Petra Diamonds Limited Sustainability Report 201240COMMUNITYCommunityEnhancing our communitiesOur approach Positive relationships with local communities around our operations are vital to securing support for our activities and maintaining our social licence to operate.We seek to engage openly and work in partnership with Governments, communities (through the local municipalities that are elected to represent them) and other identified stakeholders to ensure that our operations have the maximum, long-term positive impact on host communities and to minimise any negative impacts. Some of Petra's operations have a defined Stakeholder Engagement Plan ("SEP") in place and we are in the process of developing an overarching Stakeholder Engagement Policy in order to ensure consistent standards are applied across the Group. Our operations are predominantly located in remote areas which have a low level of socio-economic development and high unemployment, as characterised by the estimated unemployment rate in South Africa during 2012 of ~25%. Our community development efforts aim to contribute to these local communities through initiatives which focus on alleviating these issues, as well as the key areas identified through our community engagement programmes:$ sustainable job creation;$ poverty alleviation;$ skills transfer; and $ enterprise development in local communities.Where possible we establish partnerships with Government, communities, NGOs and educational institutions to ensure the impact of our initiatives is maximised. Our Group CSI spend in FY 2012 totalled ca. US$3.3 million, which represents approximately 1% of our revenues. We expect to maintain CSI spend at or around this level on an ongoing basis.We have committed over R5 billion in South Africa to extending the lives of our mines, and believe this will ensure long-term employment for our workers and contribute to the future sustainability of the communities surrounding our operations. Assessing and managing our impactsWe are cognisant that our operations do impact on their local communities and we have practices and programmes in place to evaluate and manage such impacts. These plans take into account the full lifecycle of an operation, so as to properly assess the impacts and measures required upon entering, operating and exiting a project, and are in accordance with the requirements of our mining rights.In South Africa, the SLPs in place for each mine define their obligations in terms of social, labour and community issues. All our SLPs have been approved by the DMR, with the exception of the Helam and Sedibeng SLPs, which are still going through the approval process.The SLPs form the basis for our activities and performance indicators over a five-year cycle, following which a new SLP needs to be consulted with stakeholders and approved by the DMR. Additionally, each operation is subject to the targets set out in the South African Mining Charter. The SLPs are generally drafted to incorporate some of the targets of the Mining Charter relating to Human Resources Development ("HRD"), procurement, local economic development ("LED") and housing.Our performance against these targets is subject to numerous checks, with each operation reporting annually to the DMR through the submission of a Mining Charter Report and through the annual submissions of their Social and Labour Reports. Additionally, legislation provides for an annual audit by the DMR. During these audits, various external stakeholders, including municipality and labour representatives, are present in addition to representatives from the DMR. The SLPs for our South African operations are at different stages within their respective five-year cycles and Petra remains committed to honouring all of the commitments made within them. Details of progress towards these targets is contained in detailed reports submitted to the DMR, as referred to above, and a summary can be found within the Group Social Spend Summary on page 41.CommunityOur operations are predominantly located in remote areas where the mine is the primary economic contributor to the area and our community development efforts aim to make a positive contribution to these local communities.SUMMARY$ Our plans take into account the full lifecycle of an operation, so as to properly assess the impacts and measures required upon entering, operating and exiting a project$ Effectively managing stakeholder expectations requires open and transparent communication$ Where possible we train the local community in the skills required to maximise the benefit of our CSI projects$ The multiplier effect of our mines means that whilst we directly employ 4,768 permanent employees and 807 contractors, a significantly larger number of people are dependent on our operations
Petra Diamonds Limited Sustainability Report 201241COMMUNITYCommunityEnhancing our communities continuedAssessing and managing our impacts continuedIn Tanzania, the Williamson mine is implementing the Mwadui Community Development Programme ("MDP"), which focuses on three development areas: community development, community initiatives and community support. In Botswana, our exploration operations remain at an early stage but in FY 2012 we completed a Social and Environmental Strategic Risk Report related to the progression of exploration work on kimberlite KX36 and associated drilling programmes. Community engagementEffectively managing the expectations of all stakeholders is an increasingly important challenge for the Company, which can only be mitigated through open and transparent communication. We believe we have robust processes covering engagement in place across the Group, however we are in the process of developing a Group Stakeholder Engagement Policy, which we expect to roll out across our operations in FY 2013. This is in line with our strategy of developing Group-wide policies in order to codify best practice and drive improvements in our performance.We meet regularly with community representatives to communicate on issues such as community development, environmental impacts and closure plans as well as to discuss the programmes and projects we have already put in place. Our community engagement is guided by active and fully engaged Community Development Programmes which are in place at each operation. Engagement is managed by Community Liaison Officers as well as Community Development Co-ordinators. We employ two regional Community Development Co-ordinators who are responsible for, amongst other things, the successful roll-out of LED projects as committed to in our SLPs.Due to the size of the Finsch mine, this operation has an additional Community Liaison Officer. Furthermore, the Company has recently recruited a Group Social Compliance and Sustainability Practitioner who will manage and guide all operations' SLP commitments.We monitor the progress of our various CSI projects on a regular basis and in some cases have established steering committees consisting of Petra employees, members of the local community, municipality, and other service providers.The success of some of our CSI projects is subject to the local communities having the necessary skills to effectively implement and manage them. In order to mitigate this challenge the Company, where possible, trains the local community in the required skills to maximise the benefit that these projects provide.In South Africa, all community engagement processes and SLPs are compliant with legislative requirements. In Tanzania, the Williamson mine has a well-developed SEP, which clearly defines and provides a framework for how Company representatives are to engage with all stakeholders. Community grievance processes are incorporated into SLPs in South African operations as well as into Williamson's SEP. In Botswana, we currently have no formal community engagement programme in place, however we maintain active communications with authorities, individuals, NGOs and local communities as appropriate. Since acquiring our Botswana diamond exploration assets in 2005, we have operated in a fully transparent manner and proactively communicated our activities with the appropriate stakeholders. Group social spend summaryIn South Africa, Petra's operations are involved in LED projects as part of their SLPs. Additionally, our South African mines also provide further discretionary social expenditure on initiatives which may not be formally required as part of their SLPs.In Tanzania, Williamson contributes directly towards community development through the provision of social, commercial, industrial, medical and administrative infrastructure for the benefit of local communities.Petra's total discretionary and non-discretionary spending on CSI projects in FY 2012 was US$3,259,589, which represents approximately 1% of the Company's total revenue. Expenditure by countrySpend(US$)¹South Africa2,981,703Tanzania (Williamson)277,886Group total spend (US$)3,259,589Note:1. Exchange rate of US$1: R7.7685.Projects - South AfricaAll projects funded by Petra are rigorously assessed and reviewed in conjunction with local communities to ensure they are sustainable and in line with our key objectives of sustainable job creation; poverty alleviation; skills transfer; and enterprise development. Projects are generally undertaken in partnership with local communities, municipal authorities and NGOs and receive funding and technical advice from Petra.Projects currently supported by Petra include:$ a multi-stakeholder initiative to increase the literacy and numeracy levels in rural schools benefiting some 6,000 children; $ a joint project with the local municipality at the Finsch mine to improve poorly maintained electrical infrastructure following power outages that have caused significant negative effects on the local community; $ a partnership between our Cullinan mine and the Tshwane University of Technology to support the Vukuzenzele Project, an agricultural co-operative, by providing training and equipment in conjunction with The Department of Agriculture (see the case study on page 44 for further information on this project); $ sponsorship of a farming project in partnership with local authorities, the Department of Agriculture and other businesses to develop a sustainable vegetable farming operation in Boschkop near the Cullinan mine;$ the establishment of an independent brick plant and aggregate business to create much needed local employment and help diversify the local economy at the Koffiefontein mine (these projects are currently in feasibility stage); $ support for the establishment of a market garden in Magareng to create employment and tackle food security; $ the provision of food, shelter and educational programmes for street children in the town of Warrenton near our Sedibeng mine; and$ the development of a brickmaking business in partnership with other mining companies with regional operations and the local municipality near the Star mine.