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Corporate Social Investment in a
capital constrained world
Brandon Munro Managing Director, Kunene Resources
Ltd www.kuneneresources.com KNE.AX
Mines and Money Access Africa, 25 June 2014
AgendaWhat is CSI (and what is it not)?Justifiable CSI when funding limitedIdentifying inappropriate CSI expenditure
Project risks from ceasing CSI
Managing expectations
Greater results with lesser expenditure
What is Corporate Social Investment?
CSISocial
licence to operate
Regulatory compliance
The right to operate pyramid
CharityCSI is
like charity!
Company responsibility
Investor prerogativenot
What is justifiable when funding is short?
CSI should target risk mitigation…
…not charity
(and upside opportunities)
Key downside risks
De facto regulations
Lobby groups
Community support
(opposition)
Regulatory attention
Security & accessibility
Human resourcing
Licence tenure
Corrupt practices
Exploration
Development Mining Services
What risk profile are you investing into?
Exploration
Development Mining Services
Licence Tenure
Community support
Lobby groups
Security/access
Human resources
Corrupt practicesRegulatory complianceDefacto regulations
What risk profile are you investing into?
What risk profile are you investing into?
Exploration
Development Mining Services
Licence Tenure
Community support
Lobby groups
Security/access
Human resources
Corrupt practicesRegulatory complianceDefacto regulations
Beware lead times
Upside risk… financing alternatives
Upside risks… BD opportunities
Written plan/strategy?How much and on what?Project link with risk?Assessment/decision making process?Community’s obligations?Monitoring/evaluation?Link with external relations?
Key CSI questions to ask?
CSR Charter
Implementation guidelines
(pre-production)
Operations• Profitability• Capex• licence to operate• regulatory compliance• Management
Environment• Natural• Social
Community• Engagement• Development
Workplace • Attraction• Respect• Development• Retention• AAP• Ownership
Health and Safety
Policies and Guidelines
In place HR Policies and Procedures
Community Development Program
IFC ESIA process
Red flags
No expenditure
Scattered donations
Political/religious donations
Emotive donations
Inappropriate/corrupt support
Political intervention
No accounting records
No champion
Ceasing or reducing CSI has its own risk• Use risk-management as the basis for
spending cuts. Cut by effectiveness not quantum
• Understand who are the beneficiaries… and benefactors (beware political revenge)
• Don’t risk your social licence to operate
• Any mitigations or bridging plans?
•
CSISocial
licence to operate
Regulatory compliance
• Consider risks to company’s reputation, perceived ability to execute
• Avoid shutting down projects prematurely – sends stronger message than not renewing
• Manage through interface with external relations/PCDP
Impact of CSI on community expectations
Expectations
Measure Mitigate
ManageMeet (?)
Assess (guess) hopes, dreams ...or demands
Be modest, under-promise, respect local balance
Communicate, recalibrate and extricate
Anticipate flow-on effects, avoid upward spirals
Two way contracts with communities
• Stage expenditure with obligations on recipients/community• Ensure community accountable
Greater results for less• Use procurement to create
CSI benefits• Focus on capacity building
• Leverage other funding sources• Have time limits• Focus resources on
flagship project(s)
Questions?Email me at: [email protected]
