Social performance

Integrated human capital

The group recognises employees are central in maintaining its competitive position, management of sustainability, service quality, skills development, human rights, health and safety. The group therefore has established policies, committees and forums to effectively manage employee engagement and sustainability priorities.

The group’s approach and overarching policy to managing employee priorities is holistic and systematic, informed by business strategy, feedback and engagement with teams, understanding of national imperatives, best practice and relevant legislation. Policy guidelines are maintained to further enhance and support decision making to create value and manage its sustainability risks. The group complies with and supports human rights and all relevant legislation across its geographic footprint, including but not limited to, within South Africa, the Basic Conditions of Employment Act, Labour Relations Act, Skills Development Act, Employment Equity Act and Occupational Health and Safety Act.

The executive management takes responsibility for Strategic Human Capital (HC) operations, in particular the oversight of enterprise wide employee programmes and initiatives, supporting the management in each subsidiary to implement the HC plan aligned to their business requirements. Sustainability targets including B-BBEE goals have been integrated into divisional, executive and senior management performance measures to further align and drive implementation.

People highlights

•	6 286 employees delivering value globally in diverse operations;
•	Improved Enterprise Leadership Development Programme;
•	Group wide executive and senior management succession plans;
•	Growth in black representation in management by more than 10%;
•	Achieved average B-BBEE Contributor Level 4; and
•	R9 million spend on training of which 85% was spent on employees from designated groups.

Grindrod’s cadet training programme is an industry leader in producing designated and female officers.

Human capital highlights and initiatives

In continuing to support each business within the group, special projects have been launched. An update regarding progress is as follows:

Successes	Challenges	Way forward
Improved HR structure rolled out in South African operations.	Adapting to business changes.	Improve efficiency and standard operating procedures; and Further empower line management on employee relations.
Improvements to job profiles and remuneration equity.	Operating changes in adapting to market.	Assess implications and support.
Performance process rolled out, 458 key leaders involved to drive the process.	Improving communication and feedback skills.	Further training targeted at areas of need.
Due diligence conducted across business to align policies, 27 business critical people policies revised.	Discomfort from relinquishing existing policies.	Further change and communication interventions.
Succession plans updated group wide, from board to operations management.	Skills needed for mentoring and coaching.	Rollout of coaching and mentoring skills to support senior management.
Improved, integrated human resource information system.	Releasing full functionality and further, diverse business processes across subdivisions.	Standardise processes where feasible; and Rollout employee and management self service.
Successful conclusion of B-BBEE verification and rating exercise, with on average Contributor Level 4 being achieved.	Despite improvements, low scores in skills development and management control.	Targets integrated into relevant human capital processes.

Workforce profile

The group’s global footprint is supported by a strong southern Africa infrastructure with many of the businesses harnessing the diversity in cultural, ethnic and educational backgrounds ranging from highly qualified, experienced supply chain experts, engineers and technicians to skilled artisans.

The group’s profile reflects 5 462 permanent employees and 824 contract/temporary employees. The total workforce has increased by 1 245 compared to 2009 mainly as a result of the acquisition of Fuelogic and the growth in foreign operations.

The rate of employee attrition for South African based companies was up 10% as a result of restructuring and consolidation exercises. Movement was noted particularly in release of contract and temporary staff.

The table below reflects the total workforce for Grindrod, as at 31 December 2010, including permanent and temporary employees in subsidiary, joint venture and associated companies.

Number of employees
South Africa	5 055
Rest of Africa	926
Asia	47
Europe	245
North America	1
South America	12
Total	6 286

Functional overview

Employee relations

Leadership supports the group culture and implementation of a collaborative approach in engaging and guiding staff informally throughout the year. At group and sub-divisional level, executive and senior management engage with front line employees formally at annual results discussions and reviewing operational performance.

Communication forums have also been established across levels and are supported by the intranet and group wide publications in providing channels of engagement, particularly to geographically dispersed staff. Further dedicated platforms have been created to enhance business development and internal innovation through identifying and driving opportunities for cross service integration and sales.

As a consequence of the economic slowdown, unionisation levels within South African based companies increased to 34% (2009: 30%) in line with general industry trend. Continued efforts to streamline businesses resulted in a limited number of restructuring initiatives. These initiatives mainly occurred in Freight Services, which has the highest level of union and bargaining council membership in the South African based companies. Management were able to minimise retrenchments and after effects of low morale, by engaging with staff and shop stewards in identifying solutions to support the business.

In supporting ongoing relations, supervisors and middle managers are continuously trained and supported by division based human resources experts in building communication platforms, managing employee issues, addressing performance challenges and administering progressive discipline.

Talent management

The group has made major strides in attracting, retaining and improving the performance of its people.

Recruitment

Adoption of an online e-recruitment service has shown major benefits, including sourcing critical technical skills through expanding talent databases and simultaneously reducing the cost of employing recruitment agencies.

Where there is business urgency or inadequate depth in the pool of candidates, the group has forged relationships with established agencies to source great talent.

Development

The group continues to grow and develop leaders at all levels. An assessment of talent availability and skills was launched to support and identify current leadership pipeline, scarce technical or specialist skills and the need for skilled designated employees in senior management and executive positions. Information from this assessment subsequently triggered the launch of integrated initiatives to grow the pool of leadership.

Management has accountability for succession strategies and integration with acquisition, skills development, performance improvement and reward processes. A portfolio of leadership programmes under the brand of LEAD (Leadership Education and Development) were developed and successfully launched to develop the leaders of tomorrow. Specific programmes included supervisory (NQF Level 3), junior (NQF Level 4) and middle management (NQF Level 5) development. The corporate social responsibility and ethical leadership is further promoted in the programme through the integration with the upliftment programme iKusasa lami. Founded by the Department of Education, the programme aims to introduce talented learners in disadvantaged schools to career opportunities and exposure in corporate environments. Each student was partnered with an employee in the middle management programme to provide opportunities for career coaching and mentoring. Further technical and soft skills programmes were taken up by staff and underpinned growth in training and development spend. The section on skills development outlines the relevant statistics.

Performance

In achieving targets and meeting sustainability priorities, the group has revised and rolled out a process for improving the performance and growth of its people. Group companies have incorporated the process into their operations, with 458 managers undergoing training. Performance discussions are held with employees annually to recognise achievement of goals, address areas for development and define learning needed to improve productivity and career growth.

Broad-based black economic empowerment (B-BBEE) and employment equity

The group continues to contribute to improving the quality of life of all communities in partnership with government and other stakeholders. B-BBEE is therefore seen by the group as an integral component of its business and values, contributing to a fully representative workforce and broader economic transformation. In practice, the group provides preference in appointments, progression and developmental opportunities based on merit to designated employees and direct spend to socio-economic development initiatives.

There has been progress in improving the performance of group companies to achieve the target of Level 4 contributor. The verification and rating exercise launched in 2010 was successfully concluded and improvement areas identified which will be driven by the group’s Strategic Human Capital (HC) steering committee.

Within Freight Services, Grindrod (South Africa) (Pty) Limited, which comprises the majority of the group’s South African employees, has retained a rating of Level 3 contributor. Significant efforts and strides have been taken by those sub-holding companies yet to attain Level 4 contributor status.

Grindrod (South Africa) (Pty) Limited, previous winners of the Olive Empowerment awards, received the coveted Alex Rogoff B-BBEE award as recognition for the innovative and pioneering B-BBEE deal brokered with Calulo Petrochemicals (Pty) Limited and Adopt-A-School Foundation in 2009. Grindrod was also nominated as one of the leading gender empowerment organisations for 2010, by Top Woman In Business and Government, due to exceeding industry average performance in studies conducted.

Employment equity

All group companies have adopted an employment equity policy promoting equal opportunity and fair treatment in employment through the elimination of any discriminatory practices and prejudices. In line with group B-BBEE plans and long-term targets, employment equity forums have been established in subsidiary companies and are accountable to their executive management for driving achievement of targets in acquisition, development and progression. The group HC committee will oversee overall progress through regular reporting.

The scarcity of industry skills has negatively impacted availability of black and in particular black female candidates amongst designated employees.

In this context, the designated composition of the work force stood at 88% (2009: 84%) and in particular black representation stood at 90% (2009: 87%). Further achievements include the growth in top management representation to 15 employees (2009: 10) and middle management to 250 employees (2009: 183).

Despite efforts there has been a drop in black female representation of 17% (2009: 19%). As a consequence the HC committee will support subsidiary companies in developing black female employees into senior executive positions through integrating targets into succession, acquisition and progression plans for 2011.

The group’s current demographic profile of permanent employees in South African companies per occupational level is tabled below:

•	top management;
•	senior management;
•	middle management (professionally qualified and experienced specialists and mid-management);
•	skilled (skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents);
•	semi-skilled (semi-skilled and discretionary decision making); and
•	least skilled (unskilled and defined decision making)

Demographic profile for South African based companies

2010	Designated								Non-designated
Occupational levels	Male			Female				Total	White Male	Foreign Nationals		Total
Occupational levels	African	Coloured	Indian	African	Coloured	Indian	White	Total	White Male	Male	Female	Total
Top management	2	2	7	–	–	1	3	15	40	–	–	55
Senior management	6	3	14	2	–	1	15	41	63	4	2	110
Middle management	32	7	58	7	5	24	76	219	93	3	–	305
Skilled	155	57	152	37	63	91	65	620	222	7	2	851
Semi-skilled	1 751	275	147	180	98	165	224	2 840	131	9	1	2 981
Least skilled	536	29	40	95	12	2	–	714	39	–	–	753
Total	2 482	373	418	321	178	284	383	4 439	558	23	5	5 055
Percentage	49,1	7,4	8,3	6,3	3,5	5,6	7,6		11,6	0,4	0,1
2009
Total	1 255	238	398	187	138	214	362	2 792	508	32	8	3 340
Percentage	37,6	7,1	11,9	5,6	4,1	6,4	10,8		15,2	1	0,2

Skills development

Amidst the uncertain economic conditions, the board and executives recognised and recommitted to developing and retaining skills as the engine of productivity and to position the group for growth. Training spend both on formal training, professional development and on-the-job coaching increased to R9,5 million (2009: R9 million), or a 6% increase on the previous year.

Course programme	Total attendees	Designated %	Black %	Female %
Computer skills	106	83,0	62,3	46,2
Management and support	213	81,7	66,2	50,2
Mobile hoist/driver	812	84,5	79,3	10,3
Regulatory	1 150	78,3	66,0	25,5
ABET	10	100,0	100,0	60,0
Shipping	195	79,5	58,5	49,2
Continual professional development	105	88,6	70,5	32,4
Workplace effectiveness	120	83,3	63,3	51,7
Total	2 711	85,0	71,0	41,0

A total of 2 711 (2009: 2 826) employees attended courses critical to growing the business and developing their skills. Of these learners, 85% (2009: 87%) composed designated employees, 71% black designated staff and 41% female staff. The group is working on further improvements to be realised in skills development and, particularly, black and female designated staff.

The group offers a portfolio of training and development interventions including on-the-job- training, classroom and professional development at training centres and through external service providers. On average, 58% of all training and development spent in 2010 was to the advantage of black employees.

Grindrod continues to develop the pipeline of maritime skills through Unicorn’s Training School which offers South African Maritime Safety Authority (SAMSA) accredited, internationally recognised training to individuals, Port Authorities and international shipping organisations. During 2010, 1 678 (2009:1 723) seafarers completed courses at the school. This number included amongst others, local and international categories of officers, ratings, cadets, auxiliary crew of cruise liners and yachtsmen.

Grindrod’s cadet training programme is an industry leader in producing designated and female officers. The cadet academy continues the heritage started in 1970 through training 23 cadets (2009: 31), of which 12 were black and one female. The programme is a significant investment in skills with the cost of training an engineering cadet at R345 000 and a deck cadet at R215 000.

Human rights

Grindrod continues to uphold and respect employee human rights throughout its operations. Basic human rights are enshrined in company policy and in employment contracts. There is no child labour and forced labour within the group. There were no incidents of human rights violations during the year under review.

Employee wellness

In supporting its staff and their families, the group is evaluating rolling out an employee wellness programme (EWP) to South African subsidiary companies. Managing work and personal stress has a direct and consequential impact on continued performance of people in the group. An EWP pilot was launched to 884 employees in diverse subsidiary companies to help employees and their families deal with a broad range of personal and work-related challenges and problems. Interim metrics and survey responses from the EWP have provided positive feedback and a post-EWP evaluation study shall be conducted in 2011 which will determine the nature and scale of rollout.

HIV/AIDS

The group is committed as a responsible corporate citizen to raise awareness, educate and encourage employees to know their status, curbing the spread and impact of HIV/AIDS pandemic.

Employees are guided by the group HIV/AIDS policy which is informed by the South African national framework and leading practice. The policy protects employees from discrimination, secures disclosure without prejudice, empowers managers to support staff appropriately and promotes education and awareness.

In support of National AIDS Day, the group provided their South African based staff with free onsite testing facilities. The group also continued to contribute to corporate fundraising initiatives including National AIDS Bannerthon. On an ongoing basis, subsidiary operations offer confidential HIV/AIDS testing and counselling, training and distribution of prophylactics in support of a productive, safe and healthy workplace.

Occupational health and safety

Grindrod’s health and safety objectives and targets remain simple, through full compliance with applicable legislation with a target of zero incidents, within a culture of continual improvement.

Occupational health and safety is managed in terms of site-level or ship-based integrated safety, health and environment (SHE) or SHE and quality (SHEQ) management systems. Senior employees in the company are required to ensure that all legal requirements are complied with and this forms part of their personal assessment. Wherever applicable, health and safety committees are maintained at site level, with full staff representation. Major contractors (e.g. shipyards) are audited in terms of SHE performance on an ongoing basis. All serious incidents are reported to the board and dealt with in the most serious light, with full investigations conducted and appropriate remedial action taken, in all cases.

The group’s shipbuilding technical specifications have specifically banned the use of asbestos in ship construction for the last 20 years.

Total occupational health and safety investment during 2010 was R13,4 million (2009: R6,8 million).

Performance for the year in review, by division, was as follows:

Shipping

The division maintained its excellent track record, reporting only four medical treatment cases, with one lost time incidents for the year. Following an injury, incident reports are circulated throughout the fleet and discussed in “HSE stops” (safety moments used for training and awareness). The division also participates in a lessons-learned scheme with companies in the oil and gas sector and other shipping companies.

Key performance indicators	2010	2009	2008
Health and safety spend	R2 100 989	R2 325 071	R5 576 817
Medical treatment cases	4	2	3
Lost time incidents	1	0	1
Fatalities	0	0	0
Lost time injury frequency rate (per million man hours)	0,8	0	0,9

Freight Services

Grindrod deeply regrets the accidental deaths of two employees and a contract worker during the year. These fatalities occurred during working at heights, one drowning and one vehicle accident on a public road. All of these incidents were thoroughly investigated and appropriate corrective action steps were implemented.

Key performance indicators	2010	2009	2008
Health and safety spend	R11 034 955	R4 366 734	R3 282 453
Medical treatment cases	68	24	79
Lost time incidents	72	52	29
Fatalities	2	5	3
Injury frequency rate (per million man hours)	5,83	7,03	Not reported

Notes:
1. A third fatality occurred at the MPDC Maputo site, where Grindrod has 24,7% shareholding.
2. Data from Fuelogic has only been included from 1 April, the date of the acquisition.

Freight Services has shown a marked improvement in reducing its lost time frequency rate (LTIFR) in 2010.

A review of the most serious incidents and fatalities occurring within the freight services industry in recent years has highlighted a number of recurring fatality potential risks.

High risk standards have now been developed which Freight Services believe will mitigate these fatality potential risks. To reach the target of zero fatalities, controls for the management of these risks have been defined within the relevant standards for mandatory adoption by all the Freight Services business units.

In emphasising the high risk standards, Freight Services also acknowledge that there are other fatality potential risks within its operations beyond this list. The processes for hazard identification and requirements for the management of risks beyond the high risk standards are covered in additional operational safety standards.

In terms of Freight Services, a safety strategy of all business units will initiate the implementation of Occupational Health and Safety Assessment Series (OHSAS) 18001 as from September 2011 with full implementation by July 2012. Two business units, Richards Bay and Durban terminals, have already obtained this health and safety management system certification.

Freight Services completed a safety risk audit review covering key business units and has actioned recommendations stemming from the findings. Freight Services show continuous improvement year on year with an average compliance of 76% for 2010. A target of 80% compliance has been set which the division is confident will be achieved in 2011.

Trading, Financial Services and Group Services

No medical treatment cases were reported during the year (2009: two). A total of R23 420 (2009: R97 500) was spent on health and safety audits and safety equipment, within these predominantly office-based divisions.