sustainability report

social


people

Building and retaining a talented, diverse, high performance team remains a key business priority for Woolworths. Full details of Woolworths people strategy are found in the People section of the Woolworths annual report. This report only highlights additional information as relevant.

managing employee relations


Woolworths is committed to engaging with all employees in a formal and informal manner on a regular basis, ensuring that employees remain informed of key business issues and developments (People report). The process of communication and engagement is dealt with in both the internal communication and the people engagement strategies and plans and are revisited on an annual basis in line with the group’s strategy review process.

Discrimination in the workplace and disciplinary procedures are covered by formal Woolworths policies and processes and widely communicated within the business. Policies and procedures governing engagement and consultation with the workforce around business restructuring are documented and will be further formalised in the year ahead.

The business documents and maintains detailed statistics, reflecting employee ratios in terms of role, gender and race as well as training and development statistics against these criteria. A current focus on this statistical data will seek to provide management with more comprehensive and relevant data on a regular basis, enabling the organisation to make strategic decisions based on real-time data.

building a diverse workforce


Woolworths is committed to building a diverse workforce, and to this end, is focussed on the recruitment and development of black, female and disabled people.

Employment equity remains a challenge for Woolworths although we have moved forward by 1.7% in the year.

2007 focus

The focus for the year ahead is to entrench well defined and effective skills plans, ensuring that we develop and retain the diverse talent we recruit.

reward benefits and recognition


Woolworths remuneration philosophy supports performance based remuneration, making it clear that each employee plays a role in helping to achieve the company's strategy and operating plan. All managers undertake a formal performance review twice a year with each of their direct reports, rating the employee's performance relative to the goals that were set for the period under review as well as setting goals for the coming review period.

Each employee's personal development plan for the year is also reviewed and this information forms part of the company's annual training report and the company’s workplace skills plan, enabling the organisation to identify, develop and retain talented employees. The performance rating achieved by the employee determines the salary increase that the employee will receive during the annual salary review that takes place in September of each year.

Beyond the legal mandate, Woolworths supports a comprehensive range of employee benefits throughout the business:

  • educational assistance for employees and their dependants to complete their matriculation certificate and to do tertiary studies in a field associated with retail for example, auditing and marketing;
  • staff level employees are offered housing assistance of up to R10 000 to either purchase or renovate low cost housing;
  • employees are able to purchase foods and clothing at a discount and are eligible to buy surplus food at a substantial discount;
  • in addition to maternity leave and sick leave, employees, providing they comply with certain conditions, can also apply for and receive:
    • paternity leave;
    • leave to move home;
    • leave for sport or cultural activities;
    • study leave; and
    • family responsibility leave.

2007 focus

To continue to provide the reward and recognition that helps retain talented retailers and provide for the company’s growth. To develop an employment proposition for the selling team through the STEP programme (People report), which supports Woolworths commitment to attracting and retaining passionate, committed retailers.

health and safety


Woolworths is committed to providing a safe and healthy environment for all employees, customers and third party service providers, in our stores, offices and distribution centres:

  • Woolworths is fully OHASA (Occupational Health and Safety Act) and COIDA (Compensation of Injury and Diseases Act) compliant. Within the food distribution centres, Woolworths had applied the NOSA framework to ensure that they were OHASA compliant however, due to concerns with the onerous accreditation processes required under the NOSA framework, the distribution centres were experiencing difficulties in meeting the required standards. A new Woolworths framework was developed in conjunction with Woolworths risk management team in order to simplify the processes and controls to ensure that these were focused on Woolworths key risk areas. This new framework is now being rolled-out and tested at all food distribution and equipment centres nationally and will be reviewed and amended as required. Internal audit will review compliance with the new framework to assess the level of compliance from the first quarter of 2006/7 onwards:
  • each Woolworths workplace has a health and safety representative and, where applicable, a health and safety committee. They meet once a month with management. All prescribed information is collated and reported through to a board director who is the OHASA 16 (1) assignee; and
  • employees at every new store are required to attend a workshop covering:
    • armed robbery survival;
    • OHASA (importance of good housekeeping, safety in the workplace, fire fighting, first aid, emergency evacuation); and
    • theft and fraud training (to avoid incidences of wrongful arrest).

COIDA

All workplace incidents are reported to a specialised risk consultancy, which administers the documenting and reporting process from claim to finalisation. The last few years show a decreasing trend in the number of injuries. For the year, there were 632 reported injuries (2005: 687) of which 301 were soft tissue injuries, which is typical for the retail industry.

crime


Crime unfortunately continues to be a major consideration in the management of health and safety across the Woolworths business. The area of most concern is the safety of our customers and staff in our stores environment, especially as we continue to roll-out more small convenience stores that are open long hours which often provide relatively simple access to a would-be criminal. The number of armed robberies escalated from 7 in 2005 to 15 in 2006. This is congruent with the opening of an additional 14 smaller food stores in the last year.

This continues to be highlighted as a key inherent risk and steps are being taken to try and minimise this risk (Risk report). Woolworths participates in and contributes to Business Against Crime, and the Consumer Goods Council of South Africa’s Crime Prevention Programme, working alongside other businesses, especially retailers and wholesalers, to share crime experiences and statistics and best practice solutions.

  armed
robberies		 employee
fatalities		 customer
fatalities
July 2005 to June 2006 15 0 0
July 2004 to June 2005 7 0 0
July 2003 to June 2004 6 1 0

employee well being


Woolworths continues to supplement a legally compliant and comprehensive occupational health service with Woolworths Employee Assistance Programme (EAP), which provides the following free services to employees:

  • confidential assistance following any personal or business crises, for example domestic violence, armed robbery;
  • referral of individual employee to an appropriate service provider, for example social worker, psychologist;
  • monitoring and following up with individuals with problems, for example substance abuse; and
  • lifestyle counselling, for example smoking cessation.

Twelve occupational health practitioners work with our employees across our stores and distribution centres and in some outlying areas, Woolworths has outsourced this responsibility to local occupational health practitioners to ensure that all employees’ needs are met. The effectiveness and reach of the occupational health service will be reviewed as part of the next employee survey in order to identify issues that may require attention.

hiv/aids


The occupational health practitioners manage the “Know your HIV status” campaign and encourage employees who are HIV positive to register with the Qualsa clinical management programme.

HIV/Aids is more prevalent than other chronic diseases amongst the Woolworths workforce and is thus given special attention in our employee wellbeing management process. Once an employee is infected, we provide care and treatment seeking to prolong the health and life of those infected, create a non-discriminatory and supportive work environment and provide support programmes to all affected in the workplace. Woolworths HIV prevalence remains considerably below the national average and is currently estimated to be 9.7% compared to 9.2% in 2005. (Note the basis of actuarial valuation has changed and therefore last year’s numbers have been restated).

Woolworths HIV/Aids prevention and management programme includes a focus on:

  • the prevention of infection through our educational and awareness programmes and the success of the 2004/5 “Know your HIV status” campaign;
  • encouraging employees who are HIV positive to manage their health appropriately by accessing the benefit available to them through the QUALSA clinical management programme:
    • approximately 44% of employees have had an HIV test, provided by an external service provider at no cost to the employee;
    • 174 Employees are currently accessing the QUALSA clinical management programme; and
    • all permanent employees have access to telephonic counselling, vitamin supplements and access to anti-retrovirals when needed.
  • contributing and influencing issues on how we address HIV/Aids in the workplace at a national level and in 2005 became an active member of the South African Business Coalition on HIV/Aids (SABCOHA).

Communication continues to be key in the prevention of HIV/Aids infection and management and in support of World Aids day and the 16 days of activism campaign for no violence against women and children, Woolworths, for the second year running, commissioned a number of organisations comprising of people affected by HIV/Aids to make beautiful, wire-beaded ribbons to be handed out to all Woolworths employees to wear on World AIDS Day and throughout the 16 days of activism.

Woolworths continues to encourage suppliers to implement effective HIV/Aids prevention and management programmes and all suppliers, as part of our Supplier Code of Business Principles, are required to have HIV policies.

sustainable supply chain


All Woolworths suppliers both local and international, are bound by the Supplier Code of Business Principles which requires conformance to the highest legal and ethical standards and environmental practices. Our business partners are also required to ensure that this code is applied in respect of subcontracting or secondary supplier arrangements and compliance with the code is monitored through a formal auditing process. The code covers the following:

  • child labour;
  • forced labour;
  • health and safety;
  • wages, hours of work and entitlements;
  • discrimination;
  • freedom of association and the right to collective bargaining;
  • harsh or cruel treatment; and
  • environment.

In the last year 144 food factories (2005: 146) and 122 textile factories (2005: 134) were audited against the Code. In both food and textile factories, incidences of non-compliance are being found in approximately 10% of the audits (2005: 10%). Corrective action is taken and progress is monitored. A web-based system allows us to view the results of all audits on line and our suppliers have password access to their own audit results.

In addition, rigorous food hygiene and safety audits are carried out on all our food suppliers. 276 of this nature were carried out in the last year (2005: 263). In the last year we also continued to implement "product process control audits” and audited a further 30 of our suppliers (2005: 26).

2007 focus

The Supplier Code of Business Principles will be re-evaluated during the year to ensure that it meets the current needs of the business and reflects the key sustainability issues in the supplier network.

products and services

innovation


Innovation is considered Woolworths critical differentiator and is at the core of our product development philosophy, alongside quality and value. More than 90 technologists across the business are tasked with ensuring that Woolworths applies the most recent international technology and practices in every aspect of product development and that sustainability is fundamental to this technological development. Recent examples of this commitment to innovation include:

clothing
  • Woolworths organic clothing range sells more in value terms than Woolworths very successful range of organic food and Woolworths intends to increase the purchasing of organic cotton, and by September 2006 will offer a comprehensive range of organic cotton garments in clothing and home;
  • bamboo fabric used in clothing is a renewable source of natural fibre that produces excellent quality fabric;
  • Woolworths focus on wool began in August 2005 with a test that linked the South African wool producing community directly with retail to try and establish sustainable supply chain alliances. The test production run of 16 tonnes of South African merino wool was converted into 23 000 machine-washable wool trousers – Woolworths is now committed to this approach as a sustainable platform for our local wool value chain;
beauty
  • Woolworths entire range private brand beauty products has been developed with an emphasis on natural, gentle ingredients that are completely safe for people and the environment but are still effective – we call this the Woolworths good beauty journey;
  • animal welfare issues remain a key consideration in the development of beauty products for Woolworths and certain products which did not meet Woolworths stringent animal welfare code of practice were withdrawn from the range;
food
  • Woolworths good food journey continues – a multi-faceted, long-term commitment to addressing issues including care for the environment, animal welfare and consumer food issues – meeting the increasing demand for food that is safe, healthy, and produced without damage to either the environment or other species;
  • in 2006 Woolworths launched the “Woolworths eco-efficient supplier awards”. The award seeks to reward Woolworths suppliers for innovation in their production processes, innovation which optimises use of resources, reduces the impact of business on the environment and so increases the value of products and services;
  • Woolworths fresh fruit and vegetable farmers adhere to Eurepgap farming practices –an internationally recognised standard for safe and sustainable agriculture;
  • as few chemical additives as possible are used in our conventionally farmed ranges;
  • Woolworths launched a number of innovative new food products during the year including:
    • HOWARU ( an immune-boosting culture) already added to Woolworths dairy yoghurt range, extended into soya “yoghurt” and goats yoghurt;
    • Benecol™ yoghurt drinks, which include a cholesterol-lowering additive; and
    • South Africa’s first fresh baby food; and
    • Steam Cuisine – a microwaveable meal containing both vegetables and proteins;
  • wherever possible Woolworths removes unnecessary additives (including preservatives) from food:
  • tartrazine and monosodium glutamate (MSG) have been removed from all our foods;
  • sulphur dioxide has been removed from all our fruit juices and some of our organic wines;
  • preservatives and gelatine are not added to our yoghurts; and
  • we continue to look at ways of reducing the sugar and the salt content of our products; and
  • Woolworths does not permit:
    • the sale of any eggs from caged hens;
    • the use of r-BST growth hormone in any cow producing milk for Woolworths;
    • animal by-products in chicken feed;
    • routine antibiotics in free range chickens;
    • irradiation – only certain herbs and spices are irradiated, as there is no other way of controlling potentially harmful micro-organisms in these items and these items are clearly marked with the “radurised” logo.

fair-trade


Woolworths sourcing strategies are, we believe, fundamentally in line with the Fair-trade™ principles. At this time, Woolworths is monitoring the development of the Fair-trade™ accredited product set and will continue to evaluate the value of adding suitably accredited products to the Woolworths product portfolio.

responsible lending practices


Woolworths has consciously defined responsible lending practices in terms of the financial services offering. Affordability in credit vetting and extension, and unsolicited lending, are embedded in Woolworths financial services policies and procedures.

No formal policy exists regarding consumer privacy, beyond current legal compliance, but this will be addressed as part of compliance with the pending Consumer Protection Bill.

2007 focus

All policies and procedures are being reviewed to ensure compliance with the National Credit Act and the pending Consumer Protection Bill.

customer satisfaction


Woolworths is committed to meeting customers’ needs at every level and we monitor customer satisfaction throughout the business using various mechanisms including:

  • focus groups and discussions with 30 000- strong customer panel;
  • desk research providing consumer insights and customer profiles;
  • customer surveys, mystery shopping surveys and research;
  • marketing communication, advertising and direct customer mail;
  • Woolworths call centres; and
  • meeting with consumer pressure groups for example, CGCSA.

Input from all sources is collated and addressed on a regular, formal basis, from board level input to corrective action at an operational level.

2007 focus

To entrench the “assisted self-selection” service offering across all stores, and understand and meet customers’ needs for specialist service in key areas.

product safety


Woolworths is committed to maintaining the highest possible levels of product safety throughout the business. Product recall procedures are entrenched in business policy and procedures. Some of the key product safety initiatives are highlighted below:

general
  • Woolworths supplies the Red Cross Children’s Hospital Poisons Information Centre with the formulations of all toiletry products and the Poisons Information Centre telephone number printed on the packaging;
  • Woolworths works closely with The Child Accident Prevention Foundation of Southern Africa (CAPFSA) to address issues of safety and takes precautionary action wherever possible; and
  • wherever possible, rigid PVC is eliminated from packaging.
safer clothing:
  • Woolworths unique metal detection policy requires our suppliers of childrenswear, soft toys, and men’s and ladies’ intimatewear (with the exception of bras, which use metal hooks, sliders and underwires), to scan all manufactured items to reduce the risk of injuries from broken pins and needles;
  • where possible natural rubber latex (which may cause an allergic reaction) has been removed from all our garments and replaced with dry natural rubber, which has a low level of residual protein;
  • no Azo dyes are used in the production of our textiles, as they are associated with numerous health and environmental risks; and
  • in children’s garments and toys:
    • all metal trims are nickel free as they can trigger allergic reactions;
    • reflective signage is incorporated in all school shoes, anoraks and school bags for children’s safety;
    • all toys are tested against an international toy safety standard;
    • all batteries are encased with a screw to prevent infants from choking;
    • all cords on garments, like anoraks, are security tacked and the cord length is limited to 14 cm to reduce the chances of accidental strangulation; and
    • all buttons on childrens’ clothing are lockstitched to reduce the risk of choking.

food safety


Woolworths considers food safety critical to the business and has put mechanisms in place to ensure that consumers are offered product which has undergone thorough testing and rigid process control to ensure it is as safe as possible. Processes include:

  • Routine Checks: Our SANAS (South African National Accreditation System) accredited food laboratory runs routine checks for any potentially harmful micro-organisms and pathogens. It also routinely monitors pesticide residue levels on fresh produce and heavy metal levels in fresh fish.
  • IBL Audits: An independent auditing organisation, International Britannia Limited (IBL), conducts four hygiene audits a year in each of our stores where food is cooked to ensure that good food handling routines are in place and that our stores are as clean as they should be. When incidences of non-compliance are found, they are rectified immediately.

product labelling


Woolworths labelling policy ensures that customers are given sufficient accurate information to allow them to make informed buying decisions:

clothing and home

Woolworths clothing is now fully compliant with government requirements in terms of labelling which, in addition to country of origin, require details of fibre content and care instructions plus the importer’s code for imported lines or the manufacturer’s taxpayer number for local goods.

food

All Woolworths food labels contain detailed information on ingredients, nutritional values and allergens. Sugar content is listed in addition to the usual total energy, total protein, total carbohydrate, full breakdown of fatty acids and sodium (salt).

information and communication


Woolworths, at all times, seeks to communicate with integrity and honesty, ensuring that all stakeholders are kept well informed. The focus of these efforts is:

  • clear, truthful, transparent messaging throughout the business;
  • appropriate use of language and symbolism in all communication;
  • consistent application of the brand values across all communication;
  • informative messaging and signage throughout the selling environment in order to provide customers with the level of detail they require to make informed choices;
  • cognisance of the consumers’ right to privacy around personal information; and
  • wherever possible, endorsement of the attention Woolworths gives to sustainable business practices.

2007 focus

Woolworths is establishing policies and guidelines that will ensure compliance with the Consumer Protection Act.

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