Hatch’s Approach to CSR and
Lessons Learned
Presented by Dr Dila Ersenkal
Introduction
Outline:
– Corporate Social Responsibility
(CSR)
– Global Compact (GC)
– Hatch’s Approach to CSR
– Hatch Case Study – Update on
Transnet
– Lessons Learned &
Recommendations
Challenges in Our World
• Extremes of wealth (few) and poverty
(many)
“There should exist among the citizens
neither extreme poverty nor again excessive
wealth, for both are productive of great evil”Plato 2500 yrs ago
• Serious ecological degradation
How to Overcome the
Challenges?
1. Incorporate points of views of different
stakeholders,
2. Broaden the objectives of the companies
to go beyond the economic.
What is Corporate Social
Responsibility (CSR)?
"A concept whereby companies integrate
social and environmental concerns in
their business operations and in their
interaction with their stakeholders on a
voluntary basis.”
European Commission. 2001. Green Paper: Promoting a European framework for corporate social responsibility
What is Corporate Social
Responsibility (CSR)?
“We define CSR as business'
commitment to contribute to
sustainable economic
development, working with
employees, their families, the local
community, and society at large to
improve their quality of life. ”
World Business Council for Sustainable Development
What is Corporate Social
Responsibility (CSR)?
The business contribution to sustainable
development which has been defined as
“development that meets the needs of the
present without compromising the ability of
future generations to meet their own
needs”, and is generally understood as
focussing on how to achieve the integration
of economics, environmental, and social
imperatives.
Industry Canada
Why CSR?
1. Moral obligation - to do the “right thing” – to
respect ethical values as well as people and
the environment
2. Sustainability – “meeting the needs of the
present without compromising the ability of
future generations to meet their own needs.”
3. License to operate – the permission from
government and people to carry on business
4. Reputation – the enhancement of corporate
image and brand value
Michael Porter
Business in Society
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Ever-widening range of environmental,
social and governance issues
Adopting corporate citizenship practices
to ensure sustainability
Open and accurate communication on
progress
Partnership and collaboration of
stakeholders, society and labour
The role of investors and the finance
community
Alignment with international standards
Engagement in CSR
• Reputation enhancement opportunity
• Market expansion opportunity
•
It helps addressing environmental
standards/concerns
• Senior Management requires it
• Allows for recruitment/retention of
the best and brightest employees
Common Pitfalls
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Selecting an inappropriate CSR activity
Effective launch, ineffective
implementation
Spreading resources too thin
Weak monitoring mechanism
Projected or perceived as a ‘green wash’
or ‘white wash’
Often mistaken for a Public Relations
exercise or philanthropy
Responsible Corporate
Behaviour
1. Voluntarily going beyond legal,
regulatory, and conventional
requirements,
2. Promoting and fostering interaction with
its stakeholders; characterized by
respect, transparency, openness and
dialogue; that is to say sound
governance
3. Integrating social, environmental and
economic aspects into the goals of the
organization.
Potential Benefits
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Stronger financial performance and
profitability (e.g. through eco-efficiency;
higher productivity, reduction in costs and
increase in profitability)
Improved accountability to and assessments
from the investment community
Positive engagement with government
Decreased vulnerability through stronger
relationships with communities
Improved reputation and branding; positive
public image
Enhanced employee commitment; retaining
staff, enhancing employee morale
Triple Bottom Line…
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Environmental: Compatibility between
the activities of companies and the
sustainability of ecosystems
Social: Social consequences of the
activities of companies for all the
communities concerned
Economic: Conventional financial
performance, but also the ability to
contribute to the economic development
of the corporate operating area and
stakeholders
Commitment to CSR
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Top-level involvement (CEO, Board of Directors)
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Workplace initiatives (codes of conduct, corporate
policies, programs, etc.)
•
Social/Environmental auditing, certification and labeling
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Management frameworks: i.e. AA 1000, SA 8000, ISO
14001
•
Environmentally/Socially responsible investments
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Intergovernmental initiatives
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Signatories to voluntary standards – i.e. UN Global
Compact
•
Reporting and Communication on Progress - i.e. Global
Reporting Initiative (GRI), Sustainability Reporting
What is Global Compact (GC)?
The UN Global Compact's ten principles in
the areas of human rights, labor, the
environment and anti-corruption enjoy
universal consensus and are derived from:
• The Universal Declaration of Human Rights
• The International Labor Organization's
Declaration on Fundamental Principles and
Rights at Work
• The Rio Declaration on Environment and
Development
• The United Nations Convention Against
Corruption
UN Global Compact - HR
•
Principle1: Businesses should support
and respect the protection of
internationally proclaimed human rights;
and
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Principle 2: make sure that they are not
complicit in human rights abuses.
UN Global Compact - Labor
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Principle 3: Businesses should uphold
the freedom of association and the
effective recognition of the right to
collective bargaining;
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Principle 4: the elimination of all forms
of forced and compulsory labor;
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Principle 5: the effective abolition of
child labor; and
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Principle 6: the elimination of
discrimination in respect of employment
and occupation.
UN Global Compact Environment
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Principle 7: Businesses should support
a precautionary approach to
environmental challenges;
•
Principle 8: undertake initiatives to
promote greater environmental
responsibility; and
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Principle 9: encourage the
development and diffusion of
environmentally friendly technologies.
UN Global Compact –
Anti-Corruption
•
Principle 10: Businesses should work
against corruption in all its forms,
including extortion and bribery.
Benefits of Participation in the
GC
• Adopting an established and globally recognized
policy framework
• A platform to share and exchange best and
emerging practices
• The opportunity to advance sustainability solutions
in partnership with a range of stakeholders,
• The opportunity to link business units and
subsidiaries across the value chain with Global
Compact Local Networks around the world
• Access to the UN's extensive knowledge of and
experience with sustainability and development
issues.
• Utilizing Global Compact management tools and
resources, and the opportunity to engage in
specialized workstreams in the environmental,
social and governance realms.
Hatch’s Approach to CSR
Examples of Hatch Initiatives :
 Environmental Services Group
(ESG)
Project Management Framework
 Compliance with ISO 14001
Standard
 Sustainability Reporting
ESG Project Management
Framework
Business Planning
Front End Loading Phases
FEL - 1
FEL - 2
Pre-Feasibility
Conceptual/
Study – Select
Study – Define
Most Viable
Project Options
Option
FEL - 3
Feasibility
Study –
Develop
Project
Definition
FEL-4
Start-up &
Project
Operations
Implementation
- Structured on basic PLP Framework
- Philosophy behind management systems
- Integration of environmental, sustainability, and
community issues in projects
ESG Project Management
Framework
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Sustainability Strategy Development
Risks and Opportunities Management
Legal Compliance
Environmental and Social Design Criteria
Environmental Management
Social Impact Management
Stakeholder Engagement
Local Employment
Relocation
Workforce Training
etc.
Compliance with ISO 14001
• Corporate Level Environmental
Management Systems
• Projects Level Environmental
Management Systems
Sustainability Reporting
Hatch Sustainable Development Report 2010
Case Study – Update on
Transnet Project
• HMG Joint Venture (comprising Hatch,
Hatch, Mott MacDonald and Goba)
• a 5 year contract to manage the major
infrastructure development programme
(Transnet’s Expansion Programme)
– National Infrastructure Plan
– Rail expansion
– Port expansion
• 27 projects with a combined capital value
of R80 billion.
National Infrastructure Plan
• Development of sustainable development
criteria
• High level screening studies
• Layout options for future developments
• Determination of the potential change in
the economic value of ecosystem’s goods
and services
• Identification of new major rail corridors
Rail Routing Options
• Screening and Routing Studies
• Identification and planning of
environmental permitting requirements
• Co-ordination of environmental impact
assessments
Port Developments
• Environmental studies to plan the
dredging activities
• Identification of offshore disposal sites
• Integration of Environmental Impact
Assessments (EIA) with project design
Oreline Port – Saldanha Bay
Saldanha Bay:
Status Quo
Saldanha Bay:
Future Layout
Saldanha Bay:
Long Term Potential
Background
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The oreline is a the export corridor (~863 km of rail line)
connecting the iron ore mines in the Northern Cape of
South Africa with the Port of Saldanha in the Western
Cape
Saldanha Bay is a natural deep water bay constructed
in 1976 and the towns in its immediate vicinity has
grown alongside its development
The closer proximity of residential development and the
property boom in coastal towns in South Africa led to
more conflict between communities and the port as a
result of dust
Some houses in the immediate vicinity has been stained
with a red to pink discolouration due to iron ore dust
fallout
Since 2000, the capacity of the exports have grown from
38 Million tons per annum and new mines are
establishing with a view of utilising the link
Future projections are to increase export to ~100 million
tons per annum (MTPA)
HMG were involved in conceptual studies for future
expansions as well as execution of current expansion
up to 60 Mtpa through various phases
Phase 1A
– Installation of dust mitigation measures to reduce fallout
dust and particulate matter in the surrounding
environment
– Management of long term air quality monitoring in
surrounding environment in order to determine
standards for iron ore dust fallout and to monitor the
port’s performance against increase in export volumes
– Estimating and planning of compensation for
surrounding land owners affected by iron ore dust
staining
Phase 1B
– Expansion of port facilities to handle 47 Mtpa (from 38 Mtpa) of
iron ore exports
– Reclamation of land and installation of infrastructure (1 new
stockyard, stacker / reclaimers, conveyors, port buildings, etc.)
– Engaging with local public in Environmental Monitoring
Committee meetings providing feedback on Environmental and
Social process including construction feedback and progress of
assessments
– Dredging of ~ 7000 m3 for optimising ship loading and ship
position
– Drafting of monitoring protocols and supervision of construction
and supervision of monitoring during dredging
Phase 1C
– Refurbishment of existing infrastructure to
reduce dust emissions (installation of
cleaning slabs, condition monitoring, and
chute improvement to reduce spillage.)
– Improvement of operations to increase
throughput from 47 – 60 Million tons per
annum through better ship berthing and
use of conveyors, stackers/reclaimers and
reducing equipment down time
– Management of Environmental
Assessment process, consultants and
applications for licences and permits
Phase 2
– Management of consultants and EIA process for
large EIA (~US$ 4 m) consisting of 23 specialist
studies
– The EIA studies investigated the impact of the
aspects of the development proposal:
• Reclamation of
>20 ha of sea
• Construction of
new tipplers
• Dredging of
large volumes of
seabed to
enable berth
positioning
• Construction of
new stockyards
and associated
infrastructure
• Relocation of
port buildings
Reclamation
Dredging for
berths 3 & 4,
SL 3 & 4
Reclamation, Stockyards, StackerReclaimers 5, 6 & 7
Tipplers 3 & 4
Ngqura: Status Quo
Ngqura:
Long Term Potential
Public Consultation
• Public consultation as part of the EIA
processes
• Engagement of public through:
- Transnet’s normal communication
channels
- Environmental Monitoring Committees
Developing a Permitting Strategy
• Integrate EIA and permitting processes
with the life cycle of the project
• Cross pollination of information and ideas
between the engineers and
environmental/social team
Transnet CSR
– Directed by the Transnet Foundation
– Focus on:
• Rural development & poverty relief
in region’s within the Company’s
areas of operations
• Alignment with national
Government initiatives
Transnet CSR
Scope
Transnet CSR
• Health
Examples
• “Miracle train”
– reaches 45 000
patients each year
– Supports rural
health care facilities
– Optometry
– Psychology
– Dentistry
– Health care
– Medicines
• United Nations Public
Service Award for
improving service
delivery
Transnet CSR
Scope
• Education
Examples
• Sharp Minds! Get
Ahead in Life
Programme
- Maths, Science &
English
• Sports
• Containerised
assistance
• Aims to use sport as
an intervention
agent to address
social problems at
schools
• Facilities
constructed from
shipping containers.
- Police office
- Social service
centre
CSR Drivers in Developing
Countries
Internal:
External:
• Cultural tradition
• Socioeconomic
priorities
• Governance gaps
• Market access
• etc.
• International
standardization
• Investment incentives
• Stakeholder activism
• Supply chain
• etc.
CSR Drivers in Africa
– Cultural tradition
• Ubuntu – values-based traditional
philosophy of African humanism
– Political reform
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Changes towards democracy
Redressing past injustices
Improved corporate governance
Black economic empowerment
Lessons Learned…
• Environment, sustainability and community issues
are an integral part of the project management.
• Educate the client (upfront & through out the
project) about the process and possible pitfalls
and risks.
• Public Participation - illiterate, no formal
education, must inform them in a way that they
can participate meaningfully (language, form of
communication, training).
• Integrate permitting processes into the project
schedule.
• Ensure technical information required from
engineers for environmental and social specialists
is identified early and scheduled.
• Too much pressure on the authorities can backfire
(if not on current project, then the next one)
• Manage scope changes closely, both with the
client and for it’s impact on the environmental and
social studies along with the project schedule and
cost.
Recommendations for
Business Corporations
• Recognize social, ethical and environmental
impacts and have relevant targets
• Systematic dialogue processes
• Clear accountability for CSR polices and
performance
• Incentives to achieve social and
environmental goals
• Reporting on the company’s social and
environmental performance
• Internal and external auditing processes that
build the credibility and effectiveness of CSR
processes and reporting
Thank you