Equal opportunities (B-BBEE and EE)

EMPLOYMENT EQUITY AND BROAD-BASED BLACK ECONOMIC EMPOWERMENT (B-BBEE)

Employment Equity: background and strategy

AECI is committed to transforming itself into a fully representative South African-based Group of companies and recognises that meeting the requirements of the Employment Equity Act, in terms of representative employment and human resource development, is a business imperative. Closely aligned to this is the achievement of acceptable Broad-Based Black Economic Empowerment (B-BBEE) scorecards.

Accordingly, AECI’s Employment Equity and B-BBEE targets were set to ensure that all operations in South Africa achieve Contributor Level 8 (excluding the ownership element) by the end of 2009, with AEL Mining Services maintaining its Level 5 Contributor status. Of the Group’s 20 businesses (excluding US-based SANS Technical Fibers), 13 achieved or exceeded their goals and seven were non-compliant.

Plans are in place to ensure that all Group companies are compliant. Accordingly, all operations in South Africa will improve by one level by the end of 2010 (to be measured in 2011); that is, Level 7 for all operations except AEL, which must achieve Level 4.

These targets are part of the Key Performance Indicators which influence individual performance bonuses for Managing Directors of Group businesses.

By mid-2011 AECI is planning to progress a B-BBEE transaction along the lines of the transaction contemplated in 2008 but which was postponed owing to volatility in financial markets at the time. Following the completion of the contemplated transaction, the Group as a whole will be a Level 6 Contributor. Thereafter, AECI will review its B-BBEE performance against existing targets and will set new targets for 2014 and beyond.

AECI’s Executive Committee recognises the slow progress made by the Group with regard to the representation of designated groups. This is especially true for the top three occupational levels, namely Top Management, Senior Management and Professionals. To accelerate progress, and in terms of a formal Executive Committee decision, 70% of external appointments at these levels must be from previously disadvantaged groups. Any appointment of a candidate from non-designated groups must be approved by the Chairman of the business entity concerned.

Business-specific commentary is as follows:

Mining services

Efforts to improve AEL’s Employment Equity rating continued in 2010, with the company making progress with regard to appointments in support of the Employment Equity component of its B-BBEE objectives.

Specialty chemicals

In compliance with the Employment Equity Act, use of the two-tier consultation process continued.

To redress imbalances in the demographic representation of Senior Management at businesses in the cluster, only Black candidates will be recruited externally for positions in the Skilled category and above, except where a thorough and diligent search has not identified a suitable qualified candidate.

External consultants are advising the businesses on how to improve their performance in respect of B-BBEE. Each chemicals business has appointed a Senior Manager to act as a B-BBEE Champion and to drive transformation initiatives. These Champions have received training on relevant legislation and its interpretation and their knowledge is refreshed as required.

Property

The Employment Equity plan put in place in 2009 will serve as Heartland’s platform for its programmes and interventions until 2013.

In 2010, the company achieved a net gain of five previously disadvantaged individuals at the Skilled Technical and Academically-qualified occupational levels. There was a net loss of one white female at the Semi-skilled occupational level.

As in other AECI businesses, there remains a shortage of individuals from designated groups at the Top Management, Senior Management and Professional levels. Appointments at these levels will be in line with the Employment Equity plan.

Heartland Properties and Heartland Leasing undertook a B-BBEE Contributor rating verification in 2009/10. Heartland Properties was rated as non-compliant while Heartland Leasing was rated as a Level 8 Contributor. Emphasis will continue to be placed on management control, Employment Equity and enterprise development.

AECI’s businesses continue to submit their Employment Equity reports to the Department of Labour as is required by law.

EMPLOYMENT EQUITY STATISTICS

(AECI Group – excluded here are employees at manufacturing and business activities outside of South Africa).
% = percentage of employees from designated groups per category.
Figures in all the graphs refer to employee numbers.

1 Indicates Limited Assurance.