The Changing landscape of CSR in South America

Posted: Monday 1 February 10, 9.40am GMT

Anglo American is a global mining company, historically based in Southern Africa, but now with extensive operations in Australia and South America, including Brazil, Chile, Peru and Colombia. Creating lasting benefits in host communities is a key objective for Anglo American. Enterprise development is a very successful way of doing this - not only does it facilitate a more diverse and competitive supplier base but increasing jobs and skills in the area can help the local private sector be better prepared for a post-mining economy.

This bakery in Brazil was founded as a result of a partnership between Anglo Brazil and CARE Brazil

Why enterprise development in Chile?
In 2004 Anglo American’s Socio-Economic Assessment Toolbox (SEAT) was implemented in communities surrounding Anglo’s operations in Chile. SEAT is designed to help Anglo’s mines identify ways in which they manage the social and economic impacts of our operations and promote sustainable growth. One of the outcomes was the identification of small business development as a tool to help reduce income inequality and poverty in local communities.

The result was the “Emerge” programme, inspired by Anglo’s successful South African enterprise development programme, Anglo Zimele, which has been running for over 20 years. Zimele, meaning ‘to stand on one’s own feet’ in Zulu and Xhosa, was established to provide opportunity to historically disadvantaged South Africans by providing access (for the first time) to finance, legal, technical and managerial expertise and procurement opportunities.

How does it work?

Small and medium-sized enterprises (SMEs) make up the vast majority of businesses worldwide. However, without access to finance and the right advice, many potential entrepreneurs are not able to start businesses, and if they do so the failure rate is often very high. In South America we have partnered with specialist enterprise development NGOs to help address this challenge. Local NGOs bring the specific skills training needed for the fledgling entrepreneurs, whilst Anglo adds the financial backing, plus access to promotional opportunities and procurement process.

In Chile, the model was adapted to meet local needs, where the main recipients have been rural women. The programme works in partnership with Fondo Esperanza, a non-profit micro-credit organisation which administers the loans and advice. There are two strands to the programme. Several thousand start-ups have received small loans, whilst a smaller group of particularly promising companies receive greater financial and technical support. For the latter group, loans are disbursed only after entrepreneurs successfully complete training to make their businesses more sustainable. This process is very competitive and in 2010 we expect to receive around 550 applications and select 80 recipients for support.

In Brazil, Anglo has also established a partnership, in this case with CARE International, to deliver a 3 year programme in the area of Barro Alto, As in Chile, mapping has taken place to identify demand in the area so that entrepreneurs are appropriately targeting their business.

Anglo is already seeing the success of the South American programmes – in 2007 Anglo won one of just seven Presidential Seals awarded by the government to celebrate Chile’s bicentenary. Emerge aims to have supported a total of 7,000 people by the end of 2010.