The extractive industry is under increasing pressure to improve its social performance, and to do it in a way that benefits the business itself as well as the community or wider society of which it is a part.
For many, though, the notion of social performance seems shrouded in a mist of jargon and unreachable ideals, and there seems to be an absence of clear thought about the practical steps that should be taken. However, it is possible to break down the concept of social performance into practical steps that an organisation can take.
Key definitions
I suggest the following definitions of social performance and social sustainability.
Social performance: 'All the different ways in which an operation contributes positively or negatively to the communities in which it operates and the means by which it manages them.' This embraces activities such as impact management, consultation, social investment and community relations.
Social sustainability (in the context of social performance): 'Ensuring that one's interventions are self-sustaining and not one-off incidents, and that they contribute to and maintain the long term social performance of an operation.'
Key principles
There are four essential principles, which together provide the framework for sustainable social performance interventions:
- PRINCIPLE 1 Ensure that your social performance initiatives are locally appropriate.
- PRINCIPLE 2 Maximise the linkages between different social performance initiatives.
- PRINCIPLE 3 Ensure that there is sufficient capacity to implement social performance initiatives.
- PRINCIPLE 4 Take time to take stock.
Using these principles as a framework, here are some of the practical steps that can improve the social performance of an operation.
Locally appropriate activities
Ensuring that your interventions are locally appropriate is the cornerstone of sustainable social performance. Without this, all other efforts at improving your performance are likely to fail, or deliver only a proportion of their potential. Being locally appropriate means developing interventions that are suitable to the context in which they occur. This principle applies to the full range of social performance activities during the life cycle of an operation. In my experience, the key here is the nature and extent of the consultation process, the degree of understanding of the local context, and the extent to which you take stock of existing initiatives.
Maximising linkages
Many companies have already embarked on a number of social performance initiatives. But are they maximising their value? If we take social impact assessments (SIAs) as an example, we find they are expensive, and yet organisations frequently treat them solely as a process for securing a licence to operate. But SIAs can lay the foundation for sustainable social performance throughout an operation's life cycle, and, treated in this way, can offer opportunities to save time and cost. There are numerous aspects of the SIA process where linkages with operational activities can be made.
Traditional baselines for SIAs provide information on quantifiable variables, such as occupation and income profiles, demographic profiles, availability of public services and infrastructure. While this information produces a snapshot in time that can be used for benchmarking and identification of impacts, it does not necessarily provide sufficient insight into the heartbeat of a community or its internal workings. However, if the baseline information is also designed to provide an understanding of the political and power dynamics within a community, the allocation of its resources and the needs of its vulnerable groups, you will gain both a more informed basis for identifying potential impacts and, crucially, the information required to develop and implement a sustainable social investment programme.
By putting thought into the design phase, a single information-gathering exercise can become multi-purpose.
The key is to take a more strategic view when writing your terms of reference for future SIAs. Identify what your other social performance objectives might be and use SIAs as a first step towards meeting them.
Ensuring sufficient capacity
To implement something effectively there needs to be sufficient capacity.
With social performance, there needs to be sufficient capacity among both internal and external participants. On an internal level, this concerns the number of staff and their skills. On an external level it covers a number of areas, including:
- the capacity of local stakeholders to participate in consultation and monitoring activities
- the capacity of local organisations to be effective partners in management measures or social investment projects
- the capacity of local stakeholders to reap the benefits of local employment, local sourcing and social investment opportunities.
Improving your levels of social performance takes time, specific skill sets, and sufficient human resources. Case study 1 provides an example of how one mining company chose to build the capacity of its staff to carry out social performance activities.
Taking stock
Taking stock of your current levels of social performance is the key to its sustainability. It allows you to re-design performance measures and strategies early, when it is less costly, and makes sure that you get the results you want. The benefits of taking stock include:
- improved community relations
- targeted expenditure (ie redirecting funds to where they are needed)
- ensuring that social performance initiatives are linked to key issues;
- improved management measures and associated systems
- decreased impacts of your operation
- confirmation regarding those activities that are delivering benefits.
There are a number of different ways in which one can take stock, either as a one-off activity, or as part of an ongoing process. Examples include: monitoring and consultation, socio-economic assessments of operations, community surveys and independent assurance processes. All of these can add value to your operation. Case study 2 provides an example of a self-assessment approach implemented within an extractive sector company.
In conclusion, the good news is that sustainable social performance is possible. There are guiding principles that can help to point the way.
There is also a wealth of knowledge and practical experience among practitioners that can be translated into practical guidance, and shared. But sustainable social performance requires commitment of time and resources. It requires an ability to maximise the linkages between different activities inside your operation, a willingness to take stock of existing initiatives and to respond with the necessary adjustments if they are not appropriate.
Alison McCallum is a senior consultant, Environmental Resources Management (ERM), Tel: 0207 465 7674, E-mail: alison.mccallum@erm.com
CASE STUDY 1: TRANSLATING SOCIAL PERFORMANCE INTO READY-TO-USE TOOLS
In 2001, a mining company approached ERM to develop a methodology and associated tools aimed at equipping management staff to identify and assess the impacts of their operations. A key focus of this exercise was to build capacity among staff who were not necessarily trained in social impact assessment or associated disciplines. As such, the tools were designed to be easy to understand and easy to use, while at the same time meeting the objectives of the assessment process. The end product was a total of 23 tools, which take users through the step-by-step process of carrying out a social and economic assessment. Other topics for which tools have been developed include establishing new social investment initiatives, setting up partnerships and guidance on mine closure planning. While a few tools will require external assistance (for example from local consulting firms or universities), they will enhance the ability of staff to assess the impact of their operation, to assess the effectiveness of existing management measures, and to develop appropriate responses.
CASE STUDY 2: A PRACTICAL APPROACH TO SELF-ASSESSMENT AND FORWARD PLANNING
ERM has recently been involved in developing a tool which allows operations to self-assess their levels of social performance. The tool essentially diagnoses levels of performance in a number of key social performance categories (for example external consultation, assessment, management of impacts). While the categories are generic to social performance, they have been tailored to meet the needs of a particular company.
Each category of social performance has been divided into four levels of performance (level 1 being poor and level 4 being best practice). Operations then self-diagnose themselves, decide on the key areas where they want to improve performance, and develop actions plans to move from one level of social performance to another.
One reason for this tool's success is its simplicity. It provides clear, practical guidance on what social performance is and what activities need to be implemented in order to achieve varying levels of social performance.
It allows operations to identify where their weaknesses are, thus putting them in a better position to respond appropriately and in a planned manner.
