ProPoor Tourism and the private sector' Lessons from South Africa Caroline Ashley

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Pro-Poor Tourism and the private sector.
Lessons from South AfricaCaroline Ashley
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This talk is.

• About enhancing the impact of tourism business on
  poverty reduction and development
• Lessons from experience of partners and others

• This talk is not
• Results from specific research surveys
• Measurement of impacts on poverty
• About environment and other elements of ST or CSR

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Starting assumption

• There is a social case for enhancing the
  development impact of business.
• Business remains business, but marginal change of
  a massive sector could be significant.
• Alternative view let business be business and
  public instruments tackle poverty.
• Also that the business case(s) exists for some.

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Pro poor tourism (PPT)

• An approach to tourism that increases net
  benefits to the poor.
• Not just community tourism/SMMEs, tourism in poor
  areas, or a specific product.
• PPT means doing business differently.
• i.e. going beyond philanthropic donation

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PPT and wider debates

• PPT is about pro poor growth encouraging a
  pattern of growth that includes the poor in the
  tourism sector.
• PPT is one core and sometimes under-represented
  element of responsible tourism and sustainable
  tourism.
• PPT is related but not the same as BEE. Focus is
  on poverty not race, on impact on the ground not
  ownership.
• PPT is part of the debate about Corporate Social
  Responsibility and Corporate Citizenship which
  are particularly important in tourism.

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Pro-Poor Pilots in southern Africa 2002-2005
Piloting local linkages Procurement,
partnerships, and productsWhat have we
learnt?Strategies impacts
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Advisory Board Members

• Tourism Business Council of South Africa
• South African Chamber of Business
• Department of Environmental Affairs and
  Tourism, South Africa
• South African Tourism
• Fair Trade in Tourism
• Sponsored by

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Vision and objectives

• Two core objectives
• To collaborate with five companies at pilot
  sites to develop strategies that have a
  long-term impact on poverty, make business-sense
  to the company, and are feasible and sustainable.
• 2. To communicate with tourism players across
  Southern Africa, develop PPT awareness and
  expertise.

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The Pilot Sites

• Spier Leisure s Spier Village
• Wilderness Safaris
• Rocktail Bay

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• Sun Internationals
• Sun City Resort
• Southern Suns
• Sandton Complex
• Ker Downey,
• Tanzania

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Creating new linkages
RB community tour SS township tours in
Alexandra
SP organic farmer, laundry, LPG, woodcutter SC
welcome cards, glasses
RB security forum SP link with Kayamandi Trust
RB restructuring Mgobela Trust RB establishing
Mpukane Trust
RB interviewing 70 local people for 30 new jobs
training
RB Rocktail Bay SC Sun City SP Spier
SS Southern Sun
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Doing business differently

• Goes well beyond philanthropy
• Delivers commercial objective and more local
  benefit
• Harness core competencies of a company
• Less cash injection, high long term potential

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Spier Pro Poor Tourism Pilot

• In early 2004 engaged in a project to review
  entire supply chain and adopt an approach that
  would see a focus on local and emerging suppliers
• Identified 10 key areas on which the project
  would focus. Prioritised first suppliers to
  develop.
• And did strategic review of supplier base.

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Supply Chain Project cont.

• Areas of focus were
• Supplier Criteria Including the revision of
  Procurement Practices
• Organic Farm focus
• Retail Items Particularly Craft
• Laundry
• Internal Non Perishable items Including
  Greeting Cards, O.E, etc.
• Specialised Food Supply Items
• LPG Kitchen Fuel Supply
• Firewood and other wood products
• Chemical Cleaning Supplies
• Vehicle Fuel

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Supply Chain Project cont.

• Spier Laundry
• Started in August 2004 serving one outlet Moyo
• Fixed contract price of R 14 500.00, Revenue to
  April R 148 980.00
• Now servicing 3 Spier outlets
• 6 permanent staff and 4 casual staff, all
  previously unemployed
• 8 new suppliers PPT impact into local economy
• Total estimated direct income to immediate
  communities as a result of direct and indirect
  involvement in PPT Pilot process
  R 526 640
• Total estimated income to immediate staff of PPT
  companies as a result of direct and indirect
  involvement in PPT Pilot process R 176
  000

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Supply Chain Project cont.

• Impacts within Spier
• Understanding of where impacts can be made
• An awareness of HOW
• A first step in a longer process, but a step that
  existing operational management (on the whole)
  had not been able to make before.
• Pro-poor approch adopted in other contract, e.g.
  deli upgrade, craft market development

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Spier Supplier Questionnaire project
Local Supply Statistics
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Spier Supplier Questionnaire project
Supplier Responses
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How? Implementation spans many levels

• Options and priorities
• Leg-work and communication.
• Practicalities transport, payment, electricity
• Changing corporate practice the Buyer,
  management, ops staff
• Getting Govt Authorities on board
• Selling to operators and guests

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Challenges and key ingredients

• A champion and driver
• Someone who can invest time and legwork
• Top management support, staff incentives
• Change in attitudes
• Managed expectations
• Willingness to turn the first failures into
  improvements
• Ability to form new partnerships

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The business cases

• A more strategic input more substantial
  long-term impact
• Social licence to operate local support, access
  to Municipality
• Enhanced product
• Staff morale
• Enhancement of brand and USP
• Customer choice, Fair Trade trademark, Imvelo
  awards
• Government procurement, preferred partner,
  recognition, Scorecard
• Access to responsible financing, e.g. IFC
• Minimise risk of local opposition, global
  criticism, BEE criticism
• Improved corporate governance

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Local benefits are

• incremental, diverse expanding
• Spier
• Cash since August 2004, over R0.5 million in
  new contracts to new suppliers
• Potential Total procurement budget R44.2
  million. 10 would far outweigh philanthropic
  spend.
• Access new to markets, expertise, recogntion,
  partners.
• Wilderness
• multiple linkages from a partnership.
• new product, school support, first time local
  contractors used for tree clearance, staff
  recruitment

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Overall

• It can be done!
• Different from pure CSI or BEE
• Different linkages for different business
  conditions
• Implementation can be a challenge
• A new mindset momentum real change
• Benefits are considerable.

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PPT Pilots In Southern Africawww.pptpilot.org.za

• Caroline Ashley
• Overseas Development Institute
• 111 Westminster Bridge Road
• London SE1 7JD
• United Kingdom
• c.ashley_at_odi.org.uk

Clive Poultney Mboza Tourism Projects PO Box
95636 Waterkloof 1045 South Africa pptsa_at_iafrica.c
om