Ethical business, successful relationships

Africa is the new frontier in the world, the untapped market, with tremendous wealth in the ground. Small wonder that foreigners are exploiting this up and down the continent. West Africa in particular is very exciting in terms of mineral wealth. And its also an interesting study in the power of ethical business practices.

In Mali, where my company mines gold, local people are very poor and usually live in remote and simple rural communities. They currently find themselves in the middle of a second gold rush that could either improve their lives or further impoverish them and in the hands of foreign prospectors that have the power to dictate which. If they are doing things right, the mining boom should create jobs, infrastructure, opportunities and boost the income of the local population. Without an ethical foot on the brake it could equally denude the communities of their lands which they own, even if not by title, and resources.

The mining of resources is huge here; gold, copper, iron. Mali is landlocked and, yes, it is getting a railway to transport its mined gold to Senegal, but this is not done for the benefit of the people. Government concerns for the people are very limited. Its politicians concerns are around what they get out of it. The government in Mali as in so much of Africa knows its term of office will be short, the politicians expect to be kicked out so they make hay while the sun shines. We cannot rely on them to do the right thing, to make sure that their countrys resources are utilised in a way that benefits the country as well as international businesses.

If you want to conduct successful business in Africa, especially Mali, you cant just get a license from the government. Yes, it might give you a legal right to to mine but you dont have an absolute right. Even if you get your license without bribery and do it the legitimate way which is the way we behave then its no guarantee of anything. There have been three governments in the four years weve been there.We remain and do business with the locals because we contribute back. To-date weve built a bridge over the river near where we mine, so that the locals are saved days and days of travel, weve provided a clinic for local medical care, we dig waterholes to produce water for the people and we are engaged in constant activity focused on improving the community and the local people. To be here you have got to invest in and do things for the local people that help them and that make them want you to be there.

When people talk about ethical business this is how I understand it. Too many business people take the easy road for greed and because they are short-termist. Not only is it unethical and immoral in this context, but you could easily be disenfranchised by the next government. I think you have to start with ethics and morality in business and then get to practicality. I fundamentally do not believe you can build anything worthwhile on other peoples misery. Everybody wins has always been my business philosophy.

In the case of gold mining, we sell gold to a refinery so its less about the consumer and more about the social impact. But the power of good ethics applies all the way along the supply chain. For example, I think of American business writer Tom Peters, who wrote In Search of Excellence in the early 1980s and his belief that the sale begins only after the sale has been made. By that he meant that it only really begins when you use the thing you have purchased. Before its really just an invitation for a consumer to try.

Marks and Spencer is a good example of this ethical practice, with their excellent returns policy. My daughter owns a clothing business and we were discussing her returns policy recently. I said, Come on, youve got to allow returns, why shouldnt you? It is just good business sense. And good ethics ultimately is good business. You know a companys approach and you are happy to do business with them.I dont think that companies who put profit before anything else are thinking further than their nose. Its all about the now. What about thinking about a lifetime of business? Ethics is about longevity and sustainability. And truly ethical business is sustainable business.

Sustainable business means building beneficial and quality relationships all along the chain from the producer to the consumer. And laterally in the case of mining and other land-based industries. Benefiting the community that you are working in, investing in it and leaving it better off than it was before will ultimately mean that everyone profits in the long term.

Id love to hear your thoughts - tweet me at @normanperies.

Content first posted on www.normanpeires.com.