IMPAHLA CLOTHING

IMPAHLA CLOTHING
Sustainability Report 2007
“Transparency in the Clothing Manufacturing Industry”
CONTENTS
PAGE
Impahla at a Glance
1
Introduction by the Managing
1
Director
Mission Statement and Business
2
Standards
Ownership Structure
3
Director Profiles
3
Governance and Risk Management
5
Our Most Material Issues
6
Marketing and Procurement
7
Use of Appropriate Technology
7
World Class Products for World Class
8
Customers
The Impahla Team
11
Occupational Health and Safety
16
Environmental Management
18
Stakeholder Engagement
21
DTI Codes of Good Practice
21
Human Rights
21
Lessons Learned and the Way
22
Forward
Request for Feedback
22
GRI G3 Application Level
23
Requirements
GRI Content Index
24
Non-Independent Assurance
25
Statement
IMPAHLA AT A GLANCE
•
An equal opportunity African company, owned by Africans and operated by Africans
•
Privately owned garment manufacturing company based in Cape Town, South Africa
•
In operation since April 2004, and in new/larger premises since August 2007
•
Supplier to world class sports brands such as Puma, Adidas and New Balance
•
•
Rated as an ‘A Grade’ supplier through Puma’s contractor compliance programme
(S.A.F.E.)
Employee population of just under 100 staff members, of which 89% is female and
96% is non-white
•
Provide garment assembly, screen printing, heat transfer and embroidery services
•
Increased production to over 151 000 units in 2007, up 15.4% over 2006
•
Use cotton with no less than 5% organic content
•
•
•
•
•
•
Use environmentally friendly PVC-free K2 dyes for
all screen printing operations
Experienced our first needle prick injury on duty
during 2007, not resulting in any lost days
Committed to the procurement of local (i.e., South
African) goods and services, unless unavailable in sufficient quality or quantity
Able to record less than 3% absenteeism for the year,
well below local and national trade benchmarks of
6%
Fully compliant member of the National Bargaining
Council for the Clothing Industry
Member of Cape Clothing Association
INTRODUCTION BY THE MANAGING DIRECTOR
Spring Romance Properties 34 (Pty) Limited, trading as Impahla Clothing (hereafter, ‘Impahla’) is a privately owned Cape Town based clothing manufacturing company.
With more than R5 million, but less than R35million, in annual turnover, we classify as a
‘Qualifying Small Enterprise’ (QSE) as per the Department of Trade and Industry’s ‘Codes
of Good Practice for Broad-Based Black Economic Empowerment’ (hereafter, ‘the BBBEE
Codes’). Our primary production activity is the manufacturing of apparel items, including
the provision of branding services (embroidery, screen printing and heat transfers). Our
manufacturing activities are supported by the provision of branding services for garments
produced by other manufacturers.
As a South African supplier of Puma AG, a world-class apparel company operating primarily
in the sporting arena, Impahla was invited to participate in a development programme that
taught us how to produce a Sustainability Report such as this one.
Prior to the first workshop held in Cape Town in July of 2007, our understanding of ‘Corporate Responsibility’ and the Sustainability Reporting process was limited to each partner’s
personal commitment to the physical environment and to the communities in which we operate. Granted, our personal interests are reflected in our company, just as our company has
created a mechanism for each of us to have a significant impact on the quality of lives of others. While we believe that our collective commitment to being good citizens, on a personal
basis, permeates all that we do as a company, we are now in a position to better understand
how we can apply the concept of being a ‘Good Corporate Citizen’ to improve Impahla’.
The reporting process has helped us understand how we could focus our attention on many
of the good things that the management and staff of Impahla have been doing, as well as to
further support our desire to be a sustainable business well into the future.
Moreover, the reporting process identified ways in which our management systems could
become more efficient, being mindful of the fact that Impahla is a small company that is actively managed by the ownership team. In doing so, we hope that one of the key outcomes
of our new commitment to sustainability reporting will be the ability to constantly monitor
all of our most material issues, thereby creating mechanisms for ensuring that our service to
clients is managed effectively.
At Impahla, each of our Directors plays a key ‘hands on’
operational role in the running of the business, including
all aspects of our daily production, ordering and shipping
processes. Thus we need to stress that this is our ‘first effort’ in producing a Sustainability Report, and while we may
not have included all of the information you, the reader, require, we trust that we have made the best effort possible
in our particular circumstances.
Thankfully, the process of reporting was facilitated by Trialogue Assurance Services, a Johannesburg-based consultancy that offers similar services to companies that tend to
be a lot larger than Impahla, with support from the German
Development Agency (GTZ), the Global Reporting Initiative (GRI) and Puma. It is our firm belief that without the assistance of Trialogue, we would not have been able to complete this report, at least not the extent of the depth and
breadth of statistical and qualitative information provided.
The primary goal of this report is to offer our many stakeholders an opportunity to better understand who we are as
a company, as a team of individuals and as a proudly South
African manufacturer of clothing. The following pages provide a summary of our ‘Most Material Issues’, including a
discussion of how we believe we have been doing thus far
and how we hope to improve in the future.
Although Impahla began trading in 2004, this is our first
report, and while the reporting period under question is
limited to the 2007 Calendar Year (CY 2007) we have attempted to include data for the last 2 of the 3 years of our
operations as Impahla. Where possible, trend analyses
have been conducted for all available data on a month-by
month basis.
1
Our operations exist only in South Africa, and while our largest clients (Puma, Levis, New
Balance and Adidas) are international companies based outside our boundaries, our sales
are all directed to their South African subsidiaries. All of our other clients are based in South
Africa, as are all of our principle suppliers of machinery, fabric and all other input materials.
The value of this Report may not lie within these pages, but rather within the many lessons
we learned while pulling this information together. Mostly, we learned that we actually possessed information, statistics and ideas that could support our assumptions about how good
a company we were, as well as how we can potentially improve in the future.
It is important to note that the clothing manufacturing industry in South Africa, particularly
in the Western Cape, where Impahla is located, has been under constant threat of collapse
over the past few years. As such, we believe that in order for Impahla to continue to survive
the ongoing turbulence within our industry, we must be perpetually vigilant in ensuring that
our sustainability is secure. In analysing our company data and developing this report, as
well as ensuring that our service to all of our clients, regardless of size or international status,
continues to exceed their expectations, we believe that Impahla will continue to succeed as
a well-respected, viable, and sustainable business.
At this time, it is my hope, as well as that of my co-owners and many colleagues, that you will
find value in the information we have compiled on your behalf, and we hope that you will
contact us should you have any questions or comments about this Report.
Sincerely,
MISSION STATEMENT AND BUSINESS STANDARDS
sound business practices and the constant maintenance of a safe, hygienic and comfortable
working environment ensures our compliance to all of our customers’ corporate responsibility requirements.
At Impahla, all management adheres to an open door policy, and encourages the presence
of effective communication mechanisms throughout our operations. Moreover, we live, promote and monitor adherence to the following employment standards:
Impahla Clothing is an equal opportunity African company,
owned by Africans, run by Africans and worked by Africans.
Our mission is to produce an African product that aspires to
world class quality standards, while at the same time reducing our carbon footprint through conscious awareness and
effort.
As a supplier to world-renown brands, we subscribe and
aspire to the values and principles of our customers. Our
commitment to fairness, adherence to all laws, as well as our
2
1.
Respecting all forms of Human Rights, including a commitment to ensuring that all
employees are at least 16 years of age.
2.
Ensuring that the right person for the right job is hired, irrespective of race or gender.
3.
Ensuring that company adheres to standard working hours, with a policy of attempting to avoid/limit voluntary overtime hours. However, where necessary, we ensure
that proper notification and payment of overtime is offered, in line with Collective
Bargaining rates.
4.
Ensuring that responsible people are encouraged to take responsibility for their performance, across all levels within the company.
5.
Respecting that all employees have the right to freedom of association, working with
the relevant unions to ensure that employees have mechanisms for understanding and
expressing their rights.
6.
Ensuring that worker health and safety is protected through our adherence to local
laws and global best practice client requirements. The provision of first aid training
and supplies, the conducting of emergency evacuation fire drills, and swiftly attending
to matters raised by our Health and Safety Officers are all enforced to ensure that our
workers are healthy and safe.
OWNERSHIP STRUCTURE
Impahla is owned by four partners, of which one (Paul Visser, 10%) is a non-executive, nonoperational, silent investor living in the United States. The other three partners are William
(50%), Carl (30%) and Lena (10%).
Impahla means ‘clothing’ and our logo is a Flame Lily (pictured on the front cover of this
Report), which represents the spirit and intentions or our company.
Having grown up in Zimbabwe, William (Managing Director) remembers the Flame Lily as a beautiful ‘truly African’
flower which reflects the fact that Impahla is a truly African
company, driven by the commitment and team work of
truly African individuals.
Ownership Share
William
Lena
Carl
Paul
DIRECTOR PROFILES
William Hughes was born in Nakuru, Kenya on the 6th July 1962. At an early age his family
moved to a farm in Zimbabwe, where he grew up and was educated as a boarder at Ellis
Robins School in Harare.
After a short four-year stint working for Nampak in Johannesburg, William returned to work
on the family farm. Many happy years on the farm was brought to a sudden end by the land
invasions and sadly the farm was lost in August 2003.
Having been driven from his farm in Zimbabwe during the Mugabe regime’s farm redistribution programme, William returned to South Africa in 2004 and immediately began to search
for new business opportunities, not particularly searching for an opportunity to manufacture clothing, but open to any new challenges available.
Impahla was founded in April 2004 using rented premises in Lansdowne with a staff complement of 60. Focusing mainly on international customers like Puma, Impahla has geared
its operations to the highest of international standards, and has been successfully awarded
Puma’s contractor compliance “A” status, being one of the first factories in Africa to achieve
this honour.
In 2007, Impahla Clothing relocated to brand new owned premises in Maitland and now has
a staff complement of approximately 100, predominantly female, South Africans.
William is married to Joan and they have two children, James aged 16 and Joanne, aged 12.
William is Impahla’s
Managing Director and all around ‘go to guy’.
3
Carl Visser (BSc, University of Natal) was born in Kadoma, Zimbabwe on 18 January 1955,
and qualified as a Land Survey Professional through the Harare Local Authority in Zimbabwe. Operated own practice in Harare until July 1984.
Carl emigrated to South Africa and joined a survey practice, first as an associate and then as
a partner. He Joined Rand Water as Assistant Chief Surveyor in 1995 and was promoted to
Chief Surveyor in 1997.
Carl attended several Human Resources courses including presenting and chairing disciplinary hearings. Management courses included Sean Covey’s Seven Habits for Highly Effective
People, a Certificate in General Management from Henley College of Business Management
in the United Kingdom, and a Certificate in Commercial Property Management from the
University of Pretoria in South Africa.
Carl bought shares in Impahla Clothing in March 2005 and moved to Cape Town. He attended a printing course run by a local supplier, before setting up a Branding Department
to handle all of Impahla’s printing and embroidery operations.
Carl is married to Jann and they have two children: Ian is 23 and Lauren is 20.
Carl is Impahla’s Director of Branding Operations
Impahla was started in April 2004 as a rescue plan for a company that had been struggling
to survive. The previous owners were in danger of closing the factory and adding its 60
employees to the burgeoning roster of the unemployed.
When William acquired the company, it was estimated that there were only 2 months of
further survivability.
Not knowing much about the garment manufacturing industry, William’s first decision was to
recognize his lack of experience, and to hire someone who could assist him.
Lena Lynnece Jansen was born on the 4th March 1960 in Southeyville, Transkei. She was
educated at Southeyville Primary, finishing her schooling at Elsies River High School in Cape
Town.
Lena has worked in the Clothing Industry since leaving school, giving her, by far, the most
experience (29 years) among our ownership team.
She started as a cleaner in the Finishing Department in 1979 at Elite Clothing in Maitland,
and moved through the ranks at Quality Workwear (cutter/marker, then production planning and analysis), and the Cape Town T-Shirt Company (Production Manager).
When, Impahla Clothing bought out the assets of the Cape Town T-Shirt Company in 2004,
the acquisition and respecting of Lena’s knowledge and experience was an obvious decision.
As a result, 10% of Impahla was given to Lena when she agreed to come on board as the
Production Director. Although her shareholding was initially a ‘gift’, the partnership fully
believes that Lena has fully repaid this gift through her extremely successful management of
the team on the shop floor over the past 3 ½ years.
With 29 years in the clothing industry,
Lena is Impahla’s Production Director
Lena, speaks, reads and writes four languages, including English, Afrikaans, Xhosa and Zulu,
which is an immense asset on our shop floor, where the majority of our employees come
from a range of local cultures and communities.
Lena is married to Jannie and they have two sons: Dean is 19 and Jason is 9 years.
4
GOVERNANCE AND RISK MANAGEMENT
As a small privately owned and operated company, Impahla retains lean yet assertive governance and risk management systems and processes.
Ultimately, all decisions are made by the partnership (including Paul Visser, our non-operational ‘silent’ partner, where capital expenditures are required), with the delegation of decision-making tasks filtering down through each Director’s specific roles and responsibilities.
While William (Managing Director) maintains daily oversight for all activities, Lena (Production Director) takes responsibility for all shop floor/production-related issues (including
shipping and receiving), while Carl (Branding Director) oversees all of our screen printing,
heat transfer and embroidery operations.
William also takes direct responsibility for overseeing our Health & Safety (including environmental issues), Administration and Internal Sales & Development activities.
Given the nature and size of our business, informal meetings are conducted amongst the management team on an
ad hoc basis to ensure the smooth operation of all aspect
of the business, while formal production and planning
meetings are scheduled on a monthly basis, and ownership
meetings are conducted quarterly, with input from Paul being considered as/when necessary.
Ultimate responsibility for stakeholder engagement, contractor compliance-related issues, legal and/or regulatory
compliance and compliance with union (SACTWU) and/
or National Bargaining Council requirements rests with the
partnership team, with William spear-heading all aspects
of control and assurance.
MANAGING DIRECTOR
Production
Director
Branding
Director
Health & Safety
Quality Control
Supervisor
Branding
Supervisor
Health & Safety
Officer
Administration
Internal Sales
& Development
Finishing
Supervisor
Cutting Room
Supervisor
Assembly
Supervisor 1
Assembly
Supervisor 2
Assembly
Supervisor 3
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OUR MOST MATERIAL ISSUES
At Impahla, we define “material” as those issues that can, or
in fact do, have a significant impact on our ability to remain
competitive within the markets we operate.
As such, we believe that our the long-term viability of our business rests on our ability to
manage the following issues, as identified by our management team, in consultation with our
key customers and employees:
ISSUE
PERFORMANCE
TARGETS
Securing adequate orders to
ensure the long-term financial
viability of the company
Thus far, we have been able to maintain our client base
through the provision of quality products, on-time and in a
manner that sets Impahla apart from the competition
•
Maintain current clients, and ensure that
growth in new orders does not affect
our ability to meet existing performance
expectations
Welfare of our team
Impahla has a reciprocated commitment with all of our employees, and we believe that their overall welfare is in the
best interests of the company. Impahla has never placed
workers on ‘short shift’ to cut costs, even for a limited period
of time.
Performance and zero sick leave bonuses are paid out to
workers in exchange for their dedication to performance
excellence.
‘Employee of the Month’ awards are offered to recognize
above average excellence among the team.
•
Maintain a zero ‘short shift’ policy within
the company
Ensure a zero redundancy policy
Ensure that wages are paid in-full, ontime and, where possible, in the presence
of performance and special gratitude
awards
Impahla has been certified as a ‘Compliant Member’ of the
NBC for each year of our operations. As a certificated member, Impahla has been able to prove that we:
•
pay correct normal and overtime wages
•
pay appropriate end of year bonuses
•
pay for appropriate benefits
•
adhere to appropriate guidelines on normal and overtime hours
To date, no employees have raised concerns or complaints
about Impahla to the NBC
•
Impahla has been underestimating the impact of absenteeism and late arrivals on our production capacity.
Absenteeism has averaged nearly 3% over the past 2 years,
while a further 1.5% of our production time has been lost
due to late arrivals.
•
Reduce Costs
Impahla operates as a lean organisation, adhering to the principles of ‘Just In Time’ manufacturing. By ensuring that the
purchasing of supplies is scheduled in accordance with our
production commitments, we are able to reduce overhead
costs by limiting inventories
•
Maintain acute attention to critical path
orders in order to reduce our exposure
to non-stock barriers to meeting customer requirements
Workplace safety
Safety of all of our staff is paramount to our ability to remain
an employer of choice. As such, we conduct regular internal
safety inspections, and maintain a register of all identified
hazards and incidents.
•
Continue to identify risks and hazards
before they lead to injury
Continue to conduct random fire drills
Continue to conduct employee lunchbox
briefings to discuss all potential safety
issues and hazards
Although we believe we do not have significant harmful impacts on our physical environment, we do believe we have a
role to play in reducing all possible impacts.
As such, we use fabric with a minimum organic content of 5%,
and K2 dyes that are water-based, PVC-free, and therefore
less harmful to the environment.
•
Compliance to the National Bargaining Council
(Clothing Industry)
Absenteeism and late arrivals
Environmental protection
6
•
•
•
•
•
•
•
•
•
•
Maintain certificated compliance to the
NBC
Ensure that no employee is treated in
a manner that is inconsistent with the
agreements established by the NBC
Ensure that all employees work towards
targets leading to the payment of bonuses
Maintain the new data management
systems developed to monitor all forms
of absenteeism and late arrivals
Reduce absenteeism to less than 2%
Reduce late arrivals to less than 1%
Identify other environmentally materials
that can be used in our manufacturing
processes
Find ways to reduce the amount of waste
we send to landfill
Identify ways to reduce our water and
energy consumption.
MARKETING AND PROCUREMENT
As a small manufacturing company we do not have a marketing department, but rely completely on our brand-conscious clients to keep us apprised of their evolving requirements.
The likes of Puma, New Balance, Adidas and Levis all have highly sophisticated market research and analysis teams to assess where their products should be heading to meet new
consumer trends.
In line with our commitment to environmental awareness, all
of the cotton we procure is guaranteed to have no less than
a 5% organic content, while all screen printing inks meet K2
standards (water-based, PVC-free inks that are certified as
‘environmentally friendly’).
We are confident in our reliance on our clients, and the highly competitive consumer markets
in which they operate, to act as a mechanism for marketing our products. Where deemed
necessary, we are pleased to assist our customers with brand-specific marketing activities
when called upon.
To further improve our efficiencies, Impahla implemented a
‘Just in Time’ ( JIT) procurement system that has been wellsupported by our suppliers. This system ensures that we
do not need to retain significant warehouse stocks of fabric
and accessories, while ensuring that all materials are readily
available from suppliers as and when required.
As a proudly South African clothing manufacturer we adhere to a strict ‘SA-First’ policy for
procurement. Without exception, we are committed to purchasing our supplies from a local
trader unless the quality and quantity of equipment, fabric and/or accessories cannot meet
our needs: as defined by our clients.
USE OF APPROPRIATE TECHNOLOGY
Siya and Andrew manually laying up fabric for the cutting process
Living and operating a company on the African continent is replete with both opportunities
and challenges: some more significant than others. Perhaps the greatest daily challenge for
Impahla, as an employer, is to strike the most effective balance between our personal desire
to recruit and compensate lower wage employees, and the ever-present pressure to automate processes for increased production efficiency.
As technology improves and expands our international horizons, the global village in which
we operate appears to be rapidly shrinking. No longer are we competing with neighbours
in our cities and countries, but with other operators in countries that can just as easily produce garments and ship them to South Africa as we can.
Nonetheless, we, as Africans, believe in the fair and ethical treatment of all employees, and
are committed to ensuring that retrenchments occur only where the sheer will of our human
resources can no longer allow us to compete in globally competitive markets.
With the socio-economic challenges of poverty and high unemployment ever-present in
our local communities, we continue to be committed to create South African jobs, and are
hopeful that we can remain ‘an employer of choice’ to those within our ranks who have
sought us out and remain committed to our success.
Unfortunately, we believe that the delicate balance between competitive pressures toward
automation and job creation places Impahla in the unenviable position of looking for inven-
tive ways to improve efficiencies without compromising on
our commitment to the welfare of our staff.
Sometimes this does not favour our commitment to job
creation, but we believe that our record of expanded duty
rosters is a fair representation of our values in action.
Over the past 4 years we have focused mainly on ensuring that our equipment is up-to-date and well-maintained
to ensure that we are consistently able to meet production
commitments, and that our employees remain safe and
healthy. Where possible, we have retained a well-maintained in-house range of operator-managed machines for
all of our core assembly activities, and have ensured that
our cutters, machine operators and finishers are all supplied
with reliable, safe and appropriate machines that would allow them to deliver against increasingly challenging targets.
As a relatively new company, we were also keen to outsource our non-core activities to more specialised operators. Until recently, this included the outsourcing of most of
our branding activities to third party suppliers.
7
Unfortunately, we were challenged by a lack of reliability
amongst our suppliers and had to import an MHM Automatic screen printing machine from Austria to facilitate our
branding processes in-house.
Although our design, printing and planning activities have
been at least partially automated since we first started our
operations, we recently identified a need to align ourselves
to a Puma-related technology requirement.
As per their expectations, we have decided to purchase a
Gerber Accumark system to be used for pattern making,
grading, ratings and marker making. Inasmuch as this new
equipment will align our order-taking and planning proce-
dures with Puma’s design specifications, it is also expected to improve the accuracy of costing and sourcing of fabric, ultimately improving our fabric usage efficiency, and reducing the
amount of solid waste we will need to dispose of.
Our branding department utilises the Wilcom Embroidery system and Corel Draw, as well
as Adobe Illustrator, for producing finished artwork and embroideries that can be used to
market specific teams, competitions and events, as required by our clients.
Our client-centric focus is restricted to proving that our services are accurate, timely and delivered according to client expectations Our objective is to meet the strict requirements of
our client brands, rather than attempting to develop and market our own products. While
our consistent ability to deliver according to client expectations is our tried and tested
method of proving ourselves to be a supplier worth choosing, the management of costs is
an ongoing management challenge.
WORLD CLASS PRODUCTS FOR WORLD CLASS CUSTOMERS
Although we are a young, small yet learning and growing
company, we at Impahla pride ourselves in our ability to
provide cost and brand-conscious companies and the
services they require. Our goal is always to produce top
quality products on-time, on-budget, and without any unnecessary hassles.
It’s important to note that these audits, or site inspections of our production facilities, have
been, and continue to be, extremely helpful sources of process improvement information
for our company.
2006 Sales
From cutting, printing and embroidery, straight through to
assembly and finishing, Impahla is confident that we are,
and will continue to be, a proven supplier of quality garment manufacturing and branding services to a number of
globally recognized sporting apparel and fashion brands,
including Adidas, K-Way, Levis, New Balance, and Puma.
# Units
% of Total
Puma
176 491
62.3%
Levis
30 966
10.9%
New Balance
28 231
10.0%
Adidas
27 503
9.7%
Others
11 642
4.1%
K-Way
8 411
3.0%
Puma
62.7%
Levis
7.6%
New Balance
12.3%
K-Way
6.4%
Adidas
10.0%
Others
1.0%
Without a doubt, Puma has been our greatest supporter
over the past two years, with total deliveries of units (i.e.,
garments) representing 62.3% of our total production of
283 244 units, including t-shirts, jackets, pants, and shorts.
2007 Sales
Levis, New Balance and Adidas have all represented nearly
10% of our total sales, while K-Way and other smaller clients
have supported our production team with orders equal to
7.1% of our sales.
Over the past couple of years, our biggest challenge has
been to find the right balance between secure revenues
and our ability to guarantee our clients the quality of service they have come to appreciate and expect.
As a result, we have had to make a strategic decision to decline orders from Levis (mid-2007) in order to focus on our
ability to continue to service our larger clients, particularly
Puma. However, we continue to participate in contractor
compliance audits from Levis, should our surplus capacity
reach a point where we can resume offering them quality
production services.
8
Puma
62.3%
Adidas
9.7%
Levis
10.9%
Others
7.1%
New Balance
10.0%
Since we first started in 2004, Impahla has been a proud supplier of garments to Puma, Levis,
Adidas and New Balance, all of which are among the world’s most recognised and respected
companies. We recognise that as a condition of our ongoing relationship with such wellrespected companies, we must consistently adhere to strict controls over quality, timeliness
of deliveries, as well as environmental and health and safety concerns. As such, Impahla has
undergone a number of contractor compliance audits from these companies, with Puma offering the most comprehensive feedback on how well we meet their expectations.
At first, we struggled with understanding the scope and implications of these audits, but
once we understood the expectations, we found the process to be extremely helpful in
identifying ways in which we could become a world class producer of garments: able to supply any global brand that is seeking an African partner.
Results from these audits, including Puma’s SAFE audits (below), have been a helpful benchmark of our performance in Social, Environmental and Safety areas.
Weight
2007
2004
Social
50.00%
49.33%
47.96%
Environmental
10.00%
7.50%
5.95%
Health & Safety
35.00%
33.48%
32.26%
Additional
5.00%
5.00%
4.32%
100.00%
95.31%
86.49%
A
B
Classification
Closer to our hearts, and almost as important as supporting
global brands, Impahla has been to supply garments to African teams representing our region at major sporting events
around the world, including:
On close inspection of our audit results, we have found that while we continue to excel in
the Social and Health & Safety aspects of Puma’s audits, we still have significant room for
improvement in our Environmental performance. These findings are extremely helpful when
comparing our own internal assumptions and conclusions about our performance with what
we consider to be the ‘reality’ of our progress. Moreover, where are proud of our recently
awarded ‘A’ supplier status for Puma, and we are committed to ensuring that we are able to
meet this grade in the future.
•
South African Para-Olympic team for the 2008 Beijing Olympics (Puma)
•
Athletics South Africa at various world championships since 2005 (Adidas)
•
Replica kit for national soccer teams representing Angola, Botswana and Namibia (Puma)
We believe that these partnerships, as well as our partnerships with our brand clients, have garnered recognition in
the market, ultimately leading to a 15.4% increase in sales
from 2006 to 2007.
2007 Production Efficiency
90%
Production Efficiency
Average
Target
Bonus
85%
80%
75%
70%
65%
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘07
60%
9
Perhaps the most significant increase for us this past
year was the 7-fold increase in the number of garments
that have been produced for smaller local clients seeking a cost-effective quality garment to meet a limited
distribution requirement.
Monthly Production Units
Production Units
25 000
2007 Average
2006 Average
20 000
15 000
10 000
5000
Jan ‘06
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan’ 07
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
0
Production efficiency, as measured by the time used to complete garments in comparison to
the total time available, continued to be extremely high in 2007, despite a brief period of
uncharacteristic low performance between February and June.
Our lowest level in March, only 67.5% of total time was employed in the manufacture of
garments, while September and October production reports showed efficiency rates in
excess of 82%.
2007 Garments Delivered to Customers
Number of Garments Delivered
Efficiency Target
Number of Garments Per Person Per Day
Average Efficiency
25 000
15
23 000
13
21 000
11
19 000
9
17 000
15 000
7
13 000
5
11 000
3
9 000
1
7 000
0
10
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘07
5 000
In total, we have been able to increase our average monthly production by 6.9%, from 11
832 units in 2006 to 12 647 units in 2007. Moreover, our total production has increased
from 131 482 units in 2006 to 151 762 in 2007, up 15.4% year on year.
More importantly, we have been able to increase our average number of garments produced per person day, where our total number of ‘person days’ includes our entire staff
complement (up to 98 at the end of December). Our efficiency target for garments per
person day is set at 10 units, while our 2007 average reached 8.5 units per person day.
Although we have experienced a few returns, the total number of garments that are returned by clients due to issues
of fabric and/or assembly concerns remains completely
immaterial to our operations. To date, we have never had
an order rejected by a client, and in all cases, our team has
been able to repair returns for re-issue.
THE IMPAHLA TEAM
In 2004, when the Cape Town T-shirt Company was purchased, the company consisted of
approximately 60 employees, of which every employee was given the opportunity to come
across to Impahla. Although all 60 employees initially made the decision to join the new
company, some decided to move to new opportunities within the first few months.
In the first year of our operations as Impahla, some of the workers taken over from the previous owners were clearly unsettled by the transition to new owners. In Year 1 we needed
to recruit 28 new employees to keep up with production demands during a period of high
turnover. 26 of our employees left during 2005, of which 20 of these departures were due
from workers leaving the company of their own accord (either a ‘resignation’ or an ‘abscond’:
where a worker simply fails to return to work). For those that chose to remain with the company, rewards have come in many forms, of which secure wages, non-standard benefits and
internal promotion opportunities have been recognised by our current team as reasons to
remain within Impahla.
We are pleased that as of the end of December 2007, our staff compliment of 98 employees
still includes 30 of the pre-Impahla employees at the heart of our current team, including
Lena who continues to direct our production activities.
Lena is our greatest success story of someone who has worked hard, starting from the
ground level, and who is now a part-owner of the business, and a critical link in the success
of Impahla. Based on her success, others within the team have been able to reap similar rewards. In fact, Lena’s entire supervisory team is made up of women (1 Black and 5 Coloured)
who have been promoted from the shop floor within the company. Patricia (pictured right)
was a sorter in the cutting room, while Lydia, Francis, Christine, Sharon and Joyce were all
machine operators.
Although these individuals are classified in the South African context as ‘previously disadvantaged’, each of these women has proven that they possess natural leadership qualities
that are helpful to the success of our business.
Lena is a shining example of how, with opportunity, a competent and committed individual will succeed without the
presence of forced empowerment policies and procedures.
Although Impahla complies fully with the Employment Equity Act of 1995 in our policies and procedures, we sincerely
believe that our empowerment strategy is based solely on
aptitude, and that this strategy has been proven successful.
Our latest promotion to supervisor level has been identified from within the team of machinists, and even though
we know that she has health problems, she has been identified as someone who deserves to be promoted. We expect
that this ongoing demonstration of commitment to our production staff will help reinforce our assertion that everyone
has a chance and that every employee is valued.
We believe that this approach is the fundamental key to
Impahla’s success, and it is at the heart of our vision and
values. By empowering every worker, we ensure that while
the management team receives orders and ensures delivery
on time, the actual running of the shop is left entirely in the
hands of people who have been promoted up from the
shop floor, and who have the greatest influence over their
colleagues and team members.
11
Turnover and BEE Representation
FY 2007
FY 2006
FY 2005
Left Company
13
Resignations
4
10
17
Dismissals
1
4
3
Absconds
8
3
3
13.3%
18
Illness
30.0%
26
41.9%
1
Expired Contract
3
New Recruits
51
52.0%
16
26.7%
28
45.2%
Net Turnover
38
63.3%
-2
-3.2%
2
3.3%
Total Employees
98
60
62
There are a lot of negative perceptions about the industry,
particularly with respect to the number of job losses. This
forces one to be cautious on the one hand, but committed
to proving the perceptions wrong over the longer term.
Although our industry peers often complain of high levels of staff dismissals due to poor
conduct, Impahla has only been forced to dismiss 3 employees since 2004, of which no
incidents occurred in 2007, and none of them led to any form of arbitration from either the
union or the CCMA:
We believe that by building a strong base of operations
around a core team of committed employees, we will have
the opportunity to overcome the challenges that have been
facing the clothing manufacturing sector over the past few
years. Our healthy growth, from 60 employees in 2004 to
98 in 2007 is a fair indication of the strength of our team,
and we are certain that we will continue to retain, and build,
a resilient workforce over the coming years.
•
1 cutter was relieved of his duties after persistent problems with alcohol, even
after the management team encouraged and supported him through a
rehabilitation programme.
•
1 ironer and 1 dispatcher were relieved of their duties for high levels
of absenteeism.
Florence
Zoliswa
Lydia
Mavis
Christine
Merle
IMPAHLA EMPLOYEES OF THE MONTH FOR 2007
At Impahla, we believe the recognition for excellent service to the company is our responsibility.
Inasmuch as we expect our employees to arrive at work on-time, to limit their number of sick days to only those that are truly necessary, to consistently meet our production output and quality targets, and to support and encourage the rest of the team, we also believe our employees are
entitled to expect us to reward them when superior service to the company is offered. As a result, we have initiated an ‘Employee of the Month’
programme.
Pictured above and below, in sequential order from January through November, our 2007 winners were Florence, Zoliswa, Lydia, Mavis, Christine,
Merle, Linda, Caroline, Latiefa, Elizabeth and Patricia.
Beyond the recognition each of these ladies has received from their fellow team mates, as well as the pride that comes from having their photo
placed in our ‘Frame of Success’ situated in our entrance area, each of these ladies has also received a grocery shopping voucher worth R250.
Linda
12
Caroline
Latiefa
Elizabeth
Patricia
Sick Leave as a % of Total Person Days Days
2.5%
Sick Leave Ratio
2007 Company Average
2006 Company Average
Company Target
2.0%
1.5%
1.0%
0.5%
Dec
Nov
Oct
Sept
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘07
Dec
Nov
Oct
Sept
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘06
0%
Unfortunately, sick leave continues to present itself as an
ongoing management problem. While our target remains
at 1.0% of total person days lost to sick leave taken, our
2007 monthly average has gone up to 1.24%, from 0.77%
in 2006.
Granted, we were aware of this problem, and have been attempting to manage it using a variety of possible strategies,
including the possible need to discipline and/or dismiss individuals who continue to pose an ongoing threat to our
productivity.
Equally if not more significantly important to our success is
the issue of absenteeism.
Gail has been our SACTWU Shop
Steward for the past year.
Lydia was the first lady to be promoted
from the shop floor to the position
of supervisor.
2007 Absenteeism
7%
6%
5%
Absenteeism Rate
4%
Company Target
3%
2007 Average
2%
Industry Average
1%
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘07
0%
13
While we assumed that we were effectively managing this
by tracking our Sick Leave Ratio (primarily because of need
to pay employees for Sick Leave taken), the process of developing this report opened our eyes to the fact that our
total absenteeism rate (inclusive of Sick Leave) is more than
double what we perceived it to be (an average of 2.62%
per month over the course of the year). As such, we have
embarked on a programme to actively monitor and manage
all forms of absenteeism, as well as to address what we’ve
learned is a significant and persistent problem of late arrivals.
2007 Late Ratio
3.5%
Late Ratio
3.0%
2007 Average
Company Target
2.5%
2.0%
1.5%
1.0%
0.5%
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan ‘07
0%
Although we recognise that all of our staff members are dependent upon an underperforming public transportation system, we also recognise our need to ensure that tardiness does
not become an unbearable cost burden to Impahla.
Moreover, the full extent of the impact of late arrivals to work is another indicator that, while
we knew it was a concern, was underestimated by the management team until we undertook
to produce this report.
After having analysed the data, it was clear that in 2007, our employees cost us 1.5% of our
total production time by arriving at work late. Granted, our worst month was September,
which was when we moved our operations to our new location, but this doesn’t fully justify
why we only managed three months where our late ratio was at, or below, our target of
1.0%.
As such, our total exposure to lost person days, and therefore lost production, has been
identified as roughly 4.1% of total available time. This is the equivalent of shutting down our
factory for an entire day once in every five weeks.
Clearly, the management of all form of late arrivals and absenteeism is an issue that we will
need to diligently manage more effectively in 2008.
Impahla does not permit any form of discrimination against employees. We do not tolerate
racism, sexual harassment, or the discrimination of persons with any form of disability. Our
remuneration packages, including salary, bonuses and incentives, are above average for our
industry, and we are registered with industrial councils and all other statutory bodies.
14
Our Equal Opportunity Performance
FY 2007
Total Employees
FY 2006
98
FY 2005
60
62
White
4
4.1%
5
8.3%
5
8.1%
Black
34
34.7%
13
21.7%
9
14.5%
Coloured
60
61.2%
42
70.0%
48
77.4%
11
11.2%
7
11.7%
9
14.5%
White Males
2
2.0%
3
5.0%
3
4.8%
Black Males
4
4.1%
1
1.7%
1
1.6%
Coloured Males
5
5.1%
3
5.0%
5
8.1%
Male
Female
87
88.2%
53
88.3%
53
85.5%
White Females
2
2.0%
2
3.3%
2
3.2%
Black Females
30
30.6%
12
20.0%
8
12.9%
Coloured Females
55
56.1%
39
65.0%
43
69.4%
WHAT OUR EMPLOYEES HAVE TOLD US:
In the process of developing this Sustainability Report, our consultant randomly engaged members of our production team during their lunch
break. The following is a summary of the comments and criticism they shared with us:
Impahla is a good company to work for.
William is a very good boss...and Lena is a good manager.
Money is always on time...never had to wait for money, or only get part of it.
There’s never any short-shifting. We always get paid to work a full week.
I like that the people who smoke have to go outside.
As a smoker, this is a problem, because you have to collect the permission disc so that not too many people
go out at one time. We should be able to go outside and smoke with another person if we want to.
Impahla is a fun place to work. We get to listen to the radio and often sing loudly when the good songs come
on.
We even get cake on William’s birthday.
It’s like having another family.
We should be able to buy Puma garments if we want to. We make them, and sometimes there is a problem
with the fabric or something. We should be able to buy these ones.
We shouldn’t have to work on the break-up day at the end of the year. There should be a big party (with
food!).
Unlike at our previous companies, we get a production bonus of R500 every 6 months if we work hard and
don’t stay away sick.
The management is very friendly and you can always talk to Lena or William if you have a problem. Even in
my second week, when my child needed an operation, I was able to take leave to care for my child.
This is a safe place to work. Nobody has ever been hurt until recently (minor injury).
During working hours our phones must be off, but if we need to make an urgent call we can always use the
company’s phones.
This is one of the few companies where Black people can get employed.
We don’t get enough overtime. In other places you can earn more money by working extra time.
The new location can be a problem for transport. If the trains are late then we will have our wages deducted,
even though we can’t help it.
The new factory is much better than the old one. There’s more space, more light, and it’s a much nicer place
to work.
15
OCCUPATIONAL HEALTH AND SAFETY
While the management and staff at Impahla consider the company to be a ‘safe’ place in
which to work, we are nevertheless mindful of the risks and hazards that continue to arise
on an almost daily basis. As such, we have developed and implemented an Occupational
Health and Safety Policy that sets out our ongoing commitment to ‘Zero Harm’, including:
•
•
•
•
The development, management and stocking of a First Aid Room, where treatment
can be obtained for injuries, or where ill employees can lay down and rest when required.
The conducting of monthly Health & Safety Committees, chaired by our Health &
Safety Manager and/or our Health & Safety Officer, and attended by our Health &
Safety Representatives.
Posting of appropriate signs to direct every employee’s attention to emergency exits,
hazards, and policies and procedures for managing Health & Safety.
The appointment, training and testing of Fire Marshalls, including the provision of wellmaintained fire management equipment and the conducting of regular fire drills.
For Impahla, ‘Zero Harm’ refers to the creation and maintenance of a work environment
that is free from the potential for illness or injury for our employees, our clients, and our
neighbours within our business complex and the community of Maitland. In our most recent
Hazard Identification and Risk Assessment (HIRA), we identified the following potential risks
and hazards:
1. HIV/AIDS
HIV/AIDS is a massive problem for all of Africa, particularly for those of us living and working in Sub-Saharan regions.
The HIV/AIDS pandemic will remain a sustainability risk factor to be closely monitored and managed for many years to
come, and Impahla is committed to ensuring that our workforce is perpetually aware of their role in protecting themselves, and their family members, from the disease.
To date, we are unaware of any employees who have been infected by HIV/AIDS, and to the best of our knowledge our
team has not suffered any HIV/AIDS-related deaths. However, the relevant demographics suggest that Impahla remains
vulnerable to the disease, and therefore must remain committed to addressing the risk.
Impahla is especially susceptible to HIV/AIDS related risk factors when considering the fact that our employees come
from a region of South Africa that is known to have one of the highest HIV-infection rates.
In mitigation of our direct risk, Impahla has instituted an HIV/AIDS programme which comprises of the following elements:
•
•
Policy guidelines with regard to recruitment, promotion and management of illness in the workplace, including
explicit mention of non-discrimination within our Code of Conduct;
Access to education and voluntary testing campaigns through the local union (South African Clothing and Textile
Workers Union, SACTWU);
•
Access to poster campaigns in bathrooms and common areas; and,
•
Availability of free condoms in our restrooms.
Although we have not conducted our own HIV/AIDS awareness campaigns, this issue has been addressed in one or more
of our monthly Health & Safety meetings, and we are committed to addressing this in the near future.
2. Knife cuts
16
Although we insist on the use of appropriate Personal Protective Equipment (PPE) by all of our cutting room staff, injuries
still continue to occur. The use of wire mesh gloves has eliminated the occurrence of knife cut injuries.
3. Needle pricks
The greatest risk when operating a sewing machine continues to be the potential to penetrate one’s finger with
the needle.
In the past 4 years Impahla has only faced one such incident, with the first injury of its kind occurring in 2007.
While we attribute the low number of injuries to our use
of needle guards on all of our machines, our concerted
effort to educate our staff about the danger, and the role
our supervisors play in ensuring that guards are not removed.
Joanna’s incident was devastating to our team, as all of
our staff members were proud of our perfect record of
zero needle prick injuries prior to this incident. Although
an unpleasant incident, it nonetheless reminded us of
constant need to be mindful of the risk of needles, and
the need to use needle guards.
Joanna has the unpleasant record of being Impahla’s
first-ever needle prick injury.
4. Burns
Heated clothes irons, used for pressing garments during our finishing process, have always been an obvious risk area,
but no such injuries have been recorded at Impahla. Nonetheless, we remain committed to ensuring that all of our employees are aware of the dangers and restricting access to the pressing area to ensure that unnecessary personnel are
not exposed to the risk.
5. Inhalation of harmful
dust and fumes
Impahla uses low harm and environmentally friendly chemicals wherever possible in the various areas of operation in
our business.
Although no cases of fume-related illness have thus far been reported at Impahla, we are mindful of the potential to
cause harm where solvents, dyes and glues might be used.
As such, we have designed our new manufacturing facility with specific attention having been paid to the provision of
adequate ventilation and air quality management. Where task-specific higher risks persist, we ensure that face masks and
other PPE is used by all employees operating in the risk area.
6. Sunlight
While the translucent roof tiles are great for natural lighting,
they can also present discomfort for some operators during the mid-day sun.
17
When we designed our new building, we took the decision to reduce our dependency on electrical lighting and heating,
and installed translucent roof panels to all natural light to illuminate and warm the shop floor.
While this may have appeared to be a fault-free idea at the design stage, we quickly learned that too much light could
pose a hazard to our employees.
Aside from the obvious exposure to sun-related illnesses (including burns and potential cancers), our more immediate
concern was eye strain and potential heat stroke among our machinists.
As such, we have provided large umbrellas to any staff member wishing to be shielded from the sunlight, and have used
sliding security gates in our shipping and receiving areas as a means of allowing outside air into the building to create
natural cooling, without compromising the overall security of the factory.
7. Sprains
The lifting of heavy bundles of fabric, the repetitive nature of specific tasks, and the need of some employees to move
about areas that could become cluttered creates a multi-faceted risk of sprain injuries. Although we have thus far experienced no such injuries, our supervisors are nonetheless tasked with ensuring that employees are not operating in an
unsafe or unhealthy manner, but we accept that the nature of this risk is more difficult to monitor. As such, we rely on our
weekly staff meetings to remind employees of their responsibility to avoid behaviour that could place them in danger of
a sprain, as well as to ensure that their work environment remains clean and obstacle-free.
8. Inhalation of secondhand smoke
Impahla has always adhered to policies that ensure that the rights, freedoms and health of all employees, smokers and
non-smokers alike, are not hindered, including the right to smoke, should someone so choose. However, we also believe in the need to protect the health and welfare of the our non-smoking workers through the enforcement of a zero
tolerance policy regarding smoking in the factory. As such, our employees are not allowed to smoke anywhere within
the building, but must rather exit the building and restrict themselves to a designated smoking area adjacent to our rear
parking lot.
9. Collisions with moving
vehicles
Although we do not own and operate any motorized vehicles within our factory, our positioning within a busy
business parks continues to present a possible, if not probable risk of collisions between vehicles and personnel. As such, we continue to ensure that our entrance/exit procedures are maintained and enforced to ensure
that all of our employees arrive and leave our premises in a manner that will decrease their risk of collisions.
ENVIRONMENTAL MANAGEMENT
In terms of South African monitoring and evaluation norms,
the clothing and textile manufacturing industry’s potential
for negative environmental impact is considered ‘moderate’, even according to the ratings applied by the Socially
Responsible Investment (SRI) Index at the Johannesburg
Stock Exchange ( JSE Limited). However, we believe that
because we are such a small company, with a staff complement that is not likely to rise much about 100 persons for
the foreseeable future, our total environmental footprint is
extremely limited.
That having been said, the owners of our company are all
individually committed to protecting our natural habitats,
and to minimising any potential harm our operations might
cause on the physical environment. As such, we believe that
we have a responsibility to monitor and manage our environmental impacts, wherever possible.
We use PVC-free K2 dyes in our screen printing
(right)
18
To date, we have embarked on a programme to identify and manage a number of environmental improvement areas, including several initiatives that were facilitated by our move to
new premises in August. We now are pleased to report that:
•
•
•
•
We recycle paper and plastics, making use of local service providers to collect and
process our materials
•
•
We use PVC-free K2 dyes, which consist of non-polluting water-based inks, in our
screen printing operations, to reduce our impact on the environment through the
discharge of potentially harmful chemicals
We use low volume dual flow toilets, thereby reducing our water consumption
We installed energy saving light bulbs in all areas where they could be used effectively
1. Electricity
We use cold water in all of our toilets, and only have
two very small hot water heaters (5 litre tanks) in each
of our two kitchens; and,
We have installed translucent roof sheeting to allow adequate amounts of sunlight onto the machine
floor, thereby reducing our reliance on electricity to
provide lighting, and to allow for the natural heating
of the factory during winter.
Through our participation in the contractor audits performed by many of our clients, including Adidas and Puma,
as well as through the process of developing this report,
we have consistently increased our level of environmental
monitoring over a number of issues.
As of late, the South African economy has become critically aware of our
need to become more efficient consumers of electricity.
Total capacity, as supplied by the national electricity provider (Eskom), has
failed to keep pace with demand, and consumers at all levels of the economy are now subject to periods of ‘load shedding’ (i.e., rolling black-outs).
On one hand, we believe that this situation will benefit society, and the
physical environment, by forcing each of us to find ways to reduce our
electricity consumption (e.g., increased use of more efficient light bulbs,
conversion to solar water heaters, etc.).
But on the other hand, those of us operating businesses that rely on electricity to operate are being forced to consider alternative strategies to protect our interests in the event of an electricity supply crisis.
The process of developing this Report has come at a convenient time for
Impahla, as we have now learned the value of evaluating our electricity bills
to determine if we are managing our electricity consumption in a manner
that is both cost-effective and environmentally sound.
Granted, our understanding of the need to monitor our electricity consumption, as well as our understanding of how we might do so, was limited prior
to the development of this Report. Nonetheless, we have used our monthly
municipal rates and taxes bills to calculate our total water consumption, and
to evaluate our average electricity consumption per unit of production.
Electricity
Consumed
(kWh)
Our sewing machines are efficient
users of electricity, thus keeping our
consumption level low.
Units of
Production
kWh per unit of
production
% Decrease
16.4%
2007
230 925
151 762
1.52
2006
239 173
131 482
1.82
In analysing this data, we have been able to learn that our average electricity consumption per unit of production decreased by more than 16% from 2006 to 2007.
While we believe that this is due, at least in part, to improved efficiencies in our production, as well as to the move to new
premises that use better lighting and less energy for heating and air conditioning. However, we are also willing to admit
that the process of monitoring and analysing our electricity consumption and efficiency is new to Impahla. As such, we
want to be cautious in asserting that we have become a more efficient consumer of electricity.
We’ll continue to monitor our performance during 2008, and we look forward to hopefully reporting continued efficiency improvements.
19
2. Water
South Africa is widely considered to be a ‘Water Scarce Economy’, in that access to reliable supplies of potable water is
not a given. As such, our water consumption, although relatively limited, is considered to be an ongoing management
concern at Impahla.
As in the case of electricity (above), our understanding of the need to monitor our water consumption, as well as our
understanding of how we might do so, was limited prior to the development of this Report. Nonetheless, we have used
our monthly municipal rates and taxes bills to calculate our total water consumption, and have evaluated this information
relative to our total monthly production figures.
Water
Consumed
(litres)
Units of
Production
Litre per unit of
production
% Decrease
2007
15 107
151 762
0.10
21.7%
2006
16 709
131 482
0.13
Of course, our production is not water-dependent, and therefore trends and anomalies cannot necessarily be correlated
to fluctuations in our production efficiencies, but we feel that units of production is the most effective tool that we can
use to assess our water consumption efficiency.
We believe that our calculated 21.7% decrease in our water consumption in 2007 is directly related to our move to new
premises, including the installation of low volume dual flow toilets in our ablution facilities. We also believe that this is
due, at least in part, to improved efficiencies in our production
However, we are also willing to admit that the process of monitoring and analysing our water consumption and efficiency
is new to Impahla. As such, we want to be cautious in asserting that we have become a more efficient consumer of water,
and we are committed to the ongoing monitoring of our water consumption performance during 2008.
3. Non-hazardous waste
As a rapidly growing company, the positive impacts of growth, particularly with respect to job creation, are sometimes
tempered by increases in negative environmental impacts, such as our increase in solid waste sent to landfills for disposal.
However, Impahla’s ongoing commitment to environmental protection has afforded us an opportunity to ensure that we
proactively avoid any such impacts.
Unfortunately, we are unable to provide quantitative data for our solid waste sent for disposal, as we do not have formal
systems or processes in place to monitor and measure the volume (by weight) of solid waste sent to landfills via our waste
haulage contractors. However, we are committed to measure and monitor this figure throughout 2008, and to identify
ways in which we might be able to reduce our impact on landfill over-crowding.
As of now, we already have the following mechanisms in place to ensure that we reduce the volume of non-hazardous
solid wastes sent for disposal:
•
•
Collecting and recycling our scrap paper (specifically from patterns and office use) and plastics, making use of local
service providers to recycle these materials; and,
Collecting reasonably large pieces of scrap materials and distributing them to local economic development
projects that can make use of the fabric to manufacture clothing and other items.
4. Hazardous waste
Although limited in total volumes consumed and/or disposed of, hazardous materials are often used in our manufacturing facilities, particularly in the maintenance and operation of our facilities and equipment. To-date, we do not have
formal systems or processes in place to monitor and measure the volume of hazardous materials consumed throughout
our operations. However, we are committed to measure and monitor this figure throughout 2008, and to identify ways
in which we might be able to reduce our overall discharge/disposal of these materials.
5. Greenhouse gases
As the monitoring and management of our environmental impacts has become much more rigorous with the initiation
of our sustainability reporting process, we have had to establish reasonable limits to both the development of new data
management systems and improvement processes. Although we are aware of the issue of global warming, as well as the
ways in which each company can monitor and manage their contribution to greenhouse gas build-up in the atmosphere,
we are not yet in a position to report on our emissions, nor processes to improve our performance. It is our intention to
review our greenhouse gas emissions as part of our 2008 reporting process.
20
STAKEHOLDER ENGAGEMENT
Until recently, we were unaware of the term ‘Stakeholder Engagement’. Granted, we have
come to understand that much of what we do to ensure the ongoing productivity and profitability of our company can be construed as ‘engagement’, but we are fundamentally willing
to accept that our engagement processes are ad hoc, with the exception of our customers,
suppliers and employees (including their unions and the NBC). Our formal engagement
includes:
•
•
•
Our ad hoc meetings between management and the employees and/or their representatives, to raise and discuss issues of importance to our employees. This includes
their issues/concerns being presented to management, as well as the presentation of
production results, safety briefings, and process or policy to the employees.
Regular meetings with customers to discuss new production trends, fabrics, designs
and/or orders, as well as any issues or concerns that either party might have with the
other.
Regular meetings with suppliers to discuss new materials and/or orders, as well as any
issues or concerns that either party might have with the other.
Ultimately, we intend to develop systems that are able to
more effectively capture our engagement processes and
outcomes with the following key stakeholders (not exhaustive, nor in order of preference):
•
•
•
•
•
•
•
•
•
Employees
Puma
Levis
Adidas
New Balance
Other customers
Suppliers
National Bargaining Council for the Clothing
Industry
SACTWU
DTI CODES OF GOOD PRACTICE
South Africa’s Department of Trade and Industry (DTI) has launched the DTI Codes of Good
Practice: a set of business principles that are expected to promote and develop corporate
behaviour that meets international best practice standards for corporate responsibility.
The Codes come into full effect at the end of February 2008, and at the time of writing
this Report, we are in the process of undergoing a review of our status according to these
Codes. It is our belief that Impahla is a Category 4 Supplier, based on our own internal
assessment of our Ownership, Management Control, Employment Equity and Preferential
Procurement practices.
Opportunities for significant improvement may exist within
our Skills Development, Enterprise Development and Socio-Economic Development practices, but we are confident
that these issues can be reasonably controlled and/or explained due to the size and nature of our business.
Impahla is committed to completing a full assessment of our
Codes status during the course of 2008, and we will discuss
this assessment in our next Sustainability Report.
HUMAN RIGHTS
As a small business, Impahla has not been called upon to investigate and/or ascribe to any
international conventions regarding Human Rights. However, as a South African company,
we are both obliged and committed to living up to our national Constitution, and to respecting all laws, including those pertaining to the fair treatment of employees.
Impahla falls under the watchful eye of the National Bargaining Council for the Clothing
Industry, as well as SACTWU, the South African Clothing and Textile Workers Union, and we
actively encourage and support employee participation in both of these rights bodies.
Moreover, we aspire to meet or exceed the Bargaining Council’s Collective Agreement
rules, recognizing that these rules are merely base level guidelines, and that exceeding them,
within reasonable limits, has created a work environment that encourages reciprocal trust,
respect and commitment between management and our employees.
Shop stewards are aware of the rules and they attend Union meetings on behalf of Impahla.
If any problems are raised by our workers, the stewards have the right, and responsibility, to
address them with the Bargaining Council or Union, without being victimized.
Impahla does not hire child and/or forced labour, nor do we allow any of our suppliers or
sub-contractors to engage in these practices. Impahla’s security personnel are contracted
through the business park in which we are situated, and we have not been informed of any
incidents of excessive use of force by security personnel, nor would we be willing to allow
such behaviour to persist in the exercising of their duties on behalf of our company.
21
LESSONS LEARNED AND THE WAY FORWARD
This is the first time Impahla has attempted to produce a
Sustainability Report, and if not for the support and encouragement of Trialogue we highly doubt we would have
been able to generate such a comprehensive overview of
our company, our most material issues, and our opportunities to improve our social, safety, environmental and economic performance.
One must understand that as a small-scale privately
owned and operated business, our efforts have always
been firmly invested in ensuring that our customers
and employees are ‘happy’, and that our business remains financially strong and healthy. Although we now
recognise that our data management systems were not necessarily giving us all of the information we might have needed to maximise our efficiencies, we were nonetheless in a
position to find, and analyse, information for the purpose of informing our wide range
of stakeholders.
In short, the process of developing this Report has been a lengthy learning exercise, yet we
quickly realized that the process of reporting affords significant benefits in terms of being
able to use statistics to evaluate our performance, including the conducting of comparisons,
particularly with respect to issues that are directly related to our employees.
In speaking to our staff, Trialogue has helped us better understand the issues that they have
apparently felt unable to bring to our attention, and has helped create mechanisms for addressing each of their concerns.
As a direct result of the reporting process, Impahla is now committed to:
•
•
•
•
Reducing the amount of solid waste we send to landfills sites by:
o
Collecting reasonably large pieces of scrap materials and distributing them to
rural economic development projects that can make use of the fabric to manufacture clothing and other items; and,
o
Continuing to collect and recycle our scrap paper (specifically from patterns
and office use) and plastics.
Monitoring our electricity and water consumption figures (normalised to units of production) to ensure that Impahla uses both of these scarce resources in as efficient a
manner as possible.
Distributing copies of this Report to our key clients and seeking their comments and
input into our commitment to an improved reporting process for 2008.
Reviewing and updating this Report on an annual basis, using the tools and knowledge we have gained this year to improve our data collection, collation and
reporting procedures.
REQUEST FOR FEEDBACK
Because this is our first attempt at producing a Sustainability Report, we are mindful of the possibility that
we have not provided a comprehensive discussion of
the information that is important to our many stakeholders. As such, we are hopeful that you, the reader
22
of this Report, will contact us and offer us your views on the quality and usefulness of
this Report.
Should you have any questions about our company, or comments about anything contained
within this report, please contact William via email at [email protected].
GRI G3 APPLICATION LEVEL REQUIREMENTS
Report on:
1.1
2.1 – 2.10
3.1 – 3.8, 3.10 –
3.12
4.1 – 4.4, 4.14 –
4.15
Standard Disclosures
Not Required
G3
Management
Approach
Disclosures
G3
Performance
Indicators &
Sector
Supplement
Performance
Indicators
C+
Report on a
minimum of 10
Performance Indicators, including
at least one from
each of: social,
economic, and
environment
B
B+
A
Report on all
criteria listed for
Level C plus:
1.2
3.9, 3.13
4.5 – 4.13, 4.16 –
4.17
Same as
requirement for
Level B
Management
Approach
Disclosures for
each Indicator
Category
Management
Approach
Disclosures for
each Indicator
Category
Report on a
minimum of 20
Performance Indicators, at least one
from each of:
economic,
environment,
human rights,
labour, society,
product
responsibility
Report Externally Assured
G3 Profile
Disclosures
C
Report Assured by Trialogue Assurance Services
Report Application Level
For an indicator-by-indicator discussion of our Report’s
compliance to all of the required indicators, please email
[email protected]. For details of the process employed by Trialogue Assurance Services to afford Impahla
the required Third Party Assurance over this Report, please
email [email protected].
Respond on each
core G3 and
Sector
Supplement*
indicator with
due regard to
the Materiality
Principal by either:
a) reporting on the
indicator or b)
explaining the
reason for its omission
A+
Report Externally Assured
As a first attempt at applying the GRI G3 guidelines to our Sustainability Report, Impahla has
decided to seek a C+ level of application. The following three tables provide a summary of
the GRI’s requirements as well as a quick reference to our self-assessment of compliance to
the C+ level.
23
GRI CONTENT INDEX
For our complete GRI G3 responses table, including a map of our content, please email [email protected].
VISION & STRATEGY
ECONOMIC
Core
Strategy and Analysis
1.1
1.2
Organisational Profile
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
EC1
EC2
EC3
EC4
Core
LA4
LA5
LA7
LA8
Indirect Economic Impacts
N/A
EC9
LA10
Materials
N/A
Report Profile
EN1
EN2
EN3
EN4
Report Scope and Boundary
EN8
3.5
3.6
3.7
N/A
3.8
N/A
3.9
3.10
N/A
3.11
N/A
GRI Content Index
3.12
Assurance
3.13
Governance,
Commitments
and Engagement
EN11
EN12
EN16
EN17
EN19
EN20
EN21
EN22
EN23
Energy
EN5
N/A
EN6
EN7
Water
EN9
EN10
Biodiversity
EN13
N/A
EN14
EN15
Emissions, Effluents and Waste
EN18
EN24
EN25
N/A
N/A
N/A
HR1
HR2
N/A
N/A
HR4
N/A
N/A
N/A
HR5
4.14
4.15
4.16
4.17
24
Child Labour
HR6
Forced and Compulsory Labour
N/A
N/A
Compliance
N/A
Transport
EN29
Overall
EN30
N/A
N/A
N/A
Freedom of Association and Collective Bargaining
HR7
N/A
Products and services
EN28
Security Practices
HR8
Indigenous Rights
HR9
Community
N/A
Corruption
SO2
SO3
SO4
SO5
PR1
PR3
N/A
Included
PR6
Not included, potential improvement area
Included, but requires future improvement
Not applicable
N/A
SO1
SO8
N/A
Strategy and Management
HR3
Non-discrimination
EN26
EN27
Stakeholder Engagement
Health and Safety
LA6
LA9
Training and Education
LA11
LA12
Diversity and Opportunity
LA13
LA14
Commitment to External
Initiatives
4.11
4.12
4.13
Additional
Employment
LA3
Labour/Management Relations
N/A
Market Presence
EC5
ENVIRONMENTAL
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
Additional
Economic Performance
LA1
LA2
EC6
EC7
EC8
SOCIAL
PR9
Public Policy
SO6
N/A
Anti-competitive Behaviour
SO7
N/A
Compliance
N/A
Customer Health and Safety
PR2
N/A
Products and Services
N/A
PR4
N/A
PR5
Marketing Communication
N/A
PR7
N/A
Customer Privacy
PR8
N/A
Compliance
N/A
NON-INDEPENDENT ASSURANCE STATEMENT
To the Owners and Management of Spring Romance Properties 34 Pty Ltd, trading as
Impahla:
and other best practices in sustainability reporting assurance.
Trialogue Assurance Services (hereafter, ‘TAS’) was engaged by the Global Reporting Initiative (GRI) to assist Impahla, and two other South African suppliers of Puma AG, with the development of this Sustainability Report. This project, entitled “Transparency in the Supply
Chain,” required that TAS assist the three participating companies develop an understanding of Sustainability Reporting, and help to facilitate the development of this report.
Our approach to assurance included the following:
Because of our involvement in the development of this report, TAS is not in a position to
provide ‘Independent Third Party Assurance’ over the contents herein. However, it has
been duly noted that the data presented neither belongs to TAS, nor was supplied by TAS,
and therefore our review of this information still positions us to provide Impahla, and its
many stakeholders, with this ‘Non-Independent Assurance Statement’ over the content of
this 2007 Sustainability Report, ‘the Report’.
The Report presents Impahla’s sustainability performance over the period 1 January to 31
December 2007, including, where available, sustainability trend data for previous years. This
statement represents our assurance opinion.
TAS’s responsibility in performing its assurance activities is to the management of Impahla
alone and in accordance with the terms of reference agreed with them.
ASSURANCE OBJECTIVE
The objective of the assurance process is to provide stakeholders of Impahla with a ‘Limited
Assurance’ opinion on general accuracy and completeness of the information presented in
this Report.
This is confirmed through multiple reviews of the data submitted by Impahla and the underlying systems, processes and competencies that support the Report.
SCOPE OF WORK PERFORMED
Review of quantitative content of the Report
Among other duties, TAS was engaged to assist Impahla with assessing the completeness,
accuracy and consistency of the data contained within this report, and to test that assertions
made within the report can be deemed both ‘reasonable’ and ‘supportable’ by the relevant
sustainability data presented herein.
Moreover, TAS was charged with testing drafts of the Report to determine the degree to
which it was consistent with the reporting requirements of the GRI G3 Guidelines.
External assurance
TAS limited the scope of the External Assurance process to a ‘limited assurance’ review of the
quantitative data submitted by the management team at Impahla, for collation and reporting
herein, as well as the Reports alignment to the GRI’s G3 reporting guidelines.
ASSURANCE METHODOLOGY
The process used in arriving at this assurance statement is based on the GRI’s G3 guidance
•
•
•
a review of Imphala’s sustainability measurement and
reporting procedures, background documentation
and data collection procedures;
a review of the data submitted for inclusion in the Report for any significant anomalies; and,
an examination of the aggregation and/or derivation
of, and underlying evidence for, data and statements
included in this Report.
In determining the GRI G3 application level of the Report,
we performed the following exercises:
•
•
•
Assisting in the drafting of the Report to ensure that
the content of the Report, including discussions regarding the determination of sustainability context
and coverage of material issues, was duly aligned with
GRI G3;
A review of the approach of management to addressing topics discussed in the Report; and
A confirmation that at the requisite number of
performance indicators had been covered in
the Report.
INDEPENDENCE
Because TAS was engaged to provide report development
assistance to Impahla, through the engagement of TAS by
the GRI as the South African consultants on the ‘Transparency in the Supply Chain’ project, ours is not an ‘Independent’ assessment of this Report.
Our involvement with Impahla significantly hinders our
ability to remain independent, but does not necessarily
preclude us from offering some form of assurance to stakeholders.
Because Impahla is a small organisation (less than 100 employees), with limited annual turnover, it was determined
that Impahla cannot afford to seek external/independent
third party assurance.
However, the involvement of TAS is reviewing Impahla’s
data allows us a unique insight into the content of this Report, and permits us an opportunity to make comment over
the accuracy, consistency and completeness of the data
contained herein.
25
FINDINGS
In general, Impahla’s sustainability reporting processes are
adequate to meet the GRI’s G3 ‘Application Level C’.
However, it was found that:
•
Impahla has adequate systems in place to identify its
‘Most Material Issues’, but requires a formal process
to actively engage stakeholders on ‘sustainabilityspecific issues’;
•
Although significant steps have already been taken to
improve the quantity and quality of meaningful data
(particularly environmental data), more work needs
to be undertaken to ensure that Impahla sets and
achieves specific sustainability performance targets;
•
Impahla has not yet undertaken to complete an assessment of its compliance to the DTI Codes of Good
Practice (fully implemented as of the end of February
2008).
•
•
•
Impahla should actively engage its key stakeholders to ensure that the company is
effectively addressing stakeholder-specific concerns, and that any ‘new’ issues are incorporated into Impahla’s ongoing sustainability strategy.
Impahla should undertake to complete its compliance to the DTI Codes of Good Practice within the 2008 calendar year, in order to enhance the quality and/or relevance of
this report relative to local stakeholder expectations.
Impahla should ensure that future reports include improvements in the quality of
data, particularly those pertaining to the DTI Codes of Good Practice and the environment.
OPINION
For all data under review, errors identified during our assessment were addressed by Impahla prior to finalising this Report, and nothing came to our attention to lead us to believe that
the final data is neither accurate nor reliable. As a result, we believe that the sustainability
data in this Report gives a fair representation of Impahla’s sustainability performance, and
that this report adequately represents a GRI G3 C level report.
RECOMMENDATIONS
•
Impahla should ensure that stakeholders (internal
and external) are adequately engaged to comment
on this Report and/or to inform the content of the
next Report.
26
Trialogue Assurance Services
29 February 2008
CONTACT DETAILS
Spring Romance Properties 34 (Pty) Ltd t/a Impahla Clothing
Phone Number:
+27 (21) 510 4201
Fax Number:
+27 (21) 510 4257
Physical Address:
Unit 10, Maitland Business Park
1 Mowbray Road, Maitland, 7405
Cape Town, South Africa
Postal Address:
P O Box 921 Maitland, 7404
Cape Town, South Africa
Contact Person: William Hughes
Email:
[email protected]
The graphic design and layout of this Report was completed by Candice Ekermans, our
Johannesburg-based independent design consultant. We are very pleased to support
Candice with this project, as she is a living testament that courage and tenacity can overcome
all challenges. Although one might not notice it when reviewing this Report, Candice is legally
blind, which for others might have suggested no future in the field of marketing materials development. We hereby wish to compliment and thank Candice for her excellent work.
Candice can be contacted at [email protected].