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BUILDING TRUST, LOWERING RISK:

BUILDING TRUST, LOWERING RISK: Defining and acting on your corporate responsibility and business integrity agenda in developing countries Menas Associates Limited PO Box 444, Berkhamsted Hertfordshire HP4 3DL, United Kingdom Tel: 44-(0)1442-872-800 Fax: 44-(0)1442-876-800

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BUILDING TRUST, LOWERING RISK:

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  1. BUILDING TRUST, LOWERING RISK: Defining and acting on your corporate responsibility and business integrity agenda in developing countries Menas Associates Limited PO Box 444, Berkhamsted Hertfordshire HP4 3DL, United Kingdom Tel: 44-(0)1442-872-800 Fax: 44-(0)1442-876-800 Email info@menas.co.uk Website www.menas.co.uk

  2. For over two decades Menas Associates has been working with our clients to help them understand the risks involved in operating in complex regions of the world. We recognise that such work carries unique responsibilities and challenges, and that activities such as exploration, production and development have a variety of different political, social and environmental impacts. These can be assessed, minimised or mitigated, and generally managed in a responsible fashion. Menas’ approach to CSR is not a shallow response to current fashion. Our experience has shown that there are sound commercial reasons for leading the way when it comes to issues concerning society and the environment.

  3. The finish line is always moving. Best practices of companies operating in the developing world require constant review and refinement in response to the evolving expectations of key stakeholder groups. Menas sees companies facing new dilemmas and heightened expectations from key stakeholders. We therefore work with our clients to understand and respond to both the evolving concerns of traditional stakeholder groups and the expectations of emerging stakeholder groups. When it comes to corporate responsibility and business integrity a company is only as good as its weakest link, which can be a lightning rod for unwanted attention. To remain competitive, companies are assessing their performance gaps, and are designing and implementing strategies to fill them.

  4. OUR SERVICES Menas Associates is uniquely positioned to provide companies, operating in developing countries, with support in assessing and responding to CSR accountabilities through: • Due diligence reviews; • Best practises to fill CSR gaps; • Business Integrity support and training; • Stakeholder assessment and engagement; • Community participation and investment strategies; • Understanding human rights risks and accountabilities; • Integrated Impact Assessments at programme and project levels.

  5. DUE DILIGENCE REVIEWS • Review internal commitments to CSR and existing practises in different jurisdictions (i.e. corporate values, commitments and operational practises). • Evaluate operational management systems to ensure alignment with corporate objectives. • Provide independent verification of the company’s responsiveness to its own CSR commitments. Conduct independent social and environmental performance audits, or verify and evaluate internally conducted audits. • Assess a third party operator’s CSR practises, or conduct due diligence on CSR at the time of an asset or share acquisition. Working with companies at head office and operational levels to:

  6. DUE DILIGENCE REVIEWS (2) • Discreetly and objectively examine stakeholder CSR expectations, and attitudes towards the company, encompassing: • Shareholders; • Directors; • Employees; • NGOs; • Project financiers; • Host local and national government; • Local populations. • Identify the key CSR issues in all jurisdictions in which they operate on a project by project basis, bringing Menas’ incisive knowledge of how concerns and priorities differ between countries. • Alert head office of possible liabilities and risks posed by operational practises of JV partners. Understanding potential risks to reputation:

  7. DEVELOPING BEST PRACTISE • Working with existing CSR teams to identify gaps in corporate values, (talk and walk). • Identifying options to fill the gaps based on reviews of: • Competitor practises; • Partner best practises; • Industry best practises. • Conducting bespoke due diligence reviews of country and project specific issues. • Continually monitoring a rapidly shifting agenda by focusing on newly emerging issues. • Working with our in-country associates to bring local perspectives into the design and implementation of operational CSR initiatives. Filling the gaps:

  8. BUSINESS INTEGRITY SUPPORT • Evaluating a client’s business integrity values, procedures and practises. • Assessing key issues and dilemmas at company wide and operational division levels. • Advise on how to manage business integrity issues in politically and commercially difficult operating environments, (e.g. handling bribery, corruption, and the management of agents). • Designing and implementing training workshops to conduct scenario planning exercises. Developing and implementing organisation-wide procedures on business integrity practise:

  9. STAKEHOLDER ASSESSMENT AND ENGAGEMENT • Identifying key stakeholders and reporting on their key priorities and motivation. • Assessing their potential and likely impact on a project or programme. • Assessing and making recommendations on feasible and recommended procedures for engagement. • Reviewing established practises in a jurisdiction. Using Menas’ extensive knowledge of local conditions, we support our clients when making approaches to key stakeholders and, in particular, NGOs, advocacy groups, in-country agencies and local communities. Support can include:

  10. COMMUNITY PARTICIPATION AND INVESTMENT STRATEGIES - avoiding the pitfalls • Menas’ access to government, industry, local community leaders, and NGOs, ensures that a distinction is made between key stakeholders and ‘rent-seekers’, so that the former’s opinions and needs are integrated into the client’s community investment strategy. • We can review a company’s international operations and benchmark its community participation and investment performance against best practise. • We can support clients with the design and implementation of pilot projects, and with the formation of strategic partnerships. There are invariably “disconnects” between stakeholder expectations and priorities at national and local community levels, and even within local communities.

  11. COMMUNITY PARTICIPATION AND INVESTMENT STRATEGIES - managing the intangibles • Although community investment can be characterised as the management of intangibles, Menas’ approach is to evaluate options and identify preferred options for implementation on the basis of solid data and qualitative analysis. This management process requires the same discipline as the analysis of technical and financial information. • We take the same approach on implementation – recommended community investment programmes will be supported by clear management principles and processes, including: • Dependable corporate management systems to support identified commitments and goals; • Performance measures and monitoring mechanisms; • Verification processes; • Reporting structures.

  12. UNDERSTANDING RISKS TO HUMAN RIGHTS • For many years we have helped our clients to establish, maintain and review procedures for managing risk in conflict zones and jurisdictions where human rights are at risk. • We can identify stakeholder expectations on human rights issues and assist with planning possible corporate responses (recognised best practises, strategy and reporting). We can assist with monitoring - • Working conditions, • Labour practises, • Use of child and forced labour, • The role of the military.

  13. CONDUCTING INTEGRATED IMPACT ASSESSMENTS AT PROGRAMME AND PROJECT LEVELS • What is Integrated Impact Assessment? • What are the principal benefits of this approach? • What are the the objectives of IIA? • What does the process involve?

  14. IIA – AN ANALYTICAL TOOL FOR SUSTAINABLE DEVELOPMENT • IIA is a Phase One activity – generally undertaken at the time of an investment or acquisition, or when shifting into the next phase of programme implementation. • IIA evaluates programme and project impacts in a long- term sustainability perspective. • Integrates direct and indirect social, cultural, economic and ecological impacts. • Integration, not coordination! • Identification of appropriate mitigation and management strategies. • Engage in meaningful stakeholder dialogue to understand concerns, discuss prevention or mitigation options, and elaborate ideas to enhance positive impacts. • Design appropriate measures to ensure transparency and accountability.

  15. PRINCIPAL BENEFITS OF IIA • Provides an independent, impartial view - the use of independent advisory boards reinforces the credibility and probity of the process • Promotes meaningful stakeholder participation • Creates a framework for discussion and buy-in from government and key groups including NGOs • Generates local understanding and interest • The multi-disciplinary approach enables specialists to think beyond their disciplinary boxes • Integration of issues early on in the planning process reduces the possibility of errors

  16. WHAT ARE THE OBJECTIVES OF IIA? IIA incorporates the comprehensive study of: • The structure and nature of political decision-making processes at national, regional and local levels. • Local aspirations, cultural identities and value systems. • The state of existing ‘traditional’ industries. • The capacity and capabilities of the indigenous labour force. • Past, current and projected demographic shifts. • The institutional framework within which policies are derived and administered. • The nature of the regulatory environment. • The capacity of the relevant planning and regulatory authorities. • Underlying environmental issues and sensitivities at regional and local levels. Supported by our network of in-country associates and thematic specialists, Menas can undertake integrated impact assessments in most of the regions in which our clients operate.

  17. Preparation of the study scope and terms of reference Recruitment of local / regional and international specialists Integration of a wide variety of social science disciplines Collation of base-line datasets Comparator studies Independent advisory boards Regular and frequent reporting to clients Participative consultation semi-structured interviews; social surveys; discussion forums; and focus groups. Systematic review of impacts Understanding the inter-relatedness of issues, and the attribution factor Stakeholder dissemination programmes Post-project evaluation THE IIA PROCESS

  18. CONTACT US John Christensen, Director Charles Gurdon, Managing Director Donna Kennedy-Glans, Director www.menas.co.uk info@menas.co.uk Tel + 44 (1) 442 872 800

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