Stakeholder 360:
A Pilot Project to Monitor Corporate Social performance in Papua New Guinea

What is the Stakeholder 360?

The Stakeholder 360 is a measurement and management tool developed by the Centre for Innovation in Management at Simon Fraser University (SFU) to assess the levels of social capital in a company’s relationships with its stakeholders.  The Stakeholder 360 is based on the idea that corporations exist in a network of interdependent stakeholder relationships which evolve over time and are mutually defined. This tool has been designed to help companies understand and satisfy the expectations of these multiple stakeholders who have diverging and sometimes conflicting interests.

Background on Pilot Project in PNG

Misima Mines Limited (MML) operates an open pit gold mine on Misima Island in Papua New Guinea (PNG) on behalf of Placer Dome Inc. (PDI). The ore deposit has been exhausted and the processing of a stockpile of low grade ore will cease in about four years. Environmental restoration of the pit area began several years ago.

 

The closure of the Misima mine affords PDI an opportunity to act upon its commitment to sustainability.  The commitment includes engaging with stakeholders and maintaining open and honest communication with them.  In order to allow itself to be held accountable for its environmental and social performance, PDI also committed to independent monitoring of the Misima closure.  They have contracted with the Centre for Innovation in Management (CIM) at Simon Fraser University (SFU), Vancouver, Canada in partnership with Papua New Guinea University to conduct the  Stakeholder 360 over the next five years.

Objectives

The application of the Stakeholder 360 in Misima, PNG was supported by several groups, each with its own objectives.

Placer Dome Inc. (PDI)

PDI’s objectives for the Stakeholder 360 included:

·          promote learning about stakeholder engagement within the company as a whole;

·          build social performance monitoring capacity in the host country (PNG)

·          subject the company’s closure processes to international public scrutiny,

·          promote the improvement and broader use of social performance monitoring systems.

 

Misima Mines Limited (MML)

MML wanted the Stakeholder 360 to indicate MML’s progress (or lack of progress) towards:

·          developing and maintaining constructive relationships with Misiman stakeholders even as those relationships draw to a close,

·          strengthening the capacity of Misiman stakeholders to initiate their own constructive action in adjusting to the socio-economic effects of the mine closure,
meeting the social performance expectations of international stakeholders (e.g., social justice and community development NGOs, socially responsible investment organizations).

Misiman Stakeholders

From initial conversations with Misima government and community stakeholders,  it was agreed that Stakeholder 360 could benefit Misimans in several ways. They felt the 360 could:

·          ensure that all Misiman stakeholders had input into mine closure processes regardless of their political power or influence in the Misiman community,

·          provide access to what is effectively an international “court” of public opinion in which the fairness of PDI’s and MML’s treatment of Misimans would be judged,

·          bring Misiman organizations together so that they could begin planning their post-closure future.

 

PNG Stakeholders Outside Misima

The anticipated benefits for PNG stakeholders outside Misima  included

·          providing a model for monitoring and regulating natural resource development projects in the rest of the country, whether they be in mining, forestry, fishing, or another industry,

·          developing the PNG capacity to monitor and verify the socio-economic performance of foreign corporations.

 

International NGO Stakeholders

Members of SPAC and the advisory committee suggested that the Stakeholder 360  could benefit them by

·          providing a model for monitoring and regulating natural resource development projects in the rest of the world,

·          moving global corporate management practice towards giving stakeholders a role in corporate governance,

·          raising the importance of social and environmental sustainability as a global corporate management principle.

Research Focus

Forty-seven interviews were conducted in April 2001 with Misima Mines Limited (MML) stakeholders and employees. MML employees described their relationships with 13 stakeholder organizations that were identified during a feasibility study in October of 2000.  Representatives of the stakeholder organizations described their relationships with MML.  Papua New Guinea (PNG) based stakeholders also described their relationships with one another

 

The measures included open ended questions about interviewees’ visions for the future of Misima, current realities, and priorities for action.  Interviewees also rated or ranked their relationships in terms of the motivation to collaborate, the amount of communication, the trustworthiness of the other party, and mutual understanding and common goals.  The latter three measures were converted to a standardized metric and added together to yield a measure of the amount of “social capital” in each relationship.  Relationships high in social capital have good communications, high levels of trust, shared understanding, and common goals.  Social capital predicts how easy it would be for the parties to the relationship to collaborate with one another if they were motivated to do so.