Editor's note: Catch the Latest Happenings with Kitco Video News! (Kitco News) - The first time Angie D’Amato arrived at one of Callinex Mines’ camps, she noticed there was no effort to separate trash from recyclable materials. She asked what it would cost to make two separate refuse piles. The answer? Nothing. “We just needed to sort it and attach it to the chopper when we took out other material,” said D’Amato. Starting a recycling program was a small, but easy step for the mineral exploration company to incorporate into their policies, she said. It was clear example to employees and contractors how Callinex Mines sought to embrace corporate social responsibility as part of their mission. D’Amato manages corporate social responsibility for the firm. Corporate social responsibility has become a “buzzword” in the past decade and is becoming part of many industries, mining and exploration included. CSR, as it is called, is alternatively known as being a “good corporate citizen” or paying attention to the triple-bottom line of “people, planet, profit.” CSR at one time was derided by cynics as “feel-good” practices at best, with no tangible impact on a firm’s earnings, or as a ploy for good public relations. But companies are learning that there are some practical and profitable applications by focusing on protecting the environment, being proactive regarding health and safety of employees, or working with indigenous and local populations beyond what is required by government regulations. Industry members said there is momentum growing to incorporate these standards as part of doing business, although others said there is still more progress that needs to be made. STRUCTURAL CHANGE “I think this is a structural change. It certainly grew with this boom. This idea was gaining traction in the previous boom and it got killed when (fraudulent Canadian miner) Bre-X blew up (in the late 1990s). As miners we have to be responsible, especially as we move to the Third World. We need to build sustainable communities after the mining is gone,” said Mickey Fulp, author of The Mercenary Geologist. The Prospectors and Developers Association of Canada created a guideline for its members on improving environmental practices in 2006, said Emily Nunn, CSR coordinator at The PDAC. Nunn said originally they came up with a guideline called E3, which stood for Environmental Excellence in Exploration, as their members were looking for information on improving standards. The original E3 was created as an information resource, but she said The PDAC was getting requests on how explorers could improve practices regarding social issues and health and safety. Since then The PDAC has created the voluntary E3-Plus to offer ways to share information and raise awareness on all of these topics. The organization works with members to field test the guidelines to see how they work in real life. Callinex’s D’Amato said she applied The PDAC’s original E3 framework for a research project while she was in college studying environment and sustainability. Upon joining Callinex two years ago, one of her responsibilities was to contact First Nations leaders in the Burns Lake area in British Columbia. She said they had tried to reach the four local groups for year through phone calls, emails and letters with no response. D’Amato said she asked The PDAC for advice, and they suggested she become more proactive. She and a liaison with the First Nations group decided on in-person visits. “We had a meeting with one of the chiefs already, so we decided to go visit on an idea of ‘we’re here anyway,’” she said. It was a bit of a gamble. “In our world, if someone ignored my calls, emails and letters and then we showed up at the office, they wouldn’t be happy with it,” she said. The trip paid off. “We were really well received…. We met with three of the four First Nations groups that day…. They didn’t act that surprised that we showed up (unannounced),” D’Amato said. From that first meeting, relationship-building increased, enough so that she said “they invited us to their Christmas parties.” A ‘SOCIAL LICENSE’ TO OPERATE Industry interest in CSR was evident at The PDAC’s conference earlier this month and a panel discussion featuring the chief executive officers of Barrick, Teck Resources, IAMGOLD, Avalon Resources and MMG drew a standing-room only crowd of hundreds in the biggest ballroom on the conference’s premises. Several CEOs talked about having a “social license” to operate in these areas, particularly since many mines could have useful lives for decades. Establishing communication with local communities can help improve business operations. “It’s rare that we own the land. We’re on someone else’s land and we’re working within their history and culture. We have an obligation to leave it better than it was,” said Andrew Michelmore, president of MMG. Paul Klein, founder, Impakt Corporation, which advises companies on how CSR can increase business value, said the mining industry has made strides in the area. “It’s positive how far the industry has come in a short period of time. More cynically you can say they had to come a long way, but it doesn’t matter because of the remarkable impact it has had environmentally and socially,” he said.
On that more cynical level, it could be said that companies are being pushed to play nice because the internet has made it easier for advocacy groups to target parts of an operation they don’t like. A single comment on a social media site like Twitter can set off a firestorm and undo some of the work firms’ have made – or force firms to make expensive changes. DOING WHAT THEY MUST Under the CSR umbrella, global environmental standards give mining and exploration companies guidance from the early stages of a project. “Any company that doesn’t (adhere to environmental standards) doesn’t belong in the business anymore. To be honest, does everyone have that sort of conscience because they actually want to do it or they do it because they have to? I don’t know, but its good they have to in my opinion,” Fulp said. Klein said there are still plenty of firms that do what they must to comply with local regulations in order to get permits, sort of a “CSR-Lite.” Often, firms only look at short-term costs, rather than realize the long-term impact. Improvements such as building wells or schools increases trust with communities, especially when miners spend millions to build their operations. “In the interest of creating shared value, they could build a strategic business and reduce the risk of advocacy groups coming in,” he asked. Steve Letwin, president and CEO of IAMGOLD, said the idea of working with locals has led to stronger partnerships. He gave the personal example of how IAMGOLD sought to install solar panels at an operation in Burkina Faso, but dust during the dry season made them inoperable. A local manager suggested to him to put the panels over a water reservoir. That solved two problems: evaporation was reduced and the washing the panels kept them cleaned. CAN BE COSTLY, BUT CAN BE AN INVESTMENT POINT Large firms like Barrick and Teck Resources have money to put CSR plans into action; it can be harder for smaller firms. Don Bubar, president and CEO of Avalon Rare Metals, a junior miner, said community engagement can be expensive to do, sometimes because of high expectations by local groups, or costly to produce sustainability reports. Costs can be a sticking point, Klein said. But there are some ways even smaller firms can boost transparency. He likes Ontario-based Noront Resources’ initiative. “They developed a web portal for people to see videos of local people just talking about what was important to them. It was a big deal for a company of that size,” he said. Metal exploration firms often just focus on discovery, getting financing and regulatory approval as needed for the firm to become operational. Yet both Bubar and Klein said having CSR as part of a policy itself can lure socially conscious investors. Socially responsible investing, that is investing with one’s moral beliefs as a touchstone, is growing. Once devised as a way to avoid certain sectors such as tobacco or weapons, now socially responsible investing is focusing on rewarding companies that incorporate good stewardship. According to the Social Investment Forum Foundation’s 2010 Socially Responsible Investing Trends in the U.S., professionally managed assets following companies that include corporate stewardship as criteria stood at $3.07 trillion. Rewarding companies that have strong CSR policies and practices helps to indentify “best-in-class” companies with competitive advantages over their peers, the foundation said in its report. “They haven’t traditionally embraced miners, but there are opportunities at the juniors level…. We can promote better practices,” Bubar said. Follow me on Twitter! If you want to keep up with metals news and features, then follow me on Twitter. It's free, too. My account is @dcarlsonkitco . By Debbie Carlson of Kitco News dcarlson@kitco.com |
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FOCUS: Corporate Social Responsibility Growing Focus For Mining Industry 30 March 2012, 11:09 a.m. |