Situating Corporate Social Responsibility in the Africa Mining Vision: A Perspective by Antonio M.A. Pedro UNECA

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Situating Corporate Social Responsibility in the
Africa Mining Vision A Perspective by Antonio
M.A. PedroUNECA
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Objectives

• Inform audience about the AMV
• Discuss briefly understanding of CSR
• Outline the nexus between CSR and the AMV
• Centred on the AMV, offer suggestions on the way
  forward

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ECAs work streams

• Soft and policy oriented
• Focus on improving the enabling environment
  (policies, laws and regulations), enhancing
  institutional capacity, raising awareness and
  building consensus on emerging issues of interest
  to the continent, enhancing partnerships, and
  harnessing the potential of regional integration

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The Africa Mining Vision Transparent,
equitable and optimal exploitation of mineral
resources to underpin broad-based sustainable
growth and socio-economic development 
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The Tenets

• Recognition of important role of NR to Africas
  economies
• Transform finite NR capital and transient wealth
  into lasting forms of capital beyond the currency
  of mining
• Broader understanding of benefits (beyond
  revenue streams)
• From comparative to competitive advantage A
  developmental, transformative, knowledge-driven
  and integrated mining sector with downstream,
  upstream and sidestream linkages

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The Tenets 2

• A sustainable and well governed sector resource
  rents are well managed distributed and smartly
  invested intergenerational equity, environmental
  and material stewardship and CSR respected safe,
  healthy and advanced and stakeholders empowered
• Mining as key component of a diversified and
  globally competitive economy
• Unbundle to bundle Entry points for localization
  identified

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Tenets (3)

• A sector that anchors the development of a
  competitive infrastructure base through local and
  regional economic linkages
• Optimal exploitation of finite resources at all
  levels (large and small-scale) and of all types
  (high and low value)
• A sector that puts Africa geopolitically and
  strategically at its right place in the global
  international capital and commodity markets

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The Process

• Task Force AUC, ECA, AMP, AfDB, UNCTAD, and
  UNIDO and UEMOA
• First draft presented at the First AU Conference
  of Ministers of Mines in October 2008
• Draft informed by outcomes of several meetings
  and initiatives, including comments from October
  meeting
• Vision adopted by AU Summit of Feb 2009

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Why the AMV ?

• Need to have a African common voice on how to use
  mineral resources for growth and development
• Africa significant resource endowment A key
  comparative advantage to harness
• Top producer of many minerals, but most exported
  as raw materials Potential for mineral
  beneficiation is great
• We can learn from Nordic countries who were
  successful in promoting RBI

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Why the AMV (2)?

• Mining has relatively better rents than other
  primary sectors. These rents can catalyse growth
  of the other less competitive sectors
• China and India Reshaping the ball game more
  competition for Africas acreage strengthens the
  continents bargaining power
• Failure of the Washington consensus opens room
  for more policy space
• The Latin America model (Chile and Peru) Being
  revisited

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Why the AMV (3)?

• Assertive governments Bolivia, Venezuela,
  Ecuador, South Africa (Mining Charter)
• Governance gains CSOs, democracy, APRM
• Tri-sector partnerships and public participation
  Being mainstreamed
• New age miners Captains of industry are (slowly)
  embracing developmental and transformative
  approaches triple bottom line (financial
  success, contribution to social and economic
  development, and environmental and material
  stewardship)

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Entry points

• Resource rents Invested to improve physical,
  human and social capital and infrastructure
• Expanded physical infrastructure to open up
  other resource potential (agriculture, forestry,
  tourism) and access zones with lower economic
  potential (densification, SDP)
• Downstream value-addition To establish
  resource-processing industries that could provide
  the feedstock for manufacturing and
  industrialization

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Entry points (2)

• Upstream value-addition To develop resource
  supply/inputs sector (capital goods, consumables,
  services)
• Technology/product development To incubate niche
  technological competencies in the resource inputs
  sector that can migrate laterally to other
  sectors to produce new products for other
  (non-resource) markets (e.g. Atlas Copco)

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Challenges

• Harnessing resource rents How to avoid the
  resource curse and manage price volatility
• Credit crunch
• Collateral use of resource infrastructure
  Defeating the Dutch Disease, investing in and
  maintaining non-lucrative feeder infrastructure
• Downstream value addition High entry barriers,
  non-competitive sector due to high costs and
  non-availability of other factors, breaking TNCs
  preferences and tradition, lack of competition

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Challenges (2)

• Upstream value addition Centralised procurement
  by TNCs lack of competitive domestic business
  sector to explore opportunities in the sector
  poor HRD and skills base to foment development of
  local knowledge intensive industries
• Sidestream value addition HRD and technology
  innovation centred in the West, few technology
  clusters in the South

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The strategies

• Improve the level/quality of Africas resource
  potential data (gm and mineral inventory) It
  strengthens the continents bargaining power
• Fight for more fiscal space Self-adjusting
  resource tax regimes to capture windfalls beware
  of stabilization clauses
• Introduce innovative licensing schemes to boost
  competition Go beyond the first come and first
  served approach explore competitive auctioning
  through differentiation of terrains (Liberia)

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The strategies (2)

• Boost Africas capacity to negotiate contracts
  and extract better deals (ALSF, UNDP, GTDF Crans)
• Build robust institutions and enhance the
  capacity to administer the sector (auditing,
  monitoring, regulating, enforcement (SEA,SIA),
  fomenting linkages, managing price volatility),
  plan and build scenarios
• Manage mineral wealth better (APRM, EITI,
  oversight committees)

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The strategies (3)

• Develop junior resource companies
• Address infrastructure constraints (SDP, DCs)
• Promote collaboration and competition among
  industry players to improve factor advantages and
  enhance competency, innovation and
  diversification
• Harness the potential offered by ASM
• Build stakeholder and local business capacity
  Support SMEs to enter the supply/procurement chain

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The strategies (4)

• Increase private sector confidence and
  participation
• Establish the requisite enabling markets
  including local skills development
• Facilitate RD and build knowledge networks of
  academia, private sector, government, etc
• of upstream/downstream/sidestream to be locally
  retained

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Implementation

• Shared vision, but phased (Short, medium and
  long-term actions) and context specific action
  (There is no one size fits all)
• Phases are not mutually exclusive Implementation
  can be fastened depending on internal and
  external factors
• Political will and proactive government action
  Key
• Improving natural resources governance Critical
• Collective and concerted action/The African
  voice Indispensable

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Implementation (2)

• Capacity building, RD Fundamental
• Partnerships Essential
• Policy space and ownership of the development
  process The cornerstone!
• Coordinated action between public, private and
  community stakeholders
• The minerals complex requires a new
  institutional mindset Break government silos and
  departmental rivalry

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Implementation (3)

• Regional integration Harmonise policies, laws,
  regulations and standards to facilitate factor
  flows
• Needs assessment Key
• Dont be complacent The game changes fast (Six
  months ago we were all taking about a Super
  Cycle)

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A word on CSR

• EC definition CSR, a concept whereby companies
  decide voluntarily to contribute to a better
  society (beyond mere compliance with legislative
  requirements)
• The premise Mining generates both economic and
  social impacts including to local communities
  which need to be accounted for and mitigated
  (adverse impacts) or maximized (positive ones)

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A word on CSR (2)

• Challenge areas Action after mine closure
  profiling community needs (alternative
  livelihoods projects) asymmetric relations and
  power legitimacy of community representatives
  government regulation of CSR to encourage
  commitment and compliance boundary between CSR
  and social rights shifting responsibilities from
  the State to private operators community legal
  retribution and legal recourse voluntary vs
  mandatory JRCs capacity to enforce provisions)

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A word on CSR (3)

• Opportunities New GRI Mining Supplement making
  the JSE Socially Responsible Investment Index
  (benchmarking the triple bottom approach,
  including contribution to social sustainability)
  mandatory (???) BBE Pushing the CSR bar
  higher???

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CSR and the AMV

• The tentative framework for action of the AMV
  calls for improved public participation in the
  mining sector (consultation and information
  sharing/informed decision making/dispute
  resolution)
• Governments to mainstream and entrench use of
  Strategic Environmental Assessment (SEA) and
  Social Impact Assessment (SIA)
• Establishment of platforms for consensus building
  on priorities and options for the development and
  management of mineral resources
• Domestication of relevant provisions on public
  participation of the Aarhus Convention and
  Equator Principles

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CSR and the AMV (2)

• Mining companies to develop, adopt, and implement
  CSR charters in accordance with the mining
  supplement of the GRI
• AUC to develop continental CSR codes and
  standards
• ICMM to enforce members adherence to its
  sustainable development charter
• Chambers of Mines to popularize ICMMs Community
  Development Toolkit

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Way forward

• As decided by the June AU Summit, AUC/AMP to take
  lead in the preparation of concrete action plans
  and milestones in collaboration with UNECA, AfDB,
  AMP, RECs and other stakeholders
• Develop specific guidelines/templates (including
  on CSR) to facilitate realization of the Vision
• Publicize and popularize the vision and engage
  with private sector and CSOs (among other
  stakeholders) and build coalitions for change at
  national, sub-regional, and continental levels
• Member states to internalize the Vision in their
  national development strategies

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In Conclusion

• The AMV is a broad aspirational framework to
  promote the development outcomes of
  resource-based growth
• CSR initiatives must be part of integrated
  development plans and contribute to broad-based
  socio-economic uplifting and empowerment (A key
  pillar of the AMV) Mainstream SEAs and SIAs
• Think beyond project level and being benefactor
  to developing effective partnerships for change
  Earn a real social license to mine!

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Thank You!