Social, ethics and transformation committee report

for the year ended 30 September 2019

 

I am pleased to present the social and ethics report on behalf of the social, ethics and transformation committee. I confirm that the committee discharged all its responsibilities and carried out all the functions assigned to it in terms of regulation 43 of the Companies Act and as contained in the committee's charter.

Responsibilities

In executing its social and ethics responsibilities, the committee considered and monitored Nampak's activities, having regard to human rights, relevant legislation and prevailing best practice, in matters relating to:

  • corporate social investment;
  • enterprise development;
  • consumer and customer relationships;
  • health and safety;
  • the environment;
  • ethics; and
  • transformation.

Report on focus areas

Transformation

Nampak is fully committed to transformation. The committee monitors the company's performance against its broad-based black economic empowerment (B-BBEE) targets in each category on the scorecard. We have established a new dedicated and competently resourced B-BBEE office which has reinvigorated our B-BBEE initiative. We improved our contributor status to level 4 in 2019 and on 26 November 2019 Nampak Products Limited achieved a level 2.

Employment equity results were disappointing and the committee will pursue a series of multi-year initiatives to drive improvement in this critical area.

Corporate social investment

The main focus of Nampak's corporate social investment for many years has been education and the partnership we have with seven carefully selected schools, is now in its seventeenth year. These schools have produced a number of outstanding students, many of whom have gone on to obtain Nampak bursaries and subsequently were employed within the group.

Enterprise development

Enterprise development is important in assisting small and medium-size businesses to play a meaningful role in the economy. The group assists small black businesses at our manufacturing plants through capital funding or other business development support. Some of these beneficiaries are Willem SS Logistics (Pty) Limited, Vukani Mantuli Business Enterprise (Pty) Limited, Rekonakong HRD Cleaning Services and Projects CC and Tin-Pac Promotional Packaging (Pty) Limited. The group invested over R14 million during the year in supplier and enterprise development including early settlements to our suppliers.

Consumer and customer relationships

The committee reviewed performance against customer and consumer legislation and regulations and recorded that there were no material breaches. We are pleased to note that the majority of our manufacturing sites continued to hold quality certifications, including those relating to food safety standards. Many of our operations are subject to regular audits by our customers, as well as by independent external accreditation bodies.

Health, safety and the environment

The committee acknowledges the importance of health and safety in the workplace and monitors performance against safety tolerance levels. Following several years of improvement, we regret to report a deterioration in the lost-time injury frequency rate (LTIFR) in 2019 as shown in the table below:

2019     2018 2017 2016 2015  
0.47     0.27 0.41 0.48 0.89  

We regret to report that Ngwata Matsimela, a palletiser operator at our Springs factory, was killed in an accident early in the year. We extend our deepest condolences to his family, friends and colleagues.

Individual incentive bonus payments are linked to safety targets. OHSAS 18000 certification or other safety standards have been achieved by 18 sites in the group.

The environment

As the largest packaging company in Africa, we acknowledge the important role we have to play in environmental education and for many years we sponsored the Eco Schools programme. This sponsorship ended in 2019 and we are currently assessing new initiatives that meet our criteria for support.

Refer to the full sustainability report on our website, www.nampak.com , for more details of activities with an impact on the environment, which were considered by the risk and sustainability committee.

Ethics

The committee ensures oversight of employment relationships, organised labour and the International Labour Organisation Protocol on decent work and working conditions.

Nampak is committed to promoting equal opportunities and fair employment practices across its business. Some labour relations court cases brought against the company during the year were satisfactorily settled.

Our code of conduct and business ethics is constantly revised to meet current conditions and forms the basis of ethical behaviour in the group and sets the minimum standards expected of all directors, employees, regardless of the country in which they are employed, and suppliers. These individuals are obligated under the code to act with honesty and integrity and to maintain the highest ethical standards. Tip-Offs Anonymous, which is independently administered, allows callers to confidentially report any violations of Nampak's policies and procedures. The committee exercises ongoing oversight over the management of calls received.

The table below provides details of reports received from Tip-Offs Anonymous and the action taken.

  2019   2018 2017  
Reports received 48   45 29  
  Disciplinary hearings 2   15 12  
  Dismissals   5 4  
Forensic reviews 32   38 41  
  Disciplinary hearings 2   23 10  
  Dismissals   12 6  

There are 16 investigations outstanding which once concluded may result in disciplinary action being taken. No human rights violations were reported during the year, nor were any material incidents of corruption detected or reported.

The committee considered and is satisfied with the progress in monitoring Nampak's compliance with its code of conduct and business ethics, the 10 principles of the United Nations Global Compact as well as the Organisation for Economic Cooperation and Development's recommendations regarding corruption. The committee also considered local jurisdictional issues and is satisfied that there was compliance in all respects. The committee is pleased to report that there were no reportable offences during the year.

The full sustainability report is available on our website, www.nampak.com.

CD Raphiri

Chairman

Social, ethics and transformation committee

25 November 2019