Stakeholder identification and engagement
The term 'stakeholder' is used to define any person or group of people who can affect or is affected by an organisation's activities. Xstrata has identified its stakeholders at an operational, regional and global level through regular internal assessments of key groups and engagement with interested parties. We seek to engage with stakeholder groups in a manner that is culturally appropriate, effective and transparent. We encourage dialogue with our stakeholders and integrate stakeholder feedback into business planning and strategy.
Minera Alumbrera: Environmental Officer Virginia Córdoba performing a flora survey
Our Statement of Business Principles states that we will "co-operate with employees, local communities and other stakeholders to deliver industry-leading returns to our shareholders. To achieve this, we communicate honestly and engage in good faith with all stakeholders." We use stakeholder engagement to identify and manage risk, guide our strategy and business activities, protect and develop our corporate reputation, strengthen stakeholder relationships, measure the success of our initiatives, manage expectations, respond to concerns and be open about our plans for our business. Our HSEC Standard Communication and Engagement outlines the Group's expectations in greater detail, including specific expectations regarding responsiveness to community enquiries and complaints and the integration of stakeholder feedback into practices and policy.
Our key stakeholders are the shareholders who own our business; other members of the investment community including financial and socially responsible investment (SRI) investors and analysts; our employees, national, regional and local governments; the communities associated with our operations; our customers, business partners and suppliers; non-governmental organisations (NGOs) and the organisations and groups that represent each of these sets of key stakeholders; in addition to international, national, regional and local media.
Stakeholder response
The format of our engagement is as diverse as the wide range of stakeholders in our business. Our key stakeholder groups, methods used to communicate with each group and some of the key areas of interest or concern for each are listed below. Our response to these areas of interest or concern is addressed in the appropriate chapter in this report.
Shareholders and the investment community
Xstrata's shareholder base consists primarily of institutional investors based in the UK, US and Europe, with a smaller proportion of retail or individual investors. Employees are also encouraged to own Xstrata shares and variable rewards are linked to the performance of the Xstrata Group to align shareholders' and employees' interests. The investment community includes private and institutional investors, buy-side and sell-side financial analysts, credit analysts and ratings agencies and socially responsible investment analysts and investors.
Key areas of interest
- Xstrata's returns to shareholders and potential for future returns
- Financial and non-financial risk management and governance
- Performance against strategy
Methods of engagement
- Extensive and ongoing engagement through planned and ad hoc meetings and communication with financial analysts and investors through Xstrata's corporate affairs team
- Regular meetings and communication with the SRI community
- Regular executive management team meetings with investors
- Group Treasury engagement with credit rating agencies, bondholders and debt market analysts
- Operational visits and meetings with divisional management
- Publications such as press releases, annual and interim reports six-monthly publication of financial results statements
- Investment community presentations and conference calls including the opportunity for questions and feedback to the executive team
- Annual general meetings and extraordinary general meetings as required
Employees, contractors and trade unions
Xstrata employs more than 24,000 people worldwide including contractors. A large number of Xstrata's employees are members of unions or are covered by collective agreements. Further information is provided in the Socio-economic & Employees chapter.
- Recruitment, training, career development and opportunities
- Remuneration and benefits, workers' rights
- Operational practices including health and safety initiatives
- Community issues including health, education, housing, education and job creation
- Employee and union representatives participate in operational and divisional steering committees, including specific committees on HSEC issues, black economic empowerment etc
- Direct regular feedback through management and team meetings, employee forums
- Corporate intranet and website
- Site and divisional newsletters
- Ethics line for confidential "whistle-blowing"
- Cultural surveys
International, national, regional, local government
Xstrata engages with government representatives in every region where the Group is active, at the local, regional and national level.
Issues raised vary considerably according to the region and level of government. Some common areas of interest are:
- Social and environment performance and adherence to regulations
- Mining industry policy development and new regulation
- Social development and infrastructure
- Enterprise and job creation
- Royalties and taxes
- Development opportunities
- Formal and informal regular meetings
- Communication through letters, emails and publications
- Representation on joint committees or groups, e.g. local economic development forums, local education authority steering committees, industry bodies etc
- Presentations to government members, particularly following an investment in a new territory or to explain and consult on proposed changes to operations
Local communities, indigenous peoples and community groups
Xstrata operates within a diverse range of communities with very different cultural norms, requirements and expectations. Communications are tailored to specific groups.
Key areas of interest
- Environmental impacts and management systems of operations
- Social infrastructure and development including education, health, youth development, sports, culture
- Enterprise and job creation
- Support for community initiatives
- Social impacts of operations
- Protection of sacred sites/protected areas
- Sustainable community benefits post closure
- Traditional rights and cultural heritage
Methods of engagement
- Engagement and dialogue with local community and indigenous people is governed by our Communication and Engagement and Community Standards
- Participatory environmental monitoring groups
- Community forums and site open days
- Participation in steering committees, e.g. the Indigenous Mining and Enterprise Task Force
- Site specific newsletters and targeted communications such as videos, theatre groups and workshops
- Direct communication with community relations managers and site management
- Mandatory site community complaints and enquiries mechanism which includes reporting, follow-up and integration of feedback
- Mandatory site-specific and divisional corporate social involvement plans which require extensive consultation with local communities to determine objectives and select development programmes
- Community perception studies
- Social impact assessments and participatory closure planning
Suppliers
Xstrata's suppliers range from small and medium-sized local enterprises to multinational corporations. Our HSEC Management Standard: Contractors, Suppliers and Partners, governs Xstrata's requirements for suppliers. Xstrata does not have a central or global procurement function, this is devolved to commodity businesses and regional divisions, providing greater opportunity to prioritise local procurement and support enterprise and job creation for local communities.
- Xstrata's requirements for HSEC standards and commodity business/regional procurement policies
- Contract terms and delivery
- Opportunities for further business partnerships with the Xstrata Group
- Joint community development projects (for example, Sodexho in Peru)
- Engagement with suppliers and business partners is governed by our HSEC Standard
- Direct contact with Xstrata employees responsible for procurement of goods and services
- Support from Xstrata for small businesses to help satisfy Xstrata's requirements for suppliers including training and seed funding to establish SMEs (see Socio-economic chapter and Community and Social Development chapter)
- Specific support for black economic empowerment suppliers in South Africa
- Meetings to enhance the health, safety and environmental performance of our suppliers
- Site or division-specific newsletters and reports
Business partners
Business partners include joint venture partners and minority shareholders in our operations.
- Operational practices including health and safety, environmental practices, community relations
- Financial returns
- Risk management
- Regulatory and policy compliance
- Steering and operational committees
- Annual and interim reports
- Targeted site-specific communications
Customers
The majority of Xstrata's customers are large industrial corporations. A proportion of Xstrata's products are also sold into exchanges such as the London Metals Exchange, where there is no direct customer.
- Contract and delivery terms
- Product quality
- Technology transfer
- Direct contact with marketing teams
- Targeted published communications, e.g. newsletters
- Life cycle analysis of our products and by-products through industry body working groups
Non-governmental organisations (NGOs)
Xstrata interacts with a range of international, national, regional and local NGOs
- Environmental issues such as biodiversity or site-specific concerns
- Health, for example HIV/AIDS
- Social and community development, for example, partnerships to improve social infrastructure
- Youth development and education
- Participation in community forums
- Partnerships, for example, the Breyten primary health clinic in South Africa (pages 52-53)