Beyond benevolence
Painting a balanced picture
THE WORLD OF HEINEKEN
Last year, Heineken and Dutch development agency NCDO* commissioned
Triple Value Strategy and InReturn to devise a model for an Economic
Impact Assessment (EIA) that would clearly quantify the direct and indirect
impact of Heineken's presence in the economies where it operates. Sierra
Leone Brewery Limited (SLBL)'s presence in the Sierra Leone economy was
selected as a good test case. The model itself and the results of the Sierra
Leone study were presented in November 2006 to an enthusiastic reception
from international companies and a number of leading NGOs.
Every single dollar spent by SLBL has a five times larger economic effect on
the local economy. And each job provided by the brewery supports around
40 jobs in agriculture and distribution. These are just two facts to emerge
from the completed study.
"Heineken spends between 0.4% and 0.5% of EBIT (earnings before
interest and tax) on corporate responsibility projects," says Mark van Rijn,
Heineken's Manager Company and Society. "Compared to other companies
this seems quite low. But unlike other companies, we often produce locally
for the local market. The positive effects of this for the community are
much greater than those created by an importing company that merely
spends on community involvement."
Heineken's strategy is to produce locally and use local producers for
raw materials so that the company can have a bigger positive impact on
local employment and poverty, Van Rijn says. This approach goes beyond
Nationale Commissie voor internationale samenwerking
en Duurzame Ontwikkeling
simple benevolence by making a real and sustainable contribution to the
societies in which Heineken operates.
"Our problem was coming up with hard date to substantiate that fact,"
says Sietze Montijn, Heineken's Head of Corporate Affairs. "Let's face it,
NGOs have been keen to point out the negative impact of international
companies in emerging economies, especially countries with a history as
troubled as Sierra Leone. We're typically seen as exploiting cheap labour
and taking more out of the economy than we put in. This study gives us
concrete, measurable proof that our presence can and does have a positive
impact on the local economy and the well being of the local population."
Heineken is often criticised because it sells beer, agrees Van Rijn -
especially if that beer is sold in countries with populations living in extreme
poverty by Western standards. "There's too little understanding of exactly
what we do and how much value we can add to a local economy because of
the way we do business," he says. "This study has enabled us to correct that
and paint a much more balanced picture, and it will also help us to do the
same in other countries."
The study is just the beginning rather than an end in itself, says Montijn.
"This is not about merely pointing out how good we are and then resting on
our laurels. Because the study shows how our policies can increase - or
decrease - our positive impact on local economies, it is likely to influence
how we act in other emerging economies in Africa and elsewhere, as well
as in more developed economies."
