Independent Assurance Statement

TO THE BOARD AND STAKEHOLDERS OF TONGAAT HULETT:

SustainabilityServices.co.za (SS) was commissioned by Tongaat Hulett to provide independent third party assurance (ITPA) over the sustainability content within their 2012 Integrated Annual Report (the ‘Report’, covering the period 1 April 2011 to 31 March 2012). The assurance team comprised primarily of Michael H. Rea, our Lead Certified Assurance Practitioner (CSAP), with 13 years’ experience in environmental and social performance measurement, including sustainability reporting and assurance, and Lauren Stirling, an Associate CSAP.

ACCOUNTABILITY AA1000S (REVISED, 2008)

To the best of our ability and significant experience in sustainability report assurance, this engagement has been managed in accordance with AccountAbility’s AA1000AS (2008) assurance standard, where the format of the engagement was structured to meet the AA1000AS Type I (Moderate) requirements.

INDEPENDENCE

Previously, SS assisted Tongaat Hulett with the provision of ITPA over their 2010 and 2011 Annual Reports, but has not undertaken any other commissions that would compromise our independence, nor has SS been responsible for the preparation of any part of this Report. Responsibility for producing this report was the responsibility of Tongaat Hulett. Thus SS is, and remains, an independent assurer over the content and processes pertaining to this report.

ASSURANCE OBJECTIVES

The objective of the assurance process was to provide Tongaat Hulett’s stakeholders an independent ‘moderate level assurance’ opinion on whether the sustainability content within the Report, in its printed format, meets the AA1000AS (2008) principles of Inclusivity, Materiality and Responsiveness, as well as to assess the degree to which the Report has met the Global Reporting Initiative (GRI) G3 guidelines Application Level B reporting requirements.

ASSURANCE APPROACH AND LIMITATIONS

The process used in arriving at this assurance statement is based on AccountAbility’s AA1000AS (2008) guidance, the GRI’s G3 Application Level requirements, as well as other best practices in sustainability reporting assurance. Our approach to assurance included the following:

  • A review of sustainability measurement and reporting procedures at Tongaat Hulett’s corporate offices to determine the context and content of sustainability management by the company;
  • A review of the information and/or data collection, collation and reporting procedures undertaken by Tongaat Hulett, to define the content of the Report by looking at the materiality of issues included in the Report, determination of sustainability context and coverage of material issues;
  • A review of Board and Committee meeting minutes, as well as media reports, to assess the accuracy and/or completeness of Tongaat Hulett’s materiality assertions;
  • A review of the approach of management to addressing topics discussed in the Report;
  • Reviews of drafts of the Report for errors, anomalies and/or potentially unsupportable assertions; and,
  • GRI G3 gap analyses to determine whether the requisite numbers of profile and performance indicators were reasonably covered within the Report to meet Tongaat Hulett’s GRI G3 Application Level assertion (B+).

The process was limited to the content and assertions made within Tongaat Hulett’s printed Report for the period under review, and did not extend to an analysis of the accuracy, reliability, completeness and/or consistency of data presented by Tongaat Hulett, either in the Report or on the internet. Rather, data was subjected to reasonability tests during final proof editing. The process was also limited to reviewing policies and procedures for stakeholder engagements, and did not extend to the physical engagement of any stakeholders to arrive at our assurance opinion.

FINDINGS

Based on our review of the Report, as well as the processes employed to collect and collate information reported herein, it is our assertion that:

  • Tongaat Hulett’s 2012 Integrated Annual Report demonstrates year-on-year improvements in the form and function of the policies, procedures and systems deployed to meet reasonable integrated reporting expectations. These include, but are not limited to, improvements in the systems employed to collate, collate and report key sustainability performance indicator data, such as water consumption. However, the way in which the report is presented does not fairly reflect the quality of data improvements. Moreover, the report does not fairly meet the principle of ‘neutrality’, opting to focus almost exclusively on the company’s successes, without clearly discussing any on-going challenges or performance gaps.
  • Tongaat Hulett adequately adheres to the Accountability principles of Inclusivity, Materiality and Responsiveness, although room for improvement exists with respect to both proactive stakeholder engagement (i.e., Inclusivity) and feedback on stakeholder-specific concerns (i.e., Responsiveness).
  • The Report adequately meets the GRI G3’s requirements for Application Level B (responses to all required indicators, as well as no fewer than 20 Core indicators, with at least one from each of Economic, Environment, Human Rights, Labour, Society and Product Responsibility). However, it should be noted that some indicators were only covered in the GRI Content Index Table, rather than within the body of the Report. Moreover, it was found that the reporting of performance against some indicators require either data quality improvements, or further detail in disclosure. These gaps are clearly identified with the GRI Content Index Table.

CONCLUSIONS AND RECOMMENDATIONS

Based on the information reviewed, SustainabilityServices.co.za is confident that this report provides a reasonably comprehensive account of Tongaat Hulett’s environmental, safety and social performance for the period under review. The information presented is based on a systematic process and we are satisfied that the content of the Report adequately represents Tongaat Hulett’s adherence to the AA1000AS (2008) principles of Inclusivity, Materiality and Responsiveness. Moreover, and although the quality or quantity of data of some GRI G3 indicators can be improved, including the presentation of data in a comparable manner, this Report appears to meet the GRI G3’s requirements for Application Level B (B+ with this assurance engagement).

The following recommendations have however been identified:

  • With respect to adherence to AccountAbility’s principle of Inclusivity, Tongaat Hulett should ensure that stakeholder engagement continues to progress towards the active inclusion of all significant stakeholders, and that systems and controls formally consolidate stakeholder concerns for consideration at the relevant management and/or board levels. With specific reference to sustainability matters, Tongaat Hulett should ensure that the proactive engagement of stakeholders occurs to confirm or refute the company’s assumptions regarding the materiality of key sustainability issues. Moreover, the Report should ultimately reflect how engagement is deployed throughout the organisation to affect – where necessary – business decision-making, processes and/or controls.
  • With respect to adherence to Accountability’s principle of Responsiveness, Tongaat Hulett should continue to ensure that feedback to stakeholders on sustainability matters occurs in line with King III’s recommendations for ‘Integrated Reporting’, such that all presentations of results – including interim results – include a reasonable discourse regarding Tongaat Hulett’s most material sustainability issues. Any such reporting should adhere to the principle of ‘neutrality’, by clearly defining and explaining on-going challenges and/or performance gaps.
  • Having been subjected to three consecutive cycles of AA1000AS Type I (Moderate) assurance, and noting that Tongaat Hulett has made significant strides in improving systems for collecting, collating and reporting key performance indicator data, Tongaat Hulett should seek Type II (Moderate) assurance for the 2013 Integrated Annual Report, including the quality testing of data for no fewer than 10 key sustainability performance indicators at no fewer than three significant sites (operations).

For more information about the assurance process employed to assess the Sustainability section within the Report michael@csap.co.za

SustainabilityServices.co.za
Durban
24 May 2012

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