Resource Curse or… Opportunity for Shared Value A practitioners perspective
Toby Radcliffe, Article 13
Good afternoon, and a brief introduction
Article 13 is a specialist change agent. We take plans and strategies that aren’t working - or
haven’t worked – in the social, environmental and ethical arenas and make things happen to
drive positive change and create shared – and new - value for your organisation and your
stakeholders.
We work globally with organisations (public and private) around issues which are controversial,
complex and highly scrutinised; for example:
•African mining company: Engaging local communities (including artisanal miners)
•Global pharmaceutical company: Scaling up response to HIV/Aids in sub-Saharan Africa
•UK NDA: Building a geological disposal facility for nuclear waste
•Middle Eastern shipping company: Developing an ethical response to maritime piracy
Client include
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Today’s presentation Resource Curse or… Opportunity for Shared Value
Some context
The future trends which will shape our world (resource, transparency and expectations)
Botswana and coal, the opportunity and the challenges
Stakeholders and what really matters
Identifying your stakeholders
Understanding the material issues (what matters most)
Building trust and creating shared value
Communicating complex terms (to build trust and informed consent)
Moving from ‘being good neighbours to creating shared value’
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Increasing expectations
Declining resources
Radical Transparency
Value
Cu
sto
mer
s
Energy
Metals and Minerals
Climate
Air
Species
Forest
Food
Water
Social equity
Soil
Stak
eho
lder
s
Reso
urces
The three trends shaping the world
Context is key
• Growing energy demands – nationally
ESKOM, pressed by growing power
demands in South Africa, is already
cutting back on electricity generation to
Botswana,
• And globally… Demand for seaborne
thermal coal grew from 250 Mt in 1995
to 650 Mt by 2010, an annual growth
rate of nearly 6.7%. And is expected to
continue, with demand reaching nearly
1,100 Mt by 2025.
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Source: World Energy Council
• Diamond revenues, account for approximately 41% of government’s revenue and 32.3% of
GDP, however diamond revenues are expected to dip significantly around the year 2022
• Africa’s electricity consumption is expected to grow at a rate of 3.4 % per year over the
period between 1999 and 2020.
A solution… coal?
• Botswana has extensive, and largely unexploited, coal resources which when developed can form part of the Government’s effort to diversify the economy.
• Known coal resources in Botswana are of the order of 202 billion tonnes
• Coal currently supplies 30.3% of primary energy and 41% of electricity generation.
• Coal use is forecast to rise over 50% to 2030, with developing countries responsible for 97% of this increase, primarily to meet electrification rates.
Professor Abubakar Sambo, the World Energy Council’s Vice-Chair for Africa, said:
“Our continent’s immense resources have strong potential to boost energy access and improve the lives of our people. The opportunities are huge: in renewables and energy
efficiency, our hydrocarbon reserves, and our huge gas reserves. But in order to capitalise on these, there needs to be improved regional interconnection and more concerted efforts across
national borders.”
However, this brings new challenges….
Infrastructure: The challenge of moving coal to the ports, requiring new infrastructure and considerable regional investment
Environmental impact: Coal Deposits / Methane occurrence in Botswana is / are found in the same rock units that constitutes Botswana’s major aquifer (Karoo).
Local communities: Grassroots protests against the Phulbari Coal Project in northwest Bangladesh, which would displace as many as 220,000 people, led the UN to call for an immediate stop to plans to excavate this vast open pit coal mine
Equitable wealth distribution: In 2012, protest march in South Africa to demand that a multinational mining company share more wealth. “They are making millions here, but the community around is getting nothing”
Climate change: Coal fired power plants are the biggest source of man made CO2 emissions. This makes coal energy the single greatest threat facing our climate.
An answer? / An emerging approach?
• Understand who your stakeholders are
– Early involvement to develop trust in process and actors
– Consider the ‘missing stakeholders’
• Understanding the issues which matter most to your stakeholders
– Listen to all concerns (even if they seem trivial)
– What are the quick wins, and longer term priorities
• Work with your stakeholder to create shared (societal and business) value
– Operate in partnership with stakeholders
– Development of community benefits and mitigation
Who are your stakeholders? Which ones do you have direct access to?
Those who affect the organisation
Those affected by the organisation
Those core to mission and values
Those most interacted with
Company
Shareholders Suppliers
Government
Employees Consumers
Social media?
Regulators Local
community
Media?
EXPLORE
REMOVE
PROCESS
ACCESS
REFINE
REHABILITATE
Impact on restricted areas – biodiversity
Interaction with artisanal and small-scale miners (ASM)
Land disturbance
Regional health threats
Grievance mechanisms
Employment practices and development skills
Human rights
Health and safety
Management of cyanide
Use of resources
Post closure monitoring
Post closure planning
Engaging with communities
Emissions, effluents and waste
Indigenous rights
Emissions to air
Resettlement
Material stewardship
What are the issues…
Regulators
Media
National government
Local governments
NGOs
International government The
community
Trade unions
The public
Industry and the supply chain
Staff
What are the issues that MATTER MOST
Academia
How do I know I can trust the
actors? How is it regulated?
It will destroy my business or local
tourism etc.
We should not be following this path
we need green energy
What are the benefits to me (jobs, sharing wealth, taxes)
Is it safe?
How much is it going to
cost?
What are the mis-conceptions
Opportunities for creating shared value?
Which issues matter most?
How to prioritise them In
crea
sin
g si
gnif
ican
ce t
o s
take
ho
lder
s
Increasing significance to your organisation
Human rights Biodiversity
Land disturbance
Health and safety Emissions, effluents and waste
Emissions to air
Resettlement
Post closure plans
Climate change
Water use
Regional development
Community engagement
Wealth distribution
Quick wins… addressing mis-truths and communicating risk
KEY TIPS
• Define the goal
• Identify and understand the audience
• Target/engage audiences when most likely to be receptive:
• Ensure message and messenger create trust
• Pilot messages first
• Use plain language
• Graphical presentation of uncertainty produces higher comprehensibility ratings, but lower trustworthiness ratings
• Ensure communication - including with the media - is timely and proactive.
Risk = Hazard x Outrage
Not easy to establish, Very easy to lose.
“Trust comes on foot and goes on horseback”
Trust
Risk
Lack of knowledge OR Uncertainty about the potential impact or extent of hazard.
Experts use quantitative risk attributes (e.g. probabilities) The public use qualitative risk attributes, such as voluntariness of exposure
Uncertainty
Engagement
Communication
Consultation
It is typically one-way – in this instance from the mining company to the miners. But you can add value to it....
You support people to answer questions such as – what do you want to want and what are you worried about
This is all about having a two-way conversation. True engagement is when you are prepared to share the agenda
Engagement, going beyond communication
Moving towards creating shared value
“The competitiveness of a organisation and the health of the communities around it are
mutually dependent.
Understanding the issues which matter to your stakeholders also provides an
opportunity to create shared value and build trust within the community
Creating Shared Value
The principle of shared value - creating economic value in a way that also creates value for society by addressing its
needs and challenges
”Businesses must reconnect company success with social progress. Shared value is not social responsibility,
philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what
companies do but at the center.”
Porter 2011
Opportunities to move from ‘good neighbours’ to creating shared value
Cash incentives STAKEHOLDER
CONCERN MOVING TOWARDS CREATING SHARED
VALUE
• Dangerous to local health • More medical centres (health monitoring, better screening)
• Link with health enhancement / public health
• There will be more traffic / road accidents
• Build infrastructure which benefits the local community – routes to market
• It will destroy my business
• Providing training and regional skills centre to enable local jobs for local people
• No one will ask me • Establish a local partnership to oversee the project - allowing community to learn about the issues and take part
Emerging thoughts / lessons for the future
WHAT THIS MEANS FOR MINING & ENERGY IN SOUTHERN AFRICA
•There is not necessarily one single approach – communication with stakeholders is
nation and culture specific.
•Early involvement to develop trust In process and actors.
•Proper identification of stakeholders and their interests/concerns/aspirations is the
key to success. Effective dialogue needs time and money (it may lead to delays in your
project).
•Listen to your stakeholders by establishing a two way process and gain trust.
•Be transparent and open in process development.
•Listen to all concerns (even if they seem trivial).
•Operate in partnership with stakeholders.
•Develop community benefits which the community actually want.
•Allow sufficient time (it takes as long as it takes).
Thank you for your time
For more information, contact Jane Fiona Cumming T: +44 208 840 4450 M: +44 7979 606986
E: [email protected] www.article13.com
Article 13: We create value with a conscience. Our expertise is innovative, our solutions drive behavioural change and our recommendations can be implemented immediately.