Dominic Buckwell, general counsel and compliance head at global marine container leasing company Seaco, discussed key themes including anti-money laundering (AML), sanctions, and why the industry needs common environmental reporting standards.
Seaco, a customer of financial institutions and syndicated lenders in the business of supplying shipping and freight multinationals, must navigate compliance issues relating to both sectors.
Compliance is no longer a question of simply meeting legal obligations. It’s now just as much about demonstrating to customers that you meet their ethical and environmental standards, Buckwell explained.
Q: What is your role at Seaco?
A: I qualified as a barrister and then specialized in shipping litigation before joining Seaco in 2006. As general counsel, I deal with legal and compliance risks, insurance, and corporate governance. Seaco buys shipping containers and leases them for five or ten years to shipping companies to operate. We are a provider of equipment rather than a financial service provider so generally don’t have to comply with financial services regulations, but we do have to ensure that our containers are safe under applicable international treaty terms. All our containers are built to ISO Standards relating to whether they are standard, refrigerated, or tank containers. The manufacturers (mostly in mainland China) provide quality certificates, and we employ our own inspectors to ensure the quality is maintained.
Q: What are the main compliance issues?
A: In addition to ensuring that our containers are safe, our main compliance responsibilities are around competition law, anti-bribery, sanctions, human rights, health and safety, AML, whistleblowing, anti-slavery, and environmental standards. We have around 230 employees with larger offices based in Singapore, London, Hamburg, and Houston, plus smaller offices in Taiwan, Shanghai, Seoul, Tokyo, Mumbai, Dubai, Cape Town, Sweden, Paris, and Belgium. We also employ agents in Saudi Arabia, Brazil, Portugal, and Spain, so regulations around AML and sanctions are particularly important.
Many of our suppliers and customers also require us to demonstrate that we comply with rules that affect them–for example, we need to prove to our banks that we meet their obligations over sanctions and AML work. Most of our customers also have codes of ethics that they want us to sign up to. 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. We therefore adopted GE’s codes of ethics and standards and have used these ever since, updating them as appropriate.
Q: How does compliance with legal and ethical standards differ?
A: Twenty years ago, legal compliance issues were by far the most important concern, but now ethical compliance is paramount as a broader concept encapsulating, but going beyond, strict legal obligations. There’s a difference between saying, for example, that you abide by legal employment rules and saying that you commit to employing people ethically. This immediately involves doing more than the bare minimum. Not only have the legal standards in areas such as employment and environmental law risen, but companies really understand the need to be seen to have good corporate governance and to “do the right thing.” We need to ensure that all our staff 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 spot wrongdoing.
Q: How do environmental regulations affect you?
A: In the past, our main environmental concern was to ensure that our products were safe to use for carriage of potentially polluting or contaminating cargos, such as petroleum products or corrosive substances. Now we must look far more broadly at our environmental impact, 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 the paint coverings, and some of our steel is recycled.
The carbon cost of transporting containers is complex, since we own them, but our customers lease them and move them. We then sell them on to be re-purposed at the end of their leases, and they continue to be used for a very long time.
Apart from this, we employ people in offices, so our carbon footprint comes from a share of heating, water, etc, but it’s hard to get these details from most office landlords. We’re a niche sector–only about eight companies of any significance operate worldwide–so we’re pleased that our trade body, the Institute of International Container Lessors, is currently looking to draw up a standard for calculating carbon emissions.
Until then we are doing what we can; for example, we benchmarked our performance with sustainability platform EcoVadis, which gave us a silver designation, and we signed up to the United Nations Sustainable Development Goals. We’re doing this because it’s the right thing to do and because of supplier and customer expectations, not to comply with specific regulations. However, judging by the tenor of law firm seminars that we are now seeing, in future there are likely to be more legal cases brought against companies for not doing enough to combat climate change.
No comments yet