Social performance

HUMAN CAPITAL

Management approach

Grindrod’s strategic aspirations ultimately lie in the hands of its people. Highly motivated teams of professional and skilled employees are paramount to the success of each of its companies.

Essential ingredients for Grindrod’s success include a safe working environment where employees are treated with dignity and respect, communication is open, honest and courteous, ethical standards are high, equity is a reality and where the group’s values are evident.

The group prides itself in its core values which are Respect, Integrity, Professionalism, Fairness and Accountability.

Staff complements

The number of group employees (permanent and temporary) worldwide decreased from 6 019 at 31 December 2007 to 5 245 at 31 December 2008. This staff reduction was as a result of the group exiting certain Freight Services businesses.

The table below provides a breakdown of the number of employees per country as at 31 December 2008.

Country		2008	2007
South Africa		4 000	4 754
Mozambique		935	1 017
Namibia		89	87
United Kingdom		26	24
Singapore		18	11
Russia		10	9
U.A.E.		5	5
Botswana		15	12
Peru		7	6
Ecuador		2	3
China		4	2
Tanzania		25	43
Democratic Republic of Congo		–	9
The Netherlands		1	1
France		3	4
Japan		1	1
Seychelles		–	1
South Korea		3	4
Seafarers:	India	–	1
	Philippines	53	11
	Poland	48	14
Total		5 245	6 019

The above figures include the full complement of employees in subsidiary, joint venture and associated companies.

Subsidiary companies now employ 3 995 staff with 655 employed by joint venture companies and 595 by associated companies.

Recruitment/talent acquisition

The group Talent Acquisition Policy guidelines were revised in the fourth quarter of 2008. This was done to enhance the quality of the recruitment and to provide standard guidelines for the group companies. In line with the aim to achieve continued success, the group recognises the need to attract and retain competent people of high calibre who can enjoy a long and successful career in the group.

The policy creates and promotes an environment in which all employees are afforded equal development and promotional opportunities. It is the group’s philosophy to give preference to existing employees where there are such developmental and promotional opportunities. However, in some instances it is necessary to recruit staff from external sources to complement the available competencies within the group.

The majority of group companies have adopted a fair and equitable competency-based assessment tool to guide their talent acquisition efforts. Over and above the traditional recruitment process, job and employee profiles are carefully analysed to determine the skills base and assist with both placement decisions and career pathing.

In 2008, there were 145 vacancies across the group where traditional formal recruitment processes including external sources, were utilised. 2009 will see the introduction of an internal electronic e-Recruitment system which will be more cost effective, improve efficiencies, and reduce the current dependency on external sources.

Benefits

Employee benefit structures provide for retirement, health care, disability insurance, bursaries for employees’ children, housing needs and financial assistance for employees to further their education.

Labour relations

The group follows the approach of consultation for the benefit of management and employees. Freedom of association and dissociation is acknowledged and where employees have appropriate representation, recognition agreements are entered into.

Where there is no union recognition, formal and informal communication forums have been established. These forums promote both upward and downward communication and employees have the opportunity to clarify issues relating to company/division and branch matters.

The group realises the effect that restructuring of operations can have on employees and ensures that extensive and effective consultations are conducted when this occurs.

The level of union membership in the South African based staff complement, was 28% in 2008. The Road Freight Services division has the most union members. There are nine registered trade unions representing the group employees.

There are currently three recognition agreements in place within the group. Certain business units within the Freight Services division fall within the confines of the statutory bargaining councils.

The only industrial action during 2008 occurred at Grindrod Logistics Furniture division on 12 December 2008 and it involved 26 employees.

Disciplinary and grievance procedures

Group policies provide for formal disciplinary and grievance procedures. Behavioural standards are documented as conduct, performance or disciplinary codes, and these are communicated to all employees.

The group prefers progressive corrective rather than punitive measures. To this end, in minor cases of misconduct a written warning is given, subject to an investigation of the facts and based on the balance of probability. For more serious offences which could warrant dismissal, a fair and unbiased disciplinary hearing is conducted. All employees who go through the disciplinary procedure are permitted to be represented by an employee of his/her choice. A formal appeal procedure is in place for dismissals.

A formal grievance procedure exists to enable employees to communicate grievances to management and to obtain the earliest possible resolution.

Grindrod will be implementing a “Tip-off” facility in the second quarter of 2009. This is an anonymous facility administered by Deloitte which will allow all employees the freedom to report dishonest activities.

Broad-based black economic empowerment (B-BBEE)

Grindrod believes that B-BBEE is an integral component of South African business and in this regard is committed to aligning its businesses with the national legislation in the area of sustainable business transformation and to the creation and development of an enabling environment, for effective implementation within the organisation. In doing so, its subsidiary companies ensure that they retain business focus, values, performance, customer satisfaction and increased shareholder value.

Grindrod has adopted a long-term developmental approach to B-BBEE which is aligned with the Codes of Good Practice issued by the Department of Trade and Industry. Performance against the various elements of B-BBEE is measured by means of the generic balanced scorecard and/or specific industry charters.

Scorecards have been prepared based on the 2007 financial reports. Certificates have been issued by a certified rating agency. Scorecards are currently being updated based on 2008 financial reports.

The five-year target is for each of Grindrod’s South African companies to attain a level 4 rating by 2012. The majority of them have achieved level 5 ratings in 2008 and are on track to achieve the target.

Grindrod Bank was also scored in terms of the Financial Sector Charter guidelines and achieved a B rating for its BEE scorecard.

An overview of the group’s activities in the various elements is as follows:

Ownership

In 2008, Unicorn announced the formation of a partnership with Calulo Services, an empowered South African petrochemical group. The joint venture consists of two companies, Unicorn Calulo Shipping Services, which focus on tanker shipping on the South African coast and Unicorn Calulo Bunker Services, which operates sophisticated bunker barges in South African ports under long-term agreements with the South African oil majors.

The group continues to engage in discussions with regard to equity ownership across the group. A further B-BBEE transaction resulting in the sale of 25% plus one share of Grindrod Limited’s subsidiary, Grindrod (South Africa) (Pty) Limited (GSA) to Calulo Petrochemicals (Pty) Limited (Calulo) (15%) and Adopt-a-School Foundation (AAS) or (the Foundation) (10%) by way of the issue of new equity for a total consideration of R274 million was concluded post year-end. GSA houses the majority of Grindrod’s South African based Freight Services operations, comprising the dry (Richards Bay and Durban) and liquid bulk (Durban and Cape Town) terminal operations; durable goods (automotive and furniture) and dry and liquid bulk transport operations; intermodal operations; and perishable cargo airfreight operations.

Calulo, established in 1999, is a black owned and controlled company with focused investments in the oil and chemicals sectors and in the related bulk logistics services arena and is an existing B-BBEE strategic partner of Grindrod in its marine bunkering and coastal shipping operations.

AAS is a Section 21 company that supports the development of schools in previously disadvantaged areas in South Africa and since its inception in 2002, has assisted over 60 schools. Ultimately it is hoped that the investment in GSA will form the cornerstone for the development of a foundation by AAS, with the creation of capital wealth out of the investment which will provide it with long-term sustainability. In order to facilitate AAS’s entry into the empowerment arena, Grindrod has vendor financed 100% of AAS’s investment, as AAS could ill afford to direct much needed funding from its school projects to finance the equity contribution required to acquire its interest in GSA.

GSA was placed second in the 2009 Olive Empowerment awards in the category Best Empowered Logistics Company.

Röhlig-Grindrod sold 100% of its subsidiary, Kapele Logistics to its BEE partner.

A BEE transaction with senior management within the Ships Agency division is expected to be concluded during 2009.

Management control

The group continues to strive to advance the appointment and development of black senior management through both external recruitment and internal advancement. As part of the GSA empowerment transaction outlined above, Mkhuselie Faku and Mpho Diale (Calulo) and Yaganthrie Ramiah (Adopt-a-School Foundation), have been appointed to the board of Grindrod (South Africa) (Pty) Limited.

As indicated in the demographic tables under employment equity below:

•	the percentage of black representation at top management level increased from 14% to 15% in 2008; and
•	the percentage representation at senior management level increased from 14% to 16%.

At Grindrod Limited board level Thina Siwendu was appointed in 2008 as a non-executive director to replace Dr Sivi Gounden who resigned.

Employment equity

All group companies have adopted an employment equity policy that promotes equal opportunity and fair treatment in employment through the elimination of any discriminatory practices and prejudices. An environment has been created in which every employee has the opportunity for advancement. Employment equity consultation committees consisting of individuals from different races, genders and occupational levels have been established and meet on a regular basis.

A developmental approach is being taken to affirmative action with the focus on promoting education and training to assist persons from designated groups to occupy more skilled and responsible positions within the group.

The current elements of equity have been analysed, plans and goals have been established and equity reports are submitted in accordance with the Employment Equity Act, No. 55 of 1998. The group’s current demographic profile of permanent employees in South African companies per occupational level is tabled in social performance.

Demographic profile

In 2008, 85% (2007: 82%) of the group staff complement was composed of persons from designated groups of which 73% were black (2007: 71%).

2008

	Designated								Non-designated
	Male			Female						Foreign nationals
Occupational levels	African	Coloured	Indian	African	Coloured	Indian	White	Total	White male	Male	Female	Total
Top management	–	3	4	–	–	–	2	9	35	3	–	47
Senior management	6	3	8	3	1	2	14	37	98	6	1	142
Professionally qualified and experienced specialists and mid-management	13	8	47	2	3	11	53	137	106	–	–	243
Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents	249	107	165	33	64	92	193	903	174	7	1	1 085
Semi-skilled and discretionary decision making	654	122	201	83	70	107	125	1 362	80	3	3	1 448
Unskilled and defined decision making	342	30	7	62	7	–	–	448	5	4	–	457
TOTAL	1 264	273	432	183	145	212	387	2 896	498	23	5	3 422
% per race and gender	36,9	8,0	12,6	5,4	4,2	6,2	11,3	84,6	14,6	0,7	0,1

2007

	Designated								Non-designated
	Male			Female						Foreign nationals
Occupational levels	African	Coloured	Indian	African	Coloured	Indian	White	Total	White male	Male	Female	Total
Top management	1	4	4	–	–	–	1	10	52	1	–	63
Senior management	10	4	7	–	–	2	21	44	109	7	2	162
Professionally qualified and experienced specialists and mid-management	13	16	53	14	7	18	66	187	159	3	2	351
Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents	396	146	218	30	61	90	255	1 196	264	7	4	1 471
Semi-skilled and discretionary decision making	752	122	201	114	63	103	165	1 520	162	3	5	1 690
Unskilled and defined decision making	555	32	27	75	9	3	13	714	3	–	–	717
TOTAL	1 727	324	510	233	140	216	521	3 671	749	21	13	4 454
% per race and gender	38,8	7,3	11,5	5,2	3,1	4,8	11,7	82,4	16,8	0,5	0,3