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UDS Lecture on CSR and Mining Beyond the Gate: CSR & Mining Presented by: Wayne Dunn www.waynedunn.com [email protected] University for Development Studies Lecture on CSR and Mining October 31, 2011 Wa, Upper West Region, 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 UWRAbout the LecturerWayne 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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Page 1: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Beyond the Gate: CSR & Mining

Presented by:

Wayne Dunn www.waynedunn.com

[email protected]

University for Development Studies

Lecture on CSR and Mining

October 31, 2011

Wa, Upper West Region, Ghana

Page 2: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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.

Page 3: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 4: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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.

Page 5: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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”

Financial

Responsibility

Environmental

Responsibility

Corporate Social Responsibility

(Sustainable Development)

Social

Responsibility

WBCSD

Diagram

Page 6: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

The New Reality of Business

Page 7: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 8: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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, suppliers, customers, partners;

Companies investing in social and economic development;

Companies being good corporate citizens;

Companies being good neighbours

Community

Page 9: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 10: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 11: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 12: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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/

Page 13: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Pressure: Consumers, Customers

Page 14: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 15: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 16: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 17: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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,

community and other stakeholders

~$13.00 $0.29

Page 18: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 19: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

“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

The Mining World Has Changed

Page 20: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 21: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

The Mining World Has Changed

Social issues are as important as Technical Issues

Page 22: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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.

Page 23: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 24: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

SD/CSR Implementation Challenges

more than a warm fuzzy issue

Spending isn’t the answer

Plan

Framework

System

?Results?

Solving social

problems Objectives

Page 25: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 26: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 27: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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)

Page 28: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 29: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

EmployedWorker

SupportingExtended

Family

Worker becomesHIV Positive and

Eventually developsAIDS

Healthy workerleaves village

for employment

MedicalRepatriationTerminally IllMan Returns

To Village

Virtually no support for familiesChallenge is too vast for anysingle company to address

Current reality

Family andCommunityPrepared to

RecieveWorker

FamilyCounselling

andIntegration

withCommunity

Services

Training, Support and Medical SuppliesAssist Family to

Care for terminally ill

Care Process assistsFamily member toDevelop alternative

Economic Opportunity

Without interventionthe worker goes home

to overwhelm family whohave no support and no

means of economic sustainabilty

Financially sustainable through fee for service approach

Scalable beyond the mining industry

Helps to mitigate the social andeconomic impact of AIDS

in rural villages

Mining Outreach Partnership

Mining & HIV/AIDS

Page 30: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 31: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 32: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Porgera Closure Framework

Page 33: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 34: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Main Point

CSR is about value creation not

Charity

Page 35: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Mining is coming to Ghana’s north

Mining concessions in Upper West and Upper East Regions

Page 36: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

And to the Upper West

Page 37: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Azumah Resources

Page 38: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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

Page 39: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

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.

Page 40: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Questions and Discussion

Page 41: Mining and Corporate Social Responsibility - Lecture at University for Development Studies, Wa, Ghana

UDS Lecture on CSR and Mining

Beyond the Gate: CSR & Mining

Presented by:

Wayne Dunn www.waynedunn.com

[email protected]

University for Development Studies

Lecture on CSR and Mining

October 31, 2011

Wa, Upper West Region, Ghana