CSR in Africa: How moving beyond window dressing is now strategic

John Dramani Mahama: Fewer CSR stunts please

Guest post by Wayne Dunn

Ghana’s President John Dramani Mahama recently told mining companies operating in Ghana not to use corporate social responsibility (CSR) as a populist stunt just to gain public applause. (see article here)

Companies and industry will be thinking ‘but we are spending tens of millions of dollars on CSR’.  

Many NGOs will be thinking ‘it’s about time the Government called them out’.  

Others will be thinking ‘the companies we are working with are doing well’. 

Communities will be thinking ‘yes, companies need to take care of all these things for us’.

They are all right. And they are all wrong. CSR is a new phrase with many different faces and too often little common understanding. 

And the tendency is often to put all of the responsibility on industry to make it work. 

(My keynote to the U.N. Global Compact Awards Night in Ghana in Sept 2013 spoke to the need for business, community, government and NGOs to share responsibility for the success of CSR – you can see it on Slideshare here)

Businesses in Ghana and globally are generally getting better at being good corporate citizens, trying to work more collaboratively with communities and support meaningful local development (of course, there are always some that are not doing good and this reflects poorly on the rest).  

But, while they are getting better, many industries, including mining in Ghana, do not have a good long-term history of CSR.  And communities where the industry has been active for decades are still impoverished and living with poorly functioning infrastructure. (there is an important discussion around where industry’s responsibility ends and government’s begins but that is for another post)

Images and memories of years/decades of little or no social investment by industry stick around and influence thinking, even when industry starts to be much more responsive. 

The mistakes of the past can undermine the good works of the present.

Sometimes governments pull back services and budget in areas where industry is active, leaving a vacuum in the provision of public services and infrastructure.  Often industry is blamed if the vacuum isn’t filled.

Often government and industry are both spending on public goods like health care, education, roads, etc. but are not working together and are ending up with very sub-optimal impact.

Sometimes advocacy organizations, industry, governments and communities end up in positional stances and can’t break through to reach common ground or find ways to collaborate and maximize social and community value.

But, increasingly there are good examples (and yes, there are still bad examples too)

Golden Star Resources, who operate two gold mines in Ghana, recognized that facilitating non-mining related livelihoods was important for long-term community development. It set up an Oil Palm business development venture, provided several millions in start-up funding ($1.8 million by 2009), committed to ongoing funding of $1.00 for every ounce of gold produced.  

The venture works with the community to support and develop local palm oil producers, by providing capital, infrastructure, training and support. The end result is many families have a sustainable livelihood and the ongoing investment commitment by Golden Star means that it can keep expanding and supporting more producers and families.  

In this and in various community health care programs they are working with the German development organization GIZ, which has a clear and responsive process for partnering with the private sector to optimize development impacts from private sector investment and operations.

Responsible mining is becoming more mainstream

Newmont Ghana recognized the importance of expanding the skills of its employees and engaged an international training firm (SIAST) to train local workers to an international standard, and to provide the workers with an internationally recognized welding certificate.  

While less progressive firms may have seen this as risky (would the internationally certified workers leave to work elsewhere) Newmont recognized that the overall value created by this project was good for Newmont, good for the workers and their families and good for Ghana.  

Twenty-three local employees at the Ahafo Project graduated with an internationally recognized certificate and an improved ability to contribute to Ghana’s growth and development. Here's the Ghana Web Write-up on it.

There are other examples of successes, and, of course, many examples that didn’t work as well.

Even when businesses have been spending increasing funds on CSR it has often not spent it with an eye to creating community and shareholder value.  

Too often it is simply throwing money at social and community issues without strategy, collaboration with governments or effective management and monitoring of results and impacts.  

I am often amazed that the same businesses, the same people that are diligent and focused in managing ‘normal’ business investments and operations; setting up reporting and management systems, tracking progress, improving efficiency, etc. can forget all of this when it comes to their CSR investments.  

Thus, CSR spending can often be very inefficient in terms of producing results, for companies or for communities.  Lack of strategic collaboration with other stakeholders compounds this inefficiency.

Creating value from CSR, value for communities, value for shareholders and value for governments doesn’t just happen. It takes effort and commitment from all stakeholders.  

Responsibility does not lie solely with business but with all stakeholders.  

You can’t tax CSR into creating value. It takes a strategic and systematic approach that facilitates collaboration and optimizes value for all stakeholders.

Wayne Dunn is a Professor of Practice in CSR at McGill University in Canada. He is currently the Executive Director of the CSR Training Institute and is developing and delivering Executive Programs around the world.  He is running an Executive Program in CSR Strategy and Management in Ghana in April (more here). He can be reached at wayne@csrtraininginstitute.com

Wayne is also a senior associate and advisory board member at Innovation Forum, the emerging markets publisher and events business founded by Tobias Webb in 2014. The first Innovation Forum event, focusing on Ghana and sustainable investment opportunities, takes place on June 19 in London.

Click here for the event website and here for the high level speaker list.