mines and money access africa
TRANSCRIPT
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Corporate Social Investment in a
capital constrained world
Brandon Munro Managing Director, Kunene Resources
Ltd www.kuneneresources.com KNE.AX
Mines and Money Access Africa, 25 June 2014
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AgendaWhat is CSI (and what is it not)?Justifiable CSI when funding limitedIdentifying inappropriate CSI expenditure
Project risks from ceasing CSI
Managing expectations
Greater results with lesser expenditure
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What is Corporate Social Investment?
CSISocial
licence to operate
Regulatory compliance
The right to operate pyramid
CharityCSI is
like charity!
Company responsibility
Investor prerogativenot
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What is justifiable when funding is short?
CSI should target risk mitigation…
…not charity
(and upside opportunities)
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Key downside risks
De facto regulations
Lobby groups
Community support
(opposition)
Regulatory attention
Security & accessibility
Human resourcing
Licence tenure
Corrupt practices
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Exploration
Development Mining Services
What risk profile are you investing into?
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Exploration
Development Mining Services
Licence Tenure
Community support
Lobby groups
Security/access
Human resources
Corrupt practicesRegulatory complianceDefacto regulations
What risk profile are you investing into?
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What risk profile are you investing into?
Exploration
Development Mining Services
Licence Tenure
Community support
Lobby groups
Security/access
Human resources
Corrupt practicesRegulatory complianceDefacto regulations
Beware lead times
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Upside risk… financing alternatives
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Upside risks… BD opportunities
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Written plan/strategy?How much and on what?Project link with risk?Assessment/decision making process?Community’s obligations?Monitoring/evaluation?Link with external relations?
Key CSI questions to ask?
CSR Charter
Implementation guidelines
(pre-production)
Operations• Profitability• Capex• licence to operate• regulatory compliance• Management
Environment• Natural• Social
Community• Engagement• Development
Workplace • Attraction• Respect• Development• Retention• AAP• Ownership
Health and Safety
Policies and Guidelines
In place HR Policies and Procedures
Community Development Program
IFC ESIA process
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Red flags
No expenditure
Scattered donations
Political/religious donations
Emotive donations
Inappropriate/corrupt support
Political intervention
No accounting records
No champion
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Ceasing or reducing CSI has its own risk• Use risk-management as the basis for
spending cuts. Cut by effectiveness not quantum
• Understand who are the beneficiaries… and benefactors (beware political revenge)
• Don’t risk your social licence to operate
• Any mitigations or bridging plans?
•
CSISocial
licence to operate
Regulatory compliance
• Consider risks to company’s reputation, perceived ability to execute
• Avoid shutting down projects prematurely – sends stronger message than not renewing
• Manage through interface with external relations/PCDP
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Impact of CSI on community expectations
Expectations
Measure Mitigate
ManageMeet (?)
Assess (guess) hopes, dreams ...or demands
Be modest, under-promise, respect local balance
Communicate, recalibrate and extricate
Anticipate flow-on effects, avoid upward spirals
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Two way contracts with communities
• Stage expenditure with obligations on recipients/community• Ensure community accountable
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Greater results for less• Use procurement to create
CSI benefits• Focus on capacity building
• Leverage other funding sources• Have time limits• Focus resources on
flagship project(s)
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Questions?Email me at: [email protected]