Estimating the Efficiency of Sustainable Development by South African Mining Companies

Transcription

1 Kamla-Raj 2011 J Hum Ecol, 36(3): (2011) Estmatg the Effcecy of Sustaable Developmet by South Afca Mg Compaes Mewe Obeholze ad Thomas Fedek Psloo* School of Accoutg Sceces, Reseach Ut fo Ecoomc ad Maagemet Sceces, Faculty of Ecoomc ad Maagemet Sceces, Pvate Bag X6001, Noth-West Uvesty, Potchefstoom, 2520, South Afca Telephoe: o , Fax: , E-mal: Mewe.Obeholze@wu.ac.za *School of Accoutg Sceces, Reseach Ut fo Ecoomc ad Maagemet Sceces, Faculty of Ecoomc ad Maagemet Sceces, Noth-West Uvesty, Potchefstoom, South Afca KEYWORDS Data Evelopmet Aalyss. Eegy ad Wate Usage. Geehouse Gas Emssos ABSTRACT The pupose of the study was to develop a model, usg data evelopmet aalyss (DEA), ode to estmate the elatve effcecy of e South Afca lsted mg compaes the effots to covet evometal mpact to ecoomc ad socal gas fo shaeholdes ad othe stakeholdes. The evometal mpact factos wee used as put vaables, that s, geehouse gas emssos, wate usage ad eegy usage, ad the gas fo shaeholdes ad othe stakeholdes wee used as output vaables, that s, umbe of employees, taxes, doatos, dvdeds ad evestmets. The study foud substatal dffeeces betwee the elatve effcecy of gold-mg compaes ad the effcecy of all the othe mg compaes, whee gold-mg compaes wee the most effcet to covet the evometal mpact to ecoomc ad socal gas. The pactcal mplcato s that gold-mg compaes should use the coal- ad platum-mg compaes dcated ths study as a bechmak fo best pactce sustaable developmet. Futhe eseach s ecommeded, that s, sce moe compaes ae wllg to epot o the evometal mpact, a smla study should be coducted to clude moe mg compaes fom dffeet sectos. Ths wll allow a geate dscmato betwee the compaes due to the lage quatty of data ad a bette compaso ca be made betwee mg compaes the dffeet mg sectos. INTRODUCTION Sustaable developmet focuses o the use of esouces to meet huma eeds ad pesevg the evomet, so that these eeds ca also be met by futue geeatos (Adams 2006). The Wold Commsso o Evomet ad Developmet s epot 1987 tated the debate about sustaablty ad detfes thee dmesos of sustaable developmet, amely evometal, ecoomc ad socal sustaablty (WCED 1987). To meet the eeds of futue geeatos, these thee dmesos eed to be tegated to addess the balace betwee dmesos of sustaablty. Sustaable developmet eles o ecoomc developmet (Sh 2002), ad although ecoomsts evaluate ecoomc developmet dffeetly, ts beeft, ham ad othe cosequeces should be take to accout (Cegs ad Kaevat 2009). Sustaablty s a evolvg cocept, whch makes t dffcult to put the aleady adequately defed defto to pactce by scetsts ad maages (Adeso ad Måell 2007). The mpotace of the topc s that t emphasses the elatoshp betwee evometal mpact wth socal ad ecoomc developmet that wll povde a ew pespectve to the maages of mg compaes. I the past, may authos (see Table 1) challeged the dea that the educto of evometal ham leads to a mpovemet ecoomc pefomace. These studes used dffeet dcatos to estmate ecoomc pefomace, as exhbted Table 1. Table 1: Ecoomc pefomace dcatos used by pevous studes Autho(s) Jagg ad Feedma (1992) Hat ad Ahuja (1996) Bhat (1999) Kg ad Leox (2001) Rvea (2001) Oltzky et al. (2003) Ambec ad Laoe (2008) Ecoomc Pefomace Idcato Net come, etu o equty/ assets, cashflow to equty/ assets Retu o sales/ equty/ assets Maket value of shaes Maket value vesus eplacemet value of shaes Reveue Copoate facal pefomace Poft, that s, cost ad eveue

2 180 MERWE OBERHOLZER AND THOMAS FREDERIK PRINSLOO The above-metoed studes all have two aspects commo, fstly, the ecoomc pefomace dcatos all emphasse the ceato of shaeholdes value ad the teests of othe stakeholdes ae ot measued. Secodly, these studes all measued the stegth of a lea assocato betwee evometal pefomace wth ecoomc pefomace by usg coelato aalyss. The gap that ths study attempts to fll s to use ot oly ecoomc, but also socal pefomace dcatos that emphasse the ceato of value fo shaeholdes as well as othe stakeholdes. Futhemoe, a alteatve appoach, othe tha the metoed lea asso-cato, may povde othe sghts wth egad to the teacto of the sustaablty dme-sos. The eseach questo s what s the elatve effcecy of South Afca mg compaes to covet evometal mpact to ecoomc ad socal ga? I othe wods, what s the elatve effcecy of sustaable developmet of South Afca mg compaes? The pupose of the study was to develop a data evelopmet aalyss (DEA) model whee evometal mpact dcatos ae used as put vaables ad both ecoomc ad socal pefomace dcatos ae used as output vaables. Ths s to deteme the effcecy of how mg compaes covet the evometal mpact to ecoomc ad socal gas fo both shaeholdes ad othe stakeholdes. Sce ths model was appled to e mg compaes that opeated fou dffeet sectos, a compaso betwee the mg compaes the dffeet sectos could also be made. The study foud that the gold-mg compaes wee the most effcet covetg evometal mpact to ecoomc ad socal gas fo shaeholdes ad othe stakeholdes. The pactcal mplcato s that goldmg compaes should use the coal- ad platum-mg compaes dcated ths study as a bechmak fo best pactce sustaable developmet. Sustaable Developmet Besdes a legslatve appoach, a stategc appoach s eeded to solve the evometal, ecoomc ad socal poblem (Sedou ad Roma 1999). Chages poducto ad cosumpto eed to be made fo sustaablty to be effectve. Govemets, commutes ad busesses all see the mpotace of potectg the evomet fo futue geeatos ad have espoded to the challege of sustaablty. Wth the emphass o mg, Petteso (2007) dcated the dak face of mg as today s extacto of meals, whch s o-eewable, wll educe the avalablty of those meals tomoow, ad futhemoe, aspects such as polluto ad evometal mpacts may lead to commuty ad poltcal uest. At the othe ed of the scale, that s, the lghte face of mg, Petteso (2007) metoed beefts such as the developmet of wate supples, school, chuch, medcal facltes ad buldgs, health pogammes such as malaa mtgato, spot facltes, scholashps, ad wok-elated sklls tag ad developmet. The teacto betwee the thee dmesos of sustaablty s also kow as tple bottom le accoutg ad a gowg umbe of compaes ae publshg tple bottom le ad sustaablty epots (Bow ad Fase 2006). May compaes ae epotg accodg to the Sustaable Repotg Gudeles (GRI 2002), whch ae volutay gudeles that compaes use to epot o the thee above-metoed sustaablty dmesos. The Global Repotg Itatve (GRI) s volutay gudeles that compaes use to epot o the evomet. The am of the GRI s to ehace the qualty of sustaablty epotg (Ambe 2007). Data Evelopmet Aalyss (DEA) Data Evelopmet Aalyss (DEA) s a opaametc lea pogammg techque that measues the elatve effcecy of a compaatve ato of outputs to puts fo each compay (Ray 2004; Avka 1999). Uless maages ae coceed that vaables should be estcted because they ae ove-epeseted o ude-epeseted, commo pactce allows the optmsato model to deteme the weght fo each vaable (Avka 1999). DEA s a elatve effcecy measue that accommodates multple puts, multple outputs ad othe factos a sgle model (Halkos ad Salamous 2004). The ma usefuless of DEA s ts ablty to detfy effcet compaes, to geeate potetal mpovemet fo them ad dcate effcet compaes that should be used as a bechmak by the effcet oes (Avka 1999). The fudametal assumpto of DEA s that

3 SUSTAINABLE DEVELOPMENT 181 f compay A s capable to poduce Y(A) uts of output wth X(A) puts, the othe poduces should also be able to do the same f they wee opeated effcetly. The coe of the execse s to fd the best vtual poduce fo each eal poduce ad the compae the poduce to ts best vtual poduce ode to deteme ts effcecy. The best vtual poduce s foud by meas of lea pogammg (Adeso 1996). DEA effectvely estmates the fote by fdg a set of lea segmets that evelop the obseved data. DEA ca deteme effceces fom a put-oetated (put mmsato) o output-oetated (output maxmsato) pot of vew (Coell et al. 2005). Futhemoe, aalysts choose betwee usg costat etu to scale (CRS) o vaable etu to scale (VRS). The fst mples a popotoate se outputs whe puts ae ceased, othe wods, a fm s effcecy s ot flueced by the scale of opeatos (Avka 1999). Ths s a sgfcat assumpto, sce CRS may oly be vald ove a lmted age ad ts use should be justfed (Adeso 1996). VRS mples a dspopotoate se o fall outputs whe puts ae ceased (Avka 1999), othe wods, f a fm gows sze, ts effcecy wll ot stay costat, but t wll ethe se o fall. The successful applcato of the assessmet of compaatve effcecy of compaes depeds o the selecto of appopate put vaables ad output vaables (M et al. 2009), whch ca be elated to each othe (Ray 2004) ad should ot be opposed to each othe, but athe complemetay (L ad Lag 2010). Data Evelopmet Aalyss (DEA) Model The followg summases the DEA model that was specfed, wth the followg put vaables: Geehouse gas emssos tos (x 1 ), wate usage m 3 (x 2 ) ad eegy usage gga joules (x 3 ). The followg output vaables wee specfed: Numbe of employees (y 1 ), taxes (y 2 ), doatos (y 3 ), dvdeds (y 4 ) ad evestmets (y 5 ). The thee evometal mpact dcatos, amely geehouse gas emssos, wate usage ad eegy usage, wee used as the put vaables the DEA model, because mg compaes use these thee dcatos the sustaablty epots fo bechmakg. Geehouse gas emssos cosst maly of cabo doxde (CO 2 ) ad othe gases such as methae (CH 4 ), tous oxde (N 2 O) hafum cabde (HFCs), pefluoated compouds (PFCs), sulphu hexafluode (SF 6 ) ad othe CO 2 equvalets. The wate usage s the quatty that s dcated fo pmay actvty oly. Eegy usage cludes the followg: electcty puchased fom the atoal utlty ESKOM; ad eegy fom pocesses ad fossl fuels cosumed. The am of the DEA model s to deteme how effcet the mg compaes ae covetg the above-metoed evometal mpact dcatos (puts) to ecoomc ad socal gas (outputs). Theefoe, fve vaables wee selected that ae to the beeft of vaous stakeholdes. The fst s the umbe of employees. Ths cludes full-tme employees fom all opeatos plus cotactos wokg o a tempoay ad full-tme bass o the me. The secod s the goss paymet of taxes to the govemet. The boade commuty s the beefcay ths egad. Doatos, whee selected pats of the commuty ae the beefcay, s the thd output vaable. The fouth ad the ffth output vaables ae maly to the beeft of shaeholdes, amely dvdeds ad evestmets. Sample ad Data METHOD A coveece sample of e South Afca mg compaes was selected fo the study ad the aual facal fomato (2005 to 2009) was used. The easo why oly e mg compaes wee selected was due to the lmted evometal data avalable ad due to the lmted umbe of mg compaes that epoted o evometal-elated ssues po to The e compaes opeate the followg sectos of the mg dusty; thee the gold-mg secto (AgloGold Ashat, Goldfelds ad Hamoy), fou the platum-mg secto (AgloPlat, ImpalaPlat, Lom ad Notham), oe the coal-mg secto (Aglo Coal) ad oe s a dvesfed atual esouces compay (BHP Bllto). Documetay data fom teal compay souces, such as aual epots ad sustaablty epots, wee used to acque the fomato eeded fo ths study.

4 182 MERWE OBERHOLZER AND THOMAS FREDERIK PRINSLOO DEA Methodology The softwae package of Zhu (2004) s pupose-bult to solve the DEA poblem ad was used ths pape to geeate estmates of the aual put-oetated ad output-oetated techcal effceces fo each compay ove a fve-yea peod. Techcal effcecy estmates how well puts ae coveted to outputs (Avka 1999). The less estcted VRC appoach was used. The DEA fomula s as follows (Zhu 2004): Iput-oetated m m θ - ε( Σ S - + Σ S + ) subject to s =1 =1 χ j + S - = θχ o =1,2,..., m; γ - S + = γ o =1,2,..., s; = 1 λ j 0,2,...,. Output-oetated m m ϕ - ε( Σ S - + Σ S + ) =1 =1 subject to m χ j + S - = θχ o =1,2,..., m; γ - S + = ϕ * γ o =1,2,..., s; = 1 λ j 0,2,...,. The put-oetated fomula ad the output-oetated fomula calculate put mmsato ad the output maxmsato, espectvely (whee è dcates the effcecy scoe). Each obsevato, DMU j (j = 1,..., ), uses m puts X j ( = 1, 2,...,m) to poduce s outputs Y j ( = 1, 2,...,s), ad whee DMU o epesets oe of the DMUs ude evaluato, ad X o ad Y o ae the th put ad th output fo DMU o, espectvely. I ode to cosde ay slacks, the pesece of the o-achmedea ε effectvely allows the mmsato ove θ to pe-empt the - optmsato volvg the slacks, s ad s +. [Fo a moe detaled dscusso o the DEA methodology, see Ray (2004), Zhu (2004) ad Coell et al. (2005)]. EMPIRICAL RESULTS Table 2 exhbts the elatve techcal effcecy of the e mg compaes that ca be classfed fou dffeet sectos. The aual put-oetated ad output-oetated techcal effceces of each mg compay ae gve fom 2005 to These ae estmates to dcate the effcecy of each compay to covet the puts (geehouse gas emssos, wate ad eegy) to outputs (umbe of employees, taxes, doatos, dvdeds ad evestmets). DISCUSSION Table 2 shows the aveage put-oetated techcal effcecy of Platum-mg compay Oe s 0.992, mplyg that ths compay should educe ts put by 0.8% wthout educg ts outputs. Alteatvely, the output-oetated techcal effcecy of mples that ths compay should cease ts outputs by 0.6% wthout ceasg ts puts. Oly the coal-mg compay (Oe) was fully effcet (100 pecet) fo the whole peod. The platum-mg compaes ae the secod most effcet wth a aveage put-oetated estmate fo the fou compaes (Oe to Fou) of 96% ad a output-oetated estmate of 104,9%. These compaes wee 13 out of the 20 tmes fully effcet. The sgle dvesfed compay (Oe) s thd wth put- ad outputoetated estmates of 92.9% ad 103.9%, espectvely. Dvesfed compay Oe was also thee of the fve yeas fully effcet. The thee gold-mg compaes have the lowest effcecy estmates ad oe of them was fully effcet ay yea. The aveage put-oetated estmate fo these thee compaes s 77.5% ad the aveage output-oetated estmate s 120.9%. The effcecy of the platum-mg compaes s aked oveall secod, thd, fouth ad sxth places, whee the effceces of the goldmg compaes ae aked the seveth, eghth ad th places. It s also mpotat to ote that the effcecy estmates of the goldmg compaes ae sgfcatly wose tha all the othe mg compaes. It s ot possble to compae these fdg to othe studes such as Ambec ad Laoe (2008), Oltzky et al. (2003), Kg ad Leox (2001) ad Rvea (2001), because, although the same topcs wee vestgated, the ams wee dffeet ad theefoe the measug methods wee dffeet. These othe studes used the lea assocato method ad could oly dcate fo example to mg-sectos whethe t does / does ot pay to be gee fo that secto. The poblem s that the effcecy of a dvdual compay

5 SUSTAINABLE DEVELOPMENT 183 Table 2: Iput ad output-oetated elatve techcal effcecy of dffeet mg sectos Platum Gold Dvesfed Coal Effcecy Effcecy Effcecy Effcecy Iput Output Iput Output Iput Output Iput Output Oe Oe Oe Oe Aveage Aveage Aveage Aveage Two Two Aveage Aveage Thee Thee Aveage Aveage Fou Aveage Total Total Aveage Aveage ad sectos ae ot evealed, as beg doe ths study. CONCLUSION The pupose of the study was to develop a DEA model to estmate the elatve effcecy of South Afca mg compaes covetg evometal mpact to ecoomc ad socal pefomace. To estmate the effcecy of sustaable developmet, the evometal mpact dcatos wee used as put vaables ad both ecoomc ad socal dcatos ae used as output vaables. The lmtato of the study s that oly a lmted umbe of compaes wee cluded, because of the fact that ot all the compaes submtted sustaablty epots accodg to GRI gudeles. Clea teds could be detfed wth egad to fou platum- ad thee gold-mg compaes. Sce oly oe dvesfed ad oly oe coal mg-compay wee cluded, o ted could be detfed. The study foud that all the dvdual coal-, dvesfed- ad platum-mg compaes wee most of the tme fully effcet, wheeas all the gold-mg compaes wee eve fully effcet. The sx most effcet compaes ae the coal-, dvesfed- ad fou platum-mg compaes ad the most effcet compaes ae the thee gold-mg compaes. It was also oted that the effcecy scoes of the gold-mg compaes ae much wose tha the effcecy scoes of all the othe compaes. Theefoe, the elatve evometal mpacts of gold-mg compaes ae much moe tha the mpacts of all the othe compaes to geeate gas fo shaeholdes ad othe stakeholdes. The pactcal mplcato s that gold-mg compaes should use the coal- ad platum-mg compaes dcated ths study as a bechmak fo best pactce sustaable developmet. Futhemoe, fom a put-oetated vew, maages, vestos, busess pates ad the govemet ca become awae of the fact that t seems that goldmg compaes ham the evomet to a geate extet tha othe mg compaes to ceate jobs, to suppot the commuty by taxes ad doatos, ad ceate value to the shaeholdes by meas of dvdeds ad evestmets. Fom a output-oetated vew, these shae-

6 184 MERWE OBERHOLZER AND THOMAS FREDERIK PRINSLOO holdes ad othe stakeholdes gas should be ceased elatve to the evometal mpact factos. RECOMMENDATIONS The value of the study s that ths s the fst effot to develop a DEA model to estmate the effcecy of mg compaes covetg evometal pefomace mpact dcatos to ecoomc ad socal gas fo both shaeholdes ad othe stakeholdes. As moe ad moe compaes epot o the evometal mpact, a smla study should be coducted to clude moe mg compaes fom dffeet sectos. Ths wll allow a geate dscmato betwee the compaes, due to the lage quatty of data ad moe clea dffeeces egadg the mg compaes the vaous sectos. REFERENCES Adams WM The Futue of Sustaablty: Rethkg Evomet ad Developmet the Twety-Fst Cetuy: Iteatoal Uo fo Cosevato of Natue Repot of the IUCN Reowed Thkes Meetg, Jauay, Cambdge: IUCN. Fom <cmsdata.uc.og/dow loads/uc_futue_of_sustaablty.pdf> (Reteved Octobe 24, 2010). Adeso T A Data Evelopmet Aalyss (DEA) Homepage. Fom < homedea.html/> (Reteved Febuay 10, 2009). Adeso F, Måell A A Euopea Netwok Suppot of Sustaable Foest Maagemet. Fom < (Reteved Decembe 8, 2010). Avka N Applcato efeece fo data evelopmet aalyss bach bakg: Helpg the ovce eseache. Iteatoal Joual of Bak Maketg, 17: Ambe C Pespectves o evometal maagemet accoutg (EMA) South Afca. Southe Afca Joual of Accoutablty ad Audtg Reseach, 7: Ambec S, Laoe P Does t pay to be gee? A systematc ovevew. Academy of Maagemet Pespectves, 22: Bhat VN Does t pay to be gee? Iteatoal Joual of Evometal Studes, 56: Bow J, Fase M Appoaches ad pespectves socal ad evometal accoutg: A ovevew of the coceptual ladscape. Busess Stategy ad the Evomet, 15: Cegs R, Kaevat R The assessmet of sustaable developmet: Sustaablty tedeces Lthuaa ( ). Socalta Tyma / Socal Reseach, 2: Coell T, Rao DSP, O Doell CJ, Battese GE A Itoducto to Effcecy ad Poductvty Aalyss. New Yok: Spge. Global Repotg Itatves (GRI) Sustaable Repotg Gudeles. 2 d Geeato Gudeles, Amstedam: GRI. Fom < og> (Reteved May 20, 2009). Hat S, Ahuja G Does t pay to be gee? A empcal examato of the elatoshp betwee emsso educto ad fm pefomace. Busess Stategy ad the Evomet, 5: Halkos GE, Salamous SS Effcecy Measuemet of the Geek Commecal Baks wth the use of Facal Ratos: A Data Evelopmet Aalyss Appoach. Maagemet Accoutg Reseach, 15: Fom < ma> (Reteved Jauay 5, 2011). Jagg B, Feedma M A examato of the mpact of polluto pefomace o ecoomc ad maket pefomace: Pulp ad pape fms. Joual of Busess Face ad Accoutg, 19: Kg AA, Leox MJ Does t eally pay to be gee? A empcal study of fm evometal ad facal pefomace. Joual of Idustal Ecology, 5: L Y, Lag L A Shapley value dex o the mpotace of vaables DEA models. Expet Systems wth Applcatos, 37: McGego BFA Database. Fom < obfa.co.za> (Reteved Apl 30, 2010). M H, M H, Joo SJ, Km J Evaluatg the facal pefomace of Koea luxuy hotels usg data evelopmet aalyss. The Sevce Idustes Joual, 29: Oltzky M, Schmdt F, Ryes S Copoate, socal ad facal pefomace: A meta-aalyss. Ogazato Studes, 24: Petteso MG Meals sustaablty, emegg ecoomes, the developg wold, ad the tuth behd hetoc. Estoa Joual of Eath Sceces, 57: Rvea J Does t pay to be gee the developg wold? Patcpato a Costa Rca volutay evometal pogam ad ts mpact o hotels compettve advatage. Busess Stategy ad Evomet, 10: Ray SC Data Evelopmet Aalyss: Theoy ad Techques fo Ecoomcs ad Opeatoal Reseach. Cambdge: Cambdge Uvesty Pess. Sedou C, Roma AG The evometal accoutg: A stumet fo pomotg the evometal maage. Theoetcal ad Appled Ecoomcs, Sh XQ Dyamc aalyss ad assessmet fo sustaable developmet. Joual of Evometal Sceces, 14: Wold Commsso o Evomet ad Developmet (WCED) Ou Commo Futue. Uted Kgdom: Oxfod Uvesty Pess. Zhu J Quattatve Models fo Pefomace Evaluato ad Bechmakg: Data Evelopmet wth Speadsheets ad DEA Excel Solve. Massachusetts: Kluwe.