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Business faces AIDS reporting - investors demand facts
Des Parker. Daily News 16 August 2002 Republished courtesy of Independent Newspapers (Pty) Ltd
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Much fuller disclosure of AIDS figures is likely to be reality for business in 2003. Companies can expect to be compelled by the end of next year to report on the impact of AIDS on their business to placate foreign investors.
"AIDS is the single biggest factor affecting South African businesses and will remain so for the next decade" says Andrew Sykes, CE of employee benefits consultancy NMG-Levy.
"Foreign investors know very well the size of the problem and don't believe it one bit when we say that AIDS is levelling off. They want to be convinced that our business is viable. Our view is that global investors will be increasingly keen on strict HIV/AIDS reporting here, as they need a baseline from a relatively sophisticated, industrialised economy ..."
The government said earlier this year that the current national infection rate of just below 25% - at about 4,7 million people, the highest in the world - might be levelling off.
Sykes was speaking at a Johannesburg event staged by his company for local business, to create a public platform from which to call for effective HIV/AIDS reporting guidelines. The SA Institute of Chartered Accountants and the JSE Securities Exchange are expected to release reporting guidelines for listed companies early next year.
This would be the first time any country has insisted on HIV/AIDS reporting by firms. But some fear it could be treated as a symbolic first step rather than an opportunity to create effective reporting structures.
At its most basic level, said Sykes, AIDS reporting would be expected to estimate the number of people infected with HIV in the companies, economic impact on customers, direct and indirect costs, what programmes were in place, how much they cost and how much was being saved.
South Africa boasted some of the world's biggest mines and by far the largest economy on the continent, attracting world-class manufacturing, service and financial investments. But that could all change if a growing AIDS pandemic sent labour costs spiralling and decimated markets, forcing businesses to relocate to countries where the disease was less prevalent, said Sykes.
Industry experts say only about one in 100 South African firms - big and small - have assessed the impact of AIDS, despite the fact that over 90% of them will be materially affected. Sykes warned that the cost of employment for the average company could rise by 50% over the next 10 years, though this would vary significantly across industries.
"The good news is that companies that take early action to measure and manage the impact and who operate in low-impact industries could face only one tenth the cost of companies in high-impact industries that do nothing," he said.
"Effective guidelines will force companies to behave in their own best interests. Only by measuring the problem, disclosing its extent and doing something about it, will companies contain the impact." |
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