Over the past several decades, there has been increased effort to find a balance between the positive and negative social impacts of mining. While these efforts are significant, they continue to be the domain of the “social performance” team – operating in isolation from the broader organization. This siloed approach can only go so far in ensuring local communities see sustained positive outcomes from mining.
A key challenge for the social performance team is to have responsibility for the outcomes of activities or decisions that they don’t have any direct control over, or lack the skills or knowledge to manage properly. For example, a social performance team cannot develop a local hiring program, build a road that has the least impact on community trading routes and manage resettlement issues without the co-operation of other departments. This is a very complex set of objectives that requires the input of a multi-functional team to be effective.
There are number of ways that social performance teams can be integrated into the broader mining company to enhance effectiveness.
Site and company-wide management systems should take into account social risks affecting both the site and the community.
This will ensure that decisions are made based on comprehensive and reliable information. In practice, this could include the social performance team participating in site level management meetings and risk analyses or adding new metrics to site level reporting.
Hold departments accountable
While the social performance team is responsible for engaging with the community, other critical functions in the organization must be held accountable for the positive and negative impacts of mining. For example, local employment should be advanced by human resources. Water management should be partly the responsibility of the environment group. Fleet managers must be responsible for managing traffic impacts on the community. Each department must be held accountable for their various responsibilities. Managing impacts should be part of individual job descriptions, quarterly and annual targets and reporting as well as performance evaluations. This ensures that the social impacts of mining are aligned with individual and departmental priorities.
Understand the various priorities and expectations
Each department has their own priorities and expectations.
These can appear to be directly (or indirectly) opposed to each other. For example, a procurement team may be expected to find the highest quality items for the lowest cost.
This can lead to an increase in regional or international bundling.
A local procurement program challenges this expectation and can require the procurement team to purchase a higher cost item, or alter the bundling program in order to purchase locally. Identifying these different priorities allows the site to map inconsistencies or resistance from other departments, and find ways to work around them. Ultimately, understanding the priorities of each department allows management and the social performance team to weigh the options, understand limitations and make informed decisions.
Provide adequate training
Integrating social performance into the organization can require changes to traditional roles and require new skills and knowledge. social performance personnel often come from non-profit or community development backgrounds and have a limited understanding of geology, mining processes, financing and the overarching decision-making systems that are critical to corporate performance. This can impede the department from providing site management with relevant information about social risks or communicating with other departments in a way that is meaningful to them.
Social performance teams should be trained on these critical functions to overcome these limitations. A good example of this is the project evaluation process that is central to financial decision making. Without understanding the process and various inputs required to forecast the costs and risks of building a project, the social performance team may not adequately asses or collect critical information about the costs and risks of social impacts.
Conversely, other departments should be provided training on the importance of managing social impacts. Without a full understanding of the likelihood and severity of losing a social licence to operate, other departments may fail to integrate such issues into their decision making. To properly manage impacts, personnel in other departments should get to know community members and receive training on cultural differences, social norms and etiquette when speaking with formal leaders. This will give them a more tangible sense of the social context in which the company operates.
Build relationships with other departments
It is critical for the social impact team to network and be known across the organization. This can be easier said than done. Working across departments to manage the complexities of social impacts is hard and requires group problem solving, communicating with new people in a new way and a lot of give and take. But, building personal relationships is essential for effective co-operation. This can be particularly challenging in light of the geographic distances between on-the-ground social performance personnel and corporate head offices. Despite the challenges, it is very important that social performance teams make a concerted effort to get to know their colleagues across the organization.
Social performance is not a “nice to have” or an add-on to the mining business. It is a critical part of success. To reflect this, social performance teams and all departments touching that topic should have the time, budget and expertise to adequately manage engagement and the social impacts associated with the mining project.
Social performance teams can add great value at the strategic and operational levels. But to be effective, they must be integrated into the broader organization. By doing so, companies can ensure that the social performance programs they are developing are tied closely to the business objective and that business goals are pursued in a way that promotes and enhances the attainment and maintenance of social licence.
MICHAEL TORRANCE is the director of environmental, social and governance at BMO Financial Group. CAROLYN BURNS is director of operations at NetPositive, a non-profit that works with diverse stakeholders to help local communities see sustained positive outcomes from mining.