Integrated Annual Report 2014

Social and relationship capital

Reported G4 indicators:
  • G4-4
  • G4-16
  • G4-SO1
  • G4-SO2

Community development

We restructured our Sustainable Development units to form separate Community Engagement and Development units, governed by Corporate Affairs. The Community Engagement unit was established to focus specifically on community development and stakeholder engagement.

Prior to these changes, community engagement and development, which includes corporate social investment, was undertaken by each operation while local economic development projects were also partially managed and overseen by the Sustainable Development unit, based at our corporate office.

The primary focus of our Community Engagement and Development unit is on our communities, which are directly impacted by our mining operations. We also endeavour to collaborate and partner with other mining companies and municipalities to deliver projects in labour-sending areas. We allocate resources to eligible communities in terms of their proximity to mining operations and the degree of mining impacts. To this end, our budget is apportioned in accordance with mining impacts as follows:

  • primary or mine host communities: 80% of the annual community development budget. Primary or mine host communities comprise all the municipalities within Sibanye’s footprint, as well as areas adjacent to the operations impacted directly by mining activities (such as Khutsong in Merafong, Bekkersdal near Westonaria, Theunissen in Masilonyana and Mohlakeng in Randfontein);
  • secondary or major labour-sending communities: 20% of the annual community development budget. These are communities within South Africa from which a significant number of employees originate (such as the Eastern Cape and KwaZulu-Natal); and
  • tertiary or Southern African Development Community (SADC) labour-sending communities: considered on a case-by-case basis within the prescribed budget if deemed strategically appropriate (such as Mozambique and Lesotho): Sibanye supports projects that address community needs and that have been identified and approved through a consultative process involving key stakeholders such as the Department of Mineral Resources, local and district municipalities, and the Sibanye Corporate Affairs team.

We distinguish local economic development and corporate social investment projects in terms of social and labour plan reporting. The social and labour plan reports only consider local economic development projects while the Mining Charter is more comprehensive, covering both local economic development and corporate social investment project requirements. Local economic development projects are socio-economic interventions that harness local resources for the purpose of broadening the economic base of the host and labour-sending areas. These are high-value community projects such as infrastructure development (for example, schools and clinics) as well as projects aimed at diversifying the economy of the areas in which we operate in order to create sustainable livelihoods that will endure long after the mines have reached their economic life. We therefore focus on high-impact local economic development projects required by the Minerals and Petroleum Resources Development Act as a priority before we address corporate social investment projects that attend to broad and generally short-term community needs. Corporate social investment needs are expressed mainly in the form of requests for community development funding and donations.

In order to contribute meaningfully in terms of size and impact to mine communities, we leverage benefits derived from partnering with our peers in the mining industry and other sectors, and thus address the broader challenges faced by communities. These benefits include, among others, consolidating the limited resources from various partners and channelling these resources towards a common socio-economic development vision for the community. Despite having to compete on other fronts, mining companies face similar challenges. These challenges include safety, health, preferential procurement, and social and community issues. Addressing these challenges effectively requires a collaborative approach to ensure greater optimisation of resources, economies of scale and sustained impact. As a result of our partnering and joint funding, the following projects will have far reaching impacts:

  • infrastructure development at Simunye Secondary School in Bekkersdal and the Westonaria Further Education and Training (FET) College with Gold Fields’ South Deep mine; and
  • a waste management and recycling project in Merafong with AngloGold Ashanti and Harmony.

A review of the implementation and impact of Sibanye’s local economic development projects in 2014 indicated that, while our projects were aligned with the local municipalities’ integrated development plans (IDPs) and had been approved by the Department of Mineral Resources, they did not necessarily have the desired impacts on mining communities. The reasons for this are complex and inter-related, including the sheer magnitude of the challenges faced by communities, which often neutralises the impact of projects, or hampers their set-up. The responsibility to solve the challenges facing the communities close to Sibanye’s operations cannot reside solely with the Group, we are aware that failing to make a meaningful and visible impact could threaten our sustainability.

We have begun to interact directly with the communities’ needs and the Group’s strategic imperatives – for example, establishing critical infrastructure, such as healthcare clinics that assist with efforts to eradicate diseases such as tuberculosis (TB) and community programmes initiated by the Department of Health.

The focus of our community development programme is to address the priorities of the communities in order to minimise risk for Sibanye. Aligning these programmes with the development priorities of local municipalities can be mutually beneficial as illustrated below.

Our main stakeholders also include representatives of local government authorities, communities and government departments in our areas of operation. These stakeholders may have different priorities and expectations while we have limited resources. Our approach is thus to find common ground and to identify interventions that meet the requirements of all stakeholders to some degree but, more importantly, are recognised and approved by all parties.

Community development projects are funded through a local economic development fund, which is managed and operated by the Corporate Affairs department. Each mining operation contributes R3/oz of gold produced and 0.5% of net profit after tax (NPAT). In exceptional circumstances (where the requests for corporate social investment funding exceed R50,000), an application is submitted to the executive Sustaining Social Licence to Operate Committee for approval as per the community development and corporate social investment policy.