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Mining companies urged to take a stand – Divinsky Group

22nd January 2015

By: Simon Rees

Creamer Media Correspondent

  

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TORONTO (miningweekly.com) – Mining has an image problem; it is seen by many in the public as untrustworthy, uncaring and, on occasion, unscrupulous. This is confirmed by polling data, such as the 2014 Edelman Trust Barometer, where mining came third from the bottom in trustworthiness.

Only the chemicals and oil sectors scored lower, Divinsky Group senior VP for strategy Elizabeth Dove told members of the Women in Mining Toronto branch last week.  

Much of the problem stemmed from the public’s collective memory of mining; ask someone to describe a mine today and most would probably detail an operation straight from the pages of How Green Was My Valley, a 1939 novel by Richard Llewellyn or Germinal, the thirteenth novel in Émile Zola's twenty-volume series Les Rougon-Macquart.

The image was tarnished still further as the public linked mining to the worst forms of artisanal exploitation in the developing world. Unfortunately, there are also too many examples of mining companies remaining aloof or cutting corners. Their actions – or inaction, perhaps – tars the rest of the sector.

Meanwhile, many in the industry continued to struggle with the notion that they were under near-continuous public assessment, particularly in the sphere of social media. “Today everyone has a smartphone and access to social media; people can know everything about your organisation,” Dove pointed out.

MAKING PROGRESS
In Canada, the mining sector had strived to correct many of its past wrongs, particularly in relation to the environment and in its efforts to improve consultation with First Nation and aboriginal communities.

But even the most progressive companies, those that had nuanced corporate social responsibility (CSR), environmental and consultation programmes, can experience frustrations. They would be the first to admit that building trust with stakeholders and the wider public took time, effort and patience. 

Losing this trust could occur swiftly and this often happened when companies fell into what Dove called the “say-and-do gap”. Here a company might be aware of stakeholder concerns but it then failed to address them in a timely or meaningful manner. Trust was subsequently lost or, in the worst cases, damaged irreparably.

Critical in mitigating this risk and others was for a company to develop a corporate “stand”, an ethos that informed every facet of business and helped guide both employees and management in strategy and decision-making.

“A stand is a galvanising commitment an organisation makes to the clear and unique role it will play in a rapidly-changing world through all of its activities,” she explained, adding that it was the core element that united the three central parts of a company; its business, brand and citizenship.

Having a clear and comprehensible stand also appealed to the growing number of investors whose decisions were made, in part, on the basis of whether a company had a clear and robust social licence to operate. Many investors also noted that there was a causal relationship between this and whether the company was also fiscally sound, Dove noted. 

Further, the millennial generation – those born between the 1980s and late 1990s – were keen to work for employers that had a clear stand. This was an important consideration for any mining company in search of the best talent to replace its retiring baby boomers.

“Research tells us that increasing numbers of people, particularly millennials, want to work for organisations that do good things beyond their function,” she added. “Indeed, they will often take a pay cut to do so.”

AVOIDING THE PITFALLS
Many companies continued to make the elementary mistake of viewing environmental work and the effort to obtain a social licence to operate as exceptional effort instead of being normal business practise.

This view needed to change, Dove argued. The exceptional in this case was merely the fulfilment of minimal expectations among stakeholders, the wider public and employees.

“Safety, communication, making a positive socioeconomic impact and not polluting are not exceptional things, they are minimal expectations people have in relation to mining,” she stressed.   

Companies that strove to achieve beyond minimal expectations often achieved “standout stature” among their peers, whereby they were viewed as sector leaders and worthy of emulation. A company’s stand also added authenticity to its day-to-day business and communications.

In addition, companies seen as sector leaders often received commendation from third parties. “A third party talking about your company is especially important because mining is held in such low esteem. People would be sceptical about your story if you were the only one telling it,” Dove said.

Many companies further down the supply chain wanted to know that the ore or material they were handling was free from controversy and that it was mined in a way that met or exceeded public expectations.

A solid reputation achieved through CSR, engagement and environmental work could also prove essential if something went wrong for a company. Instead of immediate censure, the public was more willing to hear a company’s explanation of events.

TRUST EARNED
Canadian diversified miner Teck Resources was one of the better examples of a mining company creating and maintaining a stand, according to Dove. She noted how it had formed ties with nongovernment organisations and charities, and had also committed to a net-positive effect on the biodiversity of the areas where they operated.

For example, Teck purchased 7 200 ha of private land in British Columbia in 2013 and was working to conserve this alongside First Nation groups and environmental organisations, she stated.

Unfortunately, a fish kill was reported in October at Teck’s Line Creek plant, in British Columbia, which was a treatment facility to reduce selenium in water. “This is a setback for the company. But Teck is showing a steady and bold commitment that goes above and beyond many of their peers’ efforts,” Dove said.

Admitting a mistake and seeking to correct it could help in the long run because this underlined the company’s reputation that it could be trusted. “Admit when you’ve had a set back. But also reap the benefits of being a standout leader,” she advised.

Edited by Henry Lazenby
Creamer Media Deputy Editor: North America

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