Mining companies need to thoroughly understand the complex social, political, and environmental issues in the areas where they operate in order to be successful. These factors, including community relations, land disputes, environmental concerns, and more, can determine whether a mining project succeeds or fails. Proper stakeholder engagement is crucial to manage these risks.

2. Mining companies
Mining is an industry
need to acquire
that more than any Socio-political sufficient
sector of the factors are the single understanding of the
economy reflects defining complex of social and political
and is directly issues that situation at national
impacted by the determine the and local levels prior
political and social success or failure of to committing
conditions in a a mining operation resources to explore
country or a region
and develop assets
2

3. 3

4. 4

5. Land compensation Environmental
issues (resolved & issues Industrial action Illegal mining
unresolved)
Natural disasters Community Community Ethnic conflict
relations development
5

6. Intercommunity Intra-community Employment Demands of local
rivalry & jealousy rivalry & jealousy government
Infrastructure use Technical failure Poor Divestment of
governance/ethics shares
6

7. Understanding evolving
Entrepreneurial needs in society
Invention
RESOURCES
REPUTATION STAKEHOLDERS
Distinctive Society Customers Employees Shareholders
Competencies
Societal Products & Working
Impact Services Conditions Financial
Competitive RESULTS
Advantage
“When Good Companies do Bad Things: Responsibility and Risk in an Age of Globalization, Peter Schwarz & Blair Gibb, 1999 7

8. “Reputation Management: The key to Successful Public Relations and Corporate Communication,” John Doorley & Helio Fred Garcia, 2nd
ed., 2011 8

9. ASSESS STRATEGIZE EXECUTE
PERFORMANCE COMMUNICATION
“Reputation Management: The key to Successful Public Relations and Corporate Communication,” John Doorley & Helio Fred Garcia, 2nd
ed., 2011 9

10. An organization’s reputation is the sum of how its
various stakeholders view it, but all too often
companies leave such stakeholder perceptions to
chance.
Enlightened companies know that an effective
corporate or organizational communication process
can both enhance and protect its reputation.
They also know that the reputation, while an intangible
asset provides a number of tangible benefits to the
company.
“Reputation Management: The key to Successful Public Relations and Corporate Communication,” John Doorley & Helio Fred Garcia, 2nd
ed., 2011 10

11. Stakeholder relations Issues management
management becomes emerging as crucial
more complicated factor that many are
unequipped to handle
Currently Indonesia has
Relations must be 34 provinces and
maintained at all levels almost 500
municipalities and
regencies
11

12. 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., Business
Horizons No. 34, 1991 12

13. 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 )

14. 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 the
Environment, Aug 2007 14

15. 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
Land Admin. Agency 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 1
Adapted from study conducted by Kiroyan Partners for a mining company to prepare a stakeholder engagement strategy 15

16. 6
WHY 1
does this WHAT
threaten the is the
organization’s problem?
ability to fulfill
its mission?
5 2
WHO WHERE
is the target, is this
for whom problem
is it a occurring?
problem?
4 3
HOW WHEN
did this did this
become a become a
problem? problem?
Adapted from “Strategic Public Relations Management: Planning and Managing Effective Commnucations Programs”, Weintraub Austin, E. and
Pinkleton, B.E., 2006 16

17. Central Government
Regional Government
(Province/ Kabupaten)
Business Associations
NGOs
Mass Media
Capacity Commun- Local and Good Interest of
Issue ication Traditional Governance Business
Issue Communities Community
Adapted from study conducted by Kiroyan Partners for an international organization to identify issues relating to stakeholders of a 17
particular obstacle faced by the organization

18. Origin Mediation/Amplification Organization Resolution
Opportunity to influence Difficult to influence
Formal
constraints
Period of increasing
awareness
Media
Coverage
Pressure
Issue Management
Early issue identification
Potential Emerging Current Crisis Dormant
Development
18
“Risk Issues and Crisis Management in Public Relations: A Casebook of Best Practice” – Michael Regester & Judy Larkin, 2008

19. 19
“The Handbook of Crisis Communication” – W. Timothy Coombs & Sherry J. Holladay, 2010

20. “Successful Spokespersons Are Made, Not Born,” Hal Hart, 2000 20

21. The more precise, research-based approach to Stakeholder
Management (=“Sniper Approach” - every bullet counts) allows
more effective and efficient use of resources in reputation building
and CSR initiatives.
21

22. Menara Karya, 10th Floor Suite H
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Jakarta 12950 – INDONESIA
T: +6221 5794 4694
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www.kiroyan-partners.com