Average of the best scores achieved collectively by all companies for each one of the indicators under the thematic area
Average of the scores achieved by each one of the companies under this thematic area
Summary of results
The assessment results reveal that while many companies are addressing some aspects of these wider economic development issues, comprehensive action is still largely missing. This is reflected in the overall average of only 23%. However, collectively, the companies show that significant improvement is well within their reach. The Collective Best Score for this thematic area (i.e., the sum of the best scores seen across all indicators and across all companies) show that the companies could already achieve a score of 81% by adopting the good practices demonstrated by their peers.
Leading practices in Economic Development include, for example, supporting national skills development by collaborating on an initiative to identify and develop critical professions for the future.
A.01 National and Supranational Socio-Economic Development Planning
The company commits to take account of national and supranational socio-economic development plans in making its mining-related investment and business decisions in producing countries, with the aim of enhancing socio-economic development.
Only one company has a commitment to take into account national-level socio-economic development plans in making its business decisions and mine planning. Several other companies have elements of this approach, a few through references in standards and associated responsibilities. Still, the majority of company commitments to collaborate with government stakeholders applies to the sub-national level, and not the national level. There is little or no evidence of companies seeking collaborations or alignments at the supranational level.
Where applicable, the company has systems in place to work collaboratively with sub-national producing country governments on socio-economic development planning.
It is relatively common for the companies assessed to have adopted collaborative approaches to socio-economic development with sub-national governments. Two thirds of the companies assessed show some level of evidence or case studies, but only a handful of companies have company-wide systems in place to ensure their operations identify priorities and develop plans to address them. It is not always evident if the identification and planning of the development initiatives have been undertaken collaboratively. And very few companies provide detailed information on the actual implementation status of these collaborative initiatives.
Related Leading Practices
- Aligning with national development priorities
- Partnership with local government for poverty reduction
- Partnership approach to regional socio-economic development
- Tripartite approach to regional development
Barrick Gold Corp is establishing a development partnership with the government of the Dominican Republic, where the company operates the Pueblo Viejo gold mine as a joint venture with Newmont. Barrick Gold Corp is requiring every functional area at the mine (community relations, government relations, environment, human resources, supply chain, legal, etc.) to review each initiative they are responsible for, to identify the conceptual links with the objectives outlined in the National Development Strategy. The purpose is to identify opportunities for collaboration and propose concrete action plans to the relevant government institutions, to collaboratively advance the Strategy in education, local procurement, local employment, infrastructure development, environmental stewardship, or other areas.
Partnership with local government for poverty reduction
Since 2015, Glencore's subsidiary Prodeco has worked in partnership with Colombia's State Department for Social Prosperity (DPS) to facilitate community investment projects intended to reduce poverty in the Cesar region of the country. These projects cover four areas: income generation; basic social services; social infrastructure; reconciliation; and peace building initiatives. The partnership is run by a strategic committee, which meets four times per year to review progress. A separate operating committee oversees individual project progress. Many of the partnership initiatives focus on social services. In one project Prodeco worked with the principals of all ten public schools in the Cesar region to develop a project for improving education quality levels. This project is now being supported by Colombia's Ministry of Education, via the DPS partnership, as a pilot programme for potential implementation nationwide.
Partnership approach to regional socio-economic development
Anglo American has developed a collaborative approach to socio-economic development planning in Limpopo Province, South Africa, where the company has diamond and platinum assets. Anglo American has worked with a team of strategic spatial analysts since 2015, initially identifying development opportunities in a number of sectors (principally agriculture, energy, forestry, tourism). The company then established a partnership platform with other actors (including for example government bodies, research organisations, faith groups and business) to design and implement specific initiatives in these sectors, both around the mines and more widely across the province. Since 2018, this partnership approach has been further developed into a Collaborative Regional Development programme and expanded to Peru with planned roll-out in Brazil and Botswana.
Tripartite approach to regional development
At the end of 2013, Minera Los Pelambres, a subsidiary of Antofagasta, established a participatory programme for sustainable development in Choapa Province, Chile. Known as 'Somos Choapa', the initiative brings together local municipal authorities, community members and the company. The programme invites local stakeholders to participate in roundtable discussions to share their vision for development in their particular commune or in the Choapa province. The programme support team (composed of professionals in social sciences, architecture and strategic design) then translates the vision into a portfolio of initiatives, which later becomes an action plan for their eventual implementation. Each project developed by Somos Choapa involves collaboration between the private and public sectors for its implementation.
A.02 National and Supranational Procurement
The company has systems in place to ensure its operations develop procurement opportunities for suppliers at national and supranational levels.
A handful of companies show evidence of company-wide systems to develop procurement opportunities at the national level . A few other companies demonstrate similar approaches but without formal systems in place. The vast majority of companies however show no evidence of identifying and addressing the barriers and opportunities for procurement from suppliers at national and/or supranational levels, in contrast with more common actions taken at the local level within the vicinity of the mine sites (see D.04.2).
Related Leading Practices
- Enterprise development programmes
- Web portal to link suppliers with financing
Enterprise development programmes
Anglo American has established several enterprise development programmes, all of which provide business and implementation support, coupled with access to capital and markets. The company's Zimele programme, launched in South Africa in 1989, consists of a network of business hubs or walk-in centres nationally and enables entrepreneurs and SMEs to access business assistance facilities, knowledge, finance, mentorship and support. Between 2008 and 2015, the programme had delivered funding to more than 2,200 SMEs and supported more than 50,000 jobs. Anglo American has since launched similar programmes in Botswana, Brazil, Chile and Peru, focusing on capacity building and mentorship and based on co-funding partnerships with local banks and other development institutions.
Web portal to link suppliers with financing
In Brazil Vale operates a web portal, InoveCapital, that links suppliers, banks and Vale. While enabling suppliers to register their contracts with Vale and keep track of their invoices, this online tool also facilitates access of Vale's suppliers to financing for working capital and investment in their operations. Suppliers can submit funding requests to participating financial institutions to facilitate the supply of goods and services contracted by Vale. Almost 800 Brazilian suppliers are now using this portal and in 2016 approximately US$ 244 million in loans and credits were released via InoveCapital.
The company tracks, reviews and acts to improve its performance on national and supranational procurement.
More than half of the companies track and publicly disclose some information on their spending on national procurement, though the information provided is usually very limited, and no companies report on supranational procurement. None of the companies show evidence of having set targets on national or supranational procurement. Hardly any companies demonstrate that they are undertaking reviews or audits of the effectiveness of their measures to develop such higher-scale procurement opportunities, beyond the vicinity of the mine sites.
A.03 Collaborative Research and Development
The company has systems in place to work collaboratively with producing country institutions on Research & Development aimed at addressing priority socio-economic and environmental issues related to mining.
The vast majority of companies show some evidence of systems in place to undertake Research and Development on socio-economic and environmental issues related to mining, though most of these are in the form of case studies, rather than formalised and systematic company-wide approaches to collaborative R&D. A few companies demonstrate a more systematic approach, having developed their own research programmes or institutions that collaborate with in-country institutions in producing countries. Other companies focus their R&D on productivity issues with little evidence of links to socio-economic or environmental impacts of mining, or they maintain a largely in-house (non-collaborative) approach to their ESG-related R&D activities.
A.04 Enhancing the National Skills Base
The company has systems in place to ensure its operations support STEM education and technical/vocational skills development among the wider population in producing countries, through partnerships with in-country institutions.
The majority of companies show evidence that their operations provide some degree of support for STEM education in local educational institutes (schools or universities), with a few companies having programmes to develop STEM skills more broadly within producing countries. Similarly, many companies demonstrate that their operations support technical and/or vocational skills among the wider population in producing countries. However, most of these examples are in the form of ad hoc case studies, with hardly any companies able to demonstrate having company-wide systems in place. The extent to which the STEM and technical/vocational support programmes are aligned with the national skills development agendas of the countries in question is not always evident.
Related Leading Practices
- Prioritising indigenous people in skills development.
- Large-scale programme offering professional qualifications to local youth
- Professional training programme for women and persons with disabilities
- Programmatic support for basic education
Prioritising indigenous people in skills development.
Since 2003, Freeport-McMoRan's subsidiary PT Freeport Indonesia (PTFI) has been providing skills development to indigenous Papuans through the Namangkawi Mining Institute (NMI) in West Papua. NMI has trained more than 3,800 and placed over 2,600 apprentices into permanent employee and contractor positions to date at PTFI, over 90 percent of whom are indigenous Papuans. As PTFI prioritises indigenous Papuans in its workforce, NMI requires 45 percent of apprentices to come from one of seven local ethnic groups, and another 45 percent must be Papuans from outside the area; the remaining ten percent must be non-Papuans who have lived in Papua for a certain number of years. Drawing on the NMI model, Freeport-McMoRan established a training institute in Arizona on the reservation of the San Carlos Apache tribe, to increase the skills and employability of Apache students. To date, more than 1,000 students have entered the program and 514 have graduated, 40% (206) of whom have been hired by the company.
Large-scale programme offering professional qualifications to local youth
Vale's Corporate University, Valer, runs a series of training programs aimed at equipping local youth with mining-related qualifications. The Professional Qualification Program, for example, trains young community members in operational and maintenance functions. From 2008 to 2015, 15,000 youth participated in this program in Brazil, Malaysia and Mozambique. The Professional Specialisation Program, on the other hand, caters to those with a university background. This program, designed in partnership with several Brazilian universities, offers postgraduate scholarships with on-the-job training in the company's operations.
Professional training programme for women and persons with disabilities
In 2019, Vale started the first class of its Professional Training Program (PFP) that is made up entirely of women and persons with disabilities. The 267 professionals from Parauapebas municipality will initially participate in the theoretical phase of the program, which includes topics such as written communication, quality of life, mathematics, diversity and inclusion. Participants who successfully complete this stage will be hired by Vale as operational trainees for the practical phase of the training. After approval in these phases, they may be hired as employees.
Programmatic support for basic education
Since 2017, Teck's Antamina mine in Peru has collaborated with an NGO, local educational authorities and other organisations in the Huari province to improve the quality of education in primary and secondary schools within its area of influence. The programme, Efecto Ancash, recruits local and talented graduates as teachers in schools in vulnerable areas, and provides them with comprehensive leadership training as well as opportunities to develop their pedagogic skills. To date, the programme has reached 2500 students in five districts and its systematic monitoring of the academic achievement levels reached shows a gradual improvement in basic subjects (reading, maths) and in soft skills such as communicating and working in groups.
The company has systems in place to ensure its operations support technical and managerial skills development of its local workforces in producing countries.
All companies show some level of evidence of supporting technical and/or managerial skills development for their operational workforce, although many demonstrate only ad hoc activities rather than company-wide programmes. A few companies take special measures to target training activities for minority groups within their operational workforces, including for example Indigenous Peoples. There is less evidence of companies systematically tracking the implementation of these training programmes.
Related Leading Practices
- Prioritising local employees for senior management roles at mine sites.
- Aboriginal leadership development
- Supporting national skills development
Prioritising local employees for senior management roles at mine sites.
Barrick Gold Corp has developed a systematic approach to encourage and increase the share of host country nationals in senior management positions across its mine sites. The company prioritises local and host country people for employment and provides the training necessary for senior management roles. The training is designed on a site-by-site basis to match the operational context and local capacity. In 2018 the company’s mine site in Mali had a full Malian management team and host country nationals at Kibali (DRC) and Tongon (Côte D’Ivoire) made up 84% and 83% respectively of the mine management teams. Barrick Gold Corp set a corporate target for 80% of senior site management to be host country nationals by the end of 2019.
Aboriginal leadership development
Fortescue is implementing a raft of programmes dedicated to empower Aboriginal people through training, employment and business development. As part of this effort, the company established its Leadership Excellence in Aboriginal People (LEAP) programme to promote career advancement for Aboriginal leaders in the workplace. The programme offers to Fortescue’s Aboriginal employees the necessary training to ensure they have the skills and knowledge for a leadership role. Programme participants receive 12 months of formal training and education on leadership and business that includes off-site education, practical on-site development and internal mentoring by the company’s senior executives. Since its launch in 2015, 42 employees have completed the programme, 50% of whom have been promoted and 30% of whom have become supervisors.
Supporting national skills development
In 2019 ERG supported the launch of an ‘Atlas of New Professions’, a tool developed by the International Labour Organization and the Russian Agency for Strategic Initiatives to identify and develop the most critical professions for the future. ERG undertook the first pilot study using the Atlas methodology, which led to a number of management actions including for example the decision to fund a new course at a local college to train operators of unmanned aerial vehicles. ERG has since rolled out the same approach to all its operations in Kazakhstan and plans to collaborate with the country’s Ministry of Education and Science to adapt its recruitment and training practices and target its support to specialist educational institutions and qualifications.