South Africa: Many Firms' Response to AIDS Disappointing

More than 75 percent of 500 South African companies surveyed by the finance group Sanlam have no idea of the prevalence of HIV/AIDS in their organizations, and more than 60 percent have no strategy to manage the disease. This will alarm analysts, given the recent pressure on companies to report HIV/AIDS prevalence within their organizations as part of their corporate governance responsibilities.

Sanlam polled the firms as part of its retirement funds survey, which was released last week. It found that 46 percent of companies had no AIDS policy and 85 percent did not offer voluntary AIDS testing. At the same time, Sanlam warned that AIDS could result in retirement fund premiums being increased fourfold. Sanlam Wealth Management head Kobus Hanekom said the effect of AIDS can be limited if employers implement an AIDS policy.

Group actuary Rob Rusconi said the survey highlighted a disappointing private sector response to the AIDS epidemic. "Proactivity is needed here; heads must be taken out of the sand," Rusconi told business leaders assembled in Midrand. He praised companies that made recent announcements detailing how they plan to respond to the epidemic.

In the past weeks, Kumba Resources, Old Mutual and Anglo American all announced measures to deal with the disease among their staff. In many instances, this includes introducing HIV-testing procedures and providing access to AIDS treatments. Rusconi admitted that the larger companies had made the biggest strides in implementing AIDS policies, while the smaller firms had lagged behind.

While 86 percent of pension fund trustees said they had seen little effect from the epidemic on their funds so far, 40 percent of them expected a significant effect over the next few years. The Johannesburg Securities Exchange is expected to release guidelines on AIDS reporting next year. This will mean that companies will have to reflect what measures they are taking to deal with the disease alongside their financial statements. Nicky Newton-King, the JSE's director of new business and general counsel, said companies' AIDS responses would also be judged in the new socially responsible investment index being launched by the JSE.

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