S Social capital
Key stakeholders in our business include the communities within which we operate, as well as shareholders, suppliers, customers and government, among others.
Open, honest and respectful engagement is essential to our earning and preserving our social licence to operate – as well as our legal right to do so. These in turn are essential to the sustainability of our business. We recognise our responsibility to share the value we create at our mining operations, thus contributing to the socio-economic upliftment of our communities. We take cognisance of our need to maintain our legislative and regulatory compliance and we strive to meet or exceed Mining Charter targets.
RELEVANT MATERIAL ISSUES
- Conducting active stakeholder engagement to minimise any adverse impact on our stakeholder relations
- Maintaining our legislative and regulatory compliance, focusing on the MPRDA and the Mining Charter
RELEVANT IDENTIFIED RISKS
- Industrial and/or community action
We define our stakeholders as those individuals, groups and entities directly affected, both positively and negatively, by our business activities.
External stakeholder engagement is the responsibility of Northam’s chief executive and chief financial officer, while internal stakeholder engagement is undertaken by the general managers at each operating mine, together with the executive officer HR.
Major impacts in the area of stakeholder relations are felt at operational level. For this reason, operational management is empowered to deal with concerns raised by stakeholders. Management is committed to reacting timeously to stakeholder concerns, and engages both formally and informally. External stakeholder concerns may be escalated to the chief financial and chief executive officers.
The group conducts a sustained programme of communication directed at its stakeholders, including shareholders and their advisors, employees, unions, communities, government and regulators and non-governmental organisations (NGOs).
Northam is a member of the Chamber of Mines and actively participates in the Chamber's industry initiatives.
Engaging with our stakeholders
Shareholders, providers of capital, research analysts, fund managers, media
Northam provides information on operating, financial and other performance in a timely manner, using clear and plain English.
Channels of communication include:
- regulatory channels such as the JSE’s Stock Exchange News Service (SENS)
- website postings
- electronic communiques to a database of registered stakeholders including the investment community and media
- regular briefings to apprise the investment community of company developments and performance
- formal one-on-one meetings with significant shareholders
Shareholders are encouraged to participate in the AGM of the company and to raise issues of concern or interest directly. The notice of meeting is a regulated issue and shareholders are notified accordingly.
Employees and unions
Relations with employees and organised labour are governed by recognition agreements and conditions of employment by legislation.
Northam supports the rights of all employees to freedom of association and acts in accordance with the South African Constitution, prescribed legislation, industry compacts and recognition agreements with unions.
The company encourages open communication and employees are encouraged to raise issues of concern and interest via the formal and informal structures in place, including through the human resources department, line management and union structures.
Northam engages on a formal and regular basis with local authorities, including the Moses Kotane and Thabazimbi municipalities in respect of Zondereinde, and the Greater Tubatse and Thaba Chweu municipalities in respect of Booysendal. Community forums are in place to address community concerns, such as local employment, training, and development and procurement.
Community development is undertaken according to the commitments made in our SLPs. In line with the requirements of the SLP, Northam ensures that its community development policies and practices are aligned with those of the local municipalities' integrated development plans (IDPs) as far as is reasonably possible.
Northam has long-standing relationships with its customer base. The group's marketing department maintains regular weekly contact with its domestic and international customers, and hosts customer meetings and visits customer facilities. Customer representatives, in turn, visit Northam's mining and metallurgical operations.
Any issues relating to customer satisfaction are taken up directly with the marketing department.
|Key stakeholders||Topics and concerns||Communication channels|
|Shareholders and investors||
|Suppliers and contracting companies||
|Communities and NGOs||
|Government and regulatory authorities||
SOCIAL AND LABOUR PLANS
The MPRDA of 2002 requires the submission and approval of SLPs as a prerequisite for the granting of mining or production rights. SLPs require the development and implementation of comprehensive human resources development programmes, a mine community development plan, housing and living conditions plan, employment equity plan and processes to save jobs and manage downscaling and/or closure.
Northam believes that these programmes are aimed at promoting employment and the advancement of the socioeconomic welfare of all South Africans while helping ensure economic growth. In particular, we acknowledge the important role of the Mining Charter, provision for which was made in section 100(2)(a) of the MPRDA, as an instrument of transformation in the industry with the help of set targets.
By our adherence to the MPRDA and Mining Charter, we share the value we create at our mining operations with stakeholders, as we strive to meet or exceed set targets.
MINE COMMUNITY DEVELOPMENT
APPROACH AND STRUCTURE
Northam recognises its responsibility to contribute to local communities and to major labour-sending areas, providing project and infrastructural support in pursuit of sustainable socio-economic upliftment. We maintain open and proactive communication channels with community structures and other stakeholders in order to deal with community concerns, expectations and developments. The company seeks to mitigate any negative impacts on local communities.
In compliance with the requirements of the MPRDA and the Mining Charter, Northam's operations focus on contributing to mine, community and rural development. The company, therefore, pays significant attention to the establishment of local economic development (LED) projects identified in SLPs.
Northam's SLPs are aligned with the integrated development plans (IDPs) of local municipalities to address community needs effectively. In addition to LED, the company also supports several projects that are not necessarily in the ambit of its SLPs but are considered worthy causes.
Compliance with aspects of the Mining Charter relating to LED and related issues is the responsibility of the executive officer HR under the guidance of the SE&HR committee. The committee updates the board on a quarterly basis on compliance with the Mining Charter.
Our CSI committee comprises three members of management and one representative from each of the organised employee representative bodies. It meets on a monthly basis to identify, prioritise and allocate resources to sustainable projects. Key interventions are planned with local municipalities.
A community and rural development strategy is applied in identifying and implementing community projects. The strategy includes stakeholder mapping, an analysis of expectations and immediate risks, as well as protocol for constructive engagement with government and related stakeholders to ensure a co-ordinated approach to community development.
COMMUNITY DEVELOPMENT PERFORMANCE IN FY2016
In FY2016, a total of R3.5 million was spent on CSI and LED. Expenditure at Zondereinde was R2.5 million during the year. At Booysendal, expenditure amounted to R1.0 million.
Zondereinde engages with three municipalities:
- Thabazimbi Local Municipality in Limpopo
- Moses Kotane Local Municipality in North West Province, a labour-sending municipality
- OR Tambo District Municipality in the Eastern Cape, also a labour-sending municipality
The identification of suitable LED projects and CSI activities in the areas surrounding the mine is guided by the Zondereinde SLP and the operation's CSI committee.
A mining forum was established in order to improve communication and coordination between the mines and municipal representatives on large-scale projects to improve infrastructure and delivery in the area. The lack of service delivery and poor follow-up and support from local municipalities remains a significant challenge, with the group sometimes having to contribute to service delivery instead of focusing on economic growth.
|Agricultural project||Farming||Thabazimbi||1 053|
|Feeding project||Supply lunch packs to schools||Thabazimbi||92|
|Donation||Donation to schools||Thabazimbi||458|
|Mojuteng housing project||Municipal services||Johannesburg||240|
Booysendal mine is located in a remote region of the Limpopo province where there are limited economic opportunities. Agriculture, forestry, mining and tourism are the region's primary activities. A further major challenge is the low level of literacy and education in the area, which is rated among the lowest in South Africa.
Booysendal's LED and CSI activities are coordinated by the divisional human resources manager, who is also responsible for oversight of community engagement in the area.
Stakeholder identification and engagement at Booysendal has been ongoing since the mine's inception, but this is complicated by the scale, proximity and needs of local communities, and by historic interests in landholdings. Booysendal has sound working relationships with its stakeholders and engages with them mainly through the following structures:
- Sekhukhune District Municipality (SDM)
- Executive mayor's office
- Socio-Economic Development Managers' Forum
- Greater Tubatse Local Municipality
- LED Forum
- Greater Tubatse Mining Forum
- Southern Cluster Mining Community Development Committee
- Thaba Chweu Local Municipality
- Executive mayor's office
Several forums have been set up in the area where Booysendal operates. These provide channels for Booysendal to facilitate the flow of meaningful benefits to communities, help the mine to keep abreast of concerns among community members and to address any issues raised.
|Forum||Structure and composition||Role|
||Focuses on social and economic upliftment of local communities through positive engagement and contributions in support of sustainable projects and programmes|
|Local Traditional Leaders||
|Community soccer tournament||Sports awareness for local communities||Thaba Chweu Municipality||27|
|State of the municipality address||Executive mayor's district address||Sekhukhune District Municipality (SDM)||54|
|SDM executive mayor marathon||To encourage communities to participate in sport activities for health purposes||Greater Tubatse Municipality||20|
|Career exhibition||Career guidance for local Mashishing grade 9s||Thaba Chweu Municipality||32|
|Bring a girl child to work||Career guidance for grade 9 girls from Ngwaabe Secondary||Greater Tubatse Municipality||8|
|R577 road maintenance||To repair and maintain the road||Thaba Chweu Municipality||860|
|Lydenburg Mashishing Business Chamber (LMBC)||To develop local business in the Lydenburg Mashishing area||Thaba Chweu Municipality||8|
|Kgoshi Mampuru||Tombstone unveiling||Greater Tubatse Municipality||7|
LOCAL COMMUNITY RELATIONSHIPS
Northam enjoys a reasonably healthy relationship with the communities where it operates. However, these relationships play out in areas of very low economic activity, among community members often with low education and skills levels and this inevitably brings challenges to bear on those relationships.
At Zondereinde, councillors and traditional leaders collaborate with the mine in respect of key interventions such as local recruitment, CSI and LED projects. Engagements with communities are on a needs basis and relationships to date can be reported as constructive and fruitful.
As discussed under human capital, civil unrest took place in the form of protests by communities in the Steelpoort Valley in July, October and December 2015. Such protests are frequently the result of heightened expectations among local communities. The protests meant Booysendal employees were unable to travel to work safely. Northam is currently engaged with other companies in the area and initiatives led by local government leaders to deal with service delivery protests. Booysendal participates in a task team established by the DMR, which has as its aim the resolution of community grievances.
LOCAL EMPLOYMENT, LED AND PREFERENTIAL PROCUREMENT
Major challenges faced by mines in remote and underdeveloped areas are employment opportunities and the availability of resources. Northam works closely with municipal officials to manage community expectations and has assisted in identifying economic targets which could be developed by way of small and medium enterprises (SMEs) or small, medium and micro enterprises (SMMEs) in collaboration with local entrepreneurs.
In FY2016, 20% of permanent employees came from the Limpopo province, and 17% originated from the North West province.
In order to limit the dependence of communities on the mining industry for jobs, Zondereinde has prioritised key economic areas to be developed through the contributions of small businesses and local entrepreneurs. These areas include:
- Environment and waste management
In pursuit of developing a local supplier base, a supplier forum has been established at Zondereinde, with mining companies and municipal officials represented on the steering committee. Ongoing engagements are held with local community structures and with municipal council representatives during which specific issues relating to sustainable small business development and establishment of local economies are considered.
As a mechanised operation, Booysendal is not labour-intensive, and it is unlikely that the mine will ever be able to meet the employment expectations and needs of everyone in the surrounding communities. As at the end of June 2016 an average of 60% of the total workforce of Booysendal mine came from the local community.
Booysendal is committed to hiring people from our host communities at all levels of the workforce and encourages contracting companies to do the same in support of local development.
The mine strives to provide meaningful support to small and medium-sized businesses in nearby communities as well as those who are already providing services to the mine so that they can contribute to the development of the local economic base.
Booysendal supports some 13 local SMMEs who provide a range of services including transport, change house maintenance, landscaping, and printing.
In collaboration with the local municipalities around Booysendal, mine management has contributed towards the establishment of a dynamic database for appointment of local suppliers and recruitment of local employees with the necessary skills and experience, particularly in the fields of engineering, trackless mining and plant operations. This database continues to provide a sound base for the recruitment of local labour.
The key economic areas to be developed in the Booysendal area as articulated in the Greater Tubatse and Sekhukhune District Municipalities IDPs are:
- Water and sanitation
- Education, especially mathematics and science
- Income generation and job-creation projects, with the primary focus on women and people with disabilities
In compliance with the Mining Charter, Northam is committed to giving preference to local businesses in the communities surrounding its operations. Northam's procurement policy accordingly gives local BEE companies preferred supplier status. Northam accords preferred-supplier status to HDSA suppliers subject to commercial competitiveness. Northam spent R3.5 billion in FY2016 (FY2015: R3.4 billion) on procurement, of which 81.7% or R2.8 billion was allocated to BEE suppliers.
NORTHAM PLATINUM LIMITED
|Capital||Services and contracting companies||Consumables||Total|
|HDSA spend as % of total discretionary spend||63.32%||89.06%||67.50%||76.14%|
|HDSA owned*||198 349||787 120||133 700||1 119 169||32.17|
|HDSA empowered**||380 187||612 485||537 020||1 529 692||43.97|
|HDSA spend||578 536||1 399 605||670 720||2 648 861||76.14|
|Exempt micro enterprise||3 022||13||4 534||7 569||0.22|
|Multinational enterprises||132 329||21 095||32 818||186 242||5.35|
|Measured HDSA spend||713 887||1 420 713||708 072||2 842 672||81.72|
|Without HDSA||194 798||144 090||263 622||602 510||17.32|
|Black influenced||4 901||6 777||21 888||33 566||0.97|
|Total discretionary spend||913 586||1 571 580||993 582||3 478 748||100.00|
|Total spend||4 117 052|
- * >50% BEE equity
- ** >25% – <50% BEE equity
- *** >5% – <25% BEE equity
Northam management is working on operationalising the two community trusts that are part of the Zambezi Platinum consortium.