Anglo American: Business Impacts on Development

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Sustainable development touches on every aspect of our business. Here, Jon Samuel, Head of Social Performance, outlines how we understand and enhance our positive impact on communities.

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Anglo American: Business Impacts on Development

  1. 1. BUSINESS IMPACTS ON DEVELOPMENT:UNDERSTANDING & ENHANCING IMPACTSJON SAMUEL, HEAD OF SOCIAL PERFORMANCE, ANGLO AMERICAN10 JULY 2012
  2. 2. OUR FOOTPRINTKey Corporate and rep officesE Exploration offices Platinum Diamonds Copper Nickel Iron ore and Manganese Metallurgical Coal Thermal Coal 2
  3. 3. DEVELOPMENT IMPACTS: CONTEXT AND BUSINESS CASE• Ongoing pressure from governments to see greater developmental benefits from mining• Communities also understand that mining projects represent a unique opportunity for socio-economic development gains, if managed properly• More general lack of trust in, and appreciation of, role of big business• Some of the ways countries have sought to enhance development outcomes from mining and other sectors (eg nationalisation, high tax rates) have been counter-productive and bad for investors• Growing understanding that good governance of the sector combined with responsible operators represents the best opportunity to secure developmental benefits• Governments, as resource owners, are therefore looking towards companies that can support broader developmental objectives• To enhance your impact you need to understand it 3
  4. 4. WHAT ARE THE LOCAL DEVELOPMENT OPPORTUNITIES FROMMINING? INFRASTRUCTURE DOWNSTREAM PROCESSING JOBS / WAGES (BENEFICIATION) SOCIAL CAPACITYINVESTMENT OPERATION BUILDING AND TRAINING SMALL BUSINESS DEVELOPMENT PROCUREMENT TAXATION
  5. 5. HOW DO WE MEASURE IMPACT? • Activity across the mining lifecycle (typically 30 to 50 years per mine): Exploration Planning Construction Operation ClosureFocused mostly Impacts Monitoring SEAT* Mine closureon consultation assessed by against social studies, social planningwith local stage gate management investment toolbox, post-stakeholders, requirements plans plus social KPIs, complaints closureplus complaints and social investment and grievance monitoringand grievance impact KPIs. Also procedures, comprocedures assessments complaints and munity (typically as a grievance development part of SEIA procedures peer reviews processes) • We also measure at country level for taxes, procurement, wages etc*SEAT: Socio-Economic Assessment Toolbox. Freely available at www.angloamerican.com/seat 5
  6. 6. STAGE GATE REVIEWS DURING PROJECT DEVELOPMENT:SETTING UP FOR SUCCESS• All projects are reviewed at three stage gates: – Concept (option generation phase) – Pre-feasibility (option selection phase) – Feasibility (final go / no go decision)• Reviews cover all financial and technical requirements, but also key social / community issues: – Identification and management of any negative impacts – Development of socio-economic benefits, including local procurement, local hire, enterprise development and social investment• Complements impact assessments required under the permitting / regulatory regime 6
  7. 7. CONSISTENT, GROUP-WIDE SOCIAL OUTPUT KPIs BEING IMPLEMENTED ACROSS ANGLO AMERICAN 14 Categories of Programme: 32 Specific KPIs Covering:1. Education and training • Facilities (or sites) built / improved /2. Health and welfare maintained3. Water and sanitation • Number of jobs (permanent / temp)4. Capacity development • Numbers trained5. Enterprise development and micro- • Number of beneficiaries for each type of credit project6. Alternative livelihoods • Number of businesses supported7. Housing • Numbers of different kinds of projects8. Other community development created or supported9. Environment • Number of houses built / upgraded10. Energy and climate change • Carbon impact11. Sport, arts, culture and heritage • Power generated / saved12. Disaster and emergency relief • Habitats improved / protected13. Other CSI or charitable giving • Waste management14. Employee matched giving
  8. 8. SEAT – WHAT IS IT? • A socio-economic impact and management planning process • Existing Anglo American operations go through the process every three years • The foundation for social issues management at our mines • A collection of resources for community professionals and other colleagues to use at any time, including in exploration, development and closure • Ultimately... designed to help secure our social licence to operate at new and existing operations, and secure competitive advantage
  9. 9. WHY DID ANGLO AMERICAN DEVELOP SEAT? A way to Improve identify and understanding manage our of social risks to impacts at each our business operation Address community concerns SEAT’s purpose Manage stakeholder Build our perceptions by capacity for transparency at Meet local level community international engagement commitments and development
  10. 10. SEAT: STRUCTURE Engagement throughout Step 1 – Profile your Step 6 – Develop a Step 7 – Prepare a operation, including social management SEAT report and feed existing community plan back to stakeholders development initiatives Step 2 – Profile and Step 5 – Deliver engage with enhanced socio- stakeholders economic benefits Step 3 – Assess and Step 4 – Improve prioritise impacts and social performance issues management
  11. 11. SEAT: STEP 5 COMMUNITY DEVELOPMENT TOOLS 11
  12. 12. COMMUNITY DEVELOPMENT PEER REVIEWS• Site level assessment of community development activities at site• Brings in partner expertise, in particular from CARE International and Tshikululu Social Investments• Cross-BU teams visit volunteer sites to undertake holistic review of community development activities• Reports-back shared with site team management and broader peer group within Anglo American 12
  13. 13. WHAT HAVE WE LEARNED FROM ASSESSING IMPACTS?• Importance of a clear developmental vision, owned by local communities• Stakeholders are most concerned about day-to-day livelihoods and quality of life issues: – Access to jobs and training – Access to alternative livelihoods – Access to supply chain opportunities – Environmental impacts – Quality of public services – Transport issues – Communication and transparency – Housing
  14. 14. MOST EFFECTIVE MEANS TO SUPPORT LOCAL DEVELOPMENT• Local procurement: – Measure at national, provincial and community level – $13.8 bn of spend in 2011 – $1.13 bn from host communities, up by $240 mn in 2011 due to growth and local procurement initiatives• Enterprise development – 47,000 job supported in 2011• Local recruitment – 145,000 jobs in 2011• Social investment ($129 mn in 2011), particularly when delivered programmatically by NGOs 84% of procurement, wages and taxes (= $18.4 billion) spent / paid in emerging markets 14
  15. 15. CONCLUDING REMARKS• Different audiences are interested in difference impacts, and that leads to different measurement approaches being required• In a large multinational, you need both aggregate and site-specific indicators, and both quantitative and qualitative information• Our work has led us to focus on the core business and enterprise development as drivers of development outcomes• Anglo American is seeking to improve tracking of key socio-economic variables over the duration of a project, and also articulating contributions at a national level in an engaging manner 15
  16. 16. THANK YOUSEAT v3 is freely available for download at:www.angloamerican.com/seat

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