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SOCIAL CAPITAL AND STAKEHOLDER RESPONSIVENESS
   

MATERIAL ISSUES

  • Our social licence to operate
  • Uncertainty of the socio-political environment
Social capital is any value added to the activities and economic outputs of an organisation by human relationships, partnerships and cooperation.

 

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 of 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.

 

KEY POINTS – 2019

The Venture spent R85.2 million
on corporate social investment and enterprise development
(2018: R49.9 million)

 

70% of the Venture’s expenditure on capital goods
was on BEE spend
(2018: 64%)

85% of the Venture’s expenditure on services
was on BEE spend
(2018: 84%)

 

66% of the Venture’s consumable expenditure
was on BEE spend
(2018: 77%)

Corporate social investment ("CSI")

The Venture, which contributes to various CSI projects, spent R85.2 million (2018: R49.9 million) on CSI projects and enterprise development in 2019. The amount budgeted for these projects is R213 million over a five-year cycle. They include community health programmes, community centres, crèches, youth programmes, school nutritional programmes and infrastructure programmes.
The Venture as part of its five year programme, has also contributed to the establishment of catering enterprises, food banks and business support centres.

As previously reported, Merafe has been supporting both the 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 located in the Bojanala district in the North West Province.

The Foundation completed the Physical Science and Life Science laboratories in 2019.

Implemented projects in 2019 include:

Meriti Secondary School Boitekong Secondary School
School Leadership Advancement Programme

School Leadership Advancement Programme

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

The implemented projects 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 the subjects and skills by way of classroom-based support;
  • Ultimately improve learner performance in targeted subjects;
  • Infrastructure projects aims to provide learners and educators with a conducive environment for teaching and learning through renovation of classrooms and ablution blocks; and
  • Social Welfare programmes provide a link between the learner, home, school and community.

The Welfare programme as part of the Whole School Development Model is also based on the Department of Basic Education’s Goal 25 of the Action Plan to 2014: towards the realisation of schooling 2025 “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”.

The Merafe spend in 2019 on CSI projects was R3.2 million (2018: R3.3 million). The work at the schools will continue in 2020. 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.

Enterprise development

Small, medium and micro enterprises ("SMMEs") 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 R16.54 million (2018: R13.5 million) on enterprise development in 2019.

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 provides 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

In terms of the discretionary procurement targets set in the Mining Charter Scorecard, the Venture performed well in 2019 as can be seen in the table below:

  Total
procurement
spend
R’m
Non-
discretionary
spend
R’m
Discretionary
spend
R’m
BEE
spend
R’m
Compliance
%
 
Capital 1 817 3 1 814 1 270 70.01  
Services 10 631 6 188 4 443 3 758 84.59  
Consumables 5 018 5 018 3 315 66.07  
Total 17 465 6 190 11 275 8 344    
Multinational capital spend 37          
Total procurement spend (including multinational companies) 17 502          

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 ("HCT") 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 tolerates 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. Further, 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.

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 human, natural and social and manufactured capital 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. 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.