BROAD-BASED BLACK ECNOMIC EMPOWERMENT

• BBBEE Independent Verification Certificate.pdf

The group is conscious of its responsibility to progress Black Economic Empowerment (BEE) in South Africa and local economic empowerment in the host countries of Illovo’s sugar operations outside South Africa. In this regard, the group has adopted an integrated approach which encompasses meaningful and sustainable participation of Black people at all operations of the company and promotes participation of communities in the value chain of the sugar industry.

In South Africa, relative to the Codes of Good Practice on Black Economic Empowerment (the Codes), which were issued in February 2007 in terms of the Broad-Based Black Economic Empowerment (BBBEE) Act, 2003, for the year ended 31 March 2008, the company was audited by an external verification agency and was rated as a Level 5 Contributor, having attained an aggregate score of 59.20%; comprising the component scores as reflected in the table below -

In the 2009 Financial Mail / Empowerdex Top Empowerment Companies report, the company was ranked 47th overall and 3rd in the food and beverages sector. In terms of the various BBBEE elements, Illovo was ranked 1st on enterprise development. Against the background that rural development constitutes one of the major national priorities and given that the bulk of the company’s enterprise development initiatives were geared towards support for emergent Black growers, this is a significant achievement. .

Particular attention is given to preferential procurement from and outsourcing to Black enterprises and service providers, including the development and support of outgrower schemes. During the 2008/09 season, revenue paid to small, medium and large-scale Black farmers for their cane supplies in South Africa amounted to R194 million.

Since the initiation of the programme for the sale of the company’s farms to Black people in 1996/97, Illovo has sold 58% of its cane lands to BEE companies and commercial farmers. Another farm sale is expected to take place in the current year.

To-date, in terms of the Restitution of Land Rights Act, 1994, land claims covering approximately 55% of the total areas under cane which supply cane to the company’s mills in South Africa, have been gazetted. Most of these claims have been made on behalf of local communities which reside in the relevant areas. The process has been particularly protracted and many of the affected growers remain uncertain of their futures. Many of the claims are being contested by the growers. However, where such claims are successful or where growers willingly agree with the Department of Land Affairs and / or the Commission on Restitution of Land Rights to make their farms available to the local communities, the company is actively involved in seeking to ensure that the properties concerned can continue to be farmed on a longterm sustainable basis.