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Scaw Metals Group integrated annual report 2015 35

Driving our business sustainably

36 Approach to sustainability

37 Our key stakeholders

39 Our people

44 SHE

51 Transformation

53 Enterprise development

54 Our communities

36 Scaw Metals Group integrated annual report 2015

We are committed to running and managing our business sustainably with a particular focus on people – in particular transformation and more specifically the development of women – as well as safety and the environment. Our various programmes to enhance sustainability are outlined on pages 37 to 55.

Approach to sustainability

Exco is responsible for ensuring that a sustainable approach forms part of group strategy and is filtered down at every level. In so doing seven focus areas have been highlighted:

1

2

3

4

5

6

7

Shareholdermatters

Human capital

Operations

Carbon tax initiatives

Procurement and supply

chain

Transformation, promotions and change at senior management

Cash flow


At Scaw we believe that building collaborative stakeholder relationships is imperative for success.

Our key stakeholders

Stakeholders: people who can affect our

business or who are affected by it

Stakeholders are defined by each

portfolio/business unit

Tailored engagement processes

Engagement informs our decision making and

influences business strategy

Established internal and external communication

channels and mechanisms, roadshows, integrated report, regular meetings, stakeholder

forums, plant tours, independent surveys, advertising, exhibitions

and trade shows

Stakeholders are grouped and responsibility assigned

to a group executive

OperationalGovernment, regulators: employment equity, environmental impact, resource scarcity, scrap metals legislation on the export of ferrous and non-ferrous metals, local manufacturing pertaining to the PPPFA legislation and outbound investments

Trade unions: Workplace environment and employee benefits

Internal Employees: Group strategy and development plans, performance feedback, transformation and change management, employment equity, recruitment and promotion policies, safety in the workplace

ExternalShareholders: Group prospects, financial performance, implementation of strategy, carbon footprint, governance

Local communities: Socio-economic development, environmental impact, responsible corporate citizenship

Customers: Product sales and on-time delivery, brand reputation

– CEO roadshows focused on briefing management and unions on the business’ performance and Scaw’s strategic objectives

– Strong relationships with trade unions proactively fostered

– Five-year EE plan registered with the Department of Labour

– Performance KPIs rolled out across the group– A culture established of celebrating employee successes – Review of ESOP Trust to enhance its value – Partnerships formed with various communities where

Scaw operates– Online, print and broadcast media coverage increased

by 100% for the brand, valued at more than R10 million– Introduced social media channels – Continued engagement at a senior level in government– Ongoing customer engagement addressing any

reputational issues– Successful execution of seven major events including

participating at the 2015 Mining Indaba

Key stakeholder engagement action in 2015

Industry associations: Global and local industry trends, sector expertise and collective lobbying

Key stakeholders in our group are shown below. We have included issues of concern to each stakeholder group, and summarised key actions taken during the year.

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Our key stakeholders continued

Industry association Purpose Scaw’s proactive engagement above membership

Steel Engineering Industries Federation of South Africa (SEIFSA)

SEIFSA is a national employer federation representing the metal and engineering industry

– Sponsoring the Environment & Stewardship award for the 2015 SEIFSA Excellence Awards

– Our executive chairman remains President of SEIFSA

– Actively participate in the safety committees when legislative changes occur

– Provide comment and issues to be raised with the authorities

South African Institute of Steel and Iron (SAISI)

SAISI is a member of the World Steel Association

– Hosted 28 students at two of our plants who participated in the 2014 Steel Day arranged by SAISI

– Actively participate in environmental and safety committees when legislative changes occur

Iron and Steel Producers of South Africa (ISPA)

They are an independent employer association represented by SEIFSA

– Our HR executive serves as the chairman of the association

South African Engineers & Founders Association (SAEFA)

They are an independent employer association represented by SEIFSA

– Actively participate in the association

– Our GM, Cast Products has held the position of chairman

Energy Intensive User Group (EIUG)

The EIUG focuses on developments in electricity security of supply and pricing in South Africa, functioning as a lobby group and technical centre of excellence on electricity supply/savings/management in South Africa

– Active participation at EIUG meetings and presentations

South African Institute of Foundrymen (SAIF)

SAIF promotes job growth and opportunities through training, skills development and education. It also seeks to improve the competitiveness of the South African metal casting industry

– Represented Scaw and was the deputy chairman of SAIF in 2014

Lifting Equipment Engineering Association of South Africa (LEEASA)

Comprises providers, manufacturers, maintenance, inspection, examination and training representatives

National Foundry Technology Network (NFTN)

Established to promote foundry technology and technical training

SAWA (SA Wire Association)

SAWA is the officially recognised representative body for the wire industry in South Africa

South African Quality Institute (SAQI)

SAQI promotes quality awareness in all South Africans and influences the general public to expect quality in products and services and to spontaneously include quality in all their activities


We regard our almost 6 000 employees as critical to achieving our strategic objectives, especially as we operate in an industry where skills are scarce.

Our people

We strive to attract and retain employees of the highest calibre to uphold the group’s performance and sustainability, and in parallel prioritise optimal working conditions and opportunities for development. Our employee relations manager is responsible for overseeing our employee relations initiatives in this regard.

Labour relationsWe endorse the rights of employees to freedom of association and collective bargaining. Scaw has a policy of negotiating wages centrally.

Breakdown of workforce byregion and employment type

SA permanent: 5 562

SA fixed term: 313

SA contractors: 584

Rest of Africa: 172

Australia: 99

North America: 3

Scaw South Africa is a member of two associations: SAEFA and the ISPA, which affiliate to SEIFSA. Collective bargaining takes place at industry level at the MEIBC at three-year intervals. The negotiation process is of extreme importance to achieving a mutually beneficial outcome. 78,1% of the total workforce falls under national collective bargaining agreements for the entire metal and engineering sector of the South African economy.

Scaw’s largest union is NUMSA. The following other unions also have representation within the Scaw group: MEWUSA, Solidarity, UASA and SAEWA.

During the year, Scaw experienced a month-long strike as part of an industry wage negotiation process. Our initial production losses at the start of the strike were estimated at more than 20 000 tonnes a week in production and a loss of more than R33 million a week in revenue. While we had no reported incidence of violence or intimidation, attendance by striking workers was low. We experienced complete lockouts for all unions except Solidarity, as SEIFSA withdrew the lockout on Solidarity members.

Training by category

Training and development courses Course outline

Employee numbersFY14/15

HoursFY14/15

CostsFY14/15

Employee numbersFY13/14

Hours FY13/14

Crane and machine operators Training of operators in overhead, pendant crane,forklift, slinging loads, hoist operation, tractors,front end loaders, bell tractors, truck drivers andloco drivers

2 072 45 768 R3 219 701 2 304 35 416

Production training Training of personnel in business understanding,business integrity, future forum, foundry skills,melding methods and operation requirements

2 103 22 333 R1 695 354 2 646 23 209

Safety training Safety training in risk management,fatal risk standards, incident investigation,safety reps and safe operation procedures

3 792 32 507 R2 840 235 2 496 19 599

Management training Supervisory programmers, skills programmers,competition compliance, quality programmers, SAP and computer training

894 14 155 R1 617 741 417 5 022

Total 7 863

Internal skills development programmes

Apprentice trainingAtrami Programme/artisan apprenticeshipInternship P1 and P2 StudentsGraduate programme

11417

47

64

195 510

14 280

55 272

R7 299 421

R1 586 000R2 604 000

160 224 000

Total hours 379 825 307 246

Average hours of training per year per employee

69,05909

Total spend R20 862 452 R12 280 513

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Our people continued

We also provided local annual training to employees including in the following areas:

– Legal compliance and licences

– Safety

– Production operator and competency assessments

– Multi-skilling

– Management development and learnerships

In the year ahead the group plans to roll out the following training programmes:

– Employment equity and diversity development programmes

– Career ladder-based training for production and

engineering

– Structured talent retention and succession development

– Trainee operator programme for external candidates

– Leadership development

– Critical knowledge retention and accelerated skills transfer

programme

– Production operator learnerships

– Coaching skills development for line managers

– Competency-based development programme for

managers at various levels

– Comprehensive induction programme

– Mentor programme

In addition, extending beyond the confines of Scaw, the group is planning to establish both an accredited computer training school and a boilermaking and welding education facility for employees as well as unemployed community members. The group is aiming to increase the number of apprentices beyond Scaw’s immediate needs in order to support broader local economic development.

Technical training and apprenticeshipsScaw has a proud tradition of technical training, offering apprenticeships in a number of trades and the majority of successful apprentices go on to enjoy long and fruitful careers in the business. During the year Scaw trained 114 apprentices.

Learnership NQF L2-4At Scaw nine employees started their artisan learnerships NQF L2-4 for the first time, in electrical and mechanical trade.

Bursary schemeBursaries worth R539 736 were awarded to external previously disadvantaged students from different universities.

Key skills development programmes

Training Objective No of employees

Accredited coaching and mentoring training for first line managers

Training line managers in effectively coaching and developing their teams, managing performance and delivering consistently high performance

202

Accredited assessor training for first line managers

Ensuring first line managers are accredited and competent in the assessment process in order to support the roll out of accredited qualifications – such as production learnerships, first line management learnerships and production, safety and quality skills programmes

155

Accredited moderators for trainers

Ensuring the quality of our learning and teaching by training trainers in a moderating process for checking and reviewing our assessment processes

21

Problem solving and root cause analysis for middle and junior managers

Changing the reactive maintenance cycle, improve safety, integrity and reliability and optimise the asset lifecycle to effect significant improvement in performance. Root cause analysis and problem solving training is a critical foundational skill for achieving operational excellence

109

A3 training for senior managers

Establishing a baseline for hazard and risk management, managers received safety risk management training. This included an introduction to risk management as well as models of work processes and management systems used to develop effective risk management strategies

22

Black Female Management Development Programme (BFMDP)

Equipping black female middle managers with the skills to become effective managers and to pursue the strategic objective of their companies. The management development programme bursary also creates a pathway for development and career growth for participating candidates. This programme attempts to address the skills gaps identified in the merSETA’s Sector Skills Plan by enhancing the availability of skilled middle management in the manufacturing and engineering sectors and specifically supports the role of black female managers

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Graduate intern sponsorship Scaw offers university bursaries in engineering disciplines. Electrical, mechanical and metallurgical engineers graduating from university who join the group will undergo Scaw-specific training in the group’s operations. 54 employees benefited from study assistance while nine children of employees received bursaries and 123 received assistance with school fees. A total number of 77 interns were appointed in 2015. The majority of our graduate trainees are female reflecting our drive to empower and provide training to females in our industry.

ApprenticeshipsThe following apprenticeships were offered during the year:

Apprenticeship Enrolment 2014 Male Female Enrolment

2013 Male Female

Millwrights 10 8

Electrical 19 8

Fitter 17 9

Fitter and turner 5 4

Boilermaker 5 2

Total 56 39 17 31 25 6

Graduate intern sponsorship (%)

Female: 61

Male: 39

DisciplineGender Number of

interns per discipline

% Males Females

Metallurgical engineering 1 2 3 5,5

Metallurgical engineering P1-P2 5 5 10 18,5

Mechanical engineering 1 3 4 7,4

Mechanical engineering P1-P2 1 – 1 1,8

Electrical engineering 2 – 2 3,7

Electrical engineering P1-P2 2 – 2 3,7

Industrial engineering – 1 1 1,8

Industrial engineering P1-P2 1 – 1 1,8

Chemical engineering P1-P2 1 2 3 5,5

Non-destructive testing P1-P2 1 1 2 3,7

Administration 3 7 10 18,5

Industrial psychology – 1 1 1,8

Human resource management – 4 4 7,4

Public relations and communications – 3 3 5,5

Law – 1 1 1,8

Accountancy 1 – 1 1,8

Information technology 1 1 2 3,7

Information technology P1-P2 – 1 1 1,8

Logistics – 1 1 1,8

Environmental sciences 1 – 1 1,8

Total 21 33 54 100

Graduate trainees starting 1 April 2014 to date

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Our people continued

The group has the following training accreditations:

MerSETA (Manufacturing, Engineering and Related Services Seta) MerSETA skills programmes

– National Certificate GETC – Manufacturing, Engineering& Related Services NQF Level 1 (23253)

– National Certificate: Production Technology NQF L2 (58781)



– National Certificate: Manufacturing and Assembly Operations NQF L4 (48915)

– National Certificate: GETC Foundry Production NQF L1



– Introduction to the manufacturing environment

– Life skills – understand and deal with HIV/Aids

– SHE business relations

– Post-production finishing operations

– Production process operations

– Apply quality assurance techniques

– Supervisory techniques

– Labour relations in the workplace

– Measurements and statistics within quality control

– Post-production finishing operations

– Maintain and monitor SHEQ systems and procedures

– Optimising production

– Tool setting and troubleshooting

TETA (Transport, Education Training Authority Seta) MICSETA (Media, Information and Communication Technologies Seta)

– Operating cranes

– Operating lift trucks

– National Certificate: Information Technology; End User Computing

CESA (Consulting Engineers for South Africa)

– Accredited programme: Steel Wire Rope Technical Training Course


Bathabile Mosala is a training instructor in the Training and Development department and joined Scaw in 2002 as an engineering clerk. Her managers describe her as “a self-starter who takes the initiative and does her best”.

Case study

Being a teacher was something Bathabile had always dreamt

about. “What I have realised during my time at Scaw and

while working in the training department, is that there’s

always a need to upgrade one’s skills and knowledge. For

me, this means that I have to study constantly to be a step

ahead of the learners.”

“I enjoy the challenges that my job brings. It enables me

to meet new people, conduct my training sessions and

see the necessary results. I get motivated to do more when

I see improvement from the learners. These learners

come from disadvantaged backgrounds, without any

computer knowledge and they leave as a different person,”

says Bathabile.

Born and raised in Dube Village, Soweto, Bathabile was the

youngest of four siblings and the only daughter to her

doting parents, Mrs Gladys and the late Mr Sello Mosala.

True to her name which means “Happy”, Bathabile describes

herself as a spirited, compassionate woman with an ever

enquiring mind.

In her youth, Bathabile always had an enquiring mind and

a thirst for knowledge. She began her schooling at Sizanani

Primary School, progressing to Vukayibambe Higher Primary

School and finally completing her Grade 12 at Langlaagte

Technical High School.

She later attended Innovation Business School where she

completed a computer course and achieved outstanding

results and later worked as a computer tutor. Before joining

Scaw she worked in a number of temp positions.

After joining Scaw consistent delivery and achievement saw

Bathabile climb steadily up the ranks receiving further

appointments in 2004, as a Production Administrator and

2005, as Scaw’s Computer Training Instructor.

Seeing this as her opportunity to finally realise her childhood

dream of being a teacher, she completed a Diploma in

Human Resource Management and obtained a BCom in

Industrial and Organisational Psychology, through Scaw’s

study assistance programme, both from Unisa. Subsequently

she has attended further training courses including project

management, management and leadership skills for women,

moderator and skills development facilitator training. All of

this has upskilled her to reach her full potential in the training

environment.

“My greatest achievement to date, while working for Scaw,

was when we obtained the accreditation through MICT Seta

to offer computer training for the employees and contributing

to Scaw’s latest and most unique achievement of obtaining

CESA accreditation for our Haggie® Steel Wire Rope product

training course.” In addition Bathabile facilitates end user

computing courses and she manages the computer training

centre.

Bathabile recognises the important role that training plays

in the development of skilled labour within the mining and

metalwork industries. “At Scaw Metals, our motto is being

about more than just steel. Great emphasis is placed on our

people and their development. For a company to be

outstanding, skilled labour is needed.”

Along with her career aspirations of progressing into the role

of a training consultant within the next five years, Bathabile

also demonstrates a passion for gender equality in the

workplace. “Women need to be upskilled and given

opportunities to balance gender inequality in the metal

industry. Women at Scaw are encouraged and supported to

work towards their career aspirations, no matter how difficult,

unconventional or impossible they seem.”

Bathabile Mosala

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SHE

Our group values guide our approach to SHE, prioritising the protection of our people and the environment through leadership, education and collaboration as we work towards zero harm.

Safety firstScaw does not accept that it is necessary for people to be injured or become ill while at work, and believes that all employees should be able to return home fit and well at the end of each shift armed with the knowledge to educate their families and communities as to SHE issues. To this end our operations should have fundamentally safe, well-designed plant, equipment and infrastructure with risk-based SHE management systems driving our goal of zero harm.

SHE principles – Zero harm mindset: An acceptance of and responsibility for the premise that all injuries and occupational illnesses are preventable and that the group can avoid, minimise and mitigate environmental impacts arising from our operations.

– No repeats: All unsafe practices and incidents and environmental incidents and poor environmental practices will be investigated to determine the root causes and the steps necessary to prevent recurrences.

– Strict rules and standards: Scaw has adopted SHE standards to ensure that minimum standards are maintained throughout the group. Divisional line management at all levels are responsible for implementing and maintaining these.

Our group values guide our approach to SHE, prioritising the protection of our people and the environment through leadership, education and collaboration as we work towards zero harm. Our SHE Management Framework defines the roles and responsibilities of the corporate centre and business units in respect of SHE. Safety, health and environmental performance is a main agenda item in all forums in the group and a KPI at all levels of the organisation.

The SHE department is based at the Union Junction operation, led by the Head of SHE. It is responsible for ensuring that the SHE management framework is maintained and continuously improved in line with the ISO 14001 environmental and the OHSAS 18001 safety and health accreditations and other policies and procedures to which the group subscribes. This team facilitates SHE programmes across the group with the support of onsite SHE teams worldwide.

2015 2014 2013

Fatalities 0 0 1

TRIFR 1,19 1,46 1,87

LTIFR 0,44 0,34 0,41

Key safety indicators at a glance


Corporate

Divisions

Leadership Scaw Metals SA Audits

Leadership Operational locations Audits

The corporate centre will define and communicate what is required, including clear, non-negotiable standards. This will require, inter alia, resourcing, communication, setting of executive KPIs and an overarching safety plan

The divisions will implement the Scaw corporate policy and add their own business-specific standards and rules to these. This will require resourcing, communication, setting of business-specific KPIs and operational safety plans

Scaw vision, principles and policy

Scaw safety management system standards

Scaw fatal risk standards

Scaw safety golden rules

Scaw board

Executive committee

Corporate SHE

Peer review

Third party

Scaw Metals’ vision and principles

Corporate and divisional policy and standards

(including contractors) Self-assessment

Divisional

Third party

BehaviouralProcedures

Training

Behaviour

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SHE continued

SHE management standards These standards form the basis for the group-wide SHE management system and are based on the ISO 14001 and OHSAS 18001 management system standards. For those sites where certification to the latter standards are not pursued, a Scaw Standard has been created and published in our document The Group Safety Way. An overview of these standards is illustrated below:

In addition, Scaw has implemented the fatal risks standards (FRS) which determine minimum requirements for managing certain specific high risks. The Scaw FRS are specific in-house controls associated with identified fatal risks. The Scaw FRS apply beyond Scaw business units and operations to contractors and visitors involved in controlled activities.

Currently most divisions exceed the group average of 90% compliance and some have even achieved 95%. Self-assessments of compliance are reviewed during independent audits. We decided in the year to focus on the implementation of the Scaw Safety Way at those sites which are not certified to ISO 14001 and OHSAS 18001, before any further new standards are introduced. Gap analyses on compliance to the Scaw Safety Way have been conducted at the relevant sites and action plans have been implemented to address any shortcomings.

Another main focus area for the year was implementation of a risk assessment review programme. During the year under review the emphasis was on the review of the baseline risk assessments and their formal signing off. The review has been completed and the sign off is nearing completion. In the coming year focus will be on the review of task-based risk assessments for high-risk tasks and relevant procedures. Training on the Safety Risks Management Programme will also continue in the new year.

Entrenching a culture of safety Living our SHE principles requires the involvement of everyone working for and with us. Visible leadership and clear accountability are emphasised and we continued to focus in the year on the time that managers spend on the shop floor. Senior and line managers conducted VFL walkabouts and engaged directly with employees at least once a week. This proved to have a positive impact on safety behaviour, safety awareness and the early identification of potentially unsafe acts.

We continue to positively reinforce safe behaviour among employees and, where necessary and appropriate, to enforce disciplinary procedures for certain unsafe actions. Zero harm certificates continue to be awarded to business units that work an entire calendar year without experiencing LTIs. The awards ceremonies are generally hosted by Scaw’s divisional managing directors. Other significant safety improvements are celebrated with the achieving teams.

TrainingThe group human resources department manages the roll out of training, while a training matrix and schedule are maintained in the individual operations of those SHE training courses required.

During the year training was held group-wide on FRS and the training material was modified in some instances to overcome

1. Policy, leadership and commitment

11. Incident reporting and investigation

12. Monitoring, audits and reviews

2. Risk and change management 3. Legal and other requirements 4. Objectives, targets and performance

5. Training, awareness and competence 6. Communication, consultation and participation 7. Documentation and control of documents 8. Operational control 9. Emergency preparedness and response 10. Contractor and business partner management

Continual improvement

Policy

Checking and corrective action

Management review

Planning

Implementation and operation


literacy challenges, for instance in lock out and isolation training. Safety fundamentals training was also formalised in the updated employee induction programme. Further, one A3 course for management risk training, 11 A2 courses for supervisors and 21 A1 courses for team members were presented in the group. In addition, specialised competency-based training held during the year included:

– Gas safety (shop floor and classroom) – Slinging and safe lifting practices training (basic level, shop floor and classroom)

– Transport Education Training Authority (TETA)-accredited pendent and overhead crane training

– TETA-accredited forklift training – Vienna testing for all mobile equipment operators – Hazard identification and risk assessment (HIRA) training for shop floor level

– SHE representative training – First aid training – Confined spaces training

Contractor induction training is provided by an external service provider.

Safety audits and reviewsSafety compliance audits continue to be regularly conducted by external auditors for OHSAS 18001 and ISO 14001 certification. During prior audits certain non-compliances were identified in respect of machine guarding and electrical installation certificates. In respect of machine guarding, projects continued but not all have been completed during the year due to financial constraints. These are expected to be completed in FY16. On the certificates only the Union Junction site remains in the process of remediating non-

compliances. This too was delayed due to financial constraints but is hoped to be completed during FY16.

The types of reviews conducted internally are determined primarily by the risk profile of the respective business units. They comprise:

Annual reviews – Scaw’s Exco reviews the group’s SHE objectives, targets and standards annually to ensure that they remain current and valid.

– Occupational hygiene surveys are conducted every two years to measure workplace exposure. In 2015, 96% of employees scheduled for medical surveillance attended the consultations.

Peer review programme (PRP) and internal audits – The PRP provides some assurance that fundamentally sound, risk-based management systems are in place at all operations, but also works to build core competence and act as a mechanism for learning and sharing across Scaw. The group reintroduced the PRP by using the SHE personnel in certain plants to cross-audit other plants. This will be expanded to more sites in the coming years. Management is responsible for implementing actions arising from the PRP.

Self-assessment and safety plans – Conducting self-assessments of the implementation of FRS is key to continuous improvement in the business units. The gaps between the self-assessments and full compliance provide a basis for safety improvement plans and reporting on self-assessments forms part of the assurance process required by Exco.

Employee wellness

Health objectives FY15

Objective Performance Target FY16

Employees to participate in VCT (including previously tested) 67%80% (including

previously positively tested)

Known HIV positive cases to be enrolled on a recognised wellness programme

91% 90%

Uptake of employees for risk-based medical surveillance 96% 100%

Reduction in South Africa of level 3 and level 4 NIHL cases 0 cases <10 cases

Group Health Improvement Plan Has been maintained

To be maintained

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SHE continued

We aim to proactively protect the well-being of employees,

providing primary and acute healthcare services, lifestyle and

chronic disease assistance and facilities and trained staff to

manage medical emergencies at work.

In South Africa, Prime Cure Wellness operates our outsourced

onsite health clinics. The group’s occupational healthcare

system tracks the entire life cycle of an employee’s career

with Scaw, so that any potential deterioration in health status

can be detected early and managed proactively. Scaw holds

to this approach because it takes into account the whole

person, not simply the visible injury, and recognises that

the injured or ill employee is an income provider for a family

who is therefore entitled to the proper time and attention to

recuperate fully.

A consolidated database of individual employee health data

was introduced in the year to advance the system.

Health clinicsScaw’s occupational health clinics (also known as medical

centres), equipped with professional medical staff and

equipment, are the first ports of call in dealing with employee

disease and injury and are responsible for monitoring

employee treatment until recovery.

At the two largest sites, Union Junction and Steel Wire Rope,

the clinics are open 24/7. Medical personnel treat injury-on-

duty cases, manage a wellness HIV/Aids clinic and will

arrange for the evacuation of South African employees who

are injured on duty overseas. The Union Junction medical

facility is staffed by seventeen medical and associated

professionals with an onsite ambulance. Access is provided

to advanced medical emergency vehicles including a

helicopter. The site’s x-ray facility is available to other medical

centres within the group, as well as that of a clinical

psychologist and optometrist on a weekly basis.

Scaw prioritises education of employees as a means to

reduce occupational health risks. Medical surveillance

includes hearing tests, spirometry (lung function testing),

visual acuity and biological monitoring where indicated.

Various programmes and awareness campaigns are

conducted to prevent NIHL cases. Those who are identified

with NIHL are monitored regularly to protect them from further

hearing loss. In some areas engineered measures have been

implemented to reduce exposure to excessive noise.

Health daysAnnual health days are conducted at most Scaw sites to

educate employees about health resources available to them

within their communities. The South African Blood Bank, and

various other external health-related service providers, all

participate. Employees are free to attend the exhibits that

interest them and share the advantages of this extended

health service with family members.

During the health days, employees also have access to

cholesterol level and kidney function tests and blood type

analyses. For many employees the health days represent their

first exposure to health services outside of the group.

HIV/AidsScaw’s HIV/Aids programme continues the battle against the

pandemic in the workplace with continual education about

prevention, treatment (including nutrition), family and social

impacts, and destigmatisation of the disease. Specifically the

programme includes:

– Voluntary counselling and testing (VCT)

Monthly testing targets are set to achieve annual testing

targets of 80%. Although this target was not achieved

many employees who had never been tested came forward

to be tested.

– Wellness programmes

When an employee has been diagnosed with HIV, she/he is

enrolled in a wellness programme unless s/he refuses.

Testing of the CD4 count is repeated at set intervals.

Antiretroviral therapy (ART) is commenced when the CD4

count reaches a certain level. In addition, the employee is

counselled and general health is monitored.

– ART

The provision of ART has proven to be successful, with the

result that nearly all employees who have been treated are

performing their normal duties. The critical importance of

adhering to therapy requirements and the continuance of

treatment forms the thrust of ART counselling.

– Training

To improve employee understanding about the impact of

HIV on individuals and society, Scaw conducts HIV/Aids

awareness campaigns and training on an ongoing basis.

One of these programmes is peer education facilitated

by HIV positive employees as trainers/speakers, who

encourage participants to get tested and use Scaw’s

wellness programme.

– HIV committees

A number of employees have joined Scaw’s volunteer

HIV/Aids education programme as peer educators. HIV

committees formed by the peer educators at most of the

large sites are integral to the HIV/Aids management

programme. Committee members and other employees

participate in the annual World Aids Day activities.


Occupational disease The principal occupational health risks in Scaw are NIHL,

illness due to dust exposure, and dermatitis or asthma due

to chemical exposure. During the year under review, two

incidences of occupational diseases were reported.

Protecting our environmentAs a manufacturer of value-added steel products from steel

scrap and directly reduced iron, Scaw is active in one of

the world’s most sustainable industries. Steel is the most

recyclable material on the planet. Every new steel product

contains recycled steel and in some countries the recycled

rate is as high as 85%. We procure and process our own

steel scrap requirements and recycle significant volumes

of scrap steel in our steelmaking operations.

Our approach to environmental management is based on

international best practice and legal compliance. Most of our

operations are ISO 14001: 2004 certified. Responsibility

for environmental management extends to every employee.

We have a comprehensive Environmental Management

Framework in place and a Scaw Assurance Programme.

Each business unit’s line management is responsible for the

full implementation including:

– the allocation of appropriate resources and the provision

of training, education, consultation and auditing to ensure

compliance;

– the development, implementation and maintenance of

programmes and procedures; and

– effective environmental impact identification, assessment

and control.

Scaw’s Exco reviews the environmental objectives, targets

and standards annually to ensure that they remain current

and valid. These include objectives for energy consumption,

water consumption and waste reduction.

We are pleased to inform you that energy consumption and

water use per tonne of steel produced are being continually

reduced year-on-year throughout the group. The following

environmental impact reduction projects were completed

during the year:

– A recycling project for slag generated at the melt shops

– Licence acquired to also recover metal from the slag at

the old disposal facilities at Union Junction

– Improving the collection of paper waste in the office areas

at the Union Junction site.

One of Scaw’s key environmental objectives is finalising

closure of historic legal non-conformances with 90% having

been closed out. The remaining items require either

substantial capital investment or are dependent on

completion of the authorisation process. For instance, the

R210 million secondary emission extraction system for the

Union Junction Foundry, is in progress and expected to be

completed in 2016.

The non-compliances that require authorisations include

the issuing of a waste licence for the closure of the waste

disposal site at the decommissioned Dimbaza site. During

the year the environmental authorisation for decommissioning

was received, but the relevant waste licence is still awaited.

It is hoped that all the required authorisations will be finalised

during the next financial year.

Interested and affected partiesWe believe that engaging with our environmental stakeholders

in a constructive manner is essential, so we host forums and

ensure we keep lines of communication open with community

members. The Union Junction site hosts an annual

environmental stakeholder forum meeting. Stakeholders in

this instance include local residents, national, provincial and

local government authorities such as the Department of

Environment (DEA), the Gauteng Department of Agriculture

and Rural Development (GDARD) and the Department of

Water and Sanitation (DWS), as well as the Ekurhuleni

Metropolitan Municipality.

Complaints from the communities in which we operate are

recorded as and when they are received and addressed

and feedback is provided to complainants. A register of

complaints received and the status of such complaints

is maintained at each site.

EnergyThe group is focused on improved energy management and

has been tracking improvements on a central database since

2005. Over this time Scaw has achieved a reduction of more

than 10%.

The group has a number of short- and long-term initiatives

under way in this regard which include, at the Union

Junction site:

– Variable speed drives for arc furnace regulation. This has

been completed for the HCBP and Wheel Plant furnaces.

– Energy efficient motor survey

– Energy efficient lights around Scaw’s Union Junction

perimeter and in the DRI plant. This was completed. Similar

projects are being investigated for various plants inside the

plant at Union Junction and also for the Benoni Foundry

– Heat pumps for change houses. These have been installed

at the Union Junction change house and seem to have had

a positive impact. An evaluation was conducted and

demonstrated energy savings

We are also in progress with other initiatives including:

– Melt Shop Number 3 scrap pre-heating

– Static VAR compensation for voltage stabilisation at 33 kV

incoming supply

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WasteScaw ultimately aims to recycle as much waste produced on

site as possible and therefore reduce or eliminate the need

for disposal at a separate waste site. Scaw is appropriately

licenced to recover metal for recycling as far as possible.

Currently the Union Junction site is the largest producer of

process waste in the group. A phased approach has been

adopted here. Process waste recycling initiatives were

implemented in the year with a focus on char and dust. All

slag from the furnaces is also now recycled and the metal

extracted and reused in the furnaces.

WaterGiven that South Africa is a semi-arid country, Scaw Union

Junction site, being the biggest consumer of water in Scaw,

has endeavoured to reduce its consumption of potable water

by recycling water through its onsite dams.

SHE continued

EmissionsScaw voluntarily participates in the Carbon Disclosure

Project. Greenhouse gas emissions, specifically of carbon

dioxide, are reported as part of the programme. Further

particulate emissions are continuously monitored at certain

stacks at Union Junction and a dust fallout sampling

programme is also in place at the site. This consists of dust

buckets placed in strategic locations on the boundary of the

site and in the surrounding communities. In addition external

consultants undertake annual emission surveys.

Further, specific annual projects get under way each year to

ensure continuous progress in the reduction of emissions.

During the year these comprised:

– The upgrade of the fume extraction system at the Union

Junction Foundry. A capital cost of R210 million was

approved and the project is expected to conclude by the

end of 2015.

– HCBP – scrubber: an additional fumex bin was installed to

allow for the removal of the other bin and disposal of the

fumex without bypassing the emission control equipment.

– New projects consider the best available technology and

practices in order to mitigate impacts on the environment.

All air emission licence applications submitted to the air

quality authorities for all Scaw plants have been granted

and either a provisional or final licence issued.

During the year Scaw maintained its level 3 B-BBEE rating, evidencing our commitment to making real change in South Africa. This is a notable achievement given the inherent challenges of the steel industry, particularly skills scarcity and gender bias. We improved our rating in five of the seven scorecard criteria, significantly in employment equity-related elements and preferential procurement.


Transformation

B-BBEE scorecard

Element Maximum points 2013 calendar 2014 calendar

Ownership 23 23 23

Management control 11 8,9 8,9

Employment equity 18 4,8 4,0

Skills development 15 3,9 5,3

Preferential procurement 20 20 19,3

Enterprise development 15 15 15

Socio-economic development 5 5 5

Total 107 80,6 80,5

B-BBEE level 3 B-BBEE level 3

The social, ethics and transformation committee has reviewed the new incoming codes and in terms of the new codes the group is targeting a level 4 status for the year ahead. Action plans have been implemented to ensure continued compliance and improvement.

As part of Scaw’s Women’s Forum, the “Women of Steel” campaign was introduced as a platform that gives recognition to women in the organisation. The key objective was to profile selected junior and senior level women that have made a contribution to the organisation. Interviews were conducted to gather the personal and career journey of these women. The profile pieces were crafted to tell the remarkable story of how these women have climbed the ladder in an industry historically dominated by men. Their stories shared their experiences, challenges and key insights for those interested in pursuing careers in the industry. The individuals were profiled in various publications.

A limited pool of black females in the industry and scarce financial resources to fund skills programmes hampers our performance in the Employment Equity and Skills Development categories. During the year a comprehensive B-BBEE strategy was formulated and approved by the board focusing on these two categories. To mitigate specific challenges: – Learnerships and apprenticeships will be rolled out to both current employees as well as unemployed individuals

– Group supplier and enterprise development programmes

will be developed and implemented

Our board continually monitors progress against transformation objectives, supported by the social, ethics and transformation committee.

Transformation in FY15: SiyaphambiliDuring the year Siyaphambili diversity and inclusion workshops were conducted for 170 managers. Further workshops are planned for in the year ahead for superintendents and foremen.

Indaba sessions were also facilitated by our diversity management partner, Mandate Molefi. These provided an opportunity for managers and employees to openly air their views regarding both the good and bad in terms of transformation at Scaw. The sessions also served as a platform for participants to identify major issues and articulate possible solutions moving forward. More Indaba sessions are planned for the coming year to ensure employee participation is as inclusive as possible.

Employment equityIn June 2013 we committed to a formalised five-year employment equity plan, although the principles of employment equity had been at play in the group since before the 1994 democratic elections.

The policy supporting the plan places significant emphasis on achieving a workplace demographic that is at least congruent with the South African labour market (as reported by Statistics South Africa). We believe this approach will

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transformation project. Employees are encouraged to communicate any concerns related to employment equity (diversity, discrimination or harassment) to committee members in their respective areas, or to the group transformation and employment equity manager. There were no reported incidents of discrimination during the year.

The employment equity categorisation of our almost 6 000-strong workforce which excludes contractors is summarised below:

Transformation continued

ensure that the business has an excellent mix of skills and cultures as well as a balanced cross-generational worker profile. Our policy further highlights the importance of improving gender representation through the employment of more women across the business. We are certain that a representative workforce, underpinned by skill, provides Scaw with a distinct competitive edge.

Our national employment equity committee drives the group’s employment equity agenda in compliance with legislation and according to the five-year plan and our own Siyaphambili

Occupational levels 2014/2015 actual 2015/2016 target Number of persons required to reach target

Top management* 50% 50% 0

Senior management 35% 38% 2

Middle management 56% 63% 21

Junior management 75% 71% 0

Gender equity

Women in management 13,79% 14,89% 65

Women in Scaw 9,12% 9,52% 23

Employment equity by race and gender

African: 83%

White: 12%

Coloured: 3%

Asian: 2%

Female: 9%

Male: 91%

Employment equity

Semi-skilled: 40%

Skilled: 29%

Unskilled: 25%

Professionally qualified: 5%

Senior management: 1%

Top management: 0%

*Top management includes only chairman and CEO

Scaw actively supports the development of local business by engaging in enterprise development partnerships with entrepreneurs and skills education training authorities.


Enterprise development

In 2013 the group created 11 entities in terms of our Enterprise Development Programme and partnered with the Small Enterprise Finance Agency to set up a joint fund of R100 million to fund these businesses. Scaw supports the growth of exempted micro enterprises (EMEs), which, by their nature, are 100% B-BBEE compliant.

Recently Scaw honed its focus onto EMEs in the scrap metal industry. This is intended to help create a complete service in the scrap metal value chain in order to promote the local beneficiation of scrap. Scaw selects scrap metal EMEs with complementary services and builds each to promote healthy competition in the industry. The employee base of each EME is sourced from the local communities in which these entities trade to promote job creation.

The group’s contributions consist of monetary and non-monetary, recoverable and non-recoverable “donations” aimed at assisting or accelerating the development, sustainability and ultimate financial independence of the beneficiary. This is accomplished through the expansion of a beneficiary’s financial and/or operational capacity with continuous training and skills development.

During the year Scaw presented certain of the initiatives to SEFA for direct financing to expedite trading. To date, financing for two entities has been approved and both are operational with Scaw’s assistance. In addition, five other entities have been contracted as part of Scaw’s ED programme to support the business in different areas.

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Our communities

We are committed to investing and allocating resources to aid development and improve the quality of life in the communities in which we live and work. Our social investment projects aim to empower communities through sustainable education, health, housing, community and infrastructure.

Category Project name

Cyril Ramaphosa Education Trust

Adopt-A-School – Eketsang

Epworth Children’s Village Outreach Programme

Cricket

Soccer

Athletics

Food and trees

The Chairman’s Fund

Total Scaw CSI contribution FY15

Education

Sports development

Environment

Chairman’s fund


Scaw’s contribution FY15 Value donated in 2015

Funded five bursaries R0,6 millionFunded: – Voluntary after-hours training for learners and educators in mathematics and science – The refurbishment of the library – English and literacy intervention – “Drop Everything and Read” – Matric revision camp

R0,6 million

– This project focuses on supporting teachers, parents and learners in various communities in Johannesburg. The impact on the communities is evident in academic success rates, a reduction in teenage pregnancies and school dropouts, etc

R0,2 million

– Transportation for the senior and junior teams – Equipment for senior and junior sides – Meals on match days

R51 000

– Transportation for players – Equipment for senior and junior sides – Funding for licence and referee fees

R31 000

– Transportation for athletes – Sponsorship – Accommodation and clothing

R0,15 million

– During Arbour month, Scaw donated 1 000 fruit trees for homes in Katlehong – For World Food Day donated vegetable gardens for a primary school in Katlehong R0,2 million

– Sponsorship of the netball team at Germiston High School R25 000

R1 796 532

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Documents

Approach to sustainability - Financial Resultsfinancialresults.co.za/2015/scaw_ir2015/downloads/Driving_our... · Approach to sustainability Exco is responsible for ensuring that