The Winter 2004 Issue of the Stanford Social Innovation Review tells the story of Placer Dome's development of "The Care Project" to facilitate the lay off of more than 13,000 employees in seven countries in a fair and responsible manner. A Canada-based global mining firm, Placer Dome purchased 50 percent of the South Deep Mine from Western Areas Limited in 1999. The mine required massive restructuring in order to make it profitable and to bring it in line with Placer Dome’s safety standards, resulting in nearly a third of the mine’s workforce being let go.
Innovation
Layoffs were a familiar feature of the South African mining industry in the 1990s, when more than 100,000 lost their jobs. Industry practice in South Africa at the time was to give laid-off employees two weeks of severance pay per year of service, plus access to various job training opportunities at the mine site. But Placer Dome felt this didn’t measure up to its corporate sustainability policy. The company embarked on The Care Project, an expensive program to train workers for new jobs or help them start their own small businesses
Few layed off mine workers in South Africa take advantage of the offer for training at the mine site after losing their jobs. It requires that they stay there, rather than return to their villages. Furthermore, training at the mine site does little to prepare workers for the economic reality of their remote, impoverished villages. Given that the Placer Dome ex-miners lived in communities scattered across five countries – South Africa, Lesotho, Mozambique, Swaziland, and Botswana – the retraining program was a mammoth undertaking. Jay Taylor, Placer Dome’s CEO at the time, recognized that the world was changing and resource-extraction businesses like his would find themselves under increasing pressure to deliver social value and environmental stewardship along with financial returns.
To aid in their Care Project, Placer Dome approached two organizations with common interests and the infrastructure to cover the vast region where the miners lived: The Employment Bureau of Africa (TEBA), a recruiting agency for the mining industry with offices throughout southern Africa, and the MDA, which had several training and development facilities in the region. Both agreed to help. The efforts of TEBA and MDA were directed by Von Wielligh, who also maintained quality control. The project team developed what it thought was a straightforward plan. About 25 laid-off miners would be armed with global positioning devices and dispatched to scour the bush country for their ex-colleagues’ homes. Once located, former workers would be registered for The Care Project and the GPS coordinates of their homes recorded. Then on subsequent visits, the team representatives would help the workers and their families decide whether they wanted to be trained for new jobs or tutored in setting up their own businesses. Workers could nominate wives or other family members to receive the training – the first time women ever had direct access to severance benefits. The plan sounded simple, but putting it into effect was anything but.
Von Wielligh appointed five regional managers, one in each country and met with them face-to-face every month to obtain report progress, set targets, share lessons learned, and develop overall strategy. The logistical nightmare of transporting outreach workers was solved with motorcycles and cell phones. As the team gradually located the examiners and informed them about the two different programs – the job retraining program and the small-business training program – that they could enroll in, they realized that the ex-miners were struggling to make an informed choice. They could become chicken farmers, bricklayers, welders, bakers, vegetable farmers, or furniture makers. They also could open convenience stores, garages, or solar panel installation shops. To showcase these alternatives and help them choose a career path, Care Project management along with TEBA and MDA came up with the idea of creating a career fair. Named "Open Days", these events became invaluable. Trainers and suppliers set up information booths, and the fairs quickly took on the feel of a celebration as old co-workers reunited. Despite the successful awareness raising of the career fair, many ex-miners were still hesitant: most ex-miners lacked all but the most rudimentary financial skills required to run it. MDA was hired and paid to develop and provide a financial life skills course. Classes included how to operate a calculator, assess micro-enterprise opportunities, and weigh the advantages and disadvantages of self-employment.
Slowly, the Care Project team’s perseverance began to pay off. Skepticism dissipated as some laid-off workers began getting new jobs, and others started setting up small businesses. In Lesotho, a young woman opened an electronics repair shop, and a school to teach others her skills. Several examiners in Mozambique decided to grow vegetables for the market in Maputo, the capital. After taking the financial skills course, another worker went back to his village, an hour away from the nearest retail outlet, and saw an opportunity. He opened a small general store in his house, making a living for himself and sparing local women and children a long walk to purchase supplies. He has since parlayed his shop into several other local businesses, and serves as an entrepreneurial role model for others.
Impact
The Care Project ended in December 2003 after virtually all the laid-off miners had been contacted. Outreach workers had made 3,251 home visits and registered 2,232 participants. Although this was less than the 70 percent participation rate initially sought, Placer Dome considered the project successful. Of those who registered, 56 percent were still making at least $100 per month in October 2003 – well above the subsistence-level wages common in the rural areas where they lived. The company projects that the average beneficiary will earn about $1,000 per year, comparing favorably to the per worker program cost of $1,667. Placer Dome had contributed $3.6 million in cash, as well as management time and corporate resources. The AIDS home-based care project has supported nearly 2,200 families and trained over 400 village care supporters in its first two years.
In 2002, the home based care project won the World Bank’s Development Innovation Award – the first time a private-sector social responsibility project had done so. The Care Project won the 2004 Nexen Award for Excellence in Corporate Social and Ethical Responsibility, given annually to the top Canadian corporate social and ethical project. The results of the Care Project have been a welcome surprise for the South African government: “The Care Project has changed the social face of the South African mining industry.” For Placer Dome, the Care Project produced a strong relationship with unions and the South African government, plus a global reputation as a leader in corporate social responsibility. “
Inspiration
“Our commitment to community development represents an added cost, but is an essential investment in our future, and should help us to achieve greater profitability,” Taylor said.
His intuition proved correct. In 2002, Phumzile Mlambo-Ngcuka, South Africa’s minister of minerals and energy, established a “social scorecard” mandating that mining companies produce social value for workers and the communities where they come from.
“….we have witnessed the Care Project making life-changing impacts, helping workers and their families to develop alternative incomes. Today [the government sees] the Care Project as an example that we encourage other mines to follow. The Care Project has changed the social face of the South African mining industry.”
Kgosietsile Mogaki, social plan director for the South African
Ministry of Minerals and Energy. [quoted in the Winter 2004 Issue of Stanford Social Innovation Review]
The World Inquiry editorial team edited this profile from the original submission of the interviewer or other source. The views expressed do not necessarily represent Case Western Reserve University, the Weatherhead School of Management or the Center for Business as an Agent of World Benefit. More >>
