sharing in governance of extractive industries
Canada’s recent reforms in CSR regulations are not only a headliner, but also a practical challenge in terms of effective scalable stakeholder engagement. Over 50% of the world’s publicly traded mining companies are headquartered in Canada, and operate in over one hundred countries and thousands of localities. Costing billions, traditional approaches that have not achieved better Environmental, Social and Governance (ESG) results will not suffice at greater scale. Businesses, however, willing to look at new innovations, have an opportunity to directly engage stakeholders everywhere and in real-time.
In the last six month, the Government of Canada has introduced a new corporate social responsibility (CSR) strategy, as well as the Extractive Sector Transparency Measures Act (ESTMA). The new conditions in payment transparency and CSR that the government now requires for lending support to Canadian exporters mean that industry is incentivized to take new measures to ensure high levels of ESG impact performance. From the perspective of the government of Canada, it is a matter of brand and reputation.
The new regime, with its cited sector-specific CSR guidelines, paints a picture worth aspiring to from a business and sustainability performance perspective. There is a call for early warning mechanisms to help prevent conflicts that too often cause delays and shutdowns. Non-judicial grievance mechanisms are encouraged to restore growing anti-industry sentiment. In terms of specific technologies, there is reference to call centers in the 2009 e3 document by PDAC.
Looking for innovation, companies have turned to social media and smartphone apps as stakeholder engagement tools. For internet-enabled stakeholders, these tools are quite effective. However, with 60 percent of the global population still offline, these tools have serious limitations in many of the frontier markets in which Canadian mining companies operate. For stakeholders in mining towns and villages with limited Internet connectivity, call centers may appear as a better option. Of course for the mining company, that creates two siloed channels of engagement - social media and call centers.
A more effective way to approach the engagement of stakeholders and early detection of conflicts is bringing the conversation together and leveraging the ubiquity of mobile phones. In 2014, mobile cellular penetration rates reached 121% in the developed world, and 90% in the developing world. All seven billion smart and non-smart mobile phones around the world can perform the same functions of making a voice call and sending a text message from areas with coverage. Although often overlooked, the latter feature is advantageous in cost and scalability due to the relative ease of processing text with computer automation compared to voice.
With a world-class mining operation in Peru, Ulula is implementing a grievance mechanism accessible to stakeholders 24 hours a day, 7 days a week. The largely unmanned application automatically collects workers and community feedback and organizes it as anonymous cases that can be systematically addressed. To be effective, the system gradually learns language patterns to improve categorization, sentiment detection as well as trends. These analytics in stakeholder feedback and reports are the essential early warnings that could precede conflicts avoiding disruptions and losses.
In addition to unprecedented opportunity for business to directly engage all stakeholders with mobiles, Ulula combines this data source with other data to offer more holistic ESG performance and risk measurement. For example, social media analytics and survey data can be integrated with community grievance mechanisms for early detection of unresolved disputes or incidents that have the potential to escalate to crisis. To foster free and safe participation for more “honest data”, stakeholders have the opportunity to participate anonymously.
Mobile technologies have already been tried and endorsed by institutions like World Bank, UNDP, UNICEF, and OECD to mitigate crisis raging from environmental emergencies, to corruption and conflict mitigation. These best practices also belong in the new recommendations for Canadian Miners. In addition to its proven successes, mobile offers continuity and scale that uniquely matches the industry’s global footprint. Combined with other data sources, mobile could unlock challenges of early warning in ESG risk measurement and performance reporting.
Ulula presented at PDAC’s conference in Toronto on March 2nd, as part of the CSR Event Series. The presentation, titled: “Mitigating Operational Delays and Revenue Losses Using Mobile Phone Technology”
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