UK strategic report, human rights disclosures, Modern Slavery Act

Lonmin Plc – Annual report – 30 September 2017

Industry: mining


Human Rights

Lonmin is committed to respecting the human rights of both its workforce and those who may be affected by its operations, and continues to seek to implement the United Nations Guiding Principles on Human Rights (the Guiding Principles) throughout its operations.

As part of the ongoing process, Lonmin is embarking on development of an internal human rights due diligence checklist to assist the Company to achieve and maintain full compliance with the relevant policies and systems.

Modern Slavery Act and Procurement

Lonmin’s human rights commitment includes a prohibition on modern slavery in all its forms, including human trafficking and forced or compulsory labour.

Lonmin’s workforce

Lonmin is alert to the modern slavery risks which can affect the mining industry, including employment of migrant workers, health and safety issues and concerns around living conditions. All new Lonmin employees are subject to vetting procedures, including age and identity verification, credit checks, criminal record checks and a medical fitness assessment. We have zero tolerance for child labour throughout our organisation, and do not employ individuals or hire contractors aged less than 18 years old. The minimum legal working age in South Africa is 15.

We strongly support the right of all our employees and contractors to freedom of association, and are committed to building constructive relationships with recognized unions, in line with the prescribed laws. Wages for our unionised employees are negotiated by collective agreement. We also comply with South African legislation regarding working hours, which stipulates that a worker may not be required to work more than 45 hours per week.

Further details on the steps Lonmin takes to reduce the risk of modern slavery amongst its workforce are set out in the 2017 Modern Slavery and Human Trafficking Statement, available on our website.

Lonmin’s supply chains

Lonmin also seeks to ensure that its counterparties conduct their own operations in line with Lonmin’s standards on human rights and modern slavery Act.

During the year, Lonmin circulated a new questionnaire to all existing vendors, requiring them to answer a set of questions relating specifically to modern slavery risks in their own businesses and their supply chains. We are currently collating and considering the responses we have received.

Lonmin’s approval process for new vendors requires potential vendors to answer questions in relation to human rights, including whether the vendor has its own human rights policy and whether it provides human rights training to its staff. During FY2017, we expanded this process to include specific questions regarding the new vendor’s policy in respect of modern slavery and the due diligence processes in place in respect of their supply chains.

In addition, the standard terms and conditions applicable to contracts with all vendors require Lonmin’s counterparties to adhere to a range of legislation relevant to human rights, including the South African Labour Relations Act (66 of 1995), the Basic Conditions of Employment Act (75 of 1997), the Compensation for Occupational Injuries and Diseases Act (130 of 1993), as well as Lonmin’s own Sustainable Development Standards and Code of Business Ethics. These acts and standards contain wide-ranging human rights stipulations, including health and safety at work, working hours, freedom of association, the prohibition of child labour, non-discrimination and freedom from forced labour and corporal disciplinary practices. During FY2017, these standard terms and conditions were expanded to expressly require each vendor to prohibit modern slavery from their operations and take steps to work with their own suppliers to reduce the risk of modern slavery in their supply chains.

Housing and Living Conditions

Lonmin reviewed the housing and living conditions of our employees through an Integrated Lonmin Employee Housing Strategy.

A high-level analysis done during the latter part of 2016 indicated that approximately half of our category 4 – 9 employees require decent accommodation. Following a formal Expression of Interest process, a strategic advisor and an implementation partner were appointed, and a joint forum with organised labour was established. The review started with an assessment of the existing strategy and included feedback from a survey of employee aspirations as well as weekly input from the joint forum. The revised Lonmin Employee Housing strategy has been presented to the Exco and Lonmin Board, the unions and the DMR and is pending approval.

This revised strategy aims to address ways to facilitate home ownership, with a focus on collaborative partnerships with government. A memorandum of understanding has been signed with the Housing Development Agency which forms part of the Department of Human Settlements. The strategy integrates into future spatial development plans for schools, clinics, transport hubs and other municipal infrastructure.

The strategy looks beyond the supply of housing and focuses on affordability and the creditworthiness of employees and community members to ensure that the demand for housing can be met.

Once the strategy is approved, the detailed implementation plan, inclusive of a funding solution, will be integral to the revised SLPs, which will be in place from 2019.

Infill apartments per SLP commitments

The Lonmin Board committed to spend R500 million on employee accommodation from 2014 to 2018. 403 of the 493 of the phase 1 and 2 single and family units constructed have been allocated and occupied. Phase 3 is currently under construction and will be allocated in December 2017. Phase 4 is expected to be completed by the end of 2018, with occupancy anticipated for February 2019.

Construction contracts have been awarded to two local companies with 100% black ownership and we estimate that circa 1,150 local jobs have been created through this project.

See Lonmin’s Sustainable Development Report 2017 for further information on employee housing.