ABOUT THIS REPORT

Sustainability of business operations is no longer regarded as discretionary business practice. It has become an international imperative for businesses to conduct their operations in a manner that does not compromise the environment, society at large, or those stakeholders directly or indirectly influenced by their operations.

The imperative is given further impetus by the requirement to report on the sustainability of a business’ operations. The mandate and directive for this report consequently come from several international codes of conduct, reinforced in South Africa by the King Report on Corporate Governance for South Africa - 2002, which outlines the need – and provides some guidelines – for more comprehensive non-financial reporting.

The purpose of this document is therefore to report on those business practices currently implemented by the National Ports Authority (NPA) that contribute to its sustainability as a business endeavour. The objective of the report is to explain current operational policies and practices, and to address those functional areas that are currently perceived by the NPA as most critical to the sustainability of its business operations.

Reporting on sustainability is also a lever through which sustainable practices can be further embedded within an organisation. In addition to communicating with the broader public, this report therefore also constitutes a catalyst for engaging relevant stakeholders and for developing appropriate systems for monitoring and measuring operational sustainability in the future. Consequently, this report is seen as the initial vehicle for a cycle of continual improvement. For the NPA, this first report marks the beginning of a long and exciting road.

It is important to note that this report merely constitutes a preliminary account of sustainability at the NPA, and that compilation of this first report was fast-tracked in order to expedite the reporting process without undue delay. It makes no attempt to fulfil the requirements of true sustainability reporting, and little or no reference was made to Global Reporting Initiative (GRI) guidelines (as recommended by King II), nor was any comprehensive stakeholder engagement process undertaken prior to its production. In acknowledgement of the preliminary status of this report, it has been titled

“An introductory report on sustainability practices at the National Ports Authority”

However, the preliminary status of the report should not detract from its significance. The report describes, in some detail, those policies and practices that influence the sustainability of the NPA’s business operations. Importantly, it also provides a framework of reference and represents a statement of intent against which all affected stakeholder groups are invited to comment.

In so doing, stakeholders will have the opportunity to contribute to the debate and to the formulation of future practices, measures and targets that will determine the ongoing sustainability of the NPA’s business operations.

Table of Contents

List of terms used in this report2

The Business Sustainability Imperative3

NPA Operations4

Serving The South African economyPorts specialised per type of cargoFinancial performanceTwo businesses make up the NPASustainability of Landlord ServicesSustainability of Maritime Services

Corporate Governance8

Leadership structureIncentives for performance in non-financial areas

Environment12

Nurturing mother natureThe NPA’s environmental policyDeveloping a layered model for the environmentEmbedding the process through formal trainingPractical measures to preserve the port environmentDurbanRichards BaySaldanhaFuture challenges and goals

Risk and Occupational Safety24

Broadening the concept of risk managementMaking policy work at the NPANPA Risk Management Policy statementNOSA Integrated Platinum 5 Star SystemFire And Emergency Services Management System – 5 HelmetBusiness Continuity Management SystemComputer Assisted Risk Management System (CARMS)

Health30

Structuring the HIV/AIDS management programme

Corporate Social Investment32

A history of giving in the new South AfricaMaking CSI a key to business sustainabilityMaking the programmeFuture challenges for the CSI programme

Transformation38

Embracing changeNormalising company demographicsUnlocking the potential in human capitalProcurement

Future Reporting44

The next reporting cycleThe NPA invites you to comment

The Business Sustainability Imperative

Change brings with it great opportunities. With the birth of the National Ports Authority two years ago, we began a drive to make our ports world-class. The result of embedding internal business processes, original innovations and learning components of our business model has led to a renewal and revitalisation of the company.

The business plan of the NPA demands that the company achieve productivity gains (efficiently and effectively), while showing continued growth and economic viability. As the newly established National Ports Authority, we have come to realise that we play an increasingly important public role beyond our role as manager of the seven major ports and harbours along our coastline. Moreover, our business is critical to the surrounding socio-economic environment

This report is the first step in sharing our experience of the triple-bottom line imperative. We have long recognised that the NPA lives because of its people. Indeed, the values derived from the social, environmental and economic arenas are as much about people as about business.

The arrangements for the conduct of our affairs are described here. In summary, this report represents a commitment to treat each other with respect and integrity; to foster open and honest communication, to comply to legislation, to empower men and women; to respect the environment and to work towards continued improvement.

When we announce that our ports are the first in the world to record ISO 9002 standardisation; that ours are the only ports that report an accelerated drive to employ women in the Marine Services; that our environmental management practices are the most recent and world leading; it is us talking to the passion, creativity and dedication of employees who aspire to the ‘best in the world’ principle. These efforts will be brought to bear on the everyday conduct of our business. To echo a well-rehearsed principle in the NPA: ‘obstacles will not become defeat – pursuit will be relentless.’

This report is also a communication tool. It is compiled with the intention to lay down a challenge to ourselves, a challenge that ensures we manage an enterprise that is viable and grows from strength to strength. In it, we accept our responsibility to promote a common welfare and transmit every detail of these efforts to you and all our stakeholders. We will continue to seek dialogue in achieving our aims, we will forge partnerships, and we will show ongoing improvement as we record and measure our progress into the future.

The challenge has been launched; we have set our sails to the wind……anchors a-weigh!

NPA OPERATIONS

Serving the South African economy

The National Ports Authority is the authority controlling and managing the seven major ports on the South African coast. Ports in operation are the ports of Richards Bay, Durban, East London, Port Elizabeth, Mossel Bay, Cape Town and Saldanha. An eighth port, being the port of Ngqura in the Eastern Cape is currently under construction; the first ship will call into the port in 2005.

Our South African ports are operating against the backdrop of rapidly increasing trade resulting from economic growth and globalisation. Operational issues that ports are having to contend with include constantly changing technology, the bargaining power of buyers and suppliers, the rise of global terminal operators and ever-changing distribution patterns. Sustainability is emerging as a key issue, influencing new development, current operations and relationships with a wide range of national and international stakeholders. Implicit within the concept of sustainability are a range of factors described in this report.

The efficiency of our ports and the sustainability of their operating methods are integral to the well-being of our economy at large. Our ports are the primary conduit to trade, and thereby serve as the world’s gateway to the Southern African economy.

Port activity levelsIn one year, the activities undertaken by the seven commercial ports (excluding the Port of Ngqura) included:

The handling of some 14 236 vessels with a combined gross registered tonnage (GRT) of 266 million tones.

The moving of vessels 26 155 times in total

Provision of Aids to Navigation to all ships sailing along the SA coastline

Dredging a sum of 2.6 million cubic metres of sand and silt, in order to maintain navigational infrastructure.

Ports specialised per type of cargoEach South African port serves the natural market of its adjacent hinterland. These markets determine, to a large extent, the nature and types of cargo handled – in turn dictating the type of facilities each port provides. Each of the seven commercial ports therefore has its own unique capability, while all taken together offer a complementary combination of facilities and services.

Richards Bay geared for bulk cargo

During the 2002/03 financial year the breakbulk and bulk cargo (including petroleum) handled by all seven South African ports totalled 166.5 million tons. The port of Richards Bay handled a total of 52 percent of this total, with the tonnage through the port made up mainly of bulk cargo such as coal, woodchips, ferro-alloys, chrome ore and

alumina. Durban accounted for 24 percent of the breakbulk and bulk cargo, made up mainly of petroleum and general cargo. The 18 percent handled by Saldanha Bay comprised primarily of iron ore exports. Fruit and agricultural products were the major commodities handled by Cape Town which contributed two percent whilst manganese ore and vehicle components (CKD's) were the major contributors to Port Elizabeth's two percent share.

Most cargo export bound

The accompanying chart shows that of the 166.5 million tons breakbulk and bulk cargo handled, exports account for nearly three times as much as imports.

South Africa’s export trade routes are dominated by the Far East at 40 percent and Europe at 36 percent, followed by the United Kingdom at 12 percent, Africa at 6 percent and North and South America at three and two percent respectively.

Import trade routes are once again dominated by the Far East at 34 percent and Europe at 21 percent followed by Oceania at 16 percent. South America supplies ten percent of imports, while North America supplies eight percent, Africa six percent and the United Kingdom four percent.

Durban the key container handler

The National Ports Authority of SA handled 2.2 million total container units (Teu’s) during 2002/03. Of these, Durban handled 1.3 million Teu’s or nearly 60 percent of all units. This was followed by Cape Town which handled approximately 560,000 Teu's, Port Elizabeth at about 250,000 Teu's while East London and Richards Bay handled the smaller amounts.

The busiest ports

When measured in terms of vessel arrivals, Durban is also prominent as the busiest port. Of the approximately 14,000 vessels handled in 2002, Durban had the most vessel arrivals at 4,570, or nearly a third of the total. This was followed by Cape Town and Richards Bay with just under 3,800 vessels each. Port Elizabeth handled about 1,250 vessels, and Saldanha and East London about 400 vessels each.

Financial PerformanceTotal assets as at 31 March amounted to R11 763 million, with turnover at R3 772 million yielding a net profit of R1 694.8m. Net profit was R183.2m (12.1%) ahead of budget, largely due to

Scale of activities at a glanceA brief statistical overview of the NPA provides a feeling for the scale of activities.

A total of 3 643 employed A handling of some 14 236 vessels over

the past year, with a combined gross registered tonnage (GRT) of 266 million tones

Moving of vessels a total of 26 155 times

Dredging a sum of 2.6 million cubic metres of sand and silt, in order to maintain navigational infrastructure

additional wharfage revenue related to the late implementation of tariff reform and savings in operating costs.

The financial position changed substantially after March 2002, mainly as a result of additional debt of R3.204 billion which was taken over from Transnet. This debt gave rise to an additional R439.3m finance cost, not previously budgeted for. As a result, gearing at year end was 54.5%, compared to 39.3% at 31 March 2002 (after profit distribution). This position is expected to further deteriorate once all major works on the Ngqura Port and other Capital Investment commitments get under way. The Executive Committee (EXCO) is currently engaged in developing a funding plan, which will form the basis of further discussions and negotiations with Transnet regarding future funding and profit distribution.

In conclusion, the twelve-month period ended 31 March 2003 reflected satisfactory results. Excluding the additional interest burden and dividends, net profit showed an R88.0 million improvement over the previous reporting period.

Two businesses make up the NPALandlord ServicesLandlord Services plays an important role in ensuring the planning, development and optimal use of Port Property and Infrastructure, as well as ensuring a safe, secure and healthy port environment. This in return has a direct impact on the image and professionalism of the port system. Landlord Services facilitates a major portion of the income stream of National Ports Authority, i.e. Cargo Dues, Port Dues and Rentals. The focus for Landlord Services is:

To plan, provide, maintain and improve port infrastructure

To prepare and update a port development framework plan for each port

To control and regulate land use within ports, including the authority to lease land

Maritime ServicesMaritime Services is the only business portfolio within the National Ports Authority of South Africa (NPA) that provides operational services. It consists of four business units, namely:

Marine Services, which encapsulates the marine operations (i.e. pilotage, tugs, berthing and other miscellaneous services) and harbour master functions (i.e. Port Control, Vessel Traffic Services (VTS), Conservancy, the Licensing Authority, Marine safety and Dangerous Goods Management);

Ship Repair Facility Services, which focus on the provision of repair facilities for vessels;

Lighthouse Services, which owns, provides, maintains and operates 45 lighthouses and two minor lights along the coast of South Africa in terms of providing a safety service and aids to navigation for sailing vessels; and

Dredging Services, which provides maintenance dredging within set parameters as well as hydrographic surveys.

Demarcation of responsibility –Redefining the leases at Maydon Wharf

Central to the functioning of Landlord Services is the demarcation of responsibility between the NPA and tenants. Long-standing leases define the terms of the relationship and obligations of tenants towards good sustainability practices. However, these lease conditions frequently fall short of modern standards, a situation that is clearly not tolerable in today’s circumstances.

The NPA is currently busy with the commercialisation and the consolidation of leases at Maydon Wharf. Consultations with a variety of interested parties have thus far progressed well. Workshops held with clusters have served to get input from clients as to how the existing demarcations can be consolidated. Parallel to this is the development of reconstruction planning for renewed infrastructure in Maydon Wharf.

In the past, the NPA has experienced logistical problems with the lead times to approve the leases. The organisation has

The sustainability issues for each of these business units are fundamentally different, yet there are common processes relevant to each.

Sustainability of Landlord ServicesThere are a complex set of issues define the way Landlord Services deal with sustainability. To this end, policies and processes have been put in place to cater for important aspects of sustainability. Key areas of application are summarised briefly below, and described more fully throughout the remainder of this report.

Environment – A comprehensive set of processes underpin the way the environment is managed. Activities range from far-reaching risk assessment tools, to daily monitoring practices which are used to pick up the smallest signs of environmental decay.

Occupational Safety and Risk – The ongoing safety of those working in a port environment is the responsibility of Landlord Services. The enforcement of standards such as NOSA and an adapted Fire and Emergency ‘5 Helmet’ system supports this effort.

Health – The NPA has successfully launched their HIV/AIDS programme, and have engaged the African Heritage Foundations (AHF) to assist with the implementation. Other employee assistance programmes are being implemented to support the human resources of the organisation.

Security – Although not covered in detail in this report, security of our ports remains an important issue. The development of the Security Framework Plans represented the beginning of a long process towards a secured port system. A security scoping session for the Port of Ngqura was conducted to ensure that the security issues are fully considered during the development of this port.

Engineering – The NPA continues to develop facilities to cater for increased demand of port services. Projects are undertaken in accordance with environmental policies and standards as described in this report.

Providing infrastructure for Ngqura

Three main Ngqura tenders were awarded in 2002. Construction is progressing well with the project team having moved to Port Elizabeth in March 2003. Port infrastructure includes aspects such as breakwaters, channels, basins, quays, road and rail infrastructure, buildings and structures, surfacing/paving and supporting infrastructure (underground structures, power, water etc.). Other services include: maintenance of physical infrastructure (including materials management), provision of utilities such as water, electricity and sewerage, technical records and drawing archiving, plan approval and physical planning.

Prospects and challenges that Landlord Services will be addressing in the short to medium term are:

o Ongoing construction of the port of Ngqura

o Securing of South African Ports – revision of security regulations at all ports in line with International Maritime Organisation (IMO) standards

o Ongoing implementation of environmental standards and processes such as the Environmental Management System (EMS)

o Development and redefining of lease conditions, specifically those pertaining to Durban’s Maydon Wharf

o The re-launching of the Employee Assistance Programme (EAP)

o Continued expansion and embedment of the HIV/Aids programme

o Empowerment across the organisation, particularly within technical fields

Sustainability of Maritime ServicesThe sustainability practices of Maritime Services are similar to those of Landlord Services, with safety and reduction of environmental risk of critical importance.

Safety - In terms of systems, the Marine Services business unit achieved ISO 9002 accreditation in all ports. Audit and review sessions are held on a regular basis and our aim is to defend the achieved status. The port of Richards Bay received a five star NOSA rating for the 10th consecutive year.

Skills - Skills development is central to reduction of risk at sea. Little or no marine pilot training was undertaken in South Africa in the 1980s and 1990s. As a result, the industry is faced with age-related block retirements of pilots without there being a pool of successors to take over. Since 2000, the NPA has embarked on an accelerated pilot and tug master training program.

Equipment – State-of-the-art equipment should be fully exploited for risk reduction purposes. To this end the NPA have:

o Rolled out a vessel tracking system (VTS) as a means of enhancing the safety of navigation and port conservancy.

o Undertaken a technical audit of dredgers with a view to determining future capital investment requirements of the Dredging Services unit.

o Put into service four new 55 ton bollard tugs, with a fifth unit due for delivery shortly, and construction for two new tugs for the Port of Ngqura now underway.

Transformation – Maritime Services have been successful in absorbing and promoting women within the maritime industry. Various female tug masters and pilots have undergone training at the Shipping and Transport College in Rotterdam and have now been placed in operational and management positions within Marine Services. Of those trained, three women have been appointed in Marine operations management. A number of others are serving in both land and sea operations as trainees and cadets.

Maritime Services have improved operational efficiency over the past few years, whilst growing the capacity of their operating team from a skills, equipment and transformational perspective. The challenge for Maritime Services will be to consolidate these gains. By doing so, the NPA aims to embark on a cycle of continual improvement in sustainability practices, underpinned by business profitability.

C O R P O R A T E G O V E R N A N C E

Leadership structure The following structures and processes are intended to achieve adequate diversity of viewpoints and enable the board to manage the strategic direction of the organisation, including environmental and social risks and opportunities.

The Divisional BoardAs a division of the Transnet Group, the NPA’s ultimate governance falls under the Divisional Board, an organ of the Transnet Board. The composition of the board is as per the Articles of Association of Transnet. The Transnet Board appoints the chairperson of this board from the members of the Transnet Board; presently the chairperson is an independent director of Transnet. The chairperson’s role is to assist in the setting of quantifiable and measurable strategies and is also responsible for communication with the Transnet Board. The Divisional Board meets four times a year.

NPA Executive Committee (EXCO)The NPA Executive Committee (EXCO) meetings take place twice a month. All key issues are discussed at this level and decisions devolved to lower levels. This process is applied also at the ports level where port EXCO meetings are conducted to address similar issues as devolved from EXCO.

NPA Risk Management Committee (RISCO)An NPA Risk Management Committee (RISCO) has been established to oversee the enterprise-wide risk management programme within the business. These meetings are scheduled to take place quarterly. The Chairperson of RISCO (normally the CEO) with his/her programme managers, represents the business at the Transnet Risk Management Coordinating Committee (RISKMANCO) where issues of common interest are discussed, as well as those that need to be elevated to this level. The Group CEO of Transnet chairs the RISKMANCO meetings. These meetings are scheduled to take place twice a year. The Transnet RISKMANCO reports to the Transnet board as the final accountability lies with the Board.

Remuneration Committee (REMCO)The Remuneration Committee (REMCO) provides an advisory service to the NPA Divisional Board. It consists of the Chairman of the NPA Audit Subcommittee (appointed externally from Transnet), the NPA Chief Executive Officer and one other member appointed from the NPA Divisional Board. Meetings are held not less than twice a year. The Committee considers the conditions of employment, remuneration and benefits of NPA Management and employees, as well as all aspects related thereto. The Chairman of the Committee reports on the deliberations of the Committee to the NPA divisional Board.

Audit sub-committeeThe NPA Audit sub-committee provides an advisory service to the NPA Divisional Board and to the Transnet Main Audit Committee. It consists of the Chairman (who is appointed externally from Transnet), the Chief Executive Officer of the NPA and external members as appointed by Transnet Group Office. Members of the appointed Internal and External Auditors, NPA General Managers and senior members of the Finance section are attending members. The Committee considers and discusses the NPA Management report, the Internal Audit report and the External Audit report. The Chairman of the Committee reports on the deliberations of the Committee to the NPA Divisional Board. Matters are identified and forwarded to the Transnet Main Audit Committee for action or notification.

Major Board Committees responsible for setting strategy and oversight of the organisation.

Divisional Board Executive Committee

(EXCO) Risk Management

Committee (RISCO) Remuneration

Committee Audit sub- committee Policy Committee Tender Board

Tender BoardThe Tender Board of the NPA is a body appointed in terms of the Transnet Procurement Policy and reports to the NPA Divisional Board. The Board has an outside, independent chairman who is appointed by the Chairman of the Transnet Board of Directors. The members are employees of NPA Head Office and are appointed by the Divisional Board on recommendation of the CEO.

The main objective of the Board is to ensure the integrity, fairness and openness of the NPA procurement process e.g. adherence to policies and procedures, applicable legislation, good commercial and ethical practice and the application of a consistent and uniform approach to tendering and contracting.

Capital Investment Committee (capin.com)Capin.com is a committee that reviews, supports, recommends and or approves all capital investment projects and related matters for the NPA. Members are the CEO of the NPA (chairman), the GM Landlord Services, GM Maritime Services, GM Corporate Services, the Chief Engineer and the executive manager of Property Services, Financial Planning and Planning & Development.

Once the annual budget is approved, individual items up to R20 million must be submitted to the relevant authority before commencement. All approvals must be notified to capin.com.

All items in excess of R20m must be submitted to the Transnet Finance Committee, via Group Finance (Corporate Planning). In accordance with the hierarchical delegation framework, these individual approvals must go through all the recommendation steps sequentially, both within NPA and Transnet. Thus the port/business originating the project will put forward a proposal via the relevant General Manager to capin.com. Thereafter it will be referred to the NPA Exco for signature by the CEO, then to the Divisional Board for signature by the Executive Director, and then to Group Finance (Corporate Planning).

N P A O P E R A T IO N A L S T R U C T U RE

L e g a l Se rv ic es

IT & S

H u m a n R e so u rcesa n d M a n a ge m e n t

F in a n cea n d A d m in istra tion

P ro c u re m e nt

G e n e ra l M an a g e r:C o rp o ra te S e rv ic es

P o rt o f R ic h a rd s B ay

P o rt o f D urb an

P o rt o f E a st L o nd on

P o rt o f P ort E liza b e th

P o rt o f C a p e T o w n

P o rt o f S a lda n ha

C o rp o rate A ffa irs

G e n e ra l M an a g e r:P o rts an d C o rp o ra te A ffa irs

P ro p e rty

S e c u rity S e rv ic es

E n v iron m e n t, H e a lth , S a fe ty a n dR isk M a na g e m e nt

P la n nin g an d D eve lo pm e nt

E n g ine e rin g

P ro je c t M a n a g erN g c u ra P ro je ct

G e n e ra l M an a g e r:L a n d lo rd S e rv ice s

M a rin e S e rv ice s

L ig h th ou se S e rv ice s

D re d g in g S e rv ice s

D ryd o ck S e rv ic es

G e n e ra l M an a g e r:M a rit im e S e rv ice s

M a rke tin g

N e w B u s in e s s D e ve lo p m e n t

B u s in e ss S tra te gy

G e n e ra l M an a g e r:T ra d e a n d L og is t ics

C E OP o rtcon

C h ie f Ex e c u tiv e O ff ic er

Incentives for performance in non-financial areas

The balanced scorecardThe NPA’s performance management strategy informing our compensation practices is modelled on the balanced scorecard approach. The non-financial goals of the balanced scorecard entail a number of perspectives: customer, internal business, learning and innovation. Specific deliverables pertaining to each perspective are contracted with each manager at the beginning of our performance management cycle and constant evaluation of achievement levels takes place throughout the year.

NPA’s compensation practice is two fold: Key Performance Areas – embodying the normal deliverables applicable to each

executive’s role. Incentive Scheme – applicable to the stretch targets and deliverables over and above

the normal key performance areas. Individual executives are incentivised upon achievement of these targets over and above the normal key performance area process.

Specific linkages to incentives The non-financial targets form a significant portion of the performance management system in place for management. In certain cases they are a prerequisite for achievement of our financial targets.

Indicators include the Environmental Self-Assessment Programme (ESAP) that gets transferred into relevant manager’s key performance contracts and therefore forms part of the equation of determining performance levels of each business unit and its relevant managers. The ESAP audits are conducted at least annually.

There is also a strong element of linking performance to occupational safety and risk performance of various depots and their managers, for example NOSA rating, Disabling Incident Frequency Rate (DIFR) and the Cost of Risk.

This year, the DIFR counts five percent of management incentive bonus scheme contracts.

Measuring and improving managementThe NPA has a continuous process developing and refining measures within a framework of performance management. Some of the measures include: Development of business plans flowing from the corporate portfolio to departmental

levels to ensure alignment, Identification of key performance areas (KPAs) and indicators (KPIs), Development of the balanced scorecard, Regular monitoring and assessment of progress in accordance with the balanced

scorecard outputs and KPIs, Setting up individual development plans that respond to the needs of each manager

and areas for improvement in line with requirements of the business, Development, implementation and monitoring of performance improvement plans

for managers not coping with their responsibilities, International benchmarking exposure.

THE ENVIRONMENT

12 pages

Picture

Nurturing Mother Nature

Increasing commercial and social pressuresPorts are critical nodes in the import and export logistics chain and the lifeblood of the coastal cities in which they are situated. Globally, there is increased pressure on ports to offer competitive shipping services while in close proximity to high density urban and peri-urban development. An environmentally responsible culture is essential in order to maintain economic and social sustainability for the business.

The environment as a vital resourceSouth Africa’s ports lie at the confluence of land and sea. This environment is a highly sensitive, natural resource used for fishing, yachting, bait collection, bird watching, education and research. The NPA is acutely aware of this delicate balance; hence the importance of understanding the environmental risks associated with each port and its shipping operations. With this understanding, systems and processes are being put in place to minimise the impact of these activities.

This chapter describes the policy of the NPA, and arising from this the systems employed to meet its vision for sustainable development.

The NPA is striving to attain international standards through: Accountability within the port

community, with respect to environmental performance

Self-regulation and proactive management of environmental risks

Continuous improvement and precautionary principle

Improving operational efficiencies and legal

The NPA’s environmental policyIn line with its vision, mission and commitment to achieving its goals of environmental responsibility and good corporate governance, the National Ports Authority of South Africa commits itself to:

Complying, as a minimum, with all relevant environmental legislation, as well as all other industry requirements to which it subscribes,

Implementing measures to conserve natural resources, reduce waste and prevent pollution,

Influencing the implementation of acceptable environmental practices (cleaner technology and production) by its suppliers, clients, tenants and surrounding landowners,

Promoting environmental awareness and responsibility among employees,

Developing and implementing environmental management systems at each of its ports that:-

Comply with the requirements of the ISO 14001 international standard;Achieve continual improvement in environmental performance, andAllows for integration with the NPA’s core business activities.

SEA

Project-specific EIA

Environmental Management Systems

Monitoring and data collection

Higher levels such as regions or sectors of development, new policies or proposed legislation. Specific development proposals and projects Construction and operations of development projects Feedback to higher levels.

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Developing a layered model for managing the environment

Model summaryThe accompanying diagram illustrates the model that will guide sustainable development in the context of the environment. The model starts with a Strategic Environmental Assessment (SEA) that sets the vision for sustainability. At project level, Environmental Impact Assessments (EIA) are undertaken to investigate specific environmental (i.e. biophysical, economic & social) challenges. An Environment Management System (EMS) is put in place to implement preventative and remedial action in order to achieve policy aims. Finally, Monitoring and data collection provides the feedback required to keep planning on track and set new goals for the future.

SEA assesses implications, providing vision, setting goalsStrategic Environmental Assessment (SEA) sets an overarching framework for all environmental programmes. The SEA is a process to assess the environmental implications of a proposed strategic decision, policy, programme, piece of legislation, or major plan. More specifically, the SEA Uncovers environmental opportunities and

constraints of a particular area, Facilitates the integration of biophysical, social

and economic issues in decision-making with regards to future port development and operations,

Provides a framework for management and monitoring.

At the completion of the SEA process, a decision can be made to either proceed with, or abandon a project, underlining its strategic importance.

EIA reveals findings, makes recommendationsOnce an SEA is in place, the NPA is better equipped to embark on a project-specific Environment Impact Assessment (EIA), taking into account the strategic vision set by the SEA process. The project (design or siting) would then be modified to reduce its environmental impact and associated risks. Environmental Impact Assessments are required in terms of the Environment Conservation Act (Act 73 of 1989) and subsequent regulation promulgated in 1997. This set of legislation lists some activities that are subject to the EIA procedure. Examples of some of these activities are construction in a sensitive area, development of structures below the high-water mark e.g. quays, moorings, breakwaters, etc.

EMS describes the plan of action for management An Environmental Management System (EMS) uses set environmental objectives and targets to construct a system to improve the

Current statusAn SEA for the new Port of Ngqura (Coega), was conducted and completed, and in 2002 the scoping stages were completed for both the Port of Cape Town and that of Richard’s Bay. These two ports have embarked on the second phase, where various specialist studies will be conducted. These assessments are also planned to be

The Environmental Self-Assessment Programme (ESAP)

The environmental self-assessment programme (ESAP) is a management tool for measuring progress made by an organisation in meeting the intentions of the International Chamber of Commerce’s (ICC’s) Business Charter for sustainable development. Historically, Transnet and all its subsidiaries subscribe to ESAP principles. At least one self-assessment is carried out at each port annually, using the 16 ICC principles for sustainable development. The results of the 2 years rated since 2001, reflect an improvement of 63% and 48% respectively. The NPA is now at a stage of identifying areas for possible integration between ESAP and the EMS so it can ultimately have one environmental management system that holistically addresses key

overall environmental performance of a port. This is an internationally recognised system, audited annually, that can play a key role in measuring the success of environmental implementing management procedures and initiatives. As the diagram shows, the EMS is also linked into the SEA, which sets the scene by identifying areas that need improvement or possibilities of ‘trade-offs’. As such it is completely inline with the broader environmental policy of the NPA. See case study on the Port of Durban.

The NPA is currently in the final stages of developing and implementing an EMS (in accordance with ISO 14001) for each port, enabling the tracking and management of key environmental aspects.

EMPs implement plans to achieve objectivesEnvironmental Management Programmes (EMP) ensure that set objectives and targets are met. These objectives and targets are in line with the Environmental Policy, which incorporates principles of sustainable development.

Feedback to track progressMonitoring of everyday operations is required in terms of the ISO 14001 code. The SEA also requires vigorous data collection and analysis as determined by specialist studies. Both monitoring of operations and data collection will be used to track progress towards achieving the vision for sustainable development.

Case Study - Application of the Environmental Management System (EMS)

Prior to 2002, the National Ports Authority did not have a formal Environmental Management System (EMS), and there was little to no consistency amongst the ports. However, with the establishment of the NPA Environmental Policy, an official, public commitment was made to develop and implement an EMS. The formation of such a management system is intended to: Assist the NPA identify possible non-compliant issues, Align the organisation with international views on environmental and

sustainability issues, Manage the risks of environmental disasters and prosecution, Increase competitiveness and credibility, with a safe and healthy

environment in mind.

Towards the end of January 2002, NPA officially started the EMS development process, with the Port of Durban chosen as the pilot site. This decision was based on the fact that the Durban commercial port is by far the most complex harbour in South Africa, handling a wide variety of cargo and housing over 400 tenants. This is not to say that the other commercial ports wait on the sidelines for Durban to complete the EMS, but rather work side by side, with a gap-analyses conducted in all ports (followed by the subsequent rating of aspects) and then replicating the Durban procedures and processes with appropriate modifications to incorporate port-specific changes and considerations. The end result – appropriately developed environmental procedures and programmes specific to each unique port.

As part and parcel of the development and implementation of the EMS, various statutes, regulations, provincial ordinances and municipal by-laws were reviewed in order to identify sections that are relevant to the NPA’s business. Relevant sections were interpreted and simplified in the form of a legal register that is now accessible to non-legal people. Considering that our ports are situated in various provinces and cities, it is crucial that we address the unique legal requirements of each province as well as the local by-laws. Most ports have either completed, or are finalising their legal registers. These will be updated periodically as amendments are made and new legislation emerges.

Embedding the processes through formal training

Training to build capacityWith processes in place to assess, plan, manage and monitor compliance with environmental policies, formal training was required to equip personnel with the necessary skills. A training plan was developed to address the following areas:

Competency training for environmental personnel - to develop competencies required to develop, implement an EMS and conduct internal audits,

Train the trainer course – roll out the training of other NPA personnel as well as delivering refresher courses and induction programmes,

Training of strategically important environmental managers – decision-makers from various business units that interact with the environment in carrying out their activities.

The objective of this training was to ensure an understanding of:-

The significance of environmental impacts of various work activities and the importance of compliance with the company’s environmental procedures.

The importance of conformance with the organisation’s environmental policy and procedures.

Roles and responsibilities in achieving compliance with the relevant environmental legislation, and ISO 14001 standard.

The significance to environmental impacts of various work activities and the environmental benefits of improved personal work performance.

The potential consequences of departure from specified operating procedures with reference to environmental impacts.

Various roles and responsibilities in ensuring the successful implementation of maintenance thereafter of the company’s EMS.

The trainers are currently rolling out training to various levels of the organisation in an attempt to reach out to all relevant NPA personnel.

Practical measures to preserve the port environment

Issues common to all portsDespite the variety of habitats and environmental sensitivities found at each of the seven commercial ports in South Africa, there are generic environmental issues that all ports have to deal with in one way or another. Responding to these issues requires procedures such as: Regular water and sediment monitoring conducted in the port itself and the

surrounding bay, and essential for the effective management of the aquatic system;

Ground and surface water monitoring points being regularly checked and monitored to avoid negative impacts on the soil, water and surrounding natural habitats;

Ongoing inspections and reviews of operational procedures undertaken within the port to monitor and minimise spillages, pollution or any incidence that could detrimentally affect the surrounding environment;

Mitigation measures to prevent the loss of biodiversity (the maintenance of varieties of fauna and flora, protection of endangered species, wetlands, mangrove swamps etc.).

Biodiversity a global and local concernOf particular importance to those South African ports that are situated in natural bays, is the issue of biodiversity. The potential loss of biodiversity is a worldwide concern, and one that is taken seriously in South Africa by the NPA. Every effort is being made to conserve our natural biodiversity, either through rehabilitation of negatively impacted areas or through stringent environmental controls and management procedures.

The unique challenges of individual portsApart from the common issues described above, each port in South Africa is faced with its own set of unique challenges. Of the seven ports managed by the NPA, the ports of Richard’s Bay, Saldanha and Durban in particular come from highly diverse biological backgrounds, and are discussed more fully in the pages that follow.

Durban

A vitally important estuaryThe Port of Durban hosts a rich diversity of flora and fauna, including mangroves, birds, fish and invertebrates. 116 water bird species and 246 species of fish have been recorded in the Durban Harbour – in fact more than in any other estuary in KwaZulu Natal. The harbour and its mangrove forest play a vital role as a nursery for marine fish and a habitat for the sand prawn and other important marine life that inhabits the inter-tidal zone.

The Bayhead Natural Heritage SiteThe priority conservation areas in the bay for waterbirds are the protected inter-tidal mudflats that fall within the Bayhead Natural Heritage Site (BNHS) and Centre Bank regions. Underlining this importance, the 20 ha of mangrove forest and adjacent grasslands in the Bayhead area was declared a Natural Heritage Site in October 1995. An alien plant eradication programme at the Bayhead Natural Heritage Site (BHNS) has proven to be effective, with alien infestation at manageable levels.

Monitoring environmental healthThere are a number of ongoing studies in the Port of Durban that provide information on the environmental health of the Port. These include regular monitoring of species numbers and diversity such as the monthly water bird counts, and the quarterly sampling of fish and sand prawn communities. Other studies are site specific, for example, the bio-physical characterisation of a sub-tidal habitat within the bay. A long-term study has recently commenced aiming to determine the biotic availability of pollutants in the bay and their affect on the development of pelagic resources.

Picture captionA total of 116 waterbird species have been recorded in the bay: 95% of these are regular

South African waterbird species

21% are non-breeding vagrant seabirds and waders to South Africa. 36 of these species are non-breeding Palearctic migrants to SA.

12 non-pelagic Red Data species have been recorded in the Bay.

Picture caption

Additional management at the BNHS includes controlling the impact of visitors through the provision of maintained hiking trails and a boardwalk through the mangroves. The construction of the Bayhead Education Centre has added to the educational value of the site, with the facility being available for use by the public.

Richards Bay

Both harbour and habitatThe Port of Richard’s Bay is an important resource that must be protected and managed to ensure the ecosystem functions remain preserved. The harbour area and adjacent Sanctuary support extensive mangrove stands, considered important for conservation due to the specialist ecological niches which they occupy, the habitat they provide to other biota and their limited distribution in South Africa.

Rich bird-lifeThe abundance of aquatic habitats in the port of Richards Bay surrounds has resulted in a rich bird life. Richards Bay has been ranked the second most important habitat for water birds along the KwaZulu-Natal coastline, and has been included in the list of Southern African globally important bird areas. 350 bird species occur in the area, including at least 23 and possibly 31 Red Data species. The Richards Bay area under the National Port Authority has the richest bird density per kilometre of shoreline in KwaZulu-Natal.

The Humpback dolphinHumpback dolphins (Sousa chinensis) are rare in South Africa and the Richards Bay port area is a hotspot for these marine mammals. This is probably due to the presence of the nursery area, which attracts many predators like the humpback dolphin. The breakwaters also form an artificial reef and this is a primary feeding area for the dolphins.

Preserving environmental buffer areasRetention of environmental buffer areas (such as extensive mangroves, mad flats and approach cut dunes) in an undeveloped state is essential to the future viability of the port. Any potential infrastructure development must ensure that commercial port operations have a minimum impact on adjacent land uses. With this in mind, the NPA has developed a long term development framework plan for each port that reflects these areas as no development areas.

In addition to these measures, there are various initiatives being implemented in the Port of Richards Bay to protect the existing environment and preserve the resource for the future:

Registering a Natural Heritage SiteThe area to the east of the south pier, which includes Spinach point, has been identified as a conservation area and is in the process of being registered with the Department of Environmental Affairs and Tourism as a South African Natural Heritage Site. This Pelican Island Proposed Natural Heritage Site is approximately 40 hectares and houses both black and white mangrove trees.

Dolphin ResearchResearch on the humpback dolphins is currently being carried out by the Richards Bay Humpback Dolphin project, which focuses primarily on photo identification and behavioural study

Setting aside green areasLarge tracts of land in the Port of Richards Bay have, in terms of the Port Development Framework Plan, been set aside as green areas. These allocations have been based on various studies, which include geo-technical results indicating unsuitable founding conditions for quay infrastructure, as well as environmental impact assessments indicating sensitive flora, etc. such as

Picture caption

The Sanctuary has the ninth highest botanical importance score out of 179 South African estuaries. The mangroves in the Richards Bay harbour are also significant because it is an old established stand as compared to the mangroves in the Sanctuary area, which are

mangroves and papyrus. Presently none of the “green” areas are being leased and there is no intention to lease them in the future.

Protecting remnant vegetation in the portSmall areas of remnant vegetation in the port should be protected where possible during any future developments on the land. Where government approval is given for such removal, other remnant vegetation areas would be expanded with similar or indigenous vegetation to ensure there is no net loss of vegetated areas or fauna habitat in the area.

Saldanha

A sensitive location near the Langebaan LagoonWhile the Port of Saldanha itself is a relatively poor biome, the surrounding areas, such as the Langebaan Lagoon, are rich in biodiversity. This Ramsar-listed site includes the inland islands of Scaapen, Marcus, Malgas and Jutten. The inshore islands of Langebaan support large breeding colonies of seabirds of which some are endemic to this area.

No current disturbance of this Ramsar siteLangebaan Lagoon is zoned into three utilization zones viz. wilderness, limited recreational and multipurpose recreational areas. The wilderness areas safeguard the wader and breeding seabird populations against human disturbance. Although the port shares the bay with the Ramsar site, the NPA is currently not using water or affecting the water of the lagoon in any significant way.

NPA Saldanha Biodiversity Management StrategiesHowever, the NPA is committed to high standards of accountability, leaving nothing to chance. Following the decision to embark on an Environmental Management System (EMS) based on the International ISO 14001 standard, all activities that could significantly affect the environment and biodiversity of the bay need to be proactively managed. The measures described below are already in place, others are still to be implemented.

Weed or Alien vegetation eradication planThis biannual eradication plan has been drawn up as a joint venture with a Coast Care community group whereby all weeds or invasive vegetation gets removed off NPA property. Alien vegetation affects the livelihood and natural growth of our indigenous vegetation.

Port Development MonitoringAll development and construction work on NPA property is actively monitored by the environment department using Environmental Specifications or an EMP to guide the construction work. All contractors on site are put on a register and their environmental performance is monitored on a regular basis to ensure the prevention of any unnecessary environmental damage.

Port cleanupThe NPA has also started a port cleanup campaign in which the port and beach area are being cleaned up on a regular basis by Coast Care of litter, flotsam and jetsam. This includes pieces of old fishing nets and litter that regularly wash up on our beaches, and in which animals and birds often get strangled.

Case Study – GloBallast – Supporting an international initiative to protect biodiversity The Global Ballast Water Management Programme (GloBallast) being implemented by the International Maritime Organization (IMO), is an example of a national initiative as opposed to a port-specific programme. The project’s aim is to manage the threat of alien invasive species that are introduced during the uptake and discharge of ballast water at ports around the world. This threat includes losses in natural biodiversity, health hazards and potential losses for the mariculture industry. The project is being piloted in six countries, including the Port of Saldanha in South Africa.

The first step has been to identify and assess all aquatic species, local and alien, present in each port. A marine fauna & flora survey has already been conducted in Saldanha, and in 2002 the NPA added to its programme with a survey of the Port of Ngqura – currently under construction. This latter survey allowed for data to be collected prior to any possible invasion by alien species due to port activities, presenting an excellent opportunity to determine a baseline against which future surveys and sampling can be compared. The remaining deepwater port, the Port of Richard’s Bay, is next in line to undertake such a survey and sampling is scheduled to commence by April 2003. All these surveys are being done according to a standardised, international protocol. The next step in the GloBallast Programme is to use the data gained from these surveys to understand the fauna and flora present in our ports, and draw conclusions regarding the possible impact of marine alien species introduced in the future. Such a risk assessment was recently completed for the Port of Saldanha, using IMO consultants to report on the findings for all six pilot countries.

The NPA has initiated a process in 2002 for the official collection of Ballast Water Reporting Forms from all ships calling at South African ports. These forms are standardised by the IMO and capture data relating to ballast water uptakes and discharges, as well as vital shipping details per vessel. In the absence of legislation making it compulsory to complete and provide the port authority with such information, the NPA is having to find ways to encourage ships and their agents to comply with these voluntary international guidelines and requirements.

Future challenges and goalsSustainable development is something the NPA regards as a crucial element in all business aspects, not just for the future but also in all current management initiatives. Continuous efforts will be made to improve environmental management in ports and positively influence those around us. Following are a number of goals the NPA is working on with regard to the environment.

Improve information managementThis year, the NPA intends to put in place systems that record and track environmental performance in such a manner that more accurate details can be provided for the next sustainability report. Currently this information is not readily available, nor easily accessible. This needs to be managed and improved between the various business units within the NPA.

Improve our understanding of the environmentThe NPA will continue to support research and development in the environment and increase both internal and public awareness of issues facing our environment. There is a lot to learn about the natural systems the NPA manages, but as the NPA grows and the environmental department develops as an independent division within the organisation, capacity is being built to face this challenge with excitement and enthusiasm.

Strategic Environment Assessments for all portsStrategic Environmental Assessments (SEA) are to be conducted in all ports. Ngqura’s assessment was completed prior to the start of construction, Cape Town’s and Richard’s Bay’s are already in progress, and the rest will follow in due course. These assessments will allow for informed port development in the planning process, and provide a framework on monitoring and management issues.

Rolling out the Glo-Ballast programmeThe NPA intends to have marine fauna and flora assessments done in all ports to identify the risk posed by alien species that could be transported via hull fowling or ships’ ballast water.

Audit and certify the Environment Management SystemThe NPA intends to have the EMS audited and certified on a national and corporate level by December 2003. This is a significant challenge considering the requirements and the various environmental management plans that need to be implemented, but with the organisation’s commitment to continual improvement, the NPA is confident of achieving this goal.

Advocate best practices by exampleThrough responsible management and continuously striving to be amongst the best, the NPA aims to use its influence to encourage other companies and institutions to adopt better environmental actions. It is NPA’s commitment to continue to boost the economy and create jobs, while continually training and educating personnel to increase productivity and efficiency – and to do so in a manner that makes the company proud of its responsible exploitation of the environment.

Case study – Developing the Port of Ngqura The development of the Port of Ngqura, near Port Elizabeth in the Eastern Cape, is a current example of how the NPA is taking into account international standards and principles, but using local knowledge and expertise to formulate management strategies specific to South African ecosystems and environmental processes. In this way, the NPA is establishing a model for the rest of Africa and other developing countries – illustrating the best-practice approach to developing a new port within stringent environmental controls and guidelines.

As part of this commitment to responsible management, the NPA developed an Environmental Specification document containing all the relevant clauses for acceptable environmental procedures and practices during the construction phase of this port. These practices are to be implemented by all contractors as part of the Environmental Management System (EMS) in order to minimise adverse environmental impacts and optimise opportunities associated with construction activities. Contractors have been provided with detailed Method Statements in line with the ES and the Method Guidance document (developed by the NPA and containing the guidelines for best practice). These were reviewed and approved by both NPA and the Department of Environmental Affairs & Tourism and written into the tender and contract documents.

In addition to the overall public participation process that was followed for the entire development, a committee has been established that includes key environmental groups and government authorities; thus ensuring transparency and effective participation from interested and affected sectors. The Environmental Monitoring Committee (EMC) was officially established in November 2002 and has been mandated to ensure that the terms of the Record of Decision for both the port and IDZ areas, and the environment they impact on are complied with. This will be done with the assistance of the Environmental Control Officer (ECO), who reports directly to the EMC, and is in charge of audit reports and site inspections. This EMC consists of representatives from developers, local and national government authorities, South African National Parks (SANParks), the local business community, civil society, environmental non-governmental organisations (NGO’s) and the affected community.

Apart from the above monitoring mechanisms and procedures built in to the development process, the NPA has its own stringent measures and best practices that will be continuously monitored for compliance. All these measures, combined with a specially compiled EMS specific to the port construction, will ensure that the new Port of Ngqura will serve as an excellent example of sustainable development.

OCCUPATIONAL SAFETY AND RISK

6 pagesPicture

Broadening the concept of risk management

Safety and risk are integral to businessOrganisations throughout the world have acknowledged the important role that occupational safety and risk management play in normal running of business. These functions form an integral part of the business and if not adequately managed, can directly cause accidents to property or indirectly result in adverse working conditions that could have serious consequences for the organisation.

Doing business responsiblyIn the past, risk at the NPA has been confined to issues such as environmental disaster recovery, and management of safety. However, risk can be viewed in a broader sense, incorporating elements such as social or governance related issues. Seen in this light, risk management does indeed influence the profitability and sustainability of the organisation. Acknowledging this, Transnet adopted the enterprise-wide risk management approach and mandated all its subsidiary companies to assume full responsibility for the management of their business.

A holistic approach requiredThe Transnet Enterprise-Wide Risk Management Philosophy, as outlined in the Policy Statement, encourages a culture of managing all risks – strategic, management and operational – whilst conducting business. It calls for best practices, world class standards, and sound corporate governance principles whilst aiming to achieve sustainable development.

Committed to the futureAs a state owned enterprise, it is crucial that the NPA follows legislation that governs the public sector. At the same time, the organisation needs to align its management philosophy and processes with the recommendations of the King II Report on corporate governance, sharpening its focus on accountability and transparency. The current description of risk – as defined in this report – still retains a narrower sense. This likely to be broadened for future reporting cycles.

Transnet Enterprise-Wide Risk Management Philosophy and Policy Statement Optimise business opportunities within

sound corporate governance principles

Subscribe to the principle of sustainable development

Effectively and efficiently manage risks that impact on the achievement of Transnet and its businesses’ objectives and related processes within laws and regulations and by means of value adding world class, integrated risk management programmes, policies, standards and associated internal control measure, verified by monitoring and auditing processes.

Provide support and resources to holistically establish, integrate, sustain and continually improve risk management in Transnet and its businesses on an enterprise-wide basis.

Making policy work at the NPA

A standard to guide member businessesThe Risk Management Department at Transnet Group level developed a Risk Management Standard (GRB AA.1) to support policy and to guide subsidiary businesses. The document provides a guideline for the implementation of a holistic and integrated risk management approach that should be adopted by all Transnet businesses. The strategy suggests a top down as well as a bottom up approach with integration being the key to ensuring that inter-linkages form part of the Risk Management System – ultimately leading towards a more robust business operation.

Broad consultation formed NPA’s policyNPA is fully committed in ensuring that it meets these requirements and has set out to develop its own business specific NPA Risk Management Policy Statement. The policy statement is in the final stages of drafting. (Leave note – it will either be approved or left out before going to press) The process has involved all the relevant stakeholders in order to ensure ownership and credibility. It encompasses the values of the organisation in that it encourages a safe and secure work environment as well as developing and conducting business that meets legislative and regulatory requirements.

NPA manages its occupational safety and risk management programmes through a process of continual risk identification and assessment – setting new targets and objectives on an annual basis.

NPA’s response to ensure complianceThe NPA has established its own specific Risk Management Committee (RISKMANCO). This committee comprises representatives of line management, internal audit, risk management and labour. The committee is tasked to advise the board on risk management issues pertaining to the business. It also plays an important role as a platform where concerns around risk

NPA risk management policy statementWhile facilitating economic growth in South Africa through providing and sustaining world class port systems, the National Ports Authority is committed to the protection of its people, property, clients, shareholder interests and the environment.

Through a process of risk identification and assessment, systems auditing and evaluation, we will in all material respects:

Comply with legal, operational, engineering and environmental requirements,

Provide the necessary guidance, appropriate training and supervision in order to promote the well-being of our personnel and the port community,

Provide adequate resources for the management of those risks threatening the health and safety of people, the environment and our capacity to deliver a quality service,

Conduct research and development for continuous improvement in the effectiveness of our safety, health and environmental management systems,

Foster a positive approach to the management of all risks by ensuring adequate and effective controls whilst striving for service excellence.

Furthermore, NPA has dedicated Safety, Health and Environmental personnel within each Port. These teams are supported by the National Safety, Health and Environmental section that oversees port activities and which ensures that strategic initiatives are implemented and set objectives are achieved.

NPA systems and processesNPA has developed and implemented several systems and processes to ensure compliance and effective occupational safety and risk management: NOSA Integrated Platinum 5 Star System, Business Continuity Management System, Fire and Emergency Services Management

Compliance System – 5 Helmet Computer Assisted Risk Management System

and Several in-house corporate standards.These systems are described over the following pages.

NOSA integrated platinum 5 star system

A new system demands higher standardsThe NOSA Integrated Platinum 5 Star System has been implemented in all the Ports. The Ports are audited by in-house auditors internally (every 6 months) and externally (annually) by NOSA auditing consultants. Prior to 2001, the ports subscribed to the NOSA Integrated Green 5 Star System, however with the NPA’s drive for continual improvement and the need to maintain world-class standards the ports now subscribe to the NOSA Integrated Platinum 5 Star System. This more stringent move has negatively influenced the grading when compared to earlier periods. However, while the grading in some ports declined as more stringent requirements were introduced; definite improvements were noted in other ports.

New ratings reveal weaknessesThe accompanying charts show the comparative grading between the 1999/00 and the 2001/02 periods. Note that the gap in the analysis is due to the change over to a new system. It can be seen that a large majority of the ports achieved a 3 star rating, though the Port of Richards Bay (Marine Services) achieved a rating of 5 stars for the 2001/2002 financial year. The main areas that require improvement are issues of incident and accident investigation and organisational management.

To address these shortcomings, the various ports analysed their respective results and identified specific areas that required corrective actions. In addition to this, the National Safety, Health and Environment Department conducted internal audits throughout the year to evaluate progress made by implemented corrective actions and monitor for compliance. The NOSA Health and Safety Qualifiers were then incorporated into the Key Performance Areas of the SHE personnel within the organisational structure. It is envisaged that in the next financial year these qualifiers would form part of the company’s key performance areas.

Gradings improving for 2002/2003The targets for 2002/2003 were set at 76% on the new Platinum system. Currently external audits are being conducted for this financial year. Early indications are that there have been major improvements with most operations expected to achieve the target star grading. In years to come, it is anticipated that the organisation will be in a position to revise their target to that of a 5 star rating.

Fire and Emergency Services Management System – 5 helmet

Functions developed of the yearsOver the years, the NPA has developed and implemented Fire and Emergency Services within all five ports to safeguard its assets (and those of its clients??). These cover the following functions:

First response to fire and hazmat? emergencies Hot work permit control Ship patrols Maintenance of fire equipment In-house fire training for operational personnel Conducting fire audits.

5 Helmet a guide to word-class standardsTo ensure that the services work effectively and efficiently, NPA’s Occupational Safety and Risk Department developed and implemented a 5 Helmet Fire Safety Management System (following the same principles as those of the NOSA Integrated Platinum 5 Star Management System). The Fire and Emergency Services have implemented this system and have been audited for the past three years (see graph). The audits indicate continual improvement and steady progress towards achieving world-class standards.

A first-response serviceThe NPA continuously looks for additional ways to improve its response to emergencies. A current initiative follows an assessment of the risks associated with the activities that take place within the port environment. Here it was identified that each port required an initial first-response, in-house Fire and Emergency Service.

Future plansFuture plans for the Fire and Emergency Services are to integrate with Marine Services in order to fight ship fires from the sea effectively and efficiently. A target rating of 91% of better has been put forward, which compares to a five star rating at all ports.

Fire and Emergency Services functions

First response to fire and hazmat? emergencies

Hot work permit control Ship patrols Maintenance of fire

equipment In-house fire training for

operational personnel Conducting fire audits.

Business Continuity Management System

Catastrophic eventsThe global business world has been hit with many damaging events in recent years; amongst others have been the Y2K transition and more recently the devastation of September 11, 2001. As tragic as this experience was, it has impressed on the minds of business leaders the need for a Business Continuity Management (BCM) System.

The NPA proactive with contingency planningThe NPA developed and implemented its own BCM system during the Y2K frenzy. While it has been a strategic initiative since Y2K, now more than ever, each port needs to have a BCM system and plan in place to address any unforeseen event. The system is designed to address every eventuality – however great or small – in every area of business. The following has been achieved since its implementation:

Establishment of a BCM Plan in all ports

Identification of Recovery Directors, support and media teams

Measurement, testing and refiningThis year, apart from the customary in-house audits (conducted to monitor progress and BCM Compliance), the NPA has commissioned external auditors to conduct a simulation of the plans that were developed in each port. Earlier this year, a flood at the Port of East London provided an opportunity to activate its BCM Plan, outlined in the accompanying case study. This incident provided valuable lessons that have led to corrective measures being addressed (implemented?) at a local and national level.

Computer Assisted Risk Management System (CARMS)

Collecting and communicating informationThe Computer Assisted Risk Management System (CARMS) was developed and implemented by Transnet - Group Risk. This system is used by all the subsidiary businesses as a means of data collection and communication within the various groups. It permits on-line data input and reference information.

Keeping track of performanceThe NPA uses this system to keep track of the various statistics that are generated; such as the NOSA Integrated Platinum 5 Star Management System, and Transnet’s and NPA’s internal standards. This national electronic database assists the NPA keep track of progress and performance throughout the financial year. CARMS also serves as a reference library for all users as it permits access to relevant and updated national legislation, regulations, internal standards and audit documentation.

A sample of statistics obtained from CARMS

COST OF RISK: The percentage turnover spent in rand value to manage occupational safety and risk within NPA. Thus far NPA has maintained a cost of risk of less than 2%.

DISABLING INJURY FREQUENCY RATE (DIFR): The number of occupational illnesses and injuries sustained in one financial year (as determined by a standard NOSA formula).

FATALITY REGISTER: Indicates the number of public and company employee fatalities experienced.

Fatalities reducedFatalities are unacceptable to NPA, however they occur. As reflected in the accompanying table, through a continuous process of risk identification, assessment, implementation and monitoring of corrective measures, the situation has improved as evidenced by the decrease in number of fatalities experienced.

3 year history of incidences at NPA

0

1

2

3

4

5

DIFR Fatality (Public) Fatility (NPA)

2000/01 2001/02 2002/03

CASE STUDY – Putting the Business Continuity Management System into practice

On the night of the 15th and 16th of August 2002, East London experienced extensive flooding which resulted in damage to infrastructure and disruption of operations. The dry dock was incapacitated, affecting both the NPA and the ship repair industry. Further damage was also experienced from storm water and runoff from hard surfaces that could not be accommodated by the drainage system.

The BCM was activated and the recovery team was set into motion to address the following issues in order to ensure business continuity.Tugs were not operational due to floating debris threatening the cooling

systems, thereby effectively closing the port,Shifted yacht moorings blocks posed a threat to the commercial ships,The Mechanical Engineering workshop was completely demobilised,The Dry-dock was completely demobilised,The rail links to the West Bank (industrial area) were washed away,Numerous roads and embankment wash-aways were noted in various areas,The training, mess and ablution facilities were inaccessible due to rubble and

water damage.

Regular meetings and feedback sessions were held to report on progress and ensure that the issues were being addressed. The recovery team was able to achieve the following:Temporary road and links were restored within 24 hours,Critical equipment identified and repaired to restore operational ability of

workshops whilst major repairs and clean-up proceeded,Dry-dock operational ability was restored by using auxiliary equipment whilst

main pump motors were still being repaired,Comprehensive damage reports and progress monitoring systems were

implemented,Good communication procedures and working relationship established with the

Insurance Assessor.

Once the issues were resolved, the teams were deactivated. This situation gave the management team of the Port of East London valuable experience and enabled them to identify weaknesses in their programme as well as affording them with several learning opportunities, in particular that certain procurement and financial systems delayed / hampered progress on some of the repairs. These have since been addressed.

HEALTH

The NPA acknowledges the seriousness of HIV/Aids epidemic. As a company the NPA recognizes that it operates within communities that have the highest prevalence of HIV/Aids, and therefore intends adopting a leading position in this field.

In addition to treating HIV/Aids as a priority at the NPA, there is a need for programmes that deal with other health concerns. Two such programmes offered by the NPA include a Corporate Wellness Programme, and an Employee Assistance Programme (EAP).

Structuring the HIV/Aids management programme

The NPA has developed the HIV/Aids workplace policy representing the strategic framework and foundation upon which other interventions are built. The policy underpins an effort to minimize the social, economic and developmental consequences to the company and its employees.

The pillars of the NPA HIV/Aids strategy are:Prevention programmesTreatment, care and supportJoint venturesHuman and legal rightsResearch monitoring and surveillance

Practices to support the NPA policy The implementation of the HIV/Aids plan is supported by the following activities:

National steering committee and regional/ports committees were established to communicate HIV/Aids within NPA,

A successful launch of HIV/Aids policy and strategy – consisting of a national launch and regional ports road-shows,

The hiring of an HIV-positive person who is able to offer personal experiences to employees, thereby increasing the impact of the message,

The installation of an HIV/Aids help-line to assist with counselling and advice,

Introduction of a formal HIV/Aids training programme, including:Peer education – employees at all levels have been trained so that they

can educate their colleagues, Home based care training – the NPA has extended its home-based care

training to employees’ family members to care for terminally ill employees at home,

A condom distribution programme – with mounted condom dispensers in strategic places for easy access to employees

A programme for treatment of opportunistic infections, offering:Prophylactic treatment – immune boosters and vitamins distributed to

boost immune system,Diet sheet – compiled to guide employees on nutrition, Symptomatic treatment – given to all employees presenting with signs of

infection,

A code of good practice is expressed in the form of a document, customized for NPA employees, to ensure that they know their rights. This aims at encouraging openness and promoting non-discrimination at the workplace.

Key features of the HIV/Aids policy Non discrimination Confidentiality Care of infected and affected

employees Commitment to providing

resources and leadership to implement HIV/Aids programmes in the workplace

Do you need help?

Call our HIV/Aidshelpline on:

031 361 8743

Continually striving for knowledge to support the programmeApart from a wide variety of initiatives targeted at employees, it is equally important that the organisation understands and is able to quantify the future impact of HIV/Aids on its operations. To this end, the NPA has commissioned a business modelling project (in the form of an actuarial study) with the intention of projecting future prevalence rates. Given the national priority assigned to the HIV/Aids pandemic, it is important that strategic partnerships are formed to assist in combating the spread of the disease. The NPA has put this principle into practice by establishing joint ventures and partnerships both internally and externally. Internal partnerships include Human Resources, Union Representatives and Corporate Communications. External associations include the holding of seminars with the African Heritage Foundation, and partnerships with the various Non-Governmental Organisations, Community-Based Organisations and other specialist organisations within the private sector.

Future HIV/Aids ChallengesHIV/Aids is a chronic illness that will require ongoing assessment and dedicated resources. To improve the impact of programme management, two other activities intended for the next (??? Check timing) year are:

A Knowledge, Attitudes and Perception (KAP) study – There is a need to conduct this study on knowledge, attitudes and perception after the roll-out to assess the effectiveness of the programme. The information will be used to design and adapt the intervention programme to suit specific employee needs.

Voluntary Counselling & Testing – This will assist employees who test negative to change risky behaviour and prevent themselves from getting infected. Employees who test positive will receive early care to ensure that they remain healthy for as long as possible.

Other Health Care initiativesThe Corporate Wellness Programme goes under the operation name ‘Abaphile Abaphathi’. The programme seeks to keep top management fit and healthy by obtaining and acting on baseline medical data for head office personnel. Phase One of this operation has been conducted, with 75% of the select group choosing to put themselves through the medical examination. Check if right and expand if necessary.

A second important initiative is the Employee Assistance Programme (EAP). In this programme, the NPA makes available social workers who counsel employees with problems which are not necessarily work-related (for example, the consequences of borrowing money from loan sharks).

Initial research on the uptake of the programme suggests that expectations were for a more proactive service. Consequently, uptake has been slow and the presence of the programme has not yet made an impact on the employee community. To rectify this situation, the NPA is re-launching the EAP in April 2003.

National Recognition AwardsThe NPA’s HIV/Aids Management Strategy is rated amongst the best in the country. This has been confirmed by the following awards: November 2002 – National

Recognition Awards and Chairman’s Award (NPA CEO) by United Nations, Business Sector and African Heritage Foundation

December 2002 – National Recognition by Transnet. Two NPA employees were awarded for their efforts.

Corporate Social Investment

Picture

A history of giving in the new South AfricaOriginally, ports worked separately on CSIThe National Ports Authority was still part of Portnet when the new South African government’s Reconstruction and Development Program was introduced. At that point, PortNet responded willingly to this programme by making ‘philanthropic giving’ a non-negotiable requirement for the organisation. This ‘giving’ effectively became the organisation’s CSI programme, with individual ports being tasked to spend the funds, but having the autonomy to choose how to spend them.Projects well-aligned to local needsIn those early years, the ports enjoyed the benefit of giving to those projects that were in close proximity to the ports themselves. This system offered the advantage that the ports could respond to those local projects that they recognised as being of high priority, whilst also catering to the specific circumstances faced by each port. On the other hand, there was always the danger of haphazard giving, losing focus and therefore diffusing the impact for both communities and corporate stakeholders.

Central guidance increased to improve impactWithin the past two years, The National Ports Authority has decided to revisit its approach to CSI. The intention is to increase the level of central guidance and in doing so to create a degree of alignment between the CSI programme and the core business. At the same time, every effort is being made to ensure that the ongoing support and involvement of the individual ports is retained. This will be achieved by continuing to support those communities that are in some way associated with the ports themselves. In a sense, the NPA is attempting to derive the advantages that can accrue from both a centralised and decentralised approach to CSI.

The principles of central guidance, but with local input Establish common themes to

giving whilst retaining local relevance

Achieve critical mass support for important areas of need

Track spending patterns Measure impact of support

offered Promote good CSI work to

stakeholders

Case study – Arts and Culture

The NPA port festivalsThe National Ports Authority hosts annual Port Festivals at each of its seven commercial ports, namely; Saldanha, Cape Town, Mosselbay, Port Elizabeth, East London, Durban and Richards Bay. The original purpose of these events was to combine the development of local communities with an awareness and understanding of NPA as a business that manages the ports of our country.

There is a distinct focus on the upliftment of less-privileged communities surrounding the ports:

Small businesses from the local communities have an opportunity to sell their wares to large festival audiences via specially established flea markets at each festival.

Young children, keen to grow their skills, benefit from Boxing, Basketball and Powerboating clinics, held before each festival.

Young artists get exposure by having their talent showcased at the port festivals, and in the process are presented with a money earning opportunity.

Equipment is passed on to communities after the festivals (for example, basketball hoops for furthering development of this sport)

The hosting of these festivals is a team effort. The NPA has set up successful partnerships with a number of sporting codes, including Powerboat South Africa, Basketball South Africa and SANABO (South African National Amateur Boxing Organisation). There are many other valuable partnerships established by each individual port.

The festivals have been highly successful in enhancing the awareness of the NPA, and in drawing them closer to port communities. Getting closer to communities will show benefits in the future: a better understanding of community needs and challenges, the attraction of well-qualified candidates for jobs, or perhaps simply an improved image of the NPA as good corporate neighbour.

(Pictures: All Sports – Basketball court handover- Lucky & development – women boxing, Music Stage, Flea Market and crowds in the Port)

Making CSI a key to business sustainability Shifting the focusThe National Ports Authority as an entity was born in the year 2001. As was the case under the banner of PortNet, the NPA believes that CSI is an essential part of being a good corporate citizen, tying in strongly to a philosophy of sustainable development. However, the NPA is attempting to shift the structure and focus of the CSI programme to enhance the developmental impact of its involvement – in synergy with its own business interests.From an emphasis on sponsorship for promotion of the brandIn earlier years, the boundaries between CSI and sponsorship were somewhat blurred, with a single budget being applied to both types of activities. This lack of distinction was an advantage when the National Ports Authority name became a brand in its own right. At that point the NPA ran sponsorship programmes with a developmental agenda, with an expressed goal of growing the recognition of the organisation’s brand. In particular, the harbour festival still serves this agenda, and remains a major part of the NPA programme.To real development and sustainable brand recognitionThe current thinking is to reduce the emphasis on branding the organisation through the CSI programme, but instead to concentrate of real development. To achieve this, one of the first activities required will be to explore the overlap between sponsorship and development, and categorise projects accordingly. In addition, NPA will aim to establish strong alignment between CSI projects and the mainstream business. This way, the brand recognition will be able to be built on a platform of credible developmental achievement.The NPA as a ‘benevolent landlord’In seeking this road to sustainable business, the NPA has recognised its role as a facilitator of economic trade and as a marine landlord. In its capacity as landlord, the NPA also acknowledges the impact that the individual ports have on both local communities and the surrounding environment. CSI focus areas have therefore been chosen to maximise the social and environmental impact so that each port will better be able to facilitate economic trade over the long term.

Focus areasEducation, training and

development – supporting those projects that enhance marine awareness and development, education capacity and infrastructure.

Environmental management – supporting coastal zone management programs, sea rescue initiatives, pollution control and marine conservation.

Arts and Culture – with a specific emphasis on utilising port events to provide an opportunity for each local community to express the richness of its unique culture.

Sports development – focussed on support of those communities located close to the ports.

Total budget for 2002 R13.9 millTotal projects approved

R11.2 mill

Managing the programmeStrong leadership from the CEOCSI is treated as a high priority at the NPA, with the Chief Executive Officer of the company taking an active interest in the programme, and being ultimately accountable for the budget. The administration of the fund is managed by the head of CSI, who reports into the Corporate Affairs division.Regional buy-in to national projects and focus areasAs noted in the accompanying chart, head office controls a major part of the budget. This situation is ideal for supporting national projects that are able to be implemented at each of the ports. In order to enhance the support and participation at an operational level, the ports themselves have access to their own budgets. More recently, the ports are being required to spend the bulk of their budgets on projects that fit within the chosen focus areas.

The screening processEach of the seven ports has a CSI committee consisting of departmental representatives. These committees make recommendations to the national committee, which is responsible for final decisions. Contractual agreements are entered into as soon as the decision to support a project has been taken. Applicants are assisted in providing relevant information for the screening process. A commitment to measurement and evaluationThis being the first year of successful implementation of CSI at the NPS, there has been no comprehensive evaluation of the programme as yet. There has been some attempt at monitoring the publicity resulting from CSI activities, but with a reduced sponsorship focus, this measure will become less relevant. A study currently underway is anticipated to shed some light on the stakeholder perceptions of the programme. A more comprehensive assessment of impact achieved, and recognition of effort will be undertaken in the not too distant future.

Case Study – Education

The West Coast School Science projectIt is widely accepted that South African schools in previously disadvantaged areas suffer from very poor matric results, particularly in maths and science. The West Coast School Science project, a partnership between the NPA and the University of Stellenbosch’s Institute of Mathematics and Science teaching, focuses on improving teaching skills.

The NPA needs new trainees with good technical qualifications. For example, skilled pilots are desperately needed for the running of day to day port operations (existing pilots are either of foreign origin or close to retirement). Sourcing of school leavers with good passes in these subjects is therefore seen as an immediate need, and one which can be addressed through the CSI programme.

This maths and science project aims to equip teachers with improved maths and science skills, with the ultimate aim of improving the results of scholars in these subjects. Specific aims are to:

Enhance and enrich the teaching and learning of Maths and Science in West Coast schools,

Develop appropriate materials for better learning,

Enable more learners to complete school with Maths and Science,

Motivate learners to enter Science and Technology oriented study programs and careers.

This project has got off to a good start and tangible results are expected in the first year of implementation.

(Picture; cheque handover to Dr. Kosie of the Institute of Maths and Science of the University of Stellenbosch & Bets Lourens who is Facilitator for the west Coast Schools. Andreas Gumede (Corporate Affairs manager – Saldanha) and Eugene Kearns (Port Manager) are doing the hand over.)

Case study – Environmental managementSustainable Utilisation of Living Marine Resources

The NPA have chosen to participate in Rhodes University project that focuses on conserving marine life that is harvested by local communities on our coastline. The scope of work has an initial research focus which, through a process of stakeholder engagement, will ultimately inform a management strategy. There are two aspects to the way the project aims to address marine life sustainability:

To investigate target species, exploitation patterns, environmental implications and the potential for renewing marine resources.

To study the social implications of changing the behaviour of coastal communities, and the effectiveness of doing this through an education process.

While the initial focus of the project is on research, the ultimate aim is to change behaviour through informing and educating those who exploit the marine resources for their livelihood or for recreation. The project also als has an important social aspect in that it aims to build the capacity of stakeholders through the training of local conservation officers, post-graduate students and casual workers, many of whom will be encouraged to continue with this line of work after the project is completed.

The National Ports Authority is highly responsible when it comes to environmental matters, and has an ingrained culture of environmental management. Yet as a Port Authority there is an unfair association with the reputation of vessels that pollute the oceans through oil spillage and other forms of disposed waste. A portion of the NPA’s CSI endeavours therefore focus on environmental projects, thus going some way towards repairing this aspect of the company’s reputation.

The NPA is the sole financier of this project and has committed an amount of R1.5m over a period of five years. In 2002, the first year of operations, the project research has reached some important conclusions regarding exploitation patterns and community dependence on renewable marine resources. Going forward, there will be an increased focus on community engagement - offering a better understanding of the complex social, environmental and economic implications of behavioural change.

The potential benefits of this project are huge, and the NPA are excited and committed to follow this project through to the benefit of all stakeholders.

(NPA’s CSI Manager, Lunga Mangcu, handed over a vehicle and computer with specialised software to the project. This project has also created employment for the research team.)

(Pictures: Hand over of Bakkie & Computer to Dr. Sven Kaehler of Rhodes University by Lunga Mangcu and some of the living resources specimen pics.)

Future challenges for the CSI programmeA good start in the first yearThe first year of implementation of the NPA’s CSI policy has lead to many rewarding moments, and evidence of satisfied communities. Yet there is always scope for improvement. Entrenched practices from the past are now being challenged, and changed wherever it is felt that the developmental effort could be improved, or where alignment to NPA activities are more suitable. Progress based on ongoing evaluationThere is a long road ahead, for true development requires dedication and committed resources. To this end, the NPA intends to reflect constantly on its achievements, with a view to achieving ongoing improvement.

Future challengesAlignment – By operating with project focus areas, to

continue to seek alignment between the CSI programme and the core business, so as to achieve mutual benefit for development and the business.

To distinguish between sponsorship and CSI – To examine the boundaries and overlap between activities, and to define and manage each activity according to its intended aim.

Structure - To formalise the structuring and disbursement of funding allocations, by geographic area and by focus area.

Communications - To improve communications on the programme and projects supported, internally and externally, with a view to inviting advice and support that will enhance the programme delivery.

Non-cash contributions – To examine ways in which port facilities and competencies can be utilised within the CSI programme, to enhance the benefits and impact.

Measurement - The organisation is already embarking on an evaluation process with the intention of gauging community perceptions of its CSI programme. Other measures will also be considered, which might call on input from partners or alternative means of determining direct impact.

Future Challenges summarised Align CSI activities with core

business goals Distinguish between

sponsorship and CSI Structure areas of giving for

better strategic management Communicate progress and

invite feedback Exploit existing capacity for

non-cash CSI Measure impact on

environment and

The NPA VisionTo be a transformed, self-sufficient Port Authority that facilitates and enables competitiveness in a world-class port system.

Transformation

Embracing change

Having evolved out of Portnet and the Port Authority Division, the National Ports Authority is a new organisation, with new personality, new corporate ‘footprint’, and fresh resolve to embrace business development challenges whilst simultaneously addressing a transforming society’s needs and aspirations.

Driving transformation

The NPA manages South Africa’s seven major commercial ports and generates over R2.2 billion in profit annually. Ports are the gateways into South Africa’s economy, and as such the NPA stands as the facilitator and primary indicator of trade – the economic lifeblood of the country.

This unique position provides the new NPA with the opportunity to embrace an increased public profile and role, and to demonstrate its leadership in transformation. The national port system is therefore committed to empowerment processes, and is welcoming of new industry players from previously disadvantaged sectors of society.

And changing from within

Like many other South African corporates, the NPA’s legacy was an inherent culture that aimed at serving the needs of a specific minority to the detriment of the majority. Part of the company’s resolve therefore encompasses the determination and commitment to change the organisation internally, both to reflect demographic and societal realities in the country, and to provide new opportunities for the previously disenfranchised.

Without compromising on delivery

Whilst legislative and social imperatives do impact on the NPA’s ability to fulfill the promise of this new company, the only constant in a sea of change is the will to deliver. Anything less is unacceptable to the NPA. Consequently, the opportunity to redress past imbalances whilst simultaneously infusing the business with a spirit of product, service and process innovation guides the company.

Normalising company demographics

The NPA has aggressively factored diversity and employment equity principles into all aspects of the business, as guided by relevant legislation and the company’s shareholder compact.

A strong business case for demographic equity and diversity

The NPA is committed to ensuring that the company’s demographics and culture are normalised to reflect those of the society within which it

conducts business, because apart from the moral rectitude of such corrective social action, the company believes diversity adds great value to the business by leveraging the many disparate skills the country has to offer.

Strategic drivers of internal transformation

Over the past three years, the NPA has invested heavily in racial and gender normalisation. From a strategic standpoint, diversity and employment equity have been addressed at the levels of governance, structure, and process – both corporate-wide and within operational entities – via a number of initiatives:

Diversity and equity targets are included as key measures in the NPA Balanced Scorecard, and these are cascaded to individual performance metrics.

The national and local JTC’s (what are these??) are fully functional as consultative forums for diversity and employment equity. These bodies serve as advocacy and watchdog bodies for compliance with diversity and transformation targets.

The NPA Womens’ Forum (NPAW) has been established as an advocacy group for womens’ gender issues in the NPA, and has been particularly active in advocating managed development initiatives for women within the company.

All recruitment activities have an aggressive transformation agenda, with women from previously disadvantaged groups receiving top priority.

Manifest results

As depicted in the graphs alongside, the fruits of the NPA’s internal transformation efforts are clear:

Improved representation of previously disadvantaged individuals, especially at management levels.

Significantly increased female representation in port management and in the marine operations fields.

Bar graph: Demographic employment trends across the company:

Designated group April 2001 April 2002 February 2003 % Black Employees 62.8% 64.5% 65.5%% Female 13.0% 13.3% 14.8%% Disabled 0.5% 0.5% 0.7%

Bar graph: Demographic composition trends at management levels:

Level Black FemaleApr 2001 Apr 2002 Feb 2003 Apr 2001 Apr 2002 Feb 2003

EXCO 100% 83.3% 83.3% 40% 50% 50%104 and 106 60% 67% 67% 17% 23% 24%109 and 610 36% 40% 43% 13% 15% 16%

The Ship Handling Simulator

The Port Academy’s new Ship Handling Simulator (due for commissioning in May 2003) will fast-track maritime training, whilst also providing the opportunity to market this service to the South African Development Community and the rest of the African continent.

Describe these two management levels in words

Challenges remain

While the NPA is satisfied with its progress to date, diversity transformation in the company is not yet complete, and the challenge remains to improve representation of disabled people and of previously disadvantaged individuals at middle management levels – issues that will be addressed through the company’s employment equity plan and targets.

Unlocking the potential in human capital

Within the context of a countrywide drive to transform learning and performance, the NPA finds itself in particularly exciting times regarding the development of its employees.

Contributing to industry training policies, standards and practice

As a key maritime player, the company has played an active role, at a ‘macro’ level, in shaping the new Maritime Chamber of the Transport Education Training Authority (TETA) – via the Port Academy and Transnet.

From a ‘micro’ perspective, the NPA has participated in the standards development initiative and in developing and implementing maritime learnerships. Not only will these initiatives align NPA practice with national standards, but they also establish a basis for recognising employees’ prior learning and contribute to the portability of staff qualifications.

Focusing on scarce skills

In keeping with business demands and the focus on sustainability, the NPA has targeted its training initiatives at those areas in which skills are scarce, and skills development in those areas of the business that are under represented by ‘designated’ employee groups.

Maritime training is at the core

The NPA’s development pipeline in the marine field is progressing well and continues to build on previous success stories:

An association between the NPA and the Shipping and Transport College in Rotterdam is yielding pleasing results. A group of marine trainees recently returned to South Africa having successfully completed the first leg of accelerated Tug Master training during 2002. No fewer than three groups of learners have benefited from this partnership to date.

During 2002, the NPA awarded a total of 16 bursaries to female students for full time study towards maritime-related courses. Of this number, ten students are currently undergoing cadet training with the NPA’s development partners, Safmarine and Unicorn Shipping

Lines, while the remaining six are undergoing practical exposure training in the ports. Based on this success, the company awarded a further thirteen bursaries during 2003 – ten to black women and three to black men.

In 2002, the NPA Academy participated in a leanership skills upliftment project through the maritime- and freight handling chambers of TETA.

A black female recently qualified as a chief engineering officer, and several other trainees in various marine disciplines will qualify soon, upon completion of experiential training in their respective disciplines.

Addressing the demand for scarce technical skills

In response to an area that is characterised by scarce skills and under representation of designated groups, the NPA has implemented two programmes:

A “Women in Engineering Programme”, aimed both at improving representation and at developing women in the management echelons of the engineering discipline. In this regard, the company is proud to have appointed five women who will undergo various forms of engineering-specific and generic management training.

The NPA “Apprenticeship Programme”, which addresses the need for technical skills at an operational level. This initiative continued successfully during 2002 with the appointment of a further six black female apprentices.

Developing management and supervisory skills

Recognising the need for management training at all levels, the NPA has three programmes in place:

Emulating Transnet’s women’s development programme for senior managers, the NPA has implemented the “NPA Women’s Development Programme” in partnership with the Gordon Institute of Business Science and the University of Pretoria. This programme aims to improve generic management skills for women at the 109 and 610 (define these management levels in words – the numbers are meaningless to the lay reader) levels in the NPA.

The second run of the NPA’s “Business Leadership Programme”, which currently has 35 NPA management enrolments, will be presented over the 2003 calender year.

The need for supervisory skills for junior employees is also recognised and is being addressed through the “Junior Officer Development Programme”, presented by the Port Academy.

PROCUREMENT

BEE Policy

National Ports Authority recognises the need to correct the imbalances that emanated from the previous political dispensation throughout its business practices. In order to ensure the involvement of previously disadvantaged suppliers, NPA has developed a clear policy supporting the involvement of Black Economic Empowerment (BEE) suppliers in the procurement process.

Key elements of the policy include:

Preference for BEE companies – Where the technical specifications are met by a BEE company, such a company would be given preference over a non-BEE company.

Set aside tenders - A certain portion of all procurement tenders are set aside for specific groups. ‘Set-aside’ tenders would normally be reserved for areas where sufficient supplier capacity by previously disadvantaged groups exists.

Proactive support and marketing – Where there is a shortage of BEE suppliers, the NPA will proactively develop new capacity. This is achieved through advertising, development of BEE skills, and through setting up of joint ventures between emerging and established suppliers.

Rating of BEE credentials

For a company to be considered as a BEE candidate, it should have black ownership of 26 percent or higher. It is however recognised that certain sectors are not adequately represented by BEE companies with sufficient capacity and technical expertise. To address this shortfall, traditional white businesses are encouraged to set up joint ventures with, or alternatively sub-contract portions of the contract to BEE companies.

A revised scoring system evaluates companies according to a variety of criteria that extend beyond ownership. For example, skills transfer is indicated by assessing the number of people in the organisation whose position is being advanced through training, whilst the level of procurement from BEE companies is itself used as a criterion for evaluation.

Set-aside tenders for specific goods and services

Certain areas of procurement have been flagged as set-aside tenders, with more stringent ownership requirements from the tendering company. For example, security companies normally rely heavily on a black staff compliment. A set-aside tender for a security service might take this further by insisting on 100% black ownership. Similarly, a tender for a catering service might require female ownership.

The type of tender that is set aside for special ownership requirements is based on the complexity and existing supply levels of preferred businesses in the sector. Currently, between 6 and 8% of goods and services procured are flagged for set-aside tenders.

Being proactive

To ensure sustainable involvement of BEE within the core business of NPA, a supplier development function was introduced. The main purpose of this function is the development of up-and-coming BEE suppliers, and facilitation of their involvement in the tendering process.

This proactive stance is particularly important in areas where little or no BEE capacity exists. The approach followed is often to locate and develop qualified individuals, who are then encouraged to set up businesses capable of interacting with bigger more established companies. A current focus at present is the development of suppliers in the marine services industry where there are virtually no BEE suppliers available.

Giving BEE suppliers a startTo ensure viable and qualified tenders from BEE companies are received, pre-tender information sharing sessions are held prior to the release of all major tenders. Every effort is then made to ensure that suitable candidates attend these sessions. The sessions are used to ensure that potential tenderers are fully familiar with the opportunities that are available and requirements of the tender. Furthermore, all those tendering are made aware of minimum BEE percentage targets to be met. This allows contract splitting and the setting up of joint ventures prior to the formal tendering process.

The more direct relationship with potential BEE tenderers also allows the NPA to assess the quality of the bid, and where suitable, relax performance or financial guarantees to enable BEE participation.

Performance and targets

Procurement from BEE companies has grown impressively over the years to a point where in 2001/02, levels of BEE procurement amounted to nearly 45 percent of the total.

Growth in BEE Performance

0

100

200

300

400

500

600

700

1999/00 2000/01 2001/02

Years

Rmill

ion

While new targets are set each year, it is not always possible to compare one year with the next. For instance, the impressive BEE procurement levels in the year 2001/02 were influenced by the large contracts such as the Durban 2005 project. Such large contracts are not repeated each year, and one would anticipate the overall percentage to decline if one considered only ongoing core procurement items. A target of 48 percent for the current period of review has been set and is considered achievable. This target will be steadily increased as new regular BEE suppliers are brought into the fold.