Koeberg nuclear power station is well equipped to handle the energy plant’s nuclear waste, according to a KPMG study.
The recent study by KPMG Services on the socio-economic impact of the Koeberg nuclear power station in the Western Cape and South Africa from 2012 to 2025, says the plant is well equipped to handle the safety regulations it has operated for more than 33 years.
Lullu Krugel, director and chief economist at KPMG, said electricity was a key input for the majority of products and processes in South Africa’s economy, making Koeberg a direct contributor to economic growth, both in the Western Cape and in the rest of the country.
Krugel said Koeberg stimulated economic activity in South Africa estimated at R53.3 billion between 2012 and 2016.
“The methodology which KPMG employed to conduct this review, is based on internationally accepted standards,” Krugel said, “with detailed information supplied by Eskom and official statistics.”
The report said the National Nuclear Regulator (NNR) oversaw the safe operation of nuclear installations at Koeberg and Vaalputs, the nuclear disposal site in the Northern Cape.
It said the NNR was committed to protecting people, property and the environment against any nuclear damage by establishing safety standards and regulatory practices and prescribes protective measures, such as frequent public safety forums.
According to the report, low-level nuclear waste is compressed into sealed and marked steel drums at Koeberg, before it is transported to Vaalputs in specially designed trucks for disposal in 10m-deep trenches.
About 500 steel drums arrive each year.
Intermediate-level waste is then solidified by mixing it with a cement mixture which is poured into concrete drums.
The drums are then transported from Koeberg to Vaalputs in specially designed trucks for disposal.
According to the report, the government is considering the addition of nuclear capacity as an option to add up to 9600MW to the national grid by 2030 in tranches that are affordable.
This highlights Koeberg’s role in the South African economy at present and going forward, and provides the knowledge base to expand the country’s nuclear capacity through new plants.
The Paris climate agreement signed by 175 nations last month will not meet its goals unless climate-smart, energy-efficient transportation systems become the new normal in many of the world’s urban centers. To help make that happen, the world’s largest multilateral donor is proposing a new “global coalition” of world leaders to move the sustainable transportation agenda forward.
“We have reached a tipping point,” Nancy Vandyke, lead economist for the World Bank’s Transport and Information and Communication Technologies Global Practice told Devex. “Now it’s no longer a question of talking. Now it’s a question of moving into action and that needs leadership — senior leadership.”
This November, United Nations Secretary-General Ban Ki-moon’s High-Level Advisory Group on Sustainable Transport will expire and is expected to issue a final set of recommendations for policymakers. Recommendations, however, will not be enough to maintain momentum and continuity in the sustainable transportation agenda, according to Vandyke.
Last week, during the Climate Action Summit in Washington, D.C., World Bank officials briefed a number of ministers, city mayors, and private sector CEOs on the idea of a new “global coalition” of transportation champions that would serve to advance the transportation agenda beyond November by putting ideas into action, Vandyke told Devex.
The coalition, according to Vandyke, would include leaders at the national level, city level, as well as in the private sector willing to take risks and implement changes to transportation systems that reduce greenhouse gas emissions, and improve efficiency and safety.
During briefings last week, “there was a lot of interest,” the bank official said, adding that it’s “premature to give any names.”
As far as the structure of the coalition, Vandyke said that still needs to be discussed, but that if adopted, it might include 30 to 40 members and could be mandated “at the very high senior level” by the United Nations or a similar body.
A single vision for sustainable transportation?
This latest Word Bank proposal comes as the global financial institution advances a new sustainable transportation framework called Sustainable Mobility for All, modeled in part after global renewable energy initiative Sustainable Energy for All, and designed to create a common vision and common metrics for changing the way people and goods move around the world.
Sustainable Mobility for All grew out of the Paris Climate Change Conference, according to Pierre Guislain, senior director for the Transport and ICT Global Practice, who added that one of the goals of the initiative is to position transportation as part of the solution to the world’s climate hurdles.
Installing new biking paths, pedestrian friendly city centers and more accessible public transportation systems are just some of what will be needed to effectively transforms the world’s transportation systems — initiatives that many cities are already taking steps to put in place.
But there is still a long way to go, according to climate and transportation experts. Nearly a quarter of energy-related greenhouse gas emissions originate from transport, and the number of cars on the road could reach two billion by 2030, according to the World Bank.
“We need to invest much more in urban mobility,” Guislain told Devex.
World Bank officials hope a common framework and a “global coalition” for the sustainable transportation agenda will help to provide some coordination in a sector that is crowded with independently functioning coalitions and initiatives.
The Partnership on Sustainable Low Carbon, for example, was developed in 2009 to generate global support for sustainable transportation and reduce GHG emissions and includes more than 90 organizations including U.N., multilateral and bilateral organizations, NGOs and foundations. Just last week, the New Climate Economy, C40 Cities Climate Leadership Group and the WRI Ross Center for Sustainable Cities launched the Coalition for Urban Transitions, a coalition designed to make the economic case for more sustainable urban development and that includes leaders from research institutions, think tanks, and international organizations.
“Although there [are] a lot of initiatives and a lot of coalitions, somehow they don’t add up to achieve the scale that we really want, and that is a very big problem,” Vandyke said. “Because the issues and the commitments that have been made are so big that we can no longer work … in parallel.”
In the field of urban development, there are a large number of “institutions and partners doing duplicative work,” acknowledged Nick Godfrey, head of policy and urban development at The New Climate Economy, but those duplicative efforts are what make coalitions so important, Godfrey said, because coalitions help facilitate knowledge sharing.
As to the question of whether there should be one overarching sustainable transportation coalition of world leaders or rather several “more focused” coalitions targeted to regions of the world, Godfrey said that’s “an open question” and “a good discussion to have.”
Godfrey also underscored that the Coalition for Urban Transitions sees sustainable transportation as only one part of its mission, although a “fundamental element,” and he said he would, “encourage a continued push on the sustainable transport side” from institutions like the World Bank.
For Vandyke, uniting the sustainable transportation community under a single agenda is key.
“We need to agree on what the vision is and what the goals are. Then we need to map out how each of these players contribute to [those] goals,” Vandyke said.
Finding the right leadership
So far, the sustainable transportation sector has not achieved enough “top-down leadership at the national level, the ministerial level, [and] the CEO level,” according to Andrew Steer, president and CEO of the World Resource Institute, who gave a lunchtime speech during a “transport workday” ahead of the Climate Action Summit last week.
Steer pointed to the education sector’s Education Commission, which includes high profile names like Lawrence Summers, economist and former Secretary of the Treasury, and Jack Ma, founder of the Alibaba Group. Steer harkened back to the high profile efforts of former U.N. Secretary-General Kofi Annan, former U.K. Prime Minister Gordon Brown and other globally recognized policymakers to dramatically reduce maternal mortality between 2002 and 2012.
Steer raised the question: how many internationally renowned leaders are making a point to put sustainable transportation in the limelight?
“My guess is not very many,” he said.
Whether the World Bank’s proposal of a global sustainable transportation coalition is the answer Steer is looking for is still unclear.
The next step for Vandyke and her colleagues at the World Bank is to bring their proposal to the International Transport Forum at the end of the month in Leipzig, Germany, where they will continue to gauge interest in the commission. Then they aim to continue to develop the idea at the U.N. Conference on Housing and Sustainable Urban Development in October, the 22nd session of the Conference of the Parties in November and the World Economic Forum early next year.
Members of the Select Committee on Trade and International Relations have voiced concerns about the negative impact perceptions about safety have on the tourism sector’s ability to contribute to the economy, as well as the low intake for domestic tourism.
Committee Member Mr Willem Faber sought clarity on a comment he attributed to the Minister of Tourism about South Africa being a safe tourist destination, in light of the fact that the United States has previously warned its citizen through an embassy statement that South Africa is not safe.
“This (statement) impacts on our tourism economy. This is not a safe country. A lot of international visitors ask if they will be safe when coming here,” Mr Faber said.
Deputy Minister of Tourism Ms Thokozile Xasa accompanied a high-powered delegation of SA Tourism to Parliament to present the annual performance and strategic plans for the entity.
Ms Xasa told the Committee that tourism was the fastest-growing sector. “We are looking into developing and promoting emerging tourism businesses with the intention to grow them and make sure they are sustainable,” she said.
She said R100 million has been set aside to promote domestic tourism, noting that domestic markets have been identified as cultural, township and ocean tourism.
The Committee heard that SA is still a safe destination compared to many other parts of the world.
Committee Member Mr Boingotlo Nthebe said perceptions about safety are an issue. He cited an example of a recent trip to Zambia where he had heard stories about incidents of xenophobia. “But when we got to Zambia, none of that was happening. We walked between the conference venue and the hotel, and we had lunch in a nearby mall. Safety was not an issue,” Mr Nthebe said.
He said South Africa remains a safe country to visit, despite isolated incidents. He urged SA Tourism to get South Africans excited about local tourism.
The Chairperson of SA Tourism Board, Ms Tanya Abrahamse, shared her view that safety is an issue worldwide, but it was not a good idea to say that tourists are safe when locals are not. “But the challenge is that safety is not our core business. As much as we want it, some other people will have to come and play their role. Travelling is good for the economy.”
Africa Check tackles the claim that all tap water in Africa is ‘unsafe for human consumption’.
Is drinking tap water in Africa “risky business”?
An infographic published on the UK’s Mail Online claimed this, saying that tap water in every African country is “unsafe for human consumption”.
Africans were quick to jump to the continent’s defence, including theAfrica Check team based in South Africa. Many branded the claim a generalisation and said that they drank African tap water daily withoutany ill effects.
“I drink ‘African tap water’ everyday and I’m healthy as a horse,” tweeted a user called Sandrine.
Is the claim true? And how was this conclusion reached? We looked into it.
Infographic not based on water quality tests
The infographic, originally published by budget airline website Just the Flight, used “information taken from the United States Centers for Disease Control and Prevention (CDC)”.
The CDC’s media relations representative, Christine Pearson, told Africa Check that the infographic was likely based on a cellphone app they had produced called “Can I eat this?” The app, Pearson said, “gives recommendations on food and water safety while traveling globally”.
Pearson said that the CDC does not test tap water globally. “The water part of the app was based on the [United Nations Human] Development Index data,” she said.
This UN index is a measure of human development on a scale of 0 to 1. This closer the score gets to 1, the higher the level of human development.
The CDC used 0.85 as a cut-off point, meaning that only 31 out of 187 countries were considered to have safe tap water. Pearson did not respond to questions regarding why that cut-off point was chosen as an indicator of water quality.
In contrast, the United States of America’s department of state advises American tourists that “food and water are generally safe” in South Africa, for instance.
‘Very crude’ way to measure tap water safety
Experts told Africa Check the index was not suitable to determine the quality of tap water. Director of theStockholm International Water Institute’s Africa regional centre, Anton Earle, told Africa Check the cut-off point appeared arbitrary.
Water resource management scientist Anthony Turton said the use of the index as an indicator of water safety was “very crude”. He added: “If it were true then there would be millions of people sick, which is not the case.”
Senior advisor for Water, Sanitation and Hygiene at Unicef, Andrew Trevett, told Africa Check that if the cut-off point were accurate then “countries such as Portugal, Poland and Hungary, all of which are in the European Union with stringent water safety regulations, would be categorised as not having safe drinking water”.
African data is ‘sparse and rather outdated’
Tracking down reliable, comparable data on water quality in Africa is difficult. “Data from Africa is currently very sparse and rather outdated,” said Philipp Saile, coordinator of the United Nations Global Environment Monitoring System and Water Data Centre in Germany.
The Switzerland-based Rural Water Supply Network’s Sean Furey said that piped water access in Africa had barely increased in recent decades and that new points of access “do have water quality problems – the biggest of which is the lack of water quality data”.
The United Nation’s Saile directed Africa Check to nationally-representative World Health Organisation (WHO) studies conducted between 2004 and 2005 in Ethiopia and Nigeria.
In Ethiopia, out of 832 piped water samples 80.4% met the WHO’s guideline standards for micro-organisms, faecal streptococci, arsenic, fluoride and nitrate levels.
The same study conducted in Nigeria, found that 77% of 630 piped water samples met the WHO’s standards. Borehole water levels were actually found to have higher levels of compliance at 86%.
However, this survey could have underestimated the extent of piped water contamination. A 2012 article published in the International Journal of Environmental Research and Public Health suggested that “one round of water quality testing is unlikely to capture the true extent of microbial contamination that might occur over a long period of time at a given source.”
More than 98% of SA tap water is safe
The quality and safety of tap water within countries can also vary greatly. Earle told Africa Check that “there are usually big differences between various parts of countries – strong rural-urban divides exist”.
“To lump together an entire country as equal risk seems extreme,” said Bartram. He explained that there are “huge sub-national differences” in the quality of tap water within countries.
This is evident in South Africa. In 2012, while 98.3% of municipalities complied with water safety standards – according to the government’s Blue Drop certification system – the department of water and sanitation warned residents of Umsombomvu Local Municipality in the Northern Cape and Nketoane Local Municipality in the Free State, amongst others, not to consume tap water without home disinfection treatment.
Conclusion: Not all tap water in Africa is ‘unsafe for human consumption’
The UK Mail Online’s claim that all tap water in Africa is “unsafe for human consumption” is false. Studies in Nigeria and Ethiopia, although dated, found that over 70% of piped water samples met international guidelines. In South Africa, over 98% of assessed municipalities meet the country’s water standards.
The claim, like many about the continent, is a sweeping generalisation that ignores the differences both between and within countries. However, Bartram notes that “as advice to a traveller, and especially a risk averse traveller, it may nevertheless be appropriate”.
South African Transport Minister Dipuo Peters has urged other African countries to join the eleven (including South Africa) that, in January, decided to liberalise air transport between them and create a single air transport market by 2017. She did so in a speech officially opening the recent Aviation Stakeholders Convention, which was delivered on her behalf by Department of Transport director-general Pule Godfrey Selepe. “This [agreement] is a massive achievement for the aviation industry on the continent as a whole,” he read. “Africa is big enough for all member States benefiting from joining these eleven countries.”
Peters expressed an understanding for those countries that wished to protect their national airlines, but pointed out that this was damaging air transport in Africa as a whole. “Liberalisation can lead to increased service levels and lower fares.” In turn, these would facilitate trade, tourism and enhance economic growth and development. She highlighted how those African countries which had already liberalised air transport on a bilateral basis had benefited as a result. These included South Africa, Ethiopia, Kenya and Zambia. Liberalisation of the South Africa–Kenya route in the early 2000s had, for example, increased air travel between the two countries by 69%.
She also pointed out that agreements which allowed low-cost carriers to operate between African countries had, in particular, led to fare reductions. However, within the Southern African Development Community, some countries were maintaining closed air transport regimes.
Peters also highlighted the importance of air safety. “South Africa remains committed to supporting safety initiatives. . . . South Africa is a key member and participates in regional air safety groups and initiatives.”
Peters was seconded by Director of Civil Aviation in the South African Civil Aviation Authority Poppy Khoza in her subsequent address to the convention. She also argued that Africa needed to liberalise its air transport sector. “We need to implement the Yamoussoukro Decision as a matter of urgency.” The decision mandates the liberalisation of the continent’s aviation sector. Implementation of the decision will stimulate development, economic growth, investment and employment across the continent and should be done speedily, she argued.
“States do need to remove trade barriers [between] each other,” she stated. “It has become clear that Africa will have to focus on benefiting from the forecast [economic] growth.” Yet, while not one African country has fully implemented the Yamoussoukro Decision, 23 have signed ‘open skies’ agreements with the US.
Because the implementation of the decision has been slow and limited, its benefits have not yet been realised. “In Africa, we have the greatest number of landlocked countries in the world,” she pointed out. “This increases the need for air transport.”
Moreover, the continent’s middle class, currently about 200-million strong, will continue to grow. “Africa has long remained an untapped source of aviation growth.” It is essential that the African aviation sector benefits from this situation. But, currently, 82% of intercontinental traffic to and from Africa is carried by non-African airlines. “We have only 18% market share.”
“There is a growing need for fast, efficient transport between countries, especially in Africa,” she said. “If we could unite in our efforts to open up Africa, we could offer competitive [ticket prices]. As a continent, we still need to work on cheap transport.”
This need for cooperation was another theme of her address. “Strong partnerships are indeed essential,” highlighted Khoza. “I would encourage each country to reach out to the continent with its particular strengths.” She observed that a lot of progress had already been made, including through the International Civil Aviation Organisation and its regional bodies, councils and seminars. She also cited South African technical support and specialised training for the aviation sectors of other Southern African countries. “There is a strong need for us, as an industry and a continent, to collaborate.”
The Aviation Stakeholders Convention was held at Emperors Palace, at OR Tambo International Airport, east of Johannesburg.
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The importance of aviation to Africa was highlighted by International Air Transport Association VP: Africa Raphael Kuuchi at the recent Fourth Aviation Stakeholders Convention. “Aviation plays a vital role in Africa’s economic, social and cultural life. Aviation is often the best and sometimes the only option to link this vast continent.” Aviation in Africa has helped create 5.8-million jobs and $46-billion in gross domestic product across the continent. Last year, airlines carried 70- million people into, out of and across Africa.
And the opportunities are vast. “The economics and demographics of fast-growing African countries will lead to tremendous demand for aviation,” he pointed out. “But African operators will need to be ready.” By 2034, there will be another 41-million passengers flying in Africa each year.
The African aviation sector suffers from a number of weaknesses and, currently, only few of the continent’s airlines are profitable. “There are fundamental issues that must be addressed for African aviation to seize the opportunities,” he affirmed. “Africa’s aviation development needs partnerships that are genuine and complementary to home-grown effort.
“Safety is the number one priority,” he stressed. “It is heartening to see improvements in Africa. In 2014, there were no jet hull losses in Africa. The best African airlines are equal to the best in the world.” But losses of other types of aircraft remain high. IATA has already developed, and is helping airlines implement the International Air Transport Association (Iata) Operational Safety Audit (Iosa). But the association has realised that there is a need for a specific programme for operators of smaller planes across the continent. Accidents involving smaller operators worsen Africa’s aviation safety statistics. Consequently, Iata will launch a Standard Safety Programme in Nairobi in June, which is designed to allow the operators of smaller aircraft to benchmark their operations against international standards.
Kuuchi also highlighted the importance of the Yamoussoukro Decision for the liberalisation of the African air transport market. “The African Union is playing a leading role through its advocacy to implement the Yamoussoukro Decision,” he said. “Iata is fully supporting this process. An Iata study last year showed that an extra five-million passengers a year would be generated by liberalising air transport between just 12 African countries.”
At the same conference, South African Airways acting CEO Nico Bezuidenhout called for improved cooperation within Africa’s aviation industry. “This year’s theme, Building and Sustaining Strong Partnerships, is more relevant than ever,” he stated. He also highlighted the role of aviation in uniting the continent and stimulating its development. Road and railway development will not be as rapid as the development of aviation across Africa.
“Passenger growth in Africa is forecast by aircraft manufacturers as being among the world’s fastest,” he reported. The development of aviation infrastructure has had a “profound impact” on the movement of goods and people.
A key question, he said, is whether the African aviation industry has cooperated properly and whether its members have worked with one another. Liberalisation of Africa’s air transport market will have its effects. “Our market will undoubtedly be an area of focus for international operators,” he noted. “How ready are we?
“Events such as [liberalisation] serve to foster cooperation.” Such cooperation would support the creation of a more connected Africa and develop more efficient African airlines. “We have a real opportunity to place Africa’s aviation industry on an upward and sustainable trajectory,” asserted Bezuidenhout. This would benefit the people of Africa.
The development of a sound air transport system for Africa has the support of the International Civil Aviation Organisation (Icao), which is a specialised agency of the United Nations. This was highlighted at the convention by Icao Eastern and Southern Africa Office regional director Barry Kashambo.
He pointed out that sustainable and affordable air transport aids development and benefits the public. ICAO fully supports the complete implementation of the Yamoussoukro Decision. Removing the current restrictions in the market would open “a new era of air transport in Africa”, he said. But the industry must be open. “Transparency is a factor we must take into consideration as we forge ahead.”
“The next two decades are poised to be exciting ones for African aviation,” affirmed Kuuchi. The Aviation Stakeholders Convention was held at Emperors Palace, at OR Tambo International Airport, east of Johannesburg.
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While there have been undoubted improvements in aviation safety in Africa, much remains to be done. This was highlighted last week by International Civil Aviation Organisation (Icao) regional director : Eastern and Southern Africa office Barry Kashambo at the recent Fourth Aviation Stakeholders Convention. African countries set targets for the improvement of aviation safety at a Ministerial conference in Abuja, Nigeria, in 2012. These are known as the Abuja safety targets.
In 2012, runway-related accidents occured in Africa at a rate of 0.59 per million sectors; this had reduced to 0.39 during 2014. However, the Abuja target is a 50% cut in the 2012 figure by the end of this year. The controlled flight into terrain accident rate was 0.17 per million sectors in 2012, falling to 0.11 in 2014. Again, the target is a 50% reduction in the 2012 rate by the end of this year. Loss of control in flight accidents and serious incidents took place at a frequency of 0.17 per million sectors in 2012, but had only reduced slightly to 0.16 last year.
Yet again, the target is a cut of 50% by the end of this year. It was also agreed at Abuja that all States would provide the resources and support the implementation of Icao State-specific plans aimed at addressing safety concerns and do so by July 2013. In fact, most of the States were yet to either implement or update these Icao
State-specific plans. Every country was also meant to implement State Safety Programmes by the end of this year.
However, out of 48 States, none has achieved Level 4 implementation of its safety programme. Only 14 have started the implementation of their pro- grammes and the highest imple-mentation level yet reached is Level 2. All international aerodromes in Africa were to be certified by the end of this year. So far, 45 international aerodromes in 12 countries have been certified: 28% of the total.
All African airlines were required to obtain International Air Transport Association (Iata) Operational Safety Audits (IOSAs) by the end of this year. So far, no African country has required any operators to undergo an IOSA. However, 20 airlines have gone through IOSA training in an Iata-sponsored programme and seven of these had been added to the IOSA registry by the end of December last year.
Slow progress has also been observed in other areas of aviation safety. These include the creation of fully autonomous, properly funded, civil aviation authorities (CAAs) as well as establishing regional safety oversight organisations and regional air accident investigation organisations. “African States should, as a matter of urgency, provide the political and financial com-mitment to make aviation and aviation safety one of their national strategic objectives,” argued Kashambo. “They should provide the resources to enhance and strengthen institutional capacity in the aviation sector.
They should promote the estab-lishment and strengthening of regional safety and accident investigation organisations (there is currently no regional air accident investi-gation organisation in Africa). They must work effectively to reduce the accident rate to levels below the global average. They must establish and strengthen well-funded CAAs. “Strong countries must help weak ones,” he stressed. He cited as an example, and praised, South African support and assistance to Zambia.
Source: Engineering News
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The South African National Roads Agency Limited (Sanral) recently outlined the benefits of its proposed R5.3-billion De Beers Expressway, saying this would result in significant relief in congestion on the Van Reenen’s Pass route.
Sanral communications GM Vusi Mona noted in a statement that the expressway would result in higher levels of safety, comfort and productivity for road users.
The De Beers Expressway section of the N3 would be a 99 km dual carriageway, which would link Keeversfontein, in KwaZulu-Natal, with Warden, in the Free State.
Although the route was part of the N3 Toll Concession, it would not be tolled between Cedra and Heidelburg, and there would be no change to current toll tariffs on the road.
The route would be 15 km shorter than the N3 and would have flatter grades, a smoother alignment and fewer sharp curves. This would result in a 30-minute time saving for light vehicles and a 60-minute saving for heavy vehicles, as well as better levels of service and a reduction in accidents.
The route would reduce the effects of N3 road closures by at least 80% and remove bottlenecks at Van Reenen’s Pass.
Mona explained that the existing Van Reenen’s Pass route, which was built in 1961, was no longer able to effectively handle the growth in traffic volumes. Increase in Accidents The number of accidents on the route had increased in recent years, resulting in many fatalities and road users being inconvenienced through sporadic road closures.
“The existing stretch of the R103/N3 past Harrismith and across Van Reenen’s Pass will remain in place and continue to be maintained by Sanral. “Once the construction of the De Beers Expressway has been completed, there will be two highways crossing the Berg, providing all road users with an alternative route between Keeversfontein and Warden,” said Mona.
He added that, while businesses on the current route would be affected, not all existing traffic would shift to the new route.
Sanral expected one-third of the through traffic to remain on the current route.
Further, Mona stated that Harrismith would become a “boom town” during the expected four-year construction period.
The N3 route had been earmarked as one of the priorities of the multibillion-rand Strategic Integrated Project 2 that was crucial to unblocking economic development and providing much-needed capacity along key freight corridors in South Africa.
Construction of the De Beers Expressway route formed an important component of plans to develop the Durban–Free State–Gauteng logistics and industrial corridor, which was vital to the future of the national and regional economies.
“With Durban handling over 40% of the country’s imports and exports and Gauteng being the country’s economic heartland, generating over 33% of the country’s gross domestic product (GDP), the Durban–Free State–Gauteng corridor is by far the most important economic corridor in the country and this route will directly contribute about R4.4-billion a year towards South Africa’s GDP,” said Mona.
Source: Engineering News
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By: Carol Adams
The potential of integrated reporting to drive changes in the way business does business lies in its focus on long- term strategic planning, the multiple capital concept and its potential to change how we define value. A focus on short-term financial value is increasingly being seen as bad for business, let alone society and our natural resources.
Changing the way business leaders and their investors think is a prerequisite for real change towards social, environmental and economic sustainability. A focus on the longer term and thinking about value in non-monetary terms, means thinking about people, relationships, know- how and the natural environment and how they create value, rather than just what they cost or how we impact on them. And a reading of the best South African integrated reports reveals a concerted effort to think about the business differently.
It is pleasing to see reports which highlight key non-financial performance indicators, along with financial indicators right up front. For example, in Sasol’s case these include environment, safety and equity measures and, in the case of greenhouse gas emissions (only) a quantified long-term (2020) target. It is also exciting to see reports which talk about values and goals in broad terms and analyse the context in which the business is operating, its risks, including reputation risk, and opportunities.
Some of the reports available, such as Sasol’s 2013 annual integrated report, attempt to follow the IIRC’s consultation draft, but they all predate the recently released International <IR> Framework (IIRC, 2013 and Adams 2013). Yet they provide many learnings for companies new to integrated reporting.
Sasol explicitly acknowledges the link between values and behaviour:
“Our shared values define what we stand for as an organisation and inform our actions and our behaviour. They determine the way in which we interpret and respond to business opportunities and challenges.”
-Sasol Annual Integrated Report 2013 p7
So what behaviours is Sasol aiming to nurture? A focus on people, relationships and long term value for those connected with the company: “To grow profitably, sustainably and inclusively, while delivering value to stakeholders through technology and the talent of our people in the energy and chemical markets in Southern Africa and worldwide…our common goal To make Sasol a great company that delivers long-term value to its shareholders and employees; a company that has a positive association for all stakeholders”. -Sasol Annual Integrated Report 2013 p6
‘Sustainably’ in this case might mean both “environmental sustainability and longevity: “We also remain acutely aware of the environmental impact of extending our operations to 2050. We are working on initiatives to mitigate greenhouse gas and carbon dioxide (CO2) emissions as well as on those related to air quality and water stewardship.” -Sasol Annual Integrated Report 2013 p27.
Social and environmental issues feature prominently in ‘top issues impacting our business’ (page 30), but neither here, nor in ‘Looking towards 2050’(page 27) is there any mention of the carbon bubble. Should there be? Well, it has been getting quite a lot of attention, it may impact on value to investors (and employees and stakeholders) and integrated reporting requires identification of material issues and discussion of the context in which a company is operating including risks and opportunities. So, yes, I think there should be a discussion on the likelihood of a carbon bubble impacting on future value.
Sasol appears to see the fight as being with regulators. “Risk of climate change and related policies impacting Sasol’s operations growth strategy and earnings” is identified as a regulatory risk (page 47) with possible regulatory interventions identified as carbon taxes, product carbon labelling, carbon budgets and carbon-related border tax adjustments linked to bilateral agreements.Sasol discusses efforts to reduce Greenhouse Gas emissions, but also notes it is engaging in “co-ordinated regulatory intervention”(page 47). In the context of its concern about the cost of such interventions, this would appear to mean trying to stop them, a move unlikely to be in the interests of protecting natural capital.
The report has been ranked highly (see EY, 2013) and indeed, I did get the feeling that there had been some considerable ‘integrated thinking’, demonstrated by the discussion on value, strategy and the business model. But I was left wondering if all the reported activity around reducing carbon emissions was an attempt to hide the elephant in the room (the carbon bubble) and delay regulation. Of course, I should not be surprised by this (see Adams, 2004 and Adams and Whelan, 2009), but I am disappointed to see integrated reporting used in this way.
On the positive side, Sasol has identified how each stakeholder contributes to value creation (pages 38-9) along with more commonly provided information on how they engage with each stakeholder group, what their expectations are etc. The process of determining materiality set out at the front of the report involved consulting stakeholders amongst other steps.
The Standard Bank Group (SBG) does not suffer the same perception that the nature of its business is fundamentally unsustainable, as some would have of Sasol, but banks come up against scrutiny with regard to the nature of the projects they fund, and they are generally mistrusted by many. Demonstrating a contribution to creating value for the societies they depend on and diligence with regard to the environmental impacts of the projects they fund is therefore critical for their long term success. The Standard Bank Group appears to do this better than many. The real proof of course comes in information about the nature of loans made.
The reader of SBG’s annual integrated report is left with the feeling that the bank sees its success as inextricably linked with its relationship to society. For example, socioeconomic development and provision of sustainable and responsible financial services are identified as material issues.
“The bank aims to embed sustainability thinking into its business processes there are a number of determinants of materiality, including the bank’s values and accountability and responsibility for sustainable development rests with the board” -SBG’s annual integrated report p 46.
The report includes a value added statement (page 49), information on stakeholder engagement processes and explains its approach to environmental and social risk screening. Sustainability risk is explicitly mentioned alongside other operational risks (page 90).
Another strength of the SBG report is its disclosure on remuneration of it executives. Some are not so bold. One of the Guiding Principles of the International <IR> Framework is ‘conciseness’.
At around 130 (Sasol) and 180 (SBG) pages, neither report examined here can be said to fulfil that, but they contain information including financial and governance information which goes beyond the Framework’s content elements.
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