Port of Tauranga Limited

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1 Port of Tauranga Limited Landlord Based Operational Risk Management Pat Kirk Group Health & Safety Manager

2 Port of Tauranga Limited NZX Top 50 Listed Company (market cap circa $3 billion) Tenth largest company on NZX by market cap 10,300 shareholders Bay of Plenty Regional Council through Quayside Securities own 55% New Zealand s largest port by volume (22 million tonnes) New Zealand s largest container port (1,085,987 TEUs) Investments in Northport Ltd and PrimePort Timaru Ltd Operate inland ports (MetroPort) in South Auckland and at Rolleston (MetroPort Christchurch) Port of Tauranga Limited

3 Tauranga Whangarei Auckland Lyttelton New Plymouth Napier Bluff Gisborne Wellington Dunedin Timaru Nelson Picton Greymouth NZ Various Taharoa Westport Thousands of Tonnes New Zealand Import/Export Volume by Port Import and Export Cargo by Port for Year to 31 December Export Import Source: Statistics New Zealand

4 Year Ended June 2017 Exports 14.2M Tonnes 2016 Exports 13.1M 22% 20% 3% 8% 16% 18% 35% Logs Other Forestry Dairy Kiwifruit Steel 2% 7% 16% 39% Logs Other Forestry Dairy Kiwifruit Steel All Other Goods 14%

5 Log Exports by Country 4% 2016 Exports 4.5 M JASM 7% 9% China Korea 8% 3% Japan 9% 54% China Korea Japan 22% 58% India Other 26% India Other 2017 Exports 5.4 M JASM

6 Container Volumes Total TEUs Container volumes 13.8% increase in container volumes 2017 vs 2016

7 Title Tauranga Container Terminal Mount Maunganui Wharfs

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9 Port of Tauranga Limited Tale of Two Cities

10 TCT Operational Profile

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13 Tauranga Container Terminal Traditional Principal Contractor dominant POTL relationship Cranes / Straddles/ Workshop Leasehold areas/buildings/tenants Carter Holt Harvey Fonterra Cool Store Nelson High degree of control of site Port user engaged contractors Stevedores Service providers

14 Mount Maunganui Wharves Operational Profile

15 Common User / Lease Area Log Yards

16 Break Bulk Operations Bulk Cargo s

17 Mount Maunganui Wharves Landlord dominant POTL relationship Lower degree of direct control/influence Leasehold buildings (Tenants) Carter Holt Harvey Zespri NZ Steel Land lease areas Fonterra Champion Flour Genesis Coal Log yards Leaseholder engaged and managed contractors Operate common user safety protocols

18 Common User Safety Protocols An agreed set of operational safety rules and protocols Developed jointly by the port user groups and the port Self policed by all parties Designed to enable multiple operations safely on a single site Reviewed annually by port user group and port to ensure operational integrity.

19 Working Relationships on the Port Over2000 people working on the Port every day Of this, only 306 (15%)are direct employees or contract workers of Port of Tauranga Remainder are other Port users employees, Contractors, Sub-Contractors, Service Agents etc.. who just happen to undertake their business on the Port The Ports Primary Business or Undertaking on Mount side is largely being a Landlord. Similar model/structure to airports and shopping malls Just because they are on the port does not mean the port employs, controls or directs them.

20 Relationships Scenario: Log Exports Party Port of Tauranga Limited Cargo owner Log exporter Marshalling company Stevedoring company Road & rail transport operators Fumigator Labour hire Various Providore (various) Ship s crew Ministry of Primary Industries (MPI) Inspectors Relationship Lessor Exporters Customer (Lessee) Lessee s contractor Lessee s contractor Cargo Owner/Lessee s contractor Lessee s contractor Genera contractor Shipping Agent Shipping Agent s contractor Shipping Agent s contractor Government Agency

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30 On Site Tenants

31 Port Tenants Building Lease (CHH, Fonterra, Zespri) Land Lease (Champion Flour, Solid Energy) 100% self contained Excellent H&S Management Systems and practices Operate own systems within lease areas Abide by higher level Port common user rules outside lease areas Understands its role in serving the wide logistics ecosystem Authentic, trusted, long- term relationships Ports Business/Undertaking creates zero risk for their Business/Undertaking within their lease areas

32 Single Site Multi User Work Areas Big area of focus for Ports given the complexity of business structures, operations and contractual relationships. Real difficulty where there is no direct legal relationship with the operators on the Port Key issue is identifying for each operational situation who has what specific aspects of control and influence. Moved beyond who employs who? to who can impact who. Frequently overlapping duties between adjacent operations irrespective of business relationship.

33 How it Works Define the operation / scenario Determine who has skin in the game Determine (jointly) who controls what Determine (jointly) who influences what Clearly define and agree operational areas of control Form a combined plan of attack (Dynamic Risk Plan) Understands its role in serving the wide logistics ecosystem Authentic, trusted, long- term relationships Assign actions, duties, responsibilities accordingly. Pressure test the plan Review and implement

34 On Train Scaling

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36 On Train Log Scaling Operation Direct Control Forest Owner Product owner Log Exporter Forest Owners Contractor Marshaller(A) Exporters Contractor Rail Company (Locomotives/Carriages) Adjacent Influences Rail Company - Adjacent operations Understands its role in Port Company (Rail Lines and serving Land) the wide logistics Port Company (Other Port Users) ecosystem Marshaller (B) Adjacent operations Fumigator - Adjacent operations Transport operators - Adjacent operations Authentic, trusted, long- term relationships

37 Key Issues/Challenges Defining who has what control Primary Duty of Care Rules? Who sets Who enforces Multi Company Communications? What How Frequency Logistics Understands its role in serving the wide logistics ecosystem Authentic, trusted, long- term relationships Combined risk management approach No legal rights to direct Disagreement Cost sharing

38 Why It Works Communicate & Collaborate Requires from all parties: Clearly define and agree operational areas of control Understand the bigger picture implications / risks Respect (no master/servant) Trust Understands Acknowledgement of skills its role in Compromise serving the wide logistics Effective Communication ecosystem / Feedback

39 How it Works Team Approach

40 How it Works Individual Responsibility THANK YOU