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Why Geoteam Invests into Social Projects before Seeing Profit?

1. Geoteam hasn’t started mining in Amulsar yet but the company has made significant social investments. In Armenia the investment of business entities into social projects is often taken with suspicion especially when a company hasn’t seen profit yet. Why would at all a business entity undertake social development projects?

I can only speak for Geoteam. From the start in 2007 we have already invested 2 million USD in different social development projects. Understandably, it is not a common practice in Armenia to do such investments before profit. This is because in Armenia social investments often take the form of charity. So the company has profits and from its profits it does some charity work. In reality, Corporate Social Responsibility is not charity. It is the responsible conduct of business. In case of mining, it is for example, thorough assessment of the environmental and social impacts, offering such projects that would multiply the positive impact of the business operation. To reach results the company needs to plan such projects not when it starts profiting, but long before – right at the beginning of exploration. For the same reason we start environmental activities long before we start mining. We have already invested 5 million dollars into research and mitigation measures before the start of construction. Responsibility does not start with profiting. It is an integral part of a responsible business conduct from day one and is closely related to a company’s core business.

2. If investing into environmental management at early stage is aimed at preventing possible risks, thus it is understandable why start before profit, what is the aim of social projects at an early stage?

It is the same approach, whether in case of environmental or social projects: namely to prevent the possible negative impacts and to create mechanisms to multiply the positive impacts. This needs to be duly planned and implemented before you start mining. Just a brief example: when mining starts many local residents will be working in the mine. Meanwhile, it is important to ensure that other spheres of the economy also develop to give an opportunity to those who want to continue to work in agriculture. To ensure this, one needs to start implementing measures today. To date we have already invested 260.000 USD into various agricultural and cattle breeding social projects in Amulsar adjacent communities to make sure alternative sources of income, independent from the mine, also develop.

The mine will generate visible wealth in the communities and our social projects are also aimed at encouraging diversifying the distribution of this income by directing to viable spheres of economy. Thus for example, we have invested 45.000 USD into various tourism development initiatives encouraging further developments in this sphere. And, of course, it is difficult to imagine the development of the community without adequate infrastructure: We have already spent around 730.000 USD on road, water pipe repair, gas supply and other infrastructure projects. All these projects are in one or the other way aimed at making Amulsar project implementation more efficient and to secure long-term economic impact.

 

Read more: http://en.168.am/2015/08/26/1850.html


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