Petra Sustainability Report 2014

Friday, 29 November, 2013

Petra Diamonds has been one of the real corporate successes of the UK mining markets over the last 14 years. Now a proven diamonds producer operating in South Africa, Botswana and Tanzania, Petra produces an annual sustainability report encompassing their commitment to worker safety, supply chain management and anti corruption, community relations, and the environment.

The 2013 report was out yesterday, so took a look at it, with our ususal specific reference to community relations. First thing to say is the report is good, dealing with real numbers and facts (funds committed etc.); but it also takes the trouble to drill down into the specifics of community work.

So, the highlights first:

“US$0.9 million¹ spent on corporate social investment, lower than expected due to delays approving the new Local Economic Development (“LED”) projects in South Africa”

The “LED” work is also distinct to specific training and worker development programmes:

“-US$4.5 million¹ spent on training across the Group, in line with commitments

-Completion of Group Skills Audit Project to inform the development of employee training programmes

-Launch of the Group’s Local Supplier Development Programme

-Launch of several internal communications initiatives as part of focus on employee relations

- Williamson won Presidential CSR Award in Tanzania”

Looking specifically at local community and social engagement, Petra outlines its regional contributions in 2013:

Expenditure by country                  Spend (US$)

South Africa                                                   587,035

Tanzania (Williamson)                                 292,848

Botswana                                                       (0)

Group total spend (US$)                              879,883

Petra obviously links CSR development with project advancement (for example, with a mandatory minimum spend in South Africa) and reiterates that’s delays in permitting and licences in South Africa mean expansion of certain social programmes has gone on hold.

Putting aside mandatory legislative spends for community support, linking project and social benefits is of key importance for corporates.  Setting parameters for commitments manages expectations and ensures that the community and government don’t just see social benefit schemes as being automatic. was also interested to read about ISO 14001. What is it? Petra tells us:

“The ISO 14000 family of standards addresses various aspects of environmental management. It provides practical tools for companies and organisations looking to identify and control their environmental impact and constantly improve their environmental performance.”

So far so good so normal… sounds like another very important environmental standards spiel until we read about how Petra has engaged in developing a biogas plant in Tanzania. This is interesting: environmental efforts that have direct relevance to a community, providing a benefit rather than just preventing something dangerous being spilt on them, are a rarity. However, Petra’s taken an imaginative approach to community support that addresses one of the key issues to communities across Africa: Energy.

Here’s what they say:

“In FY 2013, Williamson saw the opportunity to address limited energy supplies at local communities to the mine by establishing a sustainable biogas energy project. Biogas is a gas produced by the breakdown of organic matter in the absence of oxygen and as such is a renewable energy source, which can be produced from regionally available raw materials and recycled waste.”

The company is also quite open about its Community grievance processes in South Africa and Tanzania, citing key feedback about specific topics:

“FY 2013 included:

- delays in the issuing of permits and licences;

- local municipal responsibilities around Cullinan;

- unemployment in the region and local recruitment issues;

- poverty alleviation in the communities around the mines;

- mine closure and legacy issues; and

- skills development programmes for employees.”

This is the real difference in giving credibility to CSR work: demonstrating that you are listening, by showing that you’re willing to share evidence (good and bad) as above, and not just producing corporate brochures saying you are.

Petra also goes to the trouble of listing specific community support projects, which we have replicated below. The Company ticks lots of the key boxes in showing it has a mature approach to working with its host countries and having a good level of citizenship concerning community issues. It makes an effort to show that benefits are derived through both employment and presence in a region (not all run by ex-pats in the senior jobs or according to the common attitude of “we give people jobs, what more do they want?”).

Water issues are addressed and thoughtful approaches to environmental policy are undertaken. The report looks like it’s built on actual surveying of wants and needs rather than cutting and pasting some ideas out of a Major’s report and throwing up a corrugated iron shack.

An interesting element to Petra in comparison to peers operating in South Africa is that they communicate their work as a benefit they want to be engaged in, rather than having a big pre-amble about being compliant to South African Law and meeting obligations under the mining act. Over to the community projects themselves:

"Projects currently receiving ongoing support from Petra include:

- a multi-stakeholder initiative to increase the literacy and numeracy levels in rural schools benefiting some 6,000 children; and

- sponsorship of a farming project in partnership with local authorities, the Department of Agriculture and other businesses to develop a sustainable vegetable farming operation in Boschkop near the Cullinan mine.

As already noted, Petra is currently entering into a new five-year SLP cycle and there are a number of new CSI/LED projects that are awaiting approval.

Projects – Tanzania

Funds are made available for community projects through three sub- programmes: community development, community initiatives and community support.

The projects supported by the mine in FY 2013 are:

- numerous upgrades to local school facilities and housing quarters for the teaching staff, and buildings for health facilities;

- technical support to the Tanzania Police (Shinyanga region) in improving its community policing; seed funding for various cultural heritage projects;

- technical support for the artisanal mining;

- continued contributions towards the Dar es Salaam University, Engineering Faculty graduate ceremonies;

- provision of infrastructure, logistics and manpower to run a mother and child health clinic as part of the Mwadui Reproductive Child Health project, a collaboration between the Mwadui Hospital and Tanzanian Government;

- actively supporting the Care and Treatment Clinic for HIV/AIDS;

- continued support for small businesses through the provision of free property within the Mwadui village; and

- a number of local road upgrades and agricultural improvement projects.

In addition to these projects, one of the major community initiatives undertaken at the Williamson mine is the provision of water to the Mwadui Township and neighbouring villages through the installation of controlled potable water access points.

Williamson also owns and operates the Mwadui primary school which provides free English primary school education to 460 learners. The school is the only primary school in the region with formalised computer training and a computer centre and is considered to be the top achiever at district level and one of the top schools at regional and national level.”