Sappi and the United Nations Global Compact
Business should support and respect the protection of internationally proclaimed human rights.
As stipulated in our Group Human Rights Policy and Group Human Resources Policy, we endorse the principles entrenched in the Universal Declaration of Human Rights and the International Labour Organisation (ILO).
We also conform to, and in many cases, exceed, prescriptions set out in the labour legislation in the countries in which we operate.
Hotlines in all regions allow employees and suppliers to report human rights abuses in full confidentiality.
Make sure their own corporations are not complicit in human rights abuses.
- Require our suppliers to respect human rights and act in full accordance with our policies and guidelines concerning social responsibility, labour standards and human rights, and
- We commit to openly and transparently reporting on human rights violations within our value chain, should these occur.
This policy further commits us to working with communities in order to address indigenous people’s interests and to resolving land claims in South Africa by working with the claimants to achieve resolutions which benefit all parties.
In terms of our Group Supplier Code of Conduct, we also encourage our suppliers to uphold the principles of human rights as set out in the United Nations Universal Declaration on Human Rights.
The World Justice Project Rule of Law Index® measures rule of law adherence in 113 countries and jurisdictions worldwide based on eight factors: constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice (www.worldjusticeproject.org/sites/ default/files/documents/WJP-ROLI-2018-June-Online- Edition_0.pdf).
The fourth factor, fundamental rights, encompasses adherence to the following fundamental rights: effective enforcement of laws that ensure equal protection, the right to life and security of the person, due process of law and the rights of the accused, freedom of opinion and expression, freedom of belief and religion, the right to privacy, freedom of assembly and association, and fundamental labour rights, including the right to collective bargaining, the prohibition of forced and child labour, and the elimination of discrimination.
Under this index, the countries in which we have manufacturing operations are classified as set out in the table below. This confirms our understanding that human rights violations in these countries are limited. Scores range from 0 to 1, with 1 indicating the strongest adherence to the rule of law:
We have identified no operations or significant suppliers where the right to exercise freedom of association and collective bargaining has been violated or is at significant risk, nor have we identified operations and significant suppliers as having any significant risk for incidents of child labour. Similarly, we have identified no operations and significant suppliers 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.
Businesses should uphold freedom of association and the effective recognition of the right to collective bargaining.
We promote freedom of association and sound labour practices by engaging extensively with representative trade unions. Protecting the right to freedom of association and collective bargaining is fundamental to the manner in which we do business. In 2018, globally 62% of our workforce was unionised, with 70% belonging to a bargaining unit.
We focus on maintaining constructive relationships with trade unions, believing that this is essential to long-term sustainable development. Discussions range from remuneration issues, to training and development, health and safety and organisational changes.
Given the complex labour situation in South Africa, we have established a number of structures to enhance ongoing positive engagement with union leadership. This is facilitated by structures such as the National Partnership Forum which includes senior members of management and senior union leaders who hold regular meeting where business, safety and union challenges are discussed.
Disciplined behaviour is essential not only for individual wellbeing, but also to achieve our group goals and objectives. In each region, disciplinary codes ensure disciplinary procedures are applied consistently, while grievance policies entrench the rights of employees, including the right to raise a grievance without fear of victimisation, the right to seek guidance and assistance from a member of the human resources department or their representative at any time and the right to appeal to a higher authority, without prejudice.
The elimination of all forms of forced and compulsory labour.
Our Group Human Rights Policy explicitly forbids the use of compulsory and forced labour. Our Group Supplier Policy states that we encourage our suppliers to adhere to national labour law and to internationally proclaimed human rights, including those relating to forced labour (including prison and slave labour).
Our labour standards ensure that our remuneration practices are fair, with compensation levels set to reflect competitive market practices and internal equity as well as company and individual performance.
In all three regions, labour is sourced on the open market. In rural areas, forest products companies like Sappi are often the only, or major, employers in the region which makes the local population very dependent on the company and which could in turn lead to exploitative behaviour and an indirect form of forced labour.
In South Africa, as in the other regions where we operate, Sappi pays market-related wages in accordance with or above local legislation. In 2013, in South Africa, we made it a contractual obligation for our forestry contractors to pay their workers in accordance with the minimum wage stipulated by government for the agricultural sector. We check compliance with this stipulation on an ongoing basis.
Furthermore, in this region, our plantations are 100% Forest Stewardship Council® (FSC®)-certified or controlled and this forest certification system stipulates the protection of indigenous peoples’ rights.
We are further focusing on promoting economic inclusion and eliminating poverty through our Sappi Khulisa enterprise development scheme which has been in operation since 1983.
This initiative, which began in 1983, is aimed at community tree farming and has successfully uplifted impoverished communities in KwaZulu-Natal and the Eastern Cape. The total area currently managed under this programme amounts to 27,080 hectares. In 2018, under the programme 483,359 tons (2017: 448,221 tons) worth approximately ZAR387 million was delivered to our operations. Since 1995, a total volume of 3,796,940 tons to the value of ZAR2.1 billion, has been purchased from small growers in terms of this programme.
We also work actively with the authorities and communities on land reform projects which aim to promote the inclusion of previously disadvantaged South Africans into the economy.
The effective abolition of child labour.
Our Group Human Rights Policy explicitly forbids the use of child labour. Our Group Supplier Policy states that we encourage our suppliers to adhere to national labour law and to internationally proclaimed human rights, particularly those relating to child labour.
The elimination of discrimination in respect of employment and occupation.
We recognise that the creation of an equitable working environment, in which the dignity of all individuals is respected and the diversity of all employees is valued, represents an essential foundation for sustainable growth and competitive advantage.
We are committed to promoting diversity and inclusion so that all employees can develop their full potential, irrespective of their gender, ethnicity, disability, age, religion, belief or sexual orientation. We administer our People policies, programmes and practices in a non-discriminatory manner in all aspects of our relationship with our employees, including recruitment, hiring, assessments, work assignments, promotions, transfers, terminations, wage and salary administration and selection for training and development.
The Group Human Resources Policy and the Group Human Rights Policy state that Sappi prohibits discrimination based on race, gender, colour, ethnicity, age, religion, political and sexual orientation, union membership, physical disability or HIV/AIDS status.
Where an unfair or discriminatory practice has occurred, employees are able to make use of the grievance procedure to lodge their grievance. Employees also have access to a hotline telephone number where they can report incidents of this nature.
In South Africa, we have employment equity targets to promote economic and social transformation of the previously disadvantaged.
Females tend to be under-represented in our workforce due to the nature of our operations―a manufacturing environment which involves shift work.
In terms of disability, we focus on creating physically and socially ‘disability ready’ work environments. In terms of our new corporate headquarters in Johannesburg, for example, we consulted disability experts to ensure that our new offices are disability friendly.
Businesses should support a precautionary approach to environmental challenges.
As stated in our Group Sustainability Charter and Group Environmental Policy, we acknowledge that we do have an environmental footprint, but are committed to managing and mitigating the environmental, climate and biodiversity impacts of our operations.
The precautionary approach places the onus on Sappi to anticipate harm before it occurs and to take active steps to prevent any harm from occurring. We achieve this by:
- Minimising the environmental impact of our operations in terms of raw materials and energy use
- Developing new production methods and products and finding innovative new ways of beneficiating waste
- Saving water and energy at every step in production processes. This begins in our South African plantations, where we apply best practice management techniques to produce woodfibre with properties that allow it to be pulped using less energy and water
- Ongoing investment in research and development
- Monitoring environmental performance and legal compliance at each mill, by constantly assessing our performance in terms of energy dashboards, integrated water and waste management plans, air emissions and effluent
- Taking appropriate, pre-emptive action to avoid or mitigate identified environmental risks
- Ensuring that we keep up with environmental best practice through an internal environmental ‘cluster’ comprised of experts in various fields
- Having environmental targets in place in each region. Progress to achieving targets is reported to the management teams in each region on a regular basis, quarterly to the Global Sustainable Development Council (GSDC) and to the Social, Ethics, Transformation and Sustainability (SETS) Committee biannually, and
- Using internationally recognised, independently verified certification systems including the Forest Stewardship Council® (FSC®), the Programme for the Endorsement of Forest Certification™ (PEFC™) and the Sustainable Forestry Initiative® (SFI®) (woodfibre), as well as ISO 9001, ISO 14001, OHSAS 18001 and, in Europe the Eco Management and Audit System (EMAS) and ISO 50001 in Europe and South Africa.
We view conducting our business in an environmentally sustainable manner as an obligation―one which is integral to our licence to operate on an individual, community, country and global level. It also makes sound business sense, given that we depend on natural resources such as water and woodfibre for our ongoing viability as a business and it is in our interest to use these resources as responsibly as possible.
This obligation includes investing in new technology and upgrading mill processes as these become feasible or preempting changes in manufacturing regulations.
Undertake initiatives to promote greater environmental responsibility
At the heart of our business is a renewable, recyclable natural resource―woodfibre. We use this to create pulp, paper and dissolving wood pulp solutions which enhance the lives of consumers around the world.
We take a holistic approach to protecting the environment, beginning with the responsible procurement of wood that is grown and harvested sustainably and sourced only from well-managed forests and plantations. We are committed to reducing our use of traditional fossil fuels, lowering both our environmental footprint and energy costs. We focus on the efficient use and recovery of materials used in the manufacturing process in order to minimise waste.
Our energy efficiency is enhanced through our ongoing drive to make process improvements and install more efficient equipment, as well as through our extensive use of cogeneration.
We track key metrics for fibre, emissions, energy usage and the impact of our operations on air, water and solid waste. We use this data when setting improvement goals related either to our operations or our interactions with our key stakeholder groups―employees, customers and our local communities. In 2015, we established overarching 2020 global goals in addition to the regional goals established in each region to deal with specific issues. Progress against these goals are reported on in our Annual Integrated Report, our Group Sustainability Report and regional sustainability reports (see www.sappi.com/sustainability.
Land, air and water are shared resources. By motivating and encouraging people―particularly those close to our operations―to share our commitment of treading more lightly on the Planet, our aim is to enhance the sustainability of the natural resources and ecosystems on which our business depends.
In SEU, we:
- Continue with our Eco-effectiveness campaign whereby Sappi people share their stories about achieving greater levels of environmental responsibility (see www.sappi.com/eco-effective-stories).
- Communicate information internally about sustainabilityrelated topics through our Green Ambassadors, who keep colleagues informed about industry developments that could be of interest to customers
- Are closely engaged in the Confederation of European Paper Industries (CEPI) Roadmap 2050 which works to implement the transition to an effective low-carbon economy
- Belong to the Save Food initiative which signal a firm commitment to better protection of all foodstuffs the world over. Save Food is a joint initiative of the Food and Agriculture Organisation of the United Nations (FAO), the United Nations Environment Programme (UNEP), Messe Düsseldorf and Interpack, the world’s leading trade fair for processes and packaging, and
- Are actively contributing to the development of an industry standard for delivering chemical information through the paper and pulp supply chain amongst other things, through the development of a Paper and Pulp Industry Declared Substances List. The consortium is a joint working group under the Confederation of European Paper Industries (CEPI) and the European Pulp and Paper Chemicals Group (EPCG), with Sappi as chair.
In SNA, we:
- Play an active role in Living Lands and Waters, a non-profit, environmental organisation focused on cleaning up America’s great rivers and forest restoration (www.livinglandsandwaters.org/who-we-are/sponsors).
- Have established a Fishway project near Westbrook Mill, enabling natural fish passage through a portion of the Presumpscot River for the first time in more than 150 years
- Have been a long-standing supporter, together with publishers, cataloguers and other paper companies, of Recycling Works in Publishing (RWIP). We have now joined The Recycling Partnership as a funding partner and together with the organisation, will be working to help transform recycling nationwide, increase materials recovery, and reduce the creation of greenhouse gases that add to climate change (www.recyclingpartnership.org).
- The Sappi Maine Forestry Program and the Sappi Lake States Private Forestry Program assist forest landowners to meet their objective for managing their woodland. Sappi’s trained foresters are able to develop a forest management plan geared to the interests of the landowner including wildlife management and aesthetics, marketing of timber to generate maximum return and providing an extensive network of environmental- and marketing resources
- Our Cloquet Mill has had a long-standing relationship with the University of Minnesota Extension Service. In terms of this partnership, boiler ash and lime mud are diverted from landfill and put to beneficial use as a soil amendment. The alkaline pH of these materials helps adjust the pH of crop soil and allows for better absorption of nutrients―ultimately resulting in better yield of alfalfa used in dairy farming.
In SSA, we:
- Set approximately 30% of our land aside for the management and conservation of natural habitats, including indigenous forests, and the biodiversity they contain
- Have established a Group Forest Certification Scheme for small- and medium-sized growers. There are currently 42 members in the scheme with plantations ranging from less than a hundred hectares to several thousand hectares in size. While our owned and leased plantations are 100% FSC-certified, we recognised that we needed to obtain certification over and above the FSC Group Scheme certification, based on the difficulty of getting small growers certified and on customers’ requests for PEFC labelled products. PEFC endorses national certification schemes, which meant South Africa had to develop a new certiication scheme including a forest management standard. This is now known as the South African Forest Assurance Scheme (SAFAS)
- Qualified extension officers work with growers in our Sappi Khulisa, our supplier and enterprise development scheme, providing them with growing advice and practical assistance
- Participate in the National Stewardship Programme through which seven areas on our land have been declared nature reserves
- Promote multiple use of our landholdings. Our land provides a resource for planned recreational activities. We support non-motorised activities such as mountain biking and bird watching on our land, aligning with our commitment to promoting a healthy lifestyle and nurturing an appreciation for nature and the sustainable use of renewable resources. We have partnered with mountain biking clubs and event organisers, allowing access to our plantations and natural areas in Mpumalanga and KZN.
- Support the Pepper Bark Tree (Warburgia salutaris) project which in turn supports the efforts of the Kruger National Park to protect South Africa’s most endangered tree by reintroducing the tree into communities. Sappi’s intervention has enabled seedlings to be grown on a large scale. An annual target of 15,000 seedlings/trees distributed is ensuring that the tree is reintroduced across many communities in sustainable numbers, and
- We provide support to various environmental organisations including the SANBI (South African National Biodiversity Institute), Birdlife SA, WWF-SA, the Honorary Rangers of the Kruger National Park, and the UCT Animal Demography Unit (ADU) indigenous tree mapping project.
Annually, we provide information to the Carbon Disclosure and Forest Footprint Disclosure Projects and make our submission publicly available.
In each region, we sponsor environment-related publications accessible to the general reader.
Encourage the development and diffusion of environmentally friendly technologies.
Technology is a cornerstone of our business and is supported by technology centres in each region covering each section of the value chain, including:
- The Maastricht Centre of Excellence in SEU which focuses on papermaking processes
- The Westbrook Centre of Excellence in SNA (coated fine paper and speciality casting and release papers development), and
- In SSA, the Forestry Research Centre (tree breeding, propagation techniques, silviculture), the Sappi Technology Centre (fibre processing, paper science, chemical sciences, environment) and the Dissolving Wood Pulp Centre of Excellence (applications testing and fundamental cellulose properties).
The development and usage of environmentally friendly technologies underpins research at all these centres. In line with our strategy of intentional evolution which includes seeking growth opportunities by producing innovative performance materials from renewable resources, some years ago, we identified nanocellulose as a key growth area.
We collaborated with Edinburgh Napier University to find a low-cost energy-saving process that would allow us to produce the nanocellulose on a commercially viable basis―and importantly without producing large volumes of chemical waste water associated with existing techniques. Significant about our process is the use of unique chemistry, which has allowed us to very easily break down the woodpulp fibres into nanocellulose. There is no expensive chemistry required and, most significantly, the chemicals used can be easily recycled and reused without generating large quantities of waste water.
Our high-quality product, which we have branded as ‘Valida’, is easily dispersed into a variety of matrices. Valida technology uses an environmentally friendly production process which is also compatible with the requirements of the targeted applications. While naturally hydrophilic, Valida can also be subjected to surface modification to suit hydrophobic applications. Valida is suitable for many applications, including biobased composites, food, cosmetics, paper and packaging.
In North America, our trade association, the American Forest and Paper Association (AF&PA), is collaborating with the Massachusetts Institute of Technology (MIT) to develop a new approach for a more comprehensive understanding of the trade-offs of changes in recovered fibre utilisation. The MIT methodology applies a ‘systems dynamics’ approach to consequential life cycle assessment for paper production in the United States of America to model the system-wide effects. The project will deliver a comprehensive model to better educate policy makers and customers to make informed decisions about shifts in recovery rate and recycled content. Sappi personnel have worked alongside other stakeholders as members of a Technical Advisory Group and participants in several workshops to help define systems variables and interactions.
Businesses should work against corruption in all its forms, including extortion and bribery.
Maintaining a sound ethical culture forms the foundation of Sappi’s long-term sustainability as well as the creation of value for our stakeholders.
We recognise that building an accountable organisation underpins our ongoing viability as a business. Accordingly, the Social, Ethics, Transformation and Sustainability (SETS) Committee, amongst other things, monitors our activities with regard to matters such as social and economic development, including the United Nations Global Compact (UNGC) and the OECD Guidelines on Bribery and Corruption, with particular emphasis on Section VII of the OECD Guidelines for Multinational Enterprises dealing with combating bribery, bribe solicitation and extortion.
No issues have been raised regarding Sappi with regards to compliance with the convention either externally or internally.
We regularly review the Code of Ethics (Code) to ensure that it remains aligned to current governance and business trends. Accordingly, in September 2016, we launched a revised Code which incorporated the new Sappi values: At Sappi we do business with integrity and courage; making smart decisions which we execute with speed. In 2018, in light of our increased focus on safety, we added: Our values are underpinned by an unrelenting focus on and commitment to safety.
Sappi’s ethics management strengths include:
- The completion of mandatory online ethics management training for all employees
- Sappi hotlines, operated by independent service providers, are available to all stakeholders
- Retaliation against whistle-blowers is not tolerated
- An anti-fraud policy is in place to provide guidance to Sappi management in identifying and managing fraud
- Annual fraud and ethics risk assessments are conducted to try and identify potential weaknesses. The fraud and ethics risk assessments are integrated into Sappi’s control framework that covers 100% of our operations
- For forensic incidents, independent investigations are done which include due consideration for ethics management and forensic lessons learned, and
- Periodic Employee Engagement Surveys provide insight into employee and management ethics application.
The Internal Audit (IA) Department is responsible for performing or assisting with forensic investigations. During forensic investigations, IA particular attention to the circumstances contributing to the incident and management’s tone in responding to these incidents. IA also review the ethics management arrangements and ethics controls for particular units and processes during certain audits. Audit steps include confirming the status of our Code of Ethics and hotline communication, completion of ethics training by employees and reviewing the processes for employees to disclose potential conflicts of interest.
During March 2019, we will once again be rolling out the Employee Engagement Survey, part of which tests values and ethical leadership as perceived by employees. The results in this area will be a useful guide to understanding the culture of ethical behaviour and conduct in Sappi and where improvements can be made.
We are also in the process of rolling out a Group Supplier Code of Conduct which calls on suppliers to commit to ethical behaviour, human rights, health and safety, diversity and equal opportunity and environmental awareness.
In 2018, we signed the Business Leadership South Africa Integrity Pledge, thereby committing ourselves to actively combating corrupt practices wherever encountered, preventing anti-competitive behaviour, adopting a zero-tolerance approach to corrupt behaviour and protecting whistle-blowers.