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					               The Earth Is Our Home
                   Social & Environmental Report 2003

Global Logistics
   Corporate Data                                (As of March 31, 2003)

   Nippon Yusen Kabushiki Kaisha (NYK)                                                                    Nature of Business
                                                                                                          NYK offers general logistics services centered on interna-
   Head Office: 3-2, Marunouchi 2-chome, Chiyoda-ku,                                                      tional marine transportation and cruise services. In collabo-
                      Tokyo 100-0005, Japan                                                               ration with Group land, sea, and air cargo transportation
   Date of commencement of business: October 1, 1885                                                      companies throughout the world, the Group offers inte-
   Capital: ¥88.5 billion                                                                                 grated logistics solutions.
   Consolidated subsidiaries: 375
   Affiliates by equity method: 29
   Number of employees: 18,016 (consolidated basis)
   Gross operating tonnage: Consolidated: 587 vessels,
                                        33.00 million kt (DWT)

       Revenues by Industry Segment                          Revenues                                                                            Operating Income
       (Consolidated Basis, FY2002)                          (Billion ¥)                                                                         (Billion ¥)
                           Real estate 1%
                               Others 6%

               services                                                                                                                               80

Shipping-related    4%


    services 3%










                                                                   0                                                                                   0
                                                                   FY      ’98           ’99           ’00           ’01           ’02                 FY      ’98           ’99           ’00           ’01           ’02

                                                                 Consolidated                      Non-consolidated                                  Consolidated                      Non-consolidated

   Cruise 2%
                                                             Net Income                                                                          Total Assets
                                                             (Billion ¥)                                                                         (Billion ¥)

                                                                  30                                                                               1,500





                                                                  20                                                                               1,000








                                                                  10                                                                                 500


                                                                   0                                                                                   0
                                                                   FY      ’98           ’99           ’00           ’01           ’02                 FY      ’98           ’99           ’00           ’01           ’02

                                                                 Consolidated                      Non-consolidated                                  Consolidated                      Non-consolidated
Editorial Policy                                                 Contents                                                                              1

• To give a broad overview of our environmental protection
                                                                                  1   Editorial Policy/Concerning This Report
 activities in marine transportation, we dealt with as many                       2   NYK Line Business Credo/Green Policy
 issues as possible in the NYK Social & Environmental                             3   Message from President

 Report 2002, explaining particular underlying factors and                        4   Corporate Social Responsibility

 the Company’s responses. In this year’s report, we have
                                                                                 6    Environmental Management Systems
 done our best to offer easy-to-read updates on all topics.                      8    Marine Transportation and Global Environment

• Two major aspects of environmental protection in the                          10    Environmental Action Plan
                                                                                12    Environmental Accounting
 marine transportation sector are safe operation to pre-

 vent accidents and sound, efficient fuel consumption to                        14 Safe Operation and Protection of Marine Environment
                                                                                      Safe Operation
 curb the emission of greenhouse gases. This year’s                                   NAV9000
 report focuses on detailing various efforts in these two                             Continuous Improvement
                                                                                      Questionnaire Sent to Shipowners and Ship-Management Companies
 areas.                                                                               Information Technology
                                                                                      Measuring Safety
• The Group operates more chartered vessels from other
                                                                                      Injury and Sickness Records
 companies than it does its own vessels. To ensure                                    Near-miss Information
                                                                                      Learning from Accidents
 absolutely safe operation, we have introduced our rigor-                             Security
 ous in-house operational safety standard NAV9000 and                                 Emergency Response Network
                                                                                      Key Crewmembers
 brought all NYK vessels, including chartered vessels,                                Environment-friendly Antifouling Paint on Ships’ Bottoms
 under its scope.                                                                     Introduction of Double-Hull Tankers
                                                                                      Ballast Water
• In 2002, NYK acquired ISO 14001 certification for all ves-                          NYK Total Bilge/Sludge Management System
 sels in operation, including chartered vessels, and the

                                                                                26 Protection of Atmosphere
 Head Office. Since then, we have continued to broaden                                Fuel Economy and Ecology Committee
                                                                                      Ship Performance Analysis System
 our environmental management systems so that by June
                                                                                      Underwater Cleaning and Propeller Polishing
 2003 they covered five branches in Japan, three inde-                                CO2 Emission Volumes
                                                                                      Optimized Route Setting
 pendently operated container terminals, and 30 overseas                              Fuel Additives
 business bases, centered on Europe, North America,                                   CFCs
                                                                                      Acid Rain
 and Asia. We will continue to make every effort to short-                            Fuel Pretreatment System
 en transportation distances and reduce the associated                                New Technologies
                                                                                      Initiatives in NYK Line (North America)—Street Turns
 environmental burden, focusing not only on marine trans-                             NYK’s Environmental Development in Eastern Europe (EERO)
 portation but also combined modes of inland transporta-                              Initiatives at Terminals (YTI)
                                                                                      Environmental Tips for the Office (Indonesia)
 tion, including trucks, barges, and railways.

                                                                   32           32 Environmental Initiatives in the Office

Concerning This Report
                                                                   33           33 Personnel and Environment
                                                                                36 Dialog with Society

Period covered: Fiscal 2002 (April 1, 2002-March 31, 2003)
                                                                   39           39 Progress in Environmental Protection Activities

Scope: The Company and certain Group companies,
        measures taken by them to reduce the environmen-
                                                                   40           40 ISO 14001 Certified Facilities

        tal impact of their transportation activities and ves-
        sels under operation, and community contributions
Sustainability Reporting Guidelines laid down by Global
Reporting Initiatives (GRI) are followed.

For further information on the Company and its safety
and environmental measures, please see:

                                                                 Social & Environmental Report 2002           Captain Eco (see page 35)
2   NYK Line Business Credo

     Since its foundation in 1885, Nippon Yusen Kaisha (NYK Line) has overcome various challenges, grown steadily,
     and become one of the world's leading shipping companies.
        In recognizing the importance of far-ranging trade and commerce as a basis for the development of the world's
     economy and cultures, we, NYK Line, have sought to offer safe, high-quality services as both a logistics mega-
     carrier and a cruise enterprise. We believe that we can best contribute to the growth of international society by
     complying with all relevant laws and conducting business in compliance with a code of social ethics. In support of
     this effort, we have developed the “NYK Line Business Credo” that follows.
     1. Mission to Society
        Conscious of our mission to society to offer a safe and high-quality service as a logistics mega-carrier and a cruise enterprise, we
        shall listen carefully to the wishes of our customers, satisfy their expectations and earn their trust, secure reasonable profits, com-
        ply with our shareholders' expectations, and contribute to the development of society.

     2. Safe Voyages and Global Environmental Protection
        We recognize that achieving safe passage for our ships is the most important task. We shall attempt to improve existing safety
        measures based on international safety standards and encourage the use of safe operating techniques. We further recognize that
        the oceans are precious natural assets, and shall endeavor to prevent marine pollution and preserve a favorable global environment.

     3. Observance of Laws and Regulations
        We are aware that all commercial enterprises can be termed society members, and as such, shall make it our principle to act fair-
        ly, observe all laws and regulations, and perform our business activities in compliance with a code of social ethics.

     4. Exclusion of Antisocial Activities
        We shall be resolutely opposed to antisocial people or organizations that threaten the order and/or safety of civil life.

     5. Information Disclosure and Communication with Society
        We shall work to disclose business information in an active, timely, and appropriate manner and to achieve broad and meaningful
        communication with society.

     6. Preservation of a Favorable Working Environment
        We shall respect the personalities and individuality of our company staff and endeavor to maintain a favorable working environment.

    Green Policy

     At NYK Group, we:

     1. Adopt responsible practices with due regard to the environ-             5. Endeavor to avoid the purchase of those materials that cause
        mental impacts of our corporate activities. We set and con-                significant environmental impacts, and give priority to environ-
        stantly review objectives and targets for achieving our goal.              mentally friendly materials and technologies, when ordering
                                                                                   vessels or purchasing and procuring necessary resources.
     2. Seek not only to be in compliance with environmental regula-
        tions, but also to go beyond regulatory compliance by improv-           6. Endeavor to raise employee environmental awareness
        ing our environmental performance, and preventing pollution.               through programs of education, and work to ensure that, in
                                                                                   line with NYK Green Policy, all our employees address envi-
     3. Commit ourselves to perform safe operation of all our
                                                                                   ronmental challenges.
        transportation modes, including not alone our sea-going
        vessels but also our waterfront/inland transportation servic-           7. Make wide-ranging social contributions in close partnership
        es such as terminals and warehouses.                                       with local communities by disclosing environmental informa-
                                                                                   tion and supporting environmental conservation initiatives.
     4. Seek to reduce environmental loads by efficiently using
        resources, encouraging material recycling, and minimizing
        emission of substances leading to conditions conducive to
        global warming and ozone depletion.
Message from President                                                                                               3

“Globally Dedicated” and “Locally Focused”
                  Having established an in-house Global Environment Committee in 1990, the Group, in
                  March 2002, created a new environmental management system based on Groupwide
                  efforts to enhance its safety and environmental record and acquired ISO 14001 certifica-
                  tion. Then, in July 2002, we published our first social and environmental report, The Earth
                  Is Our Home, to provide updates on NYK’s community and environmental initiatives and
                  promote dialog between the Company and outside parties. And, in May 2003, we also
                  published our new medium-to long-term group management vision Forward 120. Forward
                  120, published in advance of the 120th anniversary of our commencement of business on
                  October 1, 2005, lays down the general lines along which the Group’s environmental poli-
                  cy should be moving.
                    One of what we call the “new engines” driving Forward 120 is NYK’s strength “in the
                  field” and “on the site,” a concept summarized in the key phrases “Globally Dedicated”
                  and “Locally Focused.” In the belief that it is important in environmental activities to “think
                  on a global scale and act from a local base,” we are determined to meet the goals of our
                  Environmental Action Plan (see p.10) in every detail.
                    Since our commencement of business in 1885, we have devoted all of our efforts to the
                  transportation of cargo of all kinds, as well as passengers, which has in turn promoted a cul-
                  tural exchange of sorts. With the oceans as the stage for our business activities, we have a
                  keen appreciation of the importance of continuing to protect the global marine environment.
                    With our activities spreading from ocean to land operations, and inland and inland-water-
                  way-based transportation such as trucks, trains, and barges, as well as the operation of
                  container terminals, coming under the scope of ISO 14001 standards, we have put in place
                  solid frameworks for assuring a better environment and set up regional hubs for safe opera-
                  tion and environmental protection. In the future, we will integrate our environmental activities
                  in a tangible way with a single policy and management system, covering all core businesses
                  in all regions including marine transportation, container terminals, and cruise ships. At the
                  same time, we recognize the importance of safe operations and environmental protection
                  activities in realizing better everyday administration while pursuing the Globally Dedicated
                  and Locally Focused strategy. Measures to ensure safe operation by avoiding environmen-
                  tal risk, and efforts and activities to improve environmental efficiency are not temporary.
                  They must contribute to sustainable development on a global scale and must also be eco-
                  nomically viable corporate activities. To ensure that NYK will continue to meet the expecta-
                  tions of people around the world, each and every one of our employees in whatever region
                  will work toward these goals with resolution and pride, and the Company will positively
                  address all its environmental, economic, and community responsibilities.
                    Based on strict adherence to the Action Plan fixing our position by star sight (Check),
                  NYK will sail to a beautiful blue earth, the home port beyond the horizon towards which we
                  and our customers and partners around the world are sailing.

                  June 2003

                  Takao Kusakari, President
4   Corporate Social Responsibility

                                         Governments and
                                                              Corporate Mission
                                         local communities    As a result of overemphasis on purely economic factors in recent years, we have
                                                              seen various scandals that have compromised corporate accounting. We at NYK
     NGOs                                         Business
                                                  partners    believe that it is of the utmost importance to be trusted as a corporation, includ-
    and NPOs
                                                              ing in ethical matters, as we build our business in all regions of the world.
                                                                  Corporate social responsibility also means adhering to appropriate employ-
        Financial             NYK
       institutions                        and investors
                                                              ment practices and consideration of the working environment. To fulfill our obliga-
                                                              tions in these areas, we are working to improve corporate governance, based on
                                                              a belief that this lies in fully observing the law, providing full disclosure, and
                                                              explaining our actions in all our daily activities.

                                                              Stakeholder Relations
                                                              NYK is committed to expanding bi-directional communication with a broad range
                                                              of stakeholders.
                                                                    Stakeholder                        What NYK provides to stakeholders
                                                               Customers              Assurance of safety and flexible transportation services
                                                               Governments            Continued observance of government laws and regulations while
                                                                                      conducting corporate activities
                                                               Business partners      Encouragement of fair trading in line with laws and regulations and of
                                                                                      environmental awareness on the part of business partners
                                                               Shareholders           Maximization of shareholder value and pursuit of disclosure in such a
                                                                and investors         way as to earn their trust
                                                               Media                  Accurate and fast disclosure in all media
                                                               NGOs and NPOs          Disclosure of information to NGOs and NPOs and participation in non-
                                                                                      profit activities
                                                               Local communities      Provision of opportunitiess for furthering understanding of the marine
                    General                                                           transportation business at the local community level
                   Meeting of
                  Shareholders                                 Employees              A top-quality working environment and continued employee education

                                                              Corporate Governance
                                                              Recognizing our social mission to provide the safe, top-quality services expected
                       Board of
                                               Board of       of marine transportation companies, NYK, while working to maximize shareholder
                       Directors                Auditors      profits, is committed to operating its business in a legal, fair, and efficient way
                                                              without breach of trust at the Board of Directors level.
                                                                To improve corporate governance, NYK overhauled its management structure
                    Executive                                 in April 2002 based on a belief in the need to (1) keep management and execu-
                  Committee for
                    Strategic                                 tive functions together and (2) make decision making faster and more efficient.
                                                              The following are NYK’s current frameworks and significant policies for corporate
                                                              Board of Directors
                                               NYK Group
                      Committee                Conference     The Board of Directors is a body under the Commercial Code in which various functions are
                      of Directors            of Presidents
                                                              vested, including deciding on legal matters, setting basic management policy and strategy,
                                                              deliberating and approving budgets, and supervising administrative actions.

                                                              Executive Committee for Strategic Management
                                                              The Executive Committee for Strategic Management is composed of members of the
    Departments of                   Departments of
     Management                        Operation              Board of Directors including and above the senior managing director level and is charged
                                                              with deliberating Group strategy and other essential strategy issues, as well as laying down
                                                              basic policy lines for the Board of Directors.

                                                              Committee of Directors
                                                              The Committee of Directors meets once a week to deliberate on matters referred by the
                                                              Board of Directors. It is subject to the resolutions and supervision of the Board of Directors
                                                              and is chiefly responsible for carrying out Company administration.

                                                              NYK Group Conference of Presidents
Results of In-house Compliance
Questionnaire                                                 This conference consists of the presidents of the strategically most important Group com-
(Carried out October 2002. 194 valid replies.)                panies within NYK and members of the Executive Committee for Strategic Management.
                                                                 The conference works to improve Group management transparency by creating mecha-
                                                              nisms for strategic decision making when a unified Groupwide response is required.
Are you aware
that NYK has                      Yes (194) 100%              Board of Corporate Auditors
a Business Credo?
                                                              At the statutory shareholders’ general meeting in June 2002, four auditors were appointed,
                                                              two of whom were drawn from outside the Company in anticipation of the revision of the
                                                              Commercial Code. This has strengthened and enhanced the independence of NYK’s audit-
                               Hardly any                     ing functions.
                                 (15) 8% Remember
                                          it well
Do you remember                           (35) 18%            Compliance
the content of
the Business                   Some of it (144) 74%
                                                              In line with the NYK Line Business Credo, and to strengthen corporate gover-
Credo?                                                        nance, the Company is committed to compliance with laws and regulations, cor-
                                                              porate rules, and ethical standards as a management priority. The following are
                                                              details of recent initiatives in this field.
                                    (7) 4%
                                                              Assessment of Compliance
Do you know that                                              During approximately six weeks in September and October 2002, NYK conducted an
NYK has a Code                                                assessment of its compliance with laws and regulations, corporate rules, and ethical stan-
of Conduct?                        Yes (187) 96%
                                                              dards, compiling them in a report. Tallies were also prepared for individual Group entities,
                                                              and questionnaires were sent to employees.

                                                              Establishment of Compliance Committee
                             Hardly any
                              (26) 14%       Remember         In October 2002, the existing corporate conduct and ethics committee was renamed the
                                             it well (33)
                                                              Compliance Committee, and NYK President Takao Kusakari was appointed chairman. The
Do you remember
                                                              committee meets on a regular basis.
the content of the
                                      Some of it
Code of Conduct?                      (132) 69%               Establishment of Post of Chief Compliance Officer
                                                              In November 2002, NYK established the post of Chief Compliance Officer. The appointee is
                                                              Executive Vice President Tadatoshi Mamiya.
                              Efficiency and Legal and Code   Establishment of Compliance Chamber
Which of the      profitability are the of Conduct
following best       most important observance is             In November 2002, a Compliance Chamber was set up within the General Affairs Group as
                        things (3) 2% the most impor-
describes your                           tant thing (5) 3%    an administrative center for compliance-related matters.
judgment standards
                         Efficiency and profitability are
in performing           important, but it goes without        Compilation of Compliance Manual
administrative           saying that laws and regula-
                          tions and ethical standards
                                                              In December 2002, a Compliance Manual was written into the database of the NYK
                               must be observed (186) 95%     intranet, enabling easy reference in daily administrative activities. Compliance issues are
                                                              also addressed in in-house training.

                                                              Establishment of General and Legal Affairs Group
                                                              In January 2003, the General Affairs Group and Law and Insurance Group were integrated
                                                              into the General and Legal Affairs Group to strengthen NYK’s legal functions.

                                                              NYK Line Business Credo
                                                              NYK’s Corporate Ethics Charter is explained in the NYK Line Business Credo laid down in
The results of the questionnaire sent to employees
show a high degree of awareness of the Business               Code of Conduct
Credo and Code of Conduct, as well as a thorough
understanding of their contents. In the conduct of
                                                              The Ethical Standards were laid down in 1999 as a basic set of parameters that must be
administrative duties, laws and regulations were seen         observed by NYK’s directors, executive officers, and employees.
to be strictly observed. To further improve perform-
ance, NYK is prioritizing deployment of superiors as             In January 2003, four years after their establishment, the standards were revised and all
role models and education and training programs.
   Makoto Sugiyama, Compliance Chamber                        directors, executive officers, and employees were required to indicate their acceptance of
                                                              the new terms by signing a copy sent to each individual.

                                                              Strengthening the Commitment of Group Companies
                                                              Group companies in Japan and overseas units are also required to strengthen their com-
                                                              mitment to compliance through appraisal, adoption of the Corporate Ethics Charter and
                                                              Ethical Standards, and other measures. Conferences are also organized.
                                                                NYK will do all it can to continuously ensure compliance in all activities.
Code of Conduct brought in line with
conditions throughout the world
6   Environmental Management Systems
                                                          Environmental Management Systems
                                                          As a general logistics enterprise, NYK regards the protection of the global envi-
                                                          ronment as a management priority. The Company’s environmental stance is
                                                          expressed in a Green Policy based on the NYK Line Business Credo.
                                                              In fiscal 2002, as part of a drive to globalize environmental activities, NYK
                                                          acquired ISO 14001 certification for branches and independent container termi-
                                                          nals in Japan in the first half of the fiscal year and approximately 30 operations in
                                                          North America, Europe, and Asia in the second half. NYK has already acquired
                                                          ISO 14001 certification for all transportation services offered by its fleets of
                                                          approximately 500 vessels. By acquiring ISO 14001 certification for overseas
                                                          operations, we have created a framework for environmental protection activities
                                                          not only for ship and container terminal operations but also for land and inland
                                                          waterway-based transportation such as trucks, trains, and barges. In tandem
                                                          with this, the NYK Green Policy has been revised to communicate our commit-
    ISO 14001 certificate (issued by                      ment to environmental protection in simpler terms.
    Lloyd’s Register QA)                                      As a global logistics company with a very broad range of activities, we aim to
                                                          create, in the current fiscal year, a robust basis for environmental protection activ-
                                                          ities in China, Australia, and Latin America. We also plan to aggressively develop
                                                          environmental management activities not only in shipping and other conventional
                                                          transportation services but also in global logistics agency services in fields such
                                                          as pooled delivery on behalf of customers, packaging, storage, and selection of
                                                          optimal transportation modes.

    Safety and Environmental Organization

            Safety and Environmental Management Committee
                              (established 2001,                                                          NYK Line
                  chaired by NYK President Takao Kusakari)                                              Business Credo
        Responsible for drawing up policy in safety and environmental
        issues, monitoring performance, and promotional activities                                        Green Policy
                                                                                                   Management Programs
                                                    Executive Chief of
                                               Environmental Management                 Policies and planning for each division and satellite
         Safety and Environmental             Koji Usami, Managing Director               NAV9000 (Fleet Management System)
        Management Headquarters                                                              Safety Management System (SMS)
        Safety and Environmental                   Executive Office                       Safety and environmental organization
           Steering Committee                  Safety and Environmental
                                                 Management Group                            Subcommittees for vessel types
                                                    Planning Group

                                                                                                         Dry Bulk Carriers
                           Satellite Site
                  Safety and Environmental
                   Management Committee                                                                     Car Carriers
                (Affiliates, overseas units, etc.)
                                                                                                     Tankers and Gas Carriers

                       Satellite Branch                                                                  Passenger Ships

     Fuel Economy and Ecology Committee (established 1977)
     General Office Secretariat: Petroleum Group, Technical Group
                                                                                        Vessels in
     Draw up various measures to reduce fuel consumption,                                                    Officer in Charge of Operation
     encourage their adoption on a Groupwide basis, and monitor

                                                       Robust Environmental Auditing System
                                                       To ensure effective implementation of environmental initiatives, environmental audit-
                                                       ing is essential for gaining an understanding of progress in the implementation of
                                                       NYK’s Action Plan and of employee attitudes toward environmental issues and for
                                                       taking corrective action where necessary. Using a two-tier system with international
                                                       corporate auditing carried out by the NYK Head Office in Tokyo and regional corpo-
                                                       rate auditing undertaken at bases in North America, Europe, and Asia, NYK carries
                                                       out an environmental audit at every business location at least once a year.
Environmental auditing in NYK (North
America)                                                    Under the system, audit results are reported to the senior-level Safety and
                                                       Environmental Management Committee, and appropriate corrective actions are
                                                       then taken. Deliberations and annual surveillance are also carried out by external
                                                       entities under the provisions of ISO 14001.

                                                       Global Environmental Management Organizations
                                                       Satellite Sites, which are headquarters for the coordination of environmental pro-
                                                       tection activities in every region of North America, Europe, and Asia have been
                                                       set up in Secaucus (New Jersey), London, and Singapore. Under the system,
                                                       Safety and Environmental Management Committees are set up at each Satellite
                                                       Site, and in tandem with management reviews and improvement of environmen-
                                                       tal activities at the Satellite Branches (SB) under each Satellite Site, reports are
                                                       made to the Safety and Environmental Management Committee headquarters in
                                                       Tokyo under NYK President Takao Kusakari.

Executive Chief of Environmental             Chief of Environmental Management
Management, Koji Usami, Managing Director    (North America), Stan Portlock

 Global Environmental Management Organization                                                    Global Environmental Communication Flow
                                                                                                              (Head Office)

    SEMC (Europe)                                                                                                                       SEMC
                                                              SEMC (North                SEMC (Europe)        SEMC (Asia)
                                                                                                                                   (North America)
                                               SEMC             America)
                                            (Head Office)
                     SEMC (Asia)
                                                                                                 SB                   SB                    SB

 SEMC: Safety and Environmental Management Committee

Chief of Environmental                       Chief of Environmental
Management (Europe), Hans de Vink            Management (Asia), Lawrence Liaw
8   Marine Transportation and Global Environment
    Fleet Remote Monitoring System (FROM)
    (P. 19)
    The Fleet Remote Monitoring System (FROM)
    supports safety and sound navigation by auto-
    matically pinpointing the location of vessels at sea
    using satellites.

    Propeller polishing (P. 27)
    Propeller polishing makes smoother
    navigation possible.

    NYK total bilge/sludge management                      Fuel Economy and Ecology
    system (P. 25)                                         Committee initiatives on CO2, NOx,
                                                           and SOx (P. 26)
    NYK is working to prevent marine pollu-
    tion by not only adhering to laws and                  To micromanage vessels during naviga-
    regulations but also additionally imple-               tion, information about daily weather, sea
    menting independently developed sys-                   conditions, speed, and equipment oper-
    tems.                                                  ation are fed into a database to improve     Ballast water (P. 24)
                                                           efficiency of fuel consumption and navi-     In addition to ensuring that discharge
                                                           gation.                                      and loading of ballast water is in line with
                                                                                                        laws and regulations, NYK is researching
                                                                                                        and developing water-processing sys-
    Double-hull tankers (P. 23)
                                                                                                        tems for ballast water.
    In line with measures to prevent
    marine pollution from large tankers,
    NYK is aggressively double-hulling
    its vessels.

Ensuring safe operations                      Although CO2 emissions cannot be avoided because our vessels use heavy fuel
   NAV9000 for safer operation (P. 14)        oil, we are working to improve fuel efficiency. We consider it our mission to fur-
   Making operations as safe as possi-
                                              ther cut fuel consumption by reducing consumption in volume terms per trans-
   ble in every way is a management pri-
   ority at NYK. We continue to subject       portation unit in our marine operations and by making use, where appropriate, of
   all our fleets, including chartered ves-   environment-friendly transportation modes.
   sels, to the independently developed,
   standard fleet management protocol,          Another important aspect of assuring safety in marine transportation is mini-
   NAV9000.                                   mizing marine pollution caused by accidents and similar factors; NYK is focusing
   Setting up emergency response              efforts on accident prevention.
   network, and training (P. 21)
   The NYK Contingency Plan for acci-           On the following pages is an explanation of measures we are taking to sub-
   dents covers all its operations world-     stantially reduce marine and atmospheric pollution.
   wide. Training programs based on
   the plan are carried out.

Dealing with chlorofluorocarbons
(CFCs) (P. 28)
NYK is substituting CFC-12, which dam-
ages the ozone layer, with other sub-

Coating for ship bottoms (P. 23)
NYK is adopting environment-friendly
tributyltin (TBT)-free antifouling paint.
10   Environmental Action Plan

          Green Policy                          Aspect                             Fiscal 2002 tasks and targets                     Fiscal 2002 achievements

      1. Ongoing reforms      •Environmental Management Systems             •Expand the scope of EMS to domestic            •Expanded scope of EMS to five domestic
                               (EMS)                                         branch offices (including container termi-      branch offices and three NYK terminals
                                                                             nal operations) and overseas units             •Expanded scope of EMS to 30 overseas
                                                                                                                             bases centered on Europe, the Americas,
                                                                                                                             and Asia
      2. Observing laws       •Voluntary standards that are stricter than   •Audits of 500 vessels and 20 companies         •Audits of 469 vessels and 17 corpora-
         and regulations       laws and regulations                          per year                                        tions carried out
                              •Observance of NAV9000 standards
      3. Ensuring safe        •Reduction in number of ship accidents        •Reduction of downtime affecting vessels        •Downtime reduced to 12.2 hours per ship
         operation             during navigation                             in operation to 10.0 hours per ship             (according to analysis by Safety and
                                                                                                                             Environmental Management Committee)

                              •Creation of global contingency network       •With global network mostly completed,          •Drafted and distributed contingency plan
                                                                             set up frameworks in Far East and               for Far East and Central and South
                                                                             Central and South America                       America
      4.1 Protection of       •Global warming/acid rain                     •Ongoing fuel consumption reduction             •Developed system for assessment and
          atmosphere                                                         activities                                      analysis of volumes of fuel consumed
          and ocean
          environment                                                       •Consider adoption of low sulfur diesel oil     •Completed guidelines for carrying LSDO
                                                                             (LSDO)                                          in car carriers and container ships

                              •Ozone layer depletion                        •Continue efforts to replace all refrigerated   •Replacement of CFC R-12 refrigerated
                                                                             containers using CFC R-12 cooling units         containers 90% complete by end of fiscal
                                                                             (NYK has a total of approximately 14,000        2002
                                                                             refrigerated containers) by 2004
                              •Ship bottom coating                          •Through early adoption of non-TBT (non-        •Target 65% achieved
                                                                             organic tin) paint, NYK plans to coat
                                                                             another 20 vessels in 2003 (bringing the
                                                                             total from 56% to 67% of all vessels)
      4.2 Use of              •Adoption of double-hull tankers              •Double-hull three vessels, after making        •Double-hulling of three vessels completed
          environment-                                                       preparations since 1996
          friendly            •Adoption of NYK total bilge/sludge           •Ongoing implementation                         •Adoption in all newly built vessels
      4.2 technologies         management system
      4.3 Environmental                                                     •Zero increase in amounts of water, elec-       •Reduced consumption of water, elec-
          measures for the                                                   tricity, and paper consumed                     tricity, and copier paper
          office                                                            •Rigorous separation of garbage                 •Rigorous garbage separation promoted
                                                                                                                             through campaigns, etc.
                                                                                                                            •Launched system for reusing paper
                                                                                                                             scraps from shredders
      5. Environmental        •Education of employees                       •Education for new employees (EMS)              •More employees brought under EMS, 610
         education                                                          •Simultaneous education of affected new          employees dispatched to overseas semi-
                                                                             employees                                       nars and other functions in 34 outings
                                                                            •Disseminate information via LAN                •Environmental questionnaire survey
                                                                            •Solicit environment-preservation ideas          carried out
                                                                                                                            •Campaigns extended to overseas bases,
                                                                                                                             including broad solicitation of proposals,
                                                                                                                             including from families of employees
      6. Disclosure                                                         •Issue of NYK Social & Environmental            •Published report in Japanese and English
                                                                             Report                                         •Used channels in addition to the NYK and
                                                                            •Develop environmental disclosure on Web         Ministry of the Environment Web sites
      7. Community activi-    •Proposed establishment of environmental      •To promote environmental awareness,            •Rigorous measures undertaken to
         ties                  incentive system                              make approaches to marine industry              achieve this goal (plans laid to establish
                                                                             groups and the government through the           preparatory committee)
                                                                             Japanese Shipowners’ Association and
                                                                             other bodies
                              •Community contribution                       •Hold environmental seminar in the NYK          •Staged seminar for elementary school
                                                                             Maritime Museum                                 children
                                                                            •Commendations for partner companies            •Commendations awarded to three com-
                                                                             that show rigorous environmental aware-         panies in light of their NAV9000 activities
                                                                             ness                                           •Afforestation carried out in Australia
                                                                            •Participation in afforestation project

     Note: Self-assessment:   = target achieved;     = target at least 70% achieved; x = target less than 70% achieved

             Page                    Fiscal 2003 tasks and targets                              Medium-term targets (after three years)
             P. 6    •In addition to remaining bases in the three core world         •Introduction of EMS in all core business areas (containers,
                      regions, acquisition of ISO 14001 certification for bases in    logistics, car carriers, bulk and energy carriers, passenger
                      Australia and China and for logistics, terminals, and ship-     ships, and harbor management)
                      ping management operations

             P. 14   •Draft new standards based on accident and near-miss data       •Draft new standards based on accident and near-miss data
                      as well as customer and other input                             as well as customer and other input

             P. 16   •Reduce downtime on vessels in operation to 10.0 hours          •Set new safe navigation benchmarks to replace downtime
                      per vessel                                                      statistics
                     •Develop a targeting method to achieve maximum benefits         •Establish targeting methods
                      in NAV9000 audit and reform activities                         •Extend NAV9000 activities around the world (global deploy-
                                                                                      ment of auditors, etc.)
             P. 20   •Expand contingency networks and strengthen training pro-       •Create international security network
                      grams to accommodate greater subdivision of Group com-
                      panies, etc.
             P. 26   •Introduction of automatic entry system for ship operation      •Introduction on all vessel types of automatic input system
                      data (container ships, car carriers, and VLCCs)                 for ship operational data (container ships, car carriers,
                                                                                      VLCCs, LPG carriers, and bulk carriers)
             P. 28   •Stage campaign to reduce volumes of ship ballast water         •Introduction of high-performance fuel pretreatment system
                      (reduce fuel consumption by lowering volumes of waste-          (sludge reduction, improved fuel consumption)
                      water)                                                         •Improve reliability through hardware and software improve-
                     •Research methods and onboard experiments for compiling          ments in energy-saving equipment
                      and analyzing emissions data for CO2, NOX, and SOX             •Expand range of vessels using Low Sulfur Marine Diesel Oil
                                                                                     •Enhance fuel additives and expand range of ships in which
                                                                                      they are used, to reduce CO2, NOX, and SOX, and particu-
                                                                                      late matter
                                                                                     •Develop a smoke-suppressing agent for all kinds of fuel oil
                                                                                      and expand the number of vessels in which it is used
                                                                                     •Use of electronically controlled main engines to reduce NOX
             P. 28   •Use of R-404a or R-134a as coolant in ship air-conditioning    •Conversion of 80% of refrigerated containers to HFC R-
                      and cooling systems                                             134a
                     •Complete replacement of refrigerated containers using CFC
             P. 23   •70% of vessels in operation TBT-free; 92% TBT-free in sur-     •In addition to increasing the number of TBT-free vessels in
                      face painting                                                   operation, raise the fiscal 2003 target of 92% to 100%

             P. 23   •60% completion of double-hulling of large tankers              •Compile plan for double-hulling 80% of vessels by fiscal
             P. 25   •Ongoing use in all newly built vessels                         •Ongoing use in all newly built vessels

             P. 32   •Zero increase in consumption of water, electricity, and        •Zero increase in consumption of water, electricity, and
                      paper                                                           paper
                     •Rigorous garbage separation                                    •Rigorous garbage separation

             P. 34   •Extend education programs to new employee groups (new          •Set up independent, needs-oriented regional training sys-
                      employees, staff of business bases brought under said pro-      tems centered on SEMCs of overseas bases (Europe, the
                      grams)                                                          Americas, Asia, China, and Australia)
                     •Disseminate information to Group companies through
                      Group magazine, etc.
             P. 35   •Develop e-learning system
                     •Solicit environment-protection ideas

             P. 1    •Dialog with stakeholders through NYK Social &                  •Suitably timed disclosure of information to reflect demands
                      Environmental report, Web site, and staging of seminars         of changing times

                     •To promote awareness of the environment, make                  •Create common methods of carrying out community initia-
                      approaches to marine industry and government through            tives through information exchange with overseas bases
                      groups such as Japan Shipping Exchange, Inc., and
                      Japanese Shipowners’ Association
             P. 36
                     •Hold environmental seminars at the NYK Maritime Museum         •Stage environmental seminars at overseas bases
                     •Commendations for partner companies that show environ-         •Enhance commendation system at overseas bases
                      mental awareness
12   Environmental Accounting
                                                                 The basic purpose of NYK’s environmental accounting is the enhancement of
                                                                 environmental measures during the course of business activities through an
                                                                 accurate assessment and continual adjustment of the costs necessary for envi-
                                                                 ronmental protection. In our environmental accounting,
                                                                 1. Classification of costs and results of all kinds of environmental protection activity
                                                                     is made in line with the Ministry of the Environment’s Environmental Accounting
                                                                     Guidelines (2002), as well as classification by NYK in-house standards;
                                                                 2. Investments in environmental protection are not carried over, but are recorded
                                                                     in a single fiscal year;
                                                                 3. Costs incurred through observance of government laws and regulations are not
                                                                    recorded as environmental costs; only the costs of voluntary environmental protec-
                                                                    tion activities are recorded. Results are recorded to the extent that their impact can
                                                                    be quantified;
                                                                 4. Personnel expenses refer to expenses related to staff whose positions are
                                                                     exclusively in environmental, quality assurance, or safety areas. Personnel
                                                                     expenses for staff holding concurrent positions are not included; and
                                                                 5. The main items covered in fiscal 2002 were NYK’s head offices, main branch-
                                                                     es in Japan, terminals, vessels in operation, and associated administration; we
                                                                     plan to expand the scope of environmental accounting in line with the expan-
                                                                     sion of our environmental protection activities.

     Classification by NYK in-house standards
                                                                                                                                         Cost of environmental protection
           Green Policy                   Objective                                            Item                                                           Thousands of
                                                                                                                                        Millions of yen
                                                                                                                                                           U.S. dollars (Note 8)
      1. Continuous              Continuous                     Installation and operation of EMS and ISO certification (includes          ¥0,111               $00,923
         development             development of EMS             personnel costs)
      2. Action taken in         Restorative work in            Restorative work in response to marine pollution                                  0                     0
         observance of laws      response to environ-
         and regulations         mental degradation
      3. Measures to assure      Reduction of accidents         NAV9000 and other safety activities (including personnel                       410                 3,411
         safe operation          and other incidents            expenses)
      4. Protect atmos-          Prevent warming of             Appropriate navigation                                                           0                     0
         phere and ocean         the atmosphere (CO2            Use of fuel additives                                                          340                 2,829
         environment and
         save resources
                                 reduction)                     Underwater cleaning
                                                                Propeller polishing     }                                                       17                   141
                                                                Ship-bottom coating (Note 1)                                                   202                 1,681
                                 Prevent marine pollution       Application of anticorrosion paint on bottom panels of cargo tanks              75                   624
                                 Prevent damage to              Substitution of refrigerated containers (Note 2)                                 0                     0
                                 the ozone layer                Ship air-conditioning and cooling systems (Note 3)                              12                   100
                                 Save resources                 Use of water-saving faucets (water-saving)                                       1                     8
                                                                Installation of large shredders and collection boxes (Note 4)
                                                                Use of solar batteries at Company facilities
                                                                Green procurement
      5. Use of                  Protect ocean environment      NYK bilge system                                                               112                   932
         environment-            Reduce environmental load      Use of exhaust heat from engines
                                                                Use of propeller shaft generator
                                                                Installation of propulsion-assistance devices
                                                                                                                }(Note 5)
                                                                                                                                               140                 1,165
                            R&D expenses                        Research into solar and wind power systems for ships, etc. (Note 6)             22                   183
      6. Employee education Environmental protection            Expenses for external training and environmental campaigns                       5                    42
      7. Community          Public relations                    Expenses for compilation of environmental reports                               16                   133
         activities         Community contribution              Operation of NYK Maritime Museum in Yokohama                                   80                   666
                                                                Total                                                                      ¥1,589               $13,220
     Notes: 1. Sandblasting of ship bottoms was undertaken for environment-friendly repainting. This move also contributes to the prevention of marine pollution by TBT (P. 23).
     Notes: 2. In cooling units, NYK is steadily substituting HFC-134a, but as this is considered a conventional replacement operation, it is not recorded in environmen-
               tal accounting.
     Notes: 3. The environment-friendly HFC-based compound coolant R-404a has been adopted in place of HCFC-22 in ship air-conditioning and cooling systems.
     Notes: 4. Depending on the time of machinery installation, cost benefits will be recorded in environmental accounting for fiscal 2003.
     Notes: 5. Because it is difficult to quantify results, these are not recorded under investments, although they are recorded under investments and costs.
     Notes: 6. No results have yet emerged as they are still under development.
     Notes: 7. Because sums are rounded up to the nearest thousand, totals may show discrepancies when itemized.
     Notes: 8. The dollar amounts represent the arithmetical results of translating yen to dollars using the exchange rate prevailing at March 31, 2003, which was
               ¥120.20 to US$1.

                                                             Activities in Fiscal 2002
                                                             As the chart below comparing environmental protection costs and results per fis-
                                                             cal year shows, environmental protection costs totaled ¥1,589 million, an 8.3%
                                                             reduction from the previous fiscal year. The increase in expenses from the instal-
                                                             lation of large shredders and solar batteries was more than offset by changes
                                                             made to vessels in operation in fiscal 2002 that reduced the need for the installa-
                                                             tion of propulsion-assistance devices, which have high unit costs.
                                                                Results from measures to protect the atmospheric and marine environments,
                                                             energy-saving measures, and use of environment-friendly technologies were
                                                             approximately the same as in the previous fiscal year. Expenses for safety pro-
                                                             motion activities declined as a result of a change in the method for calculation of
                                                             the presumed benefits from such activities. In the previous fiscal year, the year of
                                                             commencement of such activities, 1996, was taken as the base year for calcula-
                                                             tions, but because the accident rate has fallen significantly, reflecting the success
                                                             of initiatives over recent years, the current fiscal year is compared with the previ-
                                                             ous fiscal year (for reference, the figure compared with fiscal 1996 is ¥5,016 mil-

Comparison of all costs and results relating to environmental activities, by fiscal year
                                                                                 Millions of yen                                              Thousands of U.S. dollars
                                                             Fiscal 2001                                   Fiscal 2002                                 Fiscal 2002
                                             Cost of environ-                            Cost of environ-                               Cost of environ-
                                                                           Results                                       Results                                     Results
                                             mental protection                           mental protection                              mental protection
 Reduction in accident rate due to
 safety-promotion activities                      ¥0,488                   ¥4,848              ¥0,521                    ¥0,168               $4,335                 $01,398
 Protection of atmospheric and marine
 environment, energy-saving measures,
 use of environment-friendly technologies           1,245                   1,722                  1,068                  1,590                8,885                  13,228
Note: The dollar amounts represent the arithmetical results of translating yen to dollars using the exchange rate prevailing at March 31, 2003, which was ¥120.20
      to US$1.

Classification according to Ministry of Environment Guidelines
                                                                      Environmental Protection Costs
                                                                                                                     Millions of yen             Thousands of U.S. dollars
                                                                                                               Investment          Expenses      Investment           Expenses
 (1) Costs within NYK business activities
     1. Pollution prevention                                                                                     ¥187               ¥0,000         $1,556             $00,000
     2. Protection of global environment                                                                          152                  559          1,265               4,651
     3. Closed-loop resource recycling                                                                             47                    0            391                   0
 (2) Upstream and downstream costs
     Green procurement                                                                                               0                   0                0                    0
 (3) Costs of management activities
     1. Employee education                                                                                           0                   5                0                42
     2. Installation and operation of EMS                                                                            0                 105                0               874
     3. Expenses for environmental protection organizations (including personnel costs)                              0                 432                0             3,594
 (4) Costs of research and development
     Reduction of environmental load                                                                                 0                 22                 0               183
 (5) Costs of community activities
     Social contribution activities                                                                                  0                 80                 0               665
 (6) Costs of responding to environmental degradation                                                                0                   0                0                    0
                                                Total                                                            ¥386               ¥1,203         $3,211             $10,009
Note: The dollar amounts represent the arithmetical results of translating yen to dollars using the exchange rate prevailing at March 31, 2003, which was ¥120.20
      to US$1.
14   Safe Operation and Protection of Marine Environment
                                                            Safe Operation
                                                            If an accident involving a vessel occurs, there is a risk of serious impact on
                                                            marine ecology through pollution in the form of crude and heavy fuel oil leaks.
                                                            Another problem is the sinking at sea of enormous volumes of industrial waste in
                                                            the form of cargoes or of the ship itself. Even without accidents happening, a
                                                            delay to an NYK-operated ship can cause delays and suspensions of production,
                                                            shortages of product storage space, loss of business opportunities, and other
                                                            undesirable effects and encourages unnecessary compensatory energy con-
                                                            sumption. At NYK, we regard a commitment to absolutely safe operation, to pre-
                                                            vent accidents involving transportation services, as the highest among our
                                                            environmental priorities. For this reason, we continue to monitor not only results
                                                            of voyages but also passage (process) and take necessary corrective measures
                                                            to preempt accidents.

                                                            To maintain a high degree of safe operation of all fleets, and take continuous cor-
     NAV9000 ship audits are a means for verify-            rective actions, NYK rigorously applies its independently developed safety and
     ing agreements with shipowners and ship-
     management companies that are NYK                      environmental standard NAV9000, first introduced in December 1998. Combining
     partners and at the same time deepen mutu-             the operational know-how accumulated by NYK over approximately 120 years
     al understanding through close communica-
     tion.                                                  and the principles of the ISO 9000 and 14000 series, NAV9000, we believe, is
                                                            the only protocol of its kind in the world to serve as a management tool for fleets
                                                            including chartered vessels. NAV9000 is not an inflexible standard. We continue
                                                            to revise it in real time in line with customers’ wishes and feedback regarding
                                                            accidents and incidents, as well as legal and other regulatory changes.

                                                            Continuous Improvement
                                                            Monitoring of NAV9000-based performance is carried out through ship and cor-
                                                            porate audits. Under our audit procedures, on-the-spot mutual briefing on safety
                                                            activities and exchanges of views on corrective action make possible deepened
                                                            mutual understanding and at the same time speed up corrective action. In addi-
     NAV9000 Safety Strategists’ Conference
     At regular meetings of safety strategists,             tion to on-the-spot monitoring, audit results are fed back to partner companies
     mutual understanding is increased, relation-
     ships based on trust are built, and informa-
                                                            via the Internet, initiating corrective action. Because each corrective action con-
     tion necessary for safety and environmental            tributes to a general improvement in NYK fleet-management standards, NYK can
     activities is exchanged.
                                                            make maximum use of shared knowledge and set about removing the root caus-
                                                            es of problems.
                                                               In fiscal 2002, audits covered 469 vessels and 17 companies. After the audits,
                                                            corrective action was taken in 2,689 cases.
     Ship Audit Report




        FY    ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02   Approximately 600 items were subject to safety audits. Because NYK distributed to its business
     Note: In addition to the above, ship inspections       partners a checklist and other materials asking them to declare in advance their targets for achieve-
           were carried out in cases targeted in the        ment, a clear structure for assessment is in place.
           campaign. In fiscal 2002, approximately
           212 vessels were covered.

Questionnaire                   (unit: companies)
                                                     Questionnaire Sent to Shipowners and Ship-Management
                                   No response: 2
1. Do you            Not planning to                 As part of supply management—and also a requirement under the ISO 14001
   have an      compile an environ- Yes:
                   mental policy: 12 13              standard—NYK in 2002 sent an environmental questionnaire to shipowners and
   mental policy                   Only an
                                                     ship-management companies with which it exchanges memorandum relating to
   and/or envi-    Planning to
                    compile an environmental         NAV9000. Of the 79 companies to which a questionnaire was sent, 64 (operating
   ronmental     environmental    policy: 35
   action plan?        policy: 2                     338 vessels) provided responses, as detailed below.
                                                     Questions Asked
                      No response: 2
2. Have you                                          1. Do you have an environmental policy and/or environmental action plan?
   established a         Not plan-     17            2. Have you established a special office charged with environmental matters?
   special office          ning to                   3. How does your company go about publicizing ISO 14001 certification and other environ-
   charged with          establish
   environmental          one: 26 Considering           mental activities?
                                   the move:
   matters?                        18                4. Do you operate environmental training programs for employees?
                      Planning to establish one: 1   5. Do you make environmentally motivated demands of suppliers of ship supplies and other
3. How does                         Have PR             items?
                                No program:
   your company         response: 3 6                6. Do you have a firm grasp of volumes of waste products and oil generated by ships under
   go about
   publicizing               Do not
                                                        your management?
   ISO 14001                 plan to
                          set up PR Planning         Future Activities
   certification           program: to set up
   and other                     29 PR pro-          The questionnaire showed that in some areas environmental awareness is still wanting. In
                                     gram: 23
   environmental                                     addition to disclosing the results to shipowners and ship-management companies, NYK will
   activities?          Setting up PR program: 3
                                                     continue to carry out questionnaire surveys and seek to play a leadership role in raising
                                                     environmental awareness among partners with fleets in operation.
4. Do you        No response: 3 covering all
   operate                        8
   training            No: 34 Yes, covering a
   programs                    small number of
   for employ-                  employees: 14
   ees?                    Yes, covering over
                          half of all employees: 5
                                       Yes, in
5. Do you make
                   No response: 3 some detail:
   environmen-                    4
   tally motivat-                    10
   ed demands
   of suppliers of         45
   ship supplies
   and other
                         Have done in the past: 2

6. Do you have a     No response: Yes, we have
   firm grasp of      No:         2 full records
                                    for all corpo-
   volumes of           2
                                    rate opera-
   waste prod-                      tions: 13
   ucts and oil           Yes, we
   generated by           keep records
                          for every
   ships under            vessel: 45
   your man-
   agement?      Yes, we have partial records: 2

     Safety and Environmental Measures Using IT

                                                  Accident Data System                                                                      NAV9000 Auditing
                                                                                                               Safety and
                                                                                                              Environmental              Information Database
                                        Accident database for operational use
                  Accident                                                                                    Management
                 occurrence                                                                                    Committee
                                   Reports are compiled and posted on NYK’s LAN by
                                    each department responsible for vessel operation                                                    • Ship inspection requests
                                                                                                          Compilation of statistics
                                             as soon as an incident occurs.                                                               can be made over the LAN.
                                                                                                                                        • Reports are circulated over
                                                                                                                                          the LAN.
                                      Dry bulk                              Tankers and
                 Containerships                            Car carriers                    Cruise ships
                                      carriers                              gas carriers

                                                                                                           • Instant bulletins
                                                                                                           • Pooling information
                        Database assigned to each                                                          • Analysis and
                                                                                                             response                  Audit Information Database
                    operation/technical department
                    updates its data simultaneously.

                                                                                                          Utilization of master data
                                                           Technology                                                                        Shipowners
                                                           departments                                                                 Ship-management
                                                                                                                information            Two-way communication
             Accident reports are                                                                                                      between NYK and shipowners/
              also compiled by                                                                                  master data
                                            Accident information database                                                              ship-management companies
           technical departments.             for Technology Department                                                                is possible via the Internet.

     Downtime (Targeted and Actual Time)                              Information Technology
     (Hour)                                                           Databases for accident-record management, NAV9000 auditing, and other safety
                                                                      and environment procedures are computerized, without the use of paper. As
     12,000                                                           shown above, the accident-record management and NAV9000 audit databases
                                                                      can be accessed by any member of the Company so that it is possible to instant-
                                                                      ly research accident records, performance, and progress in corrective measures.
                                                                          Any shipowner or ship-management company serving as an NYK business
                                                                      partner can access the NAV9000 database via the Internet. In this way, a paper-
                                                                      less environment has been put in place for the study of audit results, input of rec-
           FY   ’96 ’97 ’98 ’99 ’00 ’01 ’02                           ommendations for improvements, and consultation on corrective measures.

                Actual              Targeted                          Measuring Safety
                performance         performance
                                                                      NYK’s yardstick for measuring safety levels is the comparison of hours of down-
     Downtime (per Vessel)
                                                                      time affecting ships under operation due to accidents and incidents with 1993
     (Hour)                            (Number of vessels)
                                                                      levels. Considered as “accidents” are not only serious events that are usually rec-
      40                                               480            ognized as such but also lesser incidents, and measures to prevent their recur-
                                                                      rence are tailored as necessary. As a result of this stance, NYK has steadily
      30                                               360
                                                                      improved safety records across its fleets, as the graphs on the left show.
      20                                               240                NYK also makes full use of injury and sickness records as a yardstick for
                                                                      measuring safety levels in crewmembers’ operating environments and near-miss
      10                                               120
                                                                      records as a yardstick for measuring safety-awareness levels of crewmembers.
       0                                               0
      FY ’96       ’97 ’98 ’99 ’00 ’01 ’02
           Downtime (per vessel)         Number of vessels
           (left scale)                  in operation
                                         (right scale)

Injury and Sickness Records
A ship is both a workplace and a daily living space for crewmembers, and, during
the course of their lives onboard, injuries, accidents, and sickness can occur for
various reasons. Because injury or illness affecting a single crewmember can
have a serious impact on the safety of the entire vessel’s operation, NYK consid-
ers it a vital responsibility to provide a safe onboard working environment. To this
end, we rigorously collate available records about injuries, accidents, and sick-
ness that have occurred on a ship and analyze and familiarize crewmembers with
this information to help prevent a recurrence. In addition, various specific meas-
ures are taken based on results of this analysis, such as the installation of safety
equipment and improvement of onboard facilities.

                          Place of occurrence of injury/accident
                                              Bridge 1%
            Others     9%                                           Galley     10%

                                                                    Cargo hold 6%

            Engine room
                      28%                                           On deck    29%

             Engine/Cargo control
             room      1%

            Workshop/Machinery space 12%                        Mooring area   1%

                             Injuries due to disaster or accident

            Others     12%                                          Head       6%

            Toe(s)     1%

            Foot (feet) 6%                                          Eye(s)     21%

            Leg(s)     3%

            Abdomen 1%
            Chest      3%
            Back       2%                                           Face       9%

            Wrist(s)   7%
                                                                    Shoulder(s) 1%

            Finger(s) 19%                                           Arm(s)     8%

     Near-miss reports and number of                             Near-miss Information
     accidents/disasters per million hours                       Accidents, it is said, are never unheralded. Many minor accidents and incidents
     of exposure to danger
     (Number of cases)                   (Number of cases)
                                                                 form the background to a serious accident, and, at an earlier stage, many unsafe
                                                                 conditions are not noticed. In addition to preventive measures such as regular
      40                                                 4       maintenance and inspection, it is important to set up frameworks that ensure that
                                                                 mistakes do not easily develop into accidents and increase the awareness of
      30                                                 3
                                                                 every employee as to the importance of preventing accidents and disasters.
      20                                                 2       However, it is not easy to acquire the same ability as expert seamen who have
                                                                 learned from a long experience of failures and mistakes. For this reason, it is
      10                                                 1
                                                                 important for the Group to pool information about failures and mistakes, and
       0                                                 0       have in place systems for their study. NYK collates records from each vessel
        FY      ’00              ’01         ’02
                                                                 about near-misses (unsafe acts/conditions that do not lead to accidents) and,
             Near-miss reports         Disaster/accident         after analysis of this information, compiles a near-miss report laying down neces-
             (left axis)               occurrence (right axis)
                                                                 sary response instructions. This practice is also widely followed in other contexts,
                                                                 such as aviation and hospital and factory management, indicating its efficiency.
                                                                     Through its rigorous injuries/accident, sickness, and near-miss reporting activi-
                                                                 ties, the number of injuries/accidents has been greatly reduced at NYK. For
                                                                 example, comparative research shows that companies D, K, and O that have
                                                                 compiled high numbers of near-miss reports have somewhat lower injury/acci-
                                                                 dent-occurrence rates, while companies E, F, G, and M with bad injury/accident
                                                                 records have compiled relatively few near-miss reports. Through such record
                                                                 keeping, NYK is able to offer guidance to all companies it is involved with.

                                                                 NYK Group near-miss reports in fiscal 2002 (near-miss reports per million hours of exposure to danger)
                                                                 (Number of reports)






                                                                              A   B    C   D      E     F     G      H      I     J     K      L     M      N     O

                                                                 Injury/accident occurrence involving crewmembers at NYK Group companies in fiscal 2002
                                                                 (overall cases of injury/accident occurrence per million hours of exposure to danger)






                                                                              A   B    C   D      E     F     G      H      I     J     K      L     M      N     O
                                                                 Note: LTIF (Loss Time Injury Case Frequency) 1 means only one incident requiring medical treatment
                                                                       occurred per 114 years of continuous onboard crewmember service.

                                                                     Learning from Accidents
                                                                     On July 2, 1997, a large NYK-operated crude oil tanker hit an underwater reef,
                                                            Chiba    Naka-no-Se, in Tokyo Bay. NYK made every effort to recover and neutralize
                                                                     spilled oil in partnership with other expert organizations but was unable to avoid
                 Kawasaki Artificial                  Keiyo Sea
    Buoy D           Island                           Berth          causing an enormous disturbance to inhabitants of the area concerned and con-
  Buoy C
                                             Artificial              siderable short-term damage to the natural environment of Tokyo Bay. After the


  Buoy B
                                                                     cleanup, NYK was able to confirm by marine surveys that no lasting major dam-


  Buoy A                                        Kisarazu

                                                                     age had been caused to the bay’s environment, as assessed in terms of impact


Yokosuka Harbor                       Futtsu Cape                    on water quality, seabed conditions, plankton levels, and seabed organisms.
          The Third                          The Second

                                             Artificial Island       However, NYK sincerely regrets the accident and has devised the following

    Artificial Island


                                                                     measures to ensure there is no recurrence.

                 Tokyo Bay
                                                                        Every July, NYK holds the “Remember Naka-no-Se Campaign,” in which
                                                                     progress in safety measures is monitored, to ensure that the lessons of this acci-
                                                                     dent are never forgotten.
                                                                     1. Standard Route Setting
                                                                     In contrast to aviation practice and conventional international wisdom that maritime routes
                                                                     should be set at the discretion of vessel captains, NYK has established standard sea
                                                                     routes, notably for such recognized danger spots as Japanese waters, the Strait of
                                                                     Singapore, and the Persian Gulf. Details of these routes are laid down in our Standard
                                                                     Passage Plan and observance is compulsory.

                                                                     2. Introduction of Bridge Resource Management (BRM) Training
                                                                     All NYK captains and officers are required to attend training programs in Bridge Resource
                                                                     Management (BRM), developed by NYK and incorporating National Aeronautics and Space
Standard sea routes and charts                                       Administration’s Cockpit Resource Management (CRM) principles. NYK has also expanded
                                                                     these programs and set up teamwork training that gives a hands-on idea of ship-handling
                                                                     in difficult straits (such as Singapore, Kanmon, and Irago) and harbors (such as those of
                                                                     Tokyo Bay, Nagoya Port, and Ras Tanura Port).

                                                                     3. Fleet Remote Monitoring System (FROM)
                                                                     In the independently developed Fleet Remote Monitoring System (FROM), a vessel’s loca-
                                                                     tion, speed, estimated time of arrival, and other navigational information are automatically
                                                                     calculated and updated, and necessary information about weather and sea conditions is
                                                                     displayed visually via the Internet. NYK officials in charge of vessel operation can make ves-
                                                                     sel operation safer and more economical by basing their instructions on close analysis of
                                                                     various data as well as weather and sea conditions. The FROM system also includes a sea-
                                                                     jack (sea-hijack) alarm. If it is impossible to get information about a vessel’s location for a
                                                                     certain period of time, the system realizes there is a possibility of pirate infiltration and an
                                                                     alarm is sent automatically to the mobile phone of the NYK official(s) in charge of vessel

                                                                                                                                           A seajack alarm from A-
                                                                                                                                           maru. Since 07:32, May
                                                                                                                                           6, 2003, there has been
                                                                                                                                           no locational update
Bridge simulation system for use                                                                                                           from this vessel. Its last
in Bridge Resource Management (BRM)                                                                                                        known location was 14-
                                                                                                                                           55. 2N, and 112-14. 3E.

                                                       The shocking terrorist attacks of September 11, 2001, on the United States
                                                       prompted a strengthening of international security measures and forced the inter-
                                                       national community to take note of a new threat: disruption of international logis-
                                                       tics and their networks by terrorists acts.
                                                         Currently, 97% of global transportation of consumer goods is by sea, and the
                                                       annual traffic in containers is put at 50 million. The impact of any interruption to
                                                       this traffic flow would be wide-ranging, including factory closures and the sus-
     As a logistics enterprise, we believe it is our
     mission to consolidate the reliability of cus-    pension of operations due to the disruption of distribution of parts, loss of busi-
     tomers’ supply chains through the creation
     and maintenance of robust security struc-
                                                       ness opportunities through delays in product delivery, delays in transportation of
     tures. We are working to strengthen security      food and other perishable goods, shortages of cargo storage space, and difficul-
     structures in harmony with affected parties,
     drawing on our long experience in opera-          ties in finding alternative modes of transportation.
     tional know-how and network management.              In light of their complexity and the enormity of the consequences of their
        Nobutaka Imamura, Safety and
     Environmental Management Group                    destruction or disruption, global distribution networks are held to have the same
                                                       characteristics as IT networks. However, the necessity of sound security meas-
                                                       ures was realized at an early stage in the IT field and security networks were set
                                                       up to prevent external access. By contrast, the development of security meas-
                                                       ures for logistics networks has hardly begun.
                                                         As a global logistics enterprise, we at NYK consider it a social responsibility to
                                                       create mechanisms capable of coping with the threat of terrorism while maintain-
                                                       ing efficient logistics services.
                                                          Because a great many people are involved with distribution networks, and
     Terminal gate inspection
                                                       because countries differ in their legal systems, customs, and levels of awareness
                                                       of potential danger as well as other factors, a large number of problems remain
                                                       unsolved. Nonetheless, NYK has drawn on all its resources to put in place a wide
                                                       range of measures. The details are as follows:
                                                       Establishment of NYK Security Committee
                                                       This committee was established under the Safety and Environmental Management
                                                       Committee to coordinate anti-terrorism measures for all vessels across the Group, regard-
                                                       less of status or affiliation. Under the committee is a special sub-committee for U.S.-related
                                                       security, handling land services, terminals, and logistics in our North American trade.
                                                          Through deployment of a Regional Security Officer in each part of the world in which we
                                                       operate, we aim to gather information from a wide range of sources, encourage employee
                                                       awareness of security, and make security measures as thorough as possible.

                                                Early Participation in C-TPAT
                                                On July 15, 2002, at the same time as an announcement was made encouraging the par-
                                                ticipation of shipping companies, NYK decided to join in the U.S. Customs Service-led
                                                Customs-Trade Partnership Against Terrorism (C-TPAT). In November 2002, NYK was
                                                approved as a C-TPAT carrier by the U.S. Customs Service. Following this move, NYK will
                                                continuously brush up its full range of security measures and promptly act in accordance
                                                with new legislation.

                                                Early Adoption of International Standards
Corporate security seminar with International   NYK moved early to respond to the International Maritime Organization (IMO)’s planned
Maritime Security (IMS) of the United           revisions of the International Convention for the Safety of Life at Sea (SOLAS)* and the poli-
Kingdom                                         cy of making ship security plans (SSPs) mandatory. An independently developed SSP was
                                                completed by us in November 2002, and seminars were organized for land-based and on-
                                                board security officers at Tokyo and Imabari between January and February 2003.
                                                   Experts from International Maritime Security (IMS), the U.K. company that acts as NYK’s
                                                security consultant, were also hired to give lectures to up to 200 of NYK’s sea- and land-
                                                based employees, including executives, and representatives of 50 partner shipowners and
                                                ship-management service companies. Also participating were an official of the Ministry of
                                                Land, Infrastructure and Transport’s maritime bureau office and the far-eastern general
                                                chief of the U.S. Coast Guard.
                                                * SOLAS was created by an international conference after the Titanic disaster of 1912, when safety at
                                                  sea became a matter of global concern.

Crisis Management Center                        Emergency Response Network
                                                At any given moment, NYK has more than 500 vessels in operation around the
                                                world. In the event of an incident, it is extremely important to have in place a
                                                seamless system that enables the instantaneous collation of relevant information
                                                and appropriate responses, anywhere, anytime. For safe vessel assignments, it is
                                                also necessary to have an accurate understanding of possible hazards posed by
                                                war zones and terrorist activities.
                                                   NYK divides the world into six zones, appoints to each zone a special officer
                                                (usually a master mariner or a chief engineer), gathers information, and coordi-
                                                nates responses in the event of an incident. In addition to data gathered through
                                                our network of affiliates and agencies around the world, the Company uses infor-
                                                mation from hired consultants.

                                                Emergency Response Network


                                                                                                                        bLA        bNY


                                                                                            Head Office

                                                Division of the world into six zones, each covered by an NYK officer, enables the Company to respond
                                                immediately to emergencies.

                                                    Key Crewmembers
                                                    Top-Quality Onboard Crews
                                                    NYK considers crewmembers to be one of its most important management
                                                    resources; the effectiveness of our safety and environmental measures depends
                                                    directly on their quality. A wide range of onboard personnel are recruited from
                                                    European and Asian countries. When NYK hires a new employee, the ownership
                                                    of an international crewmember’s license is required as a matter of course, and
     Stefan Yap, captain of the containership NYK   the Company confirms through not only documentary references but also written
     Sirius                                         examinations, interviews, and skills testing using simulators as well as other test-
                                                    ing to show that the employee’s professional experience matches in-house stan-
                                                      Following the opening in 1989 of NYK-Fil Ship Management, Inc., in the
                                                    Philippines, a Mumbai, India, office of NYK Shipmanagement Pte. Ltd., (an NYK-
                                                    owned ship-management company headquartered in Singapore) and a represen-
                                                    tative presence in Hamburg, Germany, were established, making possible
                                                    integrated personnel management covering recruitment, screening and training,
                                                    and health and welfare. Such measures have enabled us to ensure top-class
     Training center at NYK-Fil Ship Management,    crew rotation.
                                                    It is of the utmost importance to keep up skill levels of key personnel after hiring
                                                    through ongoing training programs. A total of 15,000 employees have been
                                                    through NYK training programs at the Company-managed crew-training centers
                                                    in Yokohama and Manila, the Philippines, with their wide range of facilities includ-
                                                    ing tanker- and LNG-carrier simulation systems. As necessary, NYK also dis-
                                                    patches employees to outside training facilities in Singapore; Rotterdam, the
                                                    Netherlands; Southampton, the United Kingdom; Copenhagen, Denmark;
                                                    Stockholm, Sweden; and elsewhere. In this way, our training programs are kept
     Training at NYK-Fil                            up to global standards.
                                                    DADAS (Dos and Don’ts at Sea)
                                                    In September 2000, NYK began sending experienced captains and chief engi-
                                                    neers to ships at sea to give on-the-spot appraisal and instruction to younger
                                                    crewmembers and others as they carried out their duties. Based on know-how
                                                    accumulated through this system, NYK has developed a program to give a wide
                                                    variety of crewmembers indispensable general technical knowledge and expert-
                                                    ise. This gives personnel a clear understanding of what should and should not be
                                                    done while performing onboard duties and them a chance to increase their
                                                    expertise at their own initiative.
                                                      This program, named DADAS, is regarded as a reference “bible” for younger
                                                    crewmembers in NYK fleets.

Bottom-Coating in NYK Fleets                                     Environment-friendly Antifouling Paint on Ships’ Bottoms
(Number of vessels)                                              Many sources of fouling, such as barnacles, slime, and seaweed, are present in
                                                                 seawater. When large numbers of these attach themselves to a ship’s bottom,
      150                                                        vessel speed decreases and fuel consumption increases. To prevent the adhe-
                                                                 sion of organisms, special antifouling paint is applied to the ship’s bottom.
      100                                                        Conventional antifouling paints contain tributyltin (TBT)-polymer, or organic tin,
                                                                 which is a very effective agent for preventing the adhesion of organic matter.
                                                                 However, when it dissolves in seawater, TBT acts as a hormone disrupter and
                                                                 causes other environmental problems.
      FY    ’97      ’98       ’99      ’00     ’01     ’02
                                                                   After ship performance analyses, NYK carries out sandblasting (the total
                                                                 removal of paint to expose the metal surface) on ships that after about ten years’
      NON TBT              NON TBT surface            TBT
                                                                 service are judged to have bottoms in an unacceptable condition and applies a
                                                                 high-specification, TBT-free antifouling paint. Since 2000, about 50 ships have
 Latest TBT-Free (Self-Polishing Type)                           undergone this treatment. In addition to moving in advance of new standards for
 Coating (Coatings used by NYK)
                                                                 TBT use, NYK has also contributed to the reduction of emissions of CO2. Only
                                                                 vessels that have never had a TBT-based antifouling coating since their construc-
                                                                 tion and vessels that have undergone full sandblasting of their bottoms are con-
                                                                 sidered by NYK to be TBT-free. Currently the rate of TBT-free vessels is 65%, a
                                                                 percentage we aim to further increase.

                                                                 Introduction of Double-Hull Tankers
                             Hull       : Antifouling agent      The environment and ecosystem suffer enormous damage when a crude oil
                                          copper oxide
                                                                 tanker runs aground or collides with another vessel. Double-hulling is an effective
The latest TBT-free (self-polishing type) coat-
                                                                 way of ensuring that a spill does not ensue immediately if such an accident
ing used by NYK is applied after sandblasting
of ship bottoms. Constant abrasion by marine                     occurs. As the illustration at the bottom of the page shows, the structure of dou-
life during voyages ensures that this coating
remains smooth, which in turn helps reduce
                                                                 ble-hull tankers incorporating ballast tanks hinders oil leakage following most
fuel consumption and emissions of CO2.                           kinds of accidents.
                                                                   NYK began double-hulling its tankers in 1993. As of March 2003, the
Double-Hulling of Crude Oil Tankers                              Company operated 17 double-hull tankers—56.7% of the tankers in its fleets. In
(%)                                        (Number of vessels)
                                                                 fiscal 2003, we plan to introduce even more double-hulling of our tankers.
 60                                                         20
                                                                   Currently, paint is applied to the bottom plates of cargo oil tanks at the time of
                                                                 construction of double-hull tankers, which reduces the risk of corrosion and the
 45                                                         15
                                                                 development of holes.
 30                                                         10
                                                                   When a ship is at sea, crewmembers enter the ballast tanks to check whether
                                                                 gas has leaked, which is a sign of oil leakage. To assure the safety of the ship
 15                                                         5
                                                                 and crewmembers, round-the-clock cargo control rooms of all NYK double-hull

  0                                                         0
                                                                 Very Large Crude-oil Carriers (VLCCs) have remote systems to monitor gas and
FY    ’97         ’98      ’99       ’00      ’01     ’02        oxygen concentrations in all ballast tanks adjoining cargo oil tanks. Their installa-
            Proportion of double-          Number of double-     tion is now a standard part of specifications for new tankers.
            hull vessels (left scale)      hull vessels
                                           (right scale)

Structure of Double-Hull Tanker
and Bottom Coating

                              Oil tank

Sea                          bottom
                                        Ballast tank

     Ballast Water
     When a vessel is in ballast condition, seawater, known as “ballast water,” is taken
     onboard during a voyage and poured into the ballast tanks to enhance vessel
     stability and propeller efficiency. Ballast water is taken onboard when cargoes are
     unloaded at destination ports and discharged at ports of origin when the cargoes
     are loaded.
        When ballast water is discharged at a port of origin, it contains marine organ-
     isms and other undesirable materials taken on with the ballast water at the prior
     destination port, raising concerns that the ecosystem of the area in question may
     be adversely affected. This has become an international environmental problem.
        Currently, the International Maritime Organization (IMO) is considering dis-
     charge regulations and treatment standards for ballast water. Measures the IMO
     is looking at include ballast-water exchange at open sea or installation of disinfec-
     tant and filter systems and other onboard treatment systems.
        Meanwhile, NYK is pursuing independent research into ways of reducing the
     amounts of ballast water taken onboard and into processing systems. To avoid
     bringing ballast water into other countries’ territorial waters, we are also making
     every reasonable effort to ensure that ballast-water exchange operations take
     place at open sea, as detailed below.

     Ballast-water exchange at sea

     By making every effort to exchange ballast water at sea, NYK is working to avoid bringing ocean
     organisms into the territorial waters of other countries.

The NYK Total Bilge/Sludge Management System
Water- and oil-contaminated fluids generated by engine rooms are known as
engine-room bilge. Under the terms of the MARPOL 73/78 International
Convention for the Prevention of Pollution from Ships, engine-room discharge
into the ocean is usually permitted only if the oil content in the bilge is reduced to
a “discharge standard” concentration below 15ppm by a bilge separator (a sys-
tem for separating bilge into oil and water content).
   NYK has gone beyond these regulatory norms. In 1996, we designed and
developed a proprietary bilge/sludge management system that reduces the
amount of bilge generated in the engine room to an absolute minimum, greatly
reducing discharges into the ocean. In this way, NYK is contributing to environ-
mental protection through in-house and external research and vigorous participa-
tion in industrywide research projects.

Differences with Conventional Bilge Treatment Systems

     Conventional Bilge Treatment System     NYK Total Bilge/Sludge Management System

                     Engine room bilge              Engine room bilge

                                                   NYK total bilge/sludge
                                                   management system
                                                                 Great reduction
                                                                 of the amount of
                                                                 bilge generated

                       MARPOL 73/78                   MARPOL 73/78
                  International Convention       International Convention
                    for the Prevention of          for the Prevention of
                     Pollution from Ships           Pollution from Ships
                      Bilge separator                   Bilge separator

                                                                        Great reduction of
                                                                 discharges into the ocean

Bilge separator
26   Protection of Atmosphere
                                                        Fuel Economy and Ecology Committee
                                                        Since the establishment of the Fuel Economy and Ecology Committee in 1977,
                                                        NYK has been committed to continuous reduction of fuel usage. The Company
                                                        strives continuously to reduce fuel consumption, improve existing technologies,
                                                        and increase the accuracy of benefit forecasting and performance-monitoring
                                                          In addition, after in-depth research and testing, NYK is considering the intro-
                                                        duction of new systems and devices for reducing fuel consumption.
     Highly detailed data analysis is necessary for
     successful reduction of fuel consumption             With approximately 600 vessels in operation, NYK considers the reduction of
       Naoyuki Ohno, Technical Group
                                                        fuel consumption an important activity that can directly contribute to energy sav-
                                                        ing and the prevention of global warming and atmospheric pollution.

                                                        Ship Performance Analysis System
                                                        NYK developed its ship performance analysis system in 1988 and uses it to ana-
                                                        lyze and research the performance of all vessels in operation. To further enhance
                                                        the accuracy of environmental and ship performance data, we completed, in fis-
                                                        cal 2002, real-conditions testing of a proprietary system for transmitting naviga-
                                                        tional data from a vessel at sea to land. In tandem with the development of this
     Changes in volumes of fuel consumed by             system, NYK is also developing a comprehensive system, based on ship per-
     ships moving at the same speed.
        The vertical axis shows fuel consumption        formance data in traditional and electronic formats, for analysis of technological
     (tons per day) and the horizontal axis shows       data and analysis and compilation of environmental data.
        The vertical lines on the graph show when         Full-fledged operation of this system, which makes possible collation and
     the vessel docked. Docking occurs after 24
                                                        analysis of large volumes of data, began in spring 2003.
     months, 50 months, and 80 months. A vessel
     going at a constant speed is seen to have
     lower fuel consumption volumes after dock-
     ing. This increases with the passage of time.      Communication system linking ships with land and relaying ship operation data

                                                                                                                  NYK headquarters
     CO2 emission volumes per unit of
     cargo transported (weight)
                                    (Fiscal 1990=100)                  Communication
                                                                                                                      Data inputted
                                                                                                                    from each vessel
        100                                                                                                       Ship operation data
                                                                                                                Communication system
                                                                                                                 linking ship with land
                                                                                                                Performance      Environment
                                                                                                               analysis system     system

                                                                                                                 DB      DB                DB
                                                                                              Manufacturer’s            Data analysis
                                                                                               information                                      In-house
                                                                                                 Shipping association
                                                                                                                           Office for
        FY    ’90 ’96 ’97 ’98 ’99 ’00 ’01 ’02                                                                           internal affairs

                                                                                              Ship-                                                    Cargo
                                                                                           management                                                  owner,
                                                                                            company                                                   customer
                                                                                                               Operator               and

                                                      Underwater Cleaning and Propeller Polishing
                                                      Analysis of operational data for each vessel allows NYK to form an accurate idea
                                                      of the degree of dirt damage to ship bottoms and propellers, which are problems
                                                      that adversely affect vessel speed and performance and tend to cause higher fuel
                                                      consumption. After assessment and consideration of various factors, such as the
                                                      degree of dirt damage to ship bottoms, vessel operating schedules, and the con-
Before propeller            After propeller           dition of paint on hulls and propellers, surfaces are scoured in optimally timed
polishing                   polishing
                                                      cleansing and polishing operations are undertaken at sea. These measures
                                                      reduce fuel consumption.
                                                      CO2 Emission Volumes
                                                      Based on voyage data, NYK accurately calculates emission of NOX, SOX, and
                                                      CO2 released from each vessel. The figures below show calculations of CO2
                                                      emissions from a container vessel. The figure at left shows CO2 emissions per
                                                      TEU (20-foot-long container) en route between Japan and Europe, Japan and
                                                      North America, and Japan and other Asian countries. The central figure is a cal-
                                                      culation of CO2 emissions per ton of cargo (MT) for container fleets, with export
                                                      and import cargoes. The figure at right compares annual CO2 emissions for a
                                                      bulker while at sea and while at port.

Containership CO2 emissions per TEU                   CO2 emissions per ton of cargo (MT)                   Annual CO2 emissions for bulker
                                                      for container fleets                                  A-maru
(g/km•TEU)                                            (g/km•t)                                              (ton)

  120                                                     20

   90                                                     15


   60                                                     10

   30                                                      5

    0                                                      0                                                        0

          Between       Between     Between Japan                  Between    Between Between Japan                  At sea    At sea      At port     At port
         Japan and     Japan and       and other                  Japan and  Japan and       and other              (Without    (With   (Discharging) (Loading)
           Europe     North America Asian countries                 Europe  North America Asian countries            cargo)    cargo)

                                                         Export       Import

     Black fumes—diesel engine exhaust                          Optimized Route Setting
     gas—emitted from ship funnels
                                                                Based on analysis of the relationship between fuel consumption and the speed of
                                                                a ship in operation, NYK is working to reduce fuel consumption through more
                                                                efficient navigation at an optimized velocity, taking into account the distance
                                                                involved, the schedule, the weather, and other pertinent factors.

                                                                Fuel Additives
                                                                By efficient use of fuel additives, it is possible to improve the quality of marine fuel
                                                                oil, leading to reduced generation of waste oil and sludge and higher combustion
                                                                efficiency. It is also recognized that the use of fuel additives curbs the generation
                                                                of black fumes, which occur notably when diesel engines are running and at
                                                                times of low load.

                                                                Chlorofluorocarbons (CFCs), a group of gases that can be made to evaporate
                                                                and liquefy easily by the adjustment of temperature and pressure conditions and
                                                                which show excellent molecular structural stability, were widely used at one time
                                                                as refrigerants and cleansing agents. But after they were found to contribute to
     (Above) Before addition of fuel additives; (below) after
     addition of fuel additives                                 the destruction of the ozone layer and global warming, an international effort
                                                                began to find substitute agents. NYK is reducing the environmental load caused
                                                                by the refrigerants it uses in cooling systems for refrigerated containers and ship
     Refrigerant used in refrigerated containers
                                                                   NYK uses three kinds of refrigerants in refrigerated containers: CFC-12,
                                                                HCFC-22, and HFC-134a. At the moment, the CFC substitute HFC-134a, which
      15,000                                                    has an ozone depletion coefficient of zero, is used in newly built NYK reefer con-
      12,000                                                    tainers. We expect to complete the substitution of CFC-12-cooled refrigerated
                                                                containers already in use by fiscal 2003, several years ahead of schedule.
                                                                   Formerly, HCFC-22 was used as a refrigerant for air-conditioning and reefer
                                                                systems on NYK vessels, reflecting its excellent performance and the reliability of
       3,000                                                    supply systems. However, all ships ordered from February 2002 have been built
                                                                including the HFC compound coolant R-404a, which has an ozone depletion
         FY    ’99        ’00           ’01          ’02        coefficient of zero.
         CFC-12        HCFC-22          HFC-134a
                                                                Acid Rain
                                                                In addition to CO2, which contributes to global warming, exhaust gas from ships
                                                                contains NOX and SOX. As these spread throughout the atmosphere, they blend
                                                                with oxygen and moisture in the air and fall to earth as acid rain. These sub-
                                                                stances cause acidification of lakes, marshes, and rivers, and adversely impact
                                                                soil and forest ecosystems.
                                                                   To reduce NOX and SOX emissions, NYK is reducing fuel consumption, devel-
                                                                oping systems for calculation and statistical tracking of emission volumes of NOX
                                                                and SOX, and developing engine systems that minimize emissions of these sub-
                                                                   Although MARPOL Annex VI* has yet to come into effect, the engines of NYK
                                                                ships already satisfy its emission benchmarks.
                                                                *MARPOL Annex VI: Under the MARPOL Convention (the International Convention for the Prevention of
                                                                 Pollution from Ships), this annex sets rules for controlling air pollution caused by ships.

                                                          Fuel Pretreatment System
                                                          It is not possible to use heavy fuel oil in engines as it is when the fuel tanks are
       Flow of fuel oil

                                                          filled. Fuel pretreatment is necessary to reduce as much as possible the adverse
                                          Fuel oil that
                                          has not         effects on engine performance of moisture, dry sludge*, FCC catalysts**, and
                                          pretreatment    other unwanted substances in heavy fuel oil.
                                                             NYK has developed a new fuel oil pretreatment system. After rigorous testing
                                                          was completed in land-based facilities and under actual navigation conditions in
                             Fuel oil
                                                          fiscal 2001, we have been able to confirm the system’s beneficial effects, after
                             system                       appropriate application, on fuel reduction in terms of reduced consumption. NYK
                                          Fuel oil that
                                                          began introducing the technology in vessel fueling systems in fiscal 2001 and is
                                          has             finalizing plans to incorporate it not only into newly constructed vessels but also
                                          pretreatment    into vessels already in service. Through the introduction of this process, and the
                                                          resulting reduction in fuel consumption, we can decrease emissions of CO2 and
                          in the diesel                   other pollutants, thereby protecting the environment.
                           engine etc.
                                                          * Dry sludge: soil, sand, and other matter contained within fuel oil that renders it unusable.
                                                          ** FCC catalysts: catalysts used in refining processes; trace elements remain in ship fuel oil.
                    Fuel consumption volume

                                                          New Technologies
 b Reduction in consumption volume of fuel oil            NYK is committed to devising and applying new technologies that increase cus-
 b Reduction in waste oil
                                                          tomer satisfaction in various ways. Below is an overview of new ideas for energy-
                                                          saving and environmental protection under development at NYK or scheduled for
                                                          Energy Saving
                                                          NYK is researching feasible ways of harnessing natural energy such as solar and
                                                          wind power for onboard electricity generation systems and, in December 2003,
                                                          plans to put into operation an LPG vessel equipped with solar-power generation
                                                          systems. We are also involved in a joint project with universities and other groups
                                                          to develop ship designs with lowered wind resistance.

Supervision of construction of the cruise ship
                                                          Electronically Controlled Engines
Crystal Serenity at French company ALSTOM                 NYK began using electronically controlled common rail engines in 2002. Because
Chantiers de l’Atlantique shipyard.
  Koji Jinnouchi, Technical Group                         these engines make it possible to improve fuel efficiency and reduce consump-
                                                          tion at times of low engine load, emissions of CO2 and SOX from engines current-
                                                          ly in use can be further cut, and they can also be adapted for the reduction of
                                                          NOX emissions. The technology has been adopted in the NYK company Crystal
                                                          Cruise-owned cruise vessel Crystal Serenity due to go into service in July 2003,
                                                          and we are considering incorporating it in the main engines of regular shipping
                                                          Electronic Fuel Injection System
                                                          In addition to the use of medium-speed, electronically regulated engines in some
Twin POD propulsion systems on the Crystal
Serenity: Propulsion system photographed                  of the main power generation engines of the Crystal Serenity, all the main power
from Crystal Serenity’s aft.
   The propulsion is called POD because of
                                                          generation engines have been equipped with water-injection devices* for the
its resemblance to a green-pea pod.                       reduction of NOX. Various other environment-friendly systems have also been
                                                          installed, including POD propulsion systems that enhance safety by improving
                                                          ship maneuverability, yielding an improvement in propulsion efficiency estimated
                                                          at approximately 8%.
                                                          * Water-injection devices: These lower the combustion temperature in the combustion chamber and
                                                            reduce NOX exhaust gas by injecting high-pressure water with fuel into the combustion chamber.

     Street Turn Cycle                                        Initiatives in NYK Line (North America)—Street Turns
      Usual equipment cycle
                                                              Proactive management of a “virtual inventory” is the initiative of NA’s National
                   Fuel consumed for                          Truck Program. By efficiently managing door moves and street turns, NA
        Importer   total 200 miles plus         Exporter
                   8 hours idling                             Operations achieved significant conservation of resources and reduction of air
                                                              emissions in 2002 while at the same time reducing costs.
             50-mile empty        50-mile empty
                                                                 This was accomplished by triangularly managing door moves with truckers
             return with 2 hours leg with 2 hours
             idling during pickup idling during pickup
                                                              from the terminal to delivery point to pick-up point and then back to the terminal.
                                                              Eliminating additional gate costs, wait time, and costs of moving empties are just
      50-mile loaded                50-mile loaded
      delivery with 2 hours         delivery with 2 hours     some of the positive results.
      idling during pickup          idling during pickup
                                                                 Ideally, turning a container from an import to an export load would occur at the
                       Marine Terminal                        same time. A challenge can occur when delivery and pickup do not occur at the
                                                              same time. Realistically, however, imports and exports do not always occur dur-
                25% fuel consumption reduction
                                                              ing the same day.
                                                                 So, what happens to the empty containers? In the past, the empties would
                                                              have been returned to the yard. Now with our National Truck Program, empty
      Street turn cycle
                       50-mile empty
                                                              containers are not returned to the yard, but are stored by the trucking companies
                       repositioning                          at their site in what is called a “virtual inventory.” An accurate inventory is kept
        Importer                                Exporter
                       Fuel consumed
                       for total 150 miles                    and managed electronically by NA Operations. This helps us to reduce fuel and
                       plus 4 hours idling
                                                              emission levels because truckers do not have additional trips to and from the ter-
      50-mile loaded                         50-mile loaded
      delivery with                          delivery with    minal. Additionally, we are able to provide better service to our customers by
      2 hours idling                         2 hours idling
      during pickup                          during pickup    being positioned to react quicker to their needs.
                                                                 Our National Truck Program is a win-win for the economy, NYK, our vendors,
                       Marine Terminal
                                                              and customers, with lowered fuel consumption, less emissions, and improved
                                                              service for our customers.

                                                              2002 vs 2001 (Calendar Year) Street Turns
                                                              (Number of street turns)





     The ability of a Customer Service agent to
     provide and receive current and accurate                      0
     information is a critical element of opera-
     tions, having a positive environmental
                                                                              Jan.   Feb. Mar.   Apr.   May   Jun.   Jul.   Aug. Sep. Oct. Nov. Dec.
     impact, such as avoiding unnecessary emis-                        2001              2002
     sions through avoidance of dry runs, diver-
     sions, and idle time; additional resources
     required for extra staff re-work; and addition-
     al employee time made unavailable for new
     work and tasks.
        Sandra Chavez-DiVittorio, Boise Customer

                                                 NYK’s Environmental Development in Eastern Europe (EERO)
                                                 NYK has finalized the establishment of agencies in seven Eastern European
                                                 countries: Russia, Estonia, Latvia, Lithuania, Poland, the Czech Republic, and
                                                 Hungary. In the process of ISO 14001 certification in Western Europe, it is intend-
                                                 ed to sell this process to all local agencies and their customers through our
                                                 EERO department in Hamburg as well. We want to develop environmental
                                                 awareness within this territory—and there is a long way to go. All individual coun-
                                                 tries have a different understanding and standard.
Klaus Milde (left) and Sandra Nussbaumer at
the Hamburg Office of NYK Line                     The first step shall be to convince our agencies to adopt some of the environ-
                                                 mental measures, mainly paper usage, paper recycling, and consumption of
                                                 energy and water.
                                                   More difficult to achieve will be the disposal and recycling of waste, as this is
                                                 closely related to governmental regulations. In the second step, we would like to
                                                 sell NYK’s success and intention in this wide field to our customers, hoping that
                                                 many will follow our practices.

                                                 Initiatives at Terminals (YTI)
                                                 Yusen Terminals Inc. (YTI, Los Angeles) has in place the following safety and
The environment has always had a high            environmental measures at its terminals:
impact on those working in vessel operations
on the waterfront. For that reason, we are       • Meetings held before commencement of work to enhance on-site safety
especially concerned about air quality and       • Feedback system for improvement of administrative efficiency through quarterly
avoiding pollution in our harbor. We are stay-
ing vigilant to avoid any hazardous spills and    compilation of accident records
unnecessary air emissions.
                                                 • Assurance of emergency readiness
   Eric Martinez, YTI Vessel Superintendent
                                                 • Development and introduction of a new timing system to prevent trucks from
                                                  idling their engines and reduce waiting times at gates
                                                 • Adoption of materials and fuels that yield less exhaust gas
                                                 • Research into facilities to supply container ships with electricity generated at
                                                  land-based facilities

                                                 Environmental Tips for the Office (Indonesia)
                                                 The NYK Line Indonesia office has introduced rigorous paper saving measures to
                                                 help reduce the cutting down of trees.
YTI’s Los Angeles terminal
                                                   Efforts have also been made to more efficiently use electricity. Staff are
                                                 encouraged to make sure lights, computers, and copiers have been turned off
                                                 when they leave a room.
                                                   The environment within the Indonesia office has also been improved with the
                                                 introduction of real plants, watered on a regular basis, to replace imitation ones.

Ellen Sylvia, PT NYK Line Indonesia
32   Environmental Initiatives in the Office
                                                   Installation of Solar-Power Generation Equipment
                                                   On December 26, 2002, rooftop solar-power generation facilities completed that
                                                   day at the NYK Tobitakyu general training institute went into operation.
                                                     Consisting of six generators with 420 solar panels (120 centimeters by 80 cen-
                                                   timeters) with a generating capacity of 50 kilowatts, equivalent to the power
                                                   demand of approximately 15 households, the system can meet approximately
                                                   30% of the electricity needs of the institute. Unused daytime capacity is sold to
                                                   an electricity company.
     Solar panels on the roof of NYK’s Tobitakyu   Installation of Large Shredder and Recycling of Waste Documents
     general training institute
                                                   A large shredder installed at NYK’s Shibaura building in February 2003 went into
                                                   operation in March. This move makes possible the recycling of important docu-
                                                   ments that have passed storage time limits and were previously disposed of at
                                                     Through a special agreement, NYK sends all out-of-date documents
                                                   processed by the large shredder to a paper factory, where they are recycled as
                                                   toilet paper. In this way, NYK’s toilet paper is now made of its own waste docu-

                                                   Water Saving
     Large shredder                                NYK has already taken such waste-reducing measures as the installation of finely
                                                   adjusted valves and flush noise machines (audio privacy devices). To further
                                                   reduce water usage volumes, we have installed water-saving devices. These are
                                                   metal washers, less than two centimeters in diameter, with two small holes, that
                                                   are fitted onto the base of faucets. Having compared water usage volumes from
                                                   toilet faucets with and without these devices in tests that began in January 2002,
                                                   NYK has confirmed that a saving of up to 26% is possible and has installed them
                                                   in faucets in all 104 sanitary locations in the Tokyo headquarters building. We are
                                                   also considering their installation in dormitories for single employees and other
                           OUT                     corporate premises.

                                                   Environmental Activities at the Malaysian Office
     Water-saving device
                                                   Malaysia produces, on average, over 15,000 tons of waste every day. This is
                                                   equivalent to 0.8 kilograms of discarded waste per capita every day. If this situa-
                                                   tion continues, Malaysia’s level of waste generation is expected to rise by 2% a
                                                     In response to an appeal by the Malaysian government for more recycling to
                                                   reduce the volume of garbage needing to be processed, NYK’s Malaysian office
                                                   has organized a recycling campaign and made environmental protection aware-
                                                   ness an important theme of its environmental management programs. At present,
                                                   recycling containers have been set up by the Malaysian government at public
                                                   facilities such as schools, gas stands, places of worship, shopping centers, and
                                                   bus stops. NYK’s office now has garbage separation containers and is working
          Garbage sorting and recycling            to raise recycling awareness among all its employees.
          in Malaysia
Personnel and Environment                                                                                                                33

                                                Personnel Policy
                                                For the Company to respond swiftly and flexibly to a management environment
                                                that changes daily, it is essential that individual employees make appropriate
                                                judgments and that the organization as a whole is able to move quickly. To accu-
                                                rately appraise the commitment and achievements of employees and ensure that
                                                each employee’s contribution is adequately rewarded, NYK introduced a new
                                                personnel system in 2001 for land-based employees and 2003 for employees at
It is most important to create an environment
in which employees can work with enthusi-         To make this system still more effective, NYK continuously and thoroughly
asm. This is why NYK has introduced a new
personnel system and is determined to
                                                reviews the methods and standards for appraisal of target achievement, creating
undertake further improvements.                 an environment in which all employees can work with a positive, forward-looking
    We would like to further enhance the per-
sonnel training system.                         attitude.
    Naoya Tazawa, Human Resources Group           As a general logistics enterprise active on a global stage, NYK believes it
                                                should not only pursue short-term business profits but also carry out its corpo-
                                                rate activities with an awareness of its role as a global citizen in the 21st century.
                                                We believe that the way to make a more meaningful contribution to global society
                                                is by enhancing corporate vigor by putting into place an environment that enables
                                                every employee to be appropriately deployed and given the right equipment to
                                                carry out his or her duties with enthusiasm.

                                                Nurturing Talent
                                                Currently, some 15,000 employees work for some 300 Group companies in vari-
                                                ous parts of the world. The Tokyo headquarters devolves powers to carry out
                                                business and administrative activities to regional management organizations
                                                around the world. With a shared group business philosophy and recognition of
                                                the increased importance of exchange among staff in regional units, NYK is com-
                                                mitted to nurturing talent—its most important corporate asset—in various ways.

                                                NYK Week
                                                The NYK Week training program is held regularly for senior executives of each
                                                administrative organization in NYK. At the first such session, held in November
                                                2002, a total of nineteen senior executives—five from Europe, six from the
                                                Americas, six from Asia, and two from Oceania—gathered in Tokyo. The goal of
                                                the program was to try to create a new sense of values through respect for and
                                                interaction of different cultures and traditions. With joint activities and discus-
                                                sions, and opportunities to sample Japanese culture in visits to Kyoto and Nara,
                                                the gathering was an excellent opportunity for building a basis for closer coopera-
                                                tive relations among members from the various Group companies throughout the

                                                                     Training Systems
                                                                     Faced with dramatic changes in society, NYK runs a range of training and educa-
                                                                     tion programs for all employees, aimed at raising their awareness of a wide range
                                                                     of issues including the environment and honing their powers of adaptability.
                                                                         In tandem with the expansion of environmental management systems, environ-
                                                                     mental awareness activities are carried out using such media as seminars staged
                                                                     at venues around the world, e-learning over the Internet, solicitation of ideas on
                                                                     the environment, and the monthly Group magazine.
     Environmental training in Hamburg, Germany

     Environmental training in Singapore

     Education Program

            Land-based employees                                                                                           For all employees
             Initial training                                                                                              Training in management of cultural differences
                                                    English language training before entering Company
             Raising basic professional awareness   Training programs for new hires
                                                                                                                           Environmental training
                                                    Onboard training
                                                    Overseas training in Chinese language (participants assigned by NYK)   Training in giving presentations in English
                                                    Self-awareness and communications skills training
                                                    Short-term foreign-langage training overseas (five weeks)              Training in in-house use of English
                                                    Overseas MBA study (candidates chosen by Company)
                                                                                                                           Training in investment and returns
             Middle management
                                                    Training programs for more-senior employees                            Training in financial matters
             Management analysis and management
                                                    Training for managers
             Nurturing ability                                                                                             Training in fund-raising methods

             Executive level                                                                                               Supplementary lecture course in communication education
             Strengthening management ability       Training programs for executives
              and leadership skills                                                                                        NYK Ningen Juku

            Ocean-going employees
             Grade on joining NYK                   New employee training program

             Second/Third Officer, Engineer
                                                    New employee follow-up training
                                                    Diesel plant simulator training for new employees (engineers)
                                                    SMS training for licensed crewmembers
                                                    Junior crew management
                                                    Training for crude oil tanker cleaning and crude oil removal
                                                     operatives (assigned to crude oil tanker)
                                                    Training on LNG vessel A (for those assigned to an LNG vessel)

             Chief Officer, First Engineer
                                                    Senior crew management
                                                    Performance monitoring training

             Master Mariner, Chief Engineer         Advanced SMS study

                                            Focus on 14 in NYK (North America)
                                            NYK (North America) is committed to providing high-quality learning experiences
                                            to enhance employees’ skills, productivity, and performance to support our
                                            vision, goals, and business plan. This year, “14 Hours Training Goals” is based on
                                            the performance and development plans (employee goals) identified through the
                                            performance appraisal process.
                                              The goals of this training:
                                            • To provide opportunities for professional career development of employees
Studying ISO 14001 accreditation in North
American operations (New Jersey)            • To provide opportunities to identify and attain skills necessary to achieve func-
                                             tional goals
                                            • To align employees with our Company vision
                                            • To support continuous improvement
                                            • To gain a competitive advantage
                                              How to achieve the training goals:
                                            • Use of cross-training
                                            • Use of in-house library
                                            • Use of educational intranet sites
Environmental character competition prize
                                            • Seminars (management approval)
                                            • Pursue further education through our Tuition Reimbursement program
                                            • In-house training programs
                                            • Time management/PC training
                                            • Attend meetings with professional guest speakers
                                            • Environmental training

                                            Green Campaign
                                            Continuing from fiscal 2001, the NYK green campaign targets all employees of
                                            the Group and their families throughout the world. In the campaign, participants
                                            were invited to submit ideas for environmental protection and think up a charac-
                                            ter that can serve as an environmental awareness symbol. To raise environmental
                                            awareness in the home, participants were invited to contribute electrical house-
                                            hold records showing calculations of the amount of CO2 generated by their
                                            monthly electricity consumption.
     A total of 72 proposals were             There was an enthusiastic worldwide response to each activity. A total of 149
     received for an NYK environ-
     mental character.                      proposals were submitted by 87 people in Japan and 62 people from 16 other
                                            countries. Proposals included:
                                            • Use of solar power in warehouses
                                            • Use of wind power at container terminals
                                            • Use of hybrid cars as corporate vehicles
                                            • Use of recycled materials for shipbuild-   I am the environmental character Captain Eco,
                                                                                         who originated from a green campaign involving
                                             ing and shipfitting                         NYK Group employees all over the world.
                                                                                            I will be appearing in various venues to help
                                              We received 72 suggestions for a           promote environmental conservation.

                                            character to symbolize NYK’s environ-
                                            mental activities from contributors in
                                            Japan and overseas.

                                                                                                                     Captain Eco
     NYK Group Green Campaign
36   Dialog with Society
     An image of deep-sea drilling                      Toward a Better Understanding of the Global Environment and the
                                                        Structure of the Earth’s Crust
                                                        In recent years, climate irregularities have been reported around the world. One factor that has
                                                        been cited is the El Niño phenomenon of the Pacific Ocean. Japan has also been involved in
                                                        efforts to strengthen monitoring frameworks since it became clear that changes in the earth’s
                                                        crust are key factors causing the plate movements that lead to major earthquakes. The NYK
                                                        Group company Global Ocean Development Inc. operates an oceanographic research vessel
                                                        named Mirai, owned by the Japan Marine Science and Technology Center (JAMSTEC). The
                                                        Mirai is conducting research into the aforementioned global issues. It has also been informally
                                                        decided that Global Ocean Development will be entrusted with the operation (including extrac-
                                                        tion activities) of Chikyu, a deep-sea, scientific drilling vessel currently being constructed by
                                                        JAMSTEC. Preparations for putting the vessel into service are well advanced.
     Riser Drilling (Capability)
     Max. Water Depth: 2,500 meters
                                                           Through Mirai and Chikyu, the NYK Group is involved in research activities to gain a bet-
                          (future plan: 4,000 meters)   ter understanding of global environmental change and the structure of the earth’s crust.
     Drill String Length: 10,000 meters
                                                        * The oceanographic research vessel Mirai: the vessel places and collects ocean observation buoys, undertakes
                          (future plan:12,000 meters)
                                                          research voyages to the Arctic Ocean and monitors the atmospheric and marine environment mainly in the Pacific. The
                                                          vessel is scheduled to gather ocean data in the BEAGLE 2003 voyage around the Southern Hemisphere in fiscal 2003.
                                                        ** The deep-sea, scientific drilling vessel Chikyu: this ship, which is used for obtaining sediments, rocks, and micro-
                                                           biological samples from several thousand meters below the seabed, has an important role in the Integrated Ocean
                                                           Drilling Program, an international deep-sea scientific project under joint U.S.-Japan leadership. In this project,
                                                           research will be carried out into global environmental change, mechanisms causing earthquakes, and unknown
                                                           ecosystems and life-forms under the seabed through the extraction of underground samples. It is hoped that
                                                           these activities will lead to the establishment of new global sciences and life sciences.

                                                        Exchanges with Universities and Educational Establishments
                                                        As part of its community contribution activities, NYK is engaged on an ongoing basis in
                                                        various initiatives under the slogan “Two-way Exchange and Alliance with Universities and
     Image photo of the deep-sea, scientific            Educational Establishments.” Under a six-month program that began in April 2003, NYK
     drilling vessel Chikyu
     Image photo supplied by JAMSTEC                    speakers gave a lecture titled, “Marine Transportation and General Logistics” under the
                                                        rubric of industry to the economics faculty of Aoyama Gakuin University and a lecture
                                                        titled, “Marine Transportation” under the rubric of industrial information to the economics
                                                        faculty of Tokyo University. The lecturers were experts in various fields, including execu-
                                                        tives of NYK and speakers dispatched from Group companies. Since 2000, special lec-
                                                        tures on marine transportation administration have been given at Tokyo University of
                                                        Mercantile Marine, focusing on the importance of safe navigation and environmental pro-
                                                        tection for the marine transportation business.
                                                            It has been decided that NYK will give further industrial information lectures at Tokyo
                                                        University in fiscal 2004. Responding to requests, NYK will further strengthen exchange
                                                        and alliances with universities and educational institutions as part of its community contri-
     The oceanographic research vessel Mirai
     Photograph supplied by JAMSTEC
                                                        bution activities.

                                                        Cooperation with Environmental Research Bodies Concerning
                                                        Ballast Water Research
                                                        The Smithsonian Environmental Research Center of the United States is conducting
                                                        research into the transmission around the world of microorganisms and other undesirable
                                                        material found in ballast water. Recently, NYK cooperated with this effort by supplying two
                                                        Company-operated container vessels, M/V California Mercury and M/V Santa Barbara, for
                                                        practical experiments.
                                                           In the experiments, researchers are verifying the effectiveness of ballast-water exchange in
                                                        mid-ocean, a practice believed to combat environmental problems arising from transporta-
     Containership at sea
                                                        tion of microorganisms, by comparing differences in residual microorganism levels in ballast
                                                        water exchanged at sea and ballast water that is not exchanged at sea.
                                                           By drawing on its global reach and supplying ships as sites for environmental research,
                                                        NYK is also supporting research activities at the National Institute for Environmental
                                                        Studies, the University of California at San Diego, and other educational bodies.

                                        Afforestation Project in Australia
                                        In partnership with seven papermaking, electricity, gas, and trading companies,
                                        NYK has launched a eucalyptus-tree afforestation project near Adelaide, South
                                          By planting 1,000-hectare plots with trees every year from 2003, NYK plans to
                                        afforest a total area of 10,000 hectares of pastureland over 10 years. The timber
                                        will be harvested in 1,000-hectare lots and turned into wood chips before being
Area designated for afforestation in    sold to papermaking companies. The harvested areas will be replanted under a
Australia                               plan for continuous afforestation.
                                          There is a general awareness that continuous afforestation is essential for
                                        securing a stable future supply of raw materials for papermaking without damag-
                                        ing the global environment. Mindful that trees have the inherent ability to absorb
                                        CO2, companies from various industrial sectors are taking part in this afforesta-
                                        tion project.
                                          NYK helps provide a stable supply of wood chips for papermaking through
                                        operation of 35 vessels forming one of the world’s largest wood chip fleets. As
                                        the first marine transportation company to have a role in an afforestation project,
Tree planting                           NYK is contributing both to global environmental protection and regional eco-
                                        nomic prosperity through the conservation of forestry resources and prevention
                                        of salinization and other harmful processes.

                                        NYK Maritime Museum
                                        NYK reopened the NYK Maritime Museum in June 2003 after an overhaul of the
                                        facility located in the Yokohama Yusen building. This building, with its character-
                                        istic Corinthian columns, is a historical building in itself, and the great hall on the
                                        first floor used by NYK as its Yokohama branch office has been turned into a
                                        space redolent of history, where craftsmanship is fused with exhibits of mod-
NYK Maritime Museum                     ernistic images.
                                          In the permanent exhibition, visitors can follow the history of NYK—Japan’s
                                        leading overseas shipping company since the late 1860s—up to the present,
                                        enjoying images of early luxury cruise liners, samples of the food served on them,
                                        beautiful cruise brochures, and various kinds of vessel models that have support-
                                        ed global economic growth as well as modern cruise liners.
                                          In the Orientation Room, where many collections of marine transportation
                                        books are kept, sketches of approximately 800 vessels owned by NYK over the
                                        years are displayed on the walls.
Child-oriented summer holiday event,      In addition, annual summer events for children, numerous kinds of lectures,
2002                                    and other functions are organized. A hands-on exhibit called “Let’s go by solar
                                        car” was also staged in 2002, with invited lecturers from the NYK Safety and
                                        Environmental Management Group, and was very well received.

                                        Study Visits to Terminals
                                        NYK operates three autonomous container terminals in Japan, in Tokyo,
                                        Yokohama, and Kobe, and fifteen overseas. Within the limits of feasibility, study
                                        tours are organized at these container terminals for representatives of trading
                                        partners and concerned ministries and agencies, to deepen understanding of
                                        safety and other issues. Study visits to container terminals help to broaden
Daikoku, Yokohama, container terminal
                                        awareness of the terminals and their operation.

                                                        Community Contributions
                                                        Pat Sturgeon at NYK Line (Europe) has been enthusiastic about recycling for several years
                                                        and actively supports Little Haven Children’s Hospice through recycling old toners, car-
                                                        tridges, and mobile phones. The company that collects these items, which include NYK’s
                                                        old toners, gives a donation to the charity of her choice, which is Little Haven Children’s
                                                        Hospice in Westcliff-on-Sea (United Kingdom). The hospice provides care for children who
                                                        are affected by life-threatening illnesses and their families in Essex and Outer London. The
                                                        superbly equipped purpose-built hospice provides family care and accommodation for up
                                                        to 52 family members at any one time as well as indoor and outdoor play areas, a
                                                        hydrotherapy pool, and a multisensory room. Families of children are supported pre- and

                                                        As an entity engaged in activities of considerable importance to society, NYK
     Pat Sturgeon, who supports Little Haven
                                                        cooperates with and supports various organizations.
     Children’s Hospice activities
                                                        Support for educational establishments
                                                        • Association for Communication of Transcultural Study
                                                        • The Japan-United States Educational Commission
                                                        • Private-sector study for teachers (Japan)
                                                        • Shanghai Marine University, Dalian Maritime University (China)
                                                        • Rio de Janeiro Japanese School (Brazil)
                                                        • Wild Bird Society of Japan
                                                        • Japan Red Cross Society
                                                        • Akaihane (Red Feather) joint fund
                                                        • Marine Rescue Japan
                                                        • International Union of Geodesy and Geophysics
                                                          NYK Group companies are also involved in various support activities at their
                                                        operational bases.
                                                        Millennium Fund
                                                        To vigorously encourage charitable activities, NYK’s London unit has established
                                                        the Millennium Fund and encourages employees to suggest ways of contributing
                                                        to the community through actions and donations. Ideas are discussed and imple-
                                                        mented by the Millennium Fund Party, and support is given to the following initia-
     Millennium Fund members Caroline Banks,            tives and organizations.
     Sarah O’Sullivan, Pat Sturgeon, and Sarah          • Approved charitable initiatives, including those with which individual employees
     Emaar in London, England
                                                          are involved
                                                        • Community contribution events
                                                        • Local hospitals, schools, youth clubs, and shelters
                                                        • Donations by employees to sports clubs and other local organizations in which
                                                          they participate
                                                        European Unit (the Netherlands)
                                                        The Dutch unit makes donations to the following:
                                                        • Het Nederlandse Rode Kruis (Dutch Red Cross)
                                                        • Roparun (charity race for cancer sufferers)
     I think it is very important to be able to con-    • Vrienden van Sofia (Friends of Sofia children’s recreational facilities)
     tribute to society not only as an individual but
     also through business activities.                  • Danial den Hoed (cancer hospital)
        Wilma Erftemeijer in Rotterdam, the
Progress in Environmental Protection Activities                                                           39

                1977   November    Establishment of Fuel Economy and Ecology Committee

                1981   April       Design and installation of first NYK total bilge/sludge management
                                   system (bilge primary tank installation, etc.)

                1989   April       Design and installation of second NYK total bilge/sludge manage-
                                   ment system

                1990   October     Establishment of Global Environment Committee

                1992   September   Establishment of Marine Safety Headquarters and compilation of
                                   NYK’s Guidelines for Safe Vessel Operation and Pollution Prevention

                1993   September   Delivery of first double-hull tanker
                1994   June        Inauguration of International Safety Management (ISM) Project
                                   Team, first moves to set up Safety Management System (SMS)

                       July        Inauguration of NYK ISM Code Working Group consisting
                                   of 14 NYK Group companies

                       September   Establishment of SMS completed, activities commenced

                       December    Completion of first edition of SMS manual

                1995   December    Introduction of ISO quality standards at Marine Safety Headquarters,
                                   establishment of quality management structures to achieve quality
                                   levels recognized by outside bodies, establishment of quality
                                   management task force to bring about safety improvements in
                                   transportation services

                       December    Acquisition of ISM Code certification for safety management
                                   systems and simultaneous acquisition of ISO 9002 certification
                                   (issued by Nippon Kaiji Kyokai)

                1997   December    Enforcement of NYK Line Business Credo

                1998   January     NYK’s SMS approved by former Ministry of Transport after
                                   initial assessment, cruise vessel Asuka gains certification

                       December    Implementation of NYK’s in-house NAV9000 standards for
                                   safe vessel operation and environmental preservation

                1999   February    First use of refrigerated containers using HFC-134a

                2001   January     Strengthening of functions of Marine Safety Headquarters,
                                   launch of Safety and Environmental Management Committee

                       September   Compilation of Global Environmental Charter

                2002   March       Acquisition of ISO 14001 certification (Head Office and 500 ves-
                                   sels in operation, including chartered vessels)

                       July        Issue of Social & Environmental Report

                       July        Global Environmental Charter renamed Green Policy
                       October     Expansion of ISO 14001 certification (five branches and three
                                   independent container terminals in Japan)

                2003   June        Expansion of ISO 14001 certification (30 key overseas footholds
                                   in North America, Europe, and Asia)

                       June        Revision of Green Policy
40   ISO 14001 Certified Facilities                        (As of June 2003)

                               Name of Company                              Name of Site          Date
     Nippon Yusen Kabushiki Kaisha                     Head Office                             March 2002
                                                       Sapporo Branch                         October 2002
                                                       Yokohama Branch                        October 2002
                                                       Nagoya Branch                          October 2002
                                                       Kansai Branch                          October 2002
                                                       Kyushu Branch                          October 2002
                                                       Tokyo Container Terminal               October 2002
                                                       Yokohama Container Terminal            October 2002
                                                       Kobe Container Terminal                October 2002
     NYK Cruises Co., Ltd.                             Head Office                             March 2002
                                                       Cruise ship, Asuka                      March 2002
     NYK Global Bulk Corporation                       Head Office                              June 2003
     NYK Line (North America) Inc.                     Secaucus Office                          June 2003
                                                       Boise Office                             June 2003
     NYK Line (Canada) Inc.                            Toronto Office                           June 2003
     Yusen Terminals Inc.                              Los Angeles Terminal                     June 2003
     NYK Bulkship (U.S.A.) Inc.                        Secaucus Office                          June 2003
                                                       Los Angeles Office                       June 2003
     NYK Line (Europe) Ltd.                            London Office                            June 2003
                                                       Liverpool Office                         June 2003
                                                       Southampton Office                       June 2003
                                                       Glasgow Office                           June 2003
                                                       North Continental Office (Rotterdam)     June 2003
     NYK Line (Deutschland) GmbH                       Hamburg Office                           June 2003
                                                       Bremen Office                            June 2003
                                                       Duesseldorf Office                       June 2003
                                                       Frankfurt Office                         June 2003
     NYK Line (Europe) Limited (Scandinavian Region)   Gothenburg Office                        June 2003
                                                       Helsinki Office                          June 2003
                                                       Helsingborg Office                       June 2003
                                                       Aarhus Office                            June 2003
     NYK Line (Benelux) B.V.                           Rotterdam Office                         June 2003
                                                       Antwerp Office                           June 2003
                                                       Rotterdam Terminal Office                June 2003
     NYK Bulkship (Europe) Ltd.                        London Office                            June 2003
     NYK Line (Asia) Pte. Ltd.                         Singapore Office                         June 2003
     NYK Line (Malaysia) Sdn. Bhd.                     Kuala Lumpur Office                      June 2003
     PT NYK Line Indonesia                             Jakarta Office                           June 2003
     NYK Shipping Service (Thailand) Co., Ltd.         Bangkok Office                           June 2003
     NYK Bulkship (Asia) Pte. Ltd.                     Singapore Office                         June 2003
     NYK Bulkship (Thailand) Co., Ltd.                 Bangkok Office                           June 2003
     NYK vessels (including chartered vessels)         About 500 vessels                       March 2002
Protecting the beauty at sea,
            on land, and in the air.
                     ~The Earth Is Our Home
Nippon Yusen Kabushiki Kaisha (NYK)

Safety and Environmental Management Group
3-2 Marunouchi 2-chome, Chiyoda-ku
Tokyo 100-0005, Japan
Tel: +81 3-3284-5214
Fax: +81 3-3284-6367
E-mail: kankyo@jp.nykline.com

This publication is printed on recycled paper using soybean-oil ink.
Published: September 2003                                              Printed in Japan

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