FORMERLY RAINBOW CHICKEN LIMITED
Sustainability Report 2013
Contents Introduction
1
Sustainability targets
1
Group profile and leadership
2
Leadership and sustainability
2
Chief Executive’s review
2
Sustainability into strategy
2
Reporting approach
3
Ensuring accuracy and credibility of our results
3
Key issues
3
Stakeholder engagement process
4
Economic sustainability practices
5
Value added statement
5
Broad-based black economic empowerment (B-BBEE)
5
Caring for our environment
6
Environmental sustainability practices
7
Land usage
7
Nature conservation
7
Environmental management system
7
Environmental Impact Assessments (EIA)
7
Environmental risk
8
Energy usage
9
Waste and recycled products
10
Packaging
11
Emissions to air
12
Carbon disclosure
12
Carbon footprint trends
12
Greenhouse gas emission reduction goals and targets
13
Social sustainability practices
14
Employees
14
Group employment equity statistics
16
Employee reconciliation
16
Training information
17
Participation in industry bodies
18
Regulators and compliance
19
Consumers
20
Corporate social investment
22
Assurance
22
Key statistics
23
Conclusion
23
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// RCL SUSTAINABILITY REPORT 2013
Introduction Rcl foods Limited (“RCL” or “the Group”) recognises that true sustainability cannot succeed in isolation and as such the sustainability strategy has been integrated in the overall business strategy and forms one of the strategic drivers of the business. In line with the company’s “Strategy into Action” (sia) process, the sustainability strategy has been converted into a number of strategic goals, each with measureable key performance indicators and targets. This integrated management approach ensures strong alignment between the sustainability strategy and the day-to-day business activities. Sustainability action plans and targets can be found in the table below. Sustainability targets Sustainability structure and systems
Action plans
Long-term targets
2014 targets
Align Group sustainability strategy with national and global best practices and strategic thrusts
Agree and roll out Group structure
Agree structure for new acquisitions and align systems for data capture, analysis, and opportunity identification
Develop framework and strategy for Group by consulting with key stakeholders. Establish “sustainability culture/mindset” within the Group
Develop and implement sustainability reporting system
Include new acquisitions in sustainability measurements and agree targets with operational units. Consolidate projects and initiatives and share knowledge and synergies across the Group
Identify sustainability “champion” for each division across the Group and align actions with Group sustainability strategy Iso 14000 and waste management strategy
Ensure sound environmental conformance (with possible cost savings) through all divisions across the Group by engaging in waste reduction initiatives (Reduce, Re-use, Renew, Recycle)
Identify and train sustainability champions in operational areas
Achieve iso 14001 at all mills, plants and farms
Have all facilities iso 140001 certified by 2014 financial year-end
By 2020 reduce: – food waste by 30% – carbon emissions by 5% – waste to landfill by 10%
Engage with all rcl’s strategic packaging suppliers, identify and quantify opportunities and formalise implementation plans
Brand rcl’s sustainability progress by being part of a formal programme to enlighten consumers. Align rcl’s sustainability focus with programme guidelines
Live sustainability through brands
Evaluate reputable sustainability certification bodies and select the appropriate programme to participate in
Implement sustainable sourcing strategy and policies to ensure suppliers identified as strategic are aligned with RCL’s sustainability strategy with that of suppliers.
Source products, services and ingredients from responsible, sustainable suppliers
Develop a sustainable sourcing policy and initiate rollout to suppliers
Reduce rcl’s impact on water, air and ground by reducing and eliminating pollution Brand development
The report has drawn on the Sustainability Reporting Guidelines developed by the Global Reporting Initiative (GRI), as well as the criteria of the Sustainability Reporting Index (SRI) of the JSE Limited. The criteria have been used for guidance only, with the reporting predominantly focusing on issues that are specifically material to RCL’s business and stakeholder base. The target audience for this report is all stakeholders that have an interest in the activities of RCL, with particular emphasis on shareholders, customers, consumers, employees and suppliers.
RCL SUSTAINABILITY REPORT 2013 //
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Introduction continued Group profile and leadership RCL is listed on the JSE Limited and is a subsidiary of Remgro Limited which holds 69,7% of the issued share capital. It has three operating subsidiaries i.e. wholly-owned subsidiaries Rainbow Farms Proprietary Limited (Rainbow), Vector Logistics Proprietary Limited (Vector) and with effect from 1 May 2013 Foodcorp Proprietary Limited (Foodcorp), a 64,18% subsidiary (increased to 88,1% shareholding post year-end). Rainbow is South Africa’s largest processor and marketer of chicken and operates in the local retail, wholesale and foodservice channels. Its consumer brands are Rainbow and Farmer Brown and its business/service brands are Rainbow FoodSolutions, Cobb and Epol. In 2005 Rainbow acquired Vector Logistics to gain control of its route to market. Since then Vector has expanded its service offerings and grown significantly to service many more customers outside of Rainbow. As part of RCL’s strategy to focus on building a diversified food business with compelling consumer brands in sub-Saharan Africa, an interest in Foodcorp was acquired with effect from 1 May 2013. Foodcorp manufactures, markets and distributes a diversified portfolio of food products ranging from basic essentials to top-end desserts and convenience meals. Many of the products are associated with South African tradition and heritage, and are therefore among the leading and best recognised brands in South Africa. Leadership and sustainability The Board accepts overall responsibility for the advancement of sustainable development at RCL and as such has included a formal sustainability charter as part of the Risk Committee mandate. The Processing and Milling director is responsible for championing the sustainability initiative. The Risk Committee’s role is to assist the RCL Board in monitoring all aspects of sustainability, including health, safety, economic, environmental and social impacts. The Risk Committee’s oversight of the sustainability initiatives provides the business with the ideal platform to identify both risks and opportunities on an integrated basis. More information on the Rainbow Board and governance structures are available in the corporate governance report included in the 2013 integrated annual report on page 30. Chief Executive’s review The Group recognises that there is a need to conduct business in a responsible and ethical way that contributes to the long-term sustainability of the communities and environment in which the business operates. The Group places high priority on sustainability practices ensuring that they are incorporated into the business’s culture, leadership, governance and strategy. The reduction in the consumption of energy and water is integral to our sustainability and carbon footprint reduction strategy. Sustainability into strategy
Mission statement
RCL
(long-term 10 years)
Risk Committee (Sustainability Charter)
Strategic thrust and work areas
RAINBOW FARMS
VECTOR LOGISTICS
(medium to long-term five years)
Sustainability SIA (consolidate and align)
= GRANDPARENT PARENT BREEDER BREEDER
Departmental SIAs (short-term one year)
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// RCL SUSTAINABILITY REPORT 2013
+ MILLING
BROILER
PROCESSING
LOGISTICS
CUSTOMERS
BRANDS
CONSUMERS
RCL is committed to sustainability, being one of the drivers underpinning the Group’s vision. To this end, sustainability targets have been established and are monitored by executive management. The Group has aligned its operations to meet government’s target of reducing carbon emissions by 34% by 2020. RCL is focusing on a long-term sustainability strategy as detailed below:
Target
Why focus?
Reduce grid generated power by 30%
Ensure stable supply
Reduce power consumption/kg by 15%
Limit effect of price increase Limit carbon effect of fossil fuelled electricity Electricity
Water
Packaging
Fuel
Target
Why focus?
Reduce processing water usage to 8ℓ per bird
Risk of poor water quality
Reduce downstream supply chain water by 1ℓ per bird
Risk of water supply interruptions and constraints
Target
Why focus?
Reduce use of fossil fuel by 10%
Limit effect of cost increase
Reduce vehicle emissions by 20%
Limit effect of new standards and carbon taxes
Reduction of Carbon emissions by 34% at 2020 Target
Why focus?
Reduce food waste by 30%
High environmental and financial cost of product waste
Reduce carbon emissions by 5%
Fit-for-purpose packaging and substrates to be selected for CO2e reduction
Reduce waste to landfill by 10%
Increase vehicle fuel economy by 20%
Landfill costs and capacity constraints will rapidly increase
RCL strives to drive sustainability by: •
Continually reducing our negative impact on our environment by minimising our use of non-renewable resources
•
trengthening our relationship with society by supporting and enabling the provision of nutrition, health and education in our S communities; and
•
Inspired people and great brands that are driving the business to new heights.
Reporting approach This report is aligned with the integrated annual report and covers the 12-month reporting period July 2012 to June 2013. The previous report was for the period July 2011 to June 2012. The information reported covers all activities of Rainbow and Vector operations for the periods described and which it considers relevant to its stakeholders. Foodcorp results relating to environmental, social and governance practices will be included in the sustainability report from the next financial year. Ensuring accuracy and credibility of our results Although external assurance has not been obtained in the current year, the Group has implemented management systems, some of which are independently verified, that provide the platform for managing the Group’s economic, social and environmental practices as indicated in the pages that follow. Key issues RCL’s issues around sustainability include environmental matters, animal welfare, food safety, nutrition, people and economics. Key priorities for the reporting period were: •
reduction of energy consumption throughout the supply chain with specific targets to reduce heat and power
•
reduction of packaging materials with focus on package size and recycle materials
•
a focused corporate social responsibility drive; and
•
creating value for stakeholders through sustainable economic growth and development.
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3
Stakeholder engagement process The Group subscribes to a partnership approach in the way business is conducted. It seeks to constructively engage its key stakeholders so as to understand and be able to respond to their needs. Interaction occurs with key stakeholders in the business through a number of formal and informal channels, including participation in industry forums, the investor relations function and consumer care line. While shareholders are primarily concerned with value creation, government and local communities are looking to the Group to create direct and indirect job opportunities, improve community infrastructures and protect the environment. The Group’s stakeholder process is therefore underpinned by management’s responsibility to remain visible and accessible to all its stakeholders and will continue to emphasise open and transparent dialogue in order to anticipate trends and make changes where possible to the way it currently operates. The Board accepts its duty to present a balanced and understandable assessment of the Group’s position in reporting to stakeholders and the greater demands for transparency and accountability regarding non-financial matters. The quality of the information is based on the principles of openness and substance over form. The integrated annual report seeks to address matters of significant interest and concern to all stakeholders and to present a comprehensive and objective assessment of the Group, so that all stakeholders with a legitimate interest in the Group’s affairs can obtain a complete, fair and honest account of its performance. The table below sets out the Group’s key stakeholders and a brief description of the nature of interactions. Key stakeholders
Dialogue channels and forms of engagement
Shareholders and other providers of capital
• Annual general meeting
• SENS announcements
• Investor relations
• Integrated annual report
• Bi-annual results announcements
• Websites
• Trading updates Business partners and customers
• Face to face interventions • Regular meetings and workshops • Market, customer and in-store surveys
Local community
• Selected projects as part of corporate social investment • Regular meetings with municipalities and civic organisations
Government and regulators
• Corporate affairs, legal and investor relations functions
Industry
• South African Poultry Association (SAPA) • Consumer Goods Council of South Africa (CGCSA) • Animal Feed Manufacturers Association (AFMA) • South African Agricultural Processors Association (SAAPA)
Consumers
• Consumer care line
• Advertising campaigns in print and media
• Consumer and product surveys
• Consumer immersions
Staff and unions
• Roadshows
• Performance reviews and career planning
• Good to Great leadership journey
• Management and union meetings
• Intranet
• Confidential hotline through Tip-offs Anonymous
• Staff meetings and training Suppliers
• Direct relationships with suppliers to enable partnerships • Face to face interventions • Regular meetings and workshops
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Economic sustainability practices Creating value for stakeholders through sustainable economic growth and development encompasses a number of elements. In generating economic value for shareholders and other stakeholders, RCL provides a quality and affordable food source to the South African nation and creates jobs both within the business and along the supply chain in the formal and informal sectors. The Group is committed to doing business through fair commercial competitive practices and to trading with customers and suppliers that subscribe to the same high ethical business practices. The Group generated headline earnings from continuing operations of R18,1 million for the year ended 30 June 2013, from which major stakeholders benefited in varying proportions as indicated in the table below. Employees were the main beneficiaries.
Value added statement
2013 R’000
%
2012 R’000
%
10 108 812 (8 055 069)
7 855 142 (5 971 078)
Value added by operations Finance income
2 053 743 53 874
1 884 064 7 370
Total value added
2 107 617
1 891 434
Revenue Paid suppliers
Applied as follows: To pay employees Salaries, wages and benefits To pay providers of capital Interest paid Dividends paid Tax (excluding VAT) Reinvested in the business Depreciation and amortisation Retained earnings
74,6 11,8
1 572 952 248 084
67,1 13,7
1 269 554 258 604
7,3 4,5
153 675 94 409
0,6 13,1
11 358 247 246
3,6 10,0
75 148 211 433
7,6 11,6
143 469 219 807
13,2 (3,2)
278 294 (66 861)
10,6 1,0
200 286 19 521
100,0
1 891 434
100,0
2 107 617
Broad-based black economic empowerment (B-BBEE) The current B-BBEE certificate expires in September 2013. Verification for this financial period will be conducted in August 2013. The Group’s aim is to retain a level 4 status, by strategically focusing on three elements, namely Employment Equity, Skills Development (both of which are further detailed in the section on Social Sustainability Practices) and Preferential Procurement. The table below provides a breakdown of 2011 and 2012 BEE scores. The Group continues to focus on all BEE procurement aspects, while encouraging further Qualifying Small Enterprises (QSE) and Exempted Micro Enterprises (EME) participation, and further leveraging opportunities of sourcing from black and black women owned suppliers. BEE scorecard BEE category Direct empowerment HR development Indirect empowerment
Element
Score
Maximum score
2012
2011
Ownership
20
13,86
11,04
Management
10
2,68
2,92
Employment equity
15
6,92
5,45
Skills development
15
7,21
4,11
Preferential procurement
20
15,39
12,48
Enterprise development
15
15,00
15,00
5
5,00
4,85
Socio-economic development
Total score
66,06
55,85
Recognition status
Level 4 100% contributor
Level 5 80% contributor
RCL SUSTAINABILITY REPORT 2013 //
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Caring for our environment RCL takes full responsibility for its environment by charging every RCL person to ensure effective use of resources and limit its impact on the environment. In addition RCL favours suppliers and partners who share the Group’s values with regard to the protection of the environment. RCL commits to set quantifiable environmental objectives and targets which are implemented and regularly reviewed with the aim of improving environmental performance in the following areas: •
Air emissions
•
Water pollution and water scarcity
•
Waste
•
Energy; and
•
Climate change.
Through the Group’s Environmental Policy it promotes shared responsibilities and accountability amongst employees, stakeholders, local communities, and other affected parties on environmental matters of mutual concern and requires that the Group’s contractors also follow responsible environmental practices. As part of RCL’s commitment and responsibility the Group commits to ensure that all employees and those working on behalf of RCL are familiar with this policy. This policy is applicable in all operations and functions including those situations where employees and contractors are required to work off site and is available to the public. Furthermore, the environmental policy has been communicated to all areas of the business through the employee induction process and intranet. Rainbow’s sustainability, carbon emissions reduction and water reduction targets and performance are monitored monthly and form part of the annual Sustainability Report.
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Environmental sustainability practices The management of RCL shall endeavour to conduct all its activities in such a way that the environment is not adversely affected. The Group acknowledges that it has a legal and moral responsibility towards the environment, its employees, its customers, its neighbours, its business and future generations. In addition, the Group favours suppliers and partners who have similar environmental policies. Land usage The Group strives to use the best environmental practices on all land used for farming, processing, milling and distribution operations, whether it be owned or leased. The table below provides an analysis of the Group’s land usage. ANALYSIS OF LAND USAGE Hectares Owned Farming operations Processing and milling operations
9 013
Partners Dormant 890
173
Distribution and administration centres Total Use
Leased
35
108
9 221
108
890
2013
2012
2011
2010
2009
401
10 304
10 225
10 225
9 090
9 132
1
174
174
135
57
99
143
143
70
36
37
10 621
10 542
10 430
9 183
9 268
402
Nature conservation The Group supports nature conservation and views it as an important national heritage. In this regard, Rainbow leases approximately 630 hectares to the North West Parks Board for the enlargement of the Rustenburg Nature Reserve, for one rand per annum. Additionally, at the Group’s 1 547 hectare Roodewaal farm near Koster in the North West province, Rainbow has permission from the Department of Nature Conservation to conserve game. Bordered by three game farms, it actively supports the North West Parks Board and game farming in the area by helping to ensure wildlife and plant conservation. In KwaZulu-Natal (kzn), 2 000 indigenous trees were planted, acting as natural biosecurity barriers between farms and surrounding areas. This project was undertaken in partnership with the Wildlands Conservation Trust, directly benefiting local communities who grow seedlings in exchange for tuition aids. Environmental management system The Group is in the process of implementing an Environmental Management System based on ISO 14001 principles. All mills are fully certified. All other Rainbow sites excluding Agriculture KZN have been through a stage one ISO 14001 certification audit. The sites are assessed for environmental legal compliance once in a three year cycle. Implementation is 76% complete with full completion expected by the end of the 2014 financial year. Environmental Impact Assessments (EIA) The Group conducts Environmental Impact Assessments as required by the Department of Agriculture and Environmental Affairs when considering investment in new or upgrading existing facilities. This process allows for comments and input from all interested stakeholders and affected parties. An Environmental Management Plan (EMP) is established for the construction phase of these projects, to serve as a guide to assist in minimising the potential environmental impact of these business initiatives.
RCL SUSTAINABILITY REPORT 2013 //
7
Environmental sustainability practices continued Environmental risk RCL has identified the following potential environmental risks in its operations: Environmental risks
Risks are mitigated by
Natural resource depletion
An updated Environmental Policy providing the framework for setting and reviewing environmental objectives and targets
Air pollution Environmental management programmes and key performance indicators that are monitored Odours from processing plants and mills regularly Poultry disease outbreaks on farms
Effective bio-security and security procedures at all operations
Waste disposal
Service level agreements aligned to ISO 14000 standards with waste management service providers for the safe disposal of diseased birds and contaminated or hazardous waste
Fires
Fire breaks maintained on all farming operations
Ground and surface water pollution
Bund walls around all tanks and storage areas containing hazardous liquids
Hazardous chemical, diesel and gas spillage
Chemical store rooms allowing for segregation of hazardous chemicals
Indirect emissions from high electricity consumption
Smart metering monitoring key electricity consumers, i.e. mills, processing facilities, distribution warehouses and load reduction programmes implemented where applicable
Direct emissions from boiler fuel combustion
Emissions testing of boilers as per Air Quality Act. Key performance indicators driving efficient boiler operation and fuel savings at all sites
Water shortages and water quality
Regular water quality assessments and proactive management to ensure sufficient and reliable water supply
Daily operation, and project related activities and related risks
Induction of all new employees and contractors on specific site health and safety and environmental risks Effective training programmes focusing on Environmental Policy and practices Induction of all management staff on environmental and sustainability policies and strategies Effective, documented health and safety procedures
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Energy usage Energy consumption is one of the main focus areas in RCL’s strategy to reduce its impact on climate change. RCL therefore follows a structured approach in selecting energy efficiency initiatives by keeping track of projects at the various operations, sharing information on efficiency projects, and cross communicating results and synergies on a Group basis. During the financial period, R24 million was spent on various energy efficiency improvement projects. These projects included power factor correction, variable speed drives on cooling equipment, insulation of steam reticulation, and conversion of poultry house lighting to LED technology. To drive energy saving and carbon footprint reduction, the Group has set a target reduction of 5% per ton produced on heat and power consumption. The Group’s total electrical energy consumption has decreased by 1,2% year on year across the Group, a satisfying result considering the fact that an additional facility in Limpopo has been included in the results. Savings can be contributed to operational efficiencies, energy savings initiatives and energy awareness. Consumption of coal increased by 75% following a fuel switch on broiler farms from Liquid Petroleum Gas (LPG) while the latter reduced by 37% during the financial period. Diesel consumption has reduced by 1,8% due to route optimisation and driver training.
Category winner at The Green Supply Chain 2012 Awards
Poultry house upgrades in KwaZulu-Natal – Application of roof insulation
– LED Poultry house lighting solution
– Roof insulation resulting in improved temperature control
– Best project between R1 million and R10 million
– Reduced heat loss and improved energy consumption
A number of energy saving initiatives where undertaken during the financial period: •
Poultry house upgrades consisting of ventilation control and redesign ensures that electrical and heating requirements are reduced. Improved insulation of poultry houses also contributes to energy savings and optimum temperatures inside poultry houses
•
Rainbow’s agricultural engineers continued the rollout of the improved poultry house lighting systems. Rainbow was announced winner for Best Project between R1 million and R10 million at the Green Supply Chain 2012 Awards. Rainbow implemented a green supply chain solution by converting the incandescent lighting in 36 facilities in three provinces to LED systems with dimming controllers, reducing consumption by 117 000 kWh per month. The aim of the project was to reduce electricity consumption, improve light quality and reduce waste and maintenance costs. Incandescent and compact fluorescent lights were replaced with LED lights to ensure better uniformity — from 50% to 80% — and bulb life was increased from 900 hours to 4 500 hours. This is the first poultry house lighting solution to comply with the International Cobb poultry husbandry standard and with national regulations for electrical installation
•
I nstallation of variable speed drives (VSDs) at the Vector Peninsula distribution hub resulted in reduced energy consumption by up to 70% and a reduction in noise levels by up to 10% on evaporators
•
Desiccant dryer optimisation at smaller distribution facilities realised energy savings of up to 13 000 kWh; and
•
mart metering enables Rainbow to gather critically important data on electricity consumption and demand patterns. It enables facility S managers and engineers to trend historical consumption patterns and to exercise better control over how operations are managed. Smart metering provides the necessary “baseline” data for feasibility studies on energy conservation, optimisation and co-generation initiatives. It also provides good insight into post-implementation success rates when comparing pre- and post-installation data sets. All milling operations and processing plants have installed smart metering systems.
RCL SUSTAINABILITY REPORT 2013 //
9
Environmental sustainability practices continued Electricity consumption (kWh per ton of product sold) 500
Coal consumption (tons/ton chicken produced) 0,14
422,15 400
0,10 0,12
0,12 364,21
349,88
300
0,08
0,08
0,08
0,10 0,08
0,08
0,06
0,07
0,05
0,06
200
LPG consumption (kℓ/ton chicken produced)
0,04
0,04 100
0,02
0,02
0
0,00 2011
2012
2013
0,00 2011
2012
2013
2011
2012
2013
Coal Coal use for steam generation at processing plants and feed mills remains a high focus area and good boiler management practices are in place at every operation. Coal-to-steam conversion, condensate return, make-up water, and managed chemical consumption are monitored performance areas. Annual boiler inspections ensure safe, efficient operation of equipment. In this financial period, coal consumption has increased from 0,07 ton of coal per ton of chicken produced to 0,12 due to an increase in coal consumption. The increase follows a fuel switch from LPG heating to coal fired heating in poultry houses. Training of farm managers on operating procedures of newly installed heating equipment continues and efficiencies are improving. Alternative, renewable sources of fuel, such as wood chips – a waste product from the forestry industry – are being used on an increasing basis. Gas Consumption of LPG has reduced during the last financial period due to switching to coal fired heating systems for poultry houses. Poultry house gas reticulation systems are inspected, upgraded and certified for compliance on a continual basis, eliminating both leaks and inefficiencies. Water Poor water quality and water shortages are significant potential risks to the business. Rainbow has mitigated the risk of water shortages by building additional reservoirs to hold capacity in times of shortage, and is looking at ways of reducing the demand for water in rearing the parent stock, broiler birds and in the slaughtering process. With significant water usage, water effluent needs to be managed and every effort is made to recycle effluent water. Measuring wastage enables early detection of system defects that can be rectified to minimise potential losses and impact on the environment. Recycled water from the three major primary processing plants is used as grey water for outside cleaning and transporting production waste, and the balance is discharged to municipal effluent plants for further recycling. Water is only discharged or used as recycled water once the Biological Oxygen Demand (BOD) and Chemical Oxygen Demand (COD) levels are reduced to acceptable standards. Rainbow has undertaken to improve the quality of effluent at its Bushvalley operation in Limpopo, by investing in an effluent treatment plant which operates with a number of treatment ponds wherein enzymes break up proteins and fats in the effluent. This system will treat raw effluent with levels of ≥3 000 COD to river discharge limits of 75 COD using no chemicals. The project became fully operational at the end of August 2013. Waste and recycled products The Group analyses all types of waste material generated. Options for possible re-use and disposal are assessed to ensure that it is used or disposed of in the most environmentally friendly way. Rainbow uses the following recycled products from other suppliers in its processes: •
Wood shavings as bedding for the chicken houses
•
Recycled paper is utilised in the finished product outer carton packaging
•
Recycled plastic is utilised in the manufacture of plastic catching crates; and
•
150 tons of recycled construction rubble was used to improve access to certain KwaZulu-Natal farms.
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// RCL SUSTAINABILITY REPORT 2013
Packaging Packaging preserves, protects, contains, transports, informs and sells Rainbow’s products. Reducing the pre- and post-consumer impact of packaging materials is a responsibility the Group takes very seriously. Rainbow has also added the recycling codes and statements such as “care for our environment” and “dispose of packaging responsibly” to all packaging material. Rainbow has also challenged its strategic packaging suppliers to assist with finding ways of implementing the 4Rs to all packaging materials used (i.e. Reduce, Re-use, Recycle, Recover).
The next financial period will see a rollout of the Rainbow Packaging Strategy and its supporting targets. The amount of packaging required to package one ton of chicken has a 69% lower carbon impact on the environment than one ton of chicken returned and dumped. Although packaging has a comparatively small contribution to product related carbon emissions, it plays an extremely important role in protecting the product and ensuring that it reaches the consumer looking and tasting good. Specific packaging projects will therefore be implemented and contribute directly, alongside electricity, water and fuel projects, to our overall company sustainability target of a 34% reduction in carbon emissions by 2020. The future focus will be on: •
Reducing food waste
•
Reducing carbon emissions
•
Reducing waste to landfill
Baseline audits conducted on packaging consumption have allowed specific targets to be set towards reducing the impact on waste to landfill despite growing production volumes. By designing packaging with the environment in mind, Rainbow has reduced indirect CO2 emissions through the following initiatives: •
liminating 230 tons/annum of carton board (equivalent to 96 tons CO2e/annum) by moving certain products out of carton board and E into polypropylene plastic bailer bags
•
ith increased focus, improved processes and successful implementation, Rainbow continues to keep split bag returns down which W would have negatively impacted post-consumer waste to landfill with an extra 8 tons of Low Density Polyethylene (LDPE) plastic – together with chicken dumped – equivalent to 8 300 tons CO2e/annum
•
ainbow successfully converted 100% of cartons used for product distribution to recycled liners avoiding consumption of 346 tons of R virgin liner; and
•
arton board boxes used as secondary packaging have been replaced with re-useable plastic crates. Care is taken to ensure that a C high level of hygiene is maintained at all times. This initiative has already achieved a 51 ton carton board saving since June 2012 with a forecasted 94 tons per annum saving equivalent to 98 tons of CO2e/annum.
RCL SUSTAINABILITY REPORT 2013 //
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Environmental sustainability practices continued Emissions to air The Group recognises its responsibilities in terms of the Air Quality Act, No 39 of 2004, and as such ensures that Rainbow’s animal matter reduction plants, coal-fired boilers and boiler stacks are well maintained and routinely inspected. An Environmental Air Quality management procedure has been circulated to and accepted by all areas of the business. The objective of this procedure is to protect the environment by providing reasonable measures for the protection and enhancement of the quality of air, the prevention of air pollution and ecological degradation; and to enhance the quality of ambient air for the sake of securing an environment that is not harmful to the health and wellbeing of people. Additional management process controls within Rainbow’s rendering plants ensure: •
Capacities of all cookers and driers are not exceeded
•
Alternative disposal of raw material is available through registered waste companies
•
Cooking recipes are balanced to prevent odours
•
Routine scheduled maintenance is carried out for the effective running of all equipment; and
•
The use of specialist consultants to investigate possible further improvements in rendering of processing waste material.
Rainbow has invested in odour control systems at the Worcester, Rustenburg and Hammarsdale processing plants. While there is currently no legislation governing vehicle emissions, the Group and especially Vector is conscious of this impact on the environment and as a result all vehicles are maintained and replaced on a regular basis to minimise both emissions and diesel fuel wastage. Carbon disclosure In the 2010 Carbon Disclosure Leadership Index, the Group achieved 84% and joint seventh position in the SA top 100 companies. Due to a recent reduction in market capitalisation, the Group was not included in the 2011, 2012 and 2013 samples, however, RCL continues to participate in Remgro’s submission of the Carbon Disclosure Project (CDP) by providing information on its greenhouse gas emissions. Carbon footprint trends Carbon footprint trend data illustrates our progress with regard to emissions reduction strategies. The graph below shows the carbon footprint for 2011 to 2013. Scope 1 emissions declined by 6,4% from 2011 to 2012 as a result of a reduction in direct fuel consumption mainly through improved efficiencies in coal boilers. The increase in Scope 1 emissions from 2012 to 2013 by 29% was due to the addition of operational capacity at Bushvalley and a change from LPG to coal heating at a number of broiler farms. Scope 2 emissions increased by 4,9% from 2011 to 2012 as a result of additional cold storage infrastructure constructed and leased as part of the distribution network expansion and declined by 1% in 2013 due to efficiency initiatives. Scope 3 emissions remained fairly constant from 2011 to 2013. While the absolute carbon footprint increased by 8% from 2011 to 2013, carbon emissions per ton of product sold reduced from 0,68 tCO2 in 2011 to 0,58 tCO2 in 2013. The annual footprints and tCO2/ton processed for sales are summarised in the graph below.
350 000
Carbon footprint by Scope (tCO2e) Scope 1
Scope 2
Scope 3
0,80
CO2 intensity (tCO2e/ton processed for sales)
0,70
300 000
0,60
250 000
0,50
200 000
0,40 150 000
0,30
100 000
0,20
50 000
0,10
0
0 2011
12
2012
// RCL SUSTAINABILITY REPORT 2013
2013
2011
2012
2013
Greenhouse gas emission reduction goals and targets Emission reduction action plans, goals and targets are valuable as they illustrate RCL’s plans to reduce emissions. Performance tracking highlights progress with regard to targets. The table below shows RCL’s action plans, targets and performance. Carbon emission, water reduction and packaging targets Action plans Manage Group sustainability report and carbon disclosure project
PACKAGING
WATER USAGE
CARBON EMISSIONS
Add specific carbon reduction targets to Group divisional SIA’s and monitor monthly
Improve monitoring and management Undergo energy efficiency assessments Consider energy efficient equipment upgrades Co-ordinate and manage energy consumption reduction projects
Study feasibility of co-generation projects (Waste-To Energy, PV Solar and Wind) and re-define payback model Add specific water reduction targets to Group divisional SIAs and monitor monthly Co-ordinate and manage water consumption reduction projects Implement water-efficiency projects where feasible Automate packaging baseline calculations
Long-term reduction targets
2013 Targets
Performance (2012 versus 2011)
2014 Targets
Measurement systems to be in place measuring at least Scope 1 and Scope 2 carbon emissions in all areas of the Group As of 2010, reduce carbon emissions by 34% by 2020
Participate in CDP
Participated in CDP as part of Remgro submission
Participate in CDP
Reduce emissions by 5%
Reduce emissions intensity per ton produced by 5%
As of 2010, reduce grid generated electricity by 30% by 2020
Reduce electricity by 5%
Compared to the 2010 base year RCL has: • Reduced emissions by 0,4% in 2011 • Increased emissions by 1,5% in 2012 kWh consumption (includes Vector) increased by 3% due to operational growth
Compared to the 2010 base year, by 2020 we aim to reduce use of fossil fuels by 10% Compared to the 2010 base year, by 2020 we aim to reduce vehicle emissions by 20% and increase vehicle fuel economy by 20% As of 2010, reduce grid generated electricity by 30% by 2020
Reduce gas and coal use per ton produced by 5%
Coal consumption increased by 3% LPG consumption increased by 3%
Reduce coal consumption per ton produced by 5% Reduce LPG consumption per ton delivered by 5%
Reduce diesel consumption per ton delivered by 5%
Tracking of diesel consumption started in 2012
Reduce diesel consumption per ton delivered by 3%
Identify feasible renewable energy sources
A number of technologies considered
Roll out one renewable energy pilot project
Reduce processing water usage to 8ℓ per bird
Reduce ℓ/bird for entire supply chain by 1ℓ
Water consumption increased by 4%
Reduce ℓ/bird by 5% in each area of Rainbow’s business
As of 2013, reduce food waste by 30%
Obtain Board approval for the packaging sustainability strategy and targets
Formalised performance measure commenced in 2013
Set plant based targets to reduce individual quick frozen (IQF) split bag returns by 15%
Consider sustainable packaging alternatives for new product development using a scorecard
As of 2013, reduce packaging related carbon emissions by 5%
Co-ordinate, manage and implement fit-for-purpose packaging with less negative impact on the environment
As of 2013, reduce waste to landfill by 10%
Reduce electricity per ton produced by 5%
Audit vienna packaging to reduce related returns by 25% Implement packaging projects to affect and absolute reduction in packaging weight within our system Through the achievement of the above targets, affect in overall product and packaging waste to landfill
RCL SUSTAINABILITY REPORT 2013 //
13
Social sustainability practices Employees The Group recognises the importance of its people in attaining sustained business performance. Human resource policies and operational strategies, which include an understanding of national imperatives and relevant legislation, have been implemented across the Group. This provides a platform for building a community of inspirational people who have a common purpose. Specific focus areas include: Key area
Business response
Human capital
• The Group firmly believes that sustainability is synonymous with achieving long-term human capital development and corporate social responsibility objectives. The “Good to Great” journey process has again been effective in developing the business leadership and achieving alignment with the respective strategies
Talent
• Attracting and retaining talent, supported by leadership and talent management programmes, is key to transforming the organisation from “Good to Great” • Underpinning this are individual development plans and sound succession plans which ensure that high potential employees are recognised and prepared for the future • As part of the talent management process, people development systems and processes have been enhanced with greater emphasis on the integration of the 2015 Employment Equity objectives. The Leadership Standards and Behaviours have been rolled out across the business, promoting behaviours that ensure every manager is accountable for sustainable delivery. Employees are also able to access specific training within defined learning pathways, such as leadership and professional skills
Employee relations
• The Group acknowledges the right of all its employees to freedom of association, and actively drives best management practices in all its operations in order to create a work environment conducive to productivity, participation and organisational stability • Through constructive recognition agreements, the Group has a significant bargaining unit, with 74% of its employees within the bargaining unit, and for whom the recognised trade unions negotiate annually their salaries and conditions of employment. To ensure proper communication and engagement with the recognised trade unions, our social partners and various trade union regional and site based employee representative forums are in place to facilitate information sharing and consultation • In order to ensure equitable and fair working conditions, the Group has well developed disciplinary and grievance policies and procedures. These policies and procedures are communicated to all employees during their induction, through training, on the intranet and through ongoing communication of the Group’s standards policies and procedures
Remuneration
• The Group’s philosophy is to reward for performance that achieves the organisation’s objectives. Competitive remuneration packages are structured in order to attract, reward and retain the talent needed to achieve the strategic goals. Salaries are reviewed annually • The Group continually reviews its reward and remuneration policies and strategy in line with industry best practice. By doing this, an effective and equitable compensation practice across the organisation is maintained
Resourcing
Resourcing scarce and critical skills has continued to prove challenging, especially within specific geographies. The Group has focused on improving resourcing strategy and practices by: • Enhancing the use of psychometric tools in aiding the recruitment decision • Improving the use of resourcing performance indicators as part of an integrated HR dashboard • Leveraging technology and maximising use of an e-recruitment portal • Effective management of resourcing service providers and service level agreements • Maximising the effectiveness of media advertising channels for resourcing • Growing the bursary and graduate entry channels; and • Emphasis on employment equity (EE) appointments By acknowledging that no resourcing strategy operates in isolation, but rather is integrated into the overall HR strategy and policy framework, the following key activities have been implemented: • Centralisation of management recruitment across the Group, streamlining the process, creating consistency in regard to best practices, creating a positive experience for applicants • Continued focus on African, Coloured and Indian (ACI) recruits at management level • Development of professional recruitment skills amongst human resources and line management teams • Globally recognised behavioural event interviewing processes have been rolled out to managers within the Group to equip them with the skills they need to deliver the resourcing strategy and partner with recruitment to find the best talent for their teams; and • Build a recruitment network to enhance RCL’s employer brand in the market place
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// RCL SUSTAINABILITY REPORT 2013
Key area
Business response
Employment equity
• RCL is an equal opportunity employer committed to a policy of employment equity. Progress towards achieving the Group’s workforce diversity objectives is measured through Group targets and monthly progress reporting • There is a process of iterative consultation and engagement with the business’s employment equity committees to ensure that the Group delivers against its employment equity plan for 2015 • Continuous engagement and consultation with the regional employment equity committees for all issues relating to workplace diversity • The integrated business transformation or “journey” process previously rolled out to management within the business has been further rolled down to all employees at all levels within the organisation. This provides the opportunity for all employees to connect with and relate to fellow employees from many different cultures, backgrounds and genders, and encourages employees to view each other as unique individuals
Staff health and safety
• A national health and safety policy has been adopted by the Board which commits all operations and facilities to the provision and maintenance of a working environment that is healthy and safe • Senior managers investigate lost time injuries and determine actions to prevent a recurrence of incidents • Risk management audits (both internal and external) and health and safety key performance indicators are key elements in evaluating performance • Health and safety registers are specifically designed to highlight and address any legal issues • Occupational health care infrastructure with accredited service providers to provide best practice • Health and safety risks are mitigated by having: – Dedicated risk control personnel in each operation – Health and Safety Committees in each operation consisting of elected health and safety representatives, workers’ union representatives and management, who meet on a monthly basis to address risks – Occupational health and safety risk identification and assessment – Policies and procedures on how to mitigate each of the risks, in addition to ensuring compliance with all legislation – Centralised reporting and monitoring of all issues and incidents; and – Training programmes for all employees in all aspects of health and safety, ensuring appropriate understanding, accountability and responsibility for health and safety • Disabling Incident Frequency Rate (DIFR) relates to the number of disabling incidents per 200 000 manhours worked. A disabling incident is defined as any incident in which an employee is booked off work for more than a shift following the incident. The DIFR for 2013 was 1,7
Employee wellness and HIV/AIDS
• The Group is committed to provide employee wellness programmes that ensure that its employees have access to support initiatives that focus on health and wellness, alcohol and substance abuse and HIV/AIDS. The Group’s HIV/AIDS policy guides the business in the management of HIV/AIDS, placing emphasis on education and peer education, prevention, voluntary counselling and testing • As part of Human Resources strategy to deliver vitality and employee wellness, a National Wellness Day was held on 30 November with specific emphasis on providing assessment facilities in order to create awareness around various health and wellness issues and to empower employees to take responsibility for their health status • The Group engages the services of Careways and partners with Life Occupational Health and Occuwell to ensure that the Group delivers professional onsite service in many of the operations
RCL SUSTAINABILITY REPORT 2013 //
15
Social sustainability practices continued Group employment equity statistics (excludes Foodcorp) As described above the Group is committed to employment equity. The employment equity statistics of the Group are illustrated below. Employment equity statistics Employees as at 30 June 2013
African M F
Indian M
F
Coloured M F
White M
Executive directors Senior managers Middle managers
1 9 23
0 3 7
1 6 28
0 3 7
0 0 10
0 0 7
14 52 89
1 8 46
Total management (number) Total management (%) Senior supervisory staff Other
33 10 256 2 974
10 3 110 1 819
35 11 120 117
10 3 67 64
10 3 116 764
7 2 48 637
155 49 174 37
Total (number)
3 263
1 939
272
141
890
692
Total (%)
42
25
3
2
11
9
Employees as at 30 June 2012
African M
F
Indian M
F
Coloured M F
White M
Executive directors Senior managers Middle managers
2 8 16
0 3 9
1 4 22
0 4 6
0 0 11
0 0 4
Total management (number) Total management (%) Senior supervisory staff Other
26 8 241 2 987
12 4 95 1 904
27 9 112 110
10 3 62 53
11 4 112 772
Total (number)
3 254
2 011
249
125
41
24
3
2
Total (%)
Employee reconciliation Employees as at 30 June
F
Total M
F
Total
16 67 150
1 14 67
17 81 217
55 17 138 84
233 74 666 3 892
82 26 363 2 604
315 100 1 029 6 496
366
277
4 791
3 049
7 840
5
4
61
39
100
F
M
F
Total
12 59 92
1 7 46
15 71 141
1 14 65
16 85 206
4 1 46 710
163 53 174 28
54 18 138 91
227 74 639 3 897
80 26 341 2 758
307 100 980 6 655
895
760
365
283
4 763
3 179
7 942
11
10
5
4
60
40
100
Total
2013
2012
Employees at the beginning of the year Add: Recruitment Less: Deaths Discharges Disabilities Resignations Retirements
7 942
8 008
696
837
(56) (372) (7) (280) (83)
(54) (442) (9) (298) (100)
Employees at the end of the year
7 840
7 942
16
// RCL SUSTAINABILITY REPORT 2013
Training information (excludes Foodcorp) The Group’s employee training and skills development spend was as follows: Training period 1 July 2012 to 30 June 2013
African M F
Indian M
F
Coloured M F
White M
F
Total M
Training courses completed ABET Specific skills SHEQ Other
15 2 934 3 293 275
1 1 684 1 855 107
1 298 186 22
0 179 84 11
8 906 1 047 224
1 495 1 330 118
0 599 234 47
0 418 86 37
Total courses completed
6 517
3 647
507
274
2 185
1 944
880
541 10 089
24 4 737 4 760 568
F
Total
2 2 776 3 355 273
26 7 513 8 115 841
6 406 16 495 14
Total spend (Rm) excluding skills levy
Training period 1 July 2011 to 30 June 2012
African M
F
Indian M
F
Coloured M F
White M
F
Total M
Training courses completed ABET Specific skills SHEQ Other
4 2 934 3 293 275
0 1 684 1 855 107
1 298 186 22
0 179 84 11
23 906 1 047 224
2 495 1 330 118
0 599 234 47
0 418 86 37
Total courses completed
6 506
3 646
507
274
2 200
1 945
880
541 10 093
28 4 737 4 760 568
F
Total
2 2 776 3 355 273
30 7 513 8 115 841
6 406 16 499
Total spend (Rm) excluding skills levy
15
RCL SUSTAINABILITY REPORT 2013 //
17
Participation in Industry bodies Rainbow has active representation on or interaction with the following industry bodies: Animal Feed Manufacturers Association (AFMA) Rainbow is involved in AFMA with representatives serving on the AFMA Board of Directors. Quarterly board meetings are held with the intention on improving the quality and impact of feed manufacturing companies in South Africa and handling any issues that affect or may affect the industry and its associated members. There is special focus on food and feed safety. The Board is made up of senior members from the feed milling industry and includes the major players as well as some of the smaller companies. Various sub-committees have been set up to proactively handle various issues and topics with regards to technical, trade, training and other issues. Representatives from Rainbow serve on these committees and meet on a regular basis to debate and give recommendations on various topics. The South African Poultry Association (SAPA) Animal Welfare Sub-committee A Rainbow representative sits on the Animal Welfare Committee and has drafted a document on “Culling of adult breeders on a farm during the grow-out period” and “Action to take in the event of emergency during transportation of chickens”. SAPA Food Safety Committee Rainbow is represented on this sub-committee where issues with regards to food safety where discussed during the year. Formulation of industry regulation of independent meat inspection and flavour enhancement is in progress. Furthermore, the SAPA code of practice, auditing system/body for industry, and cold chain code of practice were contributed to. South African Veterinary Council (SAVC) Rainbow’s national veterinarian is actively involved with setting board examination question papers (Poultry Diseases and Management) for veterinarians who qualified outside South Africa and wish to register with the SAVC in order to practise in South Africa. Institute of Packaging South Africa (IPSA) IPSA is a non-profit organisation dedicated to the development of the art and science of packaging in South Africa. It represents the interests of its members in this country. IPSA is a full member of the World Packaging Organisation (WPO). Rainbow’s Packaging Development Manager is a full IPSA member and attends speaker evenings, workshops, seminars, conferences, and annual general meetings. Membership provides access to information from WPO and global best practices. Packaging Council of South Africa (PACSA) This voluntary industry body has members in three broad categories: converters; who are the revenue generators in the industry, associates or raw material suppliers and affiliates; being customers and major recyclers. PACSA represents views of its members on national issues with particular focus on environmental matters. Plastics Federation of South Africa (PFSA) The Federation members represent all sectors of the SA plastics industry including polymer producers and importers, converters, machine suppliers and recyclers. The Federation provides industry training and drives the Plastics Industry Environmental initiative. Membership of PFSA ensures alignment of Rainbow’s Packaging research and development focus with that of the industry. For example, PFSA put out a formal statement supporting recycling and discouraging biodegradable packaging solutions which Rainbow has followed. In addition, Rainbow is keeping a close eye on the developments around the topical PVC debates in the industry. Polystyrene Packaging Council of South Africa (PSPC) PSPC focuses their priorities on promoting the sustainable development of their products. Their activities are intended to assist the producers, customer and ultimate users. They educate and communicate whilst supporting activities that improve the industry in a generic manner (such as recycling, waste to energy, marine research, etc.). Being a PSPC associate member, Rainbow’s Packaging Development Manager attends AGMs, is included in their electronic newsletter, is able to network with other industry players and is able to be part of maximising the recycling of polystyrene in SA as part of Rainbow’s extended producer responsibility. Consumer Goods Council of South Africa (CGCSA) CGCSA is a member organisation that acts as the representative body of the entire consumer goods industry. Established in 2002, RCL is one of 12 000 member companies, large and small, across the consumer goods value chain – including the retail, wholesale and manufacturing sectors. The CGCSA facilitates engagement between stakeholders in the industry, and they represent the interests of the industry to the government and other relevant parties. Durban Business Sustainability Forum (DBSF) RCL’s Sustainability Manager and Rainbow’s Packaging Development Manager regularly join this group of Sustainability Professionals to discuss current issues of corporate sustainability and to learn how changes made now will determine how well social, environmental and economic issues are balanced in the future. Cambridge Sustainablity Network (CSN) RCL joined an international network of sustainability leaders formed by Cambridge Programme for Sustainable Leadership (CPSL) from across the world from all sectors and regions, representing business, the public sector and civil society to share knowledge, foster cooperation and to achieve real change by a range of means.
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// RCL SUSTAINABILITY REPORT 2013
Business partners Our customers are managed by multi-disciplinary teams of staff, from sales and marketing; new product development; safety, health, environment and quality (SHEQ); engineering and finance, who ensure that our relationships with these parties are managed in the most efficient, professional and ethical manner. Rainbow is committed to ethical and non-collusive business practices. Independent accredited auditors conduct customer announced and unannounced audits at all processing facilities to verify compliance to food safety, product specifications and quality. Customer audits include, but are not limited to compliance to the following customers’ requirements: •
KFC
•
Nando’s
•
Steers
•
Wimpy
•
Pick n Pay
•
Woolworths
•
Spar
Animal welfare audits are conducted by independent accredited auditors throughout our agriculture discipline to verify compliance to animal welfare requirements.
Regulators and compliance As a participant in the food industry, Rainbow complies with the strictest standards and continuous monitoring by internal and external parties ensures that these standards are adhered to. There were no incidents of non-compliance, prosecution or fines during the review period. Key area
What do we do?
Total Integrated Management System (TIMS) manages risks associated with feed safety, flock health and flock welfare, food safety, product quality, consumer safety and adherence to specifications, service delivery, effect on the environment, and occupational health and safety
• International Standards Organisation (ISO) principles are embedded in the TIMS across the supply chain (from “farm to fork”) to exceed customer satisfaction, to build customer trust, to reap commercial benefits and to drive sustainability in a changing environment • Reviewed by Executive Management annually to determine suitability and effectiveness • Various skills development and communication strategies to ensure employee awareness • Internal and external audits by independent audit bodies verify compliance to feed safety, quality and legal requirements • Contingency programmes, planned preventative maintenance programmes and disaster recovery programmes are maintained and tested across the supply chain • Maintenance of integrity of the cold chain is managed by distribution centres with satellite hubs, as well as primary and secondary distribution fleets • Any product that is identified as being challenged within the cold chain is isolated, tested and destroyed if necessary
Regulatory bodies
• State Veterinarians and Health Inspectors concerned with consumer protection have 24 hours a day, 7 days a week access to our processing plants to verify legal compliance against the Meat Safety Act No 40 of 2000, and the Agricultural Product Standards Act
Management systems
• Succeeded in the implementation and certification of specific ISO Management Systems as planned (refer to table on page 21) • External audits are performed to verify compliance
RCL SUSTAINABILITY REPORT 2013 //
19
Consumers Consumers are becoming increasingly proactive with regard to issues such as health and safety, farming practices, animal welfare, product safety, product labelling and evironmentally responsible products. The Group regards these issues as critical to its business and addresses them in a variety of ways. Stakeholder concerns
Business response
Product quality and safety
The Group demonstrates its commitment to product quality and safety through: • Appointing certified meat inspectors, processing and engineering personnel to ensure safe products which comply with defined specifications • Appointing Safety Health Environment Quality (SHEQ) teams to verify processing, food safety, legal and quality compliance by conducting audits • Adopting Total Integrated Management System (TIMS) tools which are used to monitor, trend, verify, validate and report facility standards, equipment standards, processes and activities that impact on processing performance, food safety and product quality • Cold chain maintenance during processing, warehousing and transport • Ensuring that raw materials, ingredients and packaging materials are traceable with mock recalls being conducted • Compliance with ISO 22000
Labelling
• The Group is committed to adhering to labelling regulations • Conforms to the regulations in the Foodstuffs, Cosmetics and Disinfectants Act, No 154 of 1972, and compliance with regulation R146 was completed in March 2012 • Supports the Consumer Goods Council of South Africa (CGCSA) and Global Standards (GS1) in listing of all products with GS1 • Labelling of all saleable units with EAN-13 barcodes and cartons with ITF-14 barcodes • Carton labels reflect production batch number, case number, production date and sell-by date • Suppliers of packaging material with pre-printed barcodes are obliged to comply with GS1 standards
Farming practices
The Group subscribes to the British Poultry Council’s Assured Chicken Production Programme that sets the highest standards for the nutrition and welfare of poultry
Animal welfare
Animal welfare audits are conducted by independent accredited auditors throughout our agriculture discipline to verify compliance to animal welfare requirements
Bird housing
• Birds are reared in environmentally controlled houses or temperature controlled and ventilated open-sided houses • Birds are able to roam around with free access to feed and water within the houses • By housing the birds the Group mitigates the risk of the birds coming into contact with any wild birds and their faeces, both of which could be carriers of disease • Stocking density of each house on a farm is determined by the floor space of the house and the equipment within the house • Access to all farms and houses are regulated by strict bio-security measures that include: – Use of security personnel to control access to farms – Fences around all farms and chicken houses – Personnel shower on entry and exit and wear company garments and gumboots – Footbaths are present at all doors to houses
Feed
• Feed raw materials are controlled by the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, No 36 of 1947 • Feed raw materials are mainly maize and soya based ingredients with vitamins and proteins added to ensure the development of healthy flocks • Feed formulations are specified by internal nutritionists • Raw materials for feed are supplied by reputable accredited suppliers only. New materials are fully tested prior to being approved for use. Internal raw material analysis verifies the Certification of Analysis (COAs) or Certification of Conformance (COCs) submitted by suppliers with each batch of raw materials delivered to the feed mills. Raw material microbial status is verified for each batch and salmonella-free feed is supplied. Raw material traceability is tested by conducting mock recalls
Animal health and safety
• Flock treatment is controlled by the Medicines and Related Substances Control Act, No 101 of 1965 • Medication, dosages and method of application may only be prescribed by Group veterinarians and withdrawal periods are strictly monitored • The Group maintains a “human list” of medicines to eliminate use of human medicines for flock health to protect consumer health • Notifiable disease management teams ensure maintenance and verification of the notifiable disease prevention and action programme • Animal welfare audits are conducted • SPCA regularly inspects the processing plants to ensure that the processes and practices are humane
Halaal status
• Chickens are slaughtered by Halaal slaughterers and all ingredients used for Rainbow brands have Halaal status • Inspectors from the South African National Halaal Authority (SANHA) and from the Muslim Judicial Council (MJC) ensure that all practices are in accordance with Halaal standards
Consumer insight
• Marketing and product development teams ensure that the Group develops and markets competitive brands at competitive prices • The Group keeps abreast of national and international trends, through research and consumer interactions within a variety of target markets
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// RCL SUSTAINABILITY REPORT 2013
Consumer complaints The Group continuously engages with consumers through the following: •
National complaints system
•
The Rainbow website
•
Consumer immersions
•
Consumer care line
•
Advertising campaigns in the print and media; and
•
Consumer product surveys.
The national complaint system provides a care line for all Rainbow products. All details are centrally logged and emails are forwarded daily to the national complaints department where dedicated personnel manage all complaints. Personal contact with customers and consumers, response time and actions taken to prevent the same problems from occurring again, are key to the success achieved thus far with the care line. The information is communicated to all relevant teams for action and presented to executive management at the national management review. In 2013, the Group responded to 99% of complaints within 48 hours. Through these avenues the Group receives feedback from consumers and customers, covering complaints, queries and compliments. ISO management systems As a participant in the food industry, the Group complies with the strictest standards and continuous monitoring by internal and external parties ensures that these standards are adhered to. International Standards Organisation (ISO) principles are therefore embedded in the TIMS across the supply chain to ensure customer satisfaction, to build customer trust, to reap commercial benefits and to drive sustainability in a changing environment The Group has implemented the following ISO Management Systems: ISO
Operation
ISO 22000
National Office, further processing plants, Hammarsdale, Rustenburg and Worcester primary processing plants, agricultural operations, feed mills and distribution centres
ISO 9001
Feed mills
ISO 14001
Feed mills
ISO 14001*
Agricultural operations, further processing plants, primary processing plants and distribution hubs
OHSAS 18001
Hammarsdale primary processing plant and feed mills
OHSAS 18001*
Rustenburg and Worcester primary processing plants, further processing plants, distribution hubs and agricultural operations
ISO 17025
Laboratories
*
In process of being implemented.
RCL SUSTAINABILITY REPORT 2013 //
21
Corporate social investment RCL, as a large food producer in South Africa, plays an important role in providing food to a large number of South Africans, thus playing an important role in feeding the nation. The Group believes it has a responsibility to assist in improving the lives of disadvantaged communities in the areas in which its businesses operate. RCL has therefore developed a Corporate Social Investment (CSI) policy which seeks to make a significant impact in the communities within which it operates. The focus areas of the Group CSI strategy includes: •
ducation projects: Partnering with a non-profit organisation RCL is able to assist 350 underprivileged high school learners in E grades 10 to 12 giving them access to extra tuition in Maths, Science and English. The Group has an established bursary programme aimed at the children of its employees and is able to provide a bursary to children with good academic results and potential, but without the financial means to achieve a tertiary qualification – the bursary programme has also been extended to the learners on the education project.
•
rts: RCL supports a developmental theatre as well as an annual musical production, giving high school learners the opportunity to A experience working with professional directors and musicians.
•
Feeding schemes: Across the Group companies focus on assisting homes, institutions and organisations with food.
•
The Youth: The Group, has projects (such as Foodcorp’s involvement with the Soweto Canoe and Recreation Club and Rainbow’s support of the AmaZulu Football Trust) which uses sport to uplift the youth.
•
Employee involvement: RCL realises the value of involving employees in its CSI activities and as such has developed and implemented an employee participation programme that will address the needs of the employees in a holistic manner whilst also achieving its corporate objectives. The programme includes employee volunteering support, financial contributions to organisations and donations.
RCL can proudly say that, through its CSI endeavours, it is positively impacting the communities around which it operates and changing the lives of many South Africans.
Assurance Sustainability performance and reporting has not been independently assured for the year. The Board has relied on internal assurance providers with regard to the reliability of sustainability issues in the integrated report. Independent assurance will be included on the Board’s agenda for the 2014 financial year.
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// RCL SUSTAINABILITY REPORT 2013
Key statistics 2013 Rm
2012 Rm
8 057 1 935
5 971 1 659
436 166 59 285
460 173 45 233
1 571
1 270
154 94 (67)
11 247 20
75
143
4
4
(kℓ)
8 225 608
7 795 275
(tons) (kℓ) (kℓ)
47 860 18 608 5 885
25 789 30 571 5 916
(tons) (m3) (tons) (tons) (kℓ) (%)
352 402 214 455 654 2 340 960 29 nil
327 393 924 439 546 2 368 833 30 nil
13 308 102 74 14 1,7
7 942 66 74 15 1,6
ECONOMIC PERFORMANCE INDICATORS Impact on suppliers Total paid to suppliers Total contracted spend# Major sources of suppliers#: – transport – total contract growers – BEE contract growers – electricity Impact on employees Total payroll and benefits Impact on providers of capital Total interest paid to funders Total dividends to ordinary shareholders Reserves Impact on public sector Tax (excluding VAT) Impact on community Social responsibility expenditure# ENVIRONMENTAL PERFORMANCE INDICATORS Water consumption Energy consumption – coal – gas – diesel Recycled waste products – cardboard waste – poultry litter – plastic waste – scrap metal and timber – treated water for recycling – treated water as a percentage of total water consumption Non-compliance, prosecution and fines #
SOCIAL PERFORMANCE INDICATORS Full-time employees Net full-time employment reduction# Bargaining unit employees# Training expenditure# Disabling incident frequency rate# #
(%) (Rm)
Excludes Foodcorp.
Conclusion Due to the nature of its activities, RCL has the potential to make a valuable contribution to sustainability through the management of direct and indirect impacts arising from the influence the business has on consumers and suppliers. Consumers and investors are increasingly expecting companies to demonstrate concern for their employees, to minimise the negative environmental impacts of their products, to acquire ethical performance of suppliers and to support communities in which they operate. RCL believes it makes sound business sense to embrace sustainability as a strategic issue and to proactively manage and report on our sustainability performance.
RCL SUSTAINABILITY REPORT 2013 //
23
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