The private sector, driving force of africa's growth
Coal International - Andrew Hames Interview (Pages 21-25)
1. Coal International • September October 2014 21
AFRICAN SECURITY
In the late-1990s, the full potential of Africa as a global player first began to emerge. Since then
its position as a veritable powerhouse has gained momentum. Today, the continent is home
to 1 billion people and boasts an abundance of natural resources, including 10% of the world’s
reserves of oil, 40% of its gold and 80 to 90% of known chromium and platinum group metals
deposits. However, doing business in Africa is not without its challenges: Andrew Hames, Group
Director of Global Mining Solutions and a member of the G4S Group’s Strategy and Leadership
Teams, discusses the issues and how these can be mitigated against. Hames is also the Regional
Director for G4S’s African Energy, Mining and Construction business. In this role, he is responsible
for the development, implementation and execution of the strategy for the Group’s new Energy,
Mining & Construction sector for G4S Africa, covering a combined revenue portfolio in excess of
$364m/annum.
Mine security in Africa:
a G4S perspective on the
issues involved
A
frica is the second largest and second most
populous continent on the planet. It is home to one
billion people, roughly 15 per cent of the world’s
population, covers six time zones and its inhabitants
speak over 2,000 languages. The continent boasts an
abundance of natural resources, including 10 per cent of
the world’s reserves of oil, 40 per cent of its gold and 80
to 90 per cent of known chromium and platinum group
metals deposits. Africa is set to see economic growth of
4.8 per cent this year, expanding to 5.7 per cent in 2015.
By 2040, Africa is expected to have one in five of the
planet’s young people and the world’s largest working-age
population. If these trends continue, Africa will in all
likelihood play an increasingly important role in the global
economy.
It was in the late-1990s that Africa’s potential really
started to emerge. GDP growth steadily increased,
quickening the pulse of the region and infusing it with a
new commercial vibrancy. Whilst the surge in global
commodity prices over the last decade undoubtedly drove
this growth, arguably more important were government
actions to end political conflicts, improve macroeconomic
conditions, attract foreign direct investment, and create a
more business-friendly environment.
Data collated by the African Development Bank supports
the premise that Africa is a continent on the rise: average
life expectancy rose to 58 in 2011, up from 37 in 1950,
primary school enrolment climbed to 77 per cent in 2011,
up from 52 per cent in 1990, and governance improved in
46 of 52 African countries between 2000 and 2013
according to the Mo Ibrahim Foundation, which takes into
account indicators such as safety, rule of law, human
rights and economic progress.
It is therefore impossible to deny that Africa is a
2. 22 Coal International • September October 2014
continent of enormous untapped potential. However,
despite recent growth and the scale of its resource
endowment, Africa sadly remains the most
underdeveloped and unstable continent on the globe.
Political instability, corruption,
violence and economic
mismanagement have plagued
the continent for decades and
have held back growth and
development. New challenges
continue to emerge, such as the
rise of resource nationalism, the
spread of the Ebola virus across
West Africa and the rise of Islamic
militants in Nigeria.
Companies that want to benefit
from Africa’s growth need to have
a deep understanding of the
challenges facing the continent,
as well as the social and
demographic changes underway.
Recognising this, G4S has
established an unrivalled footprint
across the continent. We currently
have operations in 30 countries
across Africa, serving over 70,000
customers. We provide long term
support services to over 500
energy, mining and construction sites, 150 of which are
long term contracts within the mining industry on project
and operational sites. We are also the largest private
sector employer in Africa, with over 112,000 employees,
and are the only private sector security company in Africa
to be awarded Top Employer certification.
This footprint gives us a unique perspective on the
challenges faced by businesses operating in Africa,
particularly in the mining industry, and it is clear that the
risks facing the sector have become more extreme and
more complex due to the fast changing operational and
investment environment. As such, we are seeing security
and risk management moving up the agenda for mining
companies, from site level to the boardroom, as
companies attempt to navigate these complex operating
environments.
From a business perspective, the concerns of our
customers tend to be similar across the region – they’re
worried about access to capital, productivity improvement,
resource nationalism, a lack of skilled labour, poor
infrastructure (including access to water and energy),
reputational risk, maintaining a social and political license
to operate, commodity prices and currency fluctuations,
and widespread fraud and corruption. In contrast, at an
operational level the challenges can vary significantly from
country to country and even site to site. Our role is
therefore to take a holistic approach to assessing,
quantifying and managing the risks facing our customers,
both at a macro and at an operational level.
Multinational companies operating in Africa are having
to contend with the implementation of protectionist
measures and accompanying populist rhetoric that has in
some instances led to a greater degree of hostility from
host communities. This hostility manifests itself in many
ways, but we find that when companies have not
developed a reservoir of goodwill, operating in these
regions becomes much more difficult. In the future, it will
not be enough for companies in Africa to merely co-exist
with their host communities.
Instead, they will need to be
welcomed and viewed as
responsible partners and
contributors to the sustainable
development of the region.
At the heart of this social licence
must be an adherence to, and
promotion of, human rights – from
the right to non-discrimination to
the right to clean drinking water
and proper sanitation. Whilst most
of us are fortunate enough to take
these basic human rights for
granted, many of the territories in
which the mining industry
operates face situations of weak
governance and conflict which
can compromise the ability or will
of governments to protect the
human rights of their own citizens.
We are seeing customers and
other stakeholders increasingly
ask us to demonstrate specific
actions and practices which are aligned to internationally
accepted human rights standards, such as the United
Nations Guiding Principles on Business and Human
Rights, which is what G4S’s Human Rights policy and
framework is focussed on.
It is encouraging that the industry has begun to
recognise the importance of human rights by adopting
well-publicised policies and principles; however there is
clearly more that must be done. Mining companies already
have to consider what measures they will take to protect
employees in countries where governments may not be
AFRICAN SECURITY
“Companies want
better visibility
and control over
reputational risk, so
our job is to minimise
the complexity
and leverage our
international footprint
to provide best practice
at a local level.”
3. Coal International • September October 2014 23
meeting their own duties to respect and protect human
rights, but the industry should go further. Companies need
to work together to build a consensus that recognises that
the industry’s responsibility on human rights extends
beyond its own employees.
At G4S, a Human Rights Assessment is already in place
as part of the process for looking at entry into new
countries, and also guides the evaluation of potential
partners. We have also aligned Human Resource
minimum standards with our human rights framework and
ensured that internal audits that are carried out on every
G4S business now include a human rights element.
It is also imperative that the industry begins to develop
the business case for human rights, much like it has done
for safety, in order to ensure that
companies are able to mobilise
internal support for measures to
protect and promote human rights.
Companies should view human
rights not just as an ethical issue,
but as a critical business risk that
needs to be actively managed.
The rise of resource nationalism
and the legacy of poor socio-
economic conditions for mine
workers have brought renewed labour unrest to the sector,
and this has quickly become a primary concern for our
customers in Africa. The well-publicised and drawn out
strike action across South Africa’s platinum belt has led to
significant production losses, and companies operating in
the region are therefore beginning to realise that the
framework of labour relations under which they have been
operating for so long is beginning to crack.
In mining, as in other industries, there is no simple “one
size fits all” solution to labour unrest. Primarily however, it
is about relationships with the unions, and so companies
in the region are devoting considerable resources to
improving relationships with established trade
unions, as well as building relationships with
new unions that have emerged from the
recent chaos. Our customers have learnt that
only meaningful engagement with all
stakeholders can bring sustainable solutions.
An important part of this engagement will be
a better understanding of and response to the
socio-economic hardships still faced by the
majority of mine workers in the region.
Labour’s expectations have changed, and
therefore the way in which our customers
engage with their workers is changing too.
From a security perspective, it is important
to identify and agree processes that can be
executed at the first sign of unrest, as this will
ensure minimal disruption to operational
performance. It is also vital to have a well-
established, properly designed infrastructure
which allows for transparency within as well
as outside the mine. Much of this stems from
intelligence. Mine security must include an
effective intelligence network on the ground
to ensure that any issues are identified as
soon as possible. We believe that the right
approach is to be preventative, not reactive, and have
found that in order to ensure a community-enhanced
security environment, it is crucial to achieve genuine
partnerships that will strengthen the conflict resolution and
mediation capacity of staff, contractors, communities and
civil society. By building these relationships and involving
surrounding communities, the overall safety of a mine site
can be dramatically enhanced during times of unrest.
Illegal mining is indicative of the complex and
demanding security challenges our customers face, and
presents a unique security challenge for our customers in
Africa. Illegal mining activities result in high-levels of
competition for access to resources, often leading to
violence which is fuelled by well financed and often well
connected networks with national
and international reach. The illegal
mining industry also creates an
unregulated parallel industry and
market which threaten legal mining
activities, negatively affect the image
and reputation of the mining
industry, harm investor confidence
and raise uncertainty over the
State’s ability to exercise control
over the sector.
Illegal mining can only be addressed if both the supply
and demand chain is looked at simultaneously. This
requires a significant degree of cross boarder
collaboration to deal with the national and international
syndicates involved, regulating the trade internationally
and addressing the collusion of elements in the mining
industry and law enforcement.
We have found that a pre-emptive approach is the best
way to deal with the security risks presented by illegal
mining activities. For example, physical security
infrastructure such as cameras and fencing should be
used to discourage trespassing. Another key aspect is the
AFRICAN SECURITY
“Mine security must
include an effective
intelligence network
on the ground.”
4. 24 Coal International • September October 2014
proper tracking of assets and valuables extracted at the
mine site, and the ability to monitor the methods used for
extraction. This may seem obvious; however security is
surprisingly often one of the last functions considered on a
mine project. This can lead to poorly designed security
infrastructure that can leave mine sites exposed to the
risks of illegal mining.
Cyber-crime is a relatively new threat to emerge for
mining companies, and one that has become increasingly
prevalent as companies across the region rely on
automation to overcome challenges such as decreasing
productivity, declining grades and poor safety
performance. Such automation requires advanced
communication networks, which means that mining
companies have become easy targets for cyber criminals.
We have already seen some high profile cases of such
attacks – BHP Billiton was attacked during its attempted
takeover of Rio Tinto, and Fortescue Metals Group was
forced to upgrade its network security following cyber-
attacks to its facilities in the Pilbara and Perth, Australia.
Despite growing awareness in the sector, mining
companies have inadvertently made cyber criminals’ jobs
easier. Seeking to improve operational efficiency and
reduce overheads, many miners have merged their
information technology (IT) and operational technology
(OT) systems onto one platform. Two systems that were
once separate have come together without the
corresponding implementation of
the security infrastructure
required to protect it.
Gone are the days when the
information security of a company
was the sole task of the IT
department. Cyber-attacks must
now be a concern of the Board.
Companies must regularly
conduct attack tests, using data
analytics to identify potential threats. Companies should
work to identify the areas of their platforms most
vulnerable to attack, assessing where in current systems a
breach is most likely to appear. They should also invest in
hardware that can be easily updated, and a cyber-threat or
attack response protocol should be implemented.
Another new threat to emerge in the region is the rapid
spread of the Ebola virus across West Africa. The worst-
ever outbreak of the Ebola virus in Guinea, Liberia and
Sierra Leone, which has claimed more than 800 lives in
the six months since March 2014, has highlighted the
deficiencies of West Africa’s healthcare system. The
outbreak also threatens severe economic damage to the
region, with growth forecasts for the worst affected nations
of Sierra Leone, Liberia and Guinea already been revised
downward by as much as 1% after trade and commerce
has been prevented by the closure of borders and
enforcement of quarantines.
Although global efforts to contain the virus are helping,
the burden of responsibility for dealing with the outbreak
will increasingly be felt by companies operating in the
region, particularly those in the mining sector. Already,
some companies operating in affected countries such as
Liberia, Sierra Leone and Guinea have decided to
evacuate their staff where possible. These disruptions will
be particularly detrimental for smaller mining companies
who are dependent on one or two assets for production.
The disease, which is spread via contact with bodily
secretions, kills as many as 90 per cent of those who
contract it. There is no cure and no vaccine, and so the
impact on the region will be unimaginable if this outbreak
cannot be contained. Education will be critical, and
companies in the region need to take responsibility for
ensuring that their employees are aware of the virus,
understand how it is spread and know how to avoid
contracting it.
It is clear that the risks facing companies in Africa are
extremely diverse. In-country risk assessment must therefore
form an integral part of any business and project modelling,
and risk management must be central to ongoing operations
management.
Recognising this, our customers in Africa are increasingly
looking for long-term strategic risk management partners,
and we are therefore focused on ensuring that we are able to
add value throughout the project lifecycle – from the strategic
decision making stage of a project, when exploration and
assessment is underway, through to mine development,
expansion and eventual closure. An example of this is our
innovative Remote Site Facility Service, which offers a total
solution for operating in high risk areas, leveraging our
existing HR, banking, payroll, project management, logistics
and supplier expertise and relationships. Recently, we
announced our new capability to build,
run, manage and maintain
accommodation villages for
employees working in remote sites
throughout Africa, recognising that our
customers want to give their
employees in remote locations high
quality, safe and comfortable
accommodation to improve the morale
of their staff and ultimately the
performance and productivity of their sites.
Above all else, customers in Africa are looking for an
integrated safety and security solution, one that ensures the
resilience of their operations, mitigates risk, prevents loss
and protects their employees, assets and reputation.
They are seeking continuous improvement throughout
all processes, and they want security services that are
executed in line with their company’s vision, enhance their
sustainability and conform to their business framework and
standards. Currently in the mining sector we are seeing
companies that have traditionally allowed security contracts
to be negotiated at a business unit or operational level
assuming a lot more responsibility. They are also being
more creative and seeking out global standardisation of
service levels and want better management of their security
providers.
Companies want better visibility and control over
reputational risk, so our job is to minimise the complexity
and leverage our international footprint to provide best
practice at a local level. To achieve this, we use an end-
to-end methodology that links risk management and crisis
management. We carry out a threat assessment, where we
quantify the threats based on their capability and intent to
cause harm or loss. We then conduct a risk assessment
and prioritise the risks based on their impact versus their
AFRICAN SECURITY
“It is not enough for
companies to co-
exist with their host
communities.”
5. Coal International • September October 2014 25
probability. Once the nature and extent of the risks are
established, we decide how to manage each risk and
develop an appropriate security framework.
Mining companies operating in Africa face a rapidly
evolving risk environment which threatens their assets and
businesses. From Ebola to cyber-crime, new challenges
are changing the way the mining industry in Africa assesses
investment opportunities. Therefore, in order to continue
to benefit from Africa’s growth potential, the industry has to
change its approach to risk management and mitigation.
In this context security is becoming even more important,
and needs to be a part of project planning from the very
beginning. Companies need to view security as more than
just manned guarding – it’s about physical infrastructure,
proper crisis planning, technology and training. This trend is
already evident in companies’ planned spending on security.
The mining industry in Africa will spend approximately £3.0bn
on security over the next two years, of which £1.5bn will be
on technology.
Companies chasing ever higher returns for their
shareholders will inevitably need to bear a degree of
operational risk, but by prioritising security and treating
security providers as strategic partners, companies are
able to accept higher risk, thereby enhancing their business
performance and associated potential returns on investment.
In turn, this benefits the region by encouraging foreign
investment which drives community development, creates
employment and unlocks the potential of Africa’s vast
resources.
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AFRICAN SECURITY
Andrew Hames is Group
Director of Global Mining
Solutions and a member of
the G4S Group’s Strategy and
Leadership Teams. Hames
sits at corporate level within
the Group to shape, lead and
execute on the strategy of the
Groups global mining business.
He is accountable for the
design, implementation and
execution of the global mining
sector strategy for the Group
that will help grow and support
existing and new markets.
In addition, Hames is also the Regional Director for its
African Energy, Mining and Construction business. In this
role, he is responsible for the development, implementation
and execution of the strategy for the Group’s new Energy,
Mining & Construction sector for G4S Africa, covering a
combined revenue portfolio in excess of $364m/annum.
Hames has been Group Director, Global Mining Solutions
since 2012, and took on the addition role of Regional Director
for its African Energy, Mining and Construction business at
the start of 2014. He is based in Dubai.
Andrew has spent the last 21 years in customer driven
businesses, with the last 11 servicing the energy, mining
and infrastructure industries across all six continents.
Andrew Hames, Group
Director, Global Mining