ANNUAL INTEGRATED REPORT 2017

This report has been prepared in accordance with the GRI’s G4 Guidelines which were launched in 2013. The company reports in line with the core format. G4 places greater emphasis on the importance of materiality and improves the level of harmonisation with other reporting standards.

External assurance of sustainability reporting was provided by Ernst & Young Inc. Data indicators were selected for assurance on the basis of the company’s assessment of the issues and indicators that are most significant to the sustainability performance of the business. See Ernst & Young Inc’s sustainability assurance statement. Data which has been externally assured is indicated in the GRI content index below.

GENERAL STANDARD DISCLOSURESSection heading and page numbersReporting level

Strategy and analysis

G4-1Provide a statement from the most senior decision-maker of the organisation (such as CEO, chair, or equivalent senior position) about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability Chief executive’s reviewFully
G4-2Provide a description of key impacts, risks and opportunitiesOur business model
Managing risks and opportunities		Fully

Organisational profile

G4-3 Report the name of the organisation Scope
Throughout the report		 Fully
G4-4 Report the primary brands, products and services Focus on the Northam group Fully
G4-5 Report the location of the organisation’s headquarters Administration and contact information Fully
G4-6 Report the number of countries where the organisation operates, and names of countries where either the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the report Focus on the Northam group Fully
G4-7 Report the nature of ownership and legal form Focus on the Northam group Fully
G4-8 Report the markets served (including geographic breakdown, sectors served, and the types of customers and beneficiaries) Focus on the Northam group Fully
G4-9 Report the scale of the organisation, including:
  • Total number of employees
  • Total number of operations
  • Net sales (for private sector organisations) or net revenues (for public sector organisations)
  • Total capitalisation broken down in terms of debt and equity (for private sector organisations)
  • Quantity of products or services provided
 Our business model
Focus on delivery		 Fully
G4-10 Report the composition of the workforce, including:
  • Report the total number of employees by employment contract and gender
  • Report the total number of permanent employees by employment type and gender
  • Report the total workforce by employees and supervised workers and by gender
  • Report the total workforce by region and gender
  • Report whether a substantial portion of the organisation’s work is performed by workers who are legally recognised as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors
  • Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism or agricultural industries)
 Five-year sustainability review
Human capital		 Fully
G4-11 Report the percentage of total employees covered by collective bargaining agreements Human capital
Remuneration report		 Fully
G4-12 Describe the organisation’s supply chain Focus on the Northam group
Social capital		 Partially
G4-13 Report any significant changes during the reporting period regarding the organisation’s size, structure, ownership, or its supply chain, including:
  • Changes in the location of, or changes in, operations, including facility openings, closings, and expansions
  • Changes in the share capital structure and other capital formation, maintenance, and alteration operations (for private sector organisations)
  • Changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and termination
 Focus on the Northam group Fully
G4-14 Report whether and how the precautionary approach or principle is addressed by the organisation Managing risks and opportunities Partially
G4-15 List externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses Scope
Human capital
Social capital
Natural capital
Corporate governance		 Fully
G4-16

List memberships of associations (such as industry associations) and national or international advocacy organisations in which the organisation:

  • Holds a position on the governance body
  • Participates in projects or committees
  • Provides substantive funding beyond routine membership dues
  • Views membership as strategic

Scope
Focus on the Northam group
Human capital
Social capital
Natural capital

The South African mining industry, including Northam, is governed by various laws, codes and guidance initiatives.

These include:

  • MPRDA
  • NEMA
  • Employment Equity Act
  • National Water Act
  • National Water Act
  • ILO
  • Samrec

Voluntary codes Northam subscribes to include:

  • GRI
  • CDP
  • SRI
  • MOSH targets
  • Framework agreement on a sustainable mining industry
  • Framework for peace and stability in the mining industry
 Fully

Identified material aspects and boundaries

G4-17
  • List all entities included in the organisation’s consolidated financial statements or equivalent documents
  • Report whether any entity included in the organisation’s consolidated financial statements or equivalent documents is not covered by the report
 Focus on the Northam group
Approval of annual financial statements and company secretary’s confirmation		 Fully
G4-18
  • Explain the process for defining the report content and the aspect boundaries
  • Explain how the organisation has implemented the reporting principles for defining report content
 Scope Fully
G4-19 List all the material aspects identified in the process for defining report content Our material issues Fully
G4-20 For each material aspect, report the aspect boundary within the organisation, as follows:
  • Report whether the aspect is material within the organisation
  • If the aspect is not material for all entities within the organisation (as described in G4-17), select one of the following two approaches and report either:
  • The list of entities or groups of entities included in G4-17 for which the aspect is not material or
  • The list of entities or groups of entities included in G4-17 for which the aspects is material
  • Report any specific limitation regarding the aspect boundary within the organisation
 Our material issues
Financial capital
Manufactured and intellectual capital
Human capital
Social capital
Natural capital		 Partially
G4-21 For each material aspect, report the aspect boundary outside the organisation, as follows:
  • Report whether the aspect is material outside of the organisation
  • If the aspect is material outside of the organisation, identify the entities, groups of entities or elements for which the aspect is material
  • In addition, describe the geographical location where the aspect is material for the entities identified
  • Report any specific limitation regarding the aspect boundary outside the organisation
 Our material issues
Financial capital
Manufactured and intellectual capital
Human capital
Social capital
Natural capital		 Partially
G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements Not applicable –
G4-23 Report significant changes from previous reporting periods in the scope and aspect boundaries Scope Fully

Stakeholder engagement

G4-24 Provide a list of stakeholder groups engaged by the organisation Social capital Fully
G4-25 Report the basis for identification and selection of stakeholders with whom to engage Social capital Fully
G4-26 Report the organisation’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and give an indication as to whether any of the engagement was undertaken specifically as part of the report preparation process Our material issues
Social capital: Stakeholder engagement
Social capital: Forums in the Booysendal area
Natural capital		 Fully
G4-27 Report key topics and concerns raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns Human capital
Social capital: Stakeholder engagement
Social capital: Local community relationships 		Fully

Report profile

G4-28 Reporting period (such as fiscal or calendar year) for information provided Scope Fully
G4-29 Date of most recent previous report (if any) Scope Fully
G4-30 Reporting cycle (such as annual, biennial) Scope Fully
G4-31 Provide the contact point for questions regarding the report or its contents Administration and contact information Fully
G4-32 ‘In accordance’ option:
  • Report the ‘in accordance’ option the organisation has chosen
  • Report the GRI Content Index for the chosen option
  • Report the reference to the external assurance report, if the report has been externally assured. GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines
 Administration and contact information
This page
Independent assurance report		 Fully
G4-33 Assurance:
  • Report the organisation’s policy and current practice with regard to seeking external assurance for the report
  • If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided
  • Report the relationship between the organisation and the assurance providers
  • Report whether the highest governance body or senior executives are involved in seeking assurance for the organisation’s sustainability report
 Scope
This page
Independent assurance report		 Fully

Governance

G4-34 Report the governance structure of the organisation, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts Corporate governance report Fully
G4-36 Report whether the organisation has appointed an executivelevel position or positions with responsibility for economic, environmental and social topics, and whether post-holders report directly to the highest governance body Corporate governance report Fully
G4-38 Report the composition of the highest governance body and its committees by:
  • Executive or non-executive
  • Independence
  • Tenure on the governance body
  • Number of each individual’s other significant positions and commitments, and the nature of the commitments
  • Gender
  • Membership of under-represented social groups
  • Competences relating to economic, environmental and social impacts
  • Stakeholder representation
 Directorate Fully
G4-39 Report whether the Chair of the highest governance body is also an executive officer (and, if so, his or her function within the organisation’s management and the reasons for this arrangement) Directorate
Corporate governance report		 Fully
G4-41 Report processes for the highest governance body to ensure conflicts of interest are avoided and managed. Report whether conflicts of interest are disclosed to stakeholders, including, as a minimum:
  • Cross-board membership
  • Cross-shareholding with suppliers and other stakeholders
  • Existence of controlling shareholder
  • Related party disclosures
 Corporate governance report Fully
G4-47 Report the frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities Corporate governance report Fully

Highest governance body’s role in sustainability reporting

G4-48 Report the highest committee or position that formally reviews and approves the organisation’s sustainability report and ensures that all material aspects are covered Independent assurance report Fully

Remuneration and incentives

G4-51 Report the remuneration policies for the highest governance body and senior executives for the types of remuneration below:
  • Fixed pay and variable pay:
  • Performance-based pay
  • Equity-based pay
  • Bonuses
  • Deferred or vested shares
  • Sign-on bonuses or recruitment
  • Incentive payments
  • Termination payments
  • Clawbacks
  • Retirement benefits, including the difference between benefit schemes
  • Contribution rates for the highest governance body, senior executives, and all other employees
Report how performance criteria in the remuneration policy relate to the highest governance body’s and senior executives’ economic, environmental and social objectives		 Remuneration report Fully
G4-52 Report the process for determining remuneration. Report whether remuneration consultants are involved in determining remuneration and whether they are independent of management. Report any other relationships which the remuneration consultants have with the organisation Remuneration report Fully

Ethics and integrity

G4-56 Describe the organisation’s values, principles, standards and norms of behaviour such as codes of conduct and codes of ethics Human capital
Corporate governance report		 Fully
G4-57 Report the internal and external mechanisms for seeking advice on ethical and lawful behaviour, and matters related to organisational integrity, such as helplines or advice lines Managing risks and opportunities
Human capital
Corporate governance report		 Fully
G4-58 Report the internal and external mechanisms for reporting concerns about unethical or unlawful behaviour, and matters related to organisational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines Managing risks and opportunities
Human capital
Corporate governance report		 Fully
SPECIFIC STANDARD DISCLOSURESSection heading and page numbersReporting levelExternal assurance
CATEGORY: ECONOMIC

Material aspect: economic performance

G4-EC1 Direct economic value generated and distributed Our business model
Focus on delivery
Financial capital
Human capital
Housing project
Social capital
SLP expenditure		 Fully Yes – SLP expenditure, housing project, payments to government
G4-EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change Natural capital Partially No
G4-EC4 Financial implications and other risks and opportunities for the organisation’s activities due to climate change Not applicable – –

Material aspect: indirect economic impacts

G4-EC7 Development and impact of infrastructure investments and services supported Focus on the Northam group
Our business model
Our strategy
Financial capital
Manufactured and Intellectual capital		 Partially No
CATEGORY: ENVIRONMENTAL

Material aspect: materials

G4-EN1 Materials used by weight or volume Natural capital Fully No
G4-EN2 Percentage of materials used that are recycled input materials Natural capital Fully No

Material aspect: energy

G4-EN3 Direct energy consumption Our business model
Five-year sustainability review
Natural capital		 Fully Yes
G4-EN4 Indirect energy consumption Our business model
Five-year sustainability review
Natural capital		 Fully Yes
G4-EN6 Reduction of energy consumption Natural capital Fully No

Material aspect: water

G4-EN8 Total water withdrawal by source Five-year sustainability review
Natural capital		 Fully No
G4-EN10 Percentage and total volume of water recycled and reused Five-year sustainability review
Natural capital		 Fully Yes

Material aspect: biodiversity

G4-EN11 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Natural capital Fully No
G4-EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas Natural capital Fully No
MM1 Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated Natural capital Fully No

Material aspect: emissions

G4-EN15 Direct greenhouse gas (GHG) emissions (Scope 1) Five-year sustainability review
Natural capital		 Fully Yes
G4-EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) Five-year sustainability review
Natural capital		 Fully Yes
G4-EN17 Other indirect greenhouse gas (GHG) Emissions (Scope 3) Five-year sustainability review
Natural capital		 Fully No
G4-EN20 Emissions of ozone depleting substances Our business model
Five-year sustainability review
Natural capital		 Fully No

Material aspect: effluents and waste

G4-EN22 Total water discharge by quality and destination Natural capital Fully No
G4-EN24 Significant environmental incidents Natural capital Fully Yes

Material aspect: compliance

G4-EN29 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations Natural capital Fully Yes

Material aspect: environmental grievance mechanisms

G4-EN34 Number of grievances about environmental impacts filed addressed and resolved through formal grievance mechanisms Natural capital Fully No

Material aspect: employment

G4-LA1 Total number and rates of new employee hires and employee turnover by age group, gender, and region Five-year sustainability review
Human capital 		Partially, turnover by age group or gender is not collated and therefore not available No

Material aspect: labour/management relations

G4-LA4 Percentage of employees covered by collective bargaining agreements Human capital
Remuneration report		 Fully Yes
MM4 Number of strikes and lock-outs exceeding one week’s duration, by country Human capital Fully Yes

Material aspect: occupational health and safety

G4-LA5 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes Human capital Partially, the figure is not reported as a percentage No
G4-LA6 Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work related fatalities, by region and by gender Our business model
Five-year sustainability review
Human capital 		Partially Yes – RIIR and LTIIR

Material aspect: diversity and equal opportunity

G4-LA12 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity Five-year sustainability review
Human capital		 Partially, a breakdown of employees by age group is not available. A more critical measure in South Africa specifically, is the percentage of historically disadvantaged South Africans (HDSAs) in management roles and women in mining, which is reported. Yes – percentage of women in core mining job and percentage of HDSAs in management

Material aspect: labour practices grievance mechanisms

G4-LA16 Number of grievances about labour practices filed, addressed, and resolved through formal grievance mechanisms Not reported – –

Material aspect: freedom of association and collective bargaining

G4-HR4 Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights Human capital Partially, no violations reported No

Material aspect: child labour

G4-HR5 Operations and suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour Human capital Fully, no incidents occurred.
Northam upholds the basic labour rights of the Fundamental Rights Convention of the ILO and in legislation, regulations and practices of South Africa.
The company does not employ child labour, nor does it employ workers younger than 18 years of age as all prospective employees are screened in terms of Northam’s employment policies and procedures		 No

Material aspect: forced or compulsory labour

G4-HR6 Operations and suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour Human capital Partially, no incidents occurred. Northam upholds the basic labour rights of the Fundamental Rights Convention of the ILO and in legislation, regulations and practices of South Africa. No

Material aspect: anti-corruption

G4-SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified Managing risks and opportunities
Corporate governance report		 Fully, 100% of operations assessed for risks related to corruption and risks were identified No
G4-SO5 Confirmed incidents of corruption and actions taken Managing risks and opportunities
Corporate governance report		 Fully - whistle blowers are protected in accordance with the provisions of the Protected Disclosures Act, No 26 of 2000 and these incidents cannot be disclosed No