52 | CSI 2014

As South Africa reaches a tipping point

in its history, with a range of socioeconomic factors at play such as the crippling platinum strikes and increasing dissatisfaction with service delivery, CSI is coming to the fore as an invaluable means of drawing together various interest groups and stakeholders under a neutral umbrella.

The current instability in South Africa’s socioeconomic framework stems from the fact that the rules of South Africa’s socioeconomic game have drastically changed from what they were 20 years ago at the dawn of democracy. As a result, our local paradigm is unstable and the consequences are massive. For example, we would never have dreamed a year ago that our country would be at risk of losing its platinum industry.

In the face of such uncertainty, people are desperate and stakeholders such as government, business and labour have realised that they have got to move beyond the “noise” and use their mutual aims and ideals to create new rules of engagement.

MIND THE GAPLooking deeper, however, it’s clear that one of the key reasons why the social framework is in such a tenuous state is due to the major issues of inequality and poverty. This is evidenced by South Africa having the highest Gini Co-Efficient ranking in the world, i.e. the gap between the rich and poor.

What this equates to is that even if wages increase, the poor are getting poorer and the rich are getting richer. This has created an environment beset

by Stephen Smith, IQ Business

CSI: the secret currency for binding society together

CSI 2014 | 53

with mistrust and uncertainty leading to situations such as the deadlock around wage negotiations in the platinum sector. On the one hand, union demands were deemed outrageous by mine owners but this view was miles away from unions’ expectations, which were based on a perceived massive gap in earnings.

THE BILLION DOLLAR QUESTIONThe million, or make that billion, dollar question is therefore: How do we create a new playing field for social dialogue, based on trust and underpinned by a framework that encompasses the needs and wants of all the relevant stakeholders, namely government, trade unions, business, employees and broader communities?

A key way of doing this is by bringing together the various stakeholders around CSI initiatives and aligning all their interests in a singular vision for development. The beauty of CSI investment is that it’s neutral money that provides a stable environment without the fear of retribution or reprisal. In these types of discussions personal agendas are taken off the table and stakeholders are far more willing to embrace the other party’s ideals and aspirations based on a foundation of trust.

This in turn creates a framework for forging new relationships underpinned by mutual cooperation and constructive

“Looking deeper, however, it’s

clear that one of the key reasons why the social

framework is in such a tenuous

state is due to the major issues of inequality and

poverty.”

dialogue that can be used in all their interactions going forward.

ACCOUNTABILITY COUNTSOne of the key factors that is allowing CSI to take up its rightful role in this way, as opposed to it being seen as a nice to have, is the redefinition of the BEE codes. This has led to far more convergence between CSI, enterprise development and supplier development.

The fact that corporates are mandated to engage in CSI has also seen a big shift towards far greater emphasis on the accountability of their spend and delivering real social impact.

To achieve this measurability, the overall evaluation process

54 | CSI 2014

“Social return on impact studies are therefore

employed around an investment of this magnitude

to determine the rand value of the

change impact brought about and the value of that to the community.”

Social return on impact studies are therefore employed around an investment of this magnitude to determine the rand value of the change impact brought about and the value of that to the community.

THE SECRET ARROW IN OUR QUIVERThe fact that the evaluation process involves independent sessions with stakeholders to understand their various perspectives, and then pull them together, is where CSI’s ability to create cohesion and socioeconomic unity comes to the fore. It involves understanding the value to them in terms of what is available and then how to maximise that total value.

What we find, therefore, is that as a result, the various stakeholders have conversations around CSI in order to understand the value of a specific initiative, and this process starts to build relationships around this neutral currency. We describe it as the secret arrow in our quiver and as a country and a business community we have got to use it more because it has value and we need to make sure we’re using this incredible mechanism for change and growth. v

is aimed at understanding the value of the impact for each stakeholder. It’s not just about building a road or a railway line, but also what the value of that initiative is for the community. What type of positive impact would it have on the quality of lifestyle of the surrounding community?

For example, it might lead to a clinic being built, providing much better access to healthcare or additional business opportunities and employment, resulting in increased money in households which might in turn lead to improved schooling options and increased levels of safety. These would, however, all be initiatives that are valuable to all parties.