Society

Our business case for sustainability rests on our long-term access to raw materials, through resource efficiency, holding operating licences in our host countries and retaining competent and capable people.

Taking stock: performance against commitments

This scorecard summarises our performance against our sustainable development commitments in respect of society.

Commitment	Performance
All mills and forestry operations to have a rolling community engagement plan (CEP) and a socio-economic assessment toolbox (SEAT) process	A decision was made in 2005 to focus our SEAT assessments on those mills and forestry operations considered ‘socially material’, and these assessments have been completed. An exception is Stambolijski, which has recently been re-opened, for which a SEAT will be carried out in 2011. CEPs are in place at most mills, although some of these have not been recently reviewed. However, for all the 'socially material' mills, active community engagement processes and structures are in place. The CEP programme will be rejuvenated in 2011
Make antiretroviral treatment for HIV/AIDS available to all employees in South Africa, and provide training and awareness campaigns in partnership with local clinics and NGOs	Antiretroviral treatment for HIV/AIDS is available to all employees in South Africa, and is provided in partnership with local clinics and NGOs. We have active HIV training and awareness programmes, which include voluntary counselling and testing, in place at all our sites. Details of our HIV efforts can be found in our section on Community health

We want Mondi to be a sustainable, socially responsible business that makes a real and lasting contribution to the communities in which we operate, both through direct and indirect economic contributions and through community engagement programmes.

We aim to engage on a sustainable basis with local communities in close proximity to our operations and those directly affected by our operations in order to build mutually beneficial relationships that enhance the capacity of these communities and improves the quality of life within them.

We focus on sustainable community development initiatives by partnering with other stakeholders and by building human and institutional capacity. We aim to address the real needs of communities and our approach ensures this. Specifically, we encourage partnerships and consistent dialogue with community change agents and key government officials.

Our community investment is focused on the following identified priorities, although we are mindful that there may be site-specific imperatives:

• education and training;
• local economic development;
• poverty alleviation;
• health care and, in South Africa particularly, HIV/AIDS;
• environmental education and rehabilitation; and
• sports and recreation.

We pay particular attention to industry-specific initiatives related to improving the living conditions and livelihood opportunities for the rural poor, including forest sector workers and their families in forestry areas, in accordance with the South African Forestry Sector Transformation Charter, of which we are a signatory.

As part of our vision, we communicate our corporate social investment programmes both internally and externally on a regular basis, and monitor and evaluate the impact and progress of our projects on an ongoing basis.

With regards to management, community engagement programmes (CEPs) and corporate social investment (CSI) strategies are developed by and implemented at each operation, and divisional communication departments are tasked with the responsibility of keeping activity logs. The operations, executive and Board committees regularly review the focus of the CEPs and CSI.

Engaging with communities – SEAT assessments

Mondi is committed to helping host communities build their capabilities and to contributing to their economic and social development. Around the world, we endeavour to build mutually beneficial relationships with national and local communities.

Many of Mondi’s operations are based in transitional or developing economies in which poverty, unemployment, illiteracy, environmental degradation and infectious diseases such as HIV/AIDS are often endemic. In addition, many of our forestry sites are located in rural areas or close to small towns where we are the major employer of local people. Our corporate social investment initiatives are fashioned to address these issues.

All socially material operations at Mondi are therefore required to complete a socio‐economic assessment toolbox (SEAT), which is subject to review every three to five years to identify and manage the operation’s social and economic impacts and improve its overall social performance as necessary. A wide range of internal (including employees and employee representatives) and external stakeholders participate in these. Smaller operations undertake simpler reviews of socio‐economic impacts, opportunities and risks using the principles outlined in SEAT. Culturally appropriate procedures are in place to facilitate the participation of external stakeholders in the SEAT process. The process is led by SEAT support teams, capable of facilitating the SEAT process and its review.

SEAT assessments assist Mondi in developing a structured approach to improve the wellbeing of our communities. SEAT reports drive our community programmes and facilitate improvements in terms of quality, relevance, scope and effectiveness of our corporate social investment programmes and projects.

The SEAT process is undertaken by:

• profiling our operations and their communities within a particular area;
• engaging with the full range of interest groups in the area to identify the perceived positive and negative impacts of our operations;
• producing a management plan designed to meet the community’s development needs and to reduce the negative impact of our activities; and
• compiling and publishing – in conjunction with local shareholders – a local report that provides the basis of the ongoing relationship between the community and Mondi.

SEAT reviews were undertaken in Russia in 2009 and at the South African forestry operations in 2010. Assessments at selected Russian, Bulgarian and South African mills will be performed in 2011.

A review of the SEAT process will be undertaken in 2011, to ensure that it remains relevant to Mondi’s operations and assists us in meeting our commitment to supporting sustainable projects that benefit the local communities which surround our operations and Mondi.

Community engagement programmes

Dedicated community engagement individuals or teams (depending on the size of the operation and the complexity of the community context in which the operation is located) are appointed to take responsibility for our community engagement activities. Indicators and monitoring mechanisms are developed in collaboration with local communities to monitor the effectiveness of our community engagement, and this is reviewed on an annual basis.

Community engagement programmes (CEPs) are in place at all Mondi mills and forestry operations and assist us in maintaining constructive dialogue with our neighbours to ensure that their concerns are raised and addressed. In addition, these programmes ensure that the communities that surround our operations gain social and economic advantages from our activities.

Our CEPs provide for our engagement with our local communities through regular forums, building beneficial relationships with governments and local authorities, engaging with NGOs, local industry and resident associations, local businesses and action groups. CEPs specifically provide for training needs of local communities that facilitate employment opportunities and the enhancement of local skills.

Many of Mondi’s CEPs around the world are based on the findings of the SEAT reports. These serve as the baseline against which we benchmark the progress our operations have made towards meeting CEP goals.

Corporate social investment in 2010

At Mondi, being a good corporate citizen means being a sustainable, socially responsible business that makes a real and lasting contribution not only to the people we employ but also the families they support and the communities in which we operate.

We provide guidance in terms of operational spend on corporate social investment (CSI) activities through discretionary volunteering, financial support through donations and sponsorships. All operations are required to have a CSI strategy, which needs to be developed during the CEP planning process and is required to be based on consultation with the local community. CSI activities must reflect the priorities of local people; the principles of sustainable development; Mondi’s interests and the cost effectiveness of the projects.

The CSI strategy is reviewed annually and is approved by the operation's manager, who is also responsible for the application of a process to review and vet community requests against the aforementioned criteria.

Our approach thus ensures that we invest in those programmes that are most relevant to the needs of our employees and the communities in which they live and work.

Local CSI strategies/plans are based on SEAT findings and CEP processes. Each operation has a CSI budget which is managed locally based on operational requirements. Monitoring and evaluation of those projects we support takes place on an ongoing basis, and includes annual stakeholder feedback. Where necessary, independent research is commissioned to determine the success of our CSI interventions.

During 2010, Mondi contributed some €12,611 million (€9.3 million) towards charitable donations and corporate social investment projects.

CSI is defined as those contributions (either monetary, employee time and resources, or gifts in kind) which bring benefits over and above those directly associated with our core business activities. These investments are generally aimed at addressing needs within a selected target community. The scope generally ranges from philanthropic activities (e.g. donations to charities), to addressing social issues within target communities, to corporate initiatives that directly support the needs and success of the corporate entity (e.g. capacity-building among local residents for employment purposes).

Some of the areas in which we are engaged, and the causes we supported are discussed below and in the case studies indicated.

Community health and welfare

Mondi is engaged in a number of different health and welfare projects around the world that form part of our CEPs. In Slovakia, we support the Central Military Hospital in Ružomberok, where our employees receive medical care. In Russia, we have invested in a voluntary health insurance scheme for employees at our Syktyvkar mill. In South Africa, we support a number of HIV/AIDS programmes, sponsor a trauma centre near our Springs mill and a number of mobile clinics in our forestry operations, and also provide orphans with shelter and basic essentials through the Mkhondo Isibindi Project. In Austria, we support the Caritas Association which helps young immigrants settle in the country and provides a support base for their integration into society and the Austrian job market. See the case study: Integration through education: a new start for disadvantaged children in Austria below.

Integration through education: a new start for disadvantaged children in Austria In January 2009, Mondi initiated its support for Caritas, the international charity whose wide-ranging Austrian programme of social initiatives primarily includes support for children and youth in need, as well as for social education and integration. Mondi’s support of the Caritas programme comprises financial support and employee participation. Working with Caritas accords with Mondi’s belief that a solid educational background facilitates social integration and improves one’s future opportunities. Furthermore, we believe that involving our employees not only improves their understanding of the world around them, but also generates an awareness of their ability to contribute in a beneficial and long-lasting way. See the full case study.

Education and youth

Mondi supports a wide range of educational and research-based projects. In South Africa we support several mathematics, technical and science training initiatives at schools in the Merebank and Richards Bay areas close to our mills, while in our forests, projects include a mobile science laboratory. In addition, we support various measures to improve literacy and English language skills among our employees and in local communities. At Świecie in Poland, we have supported the introduction of two library buses for use in communities close to our operations.

The Mondi Austria Private Foundation, established in 2006, awarded scholarships worth up to €13,000 a year per student. At the end of 2010, scholarships were held by 28 students from 15 countries interested in studying technology, natural science and economic science subjects in Austria. Seven students have already completed their studies. Mondi engages many of these students for internships and vacation jobs and the foundation’s first student (currently completing his doctorate) has been working for Mondi since the summer of 2010. For the 2010 year, 166 applications and over 400 inquiries were received by the foundation from some 79 countries.

Environmental projects

We support a number of environmental projects. Many of these involve working with NGOs, governments and other interest groups. They include the Mondi Wetlands Project in South Africa and the identification of high conservation value (HCV) forests in Russia. See the case study: Protecting Russia’s most valuable forests: identifying HCV areas.

Community development

Much of our corporate social investment expenditure is focused around our forestry operations in South Africa and Russia, and is targeted specifically at community development – see below.

Arts, culture and heritage

We contribute towards arts, culture and heritage in various forms, including supporting and funding cultural events and festivals, bands, community halls, veteran and youth associations, and sponsoring and hosting sporting events and summer camps for the children of mill employees.

An example of our support during 2010 is at Syktyvkar where we sponsor the town's cultural centre, where certain cultural events and festivals are held. Both Syktyvkar and Ružomberok host and sponsor summer camps for the children of employees, as well as recreational and holiday facilities for the use of employees and their families. The Frantschach mill provides a festival room which is used for all types of community events, and which owns or leases various sporting facilities to local associations. The mill also financially supports and promotes a local band that actively contributes to the cultural life of the community.

Meeting the socio-economic needs of our communities

South African forests

The traditional perception of plantations as merely commercial assets is changing, both inside and outside of Mondi. We understand that our plantations have a social impact on our neighbours and we therefore invest in local communities to ensure their long-term sustainability.

We believe our forestry operations can support social and economic development in rural communities across South Africa through job creation, land reform, business generation and improvements to basic infrastructure. We work closely with local government, NGOs and stakeholders to meet our community objectives.

Understanding the needs of rural communities

To determine how best to help communities develop, we carry out participatory rural appraisals (PRAs). A PRA constitutes a focused, in-depth analysis of a targeted community and includes an examination of the demographics, skills-sets and other empirical data. In our South African forests, PRAs are conducted with land claimant communities where we believe this will help improve the basis of our interactions with them.

This process helps us to identify the needs and requirements of a particular community and to plan and prioritise our response. From these we have identified the following key areas of need:

• education, with an emphasis on science and mathematics;
• environmental improvement;
• community and neighbourhood development including the provision of basic infrastructure such as water and electricity;
• the prevention and treatment of HIV/AIDS; and
• local economic development and poverty alleviation.

Work undertaken in 2010

In South Africa, in terms of the Broad-Based Black Economic Empowerment Forestry Charter, we have committed to invest 4% of our net profits from South African forestry operations in communities. In 2010, we invested some ZAR4 million in infrastructure and service improvements, sustainable livelihoods, education, training and health care.

Mondi forests employs approximately 8,500 people through contractors and they in turn support at least a further 40,000 dependants. In line with government objectives to offer all workers decent work, we have taken steps to improve working conditions. These steps include improvements in education and training, transport, accommodation and the re-introduction of feeding schemes. In 2008, Mondi launched the Foods 4 Forests Programme with the aim of ensuring that employees and contractors receive and consume a nutritionally balanced meal during the course of their day’s work. See the case study: Food 4 Forests: providing a nutritious daily meal for forest workers.

In addition, Mondi recognises that that the working conditions of certain field workers in its South African forests needs to be improved by, primarily, eliminating manual debarking, stacking and loading of timber as far as cost-effectively possible.

Our view is supported by research that has been undertaken by Rhodes University, which indicated that harvesting conditions in the South African forests are typically very challenging from an ergonomic perspective. Other studies carried out through Forest Engineering Southern Africa (FESA) listed the following labour-related challenges, especially around the country’s motor-manual harvesting operations:

• high labour turnover (estimated at between 20% to 50%) and absenteeism (estimated to be between 10% and 20%) of forest workforce in South Africa;
• forestry work regarded as ‘desperation’ employment;
• 90% of forest contractors’ workforce paid at minimum wage;
• nutritional deficits, rest break deficit and hydration deficiencies of manual labour in forest operations; and
• problematic health conditions and impact of HIV/AIDS.

Mondi recognises that mechanisation is a pressing and potentially contentious issue. The technical and economic feasibility of increased mechanisation has been tested through pilot studies in the Group in 2010, and these will continue during 2011. The social implications and mitigation measures continue to receive attention and a strategy is being developed to map the way forward.

Through a permit system, we take care to ensure that local people reliant on our forests for sustenance by way of bee-keeping, collecting firewood or cattle-grazing, can access them. Access patterns are monitored closely to protect and preserve local environmental systems.

As part of our responsibility towards people living on our land, we are systematically upgrading tenant villages that provide homes for approximately 16,000 people. Through the flagship Mondi Mkhondo Development Programme in Piet Retief (a partnership between Mondi and government), residents are being offered the chance to relocate to subsidised housing in new agri-villages or urban settlements. These provide improved basic services, better income opportunities and security of tenure.

We have taken action to address the shortage of health care clinics in rural areas, piloting a mobile clinic that provides primary health care, HIV awareness and a voluntary counselling and testing (VCT) service to 30 communities in the KwaZulu-Natal Midlands and Mkhondo regions. See the case study: Mkhondo mobile clinics: providing one-stop health care services below. In addition, we support a number of community health programmes.

The Isibindi Rural Orphan Care Programme is recognised nationally for its support to children affected by HIV/AIDS. In 2010, the programme provided health care, education, food and nutritional support to some 11,000 children. See the case study: Mkhondo Isibindi Project: helping South Africa's vulnerable children.

Our operations take action to combat the economic and social consequences of unemployment by procuring goods and services through local suppliers and supporting educational initiatives that give local business people the skills they need to compete for our business on competitive terms. In South Africa, we have arranged agricultural and livestock training for local people, enabling them to establish community vegetable gardens and better manage their livestock for commercial gain. See also the Economic performance section.

The Mondi Mkhondo Education Centre provides career guidance, education and training to local people. The centre welcomes some 17,000 learners, educators and other visitors per year. See the case study: Supporting education in the Mkhondo region of South Africa.

We actively support the South African Government’s Land Reform Programme, which will see 49% of Mondi land transferred to black ownership over the next five years. We are committed to work with the new forestry owners over a 20-year transition period to assist them to acquire the necessary skills they will need to manage and develop their land (see below).

Russian forests

Understanding community needs

Historically, state forest enterprises have held wide social importance in Russian society, providing employment, offering the opportunity to produce goods and services, and making available a large variety of social facilities for employees and the local population. Despite the recent significant changes, we remain committed to helping our forestry employees and host communities in Russia adapt to changes in our business and ultimately to benefit from them.

Following the SEAT review that took place at our Russian forestry operation at the end of 2009, it was confirmed that the following issues needed to be addressed:

• reaching social agreements with host communities and districts;
• improving communication about strategy and practice;
• improving productivity; and
• updating our technology base.

Improving communication

A schedule to hold at least one annual meeting per region with all interested parties has been agreed to address the lack of communication that has arisen. Syktyvkar has also established forest councils at the regional administration offices. The forest councils include representatives from a wide variety of interested parties. These are already in place at the Udorsky and Priluzsky regions and are now being established in the Ust-Kulomsky region. Furthermore, all stakeholders now have a direct communication channel to Mondi via the Sustainable Forest Management and Certification Department and detailed information on how to access this communication channel has been distributed through all possible media sources. These measures will all help to improve communication and planning.

Mondi Syktyvkar is an active participant in the newly created Komi Forestry Committee, alongside the Komi Republic Ministry of Industry and Energy, local municipalities and the Union of Forest industries of the Komi Republic. The committee’s mandate is to co-ordinate logging activities in Komi. It offers us a channel through which we can disclose Mondi strategy at district and local level and makes sure that our plans optimise the use of forestry resources and benefit small contractors over the next five years. The committee has been widely welcomed at all levels of Komi society and should help us communicate better and play a more effective role.

Mondi Syktyvkar has signed an agreement with a community of indigenous Udorachi people in the Udorsky Region. The agreement identifies and recognises the indigenous people's rights for the traditional use of the forests and ensures consultation on issues which affect these parties, such as logging and infrastructure development. Tranditional uses of hte forests include hunting, fishing, and the collection of berries and traditional medicinal plants. Communities will now be consulted whenever logging operations are being planned. Mondi Syktyvkar has also established a contact for the inter-regional association of the indigenous Komi people ‘Komi Voityr’ and has recently participated at one of their conferences for the first time.

Work in 2010

During 2009, we launched the first stage of the Mondi Forest Academy in partnership with the Komi Republic Ministry of Industry and Energy – creating a database that contains details of vocational institutes that specialise in relevant trades and are willing to offer their services to the academy. The academy’s goal is to develop human resources and boost morale in the Komi forest industry by offering relevant skills training in three key areas – management, harvesting, and transport and forestry – to create a better equipped workforce for Mondi and other partners in the venture, including logging and paper companies.

In 2010, proposals for social agreements with the appropriate regional administrators were agreed. Some Rub 88,686 was invested in nine districts in Komi.

Common initiatives included:

• the repair and reconstruction of social buildings (including schools, hospitals, recreation centres, etc.);
• the acquisition of transport units (including a public bus, an ambulance, a log truck and duty cars);
• the provision of sanitorium vouchers to forest industry veterans;
• the arrangement of local festivals, fairs and celebrations;
• the provision of additional farming equipment to operating households; and
• the provision of firewood and sawn timber.

Land claims in South Africa

Mondi has developed an innovative model for engaging and settling with land claimant communities in South Africa, and is working constructively with government and communities to develop claimant communities into sustainable forestry enterprises. Land claims are enshrined in South Africa’s Constitution to address the wrongs that have deprived many indigenous South Africans of their rightful heritage. We are committed to playing a positive role in meeting the land reform targets that have been set out for the country and the forestry industry.

Mondi continues to partner with the South African National Office of the Land Claims Commission towards implementing sustainable models for the settlement of land claims - ensuring the rights of communities to return to their land while guaranteeing our access to raw materials.

Land claim progress

To date, 11 land claims – lodged by the AmaBomvu, AmaHlongwa, Fakazi, Langa, Isihululu-Egazini, Ogwini, KwaZiqogwana, Nhlangwini, Leeuwnek, Ntshangase and Mkhwanazi communities – have been settled on terms agreed by Mondi, the Land Claims Commission and elected community representatives. These settlements typically include a 20-year sale and leaseback of claimed land to Mondi along with local people’s involvement in the forestry industry.

The tenth settlement, officially concluded in September 2010, provides for the transfer of 258 hectares of Mondi land under forestry to the Mkhwanazi community beneficiaries (comprising 50 households), who will own the land through their Phalane Etsheni Community Trust.

The community will gain ownership of the land and derive a sustainable income from it, while at the same time progressively developing their own businesses to operate along the forestry value chain. See the case study: Mondi signs another forestry land deal.

During 2010, two land claims relating to the Mkwanazi and Ntshangase were settled involving a total of 1,244 hectares. A total of 71 land claims are currently outstanding relating to Mondi landholdings, partly due to the straitened financial position of the Land Claims Commission.

Empowering claimant communities

Critical to Mondi’s approach is to ensure that the land claim beneficiaries receive meaningful and sustainable benefits, and that sources of fibre are both assured and sustainably managed into the future and retain their Forest Stewardship Council (FSC™) certification.

Mondi works closely with claimant communities in an attempt to gain an understanding of their needs and aspirations of using the land in future. We believe that helping claimant communities acquire transferrable skills and gainful employment is key to the development of a successful model for land claims settlement. Local people are offered the opportunity to acquire the necessary skills to follow a career in forestry through the Mondi Bursary Scheme.

In addition, the Mondi Zimele and Mondi Forestry Partners Division assist new timber farmers from claimant communities to win preferential forestry contracts by means of providing dedicated business training, mentoring and funding.

These components play an important part in our active role in helping landowners build capacity, infrastructure and understanding needed to succeed in a transformed social and business environment.

Last change: 18/03/2011