Smurfit Kappa

Assessment Smurfit Kappa’s Technical, Agricultural, Livestock and Forestry Institutes

Introduction to the Company

Based in Ireland, Smurfit Kappa is a leading producer of paper-based packaging. It has some 45,000 employees and 370 operations in 21 countries in Europe and 13 countries in the Americas. The company owns more than 100,000 hectares of forest plantations in Latin America and has an industrial output of approximately 10 billion square meters of corrugated packaging. This social impact assessment case study focusses on a project that Smurfit Kappa has undertaken in Colombia.

Introduction to the Project

Colombia faces significant challenges in meeting quality education standards. In rural areas the situation is aggravated by the absence of a tailored educational approach, the presence of illegal armed groups, few access roads, and little State presence to provide quality basic services such as health and education.

When Smurfit Kappa began operating in these areas, the company recognized these social issues as risks to business operations; for example, secondary education ensures the presence of a pool of skilled potential employees and peace is a key factor for successful and sustainable business operations. In order to address these issues, in 1983 the Smurfit Kappa Colombia Foundation started providing education through three Technical, Agricultural, Livestock and Forestry Institutes (ITAFs). The tailored curriculum provides technical competencies alongside basic, citizenship, labor and entrepreneurial skills to children from rural areas. The students are incentivized (through the provision of loans and income generation support) to transfer their knowledge to their families and producers in their vicinity, thereby improving the welfare of the broader community. 

As Smurfit Kappa only has the capacity to take on board a small proportion of the students as employees, the remainder finds employment with Smurfit Kappa’s supplier base or in the agricultural business sector also active in the region. Therefore, Smurfit Kappa ITAFs help to mitigate rural exodus and contribute to peacebuilding in the region by providing alternative livelihood options to youth. 

Stage 1: Frame

The purpose of undertaking the annual social impact assessment is: 

  • To report back to internal stakeholders and investors on the positive and any negative impacts of the project.
  • As an external communication piece to local stakeholders and the Ministry of Education in Colombia to show evidence of the benefits of providing tailored education to children in rural areas. This has a reputational benefit for the company and therefore enhances the local enabling environment.

The main stakeholder groups impacted by the project are: 

  • ITAF students, their families and communities—550 youths per year aged 11-17 and their families (48% women), on average, from rural populations. 
  • Local partners—Municipalities, universities, agricultural associations. 
Stage 2: Scope

The scope of the assessment is Smurfit Kappa’s three ITAFs in the municipalities of Calima-El Darién (Valle), and in El Tambo and Cajibío (Cauca). These are Colombian regions where Smurfit Kappa has forestry operations and sources its main raw materials to produce pulp, paper and packaging. The three ITAFs were set up in 1983 and have been reporting on progress since the start, for over 30 years. Establishing a baseline has not yet been feasible due to the lack of available data from 1980, but Smurfit Kappa recognizes there would be value to having a baseline to understand the total change that the project has brought about.

Key users and audiences of the assessment results are:

  • Internal stakeholders—Project management uses the results to improve project efficiency and performance; Smurfit Kappa Foundation and Smurfit Kappa Management boards use the results to understand the impact of their investments.
  • External stakeholders—The Ministry of Education of Colombia is shown the results to demonstrate the positive impacts of the ITAF rural education approach. 

The indicators chosen mainly come from the guide written by the Colombian Ministry of Education. This is because communication with the ministry is one of the key aims of the assessment and therefore it is important that its staff recognize and understand the indicators. Some additional indicators are chosen to support reporting to internal management; for example, it is important to the company to know what percentage of ITAF students are undertaking sustainable production projects on family farms.
 

Stage 3: Measure and Value

The schools collect and report data to Smurfit Kappa on a monthly or annual basis; end-of-year tests track the quality of the education provided. Online interviews provide data on students who have graduated. Most students have access to email; however, there are some issues in getting sufficient responses through this method. In the future, Smurfit Kappa would like to collect this data through face-to-face focus groups.

The indicators are currently mainly outputs; however, Smurfit Kappa is aiming to move towards reporting on outcomes and impacts going forward. This should help attract additional investors into the project by demonstrating the change the program has created in the community over the 30-year period.

Input Investment by Smurfit Kappa in the ITAFs
ActivitiesThe ITAFs set up with a curriculum focused on developing basic, citizenship, labor and entrepreneurial skills and competencies for youths in the rural sector
Social Outputs
  • Number of direct beneficiaries (age and gender also tracked)
  • Number of families taking part in the ITAF outreach program
  • Number of inter-institutional partnership established
  • Percentage of 10th and 11th grade students from ITAFs taking part in technical and technological program with Colombia’s national learning service (SENA)
  • Number of scholarships awarded for higher education
  • Percentage of students receiving meals at school 
  • Percentage of students undertaking sustainable productive projects on family farms
  • Number and value of loans granted by Smurfit Kappa to students to finance agriculture, livestock and service projects (and percentage of loan repayment)
Economic OutputIncrease in family income from productive projects
Impact (not yet reported)
  • Hypothetical indicators: 
  • Increases in lifetime income of students
  • Increases in student and family well-being
  • Increases in farm yields
  • Program contributions to local GDP

 

Stage 4: Apply and Integrate

Smurfit Kappa will keep assessing the socio-economic impacts of the ITAF programs on a yearly basis, as the data captured provides important information to Smurfit Kappa on performance, provides reputational returns to the company, and helps maintain investor interest.

In parallel, the fact that Smurfit Kappa has 30 years’ worth of data presents an opportunity for a more in-depth analysis and the introduction of impact indicators to demonstrate what the real change in the business enabling environment has been over time.

Access to a skilled workforce and peaceful, reliable supply chains are key material issues for companies operating in Colombia. Through this study, Smurfit Kappa can demonstrate to the local government the benefits of investment in rural education and specifically investment in the ITAF approach of having different models for rural and urban education.