Community & Social Development

Our approach

We work in partnership with local communities to have a positive impact on quality of life and contribute to the development of sustainable communities, avoiding long term dependency on our operations, upholding human rights and respecting cultural considerations and heritage.

All Xstrata operations are required to plan, design, operate and close operations in a manner that enhances sustainable development. Our relationships with the communities in which we operate are governed by Xstrata's HSEC Policy, Standards and guidelines. Our HSEC Standard: Community sets out our intent systematically to identify key community risks and opportunities, manage the risks effectively and to derive mutual benefits from the opportunities that exist.

In line with our devolved structure and the diverse social and cultural regions in which our operations are located, community relations activities are developed at the local level and encompass a wide range of responses and means of culturally appropriate communication within our management framework. Community relations plans and activities are complemented by corporate social involvement plans to cover each operation, developed in consultation with local communities, to facilitate our support for initiatives to benefit the communities associated with our operations. We use social impact assessments to identify key risks and potential impacts and implement mitigating strategies to address these.

We employ local people for our operations wherever possible and have a number of initiatives in place to support education and training to build capacity and enable increased local employment both at Xstrata's operations and elsewhere, particularly in regions with a high concentration of unskilled workers.

Our performance

In 2005, all Xstrata operations were audited against our Community Standard as part of the HSEC Assurance Programme, to assess engagement with and responsiveness to community members, support for community initiatives, overall community relations strategies and plans to address key community risks or opportunities. The audit found that our community programmes and engagement are generally extremely strong and, overall, the Group's operations achieved a satisfactory result. Of all our operating regions, audit scores in Europe were lower than the Group average, due to our operations being located in industrial areas, at a distance from neighbouring communities.

An area identified for improvement is further clarification and co-ordination of community initiatives between sites, divisions and commodity businesses to ensure there are no gaps or duplication of roles. Responsibility for community programmes at our contract-managed sites and in company-owned communities was also clarified. The measurement and reporting of contributions to community development is another area of focus for 2006.

Complaints and enquiries

Although we work closely with our local communities, we recognise that sometimes we may not satisfy their expectations. We have a documented process in place for community members to contact our operations directly for enquiries or complaints. We assess each complaint and enquiry we receive and take the necessary steps to address these concerns. Feedback is provided to the complainant and, where relevant, the outcomes are discussed at community meetings.

In 2005, Xstrata received 587 complaints and enquiries from stakeholders who live and work around our operations. Every complaint or enquiry is responded to, followed up and recorded. The primary concerns from the communities in which we operate related to dust (27% of complaints and enquiries), noise (22%) and point source emissions or air quality (16%). Our management action plans for these issues are detailed in the environment chapter of this report.

The number of complaints and enquiries received at Xstrata Coal's operations decreased from 294 in 2004 to 231 in 2005. Noise and dust complaints and enquiries make up 75% of all reports to Xstrata Coal. The majority of these reports were recorded by two landholders located within the Mount Owen acquisition zone. These are the closest properties to the active mining area and following a request for acquisition, Xstrata purchased one of the properties in November 2005.

Emissions from the Mount Isa mining complex, adjacent to the town of Mount Isa remain the major source of complaints for Xstrata's north Queensland operations. The Mount Isa operations (copper and zinc) received 66 emission-related complaints and enquiries, a 41% decrease compared with 112 in 2004. Ninety per cent of all complaints and enquiries to the alloys and zinc businesses related to general dust and point source emissions. Complaints and enquiries received at the Las Bambas exploration site in Peru, where exploration commenced in March 2005, accounted for the increase in reports by Xstrata Copper. The majority of these complaints and enquiries related to employment expectations from local people.

Marifaan Primary School, near Lydenburg is sponsored by Xstrata Alloys

Awards and recognition

In 2005 Xstrata continued to build its reputation for contributions to community development and received the following awards:

• Xstrata Coal South Africa's HIV/AIDS voluntary testing and awareness programme - Commendation in the Counselling and Testing section of The Global Business Coalition's awards;
• Xstrata Coal South Africa - award from Rotary International for establishing the Middelburg Care Village and its work to "improve the lives of people" - this is only the 12th time since 1956 that this award has been made and is referred to as a "Nobel Prize for Rotarians";
• Xstrata Coal South Africa Social Development Manager Sandy Sandlana was named a Paul Harris Fellow by Rotary International "in appreciation of tangible and significant assistance given for the furtherance of better understanding and friendly relations among peoples";
• Community involvement in South Africa - award from the African Growth Institute;
• The town of Tieri near Oaky Creek Coal in Queensland - winner of a Tidy Towns award; and
• Xstrata Alloys Lydenburg plant was awarded the Best Industrial Business for 2005 for Lydenburg and surrounding areas in recognition of its contribution to the local community.