Social Responsibility | Community

Our approach

We seek to maintain broad-based, ongoing community support for our activities throughout our operations’ life cycle. We consult with communities as early as possible and establish formal mechanisms for ongoing consultation, complaints and grievance resolution. Closure planning includes socio-economic studies and consultation with employees and local communities to identify impacts and develop programmes to mitigate these.

Middelberg care village, South Africa, sponsored by Xstrata Coal

Our community strategy is focused on:

• Wherever we operate, understanding local communities’ culture, customs, priorities and needs;
• Maximising the benefits of our presence and operations for communities;
• Contributing to communities’ sustainable development, avoiding sole dependence on our operations.

Every operation is required to assess its potential social, environmental and economic impacts and develop and implement mitigating strategies for these impacts in consultation with affected parties. We also identify opportunities for positive contributions to improving the social and economic wellbeing of communities and establish socio-economic baseline studies to enable us to measure the effectiveness of our community programmes.

Xstrata’s Community HSEC Management Standard sets out Group expectations for effective and early engagement with communities, identification of the potential impacts of our operations, key risks and opportunities and appropriate community relations and other activities to mitigate the impacts, manage the risks and derive mutual benefits from the opportunities. We work together with government and other development institutions to align our activities and maximise the social and economic benefits of community projects.

Each operation and commodity business identifies its stakeholders, and we seek to understand and map the relationships between stakeholders. This includes the identification of potentially impacted communities and associated stakeholder groups, including vulnerable groups e.g. indigenous people, women, children, elderly people.

Community engagement

The core principles of our community engagement are as follows:

• We communicate openly, transparently and establish a two-way dialogue with communities, proactively seeking community input and feedback and incorporating this into planning;
• We engage with communities in a culturally appropriate manner and with respect for local protocols, customs and heritage;
• We include all communities within the operation’s area of influence and prioritise the most affected communities and vulnerable groups;
• We commence community engagement as early as possible and preferably before operations commence;
• We establish mutually understood and accepted consultation mechanisms, including the ability for communities to raise complaints and enquiries, and establish suitable grievance resolution processes;
• We address issues raised by communities and issues relevant to Xstrata’s operations equitably;
• We seek ongoing, broad-based community support for our activities and we measure this through regular perception studies and community meetings;
• We communicate the potential impacts and benefits of all proposed major changes to operations openly and fully to communities in advance and incorporate feedback and concerns raised into our decision making;
• A record is kept of all community engagement and a summary of complaints and enquiries received is publicly reported in Group divisional and site Sustainability Reports.

At a number of operations, formal agreements with local communities are in place to share benefits, maximise local employment and participation in the project. One such agreement, between Xstrata Nickel’s Raglan operation in the Canadian Arctic and Inuit communities in the region, is outlined in a case study on pages 60-61 of this chapter.

Community skills and training

Community training and skills programmes are in place at many operations and projects, particularly those located in developing countries or with a high concentration of unskilled workers, often in partnership with NGOs, government or other companies operating in the region. These programmes aim to equip members of the communities in the operations’ area of influence with the necessary skills to gain employment with or act as suppliers to Xstrata and other companies.

Xstrata Alloys Lion Ferrochrome operation includes a dedicated community skills training centre

In Peru, extensive community skills and training programmes are being implemented for communities associated with the copper exploration project at Las Bambas, which is located in one of the poorest regions of Peru. These programmes are one element of a comprehensive community engagement strategy and aim to equip local people with the necessary skills to gain employment at the project, to build capacity for future negotiations with the operation and to support efforts to improve nutrition, local agriculture and income generation. These include:

• construction and maintenance training to enable local employment for the construction of exploration camp and community projects infrastructure;
• food hygiene and preparation, to enable local employment at the exploration camp and at any future mine;
• training in handicraft business development as part of enterprise development projects to establish sustainable small businesses;
• capacity building in dialogue methodologies and techniques;
• training in pasture management and maintenance of irrigation infrastructure;
• urban planning that includes training in architecture concepts;
• training in animal sanitation, to assist communities manage their livestock more effectively.

In the Dominican Republic, the Falcondo Foundation, initiated and supported by the Falcondo nickel operations, has supported over 78,000 students and almost 2,000 teachers at public elementary schools to improve education and teacher training.

Sustainable community development

Xstrata contributes a minimum of 1% of Group profit before tax each year to fund projects and initiatives that benefit the communities associated with our operations. This support is particularly material for operations and projects located in remote areas, or in regions with a lower level of social and economic development and infrastructure. In 2006, Xstrata set aside over $49 million for this support.

Our corporate social involvement is based around five principles:

• Local focus
• Maximum devolution
• Best practice
• Flexibility
• Financial and organisational efficiency

Each managed operation and project is required to develop a corporate social involvement plan through consultation with the communities within its area of influence and other stakeholders including government, NGOs and other institutions.

We develop and support programmes in the areas of community health, education, environment, social and community development and culture and art.

Social involvement encompasses financial donations and support, management expertise and in-kind contributions. All Xstrata operations had an activeCSI plan at the end of 2006 or had collaborated with other operations to develop a regional plan. Sites acquired from Falconbridge in 2006 will developCSI plans to cover each operation during 2007 and 2008.

Children from communities near El Morro copper project, Chile.

CSI programmes must demonstrably provide benefits to the wider community and cannot be for the benefit of Xstrata’s employees alone. We do not support political parties, individuals or religious activities or organisations that are exclusive to one faith community.

In 2006, Xstrata’s businesses worked to improve the co-ordination of corporate social involvement programmes and community relations activities, particularly in areas where a number of operations are located in close proximity. This has enabledCSI programmes to leverage several operations’ expertise and work more effectively with local authorities and other institutions.

In remote, rural locations, we support sustainable farming and agricultural projects to assist farmers develop sustainable businesses, through providing management expertise, access to modern farming techniques, donating materials and financial assistance.

These include projects to improve the yield and quality of grapes, walnuts, peppers, paprika, cumin, anise in Argentina, where the local region is dominated by small-scale producers. At the Tintaya operation in Peru, support has been provided for the significant number of local dairy producers to improve the quality and quantity of milk and to assist the production of further dairy products. At Las Bambas, a wide range of projects aim to improve agricultural production, nutrition for community members and provide income generation (see case study).

In South Africa, an innovative project to train historically disadvantaged young farmers using land owned by Xstrata is under way. Under apartheid, black South Africans previously could not own land by law and were therefore not able to farm commercially. This project provides trainee farmers with management expertise and practical training, together with land, which will eventually be leased at a commercial rate. The project aligns with a key objective of the Mining Charter and BEE legislation to open up access to the mainstream economy and creates alternative employment that will outlast the mining operation.

Complaints and enquiries

Marifaan Primary School, Lydenburg, South Africa is sponsored by Xstrata

An important aspect of our engagement with communities is the documented process in place at all operations which provides community members with appropriate methods of contacting our operations directly with enquiries or complaints. We record and assess complaints and enquiries we receive and respond to each one. This procedure is audited through the HSEC Assurance Programme.

In 2006, Xstrata’s managed operations and projects (including acquired operations from the date of acquisition) received 391 complaints and enquiries, compared to 587 in 2005. The most frequent causes of complaints and enquiries were general noise and dust, which together accounted for 224 of the total. Xstrata Coal accounted for the majority of complaints and enquiries, recording a similar number to the previous year, predominantly from the New South Wales operations. Many of these coal mines are located close to residential areas and thoroughfares and a large proportion of the complaints were made by one resident. The majority of complaints received by Xstrata Copper and Xstrata Zinc relate to air emissions at Mount Isa, where operations are within a city. Sulphur dioxide emissions have decreased by 64% since 2000, and complaints received have followed this trend, with 41% fewer complaints received in 2006 compared to the previous year and 79% fewer than in 2000.

Indigenous peoples and cultural heritage

We respect the traditional rights and cultural heritage of indigenous people, recognising that these peoples have a distinct ethnic identity and are often historically disadvantaged. We ensure that indigenous and other historically disadvantaged groups are properly identified in stakeholder engagement. We structure our engagement activities in a manner that is culturally appropriate and facilitate the active involvement of indigenous peoples in consultation, including capacity building initiatives where necessary or appropriate.

We support initiatives to provide employment opportunities, training and enterprise development to indigenous and previously disadvantaged people, in particular at our Peruvian, Australian and South African operations.

Xstrata Coal Australia participates in the ‘Working in Partnership’ programme coordinated by the Federal Department of Industry Tourism and Recreation to support and encourage the development of long-term, mutually beneficial partnerships between miners and indigenous people in regional and remote areas. McArthur River Mine and Mount Isa Mines in the Northern Territory and Queensland respectively run Indigenous Employment Programmes, to provide training and development opportunities to prepare local indigenous community members for employment at the mine.

The Xstrata Community Partnership Programme North Queensland, in place since 2005, supports an initiative to provide training and support for indigenous people to identify and exploit employment opportunities in the region, including a mining sector training programme with 50 indigenous people completing the course and finding employment in 2006. An Indigenous Relations Strategy and cultural awareness course for all employees are being developed at Mount Isa Mines in 2007. A number of community health initiatives are also under way to support both indigenous and non-indigenous remote communities in the region.

We support the protection of indigenous cultural heritage, archaeological and sacred sites. We consult with indigenous people to identify and assess any potential impacts of our operations on culturally important areas. We work together to develop strategies to avoid impacts where possible and to ensure access to important sites.

All new mining areas are assessed for cultural significance prior to disturbance, in consultation with indigenous people. Cultural heritage management plans for these sites and significant areas are developed jointly and access is provided on an agreed basis. No cultural heritage sites were disturbed in 2006.

Xstrata also supports research into cultural heritage management and runs a wide-ranging programme of cultural awareness training for employees.

The Koniambo project in New Caledonia has a number of ongoing heritage initiatives with indigenous peoples, including support for the protection of artefacts obtained during the site archaeological studies. All major Xstrata Nickel projects will undertake comprehensive archaeological assessments in 2007 and devise management plans for cultural heritage sites and artefacts in consultation with indigenous people and community members.

Resettlement

It is our policy to resettle people only where this becomes unavoidable and we seek alternative solutions where possible. Where resettlement is necessary, we adhere to the World Bank Operational Directive on Involuntary Resettlement. We consult with affected communities as early as possible, providing comprehensive information about the potential impacts and benefits of the proposed project and resettlement. We use a range of culturally appropriate communication methods to ensure immediate and potential future impacts and benefits are understood by those affected. We incorporate feedback and concerns about resettlement and the proposed project into our planning.

We complete socio-economic baseline plans and census surveys as a starting point for resettlement planning. We determine a fair price for land and property acquisition and work within the relevant legislative requirements of different countries for land compensation and resettlement.

Resettlement action plans are developed to address specific issues relating to the affected communities, including socio-economic support, for example for enterprise development and training or support for community health and education.

No households were resettled in 2006, however a number of managed and non-managed operations are undertaking consultation on resettlement in 2007. These include:

• Xstrata Coal: Goedgevonden operation, South Africa;
• Xstrata Copper: Las Bambas project, Peru;
• Xstrata Coal: Cerrejón coal mine, Colombia (non-managed operation in which Xstrata has a 33% interest);
• Xstrata Nickel: Kabanga project, Tanzania;
• Xstrata Nickel: Falcondo ferronickel operation, Dominican Republic.