csr in the apec mining sector · government arm)-watch dog functions accounting and valuation, inc....

CSR in the APEC Mining Sector

APEC Human Resources Development Working Group

Capacity Building Network May 2011

Disclaimer

“The views expressed in this report are the opinions of the authors and do not necessarily reflect the views of APEC, AIM-RVR CSR Center, and are without prejudice to Member’s rights and obligations under the APEC.”

APEC Project No. HRD 03/2009A Prepared by: Asian Insitute of Manage-Ramon V del Rosario Sr. Center for Corporate Social Responsibility 4/F ACCM Bldg, Benavidez corner Trasierra Streets Legaspi Village, Makati City, Philippines Telefax: (632) 752-1208 Email: rvrcenter@aim.edu Website: http://www.rve.aim.edu Prepared for APEC Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: info@apec.org Website: www.apec.org © 2011 APEC Secretariat APEC#211-HR-03.1 ISBN 978-981-08-8501-4

1-1

CORPORATESOCIALRESPONSIBILITYINTHEAPECMININGSECTORINTRODUCTION Background

1-2

ScopeandObjectives

1-3

METHODOLOGY

RoundTableDiscussion

SpecialInterestSession

CaseStudyDevelopment

1-4

EducationalFrameworkDevelopment

CONTENTS

1-5

THEMININGSECTOR

1-6

TheMineLifeCycle BusinessCaseforCSRintheMiningSector

1-7

DEVELOPINGACSRSTRATEGYDefiningCSR

FIGURE 1: THE PYRAMID OF CORPORATE SOCIAL RESPONSIBILITY

1-8

THEECONOMIC,SOCIALANDENVIRONMENTALIMPACTSOFMININGSocialandEnvironmentalImpacts

1-9

1-10

Economic OtherConcerns :

1-11

APECMININGINDUSTRY

1-12

2008г.

Others33%

Australia11%

Russia17%

Philippines5%

Indonesia13%

China5%

Canada16%

FIGURE 2: MINERAL PRODUCERS IN APEC ECONOMIES

1-13

TheOperatingEnvironment:CSRRelevantLawsandInitiatives InternationalInitiatives CorporateInitiatives

1-14

GovernmentInitiatives,PoliciesandLaws

1-15

1-16

FRAMEWORKFORCSRINMININGINTHEAPECREGION

1-16

FRAMEWORKFORCSRINMININGINTHEAPECREGION

1-17

Controlling Stakeholders

CONCERNS

Economic Returns

Regulation Taxes, Development

KEY PLAYERS

Mining Companies

Government

Financiers(Upstream)

Buyers (Downstream)

SocialConcerns

Mediating Stakeholders

Media

NGOs

Multilateral Organizations

Regulation, Revenue Distribution and

Management

Cooperative

-From conflict to cooperation

-Dispute resolution, inc. Independent grievance mechanism

-Research clearing house (fact checking)

-International legal recourse

-Paying for caretaking (multi-level government arm)

-Watch dog functions

Accounting and Valuation, inc. for books and

balance sheets

Metrics & Benchmarks

Budgeting Process

e.g. regulatory

Financial and other risk

STAKEHOLDERS & CONCERNS

Key Stakeholders

Communities

Environment

Performance Monitoring &

Evaluation

SYSTEMSFRAME

Source:Herrera, 2010

Corporate

-Enabling internal staff

-Voluntary nature, reputation effect

-Social license to operate

1-18

1-19

TheMineLifeCycle,Mining’sFootprintsandStakeholders

Footprint

PreExploration

Exploration Extraction RehabilitationDecommissioning

CompanyFinancial

GovernmentIncome

StakeholderConcerns

EffectonStakeholder

Legacy

?

1-20

SUMMARYANDCONCLUSIONS

1-21

1-22

References:

1-23

1-24

1-25

ANNEX1.1:FRAMEWORKFORCSR41

CSR Framework

Source: Alfonso, Herrera and Roman, 2010

BUSINESS CONTEXT

Responsiveness

Effectiveness

FitwithMissionandCoreValues

CSRSTRATEGY

SOCIALVALUE

1-26

Integrating Social Performance

Business Context

Mission andCore Values

Current Enterprise

Assets & Competencies

SHAREHOLDER VALUE

Footprint & Stakeholders

SOCIAL VALUE

Social Assets

Sustainability and Social Values

Strategy

Source: Herrera, 2008

StrategyEngine

HW SW

LW

PerformanceMetrics

Herrera, 2009

1-27

Responsible Business

PhilosophyStrategyOperationsOwnershipStructureIndicatorsEvaluation

Little

Total

Form

al S

truc

ture

& P

roce

ss

AwarenessUnderstandingInvolvementEngagementCommitment

Weak StrongCulture of Responsibility

Weak

Balanced

StrategicAdvantage

Herrera, 2010

1-28

INTEGRATING CSR

CONTEXT

Issues, Objectives, Priorities

CSR Strategy

Elements & Implementation

Stakeholders: Concerns, Issues, Influence

Macro Environment

Corp Giving; Compliance; Value

Chain Mgt.; Strategy; Full Embed

Communication, Giving, Engagement, Partnering and

Collaboration

Evaluation

ContentContextActor

Process

COH

EREN

CE

Consistency of Policies, Accountabilities, Incentives

Players, owners, accountabilities, indicators

BusinessFootprint

Business Situation& Values

Herrera, 2010

1-29

1-30

ANNEX1.2:INTERNATIONALINITIATIVESAA1000 APELL EnvironmentalExcellenceinExploration EquatorPrinciples EthosIndicators

1-31

ExtractiveIndustriesTransparencyInitiative GlobalReportingInitiativeGRI International Council on Mining and Metals (ICMM) Principles for SustainableDevelopment Environmental, Health and Security Guides from the International FinancialCorporation ISO26000

1-32

ISO14000 UnitedNationsGlobalCompact VoluntaryPrinciplesonSecurityandHumanRights

1-33

AN

NEX

1.3

:EN

VIR

ON

MEN

TR

ELA

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ISLA

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Ec

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Envi

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and

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Pollu

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Mon

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Aus

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Can

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1-34

Indo

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Phili

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Chi

le

1-35

Chi

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USA

1-36

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REL

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55

Ec

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1-37

1-38

AN

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1.5

:SU

MM

AR

YO

FM

AJO

RS

TAK

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LDER

SA

ND

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SPE

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TAG

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Stak

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En

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Econ

omic

1-39

1-40

Endnotes

1-41

Asia-Pacific Economic Cooperation

Case studies

Open pit mining and the proposed South Cotabato Environment Code.

Source: Sagittarius Mines, Incorporated.

Source: Sagittarius Mines, Incorporated.

Source: Sagittarius Mines, Incorporated.

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MSME

8

Programs financed by the Antamina Mining Fund

District of San Marcos

Port Punta Lobitos

District of San Marcos

Port Punta Lobitos

EXHIBIT 4:

Regional Government

v

MINING CANON 50% of Income tax

10%

District of Mining

Operations

Province of Mining

Operations

Department of Mining

Operations

25% 40%

Investment Projects

25%

Regional Government

National Universities

80% 20%

7

-

- -

- -

Japan

Republic of KoreaChinese Taipei

India

Other Asia

European Union 27Other

China

Thailand

India

Japan

Republic of Korea

TOTAL ENERGY Exports A US$20.b

TOTAL MINERALS Exports A US$34.9b

23%

50%

23%

49%

23% 23%

50%43% 43% 43%

32%22%

ISO 14001 Global Reporting Initiative

ILO Conventions OECD MNE Guidelines

AA1000 UN Global Compact

Use now Use in the future

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