Sustainability Review - for the year ended 31 December 2018 - Mpact

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Sustainability Review - for the year ended 31 December 2018 - Mpact
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Sustainability Review
               for the year ended 31 December 2018
Sustainability Review - for the year ended 31 December 2018 - Mpact
Production

 Mpact’s integrated business
  model focuses on closing
the loop on plastic and paper                Smarter,
 packaging through recycling                 sustainable
      and beneficiation.                     solutions

                                Consumption
Sustainability Review - for the year ended 31 December 2018 - Mpact
Contents
Introduction
Mpact – Closing the loop                                         IFC
About this report                                                 2
Our vision and values                                             4
Key metrics                                                       6

Corporate profile                                                 8
Our operating model                                              10
Strategy and objectives                                          12

Management approach to sustainability                            14

Stakeholder engagement                                           17

Material matters                                                 18

Material theme: Sustaining profitable growth                     20

Material theme: Cost competitiveness and
anticipating and meeting customer needs                          21

Material theme: Being a responsible employer                     22
Employment practices                                             22
Transformation                                                   23
Skills development                                               24
Safety                                                           26
Health                                                           29

Material theme: Being a responsible corporate
citizen                                                          30
Corporate social investment                                      30

Governance                                                       34

Environmental responsibility                                     36

The United Nations Sustainable Development
Goals (UNSDG)                                                    40

                              MPACT Sustainability Review 2018         1
Sustainability Review - for the year ended 31 December 2018 - Mpact
About this report
                                       This 2018 Sustainability Review supplements the 2018 Mpact Integrated Annual Report,
                                       providing additional information of interest to stakeholders regarding the material
                                       sustainability issues facing the Company and its performance in these areas. The
                                       information disclosed in this report covers the activities of the Mpact Group, including
                                       Mpact Limited, its subsidiaries and associates for the financial year ended 31 December
                                       2018.

                                       The focus of the disclosures in the Integrated Report is primarily on meeting the information
                                       needs of providers of financial capital, including shareholders and other funders. This
                                       Sustainability Review provides additional information regarding the inputs and outcomes of
                                       the other capitals defined in the International Integrated Reporting Councils (IIRC) Integrated
                                       Reporting  Framework, primarily human capital, environmental capital and social and
                                       relationship capital.

                                       Additional information on risk management is available in the Group’s Risk Management
                                       Review at www.mpact.co.za.

                                       This report provides an overview of the nature and activities of the Mpact Group, how we
                                       approach sustainability, stakeholders and how we engage with them and the most material
                                       matters facing the Company. These are defined as the matters that could most substantially
                                       impact the Group’s ability to create value and include both financial and non-financial
                                       issues. These material matters have been agreed on and approved by the Board and the
                                       Executive Committee.

                                       The sustainability information in this Sustainability Review is disclosed in accordance with
                                       the GRI Standards: Core and our report against the GRI standards is available on our
                                       website. The Sustainability Review has not been subjected to independent assurance,
                                       although certain information has been scrutinised by the Group’s own internal control
                                       functions, as well as by external assurance providers where this has been deemed relevant
                                       and necessary.

                                       The Integrated Report and Annual Financial Statements are also available on the Mpact
                                       website, www.mpact.co.za. Should you wish to receive a copy of any of these or have any
                                       questions or comments arising from reading this Sustainability Review, please email us at
                                       pntuli@mpact.co.za.

2   MPACT Sustainability Review 2018
Documents available on the website www.mpact.co.za

• Integrated Annual Report
• Mpact King IV register
• GRI Standards: “In accordance”
• Annual Financial Statements
• Sustainability Review
• Risk Management review

                                          BEING A
                                          RESPONSIBLE
                                          EMPLOYER

                                          • Labour relations
                                          • Health and safety
                                          • Diversity
                                                                              SUSTAINING
                                                                              PROFITABLE GROWTH
                                                                              • Operating environment
                                                                              • Regulatory environment
                                                                              • Innovation
                                                                              • Capital funding and allocation

                 COST
                 COMPETITIVENESS
                 AND ANTICIPATING
                 AND MEETING
                 CUSTOMER NEEDS
                 • Managing input cost and
                   availability
                                                                BEING A
                 • Driving efficiencies                         RESPONSIBLE
                 • Implementing capital                         CORPORATE CITIZEN
                   projects
                 • Customer focus                               • Communities
                                                                • Governance
                                                                • Environmental responsibility

                                                                                          MPACT Sustainability Review 2018   3
Our vision
    and values

                                       Building a sustainable business and
                                       contributing to society through innovation
                                       Southern Africa’s largest recycler, paper and packaging producer,
                                       Mpact is committed to:

                                       •   acting as a responsible employer and corporate citizen and
                                           managing natural resources with care, sensitivity and expertise;
                                       •   meeting and exceeding customers’ requirements for product and
                                           service quality, innovation as well as cost competitiveness;
                                       •   providing a safe and secure working environment in which
                                           employees can fulfil their ambitions and aspire to continually
                                           improve their circumstances; and
                                       •   achieving sustainable, profitable growth through a focus on
                                           business excellence and strategic expansion in chosen markets.

4   MPACT Sustainability Review 2018
Vision
              Mpact’s vision is to be a leading packaging business with
              the highest ethical standards, delivering exceptional value
              for customers, employees, communities and shareholders.
              Values
              At Mpact we are differentiated by our people who are:

                              •   Ethical
                                  Transparent
      Trustworthy             •

                              •   Honouring commitments

                                  •   Setting and achieving challenging targets
                                  •   Continuously identifying innovative ways to
         Resolute                     do things
                                  •   Accountable, especially in the face of adversity

                 •   Taking care of their safety, health and personal development
                     as well as that of their colleagues
                 •   Striving to meet or exceed our customers’ requirements
                     (internal and external) for product quality, excellent service
Responsible          and cost competitiveness
                 •   Treating our natural resources with care and sensitivity
                 •   Doing what it takes to ethically deliver good sustainable
                     returns to our shareholders

                                                               MPACT Sustainability Review 2018   5
Key metrics

             Revenue                        Underlying                Total gross          Return on capital
                of                       operating profit of     dividend per share of    employed (ROCE) of

       R10.6bn                            R672m                         70c                  10.7%
        (2017: R10.1 billion)            (2017: R457 million)       (2017: 55 cents)             (2017: 7.7%)

          Serious injury                    Recovered                                           Water
                                                                      CSI spend
         frequency rate                     recyclables                                      consumption

             0.65                           630kt                   R3.5m                    5.5kℓ/t
            per 200 000                                            (2017: R4.9 million)
                                            (2017: 662kt)                                        (2017: 5.7kℓ/t)
             man hours
             (2017: 0.60)

                                                                     Scope 1 and 2          Training and skills
            Energy
                                              B-BBEE                greenhouse gas             development
          consumption

         6.5GJ/t                          Level 4
                                                                       emissions
                                                                                           63,031
        (2017: 6.6GJ/tonne)
                                         on the new Codes         0.963 tCO e/t     2     man-hours
                                         (2017: Level 3 on the    (2017: 1.032 tCO2e/t)     (2017: 70,257
                                              old Codes)                                           man-hours)

    19 fully-funded university bursaries awarded through the Mpact Foundation Trust (2017: 22)

6     MPACT Sustainability Review 2018
MPACT Sustainability Review 2018   7
Corporate profile
    Mpact is the largest paper                   Our 40 operating sites employed 5,062          and plastic, we reduce the amount of
                                                 employees in South Africa, Namibia and         material going to landfill, promote local
    and plastics packaging                       Mozambique during 2018, generating             beneficiation of raw materials and support
    and recycling business                       revenue of R10.6 billion. Our national         the development of more than 50 small
    in Southern Africa with                      footprint, leading market positions and        businesses.
    customers that include                       proximity to customers contribute to faster
                                                                                                Our liquid packaging recycling plant can
                                                 response times, reduced transport costs
    packaging converters,                        and economies of scale.
                                                                                                recycle 24,000 tonnes of used liquid
                                                                                                cartons a year, saving 65,240m3 of landfill
    fruit producers, FMCG
                                                 Innovation lies at the heart of our strategy   space and approximately 11,400 tonnes of
    companies and other                                                                         carbon emissions.
                                                 to anticipate the needs of our customers
    consumer and industrial                      and create structural and graphic solutions,   Mpact’s PET recycling plant is designed to
    packaging companies.                         as well as value-added services. Some of       process 29,000 tonnes of used PET bottles
                                                 the recognitions received for these designs    per annum saving around 180,000m3 of
                                                 during 2018 are shown on page 5 of the
    Mpact’s integrated                           2018 Mpact Integrated Annual Report.
                                                                                                landfill space and supporting the global
                                                                                                drive to reduce plastic waste. It is the first
    business model is                                                                           plant in Africa to meet The Coca-Cola
                                                 Mpact is South Africa’s largest collector
    uniquely focussed on                         of recyclable packaging (paper, plastic,       Company’s full certification for PET bottles
    closing the loop in plastic                  glass, etc.) and in 2018 we collected          to package its company’s soft drinks,
    and paper packaging                          over 630,111 tonnes of paper and plastic       while the recycling process complies with
                                                 recyclables from pre-and post-consumer         European Union (EU) Food Safety Authority
    through recycling                                                                           specifications.
                                                 sources. By closing the loop on paper
    and beneficiation of
    recyclables.

    Paper division

     RECYCLING                           PAPER                               PAPER                              CUSTOMERS
                                         MANUFACTURING                       CONVERTING
     Collects recyclable                 Makes recycled-based                Makes printed and                  Packaging converters
     paper, plastics and liquid          packaging, industrial               unprinted converted                (containerboard and
     cartons to recycle these            paper grades (such                  corrugated products,               cartonboard), fruit
     to provide feedstock for            as containerboard                   including board used to            producers, FMCG
     the paper and plastics              and cartonboard),                   manufacture corrugated             companies, quick
     divisions, and for sale to          and other converted                 packaging, corrugated              service restaurants,
     external customers.                 paper products. These               boxes, cases, trays,               other consumer and
                                         are used in the paper               point-of-sale displays,            industrial packaging
                                         converting business                 cups, lids, bags, trays            companies.
                                         and sold to external                and napkins.
                                         customers.

    Plastics division
     RECYCLING                             PLASTIC CONVERTING
                                           Makes rigid plastic packaging, including
     Collects recyclable                   polyethylene terephthalate (PET) preforms, trays                       CUSTOMERS
     paper, plastics and liquid            and film, and plastic jumbo bins and crates. Also                      Companies in the
     cartons to recycle these              recycles used or damaged crates and bins.                              food, beverage,
     to provide feedstock for                                                                                     personal care, home
     the paper and plastics                                                                                       care, pharmaceutical,
     divisions, and for sale to                                                                                   agricultural and retail
     external customers.                   MPACT POLYMERS
                                                                                                                  markets.
                                           A bottle-to-bottle recycled PET (rPET)
                                           manufacturing operation.

8     MPACT Sustainability Review 2018
We have a national operating footprint
Mpact’s national footprint, and therefore proximity to its customers,
contributes to faster response times and reduced transport costs.

                        40
         operating sites                                5,062
3 countries                                             employees

                                                        Level 4
                                                        B-BBEE

       Mpact Group
                                                                                     Baled recovered paper,
    Paper Business

                           RECYCLING                                                 plastic and other
                         (including Remade)                                          recyclable materials

                                                                                     Containerboard and
                                            PAPER                                    cartonboard
                                        MANUFACTURING
                          Recovered

                                                                                                                     External Group Sales
                          paper

                                                                                     Corrugated boxes,
                                                               PAPER                 other paper packaging
                                                             CONVERTING              products
                                         Containerboard
                                         and cartonboard
    Plastics Business

                                                                        Corrugated
                                                                        boxes

                                                                                     Recycled PET pellets:
                                               MPACT                                 SavukaTM PET
                         Recovered
                                              POLYMERS
                         PET bottles

                                                                                     Preforms, PET bottles,
                                                               PLASTIC               jars, trays, film, bins and
                                              rPET           CONVERTING              other plastic containers
                                              pellets

         External sales     Inter-segmental sales     Inter-divisional sales

                                                                                             MPACT Sustainability Review 2018               9
Our operating model

                                                                                   Plastic loop

                                                                                        13,571 tonnes of
                                                                                                                                                    Recycled
                                                                                       PET Bottles as raw
                                                                                                                                                   PET Pellets
                                                                                            material

                                                                                                                   MPACT POLYMERS                                   1,611 tonnes
                                                                                                                                                                    sold to plastic
                                                                                                                 This business unit converts                        converters to
                                                                                                                 collected used PET bottles                         make plastic
DECENTRALISED CUSTOMER-FOCUSED STRUCTURE

                                                                                                                into recycled PET pellets that                      products
                                                               Step 1                                              are used internally by the
                                                                                                                Mpact Plastics businesses or
                                                   Collect and recycle                                           sold to external customers.
                                                    Our recycling business,
                                                 Mpact Recycling, collects over
                                                 630,000 tonnes of paper and
                                                 plastic recyclables from pre-
                                                  and post-consumer streams.
                                                 The recyclables are sorted and                                           Step 2
                                                 baled and then put through our
                                                 circular value-chain – which
                                                                                         MPACT VALUE CHAIN      Prepare for reuse
                                                 operates within a decentralised
                                                  customer-focused structure.
                                                     Our Paper and Plastics
                                                  businesses add value to the
                                                   recycled materials before
                                                 these are sold for customer and
                                                         consumer use.                                           MPACT PAPER MILLS
                                                                                                                 This business unit produces
                                                                                                                  recycled-based packaging
                                                                                                                    paper grades such as
                                                                                                                     containerboard and
                                                                                                                         cartonboard.

                                                                                                                      66% of
                                                                                                                      recovered
                                                                                                                      paper
                                                                                                                      is used
                                                                                                                      internally                 Rolls and sheets
                                                                                   Recovered paper as
                                                                                                                                                  of paper and
                                                                                      raw material
                                                                                                                                                  cartonboard

                                                                                                             34% of recovered paper is
                                                                                                             sold to external customers

                                                                                   Paper loop

                                           10   MPACT Sustainability Review 2018
Mpact’s business model epitomises the circular economy, creating value beyond our
immediate operations. Our closed-loop system includes the collection of pre-consumer
and post-consumer recyclable materials which are used to create plastic, paper and
innovative packaging products.

              4,440 tonnes
              converted                                       Plastic packaging
              internally                                     products for a range

                                                                                                                                                   Post-consumer recyclables
                                                                                                                        Pre-consumer recyclables
                                                                  of sectors

                              MPACT PLASTICS
                                 This business unit
                             manufactures a range of
                            plastic packaging products
                           that are ready to be used by
                                Mpact’s customers.

                                     Step 3                                         Step 4                     Step 5
 MPACT VALUE CHAIN        Convert to product                                  Customer use              Consumer use

                                 MPACT PAPER
                                 CONVERTING
                                  This business unit
                              manufactures premium-
                            quality packaging products,
                               provides high-graphic
                           printing capabilities and other
                            converted paper products.
                                                                                                                                                   Post-consumer recyclables
                                                                                                                        Pre-consumer recyclables

                             31% of
                             products
                             sold
                             internally for
                             conversion                          Corrugated
                                                                  and other
                                                               paper products

                     69% of products sold
                     to external customers

                                                                                             MPACT Sustainability Review 2018                                                  11
Strategy and objectives

     Mpact’s strategy aims to             The core pillars of our strategy are:
                                                                                             Focus on performance
     create value for stakeholders                                                        We will focus on performance through
                                               Leading market positions
     over the long term.                                                                 effective business excellence programmes
                                           We aim to develop and selectively grow        and sound asset management, enabling us
                                          our leading market positions in rigid          to sustainably:
                                          plastics, paper-based packaging and
                                          packaging paper in sub-Saharan Africa.         • Provide our customers with quality
                                          We will grow by extracting value through         products and services worth their price.
                                          business and operational management            • Retain a motivated and skilled
                                          expertise as well as product application,        workforce.
                                          design and market knowledge.
                                                                                         • Deliver good returns to our
                                                                                           shareholders.
                                               Customer focused
                                           We will further develop our established
                                          manufacturing and service footprint to
                                          deliver superior solutions to our customers,
                                          underpinned by:

                                          • A decentralised structure reflecting
                                            management depth and experience at
                                            all levels.
                                          • Innovative customer-focused product
                                            offerings.
                                          • Leading market positions that
                                            enable us to achieve sustainable
                                            cost-effectiveness through economies
                                            of scale.

12     MPACT Sustainability Review 2018
The key principles underlying each strategy pillar are expanded upon in the following table:

      Leading market positions                            Customer-focused                              Focus on performance

 Scale                                               Decentralised structure                       Financial returns
 • Maintain leading market positions in              • Customer-centric                            • ROCE and profitable growth
   chosen geographies with scale to enable           • Responsive                                  • Disciplined capital allocation and
   competitiveness at a decentralised level                                                          spending
                                                     • Accountable
 • May consider entry below leading market                                                         • Re-investment and capital allocation
                                                     • Flexible
   position but always considering sectors                                                           based on track record
   where there is potential to lead in future        • Leverage parenting advantage
                                                       wherever possible                           • Stringent and continuous cost
                                                                                                     management
                                                     • Effectively execute differing
                                                       strategies or even hybrids across           • Long-term view of investments
                                                       business units                              • Effective risk management and
                                                                                                     governance

 Capability                                          Innovation and capability                     Skilled and motivated people
 • Invest in sectors where Mpact has                 • Applied to products and processes           • Invest in support of management with
   sustainable competitive advantages or at            internally and externally                     a track record
   least has the prospect of developing them         • Use of own R&D capabilities where           • Reward performance and results and
                                                       feasible                                      appreciate effort
                                                     • Investing to meet new and                   • Commit resources to proactive training
                                                       emerging demands of customers                 and development of staff
                                                       with good returns                           • Safety

 Products and geographies                            Intimate understanding of                     Sustainable practices
 • Rigid plastics and paper-based packaging          the Value Chain                               • Responsible environmental
   in sub-Saharan Africa                             • Engage customers and other                    management
                                                       stakeholders to improve supply              • Contributing to social upliftment in the
                                                       chain efficiency and anticipate               areas in which we operate
                                                       changing requirements
                                                                                                   • Rigorously pursuing the highest ethical
                                                     • Product specification bodies,                 standards in governance
                                                       marketing and branding people, key
                                                       distribution networks
                                                     • Make partnerships work

Specific strategic goals have been developed for the businesses and these are set out in detail in the respective operational reviews.

Anticipating customer needs
Mpact’s customer-focused strategy is             develop and test products tailored to their      classes. This deepens our relationships
built around premium quality products and        specific requirements. Innovation centres        with industrial and agricultural customers
developing long-term relationships with          at our operations focus on structural and        and the range of packaging options we
our major customers to understand their          graphic design, and value-added services.        can offer has increased significantly.
business. We aim to anticipate their needs       Our plastics design studio creates new           Customers are increasingly seeing the
and create innovative packaging solutions        designs and makes prototype forms for the        benefits of paper-based packaging as an
leveraging our well-established research         development of new plastic containers.           environmentally-friendly alternative and the
and development function.                                                                         family sharing meal carton we developed
                                                 Our ongoing commitment to innovation
                                                                                                  for Fishaways was recognised with a
Our company slogan challenges us to              looks beyond incremental improvements
                                                                                                  Gold Award for Sustainability at the 2018
create Smarter, Sustainable Solutions            to existing packaging to identify game-
                                                                                                  Gold Pack Awards for its cost-effective and
and we work closely with customers to            changing solutions and new product
                                                                                                  fully-recyclable design.

                                                                                                              MPACT Sustainability Review 2018   13
Management approach to
     sustainability

     Mpact’s focus on business            Approach to sustainability                       • Monitoring and reporting of SHE
                                                                                             performance to the Executive
     excellence includes a                The Board is assisted by the Social and
                                                                                             Committee every month in the General
     commitment to responsible            Ethics Committee in monitoring Mpact’s
                                                                                             Management report.
                                          performance as a good and responsible
     business practices in                corporate citizen. More information on the       • Continual enhancement of the SHE
     terms of environmental               role, responsibilities and activities of the       reporting system to improve data
                                                                                             accuracy, relevance, ease of use and
     responsibility, excellence in        committee during the year is available in
                                                                                             comprehensiveness of reporting.
                                          the Social and Ethics Committee Report
     safety, social sustainability        on page 48 of the Integrated Report          .   • Quarterly presentations by the GRSM
     and the principles of good                                                              on SHE performance to the SHE
                                          Policies and procedures are in place to
     corporate governance.                address disciplines including safety, health,
                                                                                             Management Committee (consisting of
                                                                                             the Mpact Executive Committee and
     These concepts are evident           environment and energy, transformation,
                                                                                             other invited attendees) and the Social
     in our slogan “Smarter,              procurement, human resources, financial
                                                                                             and Ethics Committee of the Board.
                                          management and maintenance. These
     Sustainable Solutions”               policies set the framework within which
                                                                                             SHE strategy development is also
                                                                                             discussed at these meetings.
     and are integrated into              Mpact manages its business and, together
                                                                                           • Annual visits by the GRSM to
     our strategy and business            with its Code of Ethics, provide a blueprint
                                                                                             operational sites to interact with
                                          for employees, suppliers and partners
     activities.                          to ensure a co-operative, co-ordinated             management and SHE officers on site,
                                          approach.                                          regarding SHE performance and plans,
                                                                                             and to communicate strategic initiatives
                                          Sustainable development is coordinated by          in SHE management.
                                          the Group Risk and Sustainability Manager
                                                                                           • Five-year management plans have been
                                          (GRSM), who drives continual improvement
                                                                                             developed for energy (including CO2e
                                          across the operations in industrial safety,
                                                                                             emission management), water and
                                          health and environmental (SHE) standards.
                                                                                             waste across the business.
                                          This is achieved through:
                                                                                           • A Centre of Excellence meeting for
                                          • Twice-yearly SHE Centre of Excellence            human resources is held twice yearly
                                            meetings at which representatives of             under the supervision of the HR
                                            all Mpact sites are invited to participate       Steering Committee.
                                            in discussions and receive direction
                                            on safety, health and environmental            Stakeholder engagement is a fundamental
                                            management.                                    input into our approach to sustainability.
                                                                                           Engagements with relevant stakeholders
                                          • Within the Risk and Sustainability
                                                                                           include critical sustainability issues such
                                            portfolio, the Group Energy Manager
                                                                                           as workplace safety, future resource
                                            similarly conducts Energy Centre of
                                                                                           constraints, employment practices,
                                            Excellence meetings to drive energy
                                                                                           transformation, diversity, the regulatory
                                            management strategy through the
                                                                                           environment and broader social issues
                                            business.
                                                                                           affecting the country. Our approach to
                                          • Setting challenging safety and                 stakeholder engagement is discussed
                                            environmental targets, in discussion           in more detail on page 17, including a
                                            with the Executive Committee and               summary of our key stakeholder groups
                                            Board. These are communicated to               and examples of key engagements during
                                            the sites and disclosed in the annual          the year.
                                            Sustainability Review.

14     MPACT Sustainability Review 2018
Standards and product responsibility
Mpact subscribes to various internal and international standards against which its operations and products are certificated. These include:

Internal standards                                                     International standards

• Enterprise Risk Management Guidelines: Guidelines for                • ISO 9001: Quality management standards applicable to all
  managing business risks and insurance.                                 Mpact manufacturing operations.

• Risk Control Standards: Guidelines for risk control, fire
  defence, safety and health, motor vehicles, and environmental        • ISO 14001: Environmental management standard applicable to
  management.                                                            the Group’s Paper, Corrugated and Recycling operations.

• Mpact management systems: Consisting of policies,
  procedures and work instructions dealing with an array of            • Forest Stewardship Council (FSC) standards applicable to
  management requirements throughout the business.                       the Group’s paper mills and corrugated plants.

• Safety plan: This is reviewed annually and rolled out to all sites   • German Federal Institute for Risk Assessment (BfR)
  where site-specific action plans are developed to meet the             Recommendation XXXVI: Food contact safety standard for
  safety plan requirements.                                              packaging papers.

                                                                       • ISO 22000:2005: Food packaging safety standard applicable
                                                                         to plastics and corrugated containers used for the packaging
                                                                         of food.

                                                                       • British Retail Consortium (BRC): FSSC food safety
                                                                         certification and other customer-specific certification at some of
                                                                         the plastics and corrugated plants as required by customers.

                                                                                                            MPACT Sustainability Review 2018   15
Management approach to sustainability (continued)

     Audits and external assurance
     Compliance with standards and legislation across the Group is monitored through comprehensive internal and external audits of various
     management systems, some of which are detailed in the table below. Non-compliance issues and recommendations arising from audits are
     managed closely at operational level to ensure compliance.

     System                                                                             External audits
     External audit of financial information and controls                               Deloitte & Touche
     Internal audit of financial controls                                               KPMG
     Insurance audits of fire and other insurance risks                                 Marsh
     Safety legal and environmental management audit                                    Legal Consulting Services
     Safety and environmental legal register                                            Standards and Legal
     B-BBEE Scorecard                                                                   Siyandisa Verification Solutions
     South African National Standards                                                   SANS
     ISO 9001 (Quality standard)                                                        SABS, iCert, SGS, DQS, BV
     ISO 14001 (Environmental management standard)                                      SABS, iCert, SGS, BV
     ISO 45001 (Occupational health and safety management standard)                     SABS, DQS
     Forest Stewardship Council                                                         SGS
     Fire defence                                                                       Marsh, ASIB, various others
     Occupational health                                                                Life OHS, various others
     Lifting equipment                                                                  Various
     Environmental legal                                                                Mark Ditke, Nancy Oosthuizen, Green Gain
     Safety legal                                                                       Mark Ditke
     ISO 22000 (Food safety management standard)                                        SABS
     BRC (Food safety)                                                                  Annalie Coetzee
     FSSC 22000 (Food safety)                                                           SAI Global
     Other food safety                                                                  DQS, FSSi
     Other (PEFC)                                                                       SGS
     Boiler GO (AIA)                                                                    KIS
     Boiler annual inspection (AIA)                                                     KIS
     Pressure vessels (AIA)                                                             SAIBA
     LP gas certificate                                                                 Various

16      MPACT Sustainability Review 2018
Stakeholder engagement
Mpact engages with stakeholders on an ongoing basis to                We were also active in various forums that participated in President
understand their key concerns and identify ways to address the        Ramaphosa’s growth agenda. Our participation in the organisations
various social, economic and environmental challenges they            representing the plastics industry, including PETCO, POLYCO and the
and the Group face. Transparent and open communication with           Polystyrene Packaging Council, during the year aimed to ensure that
stakeholders is critical to the long-term success of the Company.     discussions around the future of plastic are supported by a broader
These engagements provide input that helps to strengthen our          factual and scientific understanding.
programmes, identify opportunities and material issues, and
ensures compliance with the Companies Act and King IV.                CEO Imbizos to build employee engagement
                                                                      The annual CEO Imbizos that are held at the operations create an
The committee reviews quarterly reports on Mpact’s engagement
                                                                      opportunity for senior management to meet with all levels of the
with stakeholders and further reviews a list of its primary
                                                                      workforce, engage with them around their key concerns and present
stakeholders annually to ensure it reflects the key groupings with
                                                                      the results and current position of the business.
which Mpact interacts. The Group’s Stakeholder Engagement
Policy is also reviewed annually.                                     The concerns employees raised with the CEO through these forums
                                                                      have improved our understanding of the socio-economic pressures
Mpact’s primary stakeholder groups are shown in the diagram
                                                                      on workers. These issues include access to housing, education for
below.
                                                                      their children, personal security, the cost of transport and medical
                                                                      services, transformation, poor economic growth and high levels
                                                                      of personal debt. In 2018, we launched a wellness programme
                                                                      that aims to improve employee wellbeing by offering health, social,
                        Employees                                     psychological, financial and legal support.

                                                                      Analysts, shareholders and potential investors
       Industry                           Customers                   Mpact has an in-house communications manager who is supported
     associations                        and suppliers                by an investor relations consultant to ensure clear communication of
                                                                      key information to the investment community. Senior management

                        Mpact                                         engage with analysts, shareholders, the broader investment
                                                                      community and other providers of financial capital on an ongoing
                                         Shareholders,                basis, including through results presentations, investor road shows,
     Communities                         investors and                site visits and through our website. Where requested, management
                                             financial                holds one-on-one meetings with key investors and potential
                                           institutions               investors.
                        Government
                       and regulators                                 Progress on key projects
                                                                      We are pleased that the committee enhanced its monitoring of
                                                                      activities across the Group and appreciate further progress made on
                                                                      the following projects undertaken:
Examples of key engagements conducted during 2018 include             • The Excellence in Health and Safety awards, Behaviour-Based
those discussed below.                                                  Safety Programme and Mpact Safety Culture Awareness
                                                                        Programme.
Industry bodies
Mpact is active in a range of industry organisations to ensure that   • Improved the Health and Safety Standards by the implementation
our stance on issues that affect our operations are well understood     of the Mpact Safety Plan which covered the Mpact Safety Culture
and communicated effectively to government and regulators. In           cartoon awareness series; monitoring of leading indicators and the
2018, we participated in the development of the Packaging South         Behaviour-Based Safety programme. Details of these are provided
Africa Industry waste management plan which was submitted               in the Sustainability review.
to the Department of Environmental Affairs in September 2018.         • Internal plans to proactively address developments in carbon
The plan provides a consolidated multistream industry waste-            legislation including the Carbon Tax, Carbon Budgets and the
management plan for the paper and packaging sector and has              Greenhouse Gas Pollution Prevention Plan.
a five-year goal to increase recycled tonnage from 2.2 million
tonnes (58.2%) to 2.7 million tonnes (66.9%) of total paper and       • Energy improvement initiatives which covered PV solar plants and
packaging. It forms part of a bigger strategy to transition South       installation of meters at all plants.
Africa towards a circular economy. Mpact representatives engaged      • Environmental targets for 2020.
with government, the Department of Environmental Affairs and
other key stakeholders as part of the process.

                                                                                                          MPACT Sustainability Review 2018   17
Material matters

            Our material matters are                             Material matters are identified from a range of sources, including:
           those factors that have the                           • operational issues;
            highest potential to affect                          • the main concerns expressed by key stakeholders in informal and formal
             Mpact’s ability to create                             interactions during the year;

          value for our stakeholders in                          • developments in relevant legislation and regulation;

             the short, medium and                               • sustainability and integrated reporting guidelines and best practice; and
                                                                 • a media review and a gap analysis against local and international peer
                    long-term.
                                                                   reporting.

     These matters are assessed against risks and opportunities identified as part of the risk assessment process, which includes a review of
     economic, environmental and social impacts, risks and opportunities. The Board and Exco review and agree on the most material matters,
     which are then approved by the Board.

     The material matters identified in last year’s report were reviewed and remain valid for 2018. These are grouped into the four themes shown below:

           Sustaining profitable growth                               Where addressed in the integrated report
      Operating environment                                           Chairman’s message         page 24, CEO report        page 28
      • Macroeconomic environment                                     Operating context       page 32 and 40

      Regulatory environment                                          Chairman’s message   page 24, Governance                 page 63
                                                                      Risk Management    page 68

      Capital sourcing and allocation                                 CEO report       page 28, CFO review        page 94

            ost competitiveness and anticipating
           C
           and meeting customer needs
      Managing input cost and availability                            CEO report    page 28 (IR), Operations reports        page 32 and 40 (IR)
      • Raw material cost and availability                            SR     page 46 (IR)
      • Energy cost and availability                                  Operations reports      page 32 and 40 (IR), SR       page 46 (IR)
      • Water cost, availability and quality                          Operations reports      page 32 and 40 (IR), SR       page 46 (IR)
      • Labour cost                                                   SR      page 46 (IR), Value added statement        page 54 (IR)

      Innovation                                                      Chairman’s message         page 24 (IR), CEO report        page 28 (IR)

      Customer focus                                                  CEO report       page 28 (IR), Strategy and objectives         page 18 (IR)

                                                                      CEO report    page 28 (IR), Operations reports        page 32 and 40 (IR)
      Driving efficiencies                                            SR     page 46 (IR)
      • Production efficiency                                         CEO report    page 28, Operations reports         page 32 and 40 (IR)
      • Skills                                                        SR     page 46 (IR)

      Implementing capital projects                                   CEO report       page 28 (IR), CFO review       page 94 (IR)

18      MPACT Sustainability Review 2018
Being a responsible employer
  • Labour relations                             CEO report      page 28 (IR), SR       page 22
  • Health and safety                            CEO report      page 28 (IR), SR       page 26
  • Diversity                                    CEO report      page 28 (IR), SR       page 22

        Being a responsible corporate citizen
  • Corporate social responsibility              SR report     page 30

  Governance                                     Governance       page 63 (IR)
  • Ethics and human rights                      Governance       page 63 (IR)
  • Compliance                                   Social and Ethics report       page 48 (IR)
  • Customer health and safety                   Corporate Governance report         page 63 (IR)
  • Security (physical and ICT)                  Risk management         page 68 (IR)

  Environmental responsibility
  • Climate change                               Environmental responsibility       page 36 (SR)
  • Water                                        Environmental responsibility       page 36 (SR)
  • Emissions                                    Environmental responsibility       page 36 (SR)
  • Waste                                        Environmental responsibility       page 36 (SR)
  • Recycling                                    Environmental responsibility       page 36 (SR)
SR – Sustainability Review

                                                                                               MPACT Sustainability Review 2018   19
Material matters:
     Sustaining profitable growth
     The end users of Mpact’s core products        Access to financial capital to maintain and
     are consumers and the factors that affect     grow is a fundamental requirement for any
     consumer demand have an impact on             business and responsible and effective
     demand for our products. The current          allocation of capital is a key concern for
     uncertain and volatile socio-political and    shareholders and investors. Mpact focuses
     macroeconomic context in South Africa,        on return on capital employed (ROCE) a
     combined with poor economic growth            key performance metric and includes it in
     and low levels of consumer and investor       the calculation of the long-term incentives
     confidence, affect demand for paper,          for executive directors and prescribed
     packaging and plastic containers.             officers.

     The agricultural sector is a key market for   The Mpact Polymers balance sheet was
     our converted paper products and our          successfully restructured in July 2018
     plastic bins, pallets and crates. Demand      with the IDC senior loan facility converted
     for these products was affected by the        into an R83 million interest-bearing loan
     drought in the Eastern and Western Cape       at Prime +1% and a R146 million non-
     as crop volumes decreased, although the       interest-bearing subordinated loan. As part
     drought appears to have eased.                of the restructuring, the IDC increased
                                                   its shareholding in Mpact Polymers by
     The complexity and changing requirements
                                                   10% at nominal value and now holds
     of the regulations that apply to business
                                                   31%, with Mpact holding 69%. A further
     in South Africa as well as the specific
                                                   cash injection was received by way of
     legislation that affects our operations,
                                                   shareholders subscribing for preference
     creates a challenge to ensure ongoing
                                                   shares of R90 million, ranking ahead of
     compliance and to manage the impacts
                                                   subordinated loans.
     on our operations. The implementation of
     the Sugar Tax in 2018 affected soft drink     Refer to Mpact’s 2018 Integrated Report
     sales and volumes for the plastic bottles     for more information on the Company’s
     we manufacture for our customers. Other       strategy and activities to sustain profitable
     regulatory complexities that we continue to   growth in 2018.
     monitor and evaluate include the carbon
     tax, waste levies, sugar tax, and the
     changing requirements of Broad-Based
     Black Economic Empowerment legislation.

                                                        SUSTAINING
                                                        PROFITABLE GROWTH
                                                        • Operating environment
                                                        • Regulatory environment
                                                        • Innovation
                                                        • Capital funding and allocation

20      MPACT Sustainability Review 2018
Material matters:
Cost competitiveness and anticipating and
meeting customer needs
Both the Paper and Plastics businesses          energy consumption has improved 15%
operate in intensely competitive                since project conceptualisation in 2014.
environments, which affect pricing power.       However, the continued increase in the
Mpact’s goal is to meet and exceed our          cost of labour, particularly where this is
customers’ expectations for product             not matched by increased productivity,
quality, service and innovation in a cost-      or where driven by unanticipated
effective way. Managing the availability and    consequences of new labour legislation, is
cost of inputs, such as PET, polymers,          an ongoing concern.
recovered fibre, water, electricity and
                                                Innovation is a key strategic focus at
labour, is an important aspect of cost
                                                Mpact to identify better ways to do things,
management. Our integrated business
                                                introduce cutting-edge technology to
model also provides excellent access
                                                South Africa that supports the move to
to recovered fibre at a reasonable price
                                                the circular economy and deepen long-
through the activities of our Recycling
                                                term relationships with major customers
operations.
                                                by anticipating and meeting their needs.
The impact of the structural changes to         Mpact’s innovation centres research and
the Chinese waste market on the price and       design structural and graphic solutions,
availability of recovered paper in the South    food safety, and value-added services that
African market moved from a negative for        deliver on our slogan by creating ‘Smarter,
Mpact in 2017 to a positive in 2018 as          Sustainable Solutions’.
availability improved and pricing fell.
                                                Refer to Mpact’s 2018 Integrated Report
Rand volatility affects our business through    for more information on the Company’s
the cost of imported inputs including           strategy and activities to manage costs
polymers for our plastics business and inks     and meet customers’ needs in 2018.
for our paper converting business. It also
affects the price of imported competing
products and the Rand price we realise on
paper exports.

Mpact’s significant recent investments in
modernisation and strategic acquisitions
support our customer-centric business
model and commitment to business
excellence. As these investments approach                  COST
their full planned efficiencies, they improve              COMPETITIVENESS
production efficiencies and economies                      AND ANTICIPATING
of scale, and position the Group well for                  AND MEETING
improvements in economic conditions.                       CUSTOMER NEEDS
The benefits of these projects include
                                                          • Managing input cost and
reduced capital, maintenance and waste,
                                                            availability
improved water and energy efficiency,
                                                          • Driving efficiencies
labour productivity and quality of product.
The rebuild at Felixton Mill, for example,                • Implementing capital
is delivering savings of 32% in water                       projects
use per tonne of paper produced and                       • Customer focus

                                                                                              MPACT Sustainability Review 2018   21
Material matters (continued)
     Being a responsible employer
     Our employees are a critical resource who       Headcount by:
     are essential for creating sustainable value
                                                                                                              Rest of
     for the Group and its stakeholders. We
                                                                                 South Africa       sub-Saharan Africa                        Total
     aim to establish a work environment that
     is safe, stimulates engagement and is well                                          4,956                        106                    5,062
                                                      Geography                           98%                         2%
     governed, with an emphasis on diversity
     inclusion and skills development.                                                    Male                   Female                       Total
     Mpact’s human resources policies and                                                3,751                     1,311                     5,062
                                                      Gender                              74%                       26%
     procedures focus on attracting, developing
     and retaining the talent and experience                                            Paper                   Plastics                      Total
     required to deliver on our strategy. Our Fair                                       3,355                     1,707                     5,062
     Employment and Promotions Philosophy             Division
                                                                                          66%                       34%
     emphasises that there is a place for all
     people in Mpact and entrenches merit-
     based employment equity to address              Employment practices
     diversity throughout the organisation,          Mpact aims to be an employer of choice and our Fair Employment and Promotions
     especially regarding race, gender and           Philosophy promotes the practice of attracting the best talent through transparent selection
     disabilities.                                   processes. We provide a range of benefits to employees, including membership of
     At 31 December 2018, Mpact employed             retirement funds, access to medical aid schemes and primary healthcare, study assistance
     5,062 (2017: 4,889) people.4,956 of             and incentive bonuses.
     these were employed in South Africa             We respect the dignity and worth of individuals, and we fully support the constitutional
     (2016: 4,790) and 106 in Namibia and            rights of the individual to freedom of association, the right to collective bargaining and the
     Mozambique (2016: 99). The headcount            right to be a member of a union of choice.
     figure includes full-time and part-time
     permanent employees on Mpact’s payroll          Various unions represent approximately 56% (2017: 52%) of the workforce, with the
     and excludes temporary workers and              majority belonging to the unions detailed below:
     contractors paid by a third party provider.
                                                      Union representation                     2018            2017           2016            2015
     Total employees                                  CEPPWAWU                                   22%           23%             23%             27%
     6                                                NUMSA                                      16%           13%             12%             11%
     5                                                CWAWU                                       7%            7%              6%              6%
     4
                                                      SATU                                        4%            4%              4%              5%
     3
                                                      Other unions                                6%            5%              8%              8%
     2
     1
         4.126    4.467     4.998    4.889   5.062    Total                                      56%           52%             54%            57%
     0
          2014     2015     2016     2017    2018

                                                     Mpact is a member of and represented by a senior human resource manager on various
     The distribution of employees by                bargaining councils including:
     geography, gender and division is shown
     in the graph and table alongside. Details       • The Statutory Council for the Paper Packaging Industries Bargaining Forum;
     of the representation by ethnic groups is       • The Bargaining Council of the Wood and Paper Sector; and
     available in the Transformation section on      • The Metal Industries Bargaining Council.
     page 24.

                                                                 BEING A
                                                                 RESPONSIBLE
                                                                 EMPLOYER

                                                               • Labour relations
                                                               • Health and safety
                                                               • Diversity

22       MPACT Sustainability Review 2018
Transformation                                  resulted in a decrease of our Status level from Level 3 in 2017 (under the Old Sector
                                                Codes). The improvement in the overall score demonstrates the efforts made to improve our
Mpact is committed to transformation
                                                transformation performance.
and recognises the benefits of a diverse
and representative workforce. We see            The full B-BBEE certificates for Mpact Operations and Mpact Limited (which includes the
transformation and the sustainability of        non-South African operations) are available on our website.
the business as inextricably linked. The
                                                 Element                                                                              2018                 2017
Group Transformation Philosophy and our
transformation goals reflect our vision, core    Ownership                                                                           19.05                 17.84
values, culture and approach to people           Management control                                                                  10.64                  9.14
development at all levels in the business.       Employment equity                                                                     N/A                  4.26
Our transformation activities aim to add         Skills development                                                                  14.78                  9.45
value, demonstrate true empowerment              Preferential procurement                                                              N/A                 18.82
and contribute to the sustainable future         Enterprise development                                                                N/A                 15.00
of our organisation and our society. We
                                                 Enterprise and supplier development                                                 34.42                  N/A
approach transformation from the premise
of sustainability and inclusiveness to ensure    Socio-economic development                                                            7.48                 8.00
that most of our stakeholders benefit            Overall B-BBEE score                                                                86.37                 83.36
over the long term. Specific activities are      B-BBEE status level                                                                          4               3
managed and monitored in the following           N/A – Not applicable as the New Codes combine certain of the indicators from the Old Codes
areas:
                                                Employment equity
• Employment Equity Plan
                                                Mpact is committed to our employment equity (EE) plan to create a workforce that
• Black ownership and management
                                                reflects the country’s demographics and entrenches fair employment practices. Achieving
  control
                                                representivity is challenging in specialist and management roles due to the shortage of
• Skills development                            highly qualified skills in South Africa, a challenge which is common across many sectors.
• Preferential procurement
                                                Our EE plan aligns with our Fair Employment and Promotions Philosophy, which drives
• Enterprise and supplier development           merit-based recruitment and promotion of appropriate candidates that address the issue of
• Socio-economic development                    diversity throughout the organisation. The EE targets set in the plan closely align with those
                                                set in the Employment Equity Act.
The Mpact Foundation Trust was
established as a vehicle both for B-BBEE        Transformation Committees are in place at Group, divisional and operational level to drive
ownership and to channel the benefits of        transformation. Progress is monitored by the Human Resource Steering Committee, which
ownership to selected beneficiaries. The        gives regular feedback to the Social and Ethics Committee.
Trust focuses on higher education and in
                                                Employees by demographic (South Africa only)
2018 awarded a further 15 fully-funded
bursaries to dependants of Mpact’s
employees. More information on the goals        60

and activities of the Trust are available in                  13%
                                                50
the Mpact Foundation Trust Report on
page 55 of the Integrated Report.                             44%
                                                40
We report our transformation progress
against the Forest Sector Code issued           30
                                                                                                                   7%
under Section 9(1) of the Broad-Based
Black Empowerment Act No 53 of 2003             20                                       4%
at the level of Mpact Operations, which                                                                           16%
                                                10                                                                                                 1%
houses the South African subsidiaries.                                                  10%
In 2018, Mpact Operations achieved a                                                                                                               5%
Level 4 B-BBEE Status Level under the            0
                                                             African                    White                   Coloured                          Indian
New Codes, as determined by Siyandisa
Verification Solutions. While our overall              Male                           Female
B-BBEE Score improved, the more
demanding targets set in the New Codes

                                                                                                                          MPACT Sustainability Review 2018         23
Material matters: Being a responsible employer (continued)

     Workforce diversity profile (South Africa only)

                           African      White     Coloured     Indian
                         Male Female Male Female Male Female Male Female Total
      Top
      Management              –       –         2      –        –          –     –       –        2
      Senior
      Management              –        3       31       2       –          –     6        1      43
      Middle
      Management            28        12      123     45       31          8    42      17      306
      Junior
      Management          375        92       265    106      141       61      87      22 1,149
      Semi-Skilled      1,220       184        40     61      445       93      73      18 2,134
      Unskilled           557       333         6             160      195      18       3 1,272
      Temp                 11        28         3       3       1        1       3            50
      Total             2,191       652       470    217      778      358     229      61 4,956

     Representation of previously disadvantaged individuals (PDIs) (South Africa only)

      Level                            2018          2017           2016       2015           2014
      Junior management                77%           76%            75%         74%           73%
      Middle management                60%           57%            54%         54%           53%
      Senior management                28%           30%            30%         30%           27%

     Equity ownership
     The Mpact Foundation Trust holds 10% of Mpact Operations and this translates into
     ownership of the company by black individuals of 15.63% at 31 December 2018
     (2017: 15.63%). There was an increase in the ownership by black women to 10.27%
     (2017: 9.465%), which provides 19.05 (2017: 17.84) points out of the B-BBEE target of
     25 for black ownership.

     Skills development
     Mpact’s skills development interventions aim to attract, develop, retain and motivate our
     employees to perform optimally and collectively. Our goal is to create a working environment
     that is conducive to learning and development to sustain the competitiveness and
     sustainability of the Company. The effectiveness of learning and development interventions
     is monitored in individual development plans, performance targets and the Group’s
     competencies applicable to each talent segment.

                                                      2018           2017        2016          2015
      Employees trained                               4,462          3,982      3,884          3,364
      Hours of training                              63,031         70,257     88,838         67,412
      Learners and apprenticeships                      191            224        279            206
      Investment in skills development              R12.5m          R7.8m

     Training includes on-the-job learning and formal skills development that is delivered either by
     staff members or through partnerships with educational institutions. Training areas include:

     • legal compliance
     • safety, health and environment
     • pulp and paper technology
     • operational skills
     • leadership development
     • computer training

24      MPACT Sustainability Review 2018
Mpact encourages further education by providing financial assistance to employees for            Mpact Unemployed Youth
part-time tertiary study.
                                                                                                 Learnerships
There are various apprentice and learnership programmes in place at Mpact operations             Mpact partners with Skills Education
to build a skills pool of better-equipped and motivated employees. In 2018, the Company          Training Authorities (SETA) South
supported 191 people on apprentice and learnership programmes (2017: 224), of whom               Africa to support skills development in
92% (2017: 95%) are from previously disadvantaged backgrounds and 31% are black                  unemployed youth. Mpact sponsors
women.                                                                                           25 unemployed black disabled learners
                                                                                                 through the Johannesburg Council for
There are various skills development programmes in place at each of the operations. These
                                                                                                 the Disabled (JOCOD) in Lenasia. The
include the initiatives discussed below.
                                                                                                 learners completed a Fibre Processing and
Corrugated Epping Learnership Programme                                                          Manufacturing (FP&M) SETA-accredited
Eleven employees at Corrugated Epping completed the In-House Learnership Programme               course: Clothing Manufacturing Processes
in March 2018. The candidates completed a combination of theoretical and practical               – NQF level 1 (commenced 2016) and
modules compiled from the constituent modules of the formal apprenticeship programme,            level 2 (commenced 2017). In November
and completed detailed assessments on each module before being declared competent.               2018, the 25 learners started a Business
The two learning pathways followed were Corrugated Board Manufacturing Machine                   Administration – NQF level 3 learnership,
Minding, and Printing and Finishing Machine Minding respectively, leading to a certificate       which will provide them with the requisite
of competence in Good Manufacturing Practices in either Corrugator or Converting                 capabilities to turn the skills learned in
respectively. The new skills position these employees well to further their careers at Mpact     the prior two years into entrepreneurial
and the operation benefits from the improved efficiencies resulting from their updated skills.   ventures.

                                                                                                 In December 2017, the project was
Felixton Mill Production Learnership Programme                                                   expanded to Soweto with a further 25
Felixton Mill recruited 12 production pre-learners for a three-month learning period during      unemployed black disabled learners
2018. During the learning phase, the learners were assessed and successful candidates            supported at the Self Help Association
qualified to start the internal learnership programme which includes the registered Pulp and     of Paraplegics (SHAP) in Soweto.
Paper making programme. All learners selected are from designated groups as defined by           These students completed the Clothing
the Employment Equity Act.                                                                       Manufacturing Processes – NQF level 1
                                                                                                 last year and have started level 2.
Mpact Pinetown Apprenticeship Programme
Mpact Pinetown had six candidates on its apprenticeship programme in 2018. We are                Black African females comprise 68% of
particularly proud of one of our candidates, Mr Lucky Dludla (a multi-skilled operator),         the group. Mpact covers the cost of the
who completed his TT3 Block and was recognised as the Top Achiever in the province of            training and provides a monthly stipend for
KwaZulu Natal and placed second in the country.                                                  each student. Once the learners complete
                                                                                                 all three years of study in the course
Corrugated Epping Apprenticeship Programme                                                       they will be trained and skilled in making
The second batch of apprentices from Corrugated Epping successfully completed their              complex items of clothing.
first block of Trade Theory theoretical studies at the end of July 2018. The Trade Theory 1
studies comprise three modules in Packaging Studies, Printer’s Machinery and Business
Studies. Four of our candidates achieved a final mark in excess of 70% for the National
examinations.

                                                                                                           MPACT Sustainability Review 2018    25
Material matters: Being a responsible employer (continued)

     Safety                                                                                          Safety, health and environmental training
                                                                                                     is provided at compulsory induction
     Mpact is committed to providing a safe and healthy working environment for all employees,
                                                                                                     programmes for all new employees,
     contractors and service providers. We subscribe to the principle of “Zero harm” and the
                                                                                                     contractors and visitors. This is
     CEO’s Safety, Health and Environmental (SHE) Philosophy emphasises that all injuries,
                                                                                                     supplemented by annual re-induction for
     occupational illnesses, safety and environmental incidents and fires are preventable and that
                                                                                                     all employees, permanent contractors and
     the target for these incidents is zero.
                                                                                                     service providers. Additional safety training
     The SHE Philosophy is based on three important principles:                                      and awareness campaigns are also held
                                                                                                     during the year.
     • Individuals are responsible for their own safety.
     • Adherence to the ‘Fire and Safety Rules to Live By’ is the minimum standard throughout        Mpact’s comprehensive contractor safety
       Mpact.                                                                                        management programme ensures all
                                                                                                     contractors on our sites are afforded the
     • There is no differentiation in the treatment and expectations of employees, contractors
                                                                                                     same high standard of safety care as
       and service providers.
                                                                                                     employees.
     Safety, health, environment and fire defence systems are the responsibility of senior
     management, assisted by line managers at each operation who are accountable for the
     well-being of employees. Safety committees are in place at each operation to implement
     Group safety policies at the facilities.

     Mpact’s Safety Plan is reviewed at Group level at the start of each year and cascaded
     down into the operations. Each operation develops their own roll-out plan to satisfy the
     Safety Plan. The Mpact Risk Control Standards are standards and guidelines relating to a
     wide spectrum of safety, health, fire protection, security, emergency preparedness, vehicle
     control, and environmental management. Marsh Risk Consulting routinely audits an annually
     selected set of sites against these standards.

26      MPACT Sustainability Review 2018
Reports are prepared in the event of serious injuries (restricted work cases, lost-time injuries    planned job observations against Safe
and fatalities) to identify the root cause of the incident and to distribute learnings throughout   Work Procedures (SWP or SOP) that
the Group.                                                                                          identify the safest and most efficient
                                                                                                    procedure for the task.
Safety performance is included in the calculation of management performance bonuses
against their roll-out of the Mpact safety programme at their site.                                 The Mpact Safety Culture cartoon series
                                                                                                    aims to make safety awareness accessible
Safety systems                                                                                      to the entire workforce. “Sam” the safety
Mpact’s safety systems rely on three levels of intervention:                                        mascot champions all communications
                                                                                                    on safety and personifies the Mongoose
 Primary                         Secondary                          Tertiary
                                                                                                    safety award. Operations compete annually
 Physical interventions to       Safety systems that control the    Creating a safety culture       for the Excellence in Health and Safety
 provide a safe working          way people interact with work                                      Awards, an internal award for excellent
 environment                     hazards                                                            performance in these areas.
 Includes:                       Includes:                          Includes:
 • machine guarding              • CEO’s SHE Philosophy             • the Behaviour-Based           Safety performance
 • designated walkways           • Mpact’s Safety Plan                  Safety programme
                                                                                                    2018 was a challenging year for Mpact
                                 • The Safety, Health and           • the Mpact Safety
 • safety railings                                                                                  with respect to safety. It is with heartfelt
                                     Environmental Policy             Culture cartoon series
 • equipment inspections                                                                            regret that we report the death of Mr
                                 • Mpact’s Fire and Safety
                                                                                                    Maans Swart, an electrical engineer at
 • personal protective               Rules to Live by
                                                                                                    Springs Paper Mill, who was electrocuted
   equipment                     • Hazard Identification Risk
                                                                                                    while working on 6.6kV switchgear.
 • alcohol testing                   Assessments (HIRAs) and
                                     Safe Work Procedures                                           Mpact employees and contractors
                                     (SWPs) to address risks                                        sustained 32 lost time injuries (LTIs)
                                 • Mpact Risk Control                                               in 2018, up from 26 in 2017, and 13
                                     Standards                                                      restricted work cases (RWCs) (2017: 16).
                                 • Mobile device and smoking                                        Our primary safety measure is the serious
                                     policies                                                       injury frequency rate (SIFR), which includes
                                                                                                    RWCs, LTIs and fatalities, as we believe
Primary and secondary interventions are guided by, and comply with, the Occupational                this index more accurately reflects the
Health and Safety Act.                                                                              impact of safety incidents on the lives of
                                                                                                    our people. The lost time injury frequency
Developing a safety culture
                                                                                                    rate (LTIFR) per 200 000 man hours rose
Mpact’s Behaviour-Based Safety programme identifies unsafe behaviours and eliminates                to 0.47 from 0.37 in 2017, and the serious
barriers to safety by using three levels of behaviour observation –                                 injury frequency rate increased to 0.65 from
visible felt leadership (VFL), peer observation of barriers to safe working behaviour and           0.60 in 2017.

                                                                                                               MPACT Sustainability Review 2018    27
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