Wayne Dunn's lecture to Bridging the Gap: LEADING SOCIAL INNOVATION ACROSS SECTORS Net Impact Conference Stanford University Graduate School of Business November 11, 2005 www.waynedunn.com

1. Beyond the Paycheck
Placer Dome’s CSR Program in Southern Africa
Bridging the Gap:
LEADING SOCIAL INNOVATION ACROSS SECTORS
Net Impact Conference
Stanford University Graduate School of Business
November 11, 2005
Presented by
Wayne Dunn
’97 Sloan
PLACER DOME

2. Objective
• Case study of innovative developmental CSR
• Demonstrate application of CSR strategic
principles
1. CSR/Sustainability Policy
2. Strategic interventions vs. reactive approaches
3. Impact metrics vs. expense metrics
4. Partnership strategies (financial, operational,
technical)
5. Leadership and leverage
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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3. Presentation Overview
• Background – how did this get
started
• The Care Project
–Developing and implementing the
plan (challenges, partners,
learnings)
–Business value created
• HIV/AIDS
– The Crisis and why does it matter
– Programs and activities
• Other CSR Activities
• Relate Activities to CSR Strategy
• Discussion
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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4. Background
• 1990s saw massive changes in South
African mining industry – over
100,000 jobs lost as the industry
restructured;
• 1999 – Placer Dome purchased a
50% interest in South Deep (WAL), a
mine located just outside
Johannesburg
– This was the first major post-apartheid
foreign investment in the South African
mining industry
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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5. Background (cont)
• In late 1999 after detailed study
management realized that
economic reality dictated major
restructuring at South Deep
• 1/3 of the South Deep workforce
(over 2,500) workers were
retrenched
– Industry standard retrenchment
packages consisted of 2 weeks
salary per year of service plus
access to onsite training
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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6. Families & Communities must benefit from mining
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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7. Sustainability Policy
• Industry standard didn’t meet the spirit of Placer
Dome’s Sustainability Policy
• Need to go…
BEYOND THE PAYCHECK
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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8. The Care Project
• A commitment to mitigating the social
and economic impact of retrenchment
at the family and community level
• A target of assisting at least 70% of
the retrenchees and their families to
become economically active
• A commitment to develop HIV/AIDS
programming initiatives
• A commitment to enable spouses
(women) to be able to benefit directly
from retrenchment benefits
• 2 year time frame and R15 million
(CAD$3.6 million) budget was
established
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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9. Implications
• The Care project decisions and
commitments had a huge
implication for South Deep
management
• Entire industry watching to see
what this Canadian newcomer
will do
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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10. 2560 Retrenchees
•Mozambique
•Lesotho
•South Africa
•Swaziland
•Botswana
The Mine
How to successfully
provide socio-economic
support across remote
rural regions of five
countries
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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11. The Initial 4-Step Plan
1. Consultations with retrenchees in their villages
2. Recruit (from amongst the retrenchees) a group
of 25-30 fieldworkers who would provide
frontline support to the retrenchees and their
families
3. Locate and register the retrenchees
4. Provide them with training and support to
enable them to become economically active
All of the above to be done in partnership with
MDA, TEBA and other partners
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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12. Reality was different than we expected
Consultations with
• Retrenchees and their retrenchees
Unions were still angry
over the contested
retrenchment
• Retrenchees’ homes
were difficult to locate
and registration was
often problematic
Walking to a remote retrenchee
homestead in Lesotho
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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13. Reality was different than we expected
• Placer’s lack of socio-economic development
experience was an issue
• Partnerships took longer to form and more time to
manage than expected
• Industry skepticism
• Mozambique floods Yes, it shows in Africa!
• National borders
• Micro-finance
• HIV/AIDS
• Fieldworker training programs
• Retrenchee education levels
• Centralized delivery didn’t work
• Project was under-financed
• We couldn’t do it in two years
• Etc.
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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14. Meeting the challenges
• Negotiated a public private
partnership with CIDA that
contributed CAD$ 2 million in
additional resources
• Kept working at getting our
partnerships working for everyone
• Leading by example gradually
demonstrated our commitment to
industry, unions and others
• Continual revision of plan and project
delivery to ensure it met the needs of
the recipients
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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15. Orientation and Awareness Phase
The Care 1. Registration & Homestead Visits
2. District Counselling Sessions
3. Open Days/Career Fairs
4. Financial Lifes Skills Training
5. Feedback and Choices Session
Process Personal
Economic Plan
Prepared &
Assessed
Decision on Economic Option
Enterprise Stream
Employment Stream
Business Planning & Preparation Employment Planning & Preparation
13-step process 1. Business Orientation
a) Introduction to Business
1. Identification of Employment Options
2. Skills Training (Vocational/Agricultural, etc)
b) Skills/Product Training 3. Employment Counseling / Placement
Delivered 2. Develop Draft Business Plan
(to be reviewed with Counselor)
(Job search/Resume, etc.)
18 times (plan will contain market assessment,
financial, operational and skills upgrading plan)
3. Preparation of Micro-Finance Application
Personal
Employment Plan
Prepared
Across
Business &
Five countries Financing Plan Ongoing Processes
Prepared
Follow-up sessions/
Evaluation of Micro Finance Application activities to monitor
effectiveness of
Business Operation interventions
1. Ongoing availability of Technical Assistance
and Business Counselling Communication and
2. Ongoing faclitiation of skills training needs consultation with stakeholders
(i.e., business, agriculture, vocational, etc.)
Continuous improvement
process (review feedback;
enhance programs,
procedures, processes)
Retrenchee is Re-Integrated
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
and Economically Active
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16. Some results
• 92% (2,232) of the retrenchees have
been located and registered
• 56% of those (1,250) making a living
wage
• 65% (1,556) have received financial
life skills training
• Many of the trainees were women
• Care process is becoming an
industry standard in RSA and
replicated elsewhere in Africa and
globally
• Development infrastructure and
partnerships throughout the five
country region
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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17. Chicken raising business
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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18. Furniture making
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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19. Unique training programs
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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20. Rice farming in Mozambique
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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21. Spaza (convenience) shop
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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22. And the business value is…
• HIV/AIDS, Black Empowerment, new
mining legislation, social scorecards,
escalating security challenges and a
myriad of other issues are the daily facts
of mining life. Mines and mining
companies must demonstrate an ability
to create meaningful value for people,
communities and other social
stakeholders – and they must do so while
meeting increasingly challenging
financial targets.
• Placer Dome is not a charity and the
Care project was not just some sort of
corporate philanthropy
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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23. The Mining World Has Changed
• “We are determined to provide multi-
skilling to workers and assist them to
cope with retrenchments. This is a must
and not a choice for industry”
• “It is important for mining to ensure that
economic benefits accrue to society as a
whole and more specifically to
communities affected by mining . . . The
social environment has not, in my
opinion, been adequately addressed in
the past”
Hon. Phumzile Mlambo-Ngcuka
South Africa Minister of Minerals and
Energy
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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24. Reputational Capital Gain
• Kgosietsile Mogaki, Social Plan Director for the
South African government’s Department of Minerals
and Energy sums up the project. “When PDWAJV
laid-off 2,500 workers in 1999 we expected it would
be similar to other retrenchments, where the workers
and their families received little support other than
some on-mine training for the worker. However, we
have witnessed the Care project making life
changing impacts, helping workers and their families
to develop alternative incomes. Today we (the DME)
see the Care project as an example that we
encourage other mines to follow. The Care project
has changed the social face of the South African
mining industry.”
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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25. What’s in it for Placer Dome?
We believe that our ability to effectively
manage social issues is a competitive
advantage as we look towards the future of
the industry in South Africa and globally
Through programs like Care we are better
able to manage risk and are securing our
long term future in South Africa and
throughout the sub-continent
Piet Kolbe
Mine Manager, South Deep
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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26. And then there is HIV/AIDS
• RSA ACCOUNTED FOR
NEARLY 1 IN 8 OF THE NEW Life Expectancy
HIV INFECTIONS THAT
70
OCCURRED WORLD WIDE IN 65
2000 60
• HIV+ PREVALENCE RATE IN
WOMEN ATTENDING ANTE- 50
NATAL CLINICS INCREASED 40 40
FROM 0.7% IN 1990 TO 24.8%
IN 2001 30
• AVERAGE OF 1700 NEW 20
INFECTIONS PER DAY
• LIFE EXPECTANCY WILL 10
DECLINE FROM 65 TO 40 0
2001 2011
BY 2011
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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27. HIV/AIDS Facts
• ESTIMATED THAT 12% OF TOTAL RSA
POPULATION AND 25% OF MINEWORKERS
ARE HIV+
• ALREADY 400,000 PEOPLE ARE AIDS SICK,
AND THIS WILL INCREASE TO 1,4 M BY 2010
• YOUNG WOMEN PARTICULARLY
VULNERABLE – 23.9% AGED BETWEEN 15 –
49 ALREADY INFECTED AND WILL RISE TO
29.7% BY 2007
• AIDS ORPHANS AT PRESENT AMOUNT TO
660,000+ AND WILL RISE TO 1,8M BY 2015
• ACCUMULATIVE AIDS DEATHS WILL RISE TO
9M BY 2015
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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28. HIV/AIDS Impact
• REDUCED ECONOMIC GROWTH RATE – 2010 GDP 20% below a non AIDS
scenario
• REDUCED POPULATION – RSA population 10M smaller than non AIDS scenario
• SKYROCKETING DEMANDS ON PUBLIC HEALTH SYSTEM -
• RADICALLY CHANGED PRIVATE SPENDING PATTERNS – to healthcare and
funeral costs
• IMPACT ON SOCIO-ECONOMIC STABILITY? (orphans)
HIV/AIDS is the worst epidemic in human
history. At every level it is causing
devastation, destruction and suffering
throughout Southern Africa
This is the reality for business operating in much of
Africa today. Nobody can afford to ignore it
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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29. HIV/AIDS and Gold Mining
• $10/oz impact if nothing is
done (5% of production
costs)
• ~$3/oz with maximum
intervention
• Impact on social and
political stability?
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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30. HIV/AIDS Programming
Our program – multi-
level and holistic
• Education
• Prevention
• Treatment
• Impact mitigation (when
one has AIDS)
• On the minesite
• In local communities
• In rural areas where our
workers come from
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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31. Minesite Program
• TRAINING AND
EDUCATION
• STI & TB TREATMENT
• CONDOM DISTRIBUTION
• PEER EDUCATION
• VOLUNTARY
COUNSELING AND
TESTING (VCT)
• WELLNESS PROGRAM
• MEDICAL REPATRIATION
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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32. Minesite Program
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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33. Current Community Program
• AWARENESS AND EDUCATION PROGRAMS
• MOBILE CLINIC
• CONDOM & FEMIDOM DISTRIBUTION
• PERIODIC PRESUMPTIVE TREATMENT (PPT)
• TREATMENT FOR SEXUALLY TRANSMITTED
INFECTIONS ( STI)
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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34. Community Mobile Clinic
COMMUNITY PROGRAM
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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35. And when HIV prevention doesn’t work
• What to do when people can
no longer work?
• They return to their villages
where there is little or no
support
• Families are overwhelmed
• Tremendous social and
economic impact
• Addressing it effectively is
too much for one company
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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36. Industry Home Based Care
AIDS CAMPAIGN TEAM MINING
• TEBA INFRA-STRUCTURE
• TRAINING OF CARE GIVERS
• SUPPORT STRUCTURE –
QUALIFIED STAFF
• MONTHLY MEDICATION
• WORK WITH OTHER
STAKEHOLDERS (E.G.
TRADITIONAL HEALERS)
• WORLD BANK DEVELOPMENT
INNOVATION AWARD (US$100,000)
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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37. Home Based Care
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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38. INDUSTRY HOME BASED CARE RESULTS
(Year One)
Milestone Target Actual
Community Care
Supporters engaged 87 127
Community Care Training 87 123
People under Home
Based Care 696 801
THE PROJECT EXCEEDED TARGETS
IN EVERY AREA
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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39. Overview of South Deep AIDS Programming
SOUTH DEEP Sustainable Development Department
On Mine Program Community Program
•Voluntary Counseling and testing HIV Negative
•Continue working
Wellness Program
Farm
Modified work program •Agricultural work / Environmental
Medical repatriation
Back to work or Re skilled
Home Based Care Benefits Care Positive
EC
HBC OPP
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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40. But what happens to children and
families when the breadwinner
can’t work
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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41. HIV/AIDS and Rural Areas
• HIV/AIDS is having a
monumental impact on the
socio-economic well being
of families throughout rural
Southern Africa
• Workers who used to
support extended families
of 10-20 people are
becoming too sick to work
and are coming home,
literally to die
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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42. HIV/AIDS and Rural Areas
• Knowing that their family needs
the income and that there is little
medical care for them if they go
home, these workers are staying
on the job as long as possible
• In addition to the human tragedy,
this is having a severe impact on
business productivity
• There are solid business and
humane reasons to address this
problem
• But, economies of scale are
needed
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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43. Where to next?
• The Care project piloted an effective
means of assisting rural families to
become economically active and has
an existing infrastructure and
management system in place
• Industry Home Based Care project
piloted a cost effective, fee for
service, program to support medically
repatriated workers and their families
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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44. Our Vision for the Future
Mining Opportunities Care Process
Partnership
• Integrate the Home Based Care +
project with the Care process and
launch as a fee for service based Home Based
program to address the social and Care
economic impacts that AIDS is
having on rural families and =
communities
• Start with the mining industry but MOP Project
design the infrastructure and
management systems to enable
participation by other industries,
governments and donor community
stakeholders
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
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45. MOP Summary
Current reality Mining Outreach Partnership
Helps to mitigate the social and
economic impact of AIDS
Healthy worker Virtually no support for families in rural villages
leaves village Challenge is too vast for any Financially sustainable through
for employment single company to address fee for service approach
Scalable beyond the mining industry
HBC Component
Training, Support and
Family Medical Supplies
Employed Medical Family and Counselling Assist Family to
Worker becomes
Worker Incapacitation Community and Care for terminally ill
HIV Positive and
Supporting Terminally Ill Prepared to Integration
Eventually develops
Extended Man Returns Recieve with IG Component
AIDS
Family To Village Worker Community Assists
Services Family member to
Develop alternative
Economic Opportunity
Without intervention
the worker goes home
to overwhelm family who
have no support and no
means of economic sustainabilty
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
Slide 45

46. Summary of Social Value Activities
• Care project (partnership)
• Home based care (partnership)
• Income Generation support for HIV/AIDS
families (partnership)
• Minesite HIV/AIDS programming
• Community HIV/AIDS programming
(partnership)
• School feeding program (partnership)
• Personal growth and development training
• New mining project with tribal equity partner
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
Slide 46

47. Summary and Discussion
• Case study of innovative developmental
CSR
• Demonstrate application of CSR
strategic principles
1.CSR/Sustainability Policy
2.Strategic interventions vs. reactive
approaches
3.Impact metrics vs. expense metrics
4.Partnership strategies (financial,
operational, technical)
5.Leadership and leverage
PLACER DOME Net Impact Conference: Stanford University Graduate School of Business – Nov 2005
Slide 47

48. Beyond the Paycheck
Placer Dome’s CSR Program in Southern Africa
Bridging the Gap:
LEADING SOCIAL INNOVATION ACROSS SECTORS
Net Impact Conference
Stanford University Graduate School of Business
November 11, 2005
Presented by
Wayne Dunn
’97 Sloan
PLACER DOME