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An example of the importance of shared value

Article - January 22, 2014
Pacific Rubiales is Latin America's largest private and independent oil producer. Its success makes its stockholders very happy but thanks to the company’s shared value policies, it also makes the local communities more prosper
RONALD PANTIN, CEO OF PACIFIC RUBIALES
When Pacific Rubiales, a company engaged in the exploration, development and production of heavy crude oil and natural gas, began work in Colombia, it produced 14.000 oil barrels each day. In only 5 years the company has managed to take that number and multiply it – now reaching 314.000 barrels per day. Their success hasn’t gone unnoticed: the company’s stock has grown 633 percent and it quickly became the world’s fastest growing oil explorer and producer. 
 
But there is another aspect in which Pacific Rubiales has triumphed. “We firmly believe in shared value,” explains Ronald Pantin, CEO of Pacific Rubiales. “We understand a company can’t focus solely on making money, it has to care about its workers, the community where it operates, the environment and about being sustainable.” 
 
That is why the company he leads has been recognized for its continued efforts to support the Colombian people. In 2013 it won the National Social Responsibility and Sustainability Award and it was selected as the company in Colombia that most effectively applies Corporate Social Responsibility (CSR) principles. It also entered the Dow Jones Sustainability Index and the STOXX Global ESG Index. 
 
In a world that perceives large companies as the cause of many of society’s problems, the Harvard Business Review presented a few years ago the principle of shared value as the solution to this inequality that was making people so unhappy. 
 
It defined it as “creating economic value in a way that also creates value for society by addressing its needs and challenges”. But it clarified that it isn’t about social responsibility – “in which societal issues are at the periphery, not the core” – or about philanthropy, it is about looking at economic success from a new point of view: one that has the progress of both business and society at its center. 
 
“We are the region’s largest private and independent oil producer, and I believe our shared value policy is one of the reasons for our success,” says Mr. Pantin confidently,  adding that in favor of developing these policies, they have had visitors such as Michael Porter, professor at Harvard Business School and the leading authority on company strategy and regional competitiveness. 
 
The company also works within the water sector. It produces water, and that water is treated to make it clean again – more so than in many other places, like Bogota, Colombia’s capital, which prides itself on the drinkability of its water. The water is then used to irrigate extensive palm and eucalyptus plantations. “We give the water to farmers for free so that they can use it in their plantations.

This way we add value to the communities that surround our oil camps,” says Mr. Pantin. 
 
The company has operated African palm plantations for a few years now and last year it received a gold medal for responsibility towards the environment awarded by the Plant Colombia Foundation. 
 
“We couldn’t have grown the way we have if it hadn’t been for our employees. That is why we help them improve every day and why our unskilled laborers, the ones that earn the least, make more than double the country’s minimum wage. They also have benefits that cover almost all aspects of their life,” says Mr. Pantin. 
 
One of the programs that most benefits the on-camp workers is the Gaitan Pass, an additional bonus to their salary that they can only redeem in Puerto Gaitan, the community that surrounds the camp. This program is special because it not only benefits the workers but it also helps stimulate the local economy and promotes the development of the local supply chain, the formalization of businesses and jobs and the culture of tax payment, which helps minimize corruption. 
 
The company’s social programs and policies certainly show that Pacific Rubiales has taken the shared value principle very seriously and turned it into a tool for success. 

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