Trusts


Development Trusts related to Gold Fields Limited in RSA

South Deep Education Trust

South Deep Community Trust

FAQS



The South Deep Education Trust (SDET)

The South Deep Community Trust

The SDET and the SDCT were set up as part of the Gold Fields Black Economic Empowerment Transaction concluded by Gold Fields Limited (Gold Fields) in 2010

The SDCT derives its income from dividends declared by Gold Fields, whilst the SDET derives its income from dividends declared by Invictus Gold (Pty) Ltd.

Value of the Trusts
  • The SDET and the SDCT were set up as part of the Gold Fields Black Economic Empowerment Transaction concluded by Gold Fields in October 2010
  • The SDCT derives its income from fixed dividends declared by Gold Fields, while the SDET derives its income from dividends declared by Invictus, which receives its income from guaranteed Gold Fields dividends
  • The SDCT owns 1% and Invictus 9% of South Deep shares. The SDET owns 60% and BEE companies 40% of Invictus
  • The dividend income amounts to about R9.1m a year for the Education Trust and R1.7m for the Community Trust (after taxes) – this is the only money the Trusts can spend on projects and administration
  • The initial valuation of the Trusts at the time of the BEE transaction was based on the projected share values of their holdings in South Deep (influenced by factors such as the gold price, rand and the expected value of South Deep’s gold reserves in 30 years time)
  • The shares cannot be sold for 30 years – but the Trusts don’t have to pay for any of the debt owed by South Deep or cash required by South Deep during that time
  • This is similar to a piece of land that one buys – one cannot sell the land for 30 years but one gets an income from the goods one produces (dividends)
Summary - 2010 South Deep Valuation

Gold Fields organogram in 2010 and flow-through value of BEE shareholding

South Deep Valuation - 2010

Valuation of South Deep B-shares in December 2010 to determine BEE participants loan value

This was an evaluation for accounting purposes in 2010. The market values of South Deep has changed significantly since then.
Trust Geographical Scope (per Trust Deeds)
Trust Governance
  • The Trusts are managed by a Board of Trustees
  • A minimum of three and a maximum of seven Trustees serve on the Board
  • The Trustees annually nominate and vote for a Chairperson
  • The Trustees nominate and vote to approve additional Trustees as required, within the bounds of the Trusts Deeds

The Trusts operate independently from Gold Fields, although they are inter-connected.

The Trusts Intention

The Trusts intend to work in strategic partnerships with the community and a range of other influential parties to:

  • Drive collaboration and identify multiple funding sources for initiatives at different levels
  • Improve economic/employment opportunities available to Westonaria Communities
  • Improve the employability, capacity, knowledge base and resilience of the Westonaria Communities
  • Support projects within the resources and scope of Trusts’ objectives
Strategic Principles
Areas of Focus

Develop Source Skills and Employability

Support Education Quality and Success

Connect the Community to Information and Opportunities

Improve Community Resilience and Capacity

  • A portfolio approach will be applied to select a spread of projects
  • Funding will only be provided where sustainability of the project could be demonstrated
  • Social entrepreneurship is encouraged
  • Projects that have not received previous funding from other sources will be prioritised
  • Selection will prioritise clearly defined initiatives with sound sustainability plans
  • Grants will not be linked to private or individual interest
  • Grant selection will not undermine existing activity or roles played by other stakeholders
  • Efforts will be made to connect projects that don’t meet the “additionality” criteria with other role players and information where feasible (see question 10).
  • There are limited funds available – applications for large values are unlikely to be considered without evidence of potential for significant and broad impacts as well as additional funding partners

The Trusts’ websites include information on the Trusts’ deeds, purpose, history, projects, project and administration spend, beneficiaries and intended impact. Some of that information is already available, other information will be uploaded over time.

Both Trusts have spent considerable amounts on community projects since their founding in 2010. From 2015 onwards, the community was engaged extensively in the selection of relevant projects (See question 8). One of the outcomes of that engagement process was the receipt by the Trusts of approximately 60 project proposals from the community requesting assistance and/or funding. These project proposals were carefully vetted and underwent a rigorous due diligence process. Eventually five community projects were selected for support by the Trustees having regard to the Trusts’ requirements to qualify for funding and/or assistance.

The funding agreements, which contain stringent reporting requirements and the achievement of certain milestones before the next tranche of funding can be unlocked, were signed in July 2016. Project funding immediately began flowing to get these projects off the ground.

The following is a breakdown of the project spend on these projects during 2016 and 2017:

 

Project Sector 2016 2017 TOTAL
A re Ageng Victim empowerment R602525 R293375 R895900
Re a Ikoka Health R60000 R333753 R393753
Philani Enterprise development R321500 R525172 R846672
 R2136325

The funding for these projects has been committed for a period of three years from inception, ie: the funding obligations in terms of the current funding agreements will, for the most part, terminate mid-2019. In some cases, however, the type of assistance required has resulted in funding that will be spent over a shorter time period.

In addition to the so-called community projects (categorised as such because they were proposals received from the community as described above), the SDET has funded tertiary education bursaries since 2015. The funds spent on tertiary education bursaries in 2015 and 2016 and projected spend for 2017 are:

An amount of R4,107,424 has been budgeted for tertiary education bursaries in 2017. Of this, an amount of R2,151,105 has already been expended in the first two quarters of 2017. The tuition, board and lodging, and books and stationery of 34 students are currently being paid for by the SDET. Of the 34 qualifying students, 24 hail from Westonaria communities (71%), and 10 are from Labour Sending Areas (LSAs) (29%).

In 2015, the SDET also stepped in to support a SA National Civic Organisation (SANCO) project that had been established and implemented without proper funding. One hundred scholars from the community were enrolled at the Sedibeng TVET College for tertiary education studies, and were accommodated at a hostel in Sedibeng. Unfortunately, there were no funds to pay the hostel for the accommodation and catering for these students, as well as their transport to and from the TVET. To avoid these students being sent back to their homes without completing their studies, the SDET paid R1,500,000 to the hostel service provider. Thereafter, the Westonaria Community Trust (WCT) entered into a funding agreement in terms of which it undertook to pay for the students’ accommodation, catering and transport until the end of their studies, or until the students could be transferred to the WestCol TVET, currently being developed in Westonaria.

When the current board of trustees took over the management of the SDET in 2014, there were three legacy projects they inherited, namely the funding of scholarships for primary and high school scholars in the Eastern Cape and Kwa-Zulu Natal (both of which are LSAs). The nature of the funding agreements governing these projects was such that the SDET would have been guilty of breach of contract had they elected to withdraw from these projects.

In early 2015, the SDET advised the schools that the current commitments would be honoured, but that no new scholars would be funded from the scholarship programmes.

The following funds were expended on these legacy projects in 2015 and 2016:

2015 2016
Kingswood College (E Cape) R4 159 196 R4 284 240
Clifton School (KZN) R2 117 331 R2 407 987

The Kingswood College scholarships end in 2020 (8 scholars remain on this programme), and the Clifton School scholarships end in 2024 (18 scholars remain on this programme, the youngest of whom is in Grade 5 in 2017).

In 2015, the SDET began funding scholars recruited from the community on the Edumap Programme. In 2015, 15 students were supported at a cost of R1,275,000. In 2016, 20 students were supported at a cost of R1,803,000, and in 2017, 31 students are being supported at a cost of R2,984,680. All the students enrolled in the programme in 2015 and 2016 went from failing, or almost failing, matric Maths and Science to passing these subjects a year later with bachelors’ passes. All 35 of these students are now attending university and are studying for degrees ranging from engineering, environmental sciences, accounting, and geology, to law and social work.

The trustees have resolved to fund 30 students on the Edumap programme during 2018 and 2019.

In 2016, the SDET introduced the Grade 7 Excellence Awards, which are aimed at rewarding excellence of Grade 7 scholars and awarding them all-inclusive scholarships for the duration of their high school years. The top 4 achievers in these awards have been awarded scholarships to Kingswood College in Grahamstown, while the 6 runners up have been awarded scholarships to Queens High School in Johannesburg. Only scholars from the Westonaria community qualified for these awards. A total amount of R1,451,540 has been budgeted for these awards for 2017.

In 2016, and following an indication by the Department of Minerals and Resources (DMR) that the Trusts should also devote funds to projects in LSAs, the Trusts decided to support agricultural projects aimed at training and empowering smallholder farmers run by Lima Rural Development in conjunction with the Jobs Fund. The Trusts elected to support three sites: in the Eastern Cape, in KZN and in Limpopo (all LSAs). The funding provided by the Trusts (a total amount of R3,160,058 per Trust over a 4-year period) unlocked 1:1 matched funding from the Jobs Fund. The proposed number of jobs to be created by this project amount to 600, with a total number of 2,400 farmers to be supported.

It is the intention of the Trusts to reach an 80/20 split between project spend on local communities and project spend on communities in the LSAs.

The following is an indication of the monetary value and the percentage spend on local communities versus communities in the LSAs in 2015, 2016 and 2017 (budgeted):

SDET:

 

2015 (actual) 2016 (actual) 2017 (budgeted)
Total Project Spend R9 991 227 R10 011 849 R17 086 203
Project Spend – local R3 299 000 R4 248 998 R12 184 450
% 33% 42% 71%
Project spend – LSAs R6 692 227 R5 074 255 R4 901 753
% 67% 58% 29%
Total Bursary Spend R183 451 R708 204 R4 107 424
Bursaries – local R140 576 R530 891 R3 171 354
% 76% 74% 77%
Bursaries – LSAs R42 875 R177 313 R936 070
% 24% 26% 23%

 

SDCT:

 

  2015 (actual) 2016 (actual) 2017 (budgeted)
Total Spend R2 215 038 R1 774 040 R5 584 490
Project Spend – local R2 215 038 R984 025 R4 794 475
% 100% 56% 85%
Project spend – LSAs 0 R790 015 R790 015
% 0 44% 15%

 

  1. B) What amount has been spent on administration and trustee fees to date?

The current trustees took over the management of the SDET and SDCT in late 2014. The following is a summary of the spending on the trusts’ administration and reporting, strategy development and implementation, project management and trustees’ fees in 2015 and 2016:

2015

SDET SDCT
Total Project Spend 2015 R10 174 678 R2 215 038
Trust Administration and reporting (excl VAT) R284 002 R222 212
% of project spend 2.8% 10%
Project Management (excl VAT) R305 094 R217 934
% of project spend 3% 9.8%
Strategy development (excl VAT) R163 169 R163 169
% of project spend 1.6% 7.4%
Community Engagement (excl VAT) R82 079 R82 410
% of project spend 0.81% 3.7%
Trustees’ fees R50 000 R50 0000
% of project spend 0.5% 2.3%

 

2016

SDET SDCT
Total Project Spend 2016 R10 011 849 R1 774 040
Trust Administration and reporting (excl VAT) R318 583 R186 418
% of project spend 3.2% 10.5%
Project Management (excl VAT) R345 131 R216 984
% of project spend 3.5% 12.2%
Strategy implementation (excl VAT) R32 582 R32 582
% of project spend 0.3% 1.8%
Community Engagement (excl VAT) R8 146 R24 973
% of project spend 0.1% 1.4%
Trustees’ fees R80 250 R74 250
% of project spend 0.8% 4%

 

The following is a summary of the budgeted spending on the trusts’ administration and reporting, strategy development and implementation, project management and trustees’ fees for 2017:

BUDGETED SDET SDCT
Total Project Spend 2017 R21 193 627 R5 584 490
Trust Administration and reporting (excl VAT) R900 000 R420 000
% of project spend 4.2% 7.5%
Project Management (excl VAT) R528 000 R264 000
% of project spend 2.5% 4.7%
Strategy development (excl VAT)
% of project spend
Community Engagement (excl VAT) R131 700 R131 700
% of project spend 0.6% 2.4%
Trustees’ fees R202 500 R202 500
% of project spend 1% 3.6%

 

Presently, neither the SDET nor the SDCT are considering any projects with the specific aim of benefitting former mine-workers. The Trust Deeds do not prohibit such projects should proposals be received. It must be noted that these proposals will be fully vetted and considered with reference to the project requirements of each of the Trusts, as detailed in the answer to question 10 below.

During 2015, the Trusts held four broad-based community workshops (on 5 June, 10 June, 3 July and 31 July 2015 respectively), at which there was an average attendance of 60 participants, including representatives from various civil society groups, community leaders, the Municipality and the Trusts. The workshops were held as part of the Trusts’ strategy development process.

The purpose of these workshops was two-fold: to introduce the Trusts and the faces behind them to the community, and to understand what the community’s expectations were in regard to the Trusts. This informed the Trusts’ funding strategy going forward.

This was the first time that engagement had taken place between the Trusts and the community. Levels of distrust were very high and a lot of disinformation about the Trusts was being bandied about.

There were a number of key outcomes from these workshops. One of the most important ones was the receipt by the Trusts of approximately 60 project proposals from the community requesting assistance and/or funding to get these projects off the ground. Each one of these project proposals was carefully vetted and underwent a rigorous due diligence process, and eventually 5 projects were selected for support by the Trustees having regard to the Trusts’ requirements to qualify for funding and/or assistance.

It was during these workshops that the question of community representation on the Trusts was raised. The Trusts’ representatives made it very clear that community representation on the Trusts was welcomed, and was, in fact, imperative. However, when the question was posed as to who those representatives would be, the participants from the community could themselves not agree. It was very clear that different factions of the community distrusted each other. In fact, the Trusts’ workshop scheduled for 10 June 2015 was turned into a community-run workshop for the purpose of uniting the various factions and possibly nominating representatives to the Trusts.

The Westonaria community is a divided one. The decision the community was required to make in respect of their chosen representatives illustrated this point very clearly and it became clear that nominating community trustees would further exacerbate this division.

It is only in 2016, as a result of the Westonaria Organisational Workshop (WOW) work carried out by South Deep, the Gold Alliance (which includes Gold Fields and Sibanye Gold) and the Trusts that the community members have found closer common ground and established a Stakeholders’ Forum. Thereafter, the so-called Randwest Round Table was formed. The purpose of the Round Table is to promote regional development through a collaborative approach with participation from all sectors of the community, through their representatives and leadership, the Municipality, Gold Fields and Sibanye. The Trusts have been invited to the Round Table meetings, and attended the first one in May 2017. The Trust Administrator made a presentation on information relating to the Trusts, including its projects and spending, and again requested the community to furnish the Trusts with names of their chosen representatives.

It was after this Round Table meeting that two representatives were appointed to represent the community at the Trusts. The representatives are Tebogo Makolwane and Abraham L Mokome, the current chair and secretary of the Stakeholders’ Forum. They attended the trustees’ quarterly meeting scheduled for 13 July 2017, and were unanimously appointed trustees of both Trusts. The Trusts are now permanent members of the Round Table.

Please refer to the answers to question 8 above, which addresses the meetings with the communities and the presence of communities at trustees’ meetings.

Regarding the question of access of the community to trustees and the trust administrator: the telephone numbers of the trust administrator and the former chairman of the Trusts, Neville Melville, are known to the community (and have been used by numerous community members since 2015). Contact details are published on the websites.

One suggestion made at the May 2017 Round Table meeting was that the Trusts should have a local office to which community members can go to get information and to have any queries answered. This is something the trustees will consider, in consultation with the community as to how best to establish such an office

See answers to questions 2 and 3 above.

All projects are considered with regard to the same criteria, irrespective of who the proposer is.  The following is the criteria against which project proposals are evaluated:

Eligibility Criteria

  • Preferably Non-Profit led:  The applicant should preferably be a Non-Profit Organisation.  In cases where the applicant is a registered for-profit entity, its activities should support the objectives of the Trusts. The Trusts will not support individuals, unless in cases of bursaries;
  • Geographical area:  Projects to be supported must fall within Westonaria boundaries and communities affected by the operations of South Deep Mine or LSAs linked to the South Deep operation;
  • Track record:  The applicant must have been in operation for 6 months or more and have documentation of this period (financial history and impacts achieved).  In cases where the applicant is a start-up or requires assistance to get established, alternative ways of support could be considered;
  • Due Diligence:  Applicants must be legally compliant and in good standing with relevant legislative bodies and a due diligence will be undertaken of all applicants;
  • Outstanding decisions: Projects to be supported should not be dependent on an outstanding government or legal decision;
  • Relevance: An explicit link to Trust objectives must exist with a clear identification of who the beneficiaries will be and a strong logic for the scale of impact;
  • Not a simple organisational expansion: Initiatives that are merely aimed at expanding the scale or scope of an existing organisation or programme with only an incidental link to educational support, job creation or community support are not eligible; and
  • Clear Plan:  Must be provided which shows key activities and how grants will be spent.

 

Impact Criteria

  • Potential for broad, sustainable impact:  Projects should show an innovative approach to achieving broad, sustainable impact and provide a clear logic for who will benefit, how and for how long;
  • Capacity to implement:  The applicant must be able to demonstrate that they have the capacity, skills and additional resources to implement the project at scale should the grant be awarded;
  • Value for Money:  This will be determined relative to other project applications, by the monetary value requested and the number of beneficiaries that will be impacted or the scale of impact that can be reasonably expected per the project logic;
  • Additionality:   Grant selection will target activities which would not have happened without support from the Trusts; and
  • Contribution to systemic change:  Projects that incorporate funding and strategic partners in ways that create new socio-economic opportunities within the prioritised geographical areas, will receive preference.

The South Deep Education Trust and the South Deep Community Trust

The Trustees to these trusts are common, and are:

  • Alex Khumalo (chairman)
  • Neville Melville
  • Eric Ratshikhopha
  • Lucy Mokoka
  • Thulani Mashibini
  • Tebogo Makolwane
  • Abraham Mokome
  • Thandile Ntshwanti

 

The Trust Deeds of both the SDET and the SDCT allow for the appointment of no more than 7 trustees, one of which must be a representative from Gold Fields. The other six trustees are independent trustees. The current Gold Fields representative on the board of trustees of both Trusts is Lucy Mokoka, Company Secretary. In an effort to ensure that the labour-force of the South Deep mine is also represented at trustee level, a NUM representative, Thulani Mashibini, was appointed to the board of trustees of both Trusts.

Community representation on the board of Trustees of both the SDET and the SDCT is not, per se, required by the Trust Deeds of these Trusts. However, the current trustees have for some time recognised the importance of community representation on the Trusts. In this regard, reference is made to the answer to question 8 above.

The South Deep Education Trust and the South Deep Community Trust

The Trust Deeds for these Trusts regarding the appointment of trustees are identical.

In terms of the Trust Deeds, there shall be a minimum of 3 trustees and a maximum of 7 trustees, of which one shall be a representative of Gold Fields.

The Trust Deeds allow for the appointment of a NUM representative to the board of trustees.

The independent trustees are elected by the trustees in office at that time, who are obliged to take into consideration the prospective trustees’ qualifications as determined by the trustees in their sole discretion. In addition, independent trustees are not allowed to be affiliated to Government, including being an MP, a Government Official or procure more than 70% of their revenue from Government tenders or any other form of Government work.

The SDET and the SDCT derive their income from dividends.

In the case of the SDCT, it is a shareholder of Newshelf 899 (Pty) Ltd – a Gold Fields-linked organisation, and receives a fixed dividend of R2 000 000 per year. Taking withholding tax into account, it was paid R1 600 000 in respect of the 2017 dividend declared.

In the case of the SDET, it is a shareholder of Invictus, which is, in turn, a shareholder of Newshelf 899. In terms of certain agreements reached, the SDET is entitled to 60% of the dividend income earned by Invictus from Newshelf 899 . This amounted to R10 800 000 (after withholding tax) in respect of the 2017 financial year.

The Beneficiaries of the SDET and the SDCT are clearly defined in the respective trust deeds of these Trusts.

In the case of the SDET, the beneficiaries are selected by the trustees in their discretion from the ranks of:

  • The Legal Resources Centre (LRC), or its successor(s) in title, provided that all distributions received by the LRC shall be utilised for the benefit of the historically disadvantaged persons (HDPs) who hail from the LSAs and/or the communities surrounding the South Deep Mine;
  • HDPs, provided that such beneficiaries hail from the LSAs and/or the communities surrounding the South Deep Mine;
  • SAPS Widows & Orphans Fund or its successor(s) in title, provided that the Beneficiaries of the SAPS Widows & Orphans Fund hail from the LSAs and/or the communities surrounding the South Deep Mine.

 

In the case of the SDCT, the beneficiaries are selected by the trustees in their discretion from the ranks of:

  • HDPs, provided that the HDPs hail from the LSAs and/or the Community
  • Any charitable organisation (and only if the trustees unanimously agree):
    • whose primary objectives shall be carried out for the benefit of HDPs in LSAs and/or the Community;
    • Whose objectives and activities must be similar to those of the SDCT;

 

The Trust Deeds to both Trusts define HDPs as being:

  • Any individual or community categorised as “previously disadvantaged” in SA legislation;
  • Any historically disadvantaged entity (including companies, CCs or associations) duly incorporated in terms of SA law, in which historically disadvantaged individuals or communities constitute at least 75% of such entity, AND directly or indirectly
    • Hold the majority of the issued share capital, members’ interest or equivalent equity;
    • Hold the majority of the voting rights
    • Have a spes and/or right to receive the majority of the income on any distribution made by it of all its income; and
    • Have a spes and/or right to receive the majority of its capital upon winding up;
  • Any trust in which HDPs constitute at least 75% of the beneficiaries of such trust, directly or indirectly:
    • Have a spes and/or right to receive the majority of the income on any distribution made by it of all its income; and
    • Have a spes and/or right to receive the majority of its capital upon termination;

 

The Trust Deeds to both Trusts define LSAs as being “Such geographical locations which, due to socio-economic circumstances yield a high rate of migration from such areas to localities from which Gold Fields Limited or its subsidiaries trade.”

 

However, only the SDCT provides a definition of “Community”, which includes:

  • Communities forming part of the Westonaria district as determined by Municipal Demarcation Board, which as at the date of the Trust Deed ( being 7 July 2014), includes:
    • Bekkersdal
    • Glenharvie
    • Hillshaven
    • Leeudoorn
    • Libanon
    • Simunye
    • Venterspost
    • Wagterskop
    • Waterpan
    • Westonaria
    • Zuurebekom
    • Thusanang
  • Communities that are impacted by the South Deep Mine, including:
    • Poortjie
    • Jachtfontein
    • Cardoville
    • Sperusperu
    • Elisburg
    • Surrounding farms up to the borders of Fochville and Lenasia
  • Any other geographical area surrounding the South Deep mine as determined by trustees.

With the creation of the greater Rand West District Municipality, the Trustees will consider whether the definition of “communities” in the SDCT Trust Deed should  be amended.

It must be noted that the South Deep Trusts do not fund businesses. It is not within the scope of the Trusts to do so in terms of the Trust Deeds.

The manner in which the Trusts engaged the community in 2015, resulting in 5 community projects being funded by the Trusts is fully described in the answers to question 8 above.

In future, project windows will be opened from time to time, which will detail the areas of focus of the trusts, the spend allocated during the window period and the criteria which any proposals must meet to be eligible for consideration. Project proposal forms, together with substantiating documents, will have to be submitted in order to be considered.

Project windows will, in addition to being posted on the websites, be advertised in the local press, radio, community newspapers, posters etc.

Summarised Project Application and Award Process
Project Flow
Framework for deciding on projects

Contact Us
 

Trust Administrator: NLA 
Block 2 Fancourt Office Park, cnr Northumberland & Felstead Road, North Riding, 2169, South Africa
+27 11 704 1563


 

South Deep Community Trust: sheridan@NLAteam.com  

South Deep Education Trust: sheridan@NLAteam.com