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Social responsibility and stakeholder engagement

Social responsibility and stakeholder engagement

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Total CSI spend
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CSI spend
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Procurement spend SA – HDSA
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Gold Fields’ operations have a significant impact on the lives of people who reside in the communities around our mines; the company in turn requires the support of these communities to be able to operate effectively. They are an important source of labour and provide us with the access and social licence necessary to operate. The mines we operate often have a lifetime that spans generations and it is therefore vital that we invest in the upliftment and improvement of the people with whom we interact. Meaningful and transparent stakeholder engagement with these communities is a critical prerequisite for such investments and, therefore, to the sustainability of our mines.

While gaining community buy-in is an important social responsibility, it is also a business imperative. Only by understanding the needs and concerns of these stakeholder groups can we build constructive and positive relationships that will support the long-term objectives of the business. Mining operations that do not enjoy a good reputation among communities are less likely to be given a mandate for future expansion and are more likely to experience disruptions to production from them. Where community relationships are weak, it is a reasonable expectation that the mine’s bottom-line will suffer.

Talking to communities

Gold Fields is guided in this approach by the internationally used AA 1000 Stakeholder Engagement Standard. Stakeholder groups differ from one region to the next, but are generally determined by the company’s impact on local communities, which are represented by various layers of government, elected community leaders, informal community groups, NGOs, environmental focus groups, organised labour and local enterprises. The tone of engagement with these groups can have a significant impact on the company’s ability to overcome community-related challenges. We thus spend considerable time and resources in building sound community relations.

Gold Fields begins the engagement process at the exploration stage, talking to community stakeholder groups to understand their needs and obtain their input on future plans for the prospective development of a new mining operation. In exploration projects, such as Komana in Mali (see case study, page 112), we dedicate between five to ten per cent of our budget to sustainability issues, a large portion of which is spent on building community relations.

Another example is Chucapaca, the advanced exploration stage project in Peru, where we invested a great deal of time during the year under review building relationships with the Santa Cruz de Oyo-Oyo, Corire and Santiago de Chucapaca communities. These communities are now broadly supportive of our exploration work in their area, but have concerns about the potential impact of any future mine on the quality and availability of water – a scarce resource in the area. We have finalised a five-year agreement that underlines our commitment to the sustainable management of water resources and the extent of our investment in community health, education and employment projects.

Responding to community needs

Integral to the AA 1000 SES process is the establishment of regular formal engagement platforms with each stakeholder group. The agenda for participatory consultation is determined by the materiality of issues, both to the company as well as the stakeholder groups. We are also guided by country-specific legislation regarding community engagement and relations.

South Africa

Sustainable development initiatives in the South Africa Region are largely centred around spending by our mines in terms of their statutory Social and Labour Plans (SLPs), which are approved by the Department of Mineral Resources. Gold Fields also takes cognisance of municipalities’ integrated development plans and issues raised by communities in developing our sustainability programmes. During the year under review, the South Africa Region invested about R42 million in community development and skills training projects.

In line with the requirements of the SLPs, these projects are located in the areas around our mines, as well as in labour sending areas. Many of our rural development projects are based in the Eastern Cape and KwaZulu-Natal provinces, home to around 31 per cent of Gold Fields’ staff (see case study, page 124).

Closer to our operations in the Free State and the West Rand, the four mines themselves invest heavily in projects that support community initiatives, but, more importantly, support local economic development (LED). Our flagship project, the Living Gold rose farm near Carletonville, which employs about 300 local workers, continues to require funding support to the tune of around R10 million a year from Driefontein Gold Mine. Similarly the Golden Oils project was supported by Beatrix with about R2.5 million during financial 2010. Other projects include the Thusanang business support centre at Driefontein and a brick making business at Beatrix. All our operations also contribute towards the Business Trust and the National Business Initiative, two organisations heavily involved in supporting LED around the country.

The Department of Mineral Resources has also approved plans for new Local Economic Development projects at South Deep, including a flagship project that will help emerging farmers in the South Deep community gain access to much-needed seed capital. A total of R15 million will be invested over the next five years into the trust fund established for this purpose, which will be administered by representatives from the local farming community and Gold Fields.

The company is focused on projects that empower communities, build capacity and transfer skills for greater self-reliance. All community projects include clearly defined handover periods and exit strategies. In the coming year we will focus on further improving our understanding of community needs and collaborating with relevant stakeholders in devising long-term strategies that meet those needs effectively.

It is important to note that sustainability spending is fully integrated into the operational budgets of our mines in South Africa. As such the South Africa Region spends hundreds of millions of rand on projects that benefit our employees, their family members and the communities in which they live. Falling under this umbrella is Gold Fields’ five-year R550 million housing programme as well as regular investments in schools that serve our communities.

On the skills development front, Gold Fields announced a three year R28 million sponsorship of the mining engineering faculties of Wits University and the University of Johannesburg during financial 2010, of which half will be disbursed this year. This is in addition to the approximate R175 million the Group spends on training in South Africa through the Gold Fields Academy, onmine training and bursaries.

West Africa

During the year under review, Gold Fields’ West African operations invested US$2 million in community development projects at its two Ghanaian mines. These include education projects to build schools and provide scholarships for local children, 300 of whom have already benefited from secondary and tertiary education assistance over the past five years. The company’s infrastructural development initiatives have also improved road access to remote areas and delivered electricity and potable water to many adjacent communities.

Gold Fields has also invested heavily in alternative livelihood projects that provide a sustainable income for unemployed members of the community. These include oil palm and fish farms which employed 110 people during the reporting period (see case study on page 125).

South America

The remote location of Gold Fields’ Cerro Corona Mine means that local communities rely heavily on the company for health, education, skills development and training programmes, as well as basic infrastructure, such as roads and telecommunications. During the year under review we invested US$3.5 million in such projects, in line with commitments agreed upon when the company established the operation.

One of our success stories at Cerro Corona is our investment in agricultural projects in the area including pastures and meat production. The latter has seen a 50 per cent rise in local meat farmers’ production, while the yield of the pasture land has risen from five tonnes per hectare in 2005, before Gold Fields’ investment, to 15 tonnes in 2009. The area supported has increased from 800 hectares to around 1,500 hectares. The project also involved the introduction of Brown Swiss cattle to the dairy herds, and an artificial insemination programme that resulted in a 55 per cent pregnancy rate among the herd. Between 80 per cent and 90 per cent of the cattle is vaccinated compared to just 30 per cent in 2005. The third phase of the project was the construction of a US$400,000 dairy plant – it is scheduled to start operating late in 2010.

Australia

Community-related issues at the company’s Australian operations focus mainly on the rights of indigenous people under the terms of the Native Titles regulations. Gold Fields also invests in community development projects around the St Ives and Agnew mines through the Gold Fields Australia Foundation.

Tackling the unemployment challenge

Of all the challenges facing the diverse communities in which we operate, unemployment is the most pressing. Community expectations that Gold Fields will provide jobs for local people are high and our company policies heavily favour the use of local labour. In South Africa and Peru legislation requires companies to give priority to local labour and suppliers. We therefore train prospective employees to achieve requisite mining skills and assist local suppliers in meeting the standards required for all our vendors.

However, Gold Fields’ operations can only provide a limited number of jobs. Community investment in all regions thus includes an element of alternative income training and skills development for local community members. The farming projects in Peru and Ghana provide just two examples of how successful such an approach can be.

In South Africa we offer retrenched staff the option of receiving training at a registered institution, which provides workers with the skills needed to seek employment in other sectors. It is a model which we are developing further, particularly at a time when unemployment levels in South Africa remain high and show few signs of easing.