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Social issues in the mining industry in Indonesia.

Social issues in the mining industry in Indonesia.

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130319 nk pit 2 port-ibc asia-final 130319 nk pit 2 port-ibc asia-final Presentation Transcript

  • Mining is an industry that more than any Socio-political Mining companies sector of the factors are the single need to acquire economy reflects defining complex of sufficient and is directly issues that understanding of the impacted by the determine the social and political political and social success or failure of situation at national conditions in a a mining operation and local levels country or a region 2
  • Stakeholder acceptance is key to successful project delivery 73 % of delays to capital projects relate to ‘non- technical’ risk – delays in permitting and community protests Highly networked society with instant access to information and news means that local action can result in global attention“Management Systems for Social Performance – The Shell Journey,” presented by Shell at the Regional Stakeholder Consultation on the Post- 32015 Development Agenda in Nusa Dua – Bali, December 14, 2012
  • Land compensation Environmentalissues (resolved & issues Industrial action Illegal mining unresolved)Natural disasters Community Community Ethnic conflict relations development 4
  • Intercommunity Intra-community Employment Demands of localrivalry & jealousy rivalry & jealousy governmentInfrastructure use Technical failure Poor Divestment of governance/ethics shares 5
  • PRE- POST-OPERATIONS OPERATIONS OPERATIONS Social Impact Stakeholder Assessment Management Mine Closure• Stakeholder • Community • Infrastructure Analysis and Development • Local Economy Engagement • Capacity Building • Good Governance• Community Needs • Good Governance Assessment • Mine Closure • Mine Closure Finalization and• Mine Closure Refinement and Monitoring Planning Adjustment
  • Priorities relating to different social, environmental and economic goals determined through participatory process. Relationship with stakeholders based on collaboration, trust and respect. No one to be made worse of. Ensuring the rights of marginalized individuals and groups. Economic benefits by mining to be shared equitably. Investment in trust funds, skills training, or social infrastructure. No unacceptable environmental and other negative legacies. Capacity to be developed at local level to manage revenues for development needs through public-private partnership. 7“Breaking New Ground: The Report of the Mining, Minerals and Sustainable Development Project,” – MMSD, 2002
  • Livelihood of region Strong social No “ghost towns” and communities institutions in place left behind secured No serious “Mining culture” reputational issues firmly established 8
  • Good corporate community relations, stakeholder engagement and consultation and efforts to meet particular community demands are means by which companies seek to improve reputation among those with the ability to impact operations, and thereby obtain a social license to operate“Earth Matters: Indigenous Peoples, The Extractive Industries and Corporate Social Responsibility,” Ciaran O’Faircheallaigh & Saleem Ali, 2008 9
  • Any group or individual who can affect or is affected by the achievement of the organization objectives“Strategic Management: A Stakeholder Approach,” R. Edward Freeman, 1984 10
  • Stakeholder Stakeholder Stakeholder Identification Analysis Engagement What corporate Who are our What are their social responsibilities do stakeholders? stakes? we have to our stakeholders? What What strategies, opportunities and actions, or challenges are decisions should presented by our we take to best deal with these stakeholders? responsibilities?“The Pyramid of Corporate Social Responsibility – Toward the Moral Management of Organizational Stakeholders,” - Carroll, A. B., BusinessHorizons No. 34, 1991 11
  • To whom does the organization have legal obligations? Who might be positively or negatively be affected by the organizations activities or decisions? Who manifested concern about the issues or impacts? Who has been involved in the past when similar concerns need to be addressed? Who can help the organization address specific impacts? Who can adversely affect the organization’s ability to meet its important objectives? Who would be disadvantaged if they were excluded from the engagement? Who in the value chain is affected? Who may have an impact on the reputation of an organization? Who may influence the policy and regulatory environment in which the organization operates? Who may impact on the value of the organization?(Adapted from “ISO 26000: Guidance on social responsibility, 2010 )
  • 1 2 1 3 3 0 = Non-Stakeholder 1 = Latent Stakeholder 2 4 2 2 = Expectant Stakeholder 3 3 3 = Definitive Stakeholder 4 = Primary Stakeholder 1 2 1“The Primordial Stakeholder: Advancing the Conceptual Consideration of Stakeholder Status for Natural Environment,” - Driscoll, C. and Starik, M.Journal of Business Ethics, Vol. 49, 2004“The Natural Environment as a Primary Stakeholder: the Case of Climate Change,” - Haigh, N. and Griffiths, A. Business Strategy and theEnvironment, Aug 2007 13
  • Cate- Legiti- Urgen- Proxi- Main Vulnera- Real V+R Stakeholder gory Power macy cy mity Score (/20) bility Impact Score (/10) Bupati (Regent) pr 5 5 5 5 20 3 5 8 Regency Planning Bureau pr 4 5 5 5 19 2 2 4 (BAPPEDA) Land Admin. Agency (BPN) pr 4 5 5 5 19 3 5 8 Provincial EPA pr 3 5 5 5 18 3 5 8 Gunung Village de 2 4 5 3 14 5 5 10 Wira (informal leader) de 5 5 2 3 15 3 1 4 Clan-based organization la 1 1 1 2 5 1 1 2 (Jakarta) Village youth organization de 4 5 1 5 15 0 1 1Adapted from study conducted by Kiroyan Partners for a mining company to prepare a stakeholder engagement strategy 14
  • “Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets,” International Finance 15Corporation, 2007
  • Level of Engagement Methods of Engagement Consult  Surveys  Focus groups Limited two-way engagement: organization  Meetings with selected stakeholder/s ask questions, stakeholders answer  Public meetings  Workshops  Online feedback mechanisms  Advisory committees Negotiate  Collective bargaining with workers through their unions Involve  Multi-stakeholder forums  Advisory panels Two-way or multi-way engagement:  Consensus building process learning on all sides but stakeholders and  Participatory decision making process organization act independently  Focus groups  Online feedback schemes Collaborate  Joint projects  Joint ventures Two-way or multi-way engagement : joint-  Partnerships learning, decision making and actions  Multi-stakeholder initiatives Empower  Integration of stakeholders into governance, strategy and operations management New forms of accountability; decisions delegated to stakeholders; stakeholders play a role in governance(“AA1000 Stakeholder Engagement Standard 2011 – Final Exposure Draft,” – AccountAbility, 2011) 16
  • Greater sharing of information leading to knowledge Participatory/ High information exchange interactive decision-making Stakeholder engagement Two-way communication One-way communication Better understanding Ad hoc of stakeholders and communication their issues High stakeholder involvement“Unfolding Stakeholder Thinking: Theory, Responsibility and Engagement” – Jörg Andriof, Sandra Waddock, Bryan Husted, Sandra SutherlandRahman, 2002 17
  • Challenge Mining of companies generally Negative maintaining operate in Targeted by public ‘local remote local and opinion due license to areas that inter- to environ- operate’ in are national economic- mental and the face of pressure ally under- social resistance groups developed concerns by local and lack com- social munities welfare 18“Corporate Social Responsibility in the Mining Industries,” Natalia Yakovleva, 2005
  • Scope Clause 1Guidance to all types Two fundamental practices of social responsibility Clause 5of organization Recognizing social Stakeholder identificationregardless of their sizeor location responsibility and engagementDefinition Clause 2 Social resp.Terms, abbreviations Organizational governance Clause 6 Sustainable developmentand abbrev. Terms core subjectsUnderstanding The Fair Community Human Labor Consumer Environ- operating involvement/Social Clause 3 rights practices ment practices issues developmentResponsibilityHistory, Characterist-ics, Relationship Related actions and expectationsbetween SR andSustnble. Developmnt.. Integrating The relationship of Understanding the Clause 7 social an organization’s social responsibilityPrinciples of responsibility characteristics to SR of the organizationSocial Clause 4 throughout anResponsibility organization Practices for• Accountability Communication integrating social Voluntary initiatives• Transparency on social responsibility for social• Ethical Behavior responsibility throughout an responsibility• Respect for organization stakeholder interests Reviewing and improving an Enhancing• Respect for rule of organization’s actions and credibility law practices related to SR regarding SR• Respect for international norms of behavior Bibliography: Authoritative sources and Annex: Examples of voluntary initiatives• Respect for human additional guidance and tools for social responsibility rights (Adapted from “ISO 26000: Guidance on social responsibility,” November 2010 ) 19
  • Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that  Contributes to sustainable development, health and the welfare of society;  Takes into account the expectations of stakeholders;  Is in compliance with applicable law and consistent with international norms of behavior; and  Is integrated throughout the organization and practiced in its relationships. 20(Adapted from “ISO 26000: Guidance on social responsibility ,” 2010 )
  • ISO 26000 (expected behaviour) Maximizing contribution to Collahuasi’s sustainable Practices policies, development in force at principles Collahuasi and values • Interviews with key stakeholders • Information relating to Collahuasi’s management system was reviewed along with the recommendations established in Clause 7 of ISO 26000 (integrating SR throughout an organisation“Collahuasi and ISO 26000: Towards excellence in sustainability” – Regina Massai C. & Bernardita Fernandez B., presented at SR Mining 2011, 21October 2011 in Santiago, Chile
  • Menara Karya, 10th Floor Suite HJl. HR Rasuna Said Blok X-5 Kav. 1-2 Jakarta 12950 – INDONESIA T: +6221 5794 4694 F: +6221 5794 4696 info@kiroyan-partners.com www.kiroyan-partners.com