Sustainability/ Strategy and systems

Strategy and systems

The AECI Group, as a matter of policy, is committed to a clean, safe and healthy environment for its employees, contractors, customers and surrounding communities.

To fulfil this policy commitment, a set of Safety, Health and Environmental ("SHE") Standards has been agreed to and approved by the Chief Executive. The Social and Ethics Committee oversees these matters and reports back to the full Board. The Standards, as stated below, are designed for implementation in AECI's federal structure. The Chief Executive holds the Managing Director of each AECI business accountable for ensuring that implementation is effected appropriately in the business he or she manages.

REVISED STRATEGY

A single SHE and Quality ("SHEQ") strategy was developed during 2017. This strategy is aimed at driving standardisation in SHEQ management across the Group and delivering a new long-term goal and vision as follows:

REVISED STRATEGYOur goal is Zero Harm. We aspire to operate sustainably, without harm to people, the environment and the communities in which we operate.

The vision reflects an organisational belief system that drives continuous improvement over the long-term - a journey towards Zero Harm.

The strategy has 12 focus areas that will be developed and implemented over four years to deliver improved performances in Process Safety, Occupational Safety, Occupational Health, Environmental Performance, Product Transportation and Quality. Work commenced in the year on the priority areas, namely: Leadership Alignment to Zero Harm, Employee Engagement, Process Safety Management, Life-saving Behaviours and SHE Risk Management.

The strategy has been endorsed by the leadership of all Group companies as well as the AECI Executive Committee, the Social and Ethics Committee and the full AECI Board. The Chief Executive remains accountable for SHEQ performance.

Implementation and the measurement of the effectiveness of this strategy is managed through a newly constituted Group SHE Committee and progress is reported on a monthly basis to the Executive Committee and quarterly to the Social and Ethics Committee.

COMPLIANCE

The legal environment in which the Group operates is increasingly complex owing to additional SHE-related legislative requirements in South Africa and the diversity of legislation in countries in the Group's geographic footprint. In 2016 a specialist third-party SHE consulting firm was contracted to undertake and manage an extensive audit programme across all AECI sites, internationally. The programme continued through 2017 and was completed in December. A total of 57 sites were audited, with primary focus on legal compliance in SHE matters. The audit results and progress in terms of addressing associated findings are discussed by the management teams concerned as well as being tracked by the Executive Committee on a monthly basis.

As reported in prior years, certain manufacturing operations at AEL's Modderfontein facility were unable to meet all the minimum emissions standards that came into effect on 1 April 2015, in terms of the National Environmental Management: Air Quality Act, No. 39 of 2004. AEL submitted an application to the regulatory authorities for the postponement of the compliance timeframes, so as to allow the company sufficient time to make the necessary commitments of capital required to achieve full compliance. In 2017, the Department of Environmental Affairs ("DEA") responded to this request by issuing a letter outlining alternative limits to be adhered to between 24 April 2017 and 30 March 2020. AEL has since commenced installing abatement equipment, and will continue to do so over the next two years, in order to meet the 2020 Minimum Emission Standards.

As in previous years, each Managing Director has submitted a Letter of Assurance to the Chief Executive, describing the main SHE-related risks faced by his or her business and the controls in place to manage these, and also confirming that the business is in compliance with AECI's SHE Standards. Where such confirmation cannot be given, the level of non-compliance is described and details of the plans in place to achieve compliance are provided.

SHEQ MANAGEMENT SYSTEMS

AECI's businesses and/or operating sites are required to align their SHEQ Management Systems with an external standard against which third-party audits may be undertaken. The most commonly adopted such standards are:

AEL utilises its in-house World Class system which comprises seven elements, including safety, health and the environment, but also commenced a programme in the year to obtain certification against OHSAS 18001:2007. The Central Engineering Department, based in Modderfontein, achieved certification in 2017 and a number of other areas are earmarked for the same certification over the next few years.