Sustainable Development Report2010

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Employment and human rights

Petra is a significant employer in the diamond mining industry, particularly given that the Company’s operations are typically located in regions where little other economic activity takes place. Of particular importance is the fact that the Company has sustained jobs which might otherwise have been lost when operations were closed or scaled down by their previous owners.

Managing human resources

The organisational responsibility for human resources resides at the Company's office in Johannesburg, although each operation is responsible for the direct management of its employees. Petra ensures compliance with labour and other legislation in the countries in which it operates. In South Africa this includes the Constitution, the Labour Relations Act, the Employment Equity Act, the Mineral and Petroleum Resources Development Act (“MPRDA”) and the Mining Charter. In Tanzania, this includes the Constitution of the United Republic of Tanzania, the Employment and Labour Relations Act, 2004; the Labour Institutions Act, 2004; the Workers’ Compensation Act, 2010; the Occupational Health and Safety Act, 2003; the Social Security Regulatory Authority Regulations and the Mining Act, 1998.

Fair, sustained employment

Petra is committed to being a good employer and to applying fair and equitable labour practices in compliance with legislation. At the end of June 2010 Petra's total employee and contractor complement was 4,288 people, consisting of 3,624 employees and 664 contractors in South Africa, Tanzania and Botswana. The majority of the contractors (655) were at Williamson in Tanzania.

Total number of employees and contractors as at 30 June 2010

Operation	Permanent	Contractors	Total	Permanent	Contractors	Total
	2010			2009
Cullinan	928	-	928	845	83	928
Koffiefontein	510	-	510	469	-	469
Kimberley Underground	447	-	447	439	-	439
Helam	419	1	420	375	-	375
Sedibeng	494	-	494	417	5	422
Star	205	-	205	166	-	166
Williamson	591	655	1,246	622	524	1,146
Botswana	8	8	16	8	8	16
Head office	22	-	22	22	-	22
Total	3,624	664	4,288	3,487	612	4,099

Employment equity and diversity

Petra is committed to the principles of employment equity as well as to achieving a productive and fair working environment free of discrimination. The Company strives to foster an organisational culture that encourages the appreciation of the diverse cultural backgrounds of its employees.

In South Africa Petra recognises the need to implement affirmative action measures to counteract the under-representation of certain designated groups in the workplace through recruitment, training and promotion of Historically Disadvantaged South Africans (HDSAs).

Petra's employment equity policy establishes the broad framework for the Company's employment equity approach. Each operation has a separate employment equity plan that sets numerical employment equity goals and it is the responsibility of the mine manager to ensure implementation.

Appointments are made in line with Petra's recruitment and employment equity policies, and in compliance with legal statutory provisions. In support of these legislative imperatives, the Company places special emphasis on recruiting, training and promoting employees from local communities, particularly HDSAs and women.

As most of the Company's operations are in remote locations, the attraction and retention of HDSAs in management positions has proved to be somewhat challenging. The establishment of the Leadership Development Programme, see case study: Developing employees for the long term, which aims to identify potential leaders and develop them into managers within the operations, addresses this challenge. Through this commitment to employee development, Petra aims to meet its employment equity target of 40% HDSAs in management, and to motivate employees to greater achievements for their personal benefit.

In South Africa, employment equity targets are set annually and outlined in the operations' employment equity plans, which are signed by both employee and employer representatives. These targets are submitted annually to the South African Department of Labour.

In accordance with the Shareholders Agreement between Willcroft Ltd (Petra’s wholly owned subsidiary which holds Petra’s 75% interest in Williamson) and the Government of the United Republic of Tanzania, Williamson is entitled to employ eight expatriates. A labour schedule reflecting the number of local, national and expatriate employees is compiled annually and submitted to the Department of Labour. Expatriates numbered eight at Williamson at the end of June 2010, representing less than 1% of the Williamson labour force.

Women in mining

In South Africa women have historically, by law and through culture, been excluded from working in certain underground occupations. Also, working conditions and the sometimes arduous nature of mining activities have in the past made it unsuitable for women, thus making it difficult to attract and retain female employees. The MPRDA aims to promote the presence of women in mining and the Mining Charter sets a target that 10% of the staff complement working in mining should be women.

Issues relating to women in mining are being addressed by the human resource development (HRD) committee, made up of both the employer and employee representatives, including selected women in mining representatives. Each operation has a nominated HRD committee.

One of the main challenges in the recruitment of skilled women into production positions has been the high level of turnover as suitably qualified and trained women are attracted to larger operations and to less rural areas for more lucrative packages.

In Tanzania, there are no specific guidelines regarding women in mining and other sectors. However, the National Employment Promotion Services Act, No.9 of 1998, encourages employment of the disabled and disadvantaged groups, including women. In addition, section 7 (6) (a) of this Act clearly stipulates that it is not discrimination for the employer to take affirmative action measures consistent with the promotion of equality or elimination of discrimination in the workplace.

Respect for human rights

As a company operating primarily in South Africa, Petra is bound by the human rights policies enshrined in the South African constitution. South Africa's endorsement of various International Labour Organization (ILO) principles relating to forced, compulsory or child labour is also binding to Petra. There were no contraventions of these principles in FY2010.

Benefits

Petra aims to be a fair employer, offering employees’ wages and benefits that are both market-related and reward individual effort. Benefits in addition to salaries include contributions to a medical aid scheme and pension fund, maternity leave allowance, and housing and telephone allowances for some employees.

Labour relations

Petra recognises the right of every employee to freedom of association and to join a trade union of their choice to collectively represent their interests.

South Africa:

In South Africa, Petra undertakes collective bargaining in compliance with the Labour Relations Act and the company has concluded recognition agreements at all but one operation with the National Union of Mine workers ("NUM"), the most recognised and representative union. The operations negotiate with NUM on substantive issues such as wages, conditions of employment and other issues affecting employees in the workplace. The exception is the Kimberley Underground operation where a recognition agreement is being sought.

Solidarity and and the United Association of South Africa (“UASA”) are the other registered trade unions active at the Company's operations. These unions have been granted certain rights but are not fully recognised as yet as they do not meet the representation threshold. They do however, hold major representation within the "skilled" working environment (Bands C and above) and the Group therefore continues to engage constructively with them.

The minimum notice period regarding major operational changes is governed by the Company's recognition agreements, industry agreements and legislations. This notice period is regulated by the Labour Relations Act.

Union representation in South Africa

	Percentage
	2010	2009
No union	28	18
NUM	62	62
Solidarity	7	11
UASA	3	9
Total	100	100

In FY2010, there was industrial action at Petra’s Sedibeng mine, involving 338 employees, 69% of the total workforce, further to a wage dispute with NUM. Petra engaged with NUM regional and branch committees in order to resolve the industrial action and a conclusion was reached that was satisfactory to both parties.

Tanzania:

In Tanzania, there is a signed recognition agreement between Williamson and the Tanzania Mines, Energy, Construction and Allied Workers Union ("TAMICO"). Wage negotiations are governed by means of a joint voluntary agreement between Williamson and TAMICO and are held annually. Approximately 80% of the labour force in Tanzania is unionised.

In FY2010, Williamson was awarded a ‘Certificate of Appreciation’ in recognition of its “effort in maintaining harmony and good relationship with its employees by implementing the code of good practice as required by the Employment and Labour Relations Act, No 6 of 2004, for the year 2009/2010” by TAMICO. In addition, Ignas Balyorguru, Williamson HR Manager, received the best “national worker of year award” from the Trade Union Congress of Tanzania ("TUCTA").

Training and development

A key objective for Petra is to nurture and develop the Company’s skills base internally so as to meet both the current and future skills needs of the organisation. The Group's Skills Development Policy guides our practice and programmes. The Petra culture offers an environment of progression and provides various training programmes to assist employees to advance in their chosen careers. Given the wide range of activities carried out by the Group, from mining, construction and engineering, to sorting and marketing, there are numerous opportunities for employees to gain diverse practical experience.

Petra actively engages with the Mining Qualifications Authority ("MQA") in South Africa, the mining industry's recognised Sector Education and Training Authority ("SETA"). Training and development initiatives provide employees with the skills to improve not only their efficiency and safety in their working environment but also their ability to progress within the Company.

Active human resource development committees consisting of both management and employee representatives are in place at all operations to consider training and development and employment equity issues.

Established career paths are identified for every discipline as per each operation's social and labour plan ("SLP"). Once an employee is earmarked for promotion, these career matrices are used to develop their individual personal and development plan.

Adult Basic Education Training (ABET)

In line with the South African Mining Charter, Petra is committed to increasing the literacy levels among its employees through adult basic education and training ("ABET"). It is estimated that 78% of the South African workforce is functionally literate and numerate (defined as having attained an ABET Level 3 qualification, which is equivalent to around nine years of formal schooling). Company-sponsored ABET is available to employees on a voluntary and part-time basis.

Mine-based ABET facilities are available at the Cullinan and Koffiefontein mines for employees. At the Star, Sedibeng and Helam mines, ABET is provided through the local ABET school. At these operations, Petra has partnered with local schools to the benefit of both parties. The Company provides financial and developmental support to these schools, as well as a continuous supply of students, ensuring they remain open. At Helam, the Company provides transport to the school in Borolelo.

Some employees who have been identified as candidates for the Leadership Development Programme lack the relevant literacy qualifications to enable them to take part in the programme. The Company particularly encourages these employees to attend ABET for selection into the Leadership Development Programme.

In Tanzania, the local workforce has a much higher level of basic education and it is estimated that 100% of the employees at Williamson are functionally literate and numerate.

Skills development and training

Petra recognises the benefits of skills development for the growth of the organisation and its employees. A skills development policy is in place, which establishes a broad framework for the operations’ workplace skills plans. These skills plans comprise the priority training interventions to be undertaken by the Company in a specific time period. The plans are updated annually and submitted to the MQA.

Leadership Development Programme

Petra continues to recognise the value of developing employees both for the sake of the Company, as well as to empower employees to take up opportunities which become available through the Company's succession plans. To this end, the Company launched a Leadership Development Programme in July 2008, which was first available at five of the Company's operations - Kimberley Underground, Koffiefontein, Sedibeng, Star and Helam mines. In FY2010, R1.5 million was spent on this programme. In FY2001, the programme will commence at the Cullinan mine for the first time.

The main objectives of the Leadership Development Programme are to develop leadership skills and competencies; provide a foundation for succession planning; retain valuable employees by establishing clear career paths; and develop HDSA employees especially at management level. A formal mentorship programme complements leadership development.

The Leadership Development Programme is showing good signs of success: workplace performance feedback and psychometric tests have indicated an improved work ethic and leadership skills in the candidates of this programme. The group assignment assessments and presentations took place between May and June 2010. The majority of the leadership groups performed very well this year, with assessors commenting that there was a significant improvement in the second course year groups’ depth of investigation, analysis and presentation skills. Assessors were also very impressed with the high standard of the first year group assignments.

Leadership Development Programme candidates as at 30 June 2010

Operation	Year 1 (FY2009)	Year 2 (FY2010)	Total to date
Cullinan	0	0	0
Koffiefontein	13	6	19
Kimberley Underground	7	1	8
Helam	2	5	7
Sedibeng	7	1	8
Star	0	0	0
Total	29	13	42

Leadership category HDSA profile per operation in FY2010 - Total 42 candidates

Mining operation	Designated groups					Non-designated group
	Male		Female			Male
	African	Coloured	African	Coloured	White	White
Koffiefontein	6	3	1	2	4	3
Kimberley Underground	3	0	1	0	1	3
Helam	5	0	2	0	0	0
Sedibeng	3	0	0	1	2	2
Star	0	0	0	0	0	0
Total	17	3	4	3	7	8

Bursary scheme and internships

Petra’s bursary scheme aims to meet the targets outlined in each operation’s SLP. A number of bursaries and internships (all HDSAs) were offered by the Company in the 2010 financial year and commenced in December 2009 and January 2010. These bursaries were provided mainly in the engineering field, all at tertiary level.

Accommodation and living conditions

In the 2010 financial year, 356 employees (10% of the workforce) resided in company-provided hostels. A critical element of Petra's housing strategy is to encourage home ownership by providing employees with living-out allowances, thus empowering them to leave company-owned accommodation.

Employees residing at company hostels in FY2010

Operation	Number of employees	Percentage
	2010
Cullinan	127	14%
Koffiefontein	n/a	n/a
Kimberley Underground	n/a	n/a
Helam	142	34%
Sedibeng	34	7%
Star	53	26%
Williamson	n/a	n/a

There are no hostels at Koffiefontein, Kimberley Underground or Williamson.

A process is in place for consultations every two years with the health and safety committee as well as contracted dieticians for the revision and upgrade of menus. Nutritional research in the industry is also monitored on an ongoing basis and recommendations implemented when necessary.

In addition to various regulations governing employee nutrition, the Food and Nutrition Board of the Institute of Medicine of the United States directs the macro and micro nutritional needs of employees at Petra operations.

Respect for human rights

As a company operating primarily in South Africa, Petra is bound by the human rights policies enshrined in the South African constitution. South Africa's endorsement of various International Labour Organization ("ILO") principles relating to forced, compulsory or child labour is also binding to Petra. There were no contraventions of these principles in the 2010 financial year.