PERFORMANCE

Social Capital and stakeholder responsiveness

Social Capital is any value added to the activities and economic outputs of an organisation by human relationships, partnerships and cooperation.

Material issues
  • Our social licence to operate
  • Uncertainty of the socio-political environment

Organisations rely on social relationships and interactions to achieve their objectives. Externally, social structures help create a climate of consent or a licence to operate, in which trade and the wider functions of society are possible. Organisations also rely on wider socio-political structures to create a stable society in which to operate, e.g. government and public services, effective legal systems, trade unions and other organisations.

Being responsive to stakeholders enables the Venture to:

  • contribute to open, transparent and fair governance;
  • source materials ethically and treat suppliers, customers and citizens fairly;
  • respect and comply with local, national and international law;
  • pay our taxes;
  • invest in the social infrastructure;
  • provide communication;
  • minimise any negative social impacts on our operations and maximise the positive impacts they can have; and
  • support the development of the communities in which the Venture operates.
Socio-economic development

Both Merafe and the Venture are committed to working with local authorities, community representatives, inter-governmental and non-governmental organisations and other interested parties to develop and support community investment projects.

Both the Venture and Merafe focus on sustainable projects, with their focus being on education, infrastructure and health issues in the communities in which the Venture operates.

Social Capital and stakeholder responsiveness

Key points – 2021

The Venture spent
R73 million

on corporate social investment and enterprise development
(2020: R49 million)

73%
of the Venture's expenditure on capital and consumable goods was on BEE spend
(2020: 62%)

65%
of the Venture's expenditure on services was on BEE spend
(2020: 63%)


Corporate Social Investment

The Venture spent R73 million (2020: R49 million) on Corporate Social Investment (CSI) projects and enterprise development in 2021. Merafe contributes to 20.5% of this spend. A significant improvement on the execution of CSI & SLP projects occurred in 2021 compared to 2020 due to the gradual easing of COVID-19 restrictions. The Venture embarked on rolling out the Voluntary Principles on Security and Human Rights and commenced advanced stakeholder mapping. Our investments are aligned to the National Development Plans and United Nations Sustainable Development Goals (UNSDGs) 2030 for South Africa which includes community health programmes, community centres, crèches, youth portable skills development programmes, school nutritional programmes and infrastructure programmes. The Venture commenced with feasibility studies in self-sustainability food security investments in crop farming, poultry and aquaculture investments.

In addition to the above, Merafe has been supporting both Meriti Secondary School (Meriti) and Boitekong Secondary School (Boitekong) with the implementation of a variety of infrastructure, curriculum and social welfare projects through Adopt-a-School Foundation (the Foundation). Both schools are in the North West province and are situated within communities that are characterised by poverty, violence, crime, alcohol and substance abuse, family disorganisation and despair.

The projects are within budget and on schedule, despite the challenges of COVID-19.

A major initiative in 2021 was the Visual Support Programme which identified and addressed vision problems that affect the health and learning of learners. This involved workshop and eye screening tests. At both schools 288 learners received spectacles in October 2021.

Implemented projects in 2020 which continued into 2021 include:

Meriti Secondary School
School Leadership Advancement Programme
Mathematics, Life Sciences and Physical Sciences supplementary lessons for Grade 12 learners
Mathematics educator development and classroom-based support for Grades 8-12 pupils
Grade 9 supplementary lessons in Mathematics
Resourcing of the Life Science laboratory
Health, Sanitation and Sexual Education Programme
Moral Regeneration Programme
Renovations to Grades 10, 11 and 12 classrooms as well as ablution facilities
Renovation of ablution facilities

See stakeholders of this report for a review of stakeholder engagement.


Boitekong Secondary School
School Leadership Advancement Programme
Physical Sciences supplementary lessons for Grade 12 learners
Mathematics educator development and classroom-based support for Grades 8 – 12 pupils
Grade 9 supplementary lessons in Mathematics
Grade 9 supplementary lessons in Mathematics
Health, Sanitation and Sexual Education Programme
Renovations to Grades 10, 11 and 12 classrooms as well as ablution facilities
Renovation of ablution facilities

The implemented projects at the two schools seek to:

  • promote active learning and cultivate a positive attitude towards curriculum delivery;
  • provide educational support to learners to assist them in achieving curriculum coverage;
  • permit learners to learn abstract concepts through concrete experiences and thus increase their understanding of those ideas;
  • mentor learners and assist them to comprehend subjects and skills by way of classroom-based support;
  • ultimately improve learner performance in targeted subjects;
  • provide learners and educators with a conducive environment for teaching and learning through renovation of classrooms and ablution blocks; and
  • provide a link between the learner, home, school and community through the social welfare programme.

The Welfare programme is part of the Whole School Development Model based on the Department of Basic Education's Goal 25 of the Action Plan which states: "The use of schools as vehicles for promoting access to a range of public services amongst learners in areas such as health, poverty alleviation, psychosocial support, sport and culture."

We are pleased to report that there has been an improvement in the academic performance of one of the schools as well as positive social behavioural changes in the learners. Additionally, educators and the school's leadership are implementing their action plans and learnt leadership strategies.

The Merafe spend in 2021 on CSI projects was R3.1 million (2020: R0.46 million). The work at the schools will continue into 2022. The Merafe CSI budget is based on 1% net profit after tax. As mentioned earlier, this is in addition and does not include the CSI and enterprise development spend in the Venture where Merafe contributes 20.5% of such spend.

See human capital of this report for further information on the range of skills training the Venture provides and its investment in this training.

Enterprise development

Small, medium and micro enterprises play a key role in job creation in South Africa and our investment in their development is an important part of the contribution both Merafe and the Venture make to the socio-economic capacity of communities. It also increases our ability to procure from black-owned enterprises. The Venture has enterprise development commitments in terms of the Mining Charter Scorecard. The Venture spent R7.4 million (2020: R17.1 million) on enterprise development in 2021.

Job creation and skills development

The Venture recognises that its commitment to employing local people whenever possible is to the advantage of both itself and the local communities. Direct employment at the Venture's operations, indirect employment through contractors and its use of local suppliers provide an income for thousands of families.

Our commitment to employing local people includes providing training opportunities that enable community members to meet the Venture's competency requirements.

Procurement

The Venture's performance in terms of the discretionary procurement targets of the Mining Charter Scorecard is set out below:

In terms of the new Mining Charter III, 2018, procurement spend by the Venture for FY2021 was approximately R24.63 billion. Of this R24.63 billion, R15.70 billion was discretionary spend. R6.98 billion was on mining goods (72.95% BEE spend) and R8.72 billion on services (64.66% BEE spend).

  Total procurement
spend
R
Non-discretionary
spend
R
Discretionary spend
R
BEE spend
R
BEE  
spend*
R  
Capital + Consumables (Mining Goods) 7 140 358 204 162 620 904 6 977 737 300 5 090 450 667 72.95  
Services 17 486 283 833 8 764 400 021 8 724 883 812 5 641 263 471 64.66  
Total 24 626 642 037 8 927 020 925 15 702 621 112 10 731 714 138  

* BEE spend as a % of discretionary spend

Public health and HIV and Aids

The Venture favours a united approach to public health, whereby we collaborate with government, international organisations and NGOs to make the most impact at community level. The public-private partnerships formed by the Venture provide communities access to prevention, treatment and care for HIV and Aids as well as other communicable and associated diseases. The Venture supports the government's HIV counselling and treatment campaign by providing funding and testing sites. It has also funded health clinics and hospices in the communities in which it operates, including an HIV and Aids clinic in Lydenburg in Mpumalanga province. There is also a health clinic at the Lion ferrochrome plant in Limpopo province.

Respecting the rights of communities

Neither Merafe nor the Venture tolerate any form of discrimination and our policies clearly state that we do not tolerate any form of discrimination, and that all our employees and stakeholders are to be treated with dignity and in a manner that is culturally appropriate, irrespective of gender, background or race.

Human rights and ethics

Merafe subscribes to the fundamental principles of human rights as enshrined in our country's Constitution and Bill of Rights. Our policies and practices have been aligned with both to ensure that all our employees and stakeholders are treated with dignity and in a manner that is culturally appropriate, irrespective of gender, background or race. Furthermore, Glencore is a signatory to and has accepted the Voluntary Principles of Security and Human Rights.

Ethics

The Merafe Code of Ethics governs the way we do business and the way our directors and employees engage with our stakeholders. The Code, which is binding on our directors, employees and contractors, provides guidelines for behaviour which is above reproach.

See the stakeholder engagement table on our website for details of the Venture's engagement and Merafe's engagement during 2021.

Traditional authorities

Merafe supports the International Council on Mining and Metals (ICMM) and upholds the performance expectations associated with Traditional Authorities. Our engagements with Traditional Authorities around our operations assisted the Venture in enhancing transparency, resolving complaints and grievances promptly, and embedding cooperation with doorstep communities.

Stakeholder responsiveness

Merafe and the Venture address material issues we have identified that could impact negatively or positively on our key stakeholders. These stakeholders include national, provincial and local government in their roles as regulators and partners; the trade unions in their role as representatives of the Venture's employees who are from local communities; and our investors and business partners who are affected by all aspects of our business. The impact of our most material issues in regard to the Human, Natural, Social and Manufactured Capitals on our stakeholders, together with our responsiveness on these issues, is outlined in this report.

While Merafe has direct relationships with certain key stakeholders in connection with community matters, we also have indirect relationships through our partnership with Glencore in the Venture. As managers of the Venture's day-to-day operations, Glencore takes responsibility for engaging with the Venture's stakeholders.

All the Venture's operations and projects are expected to review the stakeholder engagement plans every year which includes Traditional Authorities. The Venture's operations held formal community stakeholder meetings where possible during the year. Virtual engagements continued during periods of lockdown.

Our corporate social investment and social labour plans are aligned to the objectives outlined in the 2030 UNSDGs, the National Development Plan for South Africa and the Integrated Development Plans for Local Municipalities.

All the Venture's operations and projects are expected to review the stakeholder engagement plans every year. The Venture's operations held formal community stakeholder meetings during the year.

In 2015 the Venture identified issues material to communities and stakeholders that assisted its social and labour plans for the five-year period from 2015 to 2020.