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Old
Mutual regularly identifies key issues on the South African agenda
that also have a bearing on the company’s activities. Equally,
we have looked to identify those issues that, if acted on by the company,
could have a positive impact on the national environment.
BEE is one of the issues which has been prioritised by Old Mutual.
BEE is an issue which lies at the heart of South Africa’s definition
of Corporate Citizenship, and one which is increasingly occupying
centre stage on the national and financial services agendas.
Old Mutual concurs with the view of government, as articulated by
President Thabo Mbeki, that economic growth, development and BEE are
complementary and related processes. We believe that BEE, properly
implemented, can be a key driver of sustainable economic growth and
social transformation in South Africa, and in our business.
This growth and transformation is vital to sustaining the political
miracle with which South Africa surprised the world just nine years
ago. The foundation is solid — sound macroeconomic policies
have placed our economy in better shape than at any time in the past
30 years. Social delivery is taking place. Since democracy, 7 million
South Africans have been given running water, 3.5 million people have
been connected to electricity and 1.2 million new homes have been
built.
Despite this progress, wealth and income imbalances remain too wide
and need to be addressed. BEE provides a key tool for doing so.
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is within that context, that Old Mutual has formalised a BEE
philosophy, core elements of which are: |
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An
approach of engaging proactively on BEE. |
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Support
for a broad-based definition of empowerment. |
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Putting
significant effort into developing world-class managers for
our business — believing that our staffing will be most
powerful if we hire from all segments of the community. |
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Seeking
opportunities for BEE procurement. |
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Searching
for value-adding partnerships in the BEE community, and with
the government. |
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Using
our distribution muscle to gather equity funds in identifiable
vehicles for BEE owners, and for infrastructural investment.
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Gloria
Serobe, chief executive of WIPHOLD. Old Mutual has taken a 32.5% stake
in the company as part of its aim of actively seeking investments
that facilitate the growth of black business in South Africa. |
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Old
Mutual furthermore builds BEE into its business plans, and has for
some years engaged in BEE activities that are value-adding for all
of our stakeholders, and are contributing to the sustained growth
of our business. These activities are informed by a “10-point
BEE delivery framework” summarised below. This framework has
also formed the basis for the current development of a multi-faceted
BEE strategy for Old Mutual South Africa (OMSA).
The principles captured in our philosophy, and the activities being
developed as part of our BEE strategy, are informing Old Mutual’s
input into the process of developing a BEE charter for the financial
services industry.
This process was voluntarily initiated by the financial sector towards
the end of 2002, with a view to determining the sector’s contribution
to BEE. While government is fully supportive of the process, it has
not been imposed, or driven by government. It is expected, however,
that the work being done by the sector will be in line with BEE guidelines
shortly to be released by the government.
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industry is of the view that there are significant benefits
to a charter, viz.: |
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A
consistent commitment across the sector to contribute to
sustainable empowerment. It should result in level playing
fields and not give rise to arbitrage between the
sub-sectors; |
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A
policy framework for the provision of financial services
(which has been lacking until now), and which will provide
clarity and certainty; |
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Institutional
arrangements to mobilise foreign and domestic
investment for development on acceptable terms. |
The work of the industry is also guided by the needs of retaining
the confidence of all stakeholders, and balancing sustainability with
a contribution to BEE. |
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THE
TABLE BELOW SUMMARISES OLD MUTUAL’S 10-POINT APPROACH TO BEE.
EACH AREA IS COVERED IN DETAIL IN DIFFERENT SECTIONS OF THIS REPORT,
AS PER THE LINK REFERENCE SECTION OF THE TABLE.
| ISSUE |
DESCRIPTION |
STATUS
(31
December 2002) |
LINK |
| 1.
Ownership and control |
Black
equity ownership and control in Old Mutual plc, OMSA and its
subsidiaries |
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Indirect
ownership of Old Mutual plc estimated at 16% |
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Currently,
no direct black ownership |
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Demutualisation:
many of the 3.2 million policyholders who became shareholders
were black |
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| 2.
BEE investments |
Investment
in black controlled companies, and facilitating acquisition
of equity by BEE players |
R1.9bn
(approximately 1%) of Old Mutual Life Assurance Company (South
Africa) (OMLACSA) assets invested in BEE-related activity |
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| 3.
BEE joint ventures or strategic investments |
Strategic
investments in BEE companies, or joint ventures with BEE players |
Six
strategic investments/joint ventures |
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| 4.
Infrastructural investments |
Investment
in bulk and social infrastructure |
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R2bn
infrastructure assets currently managed by OMAM |
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R1bn
of OMLACSA assets invested in infrastructure |
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| 5.
BEE-related products and services |
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Access
to financial services |
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Product
development linked to BEE financing: design of retail
and institutional products focused on BEE |
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Service
provision: growing black intermediary channel |
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Group
Schemes product range |
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Infrastructural,
Development and Environmental Asset Infrastructure Fund
(IDEAS Fund) |
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Over
50% of sales force is black |
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| 6.
Client base |
Proportion
of client base that is black |
Significant
black client base |
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| 7.
Employment equity (EE) and diversity |
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Implementation
of EE plan with goal of achieving representative workforce |
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Implementation
of diversity training programme |
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Currently,
16% of executive and senior managers are black; 54% of
total staff are black |
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Multi-faceted
diversity training programme |
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| 8.
OMLACSA Board |
Ensuring:
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Board
representivity |
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Board
attention to transformation issues |
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33%
of OMLACSA board is black |
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Board
Committee focused on transformation established |
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| 9.
Skills development and education |
Stakeholder
groups targeted: employees, clients and wider community |
Employees:
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3.4%
of payroll spent on training of black
employees |
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OMBUS |
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Diversity
training |
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Accelerated
development programmes |
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Accounting
and actuarial programmes |
Clients:
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Financial
education — radio, print media and workshops |
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Advice
and planning |
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Trustee
training |
Community:
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Old
Mutual Foundation focus on education, especially primary
school mathematics |
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10.
Small business development via:
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Procurement |
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Rural
economic development |
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Implementation
of affirmative procurement plan |
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Support
for rural economic development |
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2002:
Affirmative procurement spend of R210m — 22% of
total procurement spend. BEE suppliers represent 6% of
total procurement spend (R53m) |
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Rural
Economic Development Initiative (REDI). 85 new businesses
established in 2002 |
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