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Group Sustainability Reportfor the year ended 31 March 2010
2010
This is our third sustainability report and covers the financial year from 1 April 2009 to 31 March 2010. References made to
‘this financial year’, refer to the financial year noted above. Likewise, references made to ‘the prior year’ and the ‘last financial
year’ refers to the reporting period 1 April 2008 to 31 March 2009. References to the ‘next financial year’ refer to the reporting
period 1 April 2010 to 31 March 2011. We report annually and this is the first year that we report as a publicly listed company.
Vodacom listed on the JSE on 18 May 2009, binding itself to the JSE Listing Requirements.
Considering South Africa’s dominance within the Group – its operation serves 26.2 million customers out of a total of
39.9 million for the Group – this report largely covers issues relating to this market. Use of the terms ‘Vodacom’, ‘Vodacom
Group’, ‘the Group’, ‘the Company’, ‘we’ or ‘us’ in this report refer to the Vodacom Group, while the use of ‘Vodacom SA’
refers to the South African company, and ‘DRC’, ‘Lesotho’, ‘Mozambique’, and ‘Tanzania’ refer to individual local markets.
Where the term ‘company’ is used in this context, it refers to the local market being discussed.
Other local markets are reported on in more detail than last year, but not as comprehensively as for South Africa. Over time,
reporting will improve as we expand our sustainability programme to our various local markets, and as their operations grow
and mature. No significant sustainability information is recorded for Gateway this year.
The reporting process is based on the Global Reporting Initiative’s G3 Sustainability Reporting Guidelines, and Vodacom
self-declares a Level C GRI rating for this report. No external assurance for this report has been sought. We are consistently
improving our internal reporting structures as the sustainability programme becomes established within the company.
We will be considering assurance in the future.
For more information about sustainability at Vodacom or for queries regarding this report, contact the Group Sustainability
division by email at sustainability@vodacom.co.za or please call +27 (0)11 653 5000.
About this report
Vodacom Group Sustainability Report 2010 1
Contents
Material Issues ➾ 2
Introduction ➾ 4 About the Company 5 Foreword from the Chairman6 CEO’s statement8 Corporate Governance
Access to communications ➾ 12 Socio-economic impact of mobile telecoms12 Mobile banking for the unbanked12 Network coverage
13 Competition and cost of communications14 Affordability and clear pricing16 Reducing the level of preventable exclusion
Transformation ➾ 19 Equity ownership19 Management control20 Employment equity (EE) and diversity management21 Skills development21 Preferential procurement (local suppliers)22 Enterprise development23 Socio-economic development
Our people ➾ 24 Representation and engagement26 Attracting and retaining talent30 Employee rewards and remuneration31 Employee wellness32 Workplace HIV/Aids33 Health and safety
Impact on environment ➾ 34 Climate change/carbon footprint36 Energy efficiency/alternate energy37 Resource utilisation38 E-waste39 Placement of base stations
Social responsibility ➾ 40 Ethical business conduct41 Anti-CMT compliance programme42 Regulation of Interception of Communications Act (RICA)43 Privacy44 Wireless Application Service Providers (WASPs)44 Content standards/protecting vulnerable users46 EMF compliance48 Contribution to communities (CSI)
GRI Index / Glossary ➾ 52 GRI Index60 Glossary
2 Vodacom Group Sustainability Report 2010
Material issues
Material issues Stakeholders Summary of status Page
Stakeholder Engagement
All stakeholders A strategic workshop was held at Group level to debate the materiality of a variety of societal and environmental concerns. The resulting list of material issues (this table) was approved by the Executive Committee (Exco).
10
Access to communications
Socio-economic impact of mobile telecoms
Communities
LSM 1–3 customers
Micro- and small enterprises
Vodafone
Vodacom SA has partnered with a leading bank to launch the innovative mobile money solution, M-Pesa, to cater for the previously unbanked.
12
Network coverage Vodacom SA’s 2G and 3G networks now cover 99.7% and 54.0% of the population respectively. We continue with our roll out in rural areas, with 2G covering 81.8% and 3G covering 7.3% by area. Networks in other local markets are also expanding rapidly.
12
Reducing the level of preventable exclusion
Vodacom SA partnered with Age in Action, launching the ZTE S202 and S302 model mobile phone for older persons. Two new Speaking Phones, and three products for the hearing impaired were also launched.
16
Competition and the cost of communications
Mobile termination rates (‘MTR’) – or interconnect rates – were reduced by 28.8% this year. In addition, the average effective price per minute dropped by 7.7% in SA during the year.
13
Affordability and clear pricing Low cost handsets have decreased in price by 30% since 2008. 14
Transformation
Equity ownership
Shareholders
Employees
Suppliers
Small enterprises
Communities
6.25% of the company is BBBEE owned. dti CoGP (Department of Trade and Industry Codes of Good Practice) score: 6.13/20
19
Management control Black representation increased. dti CoGP score: 6.56/10 19
Employment equity (and diversity management)
A Transformation and Diversity Steering Committee has been established. Retention of black employees, and in particular black female employees, remains a challenge. dti CoGP score: 10.16/15
20
Skills development 80% of all training this year was invested in the Black Designated Group. dti CoGP score: 12/15
21
Preferential procurement (local suppliers)
Vodacom SA is working to increase the proportion of registered BBBEE suppliers, and requiring all suppliers to work towards a Level 4 BBBEE status. dti CoGP score: 14.72/20
21
Enterprise development Vodacom SA is expanding opportunities for BBBEE entrepreneurs through Vodacom Internal WASP. dti CoGP score: 15/15.
22
Socio-economic development Vodacom SA allocated R149 million to socio-economic development during the financial year. dti CoGP score: 5/5.
23
Performance
Vodacom Group Sustainability Report 2010 3
Material issues Stakeholders Summary of status Page
Our people
Representation and engagement
Employees
Families and dependents
An employee survey was conducted for the first time at Vodacom SA this year, with an 80% participation rate, and action plans are being drawn up to address issues raised
24
Attracting and retaining talent Vodacom SA invested R71.2 million in training employees (3.1% of payroll). Staff turnover has decreased by almost 3%.
26
Employee wellness Vodacom SA spent R10.6 million on employee wellness this year, compared with R9.9 million in the prior year (R9 million in 2007/8).
30
Impact on environment
Climate change/carbon footprint
Government
Regulators
Interest groups
Vodafone
Public
Vodacom is taking part in the Carbon Disclosure Project for the first time, and a climate change policy and strategy is currently being developed.
34
Energy efficiency/alternate energy
Vodacom saved an estimated total of 23 575 MWh on its SA network during 2009/10. Hybrid and solar power are being rolled out on the non-SA networks. Vodacom SA is now a registered member of the Green Building Council of South Africa (GBCSA).
35
Resource utilisation Vodacom’s water-saving initiatives are performing well. 37
E-waste 208 tonnes of IT and network equipment, as well as 4.5 tonnes of handsets were recycled this year.
38
Placement of base stations Vodacom’s safety, health, environment and quality team develop policies relating to the placement of base stations to ensure minimal impact.
39
Social responsibility
Business ethics
Customers
Public
Government
Regulators
Industry bodies
Vodacom launched an Ethics Advice Line, and published a “Guideline for Content in the Workplace” this year.
40
Compliance with RICA Vodacom SA’s primary target is to make the RICA registration process as simple as possible for both existing and new customers while ensuring that all existing customers are registered by 31 December 2010. Over 13 000 terminals at points of sale have been installed to enable new customers to register and over 113 000 registration agents have been trained.
42
Privacy of information Vodacom has policies in place to ensure that customer information is not unlawfully disclosed in terms of licence obligations, both internally and via our WASP business partners. The Protection of Personal Information Draft Act (2005), which Vodacom SA made submissions on, was approved in August 2009. All Vodacom SA’s key concerns were addressed.
43
Protection of vulnerable users Vodacom was instrumental in initiating a double-opt-in rule requiring customers who subscribe to WASP services in South Africa to confirm their requests prior to being billed. This is to be implemented during 2010/11.
44
EMF compliance Vodacom engages with the Directorate for Radiation Control to keep informed about any developments in local regulation, annually. The industry is currently anticipating a draft South African EMF standard for best practice.
46
Contribution to communities During the 2009/10 financial year, the Vodacom Foundation in South Africa contributed R68.6 million. A further R11.5 million constitutes CSI activities conducted by other divisions of the company.
48
4 Vodacom Group Sustainability Report 2010
About the Company
Products and servicesWe offer a wide range of products and services delivered through
a variety of technological platforms to our corporate and wholesale
customers. While each local market tailors these to suit their
specific needs, the main products and services offered are:
➾ Voice
➾ Mobile messaging
➾ Broadband data and connectivity
➾ Converged services
For full details, see our Group website at www.vodacom.com, as
well as our 2010 Annual Report.
Vodacom Group (as at 31 March 2010)
Vodacom Group
Lesotho
88.3%
South African Government14%
Public21%
Vodafone65%
DRC
51%
Mozambique
85%
South Africa
93.75%
Tanzania
65%
Analysis of value distributed
(% contributed)
■ Retained
■ Employees
■ Finance providers
■ Government
■ Reinvested
11.0
13.8
18.2
18.438.6
2010
4.9
33.020.0
18.323.8
2009
10.3
33.7
21.2
15.1
19.7
2008
Group highlights ➾ 39.9 million voice customers
➾ 7.6 million data users
➾ R95 million spent on CSI
initiatives
➾ Included in JSE SRI Index
Vodacom Group Sustainability Report 2010 5
Peter Moyo – Chairman
As one of the foremost corporates in South Africa and indeed on
our continent, we have an obligation to lead by example in saving
the planet’s resources, promoting the best interests of our staff and
customers and facilitating societal progress for the good of all. To
this extent as a company we continue to search for ways we can
use our technology to help address issues such as crime, health
provision, access to communications, education, the eradication
of poverty and the extension of social services.
The global economy is emerging from a prolonged period of
decline which saw the demise of many large corporations and the
loss of hundreds of thousands of jobs. At the same time we
witnessed the failure to implement a new binding agreement at
the global climate change summit in Copenhagen as countries
failed to find common ground on this vital issue.
Our challenge in the face of this is to continue running a successful
business which is not only financially sound but which is also
poised to address the needs of our diverse range of stakeholders
in a socially responsible manner. It is a challenge I am satisfied we
continue to meet.
The past year has seen the company deliver a robust set of
financial results, with a steady growth in customer numbers,
sustained investment in infrastructure and continued market
leadership in most of the countries in which we operate.
However it is the life-changing impact of our products and
services of which we are most proud. In many markets customers
access communications for the first time using our mobile
technology. Our ultra low cost handsets make accessing this
technology more affordable. We are introducing mobile banking
to the previously unbanked and will continue to expand this
offering across the Group. New services in the field of mobile
health are being explored, while the introduction of handsets for
the visually and hearing impaired, as well as for the elderly, has
allowed us to introduce mobile communications to those
previously excluded.
It is precisely these types of products and services which are both
commercially viable and have a high social impact that allows us
to prosper as a company while contributing to positive social
development, in effect tying our success to that of the broader
society in which we operate. Additionally our business success
allows us to contribute to a variety of social causes aimed at
improving the lives of those less fortunate.
Responsible corporate citizenship also obliges us to remain
mindful of the impact we have on the physical environment.
Judicious utilization of limited natural resources is essential as is
the need to limit our waste, particularly e-waste. We have taken
steps in this regard but more needs to be done. We see climate
change presenting both a challenge as well as an opportunity for
us. While we must make our operations more carbon efficient,
and have begun doing so, we are aware that we have the tools
to assist other corporate entities to do the same through services
such as videoconferencing and machine-to-machine transactions.
I believe very strongly in the power of corporations to be a driving
force for positive change and that a truly sustainable company is
one that delivers strong returns to all its stakeholders.
A business can only prosper and be sustainable if the society in which it operates is sustainable, and I believe that Vodacom continues to make a great contribution towards a more sustainable society.
Foreword from the Chairman
6 Vodacom Group Sustainability Report 2010
Pieter Uys – Chief Executive Officer
Chief Executive Officer’s statement
Shareholders typically expect ongoing dividends from the
company’s profits, as well as growth in the value of the
company. Neither of these is possible in the long-term unless
the company also meets the interests of its other stakeholders.
Customers, employees, suppliers, government regulators and
broader society all have expectations and concerns that require
ongoing response from us if we are to continue to grow our
brand in South Africa and on the African continent. This
thinking is in line with the 2009 King Report on Corporate
Governance for South Africa (King III), which seeks to balance
the wider concerns of society with the interests of business.
This year, we are developing systems to improve our
compliance with the GRI (G3) indicators, which form the basis
of compliance with King III.
We have followed up last year’s stakeholder survey with frank
discourse with a broad range of stakeholders. We also held a
workshop with key staff to examine stakeholder concerns
against the interests of the business, and through this process
have listed and reprioritised the issues we believe are most
important for our ongoing sustainability.
Aside from stakeholder engagement itself, five key issues
emerged, and these form the framework for this report:
1. Access to communications – We recognise the enormous
role that advanced mobile telecommunications can play in
the development of the peoples of Africa. Customers
naturally expect these benefits as affordably as possible,
and they either have concerns with products that are
confusing or they commit to them unknowingly. In
responding to these demands, Vodacom is continuing to
make voice and data more accessible while increasing its
network coverage, especially to rural communities. We are
also working with the Independent Communications
Authority of South Africa and consumer legislation to
ensure our customers continue to receive the best value
from our network. Already, we offer customers the lowest
cost handsets on the market.
2. Transformation – Vodacom is a powerful enabling agent in
our economy for the broad-based empowerment of
historically disadvantaged people. The dti Codes of Good
Practice provide the framework for us to create opportunities
for black employees, suppliers and entrepreneurs, and we
continue to improve our overall score as a Level 4
contributor, whilst acknowledging the challenges we face in
improving the representation of black women in particular.
3. Employees – Considering that our people are most directly
responsible for our sustainability, we are committed to
creating the best working environment for the most highly
skilled and motivated employees in the industry. We are
particularly focused on attracting and retaining talent
through training (skills and leadership), remuneration and
other rewards for good work. To ensure a representative
employee base, the Group has recently initiated a
Transformation and Diversity programme focusing on
developing diversity in race, gender and disability across
the organisation.
4. Impact on the environment – While mobile
communications clearly improves the energy efficiency of
the economy (e.g. mobile communications facilitates quick
and easy access to information, improving planning and
saving on logistics costs), we are nevertheless mindful of
our direct environmental impact through energy and
materials usage, e-waste and the placement of our base
stations. We continue to work on improving the
measurement of these impacts, joining the international
Carbon Disclosure Project, while finding smart solutions to
reduce our demand on scarce resources and fossil fuels.
A year ago, in May 2009, Vodacom listed on the JSE, in the process gaining some 95 000 shareholders eager to share in the company’s success. But how do we define success?
Vodacom Group Sustainability Report 2010 7
Executive summaryCEO statement
5. Social responsibility – We acknowledge the importance of
demonstrating high ethical standards as a vital measure of
our organisational integrity. To this effect, allegations made
by ex-employees on a range of issues were investigated and
where they pointed to areas of the business that needed to
be strengthened these have been attended to. As we grow
the business it becomes ever more important to embed a
strong ethical culture. We are also constantly on guard
against harm to users of our technology. We anticipate a
national electromagnetic fields standard and best practice
protocol from the Directorate for Radiation Control to guide
best practice. In addition we work with the Wireless
Application Service Providers’ Association (WASPA) on
content standards to protect vulnerable users.
South Africa’s community development strategy was recently
revised and now places a stronger emphasis on ICT-enabled
projects chosen to leverage services such as SMS and USSD to
support initiatives in community health, education and security.
This focus is echoed by all our local markets, who also direct
spend into welfare, community, environment, culture, arts,
sports and technology. During this financial year the Group
spent in the region of R95 million on these initiatives, via our
various in-country foundations as well as from other divisions
within the business.
The way we do business in all our local markets is important to
us. We work with our employees, customers and suppliers to
ensure we respect local cultures, while upholding ethical
standards of business.
8 Vodacom Group Sustainability Report 2010
As an essential part of this commitment, the Board recognises the
need to conduct business in accordance with the principles
promoted in the King III Code of Corporate Practices and
Conduct. These include discipline, independence, responsibility,
fairness, social responsibility, transparency and accountability of
directors to all stakeholders.
A number of these principles are entrenched in the Group’s
internal controls and policy procedures governing corporate
conduct. Our Board is satisfied that every effort is being made to
comply with all material aspects of King III. Where we do not fully
comply, an explanation is indicated below.
Board
Our unitary Board consists of 13 directors. Of these, five, including
the Chairman, are independent non-executive directors while five
are non-executive and three are executive directors. A Board
charter has been adopted where the detailed responsibilities of
the Board include:
➾ oversight of the strategic direction of the Vodacom Group;
➾ approving major capital projects, acquisitions or divestments;
➾ exercising independent objective judgement on the business
affairs of the Group independent from management;
➾ ensuring that policies and procedures are in place in terms of
appropriate governance structures;
➾ ensuring the effectiveness of and reporting of the Group’s
systems of internal controls;
➾ reviewing and evaluating the business risks facing the Group;
➾ approving the annual budget and operating plan;
➾ approving the annual and interim financial results and
shareholder communications; and
➾ approving the senior management structure, responsibilities
and succession plans.
Accountability
The Board takes overall responsibility for the success of the
company. Its role is to exercise leadership and sound judgement
in directing Vodacom to achieve sustainable growth and act in
the best interests of the shareholders.
In line with best practice, the roles of Chairman and Chief
Executive are separate. The Board is led by the Chairman while
operational management of the Group is the responsibility of the
Chief Executive.
Directors
The directors have a wide range of expertise as well as significant
experience in financial, commercial and mobile telecommunications
activities. In terms of the Group’s articles of association, the
non-executive directors have no fixed term of appointment while
the executive directors are subject to the standard terms and
conditions of employment.
All of the three executive directors have a notice period of six months.
In terms of Vodacom’s articles of association, the directors are subject
to retirement by rotation and re-election by shareholders at least once
every three years. Any director appointed to fill a casual vacancy must
retire at the first annual general meeting following his appointment
and stand for re-election at that annual general meeting.
Independent advice
The Board recognises that there may be occasions where one or
more directors feel it necessary to take independent professional
advice at the company’s expense. There is an agreed procedure
for them to do so.
Board committees
The Board has established several committees in which the
non-executive directors play a pivotal role. All committees
operate under board-approved terms of reference, which may be
updated from time to time to keep abreast with developments in
corporate law and best practice in governance. Board
committees are as follows:
Corporate governance
Vodacom is committed to the highest standards of business integrity, ethical values and professionalism in all its activities.
Vodacom Group Sustainability Report 2010 9
Governance
Executive Committee
The Executive Committee is responsible for the operational
activities of the Group to develop strategy and policy proposals
for consideration by the Board and to implement the Board’s
directives. It has a properly constituted mandate and terms of
reference.
Audit Committee
The primary role of the audit committee is to ensure the integrity
of the financial reporting and the audit process, and that a sound
risk management and internal control system is maintained.
Remuneration Committee
The remuneration committee ensures that the Group’s directors
and senior executives are fairly rewarded for their individual
contributions to overall performance and in line with our
remuneration philosophy.
This committee’s membership consists entirely of non-executive
directors, 50% of whom are independent. While not fully in
alignment with the King III requirement of having a majority of
members who are independent non-executives, we are satisfied
that the composition of this committee enables it to sufficiently
carry out its duties whilst ensuring that our remuneration policies
are aligned with those of Vodafone where practical and in the best
interests of the company.
Nomination Committee
The duties of this committee are, amongst others, to identify and
evaluate suitable potential candidates for appointment to the Board
and to identify and evaluate suitable candidates for the position of
Chief Executive and Chief Financial Officer. In addition to this the
nomination committee, together with the Group CEO, is
responsible for the succession planning of the CEO’s direct reports.
This committee’s membership consists entirely of non-executive
directors, 50% of whom are independent. While not fully in
alignment with the King III requirement of having a majority of
members who are independent non-executives, we are satisfied
that the composition of this committee enables it to be sufficiently
independent in carrying out its duties having considered the rights
of Vodafone contained in the company’s articles of association.
Company Secretary
All directors have access to the advice and services of the
Company Secretary, who is responsible to the Board for ensuring
compliance with procedures and applicable statutes and
regulations. To enable the Board to function effectively, all
directors have full and timely access to information that is relevant
to the proper discharge of their duties. This includes information
such as corporate announcements, investor communications and
other developments which may affect us and our operations. This
also includes access to management where required.
The Company Secretary is responsible for the ongoing
development of director training. All new directors, where
relevant, are appropriately inducted by the Company Secretary
and Chief Executive. This includes fiduciary and statutory
responsibilities as well as orientation in respect of the Group’s
operations.
Risk management
Effective risk management is integral to the Group’s objective of
consistently contributing to the business. As a result, we are
continuously developing and enhancing our risk and control
procedures to improve the mechanisms for risk identification,
assessment and monitoring. Therefore, when we set strategies,
approve budget and monitor progress against the budget, the
directors consider the identified business risks.
In order to facilitate the process of embedding risk management
within the Group, we have established a division reporting to the
Chief Risk Officer. This division assists in identifying, assessing and
recording strategic risks currently facing the Group and, where
appropriate, monitoring procedures aimed at mitigating
pertinent risks.
We identify and manage risks at five different levels within the
organisation, namely at project, process, operational, tactical and
strategic levels. These risks are periodically reviewed and updated.
A filtering and reporting process ensures that the relevant risk
items are reported to the Risk Management Committee
comprising executive management and, thereafter, are reviewed
by the Board.
Corporate governance continued
10 Vodacom Group Sustainability Report 2010
Internal control
Our internal controls comprise of methods and procedures
adopted by management to provide reasonable assurance in
safeguarding assets, prevention and detection of error, accuracy
and completeness of accounting records and reliability of financial
statements. The internal audit function serves management and
the Board by performing independent evaluations of the adequacy
and effectiveness of the Group’s controls, financial reporting
mechanisms and records, information systems and operations and
provides additional assurance in safeguarding of assets and
financial information.
For further details regarding corporate governance, such as
meeting attendance, etc., refer to the full corporate governance
report in the Annual Report.
����Material Issue����Stakeholder engagement
No successful company makes its business decisions in isolation of
those that stand to be impacted from its actions. Stakeholder
perceptions help us to determine material issues and inform our
business strategy. Our engagement with stakeholders on
sustainability issues has largely been dictated by the strategic
direction of the business. While issues key to business operations
receive high-level attention, we are increasingly incorporating
triple-bottom-line elements into all our business strategies.
Moving forward into a new era as a public company, we recognise
the importance of including the concerns of our stakeholders in
the Group’s business dealings. We interact with our people,
customers, government, the regulator, business partners and
communities at various levels and intensities during the normal
course of business. But the Company’s very size and strength often
shields us from hearing and being able to respond to important
issues affecting these relationships.
Realising this, we held independently facilitated discussions with
key stakeholders in 2008. These raised some areas of concern
regarding the future of Vodacom, our trading culture and
stakeholder relationships. The Chief Officer: Corporate Affairs,
with direct responsibility for external relations, was appointed in
February 2009. Thereafter, we began to formalise and improve
our engagement with stakeholders by formalising a list of
material issues which forms the framework of this report, as well
The key strategic risks we identified during the year under review
were as follows:
Increased regulatory requirements
The main disruptive risks in this area include wholesale and retail
price control, subscriber registration and additional fees and taxes.
These risks are managed by regulatory and stakeholder
engagement teams at the Group level, and within local markets,
which maintain close contact with ministries, legislators and
regulators; make submissions to formal hearings and calls for
comment; provide required reports to regulators; and involve
themselves in international debate, dialogue and research to
determine best practices.
In South Africa, it has been noted that additional scrutiny is
exercised with regard to proposals for new regulations by the
Independent Communications Authority of South Africa (ICASA).
This includes the imposition of wholesale price control and
increasing enquiries into retail pricing. Also affecting South Africa
is the convergence of telecommunications technologies,
encompassing Voice-over IP (VoIP) and facilities provisioning.
These factors have resulted in an increase in competition from
additional entrants into the market, placing pressure on pricing
and margins.
In the Democratic Republic of the Congo (DRC), significant
changes and increases in telecommunications fees (numbering
and spectrum) and taxes (excise taxes on airtime, sales tax,
international call termination and free minutes) are now being
imposed or threatened, which will have an impact upon future
margins. In the DRC, subscriber registration has been
implemented by the national security agencies, posing a major
logistics challenge considering the country’s poor infrastructure.
The level of taxation of mobile communication services in Tanzania
is also high. We are addressing subscriber registration
requirements together with similar requirements relating to the
commercial roll-out of the M-Pesa money transfer service, in order
to mitigate the negative impact of stand-alone subscriber
registration requirements.
Along with our management team’s efforts at implementing the
necessary controls to mitigate these major risks to an acceptable
level, we subscribe to a comprehensive insurance programme and
have a fully embedded business continuity strategy.
Vodacom Group Sustainability Report 2010 11
Governance
as of the Company’s sustainability management systems,
currently being developed (see Material Issues table on page 2).
Our executive committee is actively engaging on these issues and
working on how to incorporate them into business strategy.
The results of the stakeholder engagement opinion survey on EMF
issues, undertaken by Nunwood Consulting in 2008, were released
during the year under review. These are discussed under the
section on ‘EMF Compliance’.
We engage with our various stakeholder groups throughout the
year, in some cases in a formal and structured manner, and in
other cases on an ad hoc basis. Some of these interactions are
described below, while others are addressed in context with
relevant issues, where they are discussed in this report.
In South Africa, customer satisfaction is monitored on a monthly
basis, through the ‘Customer Delight’ questionnaire which looks
at various customer touch points such as network, products and
services, tariffs, billing, contact centres, and information provision
issues. Year-to-date, Vodacom SA scores 4.4 points higher than its
nearest competitor for overall ‘delight’.
We also track and measure brand perception. in South Africa we
achieve this through ‘brand health’ tracking on a quarterly basis,
to determine what people associate with the various brands, as
well as to check on the general success of the brand. Currently the
market leader for the category, Vodacom SA also conducts market
research and ad hoc studies with customers and suppliers based
on business requirements.
The Group continuously engages with the media on a proactive
and reactive basis via media launches, press conferences,
interviews, press releases, financial results announcements and
media queries. A media centre is available on our website
(www.vodacom.com) where all announcements to the media are
posted, and where media can request to be added to our
distribution list. In addition to our website, we communicate with
our employees and customers through a variety of media such as
newsletters and magazines.
Vodacom is consistently working towards meaningful and
constructive stakeholder engagement that will inform our
understanding of the most important business and sustainability
issues impacting on us in relation to society. By adjusting our
approach and policies where necessary, and deriving indicators of
our performance, we will be able to effectively measure our
progress in the future.
12 Vodacom Group Sustainability Report 2010
We are committed to facilitating access to all, and during the
2009/10 financial year our customer base grew to close on
39.9 million, up 0.7% on the previous year.
����Material Issue����Socio-economic impact of mobile telecoms
The socio-economic impact of mobile telecommunications is
significant and there is much evidence that it improves people’s
lives. This is particularly highlighted by the benefits that mobile
telecommunications brings to rural and marginalised
communities, providing them with a range of services they have
not historically had access to, as well as stimulating the growth of
micro-enterprises.
The ICT industry’s socio-economic impact is broad ranging.
It provides many jobs through the supply chain, value-added
services and distribution outlets. Mobile operators are top
corporate taxpayers through license fees, number-range fees,
handset duties, services, etc. Mobile networks provide data
services to schools and hospitals and are the largest Internet
service providers (ISPs) in many African countries. Most recently,
mobile banking (by SMS, for example) provides access to
financial services for the first time for many previously unbanked
customers.
The industry’s challenge is to lower the total cost of
communications for our customers, while increasing access in rural
areas. A number of key issues contribute to extending services to
new customers: the extent of network coverage we offer;
distribution models that allow access to our products and offerings
in remote communities; more affordable products (particularly
airtime) and handsets providing services that are key to commerce;
as well as specific products and services for those excluded from
mainstream communication channels.
Communications are currently made affordable to low-income and
rural groups through community service telephones (CSTs). The
pre-paid service, which we were the first to introduce, is also
credited with being the primary enabler for extending mobile
services to the general population.
Looking forward, mobile banking and micro-payments are being
implemented for developing and emerging markets in Africa.
Many opportunities for personal and property security services are
also being developed.
Mobile banking for the unbanked
In the quest to use mobile communications to improve lives of
people living on the periphery of society, we first introduced our
innovative mobile money solution, M-PESA, to the Tanzanian market
in 2008, having initially been launched in Kenya in 2007. It has
subsequently been introduced in Afghanistan, and now boasts a
customer base of more than 13 million. Following the successful
adoption of this service, this mobile money solution is being
brought to South Africa in partnership with Nedbank. M-PESA
allows even unbanked customers to transfer money from person to
person using a mobile phone. M-PESA will be launched during the
2010/11 financial year.
����Material Issue����Network coverage
Vodacom is committed to providing equal access to
communications for all, now focusing not only on 2G services, but
also 3G services, for which there is a rapidly growing demand.
During the year under review, 414 2G base stations and 462 3G
base stations were erected in South Africa, bringing network
coverage to 99.7% and 54.0% of the population respectively.
Translated to total land area covered, 2G urban coverage is 99.9%
and rural is 81.8% (the area within a city boundary is defined as
urban. Total urban area within South Africa is 27 272km2 and total
rural area is 1 191 818km2). 3G urban coverage is 63.8% while rural
is 7.3%. Vodacom SA’s data customer base grew to 1.1 million this
year.
SA Base stations
March 2010 March 2009
2G number of base stations 7 895 7 481
3G number of base stations 3 342 2 880
Access to communications
Vodacom acknowledges the enormous potential of mobile communications to improve lives, particularly as a means of enabling socio-economically marginalised communities’ access to modern services and benefits.
Vodacom Group Sustainability Report 2010 13
Communication
The aim is to continue expanding this network with the ultimate goal of having full coverage by
2G and 3G services. While development is certainly budget dependent, Vodacom SA aims to
reach the following levels of population coverage over the next few years:
SA population coverage
March March March March2010 2011 2012 2013
2G Population coverage [%] 99.7 99.7 99.8 99.83G Population coverage [%] 54.0 58.0 62.0 65.0
Vodacom Business is in the process of launching a VSAT (very small aperture terminal)
broadband solution. While this will facilitate 100% geographic coverage for broadband Internet,
VSAT will not be aimed at the general customer, but rather at social responsibility programmes
and entrepreneurs who wish to implement broadband solutions in remote areas. Such a
product would also enable regional and national government to improve service delivery to
communities.
Other local markets
During the financial year under review, Lesotho maintained a steady pace of network expansion.
The number of 2G base stations increased by 15% while the 3G network base stations more
than doubled in quantity.
Mozambique built its first fifty 3G base stations in the past year, while also increasing the
current 2G network by 27%. The aim is to continue steady growth over the coming year,
increasing total 2G coverage to 60%, and increasing the 2G and 3G coverage footprint
aggressively in the central and northern parts of the country. Roll-out of the fibre optic network
in Maputo and of microwave transmission in the northern areas of Mozambique will also be
consolidated during 2010, and licence obligations in terms of providing coverage in under-
serviced areas and to close the coverage gap will be addressed.
In Tanzania, the 2G network has expanded further, now including approximately 76% of the
population, while the 3G service now covers 36% of the population. While there are no specific
expansion targets for the coming year, Tanzania aims to have full (urban and rural) network
coverage for both 2G and 3G within the next ten years.
����Material Issue����Competition and cost of communications
During the 2009/10 financial year, mobile termination rates (MTR) – also known as
interconnect rates – have come into the focus of industry players, parliament, customers and
the media in South Africa. Vodacom supports cost-based interconnect rates and the
reductions to bring rates down to the cost-based level (Vodacom SA reduced its interconnect
rates by 28.8% this year), but this reduction needs to be done in a managed way over time (a
‘glide path’). This is a key issue, as a sudden and severe reduction in interconnect rates would
have a disruptive impact on network investment plans and the industry. The Independent
28.8%reduction of interconnect rates by Vodacom SA
Access to communications continued
14 Vodacom Group Sustainability Report 2010
customers by going beyond providing ‘just a phone’ to providing
multi-functional assets. We undertake wide-ranging research to
inform product development, looking to industry standards,
competitors, vendors, revenue forecasting, technological
developments and other stakeholders for relevant data. We also
monitor and analyse data relating to each new product and how
customers respond to them, and this in turn informs further
research and development.
In South Africa, pricing is governed through the Tariffing and
Products Committee (TAPCo), chaired by the Managing Director as
the highest authority. Responsibility for the implementation and
management of the pricing of various products and services resides
with the products and services divisions. In addition to adhering to
ICASA regulations, Vodacom SA strictly abides by the rulings of the
Advertising Standards Authority to ensure that customers are not
misinformed when buying products or services. Various customer
surveys and feedback from customer-facing business partners act as
a litmus test for determining whether content of agreements, as
well as rights and obligations are understood.
Affordable handsets
The launch of the Ultra Low Cost (ULC) handsets has been very
successful in the Vodacom market where mobile phones are still
an aspirational item to many of our potential customers. We first
introduced ULC handsets in South Africa in 2007 and subsequently
in the DRC, Lesotho, Mozambique and Tanzania in 2008. Prices
have decreased by 30% since 2008, and Vodacom foresees
another 10% decrease in 2010 with the planned launch of the
Vodafone 150, retailing at prices as low as R129 in South Africa.
Meanwhile, more technology features are being added, such as
FM radio and torches.
Vodacom SA’s key strategy for the next two years is to provide
affordable broadband and to extend the drive of low-cost
affordable communication to include features more commonly
available in the mid and upper market segments such as camera,
messaging and smartphone functions. Sales figures for low-cost
devices (costing less than US$30) during 2009/10 are estimated to
be 1.8 million units for the year and with a market size such as this
handset manufacturers such as Nokia and Samsung also intend
launching products in this segment providing our customers with
a wide spectrum of choices.
Communications Authority of South Africa (ICASA), having
conducted market reviews in terms of Chapter 10 of the
Electronic Communications Act, has proposed an aggressive glide
path in its draft regulations on interconnection, published in
April. We will be participating in the public participation
processes on this matter.
Vodacom is ensuring that top management are fully trained in
their responsibilities under competition law, in order to promote
fair competition principles and practice in the company’s
operations.
Other local markets
We are currently engaging the Lesotho Communications Authority
around its attempt to direct operators to reduce MTRs unilaterally
based on a 2007 study.
A tariff review is underway in Mozambique, and it is expected that
tariffs will be adjusted to make product offerings more competitive
and profitable at the same time. While the Mozambican
government plans to award the third operator license before the
end of this year, we believe that the market may not support a
third operator. There is a strong focus on marketing in order to
grow the client base, with the aim of obtaining at least 50% share
of the market, and allowing customers to benefit from the
economies of scale that can be achieved.
The Electronic and Postal communications Act 2009, which
empowers the regulator to control prices, was passed by the
Tanzanian Parliament in February 2010, although it has yet to be
implemented. Recently, stiff competition in the Tanzanian market
has led to significant price reductions without regulatory input.
����Material Issue����Affordability and clear pricing
Basic communication should be enjoyed by all people, and
affordable products and handsets are a means of facilitating this
access. In addition, the importance of customer understanding of
the products they choose cannot be overstated as this empowers
them to know their rights, thus reducing misunderstandings and
resulting complaints. Terms of contracts have traditionally been
complex for the lay-person to decipher, and the more
sophisticated products and services become, the more difficult it is
to communicate these terms simply.
Vodacom is developing more affordable products and handsets,
and we aim to create products that truly improve the lives of our
Vodacom Group Sustainability Report 2010 15
Communication
Affordable products
Vodacom’s pre-paid service, while being more expensive than post-paid, has made
telecommunications more affordable. Vodacom SA has continued to work towards lowering
pre-paid costs producing more affordable offerings such as the 4U pre-paid package, offered at
the same price as the 4U contract.
After the enthusiastic uptake of the R5 top-up vouchers in 2009, two new pre-paid voucher
denominations were launched in South Africa in January 2010, namely R2 and R10, extending
access to even the most price-sensitive consumer. In conjunction with the R5 and R12 vouchers,
these contribute to 79% of voucher sales and 47% of voucher usage value. Pre-paid customers
who show commitment towards spending a higher amount are now receiving discounted rates.
Products introduced this year in South Africa to improve affordability include:
➾ ‘All Day’ and ‘Per Second Plus Prepaid’ – Launched in October 2009, this offering
significantly reduced call rates for Vodacom prepaid customers with the best all-day and
on-net peak prepaid rates, available to the South African market. By the end of February
2010, more than 430 000 subscribers had subscribed to these new packages.
➾ ‘Step Up’ – Launched in November 2009, this includes two new contract tariffs
specifically targeted at customers who do not meet the credit vetting requirements as set
out by their service provider.
The Yebo4Less offering was launched in 2008. This is a prepaid plan providing customers with
variable discounts of up to 99% based on location and time of day. By the end of February
2010, Yebo4Less had a subscriber base of 10.4 million, compared with 4.8 million at the same
time last year. Further enhancements to the product are expected in the near future to enable
discount notification at the time of call as well as the possible inclusion of a dynamic tariff
engine. The minimum discount offered to Yebo4Less customers has also been increased from
5% to 10%.
The Please Call Me (PCM) service allows customers to send a limited number of free messages
requesting a call back. The platform originated an average of nearly 660 million messages per
month during the 2009/10 financial year, compared with 600 million per month for the
previous year. Vodacom SA generates revenue by selling advertising space at the end of each
PCM message. During 2009/10 almost 50% of these advertss were funded by the financial
services/insurance sector. Enhancements to this service are planned for 2010/11.
For comprehensive details of various offerings, refer to our website http://www.vodacom.co.za/
packages/index.jsp
Clear pricing
Vodacom SA supports the Independent Communications Authority of South Africa’s (ICASA)
intention to require providers to show clearly what each element of our products cost, as well as
the costs of opting out of these contracts.
Following the promulgation of the Consumer Protection Bill, we have released a simplified
version of certain products and services. This includes simplified rates, call periods and
groupings of off-net charges on the prepaid and Top Up tariff plans, assisting in making our
retail offerings easier for customers to understand.
R2 and R5pre-paid vouchers extending access to even the most price-sensitive consumer
660 million‘please call me’ messages sent per month during 2009/10
Access to communications continued
16 Vodacom Group Sustainability Report 2010
To improve pricing transparency of handset-plus-airtime packages, ICASA published regulations
in 2008 requiring providers to describe clearly the cost of each element in the package.
However, the first set gazetted was ambiguous and the required amendments have not yet
been finalised. As with all ICASA regulations, once promulgated, Vodacom SA will ensure that
the regulations are adhered to.
Other local markets
Whilst no formal policies and regulations currently exist outside South Africa, all our companies
ensure that products and services are clearly explained at the point of sale, and that supporting
literature is provided.
In Lesotho, the introduction of low-cost handsets, per second billing and promotions focused
on discounted offerings in the last year has improved customer perception of the affordability
of Vodacom products.
An offering has been introduced in Mozambique that provides the rural subscriber with a
preferential tariff. This service is branded Zona Tudobom, and was voted one of the top three
new products at the 2010 Africa GSM awards. The Vodafone 250 low-cost handset will be
launched during 2010/11 and will be exclusive to Vodacom in the country.
Tanzania is currently making basic voice and SMS services affordable to rural communities with
simple, easy to understand price plans that are tailored to these communities. Solar powered
low-cost phones will also be introduced.
����Material Issue����Reducing the level of preventable exclusion
Disabled and elderly people are vulnerable to exclusion due to physical circumstances and
the structure of modern society. In appreciation of the specific needs of some customers we
pioneered the first mobile communications products and services for the disabled and
elderly in 2004.
Since then Vodacom SA has been developing expertise in this area of research through a
dedicated unit in the Human Resources department, created in 2008. In the past year our specific
needs strategy has grown to include showcasing mobile devices and products to organisations for
people with disabilities and the elderly. It is important to inform our hearing-impaired customers
of the availability of new devices that will increase their overall communications experience.
During October 2009, we partnered with two organisations to assist with advertising their new
specific needs mobile phone offerings, as well as their hearing-aid devices (which interface with
mobile phones).
Age in Action, the biggest organisation for the elderly in South Africa, is also a partner, and they
assist with our understanding of the needs of elderly customers. This partnership has resulted in
the launch of the ZTE S302 model mobile phone for older persons. This phone was successfully
rolled out and over 18 000 units were sold within eight months. Both reviewers and users
received the phone positively, applauding the design for being user-friendly for older persons.
ZTE S302mobile phone for the elderly
This phone was successfully rolled out and over 18 000 units were sold within eight months.
Vodacom Group Sustainability Report 2010 17
Communication
Other products that were launched during 09/10 include:
1. Two new-model speaking phones;
2. Three products for the hearing impaired; and
3. The ZTE S302 phone for the elderly.
Other than standard press releases in numerous newspapers and magazines, product
information is communicated directly to these customers through partner organisations for
the disabled and the elderly. The ZTE S302 product information was communicated directly
to 550 members of Age in Action during their bi-annual elderly conference in October 2009.
During the 2009/10 financial year, general customer awareness sessions were held at various
stores and the 12580 Specific Needs Contact Centre. New specific needs products were
communicated to all staff via an internal communication campaign.
This year we sold 1 586 speaking phones (for the visually impaired) as well as 18 000 ZTE S302
phones for the elderly in South Africa. There are no figures available for the products for the
hearing impaired as these are sold by specialist companies.
Quick startguide for easy reference for the elderly
18 Vodacom Group Sustainability Report 2010
We have always held a sincere commitment to transformation,
reflected in our pioneering and steadfast investment in enterprise
development. Vodacom SA has invested the required R1 billion in
the government Joint Economic Development Programme well in
advance of the ten-year deadline. in South Africa we continue to
invest close to double the sum required for full points on the
Department of Trade and Industry’s Broad-based Black Economic
Empowerment (BBBEE) Codes of Good Practice (dti CoGP).
All functional units responsible for the implementation of specific
elements have BBBEE performance targets as part of their overall
business objectives. They report progress to senior management
at the executive and Board of Directors meetings, where BBBEE is
a permanent item on the agenda. Vodacom SA has a dedicated
BBBEE unit responsible for guiding the respective functional
groups in implementing BBBEE, and providing management with
quarterly reviews of the Company’s progress.
All key shareholders, including Vodafone, Royal Bafokeng Holdings
(RBH) and Thebe Investment Corporation (TIC) have responded
positively to the outcome of our BBBEE rating. Both RBH and TIC
are corporate customers of Vodacom SA and obtain 125%
recognition against the dti CoGP (Code 500: Preferential
Procurement) for their respective company’s spend.
BBBEE stakeholder engagement
Within Vodacom SA there are various functional units responsible
for specific engagements with our stakeholders:
➾ Shareholders – Managing Director’s office, Regulatory Affairs
and BBBEE Unit (specifically BBBEE related policy matters);
➾ Government – Stakeholder Engagement Division, Regulatory
Affairs, BBBEE Unit;
➾ Regulator – Regulatory Affairs Division including the BBBEE
Unit;
➾ Employees – BBBEE Unit, Human Resources (in respect of the
Employee Share Scheme); and
➾ Suppliers – Procurement Division supported by the BBBEE Unit.
Transformation
At a social level, transformation is about levelling the playing field in order that all South Africans realise their aspirations to participate in the economy in a way that creates value for all. At a business level, the emerging black middle class represents a huge new market opportunity, and it is essential that our South African team is diverse and representative, in order to serve this market effectively.
Scorecard summary
Actual ActualWeighting overall score overall score
% 2010 2009
Overall BBBEE score 100 69.6 68.4
Direct empowerment 30 12.7 13.2– Equity ownership 20 6.1 6.3– Management control 10 6.6 6.9
Human resource development 30 22.2 21.5– Employment equity 15 10.2 9.5– Skills development 15 12.0 12.0
Indirect empowerment 35 29.7 28.7– Preferential procurement 20 14.7 13.7– Enterprise development 15 15.0 15.0
Residual 5 5.0 5.0– Socio-economic development 5 5.0 5.0
Vodacom Group Sustainability Report 2010 19
Transformation
Government does not tend to focus on the overall score, but rather on specific elements such as
employment equity, and, in particular, the low level of employment of black females, especially
in senior management and executive roles. In terms of public sector procurement through
tenders, the focus still remains on ownership, which includes elements not covered by the rules
for ownership in dti Codes. This matter will, however, improve following the gazetting of the
regulation governing the state procurement process, which has been aligned with the dti
Codes.
While the Independent Communications Authority of South Africa (ICASA) has not as yet
indicated its perception of the overall score, their draft regulations, especially those pertaining
to licensing, tend to focus primarily on ownership.
Vodacom SA has the highest BEE rating amongst fixed and mobile operators, but we continuously
work on improving our scores across all dimensions.
����Material Issue����Equity ownership
Vodacom SA is jointly owned by Vodacom Group (93.75%), YeboYethu Limited (3.44%), Royal
Bafokeng Holdings (Proprietary) Limited (1.97%), and Thebe Investment Corporation
(Proprietary) Limited (0.84%).
YeboYethu Limited is a BBBEE company established to grant equity ownership to employees and
the public. YeboYethu Limited is held by Vodacom SA employees (45% through the Employee
Share Ownership Scheme) and black South African citizens (55%). Employees own 3.4% of the
business through the YeboYethu employee share ownership plan.
The YeboYethu website was developed to provide continuous access to information that may be
required by the YeboYethu stakeholders. This website has proven to be an effective tool and is
frequently accessed.
Vodacom SA now scores 6.13 out of 20 for the equity ownership pillar of the BBBEE Scorecard.
This is a satisfactory score at present and there are no further plans for BBBEE ownership in the
near future. However, Vodacom Group has obtained additional indirect black shareholders
during the 2009/10 financial year resulting from the unbundling of Telkom out of Vodacom
Group and the subsequent listing of the Group on the JSE.
����Material Issue����Management control
Work still remains to be done to meet race and/or gender representation targets at higher
management levels in the Group and Vodacom SA, specifically the Executive Head of Divisions
and Managing Executive levels.
Black individuals with senior level skills are relatively scarce and in high demand. In the year
under review, black representation increased to 63% compared with 54.5% in the 2008/9
financial year. Due to unforeseen circumstances this year, we lost black female representation on
the board. Vodacom SA’s score has decreased to 6.56 out of 10 for the management control
pillar of the BBBEE Scorecard, compared with 6.94 in 2008/9 in the prior year.
6.13 out of 20scored for the equity ownership pillar of the BBBEE scorecard
6.56 out of 10scored for the management control pillar of the BBBEE scorecard
Transformation continued
20 Vodacom Group Sustainability Report 2010
����Material Issue����Employment equity (EE) and diversity management
Diversity within the workforce strengthens our ability to serve emerging markets. Vodacom
scores 10.16 out of 15 for the employment equity (EE) element of the BBBEE Scorecard
compared with the prior year’s score of 9.53. Improving on these scores is a priority for the
company, as is making a contribution building a pipeline of ICT skills for natural requirements.
Vodacom SA embraces the spirit of the Employment Equity Act and involves its employee
consultative committees in the development of its employment equity plan, which has recently
been approved by the Department of Labour. Ambitious targets have been set to achieve our
2010 goals.
As per the requirement of the EE Act No 55 of 1998, Vodacom SA ensures that representivity of
the workforce is achieved by measuring its goals against the Economically Active Population
(EAP) statistics. A workforce analysis based on the EAP was conducted in January 2010 and
identified under-representation of African males and females at 22% and 14% respectively.
Vodacom SA is actively endeavouring to address these issues (See section on ‘Employees’).
Sixty nine percent of new appointments in the financial year under review were black
candidates, bringing overall representation of black people in the workforce to 70%.
Representation of different groups in senior, middle and junior management is currently
27% African, 22% Coloured, 15% Indian and 36% White. Our focus is on recruiting
African males and females in senior and middle management roles as these areas are
currently the most under-represented groups. The proportion of disabled employees
remains unchanged at 1.2%. Retention of black employees, and in particular black female
employees, remains a challenge.
Recruitment during the year focused on technical positions, for which there are a greater
number of qualified male applicants. Despite Vodacom’s focus on increasing female
representation in this area, the nature of the positions being filled resulted in a slight reduction
in the appointment of females.
While overall staff turnover has improved, falling from 9% in 2009 to 5.6% this year, retention of
black employees, and in particular black females, remains a challenge. Seventy percent of all
terminations are from the black designated group, measured against 65% in 2009.
Transformation is regarded as an important business imperative, and as such, a Transformation
and Diversity Steering Committee was established during December 2009 on request of the
Group CEO. This committee is a formal subcommittee of the Group Exco and consists of eight
executives. Their aim is to strategically drive future transformation within the company in a
meaningful way, by initiating strategic conversations on this issue at all levels of the organisation
in order to develop a transformation blueprint or charter. This initiative aims to ensure that
transformation becomes embedded not only in the ethos of management, but of all employees
within the organisation. The Committee will also focus on accelerating the development of
diversity in race, gender and people with disabilities across the organisation.
Vodacom SA conducts diversity training for our staff, to facilitate a deeper understanding of
transformation and diversity. Employee feedback is sent to line management via a monitoring
checklist, where actions as well as corrective measures are identified. Implementation is then
10.16 out of 15scored for the employment equity (EE) pillar of the BBBEE scorecard
Vodacom Group Sustainability Report 2010 21
Transformation
monitored by local consultative committees. To date, all employees have provided feedback,
with 90% rating the workshops as useful and value-adding in terms of understanding diversity.
����Material Issue����Skills development
Developing the skills of our people drives our strategy to solve the challenge of acquiring skilled
black representation on our workforce.
During the 2009/10 financial year, Vodacom SA invested over R110 million in employee training,
of which R86.7 million was spent on the training of black people (R42 million on black females).
This amount includes all direct and indirect training costs as per the BBBEE verification guidelines,
and represents an investment of 4.8% of the total amount of remuneration (the leviable amount
described by the National Skills Levy Fund) over and above the 1% the company is required to
contribute to the Fund. Three-hundred and eighty four learnerships and other learning
programmes for black employees were identified for the period under review, resulting in
Vodacom exceeding the required scorecard target of 5% to 7.4%.
Vodacom SA’s score for the skills development pillar of the BBBEE Scorecard of 12 out of 15,
which is on par with the prior year.
����Material Issue����Preferential procurement (local suppliers)
Influencing the supply chain to embrace black empowerment is another way in which Vodacom
SA contributes to transformation in the South African economy.
Increasing the presence of black suppliers in the supply chain is one of the aims of Code 500 of
the dti’s Codes of Good Practice. Procurement from BBBEE-accredited suppliers amounted to
R6.5 billion out of a total procurement spend of R13.2 billion. Vodacom SA’s internal target for
preferential procurement is increasing annually, driving spend towards smaller entities. During
the financial year under review, R646.7 million of this spend was directed to qualifying and
exempt micro-enterprises (QSEs), R488.4 million to 51% black-owned businesses and
R76 million to 30% black women-owned businesses. Vodacom SA scored 14.72 out of 20 for
this BBBEE element. Eighty-one percent of procurement spend is with locally-based suppliers.
Preferential procurement from designated entities
Year ended 31 March2009/10 R million
2008/9R million
QSEs R646.7 R748
51% black-owned businesses R488.4 R450
30% black women-owned businesses R76 R52
Vodacom SA faces two main challenges to transforming its supply chain:
➾ A large proportion of the company’s procurement spend is on costly, high-tech equipment
not available in South Africa.
➾ Even relatively small orders placed by the company are large in the context of business size
12 out of 15scored for the skills development pillar of the BBBEE scorecard
R110 millionspent on employee training of which R86.7 million was spent on training black employees (R42 million on black females)
14.72 out of 20scored for the preferential procurement pillar of the BBBEE scorecard
Transformation continued
22 Vodacom Group Sustainability Report 2010
as defined by the Codes, making it harder to achieve BBBEE
points on the dti scorecard for small, emerging businesses.
Vodacom SA aims to remedy this by improving skills and providing
opportunities for local BBBEE companies to supply products and
services that are normally imported, while working to increase the
proportion of registered BBBEE suppliers, currently only half the
total. Vodacom SA evaluates the impact of procurement spend by
identifying what a potential supplier is doing in terms of BBBEE. All
suppliers have been notified of the requirement to work towards a
Level 4 (100% recognition) BBBEE status. For large suppliers, this is
reinforced with direct engagement by the unit liaison officer, as
well as, in some cases, contractual obligations. The liaison officer
has established a database of over 700 current BBBEE-certified
suppliers.
In the event that a successful bidder is not local, Vodacom SA
negotiates, where possible, for opportunities for local agents to be
involved in the contract, making a meaningful contribution to the
required deliverables. This practice is proving successful amongst
multinational suppliers where commitments to assist the local
supply chain have improved dramatically.
Vodacom SA encourages these achievements through annual
incentive targets which contain a BBBEE element. These incentives
are cascaded to all procurement staff.
Workshops are also run with QSEs to educate them on the
requirements of BBBEE and how Vodacom SA applies them. This
assists QSEs to adjust practices in terms of BBBEE in order to do
business with us.
A large local procurement spend inevitably drives emphasis
towards working with larger suppliers. The benefits include the
ability to focus on quality, service and efficiencies of scale.
However, this presents challenges in meeting the requirement to
promote small businesses through direct engagement. Vodacom
SA is engaging with these challenges in order to ensure the
participation of small and emerging businesses in the supply
chain, both directly and indirectly.
����Material Issue����Enterprise development
Developing small black-owned businesses stimulates the economic
participation of South Africa’s previously disadvantaged
communities. Code 600 of the dti CoGP requires monetary or
non-monetary contributions to be made in order to contribute to
the development, or sustainable independence, of black-
empowered businesses.
Vodacom SA’s target contribution for Enterprise Development is
calculated based on cumulative net profit after tax (NPAT) over a
five-year period, commencing from the date of implementation of
BBBEE (February 2007) and equates to R732 million. Between the
start of 2006/7 and end financial year 2008/9, we contributed
R778.1 million to the Community Services Telephone Operators
(CSTO), with a R292.2 million contribution for the year under
review (a total of R1.07 billion). This represents an overspend of
R338 million against the cumulative target, giving the company a
score of 15 out of 15. In addition, we also spent R1.3 billion on
other enterprise development initiatives in the year under review,
i.e. start-up support, training and marketing for Vodashops and
community service telephone operators (CSTOs).
Community services
The CSTO service was initiated when Vodacom SA was first
granted its mobile telecommunications licence in the early 1990s.
One of the conditions was for the company to deploy 22 000
subsidised public mobile telephones in under-serviced and rural
areas. CSTOs were established in converted shipping containers
and earned – and continue to earn – a 50% margin on community
services airtime sales.
There are now over 133 000 community services telephones
operating through containers and retail outlets, such as rural and
peri-urban spaza shops.
CSTOs in SA
Active phones Active CSTOs
31 March 2010 114 525 3 141
31 March 2009 118 282 3 668
31 March 2008 103 024 3 778
The next step, already initiated, is to offer community services
entrepreneurs a wider range of products to sell to their customers,
including airtime, starter packs and even internet access. We also
now offer a choice of four more affordable brands of phone to the
CSTO, ranging in cost between R800 and R1 800 per unit, thereby
giving them more choice and flexibility. This will allow the
micro-entrepreneur to progress from a subsistence level operation
towards a more profitable and formal enterprise. Moving forward,
key growth areas envisaged are in data and M-Pesa.
Vodacom Group Sustainability Report 2010 23
Transformation
Retail franchisees
Since 2000, the South African Vodashop model has changed to require that all new franchisees
would be at least 51% black owned, and all existing shop owners who wish to acquire a new
shop now have to take on a black partner. This has resulted in the Vodashop franchise model
becoming an ideal vehicle for transformation, with 57% now 100% black owned, 1.6% now
50% black owned and 2.3% now 25% black owned. Vodacom SA aims for 5% growth in this
area per year. These stores receive support in a variety of forms, including training, rental support,
shopfitting and advertising.
Wireless Application Service Providers (WASP)
Although the WASP market presents a world of opportunities for BBBEE entrepreneurs, uptake in
this growth area in the South African market has been very slow. The key reasons identified to
explain this are finances and technological know-how. The current solution for the latter is for
new BBBEE WASPs to use aggregators (such as the Vodacom Internal WASP) who have the
technological know-how and offer support by delivering the technological services for them.
Once they have gained experience, the BBBEE WASPs can begin to offer these services
themselves. Vodacom SA also offers BBBEE WASPs special deals to assist them in their marketing
efforts.
During the 2009/10 financial year, the number of black-owned WASPs grew to 18 out of a total
of 155 on the South African network, a 12% growth rate. Six of these are connected directly to
the network and 12 are connected through the Vodacom Internal WASP platform. Vodacom SA
is aiming for a growth rate of 15% for 2010/11.
Qualifying small enterprises and emerging micro-enterprises
In addition to providing workshops for qualifying small enterprises (QSE) on BBBEE
requirements, we have developed a trade curriculum consisting of five levels (23 modules)
covering product, data and soft skills training. We offer instructor-led training, in-store
e-Learning as well as mobile learning, and have delivered in excess of 57 000 interventions for
the financial year under review, largely on popular demand from QSEs who have voiced their
appreciation for the value of this training. We have also invested in upgrading our learner
management system so that QSEs can view and track their staff training records or progress.
����Material Issue����Socio-economic development
Beyond direct business activities, companies have a role to play in the transformation of
communities and individuals. This is catered for by Code 700 of the dti CoGP.
Vodacom SA allocated R149 million to socio-economic development during the financial year
under review, R64.6 million of which was directed from the Vodacom Foundation’s corporate
social investment budget. The balance is contributed to the Universal Services Agency, an
organisation to which the company donates annually, and which is tasked with the roll-out
of ICT infrastructure in South Africa.
Vodacom SA scored 5 out of 5 for the socio-economic development pillar of the BBBEE
Scorecard.
5 out of 5scored for the socio- economic development pillar of the BBBEE scorecard
15 out of 15scored for the enterprise development pillar of the BBBEE scorecard
24 Vodacom Group Sustainability Report 2010
Our people are our most valuable asset, and we need to ensure they are well equipped to be productive and innovative in order to maintain Vodacom’s competitive advantage in business excellence. We draw on the expertise, talent and commitment of over 5 000 permanent South African employees and over 2 000 employees in other local markets to deliver customer service excellence and value to all our stakeholders.
Headcount per company as at 31 March 2010
Permanent Contractors/ Totalheadcount assignees/expats headcount
SA companiesVodacom Group Limited 218 15 233Vodacom (Pty) Ltd 3 955 78 4 033Vodacom Service Provider Company (Pty) Ltd 872 17 889Vodacom Ventures (Pty) Ltd 4 1 5
Sub-totals 5 049 111 5 160
Non-SA companiesVodacom Mauritius 3 1 4Vodacom Lesotho 86 10 96Vodacom Tanzania 663 15 678Vodacom DRC 620 31 651Vodacom Mozambique 191 14 205Vodacom Nigeria 1 0 1
Sub-totals 1 564 71 1 635
Gateway Communications 323 60 383
Our people
Stortech 132 0 132
Sub-totals 455 60 515
Overall headcount 7 068 242 7 310
Governance
Human Resources is headed by the Chief Human Resources Officer.
The team is responsible for all people strategies, policies and
practices inside the Company. The Chief Human Resources Officer
is a permanent member of Vodacom’s Executive Committee,
chaired by the CEO.
Our International Human Resources (IHR) division supports and
directs the human resources activities of the non-SA markets in
order to create a consistent group-wide approach to human
resources while still retaining a sense of identity in each country.
The team collaborates with each non-SA company in terms of
consulting, capacity building and skills transfer, while remaining
sensitive to the unique challenges faced in each country.
All remuneration-related decisions in local markets outside South
Africa are subject to formal approval by the Board remuneration
committee of each company. These committees also consider
general operational human resources metrics, including the
management of headcount, during their quarterly meetings.
����Material Issue����Representation and engagement
It is important to understand the needs of our people by engaging
constructively with them, and ensuring that they are represented
in a fair and democratic manner. While all Vodacom SA employees
are formally represented on consultative committees (see below),
only 12.3% (674 people) of the company’s permanent employees
are currently represented by the two registered trade unions, an
increase of 73 employees from 2009. A collective agreement exists
with the Communications Workers Union pertaining to specific
issues, such as access to buildings for meetings and salary
Vodacom Group Sustainability Report 2010 25
People
deductions for membership subscription. Ad hoc meetings take
place between our legal team and the two trade unions, and the
trade unions may meet with their membership as per formal
agreement with the company. Vodacom SA has agreed to a
threshold employee membership level of greater than 50%,
beyond which a union will be recognised and afforded all
organisational rights.
Vodacom SA has 38 local consultative committees, non-statutory
structures that meet on a regular basis. The aim of the consultative
committee mechanism is to facilitate co-operative interaction
between management and employees, involving employees in the
strategic aspects of decision-making that affect their work
environment. It also aims to enhance co-operative management in
the wealth creation process and allows employees to influence
policy changes. There is a specific focus on employment equity as
detailed in the Employment Equity Act No 55 of 1998.
The National Consultative Committee (NCC) is the Vodacom SA
and Group Limited representative body for SA based staff, chaired
by the managing director. Local committees exist for each division
and region, and each of these has one representative on the NCC.
During the 2009/10 financial year, Vodacom Group staff
established their first local consultative committee after the
successful completion of their elections. Regular meetings for the
various committees will continue as per current practice.
In the event of addressing a dispute, employees can also request
consultative committee members to represent them. Most of the
issues that were raised at both local and national consultative
committee level in the financial year under review have been
successfully addressed. These range from amending policies to
facilitating additional salary increases for staff.
Employee survey
For the first time, during October of the financial year under review,
a comprehensive employee survey (the People Survey) was
conducted at Vodacom SA and Lesotho, giving staff an opportunity
to communicate their views on a number of issues within the
company and functional areas in which they work. The survey set
out to measure employee engagement, manager effectiveness, as
well as a range of issues affecting employees’ motivation and ability
to excel at work.
On completion of the survey, managers distributed company-wide
results (key strengths and opportunities for improvement) to their
teams and team results were discussed. Priority areas for
improvement were brainstormed and identified within teams.
Employee survey results
Key strengths
➾ Strategy and market leadership – Market leader,
clear strategic business direction, agile response to
market challenges.
➾ Social Responsibility – Vodacom is socially responsible
within the communities in which it operates.
➾ Performance standards and skills development –
Mediocrity is not tolerated in the business, work is well
organised within teams, and individuals are supported
with effective training interventions, to build relevant
capability. Work is fresh and innovative.
➾ Pride in the business – Employees feel proud to be
associated with Vodacom (as a successful business with
good values).
➾ Being a caring organisation – This relates specifically
to accommodating employees with special needs.
Opportunities for improvement
➾ Managing change effectively – Employees don’t feel
that they are kept well informed about changes made
in the organisation, which can undermine support for
change efforts.
➾ Creating enabling work conditions – This relates
to the perception that job conditions do not enable
employees to work well. This may also relate to poor
cross-functional teamwork.
➾ Retaining good people – There is a perception that
the best people are not always being retained.
➾ Career development, coaching and performance
feedback – Managers need to be coached in terms of
spending time with people to identify career goals.
There needs to be ongoing praise and recognition and
follow through on agreed plans.
➾ Improve inclusivity – There needs to be a more
conscious celebration of diversity across the business,
while more effectively soliciting input from those who
may hold contrary viewpoints. (Please refer to the
section on the ‘Transformation Committee’).
Our people continued
26 Vodacom Group Sustainability Report 2010
These were then consolidated into action plans across various
levels of the business, culminating in priorities for Vodacom SA
and Lesotho respectively.
Following the popularity of this survey which received an 80%
response rate, we will be running the same survey in all our local
markets during 2010. More information on this survey can be
found in the Vodacom Group Annual Report 2010.
Other local markets
The development of our people is a primary focus across Vodacom,
with development boards being established in Lesotho and
Mozambique during the financial year under review, while
Tanzania will be appointing one during 2010/11.
An all-inclusive staff representative committee elected by employees
exists in Lesotho. Issues raised are delegated to action agents who
engage with management and report back to the committee. The
issues range from business issues to housekeeping and staff welfare
issues. Records are kept on the resolution of these issues, and there
is currently a 62% success rate, and no issues have required third
party mediation.
In Mozambique, while there is no representative body, staff are
engaged though specific focus groups to discuss matters of interest
for the company. There is a grievance procedure which can be used
for prompt resolution. Mozambique uses the same profit-based
performance incentive structure used throughout the Vodacom
Group to monitor the progress of employees, who are measured
against their delivery in terms of agreed targets and KPAs.
Tanzanian employees are represented by a consultative council as well
as the Tanzania Union of workers (TUICO) and the Communications
and Transport Workers Union of Tanzania (COTWU). Since only four
employees are members of Cotwu, by law this union cannot be
recognised by Vodacom. Departmental representatives table issues
from respective departments during the regular monthly meetings of
the consultative council, which is chaired by the Managing Director.
Performance is measured by the level of staff participation at
departmental meetings, representation during the council meetings
and achievements. During 2009/10 financial year, approximately five
significant issues were raised and three have been resolved. Employee
feedback has been positive and no issues have been referred to a third
party. The company aims to improve communication in the forum
during 2010/11, by further training council representatives.
����Material Issue����Attracting and retaining talent
Vodacom attracts and retains talent through leadership, business
and skills training, remuneration and rewards, and compensation
and benefits. We aim to acquire high calibre employees that are
the right fit not only in terms of qualifications and experience, but
also in terms of contributing to our culture of diversity and
innovation.
Vodacom SA includes the following methods in its multi-faceted
approach to attracting talented individuals:
➾ An E-recruitment system;
➾ On-line strategies;
➾ Incentivised employee referrals;
➾ Encouraging senior management to utilise the High Potential
referral process to identify talented individuals outside the
company; and
➾ An alumni process.
In South Africa our talent acquisition focus for the coming year
includes developing an online strategy and employee referral
strategy. The latter is proving to add great value, boasting 10
placements since the strategy was first initiated in October 2009,
and is receiving increased attention on a targeted basis. We are
improving the active and passive use of technology in order to
build talent pools of scarce skills and to access candidates more
aggressively.
Vodacom SA also offers many benefits which are intended to
retain valuable people, such as leadership, business and skills
training, and progressive remuneration and rewards practices.
These include wellness programmes and employee volunteer
programmes. In combination, these initiatives seek to preserve
a talent pool that will meet current and future human capital
requirements.
Despite the focus on enhancing and developing its talent
acquisition and retention strategies, the ongoing scarcity of skills
means that Vodacom SA needs to be consistently competitive in
the packages it offers its employees, in order to acquire our
talent. Vodacom SA will be establishing more skills academies
internally to grow and develop its own talent.
People
Vodacom Group Sustainability Report 2010 27
Staff turnover across the Group
Country 2010 2009 2008
SA 5.60% 9.04% 10.50%Lesotho 7.8% 9.2% 4.6%Mozambique 1.4%* 8.33% 10.8%Tanzania 0.8% 1.4% 0.8%DRC 7.3% 8.7% 3.9%
*(voluntary only)
Training
In the 2009/10 financial year, Vodacom SA invested R71.2 million in training employees
compared with R69.7 million in 2008/9 (and R43.9 million in 2007/8). This equates to 3.1%
(3.2% in 2008/9) of payroll, and is reflective of the direct actual training cost as well as the
associated costs of venues, flights and accommodation. Guided by the Skills Development Act
and in partnership with ISETT SETA, Vodacom SA contributed to the enhancement of skills for
the ICT industry by hosting a total of 381 (463 in 2008/9) learners and interns in the business.
Vodacom SA
2010 2009 2008
Number of training days provided 24 580 27 778 24 500
Average training days per employee 5.81 5.8 5.8
Average training spend per employee R16 395.17 R10 412.71 R14 463.60
Percentage of payroll spent 3.1% 3.2% 2.5%
Percentage of employees completed performance review 100% 100% 100%
Number of bursaries 768 716 512
Number of participants in Young Achievers programmes80 (Current
participants) 80 114
Number of participants in the Graduate Programme for females in Technology 22 30 09
Number of virtual learning’s courses accessed and completed15 366 (accessed)
1 577 (completed) 15 712 12 332
Number executives completed Vodacom Advanced Executive Programme 19 19 17
R71.2 millioninvested in employee training, Vodacom SA
’10’09’08
71.2
69.7
43.9
28 Vodacom Group Sustainability Report 2010
Our people continued
Yebo Bursary Programme
The Vodacom Yebo Bursary
Programme provides permanent
employees with the opportunity
to advance their careers, thus
adding value to South Africa’s ICT
talent pool. Overall performance
in specialised positions is
enhanced, keeping the Company
abreast of the latest advances in
technology. During the past year,
the Yebo Bursary Scheme has
benefited 768 (716 in 2008/9 and
512 in 2007/8) full-time Vodacom
employees with an associated
investment of R8.9 million
compared with R7.9 million in
2008/9 (R4.7 million in 2007/8).
Vodacom Foundation Bursary
The Vodacom Foundation Bursary
provides bursaries to top
achieving students from
disadvantaged communities in
order to increase the South
African skills base in the scarce
skills sectors of ICT and
engineering. Students who
receive a Vodacom Foundation
Bursary benefit from the
opportunity to participate in
Vodacom’s Vacation Work
programme, as well as joining the
selection pool for the internship
training programme and the
Discover Graduate programme.
During the financial year under
review the Vodacom Foundation
Bursary Scheme benefited 131
(140 in 2008/9) disadvantaged
students with an investment of
R9.2 million (R 6.9 million in
2008/9).
Young Achievers Programme (YAP)
Now in its third year, YAP is a
twelve-month, in-service
programme aimed at exposing
young employees to the evolution
of ICT convergence at an early
stage in their careers. This is an
interdisciplinary programme, in
partnership with the Centre for
Software Engineering at Wits
University, which aids young
employees in understanding
Vodacom’s business from a
customer perspective through
intensive exposure to the total
value chain. Since its inception,
188 candidates have completed
the programme, while 80
candidates are currently
participating.
Virtual Learning Centre (VLC)
Vodacom SA continues to use
e-learning to train employees on
new technologies and the VLC
offering also includes function-
specific training in other areas of
the business. During the year,
15 366 courses were accessed,
4 533 courses were registered and
1 577 courses were completed.
Overall, R1.9 million has been
invested in virtual learning centre
(R2.8 million in 2008/9). The
virtual learning platform has also
been launched in our other local
markets, where it is benefiting
staff who otherwise have difficulty
accessing quality training
programmes. Flexi-time staff in
our South African call centres
have also been given an
opportunity to access the VLC
platform.
768Vodacom employees benefited from the Yebo Bursary Scheme
131disadvantaged students benefited from the Vodacom Foundation Bursary
188candidates have completed the YAP programme since inception
R1.9 millionhas been invested in VCL and 15 366 courses were accessed
Vodacom SA training Initiatives
A description of our South African training initiatives follows. The Group also invests substantially in the development of technical and other
required skills in other local markets.
Vodacom Group Sustainability Report 2010 29
People
Vodacom Advanced Executive Programme (VAEP)
Launched in 2003, Vodacom’s
executive programme is run in
partnership with UNISA. This
programme aims to develop the
executive pipeline by preparing
high-potential Vodacom leaders
to enrich their contributions to
the company. Since its launch,
93 high potential leaders have
completed the programme, and
26 candidates (including
international delegates) are
currently participating in the
revamped programme presented
in partnership with Wits Business
School. The class of 2010 includes
46% international delegates and
35% female representation.
Learners and interns
Vodacom SA has a vested interest
in contributing to the country’s
ICT skills base, guided by the Skills
Development Act and the
national imperatives for growth
and development set out by
government. During the 2009/10
financial year, the company
participated in the enhancement
of skills for the ICT industry in
partnership with the ISETT SETA.
During this period, there was a
total of 381 (463 in 2008/9)
learners and interns in the
business, over the entire value
chain. In the last year, 62% of
Vodacom SA’s learners and interns
were employed and of this figure,
42% were employed within the
company.
Developing women in ICT
Vodacom SA’s Graduate
Programme for Females in
Technology (GPFT), launched in
2006, plays a crucial role as a
vehicle for the advancement and
integration of women into the
technological arena and business
at large. The first two years of
the programme were focused
exclusively on building the
pipeline of high potential females
within technology areas. During
the previous financial year, Vodacom
SA launched a multi-pronged
Graduate Development
Programme focused on the core
functions of the business, i.e.
engineering and technology,
billing and IT and commercial.
Seventy graduates have successfully
completed the programme. In
March 2010, a revised and
rebranded all-inclusive graduate
programme titled ‘Discover’ was
launched, and 23 candidates
(10 females and 13 males) are
currently participating in the
programme. The overall
investment in the graduate
programme is R27.3 million
(R25 million in 2008/9).
Succession Development Programme (SDP)
The purpose of the SDP is to grow
the leadership pipeline for middle
management. Forty-three
candidates participated in the
2009 programme bringing the
total involvement since inception
to 294. Of these, 146 candidates
were promoted (50%), 14
resigned after being promoted,
and 91 remained in their
positions.
93high potential leaders have completed the VAEP programme
62%of Vodacom SA’s learners and interns were employed and of this figure 42% were employed within the company
43candidates participated in the 2009 SDP programme bringing the total involvement since inception to 294
Our people continued
30 Vodacom Group Sustainability Report 2010
����Material Issue����Employee rewards and remuneration
Vodacom views remuneration as a business issue as it impacts directly on operational
expenditure, company culture, and the behaviour and morale of our people – all key attributes
contributing to the performance of the Company. The Group’s Remuneration Committee
(RemCo) oversees our policy, compensation, reward and benefit programmes on behalf of the
Board. The reward strategy has five components:
➾ Guaranteed pay;
➾ Variable pay;
➾ Performance management;
➾ Learning and personal growth; and
➾ Work environment.
RemCo aims to align the reward strategy to the strategic direction and value drivers of the Group,
and uses incentives and rewards to leverage performance and results. By offering a variety of
flexible short and long-term incentive schemes to our staff, we aim to enhance the retention of
skills and alignment of employee and Group goals. RemCo participates in a range of niche salary
surveys which informs the packages we offer our employees. We benchmark compensation and
benefits against industry standards and are guided by the relevant labour legislation.
Since Vodacom became a listed company, long-term incentive schemes have been altered. The
Phantom share scheme, which made use of options, is no longer relevant and has been
replaced by the Forfeitable share plan, which entitles the employee to be a shareholder with
dividend payments. This is applicable to employees at executive and senior management levels,
and selected employees at middle management.
The recent Vodacom People Survey completed by employees in South Africa and Lesotho
reported that the working environment and benefits offers are perceived as favourable.
Other local markets
A mentorship programme was launched in Lesotho, in March 2010, to coach talented
individuals for management roles. An internship programme has been in place for the past
three years through which talent is pooled from local tertiary institutions based on academic
performance and qualifications. The training expenditure for 2009/10 financial year was
R781 337 (2.6% of payroll) with the average spend being R9 400 per employee.
During 2009/10, an internship programme was introduced in Mozambique. Ten university
graduates are currently participating, and the aim is to employ most of these participants as an
outcome of the programme. There are plans to have another group of 10 interns by June 2010.
Scholarships are also provided to employees for graduate and post-graduate programmes. There
are plans to introduce two leadership development programmes in the near future in an attempt
to improve the leadership and people skills of senior managers. There are also plans to introduce
an integrated managerial programme for managers and supervisors, to help them improve their
skills and competencies and prepare them for the more senior roles in the organisation. The
training expenditure for 2009/10 financial year was R590 000, representing 1% of payroll costs.
Lesotho2.6%of payroll spent on employee training
for the 2009/10 financial year
Mozambique1%of payroll spent on employee training
for the 2009/10 financial year
Vodacom Group Sustainability Report 2010 31
People
Tanzania’s coaching programme continues to perform well, and an exchange programme is
currently being planned. Employee skills development is supported through ongoing learning
and training, and Tanzania spends 2% of its payroll in this area (over R1.5 million excluding
project related technical training). The company’s entry level salary is currently seven times the
country’s minimum wage requirement. In 2010/11 there will be a focus on enhancing staff
benefits to attract and retain talent.
Employee wellness
Healthy people are vital to a healthy business and we thus strive to ensure that employees have
access to a high level of health care, as well as a working environment that is not harmful to
their well-being. Health and safety performance is a key measure of a company’s level of care,
while low injury and absenteeism rates usually reflect positive morale and productivity.
Absenteeism is a direct result of falling productivity and Vodacom SA’s integrated health,
wellness and employee engagement management strategy aims to minimise this risk. This
strategy is performing well and includes a corporate wellness and employee engagement
programme, HIV/Aids management, an employee assistance programme, executive wellness
and occupational and primary health care.
Absenteeism rates for the 2009/10 financial year
2009/10 2008/9 2007/8
Absenteeism rate 1.15% 1.11% 1.7%
Percent drop in productivity 2.87% 2.75% 4.25%
Total revenue loss R175 million R170 million R255 million
Data from the Group’s employee assistance programme provider, ICAS (Independent
Counselling and Advisory Services) is used in the strictest confidence to track wellness trends,
identify high risk groups and shape human resources policies.
During the financial year under review, 20.3% of Vodacom SA’s employees made use of the
advice, counselling and psychological support offered through the employee assistance
programme, compared with 19% for the prior year. The biggest impacts on the level of
employee stress this year included increased concerns about the costs of living and debt
management, in light of the global financial crisis.
Vodacom SA spent R8.6 million on employee wellness during this financial year, compared with
R9.9 million in the prior year (R9.9 million in 2007/8). Descriptions of the programmes to
promote employee well-being follow.
Wellness programme
Wellness is an internal programme focusing on developing the holistic well-being of employees
and promotes greater alignment with the Vodafone human resource management strategy in
order to attract and retain talented workers. It aims to reduce absenteeism, medical aid
expenses and corporate health risk exposure by addressing the need to reduce lifestyle diseases
while at the same time increasing employee morale, engagement and productivity. Dedicated
groups of employees act as peer educators assisting Vodacom SA employees to manage their
overall health and wellness.
Tanzania2%of payroll spent on employee training
for the 2009/10 financial year
’10’09’08
8.6
9.9
9.9
R8.6 millionspent on employee wellness in SA
Our people continued
32 Vodacom Group Sustainability Report 2010
Executive wellness programme
Executives undertake an annual medical assessment to establish
the risk to the business of the chronic diseases of lifestyle: high
cholesterol, diabetes, high blood pressure, obesity, cancer,
smoking and sedentary lifestyles. In South Africa, in the financial
year under review, one-hundred and fifty-two Vodacom SA and
Vodacom Group executives were assessed and of these,
55 displayed one major risk factor while one executive displayed
two major risk factors. Executives with modifiable health risks are
encouraged to participate in health and wellness initiatives, such
as exercise and healthy eating. This year, the number of executives
participating in physical activity grew by 12.58%.
Occupational and Primary Health care
Occupational and primary health care services are currently offered
in 11 Vodacom SA buildings across South Africa, with an average
utilisation of 800 employees per month. On 1 February 2009, the
12th primary health care facility was initiated at the Vodacare
Superhub, Midrand. A total number of 8 261 permanent
employees and contractors used the primary health care clinic
services nationally during the financial year under review (7 540 in
2008/9). The most popular services utilised include Vitamin B
injections (37.05%), family planning (20.05%), hypertension
(9.83%) and musculoskeletal (6.22%) treatments. Other services
include flu vaccinations, occupational medical surveillance, travel
medicine and assistance in incapacity management. An ergonomics
drive will also be launched in order to act strategically on the high
rate of musculoskeletal complaints.
The medical surveillance programme (MSP), as part of Vodacom
SA’s occupational health programme, has maintained strong
uptake figures. We placed 275 individuals under occupational
medical surveillance during the financial year, with a 95%
compliance rate.
Workplace HIV/Aids
South Africa is in the midst of an HIV/Aids pandemic, and this
challenge can have a detrimental impact on the economy if it is
not managed effectively. Responsible companies should have a
strategy to deal with this challenge as it impacts directly on the
well-being of our employees, their families and the communities
we work in.
HIV continues to have a low tested prevalence in Vodacom SA.
Vodacom has an ongoing HIV/Aids campaign focusing on raising
awareness, encouraging employees to know their status through
voluntary counselling and testing initiatives, and providing
comprehensive treatment and health monitoring services. All
permanent SA-based Group and Vodacom SA employees can make
use of the free programme, which includes HIV counselling and
testing (HCT), HIV support and treatment, doctor’s visits and
anti-retroviral therapy (ART). All our contractors are now also
covered under the testing scheme of the HCT contract.
HIV/AIDS testing and prevelance
Country
Percent of total employee-base
tested
HIV/Aids prevalence rate
of employees tested
DRC 45.5% 2%Lesotho 43% 16%Mozambique 59.7% 5%South Africa 65% 1.6%Tanzania 86% 2%
Vodacom Group Sustainability Report 2010 33
People
Between January and December 2009, of the 1 029 contractors
and 2 204 employees that were tested, 44 contractors and 59
employees tested HIV positive. Thirty-nine HIV-positive employees
are on anti-retroviral therapy, receiving care, support and ongoing
monitoring, while 20 remain resistant to diagnoses. Part of the
strategy for this year is to improve the transition programme for
the current 59 positive employees.
Vodacom SA still faces the challenge of achieving 100% employee
participation in the HCT programme. To this end, the following
initiatives are in place:
➾ Introduction of an interactive survey tool to test knowledge
versus practice at HCT days. It is anticipated that this will
attract more people.
➾ Marketing on our revamped website, via blogs, to inform
people where to test, why to test and why to go on
treatment etc.
Vodacom SA aims to test 20% more employees in the next
three-year cycle, reaching a total of 85% by 2013.
HIV/Aids prevalence amongst contractors is high (5%) and
Vodacom SA does not currently support the provision of ARVs
to contractors.
Health and safety
Vodacom takes health and safety very seriously, aiming to ensure
that rules and measures to protect our people and our contractors
are in place at all times. However, three fatalities occurred at
Vodacom during the financial year under review, all contractor
related. In addition three members of the public died in road traffic
accidents involving our contractors’ vehicles/drivers. Fifteen lost
time injuries were reported in South Africa (where the employee was
booked off for more than three days), and a further 62 health and
safety incidences were recorded (employees and contractors). Only
two incidences were recorded in other countries.
Management of wellness, health and safety is supported by
11 health and safety committees functioning across Vodacom SA.
Balanced representation of the organisation is ensured through
813 employee appointees and 149 management members.
Vodacom has aligned its policies and procedures with that of
Vodafone to ensure consistency of management and reporting. In
2008/9 we implemented the enterprise-wide risk assessment tool,
CURA, to populate and manage all occupational health and
safety-related risks.
Other local markets
Staff wellness in Lesotho is supported through various subsidies
including gym memberships and lunchtime meals, while Tanzania
includes recreational facilities, counselling and medical cover.
While the new head-office in Mozambique will have a gym to allow
staff to exercise, employee wellness is currently encouraged though
inter-company sports activities (basketball, soccer) with an uptake of
between 5 and 10%. There are also plans to introduce various
awareness campaigns on topics including disease and exercise.
Stricter health and safety rules will be imposed on all Mozambican
employees during the next financial year. These rules will also be
extended to critical suppliers’ employees, contractors or
sub-contractors.
In Tanzania, employee wellness is supported through gym subsidies
and counselling services. The company continues to provide health
and safety training such as defence driving, tower-climbing, first-aid
and fire marshalling. During the last financial year, there were no
major industrial accidents reported.
644health and safety training courses undertaken in SA
34 Vodacom Group Sustainability Report 2010
Impact on the environment
At Vodacom, we recognise our obligation to manage our
environmental footprint while not impairing the ability of our
business to continue providing excellent service. We understand
that the ICT industry can also assist in reducing carbon emissions
from economic activity by providing alternatives to traditional
ways of doing business.
In South Africa Vodacom engages with its stakeholders broadly
through the environmental impact assessment process, and on a
case-by-case basis when installing base stations. These stakeholders
include the Department of Environmental Affairs, and EMF
stakeholders (see the section on RF Exposure). The National
Environmental Management: Waste Act released by the Department
of Environmental Affairs and Tourism in 2008 came into effect on
1 July 2009 and Vodacom SA is currently making significant efforts
to understand the implications and requirements thereof.
Lexis-Nexis-Butterworths conducted an external audit for
compliance to South African environmental legislation in
November 2009. Vodacom SA achieved a rating of 84.5%, an
improvement of 6% from last year, largely due to a reduction in
sample size from the previous year’s audit.
SA environmental audit compliance
Month of audit Score
November 2009 84.5%August 2008 78.5%February 2008 90.8%
Vodacom continues to retain its ISO 14001 systems certification
in South Africa. This reflects the company’s commitment to
maintain and improve its environmental management system,
enforce its environmental policy and comply with laws and
regulations. This is a strong focus for Vodacom and is fully
embedded in its systems. In the short to medium term, the aim
is to certify other local markets.
During 2009, Vodacom, as a World Wildlife Fund (WWF)
corporate member, hosted the WWF report-back to business on
the Copenhagen summit. Vodacom is also a member of the
World Business Council on Sustainable Development (WBCSD)
in South Africa.
����Material Issue����Climate change/carbon footprint
Climate change is a pressing issue that requires the full attention
of all global citizens. The private sector is the single largest
contributor of carbon emissions, and it is therefore vital that
addressing climate change becomes integral to business
strategies. While the ICT industry is not inherently a major
contributor to carbon-emissions, Vodacom understands that all
its activities contribute to a cumulative effect and hence we are
taking the climate change challenge seriously.
This challenge also comes with business opportunities by way
of technological solutions that have the potential to replace
traditional, carbon-intensive methods of doing business (such as
video conferencing, machine-to-machine transactions etc.). In
this way, we at Vodacom can truly assist in the mission to combat
climate change.
Unified communications is a technology that facilitates
communication over a variety of interfaces, including an easy to
use, high quality desk-to-desk video conferencing service. Vodacom
Business is currently developing products using this technology,
which will give private and public enterprises the ability to
communicate effectively from remote locations. This has been
proven to reduce carbon emissions associated with business travel.
Vodacom Business has also launched virtual hosting services in
the South African private and public sectors. Virtual data centres
reduce carbon footprints by significantly reducing the size of
physical data centres and thereby minimising the energy and
space they require. Expanding on this concept, Vodacom Business
is also investing in the development of ‘in the cloud computing’
services which reduce the power consumption of the end user
computing device.
Vodacom is currently developing a Climate Change policy and
strategy, identifying both environmental risks and business
opportunities. As part of the policy development process, we are
looking at engagement in a broad sense, and will be developing
our stakeholder engagement strategy in parallel to this policy.
For the first time, Vodacom is taking part in the Carbon Disclosure
Project by undertaking a carbon footprint assessment of the
Group’s activities. Results will be reported on in the next financial
year. While a challenging task due to a lack of metering, this
Although ICT/mobile communications is generally considered a low-impact industry, environmental impacts occur at many stages, from manufacturing of the phones themselves to the placing of base stations – also in our internal operations.
Vodacom Group Sustainability Report 2010 35
Environment
valuable exercise will also be informing our climate change policy.
Current energy saving initiatives are described in the next section.
����Material Issue����Energy efficiency/alternate energy
In South Africa, climate change is not the only driving factor behind
the move towards energy efficiency. The company also demands
more reliable electricity than is currently available from traditional
systems, as evidenced by the load-shedding and rolling blackouts
over the past few years. It is therefore a business imperative to
ensure a constant supply of energy to the systems critical to
Vodacom SA’s services, particularly network infrastructure.
Vodacom currently does not have a policy relating to energy
usage. There is also no formal engagement with employees in
the form of awareness or training. The Group is in the early
stages of establishing an energy management team, and once
this is functional, policy development and internal engagement
activities will be undertaken.
Vodacom SA is now a registered member of the Green Building
Council of South Africa (GBCSA). Our facilities team attended the
GBCSA conference in 2009 and three employees are being trained
as Vodacom SA Green Building agents this year. The GBCSA are in
the process of developing a tool to rate the energy efficiency of
our existing buildings.
Consumption of electricity and fossil fuels is currently measured
using estimates derived from billing details. Vodacom SA is
running a pilot programme for installing meters at certain
locations, and these measurements will be used as a determinant
for the level of accuracy of the data currently collected, and for
monitoring how effective current energy savings initiatives are.
Our energy usage for the reporting period is as follows:
SA energy usage
2010 2009 2008
Electricity buildings (million kWh) 118.9 80.6 74.1
Electricity sites (million kWh)* 154.2 188.6 163Diesel (million litres) 1.06 0.95 0.68Petrol (million litres) 1.43 1.27 1.3
* Electricity consumption at sites is an approximate value based on the use of averages. Vodacom SA is working on more accurate consumption measures.
Vodacom SA is working towards a realistic long-term target of 70%
energy savings at 3G base stations, and 40% at 2G base stations.
This is a multi-year project and we are upgrading several base
stations per year according to budget. As the rate of replacement is
dictated by depreciation, asset write-offs and other business drivers,
there is no clear target date for completing this programme.
The following table shows savings achieved from a single measured
site typical of Vodacom SA’s 2G and 3G base stations:
Total average kWh
RAN Swop
Pre total kW 3.11Post total kW 1.99kW reduction 1.13% reduction 36.22
Free Cooling
Pre total kW 1.99Post total kW 1.37kW reduction 0.62% reduction 31.21
Total reduction
Pre total kW 3.11Post total kW 1.37kW reduction 1.75% reduction 56.12
Key:
RAN Swop: Radio Access Network equipment renewal.
Free Cooling: supplementation of electronic air-conditioning with fresh air.
Every other item of existing radio network and core network is
being re-evaluated in terms of energy consumption and will be
included in all future decisions for roll-out and replacement.
Vodacom SA has formulated a strategic roadmap to achieve a
power saving of nearly 83 000 MWh and a carbon emissions
savings of nearly 74 000 tonnes CO2 over three years. This project
is currently on track, with actual CO2 savings for the past two years
as well as projected savings for the next financial year described in
the following table.
Free cooling
RAN swap
Hybrid power sites
Total
2 89
510
047
6 74
5
2 89
5
4 23
9
3 47
3
578
37 4
92
7 86
9
18 8
34
10 7
90
■ 2008/2009
■ 2009/210
■ 2010/2011
CO2 savings summary
Thou
sand
ton
nes
CO
2
36 Vodacom Group Sustainability Report 2010
Impact on the environment continued
Vodacom SA has deployed remote energy meters in 10% of its base stations in order to improve
the monitoring of network energy usage, and evaluate the effectiveness of various energy
savings initiatives. A further 1 500 meters will be installed in the next financial year. From these
initiatives, we have saved an estimated total of 23 575 MWh on our network during 2009/10.
A summary of our ongoing energy initiatives follows.
Alternative energy sources
We are committed to looking at alternative forms of energy supply to supplement Group energy
requirements. One of our experimental renewable initiatives involves installing fuel cells at
power base stations in order to supply electricity when unavailable. Vodacom SA has deployed
89 fuel cells at base stations during the financial year under review.
Vodacom is also awaiting the release of a new technology due in July 2010 which may prove
feasible as a replacement for stand-by generators, and we are also exploring the cost-
effectiveness of other alternative fuels through the Vodafone Green Energy Trials. Three base
station sites have been trialled with renewable energy solutions (two pure renewable solutions
and one a renewable/generator hybrid) in conjunction with Vodafone. All key performance
indicators have been achieved, but large scale roll-out is still being hampered by the theft of
solar equipment. Limited roll-out may take place in 2010 in areas deemed safe. A few trials are
ongoing with generator/battery hybrid solutions and a 50% reduction in diesel usage seems
realistic.
The move to ‘green’ our buildings
Green initiatives are currently being implemented but targets will be based on the rating tool
that is still anticipated from the GBCSA. Vodacom SA is focusing on two core areas: water usage
and energy consumption. The Durban office has been fitted with intelligent lighting and energy
efficient heating, ventilation and air-conditioning systems are being installed.
In existing buildings in South Africa, Vodacom has taken a number of steps to reduce energy
consumption, with a particular focus on initiatives to reduce the need for air-conditioning. For
example, the Midrand office uses sunlight deflection techniques to retain coolness while
another office has reduced the duty cycle of diesel generated air-conditioning. The IT
department have also implemented various initiatives to reduce cooling needs. During the last
financial year, Vodacom investigated the viability of a new technology involving ‘absorption
chillers’, but this was found to be ineffective in South Africa.
Reducing the need for powered air-conditioning at our base-stations
During 2008/9, we installed 280 free-cooling units at our base stations, to help reduce
air-conditioning use. We exceeded our target of a further 1 000 installations for 2009/10 with
1 300 units now installed. As anticipated , they are achieving a 60% reduction in energy usage.
Making Vodacom’s generators more efficient
Vodacom aims to reduce carbon emissions from diesel fuel using hybrid technology in
generators. The project is now approaching completion and has focused on the non-SA local
markets where the need for these is greater. Tanzania is currently rolling out 270 units. Full year
savings are estimated to halve fuel consumption per site.
89fuel cells have been deployed at base stations in SA during the financial year under review
876 kgCO2 saved
1 750 kWhelectricity saved
Earth hourThis year, Vodacom SA participated in Earth Hour. The company’s building-related energy savings were as follows:
Vodacom Group Sustainability Report 2010 37
Environment
Upgrading IT equipment
Vodacom SA has a policy of replacing and purchasing laptops with models that are less power
intensive with longer battery lives. This has the added benefit of allowing employees to
continue working for longer in the event of power outages.
Other local markets
An energy-use audit has been performed in the DRC, and the company is currently in the
process of replacing most of its base stations’ fossil power sources with solar or hybrid
systems to reduce carbon emission. Trials have been performed displaying good results.
The aim is to convert 180 sites to hybrid systems with limited solar power systems installed
by December 2010.
We are raising staff awareness in Mozambique through a campaign to turn off lights and
air-conditioning when leaving work. Hybrid power in the form of PVL, glass-type solar panels
and generators is being implemented in remote sites.
In Tanzania, hybrid power sources have been deployed to 20 sites, with plans to deploy a
further 276 in the coming year.
����Material Issue����Resource utilisation
As Vodacom is a growing business, it follows that our internal operations are associated with a
growing consumption of resources. We recognise our obligation to manage the resultant
impact on the environment. The resources we consume range from those related directly to our
buildings, such as electricity usage and water consumption, to those related to our information
management systems, such as data and switching centres. At Vodacom, we conscientiously
practise smarter management and environmentally ethical practices.
Vodacom SA has a corporate environmental policy which requires that resource consumption is
minimised. The implementation of this policy is delegated to the relevant divisions that initiate
their own activities. Details on energy use are described in the section on ‘Energy efficiency/
Alternate energy’.
Vodacom SA is currently engaging external parties for many of its resource management
requirements. The company has a strong supplier engagement programme, with checks in
place to ensure that suppliers are environmentally compliant. There are also plans to start
campaigns aimed at raising awareness amongst staff by the end of the next financial year.
Vodacom SA’s consumption of water and paper is shown in the table below. (See the section
on ‘Energy efficiency/alternate energy’ for details on energy savings).
SA resource utilisation
Year ended 31 March for Vodacom SA
2010 2009 2008
Water per employee (kl) 41.21 43.30 70.20Water total (kl) 209 576 216 721 335 990Paper per employee 41.65 34.90 33.40Paper total (kg) 211 797 174 497 160 000
20hybrid power sources have been deployed to sites in Tanzania
38 Vodacom Group Sustainability Report 2010
Impact on the environment continued
The figures show a consistent decrease in water consumption, attributed to Vodacom SA’s water
savings initiatives. Other initiatives being undertaken are described below.
Greening our catering facilities
Over the past few years, a number of measures have been implemented in our South African
catering facilities to reduce waste. For example, to reduce pollution all kitchens nationwide
have been fitted with fat traps and extraction canopy filters to degrease and eliminate fatty
substances from the production line (Midrand). Old cooking oil is now filtered and used in
diesel vehicles fitted with Straight Vegetable Oil kits, and 60% of our chemicals are now
biodegradable.
Using water wisely
While we are not measuring our water consumption at this stage, measures to reduce
consumption in its buildings continue. For example, water loss at the Midrand campus has been
minimised by introducing aquatic plants to decrease water surface areas exposed to sunlight.
Nationwide, irrigation time has been reduced and restricted to night-time, using water recycled
through the heating ventilation and air-conditioning system.
����Material Issue����E-waste
Waste is a serious issue in the fast-moving technology world, where newer and more
sophisticated products are constantly being replaced and consumed. With a scarce supply of
land for landfills, producers of goods need to become responsible for the entire lifecycle of their
products. In addition, these products, when entering the waste stream, are potentially
hazardous and need to be disposed of carefully. Vodacom focuses on three core areas of
e-waste, namely network equipment, IT waste and handset waste.
Network equipment and IT waste
Although Vodacom has not yet developed a robust system for measuring e-waste in South
Africa, certain controls in the finance environment ensure that all items that enter the IT and
network equipment waste streams are recorded. According to the e-waste recycling agency,
during the last reporting period approximately 208 tonnes of IT and network equipment was
recycled along with 4.5 tonnes of handsets.
Vodacom SA undertook a Green IT study approximately two years ago and, as part of this study,
e-waste processes were investigated. Some recommendations were made, but as yet no formal
internal structures have been set up.At present, many of the company’s old computers are
refurbished for reuse through the Vodacom Foundation in the NGO sector.
Recycling and scrapping of handsets
During the 2009/10 financial year, Vodacare (our handset repair network) sent approximately
13 290 handsets for recycling, compared with 12 400 in 2008/9. These were collected by
Vodacom SA’s nominated recycling agency, Desco Recycling. The company also recycled or
responsibly disposed of 1.8 tonnes of faulty mobile phone spares and accessories.
13 290handsets were sent for recycling by Vodacare, our handset repair network
208tonnes of IT and network equipment was recycled
Vodacom Group Sustainability Report 2010 39
Environment
sharing, in order to determine the next appropriate location for
new base stations. All policies and processes related to the
placement of base stations are drafted by Vodacom SA’s safety,
health, environment and quality division. The processes are
implemented by the regional operations teams.
Local planning regulations must also be complied with and these
regulations include the requirement for community engagement
and environmental impact assessments (EIAs). For the EIA process,
Vodacom SA draws on the expertise of over 13 environmental
impact assessment consultants. The proposed sites undergo either
a basic assessment, or a more thorough scoping and EIA process,
depending on the sensitivity of the site. Non-sensitive sites (for
example, rooftop sites) are more likely to be subject to a basic
assessment whereas sites in ecologically sensitive rural areas may
be subject to the more thorough EIA process. Where Vodacom SA
occupies another party’s mast, no assessment is required.
Following the EIA process, the relevant authority will either grant
or refuse authorisation for Vodacom SA to proceed with its
proposal. The legislation is currently under review and will be
amended in respect to the various categories and the respective
types of assessment required.
Total number of base stations approved in 2009/10
Vodacom SA DRC Lesotho Mozambique Tanzania
815 25 120 120 124
Other local markets
The DRC government is currently preparing a law to prohibit the
commissioning of base station sites at schools and hospitals.
Vodacom’s internal policy is otherwise currently ahead of the
national environmental regulations on the issue.
The installation of base stations in Mozambique requires the prior
approval of the Civil Aviation Institute (CAI). During the year, the
CAI denied many of the applications filed by Vodacom due to the
location of denied sites being within the limits of National Defence
Ministry territory. To date, approximately 12 proposed sites still
have not been approved by the CAI and no alternatives have been
found. While Mozambique does not have a specific policy on
environmental issues, it is endeavouring to develop and implement
one in the next few months.
For Tanzania, obtaining building permits under the Environment
Management Act of 2004 has been the biggest challenge for the
past year.
Return processes are in place for specific faulty or scrap spares and
accessories with mobile phone manufacturers HTC and Samsung,
and Vodacom SA will be proceeding in this manner with Nokia in
the next few months. In terms of this process, specific faulty spares
and accessories are consolidated from the Vodacare franchise
outlets and returned to the manufacturers, who return these to
their scrapping centres internationally.
Other local markets
Mozambique does not yet have a policy regarding e-waste.
However, it signs an agreement with all critical suppliers making
them responsible for managing and disposing of Vodacom’s
e-waste in a responsible manner. The DRC has implemented a
waste management policy which deals with e-waste, while in
Tanzania e-waste is managed by the suppliers.
Placement of base stations
In order to provide a reliable service to our customers, Vodacom
needs a sophisticated and extensive network of base stations. With
over 8 000 base stations in a diverse range of areas, from urban
centres to the rural outback, this raises a number of potential
issues in relation to each new commission. Amongst others,
potential biodiversity impacts, visual impacts and community
impacts need to be considered, and prevented or mitigated.
Vodacom SA’s policies guide the positioning of base stations by
drawing on demographic studies, research results and customer
requests, as well as the location of other operator masts, for mast
40 Vodacom Group Sustainability Report 2010
����Material Issue����Ethical business conduct
Ethical business conduct means that a company adheres to defined standards of behaviour that
should permeate the company’s culture, and motivate strategy, business goals, policies, objectives
and activities. Our culture is a strong measure of our organisational integrity and must be
demonstrable. In order to ensure a high level of ethics, management must acknowledge the risk
of dishonest behaviour and consider the role of legislation as a guide to mitigating this risk.
Guided by the King III Code of Corporate Practices and Conduct, Vodacom is committed to
creating a culture of ethical behaviour in the Group. The ethics and compliance group run the
Ethics Along the Way programme, guided by the Vodacom Way policy defining our key ethical
values. The Anti-Money Laundering Group is responsible for the Anti-Corruption, Money
Laundering and Financing of Terrorism (CMT) Compliance Programme.
Ethics
The Ethics Along the Way programme aims at enhancing strengths and weaknesses in two main
areas: thinking about ethics, and institutionalising and managing ethics. These were highlighted
as significant areas through a number of ethics risks assessments that were conducted for the
Group and its five local markets.
The performance of the programme is measured through quarterly progress reports (for the
Ethics Committee meetings, and Board and Audit Committee meetings), cyclical audits, an
ethics survey and the ethics risk/control matrix.
During the past year, the following progress has been made in South Africa in regard to ethics
management:
➾ Updated our ethics website to make it more interactive and effective as a platform for
creating awareness;
➾ Launched the Ethics Advice Line;
➾ Published the ‘Guideline for Content in the Workplace’; and
➾ The Vodacom SA Ethics Committee was established (after the Vodacom Group Ethics
Committee was dissolved), and meets as part of the Vodacom SA Exco meeting on a
quarterly basis.
Ethics training
Management training for South Africa, Tanzania, the DRC, Lesotho and Mozambique is 87%,
76%, 91%, 97% and 84% completed respectively. Once trained, managers are expected to apply
their new skills in ethical decision-making and management practices, as well as support the Ethics
and Compliance group and newly established company ethics committees in implementing their
programmes.
Social responsibility
Our culture is a strong measure of our organisational integrity and must be demonstrable. In order to ensure a high level of ethics, management must acknowledge the risk of dishonest behaviour and consider the role of legislation as a guide to mitigating this risk.
91%
97%
84% 87%
76%
■ South Africa
■ Tanzania
■ DRC
■ Lesotho
■ Mozambique
Ethics training% management training
for the 2009/10 financial year
% staff training
for the 2009/10 financial year
76%
88%
68% 61%
77%
■ South Africa
■ Tanzania
■ DRC
■ Lesotho
■ Mozambique
Vodacom Group Sustainability Report 2010 41
Social Responsibility
Staff training in South Africa, Tanzania, the DRC, Lesotho and
Mozambique is 61%, 77%,76%, 88% and 68% completed
respectively. We aim to train a further 1 200 Group employees
during 2010/11 taking us to a percentage completion rate of 83%
(including all local markets). The Company aims to instil a culture
of ethics in all our employees.
While it is unlikely that 100% training will be achieved at any
cut-off point due to staff movements, Vodacom SA aims to achieve
at least 95% completion during the 2010/11 financial year after
which the percentage completion is likely to remain static at 95%
due to staff movements. The effectiveness of the overall training
will be measured during the ethics survey that will be conducted
during the 2010/11 financial year.
In addition to the training mentioned above, ethics training is
also provided by the customer care education, training and
development practitioners for temporary call centre employees
in our call centres. To date, 941 temporary customer care
employees have received training.
Further to the general ethics training offered to employees, an
additional hour of ethics induction presentations continues to be
offered on a monthly basis during the orientation programme to
new employees in Group and Vodacom SA. Cumulatively the
ethics presentations have been made to 425 new employees in
the Group.
The Group Code of Ethics
The review of the Vodacom Group Code of Ethics did not occur
during the 2009/10 financial year, as previously planned. The
Code of Ethics will be reviewed during the first quarter of 2010/11.
Institutionalisation of ethics
The respective committees continue to meet on a quarterly basis.
Since its inception in August 2009, our ethics committee in South
Africa has met three times.
Ethics champions
The Vodacom Group ethics champions have been nominated to
raise awareness by encouraging forums and facilitating ethics
management initiatives implemented by the ethics and
compliance team. Ethics champions do not provide advice; this is
dealt with by line management or the Ethics and compliance,
legal or human resources teams.
Plans for the next financial year include creating ethics awareness by
publishing quarterly articles on specific ethics risk areas, as well as
conducting the ethics survey and associated awareness campaigns.
Anti-Corruption, Money Laundering and Terrorist
Financing compliance programme
Instilling a culture of ethics in the organisation is key to managing
the risk related to the prevention and detection of CMT. The
Anti-CMT compliance programme includes the following
elements.
Knowledge base
As developments occur, our international and country specific
CMT risk and CMT policy, law and administration databases are
continually being augmented. Specialist legal counsel provides
advice on CMT risk management in operating countries, and
various governance and CMT indicators are regularly monitored.
Monitoring also occurs in those countries in which possible
investments are being contemplated or pursued.
Risk assessment and risk management strategy and design
Vodacom Group CMT country and company risk assessments are
updated annually for all network operating subsidiaries. Based on
the findings, CMT risk management strategies and programmes
are modified to manage the various levels of risk.
Implementation
The Group anti-CMT code of compliance continues to be
implemented. Ethics and compliance officers assist and advise on
the implementation of the programme.
Training of all high risk divisions and middle management has
been completed, and Vodacom SA is on course to train junior
management and other employees. Training of executives is a
challenge, and this has been raised through the company risk
assessment process.
All Vodacom companies are required to implement a formal
approval process and maintain registers of gifts and hospitality
received or given by personnel in accordance with Group policies
and procedures. There are various restrictions applied; for example
approval is required for any gifts above R500. Vodacom SA and
Vodacom Group have faced some challenges with this policy;
specifically a lack of awareness and misinterpretation by staff of the
policy. This policy is currently being reworded to ensure correct
interpretation and training on this policy is intensified.
The electronic gifts receiving register was launched during the last
financial year. Vodacom has been working to ensure that the
system operates optimally and that our people are aware of how
Social responsibility continued
42 Vodacom Group Sustainability Report 2010
be on client confidentiality and reducing the incidences of disclosure
of client information. Externally, focus will be on reducing the issue
of subscription fraud. The launch of M-Pesa (banking product) will
also be a challenge.
����Material Issue����Regulation of Interception of Communications Act
(RICA)
On 1 July 2009, the RICA law was implemented in South Africa.
This requires everyone who has an active mobile phone number,
or purchases a new prepaid starter pack, to register their SIM
cards. All current and new contract, top-up and prepaid customers
are required to register their SIM cards by 31 December 2010. This
represents a challenge for Vodacom as there is the potential to lose
a large number of prepaid customers if the registration process is
not completed on schedule. There are three main challenges that
RICA poses for Vodacom SA:
➾ The registration of customers who don’t have formal proof of
address documents;
➾ Ensuring that all existing customers are registered prior to
31 December 2010; and
➾ Making it possible for all our customers who live in remote
areas to be able to register.
At a formal level, Vodacom is engaging the Department of Justice
and Constitutional Development (DoJ) and both the Parliamentary
Portfolio Committee on Justice (PPC) and the Select Committee
on Security and Constitutional Affairs. A progress report on the
implementation of RICA, its impact on the business, challenges
encountered and how they can be resolved was submitted to the
DoJ, the PPC and the Select Committee in January 2010.
Vodacom has invested a substantial amount of money to ensure
that people, processes and systems are geared for RICA and that
RICA is fully integrated into all the company’s business
processes. More than 13 000 terminals at points of sale have
been installed to enable new customers to register and more
than 113 000 registration agents have been appointed and
trained. These processes have been implemented both for new
acquisitions and existing customers. Vodacom has also
incentivised business partners to register existing customers by
paying them a fee for every customer they register. Customers
who register have also been incentivised with free airtime and
SMSs.
to use it. During the 2009/10 financial year, there were 179
declarations of gifts received. While it is not easy to determine
instances of corruption, if suspicious incidences do occur they are
referred to the fraud detection department. These are dealt with
through appropriate channels.
Fraud and corruption
Fraud and corruption are dealt with by the forensic services team.
Vodacom categorises fraud into internal and external cases. Internal
fraud is generally tracked through audit trails, which are applied to
all activities. Examples of external fraud include subscription fraud
and identity theft. Vodacom has robust technological systems which
track and record trends in mobile usage and are able to detect
when suspicious activities occur. Another measure includes fraud risk
analysis of new products by risk management. Products are not
released until they receive sign off from this team.
A record is kept and reported quarterly to the risk committee.
Suspected incidences of fraud or corruption are dealt with through
investigation, and escalated through appropriate channels. If
necessary, these can be escalated to a criminal case, which is then
dealt with by the South African Police.
The number of cases of fraud for the 2009/10 financial year is as
follows.
SA fraud cases
2009/10 2008/9
Internal fraud cases 286 312External fraud cases 3 163 2 743
The increase in the number of external cases (75% of which are
subscription fraud) can be attributed to a growth in customer base.
It should be noted that this number represents approximately
0.01% of the subscriber base, which means that fraud prevention is
being well managed. However, Vodacom SA continues to work
towards improving on this level through prevention (focusing on
ethics and compliance), detection and investigation.
While Vodacom SA has not experienced any cases of true
corruption, there have been incidences where unintentional cases
have been detected, and these were intercepted and diffused
through due-diligence and corrective action as stipulated in the
policy processes.
During the 2010/11 financial year, Vodacom SA is planning a
campaign to promote its whistleblowing hotline. Internal focus will
Vodacom Group Sustainability Report 2010 43
Social Responsibility
distinguish between ethical and unethical behaviours. Ethics
champions have been nominated; however, their role needs to
be further defined. During 2010/11, the online ethics awareness
programme will be promoted.
The Anti-CMT Code of compliance has been successfully
implemented. Monthly fraud statistics from Tanzania are sent to
Group Enterprise Risk Management for consolidation before being
reported to management internally. Several incidents have been
reported and escalated to the appropriate authorities for further
action. Tanzania aims to minimise fraudulent/corrupt practices
through appropriate screening of prospective employees prior to
engagement, as well as employee training to develop a sensitivity
to fraudulent/corrupt acts.
����Material Issue����Privacy
Privacy is a fundamental human right, and while new technologies
come with many valuable benefits, they also create new challenges
for the protection of personal information. As a provider of these
technologies, we have an obligation to protect individuals from
intentional or unintentional disclosure or misuse of personal
information.
Vodacom has a dedicated privacy officer (Executive Director:
Regulatory Affairs) and we have various policies, procedures and
processes in place to ensure that information is not unlawfully
disclosed. Some of the control mechanisms we use include:
➾ Audit trails in all systems that interface with the customer or
handling of customer information;
➾ An Access Monitoring Policy that discourages unlawful access
and or disclosure of customers’ information;
➾ Deterrence of potential perpetrators by adopting strict
disciplinary action regarding issues of invasion/breach of
customer information; and
➾ Regular trade bulletins and electronic newsletters to alert
employees and trade partners regarding confidentiality of
customer information.
This is also provided for in the Group’s disciplinary policy and
code and a zero tolerance approach is followed regarding policy
transgression. Our employees cannot intercept calls, SMSs or any
other type of messages sent from one person to another. This
information may be intercepted only if properly authorised in
terms of the provisions of the RICA.
The implementation of RICA has resulted in a significant reduction
in new customer acquisitions with year-on-year reductions of more
than 40% in prepaid sales. This is largely due to the onerous
registrations requirements that are now part of the purchase
process, and partly due to many customers (particularly in the
informal market) not being able to provide valid proof-of-address
documentation.
Vodacom’s primary target is to make the RICA registration
process as simple as possible for both existing and new
customers while ensuring that all existing customers are
registered by 31 December 2010.
Other local markets
The World Bank and other international agencies and non-
governmental organisations list the DRC as one of the most
challenging governance and CMT environments in the world.
With this in mind, the Group code of ethics is currently being
translated into French, and the DRC is focusing strongly on
having a robust ethics programme in place. Ethics training has
occurred across the country and feedback has been positive. The
‘Ethics along the way’ programme has been implemented and
ethics champions are currently being nominated for
appointment.
In Lesotho, 90% of all staff have been through ethics training. An
ethics committee has been established and meets quarterly. Ethics
information has been launched on the intranet, and the activities
of ethics champions have been formalised, drawing on updated
Group ethics objectives.
During 2009/10, the Mozambican ethics committee was
consolidated and ethics training was carried out. The Ethics
Champions Charter was translated into Portuguese and inputs are
being collected from Ethics Committee members to inform the
final version. Once this has been approved and issued, the ethics
champions will be nominated and trained. Ethics is still a challenge
in Mozambique as employees do not fully understand what may
constitute a breach of ethics. Regular ethics sessions are being
carried out and it is hoped that the translated code and charter
will improve ethics management.
The Tanzanian ethics committee meets on a quarterly basis to
review ethics issues. While budget constraints and training
logistics are a challenge, over 80% of employees participated in
ethics awareness sessions during 2009. Staff are now aware of
what is expected from them by the Company and are able to
Social responsibility continued
44 Vodacom Group Sustainability Report 2010
Other local markets
In Mozambique, a privacy policy is being developed which should
be implemented during the course of 2010/11. In addition, the
process of identifying a Board director (with responsibility for
reporting to the Board on privacy-related matters and risks), and a
Privacy Officer (with day-to-day responsibility for implementing
operational structures, processes and measures), is underway.
Employees are trained on the importance of protecting privacy
and on the proper access to, use and disclosure of customer
information. Under current security practices and policies, access
to personally identifiable information is authorised only for those
who have a business need for such access.
The Tanzanian Communications (Consumer Protection) Regulations
of 2005 governs privacy and client confidentiality issues. The
company issues information upon request by law enforcement
agencies and penalties are imposed for any violations.
����Material Issue����Content standards/protecting vulnerable users
While mobile communications opens the door to many beneficial
products and services, it also creates a portal for adult or other
content considered inappropriate for certain users which can be
accessed through various channels such as SMS, MMS, USSD and
the Internet. In addition to this, customers can also be targeted by
scam fraudsters via these channels. As a provider of mobile
technologies, we have a responsibility to ensure that use of these
technologies causes no detriment to vulnerable users, as well as to
ensure that these channels are not abused.
At industry level, these issues are governed by WASPA who has
developed a Code of Conduct through which users are protected
from spam, subscription services, mobile content services, and
paying for adult content on the handset. During the previous
reporting year, WASPA tightened these controls further, including
instituting further sanctions against WASPs who breach the Code
of Conduct. Vodacom SA does not grant operating licences to
WASPs who are not members of WASPA.
Vodacom subscribes to the Vodafone Group standards in its
approach to adult content on its channels, with various initiatives
to ensure the responsible delivery of this content including access
control, warning screens, an ‘opt-out’ mechanism and parent’s
guide to protecting children from harmful content. All WASPs on
Vodacom SA’s network need to comply with all applicable laws,
the WASPA Code of Conduct and WASPA advertising guidelines.
The South African Protection of Personal Information Draft Act
(2005) was approved in August 2009. Vodacom made a
submission on the draft act as published by the Department of
Justice and Constitutional Development in 2005, prior to its
tabling in parliament. The version that was tabled in parliament
in 2009 addressed all the key concerns raised by Vodacom on
the initial draft. Negotiations for the establishment of an
industry forum are now at an early stage. Given the multitude
of licensed entities in the sector and the need to make the
process more manageable, the current discussions have been
initiated at the level of infrastructure-based licensees.
Wireless Application Service Providers (WASPs)
Due to the potential infringement of customer privacy associated
with the use of location-based services (LBS), Vodacom SA has
instituted strict guidelines for its provision to WASPs. Providers
must undergo an audit process prior to the approval of the
deployment of LBS and users have to consent to being tracked
(please see the section on ‘Content Standards/Protecting
vulnerable users’). The Wireless Application Service Providers
Association (WASPA), the industry regulator, also has its own
rigorous adjudication and due diligence processes which it
follows and has, for example, suspended two service providers
who may no longer operate in South Africa as a result. These
measures have restricted the violation of privacy rules on the
Vodacom network.
Vodacom is also a signatory to the Code of Conduct for
Cellular Operators in South Africa which commits us to adhere
to certain standards, ensuring protection of consumers against
harmful behaviour by WASPs using the Group’s network. We
measure the extent of violations of these rules and aim for
zero incidents. During the last financial year, there were 12
proven incidents.
Commercial business partners are now in the process of
implementing technical solutions to address compliance to business
rules as these are not always adhered to by rogue operators.
Vodacom SA has teams of testers who check WASP services for
quality and compliance, and report cases of non-compliance.
We provide training to all customer-facing employees as well as service
providers on our privacy policies and how to deal with incidences of
non-compliance. Staff are required to adhere to strict rules and
procedures when dealing with customer information. Training on the
provisions of the Access to Information Act is also provided.
Vodacom Group Sustainability Report 2010 45
Social Responsibility
New applicants (WASPs wanting to use location-based services) must complete a two-part audit: a
business processes audit done by an independent auditing company, and a technical process
audit done by the auditing company in conjunction with Vodacom SA. The technical team has to
ensure compliance with technical criteria when the WASP is testing. The location-based services
support technical team has not identified or notified the Group of any breaches on the service
gateway platform by any WASP.
Interacting with stakeholders
ICASA, the South African Government and Films and Publications Board meet with Vodacom
when necessaryto discuss matters of mutual interest around mobile content. The Department of
Home Affairs Ministerial Task Team on the Prevention of Child Pornography holds its meetings at
least twice a year. These are standing meetings to identify and discuss trends in the country on
issues pertaining to child pornography, different measures that are in place to combat it, the
efficiency of current policies and legislation in protecting children against child pornography,
etc.
In the 2009/10 financial year, Vodacom was invited to and participated in two meetings with
the South African Films and Publications Board in relation to various campaigns to raise
awareness for the protection of women and children.
The Films and Publications Board (FPB) has introduced two initiatives for 2010 which are still in
the early stages:
(a) An awareness campaign to highlight child pornography and the need for heightened child
protection measures during the period of the 2010 FIFA World Cup. The Board is engaging
various entities for partnerships for the campaign, including Vodacom; and
(b) The establishment of an Internet Safety and Security Forum with specific focus on safe use
of the Internet by children. Discussions as to the constitution of the forum; its role and
powers, are ongoing. The FPB, the Ministry of Home Affairs and the Ministry of Education
are collaborating in the development of the forum. As one of the leading providers of
mobile communications services, Vodacom hopes to play a key role in educating young
people and its customers in general about the responsible and safe use of mobile Internet
and social networking services.
Vodacom also attends, per invitation, the WASPA AGM and the monthly WASPA Committee
meetings. Vodacom Service Provider, the legal entity that houses Vodacom SA’s internal WASP
division is a member of WASPA in its capacity as a WASP, and Vodacom (Pty) Ltd (the licensed
entity) supports WASPA in a variety of ways including:
➾ Contributing to WASPAs operational costs on a monthly basis; and
➾ Mandating compliance to the WASPA Code of Conduct and Advertising Guidelines by all
WASPs using its network.
Performance
In the past year, Vodacom SA has noticed a decrease in the number of WASPA queries, although
the stricter controls have not necessarily deterred rogue activity. Below is a customer information
centre report indicating the number of escalated WASP queries which show a healthy decline.May09
Apr09
Jul09
Aug09
Jun09
Oct09
Sept09
Dec09
Nov09
Feb10
Jan10
6 08
6
2 35
5
1 17
9
1 04
4
909
814
738
626
801
646
755
Number of escalated WASP queries
Social responsibility continued
46 Vodacom Group Sustainability Report 2010
The decrease could be attributable to a number of factors, including the following:
1. The tighter and more punitive penalties put in place by WASPA – fines for contravention of
the Code of Conduct have been increased;
2. The industry monitors put in place by WASPA to monitor any form of abuse which is
reported. This has resulted in the suspension of services that do not comply with the Code of
Conduct; and
3. Vodacom SA has implemented a WASP content-testing department which monitors
compliance to business rules and has helped reduce the contravention of these rules.
While these measures are effective, the risk of abuse still exists. More robust customer protection
measures are required such as a double-opt-in rule which requires customers who subscribe to
WASP services to confirm their requests prior to being billed. These measures have been proven
to reduce revenue but are deemed necessary for the protection of customers from rogue
activity. Vodacom SA was instrumental in initiating the double-opt-in measure and WASPA will
be adding such a rule to their Code of Conduct. This measure has become a necessity to ensure
the credibility of WASP services.
Customers can report instances of abuse to WASPA via email (complaints@waspa.org.za), fax
(086 606 2016) or postal address (WASPA, PO Box 3143, Parklands, 2121) as well as at the
WASPA website http://www.waspa.org.za. (A direct link is http://www.waspa.org.za/code/
complaint.shtml). Alternatively they can direct their complaints to Vodacom SA via telephone
(082 111 / 082 114), fax (0860 082 082) or email (customercare@vodacom.co.za).
Goals for 2010
We are committed to increasing controls on potentially harmful content and aim to keep
developing measures to achieve this. Other than the double-opt-in measure, Vodacom SA is also
developing a comprehensive technical solution to enforce compliance which it hopes to
implement in the last quarter of 2010.
Vodacom SA aims to be at the forefront of all major initiatives in the country (either by industry,
government or FPB) aimed at fostering an appropriate regulatory/legislative framework for the
protection of children against age-inappropriate and/or illegal content. To this end, the
company will continue to participate in the various initiatives currently underway or proposed.
Other local markets
Given the generally low levels of wireless application activity in Vodacom’s non-SA markets,
WASP activity is not currently considered a particularly material issue. However, there are
regulatory measures in place. For example, Mozambique’s Regulatory Authority requires all
WASPs to register with it before commencing with operations, and in Tanzania the TCRA
Consumer Protection Regulations provides for the necessary safeguards.
����Material Issue����EMF compliance
While increased network coverage is generally welcomed as it facilitates an excellent level of
service to our customers, some people are concerned about the potential health effects of
electromagnetic fields (EMF) exposure. To date, experts have not found any convincing
Vodacom engages with the South African Health Department’s Directorate for Radiation Control annually to keep informed about any developments in local regulation. The industry is currently anticipating a draft South African RF standard for best practice.
Vodacom Group Sustainability Report 2010 47
Social Responsibility
Minutes from the EMF Council meetings are then reported back to
the CEO by the Council Chairman. The matter is governed at the
policy level by Vodafone’s Health, Safety and Well-being Standard.
The purpose of the EMF Council is to ensure that the multi-faceted
nature of EMF risk management is identified and mitigated. Group
internal audit assists the EMF leader in managing the risk by auditing
the individual areas of the business and determining whether or not
controls are adequate and effective. The Risk Management
Committee reports on developments to the Vodacom Board.
Vodacom engages with the South African Health Department’s
Directorate for Radiation Control annually to keep informed about
any developments in local regulation. The industry is currently
anticipating a draft South African EMF standard and best practice
protocol. Local communities are engaged on a case-by-case basis
when commissioning new base station sites and an extensive
corporate communications plan is in place to improve
relationships with municipalities. Vodacom SA and its consultants
are now engaging with municipalities in more constructive and
imaginative ways in order to facilitate a better understanding by
interested and affected parties involved in the EMF issue.
Information on EMF exposure is communicated to customers
through the website (section on ‘base station safety’), and supplies
data on base station field measurements recorded across the
network at http://emf.vodacom.co.za.
A stakeholder engagement opinion survey was undertaken by
Nunwood Consulting in 2008, commissioned by Vodafone Group,
to provide independent feedback on the health of Vodafone’s EMF
stakeholder relationships, and Vodacom was involved as operating
Vodafone Group company. One hundred stakeholders were
surveyed over more than 20 markets. The number per market was
not large enough to provide reliable statistical information, but
rather gives an indication of stakeholder satisfaction across the
Vodafone Group.
The findings and recommendations emanating from the survey
may best be summarised as follows:
➾ The Vodafone Group (including Vodacom) should highlight to
stakeholders the education/consultation initiatives that it
undertakes to reassure the general public that it has a
responsible approach toward EMF risk management;
➾ The Vodafone Group should pursue a policy of co-location of
masts wherever possible;
evidence that EMF exposure when operated within international
guidelines is harmful to human health; however, some individual
research studies have suggested that using a mobile phone could
affect health. We recognise these concerns and are committed to
safeguarding the health and safety of our customers, employees
and the public.
The International Commission for Non-Ionizing Radiation
Protection (ICNIRP) guidelines establish permitted levels of EMF
exposure, and mobile phones and antennas are designed to
operate within these stringent levels. The levels include a safety
margin designed to assure the safety of all persons, regardless of
age and health. The World Health Organisation (WHO) endorses
the ICNIRP’s guidelines, and is conducting an international EMF
risk assessment programme. Until the WHO concludes its
international risk assessment, at Vodacom, we align our EMF policy
with the WHO’s contemporary best practice recommendations.
In May 2010, the International Agency for Research on Cancer
(IARC) published the first combined findings from all study centres
of the Interphone study, a major piece of research into the possible
health effects of mobile phones. The study concluded that overall
no increase in risk of glioma or meningioma (tumours of the head)
was observed with the use of mobile phones. While researchers
reported that there were suggestions that there may be an
increased risk of glioma at the highest exposure levels, they
discussed the limitations in the study that prevent a causal
interpretation. IARC recommends further investigation into
long-term heavy use of mobile devices. International studies into
such long term use and use by children are already underway, as
the WHO has already identified these as priorities.
The overall findings are consistent with expert reviews of the large
body of existing research. More than 30 authoritative expert reviews
over the last eight years, including work by the World Health
Organization, have found no adverse health effects from using
mobile devices operating within international safety guidelines.
The Vodacom Group has an EMF Council that meets three to four
times a year. Representatives from group marketing, regulatory,
legal, operations, communications, CSI and health and safety sit
on the Council and act as risk owners. The local markets are
represented by the EMF leader for the Group, who reports on
Vodafone EMF requirements, best practice and current research.
The Group EMF leader keeps track of recent developments in EMF
Health and Safety research through attendance of international
forums, and in conjunction with the Vodafone EMF leadership.
Social responsibility continued
48 Vodacom Group Sustainability Report 2010
In Mozambique, EMF exposure is managed by the subcontracted
auditor EMSS. While there has been no interaction with regulatory
bodies to date, Group policies on monitoring of EMF exposure are
complied with. As part of the external stakeholder engagement
strategy, the aim is to start engaging selected institutions about
the company’s initiatives to address EMF exposure. Full compliance
of high priority rooftop sites to the Vodafone standard is nearing
completion. Thirty-eight employees have undergone EMF training.
The Tanzanian Communications Regulatory Authority (TCRA)
and the National Environmental Management Council are
engaged with regularly in respect to EMF exposure. The TCRA
has recently issued a public notice on the effect of EMF
Exposure. (www.tcra.go.tz).
There is currently no public body for regulating EMF exposure in
the DRC. This risk is managed internally and in the absence of
formal regulation the company aims to ensure compliance with
Group and international best practice.
����Material Issue����Contribution to communities (CSI)
In South Africa, the Vodacom Foundation has evolved from
compliance-based charitable giving to a more strategic focus
aligned with business imperatives. The Foundation is run as an
internal business unit, with a dedicated risk management
division. We are in the process of registering the Vodacom
Foundation Trust as a not-for-profit entity to enable us to
leverage our extensive customer base for fundraising initiatives
for causes such as natural disasters.
➾ Following the initial consultation process that accompanies the
installation of a mast, the Vodafone Group should issue further
communications detailing how public concerns have been
taken into account;
➾ Stakeholders have demonstrated concerns about handset use
by children, and the Vodafone Group should be mindful of
this and ensure that marketing campaigns do not appeal
directly to minors;
➾ Safety information should be provided with handsets at the
point of sale to allow the user to make better informed
decisions about responsible usage;
➾ Personal (face-to-face) interaction with stakeholders is the
most effective way of conveying the Vodafone Group’s
responsibility toward EMF matters;
➾ The EMF resources available online are valued by those who
use them; however, to encourage engagement and awareness,
local EMF teams should remind stakeholders that the web
resource is available.
It is anticipated that there will be a follow-up survey in the last
quarter of the 2010/11 financial year.
Within the Vodafone global team, the EMF toolkit, an electronic
communication channel developed by Vodafone, has been rolled
out. This includes an ongoing training program across Vodacom
designed to raise awareness in the area of EMF Risk
Communication. Sections of the training programme will soon be
integrated with the activities of the Vodacom Group
Communications team to enhance their media response library.
Vodacom SA is aiming for 100% compliance with the Vodafone
Group Policy Standard on EMF Health and Safety by October
2010.
Other local markets
Vodacom Lesotho regularly engages the Lesotho Regulatory
Authority is, and an external stakeholder engagement framework
has been developed with its own dedicated management position.
EMF exposure issues are driven by the legal and regulatory division
with the Managing Director monitoring activity. Still in its infancy,
key issues for each stakeholder have been identified. Prior to being
included in the stakeholder engagement framework for more
focused communication, local authorities were communicated
with on an ad hoc basis.
Vodacom Group Sustainability Report 2010 49
Social Responsibility
Approach
The Vodacom Foundation in South Africa receives a budget allocation from the company
each year, which it allocates to projects selected in accordance with its strategy. Criteria
for allocating Foundation support include the potential to use ICT to address social
challenges, the degree of impact, partnerships, sustainability, sound governance, track
record and solvency. Since the inclusion of a dedicated risk management unit with the
Foundation, it has become more circumspect about whom it funds. Where identified risks
can be mitigated, they are highlighted as part of the recommendations for Board approval
of project funding, and site visits are conducted in the case of shortlisted projects.
The Foundation has developed a formal business plan based on its new CSI strategy.
Recognising that mobile communications can be harnessed to deliver social benefit, the
community development strategy was recently revised and now places a stronger
emphasis on ICT-enabled projects, and this has led to fewer projects receiving support
for a longer duration. Over the next year, project expenditure aligned to ICT is targeted
to exceed 50%. Projects are also chosen to leverage services such as SMS and USSD in
support of community health, education and security. These projects are divided into
two main funding categories, and provisions are also made for grants to ad hoc
projects, as follows:
➾ Social leadership projects (50% of the budget): These use communication technologies
to help solve social problems. They are high cost, multi-year and Vodacom SA-led projects
which are sourced proactively.
➾ Social investment projects (30% of the budget): These are moderate-cost, three-year
(renewable) NGO-led projects with which Vodacom SA may want to associate. Some
applications are entertained.
➾ Ad hoc projects (20% of the budget): These are introductory, once-off projects
requiring modest contributions relating to research, emergencies, poverty alleviation,
the environment, and arts and culture. Other projects in areas such as security, arts and
culture, community sport, and the environment are funded on a case-by-case basis.
Staff involvement
Our Foundation in South Africa provides support in the form of cash, in-kind giving, time
and skills. There are currently 2 175 employee volunteers, known as Yebo Heroes, who
drive collection campaigns to obtain books, clothing, blankets and other much needed
items. Staff are also able to contribute through deductions from salary through our
Payroll-Giving platform. These contributions totalled over R722 000 this year, with 1 220
registered payroll contributors. Cash support usually consists of once-off donations, or
one- to three-year funding agreements. Time and skills contributions are driven by Yebo
Heroes in the form of relief duty, gardening, painting and tree-planting. Staff completed
73 volunteer projects this year.
1 275employee volunteers, known as Yebo Heroes who drive collection campaigns to obtain books, clothing, blankets and other much needed items
R772 000was contributed by staff deductions through our Payroll-Giving platform with 1 220 registered payroll contributors
73volunteer projects were completed by staff this year
Time and skills contributions are driven by Yebo Heroes in the form of relief duty, gardening, painting and tree-planting.
Social responsibility continued
50 Vodacom Group Sustainability Report 2010
Stakeholder engagement
Vodacom SA Foundation has strong relationships with stakeholders such as the government
departments of education and health, at national, provincial and local levels.
During the 2009/10 financial year, a voluntary Beneficiary Forum, comprising of organisations
funded beyond a once-off basis, was established. This convenes twice a year with those unable
to attend joining by conference call. The Forum seeks to encourage information sharing as well as
best practice amongst the beneficiaries, as well as in dealings with Vodacom SA. No structured
engagement with indirect stakeholders like civil society is presently taking place.
In April 2009, the Vodacom Foundation in South Africa launched its website to serve as an
interactive communication portal for engaging with stakeholders ranging from government
and implementing partners, to communities and individuals. This is proving to be effective in
complementing other means of communications such as the intranet and newsletters to staff,
and company publications and press statements. It is also used to complement the Beneficiary
Forum, and for active searches for partnerships with government departments, as in building
classrooms on a 50-50 basis and other foundations like the Nelson Mandela Foundation, as well
as the CSI divisions of companies like Microsoft, Altech and Altron.
The risk management department within the Foundation also undertakes monitoring of a
number of key performance areas including the following:
➾ Accreditation of beneficiary organisations;
➾ Capacity building in beneficiary organisations;
➾ Coordination of CSI conducted by other divisions of the company;
➾ Monitoring of performance against the DTI BBBEE scorecard;
➾ Systems compliance and reporting; and
➾ Early warning systems.
Projects recommended by the Board of Advisers are visited and scored by independent service
providers. Regular visits by Vodacom Foundation employees are conducted during
implementation. Post-project audits are also conducted to inform decisions to renew or
discontinue projects.
Performance and evaluation
During the 2009/10 financial year, the Vodacom Foundation in South Africa contributed
R68.6 million, a 2% increase over the prior year. Cumulatively, this brings the Foundation’s
total investment since its inception a decade ago to over R500 million. A further R11.5 million
constitutes CSI activities conducted by other divisions of the company.
Other than the ongoing annual Tries for Smiles, Birdies for Kiddies and Goals for Campaigns
presented jointly with the marketing division, there have been no other notable campaigns for
the 2009/10 financial year.
For details of Vodacom Foundation’s main achievements in South Africa, please see the
Foundation website at www.vodacom.com/vodacomfoundation.
South AfricaR68.6 millionCSI spend
for the 2009/10 financial year
Vodacom Group Sustainability Report 2010 51
Social Responsibility
Future goals
Two ICT resource centres will be implemented this year in partnership with the national education
department and other corporate sponsors. The centres will offer ICT services to community
members and schools alike. Once these pilot centres are up and running, Vodacom is considering
developing a further two centres in two other provinces in South Africa.
Other local markets
The Vodacom Congo Foundation allocated approximately R3.25 million to CSI for the 2009/10
financial year. VCF focuses on six areas: education, health, welfare, environment, culture and
arts. The CSI spend supports a wide range of projects, initiatives and activities independently or
in partnership with local communities, international NGOs, and occasionally with the
government. Vodacom Congo Foundation drives all process and delivers turn-key assets to
stakeholders, to avoid misuse of funds.
Lesotho’s CSI spend for the last financial year was R2.76 million. This was distributed amongst
eight beneficiaries, in areas including health, education, sports, community and technology.
Lesotho engages with stakeholders through government and parastatal structures, as well as
through various forms of media.
For the last financial year, primary CSI focus areas for Mozambique were education, health,
safety and security. The secondary focus areas for the same period were environment, arts
and culture, and community sports. Mozambique spent approximately R4.7 million in
2009/10 (2008/9: R4.3 million). Organisations are selected through the government’s Plan
of Action for the Reduction of Absolute Poverty (PARPA) and attempts are made to
understand their specific needs in areas such as education and health (needs previously
identified by PARPA and aligned with Mozambique’s CSI strategy). The Ministry of Education
received the lion’s share of Mozambique’s support during the 2009/10 financial year.
Whenever possible, approved NGOs and foundations are sought as partners in the
execution of CSI activities.
Tanzania’s CSI strategy focuses on establishing social infrastructure and uplifting
communities through economic empowerment, education and health initiatives. During
2009/10, the Tanzanian Foundation spent almost R3.4 million on CSI programmes. Through
partnering with various organisations, the Foundation is able to deliver various programmes
such as Share and Care (which helps orphanages develop income generation projects), as
well as education and health programmes. This year saw the launch of the new M-Pesa
Women’s Empowerment Initiative.
LESOTHOR2.76 millionCSI spend
for the 2009/10 financial year
DRCR3.25 millionCSI spend
for the 2009/10 financial year
MozambiqueR4.7 millionCSI spend
for the 2009/10 financial year
TanzaniaR3.4 millionCSI spend
for the 2009/10 financial year
52 Vodacom Group Sustainability Report 2010
Global Reporting Index Table
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
Strategy and analysis
1.1 Statement from the most senior decision-maker of the organisation
Full SR (Sustainability Report) – CEO Message
1.2 Description of key impacts, risks and opportunities Full SR – CEO Message; Material issues table
Organisational profile
2.1 Name of the organisation Full SR, AR and Website www.vodacom.com
2.2 Primary brands, products, and/or services Full SR – About the company; Website - www.vodacom.com
2.3 Operational structure of the organisation Full SR – About the company
2.4 Location of the organisation’s headquarters Full Website - www.vodacom.com
2.5 Countries in which the organisation’s operations are located
Full Website - www.vodacom.com
2.6 Nature of ownership
2.7 Markets served Full SR – About the company
2.8 Scale of the reporting organisation Full SR - Employees
2.9 Significant changes during the reporting period in terms of size, structure or ownership
Not applicable
2.10 Awards received during the reporting period Full None
Report profile
3.1 Reporting period for information provided Full SR – About this report
3.2 Date of most recent previous report Full SR – About this report
3.3 Reporting cycle Full SR – About this report
3.4 Contact point for questions about the report or its contents
Full SR – About this report
Report scope and boundary
3.5 Process for defining report content Full SR – Stakeholder engagement
3.6 Boundary of the report Full SR – About this report
3.7 Any specific limitations on the scope or boundary of the report
Full SR – About this report
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organisations
Full SR – About this report
3.9 Data measurement techniques used Partial SR – Various sections
3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement
Not applicable
3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report
Not applicable
3.12 Table identifying the location of the standard disclosures in the report
Full SR – This GRI table
Vodacom Group Sustainability Report 2010 53
GRI Index
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
Report assurance
3.13 Policy and current practice with regard to seeking external assurance for the report.
Full SR – About this report
Governance, commitments and engagement
4.1 Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight
Full AR (Annual Report) – Corporate Governance statement
4.2 Indicate whether the chair of the highest governance body is also an executive officer
Full Chair is not an executive director
4.3 For organisations with a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members
Not applicable
4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body
Partial AR – Corporate governance statement
4.5 Linkage between compensation for members of the highest governance body, senior managers and executives and the organisation’s performance
Partial AR – Corporate governance statement
4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided
Not reported
4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organisation’s strategy on economic, environmental and social topics
Partial AR – Corporate governance statement
4.8 Internally developed statements of mission or values, codes of conduct and principles relevant to economic, environmental and social performance and the status of their implementation
Not reported
4.9 Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental and social performance, including relevant risks and opportunities, and adherence or compliance with international agreements
Partial AR – Corporate governance statement
4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental and social performance
Not reported
Commitments to external initiatives
4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation
Not reported
4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses
Partial SR – Climate change/Carbon footprint
4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organisations
Partial SR – Access to communications; Impact on the environment
Global Reporting Index Table continued
54 Vodacom Group Sustainability Report 2010
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
Stakeholder engagement
4.14 List of stakeholder groups engaged by the organisation
Full SR – Stakeholder engagement
4.15 Basis for identification and selection of stakeholders with whom to engage
Partial SR – Stakeholder engagement
4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group
Partial SR – Stakeholder engagement
4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting
Partial SR – Material issues table; Stakeholder engagement
Core economic indicators
EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments
Full Annual Report
EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change
Partial SR – Climate change/Carbon footprint
EC3 Coverage of defined benefit plan obligations Full None
EC4 Government assistance Full No significant financial assistance received from government
EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation
Partial SR – Employment equity and diversity management
EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation
Not applicable
EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro-bono engagement
Partial SR Access to communications – Network coverage
Additional economic indicators
EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation
Full On average Vodacom remunerate at minimum of R96 000 pa compared to the market minimum of R45 000 pa.
EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts
Not reported
Core economic indicators
EN1 Materials used by weight or volume Partial SR – Resource utilisation
EN2 Percentage of materials used that are recycled materials
Partial SR – E-waste; Resource utilisation
EN3 Direct energy consumption by primary source Full SR – Energy efficiency / alternate energy
EN4 Indirect energy consumption by primary source Not reported
EN8 Total water withdrawal by source Full SR – Resource utilisation
Vodacom Group Sustainability Report 2010 55
GRI Index
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
EN11 Location and size of land owned, leased, managed in or adjacent to, protected areas and areas of high biodiversity value outside protected areas
Not applicable
EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas
Not applicable
EN16 Total Direct and Indirect Greenhouse Gas (GHG) emissions by weight
Partial SR - Energy efficiency/Alternate energy
EN17 Other relevant indirect greenhouse gas emissions by weight
Not reported
EN19 Emissions of ozone-depleting substances by weight Not reported
EN20 NO, SO, and other significant air emissions by type and weight
Not reported
EN21 Total water discharge by quality and destination Not reported
EN22 Total weight of waste by type and disposal method Partial SR – E-waste; Resource utilisation
EN23 Total number and volume of significant spills Full None
EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation
Partial SR – E-waste; Resource utilisation
EN27 Percentage of products sold and their packaging materials that are reclaimed by category
Not reported
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
Full None received: Legal compliance = 84.5% based on an operational sample size
Additional economic indicators
EN5 Energy saved due to conservation and efficiency improvements
Full SR - Energy efficiency/Alternate energy
EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives
Full SR - Energy efficiency/Alternate energy
EN7 Initiatives to reduce indirect energy consumption and reductions achieved
Not reported
EN9 Water sources significantly affected by withdrawal of water
Not reported
EN10 Percentage and total volume of water recycled and reused
Not reported
EN13 Habitats protected or restored Not reported
EN14 Strategies, current actions, and future plans for managing impacts on biodiversity
Not reported
EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk
Not reported
EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved
Partial SR - Energy efficiency/Alternate energy
Global Reporting Index Table continued
56 Vodacom Group Sustainability Report 2010
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally
Not reported
EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff
Not reported
EN29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce
Not reported
EN30 Total environmental protection expenditures and investments by type
Not reported
Core Labour Practices and Decent Work Indicators
LA1 Total workforce by employment type, employment contract, and region
Partial SR - Employees
LA2 Total number and rate of employee turnover by age group, gender, and region
Partial SR – Attracting and retaining talent
LA4 Percentage of employees covered by collective bargaining agreements
Full SR – Representation and engagement
LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements
Not reported
LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related fatalities by region
Full SR – Employee wellness (DIFR rate)
LA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases
Full SR – Employee wellness
LA10 Average hours of training per year per employee by employee category
Full SR – Attracting and retaining talent
LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity
Not reported
LA14 Ratio of basic salary of men to women by employee category
Full From Level 1 to 5 the ratio of pay reflect that on average females are paid below their male counterparts by 10% but at level 6 females are paid slightly higher 3% more.
Vodacom Group Sustainability Report 2010 57
GRI Index
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
Additional Labour Practices and Decent Work Indicators
LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations
Full 1. Compulsory pension fund membership;
2. Medical aid scheme; 3. Performance related incentives and
bonuses; 4. Leave benefits: maternity, paternity,
family, adoption; 5. Special mobile phone benefits; 6. Flexible work arrangement; 7. Subsidies for meals and transport
(night shifts); 8. Short term Incentive; 9. Retirement Funding;10. Cell phone;11. Medical aid; and12. Specific Leave benefit e.g. study leave
LA6 Percentage of total workforce represented informal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs
Not reported
LA9 Health and safety topics covered in formal agreements with trade unions
Not reported
LA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings
Partial SR – Attracting and retaining talent
LA12 Percentage of employees receiving regular performance and career development reviews
Full 100%
Core Human Rights Indicators
HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening
Not reported
HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken
Not reported
HR4 Total number of incidents of discrimination and actions taken
Not reported One. The perceived discrimination matter was addressed with both the relevant line manager and employee where after an action plan was developed to ensure that barriers experienced by the employee were removed
HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights
Not reported
HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour
Not reported
HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour
Not reported
Global Reporting Index Table continued
58 Vodacom Group Sustainability Report 2010
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
Additional Human Rights Indicators
HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained
Not reported
HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations
Not reported
HR9 Total number of incidents of violations involving rights of indigenous people and actions taken
Not reported
Core Society Indicators
SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities
Partial SR – Stakeholder engagement
SR – Placement of base stations
SO2 Percentage and total number of business units analysed for risks related to corruption
Partial SR – Ethics
SO3 Percentage of employees trained in organisation’s anti-corruption policies and procedures
Partial SR – Ethics
SO4 Actions taken in response to incidents of corruption Partial SR – Ethics
SO5 Public policy positions and participation in public policy development and lobbying
Full Vodacom has developed lobbying and engagement guidelines that seek to formalise and standardise the manner in which engagement with stakeholders is conducted. These refer to the Vodacom Group CMT Compliance Code, Stakeholder Relations Sponsorship Guidelines, Vodacom Group Code of Ethics and The Vodacom Way. Vodacom also has Public Policy Engagement guidelines.
SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
Not reported
Additional Society Indicators
SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country
Not applicable
SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.
Partial SR – Competition and the cost of communications (The investigation into MTRs is ongoing. The complaint in respect of ‘margin squeeze’ has been enrolled for 26 April 2010.)
Core Product Responsibility Indicators
PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures
Not reported
PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements
Not reported
Glossary
Vodacom Group Sustainability Report 2010 59
GRI indicator Description of indicator
Extent of coverage for GRI Level C Reference/Section
PR6 Programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship
Partial SR – Ethics
PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services
Not reported
Additional Product Responsibility Indicators
PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes
Not reported
PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes
Not reported
PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction
Partial SR – Stakeholder engagement
PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes
Not reported
PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data
Full 12 casesSR - Privacy
GRI G3 Application Level requirements
Vodacom is self-declaring a C level of application. The following table provides a summary of the GRI’s requirements for
different levels of compliance.
Report Application Level C C+ B B+ A A+
G3 Profile Disclosure ➾ Report On:1.12.1-2.103.1-3.8, 3.10-3.124.1-4.4, 4.14-4.15
Report on all criteria listed for Level C plus:1.23.9, 3.134.5-4.13, 4.16-4.17
Same as required for Level B
G3 Management Approach Disclosures
➾ Not required Management Approach Disclosures for each Indicator Caterogy
Management Approach Disclosures for each Indicator Caterogy
G3 Performance Indicators and Sector Supplement Performance Indicators
➾ Report on a minimum of 10 Performance Indicators, including at least one from each of: Economic, Social and Environment
Report on a minimum of 20 Performance Indicators, at least one from each of Economic, Environmental, Human Rights, Labour, Society and Product Responsibility
Report on each core G3 and Sector Supplement Indicator with due regard to the Materiality Principle by either: a) reporting on the indicator or b) explaining the reason for its omission
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Repo
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Repo
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Repo
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60 Vodacom Group Sustainability Report 2010
Glossary
3G Third Generation Mobile Communications Technology
AIDS Acquired Immune Deficiency Syndrome
ARPU Average Revenue Per User
ARV Anti-Retro Viral
BEE Black Economic Empowerment
BBBEE Broad-based Black Economic Empowerment
CMT Corruption, Money Laundering and Terrorism
CoGP Department of Trade and Industry’s Codes of Good Practice
CPB Consumer Protection Bill
CSI Corporate Social Investment
CSTO Community Services Telephone Operator
CUASA Communication Users Association of South Africa
DAI Direct Aids Intervention
DIFR Disabling Injury Frequency Rate
DRC Democratic Republic of Congo
dti Department of Trade and Industry
EAP Employee Assistance Programme
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation
ECA Electrical Contractors’ Association
ECS Electronic Communication Services
ECNS Electronic Communication Network Service
EDGE Enhanced Data Rates for Global Evolution
EE Employment Equity
EIA Environmental Impact Assessment
EMF Electromagnetic Fields
ERM Enterprise Risk Management
FASA Franchise Association of South Africa
FPB Film and Publications Board
GBCSA Green Building Council of South Africa
GPFT Graduate Programme for Females in Technology
GPRS General Packet Radio Service
GPS Global Positioning System
GRI Global Reporting Initiative
GSM Global System for Mobile Communications
HDI Historically Disadvantaged Individuals
HIV Human Immunodeficiency Virus
HR Human Resources
HSDPA High Speed Downlink Packet Access
HSUPA High Speed Uplink Packet Access
IARC International Agency for Research on Cancer
ICAS Independent Counselling and Advisory Service
ICASA Independent Communications Authority of South Africa
ICT Information, Communication and Technology
ICT Charter Empowerment Charter for the ICT Industry
ICNIRP International Commission on Non-ionising Radiation Protection
IOD Institute of Directors
ISETT SETA Information Systems, Electronics and Telecommunications Technologies Sector Training and Education Authority
ISO International Organisation for Standardisation
IVR Interactive Voice Response
JSE Johannesburg Stock Exchange
LBS Location-based Services
MMS Multimedia Messaging Service
MNO Mobile Network Operator
MNP Mobile Number Portability
MPLS Multiprotocol Label Switching
OHSAS Occupational Health and Safety Assessment Series
OpCos Operating Companies
PDI Previously Disadvantaged Individuals
PUSANO Provincial Underserviced Area Network Operator
Glossary
QSE Qualifying and Exempt Micro-Enterprise
REMCO Remuneration Committee
RF Radio FrequencyRICA Regulation of Interception of Communications
Act
SAR Specific Absorption Rate
SARPSA South African Reserve Police Service Association
SHEQ Safety, Health, Environment and Quality
SIMCards Subscriber Identification Module Cards
SMS Short Messaging Service
SVS Short Voice Service
TSI Technology Strategy Initiative
USA Universal Services Agency
USAL Under-serviced Area Licence
USSD Unstructured Supplementary Services Data
VAEP Vodacom Advanced Executive Programme
VANS Value Added Network Services
VIP Vodacom Incentive Programme
VLC Virtual Learning Centre
VCT Voluntary Counselling and Testing
VoIP Voice over Internet Protocol
VPN Virtual Private Network
VSAT Very Small Aperture Terminal
VSP Vodacom Service Provider Company
WASP Wireless Application Service Provider
WASPA Wireless Application Service Providers Association
WiMAX Worldwide Interoperability for Microwave Access
WHO World Health Organisation
YAP Young Achievers Programme
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