RGANISATIONAL STRUCTURE OF NATAL PORTLAND CEMENT MANUFACTURING ORGANISATION

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CHAPTER 3: THE HISTORY AND ORGANISATIONAL STRUCTURE OF NATAL PORTLAND CEMENT MANUFACTURING ORGANISATION

INTRODUCTION

Various scholars view employee participation as a powerful tool, that can be used to involve workers in the decision making processes and activities within the manufacturing environment (Beriha et al., 2011; Bolger, 2004; Brogger, 2010; Bryne, 2011; Muthuveloo et al., 2012; Raines, 2011). This study is aimed at investigating the participation of employees in the decision making process, when undertaking OHS activities within the NPC-Cimpor cement manufacturing organisation.
The current chapter focuses on the health and safety perspective of the manufacturing operations within Natal Portland Cement (NPC-Cimpor), so as to align the information to the study at hand. In addition, a national overall view of the cement industry, the origin of NPC-Cimpor, the impact of occupational labour legislation on the organisation and the internal business processes and human resource organogram, are portrayed.
Natal Portland Cement, also known as NPC-Cimpor, primarily operates in the province of KwaZulu-Natal, and is part of the South African manufacturing cement Industry, which consists of AfriSam (South Africa) (Propriety) Limited (HOLCIM), Sepakhu Cement (Propriety) Limited, Lafarge Industry South Africa (Propriety) Limited and Pretoria Portland Cement Company Limited. The cement manufacturers are all affiliated with a non-profit organisation, called “The Association of Cementitious Material Producers” (ACMP), managed by the executive director, Dr D.B.K. Rama. The primary objective of the ACMP being that to build stakeholder trust in the cementitious material producer industry in South Africa, through the relationship initiatives with employees, the surrounding communities, legislators, public authorities, stakeholders and NGOs. In addition to the above mentioned objective, ACMP promotes environmental, health and safety best practice amongst members through study, training and the establishment of industrial guidelines based on local and international experience and best practice. This is done whilst promoting regulatory compliance and active participation with the authorities in the development of appropriate environmental, health and safety law reform in South Africa. Central to the efforts of ACMP is the responsibility to represent members in matters affecting common industry related interests.

THE ORIGINS OF THE ORGANISATION

In the early 1960’s, the market for cement in the province of KwaZulu-Natal was predominantly clustered in the surrounding Durban area. Thus it was financially viable for a cement factory to be established in the Durban area. Durban Cement Company came into production in April 1964, with shareholders Anglo-Alpha, Blue Circle and Pretoria Portland Cement.
The company then utilised waste material, namely slag from Amcor (Arcelor Mittal Steel – Newcastle) and clinker (limestone) from its shareholder factories. In 1983, Durban Cement merged with Natal Portland Cement Company, which resulted in the new merged Company, building a clinker factory in Port Shepstone and railing the cement raw material to Durban. In 1987, an inter-grinding plant for slag was installed in Newcastle, thus exploiting the waste product from the steel manufacturing plant at Newcastle. This allowed the company to have a complete cement manufacturing operation to become self-reliant for the availability of the majority of its raw materials.
Early in the 21st century, the South African Competition Board conducted investigations into most manufacturing organisations for collusion and price fixing. The company, Natal Portland Cement Company at that point of time, was owned by the three biggest cement manufacturers in South Africa. This provided an opportunity for them to discuss various issues pertaining to the cement manufacturing and the sharing of markets within the country. The results from the investigation carried by the South African Competition Board led to external pressure from the Government institutions, which eventually put the company into forced sale. A Portuguese Conglomerate, “Cimpores de Portuguese”, purchased Natal Portland Cement Company, with the objective of extending its global footprint within Sub-Saharan Africa. In 2011, the listed Portuguese enterprise then merged into a Brazilian Cement Manufacturer called InterCement.

THE MANUFACTURING ORGANISATIONAL STRUCTURE

Cement manufacturing has been in existence for generations, and has been utilising common decision making organisational charts from the very beginning. The most common and basic way to distribute work and responsibility, decision-making and authority is by operational functions at the manufacturing level.
In Figure 3.1., a typical organisational chart of a cement manufacturing operation is depicted and for larger operational sites the chart is replicated accordingly to accommodate the size of the operation.
The overall management responsibility of the manufacturing hierarchy is that of the plant manager, who normally reports to the industrial director based at a central location. As the cement manufacturing is predominantly of a mechanical nature, the plant manager’s base degree originates from the engineering discipline. The organisational structure is based on functionality, segmented into the engineering, production and administration disciplines. These functions are further split into sub-functions such as mechanical and electrical orientated functions. The company has extended the manufacturing structures to accommodate the planning and inspection disciplines within the engineering discipline.
The employees as depicted in Figure 3.1. play a vital role in the management of occupational health and safety matters at the operational front. Nationally the majority of “Blue Collar” hourly paid employees tend to be affiliated with a recognised Union. In a highly Unionised environment, Canadian Researchers found that the least effective group accepted the Company and Government standards, guidelines and assessments as uncontested (Hall et al, 2006; Busbin and Campbell, 1999). This group relied on established rules and procedures for identifying and correcting hazards (Hall et al., 2006). It is common in all cement operations for “blue collar” hourly paid employees to affiliate themselves to a Trade Union. At NPC-Cimpor, the role of trade unions is reinforced as was established by Fairbrother (1996:14-15), who concludes that trade unions improve OHS outcomes as is the case in the United Kingdom.
At NPC-Cimpor, incumbents holding the position of the safety, health and environmental (S.H.E.) officers are promoted from within the ranks of the engineering blue collar workforce. However a change is noticeable in the South African SHE manufacturing environment with S.H.E. officers attaining formal qualifications at tertiary institutions. Some tertiary institutions are offering formal post matriculation degrees and diplomas in the field of occupational health and safety. Currently the experience necessary for the S.H.E. Officer consists of practical experience in the plant environment and a formal education which consists of a two week training course, such as SAMTRAC (Safety Management Training Course). In essence the safety, health and environmental officers serve the organisation in aiding in the prevention and mitigation of harm to employees and damage to the environment.
Furthermore the organisational chart (Figure 3.1.) segregates employees into workers and managers, with the “blue collar hourly paid employees” being part of the former group, whilst the safety, health and environmental officers or practitioners, first line supervisors, engineering technicians and engineers are part of management. This division has been aligned with the study objectives, based on an argument that workers can contribute to the prevention of industrial accidents by keeping an eye on the potential hazards in the workplace. Accordingly workers are better placed to give notice of imminent dangers (Gevers, 1983) because they are at the fore front of the operations.
The socio-cultural and demographic forces include society’s cultural values, norms and the physical characteristics such as sex and age. In the cement manufacturing sector, these forces relate to the ways employees think and act, in relation to one another and how they live their lives. In the past, apartheid policies have influenced labour force composition, which is driven by a demographic “race” distributions, age of employees, abilities, attitude, skills and experience of employees. At NPC-Cimpor, these changing variables influence the level of employee participation in OHS matters. Generally, cement operations in sub-urban locations experience low turnover of employees.
This also results in different age profiles across operations and varying attitudes and behaviour with respect to maintaining a healthy and safe working environment. The irony is that the expectations from an employee, who lives in a squatter settlement with no access to basic amenities, no personal mode of transportation, who is exposed to public transport, with noise levels in excess of 85 decibels, is expected to arrive at the workplace with an attitude and exhibiting behaviour that ensures his health and safety and that of others.

THE IMPACT OF LEGISLATION ON THE ORGANISATION

Legislature since 1994 has virtually covered every aspect of employment relationships. These laws are a result of abuse in the market place, misuse of child labour, a lack of protection against injury, the systematic discrimination of groups, and the abuse of human rights. Occupational health and safety legislation is one of the most progressive legislations in the world, rendering both employees and employers to be subjected to increased liability. The accountability of management and responsibilities of all employees is increasingly becoming complex as new OHS legislation is enacted at a much faster pace. In South Africa employees all share the same level of enforcement by the OHS Inspectorate and require equal familiarity with respect to the ever changing legislation. The educational qualifications, experience and skills pertaining to the occupational health and safety at the workplace are clearly prescribed by current OHS legislation.
The cement manufacturing process entails the process of mining a primary raw material (limestone) and secondary components such as oxides of silica, alumina and iron. All are core ingredients in the manufacturing of cement but represent an on-going use of what are essentially finite resources in South Africa. These challenges fall within the scope of the Department of Mineral Resources (DMR). This obviously forces the cement industry to follow the legislation as prescribed by the DMR, more so when addressing occupational health and matters. NPC-Cimpor’s mining operations and the manufacturing operations directly linked to the mining operations fall within the jurisdiction of the legislation as prescribed by the Mine Health and Safety Act, Act 29 of 1996.
In addition the NPC-Cimpor’s manufacturing sites not linked to the mines, fall under the jurisdiction of legislation as prescribed by the Occupational Health and Safety Act, Act 85 of 1993. These operations have found a solution to the problem of utilising the finite mining resource. A part-solution to this problem lies in the degree to which we embrace the manufacture of blended cements or cements that have reduced clinker content through the use of suitable extenders. Such extenders and fillers include classified fly ash, granulated blast furnace slag (lament) and silica fume. These by-products are generated from other industries and are suitable for use as mineral substitutes in the cement manufacturing process. For example, in order to produce Ordinary Portland Cement (OPC) small quantities of gypsum have to be blended with the clinker.
In South Africa, these OHS legislations that have jurisdiction over the cement manufacturing sector afford employees a platform, to challenge employers with respect to negotiations and interpretations of specific workplace circumstances, providing employees with a collective voice This allows employees who are otherwise unable to express their needs, to contribute to OHS agenda and proving a counterbalancing voice that expresses the needs of employees, such as training.
Furthermore legislation requires employers to institute safety, health and environmental committees, as a means of communication between management and workers on S.H.E. matters concerning the workplace. Studies have reported that joint health and safety committees with employee representatives appointed by unions, as well as joint committees in which unions did not participate in the selection of employee representatives led to reductions in workplace injuries relative to those achieved in workplaces in which management alone determines health and safety policy (Reilly, Paci and Holl, 1995). NPC-Cimpor has instituted structures that include the appointment of Safety, Health and Environmental Representatives, who are voted in democratically by the workforce. This is twofold as it complies with legislation and it forms a conduit for communication between plant issues and management.
There is a mandatory duty for the Employer to appoint the Representatives in writing to ensure that the employees understand their roles and responsibility. The OHS legislation is difficult to comprehend and external training is necessary to assist these employees to grasp the implications of the legislation. All costs pertaining to the functioning of these S.H.E. committees are borne by the employer.
Globally, business is exposed to turbulent economic forces. The cement manufacturers in South Africa are not exempt, and are not protected from these economic forces. As a majority of the organisations are owned by Multinational companies and the need exists to import capital assets from abroad, the global economic downturn directly affects their bottom line, with the fluctautaions of the exchange rates. Any global economic disturbance will have an impact on local manufacturers, although the impact may lag in some cases. The capital investment to ensure a healthy and safe working environment becomes even more difficult to justify, as funds are scarce, with the justification of immediate returns on occupational health and safety interventions not easily quantifiable.
Normally in tough economic times, the cost cutting exercises focus on areas such as training. During periods of recessions, initiatives are launched to curtail expenditure due to the shortage of funds. Expenditures that are not directly related to the core manufacturing processes bear the brunt of the exercise, the capital expenses to enhance the workplace environment and other voluntary wellness programs are slashed. These externalities have contributed to cement manufacturers complying only with the minimum requirements as stipulated by legislation.

THE OHS MANAGEMENT PROCESSES

In the past Business, Government and Labour have all participated together in creating an environment that promotes the management of occupational health and safety. The common goal is to make the workplace safe and healthy. A vehicle to attaining this goal is the engagement of employees with management in joint decision-making and solving problems related to their health and safety via sophisticated OHS management processes.
To accommodate these objectives, NPC-Cimpor has established and embarked on management processes that encourages the participation of health and safety activities. These processes include the monthly review of operational matters in the S.H.E. Committees meetings, the reporting and investigation of injuries and damages in the accident/incident investigation committees, the planning, scheduling and implementation of daily maintenance programs. In addition management processs also include the identification and problem solving meetings to continuously improve OHS, the review of OHS management system effectiveness in management reviews meetings, the identification of hazards and the assessment of risks in the ad-hoc committee meetings, and the review and planning of actions and objectives in bi-annual and annual reviews.
In essence the business processes at NPC-Cimpor follow the steps of measurement, monitoring, managing and finding methods to continuously improve the current performance in health and safety. These improvements exercises are undertaken within operations in the company, and also within companies in the South African Cement Industry, and between South Africa and other cement manufacturing countries affiliated in the World Business Council for Sustainability Development. The challenge is to always have a standard system that can fulfil the requirements of these various stakeholders.
The company has a standard system in the form of an computerised library portal. It supports the reporting of fatalities, serious accidents that result in employees being absent from work, minor accidents that need first aid treatment with employees returning to work on the same day of the injury incident. The reporting of near miss incidents, which is a potential accident that did not cause any harm or damage to property, health chronic cases of high blood pressure, diabetes , alcoholism and drug dependency, mental health and HIV/Aids.
Primarily the data is used to measure two performance indicators, which are used across the operations and the South African Cement Industry, namely the disabling injury frequency rate (DIFR) and severity rate. The DIFR is a ratio of the number of injuries that have resulted in employees being away from work when compared to the man-hours worked in the period under review. This factor is then multiplied by one million to make the ratio more realistic. In line with this definition, the severity rate measures the severity of the injury by determining the number of days the injured employee was absent from work as a result of the injury versus the man-hours worked in the period under review. This factor is then increased by multiplying it by a million. These indicators do not have any units. In addition the Company views all contractors related to its manufacturing processes as employees and they are also included in the compilation of the two OHS performance indicators.
The measuring, collection and recording of data is a necessary evil, however more importantly is the evaluation of such data. The database affords management to monitor trends and analyse, giving some meaning and understanding what the data is indicating. The S.H.E. department has been seconded with this responsibility and accountable to report to management to recommend mitigation or preventative measures that aim to eliminate and reduce the risks associated with prediction of possible hazards associated with the injuries.
The key to operational excellence at NPC-Cimpor is the focus on continuous improvements. In recent years, the emphasis has shifted remarkably towards making improvements in health and safety performance as one of the main responsibilities for plant management. With the clear performance measurement, the data collection, the data analysis, the evaluations that are well established and the leverage to benchmarking across operations, companies, industries and countries; line management can establish its current OHS performance to implement improvement plans.
The philosophy around S.H.E. improvement has followed the breakthrough and continuous improvement strategies. The company experienced a spate of fatalities and serious accidents in 2009. This triggered a spate of interventions. The company immediately embarked on a S.H.E. awareness campaign, focusing on influencing employee behaviour and attitude. No information was leaked out and the sudden launch of the safety campaign in 2010, that coincided with the launch of the World Soccer Cup in South Africa. The coampny aimed at establishing a new culture of doing things within the Company. All operations were stopped, thus demonstrating to the masses that Senior Management perceived safety as one of its top priorities. The impact of the improvement was relatively sudden or abrupt and represented a different way of doing things. Senior Managers from across disciplines such as Finance, Information Technology, Human Resources and Sales participated depicting that safety was not an operational issue only. Such interventions were expensive, however improvements with the company experiencing fruitful safety and health performances going forward.
Operations have adopted the continuous improvement strategies where small incremental deviations in S.H.E. performance are investigated and solutions implemented. It has involved groups of employees from management and worker categories. The smaller interventions focussed more on the management systems issues, such as ensuring reviewing the zero energy isolation process, hazard identification and risk assessment review, emergency evacuation process and contractor management. These are smaller interventions than the breakthrough strategy, however having a greater impact on employee participation.
The improvement initiatives have increased leadership visibility, with the result that employees perceive that management is committed to the cause of ensuring the health and safety of the workers. The joint involvement in the PDCA (Plan, Do, Check and Act) cycle (Deming Wheel), has allowed greater interaction between workers and line management in finding innovative solutions on the plant floor. This process brings groups of employees together to focus on a common goal. This philosophy of viewing any problem as process with a flow of events, has allowed employees to constantly utilise the PDCA model in problem solving. It now has become culture with employees illustrating the term PDCA to imply that a particular problem needs to be solved systematically.

EMPLOYEE PARTICIPATION IN OHS

In the context of the South African legislation, employers are tasked or mandated to create a channel to foster employee participation. The employer has used the monthly safety committee meetings as a platform to work jointly with employees to seek solutions to the occupational health and safety challenges. The company appoints members to represent employer and employee interests within the health and safety committees via the management hierarchy and employee representatives from the representative trade unions. The S.H.E. representatives play an active role by transferring issues from these committees to the employee mass and bringing forth issues emanating from the shop floor. This process provides a rapid conduit for the efficient and rapid communication of health and safety matters. Participation is voluntary and no financial incentive is provided for any work related to these committees.
At the company, workers are exposed to hazards and associated risks more so than management and as such experience a greater number of injuries. These employees are at the forefront and are expected to have followed a systematic process of identifying workplace hazards and assessing the risks associated with those hazards. The process further requires ranking and prioritization so as to implement actions to mitigate the risks. In addition, this process affords participating employees greater awareness to risks associated with their work, as they are forced to think of solutions that reduce or eliminate the higher ranked risks. This process forms the basis of both the occupational health and safety legislation and the management process within the company.
The mitigating measures in hazard identification and risk assessment will always conclude with some form of residual, that employees will be exposed to. Injuries are inevitable, even if the employer has instituted measures that attempt to prevent a recurrence of a similar incident. The measures include the accident investigation that involves the injured person, the S.H.E. Officer, the injured person’s supervisor and a S.H.E. Representative as a minimum forum. Specialists, such as the occupational nurse may be called upon as and when required by this forum. The root causes and the outcomes arising from the incident are shared across operational units and even to the extent that they are shared across the cement industry and local provincial mining operations via the Tripartite Mining Forums. This form of participation allows employees to share lessons from the accident investigation, learn from the incident and allow employees a certain level of introspection.
Management’s process of driving the company in operational excellence is supplemented by the objectives and target setting forums. The company’s philosophy is that if one cannot measure an objective, then it cannot be managed. The occupational health and safety key objectives are predetermined by the corporate OHS department with consultation with key local staff. The process of target setting involves the local operational employees, including line management and workers, agreeing on a reduction of the number injuries and the number days lost due to these accidents. The objective setting process entails planning a target on having accidents, and this is contrary to the objective of ensuring that the organisation has no accidents. Employees involved normally become aware of the gravity of the accident and its impact on the business, when considering variables such as cost, both directly related and hidden, the time lost because of these accidents, coupled with the negative perception off the local community and government caused by these accidents, and the extent to which the injured and the immediate family had to endure during the period of the accident.

TABLE OF CONTENTS
ABSTRACT
STATEMENT OF DECLARATION
ACKNOWLEDGEMENTS
CHAPTER 1: INTRODUCTION AND CONTEXTUALISATION
1.1. INTRODUCTION
1.2. BACKGROUND TO THE RESEARCH
1.3. STATEMENT OF THE RESEARCH PROBLEM
1.4. RATIONALE OF THE STUDY
1.5. AIM OF THE STUDY
1.6. THE RESEARCH OBJECTIVES
1.7. SCOPE OF THE STUDY
1.8. DEFINITION OF TERMS
1.9. ASSUMPTIONS OF THE RESEARCH
1.10. SUMMARY
CHAPTER 2: THEORETICAL FOUNDATION AND LITERATURE REVIEW
2.1. INTRODUCTION
2.2. THEORETICAL FRAMEWORK IN PARTICIPATION
2.3. EMPIRICAL STUDIES WORLD-WIDE
2.4. FACTORS INFLUENCING OHS PARTICIPATION
2.5. SUMMARY
CHAPTER 3: THE HISTORY AND ORGANISATIONAL STRUCTURE OF NATAL PORTLAND CEMENT MANUFACTURING ORGANISATION
3.1. INTRODUCTION
3.2. THE ORIGINS OF NPC-CIMPOR
3.3. THE MANUFACTURING ORGANISATIONAL STRUCTURE
3.4. THE IMPACT OF LEGISLATION ON THE ORGANISATION
3.5. THE OHS MANAGEMENT PROCESSES
3.6. EMPLOYEE PARTICIPATION IN OHS
3.7. THE OHS PERFORMANCE
3.8. SUMMARY
CHAPTER 4: RESEARCH METHODOLOGY
4.1. INTRODUCTION
4.2. KEY CONCEPTS
4.3. RESEARCH DESIGN
4.4. SAMPLING TECHNIQUE
4.5. DATA COLLECTION METHODS
4.6. DATA ANALYSIS METHODS
4.7. SURVEY CHALLENGES
4.8. RELIABILITY AND VALIDITY
4.9. ETHICAL MATTERS
4.10. SUMMARY
CHAPTER 5: RESEARCH RESULTS AND INTERPRETATION
5.1. INTRODUCTION
5.2. RESEARCH CONSTRUCTS
5.3. BIOGRAPHICAL DESCRIPTION OF THE RESPONDENTS
5.4. PRESENTATION AND ANALYSIS OF THE RESEARCH RESULTS
5.5. HYPOTHESES TESTING
5.6. CONTRIBUTIONS OF THE RESEARCH
5.7. GENERALISATION OF THE RESEARCH
5.8. SUMMARY
CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS
6.1. INTRODUCTION
6.2. RESEARCH MOTIVATION
6.3. SUMMARY OF THE RESEARCH FINDINGS
6.4. IMPLICATIONS ARISING FROM THE FINDINGS
6.5. LIMITATIONS OF THE RESEARCH
6.6. CONCLUSIONS
6.7. RESEARCH RECOMMENDATIONS
REFERENCES
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