Social, Ethics and Transformation Committee report

Afrox upholds high corporate governance principles and supports the South African government’s development and transformation goals. We conduct our interactions and processes with integrity.

Our guiding principles for responsible corporate behaviour

We are committed to creating sustainable value for our stakeholders, our Company, our country and the environment. As a proud corporate citizen, Afrox’s business strategy considers social, ethical, environmental and transformation aspects. The Company complies with local and international legislation and various other applicable requirements.

The Board is periodically informed of sustainability compliance and high-level risks through reports and presentations to the SET Committee. The Company has measurable corporate responsibility policies and continuously develops specific metrics for each of its defined goals.

As in previous years, we have continuously driven our corporate responsibility focus areas which are aligned to the Afrox strategy are outlined below. An overview of the governance approach which addresses these focus areas is detailed after the overview.

Corporate responsibility focus areas

An overview of sustainability governance

The sustainability governance structure is a three-level process that enables faster decision making and enhances accountability.

Sustainability governance structure

Afrox Board

The Linde Group

African Oxygen Limited

Linde Business Unit Heads
Responsibility for the Company’s overall sustainability performance rests with Afrox’s Managing Director. Through use of the Afrox corporate responsibility policy, our Managing Director has delegated authority to the executive management responsible for ensuring economic, social, environmental and employee sustainability performance through Company standards, directives and strategic direction.

SET Committee
The SET Committee performs regular governance and management reviews. The Committee provides the Board with reports, presentations and information on the Company’s sustainability compliance, and high-level risks to keep them informed of such matters.

Afrox executive management
Implementation of governance directives is the responsibility of executive management. At the core of these implementation efforts is the Corporate Responsibility and Transformation Committee. This is a management level committee which provides a platform for identifying opportunities, taking action and sharing learnings, both within and outside the Company. The Committee also tracks progress on agreed projects.

Effective sustainability governance

The year in review

The SET Committee successfully fulfilled its mandate as prescribed by its formal terms of reference. No cases of duplication or inefficiency within the allocated roles or responsibilities were recorded across the various Board committees.

As illustrated in the matrix alongside, each committee fulfils its mandate according to the applicable regulations, such as, various codes of good practice and the Companies Act of South Africa.

The SET Committee formulates an annual work plan to outline its priority areas. We also have an accountability roadmap that has five areas that everyone is accountable for according to their agreed performance KPIs and targets. Refer to the corporate responsibility focus areas for details.

The Committee has made progress on its prior year agenda, focusing on:

  • CSI;
  • BBBEE strategy, with particular attention to Enterprise and Supplier Development; and
  • ethics and compliance.
Scope of matters SHEQ Audit NGMR SET
Companies Act, 2008
Social economic development and Company’s standing in terms of:
  • 10 Principles of UNGC
X
  • OECD guidelines on corruption
X
  • EE Act
X
  • BBBEE
X
The International Labour Organisation Protocol on decent work and working conditions X
Good corporate citizenship including:  X
  • promotion of equality, prevention of discrimination
X
  • corruption
X
  • contribution to development of communities
X
  • record of sponsorships, donations and charitable giving
X
The environment X
Health and public safety X
Impact of Company’s activities and products and services on communities/environment in which the Company operates X
Consumer relationships, including policies and records relating to advertising and public relations X
Compliance with consumer protection laws X X
Labour and employment matters X X
Health and public safety X
King IV
  • Ethical leadership
X X X
  • Good performance
X X
  • Effective control
X X X
  • Legitimacy
X
Governing stakeholder relations
Review stakeholder report on Company’s reputation X
Feedback on stakeholder engagements X
Consider stakeholder material issues X
Sustainability reporting
Review of the sustainability section of the Integrated Report X
Compliance with GRI X
Compliance with ISO 26000 X
Compliance with the JSE SRI Index X
Independent assurance of sustainability content
JSE Listings Requirements  X
Review of the Company’s material risks X X
Disclosure in Integrated Report on Company’s compliance with King IV and areas of non‑compliance with explanations X X

Ethics and human rights

Code of Ethics

The Linde Code of Ethics outlines the high standards of corporate responsibility to which Afrox is committed. Sustainability is becoming a key factor in the investment decisions made by Afrox’s stakeholders, particularly customers and investors. The Code’s focus extends beyond the Company’s own sustainability approach as Afrox is also required to provide evidence of sustainability principles in the Company’s supply chain.

Our employment policy aims to create a workforce that reflects principles of equality and fairness. The Company recruits employees based on their ability to perform or exceed desired levels. Afrox’s Code of Conduct promotes sensitivity and tolerance between different cultures. The Company aims to mitigate discrimination on the basis of racial abuse, creed, culture, nationality, gender, sexual orientation or marital status in the workplace.

Refer to the Code of Ethics for more information.

Supply chain

Our suppliers are required to support our commitment to sustainable development and adopt our responsible practices. Afrox’s ethical-legal principles procurement and the Code of Conduct for Suppliers of The Linde Group outline the principles that suppliers should adhere to, The Supplier Code of Conduct was approved by the Board of the Linde Group. To ensure all Afrox suppliers are aware of and conform to the Code, in 2017 the Code was incorporated into the General Terms and Conditions of Purchase and supply agreements, ensuring general compliance with this Code of Conduct. Refer to Code of Ethics for more.

Our suppliers are required:

  • to ensure their suppliers comply with minimum sustainability requirements;
  • to adopt internationally agreed labour standards;
  • to preserve the environment to the best of their ability;
  • to comply with all applicable laws and regulations;
  • to refrain from engaging in any form of corruption or bribery; and
  • to meet adequate health and safety standards.
Anti-corruption and training

Employees were trained on a number of anti-corruption practices, and ethics based conduct in the year:

Afrox is satisfied that a significant portion of employees, have completed the aforementioned training.

Human rights

The Group is committed to upholding the fundamental human rights outlined by the country’s constitution. We treat people according to the rights, labour laws and prescribed standards of our business.

Our human rights statement is available.

Afrox aims to build a workforce that represents the country’s diverse demographics. We value equality and fair treatment in all our operations and interactions with employees. Refer to human resources for transformation statistics and information.

All managers and consultative forums are required to be familiar with the Employment Equity Act. Employment equity and legislative compliance matters are managed by the consultative forums and the SET Committee. They collaborate to establish numerical equity targets for the Company, which senior management must work to achieve.

The Company is notified of all acts of discrimination. All acts are stringently reviewed and addressed. No claims (2016: nil) of discrimination were made in the year.

Conclusion

The SET Committee believes that relevant codes of best practice, legislation and regulations were sufficiently observed by each Board committee. The Committee is proud to note that it has made progress in line with the expectations of our new operating structure.

Afrox aims to comply with the promulgated BBBEE Codes to maintain our reputation as a socially responsible corporate citizen. We are looking forward to positively addressing any matters arising with our stakeholders.

Dr Khotso Mokhele
Chairman of the Social, Ethics and Transformation Committee