Social, Ethics and Transformation (SET) Committee report

Our guiding principles for responsible corporate behaviour

In order to operate successfully and create value for our stakeholders, Afrox considers social, ethical, transformational and environmental aspects into our business strategy, supporting our intention to remain a responsible social citizen that considers the sustainability of our Company, our country, our society and the environment. We remain aligned with local legislation, global legislation and various other requirements to ensure that its status maintained and improved.

Afrox has measurable corporate responsibility policies coupled with a strict reporting and review cycles. We strive to continuously develop specific metrics for each of our defined goals and keep the Board informed of sustainability compliance and high-level risks through reports and presentations to the SET Committee.

We support the development and transformation goals of the South African government and apply good governance in a manner that promoted the highest standards of integrity for all interactions and processes.

The Company retains the corporate responsibility focus areas that have served us well in prior years. These are aligned to the Afrox strategy which is below. The governance approach for addressing these focus areas has been updated and is detailed post after the overview.

Corporate responsibility focus areas

An overview of sustainability governance

The sustainability governance structure was simplified from a collaborative-based (Linde Group in conjunction with Afrox), six-pronged process to a collaborative three level one, allowing for greater levels of accountability and improved speed in decision making.

Sustainability governance structure

The year in review

According to its formal terms of reference, the SET Committee successfully discharged its responsibilities in 2016 and ensured that no duplication or inefficiencies existed in allocated roles or responsibilities across the various Board committees.

Oversight and monitoring of board committees is reflected in the Board committee matrix alongside, ensuring that roles and responsibilities were discharged according to applicable regulations, such as the Companies Act of South Africa and various codes of good practice.

The SET Committee continues to use an annual work plan to cover all matters requiring attention during the planned year. Our accountability road map has five areas that each person is accountable for in terms of performance against agreed KPIs and targets. Refer to the corporate responsibility focus areas for details.

The Committee has made progress on its prior year agenda, focusing on:

  • enterprise development and securing LPG supply;
  • preferential procurement and scorecard development;
  • our evolving ownership story and the positioning of the business (specifically media messaging); and
  • BBBEE compliance (including skills development and succession planning, among others).

Ethics and human rights

Code of Ethics

As outlined in the Linde Code of Ethics, Afrox is committed to high standards of corporate responsibility. Sustainability in the supply chain is becoming a key aspect, Afrox’s stakeholders, especially customers and investors, are increasingly incorporating sustainability considerations into their investment decisions. They are not only interested in how we manage sustainability in our own operations, but also require evidence of how we include sustainability aspects in our procurement practices. Governments worldwide have enacted stricter laws and regulations while intensifying the enforcement of these rules.

We employ people based on their ability to perform to or exceed desired levels and believe that our diverse workplace reflects principles of equality and fairness. We encourage tolerance and sensitivity to other cultures as set out in our Code of Conduct. The Group remains committed maintaining a workplace free from any form of discrimination, including reasons of race, creed, culture, nationality, gender, sexual orientation or marital status.

Refer here for the Code of Ethics.

Supply chain

We expect our suppliers to share our responsible practices and support our commitment to sustainable development, as defined in our ethical-legal principles procurement as well as in the Code of Conduct for Suppliers of The Linde Group.

Our suppliers are required:

  • to comply with all applicable laws and regulations;
  • to meet adequate health and safety standards;
  • to adhere to internationally agreed labour standards;
  • not to engage in any form of corruption or bribery;
  • to protect the environment to the best of their ability; and
  • to encourage their own suppliers to meet minimum sustainability requirements.

The Supplier Code of Conduct was approved by the Linde Executive Board. Of the 2 036 suppliers used in 2016, 759 have confirmed adherence to this Code of Conduct. Refer here for more information.

Anti-corruption

A total of 1 135 employees were trained on anti-corruption practices and are now comfortable in implementing the guidance principles learned. Our business partner compliance guide course was completed by 502 employees.

The senior management team of each Emerging Africa country received training on both anti-corruption and business partner compliance policies and 96% of computer users in the Company completed a electronic Code of Ethics refresher training.

In addition:

  • All office-based employees completed digital training on anti-corruption with a 97% completion rate.
  • Eligible employees obtained a 100% completion rate for digital training on business partner compliance, covering agent and intermediary corruption risk.
  • Emerging Africa: Performed a review of specific compliance risks and provided tailored guidance for interactions with public bodies. Also performed are compliance, antitrust and bribery/corruption risk assessment exercises in nine Emerging Africa countries. The projects began in 2015 and remain ongoing.

Human rights

We believe that all people are entitled to treatment in line with the fundamental human rights within South Africa’s constitution and are committed to upholding these rights, labour laws and standards across our business. Our human rights statement is available here.

We strive to attain a workforce composition that is representative of our countries diverse demographics and stand for equal opportunity and fair treatment in all our operations and interactions with employees. Refer here of for transformation statistics and information.

We ensure that all managers and consultative forums are familiar with the Employment Equity Act. Consultative forums in partnership with the SET Committee manage employment equity issues, legislative compliance and set numerical targets for the Company. Senior management is held responsible for reaching equity targets.

All acts of discrimination brought to the Company’s attention are reviewed and such incidents are dealt with firmly. No claims of discrimination were made in the year.

Conclusion

The SET Committee confirms believes that there has been no substantive non-compliance or non-adherence to legislation, regulation, codes of best practice, relevant to the committee’s mandate in the year.

The Committee is proud to share that progress against the prior year has been made in line with expectations and in line with our new operating structure. We will continue to align our business reaction to the promulgated BBBEE Codes as best as possible and maintain our socially responsible reputation. Afrox was once again included in the JSE Socially Responsible Index (SRI) and looks forward to conquering the challenges in its future with all relevant stakeholders.

Dr Khotso Mokhele
Chairperson of the Social, Ethics and Transformation Committee


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