We know our operations have a far-reaching impact on society. Our ability to work together to deliver positive outcomes is increasingly important as society comes together to address global challenges like climate change. We are engaging with our people and our stakeholders to learn how we can play our role.
The communities where we live and work are fundamental to our business. They include Indigenous peoples, landowners, governments, business partners, civil society groups, neighbours and our colleagues. We aim to contribute to a shared future and positive legacy by developing lasting relationships with people, learning about and supporting their goals and aspirations, avoiding or mitigating adverse impacts and respecting connections to land.
The destruction of the rock shelters at Juukan Gorge in May 2020 was a clear breach of our values and the trust placed in us by Indigenous peoples to respect the lands on which we operate. In the two years since, we have been changing the way we work in every part of our business.
We consult and engage with our communities regularly, in good faith, and in ways that are transparent, inclusive, and culturally appropriate. For example, we often have community information centres in local towns and villages and toll-free contact numbers community members can call with questions or complaints. We design our engagement so it is relevant and appropriate for the local context, in terms of method of communication and language.
We seek to ensure that our engagement practices respect human rights, that diverse voices are heard and that vulnerable and “at risk” groups can participate in engagement processes. As part of this engagement, we address community concerns, needs and priorities.
In addition, we only award work to contractors who are able to comply with and deliver our Group and site-specific CSP requirements, as well as any local requirements. We also look for ways to increase our leverage to help our business partners respect human rights in line with international standards.
We measure, monitor and review our CSP performance against targets, to help us continue improving. This includes reporting and communicating on how we are addressing human rights impacts, both positive and negative.
Economic and social development
In addition to the taxes and royalties we pay, and the opportunities we provide, in 2021, we contributed to our communities in a variety of ways:
- $222.9 million in payments to landowners, which are non-discretionary compensation payments made by our company under land access, mine development, native title, impact benefit and other legally binding compensation agreements
- $72 million in community investments, which comprise voluntary financial commitments, including in-kind donations of assets and employee time to address identified community needs or social risks
- $19.1 million in development contributions, defined as non-discretionary financial commitments, including in-kind donations of assets and employee time that aim to deliver social, economic and/or environmental benefits for a community, and which we are mandated to make under a legally binding agreement, by a regulatory authority or otherwise by law
Through our local employment and procurement initiatives, we help create jobs for local residents and new opportunities for local businesses – including the opportunity to supply us with goods and services. In 2021, we spent $19.4 billion with suppliers around the world.
At the Oyu Tolgoi mine in Mongolia, between 2010 and the end of 2021, we spent $4.1 billion on national procurement#. Since 2011, Oyu Tolgoi has developed and implemented policies to create a supply chain in Mongolia with a particular focus on the South Gobi region. This includes a ‘Made in Mongolia’ procurement strategy to source products manufactured locally. Our South Gobi spend has grown from $0.5 million in 2010 to over $888 million in 2021. The value of the spend with national suppliers that are majority owned by Mongolian citizens now accounts for 71% of overall operational spend.
We also work to help build new skills and improve educational outcomes in host communities. In Western Australia, home to our iron ore business, we partnered with the government of Western Australia and South Metropolitan TAFE (a technical and further education institution) to develop the Certificate II in Autonomous Workplace Operations programme, the first nationally recognised automation qualification in Australia. This partnership, launched in 2019, aims to train and certify people in new skills that are transferable across industries, so they follow opportunities wherever they arise.
#Oyu Tolgoi's (OT) national procurement figure represents spend with suppliers registered in Mongolia and more than 50% owned by Mongolian citizens. It relates to the OT operations only, and does not include the underground project.
Supporting communities through the pandemic
During the COVID-19 global pandemic, we have taken active measures to reduce the risk of transmission from our employees and contractors to local communities. For example, at our Weipa bauxite operations in far north Queensland, Australia, we worked closely with the local disaster management group, including the town authority and medical department, to develop and implement specific plans in response to the federal government declaring biosecurity health zones. At the Diavik Diamond Mine in the Northwest Territories, Canada, where many of our employees come from vulnerable, remote communities, we introduced a range of measures to minimise the risk of transmission, including mandatory testing, calls with medical professionals prior to travel, enhanced hygiene and physical distancing measures, roster and flight changes, and the mandatory use of masks.
We have strict protocols in place guiding the way we engage with communities. This included building two community-related verification steps into our critical risk management system, requiring our teams to assess potential COVID-19 risks to the community and develop a plan to manage them. If, for whatever reason, physical interaction with any community may pose risks, we have asked our employees and partners to turn to non-physical ways to interact, or to cancel or postpone the engagement.
The importance of agreements
We are proud to be the first mining company in Australia to embrace native title to land and to form agreements with Traditional Owners. Today, agreements with Indigenous groups, on whose land our operations are often found, as well as others, are central to the way we work and an important way communities drive their own development.
We have many agreements with groups around the world. These community agreements are long-term, often with horizons beyond 50 years, and they help us establish relationships and run our business in a way that delivers mutual value.
Our agreements set the framework for how we engage with communities and Indigenous peoples, often going beyond legal requirements and forming part of a long-term relationship that often spans decades. This framework also sets the value-sharing model for the financial and non-financial benefits communities receive for access to land, as well as the agreements for cultural heritage management and a range of other important actions.
Following the tragic destruction of the rock shelters at Juukan Gorge, we committed to partner with Pilbara Traditional Owners in modernising and improving agreements.
Cultural heritage management
We remain committed to achieving best practice cultural heritage management. We will continue to work with Indigenous peoples and communities to ensure we better understand their priorities and concerns, minimise our impacts, and responsibly manage Indigenous cultural heritage within our operations.
We support the strengthening of cultural heritage legislation and advocate for more meaningful engagement, the protection of heritage values, strengthened agreement making, and certainty for all stakeholders.
We consider both tangible and intangible cultural values as part of cultural heritage. Wherever we can, we design our activities to avoid damage to non-replicable cultural heritage. If it is not possible to avoid an area, we work together on the approach to it, which may include salvage and reclamation, or agreeing a non-disturbance area. In many cases, Indigenous peoples, on whose land we operate, based on their unique cultural insight, supported by experts, designate which areas can and cannot be accessed.
We also invest in activities that help preserve intangible cultural values that may be affected by our operations. Prior to starting work, all employees and contractors interacting with communities, and in particular, Indigenous peoples, are informed about our CSP policies and programmes, as well as the local community context. This includes cultural awareness training for our communities practitioners which, at our operational sites in Australia, is developed and delivered in partnership with local Indigenous groups.
We seek to operate in a manner consistent with the UN Declaration on the Rights of Indigenous Peoples, which recognises the right of Indigenous peoples to ‘maintain and strengthen their distinctive spiritual relationship with their traditionally owned or otherwise occupied and used lands, territories, waters and coastal seas and other resources’ (Article 25).
We strive to obtain the free, prior and informed consent of Indigenous peoples (as defined in the IFC Performance Standard 7 on “Indigenous Peoples”) in line with the International Council on Mining and Metals position statement on Indigenous peoples and mining.
We provide easily accessible ways for community members to provide feedback and make complaints, in line with the United Nations Guiding Principles on Business and Human Rights - so we can work on issues together and take remedial actions where needed. Every site is required to have a complaints, disputes and grievances mechanism that operates in line with these criteria.
Guided by global Standards
Our communities approach aligns with the ICMM Sustainability Framework, the UN Guiding Principles on Business and Human Rights, and the Voluntary Principles on Security and Human Rights. We use the International Finance Corporation's (IFC) Performance Standards on Environmental and Social Sustainability; our CSP standard commits us to compliance with the following IFC Performance Standards:
- IFC PS1: Assessment and Management of Environmental and Social Risks and Impacts
- IFC PS5: Land Acquisition and Involuntary Resettlement
We also support the United Nations Sustainable Development Goals.