Empowering communities through localised procurement

In South Africa, the success of a mining operation is not just measured by profits but also by the impact on building a sustainable local community surrounding the mine. Mining companies are under increasing pressure and scrutiny, both from regulatory bodies and community stakeholders, to go beyond measuring their social performance scorecards to deliver genuine, long-term impact.

In the latest episode of acQuire Connected, Dr. Poobie Pillay, Head of Transformation and Sustainability at Ivanplats, and Maritha Erasmus explore how local procurement and transparent reporting can meaningfully impact host communities.

Local procurement can be a powerful catalyst for social change

Dr Poobie has spent decades in the procurement transformation space. Reflecting on his time at Ivanplats working in Mokopane, he shares the challenges of local procurement “understanding some of the challenges of localism… the lack of experience, lack of expertise, lack of financing.” These gaps, he says, have historically “plagued mining companies for a very long time.”

At Ivanplats, the approach is simple: local procurement should improve lives.

“My underlying strategy has always been that local procurement strategies must drive social change, it must contribute to a local economy and it must impact the lives of communities that surround the mine,” shares Dr Poobie.

Unlike traditional approaches which often focus on policies over outcomes, Dr Poobie shares his approach on aligning procurement with community wellbeing. “The wellbeing of the mine and our communities, they are linked together,” Dr Pillay explains. This mindset shifts procurement from a compliance task to a transformational lever.

Real partnerships build confidence and change lives

Rather than relying on intermediaries or superficial joint ventures, Ivanplats pairs local entrepreneurs with established industrial partners, having now created more than 30 partnerships.

This approach revealed an unexpected wealth of talent. “We had a lot of very, very gifted youngsters… that were simply looking for an opportunity,” shared Dr Poobie.

Entrepreneurs undergo rigorous interviews and become majority shareholders. The impact is life-changing. One young partner told Dr Poobie that “a year ago, he didn’t know where his life was going… and a year later he’s sitting in boardrooms.” Another young woman, selected as a partner, asked, “Will you be there to hold my hand?” Dr Poobie’s response: yes, every step of the way.

This ongoing relationship between Ivanplats and the partners is intentional. Dr Poobie shares, “We talk to these local partners almost every month… to find out what they’re doing… have they got any concerns?”

Transparent reporting builds community trust – and ensures compliance follows impact

Across the mining sector, Maritha sees a consistent challenge for companies initiating and reporting on their social performance: “they don’t actually trust the data they have because the data is fragmented”. That lack of confidence undermines transparency.

But when the data is trusted, communication becomes credible and consistent.

Ivanplats reports into the community “almost on a fortnightly basis… where we’re spending the money, which communities are benefiting”. Transparency, Dr Pillay emphasises, is essential because “the integrity of this process… rests completely on a very strong platform of both integrity as well as transparency.”

Maritha adds that focusing on impact naturally improves compliance. Instead of simply preparing annual reports, teams can spot risks monthly, “change from being reporting minded… to monthly implementation management.”

At Ivanplats, both procurement and social impact data undergo rigorous internal and external review. “We trust the data implicitly,” Dr Pillay says, because “we have multiple sources vetting, validating, checking.”

This trusted data feeds strategic decisions, from youth employment programs to the creation of community trusts targeting women, youth, food security, healthcare, and education.

Read the full transcript below:

Intro (00:00): Welcome to acQuire Connected, the podcast that is your compass in the world of data across environmental, social, and governance.

Jaimee Nobbs (00:10): Welcome back to another episode of the acQuire Connected podcast, where we talk to thought leaders and tech experts who are tackling their data management challenges. I’m Jaimee Nobbs, your host for this podcast, and today we’re joined by Dr Poobie Pillay, Head of Transformation and Sustainability at Ivanplats, as well as Maritha Erasmus, who leads our social performance solution, Insite, here at acQuire. When it comes to social performance, South Africa has strict regulations when it comes to managing the people invested and involved in a mining operation. But beyond the scorecards and reporting frameworks, today we’re looking at what real transformation of a local community surrounding a mine operation can look like and how data plays a role in this? Dr. Pillay shares his work on a local procurement model that partners established businesses with women and youth in rural areas to help build locally owned enterprises with the backing of mentorship and funding. We’ll also explore the powerful role of data in making social impact visible, and how companies can balance corporate procurement goals with genuine community impact. This is a big episode. It’s one that I thoroughly enjoyed and I hope you do too. Let’s get into it.

Thank you both for joining me today on this episode. Would you be able to start by introducing yourself a little bit about yourself, your journey, and how you got to where you are today? Maritha, perhaps you would like to start us off as you’ve done a few podcast episodes now.

Maritha Erasmus (01:54): Thank you, Jaimee and welcome Dr Poobie. My name is Maritha Erasmus. I’m the Value Stream Leader for acQuire’s social intelligence product, Insite. I’m a trained sociologist and really started my career working on socioeconomic impact assessments and community development strategies in the mining industry in Southern Africa. And very, very early on I saw how critical data quality were in generating accurate reports, and that led me to co-founder a company that developed a technology product to solve these challenges. And since then I’ve worked at the intersection of social sustainability, governance and technology, really creating solutions that help companies strengthen their data governance to ensure social compliance and deliver real value to all of these stakeholders, not just shareholders. So it’s really always been for me about balancing impact with compliance, community impact, stakeholder impact with compliance reporting.

Jaimee Nobbs (02:55): And Dr. Poobie, could you please tell us about yourself?

Dr Poobie Pillay (02:59): Yeah, thanks Jaimee and Maritha. My name is Dr Poobie Pillay. I’m currently the Head of Transformation, focusing especially on enterprise and supply development, for Ivanplats at the Mokopane operations. My background is predominantly in the procurement and transformation space in this country, having worked across different sectors from banking to telecomms, but a significant portion spent in the construction space. So my introduction into mining has been fairly recent, and the reason I took on the challenge is simply to try and do something different in the mining space, especially when it comes to local procurement etc as well. So you’ll find that in the last 15 years, even though I’ve still been in the procurement space, it’s been focused predominantly on a procurement transformation space than anything else rather than your normal day-to-day procurement activities at the organisations. Yeah, so that’s me and I’ve been in the industry for close to 40 odd years. I hold various qualifications including a Master’s in Business, as well as a Doctorate in Procurement, but again with a very strong transformation bias.

Jaimee Nobbs (04:02): That’s fantastic. I’m sure I’ll learn a lot from you today. I’m very excited for this conversation. Now, procurement might not be the first area people think of when they consider sustainability, particularly in mining. Why do you think local procurement is such a powerful lever for transformation? You’re welcome to talk more broadly given your background, but in mining as well. How is local procurement such a powerful lever for transformation, particularly in areas that are under-resourced or more rural communities?

Dr Poobie Pillay (04:39): I worked in Mokopane many years ago, possibly seven, eight years ago, understanding some of the challenges of localism, understanding the challenges that they faced in securing work, the lack of experience, lack of expertise, lack of financing, et cetera as well. From that perspective, I think the challenges of local procurement have plagued mining companies for a very long time, and it’s always an area of discord between mining houses and their host communities. So I think from that perspective, my underlying strategy has always been that local procurement strategies must drive social change, it must contribute to a local economy and it must impact the lives of communities that surround the mine. Historically, when I go back and I start to research what some of the other wines are doing, we find a fair amount of policies and processes, et cetera as well, but we find very weak implementation that doesn’t have the sort of impact that one would expect.

So I think for us at Ivanplats as well, I think the wellbeing of the mine and our communities, they are linked together and this is where we needed very innovative or critical thinking to drive a transformation that changes people’s lives. So from that perspective, we’ve always looked at: do we follow the same sort of patterns of very narrow and unsustainable transformation and just look at measurement either on your B-BBEE scorecards or in terms of the mining charter or, could we use procurement to drive vital investments, to look at job creation opportunities and more importantly, to ensure that core mining skills are brought into the host communities. So this is some of the underlying reasons why we needed something different, and we started to look at forming core partnerships with larger players and we looked at how do we encourage these companies to come into Mokopane to underpin both the growth and development from an economic point of view, but also have a long-term economic impact and a skills transfer coming into these areas.

Maritha Erasmus (06:39): What Dr Poobie Pillay says is very important. It really is the multiplier effect of local procurement initiatives in local communities. So it’s not just is different from recruiting people into the mine, it is more of a one-on-one benefit to the person and possibly their immediate family, whereas local procurement has this multiplier effect of socioeconomic development on a much broader scale. That is why there’s such a key driver or has the potential to be such a key driver for transformational socioeconomic transformation in rural underserviced communities. As it creates the opportunity by the mines channeling more money into the local community, through local procurement, more money circulates or remains within the community as well, which creates long term socioeconomic development within an area.

Jaimee Nobbs (07:33): It’s incredible how much of a role procurement can play in so many different facets of a local community, like you said, Dr Poobie, around job creation and just the longevity of a community well past a mining operation potentially being in that area. Many mining companies face the pressure to tick the sustainability box rather than embed it meaningfully into a company and the way that it operates. What have you done or what have you seen others do differently to ensure that this can be done in a way that is actually impactful and sustainable?

Dr Poobie Pillay (08:14): I think Maritha would also agree that traditionally, companies take on local procurement as not just a tick-box exercise, but it’s a compliance issue. So there’s not too much thought that goes into how it’s being done or why it’s being done. So it’s simply a case of let’s spend money with local companies and hope for the best. So from our perspective, I think at Ivanplats, what we’ve gone and done differently, we’ve looked at this and said, okay, community development is a core of our entity as well, and it’s always set in different departments. Your Social and Labour Plans, your local livelihood restoration programs, your procurement activities, they’ve all sort of sat in different departments and yet, when combined, it can have a huge impact in terms of the social change that we could look to make. So first the thing that our supply chain activities are symbiotically linked to our communities and we needed to make certain that we can use this to have visible, sustainable and positive socioeconomic impact in the area.

One of the things that we look at doing is each time there’s an opportunity, we look to unpack it to fully understand how we can be used as a catalyst for social change, how do we use it to reduce inequality and how do we drive economic growth? One of the key things for us again, is being a very mechanised mine, we have limited job opportunities and obviously, in large communities, there’s a huge drive to employ people from local communities. So one of the underlying, let’s just say challenges that we looked at is how do we create jobs outside of the mine? How do we continue to create opportunities for local people without them standing at the mine and demanding jobs as well. So we then looked at it from a sourcing point of view, we looked at responsible sourcing. How do we need to ensure that we are not breaching any of our governance regulations?

We looked at compliance to global ESG norms and we looked at initiatives or supporting initiatives which continue to drive the participation of women in mining and, at the same time, increasing local spend but creating long-term economic benefits. So from that perspective, what was also the bigger challenge is how do these now be pursued transparently? More importantly, how do we do it ethically and sustainably? So the whole procurement opportunity created an opportunity for us to create growth that is inclusive. It contributed to poverty reduction and it started to create increased economic opportunities for local suppliers. That for us, was quite critical to make certain that these are not entities that we are looking to engage with or create that will fall flat on its face tomorrow. And typically if we looked at the start of the process, what I found personally is that a lot of the activities were focused on, well, I’m going to give somebody business today and that person doesn’t have business tomorrow. So we were not creating any measure of sustainability even for emerging businesses. And I think that is why, from our perspective, we looked at something that is slightly different and how do we then create not just temporary jobs, but permanent jobs for people coming out of those communities.

Jaimee Nobbs (11:14): It’s incredible. Some of the work you’re doing, particularly this program at Ivanplats that you’ve talked about, I’d be really interested to know a little bit more about the program specifically. You kind of touched on why you built it – to decrease the amount of poverty in the area, increase job creation, build up the economic sustainability of the community. Would you be able to talk to a little bit about how you balance the short term benefits of the program with the long-term sustainability? You mentioned you don’t want to set a program up and it fail. How do you ensure that a program like this is sustainable but also beneficial in the short term so that we’re not looking 20 years down the track and that’s when you start to see the return? How do you balance those two?

Dr Poobie Pillay (12:02): So from that perspective, I think if we look at the typical way a procurement department operates, it’s that they’re placing orders day-to-day basis. I place the order with supplier A today and supplier B demands that same opportunity, but it was linked to, let’s just say your low value, low intrinsic value in terms of Rand value as well in terms of the spend. But nobody seemed to want to tackle the big stuff, the core mining goods and services because again, historically these are sitting with multinationals. So nobody was really wanting to tackle that. And this is where I think we were quite different in a sense. I’ve had a lot of experience working in large operations and large corporates, so I understood what it is strategically that they were trying to do. So one of the things that we looked at is, okay, let’s take advantage of all the smaller value opportunities and the ones that don’t require an extensive skillset, but let’s focus on big boys and let’s focus on the big numbers.

And from our perspective, from the mining perspective, we obviously had the procurement spend, so we had the money that we needed to spend and we obviously had a very willing market that is happy to look into it. And where the challenge comes up is then where do we meet each other and how do we look at transforming? One of the things that we spent a lot of time on is understanding what the rest of the country was doing and understanding what the rest of the world was doing. And this is where we found that there was a sense of reluctance of going deeper into the procurement value chain. And it was a case of saying, well, if I can place the order with you today, why would I want to do anything else? This was a long journey, this took us almost two and a half to three years to get to where we are right now, but we’ve successfully created close to I think 30 partnerships. The value is incredible. Maritha and I were talking about it earlier on, the value that is going to bring into the local communities is amazing, but what it does is the bulk of the money is now retained in these communities.

Jaimee Nobbs (13:54): For this program, what does success look like in the short and long term? How would you like to see it play out? How is it playing out?

Dr Poobie Pillay (14:03): I think that success for us, we first needed to understand what the community’s understanding of transformation was. I think there was, let’s just say entrenched behaviour or entrenched expectations of how other mines were doing it. And I think we were at a bit of a disadvantage that there was a mine only 20 kilometres away from us and they handled it in a slightly different way. So I think for me, the first priority was getting the community to understand my vision, to show them the longer-term benefits of this and to move away from the get-rich-quick almost overnight thinking. And I think that was where the bigger challenge was. I needed to get them to buy into a longer term vision of saying if I change the economy surrounding the mine, and if I do that successfully, then I’m going to create possibly thousands of jobs, but I’m also going to bring a lot of investments into the area and I’m also going to create that ownership mechanism for locals and create that opportunity which they wouldn’t have had.

Now, if we look at how successfully sustainable business growing, creating jobs, creating assets, creating wealth in the area, which is critical for us as well, it was important that we needed to find partners that also shared the same vision and to have the same sort of mindset. For me, I think the success is not just starting up a business, anybody can start up a business, but it’s the kind of business that we are starting up that makes the difference. These are not the typical joint ventures that other companies have used. These are not the agency agreements, reseller agreements, which typically would allow your procurement spend to leave those communities. So one of the things that we are very good at, we follow the money and then we try to keep as much of what we spend in our local communities. Otherwise, you’re always going to have a problem with your mine becomes successful, but your communities don’t reflect that same success. So for me it was about changing some of the fundamental or underlying social challenges also that were coming on the ground as well. And we can talk about that later on, but you’ll find that one of the things that we were very good at is not just dealing with the issue of procurement, but we dealt with underlying social issues, all of which have the potential to derail your mining activities in the long term as well. And I think that for us was quite critical

Jaimee Nobbs (16:15): Potential in derailing it, how? Are you saying if it wasn’t to be successful?

Dr Poobie Pillay (16:22): If we talk about underlying social issues, Jaimee, we are looking at your issues of your gender-based violence, drug abuse, a lack of essential services from healthcare to education challenges, et cetera. And if your community is not being developed from a social standpoint as well, then you run the risk of them not having jobs, not having incomes in their families, and obviously then demanding those, let’s say demanding those resources from the mine. So for us, what we needed to do was not just look at today and where we stand. For example, is a high unemployment rate, which is currently prevalent in that area, does it have the potential to instigate marches to the mine to instigate increased demands on the mine, et cetera as well? And the answer is yes. And so does then a high unemployment rate amongst youth present a future challenge for the mine? It does.

So we needed to look at those kind of issues coming out of the social space to say, do these have a chance? When we looked at the overall procurement strategy, we needed to understand how do we implement a strategy that is different, how do we implement a strategy that meets our goals, in terms of local procurement spend, but also tackle some of those underlying issues as well, which I think is quite important. So if we had the time and we unpacked as well, you’ll find that the transformation team does a significant amount of work behind the scenes to create job opportunities for youth in partnership with government entities and government departments, et cetera as well. So at any given time, we could have 400-500 or unemployed youth in paying jobs. And whilst they’re doing that, they’re also learning a skill as well. And we are making certain that they receive training and receiving a skill that they could use on their CV at a later stage in order to secure permanent employment. And I think those are the kind of social issues that I’m talking about.

Jaimee Nobbs (18:15): I can understand how while putting some money into a problem just to be a bandaid fix isn’t going to work in the long term. It might work for the short term, but if you are only doing band-aid solutions, those underlying social issues are never going to be resolved. So it does sound quite impactful, the program. So you mentioned there are about 30 odd partnerships at the moment. What do those partnerships mean for the confidence and the long-term opportunities of local entrepreneurs that you work with?

Dr Poobie Pillay (18:51): So two things. If we look at how this has been done in the past, and maybe I want to touch on that as well and Maritha might recognise what I might be talking about. In the past there’s been the tendency of saying, “I need to spend money locally. So we will find the local partner. The local partner – as long as the person is black and from the local communities, they can become the intermediary.” And that person is simply a conduit to get to the work at the mine. Again, money leaves the communities and there’s no sustainability in that as well. Or they tend to go into joint ventures, which again, target only Ivanplats or the mines. And again, not sustainable if the work is not there. The idea of going out and finding partners to these local entities and respecting the rights and the autonomy of the larger players to find partners of their choice.

I think this opened a lot of the people’s eyes to what was available in Mokopane. It might be a rural area, but we had a lot of talent. We had a lot of very, very gifted youngsters, very professionally qualified youngsters that were simply looking for an opportunity. And the manner in which we structured these deals meant that they went through very rigorous interview processes. So that was never going to be changed by any shape or form simply because they were interviewing to become a partner in an operation that is going to have quite significant turnover over the next few years. So they jumped at the opportunity and I think what surprised me is the quality of candidates that we found. Firstly, the manner in which they carried themselves off in these very, very, like I said, structured but very intense interview processes and their willingness to then put up their hands and say, this is actually a life-changing opportunity and I want to be part of this.

And I think in terms of hitting the ground running, they were obviously scared when they walked into it. They’re now suddenly partnered with a multinational or a large player and they didn’t understand how they would fit in there. Obviously an adjustment in terms of career understanding the roles of shareholders, et cetera as well, which is where we come into it. And for us, I think it was important to prepare them, get them boardroom ready, if you want to call it. The larger players had the responsibility of getting them technically ready, but they also understood that becoming a majority shareholder in these companies also meant that they were not going to get rich overnight. There was substantial cost to set up businesses to set up manufacturing operations. So there was significant capital investments coming into these companies and the locals didn’t have to pay anything upfront. So think from that perspective, their confidence levels have gone through the roof.

Two weeks ago we interviewed a young man just to get a feel of where he is a year later and he talks about a year ago, he had a bit of a qualification. He didn’t know where his life was going, he didn’t have a job, he wasn’t certain what he was going to do. And a year later he’s sitting in boardrooms having discussions about the strategy of this business, et cetera. And when he pulls into the operations in the morning, it’s still sort of a huge shock to him that he is a significant shareholder in this business. So according to him, he still wakes up as if he’s dreaming every single day. And I think that’s the best part of this.

Last week, we also had quite an interesting presentation to a young woman locally where we had to inform her that she was the selected partner in a deal that is going to be focused specifically on mining and drilling, et cetera as well. So it was, it’s quite an interesting deal and she will be the majority shareholder in this business. I think the shock was quite intense when she realised just exactly what she had interviewed for and what she is now walking into as well. And I think the first reaction was, will you be there to hold my hands? And of course we will be there to hold their hands into this as well. I think even projects that we started two years ago, we still talk to these local partners almost every month I suspect. We talk to them, we just catch up with them to find out what they’re doing, what’s happening, what’s changing, have they got any concerns? So now there’s significant competition amongst local entrepreneurs. There’s huge competition for these opportunities. So if they see an opportunity coming out of the transformation department, the tendency is they know this is going to be quite an interesting partnership, so they want to apply. So whether they have the qualifications or not, they will simply apply.

Jaimee Nobbs (23:09): It must sound so rewarding when you do get to hear those stories. Now I’m really curious from a transparency perspective, what role does transparency of your progress and this program play in a mining company reporting on their social performance? How important is it to be transparent about those initiatives, how they’re tracking and how it impacts the community?

Dr Poobie Pillay (23:39): We have very open communications with our communities. That’s always very important for them to understand. It is. So we have a very structured steering committee that is set up for the procurement side of it – the community members that sit in on it, they represent the broader communities surrounding the mine, and this is where we iron out any concerns or any challenges that come up. One of the things that is quite important that they understand is that they don’t interfere in the process, which is great. They support it 100% because they understand what it is that we’re trying to do. But from a transparency point of view, I think the more people know about how we are doing things and why we are doing certain things, the less interference you’re going to have in the process. And I think they understand from an integrity point of view that these kind of deals that we are doing and will be creating businesses from scratch, if it’s even tainted slightly by any lack of communication or any issues around integrity, it’ll fall flat on its face.

So the integrity of this process and the success of this rest completely on a very strong platform of both integrity as well as transparency. In terms of tracking it I think as well is very important because we report almost on a fortnightly basis into the communities of what we’re doing, where we’re spending the money, which communities are benefiting. We don’t disclose the companies and we don’t disclose confidential information that will put these entrepreneurs at risk, but at the same time, we give them enough information to show the massive spike in spend trajectory. It’s almost doubled year on year for the last two years. And I think Maritha’s picked this up in the reporting on her side and she’s seen the massive movement in terms of spend with women owned companies, with youth-owned businesses, et cetera as well. And like I said, we report that on a very regular basis and if the community’s got any concerns, we will address that almost immediately as well.

And again, from the outset before we started the process, we engaged, we sat them down, we explained, we understood, we did it in different languages, we understand the longer term vision of what we were trying to do. We agreed a process that was going to be followed and how they are kept informed throughout the process of what we are doing, who we are interviewing, et cetera as well. And at the same time as well. So they were clearly in the loop even before I start negotiating these deals. And they’re in the loop very much so when we start to advertise the opportunities and when we go through the interview process, et cetera as well.

Jaimee Nobbs (26:10): So it’s keeping them involved in the entire journey. Maritha, what about from a reporting perspective? What role does transparency play or have you seen it play in mining companies?

Maritha Erasmus (26:22): Jaimee, I just want to touch on what Poobie said and it links into this reporting, is that I actually phoned him and I said, I just saw your results in your mining charter scorecard online and your compliance results and the technology. They use our tool for their compliance reporting, and I have to talk to you because I want to understand you’ve shot the lights out with your results, and if I compare it year on year, you just significantly improved year on year – lease talk to me what has been happening. And that aligns with that concept of: if you focus on impact and good solid implementation, you will meet the compliance requirements. If you focus on just ticking the boxes, you might have no impact, spend a lot of money and not even meet the compliance requirements. So it is where the attention is from a mine’s point of view or a leadership point of view, is it about impact and making a difference?

And the outcome will be meeting the minimum requirements of compliance. And there is then where I agree with Poobie, you can only implement effectively if you are transparent in your communication and you’ve got credibility with your community stakeholders and you build credibility as you mentioned, through regular communication and transparency. And for a lot of the broader mining industry, the core challenge around transparency and credibility is that they don’t actually trust the data they have because the data is fragmented. It’s often dispersed between different systems and business functions and possibly even geographically. And because they don’t trust the data, they don’t want to transparently communicate because they’re not a hundred percent sure whether they can accurately communicate with their communities and then the questions or the queries that might come from that, they might not be able to back up. So it does start with the quality of your data and your implementation program, supporting transparency and communication across your transformation implementation or your local procurement categories.

And then the other thing that I would like to just draw down into is that reporting over time. So having data available for a moment in time for the one year shows activity, it shows that you’ve been doing something, but if you’ve been accurately and consistently tracking your data over time, you can show improvement, you can show change, you can show how you’ve improved local spend over time. And that is when you start to get the buy-in from the community because they can see the benefit over time, the improvement, not only just feel it because it’s really important for them to also feel it in their pockets, but they can also see it in the reporting and buy into your broader vision of long-term value creation within the community. So from a data quality and a management and reporting point of view, those things are really important.

And then very lastly, how do we not just have dashboards that report trends or current activities? It is empowering, and I can hear that Dr. Poobie and his team has really been empowered by leadership to make informed decisions based on the reports, based on the data, based on the feedback they’re getting. So it is that mandate by leadership to use the information and the dashboards to inform decisions to drive the vision into the future. I think that is really a key part of building trust and transparency with the community as well in ensuring impact, but also compliance long term.

Dr Poobie Pillay (30:15): Just in terms of reporting what we’re doing. From day one, we were obviously able to track procurement and what it’s doing as well. But since we started this project and we started this process, we started to track the performance of these companies, specifically financial economic progress. We looked at starting to track the social impact. We obviously gave that a break for the first six months just to get these businesses up and running. But we are tracking not only the work that is being done for Ivanplats, but even for other clients in the region as well. So we are looking at investments coming in in terms of assets that they’re creating. We look at the buildings, we look at machinery, we look at the number of jobs that are being created, the kind of money that is being spent on training and development of local people and not just the new partners in the business.

And then we take it a step further to look at the impact on the social lives. Now again, we have an amazing comms team that constantly goes through interviews, look at people, et cetera as well. But when we are doing the interviews, chances are we going to end up getting very positive reports coming out. So we’ve resorted already twice to going out to independent assessments on what is happening outside and to understand the impact of what it is that we are doing. So the significant investment that’s already coming to the region to set up operations, to set up factories. We have a fantastic launch coming up next month, but the more important part for me is the jobs that are being created, and these are permanent jobs that are happening. So there’s a huge excitement that is going around Mokopane at the moment because of leaderships that we have got going on, internships that we’ve got going on as well.

But we are starting to physically see the change in the town. We’re starting to physically see the new premises coming to life. And if you saw Mokopane four years ago, you’ll find that it was an economy in decline. There was a lot of dilapidated buildings, vacant buildings lying around there, lots of businesses that pulled out of the area as well. So it was an economy in decline and there didn’t seem to be any clue as to what they should do to revive that. So when you start to see the impact of Ivanplats in some of these communities, you start to see operations, you start to see shops, you see start to see warehouses, you start to see factories coming up, you’ll see land being acquired, you’ll see buildings coming up. So there’s a huge amount of industrial activity taking place right now as well.

And a lot of it is being driven by us, but at the same time, we are also cautious not to suddenly go and put up multimillion ran businesses until we know that the partnership relationship will survive and meaning that people adjust to each other and working with each other because we’re technically marrying partners off from scratch. We are making certain that the business is growing at a sustainable level so that it can support any huge investments into infrastructure, et cetera as well. So in some cases we will sit back and say, well, fine, we plan to put up the factory in a year’s time, but in real life it’s not going to happen. It’s not going to be sustainable, or you’re not going to be viable to do it. Can we move it out another six months? So we also need to be conscious of the fact that as they say, Rome wasn’t built in a day.

So again, the economy changes, the market changes. So we need to also then adjust to the changing market needs before we push the buttons on certain things, certain buildings up and running. We have a factory kicking off next month. It took us a year and a off to get it to this point. It was a slow journey, but it was a necessary journey. And in the last few days for us to walk into this premises and see the large scale production of ventilation pipes that are going to go underground, not just into our mines, but all the mines in the area, I think people were shocked that this is now being done in Moana. It was never dreamt of even two years ago. So from that perspective, I think for us, this is the success that we are looking for is something different.

Jaimee Nobbs (34:02): It must be great to see those changes, those physical changes in the community. One thing you both kind of touched on there that I really liked was talking about impact over outcome and building that credibility with the community all the way from having that reliable data that you can trust to make those decisions right through to seeing them in the actual impact through infrastructure and all those changes that you see in the community. How important is it to have data that you can trust year round rather than just coming into your reporting period?

Dr Poobie Pillay (34:36): There’s two things that happen at Ivanplats. Obviously we track procurement on a day-to-day basis. We know what is happening on the ground, we know who the suppliers are, we know what is happening. So there’s very structured process that we follow in terms of what we do with regards to reporting. We make certain that our own records that generate this information are accurate. But more importantly, when it comes to the social impact as well as the economic impact outside of the mine in terms of what we’re doing, the data that we have is pretty accurate. It’s tested by our own team initially, and we do have at least twice a year, we’ve got an external review of the impact of what it is we’re doing. So the data that we have is pretty accurate and more on the community side and will be familiar with this on the social labour plan side of it, which tends to happen on a year to year basis.

Obviously, you’ve got five-year plans, there’s substantial amount of research that goes into the social position of our communities, some of the underlying challenges, the economic challenges that they face, et cetera as well. So we are always privy to excellent data that allows us to look at it and understand what is actually happening on the ground, what is actually happening from a social perspective, from a livelihood perspective, from an economic perspective, unemployment, all of those kind of challenges are thoroughly researched and that allows us to make decisions of where do we as an organisation want to go in and impact and have an impact as well. But what is more important for us is that we don’t operate in silos. We tend to operate as a unit so that everybody understands what it is that I’m doing, how does it impact on other departments, how does it impact on other areas of the business?

And so this is also very important for us. We use the same data to drive the change that we want to see. And this is where it becomes a challenge. Now, one of the underlying things, and I’m a firm believer of this as well, is sometimes what the community asks for versus what the community actually needs. And that is for us, something that is quite critical is that we need to look at the longer term needs of our communities in terms of data integrity, in terms of having information. We don’t really have a challenge on that simply because we know the data. We trust the data implicitly simply because we have multiple sources that is vetting, validating, checking, double checking. And this is allowing us to make the kind of decisions, which are then focused on very, very specific things. And just as an example as well, when we look at the 30 odd companies that we’ve now created and launched over the last couple of years, we’ve used very, very broad based ownership structures.

So it’s not just one individual or two individuals or even multiple individuals in those partnerships from locals. What we’ve done is as allowed by legislation, we’ve used either community trusts or we’ve used nonprofit organisations to become shareholders in these entities. And that allows us to actually then use profits or dividends that are paid into these entities to benefit communities and to tackle some of the social problems as well. So we’ve got to think a total of about seven of these trusts in place at the moment, and they are targeting at the upliftment of women, the upliftment of youth, upliftment of people with disabilities. We are targeting issues of food security in the region. We are targeting issues of primary healthcare, especially for those that are frail and infirm. We do have a lot of elderly people in those communities. We are also targeting education, but not from the perspective of basically giving top performing students, Aries, et cetera.

We are targeting it more from the perspective of improving the quality of teaching in school so that the children are impacted from a much earlier stage. And so all of these trusts were set up with very, very specific goals or outcomes in mind. So the challenge is now is to start wait for the profitability to kick in so that there’s additional money, and this is outside of the work that is being done from Ivan Plats via the BGA Trust and other social labour planning initiatives, et cetera as well. So we’ve created a new direction of channeling our procurement spend into locally owned companies, into those trusts and into the communities. And that for us is the idea was always how do we take what we have and have the greatest social impact? And this is where the creativity comes into it.

Jaimee Nobbs (38:44): This is kind of tied into a few of your answers, is how do you keep as much of the money and the profitability within the local community? Maritha, how about yourself? How have you seen mining companies benefit from having access to quality and reliable data year round?

Maritha Erasmus (39:00): The benefit we’ve seen, Jaimee, is that if the data is built or the reporting through the quality data is built during the course of the year. So on a monthly or regular basis, decision makers or operational team members are put in a position where they can use the information available to make decisions. So you’re turning the data sets from data into strategic information that can be used to make decisions that can address risks or bottlenecks or issues that come up during the course of the year. And you can change from being reporting minded or rear review minded at the yearend reporting to the compliance or the regulator or management on an annual basis to monthly implementation management of risks and opportunities, which will then take you towards your strategy. That does require significant investment into data quality and data quality processes or data governance processes, which Poobie has more than once explained today.

They’ve put those processes in place and they’ve seen the benefit of it. And we find with our customers or the broader mining industry that if your data governance processes is in a mess, understanding what is going on with it or implementing tools or data governance frameworks in order to understand it better is like I had a conversation with another person earlier this week. It’s like switching on a light in a cluttered room. Just starting to work with your data doesn’t automatically fix the data or putting a process in place, a data governance process in place does not automatically make the problem go away, but it does shine a light on the challenge that you’re having and gives you then an opportunity to start organising your data governance and putting processes in place that are repeatable and trustworthy in order to create reports that you can then trust the information in the reports, but also build transparent relationships with broader stakeholders, whether they are business stakeholders or community stakeholders within your operation. So really important to track progress on a monthly basis. And again, coming back to being implementation minded and impact minded on a daily, weekly, monthly basis rather than just tick box minded or compliance minded at the end of the year working towards delivering of an annual report that is not effective in terms of good implementation or building credible relationships with your stakeholders.

Jaimee Nobbs (41:37): Thank you, Maritha. In the interest of time, I do have one last question perhaps Dr. Poobie, I’d love your thoughts on this one. If you had the attention of other global mining leaders right now, what would you challenge them to rethink around local communities, partnerships and local procurement?

Dr Poobie Pillay (41:56): I think I would say that local procurement must never become a tick-box exercise. I think it’s important to follow the flow of your spend and understand where it goes and whether or not your communities are actually benefiting from your activities. If you’re prepared to engage with larger entities, you’ll find that a significant amount of them are actually willing to partner with locals, but it must be a negotiated settlement or solution which looks after the interest of all parties. And I think what we found quite interesting is that the larger players, they found it quite incredible that we were wanting to listen to their concerns. We were wanting to find solutions to what they perceive to be problems with starting to partner with local people. So I think in the past world, companies have found very creative ways to circumvent the challenges of local procurement targets and sometimes to the point of flouting, the transformation imperatives.

I think that it’s much easier to find balanced solutions that benefit all parties, including the mine as well as the larger players. Creating new entities requires a substantial amount of work in understanding the technicalities of the business, the commercial aspects of it, setting up the new businesses, understanding the financial models, et cetera as well. And so therefore, I think people shied away from trying to go down this route simply because of the time that it takes to put these deals together. But I think in terms of us, the rewards that we are seeing for local communities and for local people is simply worth the extra effort that we put in. So I think in a nutshell, I think procurement has the potential to be a significant catalyst for social change. It just needs creative thinking as to how we do it and why we do it, and to understand, again, how do we meet community expectations while addressing what is simply a compliance reporting under the procurement side, if we simply treat it as a compliance matter and we will simply then report every single year or every single month, and that’s not going to achieve anything at all.

I think if people are willing to put in the effort to do what we’ve gone and done, I think the rewards would speak to communities for a long, long time in the future.

Jaimee Nobbs (44:00): I think that ties in again to that impact of an outcome, which is simply compliance reporting. And I think that’s a really great spot to end the podcast. I’ve learned a great deal around the role and the impact that procurement can have on so many different people within a community. So thank you, Dr. Poobie, and Maritha, thank you so much for joining another episode with me. I’ve really enjoyed this chat.

Maritha Erasmus (44:26): Thank you.

Jaimee Nobbs (44:27): Thanks for listening to this episode of acQuire Connected. If you enjoyed episode and want to keep up to date on the latest and greatest episodes tackling your data management challenges, then please hit subscribe.

Thanks for listening to the acQuire Connected podcast channel. Find us@acQuire.com au.