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.
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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. 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
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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
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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
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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. 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
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8. OUR GUIDANCE ON MANAGING RISK AND USING
RESOURCES 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
www.angloamerican.com/seat
• 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. EXAMPLE GUIDANCE IN SEAT
All 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. 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.
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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
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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
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13. HOUSING
Anglo American is developing a low-income home ownership model aimed at
those 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
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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
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