Ethical Management Practice Guide

The ethical management practice guide is a detailed ethical action guide that the employees may turn to while performing their duties to practice the code of ethics.

Chapter 1. General Rules

Article 1 (Purpose)

The purpose of this Ethical Management Practice Guide (hereafter referred to as the “Guide”) is to establish an ethical standard for the employees of Pan Ocean Co., Ltd. to observe when performing his/her duties to prevent corruption and develop fair corporate culture by practicing ethical management.

Article 2 (Definition)

The definitions of terms used in this Guide shall be as follows :

• ①The term “employee” means any person continuously and repeatedly works for Pan Ocean, shore service and sea service alike.
• ②The term “duty-related party” means any of the following person related to an employee’s duties :
  • a)A person or an entity who has entered into a contract, or has definite intention to enter into a contract, with Pan Ocean;
  • b)A person or an entity who has applied for a project, or has definite intention to apply for a project, that Pan Ocean is taking charge; or
  • c)A person or an entity who otherwise require a certain act to Pan Ocean.
• ③The term “duty-related employee” means any of the following employee who may make a profit or suffer a loss related to an employee’s duties:
  • 가)A senior employee, or a subordinate employee, related to an employee’s duties;
  • 나)An employee taking charge of personnel · audit · appraisal · budget · organization and employees directly related thereto; or
  • 다)An employee supervising delegation · consignment, and an employee in charge of delegated · consigned duties, if Pan Ocean is to delegate · consign works and/or duties.
• ④The term “gift” means any and all goods, securities, complimentary accomodations, memberships to clubs and facilities, admission tickets for venues and performances, or other equivalent things provided without cost (or at substantially lower cost compared to the market price or common practices of transaction).
• ⑤The term “money, goods, etc.” means money (cash, gift voucher, license to use, etc.), goods and other financial benefits.
• ⑥The term “entertainment” means hospitality benefits including food and beverages, alcoholic beverages, or golf; “convenience” means supporting service including lodging, transportation, tour guide or event support other than entertainment and hospitality, in case the other party suffers an economic loss for a receiver to enjoy such convenience.

Article 3 (Scope of Application)

This guide applies to all employees of Pan Ocean.

Article 4 (Compliance Obligations and Responsibilities)

• ①All employees shall have full knowledge of this guide and comply with it; anyone who violates it shall take responsibility for his/her actions.
• ②The ethical management director of Pan Ocean may ask the employees to submit “A Pledge for Ethical Management” to the Company to ensure the observance of this guide to prevent corruption and establish fair corporate culture.

Chapter 2. Legal Compliance and Social Responsibility

Article 5 (Compliance with the Law)

• ①Pan Ocean shall faithfully comply with all domestic and international laws, regulations and local government rules regarding social activities and business transactions.
• ②Pan Ocean shall not make profits by dishonest means against corporate ethics and business morality.

Article 6 (Sound Business Activities)

• ①Pan Ocean shall obtain information by fair means and shall not illegally use it or disclose it to a third party.
• ②Pan Ocean understands that competition is a driving force of mutual improvement; it shall respect the market economy and shall not, in any way, disrupt its order.
• ③Any comparison with a competitor shall be based on objective and evident data.
• ④Pan Ocean shall not exploit a competitor’s weakness which has not been publicly announced; nor shall it slander a competitor through its advertisement.

Article 7 (Social Responsibility)

• ①Pan Ocean understands that social responsibility of a corporation begins with voluntary service to the society; it shall actively participate in various volunteer works and contribute to cultural development.
• ②Pan Ocean shall contribute to establishment of a welfare society by fulfilling tax obligation and creating employment.
• ③Pan Ocean shall reasonably operate its business and shall not, in any way, cause harm to the national economy.
• ④Pan Ocean shall petition the government in due course if it finds necessity to establish, amend or abolish a social system or a law.
• ⑤Pan Ocean shall take the initiative in promoting the sense of unity between the communities and itself by expanding welfare facilities, supporting underprivileged people, and encouraging its employees to participate in community activities for the members of the communities to which its places of business belong.

Article 8 (Environment Protection and Resource Preservation)

• ①Pan Ocean shall conduct all its businesses environment-friendly, actively participate in environment protection and observe all relevant laws and regulations.
• ②Pan Ocean shall take lead in protecting the environment and preserving resources by saving of resources and constant technological development.

Article 9 (Safety Management and Accident Prevention)

• ①Pan Ocean shall strictly observe all relevant safety standards and practice guides based on relevant laws and regulations.
• ②Pan Ocean understands that the basis of safety management is each employee’s self-management; it shall prioritize safety management and encourage its employees to improve physical strength, mental strength, and techniques therefor.
• ③Pan Ocean shall do its best to have judgment and acting power to properly react to any situation related to safety control and accident prevention; it shall have its safety managers educated and trained so that they know how to use all kinds of rescue facilities and devices.
• ④Pan Ocean shall conduct regular simulation training to prevent safety accidents and promptly cope with accident situation, as well as regular checkup of all kinds of facilities.

Chapter 3. Basic Ethics of Employees

Article 10 (Maintaining Honor and Dignity)

• ①An employee of Pan Ocean shall have self-respect and pride that his/her behavior represents Pan Ocean, and always be sure that he/she is neatly attired and decently behave.
• ②Employees shall respect one another as an individual human being and shall not arrogantly behave or slander one another.

Article 11 (Fair and Voluntary Work)

• ①Each employee and each department shall understand that Pan Ocean is an organic community moving for common goals and shall pursue growth and improvement by reasonable and harmonious cooperation, excluding departmental silos or supremacy thinking.
• ②An employee shall improve his/her competency and qualification by practicing voluntary self-development plan.
• ③An employee shall be aware of the company’s goals, fulfill his/her duties upon voluntary decisions and actions, and take responsibility therefor.
• ④An employee shall separate public and private matters and perform his/her duties fairly and impartially.
• ⑤An employee shall do his/her best in performing duties within his/her authority and responsibility, observe all relevant laws, regulations and systems, and shall not abuse his/her authority, spread groundless rumors, exaggerate a fact, conceal a truth, or reveal a secret for individual interest.

Article 12 (Fair and Harmonious Organizational Culture)

• ①Employees shall respect the privacy of one another and create an atmosphere that they could freely share ideas, proposals, or difficulties to develop more harmonized organization culture.
• ②A senior employee shall develop a subordinate’s talent and actively support to cultivate the company’s human resources.
• ③An employee shall not abuse his/her authority to benefit someone close to him/her, e.g. a relative. In principle, no employees related by kinship or marriage shall work in the same department.

Article 13 (Safe and Comfortable Work Environment)

• ①For clean and pleasant work environment, an employee shall habituate 5S - Seiri, Seidon, Seiso, Seiketsu, Shitsuke.
• ②All regulations regarding safety shall be strictly observed to prevent various accidents in advance.

Chapter 4. Fair Performance of Duties

Article 14 (Exclusion of Discrimination)

While performing his/her duties, an employee shall not give any preferential or discriminative treatment to a specific person or an entity on the grounds of kinship, religion, regional or academic ties.

Article 15 (Prohibition of Illegal Mediation, Solicitation or Request for Debt Guarantee)

• ①An employee shall not use any good office or make solicitation to hinder other employees from performing their duties in a fair and proper manner for the purpose of unduly benefiting him/herself or another person.
• ②An employee shall not introduce a duty-related party to any other duty-related party or to a public official for the purpose of unduly benefiting him/herself or another person.
• ③An employee shall not request for debt guarantee to, or become a debt guarantor of, another employee or a duty-related party for the purpose of benefiting him/herself or another person.

Article 16 (Prohibition of Illegal Solicitation for Personnel Affairs)

• ①An employee shall not ask any third party to solicit a person in charge of personnel management for the purpose of having undue influence on his or her appointment, promotion, job transfer and any other personnel affairs.
• ②An employee shall not use his or her public position to unduly influence the decisions on personnel management for other employees, including appointment, promotion, and job transfer.

Article 17 (Prevention of Conflict of Interest)

• ①When an employee’s duty is related to the interest of a person stated in the following subparagraphs, he/she shall avoid participating in, or making decisions on, such duty :
  • 1)The employee him/herself, his/her spouse, lineal ascendants/descendants or his/her first cousin or closer relatives;
  • 2)A person or an entity related with the employee’s past or future job;
  • 3)Any other person related to the employ on the grounds of kinship, religion, regional or academic ties, making fair performance of duty difficult.
• ②If an employee intends to avoid his/her duty in accordance with paragraph 1, he or she shall notice the immediate senior employee or the Ethical Management Department; if he/she cannot determine whether he/she should avoid such duty, he or she shall consult the immediate senior employee or the Ethical Management Department.
• ③The immediate senior employee or the Ethical Management Department, who received a request for consultation in accordance with paragraph 2, shall give notification to the representative director if it is deemed inappropriate that the employee concerned continues to perform the duties considering the following subparagraphs; provided, however, that the senior employee may temporarily reassign the employee to other duties without giving notification to the representative director if he or she has the authority to do so.
  • 1)Degree of interest concerned;
  • 2)The discretionary power, role and importance of the employee concerned regarding the duty concerned;
  • 3)Inside and outside sensitiveness of the duty concerned;
  • 4)Level of difficulty of the duty concerned if is assigned to another employee; and
  • 5)Other harms to the duty’s fairness, etc.
• ④The representative director, upon receiving notification under paragraph 2, shall take necessary measures to ensure fair performance of duties, including, but not limited to, the reassignment of duties.

Article 18 (Exclusion of Preferential Treatment)

While performing his/her duties, an employee shall not give any preferential treatment to a specific person on the grounds of kinship, religion, regional or academic ties.

Article 19 (Prohibition of Use of Budget for Unspecified Purposes)

An employee shall not make Pan Ocean bear economic costs by using its budget (including travel expenses, business promotion expenses, official expenses, etc.) for unspecified purposes.

Article 20 (Handling of Instructions that Hinder Fair Performance of Duties)

• ①An employee shall not give his or her subordinate an instruction that may hamper fair performance of duties in order to pursue his or her own private interests or the interests of any third party against relevant laws and company rules.
• ②The subordinate employee may refuse to follow the instructions in case of paragraph 1 by communicating the reason to the superior employee.
• ③If an employee is repeatedly asked to fulfill the same instruction notwithstanding his or her refusal under paragraph 2, he or she shall immediately consult with the Ethical Management Department or the representative director.
• ④The Ethical Management Department, when requested to provide consultation under paragraph 3, shall check the details of such an instruction. In case it is deemed necessary to change or cancel the instruction, it shall be notified to the representative director.
• ⑤The representative director, upon receiving notification in accordance with paragraph 3 or 4, shall take a proper measure including, but not limited to, the cancellation or change of the instruction, where deemed necessary. In that case, disciplinary or other necessary actions may be taken against the superior who repeated the instructions that may harm fair performance of duties notwithstanding the provisions of paragraph 2 herein.
• ⑥An employee shall not be discriminated or disadvantaged for refusal to follow instructions in case of paragraph 1 and 2.

Article 21 (Handling of Unjust Request from Politicians)

• ①If a politician or a political party forces or requests an employee to perform his or her duties in a biased and improper way, he or she shall give notification to the Ethical Management Department to handle the matter.
• ②Having received notification under paragraph 1, the Ethical Management Department shall take necessary measures so that the employee may fairly perform his/her duties, and shall report the representative director, if necessary.

Chapter 5. Prohibition of Giving and Receiving Unfair Profits

Article 22 (Prohibition of Influence Peddling)

• ①An employee shall not directly use his or her position to unduly benefit him/herself or other people.
• ②An employee shall not use or allow other people to use his/her position or the name of Pan Ocean to unduly benefit him/herself or other people.

Article 23 (Prohibition of Personal Use of Company Property)

An employee shall not benefit himself or herself by personally using or making profit from Pan Ocean’s properties including vehicles, office supplies, movables, real estate, etc. without justifiable grounds.

Article 24 (Restriction of Use of Duty-related Information for Financial Transactions)

• ①An employee shall not involve in transactions of or make investment in marketable securities, real estate and other financial instruments by using information he or she obtained in the course of performing his or her duties; nor shall he or she give such information to any other person in order to help them make such financial transactions or investment.
• ②Concerning the provision of paragraph 1, the representative director shall draw up a detailed set of standards for restricting the use of duty-related information for financial transactions, depending on specific area of each department.

Article 25 (Prohibition of Receipt of Money, Goods, etc.)

• ①No employee shall accept any money, real estate, gift, or entertainment (hereafter “money, goods, etc.”) from a duty-related party, except for the cases of the following subparagraphs :
  • 1)Money, goods, etc. offered from a legitimate source of right such as payment of debts;
  • 2)Food and beverages, convenience, etc. inevitably offered in a normally accepted range for purposes of facilitating performance of duties;
  • 3)Money, goods, etc., provided uniformly in a normally accepted range by an organizer of an official event related to the duties of an employee, to all participants thereof, in the form of transportation, accommodation, food and beverages, etc.;
  • 4)Souvenirs, promotional goods, etc. to be distributed to multiple unspecified persons;
  • 5)Money, goods, etc. publicly provided to an employee who is in need due to a disease, disaster, etc.; or
  • 6)Money, goods, etc. otherwise permitted by the head of an organization for purposes of facilitating performance of duties.
• ②No employee shall accept any money, real estate, gift, or entertainment (hereafter “money, goods, etc.”) from a duty-related party, except for the cases of the following subparagraphs :
  • 1)Cases of the subparagraphs of the above paragraph 1;
  • 2)A gift provided in a normally accepted range (where a provider provides such gift voluntarily and out of pure intention, and such act is deemed inevitable and to cause no mutual pressure; any gift exceeding 50,000 won at a time or 500,000 won a year from the same person is not considered a ‘normally accepted range.’);
  • 3)Money, goods, etc. publicly provided by the employees’ mutual aid society, etc.; or
  • 4)Money, goods, etc. that a superior employee offers to its subordinates for purposes of consolation, encouragement, reward, etc.
• ③An employee shall not receive money, goods, etc. from a person who used to be a duty-related party or a duty-related employee regarding his/her past duties. Provided that, the cases of the subparagraphs of paragraph 1 and 2 shall be excluded.

Article 26 (Prohibition of Provision of Money, Goods, etc.)

An employee shall not provide money, good, etc. to a public official or a politician related to his/her duties to unduly benefit Pan Ocean. Provided that, the cases of the subparagraphs of Article 25(1) shall be excluded.

Article 27 (Prohibition of Receipt of Money, Goods, etc. by Spouse, etc.)

An employee should make sure that his or her spouse, lineal ascendant, or lineal descendant do not receive any money, goods, etc. that are prohibited from accepting pursuant to Article 25 or provide any money, goods, etc. that are prohibited from providing pursuant to Article 26.

Article 28 (Prohibition of Borrowing Money)

• ①An employee shall not borrow money from, lend money to or rent real estate from a duty-related party (excluding his/her first cousin and closer relatives) without compensation (including cases where such compensation is significantly lower compared to the market value or customary transaction value). Provided, however, this shall not apply when a loan is made on ordinary terms and conditions from financial companies, etc. under Article 2 of the Act on Real Name Financial Transactions and Guarantee of Secrecy.
• ②Notwithstanding the provisions of paragraph 1, an employee, who intends to borrow money from, lend money to or rent real estate from a duty-related party without any compensation for unavoidable reasons, shall give notification to the Ethical Management Department.

Article 29 (Conclusion and Performance of a Contract without Corruption)

• ①An employee shall fairly and transparently perform his/her duties pursuant to processes regulated in relevant laws regarding all construction, subcontract, procurement of supplies, conclusion and performance of a contract, etc.
• ②An employee shall not require prohibited money, goods, etc., compel unfair transaction conditions or intervene in management using his/her superior position in negotiation during bidding, signing and performing a contract, etc. in paragraph 1.

Chapter 6. Transparency in Information and Financial Management

Article 30 (Fair and Transparent Acquisition and Management of Information)

An employee shall acquire all information by fair means, record and report it correctly; he/she shall not manipulation destruct any information for a purpose to benefit certain individual or an entity.

Article 31 (Transparent Accounting)

An employee shall correctly and transparently record and manage accounting and other financial records based on facts and pursuant to relevant laws and generally accepted accounting principles.

Article 32 (Prohibition of Leakage of Information)

An employee shall not disclose information he/she acquires in relation with his/her duties to a third party without prior permission of Pan Ocean.

Article 33 (Transparent Disclosure of Information)

An employee in charge of information disclosure shall sincerely and honestly respond to requests of the press and people for public announcement of management information to ensure transparent management and to build public trust.

Chapter 7. Creation of Healthy Climate of Corporate Culture

Article 34 (Restriction on the Outside Lectures, etc.)

• ①No employee shall not conduct a seminar, public hearing, open forum, presentation, symposium, training course, lecture, speech, etc. (hereafter “lecture, etc.”) not directly related to performance of his/her duties without prior authorization of the representative director.
• ②The representative director may authorize a lecture, etc. in paragraph 1 if he/she determines that it shall not disrupt the employee’s duties and there shall be no risk of leakage of professional secrets and information.
• ③The honorarium an employee receives for a lecture, etc. in paragraph 1 shall not exceed the amount that the requestor normally provides for such lecture, etc.

Article 35 (Establishment of Healthy Festivities and Funerals Culture)

An employee shall take the lead in establishing healthy festivities and funerals culture.

Article 36 (Restriction on Speculative Activities)

• ①An employee shall not play a speculative golf game with a duty-related party. If he/she does so for an inevitable reason, he/she shall acquire prior authorization from the representative director; if it is not practicable, he/she shall report after the event without delay.
• ②An employee shall not play speculative games - mahjong, hwatu, cards, betting golf, etc.- with a duty-related party. Provided that, a game clearly considered healthy leisure by social norms shall be excluded.
• ③A duty-related party in paragraph 1 and 2 refers to any of the following subparagraphs regarding an employee’s duties (the scope of authority pursuant to delegation provisions in case of a person assigned to a position):
  • 1)An employee of an individual or an entity under a contract term with Pan Ocean; or
  • 2)A person who raised a complaint against Pan Ocean which is still pending.

Article 37 (Prohibition of Forming a Private Organization)

An employee shall not form a faction or a private organization on the grounds of kinship, religion, regional or academic ties.

Article 38 (Prohibition of Sexual Harassment and Sexual Assault)

An employee shall not sexually seduce another employee or make another employee feel sexually humiliated by doing any of the following subparagraphs :

• 1)Touching or making contact to certain body parts;
• 2)Making sexual joke or having obscene conversation;
• 3)Making sexual analogy or evaluation on the other party’s appearance;
• 4)Posting or showing pornographic picture, photo or video;
• 5)Forcing the other party to pour drink or dance at a staff dinner, etc.; or
• 6)Other acts causing sexual humiliation by social norms.

Chapter 8. Measures against Violation

Article 39 (Consultation on Violation)

• ①If an employee is not confident that whether he or she violated this Guide while performing his/her duties, he or she shall consult with the Ethical Management Department.
• ②The representative director shall take necessary measures including, but not limited to, installation of exclusive line, counselling office, etc. to facilitate consultation of paragraph 1.

Article 40 (Report and Confirmation of Violation)

• ①Anyone who should become aware that an employee violates this Guide may report such fact to the Ethical Management Department or the representative director.
• ②The person who files a report in accordance with paragraph 1 shall specify in the report the personal details of him/herself as well as of the violator including name, address, etc., and the details of violation.
• ③The Ethical Management Department shall confirm the violation reported under paragraph 1 and then report it to the representative director, attaching a vindication submitted by the employee concerned.

Article 41 (Protection of Whistleblowers)

• ①The representative director and the Ethical Management Department shall keep confidentiality of the reporter and the report details regarding a report under Article 40 and prevent any disadvantageous measures against the reporter by reason of having filed a report.
• ②Notwithstanding the above paragraph, if the reporter has been discriminated or disadvantaged, he/she may request for protection measure or remedy for disadvantage to the representative director or the Ethical Management Department, in which case the representative director or the Ethical Management Department shall take necessary measures.
• ③Where an illicit act of a reporter is found in connection with a report, the reporter may face reduced punishment or be exempt from the relevant punishment.
• ④Paragraph 1 and 3 shall apply mutatis mutandis to consultation regarding instructions that hinder fair performance of duties pursuant to Article 11.

Article 42 (Disposal of Unacceptable Money, Goods, etc.)

• ①If an employee has received money, goods, etc. against this Guide, he or she shall immediately return, the received money, goods, etc. or the exceeding part thereof to those who provided them, in which case the employee may request the Ethical Management Department for the cost incurred in returning the money, goods, etc. by submitting the evidential material.
• ②An employee shall immediately report the received money, goods, etc. to the Ethical Management Department in the event it is subject to loss, decay or deterioration, or in the event that the provider of it or his/her address is unknown, or in any other situations where it is difficult to return it to the provider.
• ③The Ethical Management Department, upon being reported under paragraph 2, shall handle the money, goods, etc. in accordance with the followings :
  • 1)Money, goods, etc. that has no economic value due to decay, deterioration, etc. shall be discarded;
  • 2)Money, goods, etc. the economic value of which may be lost due to decay, deterioration, etc. shall be donated to a social welfare facility, a public corporation, etc.
  • 3)In cases other than subparagraph 1 and 2, unless stipulated otherwise in a law, money, goods, etc. shall be donated to a social welfare facility, a public corporation, etc. by posting on the company website, etc.
  • 4)Otherwise instructed by the representative director.
• ④The Ethical Management Department shall keep record of the receiver, the provider, the money, goods, etc. provided, date and time of provision, the result of disposal regarding the money, goods, etc. handled under paragraph 3, and notify the related facts to the provider. Provided that, if the address of the provider is unknown, such notification may be omitted.

Chapter 9. Supplementary Rules

Article 43 (Education)

• ①The representative director shall provide a schedule for, and conduct, education of employees to guarantee their compliance with regulations regarding ethical management including anti-corruption rules, a pledge for ethical management, etc.
• ②The education under paragraph 1 shall be at least once a year; new employees shall be educated at the time of employment.

Article 44 (Inspection of Compliance)

• ①The Ethical Management Department shall regularly inspect whether this Guide is observed by the employees.
• ②Aside from the regular inspections under paragraph 1, the Ethical Management Department may conduct special inspection if it considers that the company is vulnerable for corruption, especially during vacation and holiday seasons.
• ③The Ethical Management Department shall report the result of inspections under paragraph 1 and 2 to the representative director.

Article 45 (Rewards and Disciplinary Action)

• ①The representative director may reward an employee who observes this Guide and contributes to establishment of ethical management by reflecting it in performance evaluation, etc.
• ②The representative director may take necessary measures including disciplinary actions against an employee who violates this Guide.
• ③The type, process, and effect of a disciplinary action under paragraph 2 shall be determined by the regulations of Pan Ocean Personnel Committee.

Article 46 (Operation of the Practice Guide)

• ①The representative director shall complement, develop, and practice this Guide depending on the organization’s development and change of environment.
• ②The representative director may determine necessary details for operation of this Guide.

Addendum

1. Enforcement Date

This Guide shall enter into force as of October 12th, 2015.

2. Interpretation of the Guide

Any ethical management issue not regulated in this Guide or should there be a difference in opinion regarding interpretation of a provision, the interpretation and decision of the Ethical Management Department shall prevail.

3. Relationship with Other Company Rules

This Guide, forming the basis of ethical management, shall prevail over other company rules.