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Social Responsibility and Infrastructure Development

 

LIQ talks to Fernando Ruiz-Mier, Senior Operations Officer at IFC
 
 
1.     The Social Responsibility Forum for the Extractive Sectors has a pre-conference workshop that you will be leading and in the workshop's agenda something caught my attention, a model to estimate the financial returns of community investments. This is a very interesting concept, how does it work? 
The Sustainability Planning and Financial Valuation Tool (FV Tool) for the extractive industries generates reasonable net present value ranges on the return from community investments and calculates the financial value of risks mitigated through such activities. This value can take the form of either value protection (i.e. value of avoiding risks) or value creation (i.e. cash savings/productivity gains).  The outputs will enable the justification and quantification of the business case for social investments, and provide a comparative analysis of social investment options.  The tool is grounded in the assumption that a company’s community investments can improve relationships between a company and community, which should reduce the likelihood of risks and as a result bring value back to the company.  This kind of information helps to justify and stabilize the annual budget that companies devote to sustainability efforts. It creates incentives, within companies, to invest in their communities.   
 
 
2.     At said Forum, you also intend to address the question of how can corporate social responsibility contribute to the impact royalties and taxes have on local communities, how do you think companies and local governments can work together? 
Increasingly countries’ fiscal regimes mandate that a portion of the revenues generated by oil, gas, and mining projects, in the form of royalties and taxes, be transferred to sub-national governments (e.g. municipalities). Given that these revenues can be substantial, they constitute an i>.....




 
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