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CSR: De Beers gets praise were ALROSA faced a backlash

09 april 2012

The idea of Corporate Social Responsibility (CSR) encourages companies to have a positive impact - through their activities - on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.

Mining firms do often concentrate on environmental issues given the huge impact they cause on flora and fauna.

De Beers Consolidated Mines recently showed the other side of CSR that mining companies are spearheading when it announced the integration plan for Kleinzee, a company town in South Africa, to make it a part of the local municipality.

This was in fact not the first time that De Beers had made such a move as a similar proclamation was made for the town of Koingnaas last August.

Both towns were established and managed by De Beers to cater to the company’s employees working at Namaqualand mines.

Namaqualand mines would be owned by Trans Hex, which was still finalising “certain aspects” of the proposed takeover.

The diamond junior had already received approval from the Competition Commission and the boards of the respective companies.

Koingnaas was in the process of being integrated as part of the Kamiesberg municipality and Kleinzee would join the Nama Khoi Local Municipality.   

De Beers had invested R90 million ($12 million) in the refurbishment of municipal infrastructure to ensure that the towns were in a good condition when handed over to the respective municipalities.

“Throughout the engagement with De Beers, as the Nama Khoi Local Municipality, our objective was to ensure that what has been agreed is in the best interest of the local community,'' said Nama Khoi Local Municipality manager Aubrey Baartman at the Kleinzee signing ceremony.

The proclamation would also ensure that locals have necessary jobs and that more businesses can be established in the area.

De Beers would also donate land for agriculture and housing expansion to the Nama Khoi Municipality and valued the gesture at R20 million ($2.6 million).

“I must also commend De Beers for their willingness to listen and accommodate our many requests, this being an indication of them having the best interest of our people at heart,” Baartman said.

The Namaqualand mines' general manager, Christie Pisane, said the proclamation of Kleinzee would enable for the first time, current and former De Beers’ employees, and the general public, to purchase and own houses in the two towns.

“Following the proclamation of the two towns, De Beers will now focus all its efforts in ensuring that the mining rights are transferred to the Trans Hex led consortium, Emerald Panther Investments (EPI), and that sustainability projects are implemented successfully,” Pisane said.

“We are in the process of implementing initiatives such as the Abalone project, the Wind Farm and the De Beers Zimele Enterprise development HUB to benefit local communities through ownership, jobs creation and skills transfer, for many years to come.”

De Beers would however continue to manage and maintain the two towns until the end of this year after which contingency funds would be made available to the municipalities to ensure that they are not financially burdened if there is any maintenance work required on the towns’ infrastructure.

Although De Beers received a pat on the back following the proclamation of the towns, it was not the same case with ALROSA of Russia.

It developed a policy for development and reforming of the housing facilities and communal services.

This provided for stage-by-stage reforming of the housing facilities and transferring the title and responsibility for some of the social amenities and apartment blocks to local municipalities.

In 1998 ALROSA handed over about 1.3 million square metres of housing to municipalities of the Republic of Sakha (Yakutia).

The diamond miner was still providing funds for maintenance of the housing facilities that are now municipal property.

In 2009–2010 two apartment blocks were built by the company in Mirny and Orel.

Despite the company’s employees have been offered an opportunity to privatize their dwellings, some critics said ALROSA’s move was not noble.

They said the diamond company was abdicating its responsibilities by transferring the housing units to the local municipalities.

A sharp contrast it is, but the truth of the matter is such noble moves by both diamond giants were commendable by any CSR standards.

One should always look at the bigger picture of empowerment to the less privileged, as well as the growth of towns that benefited from such projects.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished

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