At the 2014 Mining Indaba Sustainable Development day, Archbishop Njongonkulu Ndungane (Founder and Chair of the board for African Monitor and Former Archbishop of Cape Town) gave a keynote address setting the tone for a proceeding panel discussion on mining and community relations, stressing the need to bring morality into business decisions with the understanding that profitability needs not to be the only consideration. A common thread running through the discussion that followed was the need for effective, transparent and credible mechanisms for engagement and honest discussion between mining companies and the communities affected by their work.
The mining industry finds itself in troubled times, particularly in South Africa as evidenced by the demonstrations taking place just outside the conference. Following the Marikana incident and ongoing labour disputes, the industry has a way to go to rebuild trust among the South African communities that comprise its local workforce. This is not to say the task is much easier globally, indeed, perhaps most tellingly, when it comes to performance on CSR, 2013 GlobeScan Radar data shows us that the mining industry performs very poorly with only 20 per cent giving it an above average score, ahead of only the chemical and tobacco industries and behind the alcohol industry (see chart below). While mining is an economically vital industry, these results reveal the need for companies and the industry to establish more effective community engagement mechanisms.
There was a general recognition, particularly among the NGO panelists, that terms such as ‘CSR’ and ‘social license to operate’ have become problematic and loaded. They are casually used in board meetings without a great deal of deeper meaning. They have also become somewhat synonymous with simply throwing money at the problem. It arose in the discussion that CSR is often seen being used as a way to take pressure off companies without dealing with the core issues. If approached in this way, CSR in conflict areas can actually be counterproductive. CSR should not exist as mere philanthropy; it must be targeted and strategic. In order for this to happen, certain mechanisms must be put in place. What form these take should take account of the kind of issues of most concern to communities.
It can be helpful to highlight where mining companies most often encounter conflicts. Gina Barbieri from Office of the Compliance Advisor Ombudsman added that, tellingly, large proportions of communities raise the issue of consultation. It is often found that the existence of the mining operation doesn’t create the problem in itself but rather the lack of consultation with the community on what the effects and benefits for them are. South Africa provides some of the most severe recent examples of the consequences of failing to proactively engage at an early stage. This requires the right kind of engagement mechanisms to be put in place, including stakeholder mapping, regular round-tables and town halls, partnership development as well as appropriate metrics to monitor progress on stakeholder engagement through.
One common problem to overcome, according to one panelist, is the failure of both government and companies to consider communities important stakeholders. Companies engage the government when they move into the country but don’t involve communities in decision-making processes. If they were involved they would understand what was being done, understand how it benefits them and also the potential risks before they arise. Further, it is vital that once this takes place, that corporate strategy is appropriately aligned with the community engagement strategy.
This all relates back to communication, value-driven engagement and inclusion of communities and their take on solutions in order for mining to be a catalyst for development. Effective community relations require a learning process for both companies and communities and that two-way communication requires a deeper level of engagement. In order for this to be successful, the communities on the ground must be brought on board as key stakeholders from the outset.
For the industry in South Africa, operating as it is in a volatile and low-trust environment, this process must start with a critical and honest assessment of its reputation and standing among key stakeholders, particularly the affected communities. From this foundation, an authentic and transparent engagement strategy should be pursued to address the areas where companies are falling short of their responsibilities, highlight how they can improve, create new points of dialogue and initiate an ongoing and open conversation.
This post was written by former GlobeScan Research Analyst, Robin Gilbert-Jones.