Brimo Gerard - CSR in the Heavy Footprint - Mining Industry Asian Forum on Corporate Social Responsibility October 18-19, 2011 EDSA Shangri-La Hotel Manila

1. CSR IN THE “HEAVY FOOTPRINT”
MINING INDUSTRY
Gerard H. Brimo
President & CEO

2. 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 RESULT
Generally a hostile operating
environment

3. And yet the world as we know it today can’t
survive without minerals….
It is estimated that every newborn will need:

4. NICKEL and its Uses

5. Nine of the world’s largest mining
companies
World Business Council for
Sustainable Development
International Institute for Environment
and Development (IIED)
Two-year (2000–2002) independent
process of research and consultation –
Mining, Minerals and Sustainable
Development Project

11. 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.”*

12. 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)

13. 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

14. 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

15. PRINCIPLES OF SUSTAINABILE
DEVELOPMENT
A 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

16. Low grade lateritic
Low grade lateritic
nickel ore (limonite)
nickel ore (limonite)

17. 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 Protected
Causeway 680 m Causewa 424 m
Cost = Php 23.4M y Cost = Php 14.6M
Trestle 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

18. Coral Bay: Coastal
Resource Management
Findings:
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.

19. Coral Bay – Coastal Resource Management
Trestle pile with soft corals
Trestle area teeming with fishes

20. Rio Tuba Nickel: Retention Ponds

21. Rio Tuba Nickel: Dust Emission Controls
LIMESTONE QUARRY WATER SPRAYING
MINE ROAD WATER SPRAYING WIND BREAKER CONTRACTED BY COMM. RESIDENTS
TRUCK TIRE WASHER ACCORDION CHUTE ROAD SWEEPERS

22. Rio Tuba Nickel: Mining Operations
How do you
rehabilitate this?

23. Rio Tuba Nickel: Progressive Rehabilitation of Mined-out Areas
Rehabilitated
Area
Topsoil
RTN Nursery

24. Rio Tuba Nickel: Progressive Rehabilitation of Mined-out Areas
Mined-out area
scheduled for
rehabilitation
Top soil
stockpile

25. Rio Tuba Nickel
May 2008
May 2008
Sept 2009
Sept 2009
March 2011
March 2011

26. Rio Tuba Nickel: Inside Rehabilitated Mined-out Area

27. Taganito Mining: Mine Rehabilitation

28. PHILEX MINING CORP. - REHABILITATION OF TD NO. 1
Before
Before
Today
Today

29. PHILEX MINING CORP.
Forest Protection and Watershed Management
DENUDED AREA ABOVE BANGET MILL DURING 1960’S
DENUDED AREA ABOVE BANGET MILL DURING 1960’
DURING 1980’S
DURING 1980’ THE PRESENT DAY SITE

30. 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

31. SOCIAL DEVELOPMENT MANAGEMENT
PROGRAMNS (SDMP)
“BEYOND COMPLIANCE”
2010 Commitment: Php 39.2 Million*
2010 Actual: Php 62.2 Million Disbursed
throughout
Impact Area
2010 Commitment: Php 68.6 Million
2010 Actual: Php 104.6 Million
* SDMP Commitment of Php 5.2 Million and 1% Royalty to IPs of Php 34.0 Million

32. HOSPITAL
Status : Primary Hospital
Workforce : 38 Staffs
Doctors : 09
Nurses : 14
Other Staff : 15
Total Cost (2010) : Php 60.5 Million
Credited to SDMP : Php 39.4 Million 65% of patients are non‐dependents.

33. SCHOOLS
Status :
Private school, supervised by De La
Salle University, Bacolod City
Workforce : 52 Staffs
a. School Principal : 1
b. Primary & Elementary Faculty : 25
c. Secondary : 17
d. Other Staff : 9
Total Cost (2010): Php 27 Million
Credited to SDMP: Php 17 Million 63% of students are non‐dependents.

34. INFRASTRUCTURE PROJECTS

35. LIVELIHOOD PROJECTS

36. SOCIAL SERVICES

37. EDUCATIONAL ASSISTANCE
SDMP scholars during a team building seminar. 77 graduated.
Some of the 7 school buildings, 14 classrooms constructed.

38. HOUSING FOR INDIGENOUS PEOPLES
No. of Housing Units Built:
208 Units@6 Sites
Total Cost (2010):
Php 13M

39. IP Housing (Gawad Kalinga)
Typical Palaw’an Home

40. 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

41. CORPORATE CULTURE
Must start at the top!
VISION STATEMENT
To 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

42. Corporate Culture...
MISSION STATEMENT
Using 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

43. 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

44. A CSR INDUSTRY‐WIDE INITIATIVE: TRANSPARENCY

45. +
HEAVY FOOTPRINT INDUSTRIES GOOD CSR PRACTICES
= GREAT DEVELOPMENT OPPORTUNITIES

46. WHILE CARING FOR THE ENVIRONMENT….

47. THANK YOU!