Hatch

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Hatchs Approach to CSR and Lessons Learned
Presented by Dr Dila Ersenkal
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Introduction

• Outline
• Corporate Social Responsibility (CSR)
• Global Compact (GC)
• Hatchs Approach to CSR
• Hatch Case Study Update on Transnet
• Lessons Learned Recommendations

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Challenges in Our World

• Extremes of wealth (few) and poverty (many)
• There should exist among the citizens
• neither extreme poverty nor again excessive
• wealth, for both are productive of great evil-
• Plato 2500 yrs ago
• Serious ecological degradation

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How to Overcome the Challenges?

• Incorporate points of views of different
  stakeholders,
• Broaden the objectives of the companies to go
  beyond the economic.

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What is Corporate Social Responsibility (CSR)?
"A concept whereby companies integrate social and
environmental concerns in their business
operations and in their interaction with their
stakeholders on a voluntary basis.
European Commission. 2001. Green Paper Promoting
a European framework for corporate social
responsibility
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What is Corporate Social Responsibility (CSR)?

• We define CSR as business' commitment to
  contribute to sustainable economic development,
  working with employees, their families, the local
  community, and society at large to improve their
  quality of life.

World Business Council for Sustainable
Development
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What is Corporate Social Responsibility (CSR)?

• The business contribution to sustainable
  development which has been defined as
  development that meets the needs of the present
  without compromising the ability of future
  generations to meet their own needs, and is
  generally understood as focussing on how to
  achieve the integration of economics,
  environmental, and social imperatives.

Industry Canada
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Why CSR?

• Moral obligation - to do the right thing to
  respect ethical values as well as people and the
  environment
• Sustainability meeting the needs of the
  present without compromising the ability of
  future generations to meet their own needs.
• License to operate the permission from
  government and people to carry on business
• Reputation the enhancement of corporate image
  and brand value
• Michael Porter

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Business in Society

• Ever-widening range of environmental, social and
  governance issues
• Adopting corporate citizenship practices to
  ensure sustainability
• Open and accurate communication on progress
• Partnership and collaboration of stakeholders,
  society and labour
• The role of investors and the finance community
• Alignment with international standards

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Engagement in CSR

• Reputation enhancement opportunity
• Market expansion opportunity
• It helps addressing environmental
  standards/concerns
• Senior Management requires it
• Allows for recruitment/retention of the best and
  brightest employees

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Common Pitfalls

• Selecting an inappropriate CSR activity
• Effective launch, ineffective implementation
• Spreading resources too thin
• Weak monitoring mechanism
• Projected or perceived as a green wash or
  white wash
• Often mistaken for a Public Relations exercise or
  philanthropy

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Responsible Corporate Behaviour

• Voluntarily going beyond legal, regulatory, and
  conventional requirements,
• Promoting and fostering interaction with its
  stakeholders characterized by respect,
  transparency, openness and dialogue that is to
  say sound governance
• Integrating social, environmental and economic
  aspects into the goals of the organization.

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Potential Benefits

• Stronger financial performance and profitability
  (e.g. through eco-efficiency higher
  productivity, reduction in costs and increase in
  profitability)
• Improved accountability to and assessments from
  the investment community
• Positive engagement with government
• Decreased vulnerability through stronger
  relationships with communities
• Improved reputation and branding positive public
  image
• Enhanced employee commitment retaining staff,
  enhancing employee morale

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Triple Bottom Line

• Environmental Compatibility between the
  activities of companies and the sustainability of
  ecosystems
• Social Social consequences of the activities of
  companies for all the communities concerned
• Economic Conventional financial performance, but
  also the ability to contribute to the economic
  development of the corporate operating area and
  stakeholders

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Commitment to CSR

• Top-level involvement (CEO, Board of Directors)
• Workplace initiatives (codes of conduct,
  corporate policies, programs, etc.)
• Social/Environmental auditing, certification and
  labeling
• Management frameworks i.e. AA 1000, SA 8000, ISO
  14001
• Environmentally/Socially responsible investments
• Intergovernmental initiatives
• Signatories to voluntary standards i.e. UN
  Global Compact
• Reporting and Communication on Progress - i.e.
  Global Reporting Initiative (GRI), Sustainability
  Reporting

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What is Global Compact (GC)?

• The UN Global Compact's ten principles in the
  areas of human rights, labor, the environment and
  anti-corruption enjoy universal consensus and are
  derived from
• The Universal Declaration of Human Rights
• The International Labor Organization's
  Declaration on Fundamental Principles and Rights
  at Work
• The Rio Declaration on Environment and
  Development
• The United Nations Convention Against Corruption

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UN Global Compact - HR

• Principle1 Businesses should support and respect
  the protection of internationally proclaimed
  human rights and
• Principle 2 make sure that they are not
  complicit in human rights abuses. 

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UN Global Compact - Labor

• Principle 3 Businesses should uphold the freedom
  of association and the effective recognition of
  the right to collective bargaining
• Principle 4 the elimination of all forms of
  forced and compulsory labor
• Principle 5 the effective abolition of child
  labor and
• Principle 6 the elimination of discrimination in
  respect of employment and occupation. 

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UN Global Compact - Environment

• Principle 7 Businesses should support a
  precautionary approach to environmental
  challenges
• Principle 8 undertake initiatives to promote
  greater environmental responsibility and
• Principle 9 encourage the development and
  diffusion of environmentally friendly
  technologies.

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UN Global Compact Anti-Corruption

• Principle 10 Businesses should work against
  corruption in all its forms, including extortion
  and bribery. 

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Benefits of Participation in the GC

• Adopting an established and globally recognized
  policy framework
• A platform to share and exchange best and
  emerging practices
• The opportunity to advance sustainability
  solutions in partnership with a range of
  stakeholders,
• The opportunity to link business units and
  subsidiaries across the value chain with Global
  Compact Local Networks around the world 
• Access to the UN's extensive knowledge of and
  experience with sustainability and development
  issues.
• Utilizing Global Compact management tools and
  resources, and the opportunity to engage in
  specialized workstreams in the environmental,
  social and governance realms.

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Hatchs Approach to CSR

• Examples of Hatch Initiatives
• Environmental Services Group (ESG)
• Project Management Framework
• Compliance with ISO 14001 Standard
• Sustainability Reporting

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Structured on basic PLP Framework- Philosophy
behind management systems- Integration of
environmental, sustainability, and community
issues in projects
ESG Project Management Framework
Front End Loading Phases
FEL-4 Project Implementation
Start-up Operations
Business Planning
FEL - 1
FEL - 2
FEL - 3
Feasibility Study Develop Project Definition
Pre-Feasibility Study Select Most Viable Option
Conceptual/ Study Define Project Options
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ESG Project Management Framework

• Sustainability Strategy Development
• Risks and Opportunities Management
• Legal Compliance
• Environmental and Social Design Criteria
• Environmental Management
• Social Impact Management
• Stakeholder Engagement
• Local Employment
• Relocation
• Workforce Training
• etc.

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Compliance with ISO 14001

• Corporate Level Environmental Management Systems
• Projects Level Environmental Management Systems

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Sustainability Reporting

• Hatch Sustainable Development Report 2010

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Case Study Update on Transnet Project

• HMG Joint Venture (comprising Hatch, Hatch, Mott
  MacDonald and Goba)
• a 5 year contract to manage the major
  infrastructure development programme (Transnets
  Expansion Programme)
• National Infrastructure Plan
• Rail expansion
• Port expansion
• 27 projects with a combined capital value of R80
  billion.

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National Infrastructure Plan

• Development of sustainable development criteria
• High level screening studies
• Layout options for future developments
• Determination of the potential change in the
  economic value of ecosystems goods and services
• Identification of new major rail corridors

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Rail Routing Options

• Screening and Routing Studies
• Identification and planning of environmental
  permitting requirements
• Co-ordination of environmental impact assessments

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Port Developments

• Environmental studies to plan the dredging
  activities
• Identification of offshore disposal sites
• Integration of Environmental Impact Assessments
  (EIA) with project design

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Oreline Port Saldanha Bay
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Saldanha Bay Status Quo

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Saldanha Bay Future Layout
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Saldanha Bay Long Term Potential
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Background

• The oreline is a the export corridor (863 km of
  rail line) connecting the iron ore mines in the
  Northern Cape of South Africa with the Port of
  Saldanha in the Western Cape
• Saldanha Bay is a natural deep water bay
  constructed in 1976 and the towns in its
  immediate vicinity has grown alongside its
  development
• The closer proximity of residential development
  and the property boom in coastal towns in South
  Africa led to more conflict between communities
  and the port as a result of dust
• Some houses in the immediate vicinity has been
  stained with a red to pink discolouration due to
  iron ore dust fallout
• Since 2000, the capacity of the exports have
  grown from 38 Million tons per annum and new
  mines are establishing with a view of utilising
  the link
• Future projections are to increase export to 100
  million tons per annum (MTPA)
• HMG were involved in conceptual studies for
  future expansions as well as execution of current
  expansion up to 60 Mtpa through various phases

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Phase 1A

• Installation of dust mitigation measures to
  reduce fallout dust and particulate matter in the
  surrounding environment
• Management of long term air quality monitoring in
  surrounding environment in order to determine
  standards for iron ore dust fallout and to
  monitor the ports performance against increase
  in export volumes
• Estimating and planning of compensation for
  surrounding land owners affected by iron ore dust
  staining

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Phase 1B

• Expansion of port facilities to handle 47 Mtpa
  (from 38 Mtpa) of iron ore exports
• Reclamation of land and installation of
  infrastructure (1 new stockyard, stacker /
  reclaimers, conveyors, port buildings, etc.)
• Engaging with local public in Environmental
  Monitoring Committee meetings providing feedback
  on Environmental and Social process including
  construction feedback and progress of assessments
• Dredging of 7000 m3 for optimising ship loading
  and ship position
• Drafting of monitoring protocols and supervision
  of construction and supervision of monitoring
  during dredging

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Phase 1C

• Refurbishment of existing infrastructure to
  reduce dust emissions (installation of cleaning
  slabs, condition monitoring, and chute
  improvement to reduce spillage.)
• Improvement of operations to increase throughput
  from 47 60 Million tons per annum through
  better ship berthing and use of conveyors,
  stackers/reclaimers and reducing equipment down
  time
• Management of Environmental Assessment process,
  consultants and applications for licences and
  permits

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Phase 2

• Management of consultants and EIA process for
  large EIA (US 4 m) consisting of 23 specialist
  studies
• The EIA studies investigated the impact of the
  aspects of the development proposal

• Reclamation of gt20 ha of sea
• Construction of new tipplers
• Dredging of large volumes of seabed to enable
  berth positioning
• Construction of new stockyards and associated
  infrastructure
• Relocation of port buildings

Reclamation
Dredging for berths 3 4, SL 3 4
Reclamation, Stockyards, Stacker-Reclaimers 5, 6
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Tipplers 3 4
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Ngqura Status Quo
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Ngqura Long Term
Potential
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Public Consultation

• Public consultation as part of the EIA processes
• Engagement of public through
• - Transnets normal communication
• channels
• - Environmental Monitoring Committees

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Developing a Permitting Strategy

• Integrate EIA and permitting processes with the
  life cycle of the project
• Cross pollination of information and ideas
  between the engineers and environmental/social
  team

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Transnet CSR

• Directed by the Transnet Foundation
• Focus on
• Rural development poverty relief in regions
  within the Companys areas of operations
• Alignment with national Government initiatives

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Transnet CSR

• Scope
• Health

• Examples
• Miracle train
• reaches 45 000 patients each year
• Supports rural health care facilities
• Optometry
• Psychology
• Dentistry
• Health care
• Medicines
• United Nations Public Service Award for improving
  service delivery

Transnet CSR
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Transnet CSR

• Scope
• Education
• Sports
• Containerised assistance

• Examples
• Sharp Minds! Get Ahead in Life Programme
• - Maths, Science English
• Aims to use sport as an intervention agent to
  address social problems at schools
• Facilities constructed from shipping containers.
• - Police office
• - Social service centre

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CSR Drivers in Developing Countries

• Internal
• Cultural tradition
• Socioeconomic priorities
• Governance gaps
• Market access
• etc.

• External
• International standardization
• Investment incentives
• Stakeholder activism
• Supply chain
• etc.

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CSR Drivers in Africa

• Cultural tradition
• Ubuntu values-based traditional philosophy of
  African humanism
• Political reform
• Changes towards democracy
• Redressing past injustices
• Improved corporate governance
• Black economic empowerment

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Lessons Learned

• Environment, sustainability and community issues
  are an integral part of the project management.
• Educate the client (upfront through out the
  project) about the process and possible pitfalls
  and risks.
• Public Participation - illiterate, no formal
  education, must inform them in a way that they
  can participate meaningfully (language, form of
  communication, training).
• Integrate permitting processes into the project
  schedule.
• Ensure technical information required from
  engineers for environmental and social
  specialists is identified early and scheduled.
• Too much pressure on the authorities can backfire
  (if not on current project, then the next one)
• Manage scope changes closely, both with the
  client and for its impact on the environmental
  and social studies along with the project
  schedule and cost.

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Recommendations for Business Corporations

• Recognize social, ethical and environmental
  impacts and have relevant targets
• Systematic dialogue processes
• Clear accountability for CSR polices and
  performance
• Incentives to achieve social and environmental
  goals
• Reporting on the companys social and
  environmental performance
• Internal and external auditing processes that
  build the credibility and effectiveness of CSR
  processes and reporting

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• Thank you