Sustainability Report

We subscribe to the commonly accepted definition of sustainable development as “development which meets the needs of the current generation without compromising the ability of future generations to meet their own needs”.

We are working towards incorporating the guidelines set by the Global Reporting Initiative (GRI), which are increasingly recognised as best practice for reporting of non-financial performance. However, this is a work in progress and we continue to establish the appropriate framework for nonfinancial reporting, which includes embedding formal practices and targets across the Group. Meeting this challenge will deliver benefits in managing our reputation, enhancing risk management controls, attracting skills and driving productivity and overall performance. Deepening our reporting on the nonfinancial impacts of our business will enable us to become even more responsive to the needs of our stakeholders in a rapidly changing world, helping us to strengthen our value propositions and competitive advantage.

Our broad-based black economic empowerment (BBBEE) initiatives are included in this section as we regard this as integral to the sustainable development of our company and our country.

Our framework for sustainability

We believe that building a business that is economically sustainable into the future is the best way of meeting the needs of all our stakeholders and contributing to South Africa’s growth.  Through this approach our primary objective is to build a resilient business that can deliver long-term value to our shareholders.

We are committed to delivering operational excellence in a safe and responsible way and creating value for not only our shareholders, but our employees, governments, the communities associated with our operations, our customers and suppliers.

As a Group, we aspire to high levels of integrity and professional standards, managing our financial and non-financial performance to the benefit of all stakeholders as far as we are able. We recognise that becoming globally competitive and maintaining a leading position in the chemical, mining and agricultural sectors calls for increased responsibility, enhanced accountability and higher performance levels in every aspect of our business.

Our commitment to corporate citizenship is based on sound corporate governance; safety, health, environment and quality (SHEQ) management; meaningful investment in our people; and, partnering with communities for mutual benefit.

Going forward, we see our key challenges as:

• a carbon-constrained future and the world’s energy demands;
• the challenges surrounding water quality and availability;
• the sustainable development challenge faced by resource intense industries like mining;
• promoting farmers and agronomy in Africa;
• finding innovative ways of dealing with the skills shortage;
• and,
• adopting a more formalised approach to sustainable development reporting.

Our framework for sustainability is premised on the uncompromising belief that honesty, integrity, professionalism and service must underpin every relationship entered into with employees, management, customers, suppliers, the government and the communities in which the Group operates.

The Group has developed a Code of Conduct which requires that, at all times, all our people act with the utmost integrity and objectivity and in compliance with the letter and the spirit of both the law and company policies. The Code, which is supported by an anonymous reporting line, is part of induction training, and employees are asked to sign a declaration on an annual basis confirming their compliance with the Code.

ECONOMIC PERFORMANCE

Sound financial performance based on transparent, ethical behaviour is a cornerstone of sustainable development. It enables the creation of jobs and the contribution to societal aspirations through payments to governments, suppliers, employees and returns to investors.

In 2007, we embarked on a share scheme to increase our employees’ participation in our growth and success.

Given our strong presence in southern Africa, as well as our market positions in the agricultural and mining sectors which are recognised as important drivers of economic development, the Omnia Group is in a position to contribute to the sustainable economic development of the markets in which we operate, in line with NEPAD’s objectives. We are currently engaging with Government on a number of initiatives to create an enabling environment for the promotion of agriculture, in accordance with the principle that the long-term sustainability of markets rests on commercial principles.

SOCIAL PERFORMANCE

Stakeholder engagement

The Group pursues dialogue with a broad body of stakeholders, based on the standards of promptness, relevance and transparency. Omnia makes use of general communication channels such as the Omnia website, print and radio media.

Other channels are set out below.

Overview of human resource strategy

A key objective for the Group is to create a strong alignment between creating shareholder value, reaching our business targets and the personal and career development goals of our employees. Recruitment and retention strategies, which are integral to our human resource strategy, are focused on giving our people a sense of ownership and interest beyond the parameters of their specific role. In the chemical industry in particular, where the skills profile is ageing, talent management is an increasingly important strategic imperative.

Recruitment

Intellectual capital is a core business asset. Consequently, in recruiting new talent we look for specific skills and a high level of potential, balancing this against the need to reflect the demographics of the country. In common with other technically based companies, finding the appropriate skills is an ongoing challenge. Our training and development initiatives aim to meet this challenge and expand the skills pool both internally and externally.

Retention

Our retention strategy is based on a conducive organizational culture, remuneration and development – both in terms of training and in developing internal career opportunities.

Remuneration

Share ownership is part of our broader retention strategy. Our Sakhile Share Initiative, launched in 2007, allocates a 10% stake in the Omnia Group to BBBEE company, Sakhile, which is owned by Omnia employees. In addition, the Third Partnership with Management Incentive Scheme stretches over a five-year cycle ending in March 2009 and is linked to the Group achieving a 10% real earnings growth per annum.

Defined benefit and contribution retirement funds plans are held in separate trustee-administered funds, funded by payments from employees and Group companies.

Training and development

Comprehensive training and development programmes provide the springboard for the Group’s pursuit of leadership across all our markets, both locally and globally

Development of a strong leadership bench is an important aspect of our development programme. Accordingly, we promote a working environment in which senior managers coach and mentor junior managers. Forums also exist to give management the opportunity to interact with the board and sub-committees. Where appropriate, we prefer to appoint candidates from within.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Overview

Fourteen years after the advent of democracy, broad-based black economic empowerment and socio-economic transformation remain key challenges for South Africa. At Omnia, our commitment to broad-based black economic empowerment (BBBEE) is focused on the spirit, beyond the letter, of transformation. Our aim is to play an active role in the transformation process in a manner that is sustainable, credible and of benefit to the Omnia Group, our stakeholders and the country as a whole. We are determined to broaden the base of the South African economy and promote participation in the economy by all citizens.

We follow measurements and scorecard targets as set out in the Department of Trade and Industry’s Codes of Good Practice for Broad-based Black Economic Empowerment. While each business has specific targets and initiatives relevant to the regulatory framework in its particular sector, all activities are directed and monitored at Group level to ensure a centralised approach to BBBEE. In addition, the board oversees the Group’s efforts.

Equity ownership

In terms of BBBEE, transfer of ownership and control is considered good practice. Rather than partnering with an external empowerment company, Omnia chose to offer employees the chance to participate in the growing wealth of the Group through the Sakhile equity scheme, in terms of which qualifying employees own 10% of the Group’s operations.

Employment equity

Understanding that a diverse workforce contributes to cross cultural understanding, broadens perspectives and helps to enhance our competitive edge, we are committed to transforming the Omnia workplace by systematically implementing our employment equity policy which calls for:

• Equal opportunity for all employees irrespective of race or gender, by eliminating all forms of discrimination.
• Empowering all employees to the fullest extent of their capabilities through interventions such as training and development.
• Market-related compensation packages with due regard for individual performance and union agreements.
• Due consultation with representatives of the entire workforce.

Employment equity (EE) committees at plant and divisional level set targets, debate strategies and monitor legislative compliance, while a central EE committee evaluates progress against set objectives and targets in each business on a quarterly basis.

Against a backdrop of increasing mobility in an era of globalisation and acute shortages of technical skills, meeting our EE targets is proving to be challenging. However, we are
attempting to meet the challenge by developing a pipeline of talent through training interventions and by fast-tracking high potential achievers.

Skills development and training

Training and developing our current and potential workforce are cornerstones of our strategy. In addition to ensuring a pool of

motivated, skilled employees, building individual capabilities contributes fundamentally to more sustainable societies.

Development initiatives are underpinned by a focused effort to identify and address specific training needs at every level.

In addition, these initiatives are aimed at entrenching a culture of lifelong learning and giving our people the life and technical skills they require to succeed in a rapidly-changing world.

Internal programmes

Ongoing learning is facilitated through a range of initiatives and includes on-the-job training, in-house development projects and financial assistance for external studies ranging from Adult Basic Education and Training (ABET) to post-graduate degrees.

Depending on the assistance granted, recipients may be required to work back a certain amount of time, thereby facilitating the transfer of skills to colleagues.

Omnia is registered as a Training Outside Public Practice (TOPP) training provider in terms of which accountants are trained. Six employees can be accommodated in the programme

The Group provides learnership training to approximately 5% of its employees.

External programmes

Omnia’s external programmes are targeted at black South Africans and aim to increase the skills pool in areas relevant to the Group’s business.

The low rate of mathematics and science passes at matriculation level in South Africa, particularly among black South African learners, remains a major concern. Government’s Accelerated and Shared Growth Initiative for South Africa (ASGISA) has identified engineering and information communication technology as priority sectors, both of which require a strong knowledge base of maths and science. The Omnia Group shares Government’s concern and accordingly, has initiated several programmes targeted at learners who show promise in these fields through tuition support and through the provision of bursaries for further education.

The Group’s bursary programmes offer financial assistance for tertiary education at universities and technikons in disciplines

including accounting, agriculture, engineering, information technology, marketing and general business management.

Financial assistance is made available to one child per employee family towards tertiary studies on a full-time basis at a university, technikon or technical college. Passing each year is a prerequisite for receiving assistance the following year.

Our bursary and external education programme extends to countries outside South Africa where we are involved in lecturing and in commissioning research at tertiary institutions.

Procurement

The Omnia Group is actively seeking ways to increase procurement from BBBEE-accredited suppliers. Services currently procured from BEE suppliers include raw material suppliers, transport contractors, courier and security services, cleaning material suppliers and labour brokers.

Enterprise development

This is a focus area for us, as we believe entrepreneurs form the backbone of a vibrant economy.

Protea Chemicals has developed strong business relationships with several black-owned businesses, providing assistance in the form of shared infrastructure, extended payment terms and by imparting business knowledge and expertise.

The Agriculture division contributed to the sector with practical assistance through agricultural best practices in a wide range of agronomic applications. Government is planning to redistribute 20 million hectares to emerging farmers by 2014. If this land were to be divided into plots averaging 200 hectares in size, 100 000 new farms would be created, each one needing to be run by a farmer. Agronomic assistance is a critical success factor and Omnia is committed to helping emerging farmers establish their own farming businesses.

Specific initiatives in this regard include:

• QwaQwa Project – Omnia gives emerging farmers in the region agronomic advice and has also partnered with various contractors in the area to assist in providing implements and farming equipment. There has been a dramatic increase in farm yields.
• Vlakfontein Sizanani Project – this project involves supporting the planting of maize and wheat by emerging farmers in the Nigel area. Omnia contributes fertilizer, training and agronomic advice.
• Zakhe Agricultural College – Omnia is a sponsor of this college in KwaZulu Natal. In addition to teaching mathematics, science, biology and different agricultural specialisations, the college provides a practical learning experience with students running their own farming projects during the year.

SOCIO-ECONOMIC DEVELOPMENT

Omnia’s socio-economic investment initiatives are focused on imparting knowledge,  transferring skills and helping people to farm productively. This is in line with our belief that in order to be effective, the social development role of business should be strategic rather than charitable. Initiatives include providing training, advice, farming skills and fertilizer products as follows:

• Buhle Farmers’ Academy – together with other companies, Omnia supports this initiative which has trained over 1 000 new farmers since inception in 2000.
• Elgin Community College – provides training in all aspects of deciduous fruit farming to farm workers in a two-week winter school programme.
• Foundation for Farmer Development (FFD) – an NGO established by a number of members including Omnia.  We support FFD with products as well as training and advisory services.
• Lowveld Emerging Farmers – Omnia disseminates knowledge of plant nutrition management and the principles of sugar cane fertilization at several farmers’ days in the area.

Supporting our communities

At Omnia, we believe we are not just part of a company, we are a community and we play a constructive role in socioeconomic upliftment in the communities in which we operate.
These include:

• Provision of fertilizer to community vegetable gardens that help to feed disadvantaged communities in a number of locations.
• Omnia provides a comprehensive gravity drip-based irrigation solution for smallholders, which increases the quality of year-round yields.
• Employees assist people living in the Tindehela squatter camp in the Western Cape with the provision of basic health services through a mobile clinic which services hard-to reach areas.
• Omnia participates in Business Against Crime, a partnership between the private sector and government.
• Contribution to WWF, the global environmental conservation organisation.

HIV/AIDS

While previous voluntary counselling and testing (VCT) programmes at the Group’s sites have indicated that the HIV/AIDS prevalence rate for employees is lower than the national average, we believe we have a responsibility to proactively manage the spread of the pandemic and for mitigating its impact – particularly in view of the fact that sub-Saharan Africa has the highest HIV/AIDS incidence in the world.

Our aim is to reduce the stigma of HIV/AIDS by promoting a culture of non-discrimination which ensures all employees are treated fairly and can operate with dignity. The Group’s proactive approach to preventing the spread of the disease includes:

• The provision of treatment against opportunistic diseases for all HIV-positive employees who are encouraged to seek antiretroviral treatment when necessary at state facilities or through their medical aid.
• Subsidised medical care for HIV-positive employees who are not on medical aid.
• VCT programmes at all operations.
• Education programmes in South Africa and other African operations run in conjunction with external health service providers.

Freely available condoms in accessible areas at all the Group’s sites.