Positive relationships with the local communities around our operations are vital to securing support for our activities and to maintaining our social licence to operate
Our mission is to unlock value for all our stakeholders, of which our local communities are considered to be one of the most important. We therefore continuously strive to build and improve upon our positive relationships with the communities around our operations.
Our operations are predominantly located in remote areas which have a low level of socio-economic development and high unemployment. The ‘multiplier effect’ which can be applied in Africa means that whilst Petra directly employs 5,607 permanent employees and 5,562 contractors (as at 30 June 2017), a significantly larger number of people are dependent on our operations.
Our community development efforts focus on the following key areas (as identified through our community engagement programmes):
The significant capital that we have committed to extending the lives of our mines will serve to ensure sustainable employment for our workers and contribute to the future viability of the communities surrounding our operations. This is augmented by initiatives such as locally-focused employment and developing local suppliers to a level where they can supply products and services to the operations.
More about our approach and performance with regards to our local communities.
Assessing and managing our impacts is guided by a combination of meeting country legislation, identification of and consultation on material topics with our stakeholders, review of Company performance, and internal and external audits.
In South Africa, one of the mandatory documents required in order for an operation to be awarded a Mining Right is an approved Social and Labour Plan (“SLP”). This document defines each operation’s obligations in terms of social, labour and community issues. The SLP of an operation forms the basis for its activities and performance indicators over a five-year cycle, following which a new SLP needs to be consulted with stakeholders and approved by the Department of Mineral Resources.
Additionally, each South African operation is subject to the targets set out in the Mining Charter. The SLP for an operation is generally drafted to incorporate some of the targets of the Mining Charter relating to Human Resources Development (“HRD”), Employment Equity, Preferential procurement, local economic development (“LED”) and housing.
Tanzania is not subject to legislation with regards to corporate social responsibility, but Williamson actively strives to enhance the quality of life of stakeholder communities and is committed to an active and transparent process of engagement with all its stakeholders. Williamson’s Community Development Programme focuses on three development areas: Community Development, Community Initiatives and Community Support.
As our exploration operations in Botswana are still at an early stage, we have not yet adopted a formal community development approach. However, Petra Diamonds Botswana’s comprehensive HSEQ (Health, Safety, Environment and Quality) Policy Guidelines and Due Diligence Checklist make provision for the continued assessment of any impact of its drilling programme and development work.
The implementation of a consistent and effective stakeholder engagement approach across the Group remains a priority for Petra in order to build on the robust processes covering engagement that we already have in place across the Group.
As part its strategy to assess and manage its impacts, Petra carried out a full Social Impact Assessment (“SIA”) of its South African operations in FY 2016. However, through ongoing engagement with stakeholders, these impacts are continuously being re-evaluated, re-prioritised and planning adjusted accordingly. The SIA has assisted with the identification and assessment of the key stakeholders, impacts, risks and issues across the full life cycle of our South African operations and therefore serves to inform the integrated and comprehensive Stakeholder Management Engagement Plan (“SMEP”) which is in place at each of the operations and for the Company as a whole.
Our approach to social investment is developmental in nature, hence we aim to identify long-term projects in order to have sustainable impact. This is evident particularly in our focus on education where we emphasise skills development to build scarce skills capacity required to grow the economy and create mass employment.
Social investment projects are supported for as long as is needed to ensure their sustainability. This includes the continuous monitoring of progress, providing technical and managerial assistance and advice, as well as empowering communities with the required skills to ensure that the benefits provided by the projects are maximised.
Projects are generally undertaken in partnership with local communities, municipal authorities, NGOs and other industry stakeholders, and receive funding and technical advice from Petra. To facilitate the sustainability of projects and to enable our social partners to assume ownership of projects in their communities, steering committees are set up, consisting of Petra employees, members of the local community, municipality, and other service providers.
Outside of formally committed expenditure (which is agreed as per our SLPs in South Africa), we provide further discretionary social expenditure on social investment initiatives.
Petra is committed to transparency with regards to payments to Governments, both in terms of taxes and royalties, as well as our other areas of significant social expenditure. We support the principles of the ‘Extractive Industries Transparency Initiative’ and ‘Publish what you pay’, given that publishing details of Petra’s tax payments to Governments can help improve community support for its activities.
In FY 2017, the Group paid a total of US$47.2 million in taxes and royalties. It should be noted that our operations are currently subject to varying levels of tax shields, due to the significant level of investment being spent by the Company at each asset. However, as the capital expenditure levels continue to fall from their peak in FY 2016, payments of taxes and royalties are due to rise considerably, in line with the profitability of each operation.
We believe that local business development is a key component to true sustainability and is core to the economic development of South Africa.
Local businesses face a number of challenges as start-ups often struggle to gain access to grow and expand their businesses. These challenges include access to funding, availability of skills (both management and technical) and access to established supply chains.
At Petra, we address these challenges through our Enterprise Development (“ED”) and Supplier Development (“SD”) programmes, which are rolled out at our operations through our Enterprise Development Resource Centres and monitored through our Group ED structure, working very closely with operational and Group-level procurement.
Each of our South African operations now has an operating Enterprise Development Resource Centre with a full time ED Co-ordinator. This centre serves as a link between local businesses and the mine’s supply chain.
Services offered at the centres include:
Local community members can submit feedback to Petra Diamonds by emailing:
Community.Feedback@petradiamonds.com
