For many years, COSCO has been insisting on its innovation in management system and keeping close with the world’s most advanced management standard to continuously improve its level. The corporation has grown up from a follower of advanced management system methods into a creator of advanced management system methods, and in particular has made continuous contributions to the comprehensive risk management practice. In recent years, the corporation has established systematic modern enterprise management system, based on the ISO9000: 2000 Quality Management System Standard, ISO14000: 2004 Environmental Management System Standard, OHSAS18000 Profession Health & Safety Management System 1999, ISO17799/ISO27001 Information Security Management System, and in compliance with the requirements of AS4360:1999/COSO Risk Management Framework and Guidelines for National Enterprises on Comprehensive Risk Management, Global Compact Social Liability Management System Guidelines, GRI Report System, etc. The current management system of the corporation adopts theories of system integration and lean management, integrates standards of management system and requirements of related national regulations and rules, and runs the gist of the Total Quality Management (TQM) through in the system operation. With excellent performance mode for system evaluation, and Six Sigma-centered lean management measures as important tool for continuous improvement, the management system has successfully established long-term efficient mechanism of self restriction, self discovery, self betterment, continuous improvement and excellent pursuit. The corporation therefore has become the pioneer who has successfully adopted the management system to improve enterprise value, and established the leadership in the management system building.

To realize its strategic target and ceaselessly improve the procedure efficiency and profit making capability in production and capital operation, COSCO Group introduced the management measure of Six Sigma in 2002 as an important strategic tool, to execute the Six Sigma-centered lean management and standard-meeting management. In 2006 the corporation rebuilt the procedures according to the Global Compact Social Liability Management System Guidelines, GRI Sustainability Reporting Guideline, and Guidelines for National Enterprises on Comprehensive Risk Management. COSCO has rebuilt its business procedures, to integrate the articles and requirements of comprehensive risk management and Global Compact into the management decision-making and business procedures, to build up the Procedures for Social Reliability and Harmonious Enterprise Management and Procedures for Sustainable Development Report, and risk management procedures for key processes. At the same time, through working standards, the corporation put the requirements and risk authorization of Global Compact, social liability, and risk management into the actual practice of every COSCO person. COSCO has completed the building of its total risk management system framework in early 2006.

On June 6, 2006, SASAC officially distributed the Guidelines for National Enterprises on Comprehensive Risk Management, which COSCO has conducted timely transfer for its subsidiaries. Second-tier subsidiaries of the group has carried out initial learning on the file, and drafted implementation and arrangement plans which have been submitted to the group corporation. According to the Guidelines for National Enterprises on Comprehensive Risk Management, and relying on many year of experience of the group in the implementation of risk management, COSCO Group has originated 15 steps to push and implement comprehensive risk management.

To direct subsidiaries to implement SASAC’s files on comprehensive risk management, the group has established a scientific research project titled Application and Promotion of Comprehensive Risk Management in COSCO Group. In the report of the project, COSCO offers detailed demonstration and annotation for the Guidelines for National Enterprises on Comprehensive Risk Management chapter by chapter and item by item, provides implementation steps, technology measures, and implementation solution, as well as the group’s layout, planning and milestone to push and implement the comprehensive risk management. The project therefore provides support in technology knowledge for the group to establish and prefect its comprehensive risk management system in high efficiency and high quality.

COSCO Group has become the first enterprise under direct administration of the central government, which has established comprehensive risk management information system, with the establishment of comprehensive risk management system Phase I Project, and modules of Global Compact and open affair disposal.

In February 2006 COSCO’s comprehensive management system passed the joint certification of Det Norske Veritas, China Classification Society Quality Assurance Ltd, Assessment and Certification Center of National Center of Safety Science, & Technology State Administration of Work Safety. They conducted initial evaluation for the comprehensive risk management system of COSCO, believing that the modern enterprise management system, of international advanced level, is prospective and systematic, and puts the whole under administration with scientific development view, which hence has laid solid foundation for the group to realize spanning development.

COSCO Group plans to complete the implementation of comprehensive risk management in 2006-2008.