Operational risk specialists Professional Service Solutions (PSS) implements an effective risk management solution to counter operational threats, instead of implementing a security solution. The company’s business model is built on enabling clients to fully understand risks, as opposed to guessing risks based simply on the information conveyed by governments or company security travel warnings and opting for a general approach.

PSS CEO and founder Craig Coleman tells Mining Weekly that PSS is in the process of expanding into Africa and, although the company has postponed its plans to attend the Indaba for the first time, the Mining Indaba is seen as a platform for broadening its professional network, enabling PSS to network with an extensive group of participants in the African mining sector.

“Having attended and showcased at the Africa Downunder conference held in Perth, Australia, for the past two years, we look forward to being involved in the Mining Indaba in future because of its size and the attendance of various role-players from not only Africa, but worldwide,” says Coleman.

PSS rates 55 African countries out of 222 global countries, on a continuous basis, based on how easily PSS can overcome the operational risk present in the country. At the time of going to print, of the 55 African countries rated, 22 (40%) African countries rated in the medium-, high- and very high-risk categories.

The possible risks include operational threats, such as violent crime, volatile situations of civil unrest, and recurrent but difficult-to-predict terrorist and extremist attacks, which can impact on individuals and organisations, depending on the category.

PSS observes that, currently, Africa has a higher proportion of problem countries than the rest of the world and, as a result, PSS is increasingly focusing on the operational risks at African mining operations.

A range of strategies should be determined for each situation; however, companies often make the mistake of employing a generic approach, which can lead to costly and ineffective strategies, says Coleman.

“We have found that each situation should be assessed in its own context, as not all people and situations are the same and one solution may not be relevant somewhere else,” he says.

Coleman notes that many companies opt for a security solution that involves hiring a security company to counter threats instead of assessing and identifying the real risk.

If, for example, the country’s biggest risk is vehicle accidents, a security approach will not mitigate it. This type of risk would require driver training, movement rules, vehicle servicing and a breakdown and accident response plan, he explains.

Coleman says operational risk strategies usually fail because companies have a single plan to mitigate several operational risk situations, which they simply adapt to different locations or situations, instead of understanding the environment and engaging with the local community on ways to mitigate the risks.

The key components of PSS’s operating model are based on low-profile security
and high community engagement, which focus on achieving and maintaining the support and cooperation of project stakeholders and, in so doing, eliminate the requirement of a large security presence.

PSS works at the front-end of the risk management process and builds strategies to actively prevent events from occurring, instead of simply building a response plan and waiting for something to happen, says Coleman.

When trying to mitigate operational risks, the major role-players are mining companies, governments and local authorities; however, engagement with communities in understanding the specific issues of a region is essential in establishing or sustaining operations.

“Often, communities can be seen as threats, but if they are brought on board, the project can gain a potential workforce and information that it would otherwise not have gained. Most importantly, the project gains a stakeholder that is invested in the project that does not want the project to stop, so communities will often work behind the scenes to keep threats at bay,” says Coleman.

PSS mostly works with clients who want to invest in a country where a difficult environment and risky situations could exist, such as conflict, postconflict instability, insurgency, political instability and postdisaster, or even when a project lacks community support.

Coleman says common risks in Africa include vehicle accidents; violent crime; aircraft accidents; political instability or sovereign risk; civil unrest, terrorism and incidents of bombings, shootings and kidnappings; landmines and improvised explosive devices; disease; legal issues and detention. Situations can be made worse with personnel issues, such as culture clashes and alcohol abuse.

These risks have the potential to prevent a mining project from being established or could completely halt an operation if a sufficiently negative event takes place, he says.

PSS primarily focuses on preventing events from occurring and developing strategies that engage communities as stakeholders in projects, to assist in protecting a company’s people, assets, operations and reputation.

PSS, while relatively new to the African mining sector, has worked in difficult environments worldwide, such as Eritrea, Liberia, Sudan, Mozambique, Cambodia, Papua New Guinea, Pakistan, Afghanistan and Lebanon.

The solutions offered by PSS do have many elements in common, regardless of the country, says Coleman. “If you can understand and connect with the local people you can solve many issues. The skill, however, is in recognising the importance of communities in project planning and implementation,” he adds.

The solutions to operational risks include, among others, corporate social responsibility as part of risk management, engaging the local communities as true stakeholders and not simply as beneficiaries, and respecting the structure of the community, which entails ensuring that elders are shown respect and are included in decision making, where possible.

In some parts of the African mining environment, mining companies face the operational risk of Al Qaeda-linked groups encroaching beyond their traditional strongholds, creating the potential for them to grow their operations into new areas, which could affect mining or associated operations, such as those in the vicinity of the Red Sea.

In the north of Africa, Al Qaeda-linked groups already operate in Mali, Somalia, Niger, Nigeria and Yemen, notes Coleman.

Western personnel and projects could also potentially be targeted in retaliation to counter-insurgency events, says Coleman, adding that insurgency or terrorist activity can also threaten a project by making roads impassable and intimidating people into not working at a project. It can also involve the deliberate destruction of assets and the targeting of foreigners and local workers.

Bombings, shootings, hijackings, kidnappings and attacks on mining facilities, aircraft and ships are also a threat, but are often not as prevalent as vehicle accidents and other less spectacular risks.

These risks can affect any part of the mining operation, from the extraction of the resource to personnel movements, transportation and the shipping of the resource, causing the mining environment to become unpredictable. In turn, this can cause environmental conditions to change, disrupt communities and livestock, and cause power struggles between the haves and the have-nots.