The International Finance Corporation (IFC) has released a guide to stakeholder engagement entitled A Strategic Approach to Early Stakeholder Engagement: A Good Practice Handbook for Junior Companies in the Extractive Industries.

It forms part of the IFC’s range of handbooks and aims to make popular business and mining concepts regarding strategic community investment and stakeholder engagement accessible.

Recently, the IFC has increased its investment in junior miners in the extractive industry, specifically those in oil, natural gas and minerals.

As part of its risk mitigation strategy, the IFC is keen to share its wealth of knowledge and experience to guide these operations across areas such as environmental and social risk assessments and management systems.

The Good Practice Handbook is, therefore, a pragmatic and practical guide that applies to junior miners and majors, governments, stakeholders and academics.

Consulting firm SRK Consulting partner Darryll Kilian says major miners have their procedures and are generally strongly aligned with good international industry practice, but juniors do not have the capacity and the resources.

SRK Consulting senior stakeholder engagement specialist Lysette Rothmann-Guest notes that the IFC has distilled a wealth of early strategic stakeholder engagement information into a very practical, pragmatic and realistic guide for junior companies, as they “have constraints and the main constraints occur when they start out, often with limited resources”.

She adds that juniors also have to deal with risks and do not always know if a project can go forward.

“Even though it’s focused on exploration and early project development, the guide covers all the project phases – from prefeasibility, construction and operation to closure.”
She points out that, as with all stakeholder engagement, the focus must be on trust and managing expectations. The authors, she adds, stress that stakeholder engagement is very much like a relationship; you cannot build trust if you do not honour the people and consider their traditions and cultural practices, which is particu-larly true in the extractive industry.

“The guide mentions that this is based on good practice and international principles. But it is an evolving field and there is currently a trend towards business care and viewing stakeholder engagement and community investment through the lens of risk and opportunity,” she notes.

Rothmann-Guest asserts that the guide gives practical tools in terms of how to assess what the authors call strategic investments.

“It really is strategic, planned and tested. The guide gives an overview of the good practice approaches, such as early engagement, with a strong emphasis on human rights and performance standards. There is also a section on social licence to operate and what it really means.”

Kilian notes that mining companies are familiar with terms such as sustainable development and stakeholder engagement, but they may not understand how to achieve these and what the implications are if they do not.

“Comparing majors to juniors – the majors might have a depth of knowledge from their various operations around the world,” he says.

He notes, however, that juniors do not neces-sarily have that to fall back on.

“Hence, this guideline seems to be addressing what the term stakeholder engagement means and how you practically go about doing it.”
Rothmann-Guest notes that, when it comes to nebulous terms such as sustainable development, many do not know what it means; however, the authors put the case forward for saying it is just good business practice and it is a method of risk management.
Meanwhile, Kilian points out that the guide focuses on partnerships, which are key in South Africa.

He notes that there is a strong focus on the fact that one cannot expect mines to provide everything for communities. They might not have the core competence to implement outreach programmes, while, similarly, governments seldom have the means to realise all development needs.