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 5,005 permanent employees and 5,763 contractors (as at 30 June 2016), 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 issues with our stakeholders, review of Company performance, and internal and external audits. To consolidate this process, an external specialist service provider was contracted to lead a full Social Impact Assessment for all operations, as well as to guide us in our transition to compliance with GRI-G4 reporting standards in FY 2016.
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 DMR.
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 a relatively 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.
Petra is currently significantly enhancing its approach to consistent and effective stakeholder management, in order to build on the robust processes covering engagement that we already have in place across the Group.
Comprehensive and professional Stakeholder Management and Engagement Plans (“SMEP”) are in the process of being put in place for each of the operations, and these will in turn inform the compilation of a formal Group Petra Stakeholder Management Policy.
Integrated into this process was our transition from the GRI-G3 reporting standards to the GRI-G4 standards, which allow companies to move away from a full disclosure approach towards placing a much greater emphasis on materiality. An important part of the development of the SMEPs and the G4 reporting standards involves a materiality assessment, whereby we surveyed both internal and external stakeholders about what they perceive to be the key sustainability issues relating to our operations, and a Social Impact Assessment (“SIA”) for the South African operations.
Our approach to corporate 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 corporate social investment (“CSI”) initiatives.
Read more about Petra’s approach to corporate social investment.
Taxes and royalties make a significant contribution to the countries in which we operate. 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 2016, the Group paid a total of US$49.6 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. As the capital expenditure phase starts to wind down, payments of taxes and royalties are due to rise considerably, in line with the profitability of each operation.
In line with our commitment to support local economic development, our operations aim to use local suppliers for goods and services where possible.
Preference is therefore given to local suppliers, i.e. suppliers in the immediate vicinity (‘labour sending area’ as per South African legislation) of the operation, and then (in order of precedence) to those located in the wider district, the province or region, or finally nationally, with international procurement only being done in exceptional cases.
With ‘Preferential Procurement’ being one of the measurements of the South African Mining Charter and a part of the mines’ SLPs, we have started a project to help develop local suppliers to the point where they will be able to supply goods and services to Petra operations in their areas.
