Gold Fields Ghana sets standard for responsible business

The New Economy is proud to name Gold Fields Ghana the recipient of its 2014 Award for Best Corporate Social Responsibility Policy in Africa. Here, the company explains how it has helped stakeholder communities develop sustainably

Mathias Kudi, a beneficiary of Gold Fields Ghana’s Oil Palm initiative under the company’s SEED programme, with his family. GFG has long been been playing a leading role in defining the country's corporate social responsibility landscape

The idea of companies giving back to society is not new, but the motivations and modalities for social investment have evolved over time. Cloaked under several titles – such as ‘corporate social responsibility’, ‘sustainability’, ‘corporate accountability’, ‘sustainable development’ and ‘corporate philanthropy’ – the expectations and demands for companies to do good have intensified, even as the shape and form in which it is done remain contested.

Corporate social responsibility (CSR) is the more pervasive terminology in Ghana, and companies across different sectors have adopted CSR initiatives in their many different variations, with the mining sector being very visible in that space. Long before the government, through its regulator, outlined guidelines for carrying out CSR, the country’s largest gold producer and highest taxpayer, Gold Fields Ghana (GFG), had already been playing a leading role in defining the CSR landscape in the country.

As a new entrant into the Ghanaian mining sector in the early 1990s, GFG began its community spending on a more or less ad hoc basis, responding directly to specific community needs and requests, as and when they came up. A formalised structure of funding and carrying out community development was yet to be established, as the company was more focused on establishing and stabilising its mining operations in the country. School blocks, water, health and other infrastructure were provided for communities that were affected by mining activities or relocated as a result of mining operations. And even though such support is still provided, it now takes place within a far more structured development framework.

In 2002, GFG set up a fund to finance its community investments, and also began a process of integrating community development into the company’s business and strategic thinking. In 2004, it became the first mining company in Ghana to set up a foundation to fulfil the social development aspirations of its stakeholder communities. Today, social responsibility is a fully integrated component of the company’s operations, and central to its business philosophy. Indeed, it is as critical to get ‘social consent’ from a community for a mining operation as it is regulatory approval.

It is as critical to get ‘social consent’ from a community for a mining operation as it is regulatory approval

To ensure a regular and reliable stream of funding for the foundation’s activities, GFG makes a donation of $1 per ounce of gold produced plus 0.5 percent of the company’s annual pre-tax profit to the foundation. Even though the approach guarantees a steady flow of funds as long as the company is in production, it also ties the foundation’s survival to the fortunes of the company. When the company eventually folds, it is envisaged that the foundation will cease to exist unless a new identity can be developed.

GFG is aware mining operations will eventually cease once the resources in its lease area are depleted or are no longer economically viable. Therefore, thinking ahead, the company is putting 10 percent of its contribution to the foundation into a separate investment instrument to be used by communities for social development – but only after the lives of the mines have expired. This will help the communities continue development programmes and be protected against the impact of a sudden loss of support.

Development plan and governance
Drawing from its own past lessons and activities, as well as global best practice, Gold Fields Ghana, in 2005, created a five-year development programme for its adjacent communities in consultation with local government authorities, government agencies, chiefs, opinion leaders, and other developmental organisations. The Sustainable Community Empowerment and Economic Development (SEED) plan served as the roadmap for social development in adjacent communities, with the aim of providing necessary infrastructure and empowering communities by setting up profitable economic enterprises. With agriculture being the mainstay of several such communities, there was a focus on developing the agricultural supply chain, facilitating the setup of agribusinesses, and acting as a catalyst for the growth of cottage industries. The SEED programme was reviewed and evaluated in 2010, and subsequently extended, making adjustments to ensure an even greater community impact and greater responsiveness to emerging societal needs.

GFG considers stakeholder engagement to be critical to the maintenance of its social license to operate, and the success of its community development initiatives. It has therefore developed a Society and Community Charter that guides the company’s conduct with, and pledges its commitment to, stakeholder communities. Through the charter, GFG: builds strong relationships with community stakeholders, based on trust, open, honest and frequent engagement; ensures the company leaves an enduring, positive legacy for communities in which it operates by working with stakeholders (investors, employees and communities) to create shared value; and measures its actions and impacts on communities and the environment.

In keeping with the tenets of this charter, and to promote meaningful involvement and participation in community development, the membership of the foundation’s board of trustees includes Members of Parliament of host constituencies. The board meets quarterly to review and approve all projects and expenditures. The types and nature of the projects to be undertaken are, however, determined by the communities themselves through a comprehensive consultative process involving chiefs, opinion leaders, unit committee heads, members of the district assemblies, representatives of government agencies and, most critically, members of the respective communities.

This bottom-up approach ensures only relevant projects that address key community needs are undertaken. It also guarantees a strong community ownership and buy-in of projects and programmes.

Key development areas
About a third of the over $26m spent on community development so far has been on education; this takes the form of providing infrastructure such as school buildings, early childhood development centres, furniture, learning aids, and accommodation facilities for teachers. But beyond the ‘hardware’, the company has, under the SEED programme, also provided scholarships and bursaries to more than 1,100 beneficiaries in stakeholder communities, and sponsorship for the training of teachers. Gold Fields Ghana, for example, undertook a teacher-incentive programme in stakeholder communities, whereby it provided a 30 percent top-up of teachers’ salaries in selected schools. For the duration of this programme, there was a marked improvement in the performance of the schools, with one of the teachers receiving a National Best Teacher Award – the most prestigious award for teaching excellence in Ghana.


Is donated to the foundation per ounce of gold produced


Of annual pre-tax profits are also donated

As is typical of such communities, a significant number of youths fall outside the formal education system. The company has therefore extended its sponsorship and support beyond the formal educational sector. It enrols community members in apprenticeship programmes to acquire practical training and technical skills. To maximise the value and benefit of such programmes, the company provides tools and equipment for programme beneficiaries during training, as well as fully equipped workshops upon graduation. It also encourages programme beneficiaries to acquire professional certification in their chosen fields by paying the fees for them to take the National Vocational Training Institute examinations.

Infrastructure, qualified health personnel, and health education have been the main drivers for maintaining quality healthcare in stakeholder communities. To increase access to healthcare, GFG has ensured health facilities are within about 15 minutes’ drive of each other in the company’s stakeholder communities. Some of these facilities are equipped with modern theatres for safe child delivery, as well as accommodation for medical personnel to attract and retain quality health professionals. Through effective communication and public education, the company has helped reduce the rate and spread of communicable diseases, and increased awareness about HIV/AIDS, as well as other public health diseases and issues.

Access to potable water is a concern for many towns and rural communities in Ghana, and GFG has been working with local government agencies and other key stakeholders to address this challenge. Having started off with boreholes, communities are now also beneficiaries of ‘Small Town Water Supply Systems’, which make it possible for water to be pumped, piped and distributed throughout towns and villages. All GFG’s stakeholder communities have access to potable drinking water. The company has instituted an annual ‘Cleanest Community’ award, which has generated healthy competition among communities, and increased genuine interest in sanitation-related issues.

GFG has so far spent about $5.5m on agriculture, in the form of: direct inputs and technical assistance to farmers; strengthening of the agriculture value chain; and development of microenterprises. Support from GFG has been extended to over 1,000 oil palm farmers, 500 livestock farmers and more than 400 members involved in micro-enterprises. These activities have improved local economies significantly, and are helping communities move from economic dependence to independence.

While the importance of electricity in growing local industry is widely known, access to power is a significant challenge. Under the Government of Ghana’s Self Help Electrification Project, communities are required to contribute towards their own electricity access by purchasing electricity poles for transmission. As its contribution towards increasing electricity access to rural communities, GFG provided poles to stakeholder communities to facilitate their connection to the national grid. The company’s road construction and rehabilitation programme has also helped improve farmers’ access to markets. And, in building community and social centres, GFG is providing facilities that promote social engagement within communities.

Shared Value initiative
Gold Fields Ghana continues to review its projects and programmes, and keeps exploring ways to make the most positive impact possible in stakeholder communities. The company is currently adopting a ‘Shared Value’ initiative, in addition to its existing SEED commitments, by which communities will be playing an even greater and more active role in improving their living conditions sustainably.

The company is looking at supporting the development of SMEs around the waste by-products of the mine, such as waste rocks, scrap steel, used oil, and scrap tyres. The company believes the local employment generation and economic viability of such SMEs holds considerable potential for communities. Also under consideration under the Shared Value initiative is a vocational centre of excellence that will train local youths to international vocational skill standards – they could then find employment with GFG or other companies.

In pursuing its policy of local procurement and employment, GFG also strongly encourages its suppliers and contractors to sources goods and services locally, and provide preferential employment opportunities to community people where feasible. The company regularly informs communities about the job opportunities available and the qualifications desired. To fill the relevant skills gaps, it trains and certifies community members in specific job competencies, providing a skills pipeline in the communities for GFG and extractive companies.