Arc Exploration Says Managing Expectations Is The Key To Successful CSR

Friday, 5 December, 2014

Arc Exploration Says Managing Expectations Is The Key To Successful CSR

“CSR”, says Jeff Malaihollo, “is easier in Indonesia than it is in China”.

Jeff should know. In a former life he ran Chinese gold mining company that did well enough, but which eventually got swallowed up by a combination of Chinese corporate interests and the global financial crisis.

These days Jeff runs Arc Exploration, an Australian-listed gold and copper explorer with assets in Indonesia and Australia. He originally hails from Indonesia himself, so he knows the turf pretty well and the benefits that CSR can confer.

In China, he says, it was necessary to educate local partners about CSR, starting from scratch. That’s not the case in Indonesia, where the idea is familiar and the execution relatively straightforward.

Thus it is that without a specific planned-out programme, Arc dedicates around five per cent of its exploration budget to CSR, helping out with schools, roads, and other local needs.

“The biggest issue”, he says, “is actually managing expectations”. That’s because, as anyone in the mining business knows, exploration is a fickle business and while there may be funding available for work one year, similar funding may not be forthcoming the following year.

That means that for a company like Arc, which is a long way from having revenues, a heavy and long-term investment in CSR is not possible. Not for Jeff the planning of major building works like hospitals or bridges.

But that doesn’t mean the company can’t make a difference on the ground. As long as those expectations are managed, a little can go a long way. With that in mind, Arc has one full time employee based locally, keeping relationships sweet and attending to local needs. Aside from the financial assistance that Arc has provided for schools and roads, it’s also funded youth programmes and consulted extensively over land use.

That last point is one that’s crucial for any mining company hoping to establish an economic foothold over a resource. Soil sampling, trenching and drilling may not be quite as disruptive as building a mine, but having people tramp over land, digging and drilling apparently willy nilly can be quite disconcerting if you’re not kept in the loop.

Arc is as aware of this as anybody, as the following statement from the company’s most recent annual report highlights: “Arc Exploration has ensured that disturbance of land in sampling, trenching and drilling has been carried out in full cooperation with the local people and authorities and we are satisfied that there has been minimal impact to the environment.”

In addition to all that, and to make sure all the bases are covered, the company has also been helping with the maintenance and upkeep of mosques.

Whether that last will be repaid with any divine intervention on Arc’s part is doubtful, although it’s a truism in mining that only the Great Being in the Sky knows where all the good rocks are.

But allowing that the hard graft of exploration needs human agency, Arc is mindful that employing locals is always the best option.

Hence, at the Trengalek project in East Java the company has employed more than a hundred local villagers to help with exploration work, while 12 locals area actually counted as full time employees. Plenty of effort is also put into making sure staff get proper training. The idea is that as a result of working with Arc, indigenous Indonesians will learn additional exploration skills, computer skills, management skills, English language skills, and health and safety skills.

Jeff is mindful that to continue, all this good work will need some exploration success to underpin it. But actually, the two go hand in had – you can’t have one without the other.

And anyone interested in finding out more about what Arc Exploration is doing in Indonesia - both in terms of exploration and CSR – is invited to attend the 101st Minesite conference on the morning of Tuesday 9th December, where Jeff will be one of the main speakers