CSO-business partnerships for development: Issues & Challenges
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This document discusses case studies of CSO-business partnerships for development and identifies lessons learned and implications. It analyzes partnerships in four sectors: a dairy cooperative in Tanzania, dairy system improvements in Kenya, mining in Madagascar, and mining/oil palm in Ghana. Key findings include that the origins and contexts of partnerships matter greatly to their design and outcomes. Partnerships range from philanthropic to strategic, and activities from production focused to holistic system approaches. Governance structures varied from informal to formal, and degrees of engagement ranged from transactional to committed. The document concludes that partnerships require adaptive approaches that address power imbalances, trust, and equitable benefits over time.
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CSO-business partnerships for development: Issues & Challenges
- 1. Bruce Byiers, Karim Karaki, Alfonso Medinilla May, 4th 2016 CSO-business partnerships for development: Issues & Challenges
- 2. 1. Context of the study 2. 4 dimensions 3. Lessons from ongoing case-studies and implications Overview Page 2ECDPM
- 3. • Partnerships on the rise • Commercial and development alignment Donors: PS4D… and own commercial interest? CSOs: Sustainable/inclusive business… declining core- funding Businesses: Philanthropy, CSR… and social license to operate, sustainable value chains Host government: economic transformation – more and better jobs… and political survival • Lots of interest in impact – but what about the partnership’s processes? Context of the study ECDPM Page 3
- 4. 4 dimensions framework ECDPM Page 4
- 5. 1. Dairy cooperative partnership in Njombe, Tanzania: Africa Milk Project 2. Dairy system improvement in Kenya : SNV Innovation Fund 3. Mining partnership: QMM/Rio Tinto in Fort Dauphin, Madagascar 4. Mining partnership: Golden Star Oil Palm Plantation in Western Ghana On-going case studies…
- 6. • Origins and context Social project to fight poverty and malnutrition In the rural remote area of Njombe, Southern Highlands, Tanzania Turned into a market-based approach (IDC) In an area where there is no market Reconnect to the market with the support of the largest Italian dairy cooperative through a holistic approach The AMP became a limited company to be handed over to the Tanzanian stakeholders (coop) Africa Milk Project: CEFA – IDC – Granarolo – Njolifa (coop) ECDPM Page 6
- 7. • Origins of the Innovation Fund Market-led, private sector driven programme in the dairy sector tackles the dairy sector systemic issues Kenyan dairy sector the most developed in East Africa, strong infrastructure starting attracting FDI but politically sensitive sector System Approach focusing on economic development with indirect social/institutional impacts Many donors involved in the sector: USAid, EU, Dutch, B&M Gates… SNV Innovation Fund ECDPM Page 7
- 8. Relation to core business and Activities ECDPM Page 8 Dimensions Africa Milk Project Innovation Fund Relation to core business Philanthropy – social investment from PS => Could it be strategic? Strategic/core business from PS => Follows the demand driven nature of the fund, win-win Nature of activities Production, marketing and new business development => Holistic approach; Production; new business development => Targeted system approach; flexible role
- 9. Degree of Engagement and Governance ECDPM Page 9 Dimensions Africa Milk Project Innovation fund Degree of engagement Philanthropic/Transa ctional Going beyond financial resources (knowledge; social network; reputation…) Transactional development value creation Committing resources is not only a material issue; Governance structures From informal to formal basis; Inclusive governance but… Formal basis Inclusiveness of the partnership’s governance
- 10. • Dairy sector potential for inclusive development • Origins and context ALWAYS matter – but needs to be more explicitly taken into account in design • Commercially-driven partnerships should be thought of distinctly from social ones • Pure philanthropy can lead to commercially viable project in the short-run at least • Finance is part of the story but not all Implications for policy makers ECDPM Page 10
- 11. • Frontier country for mining • Titanium Ilmenite mine since 2005 operational since 2009 • Partnerships to facilitate community engagement • Malagasy NGOs (SAHA) and international NGOs (SFCG) • Long history of mining • Industrial gold mining since early 1990s • Golden Star Oil Palm Plantation (GSOPP) • Partnership involving local communities, community leaders, NGOs and donor agencies CSO-business partnerships in extractive industries: 2 case studies ECDPM Page 11
- 12. • Disruptive effect on communities, environment, local economy, infrastructure • Social license (and stability) is not easily obtained • Companies have to engage with everyone (state, CSOs, communities, local private sector, IFIs) CSO-business cooperation in mining (1) Page 12
- 13. • Impossible to distinguish between CSR (philanthropic intentions) and core business interests • (Avoiding) conflict is a major driver for change on both sides • Move towards more direct engagement with communities (~level of engagement) CSOs as facilitators • Isolation exacerbates challenges: Power imbalance Risk of instrumentalisation/loss of CSO credibility Managing expectations CSO-business cooperation in mining (2) ECDPM Page 13
- 14. • Profitable 1000ha plantation Flagship and award-winning CSR project • Relying on traditional authorities and opinion leaders and providing access to mining income (local content) or rents (tribute) • All aspects managed tightly by the company – hardly any community agency Not a neutral investment opportunity: which role for donor agency? Beneath the surface of a successful partnership Page 14
- 15. • Mining companies are not donor agencies • Creative and profitable (CSR) initiatives are very attractive to donor agencies. (up scaling) • But major missing links that are inherent to partnerships in extractive industries: Mining partnerships require a realistic territorial strategy not simply a project logic Development partners are in a position to address the local governance dimension in some of these contexts Implications for policy makers Page 15
- 16. • Partnerships as part of the discussion on inclusive GVCs, PS engagement and working with civil society • Challenges to address (with donor support): power imbalances trust issues unequal benefits • Recognise informal aspects of partnership • Partnership not just about fin. Resources • Reactive ->adaptive-> transformational (Tennyson, 2016) • Potential key => adaptive donors: ‘think sailboats, not trains’ (Kleinfeld, 2015) Conclusions ECDPM Page 16
Editor's Notes
- This presentation is based on a mapping exercise that we did at ECDPM, where we tried to cut through some of the complexity of partnerships to work out how we can zoom in and understand better what the key characteristics for effective partnerships are and therefore what the implications are for policy makers and donors
- First I’ll shortly present the context of this study 2. Presenting our assessment approach which is our four dimensions framework which is based on the literature reviewing the different taxonomies of partnerships 3. We applied this framework in the context of case studies so I will reveal some of the implications that came out of this
- Increase attention on partnerships in the development community as a way to pull together a variety of resources from different actors – SDGs 16 + Rio+20; Busan partnership for effective cooperation…; in a context where aid is declining, partnerships seen as a one of the entry points to integrate PS in the development sphere. What we also observe is that which filters through the partnership discussion How to benefit from PS finance, technology, knowledge… but more and more there is this alignment with commercial interests. Where the question is how can business also benefit from the development agenda? This also filters through partnerships discussion that we’ll have later CSO: How to influence business to be more sustainable, people centered… but in the same time they suffer from a declining core funding, which means that they need to find alternative source of finance – and thus partnering with the PS represents a new model of sustainability For business it is about philanthropy, CSR – taking a role in the local community… philanthropy but it is also about minimizing risks and reputational issues, trying to secure supply chains… So the partnership model fits also there. For host government of these partnerships, it about using the PS for economic transformation, meaning more and better jobs agenda but it is also a question of political survival: it is not only a technocratic exercise - politics is pretty fundamental to it and will always be part of the context What are the main drivers and trends around business-CSO partnerships and the different roles that partners take; What are the main partnership characteristics that emerge as important in the process of establishing and maintaining effective partnerships What are the potential roles for partnerships’ stakeholders aiming to support such partnerships.
- Core business – the underlying purpose of the partnership / what is the nature of the partnership - Philanthropic vs. strategic - advocacy to philanthropic to social investment, incremental adaptation, innovation Degree of engagement – Frequency, intensity, and resources shared. philanthropic as a donation of money/arms length relationship, transactional/ interactive development value creation, integrative co-creation (becomes more complex) Activities - the actual activities that are carried out in the partnerships: Mkt-oriented to reach new consumers, Prod’n oriented much more on capacity building, on the supply side, New biz dev cocreation of completely new products Governance – how is the partnerships managed on the day to day basis/ who is leading whom is this social project CSO-led which attracts PS, PS-led attract CSO to make it sustainable, to make it sustainable, donor-led to bring all actors to achieve a goal from the public sector, Alliance which is a balanced approach closely integrated partnerships. The idea is to use these four dimensions to understand better partnerships.
- Based on this four dimensions framework and taking into account the external factors and origins for the partnerships, we conducted 4 case studies, in 2 very different sectors mining and dairy but still taking of partnerships as modality. And 2 in the same sector to be able to compare and contrast different set up and approaches taken
- improve dairy farmers’ livelihood in Njombe, together with local stakeholders to ensure financial sustainability… with the financial support of the IDC so they build a milk factory to provide market access to the farmers But facing difficulties: no dairy expertise and so through a random encounter met Granarolo and attract the company to finance but even more to provide expertise and knowledge. Launch the MfSP Today it’s a limited company, profitable and achieving great social impacts but now the Italian want to withdraw and let the Tanzanian take over but capacities of locals are limited and the location of the project is challenging to business development is located in a rural remote area, isolated from the main dairy markets (12h from Njombe), with limited institutional capacities Njombe = difficult to conduct business in the dairy sector as main market is far = transportation costs are high/transports conditions need to be high tech/knowing that dairy product are easily perishable Tanzanian dairy sector is not so developed and as the Kenyan one there is a lack of regulations enforcement (selling raw milk in the street); mainly informal sector… difficult to compete
- In Kenya, market development allows for a bigger role for the private sector actors (business opportunities), but a market especially at the processor level which influence by political dynamics and interests: the main processor is linked to the political elite in Kenya. Kenya is a donor darling – but we observed little coordination, knowledge sharing between donors. Some focus on poverty, some on SMEs… Innovation fund to fast track commercially viable innovations by lowering the initial investment’s risks Same sector, similar approach but very different: financially oriented with indirect social impacts It’s a system approach not a holistic approach such as milk quality; skills gap and knowledge; or fodder supply chain
- Pure CSR project for Granarolo, serving their branding marketing activities but also HR activities (productivity and motivation, and loyalty) But as they said: beyond the fact that the Tanzanian dairy market is too small to make an investment, they would never go to Njombe to enter the TZ market! This comes back as well to the origins of the project (CSO led) On the other hand PS investment are strategic and core business: HC wish to improve its milk quality to expand, fodder supply to provide smallholder farmers with decent food for their cows – BoP business model. And this follows the demand driven nature of the fund: SNV frames the fund trying to widen benefits, and PS applies for their own commercial interests: everybody benefits
- Partnerships need flexibility and adaptable – plan for sailboats, not for trains… this can question donor’s approach to partnership through e.g. logframe approach. So complex, and hence changing To be sustainable and effective partnerships need to be embedded in a geographical and/or market context – how can donors link better PSD projects with other donor-funded projects in soft and hard infrastructure (e.g. SAGCOT in Njombe; SMAP in Kenya)? How can CSOs working in the same sector coordinate better?
- 1
- GSOPP very interesting project from PS4D perspective -
- 1) They have access to funds that allow them to play that role. And in context of minimal governance such as South-East Madagascar they are expected to play that role as well, including providing funding for local authorities, the NGO community, etc. But they are a direct stakeholder, and their interests are very different. 2) Especially the GSOPP model attracts interest from donor agencies and NGOs (GIZ has previously supported) and several NGOs are hitching there wagon to the project. But these flagship projects are not simply good investment, just because they involve CSOs and private sector. The real question perhaps is where can donor agencies best come in in these things? What are the missing links that are outside the scope or direct interest of companies and community stakeholders. This is exactly the value added of this analysis of the modality. In the case of RT in Madagascar the answer perhaps lies a territorially integrated strategy that can work to empower authorities and independent CSOs while reviewing the regional development assumptions
- Reactive ->adaptive-> transformational – what policies to help more more from REACTIVE/minimising harm type partnerships to those that deliver development but not as part of the core business (GSOPP?) to those that actually come up with new business models to address the BoP (AMP) Process key– means need to have ADAPTIVE and FEXIBLE means of supporting such partnerships; must be ITERATIVE and LEARNING, accepting a RISK of FAILURE from time to time – are donor organisations able to do this? SNV as a model, where basically THEY take the bets with public mone