1. SOCIO-POLITICAL CHALLENGES FACING MINING COMPANIES IN SOUTH AFRICA Can effective corporate social responsibility mitigate against these challenges? 25 October 2010 A presentation by ERIC RATSHIKHOPHA

2. ACKNOWLEDGE AND ACCEPT … Mining does not take place in a vacuum … Mining and its operations have both negative and positive impact on the environment (physical and social) … To do business successfully we must understand the environment in which businesses operate … “Business cannot succeed in societies that fail...” Bjorn Stigson President, WBCSD … Effective public institutions and the delivery of social services and infrastructure is in the interest of business A presentation by ERIC RATSHIKHOPHA

3. SOCIO-POLITICAL ENVIRONMENT … Past characterised by divisions and inequality … Racial coincidence of political and economic power … Socio-economic challenges including education, diseases, unemployment and crime … Young democracy facing teething problems … Rectifying the past requires establishing and strengthening institutions to underpin democracy … Vibrant and articulate youth, labour and other civic organisations A presentation by ERIC RATSHIKHOPHA

4. MINING COMPANY CHALLENGES Challenges invariably result from or are linked to the socio-political environment A presentation by ERIC RATSHIKHOPHA

5. MINING COMPANY CHALLENGES … Skills shortages … Regulatory requirements: “environmental, labour, safety, socio-economic (mining charter)” … Expectations/demands from local communities …“social license to operate” … “ Social ills”: crime, diseases, corruption and bribery A presentation by ERIC RATSHIKHOPHA

6. MINING COMPANY CHALLENGES (cont.) … Political and civil dynamics and associated pressures: disruption of operations; “scary” debates and demands e.g. Nationalisation … Organised labour and business … Issues with infrastructure and energy … Efficiencies and responsiveness of government and public institutions A presentation by ERIC RATSHIKHOPHA

7. NOT ALL DOOM AND GLOOM A presentation by ERIC RATSHIKHOPHA Basic Education Health Crime Corruption Energy Assets Democratic system Powerful economy Infrastructure Innovative, non-racial middleclass Open society Competitive & responsible business sector Liabilities

8. CAN CSR MITIGATE AGAINST THESE CHALLENGES? … Without a doubt, yes! With the keyword being mitigate … CSR: define … A look at current initiatives reveals:  Scant, if any considerations of broader environmental challenges, plans and dynamics  Compliance -driven  Lack of alignment and collaboration  “Ad hoc” non-integrated or unaligned to core business A presentation by ERIC RATSHIKHOPHA

9. CSR MITIGATION CONSIDERATIONS “Insanity is doing the same thing over and over again and expecting different results” Albert Einstein A presentation by ERIC RATSHIKHOPHA

10. CSR MITIGATION CONSIDERATIONS The issue is not so much the “what”, but more the “how” and “why”. A presentation by ERIC RATSHIKHOPHA

11. CSR MITIGATION CONSIDERATIONS … Take the socio-political environment into account, especially conceptualisation of CSR initiatives … Approach and implement CSR as a business imperative and integrate it into business operations … Facilitate and support effective public and service institutions for sustainable social services delivery … Recognise the importance of regional collaboration for impact and sustainability of initiatives A presentation by ERIC RATSHIKHOPHA

12. CSR MITIGATION CONSIDERATIONS … Constructive engagement and co-operation with important stakeholders e.g. Government on issues of national importance i.e. governance … Join and support organised business organisations and utilise as a platform for collective voice … Capitalise on successful current “pilot” projects by replicating and bringing to scale:  Health (HIV-AIDS) –Xstrata Coal South Africa  Education- National Business Initiative (EQUIP), Edumap  Skills Development: Xstrata Alloys Steelpoort skills development centre. Africagrowth institute A presentation by ERIC RATSHIKHOPHA

13. IN CONCLUSION A presentation by ERIC RATSHIKHOPHA “We need to make a major breakthrough in the way that boards think if we want to save capitalism... …doing right because it is right, not because it pays, with principle, not profit, the point of departure.” Sir Geoffrey Chandler - Former Senior Executive Royal Dutch Shell