Miners unearth community view of the future
Australian Financial Review – Special Report – SUSTAINABLE DEVELOPMENT
The mining industry is beginning to take a longer-term approach to its assets, says Miriam Hechtman.
Mining is an extractive industry, not generally considered sustainable. But the industry is beginning to face up to the challenges of tackling environmental, economic and social implications, taking a triple bottom line approach. “As a mining operation, we are in the non-renewable resources business,” says Brendan Hammond, Argyle Diamonds’ outgoing managing director. He labels mining resources as “endowment assets” that are jointly owned by society. “If we have endowment assets it is not good enough that we mine them to simply generate great shareholder returns,” he says. “We have to also convert these assets to a variety of in-perpetuity assets that are able to be handed on to future generations.”
Significant opposition has prompted the mining industry to begin setting higher standards. The International Council on Mining and Metals (ICMM) was formed in 2001 to act as the international leadership and representative body for the industry. The council is made up of 16 companies and about 25 industry associations. Council secretary-general Paul Mitchell says members are bound by “sustainable development principles”. “They’ve committed to them, adhered to them and report their performance annually against them. “They do that using a set of indicators that we developed in partnership with the Global Reporting Initiative during the course of 2004,” Mitchell says.
The new face of mining is driven by a desire to improve the industry’s reputation, trust and understanding with relevant stakeholders. At the end of the day, it is an economically driven approach. “The reason for doing all that,” says Mitchell, is to “maintain or improve access to land capital and markets as well as attract civil talent into the industry. “The foundations are clearly business related, for no esoteric reasons.” In terms of environmental impact, ICMM recently signed a memorandum of understanding with the World Conservation Union, which provides the basis for a dialogue between the two organisations over the next five years.
Minerals Council of Australia chief executive Mitchell Hooke says Australian industry is being lauded as a leader in environmental performance. It was an industry at real risk of losing its social licence to operate, says Hooke, but is now committed to building communities beyond the life of the mine. “What you’re now seeing is the industry’s shift from reclamation and rehabilitation to in fact building sustainable eco-systems,” he says. Hooke conceded that big challenges remain, notably safety and health, saying the industry is “still short of our goal of zero fatalities and injuries”.
The Centre for Social Responsibility in Mining at the University of Queensland focuses on the sustainability of the community and the contributions to regions. Professor David Brereton, director of the centre, says he is hesitant to make generalisations about Australia’s development. “There’s a lot of variation within the different sectors of the industry, between companies and even within the companies,” Brereton says. “One of the big focuses for our centre is Aboriginal employment.” Brereton says Zinifex’s north-west Queensland-based Century Mine has made an important contribution by creating employment opportunities for Aboriginal people. The challenges lie in the more remote areas of northern Australia, “where you have often substantial Aboriginal population and you don’t have a lot else happening in terms of economic development”.
Assessing the environmental and social aspects of the investment opportunity is viewed as equally as important as the financial component, says BHP Billiton’s vice-president of sustainable development and community relations, Ian Wood. “If you get those issues wrong it can erode the value of the investments quite dramatically,” Wood says. To monitor these issues, BHP has implemented a “tollgate process” that all investment decisions have to pass through. “Our focus at the moment is really on consistent application of the company’s sustainable development policy across all of our assets around the world,” says Wood. “I think in Australia one of the issues that we clearly are working with is indigenous employment and our programs in the Pilbara region of WA. “We are working towards improving indigenous employment opportunities by ensuring that local people are trained and have the capacity to take meaningful positions in the company.”
Hammond says: “What we have to be able to do is do business in a way that makes the world a better place at the same time as making heaps of money for everybody.
“And that is the less trodden path and it is a really tough path. It calls for being very, very innovative, at all levels of the business, from strategic planning down to core day-to-day operational delivery.”
