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We remain committed to the values of our Charter and our Safety and Sustainable Development Policy. Over the past year we have improved the integrity of our data, strengthened our team, and implemented effective communication and training initiatives that have increased awareness of sustainable development issues.
My biggest disappointment this year is that we have not made more significant progress in terms of our safety performance. Our Lost Time Injury Frequency Rate (LTIFR) has improved, but only moderately – reflecting a 5.5% reduction relative to 2009 – and regrettably three of our employees lost their lives as a result of work related incidents. We have invested significant resources, time and effort on training and education, and I want to see this investment being more effective.
Looking to the future, we anticipate that demand for our products will increase in line with the economic recovery and, over the longer-term, an anticipated significant increase in demand for Platinum Group Metals (PGMs) in clean technologies. The increase of supply to meet this growing demand is both essential and challenging, as sustainability-related costs will increase because customers expect compliance with sustainability best practice and shareholders demand improved sustainability performance. The growing importance of the link between sustainability performance and reputation is a trend that will inevitably increase in the future.
South Africa has some particular social re-engineering imperatives that will impact on the Company’s ability to supply PGMs. The impact of these developmental imperatives on the Company will depend on the South African government’s approach to balancing competing agendas. We recognise that we have a role to play in contributing towards societal transformation in the community in which we operate. We remain committed to our duty in this regard.
Our focus in 2010 has been on getting our house in order and investing in initiatives that should result in sustained improvement in our performance over the longer term. I am much more interested in long-term sustainable changes driven by a strong business case, than focusing on short-term quick wins, and am determined to ensure that we adopt a strategic approach to sustainability. With this goal in mind, I want to see our investments in skills development translating into improved productivity and reduced skills shortages; I want to see our investment in the communities contributing visibly to the achievement of our social and labour plan commitments; and I want to see our investments in environmental protection translating into vibrant ecosystems and improved water quality.
During the year the Board has increased its focus on sustainability risks and is committed to setting and achieving ambitious, but realistic, sustainability targets. Improvements in our sustainability performance necessitate a clear understanding of our sustainability impact and our potential to improve. We have worked hard this year on improving our data collection and reporting with a view to understanding the strategic business drivers for sustainability. In many areas we have made great inroads over the last few years but we are now able to affect only incremental improvements. We have made a number of capital investments and efficiency improvements, but in the medium to longer term improvements will need to come from behavioural changes.
I am pleased that we have met our targets in terms of increased discretionary spend on historically disadvantaged South African suppliers and in a reduction in new cases of Noise Induced Hearing Loss (NIHL), as well as our targets relating to housing and community development. We are on track to meet our environmental targets. We have committed to additional targets to reduce SO2 emissions and to manage surface and groundwater quality. We have however not been able to meet our targets of achieving zero fatalities, to reduce our LTIFR by 10%, increasing female participation at the mine, increasing participation in our wellness programmes and increasing the number of active workplace peer educators.
In seeking continual improvement to achieve a high level of performance we have developed a new stakeholder engagement strategy and are developing a more proactive, integrated safety strategy. We are in the process of developing a revised housing model and a climate change strategy. I am pleased with the progress we have made towards improving our data. These efforts will contribute towards a more informed approach accompanied by ambitious but realistic targets.
As a member of the International Council for Mining and Metals (ICMM) we fully support their goal of establishing a global sustainability benchmark for the mining industry and are committed to implementing their principles through our Sustainable Development Framework. We are a signatory to the United Nations Global Compact (UNGC) and we are committed to implementing its ten principles relating to human rights, labour practices, environmental management and anti-corruption. We have once again compiled our report in accordance with the guidelines of the Global Reporting Initiative (GRI). Through our sustainability reporting and engagement with stakeholders we have been able to improve our approach and performance. Outcomes of our stakeholder engagement process helped inform our refined sustainable development risk approach and we hope that our new stakeholder engagement strategy will allow us to further build on these engagements.
Sustainability is key to the long term stability of South Africa and therefore the stability of the company. This requires that transformation, poverty reduction, environmental protection, and education and skills development takes place. This is not the responsibility of government alone. We have skills and resources that can complement the government’s developmental efforts. We could not do this effectively while based in London. To engage meaningfully in driving these shared agendas we need to have a seat at the table and this was a strong contributing factor in our decision to relocate our headquarters to Johannesburg.
Our main challenges for 2011 are to improve our performance in safety, transformation, community development and the environment. Safety is always at the top of our list and we will continue to devote significant resources to improving our safety performance. The transformation agenda is challenging and requires proactive intervention. Meeting our social and labour plan requirements will mean making more strategic investments in training and employment equity; and accelerating our investments in housing. We intend to increase our housing budget by US$10.9 million. We will continue to empower our host communities and improve their quality of life while addressing the difficult task of matching expectations with what is feasible. Environmental challenges are centred on ensuring the supply of energy and water resources, while continuing to minimise pollution and environmental degradation.
In addressing sustainability challenges strong leadership is required. I am confident that we have a strong stable team and that we have taken measures to ensure that our decisions are based on good quality data and sound science that will facilitate improved performance in the longer term.
Ian Farmer
Chief Executive Officer
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