Framework for stakeholder relations in the extractive sector in the Western Cape

Abstract

South Africa’s mining sector has been going through a rough spell in recent years. A framework to support stakeholder relations engagement initiatives and approaches have become an imperative. Undoubtedly, effective management of stakeholder relations promotes the success and sustainability of the extractive industry. Measures to transform the South African economy and the mining sector in particular, are constrained by stakeholder relationship ineffectiveness which undermines stakeholder activities of mining companies. This paper sought to develop a framework for stakeholder relations in the extractive industry. It is hoped that recent adversarial relations would benefit from a framework that offers a new approach to relationship management. Previous studies identified that there is significant divergence between mining activities in general and community development in particular. The studies further identified that the real benefits of stakeholder relations may not be easily expressed in a from a single lens view if desired benefits are to be achieved. Evidence of perceived ineffective stakeholder relations were collected from sixteen employees selected using purposive sampling from eight participating companies in Cape Town. A sequential mixed methods approach was adopted. This approach entailed collecting qualitative data using in-depth interviews on the 16 employees and quantitative data from 384 respondents using online LimeSurvey. The paper findings revealed mixed and varied respondents’ perceptions of stakeholder’s engagement initiatives. This research provides insights to understanding stakeholder relationship management from a three dimensional perspective, namely: context, group dynamics, and implementation. The value of this study was twofold. First, it was able to determine the level of engagement needed to enhance stakeholder relations. Second, it managed to a present an engagement framework that is hoped to enhance stakeholder relations in South Africa’s extractive industry.