Jinfeng Mining Company and Sustainable Community-Building

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This article is part of CDB’s Special Focus on ‘Effective Communication and Cooperation between NGOs and Business’. It originally formed the 7th case study in CDB’s latest research report which we released in July 2015 (you can view the original here).  Over the next few weeks we will be publishing translations of the ten case studies contained in that report. The case studies detail partnerships between Chinese NGOs, foundations, and businesses.

Corporate social responsibility (CSR) reflects the current trend of enterprises returning to their core business and seeking competitive advantages by solving social problems in addition to expanding business opportunities. There are still many social problems as well as room for development in China. This creates opportunities for non-profit organizations and businesses to collaborate and expand development prospects.

Each business has varying and diverse requirements. Non-profit organizations are partners for businesses undertaking community investments, the so-called “business and non-profit collaboration”. Community investments are very important for businesses, especially special enterprises such as mining and energy.

Chinese non-profit organizations need to understand the motives for collaboration. For example, does a business that only meets the lowest CSR standards do so to avoid legal disputes that might lead to a public relations crisis? Do they want to improve their public image or government relations? Do they want to focus on cause marketing, achieve business growth or improve workers’ level of satisfaction, loyalty, and company cohesion? Non-profit organizations must consider these questions when starting a new project. For a business, a healthy community is a competitive advantage. In many cases, business and non-profit collaboration is not just a matter of donating capital but a creative marketing or public relations strategy. This circumstance creates opportunities for non-profit and business collaboration. Of course, how to balance matters that do not overlap between business and the public good is also a topic for discussion.

If Chinese non-profit organizations fail to ascertain these varying demands, they will encounter frustrations. Whether state-owned enterprises or international corporations, these businesses all speak of “giving back to society” and fulfilling their CSR duties. However, internally, many businesses regard it as public and government relations management, an easy means of achieving more economical results, and do not necessarily pay continuous and indepth attention to social developments. Despite the fact that businesses do not focus on social responsibility but on government and public relations,  this still presents non-profit organizations with opportunities. Industry insiders noticed that non-profit organizations and businesses have excellent levels of communication and recognition, which allows for a good partnership. For example, the Youth League Committee and Women’s Federation, serving as the support branch, found specialized non-profit organizations to serve as the executive branch and brought in the enterprise’s internal volunteer association. This cooperative solution fulfills the business’ internal requirements while establishing a cross-departmental cooperative relationship with non-profit organizations. As a non-profit organization collaborates with a business, they can thoroughly consider the business’ needs when designing a project while leaving their own goals and principles unaffected.

Businesses highly value the concept of return on investments. Non-profit and business collaboration should also remind businesses of their role in society and allow them to reflect on that role. The case study below looks at a natural resources enterprise’s investment towards its community. Not only does the company’s development projects influence its natural environment, but they also create a series of positive and negative societal effects. If these negative effects cannot be solved in the long-run, they will compromise the company’s  productivity and harmonious community development. Jinfeng Mining Company collaborated with Guizhou Normal University’s Community-based Conservation and Development Research Center. For its community development projects, the company implemented baseline investigations, group interviews, key person interviews, and household surveys. From this basis, they drew up Jinfeng Mining Company’s community development plan. The center analyzed the social effects of the company’s new development projects and made suggestions based on legal and environmental considerations. It benefits from the expertise of the center to draft agreements, coordinate the interests of various government bureaus, found a community organization to balance interests at village level with the village committee and the party branch,  establish the four party communications platform  ( businesses, communities, village committees, and poverty alleviation offices), and fix a conference date. The center also spent a great effort producing a community workbook meeting the needs of the mining company’s various departments, winning both parties’ support, and promoting their collaborative relationship.

Case study: Jinfeng Mining Company’s Grassroots Cooperation to Create a Sustainable Community

Guizhou’s Jinfeng Mining Company is a Sino-foreign joint venture. Its flagship Jinfeng Gold Mine is located within Guizhou Province’s Qianxinanzhou. The gold mine’s neighboring villages are some of the poorest communities in Guizhou. While the community is mired in poverty, the company’s establishment also impacts the community farmers’ production and life style, changing the traditional way that locals were entirely dependent upon agricultural income and reorienting the local economy and community from a traditional agricultural system into a synthesis of agricultural and modern industrial system. While this change led to economic developments, it also brought along a certain amount of social risk. Not only must Jinfeng’s community development resolve the poverty issue but also coordinate the company’s community relationship.

In 2002, Jinfeng Gold Mine investigated its neighboring community’s poverty issue, discovering its frail infrastructure, deficient communication and electricity, insufficient water resources, poor roads and transportation, backward education, low health and sanitary conditions, and burdensome survival pressures. Following earlier community development projects, Jinfeng Company realized that scientific and practical community development policies require theoretical guidance and professional personnel to promote the cause. Hence, choosing an external partner became a priority. Through the US Business for Social Responsibility (BSR) company’s  investigation and screening, Guizhou Normal University’s Community-based Conservation and Development Research Center (the Center) became the company’s technical support organization responsible for developing and planning projects, setting up community organizations, supervising and assessing projects, as well as establishing government partnership. At the Center’s recommendations, Guizhou’s Poverty Alleviation Office and Zhenfeng county Poverty Alleviation Office energetically supported and participated in Jinfeng Company’s community development work.

The Center, established in 2000, is an open research institute, focusing on sustainable development and environmental protection with the community as the basic unit. From May to August, 2008, Jinfeng Company worked with the Center and Guizhou’s Poverty Alleviation Office’s community development experts, through participating in a paticipatory village-level environmental and poverty alleviation plan, to initiate research on the mining area’s neighboring community. On this basis, they drew up Jinfeng Company’s neighboring community development plan. The village residents raised existing problems for investigation, all of which are issues requiring urgent resolution. A detailed list of community development projects also received villagers’ approval. Moreover, the proposal also passed the county’s technical and capital exam and gained support. This plan involved Jinfeng Company’s neighboring Jinshan Village, Niluo Village, and Lanni Village for short-term, three-years, and long-term development plans under the Center’s direction.

Since the community’s poverty alleviation and community development plans are a long-term process and an enterprise or organization cannot replace the government throughout this process. Moreover, since community development involves many factors, a single community project funded with Jinfeng Company’s capital cannot solve all of the community’s development problems. Thus, increasing cooperation with the government, integrating various resources, utilizing the government’s channels of labor, and sharing labor methods all enhance working efficiency and quality. It also enhances the community’s development results. At the same time, private, public, grassroots, and community organizations can contribute various skills and resources. Their cooperation can lead to greater benefits than independent actions. Formal partnerships can lower costs, avoid creating redundant projects, and decrease the community’s reliance on the mining industry. A partnership can also spread to a wider domain, attaining the local community’s long-term approval.

On November 13, 2008, the Eldorado Company, Jinfeng Company’s foreign investor, and Guizhou’s Zhenfeng county government signed a “Memorandum Regarding Community Development Project Collaboration”. This is the first time that a Chinese mining company has signed a social responsibility agreement with its local government. According to the agreement Jinfeng Company and relevant offices – mainly Zhenfeng county’s poverty alleviation office – will work together for the next ten years, from 2008 to 2017, dividing the capital into three time periods to be invested in the neighboring community. To carry out this paticipatory community development plan, the county’s poverty alleviation office will take main responsibility for implementing the community development plan in the agreement.

At the same time, the Eldorado Company also signed a “Memorandum Regarding Collaboration to Develop ‘Guizhou’s Environmental Protection and Sustainable Development Management Training Project’” with Guizhou’s Environmental Protection Agency. This project is a five-year collaboration between Eldorado Gold, Guizhou’s Environmental Protection Agency and Sydney University’s Asia-Pacific Research Institute, in which government officials undergo annual training in both Australia and China through researching and analyzing case studies, investigating on the ground, attending seminars and exchanging information with the Australian government, all giving students the opportunity to receive hands-on experience and understand major international practices.

Establishing a community development department is a symbolic step for Jinfeng Company’s community relations. Before this, there were no Chinese businesses with a public welfare department nor did any business allocate its professional staff to carry out community development work. Nor were there businesses partnering with governmental poverty alleviation departments to directly implement community poverty alleviation projects.

The community development department, based on the participatory development plan, refers to each village’s development project list to establish the Jinfeng Company’s yearly community development plan. Under the community development department’s impetus, the development project was effectively implemented and gradually gained the villagers’ approval, affirming  the villagers as the main agents in directly implementing and managing these projects and establishing implementation and supervision groups. This not only shows its participatory nature but also increases the villagers’ responsibility and work efficiency and lowers management costs.

The project implementation includes strengthening the management of county and district coordination, providing technical support services, establishing a management body, and formulating management plans.

In light of the community’s features, and to promote the community’s economically and culturally sustainable development while constructing a “harmonious mine”, the Company undertook various types of  work and achieved very positive results. The local community’s social and economic appearance is currently undergoing noticeably positive changes. At present, the community’s infrastructure construction has already been launched according to plan in three villages. Lannigou Village’s residential road is essentially complete. The village appears to look entirely new. Investments in water and electricity infrastructures created greater convenience for local manufacturers. The construction of a model methane-generating pit relieved labor pressures and improved the village’s sanitary conditions. Educational facilities and living quarters conditions have improved, resolving teachers’ personal concerns.Thus, they are better able to focus on their jobs. Jinfeng Company’s role in promoting community development work created positive efforts and considerable contributions as well as spurring the villagers’ consciousness for self-development.

The Company’s HR policies also reflects active consideration of its community involvement. The policies prioritized employing local workers and made great efforts to encourage local participation in establishing projects. The Company also heavily stress providing workers with vocational training. After participating in this training, those who meet the company’s employment qualifications are given positions in various company departments. At the same time, in regards to different departmental and job  requirements, the Company will provide these employees with specialized skills training to raise their individual quality and work abilities. For villagers not chosen as employees, the Company will do its utmost to provide them with small-scale work, which will bring them income and also help them learn professional skills.

To promote local economic development, the Company shared some of its internal community development projects with local investors to promote county-level economic development. Villagers’ concept of life also underwent significant changes. Their conception of business operation gradually adjusted to market-oriented processes and their appreciation of the values of strong education have been internalized.

In Brief

The seventh case study in CDB’s 2015 report on business-NGO relations in China looks at the success that Jinfeng Mining Company, a natural resources enterprise, has had in cooperating with an NGO to create a sustainable community.
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