Re. Agenda Item 3: The actions of the Executive Board members are not to be approved.

Reasoning:
TUI AG’s Executive Board fails to sufficiently exercise its responsibility to develop more effective climate and environmental protection measures.

No commitment to global climate goals

TUI AG is not committed to implementing the global climate goals, which include cutting absolute greenhouse gas emissions from the transport sector by 100 per cent by 2050. (https://www.tuigroup.com/en-en/responsibility/sus_business/climate-change).

TUI AG and its subsidiaries, Hapag-Lloyd Kreuzfahrten GmbH, Marella Cruises Ltd. and TUI Cruises GmbH (a joint venture with Royal Caribbean Cruises Ltd.), continue to rely on heavy fuel oil, which is harmful to human health and the environment. Apart from the environmental pollution, no longer in keeping with the times, caused by heavy fuel oil, the greenhouse gas emissions of the fleet are also growing substantially, contrary to the industry-wide obligation. This means that the group’s current activities are incompatible with the climate goals of the Paris Agreement.

The group’s strategy respectively the composition of the fleet are not geared to match the requirements of the new EU Commission (Green Deal), which envisages a transformation of the transport sector to achieve “zero emissions” of greenhouse gases by 2050 and the inclusion of shipping in the European Emissions Trading System ETS.

The International Maritime Organization IMO aims to reduce CO2 emissions from shipping by 50 per cent by 2050 compared with a 2008 baseline. These plans fall significantly short of the climate goals of the Paris Agreement already. Meanwhile, the cruise sector under its umbrella organisation CLIA has set itself even less ambitious targets: The member companies, including Hapag Lloyd Cruises and TUI Cruises, are only aiming to cut CO2 emissions per passenger by 40 per cent by 2030. Against the backdrop of the launch of additional ships, emissions will probably continue to grow in absolute terms. This means that the cruise sector will move even further away from the globally agreed climate goals.

TUI AG’s subsidiaries focus on further fleet growth without substituting the energy supply fully based on fossil fuels in the foreseeable future. 

As a concrete example, the plans pursued by TUI Cruises contradict the IMO’s climate goals, which are not very ambitious in the first place. TUI Cruises’ planned newbuilds scheduled for delivery in 2023, 2024 and 2026 will be fully powered by fossil fuels according to current plans. While the CO2 intensity per passenger will decline slightly, absolute greenhouse gas emissions by TUI Cruises will grow strongly. Decoupling growth and greenhouse gas intensity would require the inclusion of renewable sources of energy. However, currently there are no firm plans to include them.

The use of fuels of inferior quality (heavy fuel oil) by the ships of TUI Cruises’ fleet results in pollutant emissions into air and water. The continued use of toxic heavy oil also entails the risk of oil spills that would arise if oil were to be discharged into the sea. Since 2020, an 0.5 per cent sulphur cap for fuel has applied across the globe. More than 90 per cent of global ship fleets implement these requirements by using ships powered by low-sulphur fuels such as marine diesel. The ships of the “Mein Schiff” fleet operated by TUI Cruises have selectively been equipped with sulphur scrubbers so as to be able to continue operating with toxic and dangerous but cheap heavy oil. The environmental and health-related risks have meanwhile become largely known to the general public, and in many places, a further tightening of the caps or a general ban on the use of heavy oil is being called for. As long as ships carry heavy oil on board, there is a risk of spills of heavy oil. This goes hand in hand with major financial costs resulting from ecological and economic damage.

The scrubber technology installed on many ships remains highly controversial. A growing number of studies by various national environmental authorities recently warned against the incalculable risks resulting in particular from open-loop systems discharging the washwater into the sea. Some ports, coastal towns and regions have therefore announced a general ban on using scrubbers in their waters.

Investors are threatening to withdraw in the event of non-compliance with climate and environmental protection

Compliance with environmental, social and governance criteria (ESG criteria) is becoming increasingly important for institutional investors. For the aviation and cruise sectors, in particular, their major deficits in this area are problematic. Surveys have confirmed that a positive correlation exists between compliance with ESG criteria and the performance of companies. Sustainably operating and well-managed businesses are thus better candidates for investment.

Re. Agenda Item 4: The actions of the Supervisory Board members are not to be approved.

Reasoning:

TUI AG’s Supervisory Board does not sufficiently exercise its responsibility to monitor and instruct the Executive Board to meet international obligations and align its business policy to the UN Sustainable Development Goals (SDGs).

TUI and the UN SDGs

TUI Group claims it is committed to promote “greater sustainability in tourism” and support the UN Sustainable Development Goals (SDGs). TUI has been correct in recognising that “the tourism value chain […] connects closely with many sectors, and through these industries we have the opportunity to accelerate progress towards all 17 SDGs; however, three goals focus in particular on sustainable tourism – SDG 8 on decent work and economic growth, SDG 12 on responsible consumption and production, and SDG 14 on life below water.“ (https://www.tuigroup.com/en-en/responsibility/strategy/SDGs). However, there are many deficits in implementing these goals.

Non-compliance with the UN Social Covenant

TUI Cruises does not comply with a number of essential obligations under the International Covenant on Economic, Social and Cultural Rights (UN Social Covenant). The rights anchored in that Covenant include in particular labour rights, the right to social security, the right to an adequate standard of living, the right of everyone to the enjoyment of the highest attainable standard of health, the right to education and participation in cultural life, and the right to non-discrimination in the enjoyment of these rights.

Corporate profits through exploitation of labour

Inexpensive dream cruises for passengers and record revenues for TUI Cruises are based on low wages, long working hours, many hours of overtime work and social dumping for the workers, most of whom are from Asia.

Tax and legal privileges through changing the flag of the fleet

None of TUI AG’s cruise ships sails under the German flag. The 6 cruise ships of the “Mein Schiff” fleet and all other TUI Cruises vessels are registered under the Malta flag. This does not only enable TUI to circumvent the strict standards of German Labour Law and pay very low wages, but also means that TUI Cruises is no longer obliged to hire workers from EU member states so that the company primarily recruits people from the Philippines, Indonesia or India.

The change of flag also provides another advantage: Thanks to a tax privilege, TUI Cruises’ tax rate is only 0.05 per cent. At a profit of 126.5 million in 2015, it paid less than 64,000 euros of taxes to the German tax authorities.

Two-tier society below deck

Stiftung Warentest concluded that cruise ship workers live in a ‘two-tier society’. The few more highly skilled employees, such as supply officers, will not stay aboard for more than three months. They tend to be EU citizens. Kitchen and deck assistants undertake to work nine to eleven consecutive months.

“They earn less and do not receive any social security benefits from the employer after leaving the ship.” (Test issue 1/2019: “So klappt es mit der Traumreise“)

Low wages for Asian workers

Workers from non-EU member states, primarily from Asia, are usually offered temporary employment contracts for up to 11 months and earn around 600 € a month. Although that pay is slightly higher than the average pay in the sector, it already includes overtime so that Asian workers work up to 70 hours a week. Their hourly pay thus stands at around 2 €.

Poor social security cover and inhumane living and working conditions

Workers only get a day off when they fall ill. Otherwise they have to work non-stop throughout the term of their contract. Contact with their families at home is very limited due to the high costs of WiFi on board, which the workers have to pay themselves. Life on board is also impacted by the accommodation: two workers share a small cabin, there basically is no privacy. It is not infrequent for the workers to suffer from psychological and health problems, e.g. chronic fatigue, even after the end of the cruise.