Why corporate social responsibility makes sense for communities, companies and investors

December 28, 2015 03:04 PM


A Cooperative Approach

Thyana Alvarez Claro, director of Responsabilidad Social at Red Eagle Mining Corp., which has a mine under construction at the Santa Rosa gold project near the city of Medellin in Colombia, said being a good neighbor is particularly important in that part of the world. "Mining has typically been small scale and brought negative impacts, including drug addiction and illegal activity," she said. "We are showing the community that a gold mine can bring positive impacts including education, cultural events, sports opportunities and sustainable jobs."

Red Eagle takes a cooperative approach to community involvement. "We work together with the community, government leaders, the local church and stakeholders. It is not paternal. They decide the priorities and education is one of the biggest ones. That is why we started an adult computer literacy program that has already worked with 375 people to give them the tools to be productive. Another 100 have already enrolled in the adult elementary and secondary program. This is important in the villages where many only have fifth grade educations."

Red Eagle Mining also recently participated in a program with the Lookout Ridge Foundation to donate 70 wheelchairs to local residents, including children like three-year-old Laura Arboleda, previously limited by lack of mobility. Streetwise Reports founder Gordon Holmes' Lookout Ridge Foundation, which has both a Canadian and a U.S. nonprofit, works with individuals, mining companies, other companies and The Wheelchair Foundation, which has donated more than one million wheelchairs in more than 100 countries. "A principle of Red Eagle since its foundation has been returning benefit to the communities where we work," said CEO Ian Slater during his speech at the presentation ceremony.

Laura Arboleda receives a wheelchair from Red Eagle CEO Ian Slater (left) and Gordon Holmes (right).

The company focuses on being part of the community by hiring locally as well. Of the 175 people employed at the site so far, 75% are from the local area, which is made up of about 1,000 families on the outskirts of a larger city of 45,000 people.

While calculating the return on investment of CSR can be difficult to pin down because often it requires guestimating things that didn't happen, including lawsuits and an expanded permitting process, Alvarez Claro was able to point to some real results. "The reception has been enthusiastic and that good work is part of the reason Red Eagle mining was able to get the licenses it has obtained," she said. "Of some 60 mining companies that had been exploring in Colombia in the last decade, fewer than seven are left and only Red Eagle has been permitted to start a mine."

Paying Forward

Doing the right thing requires a long-term mindset. Andrew Thomson, CEO of newly established Palamina Corp., made a visible statement about the need to stay committed to the Mexican community he used to operate in after he sold his last company, Soltoro Ltd. to Agnico Eagle Mines Ltd. When the deal closed, all parties elected to forego a celebratory dinner and contribute a collective $25,000 to the Lookout Ridge Foundation for a future distribution.

"Providing wheelchairs directly to people who need them most is a non-political statement that is quite profound in a world where the proliferation of automatic and semi-automatic weapons seems to dominate the headlines. Mobility is so significant for these people. It is a gesture that really makes a difference," he said.

"Agnico Eagle, WeirFoulds LLP, Maxit Capital LP and Palamina Corp. all responded to the call," Thomson reported. "Agnico Eagle is moving forward rapidly in the community and were quick to react positively. While not an earth-shattering amount, it is a positive gesture in a marketplace where investors are looking for leadership with regards to responsible corporate spending."

Thomson hopes more companies get the message, particularly those involved in Central America where a small investment can have an enormous impact. "Trust has to be built over time and this is a small gesture to show that celebrating the local community needs is an appropriate response to consummating a deal. If all companies did this, the road to mine development would be made easier."

As Thomson develops Palamina's other projects in Mexico, he plans to maintain his relationship with the community that provided him success. "Demonstrating continuity by rewarding the community is especially important to the new operators as the project moves through permitting toward production. Doing good work and reaching out to those less fortunate in the community can only makes things go more smoothly."

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