WBCSD-SNV Alliance: Creating inclusive business opportunities by linking local communities with big business

Investing in local enterprise development in South Africa: Anglo American

Anglo American plc, one of the world’s largest mining groups, recently unveiled a new enterprise development venture that will help to generate more jobs, support entrepreneurship and strengthen local economies in South Africa. This commitment is a pledge to the Business Call to Action – a global initiative that challenges companies to apply their core business expertise, technology and innovative spirit to tackle poverty and contributing to the achievement of the Millennium Development Goals, eight anti-poverty targets with a 2015 deadline.

Anglo American seeks to establish 12 enterprise development hubs in high unemployment areas in South Africa, within the ongoing Anglo Zimele initiative, Anglo American’s enterprise development and investment fund in South Africa, which has created numerous sustainable, commercially viable enterprises and empowered entrepreneurs to operate in the mainstream economy. The new venture is expected to create 25,000 new jobs in up to 1,500 new businesses across South Africa over the next seven years.

Supporting local economic growth in Ghana: Newmont

Building a thriving micro, small- and medium-sized enterprise sector is key to the business success and sustainability of Ghana’s Brong Ahafo region, where Newmont Mining Corporation has developed its first project in the country.

The Newmont Ghana Gold / International Finance Corporation (IFC) Ahafo Linkages Program was designed to increase the participation of local businesses in the project and bring development benefits to surrounding communities. Newmont, along with the IFC, applied the WBCSD Measuring Impact Framework to the Ahafo Mine as a way to understand the extent of the project’s benefits and establish a rigorous approach to measuring, monitoring and evaluating progress in achieving the project goals.

Read the full case study on the WBCSD case study gallery.

Enhancing the local economic and social benefits of the extractive industries

The quantity of investment in oil, gas and mining (OGM) projects in developing countries over the next twenty years is likely to be much greater than total international aid flows. If this investment is designed and managed to maximize sustainable economic opportunities for local communities, it can represent a major contribution to the achievement of the Millennium Development Goals in many countries. Involving local businesses and especially small and medium enterprises (SMEs) in the project supply chain is a crucial part of this opportunity because of the vital role these businesses play in promoting job creation and distributing the benefits of economic development more widely.

In light of this, Engineers Against Poverty (EAP) has produced an eight-page briefing note to guide OGM companies on how they can maximize the contribution of local enterprises to the supply chain of their projects in low income countries. The briefing note provides practical guidance to OGM supply chain managers and technical end users on maximizing the involvement of local enterprises in the project supply chain.

Managing the impact of a mining project – the case of Alcoa

A recent article published in the Brazilian magazine Época Negócios explains how Alcoa, the world’s leading aluminum producer, is implementing its most ambitious project ever, as it plans to transform a bauxite mine into an exemplary case of responsible exploration. The challenge lies in managing the impact of the project on the lives of the thousands of residents of Juruti, in the Brazilian state of Pará, a city that sits on top of a 700 million metric ton deposit of bauxite, the raw material used to make aluminum.

The article provides interesting insights into how Alcoa is managing relationships with the local community and government, and how it is tackling the challenges emerging from its large-scale presence in the region (infrastructure, healthcare, education, etc.). Franklin Feder, president of Alcoa in Latin America and CEO of the Brazilian subsidiary, argues that that it will be possible for the company to transform the Juruti project into a model of responsible exploration, capitalizing on the economic potential of the region and earning its social license to operate.

The Role of the Extractive Sector in Expanding Economic Opportunity

How do extractive companies currently participate in expanding economic opportunities in developing countries? A report (pdf, 52 pages) published by the Harvard University's Kennedy School of Government  provides an overview and critical assessment on this topic.

The report argues that expanding economic opportunity in the communities and countries where they operate is in extractive companies’ best interest. Indeed, extractive industries function most productively in stable economic and political environments with markets for both their inputs and products. Hence, expanding economic opportunity in host communities, countries and regions can provide continuity of supply and distribution outlets for goods and services enhance the social license to operate, and mitigate risk and potential conflict.