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ARM supports the principle of transformation and views performance against the categories of the Broad- Based Black Economic Empowerment (BBBEE) Codes of Good Practice of the Department of Trade and Industry (DTI), and the Mining Charter as an effective way to redress historic inequality, facilitate broader social development and to give all South Africans a stake in the countryís mineral wealth.
The Companyís approach to transformation is monitored and reviewed by the Social and Ethics Committee while the Employment Equity and Skills Development Committee is responsible for transformation in the workforce. Commitments made in our social and labour plans (SLPs) are achieved through transformation action plans.
All of our mines exceed the Mining Charter preferential procurement targets of 40% capital, 50% consumables and 70% services.
Achieving employment equity targets in the professionally qualified employees and senior management categories remains a challenge. The human resources strategy supports improvements in employment equity at senior levels through a combination of succession planning, graduate development and by ensuring that open positions are offered to equity candidates whenever possible.
The Draft Mining Charter Review has been released, but has not yet been gazetted, so the existing (2014) targets remain applicable until formally revised by the Department of Mineral Resources (DMR).
The targets set by the Revised DTI BBBEE Codes introduced in May 2015 are considerably more stringent and ARMís performance declined from Level 4 to Level 8 under the new Codes. We continue to investigate a range of initiatives to improve our performance over a reasonable period. However, significant improvement in the short term will be a challenge in some elements.
Ensuring that suppliers have valid and current BBBEE certificates is an ongoing focus in maintaining our preferential procurement score under the DTI Codes of Good Practice.
ARMís mining operations submitted Mining Charter reports (on performance against the Mining Charter targets for the period 1 January-31 December 2015) to the DMR in April 2016. While all of our mines reported improved scores in most elements of the Mining Charter scorecard, the DMRís web-based tool, which automatically scores each submission in terms of overall performance percentage was not available at the time of submission. We can therefore, unfortunately, not report an overall performance percentage as in the previous year.
We are confident that the action plans that we have put in place subsequent to the previous scoring, have yielded positive results, both in specific elements and overall performance against Mining Charter targets.
All of our mines exceeded the Mining Charter preferential procurement targets of 40% capital, 50% consumables and 70% services for the 12 months to 31 December 2015.
While ARMís DTI BBBEE score decreased slightly to 68.82% in F2015 (F2014: 73.19%), the requirements of the Revised DTI Codes led to the Company falling from Level 4 in F2014 to Level 7. This was further discounted to Level 8 due to the sub-minimum scores not being met for enterprise development and supplier development under the revised Codes.
A BBBEE scorecard audit and assessment was performed by the external verification agent, and roadshows at the operations presented the audit result feedback and the interventions necessary to align with the revised Codes and improve the overall level achieved. Workshops were held with operations to assess progress made in addressing non-compliant areas of the scorecard.