A huge opportunity many companies miss


By Trevor Kalinowsky

If trade press and conference promoters are anything to go by, local content is the latest trend to hit the social performance landscape. Apparently if your project or company doesn’t have a ‘framework for holistic implementation of a local content strategy,’ you’re sorely behind the times. Or so it seems…

What are we talking about here, anyway?

Unfortunately, the local content space is filled with techno-speak. But modern-sounding jargon isn’t the best way to switch people on to what is actually a great approach to driving value and building long-term social acceptance. When it comes to local content, there are two problems muddying the waters: the word ‘local’, and the fact that local content needs people with seemingly different objectives to work together.

Local content refers to the extent to which your project uses local inputs – people (local hiring) or goods and services (local procurement). There are different levels; local content can mean national content (from the host country) or community content (from the area/s closest to the project or operation), and it’s important to use the right language, since hiring at the national level versus the community level means very different things to governments and communities. A local content strategy captures an organization’s plans to optimize local content to meet commercial, operational and social performance goals.  This isn’t feel-good corporate social responsibility but the pragmatic space where company operations create real local benefits.P1000526

But we’re already hiring and purchasing locally, so we’re doing local content, right?

Not quite – the key is optimization. When human resources, procurement and community departments get together and have senior management buy-in, community development programs that drive economic development or build vocational capacity can feed into procurement and hiring processes. It’s a great opportunity to create value but, all too often, we find departments working in isolation even though their objectives overlap.

Most projects, operations and sites already have many pieces of a local content program in place; what’s lacking is the strategy to bring these moving parts together so they start delivering additional benefits to a project or operation. When this happens, construction teams eat food grown from the communities they operate in, live in buildings built by local small and medium-sized enterprises that use locally sourced materials, and work with people trained at the vocational institute that the project supports. Cohesion builds social acceptance.  It doesn’t matter whether you’re a miner, a forester or a farmer – you already need both labor and goods. Harnessing these to local community supply generates a faster return on community acceptance than almost any other method.

Is it easy to do?

That depends. How easy is it for departments and staff to break out of their traditional way of doing things and collaborate? How easily can one department adjust its timing and procedures to align with those of another department? If your team is dynamic, there’s lots of room for innovative strategies to maximize local content. If your team prefers to operate in silos, you’ll probably see this as more trouble than it’s worth. And, really, at that point local content is probably the least of your worries.

There may be lots of debate about the best way to use local content to align company and community objectives, but one thing is clear: the local-content agenda isn’t just being pushed by innovative enterprise teams. It’s also being driven by new government regulations and by communities seeking sustainable economic development before granting social acceptance of a project.