The importance of social welfare to Anglo American


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Jon Samuel, head of social performance talks about social welfare at Anglo American.

At Anglo American we have developed policies and initiatives to help improve the welfare of employees and host communities we operate in. These include: our approach to managing social performance risk management, efficient utilisation of resources, delivering socio-economic benefits, and collaboration.

You can find out more about Anglo American here:

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The importance of social welfare to Anglo American

  1. 1. SOCIAL WELFAREJon Samuel - Head of Social Performance
  2. 2. AGENDA• The importance of employee, contractor and community welfare issues to Anglo American• Anglo American’s approach to managing social performance – Risk management – Efficient utilisation of resources – Delivering socio-economic benefits• Our requirements• Opportunities for collaboration
  3. 3. IMPORTANCE OF WELFARE ISSUES TO OUR BUSINESS• In recent years employee, contractor and community welfare issues have become increasingly important for our business• Group-wide key issues of concern for Anglo American include: – Growing expectations from communities and our host governments for an increasing share of the benefits of mining to go to host communities and countries – High levels of in-migration to mining areas and associated social ills, including informal settlements, crime, community health impacts and tensions between resident and migrant communities – Inadequate provision of basic services by local governments, especially when they are confronted with rapid growth driven by mining investments – Failure to maintain positive relationships with host communities and governments 3
  4. 4. IMPORTANCE OF WELFARE ISSUES TO OUR BUSINESS• These issues are leading to direct impacts on our ability to operate profitably, including: – More challenging permitting processes, including politicisation of the permitting process with delays becoming more common and significant socio-economic contributions increasingly required, often under the umbrella of mitigation – Governments seeking to secure extra benefits through increased taxation, free carry equity interests, indigenisation requirements, local content rules etc – Increasingly stringent / onerous regulation, and increasing legal challenges from various sources – Disruption to operations 4
  5. 5. OVER-ARCHING ‘SOCIAL PERFORMANCE’ OBJECTIVES Create opportunity for Ensure we utilise the Anglo American by Manage socio-political resources we have becoming a partner of risks to our projects available for social choice, in particular and operations performance through delivery of effectively enhance socio- economic benefits 5
  6. 6. DELIVERING OUR SOCIAL PERFORMANCE OBJECTIVES • Clear link between the prosperity and welfare of host communities and the success of our operations • Our ambition is lead the mining industry on social performance issues, so that we are the employer of choice, and the partner of choice for host communities and governments Anglo American Values and Good Citizenship Business Principles Policies and Standards: the Anglo American Social Way Group Social Strategy: Partner of Choice for Host Governments and Communities 1. Education 2. Guidance 3. Social 4. Leverage 5. Internal 6. External and Training: Documents: Initiatives: Core Business: Alignment: Engagement:• SEAT training • SEAT • Enterprise • Local • Business Units • Communities• Post-grad • Mine Closure Development procurement • Functional liaison • Governments and diplomas Planning Toolbox • Social Investment • Local workforce multi-laterals• Advanced Social • Capacity development • Industry Management development • Synergies from associations Programme • HIV/AIDS infrastructure • Multi-lateral• ABET • Housing provision initiatives 6
  7. 7. MANAGING SOCIAL RISK Respect human rights Identify and manage social impacts Engage employees and stakeholders Deliver lasting, positive net benefit Efficiently utilise resources Obey all laws and regulations Ensure contractors follow our standards Set targets, review performance Develop staff competencies Report and investigate incidents 7
  8. 8. OUR GUIDANCE ON MANAGING RISK AND USINGRESOURCES EFFICIENTLY • Socio-Economic Assessment Toolbox (SEAT) is at the heart of our management of social performance issues SEAT is an award-winning manual that provides extensive guidance on: – Profiling and engaging with host communities – Assessing positive and negative impacts – Managing relationships with host communities – Contributing to community development • SEAT Tool 4F presents our approach to contractor management. But many other tools are relevant to our contracting partners • Hard copies are available here today (and on your USBs). Also freely available at • Anglo American willing to provide training on SEAT to contractors. Plan to run two free sessions in 2013, and can arrange a tailored session for your 8 business at cost
  9. 9. EXAMPLE GUIDANCE IN SEATAll of these tools cover circumstances where contractors may be active 4A Complaints and 4H Voluntary Grievance 4B Stakeholder Principles on Procedures Engagement in Security and Emergency Human Rights Planning Relationship 4C Conflict 4G Indigenous Assessment Peoples Management and Tools Management 4D 4F Contractor Resettlement Management 4E Managing Planning and the Social Implementation Dimensions of Mine Closure 9
  10. 10. DELIVERING SOCIO-ECONOMIC BENEFIT Our approach to enhancing the welfare of host communities is based on leveraging our core business to create sustainable economic opportunity • Leveraging our $13.8 billion supply chain Local (approximately 100 x social investment Procurement budget each year) • Ensuring that host communities have the Local Training best possible chance of securing and increasingly skilled jobs on our Recruitment operations • Focusing in particular on how local Governmental municipalities can use tax revenues to Capacity provide effective public services Development • Offering equity and loans on a Enterprise commercial basis to support local Development entrepreneurs, both within and outside our supply chain • Providing grants to welfare-enhancing Social initiatives where more market-based Investment approaches are not possible. 10
  11. 11. SOCIO-ECONOMIC DEVELOPMENT AND WELFARE:POTENTIAL COLLABORATION OPPORTUNITIES Local procurement: Enterprise development: • Ring-fencing • Equity provision • Targets • Loans at concessionary rates • Supplier development • Mentoring and technical • Localising suppliers assistance • Supplier development toolkit being piloted across Anglo American Employee Housing Social investment: • Commitment to build • Driven at both Anglo approx. 23,000 homes American and site level for employees • Often driven by SLPs in SA • Looking at enterprise • Focus on support where there development and micro- isn’t a more commercial option credit options for other to provide upliftment stakeholders 11
  12. 12. HOUSING• Decent housing for employees and their families is the foundation for healthy, stable workforces and communities• Committed to building approximately 20,000 homes for lower income employees in our Platinum business, and approximately 3,000 in our Kumba Iron Ore and Thermal Coal business units• Unable to make similar commitments to communities in general, and recognise that most contracting companies will not be able to afford the type of commitment that Anglo American has made• We are exploring options to widen the availability of home ownership in our mining communities 12
  13. 13. HOUSINGAnglo American is developing a low-income home ownership model aimed atthose who aren’t eligible to benefit from company housing programmes:• The fund: finance smaller, sustainable houses with room renting facilities that can be transformed into part of the main house or other small businesses once the loan is repaid (targeting a 10 year repayment period)• Greater access to finance for households: the scheme would be funding a revenue generating business (i.e. room rental) and not personal consumption, so is an easier financing proposition than a mortgage as less reliant on households being employed• How contractors can participate: help us to test the model, provide additional finances for the fund, commit to renting rooms for your workers or provide in- kind contributions 13
  14. 14. CONCLUDING REMARKS• Anglo American has developed an extensive suite of policies and initiatives to help improve the welfare of employees and host communities• Some of these apply to our contractor partners, while other represent potential opportunities for collaboration• Prepared to share our resources on social welfare: – to ensure that contracting companies can meet our standards – to help raise standards in the industry, and to strengthen our collective licence to operate• Given the rising importance of these issues to the mining industry, we believe that the offer to share some of our resources is in the interests of our contractors and should be attractive you• We are also looking to learn from good practices that our contractors have. We have done so in the past and hope to continue to do so• We look forward to discussing some of these issues with you in more detail this afternoon 14
  15. 15. THANK YOU