People

1 End poverty | Icon

End poverty in all its forms everywhere.

3 Good health and well-being | Icon

Ensure healthy lives and promote wellbeing for all at all ages.

4 Quality education | Icon

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

8 Decent work and economic growth | Icon

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

 

Material issue See targetsSee risk 10

Safety

Background Unsafe practices and conditions can have devastating consequences―the impact of human loss and suffering on individuals and those around them is immeasurable.

Our response

Our ongoing Project Zero campaign highlights our commitment to zero injuries. Our target remains a zero Employee (Own) and Contractor combined Lost Time Injury Frequency Rate (LTIFR) with a minimum of a 10% improvement year-on-year.

We keep safety at the top of employees’ minds with relevant, actionable programmes that challenge them to proactively identify potential hazards and make safe choices. Once potential hazards are identified, teams seek first to understand them and then control and minimise exposures within our operations. We have a zero-tolerance approach to safety, both in terms of our own employees and contractors and believe it is unacceptable that a single life should be lost in the course of our business.

Globally, satisfaction with our safety performance, particularly in SNA, must be tempered by our collective shock, regret and grief at two fatalities in 2018: At Ehingen Mill in SEU, an employee was cleaning the conveyor belts leading from the woodchip silos to the digesters when he was pulled in between a guiding roll and a conveyor belt and killed. In Sappi Forests (SSA), a contractor lost control of his vehicle which left the road, resulting in his death.

Regrettably, the start of the 2019 year was marred by two contractor fatalities, one at Ngodwana Mill and at one at Sappi Forests in KwaZulu-Natal. Sappi people around the world have joined the CEO and board in supporting the families, friends and colleagues of those who tragically passed away.

In terms of regional safety performance:

  • SNA had the best-ever Employee (Own) LTIFR on record and the severity rate in this region declined significantly.
  • Although there was no improvement in the LTIFR for Employee (Own) in SEU, which stayed constant, this figure was somewhat skewed by the recent integration of new business units. On average, with some exceptions, the existing business units improved safety performance, however, all the new entities were at a lower safety level with actions plans put into place to reverse this trend. Ehingen Mill took immediate action following the fatality:
    • Activities previously classified as low risk were reassessed
    • Mill representatives participated in a workshop in South Africa held with external service providers, and
    • Works Council members and safety representatives travelled to Cloquet Mill to share best practices.
  • In SSA, Employee (Own) LTIFR was the best ever, with the Contractor LTIFR just above the best ever figure. We believe these achievements are the result of safety initiatives launched in 2018 following three fatalities in 2017:
    • A team from an internationally recognised safety consultancy was tasked to perform a safety culture review and suggest mitigation actions
    • Sappi Forests initiated the Stop and Think Before You Act safety initiative underpinned by an intense communication programme supported by graphic materials, and
    • We established a forum that involves contractors in safety plans and programmes and emphasises their inputs.

Sappi group

Employee (Own) and Contractor LTIFR

Employee (Own) and Contractor LTIFR | Graph

In support of the Sappi’s 2020Vision goals, all regions have set specific safety targets to be achieved by 2020 and each region has compiled specific action plans to achieve these targets (see Targets).

Value impact

The safety and wellbeing of employees and contractors.

Sappi Forests’
Stop and Think Before You Act
safety initiative, which adopted a storytelling approach, won a Gold Quill Award of Excellence for Safety Communication Management from the International Association of Business Communications (IABC) in 2018. In addition, the work was also selected as one of eight Best of the Best entries from 258 awarded entries. In total, 699 entries from 27 countries were judged.

The 13th Global Safety Awareness Week was held in June 2018. The theme,
Own Safety, Share Safety
highlighted the message that every individual should be responsible not only for their safety, but also for their colleagues’ and family’s safety. The initiative was well supported with senior managers visiting and participating in events at all the Sappi sites. The safety theme for 2019 is We Value Safety. This aims to reinforce the direct link to our values and the engagement of all within our group― I value my safety, I value your safety and Sappi values our safety.

Employe engagment survey chart

Material issue See targetsSee risk 10

Employee engagement

Background When employees are engaged at work, they feel a connection with the company. They believe that the work they’re doing is important and therefore work harder. This has obvious implications for productivity, career development and overall job satisfaction.

Our response

We hold an Employee Engagement Survey every two years, with the last one rolled out in September 2017. The objectives of the survey are to measure:

  • Changes in employee opinions and perceptions of Sappi as a place to work since the first baseline survey conducted in 2013
  • The evolution of Sustainable engagement within Sappi globally in order for us to understand what drives Sustainable engagement among employees at Sappi, and
  • The Employee Value Proposition to understand what motivates and drives our employees to work within this organisation.

The 2017 results were compared to industry benchmarks (global manufacturing norm), best in class benchmarks (high performing companies norm) and cultural benchmarks. Sappi’s global participation rate was 85%―a significant 15% increase from 2015. The global manufacturing norm participation rate is 83% and the response rate for high performing companies norm is 87%. There was an overall improvement in all categories that were measured in the survey when compared to the 2015 results.

Globally the most improved scores were for Leadership and direction, Operational efficiency and Talent and recognition. Areas that require focus were identified as Image and customer focus and Safety and wellbeing.

Value impact

  • Reduced staff turnover.
  • Improved productivity and efficiency.
  • Higher levels of customer retention and profitability.

In 2018, we spent an average of

US$500 on training per employee.
Internal training is supported by external training initiatives in each region (see People – Training initiatives).

Material issue See risk 10

Labour relations

Background Sound labour relations underpin the ongoing production and ability to generate income for any business.

Our response

The Sappi employment landscape includes interaction with trade unions at all our manufacturing sites across the group. This interaction is based on transparent communication and mutual respect.

We endorse the principles entrenched in the United Nations Global Compact (UNGC) and the Universal Declaration of Human Rights. In many areas, at a minimum, we conform to and often exceed the labour legislation requirements in countries in which we operate. We also promote freedom of association and engage extensively with representative trade unions. Globally, approximately 62% of Sappi’s workforce is unionised, with 70% belonging to a bargaining unit.

Overall, 2018 was characterised by very tough negotiations, particularly in South Africa, but relatively good relationships with organised labour across the geographies. However, community unrest is starting to impact on businesses across South Africa (see Key material issues – On our watchlist).

In SEU, approximately 67% of employees are members of a union and are represented through Works Councils. European Works Council meetings at which Sappi is represented by the Chief Executive Officer and Human Resources Director, take place twice a year. There were no major disputes in this region and we concluded collective labour agreements (CLAs) at Alfeld, Ehingen, Stockstadt, Lanaken, Kirkniemi, Carmignano and Condino Mills. At Maastricht Mill, the current CLA is in place until November 2019.

In SNA, approximately 64% of employees are unionised. SNA has 11 collective bargaining agreements with its hourly paid employees. The overall industrial relations climate in SNA remained good with no major disputes. We satisfactorily reached labour agreements with two unions at Cloquet Mill, while negotiations with one union at Somerset Mill are ongoing. SNA also has a number of negotiations planned for 2019.

In SSA, 56% of our employees belong to a trade union. While the industrial relations climate has been volatile, with trade unions competing amongst each other for improved membership and existence, we have continued to maintain a stable industrial relations environment across our operations―the result of our proactive engagement strategy and initiatives. We continue to engage with trade union leadership.

Wage negotiations were tough, but amicably settled. The Pulp and Paper Chamber is currently reviewing its future of the chamber given the fact that no industry agreement has been reached over the last two years. This will then assist the SSA leadership decision on how to approach the 2019 collective bargaining process.

We expect another tough wage negotiation process in 2019, with the country preparing for election and the majority union continuing to operate under pressure from other trade unions.

Value impact

  • Increased levels of engagement.
  • Enhanced productivity.
  • More harmonious working environment.
Chameleon Image

Material issue

Shared value

Background Creating shared value (CSV) is not about philanthropy or even corporate social responsibility. It is about creating meaningful economic and social value that benefits companies, communities and individuals.

Our response

Our revised Group Corporate Citizenship Policy (see www.sappi.com/policies) recognises the importance of CSV in securing sustainable communities and increased profitability.

We take a very active approach to CSV both regionally and globally, driving key initiatives in support of our three primary stakeholder groups―employees, customers and the local communities in which we operate. Projects are aligned with and support business priorities and needs, taking into account feedback from our stakeholders.

The fact that Sappi is headquartered and listed in South Africa, coupled to the significant development needs of the country, dictates a higher focus on CSV activities by SSA.

While each region has its own programmes, they conform to common themes that are aligned with our business needs and priorities, including education, local community support, the environment and health and welfare. We encourage employees to participate in outreach and community projects.

For detailed information about our CSV initiatives, see People – Sharing value, but a snapshot of initiatives in each region below gives some idea of our approach.

In SEU, our focus is on adding to the wellbeing, safety and health of our communities. Each Sappi mill and sales office supports various local education, cultural and environmental projects based on annual requests and identified needs.

In SNA, to encourage more engagement and involvement from employees, we have implemented a staff version of the long- standing Sappi Ideas That Matter (ITM) programme known as Employee Ideas that Matter. We established ITM, 19 years ago to fund designers who apply their creative talents to causes that address significant issues facing our society. The employee programme operates on similar principles whereby US$25,000 is made available to staff for worthy causes close to their hearts. In 2018, 50 entries were received and 11 projects were supported. Each business unit in this region has a Community Connections Group to channel local support.

One of the Employee Ideas that Matter projects that received funding was a book called

The Rainbow Rescue
written by a retired Sappi employee. The book aims to teach children about diversity and acceptance. The book is being used to promote literacy in the Westbrook area through the Westbrook Children’s Project, a programme of the United Way of Greater Portland that brings community resources together to help children through their school years. A number of copies have been donated to the Westbrook Community Centre and Westbrook schools. Additional copies will also be donated to other school libraries in the area.

Abashintshi group photo

Social investment spend per region

Social investment spend per region graph

Value impact

  • Greater understanding of community issues.
  • Socio-economic upliftment.
  • Expanded channels of communication.
  • Enhanced licence to trade.

In SSA, Employee Wellbeing Committees at each Sappi mill support local community projects based on annual requests and identified needs. These are coordinated via the annual Mandela Day (67 minutes) initiative.

In 2018, our Alien Vegetation Removal Programme at our mills in KwaZulu-Natal (KZN) province in collaboration with the non-governmental organisation Wildlife and Environmental Society of SA (WESSA) is a good example of our approach to CSV.

It involves the removal of alien vegetation on the land surrounding our mills―important to us as weeds have been identified as one of the biggest threats to biodiversity. A total of 20 community members per mill are being trained and employed through the programme, with the goal of establishing viable businesses which would ultimately serve other customers.

First established in KZN in 2015, the Abashintshi (isiZulu for ‘change agents’) programme includes life skills training for the youth, the Ifa Lethu programme for the elderly (protecting cultural heritage), holiday programmes for school children and Asset Based Community Development (ABCD).

The latter is based on the premise that communities can drive development process themselves by identifying and mobilising existing, but often unrecognised assets.

The programme has been expanded to 65 Sappi communities across the KZN and Mpumalanga. 117 Abashintshi are now involved. They are generating an income for themselves through their own businesses and they are helping community members to improve their own businesses.

During 2018, 190 micro- and small businesses were started or rejuvenated, earning an income for 268 people.