from pariah to exemplar: csr & stakeholder engagement in six best practices

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-by Wayne Dunn Helping business to serve shareholders AND society SIMULTANEOUSLY From Pariah to Exemplar Applying the six best practices CSR ANALYSIS

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A CSR Analysis The core principles of stakeholder engagement and corporate social responsibility (CSR) are simple. But, executing on them is far from easy. Placer Dome was the first major international investor in the post-apartheid South African gold mining industry. Starting with a disputed retrenchment that became a nasty legal battle and being named the World Employer in South Africa this analysis follows the transition to Placer being cited as an exemplar by union and government. This article looks at how a complex challenge was successfully addressed through a focus on simple principles, strategic objectives and systematic execution. The analysis is based on the Six best practices in stakeholder engagement article that I recently released. It is one of the most successful, stakeholder engagement/CSR projects that I was ever involved in (thanks to a supportive company and incredible, on-the-ground execution). It is written up as a Stanford Business School case study.

TRANSCRIPT

Page 1: From Pariah to Exemplar:   CSR & Stakeholder engagement in six best practices

-by Wayne Dunn

Helping business toserve shareholders AND society

SIMULTANEOUSLY

From Pariah to Exemplar Applying the six best practices

CSR ANALYSIS

Page 2: From Pariah to Exemplar:   CSR & Stakeholder engagement in six best practices

www.csrtraininginstitute.com

The core principles of stakeholder engagement and corporate social responsibility (CSR) are simple. But, executing on them is far from easy.

Readers of my recent articles have asked me for detail and examples of how the principles were applied.

This article will discuss this and look at how a complex challenge was successfully addressed through a focus on simple principles, strategic objectives and system-atic execution.

It is a bit long so I’ve used a Table of Contents to you can go directly to any part that is interesting. To access other recent articles I’ve written click here or open https://bitly.com/bundles/waynedunn/1

IT SHOULD SERVE BOTH.

Should Business ServeSHAREHOLDERS?

Should Business ServeSOCIETY?

Page 3: From Pariah to Exemplar:   CSR & Stakeholder engagement in six best practices

www.csrtraininginstitute.com

TABLE OF CONTENTS

Introduction ………………………………………………………………………………………………………………………………… 1

Complex Stakeholder and CSR Challenge ………………………………………………………………………… 1

Confronting the Challenge …………………………………………………………………………………………………… 2

Application of Best Practice Principles ……………………………………………………………………………… 3

Honesty, Trust & Integrity ……………………………………………………………………………………………… 3

Think Value and Interests – and Do it Transparently ……………………………………………… 3

Define Stakeholders Broadly And Strategically – Go Beyond Compliance ……… 6

Innovative Partnership Example …………………………………………………………………………………… 6

Don’t Forget Internal Stakeholders ……………………………………………………………………………… 7

From Pariah to International Exemplar ……………………………………………………………………………… 7

Stakeholder Engagement and CSR. Simple, but Not Easy …………………………………………… 8

Links to Documents Cited in This Article…………………………………………………………………………… 9

Stakeholder Engagement and CSRFrom Pariah to Exemplar in

Best Practices6Simple, but Not Easy

Page 4: From Pariah to Exemplar:   CSR & Stakeholder engagement in six best practices

COMPLEX STAKEHOLDER AND CSR CHALLENGELet me share an example from one of the most complex, and one of the most successful, stakeholder engagement/CSR projects that I was ever involved in. It was in South Africa with Placer Dome in the early 2000s. It is written up as a Stanford Business School case study and you can read the full case here.

I’ll summarize it briefly and then look at it in relation to the six best practices that are discussed in Six Best Practices In Stakeholder Engagement. You can also look at it in terms of a related article on Five Common Mistakes In Stakeholder Engagement.

Placer Dome was the first major international investor in the post-apartheid mining industry in South Africa. They were also the first major mining company to adopt a sustainability policy.

Shortly after taking control of the South Deep mine, located just outside of Johannesburg, South Africa, they retrenched 2,500 workers.

Retrenchments such as this were normal in the industry at that time. 100,000 workers in the South African gold mining industry were retrenched in the 1990s. There were well established norms around how the retrenchments were structured.

Because of its sustainability policy Placer Dome did not follow the norms. Even though they were offering the highest ever retrenchment benefits to the workers, relationships with the union and other key stakeholders deteri-orated and ended up in court.

Workers and unions resisted the retrenchment.

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INTRODUCTIONIt is really important to remember that no matter how complex the execution gets, you must always ensure that it is serving the underlying principles and strategic objectives. And keep the focus, the metrics and strategies as simple and straight forward as possible.

A common problem is that people set up elaborate systems and pro-cesses and then somehow get caught up in them.

They forget that they were set up to serve and support some simple principles and, ultimately, to allow the company to better serve and support stakeholders and achieve strategic objectives.

At the end of the day a big part of the success of any stakeholder engagement or CSR program will depend on the value that the engagement creates for the stakeholders, and for the company.

The attitude with which the engagement process is carried out is also critical. Humility, openness, transparency, fairness, reciprocity. Practice these rigor-ously and you’ll be surprised at the impact it will have on stakeholder relations.

Of course, it is also about focus, and working hard, and working smart. And, some pieces of it get complex.

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CONFRONTING THE CHALLENGEPlacer Dome recognized the importance of the family level economic unit and made a commitment to work with the retrenched workers and their families to identify and develop alternative income generation opportu-nities. This was driven, in part, by the company’s sustainability policy.

The Care program was the first time that women would be direct benefi-ciaries of retrenchment benefits. This was partly in response to the burgeoning HIV/AIDS crisis that was sweeping across South Africa and a recognition that the HIV positive rate amongst the workforce was estimated at 30%+.

This was not a simple process. The workforce was drawn from five southern African countries. Their homes were mostly in remote communities scattered across a 3,500 x 500km swath of rural southern Africa.

Placer Dome was a mining company. They had no direct infrastructure or logistics capacity to reach throughout the regions where the workers came from, nor did they have any history or experience in grassroots livelihoods development.

There they were. New kid on the block. Publicly opposed by some critical stakeholder groups. An inexperienced local team tackling a formidable challenge under a glaring national spotlight.

Fortunately their leadership in South Africa (Peter Harris, Warwick Morley-

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Placer Dome won the court case, with costs, but had severely strained relationships with the Union and other key stakeholders, including government.

They were named the “Worst employer in South Africa” and their efforts to implement their retrenchment benefit program (called the Care program) were resisted and rebuffed by many key stakeholders.

The workers were advised to resist collaboration with Placer Dome while legal challenges to the retrenchment progressed through the courts.

The workers lived in remote communities scattered through-out five countries in Southern Africa: South Africa, Mozambique, Lesotho, Swaziland and Botswana

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APPLICATION OF BEST PRACTICE PRINCIPLES

1. Honesty, Trust & Integrity There is no way this project would have even come close to succeeding without taking this principle to heart. And they added in humility, openness and transparency.

Corporate leadership expected no less and Philip von Wielligh made sure these traits permeated the entire implementation team.

2. Think Value And Interests – and Do it TransparentlyFrom day one the team was very clear that the company’s objective was to enable 70% of the workers and their families to become economically active, post-retrenchment.

They also acknowledged that achieving this target was important for Placer Dome’s reputational capital and social license, in South Africa and globally.

The interests of the workers and their families was, amongst other things, focused on earning an income to support the family. This aligned perfectly with the interests of the company.

3. It’s Ok To Disagree – But, Disagree Without BeingDisagreeable. And Stay CuriousThe project started off with Placer Dome in litigation with one of the key stakeholders, the National Union of Mineworkers. The union was tacitly supported by government and other stakeholders. The company was in active disagreement with important stakeholders.

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Jepson, Sam Coetzer, Patrice Gilbert, Jim Fisher, Piet Kolbe, etc.) and at corporate headquarters (Jim Cooney, Keith Ferguson, Doug Fraser, Jay Taylor, etc.) were solidly behind the project. And, they had incredible on the ground execution leadership.

On the ground Philip Von Wielligh set up and ran a team and systems that enabled the project to keep moving forward. At the same time he maintained an open and proactive outreach and communication effort with key stakeholders at all levels (from the communities through to international organizations).

The team evolved into a group of about 30 workers, mostly retrenched mineworkers, scattered throughout the entire project area.

The project succeeded despite the seemingly overwhelming challenges. Corporate leadership and on-the-ground execution were critical for sure. So too was a strict adherence to some simple principles and not letting complexity distract from the ultimate goals and objectives.

Industry retrenchments had a devastating effect on families and children

Care project field worker in-terviewing and registering the spouse of a retrenched mine-worker in a remote Lesotho village.

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4. Do Compliance but Think and Act Strategic – Check theBoxes Yes, but That is Just the FoundationIn this case many of the ‘boxes’ were the data and process management systems and reporting processes that were set up to track and manage progress towards 70% goal.

A lot of attention was paid to setting up these systems and ensuring that they were followed. It was, for sure, onerous. Especially with a far flung team of workers scattered throughout the project area and often without adequate communications. Ubiquitous internet and cloud-based data management was far in the future.

But, reporting and process management never, ever eclipsed the real objective. Everyone knew that they were only tools to help the project to help families to become economically active.

The ultimate objective of worker livelihoods remained clear. Management systems and processes were used to serve that objective and not become an objective in themselves.

5. Share the Credit, Multiply the Resources.Find Partners!From day one everyone knew that to succeed they needed partners. There were holes throughout the company’s ability to execute on the project.

The holes could only be filled by finding the right partners and giving them reason to engage. The team needed to focus on the values and interests of the potential partners.

One key and early partner was the Mineworkers Development Agency (MDA). This is important because they were the development arm of the National Union of Mineworkers, who had challenged the retrenchment in court and were vehemently opposed to it.

Fortunately Project Manager Philip von Wielligh was able to establish a relationship with MDA and identify common interests (one of the reasons MDA was set up was to help mitigate the socio-economic effects of the decade long series of industry retrenchments).

Placer Dome executive Jim Cooney visiting a community development partner in Eastern Cape Province, South Africa

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The Union vehemently and publicly opposed the project because they felt it was unnecessary. They did not believe the retrenchment was done properly and that it should and would be overturned.

The project team didn’t try to deal with that disagreement. Instead they looked for areas of common interest and avenues where individual and institutional relationships could be nurtured and developed.

They stayed open, stayed curious and found ways to constructively engage with the Union, government and other key stakeholders, despite the disagreement.

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6. Communicate So You are Heard and UnderstoodIn this case communication was much more of a ‘show me, don’t tell me’ process.

With all of the active opposition and rhetoric surrounding the launch of the project, the company wisely did very little high level outreach communications.

Communication strategy was focused on direct outreach to potential partners and collaborators and on reaching and communicating with the retrenched workers and their families. There wasn’t a grand communication strategy to let the world know about Placer Dome’s wonderful program and what they were doing for the retrenched workers.

That would have backfired spectacularly. It would have provided a public focal point for opposition and served to further polarize an already difficult situation.

Instead the company simply put its head down and focused on the simple internal communications and only did those external communications that were necessary to enable it to do the job of helping the workers and their families to become economically active.

Eventually, as the project started to have real success at helping families, the communication focus changed. But, often it wasn’t the company driving the communications, it was the partners who wanted to share the success that they were part of.

Often, others who had heard of the project, inquired about it and asked project leadership to give talks and lectures.

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Fortuitously Union leadership was able to see beyond a serious disagreement with the company and not prohibit the involvement of the Mineworkers Development Agency.

Many other partnerships were developed, including with the Canadian International Development Agency (CIDA – now part of DFATD). CIDA made their first ever major corporate social responsibility (CSR) investment and contributed $2 million to overall project costs.

This partnership provided CIDA with outreach and leverage and a greater social impact than they could have achieved on their own. For the company CIDA’s participation gave a critically important stamp of credibility to the development program they were undertaking.

TEBA, the Chamber of Mines employment bureau and many other partners were brought on-board (see Stanford Case Study for some more information on partners).

What is important is that the company recognized that it had to share the credit and find ways for its partners to further their own objectives.

Daughter of a retrenched mine-worker apprenticing as an Elec-trician. The Care project was the first time women were direct beneficiaries of retrenchment benefits in the South African mining industry.

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Over time, as the project achieved success, the company became more proactive in communications, reaching out to local, national and interna-tional audiences. This translated into big social license and reputational capital value for the company (read more on this at the end of this piece).

7. Define Stakeholders Broadly and Strategically– Go Beyond ComplianceIt was this broad and strategic definition of stakeholders, coupled with application of the other principles, which enabled the project to develop the partnerships that fueled its success. A narrow approach to stakeholder definition would have had the company focusing tightly on the retrenched mineworkers and not identifying other groups and organizations that had some shared interest in the outcome. Success would have been virtually impossible.

In addition to MDA and CIDA the company engaged with many stake-holders ranging from local governments, to international organizations like the World Bank, community organizations and national development interests.

INNOVATIVE PARTNERSHIP EXAMPLE

This is an example that illustrates the innovation used in defining stake-holders and aligning interests.

In the Chokwe area of Mozambique, about 225km north of the capital of Maputo, retrenched mineworkers identified agricultural production as a desirable economic activity. It was something they had the skill to do, Maputo was a ready market and the land to farm was available.

There was an infrastructure of irrigation canals that had served the area but they had become overgrown and were largely non-functional.

The local government in Chokwe was interested in increasing local production and economic activity and recognized the potential of the agricultural sector.

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Chokwe mineworker cum rice farmer explaining agriculture expansion plans to Willem le Roux, field team leader.

Page 10: From Pariah to Exemplar:   CSR & Stakeholder engagement in six best practices

FROM PARIAH TO INTERNATIONAL EXEMPLARPlacer Dome went from being named the worst employer in South Africa to being held up by government and the union as an example that the rest of the industry should follow.

Government and union spokespersons cited the program for “making life-changing impacts on workers and families” and “changing the social face of the South African mining industry”.

It won numerous national, regional and global awards including becoming the first private sector project to ever win a World Bank Global Development Innovation Award.

The Care project helped to lead the South African mining industry’s devel-opment of HIV/AIDS programming. This became one of the world’s early leading examples of industry HIV/AIDS programming.

The project was developed into a Stanford Business School case study (click here). It was the subject of a huge amount of international attention, being cited in numerous articles and books and the focus of lectures and presenta-tions at global events.

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The project team reached out to them and developed a collaborative plan to rejuvenate parts of the irrigation canal system in return for access to growing land for the retrenched workers and their families.

A productive agricultural project resulted, providing taxes, economic activity and improved infrastructure for the Chokwe community, economic self-suf-ficiency for the group of retrenched workers and a small success story for the Placer Dome project team.

Don’t Forget Internal StakeholdersThe project started out with strong alignment across a range of internal stake-holders. However, it is unlikely that alignment could have been maintained without active work on the part of the project team and key leadership.

The project was expensive. Gold prices were at historic lows. Operational challenges at the minesite and partnership issues with the JV partners were big concerns.

With all this it would have been relatively easy for the project and its attention and budget to become sidelined and even resented.

Internal stakeholders were addressed in much the same way that the group systematically identified and reached out to external stakeholders. They identified common interests and shared value and created alignment with the specific interests of internal stakeholders.

The project was fortunate that it started with a core group of internal champions and a company that recognized the ultimate shareholder value that resulted from successful social investment.

However, it took focused, strategic and ongoing internal stakeholder engagement efforts to keep everyone onside and supportive of a long and difficult project.

Philip Von Wielligh, Placer Dome project leader, with World Bank President James Wolfensohn and project consultant and au-thor of this analysis Wayne Dunn after receiving the World Bank Development Innovation Awards at World Bank Headquarters in Washington, DC.

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STAKEHOLDER ENGAGEMENT AND CSR.SIMPLE, BUT NOT EASYThe principles are simple even if their application can sometimes be complex. What is key is to learn CSR and stakeholder engagement from principles up. Understand the principles and the application of them gets much simpler.

Keep the principles and the strategic objectives firmly in mind and you can be more consistent across projects and business units.

Of course, execution is critical, but it always needs to be guided by the core principles and strategic objectives.

I’ve found that people, and companies, that don’t develop a thorough understanding of some simple, key principles and clearly define overall objectives will often end up defaulting to a check the box, compliance focused approach.

This approach may satisfy bean-counters but it generally produces only minimal value to companies, communities and stakeholders. And is often quite frustrating to the workers trying to execute it.

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Retrenched worker in Xai Xai, Mozambique protesting the va-lidity of the retrenchment.

South Africa Minister of Mines, Mineworkers Union and Placer Dome hosting a multi-stakehold-er delegation from Papua New Guinea who were learning about multi-stakeholder development and HIV/AIDS programming in South Africa.

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I was fortunate to have the opportunity to work with and learn from Placer Dome, Philip Von Wielligh and the other key stakeholders and participants throughout the Care project. Re-visiting the project a decade later and seeing how relevant it is to today’s issues has been interesting and rewarding for me. And renewed my gratitude to the Placer Dome team for giving me the opportunity to be part of such a pathfinding project and to CIDA for having the courage to partner with and co-fund a mining company development project.

Wayne DunnPresident, CSR Training InstituteProfessor of Practice in CSR (McGill) [email protected]

www.csrtraininginstitute.com

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LINKS TO DOCUMENTS CITED IN THIS ARTICLEStanford Case Study - http://www.slideshare.net/waynedunn/golden-op-portunity-stanford-business-school-case-study-on-award-winning-mining-csr-project

Stakeholder Engagement Mistakes - http://www.csrtraininginstitute.com/the-top-five-mistakes-companies-make-in-engaging-stakeholders/

Stakeholder Engagement Best Practices - http://www.csrtraininginstitute.com/6-best-practices-and-1-critical-principle-in-stakeholder-engagement/

Family of retrenched mineworker in Xai Xai, Mozambique.

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Stanford Social Innovation Review 518 Memorial Way, Stanford, CA 94305-5015

Ph: 650-725-5399. Fax: 650-723-0516

Case Study

Golden Opportunity When a Canadian multinational laid off hundreds of

gold miners in South Africa, it went many extra miles to help them get back on their feet

By Wayne Dunn

Stanford Social Innovation Review Winter 2004

Copyright 2004 by Leland Stanford Jr. University All Rights Reserved

DO NOT COPY

Email: [email protected], www.ssireview.com

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Golden PH

OTO

GR

APH

BY

MA

STER

FILE

In late 2000, I set off in a pickup truckto help find an unemployed gold minerliving in the rugged highlands ofLesotho, a small independent nationsurrounded by South Africa. I had beenhired to assist a corporate social respon-sibility initiative designed to help 2,500miners laid off from South Africa’s SouthDeep gold mine, one of the world’slargest. Under the ambitious project,miners were to be retrained for newjobs or taught how to start their ownsmall businesses. The problem was thatthey had already gone home to isolatedvillages and towns scattered across a2,500-mile-long swath of rural south-ern Africa. Now we had to find them,

and that was proving quite a challenge.With me in the truck was Thato

Lethebele, himself a laid-off gold minerhired to help locate his colleagues. Sinceminers often lived in places so remotethat they appear on no map, Lethebelecarried a global positioning device sohe could record the location of miners’homes for the outreach workers whowould make follow-up visits.

After driving for hours along theRoof of Africa Highway, with sheercliffs on one side and sheer drops onthe other, we ran out of paved road andbegan following trails, some of whichlooked like they hadn’t seen a motorvehicle in a long time.

We began stopping everyone wecame across – men on horseback, boysherding cattle, women walking along thetrail – and asking if they knew where theminer lived. After two long hours ofbouncing and banging along remotemountain trails, we came to the miner’svillage. The trail turned into a near-ver-tical path for the last quarter mile, so wehad to get out and walk.

We finally arrived at the village com-posed of about 10 huts, but the miner,it turned out, wasn’t home.

But his wife was, and we explainedto her that we represented Placer Domeand that we were there to inform themabout a job retraining project for Placer

CASE STUDY

b y W A Y N E D U N N

www.ssireview.com ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ STANFORD SOCIAL INNOVATION REVIEW 59

When a Canadian multinational laid off hundreds of gold miners in South Africa, it went many extra miles

to help them get back on their feet

Goldeno p p o r t u n i t y

What happens when a multinational company suddenly changes

the social responsibility “rules” for a long-established industry?

How can a company make massive workforce layoffs compatible

with an aggressive social responsibility agenda?

What are the challenges when a firm goes far beyond its core competencies

in order to deliver on its social responsibility commitments?

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CASE STUDY

Dome’s former employees.

Going Beyond Industry PracticePlacer Dome, a Canada-based globalmining firm, has more than 13,000employees in seven countries. Its 17mines produce more than 3.5 millionounces of gold and 400 million poundsof copper annually. In 1999, the companypurchased 50 percent of the South DeepMine from Western Areas Limited, anold South African mining firm, becom-ing the first post-apartheid foreigninvestor in South Africa’s huge gold min-ing industry.

The mine required massive restruc-turing in order to make it profitableand to bring it in line with PlacerDome’s safety standards. Nearly a thirdof the mine’s workforce was let go.Layoffs were a depressingly familiarfeature of the South African miningindustry in the 1990s, when more than100,000 workers lost their jobs. Employ-ment cuts were so common that theNational Union of Mineworkers cre-ated the nonprofit Mineworkers Devel-opment Agency (MDA) to aid out-of-

work miners and their families.Industry practice in South Africa at

the time was to give laid-off employeestwo weeks of severance pay per year ofservice, plus access to various job train-ing opportunities at the mine site. ButPlacer Dome felt this didn’t measure upto its corporate sustainability policy,which commits the company to add“economic, social, and environmentalvalue to the communities where we

operate.” Few employees take advan-tage of training at the mine site, as itrequires that they stay there, rather thanreturn to their villages. Furthermore,training at the mine site would do littleto prepare workers for the economicreality of their remote, impoverishedvillages.

Placer Dome thus embarked on anexpensive program to train them fornew jobs or help them start their ownsmall businesses. Given that the ex-min-ers lived in communities scattered acrossfive countries – South Africa, Lesotho,Mozambique, Swaziland, and Botswana– this was a mammoth undertaking.

Jay Taylor, Placer Dome’s CEO at thetime, recognized that the world waschanging and resource-extraction busi-nesses like his would find themselvesunder increasing pressure to deliversocial value and environmental stew-ardship along with financial returns.And a company’s reputation, he knew,would become increasingly dependenton its ability to do so.

“Our commitment to communitydevelopment represents an added cost,

but is an essential investment in ourfuture, and should help us to achievegreater profitability,” Taylor said.

His intuition proved correct. In 2002,Phumzile Mlambo-Ngcuka, SouthAfrica’s minister of minerals and energy,established a “social scorecard” man-dating that mining companies producesocial value for workers and the com-munities where they come from. Withits new income-regeneration program,

Placer Dome not only had a head starton meeting this requirement, but gainedcredibility because it had done so beforebeing ordered to.

Key Management PlayersIn 2000, Placer Dome assigned internalresponsibility for what became knownas the Care Project to Phillip Von Wiel-ligh, South Deep’s human resourceschief. He was supported by projectcoordinator Willem le Roux, andtogether they managed a group of upto 30 full-time workers, nearly all ofthem ex-miners. Von Wielligh reporteddirectly to the mine manager. KeithFerguson, vice president of sustain-ability at Placer Dome’s head office inVancouver, became an internal cheer-leader, providing financing and corpo-rate endorsement. Placer Dome’s SouthAfrican management set a goal of get-ting at least 70 percent of the laid-offworkers or their families into new jobsor their own businesses.

Placer Dome hired my consultancy,Wayne Dunn & Associates, to providestrategic support to the Care Project.My firm was hired not to provide day-to-day management, but rather to helpdesign the project, develop appropriateinternational partnerships for it, andsupport the people carrying it out. Wenegotiated the cost-sharing partnershipwith the Canadian International Devel-opment Agency (CIDA), and managedthe relationship with the World Bank. Ivisited the project three to four times peryear to help management reviewprogress and plan strategy.

Hunting for Good PartnersWhile the project team was long onenthusiasm, it was short on experiencein managing a complex, multicountrydevelopment project.

Team members realized they neededhelp locating widely scattered benefi-ciaries. The team also needed partnersto provide the training programs. So

60 STANFORD SOCIAL INNOVATION REVIEW ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ www.ssireview.com

“When the mine laid off 2,500 workers, we

expected it would be similar to other

retrenchments, but the Care Project has changed

the South African mining industry.”{ }

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they approached two organizations withcommon interests and the infrastruc-ture to cover the vast region where theminers lived. The Employment Bureauof Africa (TEBA), a recruiting agency forthe mining industry with offices through-out southern Africa, and the MDA,which had several training and devel-opment facilities in the region, agreed tohelp the Care Project.

The Care Project contracted withTEBA and MDA for the use of theirfacilities, daily supervision of the out-reach workers who worked from TEBA’soffices, and the provision of specifictraining programs. If TEBA or MDAcould not provide the training, theycould source it to other local providers.In addition to paying them for their ser-vices, the Care Project paid to upgradesome TEBA and MDA training centersand office facilities. The efforts of TEBAand MDA were directed by Von Wielligh,who also maintained quality control.

The project team developed what itthought was a straightforward plan.About 25 laid-off miners would bearmed with global positioning devicesand dispatched to scour the bush coun-try for their ex-colleagues’ homes. Oncelocated, former workers would be reg-istered for the Care Project and the GPScoordinates of their homes recorded.Then on subsequent visits, the teamrepresentatives would help the workersand their families decide whether theywanted to be trained for new jobs or

tutored in setting up their own busi-nesses. Workers could nominate wivesor other family members to receive thetraining – the first time women everhad direct access to severance benefits.

The team felt that lengthy studiesand consultations would only delay theprocess of aiding the miners and theirfamilies. To save time, the initial budgetfor the project was set at $2.5 million sothat the CEO of Placer Dome’s SouthAfrica division could approve it with-out going to the company’s full board.

The plan sounded simple, but puttingit into effect was anything but.

Distrust and FrustrationWith no experience running such acomplex endeavor, Placer Dome madesome early mistakes. For one thing, itfailed to get the National Union ofMineworkers on its side. Enraged atthe sweeping layoffs, the union hadchallenged them in court but lost. Theunion had little reason to trust PlacerDome, and much credibility to lose ifit backed the Care Project and it failed.When the project started, the unionwas still telling workers the layoffswould be overturned and they wouldget their jobs back. On several occa-sions, I watched as project team mem-bers endured long, angry lectures fromformer miners who believed PlacerDome was unfairly taking their jobs.

The project’s biggest initial hurdlewas finding ex-workers in some of the

most inaccessible places on the planet.To locate and register one family,

for example, took us more than fivefrustrating, harrowing hours. And weplanned to do this 2,500 times.

Then there were the ex-miners them-selves. Many were in denial about theirjob status and fully expected to go backto work; some had not even told theirfamilies about the layoffs. Moreover,many workers were functionally illiter-ate or ill with AIDS, making employ-ment training for them problematic.

Adapting the Strategy to RealityThe original plan was for the 25 CareProject outreach workers to be super-vised by one person. But this was impos-sible, so Von Wielligh appointed fiveregional managers, one in each country.Von Wielligh, le Roux, and the regionalmanagers met face-to-face every monthto report progress, set targets, sharelessons learned, and develop overallstrategy. Regional managers in turn heldmonthly meetings with fieldworkerswho operated out of TEBA offices intheir jurisdiction.

We solved the logistical nightmare oftransporting outreach workers by sup-plying fieldworkers with motorcycles.They also were provided with cellphones, improving their ability to com-municate with project managers.

As the team gradually located the ex-miners and informed them about thetwo different programs – the job retrain-

The Bottom LineBENEFITS TO PLACER DOME

Meet new government social standards before they’re imposed.

Credit for “changing the social face of South African mining.”

Improved relations with miners’ union.

Won prestigious World Bank Development Innovation Award.

BENEFITS TO MINERS

Job training led to new employment.

Entrepreneurial skills training allows many to open their

own small businesses.

AIDS home-based care programs help infected miners and

their families.

COSTS TO PLACER DOME

$3.6 million in cash.

Management time.

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ing program and the small-businesstraining program – that they could enrollin, we realized that the ex-miners werestruggling to make an informed choicebetween the two. Many of them weren’taware of the range of options for mak-ing a living. They could become chickenfarmers, bricklayers, welders, bakers,vegetable farmers, or furniture makers.They also could open conveniencestores, garages, or solar panel installationshops.

To showcase these alternatives andhelp them choose a career path, CareProject management along with TEBAand MDA came up with the idea of cre-ating a career fair. Named Open Days,these events became invaluable in open-ing the eyes of ex-miners to an array ofalternative careers opportunities. Onecareer fair was held in each province, andthe project arranged and paid for trans-portation to bring workers and theirspouses in from the villages. Trainersand suppliers set up information booths,and the fairs quickly took on the feel ofa celebration as old co-workers reunited.

Despite the successful awareness

raising of the career fair, many ex-min-ers were still hesitant about choosingbetween the job training or the small-business training. While excited aboutthe possibility of striking out on theirown with a small business, most ex-min-ers lacked all but the most rudimentaryfinancial skills required to run it. I sug-gested creating a program to teach themand their spouses basic financial skills.MDA was hired and paid to develop andprovide a financial life skills course.Classes included how to operate a cal-culator, assess microenterprise oppor-tunities, and weigh the advantages anddisadvantages of self-employment. AtVon Wielligh’s insistence, trainers andcounselors were professionally certifiedand, where possible, hired locally.

These one-week financial life skillssessions, in conjunction with OpenDays and group counseling sessions,helped workers and their families maketwo critical choices: who would take thetraining, the miner or another familymember, and whether they wanted totrain for new jobs or run their ownbusinesses.

The Network of Partners Gets to WorkThose who chose new jobs weretrained, and the project team used itsextensive network of business con-tacts to help find openings for them.The project paid to give some minerson-the-job training with new employ-ers, saving the employer money andincreasing the employability of CareProject trainees.

Those who wanted to becomeentrepreneurs entered a program thatfamiliarized them with microbusinessoperations and helped them explorethe market for their proposed business.TEBA, MDA, or their local subcon-tractors provided the training.

With the vast geographic spread ofthe project, the support had to be cus-tomized based on local requirementsand capacity. If, for example, a minerwanted to become a chicken farmer, theproject paid for him to receive genericsmall-business training along with spe-cialized courses on the technical aspectsof raising poultry. Whenever possible,trainees were introduced to localexperts who could help them developtheir businesses over time. The projectconnected a group of miners-turned-chicken farmers in Mozambique, forinstance, with local suppliers of hatch-lings and chicken feed.

After the Care Project was launched,I helped bring in a governmental part-ner, CIDA, which realized that workingwith Placer Dome could further itsown poverty-alleviation agenda andinfluence the direction of the Care Pro-ject as well. CIDA provided $1.4 million,and also lent development expertiseand credibility to the project.

One condition of CIDA’s partici-pation was that South Deep develop anHIV/AIDS program. Placer Dome, inorder to fulfill the requirements ofCIDA funding, worked closely withTEBA to champion a new initiative to

CASE STUDY

62 STANFORD SOCIAL INNOVATION REVIEW ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ www.ssireview.com

Care Project fieldworker Thato Lethebele takes the GPS reading for the home of former

mine worker Ditonako Thakali in Mokhotlong, a village in the highlands of Lesotho. TEBA

regional manager Thabiso Thaaso and Thakali’s wife observe the process. The village was

reached after an arduous journey along the Roof of Africa Highway and through a maze

of trails stretching back into the remote mountain ranges.

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provide training and support to familymembers caring for dying workers.The AIDS home-based care programwas designed and led by TEBA. VonWielligh participated in the conceptdevelopment and helped the projectto gain broad industry acceptancethrough informal advocacy among hispeers in other companies. Placer Domepaid for my consultancy’s efforts togain more legitimacy and funding forthe initiative by entering it in the WorldBank Development Marketplace com-petition. Today, all South African goldmining companies participate in the

program and fully cover its costs, about$500,000 per year.

Success StoriesSlowly, the Care Project team’s perse-verance began to pay off. Skepticismdissipated as some laid-off workersbegan getting new jobs, and othersstarted setting up small businesses.

In Lesotho, a young woman openedan electronics repair shop, and a schoolto teach others her skills. Several ex-miners in Mozambique decided to growvegetables for the market in Maputo,the capital.

After taking the financial skillscourse, another worker went back to hisvillage, an hour away from the nearestretail outlet, and saw an opportunity.He opened a small general store in hishouse, making a living for himself andsparing local women and children a longwalk to purchase supplies. He has sinceparlayed his shop into several other localbusinesses, and serves as an entrepre-neurial role model for others.

Not everyone was successful; sometried hard and didn’t make it. Butmany did succeed, making a differ-ence for their families and setting an

Key Players and Roles

Laid-off mine worker and family • Participated in program or selected family member to participate in training

Placer Dome • Conceived and launched the projectSouth Deep Mine • Provided $3.6 million in cash financing

• Provided management/corporate support• Project management

Care Project team • Day-to-day management• Responsibility for quality control• Managed outreach/fieldworkers• Contracted with and paid for TEBA and MDA’s participation• Managed all southern Africa relationships

The Employment Bureau of Africa • Member of project steering committee(TEBA) • Assisted with organizing Open Days

• Office space for fieldworkers• Provided training facilities• Identified/contracted training providers• Developed and managed AIDS home-based care program

Mineworkers Development • Member of project steering committeeAgency (MDA) • Assisted with organizing Open Days

• Provided training facilities• Identified/contracted training providers

Canadian International • Provided $1.4 million in project financingDevelopment Agency (CIDA) • Provided development expertise

• Lent credibility to the project

World Bank • Awarded Development Innovation Award and $100,000 award to PlacerDome/TEBA home-based care project

• Gave global profile to the project

Wayne Dunn & Associates (WDA) • Assisted with project design• Negotiated partnership with CIDA• Managed World Bank competition entry• Provided ongoing strategic consulting, and facilitated stakeholder communications

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example for their neighbors.

Bottom LineThe Care Project ended in December2003 after virtually all the laid-off min-ers had been contacted. Outreachworkers had made 3,251 home visitsand registered 2,232 participants.Although this was less than the 70 per-cent participation rate we had initiallysought, we considered the project suc-cessful. Of those who registered, 56percent were still making at least $100per month in October 2003 – wellabove the subsistence-level wages com-mon in the rural areas where theylived. We project that the average ben-eficiary will earn about $1,000 peryear, comparing favorably to the perworker program cost of $1,667. PlacerDome had contributed $3.6 million incash, as well as management time andcorporate resources.

The AIDS home-based care projecthas supported nearly 2,200 families andtrained over 400 village care supportersin its first two years. In 2002, the home-based care project won the WorldBank’s Development Innovation Award– the first time a private-sector socialresponsibility project had done so. TheCare Project won the 2004 NexenAward for Excellence in CorporateSocial and Ethical Responsibility, givenannually to the top Canadian corporatesocial and ethical project.

The results of the Care Project havebeen a welcome surprise for the SouthAfrican government. “When [the mine]laid off 2,500 workers in 1999, weexpected it would be similar to otherretrenchments, where the workers andtheir families received little supportother than some on-mine training forthe worker,” said Kgosietsile Mogaki,social plan director for the South AfricanMinistry of Minerals and Energy.“However, we have witnessed the CareProject making life-changing impacts,helping workers and their families to

develop alternative incomes. Today [thegovernment sees] the Care Project as anexample that we encourage other minesto follow. The Care Project has changedthe social face of the South Africanmining industry.”

For Placer Dome, the Care Projectproduced a strong relationship withunions and the South African govern-ment, plus a global reputation as aleader in corporate social responsibility.For me, the project demonstrated howthe private sector can work proactivelywith development partners such asCIDA to accomplish what neither ofthem could do individually.

Development agencies and privatefirms have common interests. Devel-opment organizations have a mandateto alleviate poverty and inequality inthe developing world. Internationalbusiness, especially in industries suchas mining, is under increasing pres-

sure to demonstrate that it can createsocial value along with shareholdervalue. In much of the world, socialvalue is synonymous with easingpoverty and increasing equality.

CIDA and other developmentagencies have extensive experiencedesigning and implementing devel-opment projects, but their funding islimited and, with the increase in pri-vate investment in recent years, theirrelative influence in developingeconomies is shrinking. Multinationalbusinesses like Placer Dome have well-developed logistics and project exe-cution skills; often they have infra-structure and managers in isolatedareas (where mines are located) aswell. As the Care Project demon-strates, there are significant synergiesthat can be achieved when these twosectors collaborate effectively.

64 STANFORD SOCIAL INNOVATION REVIEW ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ www.ssireview.com

WAYNE DUNN holds an M.Sc. in management from the Stanford Graduate School ofBusiness and is the founding partner of Wayne Dunn & Associates Ltd., a Canadian con-sulting firm that helps private and public sector clients worldwide address sustainabilityand social development issues. Dunn has worked on more than 40 social licensing projectsin 26 countries on six continents. He can be reached at [email protected].

Care Project coordinator Willem le Roux observes the collection of registration

information from the wife of a former mine worker.

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Should Business ServeSHAREHOLDERS?

Should Business ServeSOCIETY?

IT SHOULD SERVE BOTH.

Wayne Dunn is President & Founder of the CSR Training Institute and Professor of Practice in CSR at McGill. He’s a Stanford Sloan Fellow with a M.Sc. in Management from Stanford Business School.  

He is a veteran of 20+ years of award winning global CSR and sustainability work spanning the globe and covering many indus-

tries and sectors including extensive work with Indigenous Peoples in Canada and globally. His work has won major international awards and has been used extensively as ‘best-practice’ by industry and academia.

He’s also worked oil rigs, prospecting, diamond drilling, logging, commercial fishing, heavy equipment operator, truck driver and underwater logging, done a couple of start-ups and too many other things to mention.   Wayne’s career includes big successes, and spectacular failures. He hopes he’s learned equally from both.

www.csrtraininginstitute.com

WAYNE DUNN, PRESIDENT AND FOUNDER

Helping business to serve society and shareholders, SIMULTANEOUSLY.