Peninsula continues to expand its supply chain presence and operational control. This commercial growth has brought new relationships across the shipping, oil, banking, insurance and trading sectors, but the manner in which Peninsula deals with these new stakeholders remains constant: We provide them with full transparency.
Transparency is a word that has become overused in our industry. What is important to us is that Peninsula’s stakeholders understand our business model so as to instil confidence and so that they can take comfort in it – only then can long-term commercial relationships flourish. Being transparent is much more than sending out policy documents. Any organisation in business today can draft a suite of compliance and risk policies for distribution.
Peninsula’s differentiating factor is our ability to implement and enforce these policies and procedures; ensuring the highest possible standards of compliance are achieved.
Throughout our history, Peninsula has always insisted that key stakeholders spend enough time in our offices, and with our people, to see our risk controls first-hand and to fully understand how they interact with our business model. Today’s fast-paced and ever changing economic, regulatory and political landscape means it is more important than ever to maintain regular and transparent dialogue with key stakeholders. One of Peninsula’s key strengths has been our continued focus and commitment to enhancing risk management controls throughout the organisation; ensuring that they are current, relevant and that our stakeholders have full visibility on what we are doing.
Unfortunately the industry has experienced failures in compliance, poor risk management and, in extreme cases, fraud. All of which have imposed losses on major banks in the process. Over many years Peninsula has embraced the irrevocable trend towards complexity and sophistication. For us a critical metric of our success has been to improve corporate governance and transparency. Our relationship with professional stakeholders in particular, has benefited significantly from this stance.
Building from solid foundations
Peninsula’s business model has always been to build risk management and control functions before expanding the business scope. From inception in 1996 the company operated with credit insurance. Since global sanctions existed, we have employed the most sophisticated and comprehensive monitoring and control techniques available; ensuring that we apply more stringent internal policies than are required by external stakeholders. For sanctions compliance the reality is that there are no perfect solutions, however our obligation is to ensure that we are doing everything possible to comply and that we have the utmost confidence in our processes.
We have always strictly enforced a fully hedged policy on oil purchases and sales, thus removing price and market risk from the equation. We employ comprehensive ‘triple check’ structures to ensure compliance, and fully open our books to professional stakeholders to audit our systems, procedures and risk professionals. We believe that Peninsula operates the most comprehensive price risk management framework in bunkers.
The importance of a risk management culture
Commitment to a culture of risk management must come from the very top and Peninsula’s leadership team has continually proved that a conservative approach to risk is no hindrance to successful business development. Peninsula’s financial performance may be better than ever, but it is the zero price and market risk with zero bad debts that our stakeholders respect most. A completely aligned Board and management structure ensures that Peninsula employees are acutely aware of their priorities and obligations across the risk spectrum.
Compliance at all levels
Peninsula has operated with a fully compliant risk culture throughout the company’s existence, the IMO 2020 sulphur regulations brought fresh challenges. As a global supplier and reseller, Peninsula had a unique insight into market preparations. We commenced project planning in mid-2018 with topics as diverse as tank cleaning, tanker preparation, customer compliance choices and refinery output analysis. All workstreams worked uniformly to produce a coherent action plan that paved the way for a seamless transition into the new marine energy environment of today. Peninsula identified the need for additional human resource to help our customers navigate the new supply options.
Our Global Head of Quality has been in situ for over a year and has proactively visited customers on every continent to help plan their procurement strategy and deal with any queries they might have. He has also trained a diverse range of Peninsula employees ensuring that we can add value to stakeholder relationships; and display integrity in the process.
Full transparency remains a key attribute that Peninsula’s stakeholders value above all else.