The year under review was a time of significant change for the company on a number of fronts. Changes in ownership and board structure are dealt with in the section on ethics and governance . A major restructuring of the organisation took place late in the year following the retirement of former CEO, Bobby Godsell, and the appointment of veteran mining engineer and manager, Mark Cutifani.
Key changes to the company’s structure followed and this was accompanied by the restructuring of the human capital of the company. Direct consequence of the restructuring were:
Restructuring was undertaken first to improve operating performance, which led to the establishment of decentralised regional operating structures; and secondly, to flatten and simplify reporting lines and hierarchies, at least at senior levels. Thus the former Chief Operating Officer roles were made redundant. Three Executive Vice Presidents were appointed in the three different time zones in which the group operates. The three – Robbie Lazare (Africa), Ron Largent (Americas) and Graham Ehm (Australia) – report directly to the CEO.
Further appointments made to the Executive Committee of the company were: Charles Carter (Business Strategy); Richard Duffy (Business Development); Peter Rowe (Business Effectiveness); Thero Setiloane (Sustainability); Nigel Unwin (Organisational Development); Mark Lynram (Treasurer) and Yedwa Simelane (Compliance and Corporate Administration); and Srinivasan Venkatakrishnan remains the CFO and is the only other Executive Director (other than Mark Cutifani).
At an operating level, two decentralised teams have been created in Africa reporting to Robbie Lazare:
These changes will involve ongoing restructuring and downsizing to the corporate services provided from Johannesburg.
AngloGold Ashanti continues to be a significant formal sector employer in most of the countries in which it operates, particularly at the South African operations (60% of employees) and Ghana (12%).
In 2007, AngloGold Ashanti employed 61,522 people (calculated on a monthly average basis), comprising 47,383 (77%) permanent employees and 14,139 (23%) contractors. This is virtually unchanged from 2006, when the group employed 61,453 people, made up of 46,407 permanent employees and 15,047 contractors. Details may be found in the table below:
|Country||2007||Total 2006||Variance (%)|
* Includes AngloGold Ashanti Health and other non-producing subsidiaries
|Separations – 2007||(%)|
Significant changes in total employee numbers were reported in Argentina, Australia, Ghana and Namibia.
These were as a result of:
In total, 5,051 people left the group during the year (represents 10.5% of total number of permanent employees) for reasons relating to dismissal, resignation, death, retirement and incapacitation. Restructuring at Obuasi in Ghana resulted in the separation of 500 employees. Separation by gender and age group is not specifically recorded by the company for management purposes and therefore cannot be reported. In South Africa and Brazil, where women in mining programmes are run, separation levels among women are lower than in the general population. See case study on: women in mining – Brazil
Certain human rights conventions, including those relating to freedom of association and collective bargaining, are entrenched within South African legislation and the constitution, as well as in laws and regulations within Argentina, Brazil, Australia, Namibia, Tanzania, Mali, Namibia and the United States. In addition, we are committed to upholding the Fundamental Rights Convention of the International Labour Organization (ILO). Specifically we seek to ensure the implementation of fair employment practices by prohibiting forced, compulsory or child labour and implementing these practices through country, operation and shaft level recognition and collective bargaining agreements, and through disciplinary, grievance and non-discrimination agreements and codes. No breaches of fundamental rights conventions of the ILO were alleged, nor were any charges brought against the company in connection with these during the year. No operations are deemed to be at risk in this regard, although in new project areas such as the DRC and Colombia, special vigilance is due.
Human rights training, particularly for security personnel, has been initiated at all operations where this is required. In South Africa, 84% of all security employees (440 people) were trained during the year.
As part of the implementation of the group’s toolkit on security and human rights, monitoring of training, particularly in high risk areas, will be an area of attention in 2008. The company’s values and business principles are unequivocal about the company’s respect for human rights, and all employees have been informed of these.
Freedom of association, in particular, is recognised as a fundamental right within the group, and collective bargaining is encouraged in those countries where the relevant structures exist. Management/union relationships are governed by collective bargaining, recognition and company-negotiated agreements in respect of all of the group’s operations, with 93% of the global workforce represented by recognised trade unions or provided for by way of collective bargaining processes. AngloGold Ashanti is a strong supporter of collective bargaining. See case study: Towards collective bargaining.
Although only 87% of all South African employees are members of unions, 97.5% fall under collective bargaining agreements, including the agency-shop agreement. (The agency-shop agreement exists across the lower bargaining unit at the South African operations. This agreement provides for the contribution by non-union members of 0.75% of basic monthly pay to a fund which is used to address work and social needs of that bargaining group. This has been negotiated because union members pay 1% of their basic pay as union dues.) The outcome of wage negotiations with the unions applies to all employees within that bargaining unit, whether they are union members or not.
The only exceptions to the collective bargaining arrangements are operations in the United States and Australia, where employees (as is common practice in these countries) are not members of unions, but where a high degree of employee participation is encouraged. Brief details on the level of union participation and the unions involved are indicated in the accompanying graph.
There were no significant disputes or strikes at any of the group’s operations during the year. The most significant agreements reached between the company and unions during the year were the review of wages and other conditions of service in both South African and Ghana. (See case study : Towards collective bargaining).
Generally, conditions of service, including minimum notice periods and negotiation practices with employees and employee representatives, are guided by country legislation, collective bargaining agreements and individual contracts of employment and therefore vary from region to region.
All forms of discrimination, including racial and sexual harassment and discrimination against the disabled, are prohibited by the company’s business principles as well as by legislation in most of the countries where our operations are situated. Policies are in place at all operations to protect employees from prejudice and, in some countries, to promote the advancement of certain groups of employees. Specifically in countries in Africa and in Australia the rights and promotion of indigenous peoples, the historically disadvantaged and women are provided for within legislation and adopted and followed by the company. No significant cases of discrimination were reported during the year.
For a number of reasons, including legislation (which has excluded women from participating in mining operations in many countries) and custom, mining has historically not been a career easily accessible to women. AngloGold Ashanti recognises that women have an equal right to participate in mining as a career and has put plans in place in those countries where it has been necessary to ensure the attraction, retention, training, development and promotion of women. (See case study on Women in mining.) Key statistics related to women in the group as at the end of 2007 are as follows:
In South Africa in particular, the planning for and implementation of recruitment and advancement programmes for women is a requirement of the Mineral and Petroleum Resources Development Act (MPRDA) and the company reports annually to the DME on both targets set and progress made. While progress is being made in this regard, the target set by the Mining Charter – that 10% of all posts must be held by women by 2009 – is a challenging one. Progress made and realistic targets prepared by the company are illustrated in the table.
|% of all employees who are women||6.9%||8.2%||9.1%||12.3%||14.4%|
|% of top management who are women||10%||16.7%||13.3%||6.2%||6.7%|
|% of senior management who are women||7.9%||8.1%||8.9%||12.8%||13.0%|
|% of professionally qualified staff who are women||14.4%||16.1%||17.4%||21.0%||23.4%|
2008 and 2009 represent targets. Top management = Paterson F band. Senior management = Paterson E band. Professionally qualified = Paterson D band.
It is the company’s intention that there is parity between the wages and conditions of service for men and women. Currently the number of women in mining are still relatively low and tends to be within administrative and advisory positions. Programmes are in place in South Africa and Brazil in particular to increase the participation of women in core mining disciplines. Where the ratio of basic salary of men to women is available and relevant, this is reported in the country reports.
AngloGold Ashanti endeavours to promote an organisation that recognises and is sensitive to the diversity of the people within its host countries and is cognisant of past inequities which need to be addressed, while at the same time affording all employees the opportunity to develop further in their chosen careers. Specifically at a time when the global resources industry is experiencing a shortage of skilled personnel, it has become even more of a group imperative to attract, train, develop and promote skilled employees.
The employment of historically disadvantaged South Africans (HDSAs) is regulated through legislation in South Africa, specifically the Employment Equity Act, the MPRDA and the Mining Charter. Employment equity targets and performance are set and monitored by a board sub-committee. Employment targets and achievements are reported annually to the South African Department of Labour and the DME.
As at the end of 2007:
Again, in South Africa, historical recruitment practices have created a reliance on the employment of people from outside the country, primarily in the South African Development Community (SADC). In turn, these practices have resulted in a dependence of these countries on the South African mining industry both indirectly, to provide jobs and support for large proportions of their economically active populations and their dependants, and directly through remittances that are provided. The Mining Charter requires that South African mining companies commit to not discriminating against foreign nationals in their employment practices. In line with the reporting required by the Mining Charter on this aspect, AngloGold Ashanti reports that at the end of 2007, 34.6% of employees in South Africa were drawn from outside the borders of the country. (2006: 35.7%).
Elsewhere in Africa, an issue that has become increasingly important and regulated is the need to encourage the employment of local employees and replacement of expatriate employees, through skills transfer programmes and career development of local citizens. We have localisation plans and programmes in place at all our operations to manage the placement of expatriate employees and the training and development of the indigenous population. This process is not without its challenges – specifically skills shortages created by the surge in exploration and mining in Africa and elsewhere in the world, the lack of technical skills and competence in regions and countries where the company operates, the remoteness of mining operations, and the finite time horizon of mining and exploration activities.
A major company and country initiative, which includes working with other mining companies and the state, was undertaken in Tanzania in 2007 where skills shortages have reached acute levels. These initiatives are reported in a case study on developing artisans at Geita. The current level of expatriate employees at the African operations outside South Africa is reported below.
Training and development initiatives at all levels – from Adult Basic Education and Training (ABET), to skills development and graduate training, to executive development programmes – underpin our overall global human resources strategy.
As part of the initiative at the South African operations to upgrade employee skills, and to create development opportunities for HDSAs in particular, the company has identified a pool of high-potential employees for whom development plans have been put in place and mentors appointed. Over and above this, all employees in the relevant disciplines are eligible to participate in learnership programmes in engineering and mining, learner miner programmes, trainee shift boss programmes, and mine overseer training. In fact, the broad level of development and exposure that the group can offer is a primary incentive in its efforts to attract and retain qualified and competent employees around the world. Direct total training and development expenditure in 2007 amounted to $31.4 million (2006: $26.4 million) of which $24.8 million (2006: 21.2 million) was spent on employee training and development in South Africa.
Data related to average hours of training per employee is not collated across the group as it is not deemed a meaningful measure given the number of people involved or significant differences in skills sets and the diversity of operations. This parameter therefore cannot be reported. While additional data will be collated in the future when the group’s global human resources database is implemented in 2008, it is likely that this will be reported at an operational level only. Some of the training and development initiatives undertaken by the group are discussed in more detail below.
AngloGold Ashanti has, over more than a decade, been providing ABET to employees so as to ensure that all employees have the opportunity to become literate and numerate. All employees at the operations in Australia and the United States are literate, as are most employees in Argentina, Brazil and Ghana. The issue of illiteracy is most acute in South Africa where, currently, 9% of the South African workforce Group 3-8 does not have a recognised school-level qualification (2006: 19%).
In South Africa, the company spent R9.20 million ($1.31 million) on ABET during the year, with 4,122 employees (includes 29 employees who attended NQF2), and community members participating in ABET programmes. The company provides extensive resources and infrastructure for ABET, with eight ABET centres for employees and two for community members.
In 2007, an ABET programme was initiated at Navachab for employees and community members – see case study on Responding to the need for literacy training at Navachab Mine.
The group’s Management Development Programme (MDP) and Intermediate Management Development Programme (IMDP) continued during the year, with 39 and 34 employees respectively participating at a cost to the company of around $490,000. Increasingly these programmes are becoming international in scope – and this again is providing a valuable forum for diversity management and training.
Support for tertiary education in business-related subjects is another important means of developing the company’s talent pool. Study assistance programmes for employees and potential employees were provided at all operations across the group. In Argentina, where the skills shortage is acute, an innovative programme has been developed in conjunction with the University of Patagonia (UNPA) and other employers. (See case studies on Companies join forces to fast track unskilled employees and Mining careers for local employees)
Training for life (also called portable skills training in South Africa) is another element of our suite of training and development products. The aim of training for life programmes (developed and applied for specific circumstances around the group) is to deliver training and development in skills that are widely applicable and transferable, providing employees and ex-employees with the skills to remain economically active, whether through formal employment or self-employment, when they are no longer employed by the company. This training is also given in preparation for career endings, whether as a result of ill-health, retrenchment, downscaling or mine closure. Portable skills training was provided to 750 people in South Africa during the year, drawing from both employees and community members. (See case study on the Lamego Project library in Brazil)
At all of its operations, AngloGold Ashanti at least meets the minimum wage requirements legislated by the state for the mining sector where it has been legislated. In South Africa, for example, minimum wages have been set for domestic workers and farm workers, but in most other sectors like the mining sector, wages and conditions of service have been negotiated through a collective bargaining process, of which AngloGold Ashanti is a firm supporter. Minimum wages in the mining sector are well above minimum wages in the agricultural sector. In Ghana, minimum wages are set by the state for government employees. AngloGold Ashanti’s operations exceed these requirements and, in addition, provide benefits such as a provident fund, which is not provided for in legislation but was negotiated through the collective bargaining process. In Tanzania, for example, a minimum wage has been legislated for the mining industry. This is well above other legislated minimum wages in the country as part of that government’s intention that mineworkers should benefit from the mineral wealth of the country.
Formal performance and career development review processes are in place at all operations, for either individuals or teams. In South Africa where most of the group’s employees are based, a formal skills development plan is in place for all disciplines and all operations in line with the company’s Social and Labour Plan (SLP) which is a submission by the company that has been accepted by government. Skills development plans are reviewed and updated on an annual basis. See the SLP reports for the West Wits (PDF - 1.75MB) and Vaal River (PDF - 2.95MB) regions.
In addition to fair remuneration practices and policies, the company provides extensive benefits to employees, beyond those which are legally mandated. These benefits include: health care; maternity and paternity leave; retirement funds; share ownership; housing allowances and accommodation; death and disability cover, and educational/study assistance.
For some employees the provision of housing or accommodation is a benefit, for others it is a necessity. This is so for employees located at mining operations in remote areas (such as Argentina and Australia) or for employees who are drawn from other areas, as is the case for a significant number of employees in South Africa.
By far the most formalised on-mine, employee-only accommodation is that provided in South Africa, where historically a large proportion of employees have been drawn from surrounding countries and from rural areas within the country itself. The company has been introducing more family accommodation and encouraging home ownership. As long as employees are drawn from areas beyond the immediate vicinity of the mines, however, some form of company-provided accommodation is going to be required. As at the end of 2007, 51% of South African employees were housed in company-provided residences: this shows a significant decline from 2003 when 62% of all employees were housed there. A programme to upgrade residences is under way and, in particular, efforts are being made to convert communal rooms into single room accommodation. Since 2005 when this initiative began 1,054 single rooms have been created and a further 1,088 rooms will be created by the end of 2008. The cost to the company in 2007 was some R11.36 million.
In South Africa, meals are provided to employees living in residences and their nutritional value is carefully planned and monitored by an independent nutritional expert. The minimum calorific value required by underground workers (as stipulated by a Chamber of Mines study) is 13,500kJ – AngloGold Ashanti’s meals provide between 15,000 and 17,000kJ per day.
Since women recruits are drawn from local areas, no exclusive accommodation is provided for women (apart from in the family accommodation). However, facilities for women have been identified as a future need, and several new change house facilities have been constructed to accommodate the increasing number of women working underground.
The provision of at least primary healthcare to all employees is a basic condition of service for all AngloGold Ashanti employees and, increasingly, healthcare benefits are provided to dependants as well. Details on the specific housing and healthcare benefits that are provided to employees at the various operations may be found in the Country operational reports.
For the purpose of reporting in line with the Mining Charter, the company produces a separate report for the DME, see the SLP reports for the West Wits (PDF - 1.75MB) and Vaal River (PDF - 2.95MB) regions.
AngloGold Ashanti Annual Report 2007 – Report to Society