on their work by guaranteeing safety at work sites

and offering a wide range of welfare benefits.

Supply chain

Ethical

management

Areas of Interest

Business partners major areas of interest include the establishment of a fair trad-

ing relationship and partnerships. They also think highly of capability develop-

ment through cooperation with the company.


Samsung C&T endeavors to establish fair and transparent transaction relation-

ships with its business partners. The company realizes the value of shared growth

by disseminating information and technology and supporting its business

partners efforts for sustainable capability development.

Local

communities

Environment

Areas of Interest

Local communities call for the companys improvement and management of the

direct and indirect impact of its business activities on the economy and environ-

ment of the local communities.


Samsung C&T maximizes the effects of social contributions and enhances the

satisfaction of local communities and employees by carrying out environmental

protection and social contribution activities tailored to the characteristics and

needs of its operation sites in Korea and abroad and in local communities.

Homepage

Public hearing sessions

Press releases

Intranet

Webzine

Blogs

CEO message

Business partner portal

- http://www.seccpartners.co.kr

Various briefing sessions

Business partner council

Employees volunteer activities

Partnership with NGOs

Sustainable&

value-oriented

management

Integrated risk

management

Areas of Interest

Shareholders and investors invest their capital in companies with stable perfor-

mance and think highly of sustainable growth.Additionally, due to the recent

increase in receiving orders for mega-projects they also pay keen attention to the

companys capabilities to execute mega-projects.Samsung C&Ts Response

Samsung C&T pursues stable creation of profits, with its E&C Group focusing on

selective orders and project implementation management and its T&I Group

concentrating on invigorating trading business and continuously exploring

organizing business opportunities. Furthermore, the company has established an

integrated risk management system by sector, reinforcing its project implementa-

tion capabilities.

IR information disclosure

Credit ratings

Homepage

Roadshows and conferences in

Korea and abroad

Sustainable&

value-oriented

management

Eco-friendly

construction

and operation

Areas of Interest

Customers call for continuous communication concerning information and value

related to the companys products and services.


Samsung C&T strives to provide top-quality products and services to customers

by researching ways to improve the quality of its products and services at each

stage of the value chain. In addition, the company operates diverse

communication channels to reinforce customer trust.

Homepage

Customer centers

Customer satisfactionsurveys

Government

Employees

Business

Partners

LocalCommunities

Shareholdersand Investors

Customers

Communication channel


24/72


Samsung C&T performed a materiality test in order to identify issues of interest among our stake-

holders, as well as other key issues that will be discussed in further detail in the Samsung C&T Cor-

poration Sustainability Report 2014. Material issues were selected through a process of identifica-

tion, issue pools, prioritization, and validation and report in accordance with the GRI G4 Guidelines.

Selection Process for Material IssuesSTEP 1. Identification

Samsung C&T identified a total of 42 key issue pools by analyzing CSR-related international stan-

dards, including the GRI Index and ISO 26000; media research; analysis of construction and trading

business trends in Korea and overseas markets; and interviews with business divisions.

STEP 2. Prioritization

Samsung C&T prioritized issues by analyzing the degree of materiality perceived by external stake-

holders and the company, respectively. In 2013, we divided issue prioritization into those of the

Engineering & Construction Group and the Trading & Investment Group to reflect the characteristics

of the respective industries.

The degree of materiality perceived by stakeholders was assessed by identifying external stakehold-ers perceptions and preferences toward the company in relation to the issues concerned and the

impact of such issues on stakeholders activities and decision-making related to the company, as well

as by analyzing surveys taken among external stakeholders, industry reports and media research on

a weighted basis. The materiality perceived by Samsung C&T is designed to comprehensively under-

stand the connection between the issues concerned and the companys short-term, mid-term and

long-term strategy directions, as well as the companys impact on economic, environmental and

social conditions related to the issues concerned. To this end, surveys of employees, interviews with

employees, internal strategy and management document analysis and collection of opinions from

the management were undertaken.

Analysis for forming issue pools

Analysis of global initiatives related to

sustainability management, including the

GRI G4 Guidelines (sustainability reporting

guidelines) and ISO 26000 (international

standards on social responsibility)

International standards onsustainability management

Analysis of domestic and international

media reports on Samsung C&T Corpora-tion in 2013

Media

Analysis of key sustainability management

issues of global industry competitors

Peer Group

Analysis of interviews with Samsung C&T

employees who are in charge of sustain-

ability management

Interviews with employees

Prioritization Process

Perceptions and preferences

toward the company related

to the issues concerned

The companys impact on ac tivities

and decision-making related

to the issues concerned

Externalshareholders surveys

Industry analysis Media research

Materiality from the standpoint of Samsung C&T Corporation

Materialityfromt

hestandpointofstakeholders

Materiality Matrix

High

High

Low

Materiality from the

standpoint of stakeholders

Connection between issues and

short-term, mid-term, and

long-term strategy directions

The companys impact on economic,

environmental and social conditions

related to the issues concerned

Analysis of strategy andmanagement documents

Surveys of internalstakeholders

Opinions of the managementand employees

Materiality from the standpoint

of Samsung C&T Corporation

Material Issues of E&C

Group and T&I Group

Material

Issues


25/72

25


STEP 3. Validation and Reporting

Samsung C&T's major activities and accomplishments by material issues in 2013 were covered in this

report by identifying the material issues of the Engineering & Construction Group and Trading & In-

vestment Group through prioritization and by reflecting the opinions of executives and employees

of divisions in charge of publishing sustainability reports and material issues.

The views of external stakeholders in the value chain, as well as those of internal stakeholders, were

fully reflected in the issue pool formation and prioritization process. Therefore, the scope of material

issues to be reported includes the diverse stakeholders that exist in the value chain.

Category Major Activities and Accomplishments Page

Ethics and Compliance Establishment of compliance system 29

Compliance enhancement activities 30 - 31

Environment Environmental impact response 33 - 34

Climate change response and creation of new business opportunities 34 - 35

Special issue of the E&C Group : Eco-friendly construction and operation 36 - 39

Safety and Health Establishment of global integrated safety and health system 41

Activities to establish safety culture 42 - 43

Employees Family-friendly management 46

Innovation of organizational culture 46 - 47

Cultivation of employees 47 - 48

Special issue of the T&I Group - Cultivation of employees with business execution capabilities 48 - 49

Supply Chain Fair supply network management 51 - 52

Special issue of the E&C Group - Efforts for shared growth 52 - 53

Local Communities Social contribution activities in Korea and abroad 55 - 57

E&C Groups

Material Issues

T&I GroupsMaterial Issues

Aspects

Material Issues and GRI G4 Aspects of the E&C Group and T&I Group

Economy

Economic performance

Indirect economic impactsProcurement practices

Environment Society

Labor practices and quality

jobs

Employment

Occupational safety and health

Training and education

Diversity and equalopportunities

Society

Support for partnercompanies

New growth businesses

Response to climatechange

Protection of biodiversity

Establishment of safetyculture

Cultivation of globaltalents

Employee diversity andequality

Ethical managementeducation

Fair transaction process

Local communities

Anti-corruptionAnti-competitive behavior

Compliance

Integrated risk

management

Global businesses


Management innovationactivities


Cultivation of globaltalents

Balance between workand life

Employee diversity andequality

Incidents and disasterprevention

Innovation of organiza-tional culture

Compliance with code ofethics

Compliance with regula-tions related to ethicalmanagement

Contributions to andinvestment in localcommunities

Energy

BiodiversityEmissions


26/72

3OUR KEYSUSTAINABILITY

PRIORITIES/ Ethics and Compliance

/ Environment

/ Safety and Health

/ Employees

/ Supply Chain

/ Local Communities



27/72


27


28/72


ETHICS AND

COMPLIANCESamsung C&T continues to express its commitment to ethics and

compliance. Based on the CEOs uncompromising dedication to ethics

and compliance, our Company has built the compliance system into

the business process to align the compliance system with the business

goals, while encouraging all employees to practice compliance.

2013KEY PERFORMANCE

Number of employees who received compliance training

14,06110,821

21,058

2011

2012

2013

Unit : persons


29/72

29


External

Environment

Samsung C&Ts

Approach

Chief

Compliance

Officer T&I

GroupFair Trade Anti-corruption

Environment

and Safety

Information

Security

Prevention ofOperationalMisconduct

Integrity

E&C

GroupFair Trade Anti-corruption

Information

Security

Employment

/LaborSubcontracting

Safety/Environ-

ment/Quality

Compliance Risk Management Categories

Chief Compliance Officer and Chief Legal Advisor, Corporate Management Division (E&C Group) _ Senior Vice PresidentSun-Myung Kang

Since 2010, Samsung C&T has conducted a variety of compliance-related activities to make ethics and compliance a part

of the corporate culture. Based on the CEOs firm belief that violating the laws, regulations, or the customs of any of the

countries in which we do business will cause a devastating harm to our companys reputation and credibility, and ultimately

undermine growth, the Compliance Team has prepared the Compliance Control Standards, Compliance Operation Regula-

tions, and Compliance Code of Conduct. In addition, to ensure employees understand the Compliance Way which is the

Right Way to do business, and the CEOs way to do business, the Compliance Team provides online and offline education

programs to all of our employees. There are also campaigns, newsletters, and an internal broadcasting services, which will

increase employees knowledge on ethics and compliance. To monitor bad behaviors and incentivize good behaviors, we

have inspected the headquarters and construction sites, Depending on the findings, sanctions were imposed against vio-

lators and awards were showered on those who have shown exceptional behaviors. During the mandatory self-directed

compliance period (which takes place at least 4 t imes a year) employees in the business units are required to take initiatives

in compliance activities. Our Company is committed to creating sustainable growth-through transparency and fairness, and

by actions, not mere words. Ethics and compliance are the keys to creating sustainable growth. Ethics and compliancemust be engrained in our culture.


Stakeholders, including the government and NGOs, have shown a continuous interest in the diverse

impacts of the construction industry on local communities. The trading and investment business

also centers on trading activities closely related to the national economy. Under the circumstances,

diverse stakeholders are continuously paying keen attention to the business activities of Samsung

C&T. Therefore, in order to ensure sustainable business operations, it is a prerequisite for the com-

pany not only to comply with laws and regulations, but also to establish a solid ethical managementsystem and have a positive impact on its internal and external stakeholders.

Putting the companys ethics and compliance management into practice begins with the com-

mitment of top executives, including the CEO. The top executives of both the Engineering & Con-

struction Group and the Trading & Investment Group have continuously stressed the importance of

ethics and compliance management. The E&C Group and T&I Group have consolidated their com -

mitment to ethics and compliance management under the respective goals of contributing to the

companys sustainable management by establishing a culture of global compliance and prevent-

ing incidents and protecting the companys reputation through compliance. Based on this strong

commitment to ethics and compliance management, Samsung C&T has built a company-wide com-

pliance system that includes not only its employees but also its partner companies.

Establishment of Compliance System

Samsung C&T operates departments dedicated to compliance risks to ensure its compliance with

laws and regulations in various fields related to its business activities. The departments inspect the

compliance status of the E&C Group and T&I Group regarding domestic and international regula-

tions related to sustainability management such as fair trade and environmental and safety issues,

as well as the companys internal regulations. They also offer education and training to strengthen

employees mindset towards compliance. In addition, the e-Cyber Audit Team, a channel where

employees and external stakeholders can report matters on compliance anonymously, has been

established on the Samsung C&T website. When reports are received, dedicated and related depart-

ments promptly handle them and take appropriate actions.

Major Activities

in 2013


30/72


E&C Groups Compliance

Training System

Common CoursesInformation Security,

Anti-corruption,Employment and Labor

Advanced Courses

Track1 Subcontracting, Safety,

Environment, Quality

For employees engaged inconstruction-related work in thefour business divisions

Track2 Cartels, Unfair

Support, Misleading Advertising

For employees engaged in such job

groups as marketing, sales, quota-tion, design

For All Employees

E&C Groups Inspection Categories by Compliance Risk

Compliance

Risk

Inspection

Categories

Object of Inspection

Sites inKorea

OverseasSites

OverseasSubsidiaries

Key Areas

Fair Trade

Cartels - -

Unfair Assistance - - -

MisleadingAdvertisements

- - -

Anti-Corruption

Bribery - -

Agent - - -

InformationSecurity

Personal InformationProtection

Unfair CompetitionPrevention

Employmentand Labor

UnlawfulEmployment

- -

Subcontracting Subcontracting - -

Safety/Environ-ment/Quality

Safety/Environment/Quality

Q-HSE

Key Inspection Categories

T&I Groups Inspection Categories by Compliance Risk

Compliance

Risk

Inspection

CategoriesKorea

Overseas

Subsidiaries/Offices

Fair Trade Subcontracting -

Environmentand Safety

On-Site/Facility Safety

InformationSecurity

Inspection of Status ofS/W Use

-

Prevention ofOperationalMisconduct

Inspection on Compliancewith Operation Regula-tions/ Processes

Integrity

Inspection on Compliance

with Regulations/ Interna-tional Regulations

Compliance Reinforcement Activities

E&C GroupThe Engineering & Construction Group has a Compliance Team as a working-level

organization responsible for implementing compliance. The group operates the Com-

pliance Committee, which is presided over by the CEO and deliberates and makes

decisions on key matters on compliance control, and the Compliance Steering Com-

mittee (CSC), which is headed by the Head of Corporate Management Division and discusses de-tailed compliance activities. In addition, compliance managers are appointed by team and on-site

unit to ensure that voluntary compliance activities at work sites take root through self-inspection

and self-training activities. The group offers online training for all employees and offline training

tailored to positions and job duties on an ongoing basis. The online training, offered in Korean, is

divided into common courses (information protection, corruption prevention, employment and

labor) designed for all employees, and advanced courses offering specialized training depending

on the work characteristics of employees. The in-depth courses have a two-track system consisting

of construction (subcontracting, safety/environment/quality) and sales (cartels, unfair support and

misleading advertisements). The group also offers separate online training programs in English and

Chinese for foreign employees. Furthermore, the group conducts compliance self-diagnosis among

its employees every year, while establishing an around-the-clock monitoring system involving a

competitor contact system where employees are required to receive prior approval and producefollow-up reports when they contact competitor companies; the issuance of warning e-mails to

those who send e-mails using prohibited words related to compliance in key areas; and the intro-

duction of an e-mail filtering system that automatically blocks outgoing e-mails.

In 2013, the group expanded on-site compliance inspections, particularly for overseas projects and

subsidiaries. It conducted an inspection of compliance risk categories including information protec-

tion and the Labor Act at 24 field sites in Korea, eight overseas field sites and an overseas subsidiary,

while inspecting key areas in 25 departments in the headquarters, including the marketing depart-

ment. The E&C Group performed voluntary on-site inspections related to subcontracting at all of its

field sites in Korea and conducted on-site inspections in 21 locations. It also conducted voluntary

inspections concerning safety, the environment and quality on 2,358 occasions and on-site inspec-

tions on 2,408 occasions at home and abroad. During the I Compliance Week event, which washeld six times, a variety of programs were featured to make compliance part of daily life, includ-

ing a Compliance Academy attended by compliance managers from different business divisions; a

Compliance Lunch Concert, designed to emphasize the meaning of compliance while listening to

classical music; and a compliance slogan contest.


31/72

31


T&I Group The Trading & Investment Group operates the Compliance Committee, a supreme

decision-making body on compliance led by the CEO and consisting of top domestic

and overseas executives, and the Compliance Affairs Committee, consisting of com-

pliance officers and compliance managers designated by business divisions and sup-

porting divisions under the leadership of the Compliance Office. The Compliance Affairs Committee

is a body aimed at promoting independent operation of the group's compliance programs anddiscusses details on the operation of compliance programs, cooperates in activities and devises

plans. The group operates an ombudsman system to monitor the compliance status of business di-

visions and promptly responds to compliance-related inquiries or complaints filed by employees.

The ombudsmen of each business d ivision share their respective business divisions compliance ac-

tivity results and hold meetings to set future directions, striving to strengthen the compliance mind-

set of employees.

In 2013, the group implemented compliance training under the leadership of the Compliance Of-

fice for all of its employees in Korea and abroad, thereby enhancing their understanding of compli-

ance and reinforcing their commitment to compliance. Furthermore, in order to reduce the risk

of violating regulations related to the groups diverse business activities, group has produced and

distributed a Guide to Compliance with Subcontract Regulations, thereby enhancing employees

understanding of Korean subcontract regulations, while helping employees determine whetherthey might have violated Korean subcontract regulations on their own through the internal contract

review system. In addition, it provided support for environmental and safety inspections led by the

Human Resources Division conducting inspections based on checklists during on-site inspections

of chemical tank terminals and tank lorry companies.

The group also obligates all employees to sign compliance-related pledges, including a compliance

and ethics pledge and an information security pledge, thereby inducing the establishment of a cul-

ture of compliance and enhancing employees commitment to compliance. In addition, the group

encouraged employees to participate in such activities as a compliance quiz contest, while sending

newsletters on the monitoring of related regulations for reference.

In recent years, CEOs and top executives of the Engineering & Construction Group and the Trading& Investment Group have continuously declared their unwavering commitment to putting compli-

ance into practice at home and abroad. In particular, they have emphasized their efforts to establish

a strong organizational culture of compliance led by top executives and implemented by business

divisions with strong determination. To this end, Samsung C&T plans and implements education

programs through various channels, including online and offline education programs with the goal

of achieving a compliance education completion rate of 100% among all the employees of the E&C

Group and T&I Group. The company will also carry out activities to further substantiate inspection,

evaluation and compensation. The two groups also plan to use compliance as one of the factors in

evaluating top executives and award prizes to employees and operation sites that show outstanding

performance.

E&C Group The E&C Group will operate an exclusive organization to inspect compliance status

and strengthen its support for activities carried out by independent compliance op-

eration organizations formed by business divisions. The group will reinforce penalties

for violations of compliance in connection with the personnel management system,

while awarding prizes to compliance managers and sites with outstanding performance to raise

employees awareness of the importance of compliance and their commitment to complying with

the laws and regulations.

T&I Group The T&I Group will further encourage employees to carry out compliance activi ties by

renewing its compliance portal, while striving to put compliance management into

practice by reinforcing compliance inspection through individual self monitoring. In

addition, the T&I Group will provide more vigorous support for voluntary and inde-

pendent compliance activities by facilitating communication among compliance organizations

through increased Compliance Affairs Committee and ombudsman meetings and dispatch of new-

style newsletters covering monitoring of related regulations.

FutureGoals

T&I Groups Compliance Training

System

Common Courses

Advanced Courses

Advanced Training on Subcontract

Transactions

Offered for employees from business

divisions on subcontract transactions

Courses for Employees in Korea

(Understanding Compliance)

Courses for Employees Overseas

(Fair Trade, Corruption Prevention)

Advanced Training on Chemicals

Offered for employees from theChemicals Division and relatedsupport divisions


32/72


ENVIRONMENT

Samsung C&T has preemptively responded to the demands of its

stakeholders and society for environmental management. The company

continues to make multifaceted efforts to create value for the company

and society as a whole through eco-friendly activities including reduction

of greenhouse gases and pollutant emissions, advancement into green

businesses, and protection of biodiversity.

2013 KEY PERFORMANCE

GHG Emissions Intensity

Energy Consumption Intensity

Environmental Management Expenditures

0.154

0.193

2011 2012 2013

0.146

2.142

2.639

2011 2012 2013

2.310

16.1

21.2

2011 2012 2013

18.6

Unit : tCO2-eq/KRW 1 bil

Unit : GJ/KRW 1 bil

Unit : KRW 1 bil


33/72

33


External

Environment

Samsung C&Ts

Approach

Major Activities

in 2013

The World Economic Forum, a private international forum in which the worlds renowned busi-

ness leaders, economists, journalists and politicians gather together to discuss and research the

world economy, publishes its Global Risks report annually. In the latest report, water supply, climate

change and sudden natural disasters were included among the top 10 risks. As such, the environ-

mental crisis is not some distant problem of the future, but a situation facing our generation. In order

to overcome such a crisis situation, governments are coming up with various environment-relatedregulations, including for greenhouse gas emissions and protection of fauna and flora, while NGOs

and local communities are calling for companies to take more responsible actions regarding their

business activities impact on the environment by adopting stricter criteria than before. Numerous

companies are making efforts to prevent financial or reputational risks that may be generated when

they do not fulfill their environmental responsibilities. Leading companies are using the crisis as an

opportunity by pioneering new business markets.

Samsung C&T endeavors to minimize environmental incidents and related issues through thorough

management of environmental impacts associated with its business operations. The company also

intends to identify and explore business opportunities generated in the process to create new markets.

E&C Group At the Engineering & Construction Group, the Safety and Environment Team, under the

company-wide Q-HSE Management Division, coordinates company-wide environmen-

tal activities. Environment managers from business divisions are appointed to join the

Q-HSE team to take care of environmental management activities on project sites. In

addition, the group systematically manages environmental performance data, achievements and

greenhouse gas emissions on domestic and overseas project sites through the Integrated Environ-

mental Performance Management System, which is the first of its kind in Koreas construction industry.

T&I Group The Trading & Investment Group conducts regular environmental inspections on op-

eration sites in Korea and abroad and offers environmental training to employees

concerned. The group intends to transform the environmental business into one of

the new growth engines that will lead the group in the future by making ongoinginvestments in the eco-friendly energy sector and winning orders for related projects.

Environmental Impact

E&C Group The Engineering & Construction Group makes concerted efforts to minimize negative

environmental impacts that may be generated in the course of its entire business

operation processes and to ensure that a better environment can be handed down to

future generations. Starting from 2013, the group has given additional points to sup-

pliers and partners with eco-friendly achievements and performances by conducting CSR evalua-

tions when selecting outsourcing and procurement partners. In addition, it supported its suppliers

efforts to acquire eco-friendly certifications, build eco-friendly construction processes, and estab-

lished greenhouse gas inventories through its initiative aimed to support the spread of environmen-

tal management among suppliers that had been implemented from 2010 to 2013. The E&C Group

has set up an integrated environmental management system that oversees both the headquarters

and construction sites, thereby ensuring that construction activities with potential environmental

impacts can be managed in an eco-friendly manner. The headquarters company-wide organization

lays the foundation for on-site management through environmental planning, environmental orga-

nization management, establishment and implementation of environmental training plans, environ-

mental documentation standard management and revision, environmental incident management

and the maintenance and management of the environmental management system (ISO14001).

Moreover, Q-HSE teams from each business division provide rigorous on-site support by carrying

out project site support, inspections, and evaluation, as well as providing support for on-site envi-

ronmental training. Project sites strive to improve the site environment and prevent environmental

incident under the leadership of project managers in accordance with the headquarters environ-

mental policy, while environmental managers are appointed to deal with on-site environmental

matters that include complaints management, drawing up of on-site environmental management


34/72


plans, environmental training, waste management, and the installation and maintenance of environ-

mental pollution prevention facilities. In order to promote mutual exchanges between on-site envi-

ronmental organizations and the company-wide organization at the headquarters, quarterly region-

al environmental council meetings are held in six areas featuring the participation of on-site

environmental managers, while workshops attended by on-site environmental managers are held

annually on a regular basis.Through systemat ic environmental management, as seen above, project sites in Korea and abroad

have shown outstanding eco-friendly management performances. In the case of the Jamsil Veterans

Association Tower project in Songpa-gu, Seoul, the group operated wheel washing machines and

high-pressure sprinklers at all times using ground water available in projects to prevent the genera-

tion of fugitive dust. In addition, it installed a stone and wood processing facility to prevent the scat-

tering of stone powder and sawdust. It also endeavored to minimize the spread of dust by installing

anemometers in construction sites to check the wind speed and suspend construction work if the

average wind speed was 8m/sec or more for 10 minutes.

In the meantime, in order to minimize possible complaints due to noise caused by construction

work, the S3/S3-A project site in Hwaseong City, Gyeonggi Province, established comprehensive

noise prevention countermeasures by introducing a noise simulation program at the early construc-tion phase. Additionally, the project site endeavored to minimize light diffusion toward residential

areas by measuring light luminance generated by construction equipment to minimize complaints

due to light generation.

T&I GroupThe Trading & Investment Group inspects hazardous chemicals management pro-

cesses, while conducting regular environmental safety inspections in business sites

with tanks storing chemicals. In September 2013, the CEO of the Trading & Invest-

ment Group visited the Ulsan chemical tank terminal to inspect its compliance with

environmental and safety regulations, demonstrating the top managements strong commitment to

the prevention of environmental incidents. In November 2013, the Chemicals Division conducted an

emergency response simulation assuming a tanker lorry capsizing accident and photosensitizer

leakage.

Climate Change Response and Creation of Opportunities

Samsung C&T is striving to preemptively respond to climate change on a company-wide level, while

creating new business opportunities in energy management, which is directly related to climate

change.

E&C GroupThe Engineering & Construction Group is making continuous efforts to achieve its

goals by 2015 based on mid-to long-term greenhouse gas management strategies.

The group has established internal GHG emissions calculation guidel ines, while devel-

oping guidelines on GHG emissions reduction during construction processes, con-

tributing to taking the construction industrys GHG emissions management level to the next height.

In addition, in order to respond to the GHG and Energy Target Management System that is sched-

uled to be implemented from 2014, the group has established a management system that examines

emissions generated not only by its headquarters and all the project sites, but also by other business

sites, including precast concrete (PC) plants and the Construction Technology Center.

In addition, the group has created new business opportunities through continuous research on

building energy-saving technologies. The E&C Group signed an agreement on a project to improve

the energy efficiency of the Guardian Building in Detroit, USA in September 2013. The achievement

was made possible thanks to the groups continuous investment in the development of the Korea

Micro Energy Grid (K-MEG) technology and system. Based on its judgment that such technology

may create great opportunities not only in the domestic market, but also in global markets, Sam-

sung C&T Corporation is pushing ahead with 10 global research demonstration projects in collabo-

ration with 60 institutions in Korea and abroad.

In collaboration with VTT, a state-funded

research institute in Finland, the E&C

Group has been separately implementing

a pilot project aimed at reducing energy

use in the VTT research wing and Aalto

University campus buildings by up to

15%since 2012.


35/72

35


Future

Goals

On-site Environmental Data

Collection Targets (relative to sales)

2014

2015

2016

70%

90%

100%

Solar Power Cluster in Ontario, Canada Wind Power Cluster in Ontario, Canada

Department of Materials Chemistry & Engineering, Konkuk University_ Professor Tak Hur


T&I Group The Trading & Investment Group is making investments in eco-friendly energy sourc-es and exploring business opportunities in the area on a continuous basis. The group

2014 Report En Samsung C&T

Documents

Transcript of 2014 Report En Samsung C&T