Beyond the Paycheck:  Stanford GSB Lecture to Net Impact Conference
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Bridging the Gap: LEADING SOCIAL INNOVATION ACROSS SECTORS Net Impact Conference Stanford University Graduate School of Business November 11, 2005
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Beyond the Paycheck:  Stanford GSB Lecture to Net Impact Conference Beyond the Paycheck: Stanford GSB Lecture to Net Impact Conference Presentation Transcript

  • Beyond the PaycheckPlacer Dome’s CSR Program in Southern Africa Bridging the Gap: LEADING SOCIAL INNOVATION ACROSS SECTORS Net Impact Conference Stanford University Graduate School of Business November 11, 2005 Presented by Wayne Dunn ’97 SloanPLACER DOME
  • Objective• Case study of innovative developmental CSR• Demonstrate application of CSR strategic principles 1. CSR/Sustainability Policy 2. Strategic interventions vs. reactive approaches 3. Impact metrics vs. expense metrics 4. Partnership strategies (financial, operational, technical) 5. Leadership and leverage PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 2
  • Presentation Overview• Background – how did this get started• The Care Project –Developing and implementing the plan (challenges, partners, learnings) –Business value created• HIV/AIDS – The Crisis and why does it matter – Programs and activities• Other CSR Activities• Relate Activities to CSR Strategy• DiscussionPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 3
  • Background• 1990s saw massive changes in South African mining industry – over 100,000 jobs lost as the industry restructured;• 1999 – Placer Dome purchased a 50% interest in South Deep (WAL), a mine located just outside Johannesburg – This was the first major post-apartheid foreign investment in the South African mining industry PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 4
  • Background (cont)• In late 1999 after detailed study management realized that economic reality dictated major restructuring at South Deep• 1/3 of the South Deep workforce (over 2,500) workers were retrenched – Industry standard retrenchment packages consisted of 2 weeks salary per year of service plus access to onsite training PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 5
  • Families & Communities must benefit from mining PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 6
  • Sustainability Policy• Industry standard didn’t meet the spirit of Placer Dome’s Sustainability Policy• Need to go… BEYOND THE PAYCHECK PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 7
  • The Care Project• A commitment to mitigating the social and economic impact of retrenchment at the family and community level• A target of assisting at least 70% of the retrenchees and their families to become economically active• A commitment to develop HIV/AIDS programming initiatives• A commitment to enable spouses (women) to be able to benefit directly from retrenchment benefits• 2 year time frame and R15 million (CAD$3.6 million) budget was established PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 8
  • Implications• The Care project decisions and commitments had a huge implication for South Deep management• Entire industry watching to see what this Canadian newcomer will do PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 9
  • 2560 Retrenchees •Mozambique •Lesotho •South Africa •Swaziland •Botswana The MineHow to successfullyprovide socio-economicsupport across remoterural regions of fivecountriesPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 10
  • The Initial 4-Step Plan1. Consultations with retrenchees in their villages2. Recruit (from amongst the retrenchees) a group of 25-30 fieldworkers who would provide frontline support to the retrenchees and their families3. Locate and register the retrenchees4. Provide them with training and support to enable them to become economically activeAll of the above to be done in partnership with MDA, TEBA and other partnersPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 11
  • Reality was different than we expected Consultations with• Retrenchees and their retrenchees Unions were still angry over the contested retrenchment• Retrenchees’ homes were difficult to locate and registration was often problematic Walking to a remote retrenchee homestead in Lesotho PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 12
  • Reality was different than we expected• Placer’s lack of socio-economic development experience was an issue• Partnerships took longer to form and more time to manage than expected• Industry skepticism• Mozambique floods Yes, it shows in Africa!• National borders• Micro-finance• HIV/AIDS• Fieldworker training programs• Retrenchee education levels• Centralized delivery didn’t work• Project was under-financed• We couldn’t do it in two years• Etc. PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 13
  • Meeting the challenges• Negotiated a public private partnership with CIDA that contributed CAD$ 2 million in additional resources• Kept working at getting our partnerships working for everyone• Leading by example gradually demonstrated our commitment to industry, unions and others• Continual revision of plan and project delivery to ensure it met the needs of the recipients PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 14
  • Orientation and Awareness PhaseThe Care 1. Registration & Homestead Visits 2. District Counselling Sessions 3. Open Days/Career Fairs 4. Financial Lifes Skills Training 5. Feedback and Choices SessionProcess Personal Economic Plan Prepared & Assessed Decision on Economic Option Enterprise Stream Employment Stream Business Planning & Preparation Employment Planning & Preparation13-step process 1. Business Orientation a) Introduction to Business 1. Identification of Employment Options 2. Skills Training (Vocational/Agricultural, etc) b) Skills/Product Training 3. Employment Counseling / Placement Delivered 2. Develop Draft Business Plan (to be reviewed with Counselor) (Job search/Resume, etc.) 18 times (plan will contain market assessment, financial, operational and skills upgrading plan) 3. Preparation of Micro-Finance Application Personal Employment Plan Prepared Across Business & Five countries Financing Plan Ongoing Processes Prepared Follow-up sessions/ Evaluation of Micro Finance Application activities to monitor effectiveness of Business Operation interventions 1. Ongoing availability of Technical Assistance and Business Counselling Communication and 2. Ongoing faclitiation of skills training needs consultation with stakeholders (i.e., business, agriculture, vocational, etc.) Continuous improvement process (review feedback; enhance programs, procedures, processes) Retrenchee is Re-Integrated PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 and Economically Active Slide 15
  • Some results• 92% (2,232) of the retrenchees have been located and registered• 56% of those (1,250) making a living wage• 65% (1,556) have received financial life skills training• Many of the trainees were women• Care process is becoming an industry standard in RSA and replicated elsewhere in Africa and globally• Development infrastructure and partnerships throughout the five country region PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 16
  • Chicken raising businessPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 17
  • Furniture makingPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 18
  • Unique training programsPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 19
  • Rice farming in MozambiquePLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 20
  • Spaza (convenience) shopPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 21
  • And the business value is…• HIV/AIDS, Black Empowerment, new mining legislation, social scorecards, escalating security challenges and a myriad of other issues are the daily facts of mining life. Mines and mining companies must demonstrate an ability to create meaningful value for people, communities and other social stakeholders – and they must do so while meeting increasingly challenging financial targets.• Placer Dome is not a charity and the Care project was not just some sort of corporate philanthropy PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 22
  • The Mining World Has Changed• “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. Phumzile Mlambo-Ngcuka South Africa Minister of Minerals and EnergyPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 23
  • Reputational Capital Gain• Kgosietsile Mogaki, Social Plan Director for the South African government’s Department of Minerals and Energy sums up the project. “When PDWAJV laid-off 2,500 workers in 1999 we expected it would be similar to other retrenchments, where the workers and their families received little support other than some on-mine training for the worker. However, we have witnessed the Care project making life changing impacts, helping workers and their families to develop alternative incomes. Today we (the DME) see the Care project as an example that we encourage other mines to follow. The Care project has changed the social face of the South African mining industry.” PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 24
  • What’s in it for Placer Dome? We believe that our ability to effectively manage social issues is a competitive advantage as we look towards the future of the industry in South Africa and globally Through programs like Care we are better able to manage risk and are securing our long term future in South Africa and throughout the sub-continent Piet Kolbe Mine Manager, South DeepPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 25
  • And then there is HIV/AIDS• RSA ACCOUNTED FOR NEARLY 1 IN 8 OF THE NEW Life Expectancy HIV INFECTIONS THAT 70 OCCURRED WORLD WIDE IN 65 2000 60• HIV+ PREVALENCE RATE IN WOMEN ATTENDING ANTE- 50 NATAL CLINICS INCREASED 40 40 FROM 0.7% IN 1990 TO 24.8% IN 2001 30• AVERAGE OF 1700 NEW 20 INFECTIONS PER DAY• LIFE EXPECTANCY WILL 10 DECLINE FROM 65 TO 40 0 2001 2011 BY 2011 PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 26
  • HIV/AIDS Facts• ESTIMATED THAT 12% OF TOTAL RSA POPULATION AND 25% OF MINEWORKERS ARE HIV+• ALREADY 400,000 PEOPLE ARE AIDS SICK, AND THIS WILL INCREASE TO 1,4 M BY 2010• YOUNG WOMEN PARTICULARLY VULNERABLE – 23.9% AGED BETWEEN 15 – 49 ALREADY INFECTED AND WILL RISE TO 29.7% BY 2007• AIDS ORPHANS AT PRESENT AMOUNT TO 660,000+ AND WILL RISE TO 1,8M BY 2015• ACCUMULATIVE AIDS DEATHS WILL RISE TO 9M BY 2015PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 27
  • HIV/AIDS Impact• REDUCED ECONOMIC GROWTH RATE – 2010 GDP 20% below a non AIDS scenario• REDUCED POPULATION – RSA population 10M smaller than non AIDS scenario• SKYROCKETING DEMANDS ON PUBLIC HEALTH SYSTEM -• RADICALLY CHANGED PRIVATE SPENDING PATTERNS – to healthcare and funeral costs• IMPACT ON SOCIO-ECONOMIC STABILITY? (orphans) HIV/AIDS is the worst epidemic in human history. At every level it is causing devastation, destruction and suffering throughout Southern Africa This is the reality for business operating in much of Africa today. Nobody can afford to ignore it PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 28
  • HIV/AIDS and Gold Mining• $10/oz impact if nothing is done (5% of production costs)• ~$3/oz with maximum intervention• Impact on social and political stability? PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 29
  • HIV/AIDS ProgrammingOur program – multi- level and holistic• Education• Prevention• Treatment• Impact mitigation (when one has AIDS)• On the minesite• In local communities• In rural areas where our workers come from PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 30
  • Minesite Program• TRAINING AND EDUCATION• STI & TB TREATMENT• CONDOM DISTRIBUTION• PEER EDUCATION• VOLUNTARY COUNSELING AND TESTING (VCT)• WELLNESS PROGRAM• MEDICAL REPATRIATION PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 31
  • Minesite ProgramPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 32
  • Current Community Program• AWARENESS AND EDUCATION PROGRAMS• MOBILE CLINIC• CONDOM & FEMIDOM DISTRIBUTION• PERIODIC PRESUMPTIVE TREATMENT (PPT)• TREATMENT FOR SEXUALLY TRANSMITTED INFECTIONS ( STI) PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 33
  • Community Mobile Clinic COMMUNITY PROGRAMPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 34
  • And when HIV prevention doesn’t work• What to do when people can no longer work?• They return to their villages where there is little or no support• Families are overwhelmed• Tremendous social and economic impact• Addressing it effectively is too much for one company PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 35
  • Industry Home Based CareAIDS CAMPAIGN TEAM MINING• TEBA INFRA-STRUCTURE• TRAINING OF CARE GIVERS• SUPPORT STRUCTURE – QUALIFIED STAFF• MONTHLY MEDICATION• WORK WITH OTHER STAKEHOLDERS (E.G. TRADITIONAL HEALERS)• WORLD BANK DEVELOPMENT INNOVATION AWARD (US$100,000) PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 36
  • Home Based CarePLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 37
  • INDUSTRY HOME BASED CARE RESULTS (Year One) Milestone Target Actual Community Care Supporters engaged 87 127 Community Care Training 87 123 People under Home Based Care 696 801 THE PROJECT EXCEEDED TARGETS IN EVERY AREAPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 38
  • Overview of South Deep AIDS Programming SOUTH DEEP Sustainable Development Department On Mine Program Community Program •Voluntary Counseling and testing HIV Negative •Continue working Wellness Program Farm Modified work program •Agricultural work / Environmental Medical repatriation Back to work or Re skilled Home Based Care Benefits Care Positive EC HBC OPPPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 39
  • But what happens to children and families when the breadwinner can’t workPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 40
  • HIV/AIDS and Rural Areas• HIV/AIDS is having a monumental impact on the socio-economic well being of families throughout rural Southern Africa• Workers who used to support extended families of 10-20 people are becoming too sick to work and are coming home, literally to die PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 41
  • HIV/AIDS and Rural Areas• Knowing that their family needs the income and that there is little medical care for them if they go home, these workers are staying on the job as long as possible• In addition to the human tragedy, this is having a severe impact on business productivity• There are solid business and humane reasons to address this problem• But, economies of scale are needed PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 42
  • Where to next?• The Care project piloted an effective means of assisting rural families to become economically active and has an existing infrastructure and management system in place• Industry Home Based Care project piloted a cost effective, fee for service, program to support medically repatriated workers and their families PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 43
  • Our Vision for the FutureMining Opportunities Care Process Partnership• Integrate the Home Based Care + project with the Care process and launch as a fee for service based Home Based program to address the social and Care economic impacts that AIDS is having on rural families and = communities• Start with the mining industry but MOP Project design the infrastructure and management systems to enable participation by other industries, governments and donor community stakeholders PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 44
  • MOP Summary Current reality Mining Outreach Partnership Helps to mitigate the social and economic impact of AIDS Healthy worker Virtually no support for families in rural villages leaves village Challenge is too vast for any Financially sustainable throughfor employment single company to address fee for service approach Scalable beyond the mining industry HBC Component Training, Support and Family Medical Supplies Employed Medical Family and Counselling Assist Family to Worker becomes Worker Incapacitation Community and Care for terminally ill HIV Positive and Supporting Terminally Ill Prepared to Integration Eventually develops Extended Man Returns Recieve with IG Component AIDS Family To Village Worker Community Assists Services Family member to Develop alternative Economic Opportunity Without intervention the worker goes home to overwhelm family who have no support and no means of economic sustainabilty PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 45
  • Summary of Social Value Activities• Care project (partnership)• Home based care (partnership)• Income Generation support for HIV/AIDS families (partnership)• Minesite HIV/AIDS programming• Community HIV/AIDS programming (partnership)• School feeding program (partnership)• Personal growth and development training• New mining project with tribal equity partnerPLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 46
  • Summary and Discussion• Case study of innovative developmental CSR• Demonstrate application of CSR strategic principles 1.CSR/Sustainability Policy 2.Strategic interventions vs. reactive approaches 3.Impact metrics vs. expense metrics 4.Partnership strategies (financial, operational, technical) 5.Leadership and leveragePLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005 Slide 47
  • Beyond the PaycheckPlacer Dome’s CSR Program in Southern Africa Bridging the Gap: LEADING SOCIAL INNOVATION ACROSS SECTORS Net Impact Conference Stanford University Graduate School of Business November 11, 2005 Presented by Wayne Dunn ’97 SloanPLACER DOME