Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana
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Corporate Social Responsibility (CSR) has become an important strategic issue for companies around the world, especially those companies working in the extractive sector. When it is done well CSR can create value and opportunities for companies, communities, local governments and a range of other stakeholders. When it is absent, or not done well the opposite can be true. This lecture will cover: Definition CSR and Social Investment; The rationale and driving forces for CSR and social investment; Understanding of relevance of CSR to business and development community; A brief description of three case studies on mining and CSR What does CSR mean for Wa and UWR About the Lecturer Wayne Dunn is an award winning global expert on corporate social responsibility. In the past two decades he has led more than forty CSR projects in over thirty countries across six continents, helping clients to innovate and succeed in difficult and challenging circumstances. His work has won prestigious global awards, including the first CSR project to ever win a World Bank Development Innovation Award. His projects been developed into lectures and case studies and one was even featured on the front page of the Wall Street Journal. In the 1990s he helped lead a paradigm-shifting transition that facilitated exponential increases in indigenous business and economic development throughout the Americas. More recently he has been a practical pathfinder helping businesses to successfully integrate social and economic value creation into their business models. Wayne is a founding member of the Leadership Council of McGill University’s Institute for the Study of International Development (ISID). He is a frequent lecturer worldwide on business and economic issues, and also provides volunteer support to numerous local, national and international organizations. This includes serving as the Vice-Chairman of the Canadian Council on Africa, on the Advisory Council to the University President and on the Board for the University of Winnipeg’s ground-breaking Master’s Program in Development Practice. He is a Stanford University Sloan Fellow and holds an M.Sc. in Management from the Stanford University Graduate School of Business. He is married to Gifty Serbeh of Wa and he and his family maintain close links to Ghana. www.waynedunn.com http://en.wikipedia.org/wiki/Wayne_Dunn
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Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana
- 1. UDS Lecture on CSR and Mining Beyond the Gate: CSR & Mining University for Development Studies Lecture on CSR and Mining October 31, 2011 Wa, Upper West Region, Ghana Presented by: Wayne Dunn www.waynedunn.com info@waynedunn.com
- 2. UDS Lecture on CSR and Mining Lecture Objective and Outline Define CSR and Social Investment; Discuss rationale and driving forces for CSR and social investment; Develop understanding of relevance of CSR to business and development community; Brief description of three case studies What does it mean for Wa and UWR Questions and discussion.
- 3. UDS Lecture on CSR and Mining How Can UDS Help? UDS well placed to play an important role Mining companies have a difficult challenge to implement CSR. Even those that try very hard often have problems Educational and Development Institutions must learn how to work with and educate mining companies and local communities Mining companies must learn how to work with and educate development and educational institutions A great opportunity for collaboration and synergy
- 4. UDS Lecture on CSR and Mining What is CSR? Corporate Social Responsibility (CSR) A concept whereby companies integrate social and environmental concerns into their business mission and operations, and in their interactions with stakeholders.
- 5. UDS Lecture on CSR and Mining Definitions Corporate Social Responsibility (CSR), Sustainable Development, Social programs, Community Relations Terms are often used interchangeably Definition “CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well of the local community and society at large” Corporate Social Responsibility (Sustainable Development) Financial Social Environmental Responsibility Responsibility Responsibility WBCSD Diagram
- 6. UDS Lecture on CSR and Mining The New Reality of Business
- 7. UDS Lecture on CSR and Mining CSR is a Global Phenomena “By working together to mobilize sustainable investment in the Least Developed Countries, government, business and civil society give hope and opportunity to the world’s poorest” Kofi Annan UN Secretary-General
- 8. UDS Lecture on CSR and Mining Corporate Social Responsibility is… Companies working in partnership with communities and others to address problems; Companies promoting good values to their employees, Community suppliers, customers, partners; Companies investing in social and economic development; Companies being good corporate citizens; Companies being good neighbours
- 9. UDS Lecture on CSR and Mining Why is CSR happening? Globalized world is demanding more of business… Global media – The CNNization of the world – remote local issues direct to television screens Proliferation of NGOs and CBOs – direct, well organized and financed support to communities Internet and other communications innovations – direct communications from remote projects to worldwide audience Global Democratization – increased attention to local issues
- 10. UDS Lecture on CSR and Mining Why is this happening (cont) Comprehensive Codes Canadian Business for Social Responsibility Guidelines for Corporate Social Performance Caux Round Table Principles for Business Clarkson Principles of Stakeholder Management Code of Ethics on International Business for Christians, Muslims and Jews Elements of a Corporate Accountability Convention (Friends of the Earth) Ethics Compliance Management System Standard ECS2000 Global Sullivan Principles of Social Responsibility The GoodCorporation Standard International Code of Ethics for Canadian Business International Finance Corporation's Performance Standards on Social and Environmental Sustainability ISO CSR Standard OECD Guidelines for Multinational Enterprises Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance Social Venture Network Standards of Corporate Social Responsibility UN Code of Conduct on Transnational Corporations UN Global Compact
- 11. UDS Lecture on CSR and Mining Why is this happening (cont) Comprehensive Codes Canadian Business for Social Responsibility Guidelines for Corporate Social Performance Caux Round Table Principles for Business Clarkson Principles of Stakeholder Management Code of Ethics on International Business for Christians, Muslims and Jews Elements of a Corporate Accountability Convention (Friends of the Earth) Ethics Compliance Management System Standard ECS2000 Global Sullivan Principles of Social Responsibility The GoodCorporation Standard International Code of Ethics for Canadian Business International Finance Corporation's Performance Standards on Social and Environmental Sustainability ISO CSR Standard OECD Guidelines for Multinational Enterprises Principles for Global Corporate Responsibility: Bench Marks for Measuring Business Performance Social Venture Network Standards of Corporate Social Responsibility UN Code of Conduct on Transnational Corporations UN Global Compact
- 12. UDS Lecture on CSR and Mining Shareholder Pressures ‘Socially conscious’ shareholders Social Investment Funds – Socially responsible investment refers to making investment decisions based on a company’s social and environmental practices and on their corporate values and ethics). The Financial Markets – Dow Jones Sustainability Index (http://www.sustainability- index.com/) – FTSE Sustainability Index (FTSE4Good) http://www.ftse4good.com/ – Domini 400 Social Index (DSI) http://www.domini.com/
- 13. UDS Lecture on CSR and Mining Pressure: Consumers, Customers
- 14. UDS Lecture on CSR and Mining Social License An emerging phenomena In addition to more traditional state issues licenses and regulatory approvals Based on the principle that communities and local interests have a valid role in determining whether or not a project will proceed Communities have inserted themselves into the regulatory approval/permitting process and can easily disrupt operations that they disapprove of
- 15. UDS Lecture on CSR and Mining Why focus on social license Social Performance is key to Financial Performance “In a transparent, globalized world, economic performance, environmental performance and social performance hang together. Business is realizing that it has become an integral part of society and now has wide-ranging responsibilities… shareholder value and social responsibility support each other” Göran Lindahl, President and CEO Asea Brown Boveri (ABB) “Our commitment to community development “represent(s) an added cost, but is an essential investment in our future…(and) should help us to achieve greater profitability”. Jay Taylor (former) CEO Placer Dome
- 16. UDS Lecture on CSR and Mining Why focus on social performance “Seven of the top ten U.S. home improvement retailers, including Home Depot, have issued restrictive lumber buying policies in the wake of an aggressive campaign by environmentalists While industry is still sorting exactly what this means, there is no doubt that it threatens a significant share of the traditional market for BC forest products.” Globe and Mail – Aug 25, 2000 “social responsibility is a matter of hard-headed business logic” John Browne, CEO British Petroleum
- 17. UDS Lecture on CSR and Mining CSR is a Value Strategy Share price of a CSR failure that rendered a multi-billion dollar reserve un-developable Good CSR creates value for company, ~$13.00 $0.29 community and other stakeholders
- 18. UDS Lecture on CSR and Mining CSR and Mining Mining is and has been on both ends of CSR performance Some of the most innovative and exciting CSR projects ever have been driven by mining companies (coming in case studies) Mining has had some of the worst CSR shortcomings ever too
- 19. UDS Lecture on CSR and Mining 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. Phumizile Mlambo-Ngcuka South Africa Minister of Minerals and Energy
- 20. UDS Lecture on CSR and Mining CSR IS about value in Mining Bougaineville - corporate practices were directly implicated in provoking civil war, allegedly cost Rio Tinto $3 billion (Stanford Univ study) Tambo Grande Ovacik/Eurogold (vs Kislidag’s success) Saskatchewan Uranium Industry
- 21. UDS Lecture on CSR and Mining The Mining World Has Changed Social issues are as important as Technical Issues
- 22. UDS Lecture on CSR and Mining Mining IS a Development Business Mining industry is amongst world leaders in creating local value from investments and operations. Sustainable Development and Corporate Social Responsibility will continue to grow in importance.
- 23. UDS Lecture on CSR and Mining Beyond Beads ‘n Trinkets To create bottom line value CSR must create meaningful development value in areas such as: – Poverty Alleviation – Community Health – HIV/AIDS – Rural Development – Local Capacity Development – Infrastructure Support Value Created is not measured in money spent
- 24. UDS Lecture on CSR and Mining SD/CSR Implementation Challenges more than a warm fuzzy issue Spending isn’t the answer ?Results? Framework Plan System Solving social problems Objectives
- 25. UDS Lecture on CSR and Mining SD/CSR Implementation Framework Advice to Mining Companies Focus on Value Creation Be systematic and integrate with overall development objectives of the country/region Catalyst for Development – development partnerships Accept that there will be negative impacts (e.g. AIDS) Build from local strengths / mitigate local weaknesses Begin closure planning NOW Build international relationships Communication is critical – appropriate and strategic Bring the industry along with you Quantify objectives and results
- 26. UDS Lecture on CSR and Mining Some Examples (deliberate use of non Ghanaian examples Placer Dome South Africa Poverty alleviation HIV/AIDS Capacity development Eldorado Gold – Kisladag (Turkey) Poverty alleviation Environmental rehabilitation Rural development Capacity development Porgera (PNG) Infrastructure Rural Development. National HIV/AIDS Strategy Closure Planning Approach
- 27. UDS Lecture on CSR and Mining Placer Dome Care Project Original objective – mitigate the social and economic impacts of retrenchment and assist 70% of family units to become economically active Innovative rural development and HIV/AIDS program, delivered at community level across 3.5 million sq km of southern Africa – Extensive involvement of women and families – Pioneered new 13 step process with extensive counseling, training and support. (Process is being copied by other development programs in the region)
- 28. UDS Lecture on CSR and Mining Placer Dome Care Project HIV/AIDS program won prestigious Development Innovation Award at World Bank’s Development Marketplace – Over 2,400 development projects from 122 countries CSR can create real development value
- 29. UDS Lecture on CSR and Mining Mining & HIV/AIDS 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 through for employment single company to address fee for service approach Scalable beyond the mining industry Training, Support and Medical Supplies Family Assist Family to Employed Medical Family and Counselling Worker becomes Care for terminally ill Worker Repatriation Community and HIV Positive and Supporting Terminally Ill Prepared to Integration Eventually develops Extended Man Returns Recieve with AIDS Care Process assists Family To Village Worker Community Family member to Services Develop alternative Economic Opportunity Without intervention the worker goes home to overwhelm family who have no support and no means of economic sustainabilty
- 30. UDS Lecture on CSR and Mining Eldorado Gold - Kisladag Project (Turkey) Strategic approach to use mining project to facilitate sustainable rural development Development of agriculture related industries and infrastructure; Increased involvement of women; Improved grazing and land management (reduce desertification) 10 years of mining production in harmony with local communities. Huge value for all stakeholders Contrast with Eurogold project next door
- 31. UDS Lecture on CSR and Mining Porgera (Papua New Guinea) Working to leave behind a sustainable community – Development of local, non- mine related, business – Creation of local infrastructure to support a sustainable community after the mine leaves – National HIV/AIDS PPP Strategy – Innovative closure planning
- 32. UDS Lecture on CSR and Mining Porgera Closure Framework
- 33. UDS Lecture on CSR and Mining Summary Why Because it is smart business and creates/preserves business value How not Don’t simply throw money at social issues How Systematic and Value Creation Focus Measure, Measure, Measure Examples South Africa, Turkey, Papua New Guinea
- 34. UDS Lecture on CSR and Mining Main Point CSR is about value creation not Charity
- 35. UDS Lecture on CSR and Mining Mining is coming to Ghana’s north Mining concessions in Upper West and Upper East Regions
- 36. UDS Lecture on CSR and Mining And to the Upper West
- 37. UDS Lecture on CSR and Mining Azumah Resources
- 38. UDS Lecture on CSR and Mining Making CSR Happen • Azumah’s mining development is an opportunity to get it right; • Mining can create beneficial value for companies, people, community and environment; • Or it can create a social, economic and environmental mess; • How it turns out is not just the mining company's responsibility. • All stakeholders must engage and help to make it work
- 39. UDS Lecture on CSR and Mining Lecture Objective and Outline • Define CSR and Social Investment; • Discuss rationale and driving forces for CSR and social investment; • Develop understanding of relevance of CSR to business and development community; • Brief description of three case studies • What does it mean for Wa and UWR • Questions and discussion.
- 40. UDS Lecture on CSR and Mining Questions and Discussion
- 41. UDS Lecture on CSR and Mining Beyond the Gate: CSR & Mining University for Development Studies Lecture on CSR and Mining October 31, 2011 Wa, Upper West Region, Ghana Presented by: Wayne Dunn www.waynedunn.com info@waynedunn.com