CommDev has developed this section in partnership with Business for Social Responsibility (BSR).
Executive Summary | What is Community Development | How Do I Do It?
The Community Development Strategy Section examines the importance of a strategic approach to community development that aligns community needs and company resources to produce tangible, sustainable benefits. First of all, five core principles are presented as a foundation for effective strategy development: 1) Be Strategic; 2) Adopt a Community-Driven Focus; 3) Build Capacity; 4) Work in Partnership; and 5) Design for Sustainability.
Next, a six-step process is suggested to guide a company through assessment, planning and implementation of high-impact community development programs. These steps include: 1) Needs and Assets Assessment; 2) Stakeholder Analysis; 3) Defining the Company’s Unique Contribution; 4) Designing the Program; 5) Planning for Partnering; 6) Budget and Resource Mobilization.
WHAT IS A COMMUNITY DEVELOPMENT STRATEGY & WHY IS IT IMPORTANT?
A community development strategy is a long-term plan that identifies company strengths and leverages them to make a unique contribution to human development in local communities hosting mining, oil and gas (OMG) operations. In other words, it is the company’s plan for doing best what only it can do among all of the development actors involved.
A strategy is important for properly aligning the company’s development program with community needs, mustering appropriate resources to respond to those needs, identifying key opportunities for partnering and focusing company efforts to assure tangible and sustainable impact. Companies who support many short-term, unarticulated development initiatives – instead of focusing on one or two strategic areas – run the risk of having many small successes but no single area where they can point to fundamental, enduring improvement in the local community’s quality of life. On the other hand, a company that has a long-term, coherent development strategy and works in partnership with the local community will have examples of tangible, lasting improvement – and a better answer to the question that communities typically ask themselves, “Are we really better off than before the extractive operation?”
A company cannot be everything to everyone – nor should it try. Taking a strategic approach to community development means making choices, sometimes difficult ones, but the reward is a clear roadmap of where a development program is going and how to decide what projects to support. It provides a company with a clear set of criteria, developed together with the community, for confidently saying “yes” to new projects or, equally confidently, saying “no”. It assures that the company is supporting projects that respond to real community needs and does so in a way that fully leverages both the company’s and the community’s ability to make a unique contribution to development.
Companies can also consider collaborating with other mining and non-mining companies in their areas of influence to promote local mining clusters. A mining cluster is a group of companies in a geographic area which are linked together through their participation in a common mining value chain. For example, a cluster may include one or more mining companies, and all of their local suppliers and subcontractors (such as caterers, equipment providers, materials suppliers, technical consultants, machinists, auto mechanics, etc.) If nourished with capacity building and a strategy of diversification, a mining cluster can become a sustainable vehicle for community development even after mine closure.
No matter the project location, experience shows that successful company-sponsored community development programs share a common set of core principles:
- Be Strategic: Develop a strategy of what to do, and what not to, and then stick to it.
- Adopt a Community-Driven Focus: Look to the community to identify their own needs, prioritize responses, and truly lead the development process.
- Build Capacity: Invest not only in community “hardware” (physical and economic infrastructure) but even more importantly in human “software” (building capacity so that local leaders can replicate successes on their own in the future).
- Work in Partnership: Partner with local community and government in the design and implementation of development programs, while maintaining active company involvement throughout the process.
- Design for Sustainability: Think about the challenge of social, economic and ecological sustainability at every step of project design and implementation.
Below we describe a broad, step-by-step approach to designing and implementing high-impact community development programs based on the core principles outlined above.
- Needs and Assets Assessment: Community development begins with understanding community needs and assets. A socioeconomic baseline study provides information on the community’s historical and current situation. Baseline data typically includes demographics, health and wellness, geography, physical and economic infrastructure, environment and ecology, social structures and norms, government, politics and institutions. Participatory Rural Appraisal (PRA) is a useful tool for directly involving the community in identifying needs, prioritizing them, and most importantly leveraging community assets to respond to those needs. A SWOT Analysis is another useful tool, applicable to both company and community, for identifying strengths, weaknesses, opportunities and threats.
- Stakeholder Analysis: Community participation is easier said than done. Identifying valid community representatives and understanding their real issues of concern and aspirations around an OMG operation is always a challenge, especially for a company new to the community. Stakeholder Mapping is a powerful tool for systematically identifying stakeholders, depicting their inter-relationships and inventorying their concerns, hopes and dreams around the operation. The result is a “short list” of the most important stakeholders and their issues to guide the rest of the steps.
- Defining the Company’s Unique Contribution: The result of Steps 1-2 will be a long list of community needs, assets and actors. No company could possibly respond to all of them. Rather, the company should look inside itself, identify its own key competencies and resources, and strategically match these with particular areas of community need. The result is a short list of program areas in which the company can make a “unique contribution” – i.e., what the company can do better than any other actor at the table. Focusing on these areas, the company can feel assured that it is maximizing impact from scarce resources.
- Program Design: The heart of a development program are the program areas, drawn from a broad range of human development possibilities: Basic health, HIV/AIDS, water and sanitation, education, agriculture, livelihoods, microcredit, small and medium-size enterprises, etc. Capacity building and partnership should be key cross-cutting themes of any program design. Other considerations may be more or less important depending on local context, such as indigenous peoples, gender, youth, etc. The logic model (See Measurement and Evaluation Section) is a critical tool for clearly modeling the logic underlying the planned program. It is also often a requirement for funding from international development agencies. The program design should also include a communication strategy for disseminating program successes, obstacles and learnings to the local community (in a culturally appropriate manner) and include their feedback to improve ongoing implementation and build community support.
- Management and Partnering Plan: A strategy is only as good as its implementation (Steps 5-6). An internal management plan clearly identifies roles and responsibilities for implementing the program, policies and procedures for making decisions and, most importantly, how the community development program will be integrated into the rest of the company. An external partnering plan clarifies similar issues in the company’s relationship with its external partners. It should address three areas that typically cause friction with partners over time: External communication (i.e., mention of partnership in public communications), shared expectations (i.e., very explicit expectations of what is possible and what is not in the partnership) and an exit strategy (i.e., how the partners can gracefully terminate the relationship when expectations are no longer met, or how the partnership simply ends at the close of the project).
- Budget and Resource Mobilization: Community development does not happen in the year-to-year timeframe of most company budgeting cycles. A multi-year budget commitment (for example, five years) assures that resources will be available for long-term program continuity. Some mining, oil and gas companies have found it useful to make public commitments of 0.5-1.5% of their pre-tax profits to their community development programs. However, companies do not have to do it all alone. They can use their investments to raise additional funds from other partners – such as businesses, local or national government, private foundations, international development agencies or multilateral organizations.
Related Items
Mining, Minerals and Sustainable Development (MMSD)
Alcoa Invests Near Planned Mines
[Access to full article requires paid subscription] JURUTI, Brazil -- The global commodities boom has spurred Alcoa Inc. to spend more than $35 million to bring a hospital, water system and technical skills to this remote jungle town.
The aim is to keep the peace while developing a mine that it hopes will supply 10% of the world's bauxite, a major ingredient for making aluminum.
Humanitarian efforts stemming from the New York aluminum company's Juruti investment marks a shift in the balance of power between Western mineral companies and residents of resource-rich countries. Growing demand from nations like China has sent Western companies to more remote and ...
UC RUSAL launches large-scale social investment programme in Nigeria
Ikot Abasi, Nigeria September 18, 2007 – UC RUSAL, the world’s largest producer of aluminium and alumina, launched an extensive social investment programme designed to support development of the local communities of UC RUSAL ALSCON, the aluminium smelter in Ikot Abasi, Akwa Ibom State which was acquired by UC RUSAL in February 2007.
Dynamic Mineral Resources Management: Anosy Case Study
The proposed World Bank’s Dynamic Mineral Resources Management system approach provides for holistic integration of mineral potential and infrastructure development, and the corresponding impacts of the two on the systems around them.Guide to Successful, Sustainable Social Investment for the Oil & Gas Industry
Social investment (SI) programmes are defined as the voluntary contributions companies make to the communities and broader societies where they operate, with the objective of benefiting external stakeholders, typically through the transfer of skills or resources. This guidance document aims to address the question of how to create successful and sustainable community investments and how to measure their success.
Managing Risk and Maintaining License to Operate: Participatory Planning and Monitoring in the Extractive Industries
This study explores how communities and companies can engage in co-planning and monitoring to ensure sustainable local development benefits from the extraction of resources. Within the context of a spectrum of participation a variety of tools and mechanisms are presented in the paper. Some of these tools have been used primarily in the public sector, however companies stand to benefit from the tools in forms that are adapted to context, as they are potential vehicles to increase transparency, and thus accountability of companies, communities and governments.
Corporate Citizenship and Sustainable Community Development: Fostering Multi-Sector Collaboration in Magadi Division in Kenya
Socio-Economic Assessment Toolbox (SEAT)
Improving the management of the social and economic impacts of significant mining and industrial operations has become an increasingly important public policy issue in recent years. It is a critical element in the sustainable development agenda. This manual provides a process designed to assist Extractive Industry operations to identify and manage their social and economic impacts (both positive and negative). It also provides guidance on how to improve overall social performance where this is necessary.
Community Development Toolkit
The Community Development Toolkit was published in November 2005, jointly by ICMM, the World Bank and ESMAP. It was developed to support government, industry, and community efforts to realize more sustainable community development around mining and mineral processing operations.
The Toolkit contains two main parts:
- 17 Tools which cover the assessment, planning, management, and evaluation phases of community development as well as stakeholder relationships.
- A Background volume, which contains the background and context to the project as well as an examination of the mineral policies and mining laws necessary for mineral activity to contribute to sustainable development.
Community Development Framework Study for the Mining Sector in the Republic of Guinea
Harnessing the opportunities that the mining sector can bring to community development is not an easy task, and not one that can be completed quickly. Within a limited time frame the activities of seven mining operations and two projects at the pre-operational phase were reviewed and lessons drawn from these experiences as well as from other community development and poverty reduction programmes in Guinea. Examples of good practice approaches to community development in the extractive industry in other countries have also been considered. This report and the framework presented are intended as a first step in establishing a new approach to community development and are dependent on the participation and commitment of all players.
Community Engagement and Development Handbook
This handbook addresses some of the key issues around these processes in the minerals sector, offering insights, approaches and practical discussion about the challenges that companies may encounter as they engage with local communities and seek to contribute to their long-term development. The handbook is supported by how these challenges have been addressed in particular contexts.Local revenue management & social accountability around extractive industry projects in Latin America
In response to a specific request of an IFC client in the mining sector, the Enhancing Local Benefits program from the LAC Office for Advisory Services (PEP) initiated an advisory service project on revenue management and social accountability at the sub-national level in 2006.
Sharing Experience: Monitoring and Evaluation for Community Development Projects tied to Extractive Industries Workshop
Diverse stakeholders -- companies, communities and governments -- share a common goal of measuring and reporting the impact of extractive industry projects on local community development. While various groups are actively involved in monitoring and evaluating oil, gas and mining projects and their related community development investments, there seems to be no clear consensus on how to go about this complex process. This event will provide an opportunity to explore innovative ideas as well as practical assessment approaches. Participants are invited to bring experiences and tools to share. Participation in teams comprised of corporate, civil society and/or government counterparts is highly recommended. While the focus is on extractive industries, there is ample scope for cross-fertilization with other sectoral projects/programs.
