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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 management.Following 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 no.82/5of 2005 -- ’in the platinum, coal and other sectors - by 2013achieve constant and continuous improvement equivalent tocurrent international benchmarks (0.03 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 theiremployees.

The first step was to recognize that part of the issue wasthat much of our work is outsourced on a contractor basis.Furthermore, 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. However, whileLonmin has many years of experience in dealing with

contractors 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 and

JULIES, A.P. and BARNARD, J.A. 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, 2014.

Five steps to effective contractor safety management: sharingthe Lonmin experience

A.P. JULIES and J.A. BARNARDLonmin Plc.

Lonmin has developed and implemented a five-step framework for contractor safety management.This was a necessary part of our drive to improve safety at our mines and facilities. The initiativeis delivering precisely what we were targeting – safer and healthier working environments.

Our recent successes are notable and we firmly believe that sharing our strategy might benefitmining industries across the globe – not simply South Africa’s.

Back 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 for.

Our responsibilities went further. We were, and still remain, well aware that we need tocontinue to support the efforts of those contractors that we appoint. 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 resulted.

Figure 1. Platinum industry fatality rate

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relationships with our contracting community. We thusdeclared the co-ordination of health and safety activities apriority throughout the organization.

Strategic frameworkA strategic review of internal and external processesidentified three key focus areas -- fatality prevention, injuryprevention, and safe production culture. It became veryclear that zero harm is achievable, but that attaining it is ajourney.

Lonmin 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 management.

The 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 programme.

Vendor / contractor relationship:standardization issues

When this process was initiated, Lonmin had relationshipswith more than 3000 vendors, and this number is stillgrowing annually. 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 dichotomy.

This called for a critical examination of whether therewas value in having so many vendors, bearing in mind that

each 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. 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 relationships.

One conclusion was therefore that health and safetyperformances of on-site contractors needed to be measuredagainst Lonmin’s own internal health and safety standards.This 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 i.e. vendor relationship management.

Lack of standardization is not simply a Lonmin issue. 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 would

Figure 2. Lonmin growth in maturity to zero harm

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provide the potential for appreciable savings of time andmoney for employees and employers. 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 partners.

BenchmarkingBenchmarking – 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 interactions.As Lonmin was setting out on its journey, we engaged withvarious external companies to compare and to shareexperiences as to the best ways of managing contractorssustainably.

We began by examining and visiting others in the field soas to determine industry-wide best practices and how theymight apply to Lonmin. 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 lifecycle.

Stakeholder 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’. Lonmin found that the first level of‘resistance’ came from senior management as well as fromsome operational units, who were apprehensive of whatchange might mean to established relationships with knowncontractors. One-on-one interactions were a tremendoushelp in overcoming apprehensions or concerns thatproposed changes might have detrimental outcomes.

These concerns were assuaged firstly by highlighting thegaps in the current processes and the risks associated withcontinuing as in the past. This was followed by elaboratingon the benefits of the change process and how each andevery stakeholder makes an equal and supportivecontribution to the framework’s successful implementation.Shortcomings in then-current practices were highlighted, aswere the benefits of a standardized approach. This wascomplemented by emphasizing that inefficient andincomplete contractor management practices significantlyincrease the Group’s health and safety risks and could, atworst, lead to serious injuries or fatalities (Figure 1).

Sharing best practices and the lessons learned was alsoencouraged. So, too, was indicating the benefits of thisprocess and how every stakeholder makes an equalcontribution to the successful implementation of theprocess.

Some of the other challenges centred on how this processcould be integrated into the current supply-chain processes,specifically SAP. The implementation was designed toenable individuals and operations within the supply chain toscreen potential vendors. That would ensure that thevendors met and continued to meet Lonmin’s relevanthealth and safety requirements. This, in its turn, wouldallow individual sections of the organization to recommendto other sections which vendors they might use mostadvantageously and which they might best avoid. To thisend Lonmin, together with Shanduka’s Black Umbrellas ,embarked on an incubator project for the development oflocal businesses. This programme would enable Lonmin toensure that the health and safety requirements would beincorporated into the development programme for broad-based black economic empowerment (BBBEE) companiesso as to support Lonmin’s social and labour plan.

During the internal stakeholder engagement process aresponsibility, accountability, consulting, and informedmatrix (RACI) was developed so as to ensureaccountability and acceptance of responsibilities by everystakeholder. The framework was piloted in business unitsthat had, from the outset, been enthusiastic supporters of thechange process. This helped identify stakeholders’ needsthat might otherwise have been overlooked, as well as inidentifying potential flaws in the framework. The changesto the framework followed a management-of-changeprocess to address all issues that might adversely affect theprocess.

Roadshows were held to gain inputs and to ensure buy-ins from all stakeholders. This was done at Group- levelforums as well as in face-to-face discussions withindividuals. Once formal Group-wide buy-in had beenachieved, the process itself was formalized in a governanceprotocol. Ratification of this protocol by all departmentalheads ensures a standard approach to contractor safetymanagement and everyone’s commitment to the newstandards.

From these engagements with the various internalstakeholders – such as supply chain, security, informationtechnology, human capital, health and safety professionals,medical services and, most importantly, operations -- afive-step framework evolved (Figure 3). It also becameclear that this five-step framework would benefit theorganization as a whole as well, facilitating Lonmin’s socialand labour plan.

The five-step frameworkA five-step framework was developed covering the variousstages needed for a satisfactory and complete interactionwith a vendor. It covers pre-qualification, tendering,engagement, execution, monitoring, closure, and review.The framework is illustrated in Figure 3.

Step 1: Pre-qualificationPrevious pre-qualification processes did notcomprehensively include all health and safety requirements.We needed to change existing vendor application processesso as to ensure that health and safety became an integralpart of the selection process.

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The aim of this initial assessment is to screen prospectivecontractors so as to establish whether they have thenecessary experience or the potential to deliver servicessafely and in an environmentally sound manner.Contractors who pass the pre-qualification stage must befully capable of managing all health and safety aspects ofthe job.

The approval process takes into account the degree of riskassociated with the services provided by a prospectivecontractor. Based on these degrees of risk, we developed anaudit protocol to evaluate a contractor’s ability to complywith Lonmin’s health and safety requirements. The risk-based audit protocol is currently being extended to the morethan 3000 existing vendors. Everyone is treated equally andthis audit protocol has been linked to a compliance gradingsystem that was a critical requirement in issuing whatLonmin terms a ‘license to operate’. Any contractor failingto meet the ’license to operate’ standard is offered theopportunity to reach that standard within a specified timeand, if necessary, given assistance in gaining thatacquisition through the Shanduka Incubator, what Lonminalso refers to as ’intensive or high care’.

Step 2: TenderingPreviously, the health and safety performance of acontractor was not fully considered during the tenderadjudication process. Considerations were mainlyfinancial, technical, and BBBEE. With the implementationof the framework the health and safety aspects becameintegral to tender adjudication.

The objective of this phase is to assess whether the healthand safety plan/ health and safety requirements and thetender evaluation criteria have been met. Once they have,we are in a position to select (where necessary on the basisof clarification meetings) the successful contractor.

The health and safety requirements were nowincorporated into the contractual agreements with thecontractor to clarify legal liabilities and compliance

standards. Health and safety roles and responsibilities thatare clearly defined in any contractual scope of work remainthe responsibility of Lonmin line management. Essentially,we are working towards an ideal situation in which onlycontractors that have a ’license to operate’ can beconsidered to tender for work.

Step 3: EngagementThe objective of this phase is to ensure that the prescribedengagement process is followed through the LonminContractors Hub. This includes such basics as induction andmedical examinations. The Contractors Hub wasestablished in October 2009 to centralize management ofthe process of granting access to contractors to work at anyof Lonmin’s premises and to ensure compliance with theGroup’s safety standards. Lonmin line management isresponsible for ensuring that contractors do not allow theiremployees to perform work or provide services beyondthose that they are qualified and competent to perform asspecified during the tendering phase. The contractor mustthen ensure that its employees understand all health andsafety risks to which they may be exposed when performingspecific tasks. This includes awareness and compliancewith Lonmin’s safety rules, policies, procedures, and site-specific health and safety requirements. A flow diagram ofthe Contractor Hub is illustrated in Figure 4.

Step 4: Execution and monitoringThe objectives of this phase are to ensure that the work tobe performed is carried out in accordance with the agreedhealth and safety plan and that additional health and safetyneeds, which might be identified as work progresses, areproperly addressed. Lonmin line management is responsiblefor monitoring safety performance and for auditingcompliance by the contractor with the mutually-agreedrequirements.

This phase is important to ensure that a contractor’s

Figure 3. Flow diagram of the framework

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employees participate in the relevant health and safetyinitiatives such as safe behavioural observations andplanned task observations or toolbox talks. Monthlymeetings between supervisors, health and safetyrepresentatives, and the contractor are the norm for trackingprogress and health and safety compliance. Should anysignificant non-compliance issues be exposed, thedelinquent contractor will be refused entry to the site.

Step 5: Closure and review (performance evaluation)The objective of this phase is to conduct a joint evaluationof the contractor's and company’s health and safetyperformance at the conclusion of each contract. This will beused to provide feedback to the contractor and to thecompany as well as to provide information to be referred towhen the contractor seeks another engagement. Lonminwill continuously review its relationships with itscontractors taking into account the fact that continuation ofindividual relationships will depend on those individualcontractors’ satisfactory health and safety performances.Figure 5 is a brief summary of the five-step framework.

Application of the five-step frameworkTo apply the framework fully to all types of contractors,Lonmin developed a model based on the risks associatedwith the technical aspects of each task or service, measuredagainst risk exposure based on the number of people andtheir time spent on site. It is evident that this model is soundand is also used in a similar fashion throughout otherindustries. This approach, which measured risks associatedwith different types of contractors, is divided into fourdifferent risk levels (Figure 6).

Benefits and best-practice initiativesThe full range of potential benefits has yet to emerge, but isexpected to do so over time. However, at this stage of thenew process the following important benefits have becomeclear.

Standardization provides a clear definition of howeffective vendor management should be carried out by alldepartments so as to avoid potential misunderstandings. Italso helps in measuring a contractor’s performanceobjectively and militates against poorly-handled appraisals.

Lonmin has a well-established social responsibilityprogramme which incorporates BBBEE initiatives. In termsof this, the group is committed to and understands the needfor investing in the development of contractors’ technicaland health and safety capacities. This is particularly thecase in disciplines where Lonmin faces shortages. Oursocial responsibility programme aligns with the DMR’sMining Charter and Lonmin’s own social and labour plan.

An internal supplier-development task team has beenformed to ensure that health and safety aspects areincorporated into the supplier development programme.This initiative will further equip the greater Lonmincommunity’s suppliers and service providers with requisitebusiness and technical skills. This is particularly the case inareas that are necessary for compliance and the normalfunctioning of contractors’ businesses. This initiative willbe incorporated into the small-business incubationprogramme.

During the preparation of this framework, interactionwith our counterparts at other companies not only providevaluable insights but also led to mutual realization of thepotential benefits of standardized approaches to vendor

Figure 4. The Contractor Hub process

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management. This, in its turn, has helped initiate acontractor management association -- a forum forexchanging ideas and for cooperation in developing newand better management techniques. Potential benefits fromthe new association emerged during discussions with ourcontractors and industry partners. Some of the potentialadvantages also emerged when contractors expressed theirfrustrations over the waste of time resulting fromduplication of the health and safety requirements fromcompany to company. Adopting an industry-wideconsistent contractor management system makes goodbusiness sense for all stakeholders. It was evident that thiscollaborative initiative would lead to reciprocityagreements, standardization and, potentially, financialbenefits to the industry as well as to contractor partners as awhole.

An additional benefit was the engagement process thatimproved for the on-boarding of contractors from 52 daysto 7 days. This has a huge cost saving benefit to Lonmin

and also has a significant impact on the safety performance.The new framework is already proving beneficial as seen,to cite one example, during the initial as well as subsequentassessments of one of Lonmin’s transport service providers.The contractor was under the impression that conforming tothe previous health and safety requirements was sufficient.During his first assessment, however, the contractorrealized that health and safety requirements had becomemore stringent and was, initially, somewhat resistant to thechanges. When the potential benefits of the new systemwere explained and how safety performance would beenhanced the contractor became an enthusiastic protagonistof the new system. An improvement in safety performanceresulted from adjustments in the way things were done –changes that would incur no additional costs, either to thecontractor or to the company. There have been follow-upsby Lonmin management leading to further improvements insafety procedures. Whether the contractor can turn thisimproved safety record to an advantage in winning otherbusiness off the Lonmin property remains to be seen.

ResultsFigure 7 depicts the overall contractor performance afterthe implementation of this framework. Supporting thisimprovement was the consistency on the performancerequirements set by the protocol, monitoring processes, andaudit verification tools.

ConclusionsContractors are, and will remain, fundamental partners inour business, and it is imperative that these partnerships bereviewed on a regular and continuous basis. Lonminconstantly reviews its processes and strategies and makesthe relevant improvements where they are shown to benecessary. One of the key outcomes of this process is thatsuccess is determined by the input and accountability ofeach and every stakeholder.

In 2011, most accidents on Lonmin’s properties

Figure 5. Framework summary

Figure 6. Contractors risk levels model

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concerned contractors’ employees, once again underscoringthe importance of continuous monitoring and safetyinterventions. In response to these accidents Lonmininitiated a safety meeting with all stakeholders, including itsunions. Among the key outcomes of the meeting was thatthe contractor management framework became an integralpart of Lonmin’s health and safety strategy. It goes almostwithout saying that all necessary energy will continue to beexerted to ensure the framework’s successfulimplementation. To a significant extent the adoption of thisframework has created a standardized approach tocontractor management with all of the attendant mutualbenefits noted earlier in this paper.

Incorporation of the health and safety requirements inLonmin’s development programme once againdemonstrates the Group’s commitment to the developmentof small businesses. We at Lonmin realize that we are, asyet, only progressing towards achieving world-class statusin the field of contractor safety management. But we firmlybelieve that the implementation of this framework is anearly step on the journey towards fully-effectivemanagement of one of the group’s highest risk areas. Andthis, in its turn, is bringing us closer to our overall objectiveof zero harm.

AcknowledgementsThe authors would like to thank the following companiesand organizations: Lonmin executive management, internaland external stakeholders, Jim Jones, Sidney Shipham, theDMR, Sasol, BHP Billiton, Enform, and ComplyWorks.

ReferencesBHP BILLITON. 2005. General Contract Management

Structure.

CHAMBER OF MINES OF SOUTH AFRICA. 2005.OH&SPC Committee circular no.82/05. July.

ENFORM. 2010. Contractor Safety ManagementGuideline.

MALTZ, M. 2008. Managing Resistance to Changehttp://triadllc.com/pdf/ManagingResistance.pdf

SHANDUKA BLACK UMBRELLAS.http://www.blackumbrellas.org/About-us/index.html

WORLD BUSINESS COUNCIL FOR SUSTAINABLEDEVELOPMENT. 2009. Cement SustainabilityInitiative, Recommended Good Practice forContractor Safety Management.

Figure 7. Contractor performance

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