Indirect economic impacts: EC8 - EC9

  • EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

    Integrated Report 2014:

    Barloworld is committed to responsible corporate citizenship, including being responsive to the welfare and socio-economic development needs of the communities in which it does business, custodianship of the natural environment and efforts to address climate change.  It approaches these objectives from a moral and commercial perspective, founded on sound business acumen. 

    The group is well positioned, through the commercial solutions it offers in mining infrastructure, automotive and logistics to invest in the sustainable future of the communities in which we do business. From 2010 to date, financial and in-kind contributions have been made to the establishment of an academic dedicated children's hospital in Johannesburg, South Africa, the late Nelson Mandela's legacy to Africa. Access to Caterpillar earthmoving rental equipment has been provided for the development of the site, a large generator has been donated to ensure energy security for the hospital and use of a rental vehicle provided to the Nelson Mandela Children's Hospital Trust for fundraising.

    In the course of its business, through extensive, ongoing interactions, Barloworld engages with a wide range of stakeholders to understand their interests and concerns so as to construct its value propositions. The group seeks to provide leadership in society by encouraging its leaders to contribute to developmental challenges and act as role models, and by helping to create the responsible leaders of the future.

    The group is committed to spending at least 1% of its worldwide profits after tax on corporate social investment. 

    Through its social investments, the group has over many years sought strategic partnerships, synergies and innovations in public-service delivery that can be taken to scale by the public sector. Through grants, networking, referrals and its insistence on sound management practices, responsible governance and accountability, Barloworld endeavours to build capacity and sustainability in its development partners, where necessary. The group has invested R78 million in such initiatives over the past five years, and R153 million over the past ten years.

    The Barloworld Trust, which implements Barloworld's corporate social investment (CSI) programme in South Africa, differentiates itself from its operations' local, product- or cause-related marketing activities through its structural approach to development, finding and supporting promising initiatives that underpin social and economic development, in order to have greatest impact. 

    The education challenges in South Africa are immense.  As a result, the Barloworld Trust's core focus is on improving the quality of teaching and learning, and providing better access to education. Its strategic approach is to work in long term partnerships with organisations that create sustainable innovations in both public and private education institutions, aiming for early adoption and support of these innovations in education, which can then be taken to scale by the public or private sectors.

    In 2013 and 2014, Barloworld's anchor CSI projects included:

    1. For Systemic Change in Education

    Programme for Improving Learner Outcomes (PILO) is a large-scale programme of interventions at learner, teacher, HOD, principal, school management team, district official, provincial and national government levels with broad-based support to improve the quality of teaching and learning in public schools, with public sector, unions, NGO'S and business. Current initiatives are in Pinetown and uThungulu in KwaZulu Natal and Kuruman in Northern Cape.
    For more information, see

    Bridge convenes / facilitates / manages the work of communities of practice to focus on key leverage points in the education system to create common purpose, peer support and trust amongst stakeholders, maximise resources, contribute to change at a systemic level and vertically link practices to policy creation and implementation.
    For more information, see

    2. To support ECD or early childhood development: 

    Afrika Tikkun provides education, health and social services for children, youth and their families through its community centres and holistic development programmes, starting with high quality early childhood programmes which lay the development foundation for the next generation of young South Africans.
    For more information, see

    Ikamva Labantu's programmes support the most vulnerable in society: orphans, vulnerable children and youth, young pre-school children in early childhood development centres and the aged in Western Cape townships.
    For more information, see

    3. To improve education outcomes in mathematics, science and English

    Independent Schools Association of SA Maths & English Programme provides scholarships to middle range independent schools for grade 9 to 12 to African learners from disadvantaged backgrounds, individuals who have potential, but lack the opportunities to succeed in mathematics, science and English in their current schools.
    For more information, see

    LEAP Science & Maths Schools include six intervention high schools focused on excellence in mathematics, science, English and emotional growth, a teacher training programme, and after-hours tuition.  The LEAP movement also works with a range of partners to effect broader systemic change in education in South Africa.
    For more information, see

    TEACH South Africa recruits, trains and supports top university graduates to teach mathematics, science, English or technology for a minimum of two years in some of South Africa's most under-resourced schools. TEACH's primary objective is to use these TEACH Ambassadors to improve learner achievement in an effort to afford quality education to every South African learner.
    For more information, see

    Thandulwazi Trust - Maths & Science Academy.  St Stithians outreach to improve the quality of maths and science teaching and learning in Gauteng Schools by offering learners at the FET Phase extra tuition in these key subjects at a Saturday School, to up-skill and offer a professional development programme to teachers in government schools across Gauteng, and train new maths, sciences, English and ECD/Foundation Phase teachers through a mentored, in-service training programme.
    For more information, see

    4. To support whole school development:

    PILO ' - see above

    Penreach, a whole school development programme operating from Penryn College in Mpumalanga, provides educational interventions and solutions in a pipeline from early childhood development to career, working with over 900 historically disadvantaged schools in programmes which address in-service skills training and support to mathematics & science teachers, pre-school, primary and high school teachers, principals, school governing bodies and their community structures.
    For more information, see

    5. To facilitate access to tertiary education:

    REAP (Rural Education Access Programme) assists students from poor rural areas in South Africa to access tertiary education by providing information, resources and referrals to grade 11 and 12 learners in rural schools and calling on state mechanisms such as the National Skills Fund (NSF) and the National Student Financial Aid Scheme (NSFAS) to provide full cost bursaries and subsidised student loans. A network of recruitment volunteers offers career information to learners and guides them through the various application processes. REAP also provides students with a structured support and development programme on campus to facilitate success in their studies.
    For more information, see

    6. To promote youth entrepreneurship:

    ENACTUS South Africa (formerly SIFE – Students in Free Enterprise) brings together student, academic and business leaders committed to using entrepreneurial action to improve quality of life and standard of living for people in need. Participating students form teams on their tertiary education campuses to create and implement community outreach projects, an experience which not only transforms lives but helps students develop the talent and perspective that are essential to leadership. Projects are formally evaluated and lead projects go to national and international competitions.
    For more information, see

    7. In support of the environment:

    Endangered Wildlife Trust's conservation strategy involves identifying human-induced threats and affected species to halt or reverse species decline, ensuring the viability of threatened habitats and ecosystems, developing innovative, economically viable alternatives to address harmful impacts to the benefit of people and biodiversity, increasing awareness and mainstream environmental considerations into the daily lives of people and decision makers, exploring and developing opportunities for mentorship and capacity building within the conservation sector and providing a leadership role in ensuring efficient and adequate implementation, compliance and enforcement of conservation legislation.
    For more information, see

    WWF South Africa (World Wide Fund for Nature)'s goals are to ensure that South Africa's biodiversity is conserved and that our footprint remains within the Earth's capacity to sustain life by securing the integrity of South Africa's ecological assets, ensuring that ecosystem services underpin social and economic well-being and building a climate resilient, low-carbon economy.
    For more information, see

    8. To facilitate the role of business in society:

    National Business Initiative (NBI) is a voluntary, non-mandated business coalition which facilitates the role of business in society through national, strategic policy interventions, and projects with a catalytic development impact. Working towards sustainable growth and development in South Africa and the shaping of a sustainable future through responsible business leadership and action, its main areas of operation are in promoting environmental sustainability (water, climate change, green economy, energy efficiency) and socio-economic sustainability (Pathways to Employability through skills development, UN Global Compact support and implementation).
    For more information, see

    9. To build the next generations of responsible leaders:

    Africa Leadership Initiative is a Fellowship established to build capacity and strong networks in next generations of African leaders from business, government and civil society through a programme of seminars on the philosophy of ethical and responsible leadership. Each Fellow is responsible for developing a community project and, post-graduation, becomes part of an alumni which meets at regular intervals to discuss relevant issues and works together towards achieving a good society with social and economic progress for all.
    For more information, see

    The President's Award for Youth Empowerment is a competitive experiential programme of leisure activities for young people that encourages character building, self-reliance and responsibility through service to the community. In prisons, the programme provides a framework for the rehabilitation of young prisoners and, in state-run residential youth facilities, aligns with their individual development plans. In schools, the programme provides a life orientation learning tool for teachers.
    For more information, see

    10. To empower people living with disabilities:

    National Council for Persons with Physical Disabilities in SA (NCPPSA) coordinates the work of national umbrella disability service organisations and a forum to promote the maximum level of independence and integration of people with physical disabilities into society, as well as the prevention of the occurrence of physical disablement. NCPPSA has also created a corps of people with disabilities who have the potential to serve on various public and private sector structures to raise awareness of and facilitate achievement of initiatives addressing disability issues.
    For more information, see

    Barloworld Siyakhula, the group's enterprise development vehicle in South Africa, promotes black economic empowerment by providing financial and non-financial support to small and medium-sized suppliers, contractors and enterprises in its supply chain. Some R103 million in accumulated funds are currently committed.

    Over the past five years the group has invested R78 million through group corporate social investment programmes, of which R33 million was accredited socio-economic development spend.  R16.8 million (2013 R16.9 million) was invested in 2014.  

    Group CSI spend

    Group CSI Spend 2014
  • EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.

    Integrated Report 2014:

    Given the nature of our operations and locations, major indirect impacts result from employee spending and local sourcing. The number of people by region who benefit from employment is reflected below. The overwhelming majority of employees are local.

    Workforce by region

      2014 2013 2012 2011  
    RSA 14 619 13 877 12 570 11 403  
    Rest of Africa 2 357 2 418 2 334 1 905  
    UK & Europe & Russia 2 472 2 632 3 548 3 743  
    Middle East & Asia 161 242 244 291  
    North America 7 13 14 837  
    Total 19 616 19 182 18 710 18 179  
    Numbers exclude Australia

    Indirect economic impacts include: employee spending, providing products and services, enhancing the image and reputation of areas, and job creation that reduces demand on the fiscus and enables resources to be redirected elsewhere. Improving skills is also a benefit.

    Indirect impacts also include providing services and customer solutions that address customer needs and enable them to operate. The group's products and services contribute to the establishing, developing and maintaining of communities, particularly in mining, agriculture, infra-structure, transport and logistical support. Examples include equipment operations in remote mining locations which enable these to continue with benefits for regions and communities.

    Similarly, providing power solutions, such as the Anixas power station in Namibia, provides electricity for local consumption aiding development of communities and industry. On a lesser scale, other power solutions supply power to customers enabling their operations to continue in the event of power supply interruptions. Handling's supply of agriculture equipment, services and solutions, often in remote regions, enable farming activities to continue with consequent indirect benefits.

    Equipment South Africa's Technical Training Academy is an accredited Caterpillar Regional Centre which means it can conduct various technical training courses on behalf of Caterpillar primarily for sub-Sahara Africa dealers including Mauritius, Reunion and Madagascar. As an established mining dealer, mining training will probably also be conducted for Africa, Europe and Middle East Caterpillar dealers.

    More directly, by operating in communities Barloworld creates significant value for local suppliers which include OEMs and sub-contractors. This is reduced where plant and equipment can only be sourced by offshore principals, in which case the commitment is to spend the balance locally. In the Automotive division some 99% of spend is local (including salaries and wages).

    In South Africa,  Equipment divisions' products are sourced from overseas principals resulting in some 26% local spend (as at 30 September 2014), while Automotive and Logistics division sources vehicles through local OEMs resulting in 99% (including salaries and wages) of its spend being locally based. Sourcing varies by regions of activity and division. Handling South Africa sources some 15% from local suppliers. In Russia, given the nature of the Equipment business and sourcing Caterpillar product, some equipment was purchased within Russia but relate to imported products. Excluding these imported products from the spend analysis, Handling Russia spent <5% of its total spend locally. Whilst, international sourcing of products within the Agriculture Russia business leaves little opportunity for local spend, AGCO products are sourced from local suppliers within Russia and SEM products from a related company based in Russia. Handling operations in Mozambique support locally sourced products and services where possible, however, most parts and equipment are sourced from its principal outside Mozambique.

    Logistics sub-contracts a large portion of its business to local contractors. Its freight management services' spend is with international airlines and shipping companies as well as international customs clearing agents and accordingly is weighted towards international suppliers.

    Indirect value for communities also includes the group's support for enterprise development initiatives under the Barloworld Siyakhula umbrella. This principally benefits communities in South Africa, as do the group's preferential procurement initiatives under the B-BBEE umbrella which amounted to some R15.7 billion for the year.

    Barloworld Siyakhula, the group's enterprise development vehicle in South Africa, promotes Broad-Based Black Economic Empowerment through providing financial and non-financial support to small and medium-sized suppliers, contractors and enterprises in its supply chain. Some R103 million in accumulated funds are currently committed.

    Over the past five years R78 million has been invested through the group's corporate social investment programmes with R16.8 million being invested in 2014 (2013: R16.9 million).