Social Performance – Mission Critical
I recently had the pleasure of hosting ICMM Council members, Tom Palmer (Newmont) and Eduardo Bartolomeo (Vale), at BMO’s Global Metals and Mining conference in Miami writes ICMM CEO Rohitesh Dhawan. Here, they spoke passionately, and very personally about why social performance is mission critical for our industry.
As I reflected when opening the session, I applauded Dan Barclay and his team at BMO for putting social performance on the main agenda – exactly where it belongs. Environmental, health and safety and financial risks have long been defined and integrated across business decision making in the industry, but this has not always been the case with social performance. During this session Tom, Eduardo and I touched on why it is so important, the different elements that can lead to social performance approaches being a success or failure, what changes are needed in workplace culture, and the sector’s future priorities on social performance.
So why is Social Performance mission critical?
“We need to be the ESG industry. Mining has to be on the forefront of the social and environmental aspects, because of what we do as an extractive industry.” Eduardo Bartolomeo, CEO Vale
Even though Eduardo, Tom and I come from three totally different parts of the globe, we all seemed to see the world through the lens of Ubuntu; the timeless African philosophy that ‘I am because we are’. It is this sense of deep connection to the welfare of their communities that underpins their approach to social performance.
Tom spoke openly about the hard lessons learned from Newmont’s early work in Indonesia, Uzbekistan, and Peru in the 1990s, and borrowed from another African proverb to illustrate that in Newmont’s approach to operating in these countries they ‘went fast but went alone’; whereas if they wanted to go far, they should have gone together.
What Tom made clear was that mining companies cannot operate in a vacuum, and social performance cannot be treated as separate to core business decision making. Simply doing no harm to workers and local communities is not enough, and companies must contribute to enhanced socio-economic outcomes for local communities for any operation to be successful. These considerations and experiences have been fundamental in shaping Newmont’s approach to social performance, helping to formulate its purpose and company culture which we see today.
Similarly, Eduardo pointed to his experiences of operating in Brazil and his reflections on the devastating events at Brumadinho. Both the impact of the tragedy and the fact that a high number of people live in extreme poverty in communities close to their operations has led to much soul searching for Vale, and for them to ask the fundamental question on purpose - ‘why are we doing what we are doing?’ In answering this question, Vale committed through their New Pact with Society to becoming a development enabler in the areas where they operate, supported by open dialogue and collaboration with local communities. This was also the starting point to launch Vale’s Social Ambition, which aims, among other goals, to contribute to lifting 500,000 people out of extreme poverty. Eduardo also talked about the importance of management systems to measure social aspects, such as grievances, conflicts, for instance, to ensure efficient social risk management.
Reflecting on these examples, we were unanimous in our view that not only is supporting the socio-economic development of host communities the right thing to do, but it’s also the smart thing to do. I could see many investors in the audience nodding their heads at that!
Workplace culture and the mining industry
“The kernel to sustainable social performance starts with culture within your organisation. If you aren’t creating, maintaining and improving a culture that is delivering a safe, equitable, and healthy workplace for your workforce, then it’s impossible to step outside the gates and build successful relationships externally.” Tom Palmer, CEO Newmont
Investigations by the Western Australia parliament and the Everyday Respect report have uncovered a distressing culture of harassment, bullying, sexual assault, and racism in the mining industry. This has led to a period of intense reflection for the industry. Both Eduardo and Tom spoke very honestly about the conversations currently going on in their businesses at the highest levels to address the critical challenge. We agreed that despite this being an issue permeating throughout society, not limited to one company, industry, country, or culture, we have an obligation and an opportunity to play a leading role in stamping these issues out from our workplaces and societies everywhere.
Tom reflected that this is a problem linked to privilege and power - held most commonly by men - and this is where we need to be focusing efforts to adjust behaviours and to demonstrate leadership. Eduardo agreed, noting that if this issue is not addressed with transparency, then it is simply impossible to have a sustainable, functioning company. Linked to this is the talent drain which will occur if we do not make the industry a place that people feel proud to work in.
It’s clear that tackling these issues will involve uncomfortable steps. Companies will need to find the courage to be transparent about the challenges in creating truly safe, diverse, equitable and inclusive cultures. We can’t just keep talking, we must act.
Looking to the future
“We need to look back and say, ‘we did great here’. We left a legacy that was much better than when we arrived”. Eduardo Bartolomeo
To round the session off, I asked both Eduardo and Tom what is the change that they would like to see in the industry in the next seven years (seven being an oddly specific number but why not!). Both unanimously agreed that we need to see a significant increase in diversity in the workplace. To do this, fundamental changes will need to be made to imbed an inclusive culture that makes people from all backgrounds feel welcome, safe and supported. That’s a goal that I’m proud to stand alongside them to progress through our work at ICMM.