PREMIER’S TEACHER SCHOLARSHIP REPORTS
Premier’s ABN AMRO Business Studies, Economics
Scholarship
Business is Business
John Carswell
Cobar High School
Sponsored by
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
How to help small business establish in challenging communities
While it may be easy to start a new business in major cities where access to advice, help and
markets is available, starting a business in smaller communities is more difficult. Small business is
more important in these communities and the value they add has more impact.
When looking at a business, social and economic roles, employment, choice and quality of life for
the community are vital and more important than innovation and wealth creation.
I have examined two options in helping establish small business.
1 Enterprise Facilitation (EF)
Enterprise Facilitation is a community based program that actively encourages entrepreneurship.
Its core values include a belief that you only help people who ask for help and you listen to
people to enable them to decide what to do. It aims to find the strengths and passions of a
community and assist the motivated but lost people to become business successes. The
community sets up a facilitation board who employs one person to be the Enterprise Facilitator.
The facilitator’s job is to help any person who asks for it to achieve their business goal. It may be
new business or existing business, but the facilitator becomes the person to go to when the
person doesn’t know who to see.
EF is based on the principle that a business needs ‘3 things done beautifully’ according to its
founder Ernesto Sirolli. They are  beautiful product, marketing and finances
 no person can do all three with passion so that’s where the community becomes involved
 the local EF group meets regularly and links businesses (the ones the facilitator has been
working with) with local people who have the skills asked for.
I visited Oakridge, Oregon, USA. Oakridge was a struggling community, after 500 jobs were
lost in the timber industry. School numbers halved to 360 K-12. I met with Gordon Zimmerman
the Chairperson of UPBEAT (Unique Program Business Enhancement Advancement Together).
Gordon is city manager. He previously started an EF program in Baker City and it was so
successful he started one when he came to Oakridge. Baker City’s program reduced
unemployment by over 1percent. Jennifer Hood is the Enterprise Facilitator. She came from a
major city in California where she worked in marketing. She stated that many people she helps
have the product and she has the marketing and financial skills that are needed.
Upbeat has started 14 new businesses with 37 employees over two years and currently has 20
active clients. It has assisted 85 businesses so far including psychologists, a mountain bike tourist
adventure, a real estate agent, an acupuncturist and a construction business owner. Amazingly, no
business that UPBEAT has assisted has failed.
Ernesto Sirolli, Gordon
Zimmerman, Chairman of
UPBEAT and John
Carswell in Oakridge.
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In the town there was no real talk of the past, the focus is on the future. John Milandin
was my ambassador and part of the 30+ UPBEAT Board. Mayor Don Hampton also
does the ambassador job and is part of the board. The ambassador shows people around
the town and does an amazing job of showing off all the positives. The positives that I
observed include the following  A Chinese Restaurant and Laundromat were new businesses opened in new
buildings as there were no suitable premises available. They are powerful signs of
the effectiveness of EF. The owners were glowing in their praise for EF and are
very proud of their establishments.
 Skip shooters is a new business that fixes CB radios for trucks and tourists. The
owner had limited formal education just loved electronics.
 The community clearly saw the need to develop more educational facilities
(golden handcuff). The local school is a major asset to sell the community. It
attains above state average in all tests, and has had articles in State wide papers
about its successes.
 A Treasure hunt was organized involving many of the businesses helped by EF.
 A Trade show was organized – Government departments and financial
institutions that local businesses would normally have to travel to see, came to
town to see them.
 The success of Enterprise Facilitation is in direct opposition to the Industrial
Park debacle Oakridge experienced. The government spent over $200,000 to
create it, but no businesses moved in.
Enterprise Facilitation is also being considered in the Sierra do Navio and Pedra Branco
do Amapari district of Brazil. The initiative looks like being sponsored by both MPBA
and another mining company MMX (owned by Batista) in the area. The mines have
undertaken to pay the US$160,000 fee to the Sirolli Foundation to cover all training and
implementation costs. The community may eventually pay for the running costs of the
program. There is a social fund with 2,000,000 Reais, which is under a government
umbrella. The involvement of the government makes it harder to access the funds.
The mines also pay a percentage of their yearly profit into local community development
funds. These are substantial amounts of approximately US$350,000 per year divided pro
rata between the two communities depending on residential numbers. It is expected that
these funds will eventually be used to fund the employment of a local enterprise
facilitator. Each community already has a board in place to distribute (loan) the funds to
projects that they see as viable and appropriate. There are many hurdles to starting a
successful business in this isolated and underdeveloped area, with a complete lack of
sealed roads being a major one.
Local rivalries may also become apparent, but MPBA has a representative on both
current boards to assist the community. According to Cesar Torresini, the MPBA Mine
General Manager, it also looks like the Giustra companies and foundation will implement
up to 10 Enterprise Facilitation programs in rural areas of Brazil.
2 Clinton/Guistira Foundation
The foundation aims to help establish new businesses and develop existing ones in
developing countries. The foundation is currently focusing on projects in Peru and
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
Columbia and have done some work in Rwanda. After establishing their projects they
intend to expand into Mexico and Africa. They have dual aims for any project –
a) Social Development – child nutrition is the main priority, but education and
general health are also addressed
b) Enterprise Development – which is the focus of this report
They will help with finance/technology/capacity as well as aim to meet market demand.
Peru is a country with “little capacity and few social services” according to Eric Nonacs,
Managing Director Global Affairs. Peru is currently experiencing a mining boom but the
wealth is not being shared equitably. Mining is not as labour intensive as it once was so
not as many locals are employed. The mining boom has not lead to a commensurate
improvement for the locals. The foundation is currently expanding a USA Ideas project
which is enterprise driven and focusing on agriculture and agriculture processing. The
project is different to foreign aid of the past as it relies on local entrepreneurs.
The foundation establishes Enterprise Service Centres (ESC) that find the market
opportunities for the locals to exploit. Once an opportunity is found, the ESC tries to
find local entrepreneurs. They do this in two ways - advertising and by seeking current
entrepreneurs. The ESC is primarily staffed by local people with some assistance from
US college students having a gap year. The foundation is trying to provide solutions to
the question of what will happen when the mining stops. They aim to use the multiplier
effect to really help the locals.
Columbia has more capacity and is quite developed. The drug issue as published by the
media is not as bad as portrayed according to Nonacs. The foundation is currently
working with two different businesses  spice growing business trying to get organic certification
 fishermen’s cooperative to work together and find new markets for the product.
Both are trying to add value to the process.
In the medium term the foundation aims to establish an investment fund for the micro
and small businesses. The foundation does not intend to make any money. They aim to
have short term equity in the new businesses and once repaid, the monies will be
reinvested in the communities. The fund has experienced little resistance yet but admits
it is early on. There are large amounts of money flowing in and out but the people living
around the mine are struggling as they do not see the money. The foundation is hoping
to increase the multiplier effect of mining and most mining companies will use local
businesses if they are competitive. Variability in income exists between those with mine
jobs (with money) and those without. This imbalance exacerbates the problem. The
foundation has experienced some environmental issues and has also noted that NGOs
are only sometimes accurate.
New York Stock Exchange (NYSE)
The NYSE is not only the most well known stock exchange but also owns a variety of
other exchanges. They have invested in San Francisco Stock Exchange and Euronext
which has four exchanges/markets. NYSE also owns 20 percent of the NSE of India
(national stock exchange) in Mumbai that’s valued at over US$32 billion. The NSE is the
third largest in the world.
A big issue facing the NYSE is what type of market that they should have. They
presently have two markets working concurrently, the floor and the electronic market.
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
This is a hybrid market. The NYSE has also become a public company in recent years
rather than a cooperative of traders. This also led to over 1000 changes in their
governances to comply with Federal company law. The security is unbelievable - the
front has ten police, two with assault rifles. NYSE security had three checkpoints.
Trading floor
The Specialist has the hardest job. He has regulations to follow and a responsibility to
the market. He must buy and sell as the market moves, even if he is going to lose money.
This helps regulate fluctuations and slow down movements. A specialist only handles up
to 12 companies at once. He works purely on numbers and it does not matter what
company it is. The specialist I spoke with believes that the electronic age is not as
exciting and takes the feel for the market away. He looks at four different screens to help
make his decisions and has an assistant in case two or three of his stocks move at the
same time. His decisions must be faster, now that more trading is done electronically as
stocks drop $1 in under a minute. His job is to buy on the way down to slow the fall. The
real skill is to buy at the bottom and sell at the top. Some sales are done automatically
electronically, others over a range of prices.
The Trader just works for the customer. He is often asked by his customer for a
percentage of market transactions – the reason for this is clouded. Big orders are now
split between exchanges, or they will put in a number of small orders on the NYSE, for
example, buy 100,000 shares which may be 10 x 10,000 shares to maintain the right
percentage for the buyer. They work out the average price.
At the New York Mercantile Exchange which deals commodities, I spoke to two traders
who believe that full electronic trading is inevitable. This will lead to more volatile
markets. Markets are being globalised and automated and the human element is being
taken out of them.
Mineracao Pedro Branca do Amapari (MPBA)
MPBA is a gold mine in the north of Brazil. It is located 2º North of the Equator, in the
Amazon, in the state of Amapa. It is owned by Peak Gold, listed in Canada and with a
sister mine in Cobar, Australia. The main focus of this section of the report is to contrast
the differences between the Brazilian and Australian mine. There are many differences
which are plainly obvious, such as climate, language and cultural differences. Specific
differences are outlined below.
Shifts The operational workers at MPBA work 20 consecutive shifts of 12 hours and
have 10 days off. Their supervisors work 19 days on nine days off. Administrative staff
work five on two off, but their workdays are between 8am and 6pm. The mine manager
works 10 on and four off. There are some variations to this. Workers are entitled to
overtime rates and most seem happy with the work structure. In Australia the workers
work four on four off, with management working the traditional five day week.
Number of Employees MPBA has twice the number of employees of Peak with 600
being employed by the mine and its contractors. The total gold production is roughly
equivalent.
Employee Origins All employees are Brazilian, with 64 percent from the local area, an
additional 22 percent from the state of Amapa and the remaining 14 percent from the
rest of Brazil. The Australian operations employ people from all over the world.
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
Type of Production MPBA uses an open cut operation with excavators used to dig out
the ore. In a year they will move14.6 million tones of material, although only 2 million
tones are ore and treated to retrieve gold. The other material moved is stored for the
future regeneration of the mine once production has halted. The Australian mine is an
underground operation.
Picture: Claudinei Alves and John
Carswell (at left) at the mine site.
The open cut face is over my
shoulder and the rainforest is over
Claudinei’s.
The Environment As Claudinei Alves, the Health Safety Environment and
Community Manager states “we have many eyes watching us”. The mine is surrounded
by the Amazon Rainforest and apart from the clearing of land for infrastructure, roads
and operations, cyanide is used in the gold extraction process. There are many
environmental safeguards and activities in place including the following  A Nursery producing up to 60,000 plants per year for regeneration.
 Regeneration with hydro seeding.
 Water monitoring using 40 points around the site. Some are checked daily, others
weekly/fortnightly/monthly, 26,000 tests are conducted in total per year.
 The mine contributes to the Environment compensation fund.
 Archeological work conducted within the mine site at locations deemed in need
of it.
 Waste management/recycling actively promoted. All areas have recycling bins.
Employee Benefits The employees of MPBA are looked after very well. MPBA has a
fully serviced canteen as part of its Food benefit program. No food is provided at
Australian operations. On site living is provided for staff due to its remote location. All
meals are provided. Health services are provided for the whole family, as is additional
medical and dental insurance.
Security The security is much more apparent in Brazil with armed guards on the front
gate, and rifle carrying guards around the extraction plant. In Australia there is only
security on the front gate and they do not have guns.
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
Gold delivery Is by helicopter, that’s all they will say. It is delivered to Sao Paulo; from
there it is sold on the gold markets of the USA. The gold is flown by plane in Australia to
the Perth Mint.
Community involvement This is a real focus for the mine. I was fortunate to visit
some small communities and witness the handing over of old mine computers to these
communities. The computers were the first ones in these places and the whole process
was made much of. The communities of Arrependido and Mario do Garno both had
town leaders accept the gifts and crowds attended to witness the hand over. The mine is
also aggressively promoting the Enterprise Facilitation concept as previously discussed.
Other facets of community involvement include  Efapen Agricultural School where the mine has previously donated money to
help build two large fish ponds to be used to breed fish.
 R$227,000 (A$ 150,000) in donations and community projects excluding the
development fund.
 Sponsor environment week in June within the local area.
 Sell cleared wood @ US$30 sq metre and donate the money to charities and local
communities.
 Involved in the Young Achievers business program in the local area.
World Trade Organisation
The World Trade Organization is located is Geneva, Switzerland and aims to create a
level playing field for world trade. It is the only international organization dealing with
the global rules of trade between nations. Its main function is to ensure that trade flows
as smoothly, predictably and freely as possible. The key word for understanding this
organization is CONSENSUS. All decisions are made by consensus, which leads to
many of the frustrations and complaints about the organization.
Consensus means that an agreement is not made until ALL members agree with it.
Consensus is different to the democracy most people assume there is. Democracy means
that only 50.1 percent of countries agree. Ukraine has just been made the 152nd member
of the WTO, meaning that if 77 countries agreed in a democratic forum that agreement
would be passed. However that means that 75 countries would disagree. The reason for
consensus is that it wants countries to voluntarily enter into agreements that limit their
trade policies and protection of local industries. Peter Ungphakorn the Information
Officer for the WTO stated that consensus lead to negations being “inevitably long and
complex”.
The WTO has many issues to deal with, but what many people fail to appreciate is that it
has had to change from being basically a bi-polar organisation dealing with issues
between the EU and the USA, to a multi-polar organisation dealing also with China,
India and Brazil. People are critical of the WTO for being a toothless tiger with no ability
to implement real penalties on offending countries. Trade sanctions are the only real
penalty that can be imposed and they are only as effective as the weakest trade partner.
However of the 364 disputes that have been before the WTO only three have ended up
in sanctions being imposed.
Mr Ungphakorn stated that “the two most effective methods of ensuring compliance
were peer pressure and mutual self respect”. The WTO is a slow moving organisation
but there is not a more effective method available. Just remember that Australia is
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PREMIER’S TEACHER SCHOLARSHIP REPORTS
currently being taken to arbitration in the WTO by New Zealand. The dispute revolves
around our quarantine policy about apples. When you consider that the simple version of
the agricultural rules is 70 pages the WTO does an effective job, even if it is slow.
Conclusion
Globalisation is clearly evident in all the areas that have been examined. The impact of
events at the New York Stock Exchange is easily seen across the world, but the impact of
the World Trade Organisation is less evident to the man on the street. The importance of
the WTO however is probably greater, especially to the developing world. Examination
of the MPBA shows that companies around the world face similar issues and that social
and environmental issues can be managed whilst still making a profit. However, all big
businesses start small and support of people at a local level is clearly a way of achieving
success. Enterprise Facilitation is obviously an effective way of helping businesses and
communities prosper. It is simple, and most effective businesses have simple plans to
achieve success.
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