Sustainable Development Framework

Xstrata’s Sustainable Development Framework is designed to ensure that each operation and project is managed consistently to the highest international and leading practice standards, through:

• Xstrata’s Statement of Business Principles, SD Policy and SD Standards coupled with a rigorous assurance process;
• An approach to SD risk management that is integrated with our broader enterprise risk management process; and
• A SD strategy and planning process that is fully integrated, from site/project level to Group level, with Xstrata’s operational and business strategy and planning process.

Xstrata’s SD Framework applies across all commodity businesses, ensuring compliance with common principles, policy and standards. The Group General Manager Sustainable Development, who reports to the Group Chief Executive Officer, oversees the implementation and periodic review and updating of the SD Framework.

Xstrata’s SD Framework provides the organisational arrangements for implementing, reviewing and continually improving the organisation’s management of sustainability. It is supported by a detailed set of SD Standards, available from www.xstrata.com/sustainability. It incorporates a precautionary philosophy and is aligned with international standards including:

• The International Council on Mining and Metals (ICMM) sustainability principles and guidelines;
• The UN Global Compact;
• Voluntary Principles on Security and Human Rights; and
• ISO 31000, ISO 14001 and OHSAS 18001.

Ethical framework

In response to a tightening global regulatory environment for bribery and corruption, including the UK Bribery Act, and in view of the range of existing and emerging ethical risks faced by diversified global mining and metals companies, Xstrata management initiated a number of actions to strengthen the Group’s management of, and assurance of, ethical risks. This includes the development of a global Bribery, Fraud and Corruption Policy, Third Party Due Diligence Standards and the development of a global Code of Conduct and associated training.

The new Code of Conduct provides more detailed guidance on the Group’s expectations for the conduct of all employees, contractors, agents and other third parties who work for or on behalf of Xstrata in a range of circumstances. The Code consolidates or refers to other relevant Group policies or guidelines, for example Group External Communications Guidelines, Data Protection and Global IT Guidelines and Xstrata’s SD Policy and Standards, providing one document that encompasses the key elements of Xstrata’s requirements for the conduct of its officers, employees and associates (see Ethics and human rights section).

Ensuring consistent implementation of our Sustainable Development Framework

We believe our devolved management structure and culture support entrepreneurial leadership, balanced with a rigorous approach to risk management and a strong framework for the sustainable development of our business. Clear governance and effective communication across the Group are essential to enable our management model to function effectively and to ensure consistently high standards of ethics and sustainable development performance. Each business is governed by a commodity business board, which includes Xstrata’s Chief Executive Officer or Chief Financial Officer as representatives of the corporate centre.

Each commodity business has an executive level SD committee, chaired by the commodity business chief executive, to provide additional focus and guidance on sustainable development strategy and issues.