AECI’s management of SHE-related issues is
guided by a formal SHE Policy, with performance
being measured in the context of supporting
SHE Standards. The Policy and Standards,
which are agreed to and approved by the
Group Chief Executive, are reviewed periodically,
and most recently in 2008, by the Corporate
Citizenship Committee on behalf of the Board
to ensure that they remain appropriate to
AECI’s diverse businesses and the changing
At the beginning of each year, the Managing
Directors of AECI’s businesses are required to
submit a Letter of Assurance with respect to
SHE-related issues to the Group Chief Executive.
This, inter alia, provides confirmation that the
particular business complies in all material respects
with AECI’s SHE Standards. In the event that such
confirmation cannot be given, the Letter details
the nature of the non-compliance, as well as the
intended corrective action.
AECI comprises a broad spectrum of businesses,
ranging from large manufacturing plants producing
chemicals and explosives, to small operations
on customer sites which provide application
services, as well as property leasing and
development activities. In addition, many of the
Group’s operational sites are situated outside of
South Africa, sometimes in relatively undeveloped
countries. Consequently, SHE-related issues
faced by the 21 businesses in the portfolio are very
diverse. It is inevitable, therefore, that a certain
degree of generalisation occurs when commenting
on such varied activities within a single report.
Responsible Care™ is the global chemical
industry’s voluntary initiative for continuous
improvement of performance in safety, health and
environmental practices. It is a public commitment
to responsible management and stewardship of
products and services through their lifecycle.
It is also the vehicle used by the industry in its pursuit of
improved SHE performance and product stewardship.
Responsible Care™ was launched by the Canadian
Chemical Producers’ Association in 1984 and has
since been adopted in 60 countries. The Chemical
and Allied Industries’ Association is the custodian
of Responsible Care™ in South Africa, and
142 South African businesses are signatories.
The Responsible Care™ Standing Committee,
currently chaired by a Senior AECI Manager, is
responsible for guiding the programme. In line
with the guidelines of the International Council
of Chemical Associations, the South African
programme is based on eight fundamentals:
- a formal commitment by each member company
to a set of guiding principles;
- a series of codes, guidance notes and checklists
to help companies fulfill their commitment;
- the development of indicators against which
improvements in performance can be measured;
- open communication on SHE matters with
interested parties, both inside and outside
- opportunities for companies to share views
and exchange experiences on implementing
- consideration of how best to encourage all
member companies to commit themselves to,
and participate in, Responsible Care™;
- a title and logo which clearly identify national
programmes as being consistent with, and part
of, the Responsible Care™ concept; and
- procedures for verifying that member companies
have implemented the measurable or practical
elements of Responsible Care™.
AECI and its chemicals and explosives businesses
are signatories to Responsible Care™. In South
Africa, signatories have their compliance with
the Management Practice Standards verified by
third-party auditors. The majority of signatory
companies in the AECI Group have been audited
successfully against these Standards.
In the broader area of corporate responsibility,
AECI was again included in the JSE Limited’s Socially
Responsible Investment Index in 2010. This index
was introduced by the JSE Limited a number of
years ago to measure the triple-bottom
line performance (environment, society and
economy) and the governance performance of
listed companies. Companies are assessed in
terms of policy, performance and reporting. The
criteria are updated each year and now include the
consideration of factors such as climate change.
The guiding principles underlying AECI’s remediation
activities are to protect human health and the
environment; to use good science, proven
concepts, and best available technologies not
entailing excessive cost; and to work with regulatory
authorities and share information with interested
and affected parties.
A risk-based approach guides the remediation
process. In addition, human health and
environmental risk assessments are undertaken
at appropriate stages of individual projects. These
assessments influence subsequent activities.
Spending on remediation and related environmental
management activities in 2010 amounted to
R9 million, compared to R13 million in 2009.
As noted in the previous reporting period, this
expenditure is relatively low compared to that incurred
a number of years ago. Most of AECI’s environmental
legacy remediation investment is now complete.
Furthermore, market conditions in 2010 were such
that little land was required to be released for sale.
Therefore, remediation requirements were
restricted since the timing of such activities is
closely aligned to that of the sale of parcels of
land. It is unlikely that remediation expenditure will
increase significantly in 2011.
At 31 December 2010, the environmental liability
for the Group was estimated at R164 million for
remediation and was fully provided for.
This section deals with current operations and
excludes waste arisings from land remediation
activities. Data from AEL Mining Services (AEL)
operations outside of Modderfontein are included
for the first time.
Total water usage for the year was 4,87 million
The vast majority of the 43% increase in the
Group’s reported water consumption is due
to the inclusion of AEL’s operations outside of
Modderfontein. With the significant expansions
in Indonesia, these international operations now account for 39% of the water consumed by the
mining services business. AEL’s Modderfontein
operations also increased their water consumption
as a direct result of increased production.
WATER USAGE (MILLION LITRES PER YEAR)
WATER USAGE BY BUSINESS SEGMENT (%)
The specialty chemicals cluster’s use of water
increased by 8% year-on-year, largely as a result of
increased production. A similar situation prevailed
at Heartland’s Umbogintwini operations, where
water consumption was 15% higher. Increased
production at STF’s upgraded manufacturing
facilities also resulted in marginal increases
in water consumption.
HAZARDOUS WASTE ARISINGS (TONNES)
HAZARDOUS WASTE ARISINGS BY
Total hazardous waste arisings for the year were
4 971 tonnes.1
Businesses in the specialty chemicals cluster
reduced their generation of hazardous waste by
24%. This was more than offset by the increase
in waste generation reported by AEL. Part of
this increase was due to the need to dispose of
592 tonnes of waste sulphuric acid during the year.
This acid had previously been supplied to battery
manufacturers. In 2010, however, there was
insufficient market demand to absorb the
full volume. The larger portion of the increase
(1 496 tonnes) was attributable to arisings
from AEL’s operations outside of Modderfontein –
sites not reported on in previous years. Hazardous
waste arisings from Heartland were minimal.
Environmental improvement targets for all AECI
businesses are being developed and it is anticipated
that these will become applicable by mid-2011.
There were 10 environmental incidents in the year
as follows: 1
- Clean-up of a sulphuric acid spillage from a road
tanker dispatched from Chemical Initiatives in
KwaZulu-Natal required the temporary closure
of the N2 freeway;
- 500 litres of tall oil leaked from a tank at
Resitec’s site in Lages, Brazil;
- About 5 tonnes of emulsion from AEL were
spilled on the side of a road near East London
when a Mobile Manufacturing Unit overturned;
- About 10 tonnes of emulsion were spilled near
Bogoso, Ghana, when a vehicle overturned;
- A vehicle transporting products for Plaaskem
was involved in an accident on the Hexrivierpoort
Pass, Western Cape, resulting in a chemical spill;
- About 5 tonnes of assorted chemicals were
spilled on and next to the N3 highway when a
contractor’s vehicle transporting products for
ImproChem was hit by another vehicle;
- 34 tonnes of bagged ammonium nitrate fell
from a contractor’s truck near Kapirimposhi,
Zambia, following a head-on collision with
another truck carrying lime;
- 24 tonnes of emulsion were spilled near
Chililabombwe, Zambia, when a contractor’s
- About 5 tonnes of ammonium nitrate were
spilled near Chingola, Zambia, when a
contractor’s truck was hit by another vehicle;
- 16 tonnes of emulsion were spilled near Solwezi,
Zambia, when a contractor’s tanker overturned.
In all cases, clean-up was carried out successfully,
with no significant permanent environmental impact.
Climate change issues
There is an overwhelming preponderance of
scientific evidence showing the effect that increased
concentrations of greenhouse gases are having on the
earth’s climate. As a result, it has become increasingly
important for companies to measure and report on
their emissions of these gases. The Carbon Disclosure
Project is an international organisation that works
with stakeholders and organisations to encourage
the measurement and disclosure of greenhouse gas
emissions. The Project is being promoted in South
Africa by the National Business Initiative, and AECI
again took part in this initiative in 2010.
The term “carbon footprint” is commonly used to
describe the total quantity of carbon dioxide (CO2)
and other greenhouse gas emissions for which
an organisation is responsible. AECI’s carbon
footprint has been calculated with the assistance of
external consultants, ERM South Africa, using the
2006 Intergovernmental Panel on Climate Change
Guidelines for National Greenhouse Gas Inventories
and the Greenhouse Gas Protocol’s Corporate
Accounting and Reporting Standards, as developed
by the World Resources Institute and the World
Business Council for Sustainable Development.
In terms of the organisational boundaries of the
study, the financial control approach was followed.
In terms of this approach, all operations under the
financial control of AECI were included within the
carbon footprint boundary, and 100% of emissions
from these operations were included.
In terms of the operating boundaries of the carbon
footprint, the following were included:
- Scope 1 direct emissions – emissions from
the consumption of fuel in mobile equipment;
emissions from the consumption of fuel in
stationary equipment; emissions released
from processes occurring at operations;
refrigerant usage in air-conditioners and
- Scope 2 indirect emissions – indirect emissions
which arise from the generation of purchased
electricity and purchased steam consumed by
The organisational boundaries for which the
footprint was determined were as follows:
- all significant AEL operations, including those
outside of South Africa, together with the
footprint associated with rock-on-floor contracts;
- all specialty chemical cluster operations,
including those outside of South Africa;
- all Heartland operations;
- the operations of SANS Technical Fibers, USA.
The carbon footprint calculated for 2009 is
presented for comparative purposes. There is an
increase in the quantities reported in 2010, for the
- in 2009, only AEL’s operations at Modderfontein
were included, whereas in 2010 operations
elsewhere in Africa and in Indonesia were added;
- the changes in the figures reported by the
other businesses are largely as a result of an
improvement in the quality of reporting, and the
inclusion of information related to individually
small sources of carbon emissions.
Emissions other than CO2 can also have a
significant impact in terms of global warming
potential. Ammonium nitrate is used extensively
in the explosives and fertilizer industries and is
manufactured from nitric acid and ammonia. AEL
has two nitric acid plants at Modderfontein. Nitrogen
oxide gases are produced through the oxidation of
ammonia on a platinum-rhodium metal catalyst gauze
in the ammonia burners of AEL’s nitric acid plants.
The ammonia is first oxidised to nitric oxide and
then to nitrogen dioxide, which in the final reaction
is absorbed in water to form nitric acid. Some of
the ammonia is converted to nitrous oxide in a
side reaction, which is usually released into the
atmosphere as it does not have any economic
value or toxicity at typical emission levels.
However, it is a greenhouse gas with a global
warming potential approximately 310 times per unit
mass as that of CO2.
To combat global warming, a number of countries
have ratified the Kyoto Protocol, thereby committing
to reducing their emissions of greenhouse gases,
or to engage in emissions trading if they are to
maintain or increase emissions of these gases.
Provision was made in the Kyoto Protocol for the
registration of Clean Development Mechanism
(CDM) projects, which allow participants in
developing countries to generate Certified Emissions
Reductions (CERs) by lowering their emissions of
greenhouse gases. CERs can then be sold to those
entities that are under an obligation to reduce
greenhouse gases but are unable to achieve the
AEL has registered two CDM projects with the
United Nations Framework Convention on Climate
Change. These are for the No. 9 and No. 11 nitric
acid plants, and they were registered in November
2007 and February 2008 respectively. The projects
involve the installation of secondary catalysts in the
ammonia burners of the plants, below the primary
gauze catalyst. This secondary catalyst decomposes
the residual nitrous oxide without affecting the
production of nitric acid.
During 2010, the Heraeus secondary catalyst on
No. 9 nitric acid plant achieved an average reduction
of 59%. The total reduction for the campaign period
was the equivalent of 33 922 tonnes of CO2.
Owing to cost considerations, performance issues
and the good performance of the Johnson Matthey
secondary catalyst on No. 11 nitric acid plant, a
decision was taken to convert No. 9 to the same
catalyst from September. The plant experienced
a mechanical breakdown at the end of October
and this precluded the proper testing of the
newly-installed catalyst. However, all initial
indications are that this catalyst performs better.
No. 11 completed its second campaign, with the
Johnson Matthey secondary catalyst achieving a
reduction of 89%. This translates into a reduction
of 171 759 tonnes of CO2 equivalent.
Safety and health performance
ALL WORKERS TRIR
Safety and health performance is expressed
as the Total Recordable Incident Rate (TRIR).
Prior to 2010, AECI reported statistics separately
for employees and contractors. From this year,
the two statistics are combined to reflect the
incident rate for all who work at AECI’s facilities.
For information, the separate figures are still shown
in the table on page 114, per business segment.
It is gratifying to report that in 2010 AECI achieved
its lowest ever level of worker injuries and illnesses.
The rate of 0,60 1 represents a 23% reduction from
the level recorded in the prior reporting period.
AECI benchmarks itself against an appropriate
grouping of international companies, with zero
incidents being the ultimate target. Given the
need for continual improvement, AECI’s Executive
Committee has adjusted the maximum tolerable level
for the TRIR for 2011 to 0,90 from 0,95 in 2010.
The benchmarked TRIR graph presented here
has been compiled by an independent consultant,
Rob Ferrie, from the latest information publicly
available from the various companies’ websites at the
time of writing. These companies were selected on
the basis of their operations being similar to those of
AECI’s businesses. Due to minor variations in reporting
formats, the rate was recalculated in certain cases
to provide results uniform with the USA’s Occupational
Safety and Health Administration system of reporting,
which is the basis for AECI’s own reporting.
The majority of these companies report their
statistics on the basis of all workers, as AECI
has done for 2010. However, unlike AECI, some
companies have not included occupational illnesses
in their figures.
TRIR performance by business segment
The mining services and specialty chemicals
businesses showed exceptionally pleasing reductions
in their incident rates. The property business
recorded an increase in incidents, largely relating
to a substantial demolition project under way in
the Western Cape. The injury rate for the fibres
business, while still unacceptably high, was half that
for 2009 and none of the injuries that occurred
No fatalities occurred in the Group’s operations
OCCUPATIONAL ILLNESS RATE
The occupational illness rate for 2010 was 0,03. 1
Three occupational illnesses were reported in
2010. An employee at AEL’s Modderfontein site
was diagnosed with silicosis and another was
removed temporarily from the workplace due to
elevated blood lead levels. A third AEL employee,
working on a mine, was diagnosed with contact
dermatitis. The underlying causes of all three
illnesses were rigorously investigated and action
plans were put in place to prevent similar illnesses
in the future.