1 July 2019
Ref#1/249
COMMUNICATION ON PROGRESS (COP)
Period covered by your Communication on Progress (COP)

From:

To:

To our stakeholders,

I am pleased to confirm that Terra Express LLC reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,
ALTANBAGANA Shiituu
Founder & CEO

COMPANY DESCRIPTION

Mission statement: We will act with integrity to create and deliver exceptional value to our customers and stakeholders.
Vision statement: Terra Express is dedicated to continuing our leadership position in the new era of integrated transportation and logistics in Mongolia.
Company Brief: Terra Express LLC was founded in 2011, and is the first company to introduce leading Western logistics solutions to the Mongolian mining sector among 300 employees.
World renowned Volvo-logistics solutions with FH13 and FH16 heavy duty trucks, integrated service and repairs/maintenance, fuel management and fatigue management systems, real time telemetric systems, driver training & education, western operational standards and an experienced management team is what drives the success of Terra Express LLC.

Most important strengths and core competencies: Its competitive advantage is based on high standards in areas of HSE, governance, reliability, asset utilization and environmental friendliness. A standardized fleet of major assets allows Terra Express to operate efficiently and keep it’s on shelf inventory to a minimum. Our technical solution is based on global best practices and managed professionally by experts in the field. Being supported by the Volvo global support network we carry out high standard service & maintenance, spare parts, tire and fuel and certified by ISO 14001 environmental management system. We introduced global best practices in human resource management, with integrated education and incentive system and extensive driver/staff trainings including implementing of UN 10 Principles policy. Terra Express sustainability starts with above value system and a principles-based approach to doing business. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. As a responsible big role in the community, we enact the same values and principles wherever they have a presence, and know that good practices in one area do not offset harm in another. By incorporating the Ten Principles of the UN Global Compact into strategies, policies and procedures, and establishing a culture of integrity, we are not only upholding their basic responsibilities to people and planet, but also setting the stage for our company long-term success.

• Workplace: Terra Express ensures employees provided in safe, suitable and sanitary work facilities where we based in convenient business in Central district at Blue Sky tower and Southgobi fully equipped standardized site camp.

• Harassment Policy and Regulations: We protect workers from workplace harassment, including physical, verbal, sexual or psychological harassment, abuse or threats as we do regular trainings and have an internal Policy and Regulations. Everyone involved with Terra Express is required to know and understand Business ethic/Code of Conduct/The way we work and our integrity and compliance standards, and apply them to their work every day. We have a specific reporting number/person in charge if anyone having issues or sees abuse/harassment who are breaching the code of conduct/ or policy. This reflects our strong commitment to undertaking our business with integrity and requires us to stick to rigorous standards of corporate governance and contribute to sustainable development.

We introduced global best practices in human resource management, with integrated education and incentive system and extensive driver/staff trainings including implementing of UN 10 Principles policy. Terra Express sustainability starts with above value system and a principles-based approach to doing business. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. As a responsible big role in the community, we enact the same values and principles wherever they have a presence, and know that good practices in one area do not offset harm in another. By incorporating the Ten Principles of the UN Global Compact into strategies, policies and procedures, and establishing a culture of integrity, we are not only upholding their basic responsibilities to people and planet, but also setting the stage for our company long-term success.

• Harm free operation: We take measures to eliminate ingredients, designs, defects or side-effects that could harm or threaten human life and health during operation/transport or disposal of products. We are certified by ISO 14000 standard which provides practical tools all kinds looking to manage their environmental responsibilities and disposal of products/waste management.

• Regular Trainings and Interviews/Feedback: We do regular Business ethic/Human Rights trainings among all staff and suppliers from an internal & external sources /legal firms and Business ethic training companies. And our legal and HR department regularly do individual interviews and take feedback on Human Rights and avoid any Human rights violence when doing business.

• Women engagement activity club: Terra Express established Mongolian local resided (Khanbogd, SouthGobi) women skills actively to promote women in everyday’s life. Our club established in January 2019, community of phenomenal women, is a source of strength, knowledge and skills sharing, support and training. Our supportive team to help to stay on track to learning and achieving their passions. We try to help to gain more exposure and growth through our individual trainers. (Reports available if necessary)

Celebrating Children’s rights day: Every 1st of June in celebration Children’s right day in Mongolia, Terra Express company showed its appreciation to employees 300 children and also in addition to 80 disability children presented with gifts. During the celebration in Ulaanbaatar and Khanbogd soum, the company also presented gifts and recognition awards to children who participated in the contest of drawing, creating poem for their family and performance during the event and a painting competition for the UB and local children. We have given the speech/presentation to the public during the event about children rights include the right to health, education, family life, play and recreation, an adequate standard of living and to be protected from abuse and harm. We wished all children and mothers that their lives will be filled with laughter and happiness.

- We do external audits of Human rights performance/specific direct numbers available for any violence occurred/

• Harassment Policy and Regulations: We protect workers from workplace harassment, including physical, verbal, sexual or psychological harassment, abuse or threats as we do regular trainings and have an internal Policy and Regulations. Everyone involved with Terra Express is required to know and understand Business ethic/Code of Conduct/The way we work and our integrity and compliance standards, and apply them to their work every day. We have a specific reporting number/person in charge if anyone having issues or sees abuse/harassment who are breaching the code of conduct/ or policy. This reflects our strong commitment to undertaking our business with integrity and requires us to stick to rigorous standards of corporate governance and contribute to sustainable development.

We build some engagement contacts with women’s NGOs, women activists, and women contacts in all areas especially in Local undeveloped areas.
We ensures that the fact-finding delegation is comprised of women, and include men and women delegates with experience in dealing with women’s human rights violations; seek contact with women from the area.
We continuously focus groups composed of women to develop a better understanding of the situation and explain your research.
We given knowledgeable about social and cultural attitudes attached to women, sexual violence, rape, and sex in the region and local community.
We ensures that women’s rights violations are properly documented; discrimination may exist in the laws and constitution, in the beliefs of society, in cultural practices, in access to economic resources and legal systems, and in family relations.
We keep maintain confidentiality and safety of any participating survivors.

• The best Company of the year company awards: Terra Express LLC has been awarded as "The Best Company in Transportation and Logistics Sector “Entrepreneur in 2014, 2016 and 2018". MNCCI held its "Entrepreneur" awards ceremony for the 20th year, distinguishing entities, organizations and business owners of the year who made solid contributions to the country’s social and economic development and corporate social responsibility commitments. UN global compact network Mongolia in partnership MNCCI started to name
The award which is recognition of business achievements in annual works, marginal profits, social responsibilities, creation of workplaces and export are the main criteria for selection of the top entrepreneurs.

• National Quality Award-2018 TERRA EXPRESS was privileged to receive a governmental award the Quality Award-2018 in terms of the Transport & Logistics SERVICE category, which is recognition of the outstanding work of quality professionals awarded from Mr. Enkhtuvshin.U a Deputy Prime Minister/Parliament member of Mongolia.
World Quality Day (WQD) is celebrated annually on the second Thursday of November around the world. In Mongolia, the day is celebrated today on 15th, as the National Quality Week co-organized by the Mongolian Agency for Standard and Metrology and the Mongolian National Chamber of Commerce and Industry (MNCCI).

The awards helps us to raise the profile of quality and its role in sustaining the success of growth as an organisation, in terms of governance, assurance and improvement. Terra’s quality management ensures that the activity of our consistently delivers on its promises to you as customers and stakeholders, an assurance framework to ensure us to reduce operational risk, and an improvement framework to mitigate it and improve.

We are continuously keen to provide customers & stakeholders with the highest safety & quality service for many years to come for our mutual development and prosperity.

• Forced/Bonded labour: Terra Express ensures that the company does not participate in any form of forced or bonded labour which we make stated in each employees labour contract and terms and policy.

• Business principles: Terra express is a member of Mongolian National Chamber of Commerce and Industry (MNCCI) and we together contributing a Business Principles which provide advice on CSR tools and policies to respect and support human rights in the workplace, marketplace and community.

• Wage standard: Terra Express comply with minimum wage standards, where employees’ wages are relatively satisfactory than other companies according to the employee surveys have taken.

• Non-discrimination: Terra Express ensures that employment-related decisions are based on relevant and objective criteria such as recruitment, dismissal, promotion, are not made (directly or indirectly) on the basis of personal characteristics such as sex, race, nationality, etc. but rather on the ability to do the job Employer has policies which promote equality of treatment and prohibit harassment in the workplace, management people are well trained in principles of non‐discrimination. We have Non­discrimination and equal opportunity guidance/regulations for senior/mid-level staff and also for clients.

• Organisation Cultural Survey is Open for employees (confidential feedback):
We do employees annual corporate culture surveys from each employees which energizes employees and makes them feel good about working to advance a company’s goals. The survey is intended to look employees current experience at the company, sees their open point of view, future of work, the forces that shape work, and implications for organizational culture. All responses will be kept confidential, and the survey should take about five minutes to complete.

• Certified OHSAS 18001:2007 international standard: as a committed service provider to OT, Terra Express LLC is proud to inform you that we have obtained a globally recognized Occupational Health and Safety Management System compliant with the OHSAS 18001:2007 standard, which allows for a system-based approach to managing and safeguarding occupational health and safety for all over operation.
An effective company safety culture can be significantly enhanced by the development and implementation of an effective occupational health and safety management system. Terra Express can actively reduce workplace risks through the implementation of an effective occupational health and safety management system.

• Organisation Cultural Survey is Open for employees (confidential feedback):
We do employees annual corporate culture surveys from each employees which energizes employees and makes them feel good about working to advance a company’s goals. The survey is intended to look employees current experience at the company, sees their open point of view, future of work, the forces that shape work, and implications for organizational culture. All responses will be kept confidential, and the survey should take about five minutes to complete.

• Certified OHSAS 18001:2007 international standard: as a committed service provider to OT, Terra Express LLC is proud to inform you that we have obtained a globally recognized Occupational Health and Safety Management System compliant with the OHSAS 18001:2007 standard, which allows for a system-based approach to managing and safeguarding occupational health and safety for all over operation.
An effective company safety culture can be significantly enhanced by the development and implementation of an effective occupational health and safety management system. Terra Express can actively reduce workplace risks through the implementation of an effective occupational health and safety management system.

Regular external audit checks by International company

• The best Company of the year company awards: Terra Express LLC has been awarded as "The Best Company in Transportation and Logistics Sector “Entrepreneur in 2014, 2016 and 2018". MNCCI held its "Entrepreneur" awards ceremony for the 20th year, distinguishing entities, organizations and business owners of the year who made solid contributions to the country’s social and economic development and corporate social responsibility commitments. UN global compact network Mongolia in partnership MNCCI started to name
The award which is recognition of business achievements in annual works, marginal profits, social responsibilities, creation of workplaces and export are the main criteria for selection of the top entrepreneurs.

• National Quality Award-2018 TERRA EXPRESS was privileged to receive a governmental award the Quality Award-2018 in terms of the Transport & Logistics SERVICE category, which is recognition of the outstanding work of quality professionals awarded from Mr. Enkhtuvshin.U a Deputy Prime Minister/Parliament member of Mongolia.
World Quality Day (WQD) is celebrated annually on the second Thursday of November around the world. In Mongolia, the day is celebrated today on 15th, as the National Quality Week co-organized by the Mongolian Agency for Standard and Metrology and the Mongolian National Chamber of Commerce and Industry (MNCCI).

The awards helps us to raise the profile of quality and its role in sustaining the success of growth as an organisation, in terms of governance, assurance and improvement. Terra’s quality management ensures that the activity of our consistently delivers on its promises to you as customers and stakeholders, an assurance framework to ensure us to reduce operational risk, and an improvement framework to mitigate it and improve.

We are continuously keen to provide customers & stakeholders with the highest safety & quality service for many years to come for our mutual development and prosperity.

• Certified ISO 14001:2015 International standard: Terra express has accredited an ISO 14001 an environmental management system in order to enhance its environmental performance. ISO 14001:2015 is intended for manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability. ISO 14001:2015 helps us to achieve the intended outcomes of its environmental management system, which provide value for the environment, the organization itself and interested parties. Consistent with the organization's environmental policy, the intended outcomes of an environmental management system include:
· enhancement of environmental performance;
· fulfilment of compliance obligations;
· achievement of environmental objectives.
We avoid environmental damage via regular maintenance of production processes and environmental protection system (air pollution control, waste, water treatment systems, etc.)
We ensure emergency procedures to prevent and address accidents affecting the environment and human health
We keep minimizes the use and ensure safe handling and storage of chemical and other dangerous substances
Terra express Assess the risk assessment on environment through and document them.

• Waste management: Terra express has waste management system that to manage waste from its inception to its final disposal. This includes the collection, transport, treatment and disposal of waste, together with monitoring and regulation of the waste management process. We have collection, transportation and treatment of the following 4 non-mineral waste from the operation site in accordance the Company HSE standards and policy.
- Paper- Plastic- Tire- Steel.
We have a technical expertise and financial capability to collect, transport and recycle and reuse 4 different waste products listed above. Waste Management system is the added value it brings to the recycling process and the local economy.

• Water policy council: Terra express enrolled in the Council which has been established on 14th April 2010 under the slogan “No water- no business”. The goal of the council is to build up legal, economic conditions for introduction of latest technologies cleaning household or industry water, to save water, to develop government and private sector's partnership in water sector.

• World water day: since 2012, Terra Express alongside Mongolian government celebrates world water day and inform & share all suppliers and employees to aware companies and public about water consumption.
• GreenDay tree planting activity: In Celebration of GreenDay, 7th October, we planted over 200 tree have been planted in the national park, growing percentage is over 96%; Planted about 3 hectares; National Park Green Project

• Long term strategic partner with EBRD: Terra Express has signed long term contract with EBRD is supporting the integration of Mongolia into the global economy with the financial and SME support package to us. Integration is one the six transition qualities that the EBRD has identified as elements of a successful and sustainable economy. The others are resilience, green, competitiveness, good governance and inclusion. EBRD ensures that the collaboration companies must follow Environmental and Social Action Plan (ESAP), a summary of environmental and social performance, implementation status and other basic information to help the EBRD review the Company compliance with the applicable environmental and social laws and the EBRD Performance Requirements (PRs). And the working conditions in the projects that it finances are in compliance with national labour laws and health and safety regulations and international good practice in these areas.

• Certified ISO 14001:2015 International standard: Terra express has accredited an ISO 14001 an environmental management system in order to enhance its environmental performance. ISO 14001:2015 is intended for manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability. ISO 14001:2015 helps us to achieve the intended outcomes of its environmental management system, which provide value for the environment, the organization itself and interested parties. Consistent with the organization's environmental policy, the intended outcomes of an environmental management system include:
· enhancement of environmental performance;
· fulfilment of compliance obligations;
· achievement of environmental objectives.
We avoid environmental damage via regular maintenance of production processes and environmental protection system (air pollution control, waste, water treatment systems, etc.)
We ensure emergency procedures to prevent and address accidents affecting the environment and human health
We keep minimizes the use and ensure safe handling and storage of chemical and other dangerous substances

• Terra Compliance Program: Terra Express implementing anti-corruption policies and procedures to meet our legal compliance obligations and mitigate corruption risks as corruption creates potential criminal, civil and business consequences. We have Business Ethic Policy, Anti-Corruption guidance/policy for every staff and business partners.
Our business partners, employees and suppliers are increasingly required to document their anti-corruption compliance programs or risk losing contracts/job. Terra express Assess the risk of corruption through each contracts and document them.

• Terra express top management commitment is always visible to support for company compliance policies and activities; this will foster a culture of integrity in which bribery is unacceptable. Our commitment for preventing corruption involves internal and external communication of our policies and our involvement in developing the corruption-prevention procedures. This includes setting prevention policies; assigning management to create, implement and monitor procedures; and keeping these under regular review. The commitment of top-management involves formalizing the company’s anti-corruption position in an available written document which ensures that internal procedures support the company’s anti-corruption commitment.

• Regular Trainings and Interviews/Feedback: We do regular Business ethic/Anti-Corruption trainings among all staff and suppliers from an internal & external sources /legal firms and Business ethic training companies. And our legal and HR department regularly do individual interviews and take feedback on bribery and avoid conflicts of interest when doing business.

• Business Engagement with Independent Authority Against Corruption of Mongolia
Terra express actively input to the implementation of the IAAC Anti–Bribery Convention and contributes the business voice to consultations with the IAAC Mongolia on Bribery, the IAAC Anti-Corruption and Integrity Forum and other relevant trainings which deal with the issues of bribery and corruption. Business works with the IAAC to encourage further activities that create opportunities for responsible business and recognize the need for joint action by business and government in the fight against corruption.

• Terra Compliance Program: Terra Express implementing anti-corruption policies and procedures to meet our legal compliance obligations and mitigate corruption risks as corruption creates potential criminal, civil and business consequences. We have Business Ethic Policy, Anti-Corruption guidance/policy for every staff and business partners.
Our business partners, employees and suppliers are increasingly required to document their anti-corruption compliance programs or risk losing contracts/job. Terra express Assess the risk of corruption through each contracts and document them.

• Terra express top management commitment is always visible to support for company compliance policies and activities; this will foster a culture of integrity in which bribery is unacceptable. Our commitment for preventing corruption involves internal and external communication of our policies and our involvement in developing the corruption-prevention procedures. This includes setting prevention policies; assigning management to create, implement and monitor procedures; and keeping these under regular review. The commitment of top-management involves formalizing the company’s anti-corruption position in an available written document which ensures that internal procedures support the company’s anti-corruption commitment.