Governance and Ethics

Advocacy and our global role

Xstrata plays an active role in a number of significant international and national industry organisations and multi-stakeholder groups, through membership, funding, provision of expertise and participation in committees and working groups.

The major sustainability organisations, associations or charters in which Xstrata participates are listed in the table on page 26. Each of Xstrata’s commodity business also plays a role in commodity-specific industry organisations, listed on page 91 of this report. All initiatives listed are voluntary.

In 2006, Xstrata became a full member of the International Council on Mining and Metals (ICMM). ICMM is a CEO-led organisation representing many of the world’s leading mining and metals companies, as well as regional, national and commodity associations, all of which are committed to improving their sustainable development performance and to the responsible production of the mineral and metal resources that society needs.

As an ICMM member, Xstrata has committed to comply with ICMM’s Sustainable Development Framework, comprising a set of 10 principles, public reporting using GRI guidelines and independent third-party assurance. Xstrata’s HSEC policy and management standards were developed using the ICMM principles, together with other international HSE standards including ISO14001, OHSAS18001 and the UN Global Compact. A document mapping Xstrata’s sustainable development framework to these internationally recognised standards is available from our website, together with an indicator showing how and where Xstrata has reported against GRI indicators, the UN Global Compact principles and ICMM principles.

ICMM promotes the perspective and experience of its members through its involvement in key international initiatives, such as the World Bank Extractive Industries Advisory Group, and the Extractive Industries Transparency Initiative (EITI).

Extractive Industries
Transparency Initiative

Xstrata supports the EITI to increase transparency over company payments and Government revenues in the extractives sector. Over 20 countries have committed to EITI principles and criteria, including Peru, where Xstrata manages one operation and one exploration project and has an interest in a further joint venture operation. In May 2006, the Peruvian Government approved the EITI Action Plan drawn up in 2005. The next step is to appoint Working Group members and commence EITI implementation. We continue to welcome the positive steps undertaken by the Peruvian Government to implement EITI. Xstrata’s payments to governments and other economic contributions are set out in the Social Responsibility chapter of this report.

Caribou at the Raglan nickel site in Northern Quebec, Canada.

Stakeholder 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, our membership of various associations, 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.

Stakeholder feedback is used to identify and manage risks and opportunities, guide our strategy and business activities, protect and develop our corporate reputation, strengthen stakeholder relationships, manage expectations, respond to concerns and share our plans for the business.

Our key stakeholders are:

• Xstrata shareholders;
• other members of the investment community (including other investors, socially responsible investment analysts and investors, sell-side analysts and others);
• Xstrata employees and contractors, unions and other organisations that represent these groups;
• business partners, including JV partners, suppliers, customers;
• communities associated with or impacted by our operations;
• local, regional and national government;
• inter-governmental bodies and organisations;
• international, national, regional and local media; and
• non-governmental and development organisations.

Associations and Charters

Openness and transparency

Xstrata’s Business Principles state our commitment to operate with the maximum transparency that is commercially possible in every aspect of our business. We make all price-sensitive and other relevant corporate announcements available via our website, regulatory news services and other communications channels simultaneously or as soon as possible after publication or announcement. We publish management presentations and other relevant information about the Group on a regular and timely basis on our public website, in accordance with Xstrata’s Group Communications Guidelines. Annual Sustainability Reports and Annual Reports are externally audited and data verified. Reports and other public documents are provided free of charge on request.

Stakeholder responsiveness

We use a very broad range of methods to engage our stakeholders, ensuring we approach stakeholders in a culturally appropriate and sensitive manner and aiming to encourage feedback and dialogue, as well as providing information. These include: face-to-face formal or informal meetings; presentations; conference calls; our website; intranets and extranets; financial and sustainability reports and newsletters; open days and operational site visits; reputation audits or perception surveys; whistleblowing facilities; formal grievance mechanisms; employee newsletters and team meetings; multi-stakeholder forums, organisations and initiatives; environmental, cultural and social impact assessments and baseline studies; regular customer, business partner and supplier meetings; community workshops and dedicated telephone lines.

Issues raised by stakeholders are incorporated into our assessment of our key sustainability challenges and the topics reported on in this report and include topics such as climate change, biodiversity conservation, fatal incidents, human rights and labour relations agreements. The case study on page 27 illustrates our approach to stakeholder engagement relating to the conversion of McArthur River Mine in Australia from an underground operation to an open cut mine.

Ratanang Care Centre – one of three care centres for orphans funded by Xstrata in South Africa.