2. 1 DEPT OF PUBLIC ENTERPRISES EMPOWERMENT PRESENTATION TO THE PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES 23 AUGUST 2006

3. 2 Content Guiding principles and legislative imperatives DPE’s strategic intent Transformation in DPE Women in SOE boards Transformation in SOE –Eskom –Alexkor –Denel –Safcol –SAA –Transnet

4. 3 Guiding principles and legislative imperatives Legislation Constitution Public sector Preferential Procurement Act Black Economic Empowerment Act of 2003 Skills Development Act Employment Equity Act King II Lever Quarterly and Annual Reporting Shareholder Compacts Corporate Plans KPIs and Targets SOEs Policies Social Responsibility Eskom, Denel Transnet, Safcol Alexkor SAA PBMR Social Empowerment Economic Empowerment Drivers

5. 4 DPE’s strategic intent Gender empowerment fundamental hence it is fully integrated into the activities and structure of DPE In respect of SOE we facilitate equity transformation through: –Directing the strategic direction of SOEs on Transformation –Board Appointments –Signing of annual Shareholder Compacts –Monitoring implementation of national policy of gender equity and BEE –Setting of KPIs through Corporate Plans –Quarterly and annual reporting With regard to our own programmes, the Properties sub-programme of the Joint Project Facility Unit contributes directly to Broad-based Black Economic Empowerment (presentation to follow)

6. 5 Transformation - DPE

7. 6

8. 7 Women in SOE Boards 2002 - 2006 Still a challenge to secure women board members but we are working towards 50%

9. 8 Transformation - Eskom Gender Development Framework Diversity Procedure Sexual harassment Flexi-time Policy Mentorship Policy Workforce AA Policy Gender Policy Disability Suppliers Black suppliers W.O. B PWD Diverse customers Penetrating new markets Community – Esdef Customers Directives Talent Management Job enrichment & rotation International exposure Coaching Worklife programmes Women networking forum Programmes

10. 9 Transformation - Eskom 14 %9 %1 % 4 %1997 25 %8 %2 %1,5 %13,5 %2006 TotalWhitesColouredAsianAfricanYear

11. 10 Transformation – Eskom (F Band) 13%8 %1 % 3 %1997 32 %8 %3 %2 %19%2006 TotalWhitesColouredAsianAfricanYear

12. 11 Empowerment programmes - Eskom Management processes in place –Targets Current and future to create clear understanding of long-term objective (intent) –Employee satisfaction surveys –Leadership effectiveness measurements –Structured learning programmes supported by formalised mentorship and coaching –Monitoring trends Staff turnover Salary scales Performance assessments EAP

13. 12 Empowerment programmes - Eskom Work/life examples –Appropriate flexibility of working hours –Child-care facilities –Tolerance of diversity Female roles (religion, home, social, business) Workplace logistics (safety clothing, bathroom facilities) Ergonomics (heights, heavy equipment) Health and wellness

14. 13 Empowerment programmes - Eskom Universities – total:532 – women 66,5% Technikons – total: 301 – women 77% Technical Colleges – total: 206 – women 74%

15. 14 Preferential procurement - Eskom Eskom development foundation Fund targets projects driven by women, persons with disability and for poverty alleviation Total BEEBWO Included* Target Without Coal10,918,449.01,695,753.0 Coal3,839,000.0 TOTAL14,757,449.01,695,753.0 * 18% of the BEE Target 2005-2006 Expenditure

16. 15 Transformation – Alexkor The vision of Alexkor Limited with respect to black economic empowerment and women empowerment is to: Employment Equity Ensure procurement of 25% from HDSA sources increasing in future years To focus on female empowerment to build capacity building for meaningful female participation in the local and mainstream economy This is in line with the BBSEE Charter for the South African Mining Industry

17. 16 Transformation – Alexkor

18. 17 Transformation – Alexkor

19. 18 Empowerment programmes – Alexkor The following programmes are in place for women empowerment and to address employment equity ratios Awarding and participation of women in shallow water and sea concession contracts Allocation of bursaries in mining related disciplines Placement of females on mentorship programmes Employment of females on learnerships in engineering trades Training of females as earth moving operators Preferential procurement; Of the R165.5 m spent in the 2005/2006 financial year, 55 % was directed towards small, medium and micro enterprises, BEE’s and women owned enterprises

20. 19 Transformation - Denel 1.Historical legacy of Denel Captured market – South African Defence Force White, male dominated Very few women in engineering – primarily secretarial, administration and support 2.Denel is committed to the development of historically disadvantaged individuals and women in particular to address historical biases 3.Denel has commenced with an organisational culture/climate survey in conjunction with Consulting Company Absolute Ndaba aimed at assessing current culture in respect of all facets of transformation within Denel. On conclusion of the survey, the results obtained will be used to develop strategies as well as an equity vision for Denel. The survey results will be available during October 2006.

21. 20 Transformation - Denel AfricanColouredIndianWhiteAfricanColouredIndianWhite Legislators, senior officials & managers 52246276308019 415 Professionals64841615182669 823 Technicians & associate professionals 1406223101327123106 1386 Clerks1656151061117715342 882 Service & sales workers9475071311519 296 Skilled agricultural & fisheries workers 00000000 0 Craft & related trades workers 214146575045121 1185 Plant & machine operators & assemblers 897417289235358160 2059 Elementary occupations1909417901311 325 Total Permanent1816802862937587497286187371 Non-permanent employees316122214813093239 852 Total2132924883085717590306578223 MaleFemale Occupational CategoriesTotal Total number of employees per Occupational Categories as at 30 September 2005 Percentage2611137.597.10.48

22. 21 Transformation - Denel Gender equity

23. 22 Empowerment programmes - Denel Centre for Learning and Development: The School of Business Leadership The School of Aerospace The School of Land Systems The Denel Youth Foundation Training Programme Skills Development Projects: Through eight sector education and training authorities Focus on Engineers, Scientists and Technicians External training within South Africa & Abroad External training in Nepad countries

24. 23 Preferential procurement - Denel Financial period 2001/22002/32003/42004/52005/6 Total Spend (Rm) 1,4631,1851,3971,9851,794 BBBEE166.211251.068201.929437.060334.276 %11.36%21.19%14.45%22.02%18.6% Women (Rm) Direct17.260 Indirect2.874

25. 24 Transformation – Safcol The SAFCOL Group is committed to supporting the policies and initiatives of Government. Black economic empowerment and the development of the second economy are key focuses. The following activities demonstrate the Group’s initiatives :- The disposal of SAFCOL’s subsidiaries and other businesses to third parties consisting of a share of BEE interests in line with Government policy. BEE is one of the criteria taken into account in the procurement policy of SAFCOL for services and products, and the sale of raw timber to processors. Funding earmarked for corporate social investment is spent on rural development and the upliftment of individuals and communities. The involvement of SAFCOL in the development of the BBBEE Forestry Charter. The increased impetus to implement employee share option plans in disposed subsidiaries.

26. 25 Transformation – Safcol

27. 26 Transformation – Safcol The organisation, because of its nature, is primarily male dominated with 83% of employees being male and 17% being female

28. 27 Empowerment programmes – Safcol An in-house training centre provides skills training to own employees as well as externally. The training is to the benefit of historical disadvantaged individuals and contractors. Annual training includes in excess of 4 600 people involving more than 12 000 person days. Auditing, mentoring and assistance are provided for emerging contractors (SMME’s). Bursaries are granted to employees, dependants and historically disadvantaged individuals to obtain academic qualifications. Current budget amounts to R1,3 million. A total of 35 current bursaries are being sponsored of which 24 are for historically disadvantaged individuals and females. Bridging classes and experiential training provided for candidates in respect of a variety of disciplines (scarce skills) e.g. :- Forestry 21 Candidates Artisans 8 Candidates Administrative 9 Candidates Marketing 3 Candidates Wood Technology2 Candidates ABET classes in progress at is centres to improve literacy levels. Current attendance is 376 learners. IEB exams (2005/6)Level 4180 passed Level 1 – 3205 passed.

29. 28 Preferential procurement – Safcol

30. 29 Transformation - SAA South African Airways is in the process of redefining its core business and revising its corporate plan Empowerment has always been a fundamental component of the SAA transformation agenda Established empowerment programmes include: Executive Development Programme Supervisory Training Leadership Development Functional courses Legislative courses ABET Airline Contact Center Management Airfreight Handling Supply Chain Management The presentation will however only speak to the establishment

31. 30 Transformation - SAA  Pilots: 2002 June 2004 Plan 2005July 2006 -PDI 4%(32) 7%(53) 7% (57)9%(68) -White Females 1%(12) 3%(27) 2% (15)4%(36) -White Males 95%(728) 90%(729) 90% (693)87%(700) -TOTAL 772 809 765802  Total Employees:2002 June 2004Plan 2005July 2006 -PDI66%(4055) 70%(4250)68% (4029)72%(4083) -White Females19%(1173) 17%(1065)18% (1167)16%(908) -White Males14%(889) 12%(745)14% (878)12%(687) -TOTAL6117 6060 60745678 (NB: These figures exclude Technical and Pilots)  Management: 2002 June 2004 Plan 2005July 2006 -PDI 44%(202) 51%(250) 51% (274) 53%(289) -White Females 24%(108) 21%(103) 20% (108)18%(99) -White Males 32%(147) 28%(141) 29% (154)29%(165) -TOTAL 457 494 536553 (NB: These figures exclude Technical and Pilots)

32. 31 Transformation - SAA

33. 32 Transformation - SAA

34. 33 Transformation - Transnet Transnet has embarked on a turnaround strategy focusing on improving efficiencies, reducing costs and adding value to customers and shareholders The goal is to build a focused freight transport company, streamlining activities into freight rail, ports and pipeline As such EE data is presented as at 30 th June 2006 for the core business units only namely: –Spoornet –Preferential Port Operations –National Ports Authority –Protekon –Petronet –Corporate Centre (including Transnet Foundation, Esselenpark and Transtel SS)

35. 34 Transformation - Transnet EEA2 Reports as @ Jun 06MaleFemale AfricanColouredIndianWhiteAfricanColouredIndianWhiteTotal Top & Senior Management10426461245441432404 Professionals147427031091252238745 Skilled Technical626208182150733789561313136 Semi Skilled15778735699263423444620236123035998 Unskilled65186453011630770131347833 GRAND TOTAL 48 116

36. 35 Transformation - Transnet Transnet Board (14 directors): –50% black persons (6 African, 1 Indian) –57% black females (3 African, 1 Indian) –No PLWD –Substantial progress has been made with representation of black persons whilst the black female target has already been reached Charter: 5 year target (2009) for Top & Senior Management –70% black persons –35% (50% of black persons target) black females –3% all people living with disabilities (PLWD) Transnet Top & Senior Management (404): –61% black persons (158 African, 30 Coloured,60 Indian) –29% black females (54 African, 4 Coloured, 14 Indian) –Information on PLWD specific to top/ senior management not available –Current transport sector achievement: 27% black persons of which 20% female –Charter targets not met yet BUT Transnet is very close to achieving the targets for black persons and black females; Transnet is ahead of current sector achievement

37. 36 Transformation - Transnet The Transnet Group has a total of 48 116 employees of which: –79.29% are black persons (6825 African, 715 Coloured, 43 Indian) –14.10% are black females (307 African, 70 Coloured, 13 Indian) –0.22% are PLWD Transnet is already beyond the overall 2009 target for black persons but progress in relation to black females and PLWD is slow

38. 37 Transformation - Transnet Professionals: 53.28% black persons and 18.52% black females Skilled: 47.77% black persons and 15.37% black females Semi-skilled: 78.95% black persons and 11.95% black females Unskilled: 96.81% black persons and 4.98% black females Current Transport Sector achievement for professional & skilled employees is 50% black persons and 27% black females Transnet is making good progress regarding black persons across all levels but progress regarding black females across all levels is slow

39. 38 Empowerment programmes - Transnet Charter sets an ongoing target of: –At least 10% of payroll expended on skills development initiatives (includes 1% skills levy); 50% of 10% targeted at training of youth –At least 5% of workforce increase in learnerships in 3 years Transnet achievement is not reported with reference to the target The Group has trained an average of 73.3% black employees

40. 39 Empowerment programmes - Transnet Transnet Executive Women Development Programme & leadership programmes at three levels namely: Transnet Executive Development Programme Transnet Business Driven Action Learning programme (GIBS) Transnet Management Development Programme (Wits ) Transnet Emerging Leadership Programme (through Esselenpark & UNISA) 43 % of women at all management levels have participated in the leadership programmes over the last 18 months.

41. 40 Empowerment programmes - Transnet Business UnitNumber trained% Black Petronet28165 Spoornet25 797 training courses72.5 NPA (Head Office)9778 SAPO (Head Office)8278 The statistics below are based on the 2005/6 reporting timeframes:

42. 41 Preferential procurement - Transnet Preferential Procurement: –5 year target (2009) 60% of discretionary spend to black owned and empowerment enterprises 30% SMME (incl. Black owned & empowerment enterprises Based on available information the total BEE spend is 42% Based on available information it appears that progress with attainment of the SMME target is slow

43. 42 Preferential procurement - Transnet

44. 43 Conclusion - Transnet Black Persons: Transnet has made substantial progress in achieving the 70% black persons Management and Employment Equity (EE) target; at all staff levels Transnet has already gone beyond the target Gender: Whilst substantial progress has been made in relation to the number of black females on the Board of Directors and Top/ Senior Management, EE for black females across all levels has not kept pace with the employment of black males Demographic representation: Transnet has generally made progress with its alignment to demographic representation but imbalances still exist –this should improve as Transnet proceeds to attain its BEE targets PLWD: Transnet has made slow progress in achieving the 3% target Skills development: Whilst Transnet has made substantial progress with the training of black employees, its reporting format has to be aligned with the Charter target Preferential procurement: Whilst some progress has been made regarding the total BEE spend, progress with SMME spend seems to be slow; reporting on preferential procurement should improve and be aligned to Charter target

45. 44 Way forward - Transnet Focus on the core business units in line with the “one company, one vision philosophy” Develop an overarching Employment Equity (EE) strategy to ensure consistency in approach, principles and implementation Develop a consolidated EE plan that will form the basis for the EE plans of all operating divisions Develop a group wide EE monitoring tool and score card to assess implementation and monitor accountability Completion of group wide strategy, EE plans and targets, by March 2007