Taking Responsibility: Managing community and environmental impacts

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How can businesses work effectively with communities, NGOs and governments to mitigate their negative impacts on local communities while increasing their social contribution? This question was discussed by the following panellists at the Global Child Forum at the Royal Palace earlier this year: Brian Ganson, Head at the Africa Centre for Dispute Settlement, University of Stellenbosch Business School; Nina Schefte, Corporate Social Responsibility Manager at Norsk Hydro and Simon Lord, Chief Sustainability Officer at Sime Darby Plantation Berhad. Additionally, Professor John Knox, former UN Special Rapporteur on Human Rights and the Environment, shared some of his recent findings.

Prof. John Knox, UN Special Rapporteur on Human Rights and the Environment

Addressing the Global Child Forum April 2018

Above and beyond

Kicking off the discussion, Brian Ganson, Head at the Africa Centre for Dispute Settlement, University of Stellenbosch Business School, commented on the magnitude of the challenges outlined by Professor John Knox, former UN Special Rapporteur on Human Rights and the Environment, in his address: “If a company is only concerned with its own immediate impacts, that’s not nearly enough to address the problem. Companies have to look at how they help shape the very system that keeps air clean, water clean, and communities safe.”

Speaking of his company’s efforts, Simon Lord, Chief Sustainability Officer at Sime Darby Plantation Berhad, agreed. Sime Darby Plantation is involved in agribusiness, predominately palm oil, which is distributed in 12 countries, five of which are producer countries: Papua New Guinea, the Solomon Islands, Liberia, Indonesia and Malaysia. The company employs roughly a hundred thousand individuals in chiefly rural areas, so with the addition of workers’ family members, Sime Darby actually houses about 500,000 people worldwide.

The company engages in a myriad of activities that impact the environment, not just waste systems but the chemicals, herbicides and fertilizers involved in palm oil production. When it comes to complying with environmental regulations, Lord recommended doing more than what’s required: “It’s not good enough to walk up to the imaginary fence of compliance; you have to go beyond it. Compliance doesn’t futureproof your business. It lulls you into a sense of false security.”

“It’s not good enough to walk up to the imaginary fence of compliance; you have to go beyond it. Compliance doesn’t futureproof your business. It lulls you into a sense of false security.”

Simon Lord, Chief Sustainability Officer, Sime Darby Plantation Berhad

 

Proactive climate strategy

Norsk Hydro is a fully integrated global aluminum company which extracts bauxite, a natural resource, to produce aluminum. In 2011, they entered the Amazon region of Brazil with facilities including a mine, a pipeline and the world’s largest alumina refinery.

Measures the company is taking to ensure coming generations have a better environment include the objective to be carbon neutral by 2020, requiring suppliers to meet environmental standards, collective initiative participation and contributing to education programs.

Accountability includes listening and transparency

Noting that Norsk Hydro’s experiences in Brazil include a difficult history and operating environment, Ganson suggested that companies sometimes talk at cross-purposes with communities. He asked what lessons the company is learning.

According to Nina Schefte, Corporate Social Responsibility Manager at Norsk Hydro, Norsk Hydro’s experience demonstrates the importance of active communication: listening rather than merely acquiring input, understanding community/societal expectations, and allowing those closest to the issues to participate in shaping solutions.

Schefte acknowledged that being transparent with local communities and engaging in open dialogue can be arduous. At the company’s refinery in Barcarena, Brazil, there are 120,000 inhabitants, high levels of conflict and little trust for neither the company nor local authorities. “In that kind of environment, we have to build trust with stakeholders. Without trust in each other, it’s difficult to get anywhere.”

A spirit of trying

When we say a company is accountable to children and communities, Ganson asked, what does that look like?

“To be honest, accountability is not necessarily very pretty,” acknowledged Simon Lord. He described a child protection program that didn’t meet his company’s expectations as an example of the need for ongoing assessments and adjustments in planning. “We had to go back and rethink it. We perhaps didn’t listen as much as we should have to the youth.“

He recommends being honest and frank as a way of restoring or preserving trust. “To build trust, you have to take action after engaging in dialogue. And you have to show the actions you’ve actually taken,” said Lord.

At times, accountability and sustainability reporting can, says Lord, “almost be a catalog of failures – areas where you experimented or tried new things. But if you’re really holding yourself accountable to your shareholders and your communities, you have to be able to take that information and present it to them.”

Lord called on businesses to permit themselves to make mistakes. “Adopt a spirit of trying, and yet allow yourself failure. We need to encourage this, because there are a lot of companies out there who didn’t respond to questionnaires, haven’t taken part, haven’t signed up. Why? They’re afraid to be exposed, and frightened that they’ll get it wrong. We have to build in the capacity to make mistakes and not punish people.”

The Right to a Healthy Environment

  • No group is more vulnerable to environmental harm than children.
  • WHO estimates that more than 1.5 million children under the age of five die every year due to avoidable environmental harm.
  • Nearly 600,000 children under the age of five die every year due to air pollution.
  • Approximately 2 billion children in the world live in areas that exceed the WHO standard for particulate air pollution.
  • Businesses need to undertake environmental and human rights impact assessments, make information on the effects of businesses’ actions and products on health public and facilitate children’s participation in consultations about proposed policies.

UN Human Rights Council, 5 March 2018

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