Cost Avoidance should factor in the Cost of Conflict
In today’s economy, mining companies are facing the challenge of not only improving operational efficiency, but minimizing expenses as well. There are many fronts on which expenses can be managed, but, accounting for them all, mitigating risk and conflict plays a tremendous role.
Although avoiding conflict is expected in every well-managed operation, estimating the potential costs of conflict is an area that needs significant attention, as there are both direct and hidden costs. With stakeholder relations, managing conflict goes beyond the idea of simply achieving some semblance of contentment on the community-level in a mine’s area of influence. The pragmatic approach to managing and minimizing conflict demands that mines acquire an understanding of the technical aspect of socio-economics as well. This understanding must consolidate diverse factors, such as the physical/geographic impact of an operation, changes in both the local and external economics of a region, and an awareness of changes to local culture. A gap in knowledge on any of these fronts can directly weaken competiveness.
Many managers in the mineral exploration industry have difficulty seeing the value of CSR and underestimate the potential risk of conflict, but today’s business climate demands a professional approach to social issues. Justifiably, investors, legislators and industry representatives are becoming more attentive towards industry practices like good governance, responsible investment, risk mitigation and social inclusion.
The proposed presentation will bring an analysis on how CSR goes beyond stakeholder engagement and community relations, in crafting sustainable, risk-avoidance and cost-concious solutions.
conflict, cost of conflict, investors, sustainability, social, CSR, cost, risk