Five steps to effective contractor safety …

1 FIVE steps TO effective contractor safety MANAGEMENT385 IntroductionWe at Lonmin are committed to creating a workingenvironment based on zero harm to our employees, to ourcontracting partners, and to the communities that host ouroperations. We also realize that reaching this goal is ajourney and not a destination. This paper describes how wehave taken the first steps in this journey more specificallyas regards our contractor health and safety the 2003 Mine Health and safety Summit,commitments were made by the CEOs to achieve the 10-year milestones, as per Chamber of Mines circular 2005 -- in the platinum, coal and other sectors - by 2013achieve constant and continuous improvement equivalent tocurrent international benchmarks ( fatality frequencyrate), at the least . Figure 1 shows Lonmin s performancecompared with the entire platinum industry as well as the2013 milestone. It should be noted that the majority ofLonmin s fatalities in 2011 hit contractors and first step was to recognize that part of the issue wasthat much of our work is outsourced on a contractor , we had no illusions -- hiring a contractor toperform a service did not absolve us of the obligations toprovide a healthy and safe place of work.

2 However, whileLonmin has many years of experience in dealing withcontractors who manage core and non-core activities, thesepartnerships were proving to be an internal challenge asregards appropriate contractor health and safetymanagement. The main issue was that Lonmin s variousdivisions tended to have different health and safetyrequirements. Furthermore, this lack of a standardizedapproach to contractor safety management increased therisks to the organization. In addition, a non-standardizedapproach did not promote sustainable performance andJULIES, and BARNARD, Five steps to effective contractor safety management: sharing the Lonmin experience. The 6th International PlatinumConference, Platinum Metal for the Future ,The Southern African Institute of Mining and Metallurgy, steps to effective contractor safety management: sharingthe Lonmin JULIES and BARNARDL onmin has developed and implemented a five-step framework for contractor safety was a necessary part of our drive to improve safety at our mines and facilities.

3 The initiativeis delivering precisely what we were targeting safer and healthier working recent successes are notable and we firmly believe that sharing our strategy might benefitmining industries across the globe not simply South Africa in 2010, Lonmin suffered a marked deterioration in its safety performance. It was clear atthe time that we needed to review and re-evaluate our safety procedures. But this was not all. Wehad social obligations in terms of the Department of Mineral Resources Mining Charter and theGroup s own approved Social and Labour Plan. We were identifying and developing new, localsources for various goods and services in other words we were taking on more outsidecontractors and service providers. And it was crucial that their safety and health performanceshould match up to the improvements we ourselves were aiming responsibilities went further. We were, and still remain, well aware that we need tocontinue to support the efforts of those contractors that we appoint.

4 It s a two-way street. Itbecame clear that the future delivery in terms of these obligations and of progressive safetyimprovement would rely to a significant extent on Lonmin itself developing and implementing astandardized safety , health, and environmental (health and safety ) pre-qualification assessmentand engagement framework. The framework would be applicable to all potential and existingcontractors. It was to be a framework to create and maintain clear understandings with ourcontractors of our safety , health, and environmental standards. This paper describes thestakeholder engagement process, the challenges encountered, and the solutions reached indeveloping and implementing the framework as well as some of the successes that have 1. Platinum industry fatality rate PLATINUM METAL FOR THE FUTURE 386relationships with our contracting community. We thusdeclared the co-ordination of health and safety activities apriority throughout the frameworkA strategic review of internal and external processesidentified three key focus areas -- fatality prevention, injuryprevention, and safe production culture.

5 It became veryclear that zero harm is achievable, but that attaining it is went through an assessment (Figure 2) todetermine the level of maturity and incorporate it into thesafety strategy. It also became abundantly clear thateffective contractor safety management also resided inthese focus areas. The strategic review was implemented bya top-to-bottom review of the systems and processes, so asto enable the development of a fit-for-purpose model. Fromthis a five-step framework was developed to operate acrossthe entire Group so as to ensure a clear and standardizedapproach to contractor safety successful creation of this five-step framework calledfor the engagement and buy-in of various departments andchampions. The framework clearly defines thosedepartments roles and responsibilities in the overallimplementation / contractor relationship:standardization issuesWhen this process was initiated, Lonmin had relationshipswith more than 3000 vendors, and this number is stillgrowing annually.

6 Lonmin was, however, well aware thatthis growth in numbers was undesirable. Lonmin was alsovery conscious of its obligations in terms of its approvedSocial and Labour Plan. This plan required that Lonminidentify and develop new, local sources of supply forvarious goods and services, and support these suppliers on acontinuous basis. Lonmin therefore had to develop astrategy to cope with this potential called for a critical examination of whether therewas value in having so many vendors, bearing in mind thateach new vendor exposed the organization to further risk. Itsoon became perfectly clear that pre-qualification andapproval of potential vendors was essential if the companywas to mitigate its health and safety risks and at the sametime meet is social and labour obligations. However, theGroup itself had no standard pre-qualification processes inplace to ensure that its health and safety requirements weremet at the contractor level.

7 Furthermore, this lack ofstandard pre-qualification extended to those already on theexisting vendor list. A further consideration was the needfor future health and safety assessments of all listed vendorson a regular basis. It was also noted that the earlier lack ofGroup-wide health and safety evaluation standards had, onoccasion, led to frustration among individual contractorsserving various business units. In short, we had to ensureconformable measurement of each and every vendor and ona continuous basis that would at the same time build andmaintain vendor conclusion was therefore that health and safetyperformances of on-site contractors needed to be measuredagainst Lonmin s own internal health and safety would also be taken into account when consideringany future relationships with new and existing vendors. Theresults of these measurements would thus form part of anyinter-departmental recommendations or criticisms ofvendors vendor relationship of standardization is not simply a Lonmin issue.

8 Itextends across the entire mining industry. Individualcontractors who worked for other firms as well as forLonmin would often chafe at the lack of conformity acrossorganizations on the same issues. The example of healthand safety induction serves to illustrate how frustrationscould arise. Normally, health and safety induction and on-boarding can take days and even sometimes weeks. Thestanding time for this process is very costly and at the endof the day the hiring company has to pay. When employeesof contracting companies migrate from one miningcompany to another, their new induction period could beshortened if mines were to agree to accept a commontraining or induction, as there would be no need to repeatwhat has already been done. Furthermore, this wouldFigure 2. Lonmin growth in maturity to zero harmFIVE steps TO effective contractor safety MANAGEMENT387provide the potential for appreciable savings of time andmoney for employees and employers.

9 These frustrationswere expressed by the contractors themselves and helpedinitiate discussions with our counterparts in othercompanies on the potential for health and safetystandardization across companies as well as withincompanies. Reciprocity became the name of the game, andsubsequently the need arose to establish an association tofocus on standardization or benchmarking. This associationwould, however, need to be supported by industry, theDMR, and contracting a mechanistic comparison of our healthand safety performances against others was not seen assimply defining our performance in a league table. Rather,it was seen as a valuable aid in improving not only our ownhealth and safety performance but that of everyone in theindustry with a like-minded approach. This, in turn, calledfor informal as well as formal cross-company Lonmin was setting out on its journey, we engaged withvarious external companies to compare and to shareexperiences as to the best ways of managing began by examining and visiting others in the field soas to determine industry-wide best practices and how theymight apply to Lonmin.

10 The companies and organizationsvisited initially were BHP Billiton, Sasol, and Enform (thesafety association for the oil and gas industry in Canada).As our ideas started to crystalize, we followed up withvisits to Xstrata Alloys, Eskom and, later, to DuPont. Thevisit to DuPont confirmed what we already knew intuitively-- change has to be championed by a committed leadershipreceptive to the need for change and determined to drivefresh strategies. An outcome of this benchmarking exercisewas the establishment of a basis for a standard contractorsafety management framework covering the entirecontractor management engagement and buy-inIt is almost trite to say that any change can give rise toresistance, and this is what we experienced. This is alsoclear from literature as described by Maltz, (2008), whostates: since change is an inevitable part of organizationallife, we believe that resistance is correspondingly inherentand should be reframed, explored and worked, noteradicated or fixed.