Port of Cape Town

Strategic Environmental Assessment

Socio – Economics Study

Report for:

Stuart Heather-Clark

CSIR, Stellenbosch

REPORT SUBMITTED BY:

Paul Kapelus

African Institute of Corporate Citizenship, South Africa

(Revision by Ralph Hamann)

15 April 2003

Contact Details:

Paul Kapelus

African Institute of Corporate Citizenship

PO Box 37357

Birnam Park

2015

South Africa

Socio-economic study for Port of Cape Town SEA

SUMMARY

The Port of Cape Town is undergoing a Strategic Environmental Assessment (SEA), aimed at integrating the concept of sustainability into strategic decision-making. This report deals with the socio-economic aspects of the SEA. It presents a set of principles and socio-economic indicators that will guide the Port of Cape Town in its development plan. The report makes its recommendations on the basis of a discussion of the socio-economic context provided by the City of Cape Town and the Western Cape Province, and the interactions between the Port of Cape Town and some of its main stakeholders.

The port’s interactions with its stakeholders need to consider international trends in corporate citizenship. These include the need for companies to gain a social ‘licence to operate,’ increasingly vocal expectations amongst civil society groups and others regarding the social impacts of business, growing surveillance by investors of companies’ social performance, and increasing requirements for risk and reputation management. For companies, such as the National Port Authority, these trends require that they implement rigorous social management and reporting systems that emphasise transparent and inclusive interactions with the companies’ stakeholders (groups that affect or are affected by a company’s actions).

For the Port of Cape Town to effectively respond to these expectations, it needs to take into account its socio-economic context and its main stakeholders. The Western Cape and the City of Cape Town provide, by national standards, a fairly well developed socio-economic context, which provides opportunities for the port’s growth. There are also significant challenges, however, such as the high incidence of TB; the port can make a contribution to proactive meeting these challenges. Furthermore, the port makes important contributions to the provincial and local economy by means of facilitating imports and exports, providing direct employment in the port, and supporting various economic activities within or related to the port.

With regard to the port’s stakeholders, the following are highlighted:

  • Employees: Port management needs to achieve its employment equity targets, ensure freedom of association and collective bargaining, and plan for and minimise the negative impacts of restructuring.
  • Businesses within the port property: The significance of these businesses is increasing in line with changing responsibilities for the National Ports Authority; hence there is an increasing need for effective communication between port management and the management structures of these businesses.
  • Small-scale and commercial fishermen: Of particular importance to the small-scale fishermen is the proposed relocation of the Oceana Power Boat Club – this needs to occur in conjunction with a dedicated stakeholder engagement process.
  • Recreational and tourism activities: The port has both beneficial and detrimental impacts on recreational users (e.g. recreational fishermen) and tourism facilities, primarily the V&A Waterfront; these can be managed more effectively in line with an overall stakeholder management system.
  • Homeless people on the port property: Their safety and welfare needs to be catered for in conjunction with relevant authorities, such as the SAPS and the City of Cape Town.
  • Woodbridge Island / Milnerton community: Their concerns regarding beach erosion are dealt with in the Environmental Impact Assessment of the port.
  • The City of Cape Town: Improved coordination between the port and City authorities has become vital for a number of reasons, and such cooperation can best be facilitated by linking existing planning efforts by both institutions (see also the institutional specialists study).
  • Communities and organisations benefiting from the port’s corporate social investment (CSI) programmes: The port has a comprehensive set of CSI programmes, including issues such as HIV/Aids and community development support, yet these initiatives would gain from improved integration, monitoring, and reporting.

The report contains a schematic stakeholder diagram that may provide the basis for a comprehensive stakeholder map that is continuously updated as part of the port’s stakeholder relationship management programme.

Finally, the report provides a table including key socio-economic issues, objectives, targets, indicators, and management guidelines. An abridged version is provided below.

Issue / Objective / Management guidelines
Social Reporting / To produce an accurate and verifiable social report on an agreed time basis. / The reporting process must be based on an integrated information management system within the organisation, incorporating the identification of indicators, continuous monitoring, and regular public reporting.
Stakeholder relationships / To establish a comprehensive stakeholder relationship management plan and resolve potential disputes as soon as possible / The development and continuous refinement of a stakeholder database and the development and implementation of appropriate communication processes with each stakeholder, either in regular intervals or as needs arise.
Jobs and income / To promote jobs and income generation within the scope of activities of the Port of Cape Town. / Identify possibilities for employment creation within the organisation and in the supply chains linked to the port, and to minimise job losses through restructuring.
Restructuring / To mitigate the potential impacts of privatisation. / Negotiate with organised labour the process of restructuring, and to develop and implement a social plan to minimise the negative impacts on workers, their families, and their communities.
Employment equity and diversity / To create a diverse workforce and leadership that can enhance the sustainability of the Port of Cape Town and provide opportunities for previously disadvantaged people. / Implementation and enhancement of the current employment equity plan.
Labour relations / To ensure freedom of association, enhance training and skills development, and establish appropriate communication platforms. / Implementation of current management plans.
Child labour / To develop a policy on child labour within the supply chain. / Engagement with companies active within the port or using port (including the fruit industry) on issues related to child labour.
HIV/Aids / To eliminate HIV/Aids amongst employees, and to have a positive impact on related companies’ approach to HIV/Aids. / Implement and enhance existing HIV/Aids programmes amongst employees, to strengthen the corporate social investment projects related to HIV/Aids (especially in employees’ communities), and to engage companies active within the port or using port on HIV/Aids issues.
Economic contribution / To maximise the positive local, provincial, and national economic impact. / Implementation of the National Ports Authority Bill (2003), whilst minimising negative impacts of restructuring; implementation of guidelines on labour relations, HIV/Aids, and stakeholder relationship management; improving planning coordination with the City of Cape Town; enhancing current efforts at affirmative procurement.
Community development / To promote community development using competencies of port management and employees / Enhance the current corporate social investment (CSI) programme by means of establishing a more integrated CSI policy and management structure, greater integration of CSI efforts into the stakeholder relationship management process recommended in this report, and the identification of competencies within the port that may benefit community development.
Safety and Security / To ensure that employees, customers, suppliers and members of the public are safe from injury and criminal actions. / Consider safety and security issues within the stakeholder relationship management process recommended in this report; sustain and improve the relationship between the port, its users, and the security services.
Port – City Relationship / To ensure that port and city planning frameworks are shared, and where relevant, to have joint planning activities. / Consider relevant City departments key contact points in the port’s stakeholder relationship management process; see also institutional specialists study.

GLOSSARY AND DEFINITIONS USED

AICC / African Institute of Corporate Citizenship
CSI / Corporate Social Investment: The investment in development activities undertaken by an organisation based on philanthropy, funding of development projects and programmes.
CSR / Corporate Social Responsibility: The overall philosophy, strategies and outcomes of an organisation. It focuses on the business as a whole (such as internal and external stakeholder management, the value chain, product stewardship, ethical trading).
CT / Cape Town
EIA / Environmental Impact Assessment
GRI / Global Reporting Initiative
A set of sustainability reporting guidelines.
NGO / Non Governmental Organisation
NPA / National Ports Authority
SA / South Africa
SAPO / South African Port Operations
SAPS / South African Police Services
SEA / Strategic Environmental Assessment
SIA / Social Impact Assessment
A tool for assessing the social impact of a development project.
SRM / Stakeholder Relationship Management
The management system for engaging and being accountable to stakeholders.

Table of contents

Page

1INTRODUCTION

2APPROACH of this study

3International trends in corporate citizenship

3.1Globalisation

3.2Voice of society

3.3Reputation Management

3.4Investment

3.5Social reporting

3.6Stakeholder management

4The provincial and local socio-economic context

4.1The Western Cape socio-economic context

4.2The Cape Town socio-economic context

4.3Implications of the socio-economic context

5The port’s economic contribution

5.1Indirect contribution: imports and exports

5.2Employment in the port and related activities

6The Port and its stakeholders

6.1The port and its employees

6.1.1Employment equity

6.1.2Freedom of Association & Collective Bargaining

6.1.3Potential impacts of privatisation

6.2Economic and recreational activities related to the port

6.2.1Businesses within or using the port

6.2.2Fishing activities and the potential relocation of the Oceana Power Boat Club

6.2.3Recreational and tourism activities

6.3Other community stakeholders

6.3.1Homeless people on the port property

6.3.2Woodbridge Island / Milnerton Community

6.4The port and the City of Cape Town

6.5The port’s initiatives on health, welfare & community development

6.5.1HIV/AIDS

6.5.2The port’s Corporate Social Investment (CSI) programme

6.5.3Safety and security

6.6Towards a comprehensive stakeholder map for the Port

7Objectives, targets, indicators, and management guidelines

8Concluding remarks

9REFERENCES

Figures

Figure 1: Conceptual Approach to Strategic Social Assessment

Figure 2: A schematic stakeholder map for the Port of Cape Town (size of arrowhead indicates immediacy of impact on group or organisation objectives / welfare)

Tables

Table 1: Objectives, targets, indicators, and management guidelines

1

SEA: PORT of CAPE TOWN

Socio-economic study for Port of Cape Town SEA

1INTRODUCTION

The Port of Cape Town is undergoing a Strategic Environmental Assessment (SEA), aimed at integrating the concept of sustainability into strategic decision-making. This report deals with the socio-economic aspects of the SEA. It presents a set of principles and socio-economic indicators that will guide the Port of Cape Town in its development plan. The indicators are based partly on the Global Reporting Initiative 2002 Guidelines, as well as issues raised in the Draft Scoping Report (SEA) produced in July 2002. In addition, some issues not identified during the scoping phase have also been considered. The report makes its recommendations on the basis of a discussion of the socio-economic context provided by the City of Cape Town and the Western Cape Province, and the interactions between the Port of Cape Town and its environment and stakeholders.

The overarching premise in this report is that for the Port of Cape Town to contribute to sustainable development it will have to increase its interaction with society. This requires the establishment of linkages with development planners in the Western Cape Provincial Administration and the City of Cape Town, and effective communication with community based organisations (CBOs), non-governmental organisations (NGOs), and all port users. Understandably this is not an easy task for an organisation that has been “cut-off” from society for so many years, but from the research it is evident that there are many opportunities for these linkages to be strengthened.

A significant challenge for the Port of Cape Town is to develop an integrated management system that allows for all aspects of the business that has an impact on the socio-economic environment to be co-ordinated, monitored and reported on to stakeholders.

2APPROACH of this study

The approach adopted in this study has been somewhat different from a traditional social impact assessment, where every issue associated with the various interested and affected parties is investigated and each impact addressed. This study has aimed to develop the PRINCIPLES of promoting a sustainable development framework for the Port of Cape Town. As a result not all stakeholders have been engaged in the research; and even when stakeholders were engaged it was necessary to emphasize that the aim of the research was not to solve their particular issue, but rather to understand the underlying principles of the issue. The generous time given by people for this research is much appreciated.

In order to investigate the principles of integrating the Port Development Framework with the social environment it is necessary to deal with three sets of interlocking environments – first, the internal port social environment, comprising issues such as HIV/AIDS, employment equity, job creation, safety and security, procurement; and second, the external social environment, including issues such as HIV/AIDS, jobs and income, access to the port facilities, housing and poverty. The third environment is the way the port functions and the roles of various departments, which have a social, function – for example, human resource development, corporate affairs, procurement, safety, health and environment. Where these three areas overlap constitutes the strategic interaction between the business of the port and the internal and external social environments. It is in this interaction that social management principles are required.

Figure 1: Conceptual Approach to Strategic Social Assessment

The study has undertaken the following:

  • Secondary data collection;
  • Interviews with key people from the Port of Cape Town, the City of Cape Town and key port users. These included the Environmental Department, Human Resources, Port Engineering, Marketing, Corporate Social Investment, Security, Health Services, City Planning, Oceana Powerboat Club, Fruit Growers Association, Wesgro; South African Police Services.
  • Observation of SIA public participation meeting in Milnerton.

It is important to note that a strategic, targeted research approach was undertaken, rather than a broad, open-ended research approach that allows issues to come to light through the process. In this regard an initial step was to analyse the key points of interaction between the port, the hinterland and the City of Cape Town.

In the context of a port-society relationship the scope of the social environment includes the following issues:

  • Stakeholder relationships;
  • Community social investment run by the Port of Cape Town;
  • Employment equity;
  • Socio-economic contribution relating to employment;
  • Management of recreational facilities;
  • Health including HIV / AIDS;
  • Public access to port facilities;
  • Port / City relationship.

3International trends in corporate citizenship

In today’s dynamic business environment there are a number of international trends that are driving this change for greater private sector commitment to corporate citizenship and the development of a sustainable development agenda. These include:

  • Globalisation
  • Voice of society
  • Reputation management concerns
  • Investment decisions being linked to social risk
  • The development of social reporting
  • The promotion of a sustainable development agenda
  • Increasing need for effective stakeholder management

3.1Globalisation

Over the past two decades multinational/transnational corporation activity has expanded considerably. There has also been significant international consolidation in all sectors including the sugar industry. With the private sector being seen as having more than simply economic influence but also substantial political and socio-economic influence as well as being perceived as conduits for technical and economic benefits there has been a resulting increase in pressure for companies to develop a corporate citizenship agenda. There is a an increasingly complex dynamic at play for the private sector, and in particular large companies who operate in a number of countries, to maintain their overarching business interests while at the same time respond to both local and international pressures for them to play a greater and more active role in benefiting society at large. The World Bank Business Partners in Development has articulated a set of global motivations for being actively involved in promoting sustainable development. These include:

  • Gaining and maintaining a ‘licence to operate’ from society
  • Reducing long term dependency on any given industry
  • Resolving or preventing disputes that might compromise financial returns
  • Creating new social capital to be called on in times of difficulty
  • Becoming a ‘organisation or company of choice’ for governments, and those granting leases, as well as for customers and employees

3.2Voice of society

There is a growing ‘voice of society’, particularly in South Africa, where companies and industries are seen to have benefited under the previous government’s policies, to address past inequalities and broaden the economic base of society as a whole. There is also a shift from a ‘tell me what you have done’ to a ‘show me what you have done’ culture on behalf of a range of stakeholders looking at corporate commitment to social issues. Public concerns have given rise to various codes of conduct including the UN’s Global Compact, the Rio’s Earth Summit’s Agenda 21, ISO 14001, the Commonwealth and OECD principles on corporate governance, the International and Chamber of Commerce’s Business Charter for Sustainability. In South Africa the recently released update to the King Report on Corporate Governance also places significant attention on the role of stakeholders and looks at the growing focus on triple bottom line reporting.