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 2017.
Gold Fields actively identifies and regularly engages with the representatives of the following groups in a formal and informal manner:
- Central, regional and local government and their agencies
- Community-based organisations
- Traditional authorities
- Civil society
- Organised labour
In 2016, 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 at www.goldfields.com>sustainability.
All operations have established mechanisms through which communities can share their grievances about Gold Fields, its actions or the behaviour of its employees on social, environmental and human rights issues. Operations in Peru, South Africa and West Africa also regularly publish and distribute communication materials to stakeholders, keeping them informed about our community relations activities and initiatives.
Subsequent to community relationship assessments in Peru, South Africa and West Africa between 2014 and 2015, action plans were implemented during 2015 and 2016 to address any gaps and further strengthen community relations. These plans are currently being rolled out in our communities. A second round of assessments commenced in late 2016 and continued during 2017 in all our regions. The International Council on Mining and Metals’ (ICMM) ”Understanding companycommunity relationship toolkit” is being piloted for these assessments at our South African and Ghanaian mines.
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, in South Africa, through an alliance with our peer, Sibanye Gold.
Gold Fields spending on SED and Shared Value programmes – US$17m in 2017 (2016: US$16m) – reflects the Group’s direct social investment spend in host communities. The investments are made in the following areas:
- Conservation and environment
- Education and training
- Health and wellbeing
- Economic diversification
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.
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:
- Strategic interventions, to proactively address socio-economic challenges that can drive community tensions, NGOs activism or more restrictive regulations
- Integration to proactively address socio-economic challenges
- Participation in collaborative action with other stakeholders
- Transparency regarding Gold Fields’ economic contributions to its host societies in line with World Gold Council guidelines
Gold Fields’ regions currently have six Shared Value projects either already running or at implementation stage.
Host Community Employment
Where feasible, we strive to employ host community members at our operations. This enables alignment between the interests of host communities and our mines, expanding of local value generation and growth of local available skills. As our ability to recruit such workers may be limited due to the available skills in host communities, we are committed to local education and skills development. From 2018 onwards growth in total host community employment has been added as a component to the bonus plans of senior mine management.
The number of host community members - including both employees and contractors - working at each of Gold Fields' regions is set out on the table below. In 2017, all operation set targets for host community employment and these were exceeded. 40% of our workforce or 7,516 people are employed from our host communities. While this is significantly lower than in 2016, it reflects a change in definition in Australia, where host communities are now defined as those living within an operation's direct area of influence. Previously, due to the fly-in, fly-out nature of most of our operations we included Perth as part of our host community area.
Host community workforce1 employed from total workforce
Host Community Procurement
To enhance the national and host supplier base, which is especially important given the remote locations of several of our mines, and to create employment in those communities, we procure goods and services from the countries and host communities in which we operate, where feasible.
During 2016, we developed three-year host community procurement and employment plans for Peru, South Africa and West Africa to increase the proportion of sustainable host community procurement and employment, thus driving shared value.
Of our total procurement spend of US$1.86bn for 2017, 88% or US$1.62bn was spent on businesses based in countries where Gold Fields has operations (2016: US$1.36bn/83%). US$774m, or 45%, was spent on suppliers and contractors from the mines' host communities (2016: US$558m/38%). (See table below).
Local and host community procurement
|Local (in-country) procurement||Host community procurement|
Gold Fields’ Cerro Corona mine host community procurement case study is showcased on the ICMM website at: