Material issues
Our most significant engagements and public policy initiatives in 2010 are shown in the table below:
| Issue | Relevant stakeholders | Xstrata’s response |
|---|---|---|
| Environment | ||
| Proposed climate change legislation in Australia, Canada, South Africa and UK | Australian, Canadian, South African and UK government:
Industry bodies Partners Investment Community |
We recognise the need to cut global carbon emissions and support equitable, market-based regulatory frameworks as part of a global commitment or protocol. We advocate that regulatory frameworks should also include support for the development and deployment of low emissions technologies. We are actively involved in the International Council on Mining and Metals’s work to review its position on climate change and its engagement activities. In Australia, we are actively engaging with the government on the design features for a proposed carbon pricing scheme to be introduced by 1 July 2012. Xstrata is a member of the Government of Ontario’s multi-stakeholder working group on cap and trade, and has provided input into the development of Quebec’s climate change policy. In Chile, we are working with the British Chamber of Commerce Climate Change Roundtable to improve climate change awareness at public, educational, governmental and industrial levels and participating in the National Energy Efficiency Programme to promote energy-efficient mining. In Germany, Spain and the UK, we are involved in consultations relating to the respective governments’ Low Carbon Industrial Strategies. In the European Union, we are participating through our membership of industry bodies in the process around the revised directive for the EU Emissions Trading Scheme. We are actively involved in public hearings, workshops and industry groups working with South Africa’s National Treasury and Department of Environmental Affairs (DEA) on proposed carbon tax options, climate change policy issues and low emission technology developments. In addition, Xstrata assisted the DEA to update the National Greenhouse Gas Emission Inventory. |
| Support for low emissions coal technology | Inter-governmental bodies and national governments
Industry bodies Research institutes/ scientific community Power generation industry |
Xstrata advocates increased public and private sector support for the development and deployment of new technologies including carbon capture and storage and other technologies to reduce carbon emissions associated with burning coal for energy. We are involved in forums to support the development of low emission coal technology policies and support a number of projects. |
| Historic soil contamination/ land remediation (Canada, Australia) | Australian state/Canadian provincial and local government
Environmental regulators Communities NGOs Industry partners Media |
We work with stakeholders to remediate areas of historic contamination from mining and metallurgical activities. In Canada, with the completion of the Sudbury Soils Study, Xstrata’s Sudbury operation is actively developing biodiversity principles in consultation with the City of Greater Sudbury, both to increase base-line knowledge of existing ecosystems and to further the efforts of the regional Biodiversity Action plan. A major remediation programme was completed in 2010 at Murdochville and Sandy Beach, Canada. |
| Responsible sourcing of coal | European Union
National governments NGOs Power companies |
Throughout 2010, Xstrata Coal participated in the Dutch Coal Dialogue with other ICMM member companies, power companies and NGOs regarding the responsible sourcing and supply of coal to the Netherlands. Xstrata is a member of the Responsible Coal Initiative in Europe initiated by power companies. |
| Energy costs, security of supply, efficiency and alternative energy sources | National government
State-owned and private power generation companies |
Securing a cost-effective, secure source of power is essential for the economic sustainability of our business. We seek long-term, cost-effective contracts for energy and we implement energy efficiency programmes across our global operations. We are also investigating or implementing alternative sources of energy, including methane-fired power stations, use of coal tailings, flue gases, microalgae biofuels and solar power. We support research into alternative energy and low emissions coal technologies and participate in public policy debates on future energy policies. |
| Water use in water-constrained regions (North Chile, North Queensland, Argentina) | Government
Communities NGOs Environmental regulators Industrial and agriculture users |
Water availability and potential impacts on water quality are key considerations in the feasibility of new projects or expansions to existing operations. We engage with government, regulators and communities to share water resources, plan for future use and to respond to concerns over water quality. In northern Chile, the use of sea water in place of fresh water is investigated during the development of projects. |
| Air emissions legislation (Australia, Canada, Chile) | Government
Environmental regulators Community Media |
We aim to continually reduce emissions from metallurgical operations and set SO2 capture targets annually. We engage with government, community and environmental regulators on proposed amendments to air emissions legislation and keep them informed about our progress in reducing emissions. We launched the Smelter Emissions Reduction Project at Mount Isa in 2007 and in 2010 invested over AUD8.7 million on a range of initiatives to limit emissions from the copper and lead smelters. Since taking ownership of the Mount Isa Mines operations in 2003, Xstrata has invested in excess of $275 million on over 220 environmental initiatives, which includes air emissions projects. Xstrata submitted a response to the Australian Government’s discussion paper on air quality standards as part of the Review of the National Environment Protection (Ambient Air Quality) Measure. Xstrata’s key recommendation was for a Government-established national strategic framework on air quality that adopts a risk based approach with appropriate guidelines for industry, taking into account the local and regional context of any existing and/or proposed development. We are currently working with regulators in the development of more stringent health-based air quality standards in Ontario, Canada. The emissions reduction project will involve the alteration of existing standards in order to allow our metallurgical facility in Sudbury the time to develop the appropriate technology to meet future requirements. |
| EU REACH legislation and proposed amendments to EU Dangerous Substances Directive | EU Commission and Directorates General
EU member state governments Industry bodies Industry partners Scientific community |
The EU REACH legislation places the responsibility for ensuring the safety of substances manufactured in or imported into the EU onto industry. By working with the various REACH consortia formed by industry, we successfully registered our nickel, ferronickel, zinc, lead, copper, cobalt, cadmium, zinc oxide, sulphur dioxide and sulphuric acid products, and all the relevant intermediates and feeds, by the first REACH registration deadline of 30 November 2010. Registration is only the first step in the REACH process. Starting in 2011, the technical dossiers accompanying all registrations will undergo an evaluation process for the quality of the data and assumptions, and some substances will face an authorisation process. Through professional associations, we continue to challenge the substance classifications in the 1st Adaptation to Technical Progress of the Classification, Labelling and Packaging Regulation. |
| Community | ||
| Lead at Mount Isa, Australia | Australian federal, state and local government
Mount Isa Community Investment community Media |
Lead is naturally occurring at Mount Isa and some areas of historic contamination are present at the site where operations began 85 years ago. The health and safety of our workforce and the community is our highest priority. We offer free blood lead testing to the community and we are a founding member of the Living with Lead Alliance to provide information about how to manage the risks associated with lead exposure. We are funding an independent PhD Lead Pathways Study, Phase 1 (land) of which was published in 2009 and are remediating any identified areas of historic contamination. Phase 2 (air) and Phase 3 (water) of the Lead Pathways Study are targeted for publication in 2011. The Smelter Emissions Project was launched in 2007 to characterise smelter emissions and identify opportunities to significantly increase the capture and treatment of emissions. |
| Resettlement - Peru, Colombia | Communities
National, regional and local government NGOs Las Bambas independent Advisory Group Cerrejón Third Party Review Panel |
We aim to avoid resettlement where possible. Where involuntary resettlement is unavoidable, we consult affected communities openly, in a culturally appropriate manner and as early as possible to explain fully the potential impacts and benefits of resettlement. We uphold the World Bank International Finance Corporation standards on involuntary resettlement. At Las Bambas, we have established an Independent Advisory Group of international and Peruvian stakeholders to provide advice and recommendations to Xstrata Copper on the resettlement of the Fuerabamba community. In Colombia, the Cerrejón coal operation is implementing a number of recommendations made by an Independent Review Panel regarding current resettlements as well as the Tabaco resettlement which took place over five years prior to Xstrata acquiring a stake in Cerrejón. |
| Security, human rights, social engagement at higher risk locations including Tampakan, Philippines and Cerrejón, Colombia | National and local government
Public and private security providers Community NGOs Investment Community |
We implement the Voluntary Principles on Security and Human Rights and in higher risk regions undertake human rights training for employees and contractors. We engage with government, public security providers and communities to improve security in higher risk regions and to raise awareness of the Voluntary Principles and human rights training. See Ethics and human rights. |
| Corporate social involvement (CSI) initiatives | Communities
Regional and local government Healthcare providers Industry partners Charities Development organisations NGOs |
We set aside a minimum of 1% of Group profit before tax each year to fund initiatives that benefit the communities associated with our operations. Each operation consults with communities and other stakeholders to develop a CSI plan to align our support with regional objectives and community priorities. In 2010 we set aside 1.2% of Group profit before tax for CSI expenditure, and donated a total of $84 million, including in-kind donations (e.g. of equipment or personnel time). |
| Employment opportunities, employment legislation and impact of operational restructurings or closures | Employees
Communities Unions Governments Suppliers and customers Media |
We work with local communities to identify job opportunities and to run skills development programmes, enabling community members to gain skills and knowledge for employment at our sites. We seek to minimise the impact of operational restructurings on our employees, avoid compulsory redundancies where possible and offer employee assistance programmes to those affected. We consult our workforce, unions and government about proposed changes to our operations. In Canada, we worked with the local authorities ahead of the closure of the Kidd Met site in May 2010. Through its membership of the Minerals Council of Australia, Xstrata Coal commented on the harmonisation of OHS legislation in Australia. |
| Economic | ||
| Executive remuneration | Investment community
Employees Media |
Xstrata’s remuneration policy is designed to attract, retain and motivate the highly talented individuals needed to deliver its business strategy and maximise shareholder wealth creation. The Board Remuneration Committee considers the following principles when setting remuneration:
|
| Amendments to mineral taxation and royalty regimes | Governments
Regulators Industry bodies Industry partners |
Mining involves substantial long-term investment and requires stable, clear fiscal frameworks. We engage with governments to advocate equitable, unambiguous legislation governing mining revenues, balancing the requirement to attract investment by responsible and accountable mining companies to develop operations that are sustainable throughout the economic cycle with the need to ensure mining contributes to the economic development of host nations. In Australia, Xstrata engaged with the federal government on the proposed Mining Minerals Rent Tax (MMRT). Following signed heads of agreement between the government, Xstrata and other mining companies a policy transition group (PTG) was established to advise the government on the implementation of the MMRT agreement. The PTG submitted their report to government in October 2010 and the government is expected to issue a formal response in the first half of 2011. Royalty credits is still the key issue that needs to be resolved. Xstrata South Africa was involved in the review and revision of the Mining Charter and New Mining code through its membership of the Chamber of Mines. Xstrata South Africa developed a proposal on the revision highlighting our position, opportunities and concerns which were used in briefings with a number of government departments. In Canada, Xstrata Nickel, Xstrata Copper and Xstrata Zinc jointly participated in the consultation process for proposed revisions to the Quebec and Ontario mining laws. |
| Extractive Industries Transparency Initiative (Peru) | Peruvian national, regional and local government
Industry bodies NGOs Investment community |
We actively engage in the process to implement the EITI in Peru, including participating as the alternate national mining industry representative. We discuss transparency and distribution of mining revenues with government and regulators in several operating regions. |
- *Xstrata publicly supports the EITI. Peru is the only EITI implementing country in which Xstrata currently operates. The key contact for stakeholder enquiries about Xstrata and EITI is Claire Divver, General Manager, Group Corporate Affairs, email: cdivver@xstrata.com.