Pan Ocean Co Ltd. – Council on Ethics

The Council on Ethics recommended on June 29, 2017, that Pan Ocean Co Ltd be placed under observation. Pan Ocean is a South Korean shipping company that owns and operates bulk carriers, container ships and tankers.
The Council rests its assessment on the fact that Pan Ocean has disposed of obsolete vessels by sending them to be broken up for scrap on the beaches of Bangladesh, a practice known as beaching, where working conditions are extremely poor. The process also causes severe environmental damage. The Council considers that companies which dispose of ships for breakup in this way can be said to contribute to serious human rights violations and severe environmental damage.
In its assessment of the likelihood that the company will in future contribute to such norm violations, the Council on Ethics has attached importance to the company’s assurance that it is willing in future to take the method of breakup into account as far as possible when making decisions on the sale of vessels for scrapping. Although the Council does not consider this to be a strongly binding pledge on the part of the company, it nevertheless perceives it as a positive indication of a change in future practice.
The Council will re-examine the grounds for observation if at the end of four years the company has not sent any ships for beaching, or before that time if the company issues a more binding pledge that it has ceased this practice. Should the company dispose of any more ships by means of beaching, the Council on Ethics will recommend that it be excluded from investment by the Government Pension Fund Global (GPFG).
Norges Bank made public its decision to place the company under observation on January 16, 2018.