Social and Relationship Capital
Stakeholder engagement
Tongaat Hulett promotes an open and transparent relationship with all of its key stakeholders, which is deeply entrenched in the business’s history. The company’s operations require the involvement and participation of a diverse range of stakeholders as it progresses delivery of its strategic thrusts. Tongaat Hulett’s key stakeholders have been summarised in the following table:
NATURE OF ENGAGEMENT |
PRIORITIES |
OUTCOMES |
|
| Shareholders, investors and analysts | Managed by Tongaat Hulett’s investor relations team
Annual and interim results presentations and publications Roadshows both locally and abroad Ad hoc meetings with management Annual general meeting |
Clear communication of the company’s
strategy and prospects going forward
Return on investment and growth in value |
The company continues to improve on reporting its strategy and prospects |
| Private farmers | Groups are organised according to logistical areas of operation | Maximum return in terms of revenue
received for sugarcane and maize.
Support from the company towards the long-term sustainability of private sugarcane farmers |
Access to maximum quality seed cane and
cost savings on key inputs such as fertilizer
and herbicides
The company works to unlock grant funding from relevant authorities Sustainable integrated farming model implemented across SADC region for staple foods sugarcane and vegetables |
| Government authorities and regulators | Partnerships on joint projects
Forums discussing existing and emerging initiatives Ad hoc meetings Compliance monitoring |
Compliance across operations with local,
provincial and national regulations
Effective partnerships towards achieving articulated government objectives, projects and policies Demonstrable company support towards sustainable socio-economic growth in the region |
Tongaat Hulett operates within regulatory
and compliance frameworks and has efficient
systems in place for addressing complaints
Ongoing partnership with relevant government agencies on various initiatives including sugar expansion in rural communities and land conversion activities |
| Local communities |
Regular and ad hoc local forums with
traditional and community leaders
Development of small-scale private farmers in the communal areas identified for sugarcane expansion Regular interaction at local level through the SED provision of basic needs and services |
Access to sustainable jobs and
economic opportunities
Affordable education, training and access to healthcare, basic amenities and infrastructure The conservation of the community’s way of life, culture and environment |
Additional direct and indirect jobs
Socio-economic investment addressing a broad range of needs in Mozambique, South Africa, Swaziland and Zimbabwe Health programmes for all employees extend to communities, including counselling, screening and treatment for both HIV/AIDS and malaria Ongoing schooling and infrastructure development projects involving local communities |
| Employees | Regular collaboration on topics of
employee protection, diversity and
performance rewards
A variety of internal communication channels, including the company intranet, internal newsletters and briefings |
Stable employment relationships and
job security
A working environment that guarantees health, safety, fairness and equal opportunity Opportunities for upward and sideways movement within the organisation Freedom of association and rights of collective bargaining Training and development |
Sound corporate governance practices
aligning remuneration with performance
Managers across operations interact with
trade unions in an open and constructive
manner
Ongoing healthcare programmes across rural operations, particularly in Mozambique, Swaziland and Zimbabwe |
| Customers, suppliers and service providers | Regular interaction on procurement
processes, responsible sourcing standards
and supply chain management
Regular interactions with customers regarding matters of relevance to this stakeholder |
Local procurement
High quality products at competitive prices that attract consumers and encourage brand loyalty Product innovation and growth of the business Professional and mutually beneficial trade relationships and robust supply chain mechanisms Product responsibility and food safety |
The company continuously improves the
quality, taste and innovative features of
products at reasonable prices
Tongaat Hulett operates under the relevant regulations, standards and laws to ensure the quality and safety of all its products |
Socio-economic development (SED)
Socio-economic development is an integral part of Tongaat Hulett’s operations and is closely linked to the company’s overall strategic objective of developing sustainable indigenous farms to support and grow rural communities.
The company exceeded its commitment of allocating one percent of annual headline earnings to SED for the 12 months to 31 March 2014. For this period, Tongaat Hulett invested R124,4 million (2012/13 R142, 7 million) in its SED initiatives, including the cost of company-sponsored occupational and primary healthcare services. Operations in Zimbabwe, Mozambique and Swaziland accounted for 84 percent of the total amount invested in SED initiatives. Key elements of SED spend for the period are as follows:
- Education:
- R12,7 million invested in education initiatives across the company.
- Purchase of exercise and text books, replacement of desks and chairs in all the Estate schools in Zimbabwe.
- The operations at Triangle and Hippo Valley in Zimbabwe have 22 schools - 18 primary and four secondary. The total enrolment at the schools is now some 14 400.
- Of total investment in education, R379 000 was directed at ABET training.
- Healthcare:
- With the majority of operations being located in rural areas, a significant amount is invested in running healthcare facilities for employees and local communities.
- R67,7 million invested in health-related activities during the period, of which R4,8 million was specifically allocated to dealing with the impacts of HIV/AIDS.
- Basic needs:
- R4, 9 million invested in basic needs and social development, which includes food security projects and the provision of basic materials, in order to uplift communities around company operations.
- In Zimbabwe, food security projects included the completion of the Chilonga cattle feedlot, the provision of 2 500 litres of diesel and other inputs (including five tons of sorghum and ten tons of fertiliser) to communities via the satellite Chiefs.
- Further development included the completion of St Joseph irrigation scheme projects and a water extraction scheme at Manjinji.
- Infrastructure development:
- R5,3 million was invested in infrastructure development projects as an important aspect of assisting with the development of successful rural communities such as road construction.
- • Sports, arts and culture:
- The company acknowledges the important role that arts, sports and culture can play in the development of successful rural communities. R381 000 was invested in these initiatives during the year.
Creating sustainable communities
Tongaat Hulett works in partnership with government and communities to develop sustainable communities. For more information on the Cornubia Integrated Human Settlement, visit Tongaat Hulett’s website at www.tongaat.com
Developing indigenous farmers
Zimbabwe
Successful operations in Zimbabwe are enhanced through a comprehensive private farmer rehabilitation programme with the objective of developing 15 880 hectares of private farmland under the Successful Rural Communities Project (SusCo). There are currently 813 active farmers, who employ some 6 700 people. In terms of phase two of the project, an additional 3 000 hectares of new private farmer sugarcane development will be completed from the Kilimanjaro project.
Mozambique
In the operations at Xinavane and Mafambisse, Tongaat Hulett continues to work with rural communities in order to develop indigenous sugarcane farmers. In the past season, 2 735 indigenous farmers on 6 155 private and leased hectares supplied sugarcane to Tongaat Hulett operations.
Food security
As a member of the UN Global Compact, Tongaat Hulett remains committed to accelerating its disaster risk reduction activities and seeking to make food production systems more resilient and more capable of absorbing the impact of, and recovering from, disruptive events. Many crop yields are expected to decline due to long-term changes in temperature, rainfall and increased climate variability. The outcome of these impacts on weather patterns may result in higher food prices, chronic poverty and undernourishment for farming households in rural communities. Disaster risk reduction activities ensure the protection of development investments in the agriculture, livestock, and forestry sectors, thereby providing assistance to vulnerable communities and assisting in food security.
Supply chain
Tongaat Hulett is committed to sustainable and innovative procurement initiatives to deliver value to the business and local communities in which it operates. In order to achieve alignment and sustained benefits, high level cross-functional teams involving Strategic Sourcing, Human Resources, SHE and business operations are working closely on sourcing projects with potential to deliver positive economic, social and environmental outcomes, including:
- Project SETH (Sourcing Excellence in Tongaat Hulett) - a fundamental reconfiguration and transformation of the company’s approach to procurement.
- Local Procurement and Enterprise Development Projects - a set of policy guidelines to accelerate the visibility and impact of local procurement and enterprise development projects in the various countries in which the company operates. Special attention is being directed to provide local start-ups and Small to Medium Enterprise (SME) suppliers with preferential access to supply opportunities inherent in Tongaat Hulett’s extensive value chain in order to improve employment opportunities for local communities.
- Green Procurement Initiatives – a good business imperative that suppliers of the company demonstrate commitment to research, development and delivery of safer, resourceefficient and environmentally-friendly goods and services. Of particular interest are current trials of organic fertilizers which, if successful, could replace chemical-based fertilizers on a wider commercial scale.
Preferential procurement
The objective of Preferential Procurement under the Department of Trade and Industry’s current Codes of Good Practice (in South Africa) includes the promotion of BEE compliance by all entities and targets for procurement from Exempted Micro Enterprises (EME’s), Qualified Small Enterprises (QSE’s), black-owned and black women-owned enterprises. Furthermore, with enhanced recognition given for Preferential Procurement from value-adding suppliers and enterprise development beneficiaries, the procurement of locally-produced goods and services is actively supported, to assist in developing sustainable income streams for such new entities.
Tongaat Hulett is committed to supporting suppliers, improving their empowerment credentials and introducing SME’s, black-owned and black women-owned suppliers to the business. The company’s Preferential Procurement score during the previous assessment period was 14,37/20. In respect of the Procurement Scorecard for Tongaat Hulett, and based on the expenditure for the period ending 31 March 2013, out of a total available spend (defined as total procurement spend less spend on parastatals and imported goods) of R7,349 billion, BEE procurement spend from all suppliers based on BEE procurement recognition levels as a percentage of total measured spend, was R5,336 billion (72,61 percent). Spend with QSE and EME suppliers totalled R965 million whilst spend with black-owned EME suppliers totaled R114 million and total spend with black womenowned EME’s was R36 million.
| 14,37/20 | Preferential procurement score during the previous assesment period | |
| 72,61 | Percentage of total available spend on BEE procurement spend | |
| R965 Million | Spend with QSE and EME suppliers | |
| R114 Million | Spend with black-owned EME suppliers | |
| R36 Million | Spend with black womenowned EME suppliers |
Transformation
Tongaat Hulett has a long history of being socially active in the
SADC region and proud of the fact that it has met its internal
transformation targets. The sixth B-BBEE rating audit by AQRate
was conducted in 2014, with Tongaat Hulett being categorised
as a Level Three Contributor and scoring 81,51%. The challenge
will be to maintain this rating as the business transitions to the
Agri-BEE Generic Scorecard rating with more stringent
benchmarks.
Safety, Health and Environment (SHE)
The Chief Executive Officer and senior management oversee allocation of appropriate resources and provide guidance on implementation of SHE improvement programmes. Progress on SHE performance is reviewed at various levels of the organisation including the Board’s subcommittee on Risk/SHE/Socio/Ethics and various SHE committees led by executives responsible for all business operations.
With a peak employee complement of some 35 000 people, working with various stakeholders and operating in different communities with diverse cultural backgrounds, human behaviour dynamics provide a critical link to Tongaat Hulett’s safety risk management framework, which includes contractors.
The company is focused on progressing a ‘zero harm’ campaign to promote a safe behavioural culture that goes beyond being conscious of safety to being and feeling subconsciously safe with the support of other individuals at the workplace, at home and in social environments. |
The company’s safety performance continues to improve in terms of both fatalities and injuries. A single work-related fatality was regrettably suffered in the 2013/14 fiscal year resulting in a Fatality Injury Frequency Rate (FIFR) of 0,002 compared to a FIFR of 0,005 recorded in 2012/13. While this fatality is deeply regretted and ‘one too many’, a reduction in the number of fatalities suffered from three recorded in 2012/13, two in 2011/12 and four in 2010/11 reflects encouraging progress towards the total elimination of work-related fatalities. Significant fatality risks were identified and their respective controls have been implemented if they were not already in place. Notwithstanding the fact that existing fatality risk controls are deemed to be appropriate, a continuous risk assessment review protocol is available and being adhered to by all operations.
A total of 45 Lost Time Injuries (LTIs) were recorded in 2013/14 compared to 56 suffered in 2012/13 representing a 20 percent reduction. A Lost Time Injury Frequency Rate of 0,087 was recorded. An encouraging improvement of LTIFR was observed during the past five years as shown in the table above. A total of 462 medical treatment cases and 939 first aid cases were recorded in the year resulting in a Total Recordable Cases Frequency Rate (TRCFR) of 0,98 and Total Injury Frequency Rate (TIFR) of 2,80 respectively. Total injuries of 1 447 recorded in 2013/14 represented a 15 percent reduction from 1 707 suffered in the previous year. High order safety interventions that included the establishment of hard barriers and engineering solutions in mitigating risks were applied during the year and have made a positive impact on safety performance.
| Actual 12 months to 31 March 2012 |
Actual 12 months to 31 March 2013 |
Actual 12 months to 31 March 2014 |
Limits 12 months to 31 March 2015 |
|||||
| LTIs | LTIFR | LTIs | LTIFR | LTIs | LTIFR | |||
| Sugar | 53 | 0,09 | 47 | 0,08 | 39 | 0,08 | LTIFR | 0,07 |
| Starch | 6 | 0,40 | 9 | 0,58 | 6 | 0,39 | LTI | 4 |
| Developments | 0 | 0,00 | 0 | 0,00 | 0 | 0,00 | LTI | 0 |
| Consolidated | 59 | 0,10 | 56 | 0,094 | 45 | 0,087 | LTIFR | 0,093 |
Food safety
Tongaat Hulett has, over many decades, developed a reputation as being a producer of high-quality products. In order to ensure that this reputation is maintained, the company manages its maize requirements on a non-genetically modified basis using a sophisticated identity preservation system. The use of this system enables the company to meet the needs of its customers in the food industry. In addition, ongoing attention is paid to the requirements of ISO 9001, the Hazard Analysis Critical Control Point system (HACCP) and ISO 22000, in terms of quality and food safety standards at all operations. These systems are in various stages of being certified by the South African Bureau of Standards (SABS).
Sugar or sucrose is a completely natural plant product. It is produced by the sugarcane plant in much the same way as other plants produce sugars in fruit or vegetables. In the body, the sucrose molecule separates into glucose and fructose, exactly the same sugars that are found in fruit. Neither white nor brown sugar contains additives or preservatives of any kind.
Consumption of any foodstuff, no matter how harmless, at excessive levels, especially if it is to the exclusion of other types of food, is not conducive to good health. As part of a sensible, balanced diet, sugar is a natural and healthy contributor to the enjoyment of food.
Health
Public health and employee well-being remain key strategic fundamentals within Tongaat Hulett. This continues to be managed primarily through comprehensive healthcare programmes that include occupational health, primary health and general wellness.
HIV and AIDS
HIV and AIDS continue to present a significant challenge for Tongaat Hulett and the communities in which it operates. Programmes that include Voluntary Counseling and Testing (VCT), HIV Counseling and Testing (HCT) and Anti-Retroviral Treatment (ART) continue to be offered by the company in addition to varying models of HIV/AIDS management already established at the various operations. Male Medical Circumcision (MMC) is a preventative measure that has been shown to reduce transmission of HIV in men by up to 60 percent and has been established at most of the business’s operations. More than 85 percent of Tongaat Hulett’s employees presented for VCT/HCT during the year. In addition, a total of 14 818 contractor employees presented for VCT/HCT offered for free by the company. The number of employees and contractor employees enrolled on the company’s ART programme during the year was 3 493 and 877 respectively. This represents a total of 4 370 people being offered ART by the company at a cost of R2 066 585.
The success of the ART programme has also resulted in more HIV positive employees remaining at work as opposed to leaving employment through death or medical retirement.
Malaria
The company operates in high malaria risk areas in Zimbabwe, Mozambique and Swaziland. Employees and communities in these countries are therefore vulnerable to the disease. Tongaat Hulett is in partnership with the respective regulatory authorities and non-governmental organisations in managing various malaria control programmes that include indoor residual insecticide spraying, larviciding, chemo-prevention with Deltaprim, use of mosquito repellents and long-lasting insecticide-treated mosquito nets. Community-based health education awareness campaigns at these operations are ongoing.
No malaria-related fatalities were recorded in 2013/14. There was a 33 percent increase in the number of malaria cases recorded in 2013/14 when compared to the previous year. The increase was attributed to environmental factors including unusually heavy rainfalls that resulted in flooding in Zimbabwe and Mozambique. Socio-economic factors that resulted in expanded informal settlements unfortunately limited the effectiveness of householdbased insecticide spraying interventions.
