Eskom pilot programme

Eskom is a South African utility that generates, transmits and distributes electricity. It supplies approximately 95% of South Africa’s electricity and 60% of the total electricity consumed on the African continent. It is the among the top 11 utilities in the world in terms of generation capacity and the top seven in terms of sales. Ownership of Eskom is vested in the South African government.

Eskom recognises that the sustainability of its suppliers could affect its own sustainability and has identified HIV/AIDS as a major risk factor to their sustainability.

It also identified that certain of its suppliers were particularly at risk because they did not have HIV/AIDS workplace programmes in place. Based on this information Eskom decided it made good business sense to invest in developing the capacity of these suppliers to manage HIV/AIDS in their businesses and their communities.

To achieve this Eskom partnered with SABCOHA on a programme to offer support to all of its suppliers (approximately 1000 companies) over a period of three years. SABCOHA had already developed an HIV/AIDS toolkit specifically for use in SMMEs.

In February 2006 the initial pilot of the programme involved 40 supplier companies (10% of the companies Eskom had identified to participate in the programme during 2006). These 40 companies, who volunteered to participate in the programme, were identified as high-risk companies who needed the most support. Many of the companies have responded with enthusiasm. Commented one supplier: "It's fantastic. Eskom is supporting us. We need to know something about HIV/AIDS but we don't know what to do or how to do it. Now we can learn from their expertise."

The main purpose of the programme is to:

1. Minimise the risk to which suppliers and Eskom are exposed in respect of managing HIV/AIDS;
2. Maintain Eskom’s supply chain;
3. Demonstrate leadership in the southern African region in managing HIV/AIDS; and
4. Develop international quality practice in respect of how the private sector responds to HIV/AIDS.

Click here to access the full report.

The report

Eskom and SABCOHA have produced a report of the outcomes of the four-month pilot programme which is intended to mitigate the impact of HIV/AIDS among suppliers to Eskom’s Generation Division. The programme focussed on those companies that had been identified as being at high risk to HIV/AIDS.

Additionally, the report aims to provide a strategy, based on lessons learned from the pilot, for rolling out the programme to the remaining suppliers identified by Eskom.

The report also provides a cost benefit analysis of the pilot, and three case studies of participating companies are also offered.

Valuable lessons were learnt during the pilot that will guide and improve future capacity building. They will increase the cost effectiveness and sustainability of the roll out of the programme.

The pilot project

SABCOHA managed the pilot project for Eskom and contracted service providers, Aganang HIV Resources Centre and The Careways Group (TCG).

Aganang is a registered Section 21 (association not for gain) company. It has been providing a comprehensive and holistic HIV/IDS management programme for over a decade. TCG has more than 20 years experience in integrating well-being solutions into corporate structures. One of its specialisations is providing HIV/AIDS workplace programmes.

The aim of this pilot was to develop best practice for the roll out of an HIV/AIDS workplace programme. It is groundbreaking and pioneering work intended to explore the level of support that is needed by suppliers to develop an effective HIV/AIDS programme.

Forty supplier companies volunteered to participate in the pilot that involved approximately 2867 people. SABCOHA was able to provide appropriate training and support to all the companies during the pilot who were committed to participating in the project. On average four visits were made to each company.

SABCOHA also introduced the management of the companies to the toolkit and discussed the process that would be followed during the pilot. In 63% of the companies participating in the pilot, either the managing director/chief executive officer or a company director met with SABCOHA. This figure was higher than anticipated and contributed to the success of the programme. The progamme should reach a higher participation level from executives with an improved communication process during the company identification phase.

Toolkits were distributed to all suppliers who participated in the pilot project. The sizes of companies who participated were:

• 46% had under 20 employees;
• 0% had 20 - 100 employees; and
• 24% had over 200 employees.

Out of the 37 companies who participated only five had undertaken some sort of HIV/AIDS intervention prior to the pilot. In other words, 87% of the participants had no form of HIV/AIDS workplace programme in place. This statistic supports the need and importance of this programme and its future expansion, with the intention, ultimately, to roll out nationally to 1000 Eskom suppliers over three years.

Success in the pilot were seen through:

• 90% level of participation
• high level of commitment by management in most companies
• 83 percent of companies received management training
• 95 percent of companies' champions were trained
• 92% of participating companies had HIV/AIDS policy in place in draft form by project end

The key learnings from the pilot project included:

1. Working closely with the Procurement Division within Eskom is crucial for the success of the programme;
2. The importance of involving supplier company management in the roll out of HIV/AIDS workplace programmes;
3. The need to ensure effective communication both before and during roll out;
4. SABCOHA toolkit proved to be a useful resource to companies setting up an HIV/AIDS workplace programme. The toolkit could be enhanced by the inclusion of additional information, upgrading the monitoring and evaluation tool, translation into indigenous languages, and the inclusion of a dildo for the condom demonstration; and
5. The lack of adequate structures, systems and resources in some smaller companies to deal with the implementation of an HIV/AIDS workplace programme proved challenging and needs to be addressed.

Cost benefit analysis

Although the cost of the implementation of this pilot programme was a direct cost to Eskom, the benefits are be difficult to measure. However, Rosen et al, Harvard Institute for International Development, have calculated that intervening to provide workplace programmes with a comprehensive programme (education, prevention and treatment with ARVs and care) will lower the present value of future costs by up to 38% if these efforts increase life expectancy by five years.

Because the majority of the companies involved are small or medium sized, the impact of the loss of skills through death, incapacity, an increase in absenteeism and reduced productivity, is immense. Therefore, the short- and long-term value of this project is enormous for Eskom and the companies involved in its supply chain.

This was confirmed during the pilot project when nearly all the businesses that participated agreed that they had already felt the impact of HIV/AIDS due to increased absenteeism and the loss of worker(s) to HIV/AIDS. They confirmed that this was why they welcomed the initiative, which helped them do something to address the numerous risks associated with HIV and AIDS.

Related articles:

Supply Chain Initiative - Beyond Big Business