- Development and impact of infrastructure investments and services supported
- Significant indirect economic impacts, including extent of impacts
- Percentage of operations with implemented local community engagement, impact assessments and development programmes
- Operations with significant actual or potential negative impacts on local communities
- R1,050 million on socio-economic development
- R17.395 million on social and labour plans/local economic development
Targets and objectives for 2013/2014
While Sibanye aims to at least comply with its SLP commitments, over and above that, the Group is committed to the provision and development of infrastructure investment and services that make a real, meaningful and sustainable difference to communities in which the Group is located and from which employees are drawn.
Delivering on SLPS
Sibanye is committed to the objectives and spirit of the Mining Charter. The Group understands, though, that earning its licence to operate takes more than compliance. Its efforts and programmes are, therefore, aimed at making a lasting and meaningful difference in the communities in which it operates or from which its labour is drawn. During 2013, Sibanye spent R1,050 million (2012: R853 million excluding South Deep) on SED.
Subsequent to the unbundling process in February 2013, Sibanye became the holder of the mining rights for the Beatrix, Driefontein and Kloof operations – to mine gold and associated minerals – converted in terms of Item 7 of Schedule II of the MPRDA.
The Group was required to submit, among other documentation, SLPs detailing how it would comply with the provisions of the MPRDA, and submit, on an annual basis, an account of its performance against the targets set in its SLPs, developed for the period from 1 January to 31 December 2013.
The SLP for the Beatrix Operation for the period 2012 to 2016 was approved in April 2013 and implementation is underway; SLPs for Driefontein and Kloof for the same time period have not yet been approved although they were both submitted in January 2012. Despite the delay in approval, the Gauteng office of the DMR subjected Driefontein to a compliance inspection on 20 September 2013. The inspection resulted in the issuing of a directive to rectify shortcomings that were identified during the audit. Areas of concern were related to transformation, qualitative aspects of SLP implementation, impact assessments, and alignment of housing programmes with local and national governments’ human settlements programmes. Corrective action was taken by various departments and a high-level team presented the report to the DMR on 15 November 2013. The DMR was satisfied with the presentation and reports submitted.
Experiences over the past year, with internal and external challenges, have influenced the Group’s ability and capacity to meet its targets. Issues such as organisational restructuring and dependencies on other partners (local municipalities and government departments), delayed project implementation and overall delivery on commitments. In some instances, Sibanye has exceeded the targets but, given the nature of the process and the realities and challenges, there are certain areas where targets have not yet been achieved.
STAKEHOLDER ENGAGEMENT STRATEGY
The Group engages with all its stakeholders in terms of the Sibanye Corporate Communications and Engagement Strategy, which has been developed to set out the principles and approach the Group follows in its internal and external communications and engagement in the short to medium term. See Engaging with stakeholders for further information on stakeholder engagement practices. This process reflects the Group’s corporate aims and objectives, and is critical to the development of key initiatives and projects to improve efficiencies and effectiveness. The strategy is evolving and is supplemented by regular departmental plans, which set out individual communications plans in detail. See the Stakeholder Engagement Policy.
DEFINING SOCIO-ECONOMIC DEVELOPMENT
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In 2013, Sibanye undertook an evaluation of its activities and community impacts, and defined these under the banner of SED, rather than the more narrowly focused definition of CSI.
SED activity and expenditure relates to all projects that are:
- external to the core business needs;
- influential in uplifting communities;
- guided by a strong development approach; and
- are linked to infrastructure investment that benefits communities beyond the closure of the mine.
Components of SED, therefore, include LED (including enterprise development and infrastructure development), education, training, conservation and the environment, as well as arts and culture.
LOCAL ECONOMIC DEVELOPMENT
LED is a significant component of SLPs. The Sustainable Development Department, led by the Vice President: Sustainable Development, engages with local municipalities to ensure alignment of community-development projects with IDPs.
Sibanye undertakes approved SLP and LED projects for host communities in the vicinity of mining operations and others in labour sending areas. Communities in rural areas of South Africa, while geographically removed from mining operations in Gauteng and the Free State, are important to the Group as a source of labour. Some 69.5% of the labour force originates from South Africa with KwaZulu-Natal and the Eastern Cape accounting for 9.7% and 26.7% of employees respectively. For this reason, Sibanye’s community development interventions in rural areas of South Africa have focused on these two provinces.
The LED sections of the Group’s SLPs are currently being reviewed to ensure implementation success and greater levels of impact. Interim findings indicate that the projects that have been implemented to date, while aligned with the local municipalities’ IDPs and approved by the DMR, do not necessarily have the desired impacts on host and labour sending areas. The lessons learned have prompted Sibanye to consider a different approach towards LED projects. To this end, the Group has decided to:
- focus on fewer projects with greater impact;
- focus on community development, education, agriculture/environment, and health;
- consider options in this regard ranging from CSI to infrastructure and enterprise development;
- ensure that all role players have had an opportunity to influence the decision on how best to invest the money that is made available for LED in terms of the Group’s budgeting process;
- enable this through the creation of a tripartite engagement platform that will assist in making appropriate decisions with regard to LED projects, which will have DMR and municipality representation; and
- provide ongoing feedback on the projects that have been approved for implementation programmes.
Some insight into the programmes undertaken during the year at Beatrix, Driefontein and Kloof, follows.
Beatrix contributes to SED in the community and areas from which its employees are sourced. Despite challenges experienced by Beatrix in the delivery of some plans, considerable progress has been made in certain instances.
The most significant challenges posed in achieving the operation’s goals have proved to be ensuring that project partners deliver on their part of agreements. An example of this is the challenge experienced with the Nanabolela Secondary School in Thabong, Welkom, where the Group has entered into an agreement with the DoE in the Free State Province (FSDoE) to build a media centre at the school. For this reason, significant attention has been paid to instituting measures to remedy deficiencies. LED projects undertaken in Beatrix’s host communities in the past year include the following:
Media Centre at Nanabolela Secondary School
In a public-private partnership with the FSDoE, Beatrix built a media centre at Nanabolela Secondary School. The centre was completed in April 2013 at a cost of R1.34 million. In terms of the Memorandum of Agreement (MoA) signed between the parties, the FSDoE will provide computer equipment, software and support, and general maintenance, while Beatrix had to deliver the structure.
The centre was launched on 15 March 2014 at a ceremony attended by the Minister of Mineral Resources, Ms Susan Shabangu. Sibanye was represented by Chief Operating Officer, Mr Peter Turner, and Beatrix senior management.
No progress has been made in the facilitation of an offtake agreement for this joint project between Beatrix, Harmony Gold Mining Company Limited (Harmony Gold) and the Star Diamond Group. Project partners have engaged with a number of stakeholders, such as the DMR, the Masilonyana Local Municipality and the project manager, with a view to securing contracts for the project, which has so far cost R1.6 million.
A meeting was held with the mayor of Masilonyana Local Municipality on 3 December 2013 to discuss the outstanding offtake agreement and reviving the project.
The Sibanye Property Division has become involved as it is experienced in construction projects at Beatrix and has been identified as a potential buyer of products for the brickmaking project.
Mathematics and Science Programme
The MoA between project partners Beatrix, the FSDoE and the Kutlwanong Centre for Mathematics, Science and Technology was finalised and signed in November 2013. The programme is underway at three sites in the host communities of Odendaalsrus, Welkom and Virginia. It addresses the challenge of poor mathematics results at schools in the region, benefiting 360 Grade 11 and Grade 12 learners.
In terms of the agreement, Beatrix contributed R1.5 million towards the annual cost of R3.2 million. The Group has allocated R16.0 million to this programme, which will be implemented over five years.
Library at Morifi School, Mohaleshoek
In Lesotho, construction of a school library began in October 2012 as Beatrix’s contribution to LED projects in major labour sending areas. It aims to address, among others, infrastructure development and provide a muchneeded facility for 367 learners and the community of Morifi, Mohaleshoek. The library was completed in March 2013. In addition to the building, Beatrix provided furniture and equipment for the library, which was handed over to the Lesotho DoE on 18 April 2013. The building was completed at a cost of R819,089.
Driefontein undertook several LED projects in its host communities over the past year. Several projects that were budgeted for have not yet been implemented but engagement processes with project partners are underway.
This project is a partnership between Driefontein, Merafong Local Municipality, Harmony Gold and AngloGold Ashanti Limited to establish a waste buy-back centre in Fochville on the West Rand. The project involves the collection of recyclable waste from townships within the Merafong local municipal area. The waste is sold to recyclers. The project is implemented with Khulisa as an implementing agent responsible for all project aspects.
Awareness campaigns initiated by Khulisa have resulted in higher volumes of waste reaching the buy back centre. Further campaigns will be extended to local schools.
Discussions have begun between Khulisa and Sibanye to explore the possibility of collecting recyclable waste from Libanon Business Park and residential areas to the project. A total of R9.0 million has been budgeted for the project for a period of three years, starting from 2011. Each mining company contributes R3.0 million per annum, which leads to a total capital injection of R9.0 million over a period of three years. Sibanye has contributed R912,000 to date to the project with an outstanding R1.5 million to be spent before the end of 2014.
Blybank Agricultural Project
Established in 2012 to provide food-security and alleviate poverty for members of the Tumang co-operative in Merafong, this was a collaborative project between Driefontein and the Merafong Local Municipality. It entailed the production of eggs, as well as farming of vegetables and chickens and a piggery. Several challenges were experienced in the past year, including lack of capacity, governance, management and technical capability. These problems persisted despite capacity-building efforts provided by the mine and interventions aimed at rescuing the project. It has been closed while project alternatives are being sought to resuscitate it in future. A total of R970,000 has been spent on the project over a period of two years – R257,072 was spent in 2013.
Blybank Community Centre
In partnership, Driefontein, the Gauteng DoH and the Merafong Local Municipality will establish a community centre, comprising a clinic and a community hall in Merafong. The project will be implemented in phases, starting with the clinic. Construction of the clinic started in October 2013. It is expected that the project will be completed by the end of March 2014. A total of 25 people, including local community members, are currently employed by the project. The budget for the project is R4.5 million and costs incurred to date amount to R2.5 million, with no spend in 2013.
Some of the projects budgeted for by Kloof did not incur any spend as they were still at the pre-feasibility stage. Details of these projects can be found below.
Glenharvie Agricultural Project
This food-security and poverty-alleviation project is a collaborative effort between Kloof and the Westonaria Local Municipality. It involves the production of eggs, vegetables, chickens and pigs. The project benefited eight community members of the Flap Youth Co-operative. The total expenditure on the project to date is R1.22 million. The project is progressing well in spite of challenges, which include, among others, the higher-than-expected cost of feed and, subsequently, the underutilised infrastructure due to a lower-than-expected number of livestock on the farm.
Plans include risk assessment in order to identify areas in the project that require mitigation and ensure the long-term sustainability of the project. Interventions identified during the risk assessment will be implemented in order to ensure the future sustainability of the project. Reports from project beneficiaries indicate that the project is at break-even point and profit margins can be improved by a reduction in the cost of feed.
Libanon Agricultural Project
Also in collaboration with the Westonaria Local Municipality, Kloof provides food security and poverty alleviation through this project. It currently benefits 112 women and youths, and has, as a result of formal engagement with Community Works Programme, been expanded to Thusanang Township and Glenharvie. The project is progressing well and continues to supply produce to local NGOs. Total expenditure for the project to date is R1.0 million with no spend in 2013. The project has been implemented as part of the Agri-Market Training Project intended to improve agricultural skills in the local area.
Alien Vegetation Project
Started in January 2012, this project aims to clear non-indigenous, water-extracting species on landholdings using local small, medium and micro enterprises (SMMEs). The project employs local people who have been given SETA accredited training by Sibanye. Felled trees are sold to Silicon Smelters Proprietary Limited for conversion into charcoal and extraction of silicon. More than 5t of trees have been sold to date. The programme employs around 30 local people. Total expenditure to date is R4 million with R268,683 spent in 2013. See case study: Rooting out invasive tree species.
Projects in labour sending areas
Two different projects, namely the Livestock Development Programme and the Abalimi Phambili Agricultural Development Programme, are run collaboratively with local municipalities in five districts – four in the Eastern Cape and one in KwaZulu-Natal. The budget for these projects is co-ordinated centrally from the corporate office and each operation’s contribution towards the budget is proportionate to the number of employees sourced from these areas.
Sibanye’s contract with Thembalethu for the management of its rural-development projects expired at the end of December 2013. Thembalethu is a registered non-profit organisation with a wide footprint in rural South Africa and SADC countries. Sibanye’s Organisational Effectiveness team believes that direct contracts with the service providers, Lima (which manages the crop and poultry projects) and Mngcunube (which manages the livestock projects), would be more cost-effective. Other social services offered to rural communities in South Africa and SADC countries include the home-based care programme and home adaptations for spinal cord-injured ex-employees, managed on behalf of Sibanye by TEBA Limited.
Livestock Development Programme
The aim of the Livestock Development Programme is to provide access to animal husbandry services and products, promote good farming practices and increase the earning potential of emerging farmers through a multi-tiered mentorship programme. The rationale for the project is based on the notion that the potential value of livestock as assets of emerging farmers is greatly reduced by poor animal health and mortality rates due to limited access to stock medicines and advisory services.
The project is implemented on the ground through farmer mentors and Village Linkage Persons (VLPs). Farmer mentors are established commercial farmers while VLPs are entrepreneurs who operate their own micro-enterprises. Once trained, VLPs make their living by conducting a cycle of village visits; giving advice and selling, at a profit, basic animal medicines to farmers.
Livestock projects underway in the Eastern Cape are run in conjunction with the Elundini, Alfred Nzo and Ukhahlamba municipalities in partnership with Sibanye. The Mbhashe project is run in partnership with Amathole District Municipality.
The main activities of these projects include, among others:
- implementing mentorship programmes;
- providing enterprise development programmes for VLPs (through the programme VLPs can become entrepreneurs);
- providing technical training and advice; and
- creating opportunities to access markets.
The impact of the programme extends to 16 VLPs who now operate as independent SMMEs (five in Alfred Nzo, two in Mbhashe and nine in Elundini), to more than 6,000 families, which benefit from poverty alleviation, and to each farmer who benefits from an increase in cash sales as well as added value.
Total expenditure for the period between 2009 and 2013 was R13.9 million.
Abalimi Phambili Agricultural Development Programme
An agricultural and economic development facilitation programme operating in the Eastern Cape and KwaZulu-Natal, this programme aims to stimulate economic development by strengthening agricultural production and food security for emerging farmers in the Lusikisiki and Bizana districts of the Eastern Cape, and the Jozini area of KwaZulu-Natal. Other beneficiaries of the programme include ex-mine employees disabled through mine accidents while on duty.
It is expected that the programme, which includes agricultural facilitation, farmer organisational development, improved agricultural infrastructure and access to input and credit, would considerably stimulate the economy of the severely depressed regions. This includes promotion of improved farming practices, such as correct crop selection, broiler-production management, support and advice for livestock farmers on herd health and general extension advice. In KwaZulu-Natal, the programme includes farmers involved in cultivating sugar cane as well as poultry, maize and vegetable farming. These farmers are viewed as having great potential for crop farming due to their access to irrigated lands on the Makhathini Flats and the Pongola River in KwaZulu-Natal.
The impact of the programme extends to:
- enterprise development: five nurseries (one in Bizana, three in Lusikisiki and one in the Bhambanana village of Jozini);
- two hatcheries (one in Lusikisiki and one in the Maphaya village of Jozini);
- more than 80 co-operatives with over 75% female representation;
- access to established markets (ie OK Foods, Spar, Boxer, Pick ’n Pay, local supermarkets and fresh produce markets); and
- 300 participants in the livelihoods programme.
Total expenditure for the period between 2009 and 2013 was R8.4 million. Spend in 2013 was R938,000.
The magnitude of issues in communities interested in and affected by Sibanye’s activities is so large that LED projects alone cannot have an immediate impact on key community issues like unemployment and levels of poverty. The responsibility for finding solutions for these larger issues cannot reside with Sibanye alone, and will require co-operation between all stakeholders.
Monitoring and evaluation are components of the community development and governance framework. In addition to internal and external verification processes, Sibanye is intent on obtaining third-party verification for its impacts, which will lend credibility to its own processes.
In light of recent developments in the industry, and ever-apparent and rising community needs, Sibanye’s approach to LED and community development is under revision. Initially Sibanye will focus on identifying connections between the needs of the community and its own strategic imperatives. An example of this is the plan for the construction of critical infrastructure such as healthcare clinics within communities. The planned establishment of a clinic and aligning efforts to eradicate TB with community programmes that reside with the DoH are prime examples of the kind of linkages that can be achieved. This approach and achievement of upfront agreement between key stakeholders, such as the DMR, municipalities and communities, have been identified as key steps required for successful LED.
To this end, Sibanye has engaged all municipalities in its areas of operation, and agreed collectively to create a formal engagement platform that will allow for active participation of the municipalities, the DMR and the Group. In turn, this will enable the Group to obtain the necessary project buy-in at an early stage. Intensified engagement in the Merafong area has begun and Sibanye is initiating similar forums in other municipal areas.
The Group currently participates in two committees, namely the Implementation Committee and the Mandating Committee. Engagement has taken place with the Implementation Committee. Issues discussed include safety and security in the community of Mpahlwa, the planning of an education summit and SLP audits.
The Mandating Committee has not convened as yet.
LED in host and labour sending areas is being reviewed to improve the level of impact with all key stakeholders in agreement before implementation. Sibanye has identified the need for marketing to improve the visibility of its presence in its host and labour sending area communities going forward.
Sibanye plans to establish monitoring and evaluation measures to evaluate its effectiveness on an annual basis. This may be conducted internally or by a specialist service provider for transparency.