Resource Curse or Opportunity for Shared Value


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Toby Radcliffe, Senior Consultant, from Article 13 has presented at the Botswana Coal and Energy Conference. If you would like more information about the conference, please visit the website:

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Resource Curse or Opportunity for Shared Value

  1. 1. Resource Curse or…Opportunity for Shared ValueA practitioners perspectiveToby Radcliffe, Article 13
  2. 2. Good afternoon, and a brief introductionArticle 13 is a specialist change agent. We take plans and strategies that aren’t working - orhaven’t worked – in the social, environmental and ethical arenas and make things happen todrive positive change and create shared – and new - value for your organisation and yourstakeholders.We work globally with organisations (public and private) around issues which are controversial,complex and highly scrutinised; for example:•African mining company: Engaging local communities (including artisanal miners)•Global pharmaceutical company: Scaling up response to HIV/Aids in sub-Saharan Africa•UK NDA: Building a geological disposal facility for nuclear waste•Middle Eastern shipping company: Developing an ethical response to maritime piracyClient © 2
  3. 3. Today’s presentationResource Curse or… Opportunity for Shared ValueSome contextThe future trends which will shape our world (resource, transparency and expectations)Botswana and coal, the opportunity and the challengesStakeholders and what really mattersIdentifying your stakeholdersUnderstanding the material issues (what matters most)Building trust and creating shared valueCommunicating complex terms (to build trust and informed consent)Moving from ‘being good neighbours to creating shared value’ © 3
  4. 4. IncreasingexpectationsDecliningresourcesRadicalTransparencyValueCustomersEnergyMetals and MineralsClimateAirSpeciesForestFoodWaterSocial equitySoilStakeholdersResourcesThe three trends shaping the world
  5. 5. Context is key• Growing energy demands – nationallyESKOM, pressed by growing powerdemands in South Africa, is alreadycutting back on electricity generation toBotswana,• And globally… Demand for seabornethermal coal grew from 250 Mt in 1995to 650 Mt by 2010, an annual growthrate of nearly 6.7%. And is expected tocontinue, with demand reaching nearly1,100 Mt by © 5Source: World Energy Council• Diamond revenues, account for approximately 41% of government’s revenue and 32.3% ofGDP, however diamond revenues are expected to dip significantly around the year 2022• Africa’s electricity consumption is expected to grow at a rate of 3.4 % per year over theperiod between 1999 and 2020.
  6. 6. A solution… coal?• Botswana has extensive, and largely unexploited, coalresources which when developed can form part of theGovernment’s effort to diversify the economy.• Known coal resources in Botswana are of the order of202 billion tonnes• Coal currently supplies 30.3% of primary energy and41% of electricity generation.• Coal use is forecast to rise over 50% to 2030, withdeveloping countries responsible for 97% of thisincrease, primarily to meet electrification rates.Professor Abubakar Sambo, the World Energy Council’s Vice-Chair for Africa, said:“Our continent’s immense resources have strong potential to boost energy access andimprove the lives of our people. The opportunities are huge: in renewables and energyefficiency, our hydrocarbon reserves, and our huge gas reserves. But in order to capitalise onthese, there needs to be improved regional interconnection and more concerted efforts acrossnational borders.”
  7. 7. However, this brings new challenges….Infrastructure: The challenge of moving coal to the ports, requiring newinfrastructure and considerable regional investmentEnvironmental impact: Coal Deposits / Methane occurrence in Botswana is / arefound in the same rock units that constitutes Botswana’s major aquifer (Karoo).Local communities: Grassroots protests against the Phulbari Coal Project innorthwest Bangladesh, which would displace as many as 220,000 people, led the UNto call for an immediate stop to plans to excavate this vast open pit coal mineEquitable wealth distribution: In 2012, protest march in South Africa todemand that a multinational mining company share more wealth. “They aremaking millions here, but the community around is getting nothing”Climate change: Coal fired power plants are the biggest source of man made CO2emissions. This makes coal energy the single greatest threat facing our climate.
  8. 8. An answer? / An emerging approach?• Understand who your stakeholders are– Early involvement to develop trust in process and actors– Consider the ‘missing stakeholders’• Understanding the issues which matter most to your stakeholders– Listen to all concerns (even if they seem trivial)– What are the quick wins, and longer term priorities• Work with your stakeholder to create shared (societal and business) value– Operate in partnership with stakeholders– Development of community benefits and mitigation
  9. 9. Who are your stakeholders?Which ones do you have direct access to?Those who affectthe organisationThose affected bythe organisationThose core tomission and valuesThose mostinteracted withCompanyShareholders SuppliersGovernmentEmployeesConsumersSocial media?RegulatorsLocalcommunityMedia?
  10. 10. EXPLOREREMOVEPROCESSACCESSREFINEREHABILITATEImpact on restricted areas – biodiversityInteraction with artisanal and small-scale miners (ASM)Land disturbanceRegional health threatsGrievance mechanismsEmployment practices anddevelopment skillsHuman rightsHealth and safetyManagement of cyanideUse of resourcesPost closure monitoringPost closure planningEngaging with communitiesEmissions, effluents and wasteIndigenous rightsEmissions to airResettlementMaterial stewardshipWhat are the issues…
  11. 11. RegulatorsMediaNational governmentLocal governmentsNGOsInternationalgovernment ThecommunityTrade unionsThe publicIndustry and thesupply chainStaffWhat are the issues that MATTER MOSTAcademiaHow do I know Ican trust theactors? How is itregulated?It will destroy mybusiness or localtourism etc.We should not befollowing this pathwe need greenenergyWhat are thebenefits to me(jobs, sharingwealth, taxes)Is it safe?How much isit going tocost?What are the mis-conceptionsOpportunities forcreating shared value?Which issues mattermost?
  12. 12. How to prioritise themIncreasingsignificancetostakeholdersIncreasing significance to your organisationHuman rightsBiodiversityLanddisturbanceHealth and safetyEmissions, effluents andwasteEmissions to airResettlementPost closure plansClimate changeWater useRegional developmentCommunity engagementWealth distribution
  13. 13. Quick wins… addressing mis-truths andcommunicating riskKEY TIPS• Define the goal• Identify and understand the audience• Target/engage audiences when mostlikely to be receptive:• Ensure message and messenger createtrust• Pilot messages first• Use plain language• Graphical presentation of uncertaintyproduces higher comprehensibilityratings, but lower trustworthinessratings• Ensure communication - including withthe media - is timely and proactive.Risk = Hazard x OutrageNot easy to establish,Very easy to lose.“Trust comes on foot and goeson horseback”TrustRiskLack of knowledgeORUncertainty about the potentialimpact or extent of hazard.Experts use quantitative riskattributes (e.g. probabilities)The public use qualitative riskattributes, such as voluntariness ofexposureUncertainty
  14. 14. EngagementCommunicationConsultationIt is typically one-way – in this instancefrom the mining company to the miners.But you can add value to it....You support people to answer questionssuch as – what do you want to want andwhat are you worried aboutThis is all about having a two-wayconversation. True engagement is whenyou are prepared to share the agendaEngagement, going beyond communication
  15. 15. Moving towards creating shared value“The competitiveness of a organisation and the health of the communities around it aremutually dependent.Understanding the issues which matter to your stakeholders also provides anopportunity to create shared value and build trust within the communityCreating SharedValueThe principle of shared value - creating economic value ina way that also creates value for society by addressing itsneeds and challenges”Businesses must reconnect company success with socialprogress. Shared value is not social responsibility,philanthropy, or even sustainability, but a new way toachieve economic success. It is not on the margin of whatcompanies do but at the center.”Porter 2011
  16. 16. Opportunities to move from ‘good neighbours’ tocreating shared valueCash incentivesSTAKEHOLDERCONCERNMOVING TOWARDS CREATING SHAREDVALUE• Dangerous to local health • More medical centres (health monitoring, betterscreening)• Link with health enhancement / public health• There will be more traffic/ road accidents• Build infrastructure which benefits the local community –routes to market• It will destroy mybusiness• Providing training and regional skills centre to enablelocal jobs for local people• No one will ask me • Establish a local partnership to oversee the project -allowing community to learn about the issues and takepart
  17. 17. Emerging thoughts / lessons for the futureWHAT THIS MEANS FOR MINING & ENERGY IN SOUTHERN AFRICA•There is not necessarily one single approach – communication with stakeholders isnation and culture specific.•Early involvement to develop trust In process and actors.•Proper identification of stakeholders and their interests/concerns/aspirations is thekey to success. Effective dialogue needs time and money (it may lead to delays in yourproject).•Listen to your stakeholders by establishing a two way process and gain trust.•Be transparent and open in process development.•Listen to all concerns (even if they seem trivial).•Operate in partnership with stakeholders.•Develop community benefits which the community actually want.•Allow sufficient time (it takes as long as it takes).
  18. 18. Thank you for your timeFor more information, contact Jane Fiona CummingT: +44 208 840 4450M: +44 7979 606986E: janefiona@article13.comwww.article13.comArticle 13: We create value with a conscience. Our expertise is innovative, our solutions drivebehavioural change and our recommendations can be implemented immediately.
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