That wasn’t a trick title; I literally read a report backwards – by accident of course. I like to think that’s what happens when you are really excited… . Excited to explore moments when international development and the private sector collide; I go nuts over things like that.
The funny thing is, at one point I thought this. “They have a very unique way of ordering their information – but hey, it works!” *facepalm*
Hello and welcome to my blog where I share my thoughts and ideas about international development. Usually from articles I read, conversations I have with others, and those I hear in passing – it’s great!
Post Map
What on my mind? International Development and the private sector
The idea of international development is about reducing poverty and improving life outcomes. If that is true, surely it seems appropriate to also view it as a matter of changing the way we have done things… Particularly in those moments when we realise the status quo is not working.
Last week I read an article titled A shared role in poverty alleviation and land stewardship. The title was just as intriguing to me as the read was. The article explored the opportunities for closer collaboration between mining and agribusiness companies.
4 things I learnt – and you should know about collaborations between international development and the private sector.
- It is possible to create collaborations between mining and agribusiness companies.
- Similarly, it is not only possible but a necessary option to be explored by the proponents of international/global development.
- It requires a lot of due diligence, fostering relationships, community conversations, and respect on all sides.
- It is doable.
The case of the Watut Cocoa in Papua New Guinea
In case you’re wondering, that is Papua New Guinea (PNG) in the right corner (coloured green). It is just North of Australia.
Papua New Guinea, like Ghana and Cote D’Ivoire, is a cocoa-producing nation. Above all, they are known for producing a variety that has a distinctive fruity flavour.
Wafi-Golpu, on the other hand, is an advanced exploration site owned by the Australian mining company Newcrest Mining Limited. The mining site is surrounded by smallholder cocoa farmers. Many of these farmers are disconnected from the international and domestic markets and produce less than they could. They also mostly earn under $2 a day. It’s the classic smallholder agriculture poverty situation – or shall I say it was.
So, what’s the story?
I think you have a sense of where this is going because I have said development and the private sector a number of times.
Anyway, these two entities, on a normal day, will not be put together. In fact, in most places, enmity is rife because of environmental concerns around safety and wellbeing. The threats to the livelihoods of farmers due to the ever-expanding (sometimes greedy) activities of the mining entity is another. But the world needs them to work together. To the main story…
Wafi-Golpu realised the opportunity to support agro development as a means to drive up income for the farmers. They thus engaged a new favourite venture of mine, Business for Development. B4D helped design and undertake studies to enhance the cocoa value chain in the Watut Valley area.
Since 2010, WGJV has worked with the Lower Watut Farmer’s Cooperative Society, and other partners, to create a vibrant cocoa industry among the 1,000 cocoa-growing families in the Project area.
Today, the Watut valley cocoa farmers now supply Queen Emma Chocolates, a subsidiary of PNG’s oldest and largest food manufacturer. And, as a result of the partnership and the quality output they produce, Queen Emma Chocolates agreed to pay the farmers premium prices for the highest quality beans. Talk about gains.
They did what now?
Wafi-Golpu provided support which included: nursing high-yielding cocoa seedlings; crop husbandry training; marketing assistance; capital equipment supplies; and fermenting, drying and quality assurance training, among others.
That is to say, they brought value. Value in areas that were lacking and would most make a difference to farming practices and output.
The actions of Wafi-Golpu are indicative of their commitment to helping mining-impacted communities. It is also indicative of the desire to contribute to the economic and social growth of the country; both of which lead to increased living standards through high wages and knowledge transfer. It’s impressive, to say the least.
So wait, international development and the private sector intersected? HOW?
Great question, engaging the right stakeholders and proper planning is how.
Business for Development is a pretty outstanding organization for this work. They have also shared a few tips for creating such join action initiatives and I thought to rehash them here.
1.Strength of alignment of interests on both sides.
It helped that the mining company – the bigger player – had strong interests in, and priority for, investing in agricultural programs.
Lesson: Instead of a general CSR commitment of money to one-off causes, corporations could push for deeper engagement. They can investigate the local economic structure and ecosystem to better understand how they can better deliver and add value.
2.Scalability and commercial sustainability.
Large mining company plus a large number of smallholders (some ten thousand plus) plus fertile area equal cha-ching – profitable prospects.
Lesson: understanding the basics and being attentive to the details of the land, labour and capital make a big difference. Large scale operations also mean a likely larger spend on a community development program. Simply because they can afford it. Such investments couple with good feasibility analysis will increase the chances of a more significant – and larger – impact.
3.Potential for development impact.
Linked to the above, reviewing in-country current crops and comparing potential outcomes and impact is necessary. It is needful for sustainable interactions with the location and stakeholders, in this case, cocoa farmers.
Lesson: Wafi-Golpu chose crops that were already successfully grown. This assured them higher chances for profits and thus success – and therefore impact. Loosely stated, having a heart for the poor is nice; having a mind for the poor, that makes all the difference. In other words, apply the analytical projections, feasibility studies, and profit analytics. When you do, you can increase the potential for success in the long-term – pas rocket science. Doing good does not mean we cannot apply reason – and business concepts.
4.Long-term horizon
A market opportunity that spans a longer period is ideal. Here, the mine life exceeded 10 years and Wafi-Golpu also had post-closure plans to support the community. They made commitments and were in for the longhaul.
Lesson: Longer durations allow the plan to be properly implemented, iterated and improved upon. As a result, it is more likely to make a substantial change to the life of farmers. As opposed to one-off engagements which rarely succeed beyond a year that is.
Stop, you’re playing!
No, and it gets better.
Through the partnership, the Watut farmers’ co-op has even won cocoa quality awards. This includes in 2015 at the prestigious Salon du Chocolat in Paris and 2017 at PNG’s inaugural cocoa show. Also, with support from PNG Cocoa Board, the Lower Watut chocolate is now sold in selected shops in PNG. The social proof and boost to morale I imagine will have multiplier effects on their work, motivation and output.
It was interesting to note that a lot of the planning, outcomes and deliverables were not one-sided conversations. They involved a series of conversations with key stakeholders agreeing on the best course of action. This consultative approach, described as, “having the right people, at the right places at the right time, for the right reasons” was important.
A lot of effort went into making this partnership happen. That approach should be the blueprint for organizations looking to make a real difference. Not just to fulfil some financial obligation on paper.
The role of the Private sector in international development
I have days when I wake up and think the private sector is all about profits and nothing else. Om other days, I recognise that for-profit does not mean disregard for impacting communities and doing good.
The SDGs provide a global framework for development. They, therefore, guide conversations and actions around inclusive growth and sustainable development. I read somewhere that the SDGs are actually to guide private sector engagement in the international development space. I am not entirely sure of how true that is but, either way, they do provide a useful framework. One that can guide their input in the cause to alleviate poverty and create better socioeconomic outcomes. Philanthropy mixed with business is important in cross-sector collaborations to create the much-needed change(s) we desire for persons and livelihoods.
Why? Because, with their (private sector) comparative strength, flexibility and innovation, they are well-positioned to contribute to poverty alleviation. By fostering – and financing- experimentation; supporting the risk-taking searches for unconventional approaches to age-old problems; and working closely with other organisations, they can make a difference. The private sector can positively contribute to improved standards of living, particularly of people in their environs.
The power of partnerships
What is key is that Wafi-Golpu did not work on their own. They engaged government institutions (national and sub-national), civil society organizations (CSOs), and other private operators such as Mondelez and Mars (at the start).
I would be keen to learn how they navigated these conversations. And not just that but also incentivized a focus on delivery. How they brokered deals with all the varying interests and cultures would be enlightening for people looking to replicate this…
I understand that such partnerships won’t be easy to create. There are nuances, power dynamics, vested interests and other factors to consider and manage. But I do think this case was too beautiful to not highlight or celebrate.
Anyway, that’s it.
Congrats if you stayed till the end! This was a bit of a long read but I hope an interesting one.
Now to you, what do you think? Will such collaborations work in your country? What are some other odd collaborations that could create impact like this?
Other reads:
WHY GOVERNANCE IN AFRICA IS AN ECONOMIC MATTER
NEGLECTED REFLECTIONS ON THE “STATE OF AID”
IS VIETNAM JUST SMARTER? – SOMETHING OF A FRUGAL AND RARE TALE ( LITTLE HACK)
DO-IT-YOURSELF PROJECT – SOMALILAND
WHY AFRICA MAY BE THE MOST BEAUTIFUL CONTINENT TO EXPLORE
Noelle Wonders
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First of all! I’m excited reading this article and even more excited that I didn’t have to read the report backwards lol
My current organization would LOVE this article, because not only was it about supporting cooperatives and producer groups but also a private sector partnership.
I know USAID actually encourages this kind of partnership under some of their mechanism.
So development organization definitely have that on their radar.
It’s great to read about one of the many positive and impactful relationships
Indeed! Thanks Nicole
Deep thinking as always, this article makes me wonder about the potential for these kinds of public-private partnerships on the African continent. The addition of the private sector in cocoa growing brings about the best of both worlds, a new brand of social capitalism that brings about longer term changes than the development world can do on its own. Knowing that there are ways for the private sector to influence development as well as creating business opportunities has me warily excited for how we can adopt these models for ourselves and nestle development in the private sphere.
Hear hear!!
We must find the intersections at which both worlds can pursue ventures that benefit each side because the potential exists and we need to try it.
Great Read!!
1.Do you have any other industries or sectors in mi d that will benefit from this kind of partnerships?
2.also I truly believe all for profit firms only consider environmental, social and governance issues if it benefits them…which sort of makes the private sector still greedy.
(With all the noise firms made last year about making efforts to fight climate change and improve diversity, most still voted AGAINST these at their AGM’s…so they only show an interest in the community and others of it benefits their pockets😂😂😂😂😂)
You know what, And I might regret dying this but I actually don’t think it’s all bad if both can benefit…They are for profit after all 😂. It’s just this time they are actually helping people with their craft with a teeny little bit of their profits. I also do think the Australians have a slightly different and more impact driven approach to development in general