CSR IN THE “HEAVY FOOTPRINT” MINING INDUSTRY Gerard H. Brimo President & CEO
MINING = CONTROVERSIAL • EXTRACTIVE: Non-Renewable Resource – i.e. not “sustainable” • ENVIRONMENTAL CONCERNS • SOCIAL CONCERNS • “NATIONALISTIC” CONCERNS – Multinationals; sharing of benefits • LEGACY ISSUES – Un-rehabilitated mines of the past • CONFUSION – Large-Scale vs. Small-Scale/Illegal Mining THE RESULTGenerally a hostile operating environment
And yet the world as we know it today can’t survive without minerals….It is estimated that every newborn will need:
Nine of the world’s largest mining companies World Business Council for Sustainable DevelopmentInternational Institute for Environment and Development (IIED) Two-year (2000–2002) independentprocess of research and consultation – Mining, Minerals and Sustainable Development Project
CSR IN THE CONTEXT OF MINING "A concept whereby companies integrate social and environmental concerns in their business operations * European and in their interaction with their stakeholders on a Commission’s definition of CSR voluntary basis.”*
Highlights STRONG LEGAL FRAMEWORK IN THE PHILIPPINES• Social Acceptability: – Endorsement of Local Gov’t Units (2 out of 3 required) – Endorsement of Host Communities to the Social Development & Management Plan (SDMP) – “Free & Prior Informed Consent” from Indigenous People, if any (supervised by National Commission for Indigenous People)• Mandated Social Expenditures: – 1% of mining & milling costs yearly (revised to 1.5% of operating costs) through the SDMP; yearly SDMP report – 1% of gross revenues (royalty) to Indigenous Peoples if FPIC satisfactorily completed, among other benefits (negotiated)
Highlights STRONG LEGAL FRAMEWORK IN THE PHILIPPINES• Environmental Studies/Reports – Environmental Impact Statement (EIS) (required for issuance of ECC) – Environmental Compliance Certificate (required for all environmental, social and other permits) – Environmental Protection & Enhancement Program (EPEP), includes Final Rehabilitation/ Decommissioning Plan (final environmental requirement for mine development, operation and closure) – Annual EPEP – accomplishment for the year and environmental program + budget for following year
Highlights STRONG LEGAL FRAMEWORK IN THE PHILIPPINES• Mandated Environmental Expenses – 3% to 5% of mining and milling costs annually• Monitoring – Quarterly Monitoring by Multi‐Partite Monitoring Team composed of Mines & Geosciences Bureau, Environmental Management Bureau, representative of host community, representative of Indigenous Cultural Community (if any) and accredited environmental NGO• Mandated Mine Personnel: – Mine Environmental Protection & Enhancement Officer – Community Relations Officer – Safety Officer
PRINCIPLES OF SUSTAINABILE DEVELOPMENTA practical approach in relation to mining:• Environmental Responsibilities: – Minimize environmental impacts during the planning stage – Ensure adequate environmental protection measures during the operations stage – Restore, if not improve, the environment post‐mining – In all instances, use Best Practices
Coral Bay Nickel Processing Plant – Protection of Coral Reefs in the design of causeway/trestle CAUSEWAY 423m FS 680m L REE CORA TRESTLE 900m 440m If Coral Reef Was Not Existing : Avoided Coral Reef ProtectedCauseway 680 m Causewa 424 m Cost = Php 23.4M y Cost = Php 14.6MTrestle 440 m Additional Cost to Trestle 900 m Cost = Php 57.4M Company Cost = Php 117.5M Total Cost Php 80.8M Php 51.3M Total Php 132.1M Cost
Coral Bay: CoastalResource ManagementFindings: A healthy marine ecosystem was maintained at the primary impact zone of CBNC’s coastal operations. Regular patrol prevented illegal fishing practices and kept the area as a de‐facto sanctuary.
Coral Bay – Coastal Resource Management Trestle pile with soft corals Trestle area teeming with fishes
PHILEX MINING CORP. - REHABILITATION OF TD NO. 1 Before Before Today Today
PHILEX MINING CORP.Forest Protection and Watershed ManagementDENUDED AREA ABOVE BANGET MILL DURING 1960’S DENUDED AREA ABOVE BANGET MILL DURING 1960’ DURING 1980’S DURING 1980’ THE PRESENT DAY SITE
Principles of Sustainable Development…• Social Responsibilities: ‐ Uplift the standard of living of the host communities in a manner that enables them to sustain themselves post‐mining. Therefore, prioritize social expenditures on: • Health and Education • Infrastructure Projects • Livelihood Programs/ Business Development ‐ Utmost respect for Indigenous People’s rights and culture
SOCIAL DEVELOPMENT MANAGEMENT PROGRAMNS (SDMP) “BEYOND COMPLIANCE”2010 Commitment: Php 39.2 Million*2010 Actual: Php 62.2 Million Disbursed throughout Impact Area2010 Commitment: Php 68.6 Million2010 Actual: Php 104.6 Million* SDMP Commitment of Php 5.2 Million and 1% Royalty to IPs of Php 34.0 Million
HOSPITALStatus : Primary HospitalWorkforce : 38 Staffs Doctors : 09 Nurses : 14 Other Staff : 15Total Cost (2010) : Php 60.5 MillionCredited to SDMP : Php 39.4 Million 65% of patients are non‐dependents.
SCHOOLSStatus : Private school, supervised by De La Salle University, Bacolod CityWorkforce : 52 Staffsa. School Principal : 1b. Primary & Elementary Faculty : 25c. Secondary : 17d. Other Staff : 9Total Cost (2010): Php 27 MillionCredited to SDMP: Php 17 Million 63% of students are non‐dependents.
EDUCATIONAL ASSISTANCESDMP scholars during a team building seminar. 77 graduated. Some of the 7 school buildings, 14 classrooms constructed.
HOUSING FOR INDIGENOUS PEOPLES No. of Housing Units Built: 208 Units@6 Sites Total Cost (2010): Php 13M
IP Housing (Gawad Kalinga) Typical Palaw’an Home
INDIGENOUS LEARNING SYSTEM (ILS) Enrolment Profile (06‐09)• Concept : Arnold Jansen Catholic 667 Students Enrolled Mission Foundation 09‐10• Implementor: St. Jude’s Parish, SVD Order• Levels: Level 1: Non‐literate 08‐09 Level 3 Level 2 Level 2: Elementary undergraduate 07‐08 Level 1 Level 3: Secondary undergraduate No. of sites• Work force: 14 staff 06‐07 0 100 200 300 Total Cost (2010): Php 10.3 Million
CORPORATE CULTURE Must start at the top! VISION STATEMENTTo be a world‐class diversified mineral resource company that has exemplary relationships with all its stakeholders. i.e. using Best Practices i.e. using Best Practices i.e. we will get along i.e. we will get along well with everyone we deal well with everyone we deal with, by doing the right with, by doing the right things all the time things all the time
Corporate Culture... MISSION STATEMENTUsing best global industry practices, we are committed to: • Optimizing our current operations; • Exploring and developing additional deposits for Business nickel and other minerals to sustain our growth; Imperatives • Delivering to our customers quality mineral products in a timely manner; • Uplifting the quality of life of our host communities; • Protecting the environment in all our operations; Social • Nurturing our employees and providing a safe and Imperatives healthy workplace for them to achieve their full potential; and • Adopting the highest standards of corporate Both governance
Corporate Culture...• Vision/Mission/Core Values cascaded down to each mining operation• Seminars to mine managers and supervisors – what do these statements of principles mean and how do we accomplish• Integration into Performance Appraisal Reports• Strong Environmental and Community Relations offices at each mine site