November 24, 2017

Enhancing relationships between mines and the host communities through CSI

Corporate social responsibility, often abbreviated “CSR,” and Corporate social investment (CSI) are both part of every mining’ set of initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing.

However, corporate social investment (CSI) is more critical in the developing nations, but it normally takes place on a smaller scale, even in the developed countries. CSI is part of enhancing relationships between mines and the communities in which they operate.

In addition to education and housing, CSI entails various activities that might be considered a priority by the community – including infrastructure such as roads, water, different services to communities, recreational facilities, religious facilities and agricultural support among others.

It is often argued that CSI is a business oriented objective, for instance a pure business requirement such as a road or supply of water can be used to benefit both the mining operations and communities, though CSI does not cover facilities, products or services technically and directly necessary to the running of the mining operation.

Mining companies are doing a lot to improve the lives of employees, the communities around mining operations and communities in labour sending areas and wider population. Apart from creating jobs and contributing billions of rands to corporate taxes, in 2014 alone, the industry spent R2 billion on projects ranging from healthcare to education, infrastructure to environmental stewardship, explains Alan Fine, from Russell and Associates.

However, companies such as Sibanye, insofar as their SLP Projects are concerned, have taken into account the objectives of the National Development Plan (NDP), Spatial Development Framework (SDF), local governments’ Integrated Development Plans (IDPs) as well as the UN’s Global Goals for Sustainable Development in its planning framework and strategy, adds Phillip Jacobs, VP Corporate Affairs from Sibanye.

The CSI commitments in South African mines are normally developed through consultation with local authorities’ Integrated Development Plans (IDPs). The ideal is a well-coordinated approach to ensure optimal meeting of community needs. For instance, “we try to collaborate with national and local government, as each party brings value to the projects, be it for facilitation or by-law compliance. In general, mines contribute significantly to the socio-economic infrastructure expenditure and project management to ensure good corporate governance and value for money”, elaborates Phillip Jacobs.

Jacobs further elaborates, “We do not take on fiscus related activities that should be budgeted for and implemented by local government as this is specifically their mandate. However, where the opportunity presents itself, we do assist in enabling local government to access funds available to them through the creation of appropriate partnerships”.

In addition, Sibanye has commissioned an independent impact assessment of the company’s current SLPs to inform its needs analysis for its next SLP cycle, which is currently being formulated. However, in order to have a long term and sustainable impact, it is critical that consideration is given to the region and its long term’s development. It also needs to be premised on economically sound developmental planning, says Phillip Jacobs.

The partnerships are only undertaken and continue as long as the parties contribute, however local participation can be impacted by skills shortage as most mines are still recruiting migrant workers from labour sending areas of the Eastern Cape and neighbouring countries. This can only be mitigated by being proactive, and through creation of extensive skills development programmes, partnerships with the universities and technical colleges as well as through funding of bursaries.

Despite having a great potential in assisting with addressing socio-economic challenges and meeting the developmental goals of the host community, it is still a hotly contested affair and the challenges affecting CSI implementation tend to be location specific.

Alan Fine further comments, “achieving and maintaining a social license to operate is a key imperative for mining companies all over the world. This “social license” is more than regulatory compliance- it is earned and not granted”.

In addition, slow pace of collaboration by government and access to funding, which is available but hindered by ‘red-tape’, and local politics and selfish personal agenda among community leaders often manifest in the disruption of well-intended community development programmes, affects the implementation of CSI initiatives.

However, the challenges are not insurmountable – companies need to take the lead and move away from the old school of doing business in Africa, and understand that good relationships with communities is a business imperative. Companies, community leaders, NGOs and local government need to create partnerships that will see everyone contributing and playing his role.

In conclusion, mining operations (and labour sending areas) are often located in areas with low levels of economic activity, and it is right that communities should expect tangible benefits from the companies that are their neighbors. Companies should engage with communities and commit to projects, but mining companies cannot meet all expectations.



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