SOCIO-POLITICAL CHALLENGES FACING
MINING COMPANIES IN SOUTH AFRICA
Can effective corporate social responsibility mitigate against these challenges?
25 October 2010
A presentation by ERIC RATSHIKHOPHA
ACKNOWLEDGE AND ACCEPT
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Mining does not take place in a vacuum
Mining and its operations have both negative and
positive impact on the environment (physical and
social)
To do business successfully we must understand
the environment in which businesses operate
cannot succeed in societies that fail...”
Bjorn Stigson President, WBCSD
…“Business
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Effective public institutions and the delivery of
social services and infrastructure is in the interest of
business
A presentation by ERIC RATSHIKHOPHA
SOCIO-POLITICAL ENVIRONMENT
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Past characterised by divisions and inequality
Racial coincidence of political and
economic power
Socio-economic challenges including
education, diseases, unemployment and crime
Young democracy facing teething problems
Rectifying the past requires establishing and
strengthening institutions to underpin democracy
Vibrant and articulate youth, labour and
other civic organisations
A presentation by ERIC RATSHIKHOPHA
MINING COMPANY CHALLENGES
Challenges invariably result from or are linked
to the socio-political environment
A presentation by ERIC RATSHIKHOPHA
MINING COMPANY CHALLENGES
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Skills shortages
Regulatory requirements: “environmental,
labour, safety, socio-economic (mining charter)”
Expectations/demands from local
communities …“social license to operate”
“Social ills”: crime, diseases, corruption and
bribery
A presentation by ERIC RATSHIKHOPHA
MINING COMPANY CHALLENGES (cont.)
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Political and civil dynamics and associated
pressures: disruption of operations; “scary”
debates and demands e.g. Nationalisation
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Organised labour and business
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Issues with infrastructure and energy
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Efficiencies and responsiveness of government
and public institutions
A presentation by ERIC RATSHIKHOPHA
NOT ALL DOOM AND GLOOM
Liabilities
• Basic Education
• Health
• Crime
• Corruption
• Energy
Assets
• Democratic system
• Powerful economy
• Infrastructure
• Innovative, non-racial
middleclass
• Open society
• Competitive & responsible
business sector
A presentation by ERIC RATSHIKHOPHA
CAN CSR MITIGATE AGAINST THESE
CHALLENGES?
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Without a doubt, yes! With the keyword being
mitigate
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CSR: define
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A look at current initiatives reveals:
 Scant, if any considerations of broader
environmental challenges, plans and
dynamics
 Compliance -driven
 Lack of alignment and collaboration
 “Ad hoc” non-integrated or unaligned to
core business
A presentation by ERIC RATSHIKHOPHA
CSR MITIGATION CONSIDERATIONS
“Insanity is doing the same thing over and
over again and expecting different results”
Albert Einstein
A presentation by ERIC RATSHIKHOPHA
CSR MITIGATION CONSIDERATIONS
The issue is not so much the “what”, but more
the “how” and “why” .
A presentation by ERIC RATSHIKHOPHA
CSR MITIGATION CONSIDERATIONS
… Take the socio-political environment into
account, especially conceptualisation of CSR
initiatives
… Approach and implement CSR as a business
imperative and integrate it into business
operations
… Facilitate and support effective public and
service institutions for sustainable social services
delivery
… Recognise the importance of regional
collaboration for impact and sustainability of
initiatives
A presentation by ERIC RATSHIKHOPHA
CSR MITIGATION CONSIDERATIONS
… Constructive engagement and co-operation
with important stakeholders e.g. Government on
issues of national importance i.e. governance
… Join and support organised business
organisations and utilise as a platform for collective
voice
… Capitalise on successful current “pilot” projects
by replicating and bringing to scale:
 Health (HIV-AIDS) –Xstrata Coal South Africa
 Education- National Business Initiative (EQUIP), Edumap
 Skills Development: Xstrata Alloys Steelpoort skills
development centre. Africagrowth institute
A presentation by ERIC RATSHIKHOPHA
IN CONCLUSION
“We need to make a major breakthrough in the way
that boards think if we want to save capitalism...
…doing right because it is right, not because it
pays, with principle, not profit, the point of
departure.”
Sir Geoffrey Chandler - Former Senior
Executive Royal Dutch Shell
A presentation by ERIC RATSHIKHOPHA