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Stakeholder Newsletter: December, 2020

17 December 2020

In the last decade, we have seen increased concerns about the sourcing and means of production of critically important metals and minerals. Earlier this year, we launched our enhanced membership requirements – ICMM’s Mining Principles – which were developed as a response to the justifiable demands of investors, customers and other stakeholders for robust evidence that raw materials are being produced responsibly.

As consumer and stakeholder concerns have increased, so too has the proliferation of initiatives that establish standards for the responsible production of metals and minerals. While each standard shares an objective of improving environmental, social and governance practices at the operational level there are points of difference that must be carefully assessed on a case by case basis. Differences occur for several reasons, mainly because standard owners are distinct organisations with different memberships, mandates, and governance structures.

Recognising this, I'm pleased to share that ICMM has undertaken an equivalency benchmarking exercise, alongside other standard owners, to support investors, consumers, and other stakeholders in their understanding of how all these different standards address sustainability concerns, and the extent to which there are similarities and differences between them. This is an ongoing exercise, with more standards to be benchmarked against ICMM's Mining Principles in the coming months.

In this newsletter you will also find updates on ICMM's Innovation for Cleaner, Safer Vehicles initiative, research on the contribution of mining and metals to national economies, and work to improve industry performance on closure and community relations.

As we approach the end of what has been a most challenging year, I hope that you and your families remain safe and well, and that you have a restful holiday season.

Tom Butler,
CEO, ICMM


News

Enhancing Mining’s Contribution to National Economies

ICMM members recognise that efficient, effective, transparent, and stable resource governance is critical for translating mineral wealth into broad-based economic and social progress. Earlier this month, ICMM published two reports that contribute to the evidence-base that better governed mining-dependent countries fare better overall in terms of improvements.

Published every two years, ICMM's Role of Mining in National Economies: Mining Contribution Index ranks 183 countries from across the world according to the relative importance of mining to the economy of that country. In this fifth edition of the index, we are able to see that that between 2016 and 2018, many of the world’s poorest countries continue to rely on income from mining as the primary driver of economic activity.

Across all five editions of the MCI, the top 25 in the index remain dominated by low and middle-income economies. When compared with the Natural Resource Governance Institute’s (NRGI) Resource Governance Index, we find that of these countries, 84 per cent are defined as possessing weak, poor, or failing standards of governance. Governance clearly matters.

The second report, ICMM Members’ Tax Contribution report: 2019 update, prepared by PwC, finds that from 2013 – 2019 ICMM member survey participants reported payments of corporate income tax (CIT) totalling US$96.6bn and royalty payments of US$56.7bn, totalling a contribution of US$153.3bn to public finances. The report shows that after a decline in the first half of 2016, commodity prices recovered, and, together with general economic growth, led to an increase of tax and royalties. Find out more here.

Accelerating Innovation for Cleaner, Safer Vehicles in Mining

There is a critical need to advance work on cleaner, safer mining vehicles to achieve important health and safety benefits, and contribute to the pressing need of decarbonising the industry. Recognising this, ICMM established the Innovation for Cleaner, Safer Vehicles (ICSV) initiative in 2018, with the ambitions of introducing greenhouse gas emission-free surface mining vehicles by 2040, minimising the operational impact of diesel exhaust by 2025 and making vehicle collision avoidance technology available to mining companies by 2025. ICSV brings together ICMM's 27 company members with the largest original equipment manufacturers (OEMs) to collaborate in a non-competitive space and accelerate innovation for the mining industry.

Partnership and collaboration fuels long-term sustainable development and is crucial for addressing some of the mining industry’s biggest sustainability challenges. Two years on, the ICSV initiative is continuing to show that by working together we can more quickly accelerate pace of change, by building the widespread confidence needed to accelerate levels of innovation investment required when scaling up commercial solutions. The initiative will benefit the entire industry and is open to all OEMs who would like to join. Two years on from launching ICSV, eight new OEMs have joined the initiative taking the number of participating OEMs to 19.

The initiative is led by a CEO Advisory Group comprising each leader of BHP, Anglo American, Gold Fields, Caterpillar, Komatsu and Sandvik, several members of which spoke to a global audience at the 2020 International Mining and Resources Conference (IMARC), when Tom Butler was joined by Denise Johnson, Group President of Caterpillar, Mike Henry, Chief Executive Officer of BHP, and Nick Holland, Chief Executive Officer of Gold Fields to discuss the recent progress. Watch the session here.

Promoting Responsible Sourcing Good Practice in the Mining and Metals Sector

Last week, ICMM published a series of equivalency benchmarks that compare the requirements of ICMM’s Mining Principles with the World Gold Council’s Responsible Gold Mining Principles (RGMPs), the Mining Association of Canada’s Towards Sustainable Mining (TSM) programme, the Aluminium Stewardship Initiative (ASI) Performance Standard, the Responsible Mineral Initiative’s Risk Readiness Assessment (RRA) and the Copper Mark.

Recognising stakeholder concerns around responsible production, and the recent proliferation of sustainability standards, ICMM has undertaken this exercise alongside each standard owner with three key aims:

  1. Simplification – support investors, customers, and other stakeholders in their understanding of how these standards address a range of sustainability concerns, and the extent to which there are similarities and differences between them.
  2. Efficiency – make self-assessment and/or 3rd party validation processes more efficient for mining companies, including situations where validation is conducted for two or more standards at the same time.
  3. Transparency – promote transparency around mining and metals sector standards and validation processes.

This has been a collaborative process and the benchmarks published have been agreed and/or accepted by each standard owner. The list of standards being benchmarked against ICMM’s Mining Principles is not finite, with other relevant standards being assessed in time. You can view each equivalency benchmark here.

ICMM Publishes Spanish Language Edition of Grievance Mechanism Guidance

Of ICMM’s 27 company members, over 70 per cent have operations in Spanish speaking countries. This Human Rights Day, ICMM published a Spanish language version of our guidance 'Handling and Resolving Local Level Concerns and Grievances: Human rights in the mining and metals sector'.

The guidance includes information on the eight effectiveness criteria for operational-level grievance mechanisms, as established in the UN Guiding Principles on Business and Human Rights. It also shares guidance on how mining and metals companies should design effective mechanisms to systematically handle and resolve community concerns or grievances and provides practical tools to support companies with implementation. Find out more here.

Discover more about the importance of ensuring that local communities have a voice to raise concerns about activities taking place at a mine site in a blog by ICMM communities and human rights lead Hannah Clayton. Read more here.

The blog is also available in Spanish.

Towards Sustainable Mine Closure

To achieve sustainable outcomes that are beneficial to a company and its employees, the environment and host communities, mine closure must be considered as an integral part of an operations’ core business and effectively integrated across the mining life cycle. In support of this, ICMM has published an interactive Closure Maturity Framework tool to help establish clearer views of an asset’s current level of maturity, while outlining pathways towards achieving desired post-closure land uses.

Through the use of tools like ICMM’s Closure Maturity Framework, companies will be better able to identify mine closure threats and opportunities from the earliest stages of mining, so that they can be proactively managed. It also makes it easier and more cost effective to achieve final closure objectives through effective integration.

The Closure Maturity Framework tool has two components:

  1. User Guide that describes each of the maturity levels and helps companies categorise the status of their sites.
  2. Interactive Excel Tool that helps companies assess closure maturity at the site level. It can also act as a communication tool to help facilitate conversations between different business units and levels within a company to converge thinking and align decision making.

This Framework is the latest in a suite of documents on mine closure that together, help our members and the wider industry to plan and design for closure in consultation with relevant authorities and stakeholders, implement measures to address closure-related environmental and social aspects, and make financial provision to enable agreed closure and post-closure commitments to be realised. Read more here.

Also, at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development's (IGF) 16th Annual General Meeting in October, ICMM closure lead Dawn Brock spoke on the 'Global Mine Closure Needs: Government and Industry Responses'. The panel explored the closure needs of both governments and industry, and provided examples of their respective responses. Find out more here.

Business Integrity Priorities in Times of Crisis

Contract disclosure helps build trust, promote open and transparent engagement, and contribute to the social, economic and institutional development of host countries and communities, all central tenets of ICMM’s membership commitments. Last week, as part of EITI’s Contract Disclosure Week, Tom Butler joined EITI in raising awareness of their 1 January 2021 deadline on contract disclosure: “[Contract transparency] levels the playing field for responsible mining companies and shows they are open about their commitments with host governments” he said. Read more here.

In November ICMM co-hosted an industry-focused webinar with the World Economic Forum, Extractive Industries Transparency Initiative (EITI) and Transparency International about business integrity priorities for the mining sector in times of crisis.

ICMM members Tom Palmer, President and CEO of Newmont, Christine Ramon, Interim CEO of AngloGold Ashanti and Tim Robinson, BHP Chief Compliance Officer joined Namrata Thapar, Global Head of Mining at the International Finance Corporation and Matt Fifield, Managing Partner at Pacific Road Capital to discuss sources of corruption risk. Among the priorities identified were beneficial owners and how COVID-19 travel restrictions have made it harder for companies and investors to investigate the culture and commitment of others to anti-corruption. A summary of the event is available here.

Celebrating 20 Years of Partnership and Collaboration to Uphold Human Rights

As the Voluntary Principles Initiative (VPI) celebrates its 20th anniversary, the principles that underpin the initiative are more relevant today than ever. Global events, such as COVID-19, have shone a spotlight on the many inequalities and vulnerabilities seen throughout society, writes ICMM’s Marcus Addy. Read his blog here.

November also marked the 9th UN Annual Forum on Business and Human Rights, where ICMM's Hannah Clayton joined a UN Working Group on Business and Human Rights' discussion on the UNGP's10+ project. Watch the recording on UN Web TV and read our contribution to the 'Compendium of Insights' for more insights and reflections.


Up-Coming Events

Visit the 'Events' page on our website to find information on all the events that we will be joining, and to watch recordings from any that you've missed.


And Finally...

2020 has been a historic year. The pandemic has led to significant and sustained disruption around the world, but through it all we have seen that companies, communities and stakeholders have remained resolute and willing to work together for the common good, while continuing efforts to improve the social and environmental performance of the mining and metals industry. From everyone at ICMM we wish you a healthy and prosperous New Year.