mining and corporate social responsibility - lecture at university for development studies, wa,...
DESCRIPTION
Corporate Social Responsibility (CSR) has become an important strategic issue for companies around the world, especially those companies working in the extractive sector. When it is done well CSR can create value and opportunities for companies, communities, local governments and a range of other stakeholders. When it is absent, or not done well the opposite can be true. This lecture will cover: Definition CSR and Social Investment; The rationale and driving forces for CSR and social investment; Understanding of relevance of CSR to business and development community; A brief description of three case studies on mining and CSR What does CSR mean for Wa and UWRAbout the LecturerWayne Dunn is an award winning global expert on corporate social responsibility. In the past two decades he has led more than forty CSR projects in over thirty countries across six continents, helping clients to innovate and succeed in difficult and challenging circumstances. His work has won prestigious global awards, including the first CSR project to ever win a World Bank Development Innovation Award. His projects been developed into lectures and case studies and one was even featured on the front page of the Wall Street Journal. In the 1990s he helped lead a paradigm-shifting transition that facilitated exponential increases in indigenous business and economic development throughout the Americas. More recently he has been a practical pathfinder helping businesses to successfully integrate social and economic value creation into their business models.Wayne is a founding member of the Leadership Council of McGill University’s Institute for the Study of International Development (ISID). He is a frequent lecturer worldwide on business and economic issues, and also provides volunteer support to numerous local, national and international organizations. This includes serving as the Vice-Chairman of the Canadian Council on Africa, on the Advisory Council to the University President and on the Board for the University of Winnipeg’s ground-breaking Master’s Program in Development Practice. He is a Stanford University Sloan Fellow and holds an M.Sc. in Management from the Stanford University Graduate School of Business. He is married to Gifty Serbeh of Wa and he and his family maintain close links to Ghana.www.waynedunn.com http://en.wikipedia.org/wiki/Wayne_DunnTRANSCRIPT
UDS Lecture on CSR and Mining
Beyond the Gate: CSR & Mining
Presented by:
Wayne Dunn www.waynedunn.com
University for Development Studies
Lecture on CSR and Mining
October 31, 2011
Wa, Upper West Region, Ghana
UDS Lecture on CSR and Mining
Lecture Objective and Outline
Define CSR and Social Investment;
Discuss rationale and driving forces for CSR and social investment;
Develop understanding of relevance of CSR to business and development community;
Brief description of three case studies
What does it mean for Wa and UWR
Questions and discussion.
UDS Lecture on CSR and Mining
How Can UDS Help?
UDS well placed to play an important role
Mining companies have a difficult challenge to implement CSR. Even those that try very hard often have problems
Educational and Development Institutions must learn how to work with and educate mining companies and local communities
Mining companies must learn how to work with and educate development and educational institutions
A great opportunity for collaboration and synergy
UDS Lecture on CSR and Mining
What is CSR?
Corporate Social Responsibility (CSR)
A concept whereby companies integrate social and environmental concerns into their business mission and operations,
and in their interactions with stakeholders.
UDS Lecture on CSR and Mining
Definitions
Corporate Social Responsibility (CSR), Sustainable Development, Social programs, Community Relations
Terms are often used interchangeably
Definition “CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well of the local community and society at large”
Financial
Responsibility
Environmental
Responsibility
Corporate Social Responsibility
(Sustainable Development)
Social
Responsibility
WBCSD
Diagram
UDS Lecture on CSR and Mining
The New Reality of Business
UDS Lecture on CSR and Mining
CSR is a Global Phenomena
“By working together to mobilize sustainable investment in the Least Developed Countries, government, business and civil society give hope and opportunity to the world’s poorest”
Kofi Annan
UN Secretary-General
UDS Lecture on CSR and Mining
Corporate Social Responsibility is…
Companies working in partnership with communities and others to address problems;
Companies promoting good values to their employees, suppliers, customers, partners;
Companies investing in social and economic development;
Companies being good corporate citizens;
Companies being good neighbours
Community
UDS Lecture on CSR and Mining
Why is CSR happening?
Globalized world is demanding more of business… Global media – The CNNization of the world – remote local issues direct to television screens
Proliferation of NGOs and CBOs – direct, well organized and financed support to communities
Internet and other communications innovations – direct communications from remote projects to worldwide audience
Global Democratization – increased attention to local issues
UDS Lecture on CSR and Mining
Why is this happening (cont)
Comprehensive Codes Canadian Business for Social Responsibility Guidelines for Corporate Social Performance Caux Round Table Principles for Business Clarkson Principles of Stakeholder Management Code of Ethics on International Business for Christians, Muslims and Jews Elements of a Corporate Accountability Convention (Friends of the Earth) Ethics Compliance Management System Standard ECS2000 Global Sullivan Principles of Social Responsibility The GoodCorporation Standard International Code of Ethics for Canadian Business International Finance Corporation's Performance Standards on Social and Environmental Sustainability ISO CSR Standard OECD Guidelines for Multinational Enterprises Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance Social Venture Network Standards of Corporate Social Responsibility UN Code of Conduct on Transnational Corporations UN Global Compact
UDS Lecture on CSR and Mining
Why is this happening (cont)
Comprehensive Codes Canadian Business for Social Responsibility Guidelines for Corporate Social Performance Caux Round Table Principles for Business Clarkson Principles of Stakeholder Management Code of Ethics on International Business for Christians, Muslims and Jews Elements of a Corporate Accountability Convention (Friends of the Earth) Ethics Compliance Management System Standard ECS2000 Global Sullivan Principles of Social Responsibility The GoodCorporation Standard International Code of Ethics for Canadian Business International Finance Corporation's Performance Standards on Social and Environmental Sustainability ISO CSR Standard OECD Guidelines for Multinational Enterprises Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance Social Venture Network Standards of Corporate Social Responsibility UN Code of Conduct on Transnational Corporations UN Global Compact
UDS Lecture on CSR and Mining
Shareholder Pressures
‘Socially conscious’ shareholders
Social Investment Funds – Socially responsible investment refers to making investment decisions
based on a company’s social and environmental practices and on their corporate values and ethics).
The Financial Markets – Dow Jones Sustainability Index (http://www.sustainability-
index.com/)
– FTSE Sustainability Index (FTSE4Good) http://www.ftse4good.com/
– Domini 400 Social Index (DSI) http://www.domini.com/
UDS Lecture on CSR and Mining
Pressure: Consumers, Customers
UDS Lecture on CSR and Mining
Social License
An emerging phenomena
In addition to more traditional state issues licenses and regulatory approvals
Based on the principle that communities and local interests have a valid role in determining whether or not a project will proceed
Communities have inserted themselves into the regulatory approval/permitting process and can easily disrupt operations that they disapprove of
UDS Lecture on CSR and Mining
Why focus on social license
Social Performance is key to Financial Performance “In a transparent, globalized world, economic performance, environmental performance and social performance hang together. Business is realizing that it has become an integral part of society and now has wide-ranging responsibilities… shareholder value and social responsibility support each other” Göran Lindahl, President and CEO Asea Brown Boveri (ABB) “Our commitment to community development “represent(s) an added cost, but is an essential investment in our future…(and) should help us to achieve greater profitability”. Jay Taylor (former) CEO Placer Dome
UDS Lecture on CSR and Mining
Why focus on social performance
“Seven of the top ten U.S. home improvement retailers, including Home Depot, have issued restrictive lumber buying policies in the wake of an aggressive campaign by environmentalists While industry is still sorting exactly what this means, there is no doubt that it threatens a significant share of the traditional market for BC forest products.” Globe and Mail – Aug 25, 2000
“social responsibility is a matter of hard-headed business logic” John Browne, CEO British Petroleum
UDS Lecture on CSR and Mining
CSR is a Value Strategy
Share price of a CSR failure that rendered a
multi-billion dollar reserve
un-developable
Good CSR creates value for company,
community and other stakeholders
~$13.00 $0.29
UDS Lecture on CSR and Mining
CSR and Mining
Mining is and has been on both ends of CSR performance
Some of the most innovative and exciting CSR projects ever have been driven by mining companies (coming in case studies)
Mining has had some of the worst CSR shortcomings ever too
UDS Lecture on CSR and Mining
“We are determined to provide multi-skilling to
workers and assist them to cope with
retrenchments. This is a must and not a choice
for industry”
“It is important for mining to ensure that
economic benefits accrue to society as a whole
and more specifically to communities affected
by mining . . . The social environment has not,
in my opinion, been adequately addressed in
the past”
Hon. Phumizile Mlambo-Ngcuka
South Africa Minister of Minerals and Energy
The Mining World Has Changed
UDS Lecture on CSR and Mining
CSR IS about value in Mining
Bougaineville - corporate practices were directly implicated in provoking civil war, allegedly cost Rio Tinto $3 billion (Stanford Univ study)
Tambo Grande
Ovacik/Eurogold (vs Kislidag’s success)
Saskatchewan Uranium Industry
UDS Lecture on CSR and Mining
The Mining World Has Changed
Social issues are as important as Technical Issues
UDS Lecture on CSR and Mining
Mining IS a Development Business
Mining industry is amongst world leaders in creating local value from investments and operations.
Sustainable Development and Corporate Social Responsibility will continue to grow in importance.
UDS Lecture on CSR and Mining
Beyond Beads ‘n Trinkets
To create bottom line value CSR must create meaningful development value in areas such as:
– Poverty Alleviation
– Community Health
– HIV/AIDS
– Rural Development
– Local Capacity Development
– Infrastructure Support
Value Created is not measured in money spent
UDS Lecture on CSR and Mining
SD/CSR Implementation Challenges
more than a warm fuzzy issue
Spending isn’t the answer
Plan
Framework
System
?Results?
Solving social
problems Objectives
UDS Lecture on CSR and Mining
SD/CSR Implementation Framework Advice to Mining Companies
Focus on Value Creation
Be systematic and integrate with overall development objectives of the country/region
Catalyst for Development – development partnerships
Accept that there will be negative impacts (e.g. AIDS)
Build from local strengths / mitigate local weaknesses
Begin closure planning NOW
Build international relationships
Communication is critical – appropriate and strategic
Bring the industry along with you
Quantify objectives and results
UDS Lecture on CSR and Mining
Some Examples (deliberate use of non Ghanaian examples
Placer Dome South Africa Poverty alleviation HIV/AIDS Capacity development
Eldorado Gold – Kisladag (Turkey) Poverty alleviation Environmental rehabilitation Rural development Capacity development
Porgera (PNG) Infrastructure Rural Development. National HIV/AIDS Strategy Closure Planning Approach
UDS Lecture on CSR and Mining
Placer Dome Care Project
Original objective – mitigate the social and economic impacts of retrenchment and assist 70% of family units to become economically active
Innovative rural development and HIV/AIDS program, delivered at community level across 3.5 million sq km of southern Africa
– Extensive involvement of women and families
– Pioneered new 13 step process with extensive counseling, training and support. (Process is being copied by other development programs in the region)
UDS Lecture on CSR and Mining
Placer Dome Care Project
HIV/AIDS program won prestigious Development Innovation Award at World Bank’s Development Marketplace – Over 2,400 development projects from 122 countries
CSR can create real development value
UDS Lecture on CSR and Mining
EmployedWorker
SupportingExtended
Family
Worker becomesHIV Positive and
Eventually developsAIDS
Healthy workerleaves village
for employment
MedicalRepatriationTerminally IllMan Returns
To Village
Virtually no support for familiesChallenge is too vast for anysingle company to address
Current reality
Family andCommunityPrepared to
RecieveWorker
FamilyCounselling
andIntegration
withCommunity
Services
Training, Support and Medical SuppliesAssist Family to
Care for terminally ill
Care Process assistsFamily member toDevelop alternative
Economic Opportunity
Without interventionthe worker goes home
to overwhelm family whohave no support and no
means of economic sustainabilty
Financially sustainable through fee for service approach
Scalable beyond the mining industry
Helps to mitigate the social andeconomic impact of AIDS
in rural villages
Mining Outreach Partnership
Mining & HIV/AIDS
UDS Lecture on CSR and Mining
Eldorado Gold - Kisladag Project (Turkey)
Strategic approach to use mining project to facilitate sustainable rural development
Development of agriculture related industries and infrastructure;
Increased involvement of women;
Improved grazing and land management (reduce desertification)
10 years of mining production in harmony with local communities. Huge value for all stakeholders
Contrast with Eurogold project next door
UDS Lecture on CSR and Mining
Porgera (Papua New Guinea)
Working to leave behind a sustainable community – Development of local, non-
mine related, business
– Creation of local infrastructure to support a sustainable community after the mine leaves
– National HIV/AIDS PPP Strategy
– Innovative closure planning
UDS Lecture on CSR and Mining
Porgera Closure Framework
UDS Lecture on CSR and Mining
Summary
Why Because it is smart business and
creates/preserves business value
How not Don’t simply throw money at social issues
How Systematic and Value Creation Focus
Measure, Measure, Measure
Examples South Africa, Turkey, Papua New Guinea
UDS Lecture on CSR and Mining
Main Point
CSR is about value creation not
Charity
UDS Lecture on CSR and Mining
Mining is coming to Ghana’s north
Mining concessions in Upper West and Upper East Regions
UDS Lecture on CSR and Mining
And to the Upper West
UDS Lecture on CSR and Mining
Azumah Resources
UDS Lecture on CSR and Mining
Making CSR Happen
• Azumah’s mining development is an opportunity to get it right;
• Mining can create beneficial value for companies, people, community and environment;
• Or it can create a social, economic and environmental mess;
• How it turns out is not just the mining company's responsibility.
• All stakeholders must engage and help to make it work
UDS Lecture on CSR and Mining
Lecture Objective and Outline
• Define CSR and Social Investment;
• Discuss rationale and driving forces for CSR and social investment;
• Develop understanding of relevance of CSR to business and development community;
• Brief description of three case studies
• What does it mean for Wa and UWR
• Questions and discussion.
UDS Lecture on CSR and Mining
Questions and Discussion
UDS Lecture on CSR and Mining
Beyond the Gate: CSR & Mining
Presented by:
Wayne Dunn www.waynedunn.com
University for Development Studies
Lecture on CSR and Mining
October 31, 2011
Wa, Upper West Region, Ghana