In tandem with its annual report, Xstrata produces an annual Group-level sustainability report. The sustainability report covers the economic, environmental and social performance of the Xstrata's managed operations for the 12 month period to 31 December. Various commodity business, regional, divisional and/or site specific sustainability reports are also published annually.
This is a report of Xstrata's economic, environmental and social performance in the 2009 calendar year. It is our sixth annual Group Sustainability Report.
Xstrata’s sustainability and risk assurance processes are the key measures used to provide Xstrata Board and management with assurance that the Group’s Business Principles, policies and standards are being met and that material risks are being identified and managed effectively. Audits, incident investigations and routine reporting provide management with information and data to monitor the performance and effectiveness of the SD systems that are in place.
Xstrata’s SD assurance programme is characterised by:
Since the inception of the Group HSEC Standards Audit in 2005, and its subsequent evolution into the Group SD Standards Audit, regular feedback has been sought on how the assurance programme could be improved. In keeping with this continuous improvement approach, Xstrata conducted a thorough review of its SD assurance processes in 2010.
A number of changes and improvements emerged from this review, most notably:
In particular, the incorporation of the SD risk audit process into the Internal Audit programme has removed duplication, improved efficiency in our audit processes and further embedded SD into our operational and business decision making. In 2010, Group Internal Audit visited 29 Xstrata sites in eight countries as well as visiting four divisions and Group. In total, they audited 34 different SD risks, including community relations, vertical openings, contractor management, aviation, furnace eruptions, resettlement, mine closure and tailings storage.
Each commodity business supplements Group-mandated SD Standards and risk audits with a range of additional, regular SD audits that include major hazard audits, legislative compliance audits, and specialist audits in areas such as electrical, lifting and loading, and tailings dam integrity.
The commodity businesses review their SD improvement plans and monitor progress. A consolidated progress report is submitted annually to each commodity business Audit Committee, and the Board Audit and HSEC Committees.
In 2010, Xstrata’s commodity businesses each submitted a comprehensive review of progress against its sites’ SD improvement plans. This exercise was performed following five years of SD Standards audits to allow sites to concentrate on closing out actions from these audits and Group SD time to review and update our audit protocols to reflect leading audit practice. Third party audits against Xstrata’s SD Framework have resumed using the updated protocol in 2011.
Xstrata has a value-driven approach to risk management and a structured and comprehensive risk management framework and system has been implemented across the Group. An ongoing bottom-up self-assessment process is in place, with results updated to operational commodity businesses’ and the Group’s risk registers.
Our risk management policy requires each commodity business and corporate function to undertake a comprehensive annual risk review as part of an ongoing process for identifying, evaluating and managing significant risks including material SD risks. The conclusions of this review are fully integrated into the annual business strategies and plans presented for Board approval. Progress against plans, significant changes in the business risk profile and actions taken to address controls and mitigate risks including SD risks are reported quarterly to both the business and Group Audit Committees as well as to the Executive Committee and the Board.
We regularly review and publicly report the principal risks and uncertainties that may affect our ability to deliver our business strategy effectively, the potential impact on our business, and the controls in place to mitigate these risks. Material SD risks are addressed as an integral part of this process. More detail is available in Xstrata’s 2010 Annual Report on principal risks and on risk management processes.
Each commodity business has processes for monitoring and reporting progress on, and completion of, tasks related to treatment of key risks and regular risk reviews are carried out by independent consultants and/ or Xstrata’s Group Internal Audit for insurance purposes. We conduct annual workshops with commodity business risk champions to facilitate the sharing of risk learnings and consistency of practices. There is a particular focus on the execution of major projects in the Group internal audit programme, which has been aligned and integrated with SD assurance activities.
The Group crisis management plan is supported by crisis management plans at each commodity business. Xstrata’s SD Standard for Emergencies, Crises and Business Continuity specifies the requirement for all sites and commodity businesses to implement emergency response, business continuity and crisis management plans in consultation with external emergency agencies. The plans include clear protocols for when and how to escalate a crisis at the commodity business level to a Group crisis. They also cover training for employees and other stakeholders, annual reviews and the incorporation of lessons learnt from actual emergencies and simulations into plans.
All managed operations are required to comply with Xstrata's Sustainable Development Reporting Guidelines, which ensure compliance with GRI (Global Reporting Initiative) G3 Sustainability Reporting Guidelines and associated technical and other protocols.