Sustainability Communities

Communities

Community relations and creating shared value

SOCIAL LICENCE TO OPERATE

Recognising the importance of solid community relations to our social licence to operate, Gold Fields is committed to minimising, managing or avoiding, where possible, the negative impacts of its operations on communities, while also maximising the positive benefits. Through active stakeholder engagement and our Shared Value development approach, our focus goes beyond just spending to the positive social and business impacts that its social investments can deliver. "

Gold Fields’ community relations approach is informed by an understanding of our operating contexts, garnered through ongoing risk assessments and stakeholder engagements. In 2016, plans to address material social risks were developed and implemented in each region. These risks were often linked to the local and national elections, which were held in all our operating regions. Our operations were sensitised to this challenge through their community relations risk assessments undertaken between 2015 and 2019.

COMMUNITY VALUE CREATION

The value we created in our communities in 2019:

US$782m – 33% of total value creation

Benefits to host communities in 2019

  • US$782m in value creation through procurement, wages and SED spend, 33% of total
  • 676 host community suppliers
  • 10,950 host community jobs in the mine value chain, comprising:
  • 2,525 employees
  • 6,744 contractors
  • 1,177 suppliers1
  • 504 non-mining jobs

1 Excluding Peru and Australia, who have not started to measure this yet

Building relationships

Gold Fields actively identifies and regularly engages with the representatives of the following groups in a formal and informal manner:

We furthered our independent measurement of our social return on investment (SROI) and shared value created to identify those investments that strengthen our social licence to operate and to inform future investment. Using our Group SROI methodology, an analysis was conducted on selected projects in Ghana, while Peru will undertake an SROI analysis in 2020.

All operations prepared community relations and stakeholder engagement (SE) strategies and three-year plans focused on maintaining the social licence to operate. These were informed by the Gold Fields community relations and SE guidelines, which together with our community policy and charter can be found on this site.

All our operations regularly publish and distribute communication materials to stakeholders, keeping them informed about our community relations activities and initiatives:

  Region Description
  Peru  
  Community acceptance improved from 5% in 2012, to 7% in 2014, to 32% in 2016, and to 48% in 2019
  South Africa  
  Community support rose from 33% in 2015, to 52% in 2017, and (for three communities measured) to 62% in 2019
  Ghana  
  Strong community support with a relationship index of 73% at Damang and 78% at Tarkwa in 2015

 

Social investment

As not all of the value created through royalties and taxes at national level benefits host communities, Gold Fields focuses on socio-economic development (SED) initiatives and Shared Value projects to create and share value at community levels. These sustainable development projects create positive socio-economic impacts for host communities by targeting their priority needs of employment, skills and enterprise development, environmental rehabilitation and access to water. Programmes and projects are delivered directly or through our trusts and foundations, often in partnership with government, NGOs and peers.

Gold Fields spending on SED and Shared Value programmes – US$22m in 2019 (2018: US$26m) – reflects the Group’s direct social investment spend in host communities. The investments are made in the following areas:

A significant proportion of the salaries and wages paid to employees also find their way back into our host communities.

For details of our regional community investment programmes, go to IAR online:

2019 Integrated annual report

Shared value programmes

Shared Value is created when companies take a proactive role in simultaneously addressing business and social needs. Shared Value goes beyond mitigating the potential harm in a company’s value chain – it is about identifying new opportunities for economic success by incorporating social priorities into business strategy and working collaboratively with multiple stakeholders to find solutions to various socio-economic and environmental issues. A key component of this approach is to ensure that the value created is shared by the business and the community.

Our Shared Value approach is based on four key pillars:

Host community employment

We continue to prioritise the employment of host community members at our operations and encourage our contractors and suppliers to do the same. This is supported by education and skills development projects which build a local skills base.

In 2019, our operations set targets to increase their host community employment. At the end of 2019, 55% of our workforce, or 9,269 people, were employed from our host communities (2018: 56%/9,259 people, 2017: 40%/7,516 people). The sharp increase during 2018 and 2019 reflects the prioritisation of host community employment by our Ghanaian operations and the expansion of the definition of our South Deep host community to reflect the 2016 municipal boundary change.

We seek to maintain the current levels of host community employment during 2020 and beyond. Our management teams at the mines are incentivised to achieve long-term host community job creation targets.

In the table below, we set out the number of host community members – including both employees and contractors – working at each of Gold Fields’ regions in relation to our total workforce.

Host community workforce1 employed from total workforce (%)

Region Host community
workforce1 2019
2019 2018 2017 2016 2015  
Peru 842 28% 27% 28% 23% 29%  
Australia2 616 23% 29% 29% 95% 90%  
South Deep3 2,590 65% 55% 16% 13% 14%  
West Africa 5,221 72% 73% 68% 72% 67%  
Group 9,269 55% 56% 40% 48% 59%  
1 Workforce comprises total employees and contractors. Host community employment data excludes our corporate and regional offices as well as projects
2 Australia’s 2017 and 2018 performances are based on its revised host community definition, which is aligned with the Group’s definition thereof, where communities are those living within an operations’ direct area of influence. Previous years’ numbers have not been restated. These numbers exclude the Perth head office. Gruyere is included from commissioning in mid-2019
3 South Deep’s 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders as well as with the Group’s guidance. Previous years’ numbers have not been restated

Job creation through socio-economic development projects

In 2019, we intensified our efforts to ensure that our SED projects – those focusing on infrastructure development, education and training, and economic diversification – grow and sustain non-mining jobs as well. We are starting to see traction in this initiative and, during the year, created 504 non-mining jobs for host community members, well over half of them in the agricultural sector. Due to their nature, many of these SED projects do not provide long-term solutions, however, they will create income and a measure of skills transfer as well.

Host community jobs in the mine value chain

Region Employees Contractors Suppliers Non-mining Total  
Americas 79 763 01 56 898  
Australia 462 154 01 0 616  
Ghana 496 4,725 969 303 6,493  
South Africa 1,488 1,102 208 145 2,943  
Group 2,525 6,744 1,177 504 10,950  
1 Not measured yet
Host community procurement

Our host community procurement programme guides us as we support those areas in our operations’ procurement chains where community suppliers can participate. Host community procurement, if implemented effectively, holds benefits both for the communities in which we operate and for our mines themselves. This aligns with our focus on driving Shared Value.

We have actively increased host community procurement since 2015 in Ghana, South Africa and Peru, and since 2018 in Australia. Of our total procurement spend of US$1.74bn for 2019, 96% was spent by our mines on businesses based in countries where Gold Fields operates (2018: US$1.81bn/85%). US$635m, or 34%, was spent on suppliers and contractors from our mines’ host communities (2018: US$441m/27%). We are committed to sustaining the impact we have made and building on our progress going forward.

Local and host community procurement

  Local
(in-country)
  Local (in-country) spend Host
community
  Host community spend
Region procurement
2019 (US$)
2019 2018 2017 2016 2015 procurement
2019 (US$)
2019 2018 2017 2016 2015  
Peru 209 965 96% 90% 89% 87% 32 15% 16% 7% 8% 7%  
Australia1 823 99% 99% 99% 99% 97% 171 21% 24% 79% 71% 66%  
South Deep2 136 100% 100% 100% 100% 100% 38 28% 29% 18% 14% 10%  
West Africa 633 91% 86% 85% 85% 64% 394 56% 32% 13% 7% 9%  
Group 1,802 96% 93% 94% 94% 85% 635 34% 27% 45% 38% 35%  
1 Australia’s 2018 performance is based on its new host community definition which is aligned with the Group’s definition thereof, where communities are those living within an operation’s direct area of influence. Previous years’ numbers have not been restated. These numbers exclude the Perth office. Gruyere is included from commissioning in mid-2019
2 South Deep’s 2018 performance is based on its revised host community definition which is aligned with needs of the regulator, local government and community stakeholders, as well as with the Group’s guidance. Previous years’ numbers have not been restated