From Theory to Practice:  Corporate Social Responsibility and Sustainable Development in Mineral Exploration

Outputs from the Short Course and Collaborative Learning Experience sponsored by the Prospectors and Developers Association of Canada

Toronto , March 2-3, 2007

Notes prepared by On Common Ground Consultants Inc.  

Coordinator

Tony Andrews , PDAC

Facilitators

Susan Joyce and Ian Thomson, Principals, On Common Ground

Organizing Committee

Peter Bradshaw, Chairman, First Point Minerals

Ross Gallinger, Vice President, Environment, Health, Safety & Community, IAMGold

Bill McGuinty, Vice President Exploration, Intrepid Minerals Ltd

Introduction

A total of 75 people were registered for the short course, plus 6 case history presenters, 3 from the organizing committee and 2 from PDAC for a gross total of 87.  Travel problems prevented a number from attending and many were delayed in arriving on the morning of the first day.  It is estimated that some 72 persons participated in the key breakout on the afternoon of the first day at which the make-up of Corporate Social Responsibility (CSR) in mineral exploration was discussed and a preliminary working model adopted.

The following notes present areas where agreement or strong consensus emerged from the breakout sessions and/or discussion.  A full listing of findings from the tables in the breakout sessions is presented in the Appendix to this document.

Basis of Participation

At the beginning of the Short Course the basis of participation, as set out below, was discussed and agreed to:

Our intent is:

• To explore, not negotiate
• To share not contest
• To inform, and when requested, advise
• To understand the diversity of perspectives and, where possible, build consensus
• To help guide the flow of the discussion in such a way that areas of common ground and of difference are identified along with the underlying reasons, and
• To respect that participation and contributions are not to be seen as an endorsement by any participant of the PDAC initiative on Corporate Social Responsibility (or any specific outcome of it)

Attribution of comments

• No specific attribution of any comment made by any participant(s) will be referenced in any written output from the Short Course unless specifically requested by the participant(s)

Notes

• Notes will be prepared from the Short Course and shared.  Notes shall typically be of a summary nature and include a list of participants
• Any notes prepared should include at the beginning, this "Basis for Participation" which shall have been discussed with participants at the beginning of the activity.

The Challenge of CSR in Exploration

In addressing the question in the first breakout session, “what are the strengths, weaknesses and challenges in implementing CSR in Exploration”, a total of 8 tables participated and recorded the following response (the list shows only where a minimum of two table had the same observation)

There was strong consensus that the strengths of the mineral exploration sector in dealing with the challenge of CSR lie in the knowledge, experience and awareness of its people, their motivation and willingness to change.  On the other hand, the weakness and challenges of the sector lie in the ignorance, lack of capacity and lack of knowledge of the nature and application of CSR.  There is also recognition that the sector is not well known or understood by the general public, particularly in many foreign countries, which creates a further challenge for the sector.

Other findings and observations include:

• Strong agreement with the proposition that ‘a formal model for CSR providing guidance and benchmarks would be useful for mineral exploration’.

• Exploration should build on existing industry initiatives and avoid creating too much ‘new’ material that might cause confusion or duplication.

• CSR is a management framework and mechanism for making a contribution to sustainable development.  It is, however, possible to achieve a high level of CSR without contributing to sustainable development.  On the other hand, it is impossible to meet the principles of sustainable development without also fully implementing CSR.

A Working Model for CSR in Exploration

The full model, incorporating all recommendations coming from the breakout groups and discussion, is attached to this document.

Aspects of the Working Model

• CSR is seen as founded in good corporate governance with engagement (defined as ‘a process of contact, dialogue and interaction that ensures all parties of interest are informed and participating in decisions that affect their future, in a way that is satisfactory to them.‘) as the most significant aspect of implementing CSR on the ground during exploration, as illustrated in the diagram below created by Short Course participants.

• A hierarchical/layered approach is required with principles, guidelines and tools
• It is reasonable to adopt an existing set of high level industry principles such as those published by ICMM, but they should be adapted to meet the characteristics of exploration.

Limitations of the Working Model

• The present Guidelines are an aggregate of high level objectives, tasks and tools and require dis-aggregation.
• The Guidelines are incomplete in many areas.
• The Guidelines represent the gross character of CSR in exploration and not all aspects would necessarily be implemented at the same time.  There is thus a need to develop milestones linked to the incremental advance of an exploration project and/or the stages of exploration to indicate what is appropriate for CSR at each stage.

Operationalizing CSR in Exploration

Participants identified a number of factors that are considered critical to the effective implementation of CSR in exploration;

Issues for Management and the Field Team

• Communications are the cross-cutting issue.  Information must flow freely in both directions.  There should be a high level of transparency inside the company.
• Management
• Provides leadership, articulates vision, sets goals, provides resources
• Creates a working environment with a shared vision, common CSR philosophy, mutual respect and trust
• Be flexible and responsive to social issues
• Should be very familiar with the field area, visit the area frequently, be seen and known by key stakeholders
• Be role models for the company/project – demonstrate truth and transparency in reporting
• Creates a ‘safe working environment’
• Establishes management structures to:
• Facilitate two-way internal communications
• Sharing of information
• The Field Team
• Should have a mandate and authority granted/defined by management
• Gives continuous feedback
• Flags issues early so that they can be resolved before there is a crisis
• Resources and tools
• Budget
• Timetable that is realistic for both CSR and technical objectives
• People – appropriately trained and informed
• Guidelines for engagement with stakeholders – particularly for pre-engagement and engagement
• External verification and validation
• Tool kit optimized to local situation
• An ‘exit strategy’

Resolving the Lack of Capacity

• Recognize that CSR is more valuable than a drill hole
• Early, up front identification of the resources needed
• People (skills, personality, aptitude)
• Budget
• Time
• Training and instruction for all personnel – use all available sources
• Recognize when you need help and bring in the best people possible
• Use consultants as necessary to support and validate your staff
• Be willing
• Manage your supply train
• Develop industry knowledge sharing

Going Overseas

In addition to the many familiar challenges to working overseas, participants identified the following as being particularly important with respect to implementing CSR:

• Finding people who share the same social values as the parent company – particularly important for the in-country manager as well as the field staff
• Language and the challenge of communicating values across cultural as well as linguistic distance
• Establishing limits to CSR, particularly benefits
• Defining the area of social impact/influence of a project
• The need for a ‘tool kit’ specific to the realities of a country or region
• The lack of knowledge/understanding of exploration (often mining in general) in local communities
• The low credibility of the mining industry due to legacy issues and/or bad image in many places
• The presence of activist NGOs and others critical of or opposing mining
• Recognizing the lack of government capacity in many developing countries

Challenges and Barriers to the Implementation of CSR

• Industry ability to be credible
• Where to draw boundaries on participation, benefits etc
• CSR, particularly Engagement, not accepted as an exploration cost.

Lead Issues Identified by Participants

• People – the difficulty in finding appropriately qualified individuals and/or those with the aptitude to work with communities
• Knowing and/or understanding the community and other stakeholders
• Communicating what exploration is and managing expectations
• Setting boundaries to CSR with respect to benefits, etc
• Defining the areas of social impact and influence
• Buy-in/acceptance of the importance of CSR by shareholders and analysts
• Lack of acceptance that aspects of CSR, and in particular Engagement, are a ‘cost of exploration’ and are just as important as great drill holes
• The lack of a level playing field in many places where community groups, NGOs, the media and others are not necessarily truthful, ethical or honest in their criticism/opposition to mining and mineral exploration.

Recommendations for Moving Forward

• PDAC should form a working group to advance development of the model.
• Next steps include optimizing the working model for the various stages of exploration from first contact through to full feasibility to form an operational model.
• Case histories are an important part of learning and communicating CSR and it would be highly advantageous to have linkages between recommended procedures and practical examples.
• A self assessment tool kit would be very useful.
• The CSR for exploration model should be validated with a broader group of peers in the industry and then external stakeholders – a multi-sector process would be appropriate once the model is a little more refined.
• The final model should be widely disseminated within the industry and be available to communities and other stakeholders – e3 is a potential platform or model for this.
• The final product should be linked to the Global Compact.
• A reporting tem plate based on Global Reporting Initiative standards, preferably developed under GRI with the collaboration of industry, NGOs, lending institutions and unions, is needed as a matter of urgency.

Unresolved Issues

Parked as being either too complex or a detailed sub-set of CSR

• International accountability – guidelines, benchmarks for other actors as a mechanism for leveling the playing field.
• First Nation/Aboriginal Consultation and Rights in Canada – the role of government        

A WORKING MODEL FOR CORPORATE SOCIAL RESPONSIBILITY IN MINERAL EXPLORATION

As developed in the PDAC Short Course,

March 1-2, 2007

PRINCIPLES

(Modified from ICMM)

•          Implement and maintain ethical business practices and sound systems of corporate governance.

•          Integrate sustainable development considerations within the corporate decision-making process.

•          Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.

•          Implement risk management strategies based on valid data and sound science.

•          Seek continual improvement of our health and safety performance

•          Seek continual improvement of our environmental performance.

•          Contribute to conservation of biodiversity and integrated approaches to land use planning.

•          Contribute to the social, economic and institutional development of the communities in which we operate.

•          Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

GUIDELINES

(Incorporating contributions from Short Course breakout workgroups)

Mineral exploration activities should be conducted taking into consideration the following guidelines.

Pre-engagement

•          Before going to the project area, assemble all available information on social, cultural, legal and environmental conditions so that a pre-visit assessment can be made of social and environmental risks and develop a strategy for initial engagement with local populations.

•          Provide information, instruction and, if necessary, capacity building to the field team charged with making the first visit to the field area.

•          Provide specialist assistance to the field team to facilitate risk assessment and initial contact with local populations

Engagement

•          Set up an engagement process that provides for the mutual exchange of information in      a transparent, inclusive and respectful manner, and community participation in decisions that affect their future.

•          Conduct social profile/mapping and analysis of the community and other stakeholders in order to understand local social, socio-economic and cultural characteristics as baseline for a plans for engagement, communications and community relations;

•          Provide complete, objective information about the companies exploration program, the process of exploration, it’s possible chances of success and potential time lines; and both the risks and opportunities of mining, should a mine eventuate.

–        Provide company press releases to all stakeholders in their native language.

–        Provide independent information about exploration and mining

–        Provide access to independent advice (the company should be prepared to finance the provision of independent advise to the community and individual landowners where exploration takes place)

•          In consultation with affected parties, develop a schedule of compensation for access to land and/or harm arising from exploration activities prior activity taking place 

•          Have a signed agreement with any affected surface owners before any stage of physical work

•          Develop specific plans to cope with

–        Communications and information issues during extended periods of time when the company is absent;

–        A signed  “completion” agreement when any stage in completed (e.g. trenches filled in and re-seeded;  drill pads reclaimed;  etc).

–        An exit strategy for projects that terminate/fail; and

–        Transfer of project management or ownership.

Transparency

•          Develop and publicize policies and procedures for transparency and the availability of information to interested parties and affected populations.

•          Provide complete disclosure of information using language and mechanisms that facilitate access and comprehension by interested parties and local populations (jargon free, non-technical vocabulary, language of receiving population, appropriate mechanisms of distribution of information)

•          Provide complete and objective reports on all activities

•          Adopt processes of third-party verification of company actions and compliance with corporate policies and objectives for transparency.

Benefits

•          In consultation with the community, create inclusive procedures for employment and maximizing economic opportunities.

Emphasis should be given to maximizing local employment and training, the use of local services and suppliers and encouraging the formation of local business to provide such services.

•          In consultation with community, support and strengthening institutional capacity in existing social structures and authorities.

•          Assist the community in liaison with regional and national authorities.

•          If the potential for a mine becomes visible, assisting the community in gaining access to training so that persons who wish to work can become qualified for positions in the mine.

•          If a mine looks feasible work with the community to have only the appropriate level of in-migration.

Bribery and Corruption

•          Develop and publicize policies and procedures to cover bribery and corruption.

•          Provide instruction and training to personnel on how to handle situations in which bribes are suggested, requested or demanded.

Security and Human Rights

•          Conduct a situation assessment of security and human rights at the project, regional and national level

•          Apply the ‘Voluntary Principles on Security and Human Rights’.

Relationship with Government

•          Assess the regulatory regime with respect to quality of legislation pertaining to exploration/project development.

•          Assess the capacity of government (at the National, regional and local level) to implement the regulatory regime.

•          Develop a plan for interaction with government.

Environment, Heath and Safety

Environment

•          Conduct an assessment of environmental risks and hazards

•          Apply best practice procedures for management of the environment that are relevant to the geography and culture of the area.

•          Capacity building/education of community/stakeholders in environmental management

•          Create a community based environmental monitoring and verification process

Health and Safety

•          Assess risks to health and safety of employees and local people

•          Provide training and equipment (minimum of safety glasses and boots) to local employees to ensure a safe working environment

•          Conduct (or sponsor) base line health studies to define the   pre-mine situation and identify where early intervention can be productive.

Corporate Governance

•          Develop and publicize policies and procedures to cover CSR including corporate governance and ethics

•          Create a management structure, budget, responsibilities and reporting for environmental and social aspects of exploration both leading to success (i.e. a mine) and failure (i.e. cessation of all activity).

•          Employ specialists to support the exploration team and/or fill capacity gaps.

•          Create, in collaboration with the community, an extra-legal mechanism for managing disputes.

•          Adopt processes that encourage continuous learning and adaptive management such as.

–        Monitoring, reviews and evaluations

–        Education and training programs

–        Regular review and update of plans

•          Establish community/stakeholder based processes to verify company performance

•          Negotiate community agreements that define rules, roles and responsibilities of all parties (reduce uncertainty).

•          Bind sub-contractors to company environmental and social policies.

•          Report outcomes of CSR to public

APPENDIX 1

Raw findings from the breakout groups

Breakout 1 - Responses to Questions

•         List three

–        Strengths

–        Weaknesses

–        Challenges

Of the Canadian mineral exploration sector in meeting the expectations of Corporate Social Responsibility

•         In groups – discuss and develop a list of the five most important ‘strengths’, ‘weaknesses’ and ‘challenges’.

Responses listed below with the number of tables (total 8 tables reporting) recording the same or very similar observation

Breakout 3 – Responses to Questions

•         In implementing CSR in exploration:

–        What do management and the field team need from each other?

–        What are the critical capacity issues and how would you resolve them?

–        What are the challenges for a company implementing CSR outside of Canada ?

–        What is currently working/not working?

–        Internal/External relations, barriers, challenges, etc

What do management and field team need?

Communication

Management articulates and team BUYS IN

Mutual respect and trust

Budget

Flagging issues – two way communication

Shared vision

Health and Safety – emergency response planning

Management helps create security at field level

Knowledge sharing

Time

Common philosophy

Resources – People – internal/external

                        Information

Leadership and management on the ground

Pre-engagement

Both led through and external evaluation

Internal Champion

Management provides training to field team

Feedback from field team to management

Management gathers info from site as pre-engagement due dilligence

Management as role model to set tone

Act to identify problems early

Frequent communication – management to visit field

Truthful reporting – management style – culture

Flexibility, promptness

CSR has to permeate company – report on CSR as well as geology

Respect – trust

Management to field team

            Strong direction/support

            Awareness (cultural/social)

            Rules of engagement

            Some form of tool-kit

            Exit strategy

Field team to management

            Communication

Mgmt needs info/data from field

Field needs support/mandate

Both need CSR capacity (process, elements)

Resources (time, funding, training, expertise, people)

Mutual respect and trust

Common vision and commitment

Transparency within company

Critical capacity issues – how to resolve

Recognizing a ‘good’ CSR is as important as a drill hole

Manage strategic stakeholder expectations

Capacity to do stakeholder mapping

Resources – people – industry shortage

Training local people

Time and funds

Training from appropriate sources

Consolidated information

Company/Industry ability to be credible

Get capacity from local partners (caution) resources (intellectual)

Develop industry level knowledge sharing

            Company – investor

Manage expectations

Training, trust, empowerment

Indigenous language training

Up-front identification of resources

Choose right personality

Social skills greater than geological

CSR ‘training’

Appropriate consultants – validate staff

Internal CSR reporting

Manage supply chain

Communication/people skills

Awareness of CSR principles

Where to draw boundaries?

Training, expertise (in house)

Fear of failure – perfection/procrastination

Money, time – resources

Willingness

Recognizing when you need help/external expertise

Local knowledge, people

Communications

Challenges overseas

Multi layered governments

Finding the RIGHT local people

Language issues – barriers

Cultural challenges

Not knowing the community

Governance corruption/anti-corruption policy

Creating partnerships at the local level (village –ministry, etc)

Understanding local politics

Credibility

Cultural – social/govt/local business corrupt

White knight/father Christmas syndrome

Expectations (success) – community/stakeholders/shareholders

Levels of play

Delegation of authority from management to field team

Educating communities about exploration and mining

Negative legacy or bad behavior

Validation of field team judgments

Establishing limits to CSR

How to identify the best person for local manager and community relations

Defining area of influence

Weak host country governance

Defining appropriate community contacts

Risk of perceived bribery

Understanding of Culture – Values – Social structure, etc

Legislation/regulatory differences/lack of

Often political instability

Different regimes (political)

Extreme poverty

Low education and health levels in some areas

Cases of Human Rights abuse

Threat of nationalization

Transparency

The boom/bust cycle

Managing expectations

Local understanding of the industry

NGOs

Having a corporate philosophy

Political will of host govt

Corruption

Local expertise (or lack of)

A TOOL KIT (mechanisms)

Maintaining continuity of engagement

Resources (time, money, people)

Investor support

Currently working

Awareness of CSR importance

Third party reviews

Established role models for CSR – best practice

Incremental benefits to local community

Increased awareness – case histories, meetings like this

E3

Third party reviews

Potential for partnerships and motivation

Agreement on need for CSR

Currently NOT working

Co-operation (industry, government, local people, etc)

CSR Not applied

No real culture – so new

Still reactive

Too many players – too many views – national leadership in Canada

Buy-in by most juniors to CSR

Government support

Lack of simple guidelines

Generalization

Awareness needs to spread, foster and reach all stakeholders, including shareholders

Holding to account (internally and externally)

A common philosophy

Co-operation (internally and externally)

Cultural understanding

Contrived issues

Barriers –

lack of recognition of real cost (assessment credit?)

PARKING LOT

International accountability – guidelines, benchmarks

First Nation/Aboriginal Consultation and Rights – role of government       

APPENDIX 2

List of Participants