Q&A: Seaco General Counsel, Head of Environmental Compliance | Premium

Seaco, a client of financial institutions and syndicated lenders serving international transportation and freight forwarding companies, is faced with compliance challenges across both sectors.

Compliance is no longer a matter of simply meeting legal obligations. It is now about showing customers that you meet their ethical and environmental standards, Buckwell explained.

Q: What is your role at Seaco?

AND: I qualified as a barrister and then specialised in shipping disputes before joining Seaco in 2006. As General Counsel I look after legal risk and compliance, insurance and corporate governance. Seaco buys shipping containers and leases them for five or ten years to shipping companies to run their business. We are an equipment supplier, not a financial services provider, so we do not generally have to comply with financial services regulations, but we do have to ensure that our containers are safe in accordance with applicable international treaty terms. All our containers are built to ISO standards, whether they are standard, refrigerated or tank containers. Quality certificates are provided by the manufacturers (mainly in mainland China) and we employ our own inspectors to ensure that quality is maintained.

Q: What are the main compatibility issues?

AND: In addition to ensuring the security of our containers, our main compliance responsibilities relate to competition law, anti-bribery, sanctions, human rights, health and safety, AML, whistleblowing, anti-slavery and environmental standards. We have around 230 employees in larger offices in Singapore, London, Hamburg and Houston, as well as smaller offices in Taiwan, Shanghai, Seoul, Tokyo, Mumbai, Dubai, Cape Town, Sweden, Paris and Belgium. We also have agents in Saudi Arabia, Brazil, Portugal and Spain, so AML and sanctions regulations are particularly important.

Many of our suppliers and customers also require us to demonstrate that we comply with the laws that apply to them – for example, we have to prove to our banks that we meet their obligations regarding sanctions and AML activities. Most of our customers also have codes of ethics that they want us to join. We are a subsidiary of a Chinese listed company called BoHai Leasing Co., registered in Tianjin, and before 2012 we were 50 percent owned by General Electric. So we adopted GE’s codes of ethics and standards and have been using them ever since, updating them as needed.

Q: What is the difference between compliance with legal and ethical standards?

AND: Twenty years ago, legal Compliance issues were definitely the most important issue, but now ethical Compliance is key as a broader concept that includes, but goes beyond, strict legal obligations. There is a difference between saying, for example, that you comply with legal employment rules and saying that you are committed to employing people ethically. This immediately involves doing more than the bare minimum. Not only have legal standards in areas such as employment and environmental law risen, but companies are really understanding the need to be seen as having good corporate governance and ‘doing the right thing’. We need to make sure that all our employees are trained to understand how issues such as AML, competition, bribery and sanctions relate to their day-to-day roles and what they should do if they see something wrong.

Q: How do environmental regulations affect you?

AND: In the past, our primary environmental concern was ensuring that our products were safe to carry potentially polluting or contaminating cargo, such as petroleum products or corrosive substances. Now we have to look at our environmental impact much more broadly, but there is no industry standard yet. We have changed the design of our containers to use sustainable flooring (usually bamboo) instead of hardwood, water-based solvents in paint coatings, and some of our steel is recycled.

The carbon cost of shipping containers is complex because we own them, but our customers lease them and transport them. We then sell them to reuse them at the end of the lease, and they continue to be used for a very long time.

We also employ people in offices, so our carbon footprint comes from some of the heating, water, etc., but it’s hard to get that detail from most office landlords. We’re a niche sector – there are only about eight significant companies worldwide – so we’re pleased that our industry body, the Institute of International Container Rentalors, is currently trying to develop a standard for calculating carbon emissions.

Until then, we’re doing what we can; for example, we’ve benchmarked our performance against the sustainability platform EcoVadis, which has awarded us a silver certificate, and we’ve signed up to the UN Sustainable Development Goals. We’re doing this because it’s the right thing to do and because of what suppliers and customers want, not because we want to comply with specific regulations. But judging by the tone of law firm seminars we’re seeing now, there’s likely to be more lawsuits in the future against companies that aren’t doing enough to combat climate change.